Carnival Ship to be Built in China???

[chengkp75]

Cruise lines looking to do business in China are not primarily looking to market to US. Alarmist tactics have no effect.

 

Alarmist tactics? Wow, are you off base. The OP asked how we, the CC community feel about building ships in China. I stated how I felt. And you are correct, that the ships would be marketed to the Chinese. So, how many Chinese members are there reading CC at this time? Probably not a lot, and those that are, are aware of the faults in China's economy. So, how am I being alarmist, if I'm stating my somewhat educated opinion in a forum that won't be read by those affected?

 

Sure, Carnival is going to make bundles of money on this, and given the current business school model of making the most money each quarter, and letting next quarter or next year worry about themselves, this is a good move for Carnival. It will also help the Chinese economy to have Chinese built, Chinese crewed cruise ships bringing money to their ports, but would I feel good about it? No, both from a personal as well as a professional viewpoint.

[mdwcruises]

The first few ships built will not likely to be world class but I am sure after they have learned the basics and gained more experience the Chinese will be just fine in building ships. I wouldn't worry as long as they don't hire a certain Costa Captain. :p

 

I think it's smart of Carnival to hire local. The cost will be more inline with the revenue.

[chengkp75]

The first few ships built will not likely to be world class but I am sure after they have learned the basics and gained more experience the Chinese will be just fine in building ships. I wouldn't worry as long as they don't hire a certain Costa Captain. :p

 

I think it's smart of Carnival to hire local. The cost will be more inline with the revenue.

 

It's not so much that the Chinese need experience in building ships, though the hotel installations will be problematic at the beginning. China has been building and exporting ships for a couple of decades, and plans to be the worlds largest shipbuilder by 2015. They can build ships, and they can build ships at a cost that other countries cannot match. However, as Tonka's Skipper and I have pointed out, they use inferior materials and inferior quality control, and the ships start to fail long before their expected life span.

 

What would keep cost more in line with revenues would be for the lines to retire their older, less efficient tonnage to these areas, much like RCI selling ships to Pullmantur. Given China's cabotage laws, and the fact that Carnival is looking to make this the largest division of Carnival Corp, that model won't fly, so they will need to build ships in China.

[Maraprince]

Due to the unrest in Hong Kong, some of the merchandise my company ordered that is being produced overseas has been delayed at least 45 days or more.

 

This is something that will have to be factored into the time line.

 

MARAPRINCE

[mdwcruises]

It's not so much that the Chinese need experience in building ships, though the hotel installations will be problematic at the beginning. China has been building and exporting ships for a couple of decades, and plans to be the worlds largest shipbuilder by 2015. They can build ships, and they can build ships at a cost that other countries cannot match. However, as Tonka's Skipper and I have pointed out, they use inferior materials and inferior quality control, and the ships start to fail long before their expected life span.

 

What would keep cost more in line with revenues would be for the lines to retire their older, less efficient tonnage to these areas, much like RCI selling ships to Pullmantur. Given China's cabotage laws, and the fact that Carnival is looking to make this the largest division of Carnival Corp, that model won't fly, so they will need to build ships in China.

 

You mentioned earlier that Chinese built ships fail sooner. Is there any way to test how soon something is likely to fail in the beginning?

 

Royal is actually bring their newest ship Quantum to China.

[Disconnections]

You mentioned earlier that Chinese built ships fail sooner. Is there any way to test how soon something is likely to fail in the beginning?

 

Royal is actually bring their newest ship Quantum to China.

 

Although QoS is going there, it isn't being built in China.

[chengkp75]

You mentioned earlier that Chinese built ships fail sooner. Is there any way to test how soon something is likely to fail in the beginning?

 

Royal is actually bring their newest ship Quantum to China.

 

Some things can be tested for life cycle, some cannot. Sometimes things like steel are "certified" to meet the customer's requirements, and then after failure, are found to not have met the test as claimed. A lot of things that go into a ship, like valves (and valves can make up to 15%+ of a ship's total cost) are known from past experience to be "throw away" items. It is ironical that China and Korea build things like valves to JIS (Japanese Industrial Standards) even when Japan no longer makes these items since they cannot compete in price, yet the Chinese and Korean products fail routinely long before the Japanese products they replaced would. European equipment is designed to be maintained and repaired. Chinese equipment is designed to be thrown out when it breaks, and a complete new item installed.

