Maritime Memos


March 2009


TIME FOR ACTION ON SHORT-SEA SHIPPING

OK, it’s been six years since Bill Schubert got fired up about short-sea shipping, and it’s been 12 years since Fred Hillmann and I wrote a SNAME paper on the economics - read it here.  Are we not done talking yet? 

Western Europe has had short-sea shipping operations for decades.  The designs for suitable ships exist and can be bought.  There are at least eight U.S. shipyards which can build them.  There is no shortage of crews or vessel operators.  If there’s a bottleneck in the system, it’s in our ports, but these are drive-on, drive-off trailerships we’re talking about: you don’t need a huge storage yard or a major deep-water port. 

So if the problem is not with the marine industry, it must be with the shippers and trucking companies.  Can they please tell us what they are doing to solve it, apart from just passing the cost of congestion on to their customers?

The FHWA’s budget is over $40 billion: MARAD’s is about $300 million.  The FHWA gets over $400 million for R&D: MARAD gets zilch.  Here’s a challenge for Secretary LaHood and the incoming FHWA and MARAD Administrators:

  • Fund a pilot project, using chartered ships – say Boston to Jax – to demonstrate that short-sea shipping works;

  • If it does, and it will, fund a “Mariner”-type shipbuilding program – standard-design ships built in series;

  • Charter the ships to operators who put together long-term deals with major shippers;

  • Provide tax incentives to shippers for getting their freight off 18-wheelers and on to ships;

  • Once it’s all going smoothly, sell the ships to the operators and take credit for your achievement.

March 31, 2009.

SUPERFERRY HEADED FOR MOBILE

The Honolulu Advertiser reports that the Hawaii Superferry has left Hawaii already and is headed to Austal's shipyard in Mobile "to position her for future employment".  Read the story here.  How exactly does that position her for future employment?  And why to the shipyard, which has very little pier space, and not to some lay-up pier somewhere?  Are there modifications and/or repairs required?  If so, what?  And why is the second Superferry still in Austal's yard and not in lay-up?  Well, let's think.  The Superferries are too big for any U.S. market.  And they are too expensive to sell to a foreign operator.  So that leaves what?  Oh, yes, the U.S. Navy.  Expect to see them chartered for service in the Pacific, like the Westpac Express.  March 30, 2009.

RAY MABUS TO BE SECNAV

Reliable sources confirm that, as predicted in this column two months ago, Ray Mabus is to be nominated as Secretary of the Navy.  (The nomination was announced by the White House later on March 27: read the announcement here.)  A Harvard-trained lawyer, he served in the Navy, was Governor of Mississippi from 1988 to 1992, and was Ambassador to Saudi Arabia from 1993 to 1996.  He has had no association that I know of with Mississippi's largest private-sector employer, Northrop Grumman Shipbuilding, but he will obviously have to be careful how he deals with shipbuilding issues.  Unfortunately, he did serve on the Board of Directors of the disastrous Friede Goldman Halter, which is not what you would call a golden recommendation.  I don't think that he's exactly the forceful leader who can whip the naval establishment into shape, the way John Lehman did, but maybe he will surprise us.  March 27, 2009

HARTFORD ROLLED 85 DEGREES

The Navy Times reports that the USS Hartford, (SSN 768), rolled 85 degrees after the collision with the USS New Orleans, (LPD 18) last week.  Read the story here.  So they are not going to dock her in the Gulf, are they: watch for her return to the U.S. on a heavy-lift ship.  March 27, 2009.  Other sources say that she's coming back on the surface, however.  March 30, 2009.

PICK ONE LCS?

The highly respected naval analyst Loren Thompson says that the Navy can't afford to build both LCS designs and should pick one and go with that.  Read the story here.  Well, he has a point but I've got a better idea.  Don't pick either.  They are too big, too fast and they are trying to do too much.  They both cost way too much to build and they will also cost way too much to operate.  I say, scrub the whole damn misbegotten program and start again.    Let's build something that's about half the size, goes about 35 knots and costs less than 20% of what the LCSs apparently cost, no more than $100 million each.  Then build a whole lot of them, a hundred or more, in an uninterrupted series.  100 boats @ $100 million = $10 billion sounds better to me than 55 boats @ $500 million = $27.5 billion.  Of course they won't do all the amazing things that the Navy wanted the LCSs to do, but most of that was dreaming.  March 25, 2009.

