Abstract
Knowledge of the behaviour of ship operators relating to their investment in retrofitted equipment or systems is of fundamental importance to those engaged in designing and developing products. Evaluation of product offerings is often undertaken on the basis of return on investment over its full life but this may not be convincing to buyers for existing ships who may only expect to own the ship to which the equipment is fitted 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 developments. While 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 article uses secondary sources to present a retrospective analysis of the average period of ship ownership for that portion of the fleet that was approaching the end of its economic life at the time the study was undertaken. The results question the widely held view of speculation being the prime motivator in ship sale and purchase. The pattern of behaviour of owners is found to vary significantly between the first and subsequent owners, with the first owner keeping the vessel for considerably longer than subsequent owners and with the influence of speculation increasing as the owner number increases. Rational values are proposed for what constituted short term and long term in relation to ownership periods for the vessels reviewed, and further analysis is recommended to investigate how these values may vary as the market changes.
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