WorkBoat August 2015

Fireboats • Annapolis Cruises • Safety ®

IN BUSINESS ON THE COASTAL AND INLAND WATERS

AUGUST 2015

YEARBOOK

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ON THE COVER

®

AUGUST 2015 • VOLUME 72, NO. 8

Harley Marine’s Michelle Sloan at its christening in Seattle.

Photo by Bruce Buls

FEATURES 22 In Business: Capital Gain Maryland passenger vessel operator continues to share its founder’s love of boating.

26 Vessel Report: Slower Burn The fireboat market has cooled, but the boats have not.

38 Cover Story: Yearbook Some shipyards feel the impact from low oil prices, while others continue to plug along. Barge operators enjoy another steady year. The tug market keeps building and pushing the limits of technology. Less demand, more cost cuts offshore. Business is good and getting better for passenger vessel operators.

22

BOATS & GEAR 30 On the Ways Vigor delivers first of three 4,500-hp towboats to Tidewater Barge Lines. Gladding-Hearn delivers 52' pilot boat to Cape Fear Pilots. Navy exercises option with Willard Marine for more RIBs. Texas A&M takes delivery of 65' research vessel from Geo Shipyard. Miracle Marine delivers 25' fire/rescue boat to Missouri.

52 Accident Report Towing vessel mishaps featured in National Transportation Safety Board’s annual compilation of marine accident investigations.

AT A GLANCE 10 10 11 12 14 14 16

On the Water: Learning from experience — Part II. Captain’s Table: How to survive a Coast Guard inspection.

OSV Day Rates: The candidates and offshore drilling.

WB Stock Index: WorkBoat stocks lose ground in June.

Inland Insider: U.S. is a major exporter of waste and scrap.

Insurance Watch: With claims handling, who’s on your side?

Legal Talk: Attorney seeks salvage award.

NEWS LOG 18 18 19 19 20

Harvey Gulf acquires Gulf Coast Shipyard Group.

Hercules Offshore to seek bankruptcy protection.

National Maritime Center begins testing online chat service.

New CEO for VT Halter Marine.

Busiest ports and waterways need improvement, reports say.

www.workboat.com • AUGUST 2015 • WorkBoat

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26 DEPARTMENTS

4 Editor’s Watch

8 Mail Bag 54 Port of Call 67 Advertisers Index 68 WB Looks Back

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Editor'sWatch

Beyond the oil patch

A

t this time last year the headline on my Editor’s Watch read, it was “business as usual.” OSV contracts had slowed, but offshore-related newbuild and repair work were still fairly steady.

That started to change a few months later.

The offshore market is suffering, a result of low prices that dipped below $53 bbl. on July 6, hitting its lowest price since mid-April. I could take up this entire column on the subject, how the combination of lower oil prices, reduced spending and excess rig capacity continue to weaken offshore industry fundamentals.

But as we explain in our annual Yearbook report that begins on page 38, when you look beyond the oil patch, other workboat sectors are doing fine. Let’s start with shipyards. Sure, several U.S. Gulf shipyards with strong ties to the energy sector are hurting.

But others who are more diversified or in other parts of the U.S. are not. Take Vigor Industrial which continues to build and grow. As Vigor’s chief Frank Foti said after the Portland, Ore.-based company merged with Kvichak Marine, it’s not about getting bigger, but getting better.

Though it likely won’t top the past four years that saw barge operators enjoy strong rates and demand, improved earnings and record financial performance, the next 12 months should be steady as the economy continues to strengthen.

The tugboat market, too, isn’t expected to set new records, but business and tug construction have been steady and are expected to remain that way going forward. Tug designers continue to update previous designs for customers.

David Krapf, Editor in Chief

This includes two Robert Allan designs for ship-assist tugs for two West Coast operators. Tug designers expect another busy year in 2015-2016.

Finally, passenger vessel operators say this year may end up being the best summer season in years. And this comes on the heels of several strong years. Operators on the East, Gulf and West coasts are all seeing strong bookings, sold out cruises and rebounding corporate business. All say that ridership is up, with some talking about adding to their fleets.

