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 Maritime
Memos
A somewhat opinionated commentary on U.S.
maritime matters.

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FMS CONTRACT FOR WHOM?
The Navy has awarded a sole-source contract to RiverHawk Fast Sea Frames, LLC,
of Tampa FL, for two OSVs for the Iraqi Navy. The contract value is $70
million, with the work to be done not in Tampa but in Houma. Read the
DefenseLink announcement
here. Who are they, do you ask?
RiverHawk is run by Mark Hornsby, formerly of Global Ship Systems, the company
that used to operate the former Intermarine USA yard in Savannah. See
their patented design
here. March
6, 2010.
AUSTAL AND BIW PART COMPANY ON LCS
The Mobile Press-Register reports that Austal USA will bid for the LCS
program on its own, not as a subcontractor to BIW. Read the story
here. Makes sense to me, simultaneously
lowering the cost of the Austal version of the LCS and freeing BIW to go after
the second-source contract. Now, if only Marinette could dump Lockheed
Martin! March 5, 2010.
SEAPOWER SUBCOMMITTEE TESTIMONY ON THE 30-YEAR PLAN
The HASC's Seapower Subcommittee held a hearing yesterday. Read the Navy's
testimony
here, GD's David Heebner's
here and NG's Mike Petters'
here. Depressing stuff. March 4,
2010.
MAERSK DITCHES HORIZON LINES
Maersk Line has terminated its TP-1 (Trans-Pacific) service, which involves a
slot charter for Horizon Lines' five US-flag but Korean-built ships: read
Maersk's announcement
here. This comes only four days after
Horizon announced expansion of its Trans-Pacific services: read that
announcement
here. Not good news for Horizon.
March 3, 2010.
NCL TO SCRAP THE UNITED STATES?
Marine Log reports that the owner of the legendary liner United States
is getting bids for her demolition. Read the story
here. No surprise here. NCL's
acquisition of the United States and the Independence in 2003 was
always more to do with getting waivers for its cruise ships under the PVSA than
actually preserving the two old liners. Note that, in contrast to the
sordid saga of the Independence, it will almost certainly be legal to
scrap the United States overseas, because she was cleaned of asbestos etc
back in 1994. March 3, 2010.
WATERWAYS COUNCIL AIRS TV AD
Finally, a response to all that BS from CSX! The
Waterways
Council has produced an excellent television ad promoting the
industry. Watch it
here. Let's hope that it gets plenty of
air time. March 2, 2010.
DRUG PROBLEMS AT NEWPORT NEWS
If it's not one thing, it's another. Newport News Shipbuilding is being
racked by an investigation into the illegal possession and use of drugs.
Read the story in the Daily Press
here. People are people and a percentage of any
group will be users of illegal drugs, but shipyards have mandatory drug testing
programs for safety, not law enforcement, reasons. This seems to be
another indicator of management failures at Northrop Grumman. March 2,
2010.
INCOMPLETE SHELL TANKERS BEING SHOPPED AROUND
Compass Maritime Services, the Fort Lee NJ shipbroker, has been appointed by the
Bankruptcy Court in New Orleans to sell the three incomplete product carriers
that were being built at Atlantic Marine Alabama for companies aligned with
American Heavy Lift Shipping and Shell. Personally, I cannot imagine why
anyone would want them. The much more interesting question concerns
Shell's plans for their replacement: I've heard several rumors but none that
have any credibility. In addition, this problem appears to have revived
speculation about a possible sale of Atlantic Marine. I love rumors but
what's the reality? March 1/2, 2010.
INDEPENDENCE
SEAPORT MUSEUM UP THE CREEK
Philadelphia's Independence Seaport Museum - visit it
here -
has notified the Navy that it can no longer accommodate the historic USS
Olympia, (C 6) - pictured on the right. Read the report in the Navy
Times
here. A sign of the times and not a good
one, if a city the size of Philadelphia cannot support a museum of this
significance. February 28, 2010.
SUPERFERRIES NOT SO SUPER
So the Alakai was mobilized but never actually left Norfolk. The
Huakai did its part and is now loading for the return to Norfolk, but talk
about a tough duty for the crew: sleeping on air mattresses and sharing a single
shower! Somebody please upgrade these boats before they are mobilized
again. February 28, 2010.
