Maritime Memos

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

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THE NEW GREEN NAVY

Marine Group Boat Works, in Chula Vista CA, has delivered the first of three 114-foot Range Training Support Craft, (RTSC), to the Navy Range Office in San Diego.  That's her on the right.  Interestingly, this elegant, aluminum-hulled boat is biofuel-powered.  Read more here.  You didn't know about this project, did you?  Neither did I.  Nothing on the PEO Ships page about this and never any announcement of the award, although it's a $30 million contract.  It's amazing what the Navy gets up to without telling anybody.  July 28, 2010.

BUT THE NAVY HAS MORE MONEY FOR GULF COAST YARDS ANYWAY

Ironically, in the context of the preceding item, there was an announcement on the FedBizOps web site yesterday inviting proposals for infrastructure improvements from naval shipbuilders damaged by Katrina.  Read it here.  Good grief, it will have been five years next month and we're still handing out free money!  How about returning it to the Treasury instead?  July 28, 2010.

GAO PANS NAVY'S INCENTIVIZATION OF SHIPYARD CAPEX

The GAO has taken a look at the way in which the Navy incentivizes its shipbuilding contractors to make capital improvements and has concluded that "the Navy lacks policy to help ensure it achieves goals and objectives from providing facility and equipment investment incentives at private shipyards."  Read the report here.  According to their 10-Ks, GD spent about $0.7 billion and NG about $1.9 billion on CapEx in their shipyards over the past nine years.  (Some of NG's investment presumably represents replacement of Katrina damage, because the GAO puts the figure at $1.9 billion for both companies together.)  But it's not the shipbuilders' facilities that need upgrading.  And there's never been anything wrong with their workers.  No, it's still their management that's the problem.  The Navy might try telling them to stop throwing money at the facilities and maybe hire some competent managers.  July 26, 2010.

SOME CHANGES AT MARAD

Well, the good news is that MARAD finally got around to removing the Acting from in front of its boss's title.  And we now have a Deputy Administrator in Orlando Gotay.  Mr. Gotay is an Annapolis graduate, a former Engineering Duty officer and is also a lawyer.  His most recent position was General Manager of the San Juan Port Commission.  Read about him here.  Denise Krepp, the Chief Counsel, is now also listed as Acting Associate Administrator for Business Development, Jean McKeever's old job, which has been vacant for nine months: I guess this means that they didn't like any of the applicants and will try again.  That's depressing.  And we still don't have a Superintendent for Kings Point, another job which has been vacant for nine months.  July 26, 2010.

PELICANS GOOD, GEESE WAY, WAY BADDER

We noted earlier this month that, while we were fussing over some birds getting injured by the oil spill, the Department of Agriculture was rounding up and gassing Canada geese - 400 in New York so far this year.  It now appears that this is just a drop in the proverbial bucket.  The Department actually plans to reduce the U.S. population of Canada geese by 450,000 birds, systematically rounding them up and euthanizing them.  Poor old geese.  At least they don't defecate on my car the way the darned pelicans do.  July 24, 2010.

NASSCO DELIVERS FOURTH PRODUCT CARRIER

Although there have been no announcements, the fourth of the five product carriers being built by NASSCO, the Empire State, left the yard on Friday.  Down goes the workload.  July 20, 2010.

CROWLEY'S NEW TUGS - 4 DOWN, 31 TO GO

Crowley has ordered two more Ocean-class tugs from Bollinger Marine Fabricators.  If these boats are replacements for the 35 Invader-class boats built by McDermott in the same yard in the 1970s, they still have 31 to go.  Nice business.  July 20, 2010.

JUST HOW BAD IS AVONDALE, PART TWO

Avondale's cost performance was as bad as its schedule performance - see the table below.  Avondale's tankers cost about 16.5% more per deadweight ton than NASSCO's.  The write-off figures included below are from the companies' 10-Ks.

NASSCO's Four 185,000-dwt Tankers Avondale's Five 140,000-dwt Tankers
Hull # Name $ million $/dwt Hull # Name $ million $/dwt
484 Frontier 210 1,135 2497 Endeavour 166 1,186
485 Explorer 210 1,135 2498 Resolution 166 1,186
486 Navigator 210 1,135 2499 Discovery 164 1,171
487 Legend 210 1,135 2500 Adventure 196 1,400
        2501 Enterprise 205 1,464
  Total 840  1,135   Total 897 1,281
  Write-Offs 163 220   Write-Offs 208 297
  Total 1,003 1,355    Total 1,105 1,579
  Average 251 1,355   Average 221 1,579

I have been reminded that Avondale's cost and schedule performance were, in fact, even worse than these tables indicate, because the exasperated customer pulled the last three of the five ships out of the yard before they were complete and finished them elsewhere.  July 19, 2010.

