Orders for new ships slow, but U.S. owners active in sales and purchase

The total capacity of these vessels is just over 7 million deadweight tons (dwt), with a total current value of $4.5 billion (See Table 1: Value of U.S.-Built Shipping). Globally, the United States (as a shipbuilding nation) is ranked in 11th place (in terms of dwt) and a respectable sixth place behind South Korea, Japan, China, the Philippines, Germany, and Turkey in terms of the current value of the U.S. built fleet. Based on the volume of ships on the water, the most prolific U.S. shipbuilder has been NASSCO, San Diego, CA, a unit of General Dynamics. NASSCO also operates shipyards on the U.S. East Coast in Mayport, FL, and Norfolk, VA. As of mid-March, VesselsValue estimated the ships being built at NASSCO had values of around $900 million (this value excludes delivered ships). NASSCO recently launched the 53,700 dwt MR tanker Independence, which VesselsValue currently values at $133.45 million (this excludes a premium for the Jones Act). The Independence will be joined by two MR2 tankers on order at NASSCO for Seabulk Tankers. As of mid-March, NASSCO had four MR2 tankers on its order book for American Petroleum Tankers.  Charts Shipbuilding

The San Diego shipyard delivered two LNG-fuelled 3,100-TEU containerships, including the lead of the Marlin class, the Isla Bella, in November 2015 to Tote Maritime. The Isla Bella, along with its sister, Perla dela Caribe, are now operating between Jacksonville, FL, and San Juan, PR.

The only other U.S. shipyard with bulker, tanker, and gas carrier vessels currently on its order book is Philly Shipyard, Philadelphia, PA (formerly known as Aker Philadelphia Shipyard Inc.) Philly Shipyard has built product tankers, crude carriers, and containerships. The Philly Shipyard built fleet is currently valued at just over $1 billion. Its order book consists of eight 50,000 dwt MR tankers and this design has been classed by ABS as LNG Ready, which provides the owner with the flexibility to choose to convert the ship to dual fuel operation in the future.

In early May, Crowley Maritime Corporation christened the Louisiana, third of four LNG Ready product tankers at the Julia Street Cruise Terminal in New Orleans, LA.

Like its sisters, the 600 ft Louisiana is based on a proven design from Korea’s Hyundai Mipo Dockyards (HMD) design. It can carry crude oil or refined petroleum products, as well as other chemical products. 

Construction management services were provided by Crowley’s marine solutions group, which provides oversight and management in shipyards across the country for Crowley and other third-party companies. Philly Shipyard also built the tankers Texas and Ohio for Crowley, and the fourth ship in the program is under construction with delivery planned for third quarter 2016.

“The christening underscores our continued commitment to building and operating innovative vessels that deliver the best possible service and efficiency for our customers who depend on us for safe and reliable transportation of petroleum products,” says Rob Grune, Senior Vice President and General Manager, Petroleum Services. “And, as is the case with its sister ships, we designed and built the Louisiana to have the capability to be converted to LNG propulsion in the future, increasing the likelihood of a long service life as new emissions regulations are developed in the years ahead.”

JONES ACT FLEET CONSIDERABLY OLDER THAN WORLD FLEET
It’s no secret that the U.S. Jones Act fleet is considerably older than the average age of the global, non-U.S.-built fleet. The current U.S.-built fleet has an average age of 33 years old versus 13 years old for the global fleet. The most recent ships produced by U.S. shipyards have been tankers and the average age of U.S.-built tankers is only five years older than the global fleet. However, there has been virtually no U.S. investment in bulkers (many of them are part of the Great Lakes fleet). The U.S.-built bulker fleet has an average age of 46 years old versus nine years old for the global fleet. Even a relatively modern ship type, such as containerships, the average age of the U.S.-built fleet is 32 years old, considerably older than the average of 11 years old for non-U.S.-built vessels.

TOP TEN U.S. SHIPOWNERS
According to VesselsValue, the Top Ten U.S. shipowners ranked by value control around half the capacity (48%) of the U.S. fleet (see Table 2. U.S. Shipowners Ranked by Fleet Value).

