US SHIPPING FILES UNDER CHAPTER XI

The day finally arrived.  US Shipping Partners filed for protection under Chapter XI of the Bankruptcy Code yesterday.  Find all the details here.  April 30, 2009.

MARAD SWAMPED !

Here's the big number: 450.  MARAD received "over 450" applications for small shipyard grants, with a total value of over $1.25 billion.  Do we have a vibrant shipyard industry or what?  Let me see, now, that's an average request of $2.8 million.  So, what do we think?  115 awards with an average value of a little less than $1 million?  57 awards with an average value of $2 million?  I wouldn't want to be in MARAD's position, having to select the winners and explain to the losers.  April 29, 2009.

I SPOKE TOO SOON

The Acceptance Trials for LCS 1 have been postponed a month.  April 28, 2009.

STEWARD OF MAERSK ALABAMA SUES

That didn't take long.  The Chief Steward has sued Maersk Line Limited for sending him into "pirate-infested waters" without adequate protection.  Read the AP report on Bloomberg here.  April 27, 2009.

GULFMARK REPORTS 1Q INCOME OF $14 MILLION

Gulfmark Offshore filed an 8-K today in which it reported net income in the first quarter of $14 million, on revenues of $109 million.  It confirms the impairment charge of $46 million as a result of terminating the three-PSV contract with Bender.  That's a big number, considering that the entire contract was priced at $76 million: I think we can expect to see some interesting developments in this dispute.  Read Gulfmark's press release here and the 8-K here.  The webcast is interesting too, if you have the time.  April 27, 2009.

LCS 1 TO UNDERGO ACCEPTANCE TRIALS

Yes, I know she was delivered last September and commissioned last December but what we forget is that she only had a partial AT on the Great Lakes.  A very small part, half a day's worth, compared to this week's four-day schedule.  Of course we will never know how it goes because the head of INSURV has decreed that all INSURV reports shall, in future, be classified, to prevent them being leaked to the Chinese.  April 27, 2009.

NAVY READINESS IS SADLY LACKING

Defense News reports today on the deplorable state of the Navy's readiness.  Read the story here and groan.  April 27, 2009.

LPD 18 DRY-DOCKS IN BAHRAIN

The USS New Orleans, (LPD 18), is in ASRY's graving dock for repairs.  The USS Hartford, (SSN 768), however, is coming back (on the surface) to be repaired in the U.S.  Read the Navy's announcement here.  April 27, 2009.

BERNIE JACOBSON LOSES THE BATTLE

One of our leading experts on ferries and also one of the characters of the industry, lost his battle with cancer last week, at age 75.  Read Marine Log's tribute to Bernie Jacobson here.  April 26, 2009.

AKER PHILLY WORRIES ABOUT BACKLOG

Aker Philadelphia Shipyard reported a first-quarter profit of $2.7 million on revenues of $62.6 million.  Read the announcement here.  Read, in particular, the section headed Outlook.  As pointed out here recently, the yard is running out of work: they need to start fabrication of Hull 17 in less than a year, but they don't have a customer for Hull 17.  April 26, 2009.

WHAT THE HECK, OVER

So here we are at about 1745 hours on a beautiful Saturday and a container barge goes past no more than 50 to 100 yards off the beach, well within the line of coral reefs.  I don't have my binoculars and the barge looks like it hasn't been painted in about 17 years, so it's hard to read the name, but it's two words and they are both quite long.  Hey guys, whoever you are, do you normally send your barges down the coast so close in that you could hit a swimmer?  The Atlantic Ocean's not big enough for you, maybe?  Good grief!  April 25, 2009.

NG REPORTS FIRST QUARTER

Northrop Grumman reported $389 million in net earnings in the first quarter, on gross revenues of $8,320 million.  It could have been worse.  Read their press release here and the 10-Q here.  For real entertainment, read the transcript of their webcast here: they got more questions about shipbuilding than everything else combined and managed to give the impression that they have only just discovered that shipbuilding is more efficient (a) if you design the ship first and (b) if you then build a whole bunch of them in an unbroken series.  April 25, 2009.

VT HALTER LOSES ITS LEADER

The CEO of VT Halter Marine, Boyd E. ("Butch") King, died suddenly of a heart attack yesterday.  Read the company's announcement here.  Butch had been running VTHM since it was created in 2002 out of the bankruptcy of Friede Goldman Halter and had become one of the most popular and effective CEOs in the industry.  You only had to see Butch with his management team to recognize the man's leadership qualities - businesslike but promoting a congenial atmosphere.  He will be greatly missed.  April 21, 2009.

BENDER CLAIMS TO HAVE BUYER FOR PSVS

The Mobile Press-Register reports that Bender Shipbuilding claims to have another customer for the three 245-foot PSVs that it had been building for Gulfmark Offshore, the contract for which was recently terminated.  Yeah, right.  Read the report here.  April 20, 2009.

ISLAND BOATS CLOSES

Island Boats, of Jeanerette LA, closed this week.  Read the report in the New Iberian here.  Get used to it.  There are going to be a lot of news items like this over the next few years as the smaller yards drop out.  On www.shipbuildinghistory.com, we have already moved about 15 small yards from the "active" to the "inactive or occasional" category.  April 19, 2009.