 

A good portion of equipment even on US flag (US built) ships comes from Korea and China. I continue to find where something breaks, I can find the parts I need in the manufacturer's manuals, I order the parts to fix the item, and am told that the manufacturer does not sell the individual parts, they only sell the complete item.

 

Ships are continually inspected for hull and machinery conditions by the classification societies (Lloyds, DNV, ABS; think of them like Underwriters' Laboratories) as insurance underwriters. Every year, things need to be taken apart for inspection, or at every dry docking the hull welds will be looked at, and any problems will be taken care of at that time. The problem with China, is the same that the old Soviet Union had: the shipyards that build the ships, and the classification societies that inspect and approve the ships are all controlled by the government. Not a lot of checks and balances. For most ships, the shipowner is of course trying to spend the minimum amount on maintenance, while keeping reliability as high as possible (reliability equals customer satisfaction), while the class surveyor is looking for reliability over everything else, since he personally, and his company, are putting their bond on the statement that the ship is "seaworthy" for another year.

[andy.capitan]

Due to the unrest in Hong Kong, some of the merchandise my company ordered that is being produced overseas has been delayed at least 45 days or more.

 

This is something that will have to be factored into the time line.

 

MARAPRINCE

 

Italians strike about every other week.

 

The average Chinese may not be in a position to cruise today, but as the article above points out, it won't be many years before their market is larger than the US.

 

For Carnival to have a China based brand, the ships are going to have to have a significant Chinese content. Chinese ships built by Chinese, for Chinese.

 

That the COO or whoever is moving there shows Carnival Corp is serious.

 

The move is BRILLIANT and most Carnival customers should love it. Why? Because it provides hope that Carnival won't poach our beloved Funships from the shores of the US.

 

It is also BRILLIANT because while RCL is sending overpriced ships to China, Carnival will be able to become an even greater value leader.

[mdwcruises]

Some things can be tested for life cycle, some cannot. Sometimes things like steel are "certified" to meet the customer's requirements, and then after failure, are found to not have met the test as claimed. A lot of things that go into a ship, like valves (and valves can make up to 15%+ of a ship's total cost) are known from past experience to be "throw away" items. It is ironical that China and Korea build things like valves to JIS (Japanese Industrial Standards) even when Japan no longer makes these items since they cannot compete in price, yet the Chinese and Korean products fail routinely long before the Japanese products they replaced would. European equipment is designed to be maintained and repaired. Chinese equipment is designed to be thrown out when it breaks, and a complete new item installed.

 

A good portion of equipment even on US flag (US built) ships comes from Korea and China. I continue to find where something breaks, I can find the parts I need in the manufacturer's manuals, I order the parts to fix the item, and am told that the manufacturer does not sell the individual parts, they only sell the complete item.

 

Ships are continually inspected for hull and machinery conditions by the classification societies (Lloyds, DNV, ABS; think of them like Underwriters' Laboratories) as insurance underwriters. Every year, things need to be taken apart for inspection, or at every dry docking the hull welds will be looked at, and any problems will be taken care of at that time. The problem with China, is the same that the old Soviet Union had: the shipyards that build the ships, and the classification societies that inspect and approve the ships are all controlled by the government. Not a lot of checks and balances. For most ships, the shipowner is of course trying to spend the minimum amount on maintenance, while keeping reliability as high as possible (reliability equals customer satisfaction), while the class surveyor is looking for reliability over everything else, since he personally, and his company, are putting their bond on the statement that the ship is "seaworthy" for another year.

 

Thank you for the explanation! Very interesting. :)

[andy.capitan]

Some things can be tested ...

 

Yes, the Chinese have been know to fake tests and rubber stamp certifications. It is expected.

 

Carnival/et al will have to provide oversight in many areas. Carnival probably figured that out with all of the Sunshine "sabotage". The ships should still be cheaper and of sufficient quality to work.

[SeaPeaInn]

Does anyone remember the two cruise ships they tried to build in Louisiana. They finally gave up and towed the hulls to Europe to be completed. These were American workers not used to the thin steel used on cruise ships.

[mdwcruises]

Yes, the Chinese have been know to fake tests and rubber stamp certifications. It is expected.