The Top Ten Shipowners are tanker companies or the tanker arms of oil majors. The current most valuable U.S.-operated fleet is that American Shipping Co., a Norwegian public company controlling a fleet of 10 MR2 tankers built by Philly Shipyard and leased out to OSG, which charters them out to Jones Act qualifying companies. VesselsValue estimates this fleet is worth $830 million. The second most valuable U.S. fleet belongs to new entrant American Petroleum Tankers, which is a subsidiary of Kinder Morgan Terminals, with its fleet operated by Crowley Maritime Corporation, Jacksonville, FL. This fleet will be supplemented by MR tankers currently on the order book of NASSCO. However, in the last 12 months, the U.S. order book has been very quiet, with no bulker, tankers or gas carriers ordered.

SALE AND PURCHASE ACTIVITY
If there is one area where U.S. shipping has been active, it’s been in the sale and purchase market. The dire dry bulk market is one of the driving forces behind Scorpio Bulker selling 25 vessels in the last 12 months (March 2015 to March 2016) for a combined value (at the time of sale) of $878 million (where the sale price is undisclosed, the VV Value the day of the sale is used). Altogether 88 vessels have been sold by U.S. owners for a combined value (where the sale price is undisclosed, the VV Value the day of the sale is used) of $3.4 billion (see Table 3: Sales by U.S. Owners).

Of course, under the Jones Act, U.S. companies cannot purchase foreign-built vessels to operate in Jones Act trade routes. This reduces the pool of potential purchases, which in the last 12 months (March 2015-March 2016) have been limited to eight vessels, including four MR tankers from Philly Shipyard purchased by Kinder Morgan for a reported $568 million (See Table 4: Purchases by U.S. Owners).

 

 

 

 

A return to its maritime roots

“Anyone studying the growth of the city …cannot help but be struck by the fact that New York was first a port before it was anything else.” This William Bixby quote adorns the perimeter of South Street Seaport in New York. The city is one with a rich maritime history—operations on both the East and Hudson River have played a vital role in shaping the city and its people’s history—but its one often forgotten by most New Yorkers navigating their way through the hustle and bustle of the concrete jungle.

New York was originally the landmass south of Wall Street on the island of Manhattan, as time went on, however, New Yorkers began expanding out into the neighboring boroughs and eventually made their way to the suburbs. Today, Manhattan is still the city’s center with New Yorkers spending, on average, 40 minutes traveling to or from work each day, according to the New York Times —more than any other city in the United States. But one mode of transportation often not used by New Yorkers, are ferries operating on New York’s marine highway, the East River. Granted, most communities in the city’s five boroughs don’t have access to such ferry operations—except for Staten Island which has the government operated Staten Island Ferry, most ferry operations are private and confined to Manhattan and parts of Queens and Brooklyn—but that’s all about to change thanks to a partnership between the New York City Economic Development Corporation (NYCEDC) and Hornblower, Inc.

Hornblower is no stranger to New York, the company’s subsidiary Statue Cruises currently provides transportation to the Statue of Liberty National Monument and Ellis Island. Hornblower also debuted its New York Hornblower Hybrid, a ferry/luxury yacht, back in 2011.

Citywide Ferry
Promising a fast, frequent and convenient service operating year round, the Citywide Ferry will bring a total of six routes that, when combined, will cover over 60 miles of waterways. The creation of the service will help meet growing waterfront community demand, and help lighten the load for an already overworked, overcrowded, and outdated MTA subway system.

Hornblower will have the option to purchase at least 17 new ferries, as well as chartering already existing ferries to help meet the system’s demand. Our sources tell us Hornblower will likely contract up to three shipyards, which will each build three to four ferries in the first round of construction. One of the shipyards is believed to be Metal Shark Aluminum Boats, Jeanerette, LA. It recently received a Small Shipyard Grant from the Maritime Administration for its Franklin, LA, shipyard.

The city is providing the service with $55 million in infrastructure upgrades—this includes the building of ten new ferry landings and the repair/refitting of six others. Additionally, the city will provide $10 million for startup costs, such as vessel upgrades and ticketing machines and $30 million in operation support per year for a period of six years.

NY Waterway’s East River Ferry boats are also to be fully integrated into the Citywide Ferry fleet. The transition is expected to be complete by the summer of 2017.

The Citywide Ferry service will roll out in two phases. Phase one will initiate service to Astoria, South Brooklyn and Rockaway in 2017. Phase two to Soundview (Bronx) and Lower East Side will launch in 2018.

