Maritime Memos                                                                                        April 2010


INCONCLUSIVE CBO REPORT ON LCS

The Congressional Budget Office has released a brief report on the life-cycle costs of the Navy's different types of surface combatants - CG, DDG, FFG, MCM, LCS 1 and LCS 2.  But, in the absence of complete data on the LCS 2 design, it's pretty much a waste of time, revealing only what we already knew, which is that the LCS 1 is one expensive boat.  If you are interested, you can read it here April 29, 2010.  The more I think about it, the more I deplore the Navy's approach to this procurement: hasty, poorly thought out and prejudiced.  The institutional bias against LCS 2 reminds me of the arsenal ship, which was anathema to all those dimwitted surface warriors who couldn't imagine commanding a warship on which they could not stand on the bridge and cry "Damn the torpedoes, full steam ahead!"

THE LATEST ON AHL

I am told that MARAD has repossessed three of AHL's four ships and the fourth is under arrest.  It definitely seems to be over for AHL.  April 28, 2010.  Further, MARAD has now retained Keystone Shipping to move the ships to the Reserve Fleet anchorage in Beaumont.  Anyone want to bet on them ever sailing again?

TRANSOCEAN FLAGGING OUT THE HUGHES GLOMAR EXPLORER

The famous ship, built by Sun Ship in 1973, at a cost said to have been at least $350 million, for the purpose of recovering a sunken Soviet submarine, is being flagged out.  Now called the GSF Explorer, it was converted to a regular drill ship in 1997, after the Navy leased it for 30 years to Global Marine's successor company, Global Santa Fe, which is now part of Transocean.  The Congress authorized its sale to Transocean in 2002, for "a fair and reasonable amount determined by the Secretary of the Navy".  I'm told that they only paid $15 million, which is hard to believe: can anyone confirm this or provide the true figure?  There now seems to be nothing to stop Transocean taking her foreign.  Of course, Transocean reflagged itself last year, when it moved from Houston to Geneva and became a Swiss corporation.  April 28, 2010.

DERECKTOR CONNECTICUT LAUNCHES ITS NEW DRY DOCK

Click here for a link to a video of how not to launch a dry dock.  See that bulldozer?  Let's hope they don't try launching megayachts this way.  April 27, 2010.

TRINITY YACHTS TO BUILD ESCORT TUGS

Trinity Offshore, the Trinity Yachts entity that is structured to handle projects involving things that are not yachts, has signed to build two escort tugs for the planned LNG terminal in Pascagoula MS.  The customer is Colle Maritime, a collaboration of Colle Towing and Signet Maritime, and the tugs will be 6,800-hp units designed by Robert Allan.  April 27, 2010.

MORE RB(M)s FOR MARINETTE

The Coast Guard has exercised the FY10 option on its contract with Marinette Marine for 30 more RB(M)s.  The award is valued at $63.6 million.  Work will be evenly divided between Marinette's Green Bay operation and Kvichak Marine in Seattle.  April 24, 2010.

RYERSON STALKING BENDER'S FAB SHOP

Sources say that the stalking horse for Bender Shipbuilding's state-of-the-art prefab shop is the Joseph P. Ryerson Company, of Chicago.  Ryerson is a leading distributor and processor of metals: visit them here.  No shipbuilders interested?  April 23, 2010.

HYUNDAI, DAEWOO NAMED IN GAO'S IRAN REPORT

Two of the world's leading shipbuilders have been named in the GAO's report on companies doing business with Iran, on the basis of their construction  of tankers for NIOC.  What might this mean for U.S. companies doing business with HHI and/or DSME?  Read the report hereApril 23, 2010.

AHL NOT IN CHAPTER 7 ?
I am told by someone who should know that AHL is not in Chapter 7.  Yet.  But the Masters, Mates and Pilots think it is and they are VERY closely tied to the company.  Read their newsletter hereApril 23, 2010
MERRY SAINT GEORGE'S DAY

And it's Shakespeare's birthday too.  April 23, 2010.

ANOTHER BENDER AUCTION

When Signal bought Bender's shipyard, there was a bunch of stuff that was not included in the deal and an auction of miscellaneous machinery and equipment is now scheduled for May 12 and 13.  See the auctioneer's catalog here.  Even when this is over, there will still be the question of what happens to the remaining real estate and buildings, including the shipyard in Mexico.  April 21, 2010.

AHL IN CHAPTER 7

American Heavy Lift Shipping, which has been in difficulty since the collapse of its recent new construction program, has filed under Chapter 7 of the Bankruptcy Code.  Its assets, which mostly consist of four steam-powered product carriers, will be auctioned.  The four ships are oddities: they were built by Bethlehem Steel at Sparrows Point between 1957 and 1960 and converted by Avondale in 1996 and 1997, new double-hull forebodies being combined with the original afterbodies.  But regarding the Shell program, let's be clear: there's no reason why the "virtual shipyard" approach shouldn't work - it was the way that the AHL team tried it that didn't work.  Perhaps if they had gone for four standard ships from either Aker Philly or NASSCO, AHL would still be in business.  April 21, 2010.

