Now we are at the tail end of the year, tug owners’ thoughts are turning to what will be required for 2019 and perhaps even 2020
Certainly, I have started forecasting what could be in store for the Wingrove family in 2019 and am stocking up for the northern hemisphere winter.
So has tug builder Damen Shipyards. It has built a stock of 24 vessels, most of them tugs, in China and shipped them to the Netherlands in one batch for final outfitting and commissioning.
As soon as its latest batch of azimuth stern drive (ASD) and Stan design tugs arrived, Damen announced a tug supply contract.
Damen took delivery of ASD tugs, Stan tugs, Stan pontoons, Shoalbusters, multicats and launches on 28 October. Two days later, it announced it had secured a contract to deliver a new workboat from owner Herman Senior.
This will be a Shoalbuster 2308 design vessel, to be named Teddy, which has already been built speculatively. This rugged and versatile workboat will be completed at Damen’s shipyard in Hardinxveld in the Netherlands. Damen said the vessel will be available for the new owner in March or April 2019.
It is clear that this strategy, of building stock on a speculative basis and then selling them on, works for Damen. It also works for Turkish tug builders Sanmar, Uzmar and Med Marine.
These shipbuilders have loyal clients that purchase tugs either before they are completed or after they have been brought into service in Turkey. For example, Svitzer returns regularly to Sanmar for newbuildings for its European and African operations.
These shipbuilders will continue to construct tugs on speculation and for their own fleets next year. At the end of September this year, they announced plans to add more than 20 tugs to the orderbook during the first nine months of 2019, ensuring they have full orderbooks for the next 12 months.
While owners continue to purchase partially- or full-built tugs from shipyard stock and affiliated fleets there will be benefits for builders to follow this strategy.
But the tug market could become over-supplied if they continue building stock vessels. This will be a problem if warnings of competitive regional markets becomes a reality.
Svitzer Europe managing director Kasper Friis Nilaus said the market his fleet covers is highly competitive and rates are under pressure. SAAM Smit Towage Brasil chief executive Pieter van Stein said the market in this key South American country has become too competitive to contemplate purchasing newbuildings. The full reports are in the upcoming issue of Tug Technology & Business.
With these comments from some of the largest tug operators in mind, I expect the market will turn and then yards will be left with stock they cannot shift. Will this be in 2019, or beyond? That needs a crystal ball, but I expect there will be a turning point and it may come soon.
Therefore, the strategy of building for stock works for now, but it could turn sour in the future.
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