MARINETTE WITHDRAWS FRC PROTEST

Reliable sources report that, only five days after getting a frosty reception in the Court of Claims, Marinette Marine has dropped its objections to the award of the FRC program to Bollinger Shipyards.  March 25, 2009.

ICGS ON ITS WAY OUT

It was revealed at the House Coast Guard Subcommittee hearing yesterday that the Coast Guard has signed an MOU with Integrated Coast Guard Systems that eliminates the prospect of ICGS building any more boats.  All remaining Deepwater procurements will be handled by the Coast Guard's Acquisition directorate.  Good.  This means that the OPC program will definitely be open to the second-tier shipyards.  And maybe Bath Iron Works could take over the NSC program.  March 25, 2009.

MARINETTE GETS 36 MORE RB(M)S

The Coast Guard has exercised an option on its contract with Marinette Marine for 36 additional RB(M)s.  This batch will be built in Marinette's new facility in Green Bay, rather than by Kvichak Marine, which is building the first 30 boats in Kent, Washington, as a subcontractor to Marinette.  March 25, 2009.

LOCKHEED MARTIN GETS ANOTHER LCS

The Navy has awarded a contract to the Lockheed Martin team for the next LCS.  The ship will be built by Marinette Marine.  There's no price given, because the procurement is not over yet.  Completion is by December 2012.  Read the DefenseLink announcement here March 23, 2009

OSG BARGES REMOVED FROM BENDER

Reliable sources report that OSG America's incomplete ATBs were removed from Bender Shipbuilding's yard in Mobile this afternoon and are now at VT Halter Marine's yard in Pascagoula.  March 20, 2009.

TOW TAKES OUT POPPS FERRY BRIDGE

A tow of eight barges full of rocks, pushed by Southern Towing's "Cheryl Stegbauer", took out the fixed span on the south side of the Popps Ferry Bridge over Back Bay in Biloxi today.  See the Coast Guard's report, with a bunch of excellent aerial photographs, here.  The Back Bay is, of course, fed by the Tchoutacabouffa River, Bayou Bernard and the Gulfport Industrial Seaway, the last of which is home to three shipbuilders - Trinity Yachts, United States Marine and GulfShip - as well as several other industrial enterprises.  March 20, 2009.

SSN AND LPD COLLIDE

The AP reports that the USS Hartford and the USS New Orleans collided last night in the Arabian Gulf.  We seem to be having a lot of naval accidents these days: doesn't the Navy teach its officers how to use their navigational equipment?  Apparently the New Orleans ruptured a fuel tank and spilt about 25,000 gallons: why do these ships have fuel tanks that are contiguous to the hull?  March 20, 2009.

MAKIN ISLAND COMPLETES INSURV

The future USS Makin Island, (LHD 8), spent three days on Acceptance Trials this week and did well.  Some deviations and waivers required in her main propulsion and electrical plant, but generally very good.  So Ingalls can perform when it wants to and the right people are on the job, but I think we all knew that.  She will be delivered and go around Cape Horn this summer (midwinter down there) to her home port in San Diego.  March 20, 2009.

US SHIPPING GETS UNTIL END-APRIL

US Shipping has filed another 8K reporting that its forbearance agreement with its lenders has been extended yet again this time through April 30.  Read it hereMarch 19, 2009.

CANDIDATES FOR MARITIME ADMINISTRATOR

As far as I can tell, there are at present three candidates for the position of Maritime Administrator, all three with good maritime backgrounds:

  • John Graykowski, whom we all know from his sterling service in the Clinton Administration

  • Art Sulzer, a maritime consultant and surveyor in Philadelphia with a terrific resume: he is the current Chairman of the Ship Operations Cooperative Program

  • Deirdre McGowan, who is Executive Director of the Inland Rivers, Ports & Terminals Association.

March 19, 2009

GATES READY TO CUT PROGRAMS

Well of course we are all anxiously awaiting the DoD budget to see which shipbuilding programs will be eliminated or scaled back - I predict all of them except LCS and T-AKE.  There was an interesting article in the Boston Globe on Tuesday: read it here.  I like Secretary Gates' analogy of today's needs with the Hundred Years War's longbow: there was a weapon system that didn't over-run its budget, although they almost ran out of arrows at Agincourt.  (Read the book referred to by Gates - Agincourt, by Bernard Cornwell - it's terrific.)  March 19, 2009.

C. & G. BOAT WORKS GETS TWO MORE YPs

The Navy has exercised an option on its contract with C. & G. Boat Works for the construction of YPs 705 and 706.  The total value is $17.6 million, with delivery by March 2011.  Read the DefenseLink announcement here March 18, 2009.

