A somewhat opinionated commentary on U.S. and
Canadian maritime matters.
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Teams Up with Kinder Morgan
There's hope for
Avondale yet. HII announced today that it is teaming up with Kinder Morgan
Energy Partners in its search for something to do with the now idle New Orleans
shipyard. Read their release
here. A good move. Kinder
Morgan is active in a whole bunch of markets that could generate the sort of
work that would suit Avondale well. Visit their web site
and see for yourselves. And maybe there's a hidden agenda here.
Maybe, if it turns out that there are business opportunities here, KMP might be
persuaded to take the yard off HII's hands. April 11, 2014.
Saltchuk Resources, the parent company of
industry leaders Foss Maritime and TOTE, among other things, is buying Tropical
Shipping for $220 million. Read the announcement
Tropical operates a fleet of 14 relatively small ships, mostly LO/ROs, mostly
St. Vincent-flagged. Their network of services links the U.S. and Canada
to the Bahamas and just about every one of the Caribbean islands. Visit
Sounds like a good move to me. And, even though Saltchuk says that
Tropical will continue to operate as an independent entity, i.e., serving the
non-Jones Act trades, while TOTE continues to handle the Jones Act routes, it
will be interesting to see what synergies (horrible word) result. April
Case You Were Wondering
You will recall that, almost exactly two years
floating dry-dock at Vigor Industrial's Everett shipyard capsized, dumping Crowley's Invader, the first of
Invader class of tugs, built by McDermott in 1974. In case you were
wondering, Crowley subsequently sold the Invader to AMIX Recycling, in
Vancouver BC. April 4, 2014.
Switches to Eastern
Now that their dispute with Signal International has been
resolved - read Signal's release
- Great Lakes Dredge & Dock has contracted for a modified version with Eastern
Shipbuilding. Read Eastern's announcement
Let's hope that Eastern gets on better with this customer than Signal did.
April 1, 2014.
Jones Act Conundrum (Revised)
One of these days, we'll all get together and
straighten out the Jones Act, but I'm not holding my breath. It was passed
in 1920, when the maritime industry was struggling to survive in the years after
World War I, and here we are, 94 years later, pretending that it's still
relevant, when it obviously isn't. Or is it? Does it still
make sense or doesn't it? The Cold War is long over and, in this era
of world trade, it isn't coming back. What wartime scenario requires the
availability of a huge fleet of inland hopper barges? If you lived in
Hawaii, wouldn't you resent the requirement to support our inefficient and
costly non-contiguous operators? What have OSV and crewboat operators got
to do with national defense? Now don't yell at me. I'm not proposing
any change, I'm just pointing out the obvious, that the anti-Jones Acters have a
legitimate point, and postulating some topics for discussion. Me, I'm with
Adam Smith, one of the greatest economists of all time - well, he was a
Professor at my alma mater - who made it clear in his manual of free trade,
The Wealth of Nations, that the maritime industry was the sole industry that
should be protected. But would he say the same today? Oh and then
there's the second question. Even if, hypothetically of course, we were to
agree that we don't need the Jones Act any more, how exactly would we go about
phasing it out? If half the operators in a particular market have just
renewed their fleets with modern, expensive, US-built ships, is it fair that,
post repeal, the other half gets to replace their old crocks with new,
inexpensive, foreign-built ships? It would be great if we could recognize
that there's a problem here that we should do something about, but no, it's much
easier to pretend that there's no problem and to continue on down the same old
hypocritical trail. March 18, 2014.
P.S.: I'm told that the second MARAD
conference on maritime policy is going to focus on the Jones Act.
Excellent. The conference needs to address the Jones Act with an open
mind, identifying ways in which its coverage might be either expanded or
reduced, and any changes needed in the ways in which it is enforced. And
the organizers need to solicit suggestions in advance, so that everyone can dive
right in at the outset. March 19, 2014.