THIRD NSC LAUNCHED

Good news from NGSB is the launch yesterday of the third WMSL, the future USCGC Stratton.  The christening, by Mrs Obama, is not till Friday.  July 19, 2010.

ONE STEP AT A TIME ON THE OPC

The Coast Guard has published its schedule for the 25-ship Offshore Patrol Cutter (OPC) program.  Read it here.  No rushing into things seems to be the philosophy.  But that's ok, it's important not to screw this up.  The schedule and the familiar name on the notice give us assurance that this procurement will be conducted carefully and professionally.  July 17, 2010.

JUST HOW BAD IS AVONDALE?

There are good people at Avondale, but the blunt truth is that its performance has been terrible in recent years.  You don't have to get into the intricacies of its cost structure to see the difference between Avondale and NASSCO.  Just look at the two tables below.  In a nutshell, Avondale took twice as long as NASSCO to build an LMSR and it also took twice as long as NASSCO to build an Alaskan-trade tanker, even though its tanker was 25% smaller than NASSCO's.  It should also be noted that these programs were completed before NASSCO did its deal with Daewoo, which has clearly resulted in a significant additional improvement in its performance.  Conclusion: It's not a matter of the declining naval shipbuilding workload: Avondale just isn't good enough. Close it down.  July 16, 2010.

LMSRs Built by NASSCO
T-AKR # 310 311 312 313 314 315 316 317  
Name Watson Sisler Dahl Red Cloud Charlton Watkins Pomeroy Soderman Average
Keel Laying 23-May-96 15-Apr-97 12-Nov-97 29-Jun-98 4-Jan-99 24-Aug-99 25-Apr-00 31-Oct-00  
Float Out 26-Jul-97 28-Feb-98 2-Oct-98 7-Aug-99 11-Dec-99 28-Jul-00 10-Mar-01 26-Apr-02  
Delivery 23-Jun-98 1-Dec-98 13-Jul-99 18-Jan-00 23-May-00 2-Mar-01 14-Aug-01 24-Sep-02  
KL-FO (weeks) 61 46 46 58 49 48 46 77 54
FO-D (weeks) 47 39 41 23 23 31 22 22 31
KL-D (weeks) 109 85 87 81 72 79 68 99 85
LMSRs Built by Avondale
T-AKR # 300 301 302 303 304 305 306    
Name Bob Hope Fisher Seay Mendonca Pililauu Brittin Benavidez   Average
Keel Laying 29-May-95 15-Apr-96 24-Mar-97 3-Nov-97 29-Jun-98 3-May-99 15-Dec-99    
Float Out 27-Mar-97 21-Oct-97 24-Jun-98 25-May-99 29-Jan-00 11-Nov-00 11-Aug-01    
Delivery 18-Nov-98 4-Aug-99 28-Mar-00 30-Jan-01 24-Jul-01 11-Jul-02 10-Sep-03    
KL-FO (weeks) 95 79 65 81 83 80 86   81
FO-D (weeks) 86 93 92 88 77 87 109   90
KL-D (weeks) 181 172 157 169 160 166 195   172

 

185,000-DWT Tankers Built by NASSCO for Alaska Tankers
Name Frontier Explorer Navigator Legend   Average
Keel Laying 20-Jan-03 7-Nov-03 8-Jul-04 18-Apr-05    
Float Out 5-Nov-03 2-Jul-04 10-Apr-05 8-Jan-06    
Delivery 11-Aug-04 21-Mar-05 23-Nov-05 18-Aug-06    
KL-FO (weeks) 41 34 39 38   38
FO-D (weeks) 40 37 32 32   35
KL-D (weeks) 81 71 72 70   74
140,000-DWT Tankers Built by Avondale for Polar Tankers
Name Endeavour Resolution Discovery Adventure Enterprise Average
Keel Laying 5-May-98 12-Jul-99 28-Aug-00 1-Aug-01 30-Apr-02  
Float Out 23-Dec-99 4-May-01 30-Apr-02 15-Mar-04 23-Aug-05  
Delivery 30-Apr-01 30-May-02 21-Jul-03 13-Aug-04 30-Sep-06  
KL-FO (weeks) 85 95 87 137 173 115
FO-D (weeks) 71 56 64 22 58 54
KL-D (weeks) 156 150 151 158 231 169

JUST HOW BAD IS NGSB?

