Maritime News and Comment

July 2006

   LEBANESE LOGISTICS.  In all the reams and reams of press coverage and punditry about the mess in the Lebanon, I have seen no discussion of how 12,000 Hezbollah rockets and an unmeasurable amount of other armaments actually got there.  It seems to be widely accepted that they came from Syria and/or Iran.  How?  By land, by air or by sea?  Some of this stuff may have been driven down the highway from Syria, but you would have thought that someone, Mossad or the CIA, for instance, would have noticed.  Most of it must have come by sea.  Didn't anybody, Mossad or the CIA, for instance, track these movements?  And where were they stored?  It's not as if you can hide a Katyusha rocket launcher in your basement.  A first principle of warfare for centuries has been the need to cut off the enemy's supply lines.  If Israel had done this, Hezbollah would now be toothless.  Why didn't they?  What am I missing here?  July 29, 2006.

   T-AKE NAMES ANNOUNCED.  The Navy used the occasion of the keel-laying of the fourth T-AKE at NASSCO in San Diego today to announce the names of the fourth and fifth ships of the "Lewis and Clark" class.  The explorers honored in this way are Richard E. Byrd and Robert E. Peary, both Navy admirals and famous for their polar expeditions.  Read the Navy's announcement here.  July 28, 2006.

   HORIZON'S 2ND-QTR RESULTS WEAK.  Horizon Lines made $6.4mm net on revenues of $289.8mm in the second quarter, a margin of only 2.2%.  Not much of a return for their poor confused stockholders.  Of course, they tried to make this result sound good by comparing it to the loss they made in the second quarter last year, in the customary meaningless way that those simple-minded Wall Street folks like.  Read Horizon's announcement here.  I love their use of language, especially "robust growth" and "the second quarter was another great one".  Combined with the first quarter's slightly-less-than-robust $2.4mm on $274.9mm in revenues, a staggering 0.9% margin, they have now eked out $9.0mm in profit from $564.7mm in revenues, or a blistering 1.6% margin for the first half of the year.  If they can keep this up they should be able to afford to buy a new ship in about 2016.  July 28, 2006.

   KIRBY BUYS CAPITAL TOWING.  Continued consolidation in the inland industry as Kirby announces that it has acquired Houston-based Capital Towing, which operates 11 towboats, for $15mm, and Baton Rouge-based Marine Engine Specialists, Inc., a diesel engine distributor and service provider, for $3.6mm.  Kirby's announcement also reveals that its huge fleet is fully utilized.  Read it here.  July 27, 2006.

   HORIZON SHIP GROUNDS IN JAX.  The 38-year-old "Horizon Discovery" collided with a jetty and grounded in the St. John's River on Tuesday, resulting in a brief closing of the waterway.  She was later freed.  You might have thought that they had been visiting Jax long enough now to know the way.  Read the Coast Guard's announcement here.  July 27, 2006.

   MOODYS DUMPS ON US SHIPPING DEAL.  It appears that there's at least one organization in the financial community that doesn't just lap up the bs purveyed by shipping company managers.  Moodys has downgraded US Shipping Partners debt, with a scathing write-up.  You need to register with Moodys to read it, but this is not difficult.  Visit them here.  July 26, 2006.

   GOOD SHIPS.  It is interesting to note two concurrent examples of good ships.  First, Princess Cruises now concedes that the 15 seconds of 15-degree list on the "Crown Princess", that gave rise to so much hysterical nonsense in the press, was caused by human error.  Nothing wrong with the ship.  Second, MOL's car carrier, the "Cougar Ace", is afloat and will be towed in, even though it is lying on its side, at a 60-degree list.  (See terrific pictures on the 17th District's web site - click here.)  Nothing wrong with that ship either.  Those of us in the ship biz should take some small satisfaction from this.  It's rarely the ship that's the problem.  The "Exxon Valdez" spill wasn't caused by its design or its construction.  It's usually either human error or one of those strange events known as an "act of God", a label that always seems to me to be unfairly critical of God.  July 26/27, 2006.

   46-YEAR-OLD LAKER RETURNS TO SERVICE.  The "Edward L. Ryerson", built in 1960 by Manitowoc Shipbuilding (Hull 425), and one of the only two remaining straight-deck lakers, has been refurbished by Bay Shipbuilding and returned to service by Central Marine Logistics, after being laid up for eight years.  See a picture here.  July 25, 2006.