P.P.S.: The second MARAD conference will
be on May 6th. Read the notice in the Federal Register
here. March 27, 2014.
Can't Dock an LHA! (Revised)
The future USS
America, (LHA 6), is due to be delivered next month, so she's in the big
dry-dock at BAE Systems Mobile this week. Huh? What's wrong with
Ingalls' dry-dock, do I hear you cry? Well, no surprise, but an America-class
LHA is a lot heavier when complete than when launched. But it raises again
the issue of the BAE dock not being Jones Act-qualified. Docking and
undocking a ship on this dry-dock requires a coastal movement, even if it's only
from the pier to deep water and back again. This is cabotage and
requires a Jones Act-qualified vessel. The BAE dock is not a Jones
Act-qualified vessel: not only is it not US-built but its operator is not a U.S.
citizen. Once again, it seems that the Coast Guard is bending the rules.
Mind you, it's the only rational way of doing the job, but should there not be
some kind of quid pro quo? We'll let them use a non-Jones Act
vessel if, in return, they agree to do ..... what? March 18, 2014.
P.S.: By the way, the BIW dry-dock also
has to make a coastal movement to launch a ship and it's not a Jones Act dock
either. Sometimes it seems that our great leaders believe that the Jones
Act is fine in principle, but if it gets in the way of current requirements then
it can be ignored. March 18, 2014.
P.P.S.: OK, I'm wrong (I'm often wrong
but I don't usually admit it.) First off, BAE's big dock does not have to
leave the pier to lift LHA 6, so the question of a Jones Act movement doesn't
arise. Second, even if it did, I am reliably informed that BAE has a
blanket Jones Act waiver for movements inside Mobile Harbor. March 19,
So, Kirby just
announced that it has ordered 29 tank barges from Trinity. Well, good, but
not the hottest news of the month. The intriguing thing is, however, that
they say that only 11 of the 29 are new orders for Trinity: the other 18 are
previous orders canceled by the company that ordered them. Huh?
Somebody ordered some tank barges but is now walking away? In this market?
Does anyone know who this company is? E-mail me at
email@example.com if you know, using one of your kids' e-mail addresses if
necessary. March 18, 2014.
P.S.: The general opinion seems to be that
there is no one company which gave up 18 slots - the figure 18 is just the
aggregation of ones and twos from multiple contracts. I guess we can
conclude that tank barge options should not be left unattended, in case someone
from Kirby comes by. March 19, 2014.
Barges by the Yard (Revised)
In the item below
about pipelines, I never meant to suggest that nothing was happening in the
tank barge sector. Quite the contrary, as you can see from the table below.
The total number of tank barges built in the U.S. in 2013 was 341, 36% more than
in 2012 and 88% more than in 2011. With Trinity switching Caruthersville
to tank barges and all those smaller players getting in on the game, who knows
how many we might produce
this year? March 5, revised March 7, 2014.
SY to Build a Cable Ferry
Ferries has awarded a contract to Vancouver Shipyards for construction of a
cable ferry. The contract price is CDN 15 million and the delivery is
scheduled for the first quarter of 2015. Read the announcement from BC
and that from Vancouver Shipyards
here. Note that this monster
contract apparently fills VSY up and they won't be bidding on anything else for
a while. Huh? Anyway, it'll be good practice for all those
billion-dollar RCN and CCG contracts that are coming down the pike. February
Those folks who
are opposed to the Keystone pipeline need their heads examining, but, however
that argument turns out, we still have the challenge of getting all that crude
out of the Dakotas safely and efficiently. Let's consider the
alternatives. The cheapest and safest solution is pipelines, but nobody
seems to like pipelines. The next cheapest and safest is barge
transportation, but nobody's talking barges, they've skipped ahead to rail,
which is significantly more expensive and apparently not all that safe.