Just in case you missed it, I reproduce here my comparison of GD and NG's operating results for 2009.  GD's 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, which had an operating profit of $299 million on revenues of about $6,213 million, a margin of 4.8%.  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 hereJuly 16, 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 % 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%

AFL SIGNS LOIS FOR 10 FEEDER SHIPS

The Philadelphia Inquirer reports that newcomer American Feeder Lines - visit them here - has signed letters of intent with Aker Philadelphia and an unnamed company in Green Bay which has to be Fincantieri, for five ships each.  Read the story here.  Normally I'm pretty sceptical about stories like this but I'm so much in favor of what AFL is trying to do that in this case I'm rooting for them.  July 15, 2010.

NG TALKS SPIN-OFF

Northrop Grumman had a conference call yesterday.  Most of it was the usual pablum but two things were clear.  First, they don't want to break it up: Wes Bush calls NGSB "one single integrated enterprise".  Yeah, right.  Second, they clearly prefer a spin-off to a sale: that way they can overvalue it and load it up with debt.  Bush also described NGSB Pascagoula as "one of the most flexible shipyards in the world", building "a whole variety of different classes of ship".  Good grief, what nonsense: every time they've tried to build anything that wasn't going to be painted gray they've lost their proverbial.  Well, we shall see what transpires.  I think this is going to be the hot topic of the next six months.  July 15, 2010.

NASSCO DELIVERS T-AKE 10

The USNS Charles Drew, (T-AKE 10), was delivered yesterday, only 16 months after its keel was laid.  Read GD's announcement here July 15, 2010.

WHAT WILL HAPPEN TO NGSB?

I like the line in the NG announcement about NGSB not being synergistic with the company's other businesses, as if it had been any more synergistic when they bought it back in 2001.  Anyway, the question now is, what's the best way forward. 

First, what exactly does NGSB consist of?

  1. Newport News SB, in Newport News VA, with ~18,000 employees.

  2. The former Ingalls SB, in Pascagoula MS, with ~11,000 employees, including a composites facility in Gulfport MS.

  3. The former Avondale Industries, in New Orleans LA, with ~5,000 employees, including a fabrication shop in Tallulah LA.

  4. Continental Maritime, in San Diego CA, with 400 employees.

  5. AMSEC, in Virginia Beach VA, with 2,000 employees.

Second, what are the choices?

  1. Sell the whole thing, en bloc, although there are few qualified buyers.

  2. Sell the whole thing, piecemeal, giving access to a lot more buyers.

  3. Sell everything except Newport News.

  4. Spin off rather than sell.

  5. Some combination of spin off and sell.

Next, what will happen?

  1. Newport News is the tough one.  There are few potential buyers - Lockheed Martin, GE, Raytheon - none of whom would want it.  It may have to be spun off, but that's OK: it did alright on its own before and it can do again.

  2. Ingalls will be sold to BAE Systems.  Count on it.

  3. Avondale will be turned over to the State of Louisiana, who will look for a shipbuilder to take it over - you know they are thinking Bollinger - but won't find one and it will end up being a dismal run-down mess of an industrial park.

  4. Continental Maritime will also be sold to BAE Systems, who will combine it with their San Diego operation.  If the Navy has a problem with that, it could be sold to GD and combined with NASSCO.  Or it could go back to being a subsidiary of Newport News.

  5. AMSEC could be spun off, it could be sold to its management, or it could be sold to one of the other DoD beltway bandits.  Several choices there.

You read it here first.  It will be interesting to see what actually happens.  July 14, 2010.

ATLANTIC MARINE IS NOW BAE SYSTEMS SOUTHEAST

The Atlantic Marine yards in Jacksonville and Mobile are now called BAE Systems Southeast Shipyards Inc.: there's a new web site under construction at www.baesystemsssyi.com.  The Atlantic Marine yards that were not sold are now called Boston Ship Repair and Philadelphia Ship Repair and there's a new web site at www.northeastship.comJuly 14, 2010.

NORTHROP GRUMMAN GIVES UP !

Well we all knew they didn't understand shipbuilding.  Just remember Phil Dur and shudder.  Now it's official, they're quitting, after nine years of chaos and confusion.  Read the announcement here.  Interesting timing, announcing it on the day that BAE Systems closed on its acquisition of Atlantic Marine.  Reliable sources have told me that, before Wes Bush got to be NG's CEO, he did a deal to sell NGSB to BAE, but it was vetoed by his predecessor, Ron Sugar.  So what's the betting that it's BAE this time?  Mind you, there are some twists to this that bear thinking about, such as, are there advantages in breaking the division up rather than selling it in one piece?  More comment to come tomorrow.  July 13, 2010.

MITSUI JOINS ANADARKO IN STICKING IT TO BP

Both the minority investors in the Macondo well have now told BP that they are not accepting any liability.  Mitsui today told BP that it won't pay the $111 million that BP is expecting from them.  If you missed it, read Anadarko's statement here July 13, 2010.

