Maritime News and Comment

December 2007

    NEW YEAR RESOLUTIONS.  Another year has come and gone in the U.S. maritime industry and, once again, we don't seem to have achieved much of which we can be proud.  A few good things, but not many.  At least it's been a busy year, which is a lot better than the alternative.  But let's not give up.  Here are some resolutions for our industry's leaders.  December 31, 2007.

The U.S. Congress: This year we're going to stop telling the Navy what kind of ships to buy and from whom to buy them, because we admit that we know nothing whatever about this stuff.  And we're going to switch to multi-year procurement, to give the yards a real basis for planning.  And we're going to fund Title XI.  And we're going to expand the use of CCFs.  And we're going to dredge all the ports.  And as a bonus, Congressman Taylor promises not to grandstand at committee hearings.

The U.S. Navy: We're going to re-read our Economics 101 text books and cancel the new CVN and the new DDG.  We understand that simpler is more affordable and less risky and we're going to live by that philosophy in future.  And we are going to change our way of doing business so that the shipyards have an incentive to save money, not spend it.

The U.S. Coast Guard:  We recognize that we have a lot more on our plate than we can handle and this year we will work out a way to share some of these responsibilities with others.  As long as it's not the Navy, heaven help us.

The U.S. Maritime Administration:  We recognize that we are not here just to create jobs for King's Pointers and we will do something useful this year, such as taking over some of the Coast Guard's regulatory functions.

Wall Street: We are going to stop with all these idiotic quarter-to-quarter comparisons and start looking at companies' performance in the context of an industry with a 30-year business cycle that needs strategic rather than financial investors.

Bankers: We are absolutely not going to lend any money, not a penny, to people who want to build new shipyards.

Northrop Grumman: We are going to amaze everybody by reducing costs and cutting construction times, because, who knows, it might be good for our stockholders.  We've always known that we could, but we've never wanted to before.

Horizon Lines:  We are mortified to be the operator of the world's most decrepit collection of floating razorblades and we are going to take a look at what OSG and USS did with a view to finding a way to build some new ships.

Second-Tier Shipbuilders: We are going to use our imaginations and pool some resources and show the world that, yes, we can build containerships and coastal trailerships and littoral combat ships and shuttle tankers and a lot more besides, and not only that, but at reasonable prices too.

    FIVE MORE FOR SCRAP.  MARAD has awarded contracts for the demolition of five more NDRF ships.  Read the announcement here.  The five ships are the "Pride" - built by Sun in 1960 as "Mormacpride" (Hull 617), the "Scan" - built by Sun in 1961 as "Mormacscan" (Hull 620), the "Southern Cross" - built by Sun in 1962 as "Mormactrade" (Hull 622), the "Cape Charles" - built by Sparrows Point in 1963 as "Charlotte Lykes" (Hull 4594), and the "Banner" - built by NASSCO in 1961 as "Export Banner" (Hull 324).  December 26, 2007.

    NGSS GETS ANOTHER LPD.  The Navy has exercised an option on its contract with Northrop Grumman Ship Systems for construction of the ninth and (hopefully) last of the "San Antonio" class of LPDs, the future USS "Somerset", (LPD 25).  The contract price is $1,003.3 million, which may be ridiculous but is actually quite a bit less than the contract prices of its three predecessors, so expect additional appropriations in the years ahead, especially as this one is to be built by Avondale.  Delivery is scheduled for November 2011 but don't hold your breath.  I suppose this will allow NG to meet its commitments to the State of Louisiana regarding maintaining employment at Avondale, albeit at the U.S. taxpayers' expense.  How much less would this ship cost if it were built in Pascagoula?  Read the unusually chatty and somewhat defensive DefenseLink announcement - reproduced below with emphasis added - spelling out what's covered by this price, as if it was in some way unusual.  December 21, 2007.

Northrop Grumman Ship Systems Inc., Pascagoula, Miss., is being awarded a $1,003,329,142 fixed-price incentive modification to previously awarded contract (N00024-06-C-2222) for construction of the ninth LPD 17 Class Amphibious Transport Dock ship (LPD 25). LPD stands for Landing Platform Dock, although the ship is usually referred to as an amphibious transport dock. LPD 17 will perform more than amphibious missions and serve as more than a transport for the landing forces. This contract provides full funding for construction of one LPD 17 Class ship (LPD 25), to include design and engineering efforts, material procurement, testing and quality assurance required to support ship construction, as well as initial spares and technical documentation load out. The contractor will also provide the management efforts, including subcontract and risk management, during the entire period of construction and testing. Work will be performed in New Orleans, La. (85 percent) and Pascagoula, Miss. (15 percent), and work is expected to be completed by Nov. 2011. Contract funds will not expire at the end of the current fiscal year. The Naval Sea Systems Command, Washington Navy Yard, D.C., is the contracting activity.

    TECO GETS NEW NAME.  The sale of TECO Transport to Greenstreet Equity Partners has closed and TECO Transport is now called United Maritime Group, with TECO Barge line becoming U.S. United Barge Line and TECO Ocean Shipping becoming U.S. United Ocean Services.  What an unimaginative choice of name!  Visit the new web site here.   December 21, 2007.