So, why not barges? The Missouri River rises in western Montana and comes
pouring down through the Dakotas until, two thousand miles later, it runs into
the Mississippi. At one time it was navigable pretty much the whole way
but now it's described as navigable only from Sioux City on down: what would it
take to extend the waterway up to Pierre, or even to Bismarck? Has anyone
looked at that? Anyway, why wait? Let's start moving crude on
barges. We don't need to move it all: start modestly and demonstrate that
barges beat railcars any day of the week. So, ok then. February
and VTHM Protest
shipbuilders that were not selected for the U.S. Coast
Guard's OPC Phase I contracts, Ingalls Shipbuilding and VT Halter Marine, have
filed protests with the GAO. Read the Defense News story
here. If you are interested, the
docket number for both is B.409541.1. Do they have a chance?
Probably not. Protests are rarely successful, especially these days, when
Contracting Officers have much less independent authority than they used to
have: sometimes it seems that they can't go to the bathroom without permission
from the lawyers. In this case, however, the PCO is Carl McGill, who has
been there for ever and knows what he's doing: small chance of any mistakes.
The other thing is that the cost of a protest is rarely justified by the size of
the contract. In this case, however, the contract is clearly big enough to
justify the cost, so why not? But that does not mean that this protest is
necessarily valid. My bet is that both protests will be rejected. February
It's Going to Be a Smaller Navy
been obvious for ages that our armed services were going to have to get smaller,
what with the Cold War being over and most of the services' missions being
focused more on smaller-scale challenges. But none of the services seem to
be capable of making rational plans involving affordable weapons. The Navy
may or may not be the worst offender, but its ability to burn up huge quantities
of the taxpayers' money designing and building ridiculously gold-plated boats
(like the one on the right) has certainly been impressive. Is it not
astonishing that we've got to the point that the Secretary of Defense has to
tell them what they need to do?
All three service
secretaries should have resigned or been fired. Read SECDEF's statement
here and the
Defense News report
as far as the shipbuilding sector is concerned, where do we go from here?
First, the Congress needs to back DoD on the planned reductions - 11 cruisers, 3
amphibs and probably one carrier - and on the planned shift from the LCS to a
new class of some kind of corvette or OPV - which needs, of course, to be a
standard, off-the-shelf design. Second, everyone needs to get on board
with fully-funded multi-year procurements for every program. Third, the
Navy needs to give serious consideration to single-sourcing: carriers at NNS,
subs at EB, DDGs at BIW, amphibs at Ingalls and auxiliaries at NASSCO. The
absence of competition will be seen as a problem, of course, but this can be
handled (a) by restructuring the form of contract to provide real incentives for
cutting costs and delivering early, and (b) by managing the programs with zero
changes - if changes must be made, they can do them post-delivery. None of
this will happen, of course. The Congress and the Navy will continue to
stumble along from one unstructured decision to the next, in that ongoing
demonstration of incompetence which we have been living with now for 25 years.
Miss Sting's "The Last Ship"
A musical about
the decline of shipbuilding? Yes, indeed, and why not? Almost all of
us in this industry have experienced the
misery and the
pain associated with the shift of big-ship shipbuilding to the Far East and the
dramatic ups and downs of the small-ship markets, all made so much worse by the
fact that in so many communities the shipyard is the major employer and when it
goes, nothing replaces it. Sting grew up in Wallsend, on the Tyne, in the
shadow of the cranes and shops at that great yard, Swan Hunter, where his father
worked. He's created an amazing musical about Swan's decline, a work of
art, something everyone should see. Click on the logo on the right to go
to the web site and learn more. And Sting himself is doing a concert
performance on PBS at 9 pm tomorrow evening.
Goes to the Lakes
shipping subsidiary, Seabulk Tankers, currently owns and/or operates seven
product carriers - five of the six Double Eagles and the two Avondale-built
ships that were so notoriously double-hulled in China a few years ago.
