Maritime News and Comment

May 2008

    DISCIPLINARY ACTION AT HORIZON LINES.  Horizon Lines has suspended six employees in its Puerto Rico operation and two of them have resigned.  Read Horizon's announcement here.  It's tempting to speculate as to what this means but we will wait and see.  May 29, 2008.

    GULFMARK TO BUY RIGDON.  Gulfmark Offshore has announced that it will buy Rigdon Marine for a combination of cash, stock and debt assumption that adds up to about $550 million.  Read Gulfmark's announcement here.  See the two companies' fleets below.  Note that Gulfmark is an international operator, with only one US-flag vessel, while Rigdon is exclusively a US-flag operator. Note also that this deal also takes out Bourbon, which had a big stake in Rigdon: read Bourbon's announcement here.  May 29/30, 2008.

    USCG SUSPENDS NEGOTIATIONS ON 123S.  The Navy Times reports that the Coast Guard has backed off its negotiations for compensation from the screwed-up 123-foot WPB program until the DoJ and DoHS have finished their investigations.  Read the story here.  May 28, 2008.

    FRC-B FIELD THINNER.  Two of the four shipyards that submitted proposals for the Coast Guard's fast response cutter (FRC-B) procurement have apparently been eliminated.  Sources say that Bath Iron Works (always the outsider in this race) and VT Halter Marine have been dumped and BAFOs have been requested from Bollinger and Marinette, with a due date in June.  But the offers have to be good for 225 days, which means that the Coast Guard's still taking its time over this.  I'll bet the lawyers are looking over everyone's shoulders.  May 20, 2008.  Contrary to this report, the Portland Press-Herald says that BIW did make the cut.  Read the article here.  May 23, 2008.

    50 YEARS!  I started my apprenticeship at Lithgows, on the Lower Clyde, 50 years ago today.  I can't say it's been downhill ever since but it's certainly been interesting and entertaining.  I don't kid myself that anyone would ever want to buy my memoirs, but selected bits may be of passing interest, so I'm going to publish them on-line, in monthly installments.  Names will be named!  Coming soon.  May 19, 2008.

    THE VLPCS ARE COMING.  ConocoPhillips and Saudi Aramco confirmed today that they will build a 400,000 bpd refinery at Yanbu, the Saudi industrial city on the Red Sea.   Read ConocoPhillips' announcement here.  This comes two days after Total and Saudi Aramco announced an essentially identical project at Jubail, the Saudi industrial city on the Arabian Gulf.  Read Total's announcement here.  Let me see now: 800,000 barrels is about 110,000 tons, i.e., about an Aframax load every day.  To move this efficiently is going to require a lot of pretty big product carriers.  How big?  Aframax?  Suezmax?  VLPCs?  But we can't get anything bigger than an Aframax tanker into our antiquated U.S. ports, so it's going to have to be Aframaxes, unless they are also planning some humongous trans-shipment terminal somewhere.  It's about 7,250 n.m. from the Arabian Gulf to the U.S. Gulf, which would be a 20-day trip at 15 knots, say eight round trips per ship per year.  So it would take a fleet of at least 40 Aframax product carriers - a size of product carrier, by the way, that barely exists at present - to move it all to terminals in the U.S. Gulf.  What will the environmentalists have to say about this?  (Personally, I would much rather have an LNG import terminal in my back yard than a gasoline import terminal, but that's just me.)  Of course, there is no reason to suppose that any of this product would come to the U.S.: maybe they are going to ship it all to Europe and we don't have to worry.  But I have a feeling that these projects are going to be interesting to watch.  May 16, 2008.  (ConocoPhillips is a client of mine but I'm not involved in this project.)

    EXXON VALDEZ SOLD.  No announcements from ExxonMobil, naturally, but it appears that they have sold the poor old "Exxon Valdez", the fine ship that was so ill-served not only by Exxon's incompetence but also by the idiot politicians who banned her from the trade for which she was designed and built, as if the accident had been, in some mysterious way, the ship's fault.  Equasis says she was sold to unknown buyers last month but the Anchorage Daily News and  Pacific Maritime magazine report that the buyer is Hong Kong's Bloom Shipping - I think that should be Ever Bloom Shipping - who plan to convert her to an ore carrier, to be called "Dong Fang Ocean".  May 15, 2008.

    FIRE AT BENDER.  According to the Mobile Press-Register, there was a fire on the "Seacor Sherman", the fourth of six AHTSs being built for Seacor Marine by Bender Shipbuilding on Wednesday.  Read the report here.  May 14/15, 2008.

    UNREALISTICALLY FEASIBLE.  According to the Newark Star-Ledger, Jayson Ahern, the deputy commissioner of Customs and Border Protection, told a congressional homeland security committee last month that checking 100 percent of the containers at massive foreign ports like Hong Kong is "unrealistically feasible."  Read the report here.  So true, so true.  And true of so many other DHS programs too.  May 13, 2008.

    US SHIPPING IN THE TANK.  Following its terrible first-quarter results, announced on Monday, and yesterday's conference call, US Shipping's stock price fell by about 30% yesterday, closing at $7.75, and today is down to $7.02 at the market closing.  May 13/14, 2008.

