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ASSESSMENT OF THE U.S. MARINE MARKET FOCUS ON THE STEADY GROWTH IN THE SMALL SHIP, BARGE & BOATBUILDING SECTOR By Jim McCaul, President, IMA Associates, Inc. IMA has just completed an in- depth business assessment of the entire U.S. marine market. The study looks at 38 specific segments of the U.S. marine market—from large commercial ships through small municipal craft. The current situation in each sector is examined and a forecast made of business demand over the next five years. This article highlights some of the findings and data in IMA's new report which deal with the small ship, boat and barge building seg- ments of the U.S. marine industry. Product Range Ship and boatbuilders in the U.S. build a wide variety of small and medium-size ships and marine ves- sels. Included among annual deliv- eries are ferries, dinner and excur- sion boats, harbor tugs, naval land- ing craft, patrol boats for foreign and domestic delivery, Coast Guard cutters and tenders, offshore sup- port vessels, fishing boats, recrea- tional boats, pushboats, river barges and a variety of other floating equipment. Trend In Orders Shown in Exhibit 1 is the number of vessels ordered from U.S. yards over the past decade. As the data indicate, orders fell precipitously through the mid to late 1980s— reflecting a variety of underlying economic and weak market condi- tions. The last three years have seen a dramatic pick up in this business sector. The nadir was reached in 1987, when only 146 small powered vessels and 119 barges were on order in U.S. yards. At present, there are 384 pow- ered vessels and 609 barges on order in U.S. yards. Steady and pos- sibly dramatic growth will take place over the next few years as underlying market conditions im- prove. Underlying Market Drivers Each component of the small ship, boat and barge building sector has its own unique market drivers which will size and shape future construction demand: •Ferries—increasing road con- gestion has created demand for commuter ferries in cities such as New York, Boston and San Francis- co, a trend likely to continue; •Dinner & Excursion boats— changes in gambling laws have im- pacted the market for river gam- bling boats, enhancing the near term market for small "theme" ves- sels for use on the river system; •Harbor tugs—growth in future port traffic and resulting increases in ship entries will provide a steady, albeit modest, flow of future tug- boat orders; •Naval landing craft—the tightening Navy budget and chang- ing military requirements will slow the growth in this sector; •Patrol boats for foreign & domestic delivery—sale of patrol boats under the Foreign Military Sales (FMS) program will create a continuing market for companies such as Halter Marine and Swift- ships; •Coast Guard cutters & ten- ders—the drug interdiction pro- gram and replacement requirements for aging Coast Guard vessels will make this one of the more interest- ing market segments over the next decade; •Offshore support vessels— rising oil prices and increased U.S. offshore exploration and production will make this one of the most rap- idly growing market segments dur- ing the 1990s; •Fishing boats—this market segment will continue to benefit from the Magnuson Act, which pro- vides protection for U.S. fishing ves- sels in the 200-mile coastal zone; •Recreational boats—produc- tion of megayachts is already an export business in the U.S.; business prospects look very promising, but changes in foreign exchange rates could affect future demand; • Pushboats and river barges—grain coal traffic on the river system will likely increase over the next several years, creating de- mand for river equipment; however, a large surplus of equipment contin- ues to exist which has to be worked off before new construction require- ments significantly increase. Principal Players There are about 60 U.S. firms currently involved in the small ship, boat and barge building sector. Many of these firms tend to