The catamaran ferries, which will be based on an Incat Crowther design, say our sources, will carry at least 149 passengers, will be fully accessible to those with disabilities, will be equipped with WiFi, and will operate using low emission engines and “Low Wake” technology. The ferries will offer passengers 360 degree views, and LED screens will be fitted on board displaying information and entertainment.

The ferries, like its Staten Island ferry counterpart, will also offer food and beverage options on board.

However, unlike the Staten Island Ferry, which is free, the Citywide Ferry will cost passengers $2.75, the same price as a New York City Metro Card swipe on the city busses or Subway system.

Passengers however will not be able to transfer from the train/bus to the Citywide Ferry—meaning the service won’t be fully integrated with the NYC mass transit system. However, free transfers will be available between ferries. The ferries will operate from 6:30 am to 10 pm, seven days a week.

LandingsFerry Landings for Citywide Ferry
A total of 10 ferry landings—the barges were designed by Blancke Marine Services, Woodbury, NJ, and the topside outfit by project design manager McLaren Engineering—will be built for the service, and are expected to be ready in time for the service’s launch in 2017.  The barges for the landings are being built at May Ship Repair on Staten Island.The ferry landings will be 35 ft wide by 90 ft long.

The landings are being fabricated for Soundview, Bronx; Astoria, Queens; East 62nd Street, Manhattan; Roosevelt Island (between Manhattan and Queens); Long Island City, Queens; Stuyvesant Cove in Manhattan; Grand Street (Lower East Side Manhattan); Red Hook, Brooklyn; Bay Ridge, Brooklyn; and the Rockaways.

According to NYCEDC, upon completion, the landings will be equipped with canopies and wide screens to provide passengers a sheltered space from inclement weather. Additionally, the barges will feature ticket machines and waiting areas, allowing for minimal upload impact at the landing sites, says the NYCEDC.

Helping the waterfront community
The Citywide Ferry system is projected to add 155 new jobs to the New York Harbor. Additionally, the company will participate in the City’s HireNYC program which will match qualified applicants from neighborhood-based WorkForce1 training centers, meaning that the folks working at the landings will be qualified people from the communities.

Crews are expected earn more than $15 an hour and will also receive a comprehensive benefits package.

Further exemplifying its desire to highlight and foster the growth of the city’s maritime tradition, NYCEDC has partnered with a number of federal, state and city agencies to launch the Waterfront Navigator—a website that will serve as an official source of information for businesses and waterfront property owners seeking to learn what tools are available to them. In addition, the website, WaterfrontNavigator.NYC, will help facilitate environmental permit applications for waterfront construction.

NYCEDC President Maria Torres-Springer says that the “one-stop” user friendly website is where regulatory agencies from the federal, state and local levels joined forces to create a resource for simplified permit planning.

Staten Island Ferry
One constant presence on the New York Harbor has been the Staten Island Ferry (or at least some incarnation of it). Formal service on the route between Manhattan and Staten Island was established in 1817 under the Richmond Turnpike Company when it began sailing the steam-powered Nautilus. Eventually, the City of New York took over the operation in 1905 when it ordered five new ferries for the route, each named after the city’s five boroughs: the Bronx, Brooklyn, Queens, Manhattan and Staten Island.

Since then, a number of new ferries have been built and retired for the now famous orange Staten Island fleet. Currently, the fleet is made up on nine ferries providing service to 22 million passengers a year. And with the population on the island growing, demand is high for a new series of ferries that provide faster, more efficient ride.

Earlier this year, New York City Mayor Bill de Blasio confirmed that the NYC Department of Transportation (NYC DOT), the agency that runs the Staten Island Ferry operation would be ordering three new ferries for the route. This would enable the operator to retire three of the older ferries in the fleet including the 51-year-old John F. Kennedy, commissioned in 1965. Additionally, the S.I. Newhouse and Andrew J. Barberi, both commissioned in 1981 will also be put out of service. The two hold the distinction of having the highest passenger capacities, with room for 6,000 passengers.

The three new 320 ft x 70 ft ferries are designed by Seattle-based Elliott Bay Design Group, and are expected to bare a striking resemblance to the beloved Kennedy, with lots of open-air space. The ferries will also be double-ended and have capacity for 4,500 passengers.

The ferries, which will be built to ABS class requirements, will be powered by Tier 4 EMD engines and Voith Schneider Propulsion drives.