SECOND ZUMWALT TO BE FPI

According to Reuters, the Navy and GD have agreed on an FPI contract for the second Zumwalt-class DDG.  Read the story here.  OK, if we can fix-price the second ship of a class that is as radically different from its predecessor as Zumwalt is from Burke, we can fix-price practically everything except a prototype from here on out.  Let's eliminate all that cost-plus free-loading once and for all.  April 18, 2009.

NAVY REJECTS CVN 77

Despite all the enthusiasm last week over the success of the acceptance trials, the Navy today refused to accept delivery of CVN 77.  Read Springbored's Springboard here.  The problems don't sound insuperable but it's a black eye for Northrop Grumman.  April 17, 2009.

LHD 8 DELIVERED

The last of the "Wasp" class of amphibs, USS Makin Island, (LHD 8), was delivered to the Navy by Northrop Grumman yesterday, an astonishing five years and two months after her keel was laid.  Read NGSB's announcement here.  April 17, 2009.

BENDER DEFAULTS ON ITS PSV CONTRACT

Gulfmark Offshore has filed an 8-K revealing that "a U.S. shipyard" has defaulted on its $76.5 million contract to build three PSVs and Gulfmark is, as a result, taking a material impairment charge of $46.5 million.  Construction has stopped while Gulfmark figures out what to do next.  Read the announcement here.  The unnamed yard involved is Bender, which is now in the unusual position of having no new construction work at all.  Would this not be a good moment for someone to buy them?  After all, it's not that Bender can't build ships: their problem is that they can't get the prices right.  April 16, 2009.

ALAKAI ON THE WAY BACK

The failed Hawaii Superferry, Alakai, transited the Panama Canal on Saturday.  Headed where?  April 14, 2009.   Old news already: she arrived at Atlantic Marine's shipyard in Mobile yesterday.  April 15, 2009.

COMMANDING OFFICER OF HARTFORD RELIEVED

The Navy has relieved the commander of the USS Hartford (SSN 768).  Read the announcement here.  April 14, 2009.

PIRACY

I wasn't going to comment on the piracy problem at all, because it isn't specifically a U.S. maritime industry problem, and this is a column that sticks to U.S. maritime industry issues.  Now a US-flag ship has been attacked, but that still doesn't make it a U.S. maritime industry problem.  It's an international problem and that's why there are now warships of all nations, including China and Iran, patrolling in the area.   And it seems to me that the only long-term solution is a political one, involving the government and the economy of Somalia.

Having said that, which probably annoys a bunch of you, there are a few additional conclusions that we can draw:

• The skill and bravery of the US-citizen crew of "Maersk Alabama" were very impressive and a credit to the flag.

• Sending a guided-missile destroyer to handle this situation is a ludicrous misuse of resources and draws attention to the urgent need for lots of littoral combat ships.  Only it's not the ridiculously over-designed, over-expensive LCSs currently under construction that we need: it's smaller, cheaper, offshore patrol ships, in much greater numbers.

• The last thing we need to do is arm the crews of merchant ships.  Warships can and should use force, when necessary, as the Bainbridge did today, but the pirates count their own lives cheap and the risk of unintended deaths of civilians and of international disputes is much too high to have everybody and his uncle being free to fire away as they think fit.  April 12, 2009.

CVN 77 COMPLETES ACCEPTANCE TRIALS

The USS George H. W. Bush, (CVN 77), successfully completed Acceptance Trials today.  Read the Navy's announcement here.  April 9, 2009.

US SHIPPING SUES BLACKSTONE

The hapless US Shipping is suing its partner in the JV that owns the product carriers being built by NASSCO.  Read the 8-K here.  April 9, 2009.

VT HALTER GETS T-AGS 66

The Navy intends to award a sole-source contract to VT Halter Marine for design and construction of a "Pathfinder"-class survey ship, designated T-AGS 66, with delivery in February 2013.  Read the announcement here.  The design will be a modification of that used for T-AGS 60 through 65, all of which were built by Halter at its Moss Point shipyard.  April 9, 2009.

DDG DEAL CONFIRMED

It didn't take long.  GD and NG reached an agreement with the Navy this afternoon that Bath will build all three Zumwalts and Ingalls will get two more Burkes ASAP.  April 8, 2009.

UNITED MARITIME EXEC ACCUSED OF STEALING $300K

United Maritime Group, of Tampa, which operates the former TECO fleet and terminals, has filed a complaint in the United States Court for the Northern District of New York against one of its own executives, David O'Neill, accusing him of stealing $300,000 of the company's money and using the company's resources to build himself a hunting lodge.  Read the story on WPSD here and the complaint here.  April 8, 2009.

ANOTHER YARD CLOSES

Superior Boat Works, in Greenville MS, has closed.  "We are a victim of the economy", said its President, Brent Collins.  Well maybe, but the inland fleet still needs efficient repair yards.  April 8, 2009.

