THE MARKET POTENTIAL OF 3RD PARTY SHIP MANAGEMENT

Looking at the 15 ‘premier league’ ship managers and a selected few ship managers of the ‘lower league’, we find a total global management base of 6,700 vessels under ship management. Given the fact these these vessels have been outsourced from shipowners, we believe the average vessel size goes above 1,000 GT. Our calculations of vessels under technical management gives a tech. mgmt./total mgmt. ratio of 47.9%, which corresponds well to the industry average.

According to Prestigo Research, there are over 200 third-party ship managers in the world. Given that we have already accounted for, what we believe, are the 20 largest ship managers in the world, a conservative estimate of the total number of vessels under third party ship management would be around 10,000. This would give V-Ships a gross market share of around 9.0%, which is in the region of previous industry estimates. In a Tradewinds interview in 2012, the chairman of Bibby Line (Bibby Ship Management), Sir Michael Bibby, estimated V-Ships’ market share to be around 11%. According to V-Ships company data, its total managed fleet grew by 5.6% from 2011-2013, which is far below that of competitors such as Thome and Wallem.

According to Clarkson, the current world merchant fleet, above 1,000 GT, stands between 57-58,000 vessels. For commercial vessels above 100 GT, the same figure comes to around 88,000. However, for the sake of 3rd party ship management outsourcing, we believe the >1,000 GT sum is more reliable and of greater relevance. As seen, currently, ship managers are widely expected to outperform the annual vessel growth rates of around 2.0% when expanding their managed fleets. For the 2007-2013 period, the global shipping fleet grew an average of 1.5% every year (Prestigo Research estimates).

Given the lower range estimate of 58,000 vessels for the total target size of vessels for the ship management industry, third-party ship mgmt. penetration only reaches 11.8%. This is significantly lower than the previous estimates made by Prestigo Research (20%), and by Wilhelmsen Ship Management (33%).

Using the same assumptions for estimated tech. mgmt. penetration of the total fleet would give even lower ratios. 

However, including the large number of ship management JVs, which Equasis may not register, such as the Taskos-CSM, Teekay-AESM, Wallem-COSCO, may increase third-party ship management penetration somewhat.

Prestigo Research

Website: http://prestigoresearch.com

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