Glosten Inc. will act as the Owner’s Representative [Team] providing all construction management and oversight on behalf of the NYCDOT.

Industry Day Reveals Interested Parties
At the New Staten Island 4500 Class Ferry Industry Day event held last September at the Whitehall Terminal, the NYC DOT laid out details on the Ollis class project as well as its target dates.

The city operator expects for bids to be due 90 days after it was advertised (sometime in the 3rd Quarter of 2016)—we should note that as we were going to print, the NYC DOT released the Request for Bids (RFB) for construction of the ferries; and expects to issue a Notice to Proceed (NIP) contract start by the 4th Quarter of 2016. The NYCDOT expects all three vessels to be completed within 1,460 consecutive calendar days following NIP.

Looking at the Industry Day’s attendance sheet, one could wager a guess on what yards will be bidding on the project. Conrad Shipyards, Dakota Creek Industries, Eastern Shipbuilding Group, Fincantieri Bay Shipbuilding, GD NASSCO, Leevac Shipyards, Vigor Industrial, and VT Halter Marine were all in attendance.

The first of the three new ferries, the Staff Sgt. Michael Ollis, is expected to begin operations in 2019. The ferry is named in honor of the late U.S. Army Staff Sgt. Michael Ollis, a native of the New Dorp area of Staten Island, who died while saving a Polish soldier in Afghanistan. He was only 24 years old at the time of his passing. 

Vessels two and three in the Ollis Class are to be delivered later in 2019 and 2020.

FTA awards ferry grants, WETA expands
The Staten Island Ferry system will also get a boost from the U.S. Department of Transportation’s Federal Transit Administration (FTA). Under its Passenger Ferry Grant Program a total of ten projects received a combined $59 million in funding. Of that, $6 million will go to the NYC DOT, which will use part of the funds to replace the deck scows (barges) for the Staten Island Ferry Dockbuilding Unit as well as upgrade the Staten Island Ferry Maintenance Facility Ramps and Racks.

WETAThe San Francisco Bay Area Water Emergency Transportation Authority (WETA) was also a recipient of the FTA grants. Under the program, WETA will receive $4 million to expand berthing capacity at the Ferry Terminal from its current four berths to six, and the construction of three new ferry gates. According to WETA the expansion project is set to begin Summer 2017. WETA says the project will improve landside conditions at the Ferry Terminal by providing new amenities, such as weather-protected canopies, the construction of a new plaza area south of the Ferry building, the extension of pedestrian promenade areas and other public access improvements. The expansion will also enable WETA to stage emergency water transit services in the event of a regional transportation disruption or disaster.

“Improvements to the San Francisco Ferry Building ‘hub’ is a key element to expanding our services on the Bay, and validation of the important role ferry service will play in the future of the Bay Area’s transit infrastructure,” says Nina Rannells, Executive Director of WETA.

The improvements come at a time of growth for WETA. The ferry system in the Bay area has experienced a boost in ridership over the last few years and to help meet increasing passenger demands WETA has invested in both new ferries and is currently in the process of converting/refurbishing other members of the fleet.

Last April, the operator awarded Kvichak, a Vigor company, the contract to build two all-aluminum 400-passenger only ferries. The 135 ft x 38 ft catamarans, currently under construction—the hulls are being built by Kvichak and the superstructure is by Nichols Brothers Boat Builders, were designed by Australia’s Incat Crowther, and will be equipped with MTU 12V4000 M64+ EPA Tier III engines rated at 1,950 bhp at 1,830 rev/min. The engines, coupled to ZF7600 reduction gears, will enable the ferries to reach a top speed of 27 knots. Delivery of the ferries is expected to occur November 2016 and April 2017.

Beyond the newbuilds, WETA also has two of its existing ferries, the MV Intintoli and MV Gemini, undergoing upgrades at San Diego-based Marine Group Boat Works.

At press time, the MV Intintoli was nearly done undergoing a propulsion upgrade. Meanwhile, the MV Gemini is currently undergoing a minor refit to help improve vessel reliability and passenger amenities, according to WETA’s Ernest Sanchez. Among the improvement is the refurbishment of shafts, propellers and rudders, and the replacement of bearings; plus the overhaul of the Selective Catalyst Reduction System as well as the main engines, HVAC, electrical, plumbing, emission and fire and lifesaving safety systems.