 

Carnival/et al will have to provide oversight in many areas. Carnival probably figured that out with all of the Sunshine "sabotage". The ships should still be cheaper and of sufficient quality to work.

 

I thought Sunshine was built somewhere in Europe?

[Disconnections]

I thought Sunshine was built somewhere in Europe?

 

It was built during 1994 through 1996 at the Fincantieri Shipyard in Monfalcone, Italy. It launched in 1996 as the first mega ship over 100,000 GRT.

[andy.capitan]

I thought Sunshine was built somewhere in Europe?

 

It was.There were schedule slippages, reports of unqualified workers being used by the ship builder, and even reports of deliberate sabotage that put the transformation behind schedule and cause numerous problems after being relaunched.

 

The shell that was used was the old Destiny that had its own problems due to shoddy construction.

Edited October 15, 2014 by andy.capitan

[chengkp75]

Yes, the Chinese have been know to fake tests and rubber stamp certifications. It is expected.

 

Carnival/et al will have to provide oversight in many areas. Carnival probably figured that out with all of the Sunshine "sabotage". The ships should still be cheaper and of sufficient quality to work.

 

Sorry, the Sunshine just goes to show how little oversight Carnival had over the yard. Sure the ship will work, but they will be further examples of saving money this quarter by spending less in capital cost, and then two years down the road, when 30% of the sea valves are failed during drydock, we have to spend more that quarter, but our balance sheet looks great right now.

[chengkp75]

Italians strike about every other week.

 

The average Chinese may not be in a position to cruise today, but as the article above points out, it won't be many years before their market is larger than the US.

 

For Carnival to have a China based brand, the ships are going to have to have a significant Chinese content. Chinese ships built by Chinese, for Chinese.

 

That the COO or whoever is moving there shows Carnival Corp is serious.

 

The move is BRILLIANT and most Carnival customers should love it. Why? Because it provides hope that Carnival won't poach our beloved Funships from the shores of the US.

 

It is also BRILLIANT because while RCL is sending overpriced ships to China, Carnival will be able to become an even greater value leader.

 

Actually, given Carnival's fixation with Asia, and pulling out of Europe, and fighting tooth and nail over the US ECA regulations to the last minute, what I see is just the opposite. They will build all their newbuilds in China, and send the older tonnage to the US. It is still cheaper to convert a ship to/from the Asian market to the US market than build a new one. I really see this as a Carnival focus on a new market to the possible detriment of their traditional market.

[chengkp75]

Does anyone remember the two cruise ships they tried to build in Louisiana. They finally gave up and towed the hulls to Europe to be completed. These were American workers not used to the thin steel used on cruise ships.

 

Ah, no, not quite accurate. They were at the Lytton yard in Pascagoula, MS. The two ships, and only one had more than a little steel cut, were for Hawaiian American Cruises, which since they were going to sail in Hawaiian waters exclusively, needed to be built in the US. After 9/11, Hawaiian American went bust, and the one semi-completed hull and two ships' worth of equipment were left with Uncle Sam holding the bill, since they were financed with Title XI money. The government was understandably anxious to unload a partial cruise ship that they had no interest in operating. Along came NCL, and brokered a deal where they would buy the ship for the outstanding loan amount, complete them overseas (because US yards are not set up to do cruise ship modular cabins like European yards), allow in two other foreign built ships, and allow them to flag US and trade in Hawaii.

 

The reason the hull was taken to Germany had nothing to do with the US yard not being able to work with "thin" steel, but with the ability to pre-fabricate cabins outside the yard and ship them in for installation, as every yard in Europe does, and is far cheaper than building this on site in the yard. Shipyard workers build ships, not cabinetry for bars, restaurants, and theaters. Even in Europe, the cruise line will bring in sub-contractors to do this kind of work, which is how RCI got fined in Rotterdam for the Oasis.

 

Not sure if you are referring to the cabin modules as the "thin" steel, but there is virtually no difference between the steel in cruise ships or cargo ships. Cruise ships do use aluminum for some superstructure, but so does the US Navy, many offshore supply vessels, and others, and US yards can fabricate this as well as any (but at a higher cost).

[andy.capitan]

Sorry, the Sunshine just goes to show how little oversight Carnival had over the yard. Sure the ship will work, but they will be further examples of saving money this quarter by spending less in capital cost, and then two years down the road, when 30% of the sea valves are failed during drydock, we have to spend more that quarter, but our balance sheet looks great right now.