At this time next year, hopefully we can report that business is looking up for OSV operators too.

dkrapf@divcom.com

WORKBOAT® (ISSN 0043-8014) is published monthly by Diversified Business Communications and Diversified Publications, 121 Free St., P.O. Box 7438, Portland, ME 04112-7438. Editorial Office: P.O. Box 1348, Mandeville, LA 70470.

Annual Subscription Rates: U.S. $39; Canada $55; International $103. When available, extra copies of current issue are $4, all other issues and special issues are $5. For subscription customer service call (978) 671-0444. The publisher reserves the right to sell subscriptions to those who have purchasing power in the industry this publication serves. Periodicals postage paid at Portland, ME, and additional mailing offices. Circulation Office: 121 Free St., P.O. Box 7438, Portland, ME 04112-7438. From time to time, we make your name and address available to other companies whose products and services may interest you. If you prefer not to receive such mailings, please send a copy of your mailing label to: WorkBoat’s Mailing Preference Service, P.O. Box 7438, Portland, ME 04112. POSTMASTER: Send address changes to WORKBOAT, P.O. Box 1792, Lowell, MA 01853. Copyright 20 15

by Diversified Business Communications.

Printed in U.S.A.

www.workboat.com • AUGUST 2015 • WorkBoat

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EDITOR IN CHIEF

David Krapf dkrapf@divcom.com

SENIOR EDITOR

Ken Hocke khocke@divcom.com

ASSOCIATE EDITOR

CONTRIBUTING WRITERS

Kirk Moore kmoore@divcom.com

Capt. Alan Bernstein • Bruce Buls • Michael Crowley • Dale K. DuPont • Pamela Glass • Max Hardberger • Kevin Horn • Joel Milton • Bill Pike • Kathy Bergren Smith

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Credentialing and medical doctors

I

realize that the Coast Guard had a learning curve when they decided to bring medical doctors into the credentialing mix. But it’s been over three years and they still don’t have it right.

I hope these doctors have gone through medical school, residency training and have spent some time in practices. My doctor told me I am diabetic, and to eat better and lose weight.

I have done all these things. But my doctor made the mistake in telling the Coast Guard. He has not lied to the Coast Guard, but instead offered too much information. The Coast Guard now has all this information. I have no symptoms of diabetes other than an elevated A1C test result (blood glucose levels) of plus six. The Coast Guard limit is plus 10. Thus, according to the Coast Guard’s flow charts, I’m healthy.

My doctor sees me at least every six months and I have been with him for 11 years. He has written letters attesting to the fact that my diabetes is well controlled.

My medical waiver isn’t up until December, but the Coast Guard seems to have lost all of my medical records.

Or maybe they are just not looking through them? When I submitted my

8

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A1C test results it was within the Coast Guard’s 90 days (before the medical waiver expired). Now they are asking for another A1C test. This has been an uphill battle every step of the way. The National Maritime Center (NMC) are the ones that want the A1C retest and are asking my doctor what his treatment plan is.

I thought the Coast Guard wants healthy people? There must be 10 or more ways to treat me for diabetes.

Why doesn’t the Coast Guard list the acceptable ones? I have asked my doctor to keep me off insulin.

I do my captain thing as a volunteer for Excalibur, a private non-profit volunteer organization dedicated to providing adaptive boating and fishing opportunities on Lake Erie for persons with disabilities. I thought I would simply do my volunteer work to help a friend and to improve myself.

How full-time mariners put up with this mayhem is unbelievable.

Charles M. Pohl North Tonawanda, N.Y.

Trade shows educate

A

s a regular reader of Gene McKeever’s Insurance Watch column I find his insights and comments very enlightening. His May column regarding

trade show education (“Use your trade show education”) was clearly intended to show how much knowledge can be had for free at a trade show. I concur.