The Gemini’s conversion from a Subchapter T to a Subchapter K ferry—means an increase in passenger capacity from 149 to 225 and an upgrade of the interior spaces. The MV Gemini project will be completed this summer.

WSF phases out older ferries
While New York City and San Francisco get ready to up the ferry ante, up in the Northwest, the largest ferry operator in the U.S., Washington State Ferries continues its newbuild program in the hopes of phasing out older members of its fleet and improving safety and efficiency. The ferry division of the Washington State Department of Transportation recently announced that construction has officially began on the state’s newest ferry, the Suquamish.

The keel was laid last month at Vigor’s Harbor Island Shipyard in Seattle, where Governor Jay Inslee, State Senator Christine Rolfes, and Suquamish Tribal Chairman Leonard Forsman struck ceremonial welds on to the keel—Inslee welded his granddaughter’s initials, Rolfes welded an orca whale, and Forsman welded a circle with a dot, an ancient design element found in the early Suquamish winter village.

The Suquamish is the fourth ferry in the Olympic Class, which was designed by Seattle-based Guido Perla & Associates, Inc., and is based on the Issaquah class design, WSF’s most versatile ferry. The Olympic class ferries each have capacity for 144 cars and 1,500 passengers.

While construction has officially started on the Suquamish, the third ferry in the class, the Chimacum, is about 75 percent complete. In April, Chimacum’s superstructure, built by Nichols Brothers Boat Builders, was joined to its hull at Vigor.

The Chimacum is expected to go into service on the Seattle/Bremerton route in 2017. WSF is expected to take delivery of the Suquamish in the Fall of 2018.

The total cost to build four Olympic Class ferries is $515.5 million.

The hope for WSF is to continue “investing in long-term ferry build programs” in order to keep up with increasing ridership numbers—WSF carries more than 23 million riders and 13 million cars, annually— in addition to replacing aging members of the fleet, said Matt Von Ruden, Director of vessels for WSF.

One of those aging vessels, the Hiyu was officially retired last month after nearly 50 years of service. Considered cute by many, it was even affectionately called “Baby Hiyu” by some, the ferry was tiny in size—only 162 ft long with a maximum capacity for 199 passengers and 34 vehicles—but lacked ADA accommodations and incurred high maintenance costs, rendering it obsolete.

“While the Hiyu was a good and dependable vessel, its tiny size means it is no longer the best option for moving passengers and commerce across the Puget Sound,” said Elizabeth Kosa, Washington State Ferries’ Chief of Staff. “The addition of modern, bigger and faster Olympic Class vessels to the fleet means its time to bid farewell to the Hiyu.”

WOODSHOLE1Conrad christens MV Woods Hole for Steamship Authority
As we were going to press, the Woods Hole, Martha’s Vineyard and Nantucket Steamship Authority was prepping to take delivery of its newest ferry, the M/V Woods Hole.

Built by Conrad Shipyard, the ferry, was christened on May 20th at Conrad Aluminum, Amelia, LA. Called a “beauty” and a “perfect example of the ships built by Conrad…quality in every detail,” by Project Manager Thomas Rachal, the ferry features state-of-the-art technology, WiFi stations, a snack area, and oversized reclining leather seats for passenger comfort.

The M/V Woods Hole, designed by Seattle-based Elliott Bay Design Group (EBDG), is 235 ft x 64 ft with a maximum draft at 10 ft 6 inches. It has a passenger (plus crew) capacity of 384, car capacity of 55 and the freight-vehicle deck is designed to carry ten 100,000 lb tractor-trailers.

It features a highly shaped bulbous bow to help minimize wave and improve fuel efficiency. Further improving efficiency are Becker high-lift rudders, which, when working in combination with the controllable pitch propeller system and vectorable bow thruster provide the ferry with high maneuverability in a small area.

Powering the M/V Woods Hole are a pair of MTU 16V4000 EPA Tier 3 engines providing 2,680 hp connected to Hundested controllable pitch propellers, generating service speeds of 12 to 14 knots and sprint speeds of 16 knots.

The ferry is expected to go into service sometime this month providing service between Woods Hole and Martha’s Vineyard.