   NASSCO DOES US SHIPPING DEAL.  U.S. Shipping Partners LP has filed an 8-K with the SEC that reveals that a new subsidiary called USS Product Carriers LLC has signed a contract with NASSCO for the construction of nine 49,000-dwt product carriers, plus options for up to five more.  The "current cost" of the nine ships is said to be "approximately $1 billion", or about $110 million per ship.  (The current world-market price is $45 million.)  Oh, dear me.  Read the filing here.  No announcement yet from GD: they are probably still sitting around the Board Room table asking "Why, exactly, are we doing this?"  More to come.  July 19, 2006.

   ATLANTIC YARDS SOLD.  Atlantic Marine Holdings, the parent company of Atlantic Marine and Atlantic Dry Dock, in Jacksonville FL, and of Alabama Shipyard and Atlantic Marine Mobile, in Mobile AL, has been sold to J. F. Lehman & Partners, the New York investment group headed by former SECNAV John Lehman and George Sawyer.  Read Atlantic's press release here.  July 19, 2006.

   MAERSK BUYS PETROJACK RIGS.  Maersk Drilling has bought two Baker 375 jack-ups, the "Petrojack I" and "Petrojack III", that are currently under construction in Singapore by SembCorp's Jurong Shipyard.  The price is said to be $420mm.  Read Maersk's announcement here.  July 19, 2006.

   THREE SPANISH SHIPYARDS SOLD.  The Spanish government has revealed the new owners of the former Izar shipyards in Sestao, Seville and Gijon.  Sestao goes to Construcciones Navales del Norte (CNN), a consortium formed by ship owner Naviera del Nervion, private yard Astilleros de Murueta and two engineering companies; Seville goes to Astilleros de Huelva; and Gijon goes to Factorias Vulcano.  July 19, 2006.

   "CROWN PRINCESS" HAS PROBLEM.  The brand-new 166,000-GT "Crown Princess" unexpectedly heeled 15 degrees to starboard yesterday, in calm seas, while heading north from Port Canaveral, causing major confusion, 240 injuries and more bad press for the industry.  Read Princess' "we don't know what happened, but don't worry" announcements here.  Well there are only so many things that could have caused this.  July 19/20, 2006.

   CELEBRITY CRUISES ORDERS FROM MEYER.  Celebrity Cruises has returned to Germany's Meyer Werft for another "Solstice"-class cruise ship of 118,000 GT and 2,850 berths.  The price is said to be close to $700mm and delivery will be in mid-2010.  This extends Meyer's order book to nine ships, with deliveries through mid-2010.  Read Meyer's announcement here.  July 18, 2006.

   FOSS BUYS CONSTELLATION TOWING.  Foss Maritime, a subsidiary of forward-looking Saltchuk Resources, has bought Constellation Towing of Boston, which operates four rather elderly tugs.  Foss plans to inject a pair of modern tugs into the Constellation fleet.  This is Foss' first venture into the East Coast market and almost certainly not its last.  July 17, 2006.

   USS "GREEN BAY" CHRISTENED.  The Navy has christened the fourth of the "San Antonio"-class of assault ships, the USS "Green Bay", (LPD 20): the ceremony took place at Avondale Shipyards on Saturday.  Read Northrop Grumman's press release here.  July 17, 2006.

   NAVY TO HALVE SSN SIZE AND COST.  The Navy has initiated a project with DARPA aimed at halving the size and the cost of attack submarines, without any reduction in capability.  Read the story in "Defense Industry Daily" here.  Good for them.  And if it can be done for SSNs, then let it be done for all surface combatants too.  But don't hold your breath.  July 13, 2006.

   WWII SUBMARINE WRECK LOCATED.  The Navy has revealed that the wreck of USS "Lagarto" (SS 371), has been found in 225 feet of water in the Gulf of Thailand.  Read the Navy News announcement here.  The "Lagarto" was built by Manitowoc Shipbuilding, which delivered her in October 1944.  She disappeared on 3 May 1945 while attacking a Japanese convoy.  Read her entry in DANFS here.  July 13, 2006.

