Dufour, Laskay & Strouse, Inc.

Worldwide Marine Appraisers,
Surveyors, & Consultants




It’s the economy, stupid.” James Carville coined this very famous and often quoted remark in 1992 when he pointed out during an election year that it was the economy that was most important to voters. Here again we find ourselves in an election year and here again – it is the economy. More specifically in our industry, the current marine economy for operators and lenders.

I have built a fascination about future technology in the marine industry and its acceleration where technical and economic obsolescence will be replacing physical depreciation as a major factor in the valuation of marine assets.

As of now I tend to agree with the “experts” that say the greater marine industry may happily be part of a V recession. That is, the recovery can be as swift as the fall. In appraisal lingo this opinion is called an extraordinary assumption.

There will be exceptions. I have no idea where the offshore service industry is going to go with oil at a near give away price. Some of it will have to move to renewables such as wind farm or tidal power use. Oil was easing out and with the actions of the Saudis and the blast of COVID-19, oil’s demise is nearer.

Some corporate budgets and investor’s monies are already moving into renewables including the cleaner fuels of hydrogen, LNG, ammonia and battery electrical power. Ergo, technical and economic obsolescence.

Under the present conditions only the oil majors have the deep pockets to survive and many have already opened subsidiaries in the renewables. With low oil prices only the easy pickin’s will come out of the ground and the Saudis have most of that.

Another maritime section left behind with tough future prospects, at least in the shorter 6-12 month view, will be the passenger vessel operators. Disposable income may be short for many families on top of the fear headlines have created on cruise ship sickness and death. Some smaller areas like whale watch, harbor tours and charter fishing may have a spark of life from families ready to spend a bit of money as a “reward” for weeks or months of confinement – if they can get past the fear of being around people.

Of course all of this is dependent on the mysterious actions of the virus. If it acts as past viruses have acted, a preventative serum dose will be discovered and approved. If it continues to spread through a longer than expected life cycle or the resumption of a swiftly growing infection rate, there is no telling what a future world’s economy will look like and not just for certain sectors of the industry.

The crash of the oil industry is going to impact a number of countries whose budget is based on oil revenues. This is a troublesome time for lenders, putting out the fires that today’s economy has caused and trying to guess which way the wind will blow so that they can try to plan for where the fire might flare up next.

DLS Marine has always worked hard to make sure we are up with the technological and regulatory changes in the marine industry in order to better serve our customers.  As for today’s economic situation, we are being re-educated day by day like everyone else.

Future writings will try to keep abreast of significant moves in vessel fuel research and design as regulations and economics are forcing these changes. I am in the process of updating a presentation I gave at the 2019 International Conference for the Valuation of Plant, Machinery and Equipment in Auckland New Zealand.  Its title was Thoughts on How Technology and Regulations May Affect Future Vessel Values. Changes in just the past year call for an update and the revised version will be printed in the American Society of Appraisers Machinery & Technical Specialties Journal and will be available through a DLS Marine website link.

Norman Laskay