NASSCO GETS FUNDING FOR T-AKEs 13 AND 14
The Navy has exercised an option on its contract with NASSCO for the
construction of T-AKEs 13 and 14. The contract value is $825 million, with
completion by Dec-13 and Nov-14, respectively. Read the DefenseLink
announcement
here. February 26, 2010.
BATH GETS FUNDING FOR DDG 115
The Navy has exercised an option on its contract with BIW for the long-lead-time
material for DDG 115. The contract value is $114 million, with completion
by Dec-12. Read the DefenseLink announcement
here. February 26, 2010.
NAVY THROWING MONEY AT ENTERPRISE
The USS Enterprise will be retired in three years' time but that
apparently doesn't discourage the Navy from throwing the taxpayers' money at
her. Yet another amendment yesterday to the contract for her current EDSRA
brings the total to over $600 million, enough to buy a new DDG. See the
numbers below. February 26, 2010.
|
Date |
Amount |
Cum. |
|
6/26/2007 |
20,669,181 |
20,669,181 |
|
10/18/2007 |
6,000,000 |
26,669,181 |
|
4/11/2008 |
453,263,184 |
479,932,365 |
|
11/6/2008 |
6,457,805 |
486,390,170 |
|
12/9/2008 |
12,000,000 |
498,390,170 |
|
4/29/2009 |
6,000,000 |
504,390,170 |
|
5/22/2009 |
21,000,000 |
525,390,170 |
|
6/15/2009 |
14,500,000 |
539,890,170 |
|
8/3/2009 |
7,000,000 |
546,890,170 |
|
8/10/2009 |
28,000,000 |
574,890,170 |
|
10/20/2009 |
7,000,000 |
581,890,170 |
|
11/13/2009 |
6,000,000 |
587,890,170 |
|
12/3/2009 |
6,000,000 |
593,890,170 |
|
2/23/2010 |
19,400,942 |
613,291,112 |
ANOTHER DOUBLE PLAY FROM NASSCO
NASSCO delivered T-AKE 9 on Wednesday - a month early - and will launch T-AKE 10
tomorrow. Read NASSCO's
announcement
here and the Navy's
here. At least one of the "Big Six" has a
clue about modern shipbuilding. February 26, 2010.
DAVIE BANKRUPT AGAIN
Davie Yards ASA has filed for bankruptcy protection. Read the announcement
here. By my count, this is the seventh
time they've gone bust: somehow they always seem to get bailed out for another
try. This most recent time it was a bunch of Norwegians - not the same
ones that own the failing Aker Philadelphia, but another bunch that also thinks
it knows more about shipbuilding in North America than we do. It's a
shame, because Davie is a fine facility, with a highly skilled work force: the
economics of running a large, unionized shipyard in Quebec are, however, just
not in its favor. See its record
here. February 26, 2010.
GD OUTPERFORMED NG AGAIN LAST YEAR
General Dynamics released its 10-K for 2009 yesterday. Read it
here. The corporation as
a whole made a profit of $2,394 million on revenues of $31,981 million, a margin
of about 7.5%. Operating profit was $3,675 million, a margin of about 11.5%.
The shipbuilding division had an operating profit of $642 million on revenues of
about $6,363 million, a margin of 10.1%, double that of NG's shipbuilding
division. To see a summary of GD's historical financial performance,
plus that of its predecessor companies, going back to 1985, click
here.
The comparable data for NG are
here. See
below for a comparison of NG's and GD's results for 2009.
There's not much doubt which is the better company, is there?
