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A retrospective review of the average period of ship ownership with implications for the potential payback period for retrofitted equipment

Lookup NU author(s): Dr Paul Stott

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This is the authors' accepted manuscript of an article that has been published in its final definitive form by Sage Publications Ltd, 2014.

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Abstract

Knowledge of the behaviour of ship operators relating to their investment in retro-fitted equipment or systems is of fundamental importance to those engaged in designing and developing those products. Evaluation of marine equipment product offerings is often undertaken on the basis of a through-life analysis but this may not be convincing to buyers who may only expect to own the ship for a limited period, not its full life. Knowledge of the typical period of ship ownership then becomes important to enable a realistic payback period to be taken into account in the evaluation of product offerings. Whilst many involved in shipping will give an anecdotal opinion of the typical length of ship ownership there is an absence of research to give any precision to such anecdotal opinions or even to confirm them. This paper presents an analysis of the pattern of ownership of the fleet currently approaching the end of its economic life and presents suggestions on which the bounds of payback period can be assessed rationally. The pattern of behaviour of owners is found to vary between the first and subsequent owners and this is likely to have an influence on the marine equipment market, with first owner presenting the most appropriate target for the sale of retro-fitted equipment. The commonly held view of the short term and speculative nature of ship owners as being typical is also questioned by the data produced for this study.

Publication metadata

Author(s): Stott P

Publication type: Article

Publication status: Published

Journal: Proceedings of the Institution of Mechanical Engineers, Part M: Journal of Engineering for the Maritime Environment

Year: 2014

Volume: 228

Issue: 3

Pages: 249-261

Print publication date: 01/08/2014

Online publication date: 01/08/2014

Acceptance date: 18/03/2013

Date deposited: 24/03/2017

ISSN (print): 1475-0902

ISSN (electronic): 2041-3084

Publisher: Sage Publications Ltd

URL: https://doi.org/10.1177/1475090213486096

DOI: 10.1177/1475090213486096

Notes: epub:04/07/2013

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