VesselsValue has brought algorithmic data modeling techniques to the centuries old business of valuing floating assets – bulk carriers, tankers, and container vessels. Formed five years ago, VesselsValue is the brainchild of Richard Rivlin, an old school shipbroker in London who realized there must be a way to improve ship valuations through technology.
The company recently expanded into the realm of offshore vessels, and COO Adrian Economakis provided a glimpse into the methodologies the company uses in a presentation at last month’s Marine Money Week conference in New York. Unlike markets with continuous trading (e.g. stocks or oil futures), the illiquidity in vessel markets requires some judgment be applied to particular price points. The infrequent transactions that occur have traditionally formed the baselines for extrapolation by experienced human brokers (who may differ widely, as experts are prone to do) on market trend directionality and magnitudes, and vessel-specific characteristics.
In the data-driven VesselsValue approach, valuations are dynamic, adjusted every day for thousands of vessels or portfolios in the hands of shipowner clients or their financiers, who closely monitor compliance with loan to value ratios.
VesselsValue’s move into the offshore sector should pique the interest of WorkBoat readers for two reasons.
First, the valuations themselves are of vital importance to shipowner financial types and their external funds providers. Values are affected by dozens of technical specifications (horsepower, bollard pull, deck characteristics, positioning capabilities, etc.), but also by market sentiment.
“There is NO adequate reporting of OSV rates that can be used to correlate changes in vessel values,” Economakis explained in his presentation. He noted that reported charter rates don’t take utilization into account, and that there may be considerable downtime in between periods of reported employment.
In response, VesselsValue has found a way to infuse sentiment (tied to a measure derived from moves in the price of oil) into its valuations of offshore equipment. This aims to provide a consistent basis for pricing of assets, unlike shipbroker valuations, which are all over the map. Over the past cycle, back-testing indicates value assessments right on the money when compared to actuals.
Second, VesselsValue has recently integrated vessel location data (obtained through AIS) and platform, rigs, fields and pipeline GIS (mapping data) into its database. Economakis described an example in which location and mapping data for a particular production platform showed numerous vessel tracks, indicating PSVs and other OSVs coming and going. Alternatively, the VesselsValue screen might reveal the opposite – a platform not producing, as indicated by a dearth of vessel tracks. For a boat owner marketing to the offshore space, or a bank financing the platform, such information could prove invaluable and actionable.
