Tugs have been constructed for owners such as Fairplay Towage to support LNG carriers at new import terminals in northern Europe (source: Damen Shipyards)
Owners continue to order newbuilds with low emissions from shipyards despite prices hitting an all-time high due to inflationary pressures
Increasing global trade, shifts in geopolitical power and green ambitions are having a major impact on the global tugboat fleet. There is strong demand for newbuilds and modern tugs in the secondhand market as owners strive to modernise and expand their fleets to meet rising shipowner and port expectations of performance, power and emissions reductions.
ACL Shipbrokers Ltd director Alec Laing says there are regional demand hotspots where geopolitical and regulatory shakeups have led to a sharp rise in demand for towage services. For example, LNG import terminals opening in northern Europe.
New container terminals are opening, and trade and shipping lines are changing, resulting in new tugboat orders. New markets are emerging for harbour tugs, such as in the Caribbean and Indian Ocean.
“Global trade is still growing. Geopolitical concerns, protectionism and supply chain reconsiderations should be cause for concern for owners and operators, but there is, of course, a time lag for towage and port marine services, which in general terms are still experiencing high demand,” says Mr Laing.
“There has been unprecedented demand for port tugs over the last 12 months, despite the global inflationary pressures affecting the price of newbuilds and component parts.”
This has had a knock-on effect on the secondhand market, keeping it buoyant, with little tonnage available to purchase outside of shipyards’ own stocks and fleets, especially azimuth stern drive (ASD) tugs.
“For the more compact ASD tugs with 60 tonnes of bollard pull and below, there is a complete vacuum in newbuild availability and a long wait of up to 12 months for new deliveries,” Mr Laing explains.
“Depending on the size and bollard pull required, demand is outstripping supply across global shipyards. There has been a relatively constant number of newbuilds coming into the market.”
Most estimates, including International Tug & Salvage data, show around 300-350 tugs per year are completed by shipyards worldwide, with the main tug building nations being (in alphabetical order) Brazil, China, Indonesia, Malaysia, Turkey, the US and Vietnam.
Mr Laing expects strong market sentiment and demand to continue this year and into 2025, with some regional variations.
“There are regions which are seeing great modernisation of owners’ fleets due to a change in import regulations, while other areas are benefiting from competition between big global players vying for business in key ports with newer tonnage,” he continues.
“Owners are faced with a predicament. Despite it being a strong sellers’ market, the cost of replacing vessels with new or newer equivalent tonnage is at an all-time high.” Shipyards have raised prices due to inflation and increasing costs, and delivery periods are lengthy due to long-lead times for machinery and parts.
“Unless owners have long-term contracts, it is hard to justify fleet renewal as day rates are struggling to keep pace with global inflationary pressures,” says Mr Laing.
It was a busy period in the tugboat sale and purchase market at the end of 2023 and the beginning of 2024 with notable deals in Canada, the Indian Ocean and the UK. There was also business in Africa, India and South America as owners rationalised and expanded fleets.
Newbuilds are being ordered with technology, hullforms and machinery that are helping to reduce emissions and increase efficiency.
“The energy transition is also accelerating, with many fully electric, dual and alternative-fuelled tugs hitting the headlines and being delivered to various different parts of the world,” says Mr Laing.
“Depending on local emissions regulations, operators are taking up the green gauntlet at varying speeds. State-run and port trusts often lead the charge towards greener tonnage as they are keen to differentiate themselves early in the race to net zero.”
But he notes there is still a steady flow of conventional diesel-powered tugs being built worldwide, but with more efficient, cleaner engines.
The 27th International Tug & Salvage Convention, Exhibition & Awardswill be held in association with Caterpillar in Dubai, UAE, 21-23 May 2024.Use this link for more detailsof this industry event and the associated social and networking opportunities; andthis link to book your ticketfor the exhibition, social gatherings and awards night.
