Marcon issues new Tugboat Market Report

JUNE 12, 2014 — The latest Tugboat Market Report from broker Marcon International, Coupeville, WA, says that 4,770 of the 12,705 vessels and 3,888 barges that the brokerage currently tracks are tugs and 687 of them are currently officially on the market for sale worldwide, up 2.38% since November 2013 and down 5.50% from February 2013.

Of the tugs for sale, 46.15% of foreign and 91.3% of U.S. tugboats are direct from owners.

A sizable percentage are young: 215 or 31.3% of the tugs worldwide, primarily foreign flagged, were built within the last ten years, are newbuilding re-sales or currently under construction – compared to 32.9% at last November's report. In contrast, 62 (9.02%) are over 50 years of age and 12 have no age listed. The oldest tug Marcon currently has listed was built in 1897 as a wooden passenger/freight steamer and converted to a tug in 1902. Marcon says this "old lady" is balanced by 18 newbuildings up to 7,999 HP scheduled for delivery in 2014.

The largest number of tugs Marcon tracks for sale are in Southeast Asia with 148 tugs officially on the market (down from 147 last report), followed by 112 in the U.S. (111), Europe with 105 (vs. 104), 83 in the Mediterranean (71), 72 in the Far East (70), 45 in the Mid East (43), 25 each Caribbean (31) and where location unstated (23), 22 in Africa (22), 20 Latin America (17), 15 in the South Pacific (14), 12 in Canada (13) and 3 in Southwest Asia (5).

Caterpillar diesels still power most tugs for sale with machinery in 137 or 21% of the tugs Marcon lists. This is followed by 91 Cummins, 55 EMD, 52 Yanmar, 50 Niigata, 28 Deutz-MWM, 27 Mitsubishi, 22 GM and 21 Ruston powered tugs, while 186 tugs are powered by machinery from other manufacturers from ABC to Zibo with, as always, 10 Fairbanks Morse boats still on the market.

Conventional single and twin screw tugs prevail with 151 (22.0%) and 400 (58.2%), respectively, for sale worldwide. These are followed by 113 azimuthing tugs (16.4%) on the market, 20 Voith Schneider tractor tugs (2.9%) and three triple screws (0.4%). Just as a comparison, five years ago 35.5% of the 402 tugs for sale were single screw, 48.3% twin screw, only 13.4% azimuthing and 2.0% were Voith Schneider. Only 18.4% listed for sale were built during the last 10 years compared to 31.3% today.

In the tugs listed for sale, since January 2009 Cat diesel powered vessels are up 2 percentage points, Cummins 5 percentage points (with most of the gain from Southeast Asian and Chinese built vessels constructed in the past five years), EMD down 4 percentage points, Yanmar up 3 points, and Niigata up 1 point.

Five years ago the United States had the largest selection of tugs available for sale at 26.4% with Europe in second place, Far East third, Southeast Asia fourth and the Mediterranean in fifth place. That has changed. There are now more tugs for sale globally in Southeast Asia (up 10 percentage points) than anywhere else in the world with the United States in second place, down 10.1 points; Europe down 5.1 points; Mediterranean up 4.6 points and the Far East down 2.5 points. Of course, many Far East built tugs migrate to Southeast Asia, so probably should just lump them together.

What does all this mean? First, the average tug now listed for sale is 26 years of age vs. 32 years of age and the numbers document the decline of single screw and the increase in popularity of azimuthing tugs in the market.

Marcon currently has listed 687 tugs worldwide currently on the market officially for sale worldwide, up 16 tugs from November 2013, but still down 5.50% from one year ago. The largest change in available since the last report is in the under 999 HP range with eight more tugs available worldwide. There is one less U.S. flag tug for sale this quarter and 17 more foreign flagged tugs, mostly in the 2,000 – 3,999 BHP range. There still have not been any strong trends or direction to point to in the tug S&P market – or significant changes in pricing.

Older, fuel-guzzling, higher horsepower tugs – of which there are a lot out there, are tending to sit on the shelf.

Actual sale prices of all vessels and barges sold by Marcon so far in 2014 have averaged 93.67% of asking prices, compared to 2013's 87.07%, 2012's 81.79% and 2011's average 93.03%. Average official asking prices and price indications have remained steady since Marcon's last report, but there generally seems to be room for negotiation for the older units. No tugs have been sold to-date in 2014, so the average price per BHP to-date for 2013 for a "generic" 33 year old twin screw tug is US$ 324.78, down 5.6% from US$ 344.09 in 2012.

Sales included both foreign and domestic tugs, and actual ages covered a wide range from 8 to 53 years of age.

Download the full 116 page report HERE