Maritime Memos


August 2009


CHINA TO PHASE OUT OLDER SHIPS

Good grief, now the Chinese are showing us how to manage a maritime industry.  They are apparently working on a plan to provide incentives to shipowners for the retirement of ships over a certain age.  No details have been leaked yet but what an excellent idea!  It took OPA90, unscientific though it was, to get the U.S. to modernize its tank vessel fleet: now let's have an OPA90 look-alike to stimulate modernization of our disgraceful old dry cargo fleet.  August 31, 2009.

NGSB TO SCREW UP CROATIA?

The authoritative Croatian newspaper Slobodna Dalmacija, (Dalmatian News), reports that Northrop Grumman is considering buying the bankrupt Croatian shipyards 3 Maj and Kraljevica.  Read the story here.  If they succeed, heaven help the poor Croatians.  August 31, 2009.

FOUR YEARS TODAY

And the Mississippi coast is still a wasteland of empty lots and concrete slabs.  August 29, 2009.

MORE ON THOSE PREPO SHIPS

Marine Log reports today that the former PFC James Anderson, Jr., (T-AK 3002), now called the Anders, left Norfolk in the middle of last night.  Headed where?  Meanwhile, her sister ship, the former 1LT Alexander Bonnyman, (T-AK 3003), now called the Bonny, is tied up at a pier in Norfolk, but is alleged to be scheduled to sail today.  Interestingly, she's parked at the next pier to the two Hawaiian not-so-superferries.  Marine Log also surfaces the question of environmental clean-up: read the story here.  There is a really interesting question here.  The charter on these ships specifically required that, if and when the Navy were to return the ships to their owner, they must be free of contaminants.  The specific language is “Charterer warrants that in all events the Vessel upon redelivery shall be free of contamination, including radioactivity and toxic chemicals.”  So, were they?  There is an appearance of rush, stealth and inter-agency connivance about this whole deal that does not look good at all.  Why do the Navy, MARAD and the EPA not come clean, as it were?  August 27, 2009.  The Bonny has since left Norfolk.  August 31, 2009.

BISSO TAKES ONE, ORDERS ANOTHER FROM MAIN IRON WORKS

Bisso Towing accepted the 4,000-hp tractor tug Michael S, pictured on the right, from Main Iron Works this week and ordered another one just like it, for delivery in mid-2011.  August 27, 2009.

$3 BILLION TO OVERHAUL AND REFUEL A SHIP

The Navy has awarded a contract to NGSB Newport News for the Refueling Complex Overhaul, (RCOH), of the USS Theodore Roosevelt, (CVN 71).  The contract is Cost Plus Incentive Fee, with a value of $2,429,828,879 and completion scheduled for February 2013.  Read the DefenseLink announcement here.  If you're thinking "Is that all?", remember that this project has already been funded by $65,292,403 on 16-Nov-06, $190,704,758 on 24-Oct-07 and $300,705,466 on 27-Oct-08, for a grand total of about $2,986 million.  And in case you were wondering, the comparable number for the last RCOH of a CVN was $2,437 million, so the new project is only costing 22% more than the last time.  That seems reasonable, doesn't it?  No?  Oh and, by the way, the Theodore Roosevelt, which was delivered in 1986, only cost $1.2 billion in the first place: in today's money, that's just over $3 billion, but still a whole lot less than the $4.5 billion-plus cost of CVN 77, delivered this year.  August 26, 2009.

BAY SHIPBUILDING TO LAY OFF 400

The last big yard on the Great Lakes, Bay Shipbuilding, in Sturgeon Bay WI, pictured on the right, will lay off about 400 of its 700 employees later this year.  This is no big surprise, as it has been building almost nothing but large tank barges for the last five years and that sector is now dead.  Gotta diversify to survive.  August 26, 2009.

MORE SSN QUALITY PROBLEMS FOR NGSB

Defense News reports a pattern of problems with the weapons handling systems built by NGSB Newport News for the Virginia-class SSNs.  Read the story hereAugust 25, 2009.

