2019 started with a steady stream of tug newbuilding orders with yards securing 16 contracts compared with 27 in Q4 2018
The ship towage scene is changing, as evidenced by fewer but more powerful tugs being contracted. 2019 is off to a steady start with 16 tugs ordered illustrating that new trends are having an impact on contracting.
Port authorities, owners and designers are collaborating to employ vessels capable of handling the world’s largest ships. Over the last two years there has been a plethora of business with record numbers of tugs ordered. There were 27 tug newbuildings contracted in Q4 2018, according to BRL Shipping Consultants. Of these 11 were ordered in North America, eight in Europe, six in Asia and two in the Middle East.
Some question if the bubble will burst. Others expect tug numbers to double, continuing the boom. Several factors account for this.
Ship newbuildings are increasing in size, such as ultra large container carriers and very large ore carriers. Newcastlemax and Capesize bulk carriers, from 120,000-325,000 dwt, built to transport iron ore and coal, demand attendance by three or four tugs.
In ports, there is rising demand for essential safety, especially with tanker navigation, resulting in some port authorities insisting on an extra escort tug for these operations.
There are around 222 large bulk carriers and 120 very large crude carriers on order for delivery over the next three years. Ports receiving such giants need to plan carefully and acquire the right tugs for the port environment.
So much will change in respect to low sulphur fuel specifications from the start of 2020 under IMO legislation influencing decisions that must be made now. All the new tugs concentrate on fuel economy as well as power which contributes to economy of scale and brings down port operational costs.
However, with new environmental legislation less than a year away, some ports and owners are seriously considering direct ownership of their own tugs instead of contracting established tug owners.
For example, tankers and bulk carriers operator Formosa Plastic ordered seven powerful tugs to serve vessels using Taiwanese ports for deliveries starting this year. Fortescue Metals Group is about to take control of its own tug fleet. Damen Shipyards is providing nine tugs including six Rotortugs and three other units from its shipyard in Vietnam, with deliveries set to begin in April 2019.
Technical innovation is keeping pace with the new powerful designs for bigger ships. In Europe, Damen Shipyards expanded its design portfolio with a new contract from Dutch owner Herman Senior for the first Shoalbuster design to be fitted with diesel-electric propulsion. Damen has unveiled the Shoalbuster 3514 SD DP2-classed shallow draught vessel.
It is encouraging for builders that ports globally are expanding, especially in West Africa with Takoradi and Tema the latest to announce development plans.
Also in Europe, P&O Reyser ordered its first IMO Tier III-compliant newbuilding tug since its formation in 2017, when P&O Maritime acquired the Spanish marine operator Reyser. This asymmetric tractor tug (ATT) will commission from P&O-owned Drydock World Dubai shipyard for operations in Barcelona port. P&O Reyser already operates a fleet of 20 tugs in 10 Spanish ports. This ATT will be built to a Cintranaval design and have 75 tonnes of bollard pull.
Canadian designer Robert Allan boosted the portfolio of Turkey’s Sanmar Shipyards with a new series of RAstar 3200 SX design tugs, known as the Sanmar eXclusive Kocacay series. An inaugural order calls for two shallow draught tugs for Orkney Islands Council Marine Services. Two Caterpillar 3516 engines will form the main propulsion units on both. The 77-tonne bollard pull tugs will provide escort services in these northern isles of Scotland, replacing two older vessels.
Owners are coming under more pressure regarding increased costs to comply with IMO Tier III regulations, resulting in articulated tug-barge (ATB) units being scrapped early from US inland fleets because owners are reluctant to pay the high costs of renovation to meet new ballast water treatment legislation.
Kirby Corp has announced it will scrap several of its older units and replace them with newer ATBs, over three to four years as renewal surveys fall due. It has set aside US$25M this year to fit ballast water treatment systems on younger members of the fleet. The good news for US shipyards is that Kirby will order three new tugs and 15 inland towage craft, all valued at around US$165M, in 2019.
Kirby also acquired Cenac Marine Services in January 2019, adding 34 inland tugs, two offshore tugs and 63 inland petroleum barges. The acquisition of Cenac was valued at US$244M paid on cash terms. ATB traffic is currently enjoying boom conditions with many more orders guaranteed in the near future.
Tugs contracted October-December 2018 (over 20 m)
Tug orders January-February 2019 by owner country (over 20 m)