Dufour, Laskay & Strouse, Inc.

Worldwide Marine Appraisers,
Surveyors, & Consultants

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From the Desk of Norman Laskay: Today it’s Cash Flow. Tomorrow Oil Flow?

SIR, YOUR CARD IS MAXED OUT

On an adjusted dollar value basis oil hasn’t been this cheap in over thirty years. Fuel is the biggest single expense for vessel operators so this should be a blessing. Even the shock of IMO 2020 low sulfur fuel regulations have been greatly softened with the difference between high sulfur and low sulfur fuels dropping to a small gap. Only in today’s economic climate it is not the blessing it could be.

It doesn’t matter what bunker fuel costs if you can’t buy it.

With the battered world economy maritime industry, be it operators of the largest container ships, an ocean going tug, or a local fisherman, cash flow is needed to buy the fuel to run the ship. But petroleum is a cash product. Cash on delivery – from the refinery to a transporter or from a fueling site/barge to an end user. You don’t get the fuel unless you have laid down the cash.

For some end users it is actual cash, but for most national or international users it is through bank transfers which may depend on credit ratings dependent on a company’s financial health or lack of health.

At a time when lenders may already have to worry about their asset-based loans, they may also have to worry about whether the customer can run the vessel if it gets work.

INTO THE CRYSTAL BALL

The American Bureau of Shipping (ABS) has produced a study “LOW CARBON SHIPPING OUTLOOK” which opines on shipping’s compliance with the IMO guidelines for 2050. Of particular interest might be the graphs showing the make-up of the world fleet into the future, the type fuel they will be using and the commodities they will be carrying.

The ABS study, and several others I’ve read, believe that LNG will be the fuel of the future, but just of the near future. Say 20 years, the lifetime of vessels being designed and built now. The problem is that LNG, when looked at in the overall picture, including its production, is not as clean as other products. Hydrogen is the longer term future and larger hydrogen fuel cells are being designed and built. The ABS report I noted above also shows ammonia being the future along with hydrogen. I was originally surprised by ammonia being a growth fuel as I think of it as being very dangerous to humans and requiring special handling. Fine to power an ammonia tanker which already has ammonia on board and can use the boil off as fuel for its diesel engine.

But some deeper diving into the world of chemistry, a scary world for this brain, I learned that ammonia can be a cheap and easy way to produce more hydrogen for fuel cells. But the production of ammonia produces a large output of CO2. There are now a number of trial plants around the world that are using solar or wind power to produce ammonia then hydrogen through water electrolysis. I will be trying to learn more about that as I do believe hydrogen fuel cells will be a major source of power for many industries and modes of transportation in the future.  

One benefit of having so many experienced surveyors in the field is having constant feedback on what is going on onboard the vessels, at the docks, and in the shipbuilding and repair yards. This daily interface with the maritime front lines is of great immediate value in understanding the markets, which is useful in DLS’s appraisal work and for helping underwriters and owners on repair costs. At the same time, we continue research to try to understand what we and our customers may be dealing with in the future. Future articles will try to look at what the industry might look like in the next decade as new technology takes hold, and what the new technology might mean to vessel designs.

Norman Laskay
nlaskay@DLSmarine.com


DLS Marine Builds Remote Survey Vehicle to Access Confined Spaces

A long-time customer of DLS Marine recently came to us with a knotty problem. The customer had 6 large pieces of marine equipment arriving at an East Coast port from the Middle East. The equipment was loaded on the cargo deck of a semi-submersible heavy lift ship.

The issue was that the contract read that the carrier’s liability for any damage that occurred during the loading and voyage ended when the cargo was lifted from the ship. Our customer needed to determine the condition of their equipment, and stake a claim, when much of the equipment was hidden by the stowage arrangement, and the bottom of the hulls were at the most 12” (30 cm.) above the deck.

Internal inspection would necessitate making all spaces safe for entry and involve two or three surveyors looking for damage and taking several days to complete internal tank inspections.

Within weeks our Drone specialist, Scott Bourgeois, built in house a custom Remote Survey Vehicle (RSV) specifically suited for the customer’s difficult problem.

The DLS solution was RSV-1. The DLS Marine RSV-1 (Remote Survey Vehicle) is the first of its kind remotely operated, WIFI enabled, 4K inspection rover. 

The base of the unit is a specially designed waterproof radio-controlled vehicle purpose built to move at very slow speeds over a variety of difficult terrain.  A first-person view (FPV) camera is mounted to the front of the vehicle and connected to an electronic long-range video transmitter.  This system sends live video back to the operator with a range of over 300’. The RSV can be operated via the 7” HD field monitor or through a set of goggles that give the operator the sensation of being on board the vehicle. The video recording is handled by a WIFI enabled ultra-high definition action camera that can be controlled via its own mobile phone app. 

The unit is additionally fitted with adjustable lights and an on-screen display module.  All electronics are wired into the vehicle’s electronic speed control and powered by the main battery.  The RSV is small enough to fit into a backpack and can be deployed in areas where people and other machines cannot access.

Instead of multiple surveyors, gas chemist costs, extra labor and definite delay with associated costs, the customer was able to receive a detailed look at the areas of concern and see what the surveyor saw in real time.

The RSV-1 is now in the DLS Digital Inspection arsenal along with multiple unmanned aerial vehicles and the DLS 360 survey.

The DLS 360 drone inspections have now been used for salvage, insurance, litigation, and lease condition documentation, all uses where high resolution digital photos and videos bring the situation and conditions of an asset or a site to the desk of the customer user.


DLS Introduces Marine Business Valuation Services

We are proud to announce a new strategic relationship with The McLean Group (TMG), one of the top middle market business valuation firms in the nation.  Business owners in the marine industry can confidently rely on our decades of marine asset appraisal at DLS, now combined with decades of advanced business valuation experience at TMG.  Our offering includes a wide range of applications:

  • Pre-transaction Value Assessment
  • Tax Compliance
  • Equity Incentive Plans
  • Litigation Support
  • Transaction Opinions and Advisory

At DLS, we understand the nuances of the marine industry and can ensure that all values are fairly considered in this asset-heavy business segment.  Call me directly with questions about this comprehensive service and we will provide an overview of the process and costs involved.  To learn more about TMG’s business valuation services, visit McLeanLLC.com

Harry Ward, President

Direct: 757-938-7109


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