LEHMAN COMPLETES SALE OF ATLANTIC TO BAE

The Atlantic Marine shipyards in Mobile and Jacksonville are now part of BAE Systems. Read J. F. Lehman's announcement of the closing here July 13, 2010.

GEORGE STEINBRENNER DEAD AT 80

George Steinbrenner died this morning.  He is, of course, best known for his ownership of the New York Yankees, but some of us in the maritime industry knew him for his stewardship of two famous old Great Lakes companies, Kinsman Transit (which was the family business) and The American Ship Building Company (which he and John McMullen acquired control of by buying stock).  Later on, after he had abandoned the Great Lakes, he also owned Nashville Bridge, (now Trinity Industries' Ashland City division), and Tampa Shipyards, (now operated by Edison Chouest).  Like him or loathe him - I'm in the second category, based on my experience of working with him on AmShip projects back in the 1970s - he was definitely an inimitable character and the world will be a tad less interesting without him.  July 13, 2010.

LAYOFFS AT NASSCO

It was inevitable but the first wave of 300 layoffs is not quite as bad as had been feared.  Read the story in the San Diego Union-Tribune here July 13, 2010.

THE MAD HATTER STRIKES AGAIN

Secretary Salazar's new moratorium is slightly less idiotic than the last one, but not much.  Read the DoI statement here and API's statement here.  In the meantime, the number of deepwater rigs that are still in the Gulf is already down from 33 to 17, and none of these are actually drilling.  Thousands and thousands and thousands of jobs.  July 13, 2010.

PELICANS GOOD, GEESE BAD

All that fuss over a few oil-covered pelicans and we learn today that the Department of Agriculture has been systematically rounding up and gassing geese.  About 1400 last year, 400 so far this year.  Don't geese have rights too?  By the way, the University of New Mexico, which studies these things for DoT, says that a million vertebrate animals are run over on our highways every day.  Every day!  That's in addition to the average daily toll of 155 human deaths.  Maybe we should close down the highways until they can be proved to be safe.  July 13, 2010.

LIFE GOES ON IN NAWLINS

They live in a different world down there.  It may be neither better nor worse than the world the rest of us live in, who can say, but it's definitely different.  Click here to go to nola.com and take Dat Quiz  It's a blast.  July 12, 2010.

NG MOVING TO GD'S NEIGHBORHOOD

How cosy!  Northrop Grumman has announced that it is moving its corporate headquarters from LA to the DC suburbs.  Specifically, to Falls Church VA.  Read the announcement here.  Mr. and Mrs. Grumman have bought a place at 2980 Fairview Park Drive, just across the street from General and Mrs. Dynamics, who live at # 2941.  I hope they both have tinted glass in their windows.  July 12, 2010.

LCS PROPOSALS GO IN

The proposals for the lead-yard LCS contract were submitted today, covering up to ten more ships.  So how long will it take NAVSEA to make a decision?  And what's the betting?  I say 4/5 Marinette, evens Austal.  July 12, 2010.

IS THE CURTAIN COMING DOWN ON AVONDALE?

I've been saying for ages that it was only a matter of time before NGSB walked away from Avondale.  Well, it may be about to happen.  Read the story in the Times-Picayune here July 12, 2010.

NOAA TERMINATES VTHM

NOAA has terminated its contract with VT Halter Marine for the construction of the SWATH coastal mapping vessel Ferdinand R. Hassler.  The construction option on this contract was exercised back in September 2006 and the completion date at that time was June 2008.  She was launched last September.  See VTHM's letter to its subcontractors here.  Although the termination appears to have been for convenience, not for cause, this is still not good news for VTHM.  What next?  Who will get to finish the job and what impact will this have on future NOAA business for VTHM?  July 12, 2010.

MATSUDA CONFIRMED (BUT DON'T TELL ANY ONE)

David Matsuda was confirmed by the Senate as Maritime Administrator on June 22.  Don't believe me?  Understandable.  There's been no announcement from either MARAD or DOT,  both of which still list him on their web sites as Deputy Maritime Administrator.  But read one report here And we still don't have either a replacement for Jean McKeever or a new Superintendent of Kings Point.  Or maybe we do and it's a secret.  July 10, 2010.

OH GOSH, WIND FARMS AREN'T SAFE

We'd better have another moratorium.  July 7, 2010.

