Marcon’s Tugboat Recap – August 2012

According to boat broker Marcon International, there are 711 tugboats officially on the market for sale worldwide; up 12% since May. In all 232, or about one-third of the tugs available worldwide – primarily foreign flagged – were built within the last 10 years, or are newbuilding re-sales or currently under construction. A total of 41 newbuildings up to 6,000 HP range are scheduled for delivery through 2013, balancing an average worldwide age of 38 years for all tugs being offered. U.S. tugs are older, averaging 47 years versus 35 years for their foreign counterparts, but the tugs are getting younger (2 years in less than 9 months) as fleet renewals continue everywhere. A large percentage of tugs for sale are in the U.S. with 144 tugs on the market, but that shouldn’t be surprising with ECA’s coming on line and tighter emissions standards here at home. Operators have to decide whether to re-engine existing vessels, also weighing the merits of (more expensive) new tonnage equipped with the latest in green technologies.

Power – Spreading the Wealth
Speaking of engines, CAT diesels still power most tugs with machinery in 145 or 21% of tugs for sale, followed by 101 Cummins (CMI), 58 EMD, 45 Niigata, 40 Yanmar, 29 Deutz, 26 GM, 24 Mitsubishi (MBI.F), 22 Ruston and 18 MAK powered tugs. 189 tugs are powered by machinery from others; from ABC to Zibo with, as always, nine Fairbanks Morse boats out there looking for a new home. Conventional single and twin screw tugs prevail with 140 (19.7%) and 421 (59.2%), respectively, for sale worldwide. There’s plenty of high-tech propulsion out there; including 116 azimuthing tugs on the market, 26 Voith Schneider tractor tugs, six triple screw and two shallow draft quad screws.

Numbers – what do they mean?
Bob Beegle, President of Marcon International said, “I keep predicting the number of tugs for sale to level off at a plateau, but as of August 2012 we hit a record total of 711 tug listings officially for sale, up 110 listings or 18.3% since the same time last year … I cannot say whether this is good news or bad news. It is just the facts of the market.” Marcon says that most of this latest increase was in the foreign market with 74 more tug listings added for sale and 16 more added for charter since the last Market Report. Beegle adds, “I guess the good news is that we are starting to see some signs of activity in the market instead of just stagnation.”

Falling Prices = More Newbuilding?
Actual sales price compared to brake horsepower (BHP) has fallen $250/BHP in 2012, but that’s to be expected as the average vessel age sold so far is 34 years vs. 23 last year. This does not take into account the type of tug or condition, but just a simple comparison of generic tugs built 11 years apart. Marcon doubts that we will see any great improvement in secondhand tug prices in the near future. Perhaps a harbinger of what is to come; Marcon insists that older tonnage/horsepower will continue to weigh down the numbers. It is becoming increasingly expensive to modernize older tugs to meet today’s stringent emission requirements and new safety standards for all aspects of towing. As the market improves, many owners who are financially able will look more towards building new rather than refitting.

Access the Marcon Report: http://www.marcon.com Contact: Tel: (360) 678-8880; E-mail: [email protected]

(As published in the September 2012 edition of Marine News - www.marinelink.com)