Tank Barge Market Report - October 2018

Following is a breakdown of both foreign and U.S. tank barges officially on the market and available through Marcon. Not included are those barges not officially on the market, which we may be able to develop on a private and confidential basis.

Of the 3,740 barges and 13,350 vessels we currently track, 700 are tank barges with 31 each inland and ocean or coastal barges officially on the market for sale. Three of the 31 inland barges are 10 years of age or less. Fifteen or 48.4% of the inland barges are 25 years of age or over. The oldest inland tank barge listed today is a 75 year old, 9,000BBL tank barge previously used for transporting #2 oil in the U.S. Great Lakes. This old lady is counterbalanced by two U.S.-flagged 2009-built 1,600mt capacity tank barges located on the U.S. Gulf Coast. Nine double hull inland barges listed in the Americas from 11,066-30,000BBL capacity were built after 2000. One year ago, 56 inland barges were available with an average age of 22 years and five years ago, 46 inland barges were available with an average age of 35 years. The inland barges currently available for sale average 26 years old. Some tonnage has started working again and several units went to scrappers, however, we continue to see excess barges available for sale.

Of the 31 ocean/coastal barges, nine are 10 years of age or less. Fourteen or 45.2% of the ocean & coastal barges are 25 years of age or over with the oldest one, a U.S. flagged, double-hull, 119,000BBL barge, built in 1970 and retrofitted in 2006. This is countered by a newly built 280’, 42,000BBL double hull oil barge. In November 2013, 48.5% of the 33 ocean and coastal barges listed for sale were 25 years of age or over, with the oldest barge being a 1965-built 53,000BBL barge in West Africa. Today, two less and five more ocean/coastal barges are officially available for sale compared to five years and one year ago, respectively. Average age of all ocean/coastal barges for sale today is 23 years old (1995), compared to 24 years (1993) last year and 24 years (1989) five years ago. The closeness in avOf the 31 ocean/coastal barges, nine are 10 years of age or less. Fourteen or 45.2% of the ocean & coastal barges are 25 years of age or over with the oldest one, a U.S. flagged, double-hull, 119,000BBL barge, built in 1970 and retrofitted in 2006. This is countered by a newly built 280', 42,000BBL double hull oil barge. In November 2013, 48.5% of the 33 ocean and coastal barges listed for sale were 25 years of age or over, with the oldest barge being a 1965-built 53,000BBL barge in West Africa. Today, two less and five more ocean/coastal barges are officially available for sale compared to five years and one year ago, respectively. Average age of all ocean/coastal barges for sale today is 23 years old (1995), compared to 24 years (1993) last year and 24 years (1989) five years ago. The closeness in average age suggests that while older barges have been disposed of, relatively younger units are coming onto the market.erage age suggests that while older barges have been disposed of, relatively younger units are coming onto the market.

Twenty-four of the inland tank barges which Marcon has today listed for sale are located in the U.S., followed by six in Europe and one in Latin America. Fifteen ocean / coastwise barges listed for sale are in the U.S., followed by eight in Southeast Asia, two each location unknown, Canada and the Far East and one each in Europe and the Mid-East. Thirty-seven of the 62 tank barges Marcon has listed for sale worldwide are double hull. Twenty-eight of these are U.S. flag of which five are two to ten years old, 12 are 11 - 25 years old and the remaining 11 are 37 - 55 years of age. The foreign double-hull barges range from a new build in the Far East up to 24 years old in Europe.

Marcon's Market Comments
The US inland barge market is steady with presently good demand for both hopper and tank barges. A number of tank barge operators report inland utilization in the low to mid 90% range during the third quarter of 2018, an improvement over 2017. In the coastal market, barge utilization rates were in the 80% range during the 2018 third quarter. There is a shortage of second-hand smaller ocean going tank barges for sale (in the 25,000 to 50,000 bbl range). There are several potential buyers (both domestic and foreign), but little to offer. It is also a slow market for medium size ocean barges. For us lately, it seems that everything we get for sale is either too big, not classed or has competition issues. From close operators, we have been told that the coastal market is "over tonnaged", and that the oil majors are looking only at securing any long term business against very favorable terms in their interest (i.e. rates of barely break even for multi-year charters). Spot market is pretty flat too. Just too many barges out there in the 80,000BBL coastal category to meet what demand there is. Tank barges specifically are benefiting from increased domestic US petroleum production and the inability of pipelines to keep up. While this benefit is seen as potentially affecting long term demand for tank barges, it is at the cost of recovery in the offshore oilfield, considering the majority of new US production is coming from cheaper and quicker to develop onshore projects.

Commercial Marine Brokers since 1981

Tank Barge - October 2018 Market Report.pdf