The global orderbook of 284 tugs was bolstered by strong contracts so far this year, but ordering could slow down as the Covid-19 pandemic begins to bite
After two very bullish years for tug construction and high levels of newbuilding orders, 2020 also looked promising, with 38 more tugs contracted in Q1 2020.
This plethora of ordering represents the demand for sophisticated tug designs in excess of 70 tonnes of bollard pull, as tugs below this strength struggle to compete in ports handling the world’s largest container ships and very large crude carriers.
Tug technology is moving fast on versatility and power for a variety of demanding roles. Gas propulsion is now being specified for the latest units delivered and on order. However, the arrival of the Covid-19 coronavirus pandemic could change things drastically and halt the advance of tug construction in high numbers.
Statistically, tug activity continues to stand firm with an orderbook backlog totalling 284 units by mid-April. Some shipyards have work stretching into 2022 and 2023.
Europe, including Turkey, has the highest number of tugs on order or under construction, with 86 in the orderbook. This is closely followed by 73 tugs under construction in east Asia, where Chinese and Japanese shipyards dominate. Shipyards in North America have 63 tugs on order as owners continue to invest in their domestic fleets. There are another 31 tugs under construction over the rest of Asia, 27 in the Middle East and just four in South America.
The global orderbook reflects series of orders of popular tug designs, many for shipyard stocks, ready to be sold to owners.
Until now, with so many large tankers, gas carriers and bulk carriers occupying the shipyards, builders could count on speculative constructions being purchased or taken on charter by the port authorities on the routes they serve under long-term contracts of affreightment.
Up to mid-April 2020, 38 new tug orders were contracted, including 14 in east Asia, another 14 in North America and 10 in Europe.
Most of these specify power outputs between 70-95 tonnes of bollard pull.
However, the spread of the Covid-19 pandemic is seriously beginning to bite into shipping with everyone in the industry affected.
Shipyard capacity has been badly hit resulting in production delays and potential drying up of future business. Therefore, Q2 2020 may prove a tough one for tug newbuilding investment, which could get worse if the global Covid-19 crisis is prolonged over many more months.
The economic damage caused by the coronavirus is already increasing with total global newbuilding ship orders down 71% in Q1 2020 compared with the same period in 2019.
This is not good news for future towage business. More port authorities may have to consider contract-hire over operating their own tugs, ultimately boosting employment prospects for the big tug owners.
Among the contracts recently signed was a 10-year extension for Svitzer to provide marine services for Sakhalin Energy Investment Co’s LNG production and export terminal in Far East Russia. This covers LNG carrier movements, berthing and undocking until at least Q4 2032.
Svitzer has gained a five-year extension for tug services from NuStar, one of the largest liquid terminals and pipeline operators in North America covering ship assistance at its terminal in Point Tupper, in eastern Canada.
Svitzer will provide towage and docking support with three tugs to tankers using the oil storage facility until August 2025 through this contract extension.
Port authorities know they are under increasing pressure to hire some of the world’s most powerful tugs if they wish to retain and build on port calls increasingly served by ever-larger ships. This should result in newbuilding orders and stock tug purchasing during 2020.
US construction orders
Noticeable in rising fortunes are shipyards in the US. Much, if not all, of tug business is protected by Jones Act domestic regulations freezing prospects of overseas owners placing business, although this raises newbuilding pricing.
Overseas designs are accepted, however, built on their global operation reputations. There are currently 53 harbour tugs on order in the US, five salvage tugs and five articulated tug-barge (ATB) units, underlining a renaissance in US construction.
Realistically the orders have been spurned by the increase in oil and gas activity which, until now, has been paramount in the nation’s economic performance.
Currently due to falls in demand many container ships have cascaded into other routes, especially into North America where ultra large container ships now call.
The demand for more powerful tugs to meet these big container ships, very large gas carriers and crude oil tankers is being adequately met to date.
Demand for orders has highlighted some previously less-known shipyards while also evidencing the growing number of very powerful units joining tug fleets.
In April, Diversified Marine delivered Hercules, built to a Robert Allan Rapport 2500 design. This is now stationed in Seattle under operational ownership of Crowley Maritime, which has licence to operate this tug in the Pacific Northwest and Californian ports.
Crowley has control of Hercules on a long-term bareboat charter arrangement from Brusco Tug & Barge. This cost-effective azimuth stern drive (ASD) type tug is the most powerful in the Crowley fleet registering a bollard pull of 89 tonnes ahead and 87 tonnes astern on sea trials. It has two Caterpillar 3512 engines, which comply with US Environmental Protection Agency’s Tier 4 emissions requirements. which exceed California’s strict environmental and fuel efficiency regulations.
