Value
Market Value
How does VesselsValue calculate a Market Value?
To derive the Market Value (MV), we use an advanced mathematical model incorporating five key factors, specifically Age, Size, Type, Features, and Market Sentiment. This ‘five-factor model’ uses multivariate non-linear regression analysis, calibrated using transactional data over a period - usually three years, with the most recent transactions having the greatest weighting. By precisely weighting the transactional data’s impact on our value, we are able strike the ideal balance between reactivity and robustness. Our regressions are run daily, meaning the values produced for every vessel reflect the most recent market information. Vessels are divided into groups with similar operational characteristics and subject to similar market forces. The model is regressed and calibrated independently for each group.
For more information on our methodology please email us at info@vesselsvalue.com.
How does VesselsValue calculate Market Values if there have been no recent transactions in the sector?
If there are fewer than 10 sales per year for a particular sector, the sector is classed as illiquid. VV has developed an Illiquid Market Value Methodology which puts greater emphasis on newbuilding prices of vessels, interpolates with the residual value and is supplemented by sales and earnings data where known.
How accurate are the Market Values?
We measure our valuations against actual historical sales to test for accuracy. If you have a login, we publish a monthly accuracy report for all clients, which can be found here. Subscribers to “Deals Database” can also view VV’s accuracy in relation to recent sector transactions via the “Sales Analysis” page.
How can I produce a Market Value Certificate for a historical date?
On a vessel page, select the date you require using the calendar. Once the page updates, the date box will turn pink. You can then create your ‘Market Valuation Certificate’ for the historical date.
How can I easily see changes in the Market Values by sector?
From the dashboard home page, you will see the VV Indices on the left side of the screen. This is a quick way of getting a snapshot of market changes by weekly, monthly and a yearly percentage change, based on the overall fleet value. Additionally, you can use the “Matrix” to view generic Market Values by subtype and age for sectors you subscribe to.
How often are the values updated?
Our regressions are run daily, meaning the values produced for every vessel reflect the most recent market information.
Difference between VV and Broker valuations
If you have received a valuation from another broker and the VV value of a specific vessel does not appear as you would expect, whilst we cannot comment on the methodology of a comparison broker, please refer to the market value methodology documents provided here. For further details please contact your account manager.
What impact does Dry Dock or Special Survey have on the Market Value of the vessel?
The Market Value provided is an estimate of fair market price, in US Dollars (USD) and is based on the price that the vessel would obtain in a hypothetical transaction between a willing buyer and a willing seller on the basis of prompt, charter free delivery at an acceptable worldwide delivery port, for cash payment under normal commercial terms. For the purposes of that opinion, it is assumed that the vessel is in good, sound and seaworthy condition, free of maritime liens and all debts whatsoever, fully classed to the requirements of her present classification society, free of class recommendations, with clean and valid trading certificates, and where relevant to type and age of vessel with full oil majors, Rightship and any other relevant approvals in place. Therefore, Dry Dock (DD) or Special Survey (SS) does not directly impact the Market Value of a vessel.
Vessel Queries
Why has the market value of a vessel changed over the past couple of weeks/months?
This ‘five-factor model’ uses multivariate non-linear regression analysis, calibrated using transactional data over a period - usually three years, with the most recent transactions having the greatest weighting. By precisely weighting the transactional data’s impact on our value, we are able strike the ideal balance between reactivity and robustness. If, for example, a vessel is sold for a known price lower than its MV and subsequently included in our regression analysis, typically values for vessels of similar size and age will decrease. The opposite is also usually the case; if sold above its VV Value, values for vessels of similar size and age will typically increase. However the possibility of a sale having little to no impact on MVs is also plausible as the system calibrates against three years of data and many other factors are at play, e.g the delta between sale price and VV MV.
The value of the vessel is not correct?
If you have an opinion that the value of a specific vessel does not appear as you would expect, please contact your Account Manager to raise a query. We will then investigate this through our Research and Analyst departments to ensure that the value is reflective of the current market.
