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Article - Maritime Industry

The Maritime Industry

Introduction

Germany is a country that is very much oriented towards foreign trade. A strong and internationally competitive maritime sector is therefore of great importance for the entire economy as it drives Germany’s competitiveness and helps safeguard growth and employment. The business community and policymakers seek to ensure that the maritime industry is structurally strong and that it can harness its full potential.

Estimates place the annual turnover at up to €50 billion and the number of jobs which are directly or indirectly dependent on the maritime industry at up to 400,000. This makes it one of the most important sectors of the German economy. The industry is characterised by its modern, high-tech shipbuilding and shipbuilding supply industries – many of which are well-positioned in the global markets –, its globally leading shipping companies – particularly container shipping companies –, its high-performance port and logistics industries, its innovative marine engineering industry, and its renowned maritime research and training facilities.

Despite difficult global market conditions, the maritime industry remains a key sector for the future of the German economy. It can help us find answers to the important questions of our time such as how we can transition to a sustainable energy supply, mitigate climate change, protect our environment, and ensure a secure supply of resources. Among the most important sectors of the maritime industry are maritime shipping, ports, shipbuilding, the shipbuilding supply industry, marine engineering, offshore wind energy and maritime research and development. The German government seeks to adopt an integrated policy approach that helps safeguard jobs, economic output and training and thus strengthen the German maritime industry as a whole.

Maritime Agenda 2025

Against this background, the Federal Cabinet approved the Maritime Agenda 2025 on 11 January 2017. This strategy, which was developed jointly by several different ministries, provides the Federal Government with a long-term framework that will make it possible to shape the future of the maritime industry in a targeted manner, and strengthen Germany’s role as a maritime hub.

The Maritime Agenda 2025 sets out a wide range of measures to be deployed across nine fields of action of the maritime industry. The government also seeks to work with the business community to draw up a roadmap that describes the priorities of their applied research funding programmes and how the innovation capacity of SMEs – which form the backbone of the maritime industry – is to be strengthened. This is to help companies maintain technology leadership and tap new growth markets. Digitisation is another key focus of the Maritime Agenda 2025. High-speed broadband connections are to be expanded, not least in ports, and flagship projects (e.g. real-time services in navigation) provided with funding.

A special focus will also be placed on sustainability in maritime transport. Here, the Federal Government will provide targeted funding for green fuels and ship propulsion systems. The Maritime Agenda also calls for the development of international environmental standards as this will help to prevent distortions of competition within the industry.
The task of the Federal Government’s maritime coordinator, who has been based in the Economic Affairs Ministry since 2000, is to coordinate all measures for strengthening Germany’s competitiveness in the fields of shipbuilding, marine technology, offshore wind energy, shipping and ports.

In the run-up to the 10th National Maritime Conference, the Federal Government adopted its 5th report on the development and future prospects of Germany’s maritime industry on 8 February 2017. The report describes the current situation in the maritime industry. It also provides an overview of the policies adopted by the Federal Government on maritime shipping and ports, shipbuilding and marine engineering, offshore wind power, and marine research.

Four figures on Germany’s maritime industry

5,4
Banknote-icon

billion euros
Turnover generated by German shipbuilders in 2016

21
Symbolicon für Dampfer

per cent
Germany’s share of global container shipping capacity (2016)

400,000
Symbolicon für Arbeiter

Number of jobs
in Germany that directly or indirectly depend on seaports

> 83,000
Symbolicon für Menschen

Number of employees
that work for the shipbuilding and shipbuilding supply industries

Maritime conferences

The National Maritime Conference – providing a fresh stimulus for the maritime industry

The first National Maritime Conference was held in the year 2000. Since then, this regular conference has become a tried-and-tested forum for dialogue within the maritime industry. Its objective: making Germany’s maritime industry more competitive vis-à-vis the rest of the world.