DDG DEAL DONE

It's apparent from today's news reports that Secretary Gates' proposed solution to the DDG budget problem was pre-cleared with the relevant congressional leaders.  Ingalls will get two more DDGs in the 2010 budget, Bath will build all the DDG 1000s, whether that turns out to be one, two or three ships, and then both yards will build more DDG 51s.  April 8, 2009.

BIW TO BID FOR OPC PROGRAM

No surprise, it's now clear that Bath will definitely go after the Coast Guard's OPC program.  Senator Collins, (R-BIW), and the Commandant will tour the yard today.  This would be a good program for Bath, if they could only compete on cost with Bollinger, Marinette and VT Halter.  April 8, 2009.

SECDEF RECOMMENDS CUTS IN NAVAL SHIPBUILDING

Secretary Gates revealed his recommendations for cuts in defense spending today.  Read his speech here.  The key points as far as naval shipbuilding are:

• Increase the number of LCSs in 2010 from two to three: in addition, he confirmed that the plan is for 55 of them.

• Increase the number of chartered JHSVs from two to four.

• Begin replacing the "Ohio" class of SSBNs in 2010.

• Slow the rate of ordering of CVNs to one every five years and reduce the total number from 11 to 10.

• Delay the next-generation cruiser indefinitely.

• Delay the 11th LPD indefinitely.

• Delay the MLP indefinitely.

• Build no more than three and preferably only one DDG 1000: however many, Bath will build all of them.

• Restart the DDG 51 program at both Bath and Ingalls.

• Shift the acquisition workforce from contractors to Government employees.

In sum, bad news for the "Big Two" and for the "beltway bandits".  Good news for Marinette, Bollinger and Austal.  And good news for Hawaii Superferry too - what did I tell you?  April 6, 2009.

CONFUSED IN MICHIGAN

To stimulate this way or that way?  Another lock at Soo, or not?  Let's argue about it and maybe the money will still be there when we make up our minds.  Except that maybe it won't.  Read the story in the Milwaukee Journal Sentinel here.  Those are strange people up there in northern Michigan.  April 6, 2009.

NEW ORLEANS PILOTS GET PAY RAISE

NOLA.com reports that New Orleans pilots are getting a raise, from $359,000 to $378,000 a year.  It's needed to keep up with inflation, apparently.  Read the story here and don't miss the excellent comments from readers.  April 6, 2009.

IS IT THE EXIT FOR THE USS ENTERPRISE?

The Navy Times quotes the CNO as saying "We really need to take Enterprise out of service."  Read the story here.  He doesn't admit to settling for fewer than 11 carriers but it sounds like he's moving in that direction.  April 6, 2009.

NAVY MAY DUMP EMALS

At a hearing of the House Defense Appropriations subcommittee on Wednesday, it was revealed what had already ben widely rumored, that there are huge problems with the Navy's new Electro-Magnetic Aircraft Launching System, known as EMALS, so huge that they may be forced to revert to steam, which would nullify many, many billions in cost savings and stretch out the CVN construction program by many years.  Read about it here.  It boggles the mind that this could be happening.  Will we ever get anyone in there who can straighten out the Navy's ship acquisition process?  April 3, 2009.

ANOTHER $17MM FOR SMALL SHIPYARDS

MARAD's Small Shipyards Grant program just picked up another $17 million.  The money came from this year's Defense appropriation, the same source as last year's $10 million.  Read the Federal Register announcement here.  April 3, 2009.

BLACKSTONE DUMPS US SHIPPING

US Shipping has filed a notice of late filing of its 10-K because of "the Joint Venture’s class A member purportedly terminating the Partnership’s role as managing member of the Joint Venture and reducing the number of directors appointed by the Partnership to the Joint Venture’s Board of Directors from three to one based on alleged defaults under the Joint Venture agreement and the Joint Venture’s credit facility".  Read the filing here.  The JV referred to is the one that will own the tankers being built by NASSCO and the class A member referred to is Blackstone.  An interesting development that raises all sorts of new questions about US Shipping's future.  April 3, 2009.

FRED HARRIS TO HEAD THE ASA

The President of NASSCO has taken over as Chairman of the ginormous, two-member, one-issue, American Shipbuilding Association.  Don't give up your day job, Fred.  Read the announcement here.  April 2, 2009.

CUSTOMS REVERSES ANTI-JONES ACT RULING

The Offshore Marine Service Association, (OMSA), reports that it has persuaded the Customs and Border Protection Agency to reverse a recent and highly controversial ruling under which it had allowed sub-sea equipment to be delivered to offshore platforms in non-Jones Act vessels.  Good for OMSA.  April 2, 2009.

EPA PICKS ON OCEAN SHIPPING

The EPA and its Canadian counterpart have petitioned the IMO to get tough on emissions from ships in North American coastal waters.  Read their proposal here.  One might think that the EPA had enough to do cleaning up the pollution inside the coastline without fussing over ships at sea.  April 1, 2009.

GAO SLAMS NAVY SHIPBUILDING

The GAO has released a new report on defense acquisition, including naval shipbuilding costs.  Read it here.  It's depressing stuff.  April 1, 2009.