February 22, 2010.
|
Item |
NG |
GD |
|
2009 |
2009 |
|
mm USD |
mm USD |
|
Total Company |
|
Net Sales |
33,755 |
31,981 |
|
Operating Margin |
2,483 |
3,675 |
|
Operating Margin (%) |
7.4% |
11.5% |
|
Net Income |
1,686 |
2,394 |
|
Net Income (%) |
5.0% |
7.5% |
|
Total Assets |
30,252 |
31,077 |
|
Stockholders' Equity |
12,687 |
12,423 |
|
Property, Plant and Equipment |
4,868 |
2,912 |
|
Depreciation |
736 |
344 |
|
Capital Expenditure |
654 |
385 |
|
Employees |
120,700 |
91,700 |
|
Net Sales/Employee |
279,660 |
346,500 |
|
Shipbuilding Unit |
|
Net Sales |
6,213 |
6,363 |
|
Operating Margin |
299 |
642 |
|
Operating Margin (%) |
4.8% |
10.1% |
|
Total Assets |
4,585 |
2,512 |
|
Depreciation |
186 |
71 |
|
Capital Expenditure |
181 |
85 |
|
Shipbuilding as a Proportion of the Total Company |
|
Net Sales |
18.4% |
19.9% |
|
Operating Margin |
12.0% |
17.5% |
|
Total Assets |
15.2% |
8.1% |
|
Depreciation |
25.3% |
20.6% |
|
Capital Expenditure |
27.7% |
22.1% |
AKER PHILADELPHIA ON DOWNWARD SLOPE
Aker Philly incurred a net loss of $4.4 million in 2009, on revenues of $226.7
million. Read the report
here.
Given their remaining backlog, it'll only be another twelve months before
they'll be gone. February 22, 2010.
THE COAST GUARD'S FLEET IS FALLING APART
Twelve of the 19 Coast Guard cutters mobilized to Haiti have had serious
mechanical problems, the Commandant says. Read the story in Navy Times
here. So, let's get on with fleet
renewal, right? If the Coast Guard had not wasted years of effort and many
millions of taxpayers' money on its insane flirtation with Northrop Grumman and
Lockheed Martin, it might not now be having these problems. February
22, 2010.
LCS 3 VERY DIFFERENT FROM LCS 1
Navy Times reports that the design has changed. Read the story
here. But has it changed enough? Or
too much? Is it still proven? Has the Navy changed its requirements
since accepting delivery of LCS 1? I think we should be told.
February 20, 2010.
ROME'S FAST PATROL BOATS
I have just been introduced to the wonderful web site/blog
Cog and Galley, which is currently featuring an
article on the FPBs deployed by Rome on the Rhine River in the 4th century, with
the mission of preventing a crossing by those dastardly Visigoths. Isn't
naval architecture a great profession? February 20, 2010.
NDIA ANALYSES THE LCS PROGRAM
There's a really remarkable analysis of the LCS program's two competitors in the
latest issue of National Defense, the journal of the NDIA web site.
Read it
here. Now, given the way the Navy has
structured the proposal evaluation factors - see Section M of the RFP
here
- is there not a danger that they could end up with the wrong boat?
February 19, 2010.
CROWLEY
ORDERS FROM BOLLINGER
In a surprise move, Crowley Maritime has ordered two 11,000-hp oceangoing tugs
-
pictured on the right -
from Bollinger Shipyards, with an unspecified number of
options for more. The boats, designed for
ocean towing of rigs and Crowley's new 400-foot deck barges, will be built at
Bollinger's Amelia shipyard, which used to be McDermott's and which built all
but two of Crowley's 25-boat Invader class, which are now around 35 years
old. Could these be the first two of a wholesale replacement of the
Invaders? Other large Crowley
tugs are currently being built by Dakota Creek and by VT Halter. The price
was not revealed but deliveries will be in 2011 and 2012. Read Crowley's
announcement
here. Note that they specifically address
the greenness of the design. I think that, in future, I'm going to blast
all announcements of new designs that don't feature green initiatives.
February 17/18, 2010.
OUR INDUSTRY JUST GOT A BIT OLDER
Archeologists have discovered tools on Crete that are at least 130,000 years
old, providing evidence of migration by sea that is at least 70,000 years
earlier than had previously been identified. Read the story in the New
York Times
here. February 16, 2010.
US SHIPPING'S ITB PHILADELPHIA HEADS OUT
Only a week after hearing of the third and fourth of US Shipping's six ITBs
being sold for demolition, the fifth has now left its lay-up berth in Violet LA
and is waiting to load grain in Galveston. She's bound for a port in East
Africa, from which it will just be a short hop to a scrapping beach.
February 16, 2010.