Recently they ordered three new ships from NASSCO. And now, for a change
of pace, they have ordered a 185,000-barrel ATB. Read their announcement
here. The barge will be built by
Donjon Shipbuilding, in Erie: Donjon has never built a tank barge and apparently
needs over two years to build this one. Donjon built a dry-bulk ATB a coupla years ago, in which Seabulk was involved, and I'm told that a follow-up
project had been expected. But why
would Seacor pay for Donjon to learn how to build tank barges? And,
although Donjon built the tug for the dry bulk ATB, the tug for this combo will be
built by BAE Systems Jacksonville. All very strange. Finally, I'm
told that BAE's contract includes an option for a second tug, so maybe there's
an option on Donjon's contract too: nothing about options in Seabulk's
February 12, 2014
(expanded and amended several times).
Bollinger and Eastern
The U.S. Coast
Guard has awarded firm-fixed-price contracts for the Offshore Patrol Cutter (OPC)
program to Bath Iron Works, Bollinger Shipyards and Eastern Shipbuilding.
Not selected were Ingalls and VT Halter Marine. (Earlier casualties were
Marinette, NASSCO and Vigor.) Read the FedBizOps announcement
here. Read the Coast Guard's
These are Phase I contracts, each for just less than $22 million, covering
Preliminary and Contract Design: one of these three shipbuilders will be
selected to continue to Detail Design and Construction of up to 11 cutters, with
another 14 or so up for grabs after that. The choice of contractors is
interesting. Bath - one of the "Big Five" and one of the best builders of
surface combatants in the world. Bollinger - one of the "Second Tier" and
the yard that knows better than anyone what the Coast Guard wants. And
Eastern - an outsider in many ways but a yard which has increased its
productivity, its output and its average ship size in recent years, which has
moved into more complex and more valuable market sectors, and which has had the
nous to team for this program with STX Marine USA, possibly the best
naval architects in North America. Who will win? Well, it should be
Bollinger: logic says that Bath is too expensive and Eastern too inexperienced,
but there are a lot of conflicting factors at work here and early
chicken-counting would be most unwise. February 11, 2014.
Shipbuilding has announced its acquisition of a 12-acre property in Moss Point,
to be used for warehousing, as part of a "strategy to consolidate
facilities." Read their release
Buying a facility that is several miles away from their ludicrously over-sized
monster of a shipyard could hardly be described as consolidation, but they talk
a different language in HII. This story is, of course, a non-event of a
news item, one that I wouldn't normally bother to comment on, but it also
contains this burst of humor from Mr. Edenzon: "Improving efficiency
and reducing leasing costs will help us make our ships more affordable so we can
sell more ships." This from the world's most expensive shipbuilder!
Really, who knew old Irwin could be so witty? February 6, 2014.
The first of the
big-deck carriers, the former USS Forrestal, (CV 59), left Philadelphia
this morning on the first leg of the long 17-day tow to Brownsville TX and the
recyclers' torches. Built by Newport News, she was delivered in 1955 and
retired in 1993. Read the Philadelphia Inquirer's story
She's being towed by the 8,000-hp ocean tug Lauren Foss, and is currently
zipping along at an average speed of about six knots. February 4, 2014.
Sells Bee Mar 2
Back in 2007,
Bollinger Shipyards started building a series of ten PSVs on spec. for a related
entity called Bee Mar and then, in 2009, sold them en bloc to Harvey Gulf
International. If it works once, it'll work again, right? So, in
2012, they created another Bee Mar and are currently building seven PSVs on
spec. And yesterday they sold them en bloc to Edison Chouest. Good
move. February 4, 2014.
Buy Seward Shipyard
A further addition
to the Vigor Industrial group was announced yesterday. An agreement has
apparently been reached for the acquisition of Seward Ship's Drydock, of Seward
AK. Read Vigor's announcement
visit the Seward yard's web site
See the shipyard from the air on Google
here. January 31, 2014.
