Marine Log - June 2008 - (Page 61)

TUGS&BARGES The 80 ft ASD tug Madeline, recently delivered by GladdingHearn Shipbuilding HIGHER DEMAND HIGHER PRICES f you are waiting for the price to drop for a newly built tug or barge, don’t bother. Prices for tugs have risen 50% or more over the last three to four years in the U.S. and are expected to continue to climb for at least another five years, according to a vessel broker. Speaking at the recent Marine Log’s Tugs & Barges 2008 Conference & Expo in Stamford, Conn., vessel broker John Braden of Marcon, Inc., Coupeville, Wash., said, “The demand for newbuildings worldwide has fueled unprecedented inflation in prices for engines, thrusters, steel, paint, wiring and all other products needed to construct a vessel or a barge.” Added Braden, “Shipyard capacity and experienced labor are also in short supply, further driving up newbuild prices.” As a result of the shipbuilding surge over the last five years and resulting inflation, Braden said the once tried-andtrue rules of thumb for estimating the newbuild price of a tug or a barge have had to be thrown out the window. “Tugs built by U.S. or European yards prior to 2002-2003 could be ‘ballpark’ estimated to cost about $1,000 per bhp,” said Braden, “depending on their final outfitting (i.e. a basic 4,000 bhp shipdocking tug would run around $4 million). This www.marinelog.com I THE RISING PRICE OF TUGS (Avg. Tug Sales Price per BHP) 2000 $352 33 2001 $222 37 2002 $202 36 2003 $296 33 2004 $372 30 2005 $340 36 2006 $502 36 2007 $645 29 2008 $774 21 Actual Sales Price/BHP Average Age figure has recently climbed from $1,500 to $1,600 to $1,700 and above for U.S. yards.” Meanwhile, prices at Turkish yards have risen, too. “Turkish yards that delivered 5,000 bhp/65 metric ton bollard pull azimuth tugs at around $6.8 million (about $1,360 per bhp) in 2005 are now charging around $10.5 million ($2,100 per bhp) for the same vessels,” Braden told delegates. “This amounts to a 54% increase in price, due mainly to strong demand, but also to the devaluation of the U.S. dollar versus the Euro. In Euro terms, the prices at Turkish yards went up by about 28%,” he added. Generally, most shipyards worldwide are building these tugs with U.S. or European engines, propulsion equipment and machinery. As an example, Braden cited the case of one European owner building in Southeast Asia. According to Braden, that owner has seen the price of its new 60 ton bollard pull shipdocking tugs jump in price about 35% over 20042005. “This European owner,” said Braden, “expects that newbuilding tug prices will continue to remain high and increase for at least another five years as the demand continues at a faster pace than shipyards (and diesel engine manufacturers) can supply.” U.S. HAS LARGEST TUG FLEET By far, the U.S. has the largest fleet of sea-going tugs by bhp, with 1,446 tugs with a total of 4,237,482 bhp, according to Lloyd’s Register. Japan is the next nearest, with 817 tugs with a total of 2,337,627 bhp. What’s noteworthy is that despite the recent newbuilding surge, the U.S. sea-going tug fleet still has an average of 34 years old, possibly pointing to some additional replacement demand. JUNE 2008 YEARBOOK MARINE LOG 61 http://www.marinelog.com

Table of Contents Feed for the Digital Edition of Marine Log - June 2008

Marine Log - June 2008 Contents Editorial Second Thoughts Update Inside Washington Innovation Needed to Meet Crew Shortage Optimism Abounds Despite Slowing Economy Can Shipping's Shopaholics Keep Up the Buying Binge? Can Congress Keep Navy Shipbuilding Off the Rocks? Fitting the Ultra-deepwater Pieces Together Generation Next Higher Demand, Higher Prices Demand Up For Large Combination Vessels The Dirty Truth About Emissions SSAS: Realizing Its Potential Fuel Saving Technology Newsmakers Tech News Contracts Events Buyer's Guide Website Directory ML Marketplace Tech Talk

Marine Log - June 2008

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