NOAA PAYS A HIGH PRICE TO SWITCH TO MARINETTE

NOAA has ordered a fifth Oscar Dyson-class Fisheries Survey Vessel, but has awarded the contract to Marinette Marine, rather than VT Halter Marine, who built the first four of these ships.  Even more surprisingly, NOAA is paying Marinette $73.6 million, almost 2.5 times the $30 million it paid VT Halter Marine for the fourth ship of the class, which was delivered only two months ago.  Read the announcement here.  Seems odd to me but no doubt there's an explanation.  April 20, 2010.

THIS YOU REALLY HAVE TO SEE

The CO of the Coast Guard Yard has released a time-lapse video of the USCGC Eagle being docked on the Syncrolift at the Yard. complete with stirring music.  It's terrific!  Go to: http://www.uscg.mil/hq/cg4/yard/8Min-EAGLE_In_Yard-HIGH.wmv April 16, 2010.

FERRY-TO-NOWHERE FLOATS

The 130-passenger/20-car SWATH ferry Sisitna has finally hit the water, with delivery now scheduled for June 11th.  Read the story in the Ketchikan Daily News here.  At $70 million - about $100 for every resident of Alaska - it has to be the world's most expensive ferry on a $/ton basis: now, who's going to subsidize its operation?  And at more than four years in construction, it has probably taken longer to build than the Ark.  But then it's a Lockheed Martin design, funded by the Office of Naval Research, so what can you expect?  Credit to Alaska Ship & Dry Dock, however, for whom this is only their second new ship: for a young yard, they've done OK.  April 16, 2010.

2010 SHIPYARD GRANTS ANNOUNCED

The Maritime Administration has announced its awards of small shipyard grants.  April 15, 2010.

  • Boothbay Harbor Shipyard, LLC (Boothbay Harbor, ME) - $360,900 for new wider cradle for 750 ton marine railway

  • C&G Boat Works, Inc. (Mobile, AL)- $1,199,122 for new 220 ton crawler crane

  • Caddell Dry Dock & Repair Company, Inc. (Staten Island, NY)- $1,162,636 to refurbish drydock

  • Chesapeake Shipbuilding Corporation (Salisbury, MD)- $519,098 for improvements to doors, heaters and air and gas distribution systems

  • Detyens Shipyards, Inc. (Charleston, SC)- $922,393 for new tower crane, hydro-blast units and overhead shop cranes

  • Diversified Marine Tech, Inc. (Tampa, FL)- $644,425 for 90-ton crane and modification of barge for crane use

  • Earl Industries, LLC (Portsmouth, VA)- $923,496 for laser cutter and two 5-ton bridge cranes

  • Fraser Shipyards, Inc. (Superior, WI)- $257,990 for cutting machine and welding equipment

  • Gulf Craft, LLC (Patterson, LA)- $1,760,065 for 500-ton travelift crane

  • JB Marine Services, Inc. (St. Louis, MO)- $195,000 for bridge crane, ironworker, steel shear, and forklift

  • Marisco, Ltd. (Kapolei, HI)- $1,079,224 for cranes, forklifts, welding machines, compressors and dust collector

  • Pacific Fishermen Shipyard and Electric LLC (Seattle, WA)- $643,095 for worker training program, sand blast paint and booths, sand blast grit recovery systems, man lifts and 15-ton crane

  • Puglia Engineering, Inc. (Bellingham, WA)- $1,333,267 for floating drydock enhancements, 80-ton rough terrain crane and coating equipment

  • Sause Bros., Inc. dba Southern Oregon Marine, Inc. (Coos Bay, OR)- $173,749 for water blast system, sandblasting machine and big top shelter

  • Southwest Shipyard L.P. (Channelview, TX)- $1,602,870 for panel line

  • The Thames Shipyard & Repair Company, Inc. (New London, CT)- $1,446,000 to widen and lengthen drydock

  • United States Marine, Inc. (Gulfport, MS)- $476,670 for epoxy oven, composite freezer and CNC material cutter.

LPD 26 TO BE NAMED FOR JACK MURTHA

The Navy Times reports that LPD 26 will be named the John P. Murtha, in honor of the long-serving congressman and former Marine colonel who chaired the Defense Appropriations Subcommittee until his recent untimely death.  Read the report here.  As the story says, this is yet another break with ship naming protocol and it's a controversial choice for other reasons too, but, let's face it, Jack Murtha did an amazing job of looking after the Marine Corps' interests and it's not worth getting steamed up about.  It's also an interesting decision in view of the fact that LPD 26 has not yet been funded.  April 14, 2010.

THE FUTURE OF NGSB

The highly respected defense analyst Loren Thompson, of the Lexington Institute, has an excellent article on their web site today headed "Northrop Backed Into Shipbuilding, And It Can Back Out".  Read it here.  Of course, most of us in the shipbuilding industry wish Northrop would back out of it.  Their management of their shipyards has been a disaster from the get-go: by contrast, GD is brilliant, although all things are relative.  Here's what needs to happen:

  • Avondale needs to close, go away completely: it was never a good shipyard - just ask their commercial customers - and now it's a disaster.  There are no buyers, at least no sane ones.  NG should give it to the State of Louisiana, in exchange for the money the State gave them to keep it operating, and the State should turn it into an industrial park.