    USCG TO TERMINATE ICGS?  The Mississippi Press - the local paper in Pascagoula MS - reports that the Coast Guard has decided to terminate Integrated Coast Guard Systems, the disastrous joint venture of Northrop Grumman and Lockheed Martin that has so royally screwed up the Coast Guard's Deepwater program.  Hurrah!  Read the article here.   December 19, 2007.

    BLESSEY ORDERS 18 FROM R. & R.  Blessey Enterprises has ordered up to 18 inland tank barges from R. & R. Marine Shipbuilding, Inc., of Port Arthur TX.   December 19, 2007.

    DHS: "WE ARE THE POLICE".  The Department of Homeland Security seems to be getting more and more out of control.  Read Sunday's article in the Washington Post, here, about how they treated a civilian Coast Guard employee who had the temerity to blow the whistle on one aspect of the Deepwater program.  Is this the American way?  December 19, 2007.

    HUGE WELDING PROBLEM AT NEWPORT NEWS.  Defense News reports that there may be faulty welding throughout all the ships that Northrop Grumman Newport News has built in recent years, including as many as four aircraft carriers and the last few "Los Angeles" class subs.  Read the article here.  Read the Virginia Pilot's coverage here.  No response from NG.  Oh lord, what next from these people?  In this connection, three of my regular correspondents have already pointed out that at these super-efficient shipyards that NG runs, a welder is paid a bonus based on the amount of weld he or she lays down, he gets that bonus regardless of whether the weld is accepted or not and he also gets it for cutting out any bad welds.  Well that makes perfect sense in NG's "screw the taxpayer" world, doesn't it?  December 18, 2007.

    REBUILT MOKIHANA RETURNS TO SERVICE.  Matson Navigation announced yesterday that the "Mokihana" has returned to Jones Act service following completion of its reconstruction.  Read their press release here.  Note that the release doesn't include a photograph - I guess they wouldn't want anyone noticing the extent of all that new structure.  The upper picture shows what she used to look like: the lower one shows what she looks like now.  Not much difference, is there, I don't think.  I blow steam out of my ears thinking about the arrogance of these jerks, that they believe the Jones Act is there just to protect them and screw everyone else.  December 14, 2007.

    NASSCO LAYS KEEL FOR FIRST USS TANKER.  NASSCO has laid the keel for the first product carrier for US Shipping Partners, the future "Golden State".  Read NASSCO's press release here.    December 11, 2007.

    HORIZON LINE STOCK CRASHES.  On a generally bad day, Horizon Lines' stock price crashed more than most, by over 10% today after the company's rating was cut by Morgan Stanley.  It's now down to $16.29, having been at a high of $36.55 only four months ago.  They do know what they are doing, don't they?  December 11, 2007.

    SHIPBUILDERS REFILE COMPLAINT AGAINST COAST GUARD.  The Shipbuilders Council and Pasha Hawaii Transport Line have refiled their complaint against the Coast Guard for allowing Matson Navigation to rebuild the "Mokihana" in a Chinese shipyard, in contravention of both the letter and the intent of the Jones Act.  Good.  Read the filing here.  December 11, 2007.

    MARINETTE GETS MORE INLS WORK.  The Navy has exercised an option with Marinette Marine for the construction of two additional causeway ferries.  This brings the cumulative value of the contract (so far) to $266 million, running through the end of 2009.  Read the DefenseLink announcement here.  December 11, 2007.  The Navy has exercised additional options with Marinette Marine for the construction of eight more causeway ferries, four warping tugs and one Roll On/Roll Off Discharge facility, a total of 35 separate watercraft.  This brings the cumulative value of the contract to $334 million, running through May 2010.  Read the DefenseLink announcement here.  December 20, 2007.

    GULFSHIP LAUNCHES ITS FIRST FOUR.  Edison Chouest's impressive new shipyard on the Industrial Canal in Gulfport MS launched its first four hulls recently, using one of Bisso Marine's cranes.  These are tractor tugs for service at the Cheniere LNG terminal in Sabine Pass.  See the press release from Bisso Marine here.  December 11, 2007.

    FERRY HITS ALCATRAZ.  The Red and White Fleet's ferry "Royal Prince" hit the rocks of Alcatraz island on Thursday.  Read the Coast Guard's announcement here.  December 8, 2007.

    INGRAM ORDERS 10 FROM JAMESBUILT.  Ingram Barge has ordered 20 10,000-bbl, inland tank barges from Jamesbuilt, LLC, of Paducah KY.   From whom?  Jamesbuilt is an expansion of James Marine, the long-established and well regarded barge repair operation: it represents another new construction yard that's not needed.  December 8, 2007.

    ARIES TO TAKE TWO FROM EASTERN.  Aries Marine has executed an LOI with Eastern Shipbuilding for two 284-foot PSVs of the "Tiger Shark" design developed by Aker Yards Marine, of Vancouver BC.  December 8, 2007.

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