GOODBYE MARINETTE
In one of the shipbuilding industry's dumbest ever managerial appointments, Fred
Moosally is now President of Fincantieri Marine Group, the parent of Marinette
Marine, Bay Shipbuilding and Cleveland Ship Repair. Read the announcement
here. This is the man who recently
retired in a storm of criticism from the leadership of Lockheed Martin's
Maritime Systems Division, a position which he had held for the past seven
years, and we all know how brilliantly that organization has been doing, don't
we? What does Fincantieri think it's doing? They don't need a good
man to run the shipyards: they've already got one. And they don't need a
good man in Washington: they've already got one of those too. This is
suicidal. Gaaaaaah. February 15, 2010.
NGSB MADE ALMOST $300 MILLION PROFIT LAST YEAR
Northrop Grumman released its 10-K for 2009 yesterday. The corporation as
a whole made a profit of $1,686 million on revenues of $33,755 million, a margin
of about 5.0%. Operating profit was $2,483 million, a margin of 7.4%.
The shipbuilding division had an operating profit of $299 million on revenues of
about $6,213 million, a margin of 4.8%. Isn't it great that the world's
most incompetent shipbuilder can also be one of the world's most profitable
shipbuilders? To see a summary of NGSB's historical financial performance,
plus that of its predecessor companies, going back to 1985, click
here. February 9, 2010.
WASHBURN
& DOUGHTY'S NEW TUG
The highly regarded Maine tug builder, apparently fully recovered from the fire
last year, has unveiled a new design for an 80-ft. Z-drive tug - pictured on the
right. Read about it
here. But is it green? Who knows?
Why introduce a new design for any type of vessel without addressing the major
challenge facing our industry, that of reducing emissions? February 9,
2010.
IF THE FRENCH CAN SELL LHAs TO RUSSIA, WHY CAN'T WE?
Defense News reports that Russia is now talking to France about buying not one
but four Mistral-class helicopter carriers. Read the story
here. As you can imagine, this ticks off
a lot of U.S. senators, who, having an average age of 63, are still fighting the
Cold War. But think how badly the Russian Navy would get screwed up if it
had to buy ships from Northrop Grumman. February 9, 2010.
ALAKAI STILL IN NORFOLK
Nineteen days after being mobilized for Haiti, the ex-Hawaiian SuperFerry
Alakai is still in Norfolk. Why? February 8, 2010.
ONE DECENT WEB SITE
Here's at least one decent DOD web site, at
U.S. Fleet
Forces Command. Good for Admiral Harvey. Note the
excellent map of Haiti Operations that's halfway down the page.
February 8, 2010.
US SHIPPING SCRAPS TWO MORE ITBS
Tradewinds reports that US Shipping has sold two more of its ancient ITBs for
scrap. The ITB New York went for about $3.6 million and the ITB
Baltimore for about $4.5 million. Progress, of a sort.
February 7, 2010.
DON'T LOOK TO GOVERNMENT WEB SITES FOR USEFUL INFORMATION ON THE HAITI STORY
If you want to know what's gong on in Haiti as far as the maritime side of
things is concerned - you know, fixing the port facilities, latest ship deployments, putting
cargo ashore, etc. - don't waste your time visiting U.S. Government web sites.
They are almost completely useless. Visit the media portals of the
Navy,
MSC,
MARAD and the
Coast Guard to see what I mean. The Coast Guard's is the worst,
especially with that thoroughly off-putting opening question. Badly
designed web sites, astonishingly user-unfriendly, providing little or no useful
information and hardly any pictures, and what info there is is far from up to
date. Where's the hard data? What ships are where? What are
they doing? What have they achieved so far? What equipment are they
using? What's the plan for the next few weeks? Do you see this kind
of info anywhere? No. Or any decent pictures? No again.
It's not as if this is a war and the info might be classified. No, it's
just incompetence. Meanwhile, there's information and there are pictures
out there if you have lots of time to search for them, just not on the
Government web sites that you and I pay for. February 6, 2010.
HUAKAI
AT WORK IN HAITI
Army equipment coming ashore from the former Hawaiian SuperFerry.
February 5, 2010.
