Second-hand ships vs. new buildings: pros and cons in focus for smart purchasing decisions

Davide Ramponi
13. Jan.
3 Min. Lesezeit

Aktualisiert: 13. März

My name is Davide Ramponi, I am 20 years old and I am currently doing an apprenticeship as a shipping agent in Hamburg. In my blog, I will take you with me on my journey into the exciting world of shipping. I will share my knowledge, my experiences and my progress on the way to becoming an expert in the field of ‘Sale and Purchase’ – the trade in ships.

Illustration comparing second-hand ships and new buildings, featuring a split design with a used cargo ship on one side and a modern new vessel on the other. Icons highlight key factors like cost, technology, and sustainability. The background includes maritime elements such as the ocean and a shipyard, emphasizing smart purchasing decisions in the shipping industry.

One of the key decisions buyers face in the shipping market is: should it be a used ship or a new build? Both options have their pros and cons, which carry weight not only financially but also operationally and technologically. In this article, we shed light on the differences between second-hand ships and new builds, analyse trends in the market and give you an overview of the deciding factors that can influence your choice.

Differences between second-hand ships and new builds

The decision between a used ship and a new build depends on a variety of factors. Both options have their strengths and weaknesses, which can be weighted differently depending on the situation and requirements.

Second-hand ships:

These ships have already been in service and can often be taken over at short notice. They are generally cheaper than new builds and are available immediately.

Newbuildings:

New builds are customised to the buyer's requirements. They are technologically up to date, meet current environmental requirements and offer a longer service life.

Factors influencing buyers' decisions

The choice between a used ship and a new build is rarely easy. Here are the most important factors buyers should consider:

Cost:

Second-hand vessels: Used vessels are often significantly cheaper than new builds. The lower purchase price can be particularly attractive for companies looking to minimise their investment costs.
New builds: New builds are more expensive, but offer the advantage of modern technology and more efficient operating costs.

Delivery time:

Second-hand ships: One of the biggest advantages of used ships is their immediate availability. Buyers can put them into operation quickly after the sale has been completed.
New builds: It can take months or even years to build a new ship. For buyers with short-term needs, this is often a deal breaker.

Technology:

Second-hand ships: older ships are often less efficient and can incur higher operating costs. Retrofitting can help, but it is costly.
New builds: new builds use the latest technology, are more energy efficient and often already meet future environmental requirements.

Trends in the second-hand market

The second-hand market has changed considerably in recent years. Here are some of the trends shaping the market:

Sustainability as a driver: Environmental regulations such as the EEXI and the CII have led to a strong demand for modern, energy-efficient second-hand ships.
Increase in demand: With the rising construction costs for new buildings, many buyers are turning to the second-hand market, which is driving up prices for used ships.
Focus on special-purpose ships: There is growing interest in used ships that can be modified for special requirements, particularly in the case of tankers and bulk carriers.

How new builds are influenced by environmental regulations

The introduction of strict environmental regulations has influenced demand for new builds. Buyers are increasingly turning to ships that meet the latest standards from the outset.

IMO standards: Regulations such as EEXI and CII make new builds more attractive as they can often be operated without retrofitting.
Alternative propulsion: New builds are increasingly using LNG, methanol or even zero-emission technologies such as ammonia, making them particularly interesting for environmentally conscious buyers.
Longer lifespan: Modern new builds are designed to meet the future needs of the industry.

Financial and operational considerations

In addition to costs and technology, financial and operational considerations also play a central role in the decision between a second-hand ship and a new build.

Operating costs:

Second-hand ships: Higher maintenance and fuel costs can quickly cancel out the savings in the purchase price.
New builds: Lower operating costs and longer maintenance intervals often make new builds more economical in the long term.

Financing:

Second-hand vessels: Banks and lessors are often more reluctant to finance older vessels, especially if they do not meet the latest environmental standards.
New builds: New builds are easier to finance as they have a longer lifespan and higher market demand.

Conclusion

Deciding between a used ship and a new build is complex and depends on a variety of factors. While second-hand ships score points for their lower costs and immediate availability, new builds offer state-of-the-art technology and better adaptation to current environmental standards.

I hope this post has helped you to better understand the pros and cons of both options. Have you had any experience buying a used or new-build vessel? I look forward to reading your opinions and stories in the comments!