China's coronavirus crisis has created a labour standstill at a time of high demand for ship upgrades.
The result is chaos to dry-docking schedules, as yards cut off from their workers face a queue of vessels in urgent need of repairs and retrofits.
Sister publication Upstream reports that China's efforts to contain the outbreak have affected activity at many offshore shipyards, making delays likely for oil and gas vessels.
Masters have confined ships' crews onboard and many technical superintendents have been sent home, shipyard officials told TradeWinds.
Yards are unable to advise shipowners when jobs can be finished and ships can sail, and owners whose scheduled dockings are now in limbo may have to wait for summer for a new dry-docking slot if they cancel.
Not all Chinese shiprepairs face the same challenges, but an official of the largest one described a crisis that all face.
“First, many of our workers went home for the holidays as usual but, because of the virus, quarantine policies and transport issues cannot return now,” said a Cosco Shipyard Group executive, who was not willing to be named.
"Second, most vessels in our yards were doing ballast water treatment and scrubber retrofits as well as regular dry-docking.
“There is new equipment that must be commissioned, there are engineers who must visit and spares that must be delivered. But, because of the coronavirus situation, it is difficult to visit the yard and logistics are less reliable.”
A round-up of several leading yards confirms that assessment.
Changhong
An official of privately owned Zhoushan Changhong International Shipyard told TradeWinds that only about 500 locally based staff are at work at Changhong and sister yard Ouhua, which employ up to 3,000 more subcontracted labourers depending on work volume.
The 20 ships that were already berthed there before Chinese New Year now face a severely reduced work schedule. And there is uncertainty about when labourers will be able to return and how long they will remain in quarantine after returning. Work has also slowed on seven newbuildings under construction.
Zhoushan IMC
Another privately owned Zhoushan-based repair yard, Zhoushan IMC-Yongyue Shipyard & Engineering — part of Singapore-based IMC Pan Asia Alliance Group — was more optimistic because it hires all of its labour directly and most workers live on site. The yard has 12 ships under repair and two more waiting at anchor.
"We did not close for the holiday," said yard chief executive Chen Yong. "We are keeping our workers in the shipyard until the end of the virus."
Other observers have remarked that even the few yards that enjoy labour self-sufficiency will face logistical problems that could lead to slowdowns.
Cosco Shipyard Group
The biggest shiprepair player, Cosco Shipyard Group, is somewhere in the middle in terms of staffing challenges. The official said the Cosco yards had retained a larger than usual proportion of staff during the Chinese New Year holiday to address the high demand for scrubber and ballast water treatment system retrofitting.
The five large and medium-size yards currently have about 90 ships under repair.
"For the time being, we are running the yards on a minimum basis, and performance will be slower," he said.
Work has been entirely stopped only on vessels that face special challenges.
Outside sources claim Cosco has been hit by numerous cancellations but the official said these were relatively small.
"Because now the trading market is not so good, some owners have just decided to stop trading," he said.
Hired and contract labour
Cosco uses a roughly even mix of directly hired and contracted labour.
The executive said conditions are best at Cosco's Zhoushan, Shanghai and Nantong facilities, while Dalian and Guangdong face greater challenges.
Classification society sources in the Bohai Sea and Shandong region said the Jinling Weihai Shipyard (formerly Avic Weihai) and South Korean-owned Samjin Shipbuilding are closed to repair.
They said other major yards active in repair including the China State Shipbuilding Corp-owned Shanhaiguan Shipbuilding Industry and Qingdao Beihai Shipbuilding Heavy Industry are severely slowed. A source close to Qingdao Beihai said that yard is operating at about 20% capacity.
Even when workers return, quarantines will stand in the way of resuming full production.
"Employees returning from Wuhan will still have to be secluded for two weeks," said the Cosco official.
"We normally calculate that during Chinese New Year there is a two to four-week impact on production," he said. "But in this case, considering the effect of the virus, we believe that if its spread is under control within the next two or three weeks, production could be back to normal two or three weeks after that."
But when China will resume normal operation is anybody's guess.
"This holiday has been extended twice already, so I'm not sure," said the Changhong shiprepair official. "It depends on how the coronavirus develops."