In that spirit you might like to know that the U.S. Virgin Island Water and Power Authority (WAPA) is converting to LPG from diesel. They expect to eventually see the cost of electricity drop by 30% per kilowatt-hour.

Currently islanders pay about 50 cents per kilowatt-hour. Why LPG over LNG? Easier handling — lower vapor pressure LPG is easily compressed and liquefied without complex (expensive) machinery, more heat energy per cubic meter. LPG has none of the associated LNG hysteria that we see in the states.

David M. Hawes Senior Marine Surveyor CSL North America Houston, Texas

Send letters to: MAIL BAG P.O. BOX 1348 Mandeville, LA 70470 workboat@cox.net fax: 504-891-4112

www.workboat.com • AUGUST 2015 • WorkBoat

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6/30/15 10:14 AM

On the Water

Learning from experience — Part II

I

By Joel Milton

Joel Milton works on towing vessels.

He can be reached at joelmilton@ yahoo.com.

n recounting the tale of the cruise ship Royal Majesty and other avoidable “accidents” in his book Strandings and Their Causes, Capt. Richard Cahill repeatedly points out that manufacturers have been working gradually over the years towards “idiot proofing” electronic devices used for navigation.

It seems that mariners are just as likely as anyone else to be inattentive, complacent, take shortcuts, etc. Idiot proofing is meant to reduce the chance that these actions will result in tragedy. But does it work?

Decca, Loran, Omega, Transit and now GPS brought us the miracle of radio navigation — more precise position fixing via radio waves, first from terrestrial towers and then from satellites in space.

Loran C was state of the art when I began my seagoing career in the early ‘80s and the receivers we used had to be monitored. We had to manually

Captain’s Table How to survive a Coast Guard annual inspection

E

By Capt. Alan Bernstein

Alan Bernstein, owner of BB Riverboats in Cincinnati, is a licensed master and a former president of the Passenger Vessel Association. He can be reached at 859-292-2449 or abernstein@ bbriverboats.com.

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arlier this year, the Coast Guard and passenger vessel operators in many parts of the country went through annual inspections prior to seasonal start-ups.

This can be a very stressful time for operators that have pending charters and are under pressure to get vessels back up and running and generating revenue. In many cases these inspections go smoothly with just minor changes that the inspector and operator agree to. This is the way things should go. But this year I have been hearing far too many stories about overzealous inspectors who are writing CG-835s (Notice of Merchant Marine Inspection Requirements) that contain long lists of seemingly minor corrections that sometimes result in “no-sails.”

Sometimes the 835s are the result of confusion between old and new regulations or sometimes Coast Guard inspectors misinterpret regulations due to inexperience. Regulations are often difficult and your inspector may not always correctly

check the signal quality (signal-to-noise ratio or SNR) of the master and secondary stations that the receiver was using to calculate our position.

Failure to do this regularly, combined with overreliance on Loran, could result in trouble. If you didn't check those SNRs you wouldn’t know when they were poor or lost. You could say you were being “lied” to.

Today, idiot-proofed devices will usually warn you visually and audibly when its accuracy is degraded (such as the loss of DGPS correction signal) or the signals are lost altogether (like what happened to the Royal Majesty).

There was, of course, no reason why the navigation watches on the Royal Majesty didn’t realize that their GPS unit was no longer receiving satellite data and was instead calculating position merely by dead reckoning.

At the beginning of each watch the oncoming deck officer should have checked that the GPS was locked on to the satellites and had at least a decent signal. Instead, they placed blind trust in it and never looked back, until they were aground on Nantucket Shoals. How many of us today ever bother to check?

interpret the rules. So, what is your recourse when an inspector asks for corrections for items that had been approved by inspectors for many years? In many cases, it is an understanding or agreement between the operator and the inspector based on regulation.

Do your research and ask for help whenever you have a question. I ask other operators for advice and seek guidance from the Passenger Vessel Association, who has experienced staff to help out.