  • Ingalls should be sold.  To whom?  BAE Systems is the obvious candidate but would that fly with DoD?  Maybe John Lehman would like to have a go.  Or Carlyle Group.  Or Raytheon.  Anybody but Lockheed Martin, the only company that could do a worse job than NG.

  • Newport News should be spun off again.  This great shipbuilder would have done fine when they were spun off by Tenneco, back before NG bought them, if it had not been for their disastrous Double Eagle tanker program, which wiped out two years of profit.  They are big enough and secure enough to go it alone.

Will it happen?  Probably not.  April 6, 2010.

DOUBLE-HULL TANKER BEING SCRAPPED

We haven't even reached the OPA 90 cut-off date yet and there's a double-hull tanker being scrapped already.  To be fair, it's one of the five gas-turbine ships that were built by FMC in Portland in the 1970s.  Chevron has sent the 40,000-dwt Arizona Voyager to Esco for recycling.  April 5, 2010.

DUTCH NAVY RECAPTURES PIRATED CONTAINERSHIP

Marines from the Dutch frigate Tromp, (F 803), recaptured the German containership Taipan from Somali pirates this morning.  Read the report from EUNAVFOR here.  Good stuff.  Strange to think that so many of our military and naval leaders dismiss the Dutch armed forces as a bunch of you-know-whats.  Tromp, by the way, was a famous Dutch admiral.  Legend has it that he was the first man to tie a broom to his foremast, after the Battle of Dungeness, in 1652, signifying that he had swept the English from the sea.  It's nice to see his successors sweeping the Somali pirates from the sea.  April 5, 2010.

US SHIPPING ATB IN TROUBLE

The tank barge PetroChem Supplier and its tug Corpus Christi, built last year by Bay Shipbuilding and Eastern Shipbuilding, respectively, are in trouble off the Columbia River bar.  Read the story on OregonLive.com here.  April 5, 2010.

HEALTH CARE STRIKES JEFFBOAT

Workers at JeffBoat who are members of the Teamsters are on strike today, as a result of the company's proposal to reduce health benefits while simultaneously increasing the cost to employees.  Read the story in the Louisville Courier-Journal hereApril 3, 2010.

MARAD TO DO ITS JOB

Apparently you have to sue MARAD to get it to do its job.  Secretary LaHood announced yesterday that, as part of a court agreement with some environmental groups, MARAD would clean up and clear out the Suisun Bay Reserve Fleet - the 20 ships that are in the worst condition by September 30, 2012, and the other 32 by September 30, 2017.  Read the announcement here.  Oh, good, but isn't that what MARAD was supposed to be doing anyway?  And why do we do this in Suisun Bay but not in the James River or Beaumont, or do we have to wait for more lawsuits?  Incidentally, this is a nice little gift for BAE Systems in San Francisco, who get to clean these wrecks up before they can go anywhere.  April 1, 2010.

VT HALTER TO BUILD TWO ATB TUGS FOR OSG

VT Halter Marine, to whom OSG turned for the completion of the 350,000-barrel ATBs that were begun by Bender Shipbuilding, has now been entrusted by OSG with the construction of two 8,000-hp ATB tugs.  Presumably these are the two that were originally ordered from Bender in addition to the two series of ATBs that were cancelled.  The price is $21 million, with deliveries in the second and third quarters of 2011.  Read the announcement from VTHM's parent company hereApril 1, 2010.

LAYOFFS IN PASCAGOULA

NGSB has been reducing its workforce for a while but the hot news is a 10% across-the-board reduction planned for this month.  There are plenty of job openings at other yards in the area, however, so the politicians need not get too excited.  It raises questions about the future of Avondale, though, doesn't it?  There must be those who say "Close Avondale and save the jobs in Pascagoula."  April 1, 2010.  I had barely posted this item when I found that Defense News was suggesting that the Navy might be pressuring NGSB to close Avondale.  Read the story here.  Sources tell me that most of the Avondale personnel needed for post-launch outfitting have already been laid off, suggesting that the plan may be to move the last two ships to Pascagoula as soon as they are afloat. 

BOB HERRE MOVES TO VANE BROTHERS

Bob Herre, the experienced and well regarded guy who headed up Manitowoc Marine Group and then Fincantieri Marine Group, has moved on..  Not surprising, really, since Fincantieri hired Moosally.  Bob is now Senior VP and General Counsel of Vane Brothers.  Read the announcement hereApril 1, 2010.

FIRST US-FLAG SHUTTLE TANKER DELIVERED

Detyens Shipyard has completed the conversion of the Overseas Cascade to a shuttle tanker and she is now tied up in Tampa, awaiting the order to start work moving crude oil from PetroBras America's FPSO BW Pioneer, which just arrived on station in the Cascade field offshore Louisiana.  April 1, 2010.


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