Alaska Class Ferries Get Named
Meanwhile, another EBDG-designed ferry series, the new Alaska Class ferries being built for the Alaska Marine Highway System have officially been named. Following a call to students from Alaska’s Governor Bill Walker to submit essays on what the ferries names should be, two students, seventh grader Malea Voran and 10th grader Taylor Thompson, won the naming rights.

The two new ferries will be named Tazlina, which Voran explained in her essay was an Ahtna Athabaskan name that means “swift river”, and the Hubbard, after the Hubbard Glacier, which Thompson says “surpasses all others (glaciers) in its beauty and magnificence. A ferry named after it would surely do the same.” The Hubbard Glacier has actually thickened over the years as opposed to melting like its other glacier counterparts, making it an anomaly to the science community.

The 280 ft ferries are being built in modules by Vigor’s Ketchikan Alaska Shipyard. Once the modules are complete—with pipes, electric cable raceways and other systems installed—they will be set in place and attached to the ships.

The two-day boat Alaska Class ferries will seat up to 300 passengers and carry 53 standard size vehicles. Delivery is expected from the yard in 2018.
 

How are tankers valued?

The birth of VesselsValue was driven by timing and need. In 2008, the crisis in the financial market extended into shipping. The dry bulk sector and the containership sector were hit the hardest, and while tankers remained relatively buoyant, banks needed to assess their capital commitments against the value of the assets being financed and being used as collateral. However, in the depth of the crisis (2010 / 2011), ship brokers were telling clients they could not value the ships as there had been no recent sale or “last done” in ship broker speak. Richard Rivlin, a sale and purchase broker with 30 years’ experience, had long felt that an automatic valuation system could be built, which would produce valuations in any market, at any time. Luckily, his brother is a Professor of Mathematics, and together they designed and built such a system. It quickly became apparent that the highly detailed multi-level regression model was far too complex for normal spreadsheets, and a specialist modelling company was employed to develop the model.

The model is fed by two databases. One contains the features and specification of the ships arranged in a unique structure that allows the computational model high speed access. This database is researched and compiled by VesselsValue own team of 30 researchers and analysts on the Isle of Wight in the UK. The second database consists of sale and purchase transactions and charters. Both feed the mathematic model which is operated by a team of quantitative analysts. The aim was to produce an instant, accurate and always available online ship valuations for the banks and finance houses, that form the main customers of VesselsValue.

Tankers Valuation
According to VesselsValue, five factors make up a valuation:

  1. Type (VLCC, Suexmax and so on)
  2. Features (shipyard, hull, and so on)
  3. Age
  4. Cargo Capacity
  5. Freight Earnings

Each factor is broken down into further elements that are scored. As an asset, tankers are relatively straightforward, being highly commoditized, and standardized in terms of size ranges and specification. In part this is due to the international safety and pollution control legislation that has been forced on the tanker sector. This level of standardization makes VesselsValue task somewhat easier when it comes to scoring the factors, than offshore vessels, which have just been added to the system. In the case of tankers, there are around 140 scores. One of the most important scores is the shipyard. A vessel built in China is less desirable than one built in Japan. A well-published example is the one shown above. In November 2014, the New Century-built Supramax bulker ACS Diamond was sold for $10 million. The previous week, the slightly older Japanese-built pair of Supramaxes were sold for $15.5 million each. This was an implied discount of around 40% between Japan and China. However, the shipyard scoring goes into several levels of sophistication, including many ships the shipyard has built and when the last vessel was constructed.

This model is continually updated and recalibrated overnight to give the closest possible fit to the reported sales prices. It is the analysis of the sales that can produce the weightings required for different shipyards. These are applied to all shipyards, not just Chinese shipyards.

So far VesselsValue have performed over 1,000,000 valuations to date, about 400,000 a year and the number is increasing.

How Accurate is VesselsValue?
The split of VV customers are banks and finance houses, owners and other maritime industries such as lawyers, insurers and charterers – sophisticated market participants who insist on knowing the methodology behind our valuations. But ultimately they want to know how accurate are our valuations because this will affect their bottom line. Valuation accuracy is assessed as the difference between the price a vessel is sold at, and VV valuation on the day before the actual sales date. This is expressed as a % of valuations within a certain band of accuracy and shown in a chart form. The accuracy report is available on the website.