The 10th National Maritime Conference, which took place in Hamburg on 4 April 2017, discussed the role that the digital transformation plays for the future of the maritime industry. Its motto was: ‘Excellent maritime networking – harnessing the opportunities of digitisation for the maritime economy’. More than 740 representatives from business, trade unions, academia, research, politics and the administration took part in the conference to discuss how the digital transformation can be used to ensure that German maritime businesses remain technology leaders and can compete with the rest of the world. In addition, the conference focused on taking additional action for implementing the government’s Maritime Agenda 2025. This includes promoting sustainability in maritime shipping and looking into the contribution maritime technologies can make to the energy transition.

The 10th National Maritime Conference saw representatives of the Federal Government, Länder governments, associations and trade unions sign a joint declaration on digitisation (PDF; 415 KB, in German). This declaration sets out key fields of action and measures that are to make the sector fit for the digital revolution. These include in particular expanding digital infrastructure, transferring data within the maritime supply chain in a smart manner, providing targeted funding for digitisation under our maritime research and development programmes and introducing international industry standards.

Contact at the Federal Ministry for Economic Affairs and Energy

How does the Federal Ministry for Economic Affairs and Energy support the maritime industry?

Around 95% of the intercontinental trade in goods is conducted by sea. This means that for an export-oriented economy like Germany, having a strong maritime industry is key. The Federal Ministry for Economic Affairs and Energy is employing a wide range of different measures to provide support for the maritime industry.

The business community and policymakers seek to ensure that Germany’s maritime industry is structurally strong and that it can harness its full potential.

2025 maritime research strategy

The Economic Affairs Ministry’s 2025 maritime research strategy is strengthening the maritime sector by providing funding for research and development. The research strategy covers the entire spectrum of ship, production, shipping and maritime technology. This permits cooperation along the entire value chain. In the case of shipbuilding, for example, this ranges from the suppliers to the shipyards and the ship operators. In this way, large parts of the maritime industry throughout Germany benefit from support as they pursue their longer-term goals.

The research strategy consists of two funding measures.

The maritime research programme covers the entire range of technology in the sector. The focus is on research and development, particularly in terms of environmental compatibility and the mobility transition, the use of digital technology, maritime safety and security, and the development of maritime resources.

The line of funding entitled “real-time technology for maritime safety and security” provides targeted support for innovative real-time technologies to boost civilian maritime safety and security.

The funding for maritime research provided by the Economic Affairs Ministry is fostering progress. Breakthroughs in the development of alternative fuels for maritime applications (e.g. methanol), in the maintenance of offshore wind farms, and in efficient manufacture of one-off products are just a few examples. From 2011 to 2017, the Economic Affairs Ministry provided €225 million in funding for 485 maritime R&D projects. In the same period, the entire volume of funding for research amounted to €317 million.

Promoting sustainability in shipping

The Economic Affairs Ministry, the German Mechanical Engineering Industry Association (VDMA) and the German Shipbuilding and Ocean Industries Association presented their joint initiative for a maritime energy transition at the 10th National Maritime Conference. The aim is to provide more targeted funding for the development of technologies at the interface of energy, transport and industry, and to strengthen the dialogue of the maritime stakeholders. In spring 2017, the Economic Affairs Ministry announced the cross-programme funding initiative “Energy transition in transport”, with total funding of €130 million. The focus is on aspects like sector coupling via electricity-based fuels, innovative maritime technologies in the field of offshore wind energy, and an efficient distributed supply of electricity and heat.

Improving German companies’ capacity to export

The Federal Ministry for Economic Affairs and Energy is providing support for German shipyards so they can offer their customers competitive financing solutions. Fixed-rate financing at the CIRR rate and export credit guarantees from the Federal Government (Hermes guarantees) ensure that German companies can operate on a level playing field.

Dialogue with the maritime industry

In order to ensure that the maritime industry continues to move in the right direction, the Federal Ministry for Economic Affairs and Energy is promoting close dialogue between policymakers and the business sector. The National Master Plan for Maritime Technologies (NMMT) serves as a key tool for coordination and networking.

