At this time last year, new OSV construction contracts had finally slowed, but yards still had some OSV backlogs and repair work was also fairly steady. That started to change a few months later.
The offshore market is suffering, mainly a result of low oil prices that closed just above $50 bbl. yesterday. I could dedicate this entire blog on the subject, how the combination of lower oil prices, reduced spending and excess rig capacity continue to weaken offshore industry fundamentals. But when you look beyond the oil patch, other workboat sectors are doing fine.
Let’s start with shipyards. Sure, several U.S. Gulf shipyards with strong ties to the energy sector are hurting, and Signal just filed for bankruptcy protection last week. But others in the Gulf who are more diversified or located in other parts of the U.S. are not. Take Vigor Industrial which continues to build and grow. As Vigor’s chief Frank Foti said after the Portland, Ore.-based company merged with Kvichak Marine, it’s not about getting bigger, but getting better.
Though it likely won’t top the past four years that saw barge operators enjoy strong rates and demand, improved earnings and record financial performance, the next 12 months should be steady for the inland waterways as the economy continues to strengthen. The tugboat market, too, isn’t expected to set new records, but business and tug construction have been steady and are expected to remain that way going forward. Tug designers continue to update previous designs for customers. This includes two Robert Allan Ltd. designs for ship-assist tugs for two West Coast operators. Tug designers expect another busy year in 2015-2016.
Finally, passenger vessel operators say this year may end up being the best summer season in years. And this comes on the heels of several strong years. Operators on all coasts and the Great Lakes are all seeing strong bookings, sold out cruises and rebounding corporate business. All say that ridership is up, with some talking about adding to their fleets.
At this time next year, hopefully offshore operators can rejoin the party and we can report that all workboat sectors are hitting on all cylinders.
