Crew Boat Market Report - September 2019

Marcon presently has the following crew boats, pilot boats and launches officially available for sale, both domestically and abroad. Others can be developed on a private and confidential basis.

Market Overview

Of the 13,502 vessels and 3,675 barges Marcon tracks, 1,152 are crew, fast supply & pilot boats with 225 officially on the market for sale, plus we have 33 boats available for charter worldwide. 40.9% of the boats officially for sale are U.S. flag. 60 crew boats for sale worldwide were built within the last 10 years. 74 boats, or 32.89%, are 25 years of age or older. The oldest boat listed is a 51', 460BHP 1961 built and located U.S. West Coast. This vessel is counterbalanced by 11 foreign 2019 built 32.5' to 78.4' LOA crewboats, nine of which are located in the Mediterranean and two in Southeast Asia.

As of end September, Marcon's Sales Price to Asking Price ratio for all types of vessels sold in 2019 is 92.15%, an increase from 2018's 77.79% and 2017's 81.49%. Of our sales, 22% were at asking price, while the remaining sales were at as low as 50% of asking. This bears out what we've been seeing elsewhere - that sellers' prices have been above what the market is bearing for vessels of their age and condition or at just above scrap levels in order to get the vessel sold. 62.7% of our sales so far this year have been US seller to US buyer, 34% were US seller to foreign buyer, and 3.3% were foreign to foreign sales. Vessels were sold into Canada, the Caribbean, South Pacific and Southeast Asia.

Unfortunately, nothing has really changed in the market since our last report in March. The market is as bad or worse than it has been since 2015 and there is no improvement in sight. As brokers we are aware of some sales in this segment, but they are far and few between and at greatly reduced prices, though in the Asia-Pacific region, we are hearing of a few more sales but those from companies consolidating or outright liquidating. Utilization levels have increased slightly in certain regions, but at rates which do not justify any activity on behalf of the Owners. A typical sale which we are seeing is a vessel has been laid up since the drop in 2015. Dry-docking for Class or USCG is overdue, and the original asking price has continued to depreciate until a deal at often 25% of the original asking level post 2014 high water mark. Sales of older units are effectively non-existent. Sales of newer vessels with high book values don't really exist as those parties continue to try and wait out the market. As brokers, we are not really seeing any sales of older tonnage into alternate trades for older units (1980s-1990s built) as we had often seen in past down turns. It will continue to take time to reduce the excess capacity regardless of the turnaround point in the market, and if the turnaround is two years' away, then the competition from lower priced vessels acquired during the downturn will plague those fleets with high book values, and companies reorganized in bankruptcy. The competition will be tough for a long period of time as a result, and this will continue to haunt the industry's recovery efforts well into the future. Sea-Web reports 29 crew & pilot boats broken up, to be broken up or scuttled. 1,162 offshore support vessels of all types also met this fate.

The dominant location for second-hand tonnage on the market September 2019 is the U.S. with 41.8% (down from 44.6% one year ago and up from 30.8% five years ago) followed by Southeast Asia with 15.1% (up from 11.8% one year ago and down slightly from 15.2% five years ago), Mid East with 10.2% (up from 8.5% last year and 7.1% in 2014), Mediterranean with 9.8% (up from 4.3% in 2018 and down from 10.0% in 2014) and Europe with 9.3% (down from 12.8% last year and 19.0% in five years ago). Where location is unknown is 1.8%. The rest of the globe makes up the final 12.0% of locations. Of the crew, pilot boats and launches listed, the most popular engine is GM/DD in 59 of 222 boats where engines are given, followed by 57 CATs, 56 Cummins, 10 each with MAN-B&Ws and MTUs, 6 each Ivecos and John Deeres and 18 other types, ranging from DAFs to Yanmars. Compared to one and five years ago, GM/DDs were the most popular engine with both CATs and Cummins each increasing their share by 10 percentage points since 2014.

The number of crewboats officially on the market for sale by Marcon is 225, up seven, or 3.21%, from our last report published in March 2019. This is 14, or 6.64%, more than one year ago in September 2018 and five years ago in August 2014. Composition of LOA ranges in the last year has changed with the biggest shifts being 46 more 40'-49' LOA with an average age of 1999 (up from 1995 one year ago), 17 fewer over 130' LOA (average age now 2003 vs. 2002 one year ago), ten fewer 100-109' LOA (1991 vs. 1992) and eight each more 30'-40' LOA (1999 vs. 1998) and 60-69' LOA (1990 vs. 1983) crew boats offered. As of this report, 26.67% of the crew boats available are less than 10 years old, up from the 23.22% reported one year ago, but down from the 27.96% reported five years ago. In looking at overall fleet age and then by U.S.-flagged versus foreign flagged, over the past five years we can see a slight increase in the age of crew boats on the market. Five years ago, the average age of all on the market through Marcon was 21 years, compared to 22 years one year ago and 21 years as of this report. Older U.S.-flagged vessels remain on the market, aging slightly from 28 years in both 2014 and 2018 to 29 years in 2019. Foreign flagged crew boats also aged slightly, but are still almost a decade and a half younger than U.S. vessels, going from 13 years to 14 years and then to 15 years as of this report date.

 

Commercial Marine Brokers since 1981