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Tug Technology & Business

July 2016 : Total of 79 tugs on order worldwide

Thu 21 Jul 2016 by Barry Luthwaite

July 2016 : Total of 79 tugs on order worldwide

Many relatively small shipbuilders are still finding that orders for harbour and heavy duty escort tugs are in short supply. There is encouraging potential for more tug orders, and clear regional variations, but owners remain hesitant.

The collapse of the offshore market has led to some smaller yards showing interest in the construction of large, and versatile anchor handling tugs, as well as harbour towage craft. Take up has however been minimal, to date.

There are some regional bright spots amidst the gloom, with the growing success of southern European builders being a case in point. US yards are also increasing their tug building business, helped by the growth of oil exports and the subsequent increase in vessel calls by overseas tanker owners, who require towage services when in port. Indeed, US ordering activity is perhaps most prominent at the moment, particularly when it comes to contracts for multiple tugs from a single owner, where there have been several such orders for US builders over the past year.

One of the latest deals has benefited Conrad Industries, which has secured a commitment to build four 80 tonnes bollard pull harbour tugs for Young Brothers Ltd, a subsidiary of Foss Maritime. Powered by two General Electric 8L25MDC EPA Tier IV emissions compliant exhaust gas recirculation engines, the tugs will link up with the powerful barges in the Young Brothers’ fleet, with deliveries due from the first quarter of 2018 through to the first quarter of 2019. Known as the Kapena class, the design is based on Damen’s Stan 3711 design and the quartet is valued at US$80 million.

Following this success, Conrad’s shipyard booked two ATB units from Harley Marine Services. The latter offers marine transport services in every major US West Coast port, Alaska, New York and the Gulf of Mexico.

While US yards are benefiting from an increased orderbook, driven by positive domestic port and inland waterway trends, shipbuilding productivity remains at a relatively low level and very few builders complete vessels on time. Some of the tug orders being placed in the US are protected by the Jones Act, which has had the effect of making US yards less competitive with those in other countries and so limits the export business they are able to secure. The US tug building business is for the time being very much focused on the domestic market, with the Jones Act preserving the status quo and doing little to encourage yards to broaden their horizons.

China, which has not in the past been greatly noted for export tug business, is sharpening its act to go for more overseas sales. Licensing agreements are already in place for Damen designs, on the basis of which more success is expected. Already several stock hulls for ASD tugs are available and, as it is much cheaper to build in China, these may well find willing markets.

As a sign of things to come, a so far unnamed Chinese yard has secured an order from Atlantic Navigation Holdings for the construction of five multi-purpose tug units, complemented by two offshore AHTS vessels. All seven will be chartered for at least five years to work in Middle East waters, helping ports and terminals cope with the increased numbers of large vessels serving this region’s tanker and container trades.

Reflecting on the Damen strategy, of building for stock, with production in low cost area such as China, Vietnam and Romania, one cannot argue with the fact that ready availability of standard design tugs is a huge advantage. In a recent deal, Rimorchiatori Augusta selected Damen’s Song Cam yard in Vietnam for the construction of a single 60 tonnes bollard pull ASD 2810 design for duties in Italy. Until recently such an order would have been expected to be placed in Europe, but the very prompt delivery was a crucial inducement in terms of decision making by the owner.

Looking for trends which could boost tug orders in future is difficult. The oil price is moving up, which is good news for some, including those depending on the offshore market and oil terminal operations for example, but not others. Many tug owners will become increasingly concerned that diesel-only driven tugs will be more expensive to operate, and they have so far been slow to grasp dual-fuel technology. This is likely to change as, in the long run, it will be cheaper to operate on LNG. Next year Gondan will deliver Europe’s first dual-fuel tug to Norwegian owner Ostensjo. This is the first of three vessels destined to serve Norway’s LNG Melkoya terminal as escort tugs for LNG carriers and therefore ideally placed to burn the fuel.

It is still just about possible to look at the market and know who will invest in newbuildings and who will only buy secondhand tonnage, but this is less easy than it was in the past. On the one hand distress sales have been increasing and full advantage is being taken to acquire individual vessels or whole fleets by those active in the secondhand market. On the other, ordering new can be the only way to get the right tug for the job, given the need for greater power and manoeuvrability as ship sizes increase.

