Tug Boat Market Report - August 2018

Following is a breakdown of available anchor handling coastal, ocean and harbor tugs. Separate reports available on inland river pushboats and anchor handling tug supply vessels.

Keeping track of the overall numbers has always been key to Marcon’s success. Of the 13,342 vessels and 3,769 barges we currently track, 5,057 are tugs with 523 officially on the market for sale worldwide, down 70 or 11.80% from one year ago, August 2017, and down 145 or 21.71% from August 2013. 59.00% of foreign and 97.56% of U.S. tugboats for sale are direct from Owners. 171 or 32.70% of the tugs worldwide, primarily foreign flagged, were built within the last 10 years, are newbuilding re-sales or currently under construction - compared to 32.38% one year ago and 31.59% five years ago. 65 (12.43%) are over 50 years of age. Eight have no age listed. The oldest tug Marcon currently has listed was built in 1912 and is very last of over 1,000 first generation steam trawlers and halibut fishers. This "old lady" is balanced by 11 newbuildings between 3,200BHP and 8,000BHP scheduled for delivery in 2018 and 2019. Nine newbuildings are azimuthing, with one traditional twin screw and one articulated tug twin screw. We are the exclusive brokers for one 8,000BHP ATB built in the Pacific Northwest (photo left).

Market Overview

The majority of tugs Marcon tracks for sale as of this report are in the US with 120 tugs officially on the market (157 one year ago), followed by 108 in Southeast Asia (129), Mid-East with 56 (60), 50 in Europe (65), 43 each in the Far East (50) and Latin America (28), 42 in the Mediterranean (25), 21 in the Caribbean (15), 13 in Africa (18), 11 in the South Pacific (20), 6 each in Canada (15) and where location unstated (9) and 4 in Southwest Asia (2). CAT diesels still power most tugs we have for sale with machinery in 145 or 28% of the tugs Marcon has listed. This is followed by 59 vessels each with Cummins and EMDs, 50 Yanmar, 41 Niigata, 22 Mitsubishi, 20 GM/DD and 16 Wartsila powered tugs. 111 tugs are powered by machinery from other manufacturers from Akasaka to Volvo with four Fairbanks Morse boats still on the market.

Five years ago, 31.59% of tugs for sale worldwide, primarily foreign flag, were built within the previous 10 years compared to 32.70% today. Five years ago, 7.78% of the tugs on the market were 50+ years old compared to 12.43% today - which at first surprised me because I do not think of a 1968 built boat being necessarily that old after personally sailing on more vintage hulls. The first tug I worked as mate on was built in 1931. The average age of all tugs we have for sale worldwide decreased slightly from 26 to 25 years (1993 build dates now vs 1987 in 2013). Southeast Asia then had the largest selection of tugs listed with 129 available (19.3%) tracked by Marcon. This was followed by 115 in Europe (17.2%), 103 in the United States (15.42%), 79 (11.83%) in the Far East, Mediterranean 69 (10.33%), Mid-East 43 (6.44%) and Caribbean 34 (5.09%).

Looking at all the types of tugs for sale worldwide, conventional twin screw tugs still prevail with 323 (61.8%) available. These are followed by 115 azimuthing (22.0% - and growing), 70 single-screw (13.4% - and shrinking), 11 Voith Schneider tractors (2.1% - never a high percentage) and four triple screw (0.8%). As a comparison and demonstrating the trend in propulsion, five years ago 21.0% of the 668 tugs for sale were single screw, 60.3% twin screw, 14.7% azimuthing and 3.4% VS tractor tugs. More ASD tugs are being listed today worldwide than single screw tugs as ASDs become more common worldwide. It is difficult to get a precise figure handle of tugs, mostly older single and twin screw, being scrapped, but Sea-Web reports 1,383 tugs worldwide broken up or to be broken up. We expect this to continue, although we do have several single screw boats that may be candidates for conversion to yachts if someone is crazy enough to dive into a project. 145 fewer tugs are officially for sale than five years ago in August 2013, but increasing the number of listings is only a phone call or e-mail away. Most of the decline in listings were lower horsepower boats. 174 fewer tugs are today listed in the under 3,000HP range. The 5–6,000HP range gained 19 tugs while their average age decreased from 24 to 16 years. 3-4,000HP tugs for sale increased by six boats from five years ago, while their average age decreased slightly from 22 to 21 years. Four more tugs are also available each in the 4-5,000HP range (average age 17 years) and in the 6-7,000HP range (average age 35). There still is demand for good, higher horsepower, modern tugs (especially ASDs) which has seen a 4 tug drop in the 7,000HP and above units due to a combination of sales and employment. The few higher horsepower tugs we have listed are generally older conventional boats with average age 25 (1993) versus 22 years (1991) five years ago - basically some of the same boats, but only older. We have seen an increase in sales this year compared to 2017, but regretfully this is due to owners clearing under-utilized or laid up vessels out of their fleets - " blue light specials" as we refer to them in house, in honor of Kmart's popular discounts. Marcon has sold twelve tugs so far this year with an average price per BHP of $64.84 and an average age of 39 years. Two tugs were 17 years old and sold for $294.44/BHP, whereas the rest averaged 43.4 years of age and $61.83/BHP. All 12 tugs were sold within the US. Four tugs were sold in 2017 for average $312.53/BHP with average age of 33 years, which included two extremes: one sale was basically for the zero hours main engines, while another was for a 5,200HP 11 year old tug. As of beginning of August, Marcon's Sales-to-Asking-Price ratio was 70.69%, lower than 2017's 81.49% and 2016's 91.70%. The majority of Marcon's 2018 sales have been within the US with one foreign to foreign and three US to foreign sales either in the Caribbean or Latin America.

Commercial Marine Brokers since 1981

Tug Boat - August 2018 Market Report.pdf