Maritime News and Comment

April 2006

   IAROSSI RETIRES.  Former long-time Chairman of the American Bureau of Shipping, (ABS), Frank Iarossi, has retired as Chairman of the affiliated company, ABS Group of Companies, Inc., and has been replaced by Bob Somerville, who succeeded him as Chairman of ABS itself.  Read ABS' press release here.  April 28, 2006.

   BERGESEN WORLDWIDE BUYS YARA.   Bergesen Worldwide Gas, (BW Gas), has bought Norwegian owner Yara International's 10-ship LPG fleet, beating out Teekay and OSG in the process.  Read BW's press release here.  The price is reported to be $347mm.  BW Gas was already the world's largest operator of LPG carriers and is now even more so.  April 28, 2006.

   FIRST T-AKE ON TRIALS.  The first of the new class of combat support ships being built by NASSCO in San Diego, USNS "Lewis and Clark", (T-AKE 1), went on sea trials this week.  See one of NASSCO's publicity pictures to the right.  She is due to be delivered to the Navy, on schedule, in mid-May.  Good-looking ship.  April 27, 2006.

   BULKER AGROUND IN STRAITS OF DOVER.   The 77,000-dwt Panama-flag bulk carrier "Lowlands Maine" ran aground in the Straits of Dover, last night, while en route from Dunkirk to South America.  Read the U.K. Coast Guard's press release here.  The "Lowlands Maine" is a Panamax ship built by Sasebo H.I. last year: her owners are Misuga Shipping, of Japan.  April 27, 2006.

   TANKER AGROUND OFF PUERTO RICO.  The 72,000-dwt Cayman Islands-flag product carrier "Margara" ran aground near Tallaboa, Puerto Rico, last night, while en route from Tallaboa to Cartagena, Colombia.  Read the Coast Guard's press release here.  The "Margara" is a double-hull ship of Panamax dimensions built by Brodo. 3 Maj in 1997: her owners are Scorpio Ship Management, of Monte Carlo.  April 27, 2006.

   UAE YARD TO BUILD JACK-UPS.   Maritime Industrial Services, Ltd., (MIS), in the Emirate of Sharjah, has signed a contract with Norway's Mosvold Jackup, Ltd., to build two Friede & Goldman Super M2 jack-ups, with deliveries in June and September 2008.  Read more about MIS here.  April 26, 2006.

   PANAMA CANAL EXPANSION PLAN.   The Panama Canal Authority has unveiled its long-awaited expansion plan.  Read the press release here and the plan itself here.  In essence, it involves the construction of an additional set of locks that can handle ships with beams of up to 49 meters (compared to the existing limit of 32 meters).  The project is expected to cost $5.25 billion and to be completed by 2015.  April 25, 2006.

   LARGEST CRUISE SHIP DELIVERED.   Aker Yards has delivered the 158,000-GT "Freedom of the Seas" to Royal Caribbean Cruise Lines.  The new ship is more than 10% larger than the "Queen Mary 2" and carries an astonishing 3600 passengers.  No formal announcements yet.  April 25, 2006.

   COAST GUARD TURNS TANKER AWAY.  The 17,500-dwt Marshall Islands-flag gasoline tanker "Aral Wind" was expelled from Port Canaveral on Friday when Coast Guard inspectors found that "conditions on the ship were so unsafe (that) inspectors left the vessel shortly after beginning their inspection".  Read the Coast Guard's announcement here.  The "Aral Wind" is a single-hull ship built by Brodo. Split in 1988: its owners are Georgian (as in the former Soviet Union, not a bunch of crackers).  The big question, however, is what U.S. company chartered this ship and who did the vetting?  April 24, 2006.

   BOURBON ORDERS 56 NEW OSVS.   French OSV operator Bourbon has ordered 56 new OSVs from yards in India and China.  Read the company's press release here.  The orders include 26 AHTSs and 10 PSVs from Dayang Shipyard in China, 12 PSVs from Zhejiang Shipyard in China, 5 AHTSs and 2 MPSVs from Bharati Shipyard, in India, and 1 very large MPSV from De Hoop Shipyard, in Holland.  The total value of these orders is said to be $808 million.  No orders for U.S. yards but it's good to note that the Dayang and Zhejiang PSVs will be built to designs from Guido Perla Associates.  By my count, Bourbon already has 26 boats on order at various shipyards: these orders bring its total to 82, or close to 20% of the world orderbook, which you can see here.  Do these guys mean to dominate this industry or what?  By the way, note that the company has now divested itself of all non-marine activities, dropped the word "Groupe" from its name, and relocated its corporate headquarters to Paris from the island of Reunion in the Indian Ocean.  (Historical note: Reunion was called the Ile de Bourbon prior to the French Revolution.)  April 24, 2006.

