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Tug operators renewing their fleets while hoping for new business

Jul 2, 2014 02:55 PM
Devin Koch prepares Brusco Tug & Barge’s 4,000-hp ASD tug Peter J. Brix for painting at Diversified Marine in Portland, Ore.

Brian Gauvin

Devin Koch prepares Brusco Tug & Barge’s 4,000-hp ASD tug Peter J. Brix for painting at Diversified Marine in Portland, Ore.

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These are not exactly boom times in the towing industry, but operators seem to have regained their footing and are finding reasons to build new boats. While some new business opportunities may be opening up, for most companies the most compelling reason for building new boats seems to be modernization of their aging fleets.

Many line-haul companies are thinking about expanding or modernizing their fleets, according to Jonathan Parrott, vice president of new design development at Jensen Maritime, the Seattle-based naval architecture and marine engineering firm.

Part of this trend has to do with the age of the current fleet.

In recent years the marine industry has seen the construction of a great many double-hull oil barges. But the tugs towing those modern barges tend to be older vessels, Parrott observed. That has left the oil majors and insurance companies to “question the wisdom” of towing a “five-year-old double-skin barge with a 50-year-old tugboat,” Parrott said.

John Gormley

The deckhouse of Eric McAllister at Senesco’s shipyard in Rhode Island.

The expansion of the barge fleet means that it may not be enough for towing companies just to replace their aging ones with brand new vessels. As the size of the oil barge fleet expands, the tug fleet may have to follow suit.

“These new barges are not replacements,” Parrott said. “The line-haul tugs are a little behind the barges.” He suspects that a surge in new construction of line-haul tugs is in the offing. “The wave is coming,” he said.

That wave may already be taking shape. Hyak Maritime LLC built a 120-foot, line-haul vessel, Hawaii, in 2013 and a sister vessel, Washington, in 2014. Under charter to Crowley, both are 5,358-hp z-drive tugs. A third boat is under construction and a fourth is planned.

Hyak is a recent startup by Robert Dorn and a partner, Gordon LK Smith. They are in the business of building and then chartering their vessels rather than operating them themselves. Their strategy is based on the insight that many line-haul operators are depending on some of the oldest tugs in the country.

Dorn saw this at first-hand. In 2008 and 2009 he was in charge of the K-Sea Transportation fleet of 25 tugs and 25 barges. His annual budget for repair and maintenance was about $300,000 per tug. That kind of cost, he said, “makes it hard to make a case for operating old boats.”

Older boats are not even allowed to dock at some oil terminals. “At certain docks on the West Coast you can’t bring a tug over 25 years old,” he said. “There’s a new kind of paradigm. We could see it coming over the last 10 years.”

John Snyder

The stem of a new tugboat taking shape at Washburn & Doughty in Maine. The yard is fully booked for the next few years.

There are other forces at work leading to modernization of the line-haul fleets, notably the recognition of fleet operators that their boats need to be comfortable if they are to retain and attract good crews.

When many of the older boats that are still in service were built, crew comfort was not a driving concern of the owners. “They didn’t pay as much attention to vibration and noise,” Parrott said.

In the last 10 years, international standards have begun to reflect these concerns by calling for things such as minimum stateroom size, wash basins in rooms with no head and natural light in living quarters.

“There is a scarcity of good crews in the U.S. now,” Parrott said. “To attract good crews, you have to have good work conditions. Everyone’s taking a look at that.”

In addition to boats that will help them attract good crews, operators are also looking to upgrade with more powerful boats. Part of the push for more power is coming from the insurance companies and the pilots. “Everybody wants more power,” Parrott said. “It’s not whether you need more power. It’s the perceived idea that more power is better.”

And the days of the single-screw line-haul tug are over. “You’re not going to tow a barge with a boat with only a single-screw,” Parrott said.

If the era of the single-screw tug is past, the age of the LNG tug fueled by liquefied natural gas is still just over the horizon. Part of the problem is that tugs are relatively small vessels.

LNG vessels must have specially designed tanks for holding super-cold liquids. Typically they must be located above deck, and because LNG has less energy content per unit of volume, they must be larger than a conventional tank.

“You can’t stick it in the bilge,” Parrott said.

Another problem is the lack of LNG engines that would be appropriate for all but the largest tugs. No approved marinized dual-fuel engines smaller than 1,800 hp exist, Parrott said.

“All the major diesel engine makers are focused on Tier 4, getting that squared away,” said Parrott.

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