Why are similar vessels showing different values?
Two almost identical vessels may show different values due to differences in the age, features, or size of the vessel. You can look at the vessels’ features under the “Vessel Details” tab and compare them via the Fleet Database.
Why are the values lower/higher than recently sold ships?
The Market Value of a vessel will broadly follow the trends of the comparable sale prices fed into our non linear regression algorithm. Analysis of future market sector sentiment is also built in. To reduce the volatility of Market Values, we stabilise any significant increases and decreases over several days.
Why do you depreciate on a daily basis when vessels are sold basis their ‘built year’ and not ‘built day’?
We value vessels based on a their “Real Age”. This method considers the actual build date, to take into account a more accurate depreciation curve as opposed to looking at a vessel based on 12-month intervals.
Features
How do I understand the premiums or discounts a vessel is receiving in the algorithm?
On a vessel page, use the “Market Value Analysis” tab in the box to the right of the Market Value graph. This will show a visual representation of the premiums and discounts applied to the specific vessel. For client’s with a subscription, you can find our methodology here.
What features are included in the algorithm for valuation?
We award premiums and discounts based on a vessel’s specification which helps us to determine the most accurate value. These include builder, BWTS, engine, gearing, Jones Act, pumps, segregations, scrubber, tank coatings, plus many more. Features and their associated premiums and discounts are regularly audited, tested, and reviewed to check for accuracy.
Does VV consider scrubbers or BWTS when calculating Market Values for vessels?
Yes, we collect data for all Scrubber and BWTS fitted vessels. This includes fitted date and make or model where known. Both BWTS and Scrubbers receive a premium in the system.
Do you give premiums for certain design features?
We take the full specification of the vessel into consideration. Our in house team of Analysts monitor the relevant premiums and discounts assigned to standard vessel designs using the latest S&P, newbuild and chartering information.
Is the yard of build considered in the valuation model?
Yes, yard of build is taken into consideration. VV assumes that the best builders have no negative impact on an asset’s value. Hence, top quality (usually Japanese /S. Korean) yards receive no discount in value and other yards are then discounted from this point. The builder discount may vary between individual ship types and date of construction.
Is a vessels Ice Class taken into consideration in its value?
Yes, VV records a vessels ice class. There are different levels of ice class classification, and each of these is recorded in VV. Depending on the level of ice class a vessel has, it may receive a premium.
Where can I find comparable vessel sales?
Subscribers to the “Deals Database” will be able to view comparable transactions at the bottom of the vessel page.
Do you have a definition of an “eco” ship?
We do not currently have a specific definition of an “Eco-Ship”. Our database uses the current statutory IMO system of efficiency ratings; the CII and EEXI/EEDI metrics. Our modelled values for these allow comparison of operational efficiency (CII) and design (EEDI/EEXI) amongst vessels in our database.
Furthermore, we do have a comprehensive database of green features such as dual fuel engines and Energy Saving Devices (wind power, exhaust gas recirculation, propeller efficiency features) which can provide information on uptake of efficiency features within the fleet.
Classifying a particular vessel design as “Eco” is difficult, as the efficiency of the vessel also depends greatly on how the vessel is operated – for example - are efficient speeds being used, what is the condition of the hull, is the routing of the vessel optimised for fuel efficiency? These factors can vary greatly depending on factors such as vessel earnings, port congestion and route diversions such as canal closures.
What is a Jones Act vessel?
The USA law requires goods shipped between USA ports to be transported on vessels that are built, flagged, owned, and operated by United States citizens or permanent residents. VV identifies these vessels as ‘Jones Act’ ships.
VesselsValue applies a large % premium to the calculated Values for Jones Act vessels, due to their unique status, capability of intra-USA trade allowing the ability to earn greater charter revenues due to the limited amount of Jones Act vessels for competition, their increased crew costs, higher newbuilding prices and well-maintained vessel condition.