   PSA BUYS INTO HIPH.   The Port of Singapore's port and terminal operating subsidiary, PSA International, will pay $4.4 billion for 20% of Hutchison Whampoa's port and terminal operating subsidiary, Hutchison Port Holdings.  Read PSA's announcement here and HPH's here and visit their web sites while you're about it.  PSA is, like all large Singaporean companies, controlled by the Government of Singapore.  Hutchison Whampoa is privately held but popularly supposed by our idiot politicians to have "close ties" to the Chinese government, whatever that means.  HPH is the world's largest port and terminal operator, operating in 42 ports in 20 countries and handling 56 million containers a year.  PSA is the third largest, operating in 19 ports in 11 countries and handling 47 million containers a year.  (Dubai Ports World is #2, operating in 51 ports in 30 countries and handling 50 million TEUs a year.)  PSA was the losing bidder to DPW for P&O's port and terminal operating subsidiary but, if they had won, they would probably have been just as unpopular in Washington as DPW turned out to be.  Both HPH and PSA, like DPW, are astonishingly efficient, but we wouldn't want them over here messing with our ports, would we?  April 22, 2006.

   SECOND PROJECT AMERICA SHIP DELIVERED.  Malaysian-owned Norwegian Cruise Lines has taken delivery in Eemshaven of the second Project America ship, started by Northrop Grumman Ship Systems Ingalls Operations and completed by German cruise ship expert Meyer Werft.  The new ship is called "Pride of Hawai'i": visit the ship here.  Goodness, these modern cruise ships are ugly, aren't they?  April 21, 2006.

   LUTHER BLOUNT DONATES SHIP.  The doyen of shipyard managers, 90-year-old Luther Blount, who started Blount Marine in Warren, Rhode Island, in 1947, and is still running it, along with American Caribbean Coastal Line, has donated the coastal cruise ship "Niagara Prince" to three local colleges - Rhode Island College, Roger Williams University and Wentworth Institute of Technology.  The ship was built in 1994 - Blount Hull # 287 - so she clearly has plenty of life remaining.  Mr. Blount, who is quoted as saying "I got a pile of ships", thinks she's worth about $6.5 million.  What a great thing to do.  Visit Blount Boats here.  April 20, 2006.

   ANOTHER BARGE YARD TO RE-OPEN.  The former Maxon Construction yard in Tell City IN is to be reopened.  The yard now belongs to Perry County Port Authority and some port operations will need to be relocated to accommodate the new activity. The developer, Tell City Marine Contractors, LLC, expects to negotiate a ten-year lease of the site and to invest $18mm in improvements: they are betting that the current strong demand for inland barges will hold up long enough for them to make some money.  Maxon Construction was a railcar builder prior to WWII, when it became a barge builder: it closed in the 80s, a period when we lost about half the nation's shipyards.  April 20, 2006.

   AN AFFORDABLE CARRIER.  I am indebted to a regular reader for the attached photographs of an affordable CVN.  See the pictures here.  Low operating and maintenance costs too.  April 20, 2006.

   BAY AREA WANTS 76 NEW FERRIES.  On the centenary of the great earthquake and fire, San Francisco's Bay Area Council has released a report calling for construction of 76 new ferries, plus another ten support craft.  Among other things, the report suggests that all these boats should be built right there in San Francisco Bay, a region with a long history of driving its shipyards out.  (Shipyards, dirty, ugh, go away!)  Read the report here.  April 18, 2006.

   NEW PEO FOR DEEPWATER.  RADM Patrick Stillman has been relieved as Program Executive Officer (PEO) for the Coast Guard's deepwater program, after completing five years on the job.  (Five years that must seem like twenty-five.)  His replacement is RADM Gary Blore, whose most recent assignment was as Senior Director for Border and Transportation Security at the Homeland Security Council.  April 18, 2006.

   SHIPYARDS TOO BUSY FOR FERRIES.  The Houston Chronicle reports that Harris County has had to postpone replacement of the two ferries that serve the Lynchburg crossing of the Houston Ship Channel because of a lack of interest by shipbuilders.  The two existing ferries, the "William P. Hobby" and the "Ross S. Sterling", were built by Todd Houston in 1964.  Boy, the industry must be really busy if no one can fit in a couple of simple little double-enders.  Read the Chron's story here.  April 17, 2006.

   CONTAINERSHIP GROUNDS IN NEW YORK.  The 4,250-teu Hapag Lloyd containership "New Delhi Express" ran aground in the Kill Van Kull on Saturday but was later refloated.  More dredging!  Read the Coast Guard's announcement here.  April 17, 2006.

   ONE MORE FOR KEPPEL.   Keppel Offshore & Marine has signed another jack-up contract, this one for Mercator Lines, for a KFELS Mod. VB.  The rig is priced at $180mm and will be delivered in the first quarter of 2009.  This gives them a backlog of 24 rigs, plus seven more at AMFELS in Brownsville.  Read the announcement here.  April 17, 2006.