BIG DOCK ON THE BOTTOM

Signal International's big floating dry-dock, the ex-Navy WWII-vintage battleship dock AFDB 5, experienced a mechanical problem last week and is sitting on the bottom of its 65-foot-deep pit in the Sabine River, in Port Arthur TX.  The only good news is that there is no obstruction to marine traffic.  Signal officials say that they are currently assessing the situation and planning the dock's recovery.  August 25, 2009.

DDG 105 DELIVERED

The future USS Dewey, (DDG 105), pictured on the right, was delivered to the Navy in Pascagoula on Monday of last week.  NGSB just got around to putting out an announcement of this event: read it hereAugust 25, 2009.

PRIDE SPINS OFF ITS OLD JACK-UPS

Pride International has spun off its 20 old mat-supported jack-ups in a company called Seahawk Drilling.  Read the announcement here.  Note that the average age of this fleet, all but one of which are Bethlehem-designed and built, is 29.  So how long will Seahawk last?  August 25, 2009.

PREPO SHIPS REFLAGGED BEFORE SCRAPPING

The Christian Science Monitor reports that the PFC James Anderson, Jr., (T-AK 3002), and the 1LT Alexander Bonnyman, (T-AK 3003), have been (a) flagged out, (b) renamed the Anders and the Bonny, and (c) sold for scrap.  Read the story here.  The two ships were built at Odense in the late 1970s as the Emma Maersk and the Emelie Maersk and converted to prepositioning ships in 1985 by Bethlehem Steel.  August 25, 2009.

MARAD SELLS TWO MORE FOR SCRAP

MARAD has sold the Escape, (ARS 6), built by Basalt Rock Company in 1942, and the Cape Cod, (AD 43), built by NASSCO in 1980, for scrapping.  Unusual to scrap a Navy ship as young as the Cape CodAugust 25, 2009.

SEABULK WINS REFLAGGING CASE

The Fourth Circuit Court of Appeals has handed Seabulk a victory over Crowley, OSG and the Shipbuilders Council in the case of the rebuilding of the Seabulk Trader and, by implication, the Seabulk Challenge.  Read the decision here.  This is complete nonsense, of course, but that's probably the end of the matter.  Another nail in the coffin of our dying ship repair industry.  August 25, 2009.

LPD 21 DELIVERED

The future USS New York, (LPD 21), pictured on the right, was delivered to the Navy today in New Orleans.  Read the story in the Times-Picayune hereAugust 21, 2009.

SAVE THE PLANET, BUY FRENCH WINE

That great but slightly loopy journal, New York magazine, thinks that we here on the right coast should buy European rather than Californian wines, because Californian wine has to be transported here by nasty, polluting trucks, while European wines are transported in nice clean ships.  The marine industry has friends in the most unlikely places.  Read the item here.  I couldn't agree more: bring on the Burgundy.  August 20, 2009.

MINI CRUISE SHIPS SOLD

The Wilderness Discoverer and Wilderness Adventurer, both of which were built by Blount Marine, have been sold by Chase Bank to a new venture called InnerSea Discoveries, for cruise operations in Alaska.  The two ships had been owned by Glacier Bay Cruise Lines, which folded in 2006.  August 20, 2009.

NO, THE EXIM BANK IS NOT FINANCING OFFSHORE EXPLORATION IN BRAZIL

A grossly dishonest story in Tuesday's Wall Street Journal claims that the ExIm Bank is "going to lend billions of dollars to Brazil's state-owned oil company, Petrobras, to finance exploration of the huge offshore discovery in Brazil's Tupi oil field in the Santos Basin near Rio de Janeiro".  Read the story here.  Nowhere in the article does it say that the ExIm's commitment to Petrobras is to finance its purchases of U.S. goods and services.  Read the ExIm Bank's announcement here.  This is what ExIm does, guys: it provides financing for U.S. exports.  This is good news for U.S. manufacturers, shipyards and offshore operators and has nothing whatever to do with the Administration's policy (or lack of policy) on offshore exploration in the United States.  August 20, 2009.  By the way, the ExIm Bank made a similar commitment to Pemex, but this apparently did not catch the Journal's attention.

