Cable Ships, Is Old Age

really An Issue?
Bruce Neilson-Watts, Global Marine
Submarine Cable Workshop 1
09.00-10.30
Cable Ships of the World
No. of Cable Ships • Very little change in the last 15
Installation Maintenance
years
• Barriers for entry are high
• Average age of the fleet is 21 years
50% 50%

• Ships have a useful economic life of

up to 35 years
• Ship owners would love to build
Approx. 46 cable ships in market
new vessels, but do the business
owned by 13 vessel operators cases add up?
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 The Global Cable Ship Fleet
Installation &
Maintenance Installation Maintenance
9% 13% 10%
<15 years old <15 years old
Installation 15-20 years old 33% 24%
30% 15-20 years old
21-30 years old 21-30 years old
48%
31-45 years old 31-45 years old
33%

Maintenance

0 5 10 15 20 25

<15 years old 15-20 years old 21-30 years old 31-45 years old

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Vessel Locations November 2017

Installation Ship
Maintenance Ship

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Why is there not a boom in
new builds to match a construction boom?
• In reality new ships are ordered when demand outstrips supply or when old vessels are
disposed of
• A new ship costing $60-80M requires a strong business case and a long term view
• Banks need to see an even stronger business case, the sector is reacting to a perception
that the shipping sector is seen as somewhat ‘toxic’
• There is an appetite to lend BUT solid service contracts required
• Cable ships are specialist vessels, difficult to finance, lenders have concerns about
disposing of assets if there are payment defaults

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So what would that new
ship look like?
• Cable ships have different and often complex requirements, not appealing to banks
• Cross-functional vessels able to operate in telecoms and power
• Bespoke designs are expensive to construct repurposing vessels from depressed sectors is
a solution BUT there is a compromise
• Changes in legislation are increasing construction costs, SOLAS, MARPOL, MLC, SPS codes
• One of the vessel largest expenses is fuel, making bigger ships expensive to run, reducing
vessel size, transit speeds or creating more fuel-efficient vessels reduces opex
• Hybrid/battery powered ships are gaining traction and could cut costs by $10k/day -
would need to be integrated into new builds
• Equally, this could apply to LNG powered vessels, being cost effective as well as meeting
future emission regulations

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Summary
• In the next 5 years we will start to see a drop in the average age of vessels

• A few new ships expect to be delivered but these will replace older vessels so
there will be little change to the supply/demand situation

• Ship financing will be difficult, sector has taken a real hit.

• Vessels are operated by competent and professional companies and crews,

adhering to robust legislation, old age is not an issue.

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