MERCHANT MARINE INTEREST:
THE ECONOMIC HEALTH OF AMERICA'S WORK BOAT
TRADES
Our print copy of WORKBOAT Magazine arrived today. There is a hyperlink to the electronic version of this excellent trade journal in our News Service section. We frequently refer to several of their features when preparing our periodic assessments of maritime economic health. Our latest assessments are in the archive section of our News Service section and are less than a month old. However we never miss a chance to see what WORKBOAT is reporting about the economic health of America's domestic commercial fleet. WORKBOAT tracks the towing, and off shore service vessel sectors, as well as the ferry and excursion boat fleets, and other forms of inland, off shore, and Exclusive Economic Zone (EEZ) activity.
We are "pleased as punch" as my grandma used to say to report that the positive trends that we reported last appear to have mostly continued through June as reliably reported by WORKBOAT. "The offshore service vessel and crewboat markets continued to post steady increases in average day rates and utilization in June. Once again, the increases were primarily for the large supply vessels and crewboats. Utilization rates for these types of craft were up 1% for the smaller craft and 2% for the larger. The total utilization rate is about 76% of the fleet at present still recovering from the the drilling and leasing stops in the wake of the BP Oil Spill. There is another OCS lease sale coming up and the outlook is good for a continuing increase in the utility rate for OCS service vessels.
The WORKBOAT COMPOSIT INDEX which tracks offshore service vessel and towing industry related publicly traded stocks including the so called "second tier ship yards was up 2%. The big improvements were shipyard issues.
There seems to be only two flies in the ointment. First low water on the Mississippi is hampering navigation requiring smaller tows which reduces profit per ton mile. So far the weather hasn't caused a major cargo shortage, but if a major portion of this year's grain harvest fails the industry will be in for a very rough Fall quarter.
Second across the work boat fleets crews are aging and new recruits aren't coming in. The reason is the working conditions as described in BLOOD ON BROWN WATER which we have been bringing to you in serial form. Our view is that a single drought followed by a reduced quarter isn't going to kill the towing industry. As for the failed human resources management of the industry we feel this will result in another round of consolidation as companies that know how to recruit, train, and retain the highly skilled crews needed to operate the industry's vessels acquire those who don't. If you're thinking of investing in this industry particularly in a vessel operating company we suggest checking out the Human Resources management. Stay away from companies with turn over. The long term looks promising of profit for those who have skilled crews and decent vessels.
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I wonder how you got so good. This is really a fascinating blog, lots of stuff that I can get into. One thing I just want to say is that your Blog is so perfect!
ReplyDeleteI wonder how you got so good. This is really a fascinating blog, lots of stuff that I can get into. One thing I just want to say is that your Blog is so perfect!
Thank you Colby. You are every generous we would like to be a lot better. Our editing and formatting we think leave a lot to be desired. We'd love to be able to get away from the scrolling format, we really appreciate our readers like you who have the patience to "read past the first fold" as they used to say in the newspaper trade. We are nearing capacity in this format and will have to change over to something more cyber sophisticated probably within the year. Our problem is being mostly a bunch of over 50 to 60 somethings with extensive seafaring and marine investigative experience, we have a lot to say, but came late to computers. We have a couple of 30 somethings who do understand computers but they still have day jobs and its hard to get the time and effort out of them that we need. Thanks for your comment.
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