DOES THIS LIST OF SHIPYARD GRANTS MAKE SENSE?

I'm going to rant about grants.  Why are we giving money to BAE Systems, one of the world's largest defense contractors?  Or to Aker, a Norwegian company?  Or to Austal, an Australian company that's loaded up with Navy work?  Or to a company that's in Chapter 11?  Or to Ellicott Dredge, that isn't a shipyard at all?  What evidence is there in this list that the funds were directed to areas with high unemployment, which was SecDoT's complaint about the initial version of the list, or is everywhere an area of high unemployment these days?  What can MARAD or SecDoT say to the 430+ unsuccessful applicants that would make any sense?  August 19, 2009.  Additional questions.  How is MARAD going to verify that these grants actually create employment?  Under what circumstances can they take the money back?  How much is each new job worth?  How can you differentiate between jobs created by ARRA and jobs created by economic growth and jobs created by Navy contracts?  How do "training programs" create jobs?  Are grants for "training" not just subsidies for high overhead costs?  Should the "small" criterion not have been set lower?  Would MARAD not have saved themselves a lot of trouble and strife by just giving every applicant a check for $200,000, with no strings attached, using the same logic that got me a "stimulus" check for $250 from Social Security back in May?  August 20, 2009.

NEW SHIPYARD GRANTS LIST RELEASED

Read the press release from MARAD here.  Read the original report on this web site, with the original table, here.  Compared to the original list, there appear to be six additions, three deletions and two reductions in scope, as shown below, for virtually no net change in the total.  August 18, 2009.

ADDITIONS

Associated Naval Architects, Inc.

Portsmouth VA

$476,893

Fairhaven Shipyard Companies, Inc.

Fairhaven MA

$1,630,750

Paducah River Painting

Calvert City KY

$453,000

Platypus Marine, Inc 

Port Angeles WA

$73,780

Trinity Industries, Inc.

Caruthersville MO

$308,538

Yager Materials, LLC

Owensboro KY

$1,407,612

Subtotal

 

$4,350,573

DELETIONS

Intracoastal City Drydock & Shipbuilding

Abbeville LA

($1,630,638)

Kennedy Con Inc.

Galveston TX

($856,273)

Walker Boat Yard

Paducah KY

($695,550)

Subtotal

 

($3,182,461)

REDUCTIONS

Guam Industrial Services, Inc.

Santa Rita GU

($1,150,352)

SAFE Boats International, LLC

Port Orchard WA

($17,860)

Subtotal

 

($1,168,212)

Net Change

 

($100)

ANOTHER NASSCO LAUNCH/TRIAL DOUBLE

In its systematic, Daewoo-style way, NASSCO repeated its double-barreled performance of March, launching the USNS Matthew Perry (T-AKE 9) while sending the USNS Wally Schirra (T-AKE 8) out on a highly successful Builder's Trial.  Read MSC's press release here and NASSCO's hereAugust 18, 2009.

WAESCHE COMPLETES BUILDERS TRIALS

The second National Security Cutter, Waesche, completed her Builders Trials today and all went well.  No major problems.  24 knots on diesels, 30 on gas turbines, very smooth running, apparently.  Good stuff.  August 17, 2009.

SHIPYARD GRANTS LIST DUE TODAY

Secretary LaHood promised to give us the revised (or maybe unrevised) list of shipyard grants today.  Watch this space!  August 17, 2009.  DOT now says that the announcement will be today.  August 18, 2009.

McALEAR OUT AT ATLANTIC MARINE

Ron McAlear is no longer CEO of Atlantic Marine Holdings and has been replaced, on an acting basis, by Ed Fleming.  No indication yet of what's going on but I'd bet that it's related to the American Heavy Lift tanker program.  August 15, 2009. 