Although tugs have long lives and can be upgraded, more ports and tug operators perhaps could, and should, order newbuilding tonnage to keep up with new technology. There are signs that this in fact starting to happen in some regions.

There is certainly a shift towards newbuildings in South America, where typical container vessels are now around 11,000 teu capacity, compared with 4,000 teu not so long ago, requiring newer, more powerful tugs in the region’s ports. This has triggered changing emphasis in terms of replenishing tug fleets, with a move towards larger, new tugs.

Recent months have witnessed newbuilding tug orders from companies in Chile, Peru and Argentina. As an example, the 434 grt harbour tug Bernador joined the fleet of Argentina’s Maruba at the end of August, from Nanyang Shipbuilding Co, South Korea, and represents the operator’s first newbuilding in an 11-strong tug fleet. Mexico, Venezuela and Brazil are other markets providing fresh impetus, with operators looking for powerful, agile tugs able to handle today’s market demands.

Shipbuilders in the region could well benefit eventually, although for the time being yards outside of the region seem to be building the majority of new tugs destined for this part of the world. If this changes, look out for yards in Brazil especially taking advantage, possibly with assistance in terms of licensing deals from established players like Damen and Sanmar.

region/builder owner no design bollard pull year
Africa          
South Africa          
South African Shipyards Transnet 2   100 2017-2018
Asia          
Malaysia          
Boustead Shipbuilding* KFS Support Services 3   45 2017
Europe          
Netherlands          
Damen Maaskant Novatug BV 2     2017
Damen Shipyards Bugsier-Reederei 1 ASD 2411   2016
Damen Shipyards Serco 1     2017
Romania          
Damen Galatz Bogser Team Oresund 1 Damen ASD 2810   2016
Damen Galatz* Port of Caen 1 ADS 2810   2016
Damen Galatz Rimorchiatori Riuniti 2 Damen ASD 2913   2016-2017
Damen Galatz SAAM SMIT Towage 1 Damen ASD 2913   2016
Spain          
Armon Gomera  1     2016
Zamacona Boluda Group 1   70 2016
Zamacona Boluda Group 1     2016
Turkey          
Bogazici Denizcilik Bugsier-Reederei 1   80 2016
Dentas Gemi Insaa Bugsier-Reederei 1   80 2016
Sanmar Denizcilik Svitzer AS 2 RAstar 2800 80 2017
Sanmar Denizcilik Svitzer AS 6 RAstar 2800-E 70 2016-2017
Sanmar Denizcilik Albros Denizcilik 1     2017
Far East          
China          
Chinese Yard Atlantic Navigation Holdings 5     2017
Jiangmen Hantong* Second Engineering Co 1     2017
South Korea          
Nanyang Shipbuilding Maruba 1     2016
Thailand          
Sea Crest Shipyard* Thailand Port Authority 1     2017
Vietnam          
Damen Song Cam* Ian Taylor Peru 1 ASD2810   2016
Damen Song Cam* Rimorchiatori Augusta 1   60 2016
Damen Song Cam Svitzer AS 4 Damen ATD 2412 DESIGN 65 2016
Song Thu Company SAAM SA 2 Damen ASD 2411 70 2016
Triyards Vungtau Greenbay Marine 4 RAstar 3400   2017
Middle East          
Egypt          
Port Said Suez Canal Authority 4     2018
North America          
USA          
Bay Shipbuilding Co US owner 2     2017
Chesapeake Shipbuilding Inc Vane Brothers 3   40 2016-2017
Conrad Industries* Young Brothers Ltd 4 Damen 3711 80 2017
Conrad Orange Yard* Harley Marine Services 2     2017
Eastern Shipbuilding Bay-Houston Towing Co 3 Z-Tech 2400 60 2017
Eastern Shipbuilding Suderman & Young 3 Z-Tech 2400 60 2017
Great Lakes Shipyard Great Lakes Towing Co 2 Damen Stan Tug 1907   2017
Horizon Shipbuilding* McAllister Towage 2   90 2017
JT Marine Inc* Vessel Chartering LLC 1     2017
Main Iron Works Bisso Marine Co Inc 1   0 2017
South America          
Brazil          
Inace Shipyard Svitzer AS 4   60 2017
           

Table shows all tugs  contracted in the 12 months to the end of June 2016 above 20m in length.

Source: BRL Shipping Consultants 

         
           
           
* indicates tugs ordered 1st April- 30th June 2016          

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