Other Values
How is the Demolition Value calculated?
Demo Value is the amount in USD millions for which a vessel could be sold for scrap. Sometimes called the residual value or scrap value. The value is calculated from the LDT in long tons of the vessel and the scrap price per ton of steel for the sector based on the prevailing Indian Subcontinent USD/LDT rate. You can track our demolition pricing on the “Market” tab.
Why does the Newbuild Value for LNG and LPG vessels go back four years, but only three years for Tankers, Bulkers, and Containers?
The Newbuild Values for Gas vessels go back four years due to the longer build time we have historically seen in the construction of both LNG and LPG carriers when compared to other asset types.
Why can I not see a fixed age value for my newbuilding vessel?
Fixed age values don’t become available for a vessel until its age is within the build period for its type which is 3 years, unless it is a Gas vessel which have a build period of 4 years.
Where do OPEX figures on the DCF page come from?
VV uses several sources of OPEX data, each collecting data from various vessel operators. We use a blend of these genericised OPEX figures with a set of propriety adjustment for vessel specifications to produce the figures observed on the DCF page.
How is the inflation pa field on the DCF page produced?
For OPEX, the inflation rates are derived from the same sources that provide our underlying data.
For charter rates, the inflation rates are intended to be representative of the long term trends seen in the shipping market and so a suitable estimate is used here.
Can I produce a certificate for an adjusted DCF Calculation?
Yes, once you have made any changes to inputs on the DCF page and calculated a new value, just click the main DCF Valuation Certificate link at the top of the page, and this will produce a certificate with any adjustments included.
How Can I get a Condition adjusted Value for my vessel?
To produce a Condition Adjusted Valuation (CAV), an inspection condition score for the vessel is required. Typically, condition scores are obtained through Idwal Marine. However, if a report from another third party is available, it can be provided to us. This report can be processed into a condition score, which will then be used in the valuation model to generate the CAV. If you are subscribed to CAV and we have the condition score in the system, the CAV will show alongside the market value in the vessel page.
Website Queries
Do you have a list of vessels available for purchase on your system?
We do not display Cargo or Offshore vessels which are for sale on our database. However, our sister company, Seasure Shipbroking, is available to discuss any S&P, newbuild, demolition or chartering enquiry you may have. Find out more here.
What is the Matrix and what does it show?
The VesselsValue Matrix displays the market value of a generic vessel. It covers all the main vessel types valued on the platform, for all ages from -3 YO to 25YO, split by ship type. The matrix vessel aims to reflect the industry standard in terms of size and features for each year of build. If you hover over a particular vessel, you can see a display of the vessels features. To view historical matrix values, use the link at the top of the page and select the required date. The percentage change between two dates is also available.
How is the charter data on the Market page calculated?
The 1 YR time charter rates displayed on the market page are calculated using data from a range of different sources. VV is able to analyse and adjust the data using a unique blending calculation to align frequency and produce a homogeneous timeseries that is updated daily. The aim of displaying the historic timeseries is to provide a benchmark charter rate for a ‘standard, modern’ vessel of that type.
What is the definition of an on order, launched and live vessel?
On Order - For the period when the vessel is being built, but before it starts signalling in AIS.
Launched - When a vessel is undergoing sea trials but has not entered service yet. AIS signals can start to be received for vessels that are newly launched.
Live - Vessels that are in service.
Some additional statuses that you may see in the database also explained below.
Option – A vessel that has been declared as an option to add to their current newbuild order under the same contractual terms.
LOI – A vessel for which a Letter of Intent has been signed with a yard, before a newbuild order has been confirmed.
Failed Option – A vessel that was an option but the buyer but doesn’t take it.
Dead - A vessel that is either scrapped or declared a loss for other reason (sinking, damage etc).
Cancelled – An on-order vessel that has been cancelled by the owner or yard.