SECOND NSC'S TRIALS NOT GOING THAT WELL

The second National Security Cutter, Waesche, had to abort her Builders Trials today because of a problem with one of her air compressors.  They will have another go over the weekend.  August 13, 2009.

MAERSK ALABAMA'S LIFEBOAT GOES TO SEALS MUSEUM

The lifeboat from the Maersk Alabama in which those pirates held her master for five days has been donated by Maersk Line Limited to the National Navy UDT-Seal Museum, in Fort Pierce, Florida.  Read the story hereAugust 13, 2009.

"WHO NEEDS DOOR-KICKING MARINES?"

Apparently I'm not the only person who wonders why we need a Marine Corps any more and not just a bigger and better Army.  Read the story in DoD Buzz with the headline quoted above hereAugust 13, 2009.  It seems I could have phrased this better.  I did not mean to suggest that the Marines are anything other than an awesome fighting machine and that we need more of them, not fewer.  My question is, really, why do we need all those expensive ships to move them around?  Their equipment is prepositioned nowadays and they themselves get to most places by plane.  I have no ideas about how we could keep the marines and lose some (not all) of the ships, but I think it's worth discussing, as, apparently, do some other folks.

COLLISION CLOSES GIWW

The five-barge tow being pushed by Canal Barge Company's Caroline collided with the tow being pushed by Double Eagle Marine's Miss Stacie yesterday, just east of the High Island Bridge in Port Arthur.  The Caroline is partially submerged - that's her surrounded by booms in the picture - and the Gulf Intracoastal Waterway is closed.  Read the Coast Guard's report hereAugust 11, 2009.

DSME ENTERS U.S. WIND TURBINE BUSINESS

I keep telling U.S. shipbuilders to get into the wind turbine business but who actually does something about it?  Daewoo.  Daewoo Shipbuilding & Marine Engineering, (DSME), has bought DeWind, Inc., of Round Rock TX, which designs, produces, and sells wind energy turbines.  Read the story here.  These babies each have three 130-foot blades: who better to build them than a shipbuilder?  August 11, 2009.

SECOND NSC ON TRIALS THIS WEEK

The second National Security Cutter, Waesche, (WMSL 751), heads out into the Gulf for trials this week, although insiders say she's not really ready.  What's the betting that NGSB will report a huge success, anyway?  August 10, 2009.

GAO DUMPS ON NAVY'S CRUISER COST ANALYSIS

In a pithy memo to the leadership of the Senate Sea Power Subcommittee, the GAO destroys the Navy's argument for a nuclear-powered cruiser.  Read it here.  But I doubt that this issue is dead yet.  August 10, 2009.

CHOUEST TO KEEP THEM COMING

Edison Chouest has announced that it is starting construction of a series of 300-foot PSVs, ten to be built in its U.S. yards and two in its Brazilian yard.  No signs of a slowdown in this sector.  August 7, 2009.

TRINITY'S MADISONVILLE YARD TO CLOSE

We've already had announcements of lay-offs at Trinity Port Allen and at JeffBoat.  Now comes news of a series of progressive lay-offs at Trinity Madisonville, culminating in closure of the 88-year-old yard in December.  Further evidence of the decline in the inland barge sector (which was coming anyway, with or without a recession).  Read the report in the Times-Picayune hereAugust 7, 2009.

AKER PHILLY RUNNING OUT OF WORK

The Norwegian-American shipbuilder reports on its second quarter here.  Note that it delivered Hull 11 in June and at its current rate of work will deliver Hull 14 next June.  They should have started fabrication for Hull 15 by now, but the owner cannot get financing for either Hull 15 or Hull 16.  And it gets less likely every day that the option hulls beyond that will be needed.  Looks like lay-offs soon.  August 6, 2009.

BOLLINGER DELIVERS BOUCHARD BARGE

Bollinger Gretna, the 75-year-old shipyard on the Harvey Canal, has delivered the 80,000-barrel tank barge B. No. 284 to Bouchard Transportation.  August 6, 2009.