   YOUNG BROS. TO EXPAND FLEET.  Hawaii's Young Bros. has announced that it plans to build eight new barges and six new tugs, to modernize and expand its inter-island fleet.  Read the announcement here.  Young Bros.' existing fleet consists of nine barges and six tugs.  One of the barges (built by Halter) and two of the tugs (built by Bollinger) are modern and will presumably be retained: the balance are over 30 years old.  They also operate six harbor tugs.  April 12, 2006.

   JURONG TO COMPLETE BINGOS 3 AND 4.   Noble Drilling, which in 2004 bought the third and fourth Bingo 9000 bare hulls built by New Dalian Shipyard for Ocean Rig in 1998, has executed an agreement with Jurong Shipyard in Singapore for their completion.  The first of the two, to be called "Noble Danny Adkins", is on its way from Dalian already.  The first two, now Ocean Rig's "Leif Ericsson" and "Eirik Raude" were completed by Friede Goldman International and were the principal cause of the downfall of that company.  Read Jurong's announcement here.  April 12, 2006.

   MEBA TO PROVIDE SURVEYORS FOR ABS.  In what seems to be a remarkably smart move, ABS has contracted with MEBA for the provision of qualified and experienced marine engineers as surveyors.  Read the MEBA announcement here.  April 11, 2006.

   CURIOUS COAST GUARD AUTHORIZATION.  The Conference Report for the Coast Guard and Maritime Transportation Act of 2006 has been released - read it here - and contains the usual selection of interesting items.  Note the following, in particular.  April 11, 2006.

   PANAMA AUCTIONING TRANSITS.   With more than 100 ships queuing for as long as a week, the Panama Canal Authority has decided to take advantage of the situation by auctioning off the few slots each day that are not pre-booked.  Read the procedure on the Advisories page of the Authority's web site, here.  What a rip-off!  April 10, 2006.

   TESORO CHARTERS OSG SHIPS 5 AND 6.  Overseas Shipholding Group, (OSG), has announced the execution of time charters with Tesoro Petroleum of the fifth and sixth of the ten product carriers being built by Aker Philadelphia Shipyard.  Read OSG's press release here.  As with the previous charters - with Shell and BP - OSG does not say what their term is, but "Tradewinds" reports that it's five years.  April 8, 2006.

   DOD PROGRAM COSTS UP $40BN IN 4TH QUARTER.  The Department of Defense has released its quarterly Nunn-McCurdy report on major program acquisition costs.  Read it here.  Total estimated costs, in current dollars, are over $1.5 trillion, up about $40 billion in the fourth quarter of 2005, not counting either the new programs or the ones that have been closed out.  Among the stand-outs: the LPD 17 program, which is >50% over its original estimate and the SSN 774 program (>30%).  April 8, 2006.

   DD(X) TO BE NAMED "ZUMWALT".  The Navy has announced that the first DD(X) will be named USS "Zumwalt", after ADM Elmo R. "Bud" Zumwalt, Jr., who was CNO from 1970 to 1974 and was one of the Navy's most popular, even revered, leaders.  A fine decision.  In addition, the first of the "Zumwalt" class will be numbered DDG 1000, a very strange decision, totally contrary to naval tradition.  Read the Navy's announcement here.  April 8, 2006.

   PULL THE OTHER ONE PLEASE.   Northrop Grumman says that, at $7.3 billion (in 2005 dollars), the next generation of aircraft carriers will cost less than the last of the present generation and that each successive ship in the new series will cost still less.  Read the report in the Virginian Pilot here.  See also the accompanying table.  April 7, 2006.

   WILLARD TO BUILD INTERCEPTOR.   Integrated Coast Guard Systems, (ICGS), the Lockheed Martin/Northrop Grumman joint venture, has contracted with Willard Marine, of Anaheim CA, for the first of what could be as many as 33 long-range interceptors, (LRIs).  One LRI will be carried on each of the Coast Guard's eight National Security Cutters and 25 Offshore Patrol Cutters.  The LRI is a 35-foot, 10-ton RHIB capable of carrying 14 people at 45 knots, with an endurance of 10 hours.  (In comparison, the Short-Range Prosecutor, (SRP), which is being built by Zodiac Boats, is a 25-foot, 9-ton RHIB capable of carrying 10 people at 33 knots, with an endurance of 4 hours.  One SRP will be carried on each of the Coast Guard's 91 new deep-water cutters.)  April 5, 2006.

   SECOND LCS TO BE "INDEPENDENCE", MAYBE.   Secretary of the Navy Donald Winter announced yesterday that the second Littoral combat ship, (LCS), now under construction by Austal USA, will be named "Independence".  Curiously, the Naval Vessel Register says that she will be named "Liberty", which is what I predicted back when they named LCS 1 "Freedom".  Her builder also thinks she will be named "Liberty".  Maybe it's LCS 3 that is to be called "Independence".  Who knows?  April 5/6, 2006.