Another powerful tug – Eileen McAllister – joined the McAllister fleet in April, alongside its sister Tate McAllister, and will attend cruise vessels visiting Port Everglades.
These tugs, built by Washburn & Doughty Shipyard, registered bollard pulls of 84 tonnes on trials.
The ordering resurgence in the USA is evidenced by 63 tugs in various construction stages, 14 of which were firmed in the last quarter.
Among these were seven harbour tugs ordered from Steiner Construction by Maritime Partners to operate in domestic waters. The prototype, Darrell Hiatt, was delivered before it was revealed that six sisters will also be delivered over the next two years.
Maritime Partners provides financing services for the US Shipping market which includes owning or chartering out Steiner-built vessels.
The seven tugs awarded to Steiner are designed by Farrell & Norton Naval Architects with each being 29 m long. The builder is based in Eden Prairie, Minnesota.
Washington-based Naval Sea Systems Command firmed two more sophisticated towing, salvage and rescue vessels after delivery of the prototype.
Five are still to be delivered in a six-unit series with completion of all expected towards the end of 2022 from Gulf Island Shipyards.
US owners have long been exponents of push tow units with barges increasing in capacity. Shipyards are busy building dozens of these for waterway service in the US hinterland. This in turn gives a boost to tug construction.
Two push tow LNG bunkering barges accommodating 4-5,000 m3 of LNG fuel are nearing completion. Designers are said to be working on units double this size as LNG gains more of a foothold in infrastructure and bunkering requirements.
Hydrogen advances
Aside from the growing importance of LNG as a fuel, hydrogen fuel cells are being added to the choice of propulsion on smaller vessels such as ferries and tugs.
French transport group Sogestran intends to build an inland waterways pusher tug and barge unit incorporating hydrogen fuel cell propulsion.
The design is already well advanced, prompting a confident Compagnie Fluvial de Transport, a subsidiary of Sogestran, to invite tenders from shipyards. The push tow duo will ply between Lyon on the river Rhone, to the city of Marseille.
A mobile fuel tank may be removed and refilled with green hydrogen created at an electrolysis plant taking power from the Rhone hydroelectric dams.
Compressed hydrogen capacity is enough to power the pusher tug for two weeks. A second tank will be available for use while the first one is refilled with compressed hydrogen.
The order will be supported by a €6.8M (US$7.3M) project under the EU’s Fuel Cells and Hydrogen Joint Undertaking. Funding will be provided from the European Union’s Horizon 2020 framework project. Delivery of the push tow unit is scheduled for Q3 2021.
Japan renaissance
In Japan, there has been an upturn in tug construction contracts from domestic owners and a multi-vessel export order. Kanagawa Zosen secured contracts for five tugs with three of these destined for India and the other two for Japanese harbour work.
India-headquartered Adani Group returned to Kanagawa for three new harbour tugs, for deliveries in H2 2022. The 495-gt vessels will have an overall length of 34.5 m and breadth of 11.4 m.
These are in addition to orders from Adani Group in 2019 for seven 34.5-m harbour tugs scheduled for delivery between June 2020 and December 2021.
India needs more powerful tugs as its ports expand and prepare to assist larger container ships, tankers and gas carriers.
Kanagawa Zosen also secured newbuilding contracts from domestic owners, with one each from Kawasaki Kisen and Fukushima Kisen. These will both have two Niigata diesel main engines with power ratings of 2,040 kW.
Kawasaki Kisen’s order is for a tug with an overall length of 38 m, breadth of 10.2 m, with delivery slated for July 2020.
Construction of the 32.5-m tug ordered by Fukushima Kisen will be well advanced as it is scheduled for delivery in September 2020.
In addition, Kanagawa Zosen is building a 290-gt, 40-m harbour tug for Kaisho Marine, with delivery due in Q3 2020. The shipyard has benefited from tugs ordered to renew Japan’s ageing tugboat fleet with new technology and greater power to handle larger ships.
Tug orderbook as of mid-April 2020 >20m
Shipbuilder region |
Type |
|
Asia |
|
|
|
Harbour tug |
31 |
Europe |
|
|
|
ATB |
1 |
|
Harbour tug |
78 |
|
Pusher tug |
2 |
|
Salvage tug |
5 |
Far East |
|
|
|
ATB |
4 |
|
Harbour tug |
69 |
Middle East |
|
|
|
Harbour tug |
25 |
|
Tractor tug |
2 |
North America |
|
|
|
ATB |
5 |
|
Harbour tug |
47 |
|
Salvage tug |
5 |
|
Tractor tug |
6 |
South America |
|
|
|
Harbour tug |
4 |
Total |
284 |
Source: BRL Shipping
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