Tanker Valuations Development
According to the VesselsValue transactions database, between the start of 2012 and May 2016, a total value of $143 billion of tankers have been traded on the sale and purchase market. During that period the value of second-hand tankers has steadily increased, as can be seen from figure 1 (“VV Tanker Matrix”) below of the VV Tanker Matrix, expressed as USD / DWT.

During that period, the MR tanker has been the most frequently traded tanker type, both in terms of number of sales, and value (see figure 2 “Total Value by Type of Tankers Sold 2012 to Date”).

So far in 2016 (to 15 May 2016) 83 tankers with a total value of $1.4 billion, have been traded on the second-hand market, and again the MR tanker is the most popular (see figure 3 “Value of Tankers Sales Jan 2016 to YTD).

Interestingly, the average age of MR2 (Chemical / Product) tankers sold in the first five and half months of 2016 is only three years-old. Altogether 17 of these vessels were sold in this period, with eight tankers being sold by owners in the USA (these were not Jones Act vessels).

The majority of tankers and the largest value of tankers sold so far this year (2016) were constructed in South Korea, followed by Japan and China. As far as owners are concerned, the lead seller across all types of tankers was Chembulk Tankers, Scorpio Tankers and companies associated with the Navig8 group (see figure 4 “Top Ten Sellers of Tankers Ranked by Number of Vessels Sold”).

Recent Sales of Interest
The top three sellers have sold tankers for completely different reasons and strategy. In January 2016, Chembulk Tankers was sold by parent company Berlian Laju Tanker (BLT) to private equity investor Kohlberg Kravis Roberts (KKR). Chembulk Tankers is said to have a number of Contracts of Affreightments (CoAs) and the older tankers were surplus to requirement. This is part of the KKR growth strategy to rebuild the Chembulk Tankers fleet. KKR has also invested in a fund to invest in two Greek bank shipping portfolios.

The number two top seller, Scorpio Tankers, was a tactical, opportunistic sale. The purchaser, Bahri (formerly known as National Chemical Carriers of Saudi Arabia) is on something of a buying spree. Bahri has recently purchased two VLCCs from Tanker Investments in December 2015, for a reported $77.5 million. The five 2014-built MR2 tankers were sold en bloc for $167 million are trading in the UAE under Bahri CoAs.

The third most active seller, Navig8 Chemical Tankers, Inc., sold the four resales (the MR2 tankers are due for delivery in 2017) under a ten-year bareboat charter (with purchase option) for a reported $35 million each. This was an internal sale within the group, and part of a longer term strategy.

Incat Crowther design for New York’s Citywide Ferry system

June 16, 2016 — New York City has released the initial renderings of the ferries for the new Citywide Ferry system that will start operating in the summer of next year. Hornblower,

Stena Weco christens new product tanker

JUNE 15, 2016—The 50,000 dwt chemical and product tanker Stenaweco Impulse was recently named at Langelinie Pier in the center of Copenhagen at a christening ceremony attended by 300 guests. H.R.H. Crown

Shipping magnate Angelicoussis big spender at Posidonia

JUNE 15, 2016—Billionaire Greek shipping magnate John Angelicoussis was the biggest spender at the recently concluded Posidonia 2016 Exhibition in Athens. Angelicoussis, owner of Angelicoussis Shipping Group, which includes Anagel Maritime Services,

Frigate towed to Detyens for conversion

JUNE 14, 2016—Crowley Maritime Corporation’s Invader class tug Monitor recently towed the 33-year-old, ex-USS Taylor (FFG-50) from Philadelphia Naval Shipyard to Detyens Shipyards in Charleston, SC, where the vessel will be converted in preparation for

New high-speed ferry for Majestic Ferries

JUNE 14, 2016—Singapore’s Majestic Ferries recently took delivery of the Majestic 7, the first of four 200-passenger, high-speed catamaran ferries for service between Singapore and Batam. Based on a design by Incat

Ship repair deals struck at Posidonia

JUNE 10, 2016—Turkish and Portuguese shipyards report that they have struck deals for major ship repair projects during Posidonia Exhibition at the Athens Metropolitan Expo in Greece. Greece is the world’s largest

Shipowners: EU must align its CO2 reporting with IMO

JUNE 6, 2016—Through a coordinated campaign, shipowner associations are going to try to persuade the European Union to align its unilateral regulation on the monitoring of shipping’s CO2 emissions with the mandatory

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