Power Boating Going the way of the Dinosaurs?

In most people's minds there is little doubt that we are all being taken for a ride when it comes to retail fuel prices at the pump. In the 7 years since importing my boat, I have watched the petrol prices grow from $1.05 - $1.10 up to $1.70 for premium unleaded petrol. In other words, the cost to run mt boat has increased nearly 60% in that time.

If you add to the increased costs associated with marine insurance for your boat (also going up) and perhaps storage fees at your marina, things are not so rosy. Increasing operational and maintenance costs for boats mean that boat owners start to use their vessels less and less as those costs rise. Naturally, there are price brackets which dictate what market segments can afford to own and run their boats. As costs rise, a number of brackets are eliminated, as boating is no longer viable for them.

The downturn in economies worldwide - particularly western nations where boating is a lifestyle expression, is killing boaters. Considered a luxury item, they are being sold off in cut-throat fashion. The massive price reductions across used boat markets thus affects the new boat sales market. Bargains are to be had everywhere, which makes it less appealing to pay more on the showroom floor.

Back to fuel costs. We know we are being taken for a ride. Prices at the bowser go up Friday morning (or even Thursday night). They come down on Tuesdays - if you're lucky. They go up on school holidays and back down again a few days after the kids return to class. Up when there's a public holiday and back down a day or two after we return to work. We're sold a lie by Governments reliant on oil company's political donations and various commissions who have no teeth to do anything.

Power boating is becomming even more expensive at a time when people are burdened with enormous real estate debts, declining income and job prosepcts and an ever-uncertain future. That is not good news for the boating industry per se and the power boat industry specifically. The fact is that marine engine manufacturers cannot improve technology and fuel consumption performance at a rate exceeding the rate of fuel price increases. 

If you're going to get into selling sailing boats, you need no further incentive. Stink boaters are going to lose the battle! They will be consigned to forever being land-lubbers or be forced to walk the plank and jump into a rag boat!!! Take a look at the boat sales websites. Not just in Australia, but the UK and United States too.

The biggest losers are the V8 driven boats. All of a sudden, no one wants them! Not even for free. The Aussie tradie who has done so well for himself over the past decade in a relentless construction boom, knows what how much it costs to run his Holden or Ford ute around from job to job each week. His 80 litre fuel tank is now well north of $100 to fuel. So in an instant he can calculate the cost of filling a 300, 400, 500, 1000 litre fuel tank on a boat. Scary. And scared off buying a new, or even used boat. Scared to even fuel the one he has now!

Boat owners with diesel engines will be less likely to want to sell. None of them will want a petrol boat, that much is certain. But being able to cruise more economically dollar-for-dollar will not entice them to sell in a down market with few sales prospects. Older and ageing vessels are a tricky proposition, with insurance companies more likely to want a marine survey conducted before they agree to insure a vessel. Who needs these cost burdens when they are struggling to maintain their budget as it is?

Where is the light at the end of the tunnel for the boating industry? Is there a remedy to fix the growing financial mess that might envelope and swallow it? How soon will the Chinese perfect the electric engine...and the electric boat? Granted, the first electric boats will be slow and have limited cruise range and time. But you can bet your V8 engines it will be the Chinese who come to the fore.

Anyone want a cruiser with twin V6's? Mine is for sale!!!

Is it easy and profitable to import boats and resell them?

I'll try and keep this short and sweet. Boats and yachts aren't exactly something you can bring in by the container load, stack on a shelf and sell like lollypops. It's speculative by nature, can be seasonal and is the mercy of exchange rate fluctuations, prevailing market conditions and economic sentiments. Moreover it involves goods which depreciate in value rather quickly.

Most people look purely at the face value of what looks like an attractive proposition; that is that boats overseas appear much cheaper than their Australian counterparts. What many people do not realise and sometimes don't investigate, are all the costs involved in what is a long and arduous process.

Importing and exporting any product involves risk. You can get the wrong product, a damaged product, or no product at all! At each stage of the import process, there are risks and there are associated costs. Here are just a few to consider:

• Exchange rate risk - you might win, but you can lose on the flip of a coin!
• Marine survey - an absolute must and money well spent, but still a cost
• Pre-shipping costs - any cleaning of the vessel required for Customs clearance
• Pre-shipping costs - protective wraps over the boat and labour to prepare the vessel
• Pre-shipping costs - cradle construction and or fitting, lift fees, handling charges
• Pre-shipping costs - transit insurance for trip to port of origin (export)
• Transport costs - to move the boat or yacht to its port of origin for shipment
• Shipping Charges - port and terminal charges, handling, crane lift/loading etc at BOTH port of origin and destination ports
• EXTRA port and handling charges - because the rates have gone up since you got your quote 2 or 3 months ago. Sorry to say, but it happens and you DO NOT have a leg to stand on when it does.
• Transit insurance - to cover damage or loss of the vessel whilst in transit at sea
• Customs charges - fumigation costs plus GST
• Import duties and taxes to import vessel - varies according to the country
• GST - levied on the imported value of the boat which includes the port and terminal charges!
• Transport to your marina berth or the vessel's new home
• Comprehensive insurance on the vessel
• A marina berth or dry storage whilst you try to find a buyer!
• Any repairs or service costs required or recommended in the marine survey to bring the vessel into saleable condition (if used)
• Your advertising costs to market, promote and sell the boat or yacht
• EXTRA cash - sorry, but you will need money over and above what you budget for!

If you budget for $25,000 costs (excluding the boat, I mean), have at least $10,000 - $15,000 additional cash in the kitty, bare minimum. If you budget for $50,000 import costs, I'd be wanting access to another $50,000 risk money sitting there waiting to go. You might feel you are being held to ransom if the port charges end up being higher than stated. Let me tell you that you don't have much choice. When someone tells you it's X thousands of dollars per day storage fees while you debate the charges, you pay the money and get your boat out of there, quick smart. 

Good luck to any moron who wants to take on multi-billion dollar corporations in  the courts. Otherwise, be on the front foot - pay the fees and get her out as quickly and as expediently as possible.

In the meantime, the vessel is depreciating the longer you hold it. If you can't sell her for what you expect or can't sell her at all, you're stuck with her. And if that's the case, I hope it's a boat you really like. Otherwise you've bought the proverbial hole in the water with no end in sight, baby!

Have I put you off? I hope I've opened some eyes. If you love boats/yachts and have double what you budget for then maybe you'll still have a shot at it. Just don't be too disappointed if your expected profit dissipates gradually...or very suddenly.