Page 53: of Maritime Reporter Magazine (February 2018)

well as other marginal improve- placed in a US shipyard would ments in design to reduce fuel almost certainly opt for the most consumption. The trend in owner ef? cient engine due to the small adaptation of Eco ships can be incremental cost of improving seen in the charts below. the engine when compared to

Oil prices have been softer in the $100mn + price tag already the past two years, but remain a incurred for building at the high signi? cant drain on owner’s cof- cost yards. Currently 23% of the fers. Demand from charterers US tanker ? eet and 19% of the for faster delivery of oil has not container ships are run with Eco been an issue for a while now, type engines. The premium for and they seemed to have accepted Eco type ships can run to about a structurally slower ? eet. This 5% of the total value depending is increasing preference by all on the overall price of the asset.

About the Author parties for more ef? cient ships, This makes it a valuable speci? -

Court is providing market insights and even if they lack the high top end cation, and one that may become reports for Vessels Value. He was head speeds that many wanted during even more precious after the fuel of research for MJLF and Poten & Part- the commodity super cycle in the transition in 2020. The ability to ners, and has written for Argus Media 2000’s. These ships may or may save tons of fuel per day can add and Lloyd’s List.

not demand a higher time charter up to hundreds of thousands of rate, but as bunker prices increase dollars per year, and translates di- the likelihood is that the earnings rectly into higher TCE returns for they could potentially command the ships. Survival in the ship- will increase. ping markets can often rest on ra-

Newer Jones Act tankers have zor thin margins during periods of been built with Korean yard de- weak returns. Since most markets signs, including Eco engines. are in a depressed state, the value

However, the depressed market of Eco type ships can mean the returns make future orders on the difference between living to the basis of fuel consumption alone next bull market or liquidating unlikely. Any new order that is assets at the bottom of the cycle.

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