   SECNAV ON SHIPBUILDING.   Secretary of the Navy Donald Winter addressed the annual meeting of the Navy League yesterday and focused on the problem of naval shipbuilding costs.  Read his speech here.  He was right to say that the Congress and the Navy need to "stabilize funding" and he was right to say that the Navy needs to "do a better job of stabilizing requirements".  He was also right to tell the shipyards that they need to do three things: "implement rigorous process improvements", "invest in capital improvements" and "evolve its workforce", as long as "evolve the workforce" can be construed as including "hire some competent managers".  Now let's see some follow-through.  I'm available to help.

By the way, Mr. Secretary, your history's a bit shaky.  We didn't build 2,000 Liberty ships and 2,000 Victory ships in WWII: we built 2,718 Liberty ships, 550 Victory ships, 533 T-2 tankers and 1,801 other oceangoing cargo ships.  April 5, 2006.

   NELSON TO RUN MARAD.  No, not that Nelson: he's still in Westminster Abbey.  The Prez has nominated MARAD General Counsel Julie Nelson to be Maritime Administrator.  She came to MARAD from Oceaneering, an excellent company, she's a graduate in maritime law from Tulane and she's a former naval officer, giving her knowledge and experience in all sectors of our industry.  And she doesn't wear those special blinders that so many King's Pointers wear, the ones that prevent them from seeing any issue other than the need to preserve the U.S. merchant marine.  April 5/6, 2006.

   PETROJACK SELLS THREE RIGS.   A measure of the intensity of the offshore rig market is provided by the news that Petrojack ASA has agreed to sell the three jack-ups that it has under construction at PPL/Sembawang, in Singapore, to Awilco ASA and Sinvest ASA, which already have six jack-ups under construction, three at PPL/Sembawang and three at Keppel.  The package price is said to be $600mm, which should give Petrojack a profit of around 7%.  The rigs concerned are Baker Pacific 375s, with deliveries scheduled in March 2008, January 2008 and June 2008.  April 4, 2006.

   OREGON IRON WORKS TO DEVELOP A DROPPABLE BOAT.   The Navy - in this case NAVAIR - has awarded a $25mm five-year SBIR (small business innovative research) contract to Oregon Iron Works, of Clackamas, Oregon, to develop an "air-droppable, high-speed, low-signature craft".  Read the DefenseLink announcement here.  Good for OIW, a truly innovative small shipbuilder.  (Northrop Grumman would have charged $250mm.)  April 3, 2006.

   NASSCO AND DAEWOO TEAM UP.   NASSCO has executed a teaming agreement with Daewoo Ship Engineering Company (DSEC), under which DSEC will provide technical support to NASSCO on Jones Act shipbuilding projects.  Read NASSCO's press release in the News Releases section of its web site here.  DSEC is a wholly-owned subsidiary of Daewoo Shipbuilding & Marine Engineering, (DSME): its principal activity until now has been the provision of technical support to Daewoo's Mangalia shipyard, in Romania.  Given Daewoo's undoubted expertise, this might well be all that NASSCO needs to get back into the Jones Act game, if it's not too late.  Expect a containership program to be the new venture's first project.  April 3, 2006.

   USS "TRENTON" TO INDIA.   A delegation from India is currently negotiating the transfer of the USS "Trenton", (LPD 14), to the Indian Navy.  Read the report in the Indian Express here.  This would be the first overseas transfer of an LPD.  The Trenton was built in Seattle by Lockheed Shipbuilding and delivered in 1971, but is still active, like all but one of her 11 sister ships.  Incidentally, the contract price for her construction was $24mm, which should not, of course, be compared to the $1.85 billion that we the taxpayers paid for her replacement, USS "San Antonio", (LPD 17).  April 3, 2006.

   LNG FLEET HITS 200.   With the delivery last week by Samsung of the "Methane Rita Andrea" to British Gas, there are now 200 LNG carriers in the world fleet, up by 20 from this time last year, with a combined capacity of close to 24 million cubic meters.  More impressive, however, is the order book, which is now at 145 ships, with a total capacity of over 24 million cubic meters, i.e., more than that of the active fleet.  April 3, 2006.

   FRC DESIGN UNFIXABLE.   Informed sources say that the problem with the Lockheed Martin/Northrop Grumman FRC design is that model tests revealed it to be dynamically unstable at speeds over 25 knots.   Since the mission requires 30+ knots, it would have to be lengthened by at least 40 feet to meet the spec.  And since it is already longer, at 140 feet, than any self-respecting patrol boat needs to be, that's out of the question as well as being horribly expensive.  So good, back to a conventional steel/aluminum, affordable design, which was, after all, the original plan.  April 1, 2006.

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