Reopens Avondale's Waggaman Plant
An internal memo
advises HII employees that the new Commercial Energy Division is reopening the
old Avondale modular construction facility in Waggaman. This is a very
small plant - 200 employees, tops - that's only a short distance to the west of
the shipyard itself and not on the river, so it's limited in the size of module
it can produce. What's going on? What can they do at the Waggaman
plant that they can't do in the shipyard? Could they be going to move the
few workers remaining at the shipyard to Waggaman and close the shipyard?
Surely not. All very sad. January 30, 2014.
P.S.: Read the Time-Picayune's coverage of
here. Apparently Avondale is now down to 644 employees.
January 31, 2014.
P.P.S.: Read today's article in the
here. LPD 25 will leave the Avondale yard on Monday.
February 1, 2014.
Boats Moving Up
who are currently building up to 500 Response Boats (Small) for the Coast Guard
and up to 350 High-Speed Maneuverable Surface Target (HSMST) boats for the Navy,
is developing a new shipyard on a 25-acre site on the Charenton Commercial
Canal, in Franklin LA, where they can build vessels up to 250 feet. Read the story
Interesting location: Gulf Craft, one of the companies MetalShark will be
competing with in these new markets, just moved its Patterson operation to a
25-acre site on the Charenton Commercial Canal. See MetalShark's existing
Jeanerette plant from the air on Google
here and the Charenton Commercial
here. January 29, 2014.
to HII and Louisiana
Finland's YLE News reports that STX
Finland has sold the Rauma shipyard to the City of Rauma. Read the story
here. When STX bought Aker Yards
Finland and created STX Finland, they had three shipyards, all building
high-value ships but each focused on a different market sector. The Turku
yard built big cruise ships, including the 220,000-GT Oasis-class
monsters; the Helsinki yard built icebreakers, mid-sized cruise ships and other
high-value ships; and the Rauma yard built large ferries,
offshore patrol vessels and the like. None of the three were competitive, even by
Western European standards,
so STX's first move was to put the Helsinki yard into a joint venture with
Russia's United Shipbuilding, to build icebreakers, which are, of course,
government-financed. Now they have dumped the Rauma yard, for the trivial
sum of €18 million. The City plans to turn it into an industrial park,
with Rolls-Royce Marine already signed up as a tenant. Does this theme
sound familiar? January 22, 2014.
Remember him? He's the MIT graduate who
created Massachusetts Heavy Industries and persuaded the Massachusetts
congressional delegation to force a reluctant Maritime Administration to finance
the reconstruction of the Quincy shipyard, using $55 million of Title XI funds.
When MHI defaulted, he went back to Greece and disappeared. Well, now he's
been arrested by the Greek authorities, for allegedly taking $31 million in
bribes relating to a contract for the construction of German-designed submarines
by Hellenic Shipyards, of which he used to be Chairman. Read a splendidly
comprehensive account of this saga in Defense Industry Daily,
January 19, 2014.
Steps Up the Pace
The future USNS Fall River, (JHSV 4), was
floated yesterday, using Austal's uniquely complicated system. Read
here. It may be that the
interesting thing here is that Austal is really stepping up the pace, with four
ships now in the water and four launches scheduled this year. They just
launched LCS 6 last month, so they must be planning on launching LCS 8 this
year, which would definitely represent an increase in the construction rate for
that program. They started their LCS program ten months behind Marinette,
who just launched LCS 5 last month, and now appear to have at least caught up.
And launching JHSV 5 in the summer and JHSV 6 before the end of the year mean an
increased pace on that program too. Excellent!
January 18, 2014.
Turns to V.Ships for Help
Overseas Shipholding Group, still working its way
through bankruptcy, has turned over the management of its international fleet to
V.Ships, the Monaco-based company that is the world leader in managing other
people's ships. Read OSG's announcement
here. OK, this is good news, not
only because V.Ships are really good at what they do, but also because it should
free up OSG's guys to concentrate on managing the domestic fleet, where their
leadership position has been taken over by Crowley and Kirby.
January 18, 2014.