   PHILLY DELIVERS FOURTH MATSON SHIP.  Aker Philadelphia Shipyard has delivered the fourth of four containerships to Matson Navigation.  The 2890-teu "Maunalei" is a modified Aker CV2500 design, unlike its three sisters, which were of the Kvaerner CV2600 design.  Although formally delivered, the new ship will stay in the shipyard a bit longer, to allow some modifications to the galley.  Read Aker's announcement here and Matson's here.  Good for Philly and good for Matson.  It seems reasonable for Matson to draw attention to the fact that this four-ship program has the effect of reducing the average age of their fleet from 25 to 14, but it would be nice to hear their plans for getting that second figure down to, say, single digits.  July 13, 2006.

   FOUR MORE BIG ATBS FOR HALTER?  Rumor has it that Crowley Maritime has ordered four more 180,000-barrel ATBs from VT Halter Marine, a contract that would be worth at least $180mm and that would extend the backlog at Halter's Pascagoula shipyard well into 2010.  It is also said that the tugs will be Wartsila-powered, Caterpillar being unable to meet the required delivery schedule.  July 11, 2006.

   TWO DIE AT AVONDALE.  Two shipyard workers at Northrop Grumman's Avondale shipyard, in New Orleans, have died, in separate incidents.  Read the story in the New Orleans Times-Picayune here.  July 11, 2006.

   TANKER "CHELSEA" SOLD FOR SCRAP.  Another one gone.  The 39,000-dwt product carrier "Chelsea", built by NASSCO for Apex Marine in 1975 - hull # 386 - has been sold for scrapping in Bangladesh.  July 11, 2006.

   ICEBREAKERS FROM SINGAPORE.  Further indication of the decline of European shipbuilding, as if any were needed, is provided by the news that Russia's Lukoil has ordered an icebreaker from Keppel's Singmarine shipyard, in Singapore.  If the Europeans can't compete for the construction of a high-value, high-complexity ship like this, what hope is there for them?  Read Keppel's announcement here.  July 7, 2006.

   BC FERRIES ORDERS AT HOME.  Amazingly, the British Columbia ferry company has ordered a ship from a Canadian shipyard.  Just when we were beginning to think that Canadian shipbuilding was dead.  The new ship will be a 125-car 600-passenger ro-pax, to replace the 46-year-old "Queen of Tsawwassen", built in 1960 by Burrard Dry Dock.  She will be built by Vancouver Shipyards (now headed by former Todd President Rollie Webb) for CDN 45mm (about USD 41mm) and delivered in the summer of 2008.  Read BC Ferries' announcement here.  July 7, 2006.

   FIRE ON NOAA PIER IN SEATTLE.  A fire broke out on Tuesday night at the NOAA pier on Lake Union in Seattle, damaging several NOAA vessels.  Read the report in the Seattle Times here.  July 6, 2006.

   27-KNOT CONTAINERSHIP.  Korea's Hanjin Shipping has announced that its new 6,655-TEU containership, "Hanjin Bremerhaven", the first of a class of eight, which was christened today at Hyundai, has a 93,000-hp power plant, giving it a service speed of 27 knots, sufficient to knock two days off the time normally needed for the transpacific route.  No concern about fuel costs here.  Read Hanjin's announcement here.  July 5, 2006.

   FIRE ON ALASKAN FERRY.  The ferry "Columbia", (built by Lockheed Shipbuilding in 1974), is in Ketchikan for repairs following a generator fire on Saturday.  The 418-foot "Columbia" is the largest ship in Alaska's 11-ship fleet and one of two deep-sea vessels that operate from Bellingham WA.  Read the State's press release here.  July 3, 2006.

   MAERSK BUYS ADSTEAM.  The A. P. Moller - Maersk Group has announced that its SvitzerWijsmuller division will pay AUD 693mm (about USD 515mm) for the Australian towing company, Adsteam Marine Ltd.  Read Maersk's announcement here.  July 3, 2006.

   ALASKA ORDERS FLOATING DRY-DOCK FROM CHINA.  The Alaska Industrial Development and Export Authority has ordered a 2500-ton floating dry-dock from a Chinese shipyard.  The dock will be used at its Ketchikan Shipyard, which is operated by Alaska Ship & Drydock, Inc.  The dock will cost $9mm and be delivered in July 2007.  July 1, 2006.

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