special- ize in certain types of products or markets. The principal builders are listed in Exhibit 2. IMA's new report, "Assessment of the U.S. Marine Market and Fore- cast of Future Construction Re- quirements" (Report No. 7115, Au- gust 1990, is available for $575 by contacting IMA Associates, Inc., 2600 Virginia Avenue, N.W., Suite 901, Washington, D.C. 20037; tele- phone: (202) 333-8501; or fax: (202) 333-8504. • Company Exhibit 2 Principal Small Ship, Barge and Boat Builders in the U.S. Location Principal Current Product Aluminum Boats Halter Marine Halter Marine Moss Pt. Marine Equitable Shipyards Trinity Yachts Avondale Boat Div. Avondale-Gulfport Div. McDermott Service Marine Swiftships Bollinger Textron Marine Bender Shpbldg. No. Amer. Shpbldg. Leevac Patti Eastern Shipyards Master Marine Homeport Marine Steiner Shpyd. Balehi Marine Conrad Gulf Coast Fabr. Platzer Atlantic Marine Lantana Derecktor Blount Marine Intermarine Hatteras Yachts Gladding-Hearn Washburn & Doughty Broward Marine Huckins Yachts Freeport Shpbldg. Denison Marine Goudy & Stevens Tidewater Petersen Marinette Marine Burger Yachts Palmer Johnson Skipper Liners Jeffboat Carruthersville Serodino Seaark Tacoma Boatbldg. Marco/Campbell Nichols Bros. Munson Mfg. Christensen Yachts Delta Marine Westport Shipyards SWATH Ocean Hansen Boat Martinac Gulf Crown Point. LA Lockport. LA Moss Pt.. MS Escatawpa, MS New Orleans, LA LA LA LA LA LA New Orleans New Orleans Gulfport. MS Morgan City Morgan City Morgan City, LA Lockport, LA New Orleans Mobile. AL LaRose. LA Jennings. LA Pensacola, FL Panama City, FL Bayou LaBatre, AL Moss Point, MS Bayou LaBatre, AL Lacombe, LA Morgan City, LA Pass Christian, MS Houston, TX Coast ferries and dinner boats small commercial craft small Navy ships Army LCUs patrol boats megayachts ferries Navy ACVs small Navy ships dinner boats small military and commercial Coast Guard cutters Navy ACVs fishing boat conversions icebreaker and conversions offshore vessels ferries fishing and small commercial vessels fishing boats fish tenders fishing boats and offshore vessels towboats barges barges tank barges East Coast Ft. Geo. Isl., FL Lantana, FL Middletown, Rl Warren, Rl Savannah, GA High Point, NC Somerset, MA East Boothbay, ME Ft. Lauderdale, FL Jacksonville, FL Freeport, FL Dania, FL East Boothbay, ME Norfolk. VA fishing boats and ferries yachts Army tugs, Coast Guard cutters, yachts ferries, dinner boats MHC minehunter yachts ferries fishing boats and ferries yachts yachts dinner boats and fishing boats yachts oil recovery vessels barges Great Lakes and Rivers Sturgeon Bay, Wl MCMs and other Navy craft Marinette, Wl MCMs Manitowoc, Wl yachts Sturgeon Bay, Wl yachts LaCrosse, Wl dinner boats Jeffersonville, IN barges St. Louis, MO barges Chattanooga, TN dinner boats Monticello, AR small work craft West Coast Tacoma, WA Seattle, WA and San Diego, CA Whidbey Island, WA Edmonds, WA Vancouver, WA Seattle, WA Westport, WA San Diego, CA Marysville, WA Tacoma, WA FMS work and megayachts fishing and small commercial boats ferries small work craft megayachts fishing boats, motor yachts yachts and small commercial vessels passenger vessels fishing boats tuna seiners Exhibit 1 Number of Small Ships and Barges on Order in U.S. Shipyards: 1980 through 1990 Type Vessel 1980 1981 1982 1983 1984 1985 1986 1987 1988 1990 (as of Jan.) Towboats 47 39 57 12 12 8 1 2 3 1 1 A Tugboats 148 148 107 22 3 6 4 6 7 f Fishing vessels 105 86 65 24 11 8 13 6 3 \ 29 Ferries, passenger vessels 0 1 2 7 12 13 15 15 20 1 65 Offshore supply boats and crew boats 140 192 276 14 11 6 1 0 0 ) Military vessels 33 37 17 28 99 109 69 52 133 } 276 Other power-driven vessels 177 150 103 99 124 97 82 65 52 J River barges 2,274 2,958 800 182 217 266 166 145 276 1 Offshore barges 81 108 102 15 10 8 5 4 6 / OUr7 Note: Data for 1980-1988 not fully comparable to 1990 data. Sources: American Waterways Shipyard Conference for 1980-1988 data; data for 1990 based on industry survey conducted by Maritime Reporter in January 1990