BP LOOKING TO THE OTHER GULF

Now that the markets are so drastically undervaluing BP's stock, the company has inevitably become the object of take-over speculation.  I speculated on this myself, back on June 3.  Now it turns out that BP is taking defensive measures, talking to three investment funds - the International Petroleum Investment Company, (IPIC), of Abu Dhabi, the Kuwait Investment Office, (KIO), and the Qatar Investment Authority, (QIA) - about taking a piece of the business.  That would be an interesting development, would it not?  The largest oil producer in the U.S. effectively controlled by Arab governments?  Some of our brainless politicians and pundits would have conniptions.  July 5, 2010.

WHAT ARE WE GOING TO DO ABOUT POLAR ICEBREAKING?

The news that the Coast Guard has had to cancel the Polar Sea's next Antarctic deployment raises anew the question of what we are going to do about our ever-diminishing polar icebreaking capabilities.  Goodness knows the Coast Guard has its hands full right now in the acquisition arena, what with all the Deepwater procurements.  In any case, it would take how long to design and build new ships?  Ten years?  And then there's the question of who's going to build them: anybody but NGSB, please.  This is one really big mess and as far as I can see, there isn't even a semblance of a plan for its resolution.  July 2, 2010.

THE A WHALE JOINS THE BATTLE

In case you were wondering, because there's been almost no press coverage, the A Whale, the 320,000-dwt o/o equipped as a skimmer, is now out in the middle of the spill, roughly 20 miles southwest of the focal point of activity.  One hopes that she's working, not just sitting there waiting for our government to do its bureaucratic thing.  July 2, 2010.

ONLY ON MARITIME MEMOS

Click here to see video of the launch of T-AGM 25.  July 1, 2010.

ROWAN TO BUY SKEIE DRILLING

More consolidation offshore, only three days after the announcement that Noble is buying Frontier Drilling.  Skeie is a new player but it has three of Keppel's heavy-duty N-class jack-ups on order.  July 1, 2010.

ANOTHER CHANCE FOR THE BIG U

The Wall Street Journal is reporting that Senator Inouye's friends at NCL have agreed to sell the SS United States to the SS United States Conservancy, for $3 million.  So much for returning her to service, but at least we can be assured that she won't be towed out in the middle of the night and then magically show up later at Alang.  Don't get your hopes too high, though.  She's a big ship, she's been idle for 40 years and she's been an abandoned shell for the last 15 years.  It will still cost a bundle to make her in to any kind of decent memorial, museum, hotel, whatever.  Read the WSJ article here and visit the Conservancy's web site for donations hereJuly 1, 2010.

ERIK SEITHER TO RUN SNAME

SNAME has hired Erik Seither, currently of DNV, as its new Executive Director.  An excellent choice, made at a crucial period in the Society's history, with so much change still so badly needed.  Read the announcement here.  July 1, 2010.


LISTEN TO THE DUTCH

The country that is by far the best organized when it comes to managing its coast has got to be the Netherlands, more than half of which is essentially land recovered from the sea.  They are not called the Low Countries for no reason.  Why don't we listen to them on the subject of coastal protection?  Read an interesting article in Canada's Financial Post hereJune 29, 2010.

HALTER CHRISTENS/LAUNCHES T-AGM 25

The USNS Howard O. Lorenzen, (T-AGM 25), which will replace the converted Mariner, the USNS Observation Island, (T-AGM 23), was christened on Saturday at VTHM's yard in Pascagoula.  Read the Navy's announcement here.  She was launched on Wednesday: see photo on the right.  June 28/July 1, 2010.

NOBLE BUYS FRONTIER

Another company with few apparent concerns about the future of offshore is Noble Drilling, which has bought Frontier Drilling for $2.2 billion.  Read Noble's announcement here.  Frontier operates three drill ships, one semi (currently in the USGoM) and one FPSO, and has two drill ships under construction.  June 28, 2010.

BOURBON BULLISH ON OFFSHORE

Bourbon unveiled its plans for the next five years today in Shanghai.  It's terrific.  If you have any doubts about the future of offshore, click here and then watch the presentation.  June 25, 2010.

CALM DOWN, PLEASE

Just because Senator McCain has introduced a bill does not mean that the Jones Act is going away.  Not a chance.  Senator McCain is a nincompoop.  He introduces bills all the time and even the ones that represent half-sensible ideas don't get passed.  In the past 20 years, he has sponsored over 1600 bills.  How many became law?  Seventeen, just over 1% of the total.  Whoop-de-doo.  June 25, 2010.

CHAVEZ SEIZES MORE U.S. RIGS

Apparently the Government of Venezuela has seized eleven rigs owned and operated by Helmerich & Payne.  Read the Bloomberg story here.  Read the company's statement here.  Why do we put up with this nonsense?  Are the Marines doing anything this weekend?  June 25, 2010.