HAWAII SUPERFERRY TO CEASE OPERATIONS

The Hawaii Superferry will cease operations, following a ruling yesterday by the Hawaii Supreme Court which found that the special-purpose law that allowed it to operate without an environmental impact statement was unconstitutional.  Read the story in the Honolulu Advertiser here March 17, 2009.

IS TODAY THE DAY FOR US SHIPPING?

The clock on US Shipping's forbearance agreement with its lenders ran out again at the end of the day on Friday, so, unless there is yet another short-term reprieve, today could be the day that the beleaguered company finally folds.  March 16, 2009.

NAVSEA DISCOVERS A NEW (OLD?) FUNCTION

The Navy Times reports that Naval Sea Systems Command has created a Surface Ship Life Cycle Management Activity, dedicated to keeping ships around as long as possible.  Read the article here.  It's not clear why this would be considered a new activity.  Has it not always been NAVSEA's responsibility to keep ships around as long as possible?  Of course, it's particularly important nowadays, given NAVSEA's propensity for building unaffordable ships.  The way they are going, they will soon be lucky if they can afford three new ships a year and the average life of a naval combatant will have to be stretched and stretched.  Maybe they could start by stopping the premature retirement of perfectly good cruisers - five Ticonderoga-class ships gone at age 22 - and the premature sinking of perfectly good destroyers - all 31 Spruance-class ships gone at an average age of 25.  The Ides of March, 2009.

NAVY NAMES LCS 4

Following up on Friday's announcement that LCS 3 would be named the USS Fort Worth, the Navy today revealed that LCS 4 will be named USS Coronado.  Read the announcement here.  As with LCS 3, the contract for construction of this ship has not yet been awarded.  Note that in this case, no dimensions are given, leaving it an open question as to which of the two designs it might be.  March 12, 2009.

WRECK OF ENSCO 74 LOCATED THE HARD WAY

It appears that the cause of last week's accident to the tanker "SKS Satilla", 65 miles south of Galveston, was the wreck of the jack-up "Ensco 74", which was destroyed last year by Hurricane Ike.  Read the Coast Guard's report here March 12, 2009.

MORE T-AKE ENGINE PROBLEMS?

Sources say that both T-AKE 1 and T-AKE 2 have recently been undergoing unscheduled maintenance periods that involve unspecified problems with the main propulsion plant.  I thought those early vibration and piping problems had been fixed.  What's all this about?  March 12, 2009.  This is apparently a false alarm.  MSC says that the maintenance periods are scheduled maintenance periods and there is no "unscheduled maintenance that involves unspecified problems".  And NASSCO says that the vibration problems were all resolved ages ago.  Other, independent, sources support these positions.  End of story.  March 13, 2009.

BIG U FOR SALE AGAIN

The Philadelphia Inquirer reported recently that the liner "United States" is for sale again, NCL having apparently given up on its commitment to return her to service.  What, you're surprised?  Why?  They only bought her to win political support for bringing foreign-built ships into the U.S. flag.  Read the article here March 12, 2009.

TAYLOR STILL OFF TRACK

The Navy Times reports that Rep. Gene Taylor (D, Northrop Grumman), was railing at the LCS program again this week.  Read it here.  Mote and beam, congressman.  March 12, 2009.

ONLY TEN CARRIERS?

Loren Thompson of the Lexington Institute is predicting that the Navy will take its share of the coming budget cuts by agreeing to drop the size of its carrier force from eleven to ten.  Read the article here.  This would also suggest a parallel reduction of two cruisers, two destroyers, a frigate, two submarines and a supply ship.  March 12, 2009.

QUINCY'S GOLIATH CRANE SHIPS OUT

The 1200-ton Goliath crane from the Quincy shipyard is now loaded on a barge and headed for Daewoo's Mangalia shipyard, in Romania.  Read the story in the Quincy Patriot-Ledger here and see a bunch of excellent pictures hereMarch 7, 2009.

NASSCO DELIVERS T-AKE 7, LAUNCHES T-AKE 8

NASSCO delivered the USNS "Carl Brashear", (T-AKE 7), on Wednesday and will launch the future USNS "Wally Schirra", (T-AKE 8), on Sunday.  Ahead of schedule, of course.  March 7, 2009.