ANTILLEAN SHIPPING AND SEABOARD MARINE DELIVERING TO HAITI
Two more U.S. shipping companies that are pulling out all the stops for Haiti
are Antillean and Seaboard. See a series of great photographs on
Antillean's web site
here. Read Seaboard's latest report
here: note the high-tech pier they are using.
February 4, 2010.
INLS AT WORK IN HAITI
Three excellent pictures of the INLS handling cargo from the USNS PFC DeWayne
T. Williams. February 4, 2010.
  
OFFSHORE SERVICE IS $18 BILLION INDUSTRY
OMSA has just published a study of the economic impact of the offshore service
industry - both shipbuilders and vessel operators. The key conclusions are
that U.S. businesses experience about $18.1 billion in new sales annually as a
result of economic activities within this segment of U.S. shipbuilding and
offshore vessel operations. These new businesses help to generate about
$4.6 billion in new household earnings annually for U.S.
workers. Approximately 103,160 jobs are supported by the economic activity
of these segments, with average annual earnings of about $43,992. And it
is estimated that the federal government collected nearly $1.4 billion annually
in taxes directly and indirectly in 2008, and $770.8 million in state and local
government taxes in the same year. Read OMSA's announcement
here and the study itself
here. February 4, 2010.
THE NAVY'S 30-YEAR PLAN
The new 30-year plan is interesting, reflecting several changes in policy since
the previous edition. Click
here to see a summary table. I have broken down the categories
defined in the plan by vessel type but, because the plan is not quite as
detailed as I would have liked, I'm not 100% positive that I did it correctly.
In any case, the key points for me are:
•
Bad news for Newport News and Electric Boat as the carrier and submarine
schedules are both cut back and stretched out.
•
Mixed news for Bath and Ingalls as the DDG schedule is cut back and the CG(X)
goes away, but overall this schedule looks better for long-term workload
planning.
• No surprises for the LCS contractors: the planned force structure
is still 55 boats.
•
Good news for Ingalls as the amphib schedule seems to be strongly
supported and more logical than it was, although the LCC program goes away.
•
Excellent news for NASSCO as the MLP not only survives but will be based on
NASSCO's Alaskan crude carrier design, and the next-generation T-AO, of which 19
are planned, is also to be based on a commercial design, presumably NASSCO's
product carrier.
•
Wonderful news for Austal as the Navy now plans to buy 22 more JHSVs over the
next 12 years, and that doesn't include the ones the Army will buy.
•
Not much else: two ASs, which would have to be built in a big yard,
four T-ATFs,
four T-ARSs and five T-AGOSs.
•
Note that 156 of the 276 ships in the table - about 5 ships a year - are
large enough to require a big shipyard, while 120 - about 4 ships a year - can
and will be built in mid-size shipyards. How times have changed!
February 4, 2010.
THE DECLINE IN EDITING
The almost complete lack of competent editing in today's media was emphasized
this morning by the headline over a long article in the New York Times
about Admiral Mike Mullen. The headline? "General's Opposition to
Gay Policy was Years in the Making". Amazing. February 4, 2010.
PROPOSED 28TH AMENDMENT
Have you seen the language that's being circulated? I kinda like it and
it's hard to imagine more than 535 people being against it.
"Congress shall make no law that applies to the
citizens of the United States that does not apply equally to the Senators and
Representatives; and Congress shall make no law that applies to the Senators
and Representatives that does not apply equally to the citizens of the United
States."
The general idea is to prevent them from exempting themselves from the laws that
they inflict on the rest of us, which at present they do wholesale. Oh, I
know it's totally impractical, but just discussing it might get their attention.
February 3, 2010.
NAVY RELEASES NEW 30-YEAR SHIPBUILDING PLAN
The latest edition of the Navy's 30-year shipbuilding plan is out. Read it
here.
Comment and discussion tomorrow. February 3, 2010.

VT HALTER DELIVERS FISHERIES RESEARCH VESSEL
VT Halter Marine has delivered the Bell M. Shimada, (R 227), the fourth of four
FRVs it has been building for NOAA. Read NOAA's announcement
here. February 3, 2010.
