Over the past ten years, the world fleet increased from roughly 75,000 ships to almost 95,000 (+26%). The total gross tonnage went from 773 million to 1,300 million (+68%). Typically when tonnage grows faster than number, average ship size goes up. In order to manage this fleet rise, tugs are needed. Consequently, worldwide tug capacity would go up. In fact that is exactly what happens over the past ten years. The number of tugs in the world grew with 47% from 13,000 to 19,000 and GT grew in the same pace (+53%).
Sofar for the good news. Positive as it looks, a further examination learns that since 2014 the average age of tugs goes up from 21.7 years to 23.4 years. In four years time the global fleet aged on average with 1.7 years. In the years before an opposite trend was visible.
Slightly disturbing is the number of new tugs delivered to the market. In the good old days a monthly delivery of 50 tugs was shown, with a peak of close to a stunning 200 in January 2013. Now monthly worldwide deliveries of 20 ships with no significant peaks are the new normal.
It seems the tug market shows signs of overcapacity. Probably this is caused by a high contracting activity and subsequent deliveries in the period until 2012. After this years new orders almost lineary decreased to the depressed numbers nowadays. On the one side it appears the tug fleet is too numerous and needs rationalization given the increasing age. On the other hand, the drivers of the tug market show positive signals again: oil prices are going up with increased offshore and terminal operations. Moreover, the world economy and seaborne trade show clear signs of recovery. Beyond the horizon there is hope.
There is surely hope for shipyards in the longer term, but in the short term the construction of tug boats is expected to remain expressively weak. In this market only a few dedicated shipbuilders can survive. My bets are on Damen Shipyards Group because of their economies of scale, standardization, diversification, unique approach to R&D and their unbeatable marketing power in upcoming regions across the globe. We cross our fingers for the future, but we are confident for the winners.