NAVY NAMES LCS 3 BEFORE CONTRACT AWARD

In a very curious development, the Navy announced today that LCS 3 will be named the USS "Fort Worth".  Read the announcement here.  Note that the dimensions given in the announcement are those of the "Freedom" class ship built by Marinette and Bollinger for Lockheed Martin rather than those of the "Independence" class ship built by Austal USA for General Dynamics.  But the contract for construction of LCS 3 has not yet been awarded!  Note also that the class is apparently to be named for "American mid-sized cities, small towns and communities".  It is surely a complete coincidence that Fort Worth is a city in which Lockheed Martin has a major facility, and an even greater coincidence that they bought that facility from General Dynamics.  Isn't defense contracting fun?  March 6, 2009.

PRESIDENT OBAMA'S PROCUREMENT POLICY

The President says he wants to change procurement policy in such a way as to increase competition, minimize the use of no-bid contracts and reduce the use of contractors to oversee other contractors.  That's all very well in theory, but as far as naval shipbuilding and ship repair are concerned, it will be very difficult to put into practice.

More competition?  The Navy has effectively eliminated competition for major shipbuilding contracts by allowing the consolidation of the six large shipyards that survived the Reagan years.  Can we now force a break-up of NG Shipbuilding and GD Marine Systems?  And there's precious little competition in the repair world because of the Navy's insistence on doing almost all the work in just two locations.  The Reagan Administration was right to spread the repair work around the coasts.

More fixed-price contracts?  That would require the Navy to actually design its ships before procuring them, and then not messing with the design during construction.  Could they handle that?

More direct oversight of contracts?  That would mean building the size of NAVSEA back up to its old levels.  Even if that were practical, would it not also be much more expensive than the present, admittedly unsatisfactory, system?

There's a lot more to this topic than can be contained in these few observations: would someone please write a paper for the USNI Proceedings?  March 5, 2009.

MORE STUPID NORWEGIANS

Trico Marine's stock took a tumble yesterday after it was revealed that the company's Jones Act eligibility was being jeopardized by Norwegian investor Kistefos AS.  Read Trico's press release here.  Why do so many Norwegians think they know more about the U.S. market than we do?  Let them go and screw with each other in their own back yard.  March 4, 2009.

MARINETTE GETS CASH FROM THE NAVY

But we don't know how much.  The Navy has modified its LCS contract with the dreaded Lockheed Martin to provide for what it calls "LCS program continuation efforts necessary to preserve production capability at its industry team shipyard facility".  Read the DefenseLink announcement here March 2, 2009.

"PORT ROYAL" INCIDENT EXACERBATES NAVY'S BUDGET PROBLEM

Sources say that the Navy's fleet maintenance program is underfunded by at least $450 million.  As if that were not enough bad news, the accident to the cruiser "Port Royal" compounds it.  I am now told that, in addition to the damage already reported, she has stripped both reduction gears, and fixing her could run the Navy $100 million or more.  The Navy wants a bigger fleet, comprised of increasingly complex, increasingly expensive ships, but they can't maintain the ones they've got.  Seems like something's got to give.  March 2, 2009.

NOAA DUMPS ON THE MARITIME INDUSTRY

We are polluters.  NOAA says so.  Read the story here.  Of course, we aren't anything like the polluters that road and rail are, but that's apparently irrelevant.  March 2, 2009.

OSG - BENDER DISPUTE SURFACES

The much rumored dispute between OSG and Bender Shipbuilding surfaced publicly today as OSG America revealed that it is in negotiations to cancel its contracts with Bender Shipbuilding for the construction of six ATBs and two additional tugs.  OSG says that it intends to complete two of the ATBs and the two additional tugs at "alternative shipyards".  If the contracts are, in fact, cancelled, it's safe to assume that Tampa Ship will finish the two barges and it would not be a big surprise if the four tugs were finished by Chouest's new yard in Gulfport, Gulf Ship.  The interesting question is what would happen to perennially cash-strapped Bender, a good yard that never seems to live up to its potential.  March 2, 2009.

SHIPYARD GRANTS

MARAD has published the rules for the new $100 million shipyard grants program.  Read them here.  Note that the program is not restricted to shipyards with fewer than 600 employees: up to 25% of the money can go to shipyards with more than 600 but fewer than 1200 employees.  Note also that it's individual facilities, not companies as a whole.  And it's production employees, not all employees.  Applications are due by April 20.  March 1, 2009.


~~~~~ NEWS & COMMENT ARCHIVES ~~~~~

To read earlier news and comment, click here.