Big-name ship-assist operators have restarted fleet renewal programs. Regional towing companies are once again looking to build. Projects that have sat on the shelf are now going under contract.
After three difficult years for shipyards and the tugboat operators considering whether to invest in their fleets, a sense of calm is returning to the harbor tugboat market. Although prices for new tugboats remain substantially higher than five years ago, inflation is slowing and supply chains are healing. Just as important for the shipyards building the tugs, workforce challenges are no longer as acute.
That collective sound you’re hearing at maritime trade shows, conferences and industry events — it might just be a sigh of relief.
“The harbor tug market right now is probably most sustainable market of our industry,” said Garrett Rice, president of Master Boat Builders of Coden, Ala. “I foresee quite a few tugs being built in the next three to five years.”
There are numerous factors driving this change. One is the age of the Jones Act ship-assist fleet. Operators that invested to bring older vessels into compliance with U.S. Coast Guard Subchapter M regulations in the late 2010s are now weighing when to replace their oldest vessels. At some point, higher maintenance costs and likely higher build costs down the road make the case for new construction.
“A lot of the Jones Act fleet has been operating for a long time, and some tugs are 40 or 50 years old,” Rice said. “Operators are doing a great job replacing them, and over the last 30 or 40 years they have been replenishing their fleets, but there are still a lot of them out there and they are continuing to replace them.”
Suderman & Young Towing Company is but one example. The Houston-based operator added three versatile azimuthing stern drive tugs to replace older twin-screw conventional tugs that worked narrow, shallow slips along the Houston Ship Channel. The 4,426-hp Aurora (profiled on page 45) is the third and final tug in a new series.
The Great Lakes Towing Company is another. With the arrival of Minnesota (profiled on page 32), it has added the eighth tugboat in the 10-boat Cleveland class. These 64-foot, 2,000-hp tugs replace historic vessels the towing company has operated on the Great Lakes for a century or more. Fleet renewal efforts will continue with a new series later this decade that could feature electric propulsion, company President Joe Starck said.
Another factor driving new construction is the continued growth of oceangoing ships calling on American ports. As the ships get larger with deeper drafts, more powerful tugboats will be necessary to safely bring these behemoths into berth.
Moran Towing, which takes delivery this spring of a versatile 86-foot tugboat (Paul T. Moran, profiled on page 54), has already acknowledged that trend. The company said the 92-by-40-foot tugs it has under contract at Master Boat Builders will “bring more power to accommodate the larger, deeper-draft vessels coming into ports along the U.S. Gulf and East Coast.”
McAllister Towing has a similar newbuild program underway at the Washburn & Doughty Associates shipyard in East Boothbay, Maine. The 93-foot tugs deliver close to 7,000 hp, and in the case of Grace McAllister (profiled on page 40), 85.5 metric tons of bollard pull — the most of any New York City ship-assist tug. Two more vessels in the five-boat series are under construction.
The inland towboat market is another one that is showing signs of life. Kurt Moerbe, vice president of Vessel Repair Inc. in Port Arthur, Texas, said there is a sense that business is starting to return to normal. He said the labor issues related to Covid-19 have settled down, as have the unpredictable supply chains that resulted in numerous delays in recent years. Lead times are returning to normal — with certain electrical components a key exception — and overseas shipping costs are normalizing.
Prices for new boats remain substantially higher than in 2019 but have largely stabilized, he said. “I think the sticker shock takes everyone a while to overcome,” he said. “But eventually, you’ve got to either move forward or move backwards. The clients we’re working with want to move their business forward, and although some took a pause, many are starting to come off that.”
Trends to watch in 2024
What’s next for cleaner propulsion?
Crowley’s electric ship-assist tugboat eWolf (profiled on page 6) and Kirby’s hybrid-electric pushboat Green Diamond (profiled on page 16) present real-world examples for an industry that has been reluctant to embrace new and sometimes unproven technologies. Will more operators follow their lead? Grant programs available through state, local and federal partners could ease the cost of these new technologies and help them gain a foothold in the U.S. towing industry.
Meanwhile, the innovative Hydrogen One towboat under development by Maritime Partners cleared a major regulatory hurdle in early May 2024. The first-of-its-kind vessel will be powered by fuel cell technology that works by converting stored methanol to hydrogen, the company said.
More Tier 4 towboats running on the inland waterways
In recent years, the number of inland towboats powered by Tier 4 engines has started to pick up. This was bound to happen as the number of Tier 3 engines and keels ordered before the EPA Tier 4 rules took effect dwindled.
Early indications suggest this transition to Tier 4 has gone more smoothly than some feared. Naval architects have modified existing designs to accommodate new engines and exhaust aftertreatment systems — sometimes with innovative results.
The Tennessee Valley Authority’s towboat Freedom (profiled on page 22) is among the new inland towboats equipped with these cleaner-running engines. Other operators, such as American Commercial Barge Line, are touting new Tier 4 towboats in an effort to reduce emissions.
The price of new construction
The price of steel used in tugboat hulls has fallen from the peaks reached in 2021 and 2022 but remains well above historic levels. The same remains the case for most of the components that go into tugboat construction, from engines to drives to electronics to the paint that covers the hulls. In many cases, prices are no longer surging — but they aren’t exactly bargains, either.
If these prices continue to stabilize, will more operators take the leap with new tugboat orders? As one shipyard official observed, barring something big and unexpected, prices won’t be returning to levels seen before the Covid-19 pandemic. •