NINE MORE RB(M)S

The Coast Guard's RB(M) program reached 105 today, with the award of nine more boats to prime contractor Marinette Marine.  The contract price is $19 million with deliveries starting in 2011.  Marinette says that half will be built by Marinette's subcontractor, Kvichak Marine, and half by its own Green Bay subsidiary, Ace Marine.  (What's half of nine boats?)  According to the Coast Guard, 27 of these versatile and effective little boats have now been delivered.  June 24, 2010.

FEDERAL JUDGE THROWS OUT DRILLING MORATORIUM

The industry team, led by Hornbeck, won the day in New Orleans, although the Government will appeal.  Read the order on Marine Log's web site here and AP's story on NOLA.com hereJune 22, 2010.

COCHRAN GETS BATEMAN AWARD

Marine Log reports that the two-member American Shipbuilders Association has given the Bateman Award for 2010 to Senator Thad Cochran of Mississippi, saying that "He has consistently increased shipbuilding budgets".  Read Marine Log's report here.  This should look well in the Senator's office alongside his recent Porker of the Month award from Citizens Against Government Waste.  Read that nomination here.  June 22, 2010.

HORIZON SEEMS TO BE IN TROUBLE

The following message was sent to Horizon's senior seagoing personnel on Thursday by Don Watters, whose job title is shown as "Director of Operations OTS".  This is a pretty clear indicator of a company in financial difficulties and, given the advanced age of the Horizon fleet, it's also fairly alarming.  June 22, 2010.

Subject: Overtime

Effective Immediately:  All discretionary and maintenance OT is to be discontinued until further notice.  This applies to all officer ratings.  All at sea and in port weekend and holiday OT for the Day workers is to be discontinued until further notice.  All excess of 8 OT for the day workers and watch standers is to be discontinued until further notice.  This means that only the OT required to keep the ship running safely and efficiently on proforma, to protect personnel, cargo and cover cargo operations in port can be worked.  The OT associated with all previously approved maintenance projects is to be discontinued.  If you have something critical and need to work people on OT outside the above restrictions,  you must obtain your Vessel Superintendents approval ahead of time or in the case of an emergency notify them as soon as possible.

US SHIPPING'S ITB PHILADELPHIA A CTL

The Philadelphia was transiting the Suez Canal when it collided with K Line's containership Rhein Bridge.  Damage was extensive - the port engine room was flooded - but no one was hurt.  She was towed to Port Suez, where she was turned over to an Indian shipbreaker.    I think that just leaves one of the six ITBs still in the fleet - the Mobile - and she's still tied up in Violet LA.  June 21, 2010.

IS THIS THE WORLD'S UGLIEST SHIP?

That strange Malaysian/Hong Kong entity that calls itself Norwegian Cruise Lines has just taken delivery from STX France of its first post-Panamax cruise ship, the Norwegian Epic.  Some of us might have been getting used to the surpassing ugliness of modern cruise ships but this one sets it all back to square one.  Is that not one hideous monster?  Those top two decks look as if they had been dumped there (as it were) by a passing albatross with a problem.  June 21, 2010.

NO DAY OFF FOR ANYONE

Gosh, how insensitive was it for Tony Hayward to take a day off?  What can he have been thinking?  I mean, don't the folks at BP know that nobody in any kind of responsible job is allowed to take a day off, ever?  Ever, ever, ever?  Look it now, President Obama never takes a day off, does he?  Oh, yes, silly me, of course he does.  And the members of Congress, who are supposed to be getting us out of the mess they got the country into, they never take days off.  Hell, no, they take whole months off.  Such hypocrisy!  June 20, 2010.

WHEN ARE CONFLICTS NOT CONFLICTS?

It's hilarious to see members of the Congress, of both parties, calling on the odious Rep. Barton to step down from the Energy Committee because he has a conflict of interest.  Hey, people, you've all got conflicts of interest!  Or almost all of you.  Get real!  Here's how to clean up the congressional cesspit: make it an ethics violation subject to loss of seat for any member to accept any campaign contribution from any person or entity with an interest in a matter that comes before a committee on which that member serves.  July 19, 2010.

HAYWARD STEPS ASIDE

BP's Chairman has told Sky News that Bob Dudley, formerly of Amoco, will be the point man for the Macondo spill from now on.  Read the story here.  So Tony Hayward didn't even make it to the end of the spill, let alone to the end of the year.  But he's still CEO.  By the way, the bookies are now offering 4 to 1 against BP filing for bankruptcy before the end of the year: if you own a lot of its stock, this might not be a bad hedge.  July 18, 2010.