The funding of research, development and innovation in maritime technologies also forms part of the “High-tech Strategy – Innovations for Germany”, which was adopted by the Federal Cabinet in 2014. Here, the maritime technologies are identified as key enabling technologies, i.e. as driving forces for innovation. Taking this development into account, the Federal Government intends to work with the sector to develop the NMMT, which has so far focused on maritime technology, into an instrument for the entire maritime industry. Accordingly, the NMMT shall in future map the entire spectrum of the maritime industry, including innovative shipbuilding and the offshore supplier industry.

An “analysis of the supply side and needs of the institutions, structures and networks in the maritime sector in the field of research, development and innovation” commissioned by the Economic Affairs Ministry arrived at the finding in September 2016 that potential improvements lie in particular in the field of cross innovation and information on cross-sectoral technology and market developments. Corresponding initiatives are now being pursued by the Federal Government, not least via cross-sectoral research initiatives and programmes, and the establishment of a Lightweighting Initiative Coordination Office by the Economic Affairs Ministry.

Keeping shipping routes safe

Piracy and armed robbery at sea are a massive and extremely serious threat to life, limb and significant assets in maritime transport. In order to help protect the crews, particularly of ships sailing under the German flag, against such attacks, and in order to offer legal certainty to the shipping lines and security firms, a mechanism for the licensing of private-sector security companies was launched in 2013.

Private-sector security firms can apply for this licence from the Federal Office for Economic Affairs and Export Control (BAFA). For more information, please click here (in German).

LeaderSHIP strategy

The Federal Ministry for Economic Affairs and Energy is continuing to develop its LeaderSHIP dialogue with the shipbuilding industry, which allows all the stakeholders to discuss priorities for research and working methods. The aim is to establish “LeaderSHIP Deutschland” as a powerful body for representatives of shipyards, suppliers, trade unions and policy makers which gives advice on current issues affecting the German shipbuilding industry at regular intervals.

Maritime Conferences

The Maritime Conferences – which are held every two years – are a good opportunity for the Federal Ministry of Economic Affairs and Energy to join with all the relevant stakeholders to devise measures that help strengthen Germany’s position as a maritime hub.

Focus on the sector

The current situation of Germany’s maritime industry

More than other sectors, Germany’s maritime industry is closely connected to the global economy and global sea trade. This makes the maritime industry particularly vulnerable to global economic changes and fluctuations.

The maritime industry comprises material, component and system suppliers, shipyards as system integrators as well as numerous skilled craft businesses and service providers. According to estimates there are around 500 companies with around 90,000 jobs in the field of shipyards and mechanical and plant engineering.

Shipyards/shipbuilding

The situation of the German maritime shipyards further stabilised in 2016. Turnover rose slightly, by around 6%, in year-on-year terms. The volume of orders on the books actually reached a new record level, at €18.5 billion.

Many shipbuilding companies have managed to undertake the structural changes needed to adapt to a changed market environment in a difficult market.

Shipbuilding and offshore supply industry

Germany’s shipbuilding and offshore wind energy supply industry is largely characterised by small and medium-sized enterprises. It accounts for an estimated 400 companies and around 65,000 employees and generates €11.1 billion in turnover. Germany’s suppliers have a technological edge, which they seek to maintain and further build on by continuing to invest in research and development. There are particularly good prospects for selling green products and technologies.

Merchant fleet

Germany has 2,720 merchant vessels – which represents a market share of 6.2% and means that Germany has the fourth-largest merchant fleet (as of mid-2017). Germany is an international leader when it comes to container vessel capacity, with the country holding approx. 21% of the market share.

Seaports

As an export-oriented nation, Germany depends heavily on its seaports for generating economic output and creating jobs. An estimated 300,000 jobs depend directly or indirectly on the German seaports. In 2015, the volume of goods handled in seaports increased slightly by 0.1%, reaching 296.5 million tonnes.

Marine engineering

Marine engineering is a fast-growing sector within the maritime industry. It comprises offshore technology for extracting oil and gas, offshore wind energy, underwater technology, environmental and safety technology, aquaculture and mariculture and mining the seabed for mineral resources. Although the share that German companies have in this market today is rather small, many of these companies have a high level of technical expertise and great potential for innovation.

Further information

Port, symbolic of the maritime industry; Source: istockphoto.com/Fabian Wentzel