2 Completes Trials
The second Mobile Landing Platform, the future
USNS John Glenn, (T-MLP 2), has completed Builders Trials and will be
christened on February 1, with delivery in March. Read NAVSEA's
Pretty quick work on the part of NASSCO, all things considered, but these are
pretty basic ships. The problem is that the third ship is not far behind
the second. Although NASSCO has a healthy backlog of commercial work -
seven product carriers and two containerships - it's never healthy to have to
shut down the government product line and the T-AO program continues to move at
NAVSEA's now standard snail's pace. In fact, snails are positively
cougar-like compared to NAVSEA.
January 18, 2014.
Shipping in Trouble Again
Reliable sources report that US Shipping's
30-year-old T-5 tanker Houston, (ex-Gus W. Darnell), dumped
contaminated ballast water recently, while discharging at Sun's Nederland
terminal. The contamination was apparently caused by crude leaking from
the cargo tanks into the double bottom and, as a result, she is now in Gulf Copper's
Port Arthur shipyard. Significant cost and loss of revenue, of course, and it
may not be all that simple to get the clearances needed to get her back in
service. Who would charter this old boat, anyway? And all this
follows on the problems US Shipping has been having trying to keep that other
30-year-old relic, Charleston, in service. What an embarrassment US
Shipping is to the US flag.
January 18, 2014.
Starts Work on Crowley's Ships
month, Aker Philadelphia started work on the first of the four product carriers
they are contracted to build for Crowley. Read Aker's announcement
Now my question is, can they improve their productivity? On the first 14
product carriers, Aker reduced construction time initially but its later record
was surprisingly erratic, especially for a yard that was specifically designed
for series production. Now they will be building in direct parallel with
NASSCO and it will be interesting to make comparisons.
January 18, 2014.
Pushes Further into Ocean Trades
In the past three years, Kirby Corporation has
transformed itself from being primarily an inland tank barge operator to being
as big a player in the ocean trades as in the inland trades. Apparently
6.3 million barrels of capacity is not enough, however, and this week Kirby
ordered an ATB with a capacity of 185,000 barrels from Gunderson Marine, with a
10,000-hp ATB tug from Nichols Bros. Both contracts include an option.
Read Kirby's announcement
An interesting order: this will be the biggest barge ever built by Gunderson
and, I think, the biggest tug ever built by Nichols.
January 18, 2014.
Cuts the LCS Program
Back in 2002, the
original plan was for 56 littoral combat ships, (LCSs), in a 375-ship Navy.
That held for a couple of years but in 2005 the goal was increased to 84 LCSs in
a 325-ship Navy. Wow! Shades of the Gary Hart Navy! Of course, in
those halcyon days, almost ten years ago, we didn't know what an LCS was going
to cost. Then in 2006, the number dropped back to being closer to the
original plan: 55 LCSs in a 313-ship Navy. That held good until last
year's relatively minor adjustment to 52 LCSs in a 306-ship Navy. But now
here comes the big, bad DoD with an order that says 32 LCSs max. So where
does that number come from? If we only build 32, how do we cover the
missions that would have been covered by the other 20? Isn't it amazing
how fuzzy our fleet planning process is? I wouldn't mind if we couldn't
make up our minds about how many saucepans to buy for the Pentagon's kitchens,
but we are talking about tens of billions of dollars of the taxpayers' money.
Of course, I'm always on the wrong side on this and similar issues. I keep
reminding people that the Cold War has now been over for 25 years and there is
little prospect of another one any time soon, so why do we need all those
submarines and carrier battle groups? (Don't write and tell me: this is a
column, not a blog.) If we really feel the need to maintain a presence in
every corner of the earth, why don't we do it in multinational task forces,
instead of charging around like bullies in the playground? This means more
LCSs, not fewer. Cut one carrier group and build more LCSs. Cut some
submarines and build more LCSs. Cheaper ones, maybe, but still more.
January 18, 2014.
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going back to 2001