 

You misunderstood. That is why I think wherever ships are built in the future, Carnival will have more oversight. Carnival learned their lesson and it was an expensive one.

[Disconnections]

You misunderstood. That is why I think wherever ships are built in the future, Carnival will have more oversight. Carnival learned their lesson and it was an expensive one.

 

Are you saying the Carnival Sunshine's first few sailings weren't "brilliant" and some guests were disappointed with their onboard experience? Is this a result of their "expensive lesson" that you mentioned?

Edited October 15, 2014 by Disconnections

[AZmike480]

I bet Walmart has something to do with this. :)

 

The main problem with a Chinese made ship is that once you sail on it, a week later you are hungry to sail again.

 

 

Topguy,

 

That's funny!:D

 

Azmike480

[andy.capitan]

Actually, given Carnival's fixation with Asia, and pulling out of Europe, and fighting tooth and nail over the US ECA regulations to the last minute, what I see is just the opposite. They will build all their newbuilds in China, and send the older tonnage to the US. It is still cheaper to convert a ship to/from the Asian market to the US market than build a new one. I really see this as a Carnival focus on a new market to the possible detriment of their traditional market.

 

Perhaps. In days gone by, didn't NCL do the opposite and convert some Asian ships for the US Market?

 

With the Chinese government backing the initiative in China, they will likely have a new industry.

 

Carnival Spirit will be headed to dry dock in Singapore. Will it be that many years before they are scheduled in China instead?

 

One thing certain is that cruise ship building in the US is dead.

[andy.capitan]

Are you saying the Carnival Sunshine's first few sailings weren't "brilliant" and some guests were disappointed with their onboard experience?

 

I made no such statement and am not interested in participating in a thread hijacking other than to state some guests are disappointed with every cruise ship and every sailing.

Edited October 15, 2014 by andy.capitan

[Disconnections]

I made no such statement and am not interested in participating in a thread hijacking other than to state some guests are disappointed with every cruise ship and every sailing.

 

I was trying to find out more about the expensive lesson you stated Carnival learned. Check the edited post. ;)

Edited October 15, 2014 by Disconnections

[chengkp75]

You misunderstood. That is why I think wherever ships are built in the future, Carnival will have more oversight. Carnival learned their lesson and it was an expensive one.

 

Sorry, this is a lesson Carnival hasn't learned in quite a few years. This is why the Splendor was found with a CO2 fire suppression system that couldn't work for the first year of its operation due to improperly installed check valves that would not allow the system to operate (from the USCG Report of Investigation on the Splendor). This system should have been tested in the shipyard before sea trials, or even before dock trials, and signed off by the shipyard, the class surveyor, the flag state (many times the class surveyor), and Carnival's representative. Sorry, but these two examples show me that Carnival has for years let things slip while building ships.

[chengkp75]

Perhaps. In days gone by, didn't NCL do the opposite and convert some Asian ships for the US Market?

 

With the Chinese government backing the initiative in China, they will likely have a new industry.

 

Carnival Spirit will be headed to dry dock in Singapore. Will it be that many years before they are scheduled in China instead?

 

One thing certain is that cruise ship building in the US is dead.

 

Oh, well aware that virtually all shipbuilding in the US is dead. Yards are fixated on US Navy work, where there are very few time constraints, the customer has no profit motive, and things are bid on cost plus basis.

 

Until the US cruising public votes with their pocketbooks, which is unlikely to happen unless there is a major catastrophe, there will be no US cruise ships. Given the reality of the marketplace, I am okay with foreign flag ships operating out of the US, since that meets the letter if not the intent of the law, but those ships are better built and better inspected than those of flag states where the government controls everything.

 

Back in the '80's-'90's, Russia was looking to get hard currency for their oil. The problem was that they would only deliver the oil in their tankers. No one would insure a cargo on a Soviet ship, built in Soviet yards, and classed under the Soviet classification society. So, when I was in Lisbon in shipyard, there were 20 Soviet tankers being completely torn apart and rebuilt so that they could meet Lloyd's requirements and get Lloyd's classification, which would allow customers to insure the cargos. China today is not quite as bad as that, but there is no checks and balances in place.