ADA EXTENDED TO VESSELS

The DoT has extended the rules of the Americans with Disabilities Act to apply to passenger ships and boats.  Read the announcement here.  Great timing!  Bad news for the struggling passenger vessel operators, of course, but good news for the shipyards which get to make the modifications.  Elevators, ramps, wider doorways, accessible bathrooms, facilities for dogs, even on those little harbor tour boats.  June 18, 2010.

DOES NO ONE WANT THE JOB AT KINGS POINT?

The Superintendent of Kings Point resigned in November.  The Academy is in disarray and desperately needs strong and effective leadership.  So who's his replacement?  Who knows?  Well, it's only been seven months: it's not reasonable to expect prompt action from MARAD on anything, especially not something as unimportant as this.  Is it?  Commencement's on Monday: maybe there will be an announcement.  No, probably not.  Anyway, I say give the job to Dean Kumar, who's Acting Superintendent now.  He's a maritime economist and he has broad international experience, which makes him vastly more qualified than the retired admiral they'll probably end up appointing.  June 18, 2010.

WHAT ABOUT A REPLACEMENT FOR JEAN McKEEVER?

The long-time Associate Maritime Administrator, the one with all the important program responsibilities, such as Title XI and the Small Shipyard Grants Program, retired in November and has not yet been replaced.  What is going on at MARAD?  Are they all on vacation, or just asleep?  Maybe they are busy explaining the Jones Act to the new, but still unconfirmed, Administrator.  June 18, 2010.

BOLLINGER AND CHOUEST JOIN HORNBECK

A double blast on the vuvuzela for Bollinger and Chouest, who have joined Hornbeck's suit against the Government's illegal moratorium on deepwater drilling.  But where are the rest of you?  June 16, 2010.

MORE RIGS LEAVING

The day before the Macondo well blew out, there were 42 deepwater rigs working in the USGoM.  Today there are 24.  That's a whole lot of lost jobs already - 4,000 to 5,000 on the rigs themselves, plus at least twice that number in the boats and on shore.  June 16, 2010.

THE LATEST ON THE INDEPENDENCE

The old Independence, which was beached near Alang in October, but not accepted for demolition, is now breaking up, as you can see from the picture on the right.  This is very sad.  We've never had any kind of explanation from either MARAD or the EPA regarding the legality of her removal from the U.S.  And what was the role of NCL in this sordid affair?  I guess that because she's at Alang, she's "out of sight and out of mind".  Can you imagine the fuss if she had been beached somewhere in the U.S., such as Senator Inouye's back yard?  I think there's been a dereliction of duty by senior civil servants here.  What do the DoT and EPA Inspectors-General have to say?  June 16, 2010.

THE CANADIAN NAVY TURNS 100

There's a naval review this weekend in Victoria BC and another next month in Halifax NS, to celebrate the centenary of the Canadian Navy.  This is excellent: a naval review is always a great occasion.  And I shall refrain from making any snide observations about the currently minimalist state of the Canadian Navy, which consists of three 40-year-old destroyers, 12 frigates and four ex-RN submarines that don't work.  June 16, 2010.

OLE SKAARUP DEAD AT 94

One of the great men of our industry, Ole Skaarup, died yesterday, 94 years young.  I had the privilege of working with him in the 1990s, when he tried to put a small bomb under the U.S. shipbuilding industry's approach to the construction of tankers.  He was simultaneously brilliant, exasperating, charming and funny.  Read the CMA's tribute to him hereJune 16, 2010.

THE OTHER BIG BP SPILL

Check out the other big BP spill hereJune 15, 2010.

RHODE ISLAND SHOWS THE WAY

In another example of political clear thinking, such as we have come to expect from Rhode Island, the state's House of Representatives has passed a bill requiring a police escort for all LNG carriers calling there.  Read the story in the Jamestown Press here.  Great pocket money for off-duty state troopers, but how they would actually do anything useful is not too clear.  June 11, 2010.

ENOUGH OF THIS LACK OF RESPECT FOR THE CONGRESS

It's a given that nobody knows better how to run the country than those 535 members of the United States Congress.  If they didn't, we wouldn't have elected them, would we?  I've had it with all these big corporations acting as if they know what they're doing.  Where does BP get off proposing to pay dividends to British widows and orphans?  The temerity of these people!  I think we should nationalize all the oil companies and re-create Standard Oil, only with Congressman Ed Markey as CEO.  And while we're about it, let's nationalize the big six shipyards and put Congressman Gene Taylor, the man who claims to be able to design a Coast Guard cutter on the back of an envelope, in charge.  Simple, really.  June 10, 2010.