DHS/CBP PROPOSING NEW INTERPRETATION OF JONES ACT REGS

The International Marine Contractors Association, (IMCA), is up in arms (metaphorically, of course) over the CBP's proposed changes to the way it interprets the rules for vessels carrying offshore equipment.  Read its latest press release hereAugust 6, 2009.

COST OF SSN REPAIRS MOUNTS

The Navy has added $65 million to EB's contract to repair the USS Hartford, which already totaled $37 million.  Read the DefenseLink announcement here.  How much more, do you suppose?  And where is this boat's CO now?  Shunted to one side or shunted right out?  When's the court martial?  Oh, no, I suppose that the PC thing these days is to consider him to have been punished enough by the shame and the humiliation.  Doesn't anyone, anywhere in the Navy, uniformed or civilian, ever get held accountable for anything any more?  August 6, 2009.

T-AKE 8 ON TRIALS

The next T-AKE, Wally Schirra, is on trials this week.  August 5, 2009.

PROPOSALS SUBMITTED FOR NEXT BATCH OF LCS

Just in case you were wondering, yesterday was the day that proposals were submitted by LMT and GD for the next batch of LCSs.  Will they come in under the congressionally mandated cost cap of $460 million?  And if not, what then?  August 4, 2009.

MATSUDA BECOMES DEPUTY ADMINISTRATOR

We may not have a Maritime Administrator yet, after all, it's only August, but we've at least got a Deputy.  David T. Matsuda was previously counsel and primary transportation advisor to Senator Frank Lautenberg.  Read the announcement here.  And guess what?  He's an engineer!  Whatever next?  August 3, 2009.

RAND LOGISTICS MAKES OFFER FOR USSP'S ASSETS

Laker operator Rand Logistics has offered $255 million for most of the assets of US Shipping.  This covers the four new ATBs, the Houston, the Charleston and the Chemical Pioneer, but not the Sea Venture or the four remaining ITBs, which Rand proposes to bareboat charter until it can sell them.  Read the offer here.  Not such a great offer - the four ATBs alone are worth more than that -but it may be the best deal that USSP can get.  Rand is right to be planning to dump the Sea Venture and the four ITBs, presumably for scrap, because that's all they are good for.  It's a nice question of economic analysis, balancing the cost of keeping them going against the recovery in the price of scrap.  See the following table of the USSP fleet.  August 1, 2009.

 

3 x ATBs

1 x ATB

Houston

Charleston

Chemical Pioneer

Sea Venture

4 x ITBs

Newbuild/Conversion

Newbuild

Newbuild

Newbuild

Newbuild

Conversion

Conversion

Newbuild

Year Built/Converted

Aug-08 to Aug-09

Jun-07

Sep-85

Oct-83

Sep-83

Aug-83

Feb-83 to Jun-84

Built/Converted By

Bay/Eastern

SENESCO

Tampa

Avondale

Newport News

Tidewater Equipment

Sparrows Point/Halter

Original Price Paid (mm)

$67

$91

$55

$100

 

 

$72

Date Acquired by USSP

Aug-08 to Aug-09

Jun-07

Sep-05

Apr-04

May-03

Nov-05

Sep-02

OPA 90 Phase-Out

n/a

n/a

n/a

Oct-13

Jan-13

Aug-13

Feb-13 to Jun-14

Price Paid by USSP (mm)

$67

$91

$25

$33

$20

$12

$32

Deadweight (tons)

11,000

18,000

33,000

48,000

35,000

25,000

48,000

Lightweight (tons)

6,000

6,000

10,000

15,000

10,000

7,000

14,000

Cargo Tanks

10

10

14

43

50

26

13

Power Plant

Diesel

Diesel

Diesel

Diesel

Steam

Diesel

Diesel

Speed

13.5

13.5

16.5

16.0

21.0

16.5

15.0


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