Tug Market Report - Nov 2021

Of the 13,609 vessels and 3,718 barges that Marcon tracked as of November 2021, 5,221 are tugs with 475 officially on the market for sale worldwide, down 141 or 22.89% from one year ago, November 2020, and down 180 or 27.48% from November 2016. 94.07% of U.S. and 47.90% of foreign tugboats for sale are direct from Owners. 111 or 23.37% of the tugs worldwide, primarily foreign flagged, were built within the last 10 years, are newbuilding re-sales or currently under construction - compared to 27.11% one year ago and 34.05% five years ago. 74 (15.58%) are over 50 years of age. Nine have no age listed. The oldest tugs Marcon currently has listed are an 87' LOA, 1,500BHP single screw tug and a 100' LOA, 1,700BHP twin screw tug, both built in 1943 and located on the U.S. West Coast. These "old ladies" are balanced by four newbuildings between 1,490BHP and 5,630BHP scheduled for delivery in 2021. Two newbuildings are azimuthing for delivery to the Far East and Mediterranean, with the remaining two traditional twin screw tugs for delivery to the U.S. and Southeast Asia.

Marcon's Market Comments

The majority of tugs Marcon tracks for sale as of this report are in the US with 117 tugs officially on the market (vs. 126 one year ago), followed by 80 in Southeast Asia (111), 58 in both the Far East (72) and in the Mediterranean (86), 54 in Europe (60), 33 in Latin America (30), Mid-East with 31 (54), 15 in the South Pacific (24), 10 where location unstated (13), 9 in the Caribbean (21), 6 in Canada (3) and 4 in Africa (14). Where machinery is known, CAT diesels power 126 or 27% of the tugs listed for sale. This is followed by 70 vessels with EMDs, 55 Cummins, 44 Yanmar, 42 Niigata, 12 Wartsila and 11 Deutz/Deutz-MWM powered tugs. 106 tugs are powered by other machinery from Akasaka to Zibo with one Fairbanks Morse tug on the market.

Five years ago, 34.05% of tugs for sale worldwide, primarily foreign flag, were built within the previous 10 years compared to 23.37% today. Then 9.77% of the tugs on the market were 50+ years old compared to 15.58% today. At that time, Marcon had two tugs older than 75 years compared to five today. The average age of all tugs that Marcon has for sale worldwide today is 17 years, with 2004 average build date, compared to 25 years, 1991 average built, in November 2016. The U.S. had the largest selection of tugs listed in 2016 with 138 available (21.1%), followed by 135 in Southeast Asia (20.6%), 74 in the Mid East (11.3%), 72 in Europe (11.0%), Far East 65 (9.9%), Mediterranean 53 (8.1%), 24 each in Latin America and South Pacific (3.7% each), 21 in the Caribbean (2.9%), 16 Africa (2.4%), 15 Canada (2.3%) and 9 each in Southwest Asia and where location is unknown (1.4% each).

Looking at tugs for sale worldwide, conventional twin screw tugs lead with 298 (62.7%) available, followed by 111 azimuthing (23.4%), 46 single-screw (9.7%), 15 Voith Schneider tractors (3.2%) and 5 triple screw (1.1%). This is fairly comparable to five years ago when 15.1% of the 655 tugs for sale were single screw, 60.0% twin screw, 22.4% azimuthing, 2.0% VS tractor and 0.5% triple screw tugs. Bearing in mind that we are focusing on those available for sale, it seems that for the past five years, azimuthing and conventional twin screw tugs have maintained steady positions in the market. Single screw tugs are mostly relegated to nearly zero commercial work, except in certain specific cases. Available for sale units have dropped considerably with many of those being scrapped due to age and condition. It is noted that in mid-November 2021, Sea-Web reported 2,097 tugs worldwide scuttled, broken up or to be broken up world-wide. This is up 34.6% from November 2020's 1,558. Prior reports tracked the scrapping at around 3%, so this confirms our observations that many companies did aggressively scrap excessive tonnage amidst the economic fallout of the COVID 19 pandemic in various sectors of the market.

Marcon's database shows 180 fewer tugs officially for sale than five years ago in November 2016 with largest shifts in the lower horsepower categories. There are 70 fewer tugs are today listed in the 2-3,000HP range with average age increasing from 27 to 33 years. The 3-4,000HP range lost 40 tugs while their average age increased from 23 to 26 years. 28 fewer tugs are listed in the 1-2,000HP range, with average age increasing from 28 to 31 years old. The under 1,000HP tugs category decreased by 19 with a three year increase in age to 38 years. The 4-5,000HP range decreased by 17 tugs with average age rising from 18 to 20 years. There are nine fewer 5-6,000HP tugs with average age increasing from 14 to 19 years now. There were minor changes in the higher horsepower ranges as far as number available for sale and average age. In summary, we saw a 27.48% drop in listings, all in the under 6,000HP ranges and average age overall increased by eight years.

Marcon has closed ten sales and one charter in 2021 after ending 2020 with 22 sales and charters completed. Many of the 2020 deals were well in the works before the Covid-19 situation developed and oil prices crashed. Throughout most of 2020 and early 2021, the market was extremely slow both domestically and world-wide. We continue to see a pickup in inquiries and inspections and have multiple sales pending at this time as business rebounds. We are hopeful, with the current pace of business, to return to pre-Covid sales levels in 2022. There remains uncertainty in the market, but prices have been moving up for various classes of vessels and barges. This is likely the result of both increased demand, as well as increased replacement cost due to inflation. In 2021, Marcon recorded the sale of six U.S.-flagged tugs, ages 10, 11, 23, 24 and two at 45 years old, and three foreign-flagged tugs, ages 22, 40 and 51 years old. In 2020, we sold a total of seven tugs with average age of 47 years, all U.S.-flagged tugs. As Covid-19 slowly subsides and economies turn around with higher oil prices, fiscal stimulus and delayed projects coming online, Marcon sees 2022 in a positive light.

 

Commercial Marine Brokers since 1981