Thursday, October 2, 2008

Quick Case Study on Ferries in Japan

Got the following question on the prior post:

fastshipfan said... October 2, 2008 6:32 PM
"Hey Brad, I'm interested to know what's behind your assertion that Incat ships are better than those from Austal (and others). The last two ships built by Incat were for a Japanese company and delivered after Alakai. Yet the fact is those two 112m vessels have already proven not to be successful - the operator is premanently withdrawing them from service at the end of this month: Suggests to me that they are no better."

Good question. The answer is interesting and relates to the situation here. In summary, I'll just restate a calculation point that has been repeated many times before on this blog and was based in sensitivity analysis done last Fall of proforma income statements of these types of ferry companies:

Large fast ferries with 4 or more diesel engines traveling on routes of significantly more than 2 hours duration with the same revenue generating load are not cost effective nor long-term viable from a commercial standpoint only, due to diesel fuel costs. This applies to anywhere in the world, including most of the routes in question in Japan and here in Hawaii, whereas routes in places like the Canary Islands and Trinidad and Tobago are short enough to have the potential to be cost effective and profitable with these types of fast ferries. This is so regardless of whether the fast ferry is an Austal, Incat, etc.

The fuel consumption constraint, though, is not the primary nor determining comparison that will be made between Austal and Incat for the JHSV. I believe the reason Incat's is a better design is because it's M-hull provides a smoother ride with less underside hull "deck slamming" than Austal's straight catamaran hull.

Your question about Japan is interesting and so I provide some more information on it:

First the quote that was referred to:
"HIGASHI NIHON FERRY The new Incat fast ferries "Natchan Rera" and "Natchan World" will be withdrawn from service on the Aomori – Hakodate route from 1st November because of increased fuel prices which have rendered the service uneconomic."

That pretty much speaks for itself, but we can take a look at the ferries and their routes:


Hull #064, Model 112m WPC, Name Natchan Rera, Co Operating Higashi Nihon Ferry Co.
Hull #065, Model 112m WPC, Name Natchan World, Co Operating Higashi Nihon Ferry Co.

Natchan Rera - Credit:

Natchan World - Credit:

About the powerplants in these two ferries, the following quote is useful:
"...The Natchan Rera is powered by four MAN 20V 28/33D diesel engines, each rated at 9,000 kW at 1,000 rev/min. ...In 1998, Incat conceived that a larger wave piercing catamaran was required to fill a market niche for a larger high speed ferry. After several years of research, the 112 m design emerged. The Natchan Rera is a result of that research and it is a vessel that the worldwide high speed craft community will be watching with interest."

These diesel engines burn about the same amount of fuel as those used on recent Austal ships. The useful differences would be for how long they are burned per revenue generating load or whether less than 4 of these types of engines can be used to accomplish the task.

Lastly, I found a neat webpage that shows all of the domestic ferry routes in Japan with their durations and links to the companies operating on each route...including the Higashi Nihon Ferry Company. Most of the long Japanese routes are not serviced with fast ferries, and those can be viable, although even they would be experiencing fuel cost difficulties.

Thanks to "fastshipfan," my prior recommendations would not help Incat in Japan. Clearly fast ferries can have business difficulties even on shorter routes if the demand is not there for high-end, luxury ferry travel.

Aloha, Brad

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