COAST GUARD ANNOUNCES OPC ACQUISITION STRATEGY
Simultaneous with the Administration's budget request of $45 million for the
design of the Coast Guard's OPC, or next-generation medium-endurance cutter, the
Coast Guard has announced its acquisition strategy for this program. Read
it
here. There will be three Phase I design
contracts followed by a winner-takes-all construction contract. Who are
the probable competitors? NGSB and BIW, of course, but they will be too
expensive. Bollinger, Marinette and VT Halter Marine, certainly: these
three are the likely Phase I contractors. Dark horses include Todd,
Derecktor and Signal Ship Repair (ex-Bender). And just to complicate
things, wouldn't it be interesting if Austal were to have a candidate design?
February 3, 2010.
ASN "CONFIDENT" IN NGSB
The ASN(RDA), Sean Stackley, is quoted in the Newport News Daily Press as
saying that "he is confident in Northrop Grumman Corp.'s ability to deliver
quality ships to the Navy despite widespread problems reported last week on
surface ships built at Northrop's Gulf Coast shipyards". Read the story
here. Well, he's about the only person
outside Northrop Grumman who is, and his statement is way out of line.
This is further evidence that the Navy and the big defense contractors are
closely allied in their incompetence and unable to maintain a proper
customer-supplier relationship. What Stackley, whose qualifications for
being ASN include having been in charge of the disastrous LPD 17 program, should have said was
something like " I am no longer confident that Northrop Grumman has the ability
to deliver quality ships to the Navy and I require them to take immediate and
effective action to restore my confidence." February 3/4, 2010.
NOTHING FOR TITLE XI
The entire MARAD budget request for 2011 is only $352 million, almost all of
which is either for the operation of Kings Point or for subsidies to employers
of Kings Point graduates. Nothing for Title XI, which actually creates
jobs in the U.S. Why don't we just close MARAD down?
February 3, 2010. Apostrophes deleted February 4.
AMFELS DELIVERS JACK-UP TO MEXICAN OPERATOR
The Brownsville rig builder has delivered the LeTourneau Super 116-E jack-up
Tuxpan to Perforadora Central, SA. Read the announcement
here.
February 2, 2010.
NAVY BUDGET COVERS ONLY NINE SHIPS
The FY11 budget request totals $16.6
billion and provides for nine new ships. Notable are the decision to kill
the CG(X) and LCC(R) programs and the lack of any NDSF ships. A tenth ship,
a JHSV, will be paid for separately, by the Army.
February 2/5, 2010.
|
SC,N Program |
Qty. |
Amount ($000) |
|
NDSF Program |
Qty. |
Amount ($000) |
|
Carrier Replacement Program |
0 |
2,639,569 |
|
MPF MLP |
0 |
380,000 |
|
Virginia Class Submarine |
2 |
5,132,688 |
|
Post Delivery and Outfitting |
0 |
31,202 |
|
CVN Refueling Overhauls |
0 |
1,663,836 |
|
National Def Sealift Vessel |
0 |
1,463 |
|
DDG 1000 |
0 |
186,312 |
|
LG Med Spd Ro/Ro Maintenance |
0 |
106,898 |
|
DDG-51 |
2 |
2,970,174 |
|
DoD Mobilization Alterations |
0 |
25,902 |
|
Littoral Combat Ship |
2 |
1,509,335 |
|
TAH Maintenance |
0 |
24,384 |
|
LHA Replacement |
1 |
949,897 |
|
Strategic Sealift Support |
0 |
4,875 |
|
Intratheater Connector |
1 |
180,703 |
|
Research And Development |
0 |
28,012 |
|
Oceanographic Ships |
1 |
88,561 |
|
Ready Reserve Force |
0 |
332,130 |
|
Outfitting |
0 |
306,640 |
|
|
|
|
|
Service Craft |
0 |
13,770 |
|
|
|
|
|
LCAC SLEP |
0 |
83,035 |
|
|
|
|
|
Total SC,N |
9 |
15,724,520 |
|
Total NDSF |
0 |
934,866 |
COAST GUARD BUDGET INCLUDES AN NSC AND FOUR FRCs
The FY11 budget request includes $538
million for the fifth NSC; $45 million for the selection of a design for the OPC;
$240 million for four more FRCs; and $42 million for ten more RB(M)s.
February 2, 2010.
Read earlier "Maritime Memos", going back to 2001,
here.
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