    MORE NSC RUMORS.  Anonymous sources say that the C4ISR system on "Bertholf", the first NSC, was installed last month, but was at least partially uninstalled before the recent INSURV which resulted in preliminary acceptance.  The suggestion is that this was done so that the INSURV team wouldn't inspect it and fail it.  Is this true?  Anyone know?  May 13, 2008.

    CG ACCEPTS INCOMPLETE NSC.  In one of the most astonishing examples of dereliction of duty and irresponsible procurement, the Coast Guard has accepted delivery of the first NSC, despite the fact that everyone in the world knows that it doesn't work.  Read the Coast Guard's announcement here and NGSB's here.  Note that the Coast Guard is calling it "preliminary acceptance (delivery)", a new term that I suppose they think gets them off the hook of responsibility, but there's no "preliminary" in NGSB's announcement.  Oh my, this piece of %#@$ is now the "flagship of the U.S. Coast Guard's fleet".  No cause for celebration here: there's lots more trouble ahead.  May 9, 2008.

    FORMER CNO TO RUN GD.  General Dynamics has selected ADM Jay Johnson, a former CNO who's been on the GD board since 2001, to take over as CEO in July next year.  Read the announcement here.  Oh, dear.  Apparently there are no competent managers anywhere in GD who could move up.  May 9, 2008.

    NO BIDS FOR THE NEXT LCS FLIGHT?  The Navy Times raises the possibility that GD and LM may decline to bid on the next flight of LCSs, because of the Navy's unusually tough contract clauses.  Read the story here.  It's an interesting thought.  May 7, 2008.

    MYSTERY SHIPS REVISITED.  Today's New York Times features a delightful illustration in the "Letters to the Editor" section.  I would reproduce it here but that might get me in trouble, so see for yourselves by clicking here.  There are two questions.  First, what has this illustration got to do with the topic of today's letters, which is leadership in U.S. politics? Several readers who are more alert than me have pointed out (a) that the ship is sort-of US-shaped and (b) that the symbolism is of the ship of state being in need of repair.  My second and regrettably frivolous question was: What kind of a funny-looking boat is this and what might it be good for?  Suggestions so far include (a) the liner "United States" after reconstruction by NGSB, (b) a double-acting whale rescue ship for Greenpeace and (c) a drug-smuggling sub.  May 6, 2008, amended and expanded May 6.

    "INDEPENDENCE" AT ALANG?  The Quincy-built liner "Independence", which may have been sold without the necessary governmental permits and which was towed out of San Francisco on February 8, again possibly without  the necessary governmental permits, is now reported to be offshore the breakers' beach at Alang.  Can anyone confirm this?  May 3, 2008.

    NSC "CAPABLE", BUT IS IT?  The Navy Times reports that the Coast Guard's first National Security Cutter, (NSC), the future USCGC "Bertholf", (WMSL 750), was found to be "capable" by the Board of Inspection and Survey and NGSB is, understandably, pleased.   Read the story here.  But note that the ship's highly controversial C4ISR system was not addressed, because it apparently hasn't been installed yet.  What?  This program sometimes seems to be wrapped up in a spider's web of lies and obfuscations.  May 3, 2008.

    NGSB STILL EXCELLING AT PULLING CABLE.  Many readers will remember the stunning photographs of the cable runs on LPD 17 that were published here in October 2005.  Now look at these new pictures, which were taken on LHD 8 last week, and tell me if the yard is getting any better.  Click here.  Let's just terminate all NGSB's Pascagoula contracts.  Move the amphib programs to Newport News, the DDGs and NSCs to Bath, and the OPCs to the second tier.  Then let's sue NG for the taxpayers' money that they have thrown away.  May 2, 2008.

    WSDOT CHANGES ITS MIND AGAIN.  Washington State DoT has changed its mind about rebidding that 50-car ferry project and will now plan on building two 64-car "Island Home"-class ferries as well as the previously planned three 144-car ships.  Read the news release here.  I love the way they say that "the first vessel will be completed by spring 2010, with the second vessel following in fall 2010".  How do they know that?  Note that the "Island Home" they refer to was built for the Nantucket Steamship Authority by VT Halter Marine: no nonsense in Massachusetts about only buying from in-state contractors.  Good luck getting it built inexpensively in Washington State.  Now, if I were VT Halter, I would submit an unsolicited proposal, just to show them what their policy costs.  May 1, 2008, expanded May 4.

    MPSV CONVERSIONS DELAYED AGAIN.  Hornbeck's first-quarter report reveals that the two MPSV conversions being performed in Portland ME by non-shipbuilder Cianbro have slipped yet again.  Read the report here.   Completion is now scheduled for "third quarter of 2008" and "early 2009".  When this contract was executed, in June 2006, deliveries were supposed to be in "mid-2007" and "late 2007".  Can you imagine where the cost has got to?  May 1, 2008.

    YOSSI HAREL DIES.  Much press coverage today of the death of Yossi Harel, the charismatic Israeli who commanded the immigrant ship "Exodus".  Read the obituary in the London Times here.  Here are two maritime notes.  First, Harel was an MIT-educated naval architect: bet you didn't know that!  Second, the "Exodus" was US-built: she was the former "President Warfield", built in 1928, in Wilmington DE, by Pusey & Jones - hull # 399 - for the Baltimore Steam Packet Company.  May 1, 2008.

    MERRY MAY DAY!  It's the first day of summer!  Compulsory morris dancing on the village green at 4 p.m.  May 1, 2008.

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