BP BRINGING IN NORTH SEA SHUTTLE TANKER

Now that they are capturing over 15,000 bpd from the Macondo well, BP needs shuttle tankers.  They have started work with the 24,000-dwt ATB Massachusetts and are planning to use OSG's 48,000-dwt Overseas Cascade, but Tradewinds reports this morning that the 130,000-dwt Loch Rannoch is now on its way from the North Sea.  Serious capacity.  June 10, 2010.

HORNBECK GOES ON THE OFFENSIVE

Hornbeck Offshore is taking on the Administration's offshore moratorium in court.  Read the suit here.  Good on them!  June 10, 2010.

SPILL PUTS JONES ACT UNDER ATTACK

For a classic example of ignorance and confused thinking, read this from the Heritage Foundation.  I trust that our industry associations are on the alert.  June 10, 2010.

ODDS ON HAYWARD LENGTHEN

The odds on Tony Hayward surviving as BP's CEO are lengthening.  A week ago, evens: now six to four against.  Personally, I bet he quits the week after the flow of escaping oil is finally stopped.  BP's invisible Chairman should quit the same day.  And I would bet that BP goes outside the company for successors: there are, of course, good candidates inside the company, but they are now all tarred with the Macondo brush.  June 9, 2010.

LYNNE FRINK ON THE WAY

The National Response Corp's Oil Spill Response Vessel Lynne Frink, normally based in Delaware Bay, just sailed past my window.  I guess we all know where she's going.  June 8, 2010.

TRINITY YACHTS DELIVERS

Reinforcing its leadership position in the worldwide megayacht market, Trinity Yachts has delivered the 190-foot Mi Sueño, pictured on the right.  Impressive stuff.  June 5, 2010.

AUSTAL GETS FUNDING FOR JHSV 4 AND 5

The Navy has exercised an option on its contract with Austal USA for $100 million worth of LLTM for JHSVs 4 and 5.  Read the DefenseLink announcement here.  June 4, 2010.

FORGET THE FISHERMEN, WHAT ABOUT THE OFFSHORE WORKERS?

The Louisiana Mid-Continent Oil & Gas Association has released some data on the impact of the Administration's poorly thought out suspension of exploratory drilling.  It's a very badly structured document, which doesn't spell out the numbers at all clearly, at least not by my nitpicking standards, but it seems to be saying that there will be at least 50,000 jobs going with the 33 rigs and 70 or so associated OSVs that have been idled by the order and that are already starting to move out to Brazil and West Africa.  Read the LMOGA fact sheet here.  And read OMSA's press release here.  I don't hear Governor Jindal, who doesn't want the federal government to help Louisiana except when he does want the federal government to help Louisiana, yelling and screaming about this, which is many, many times bigger than the damage to the Louisiana fishing industry.  Regardless of the political issue, however, the other big question for the industry is whether or not the moratorium constitutes a force majeure event under rig charters and other contractual vehicles.  June 4, 2010.

HERE'S ANOTHER WAY TO PLUG THAT WELL

I've already suggested that BP should try to plug that hole with MSNBC's Chris Matthews but an alternative and probably even more popular approach is pictured on the right.  June 4, 2010. 

THOSE LOUISIANA FISHERMEN

Well, as I said earlier, I'm sure that we are all totally distraught about the suffering among Louisiana fishermen.  But consider this.  The New York Times reports today (a) that the fishing areas that remain open are not being fished intensively, (b) only 6 of 10 tuna boats are going out, although they fish in another part of the Gulf altogether, and (c) despite the plentiful fish, many boat captains cannot find enough deckhands.  Such misery!  June 3, 2010.

AN ALTERNATIVE SCENARIO

If BP is too big to merge with another oil company, maybe the solution is for it to sell its North American operations, so that the dreaded BP name disappears from our sacred soil.  Who might buy them?  ExxonMobil would probably not be a politically acceptable buyer.  Either Chevron or ConocoPhillips could be.  What about a European company?  Shell?  Statoil?  Total?  ENI?  Or a state-owned company from a country that we don't hate, such as PetroBras?  June 3, 2010.

WHO WILL REPLACE HAYWARD?

The British and Irish bookies are, of course, making books on the replacement of Tony Hayward as CEO of BP.  They are saying it's an even bet he'll be gone by the end of the year.  See the odds on his successor here.  Interesting to see three ConocoPhillips guys in the list.  Do you think that  there could be a merger in the works?  June 2, 2010.

BUY NOW?

It seems to me that the drops in the prices of BP's and Transocean's stock are much greater than could possibly be justified by even the worst possible outcome from this mess.  I think I may have to buy some of it.  Of course, I know nothing, you don't want to listen to me, I'm just a retired riveter.  June 1. 2010.


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