Communication is also important. Be sure that you know your Coast Guard chief of inspection, OCMI (Officer in Charge of Marine Inspection) and sector commander. If you are not successful solving your problem with the inspector, don’t hesitate to call the Coast Guard office to request an immediate meeting with the inspector and his or her commanders to discuss the issue. Offer a defense, give your position and know the facts.

If you are unsuccessful at the local level, don’t be afraid to appeal the decision up the Coast Guard’s chain of command. This is how the system is designed to work. But you have to be willing to do your homework and defend yourself.

An informed and prepared operator will command respect, and it will result in smoother inspections in the future. www.workboat.com • AUGUST 2015 • WorkBoat

7/6/15 4:48 PM

JUNE 2015 DAY RATES, FLEET UTILIZATION VESSEL TYPE

OSV Day Rates Drilling and the election

By Bill Pike

T

he 2016 election is over a year away, but the rhetoric is already heating up. Among the topics is offshore drilling, always a volatile issue.

A Washington Examiner poll of presidential candidates published on May 26, questioned candidates from coastal states most likely to be affected by offshore drilling. All were asked the same questions: Whether they supported Arctic drilling, opening all of the Atlantic outer continental shelf or just part of it, allowing drilling off the Pacific Coast, ending the moratorium in the eastern Gulf of Mexico, or banning offshore drilling altogether.

Republican Jeb Bush, who has alternately opposed and supported offshore drilling — as long as it is not too close

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4,000-4,999 $29,500 $29,500 $31,250 88% 100% “Expanding 5,000 & above $34,200 $34,200 $39,589 100% 100% domestic enCREWBOATS ergy producUnder 170' $ 3,654 $ 3,670 $ 4,667 60% 81% tion is key 170' & over $ 6,082 $ 6,082 $ 7,472 82% 87% to ensuring SOURCE: WorkBoat survey of 32 offshore service vessel companies.

America’s energy security, and with input from state lead- states the right to determine whether ers, we now have a chance to create a they would allow drilling off their national energy plan to reform the leascoasts, although the bill did not include ing system to expand drilling in areas some areas of the North Atlantic and where it is safe.” the North Aleutian Basin off Alaska.

Democrat Hilary Clinton declined to Independent candidate Sen. Bernie participate in the survey but sided with Sanders of Vermont is against all offRepublicans and oil-patch Democrats shore oil and gas development. by voting for the Gulf of Mexico For the most part, it appears that the Energy Security Act in 2006. The act current slate of presidential candidates opened some eight million acres of the are in favor of offshore drilling as part Gulf for oil and gas development. of a larger, loosely defined U.S. energy Republican Sen. Ted Cruz from plan. That should be reassuring for the Texas introduced a bill last year to give offshore service vessel industry.

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STOCK CHART For the complete up-to-date WorkBoat Stock Index, go to: www.workboat.com/ workboat-index.aspx

WorkBoat Composite Index Index loses 2.8% in June

T

he WorkBoat Composite Index lost 48 points in June, or 2.8%. For the month losers topped winners by a ratio of more than 4-1.

All indexes lost ground in June, with the Operators Index dipping over 7%. Big losers included Hercules Offshore, which announced it would

INDEX NET PERCENT COMPARISONS 5/29/15 6/30/15 CHANGE CHANGE Operators 375.67 348.19 -27.48 -7.32 Suppliers 2812.39 2761.67 -50.71 -1.80 Shipyards 1790.79 1758.09 -32.70 -1.83 Workboat Composite 1741.95 1693.39 -48.56 -2.79 PHLX Oil Service Index 209.52 199.60 -9.92 -4.73 Dow Jones Industrials 18010.68 17619.51 -391.17 -2.17 Standard & Poors 500 2107.39 2063.11 -44.28 -2.10

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file for bankruptcy protection so the shallow-water driller can adjust to what company officials see as a continued down trend in petroleum prices and new jackup rigs entering the market.

The restructuring plan called for Hercules to enter Chapter 11 bankruptcy proceedings in July, followed by its noteholders exchanging $1.2 billion in debt for 96.9% of the company stock.

The noteholders also agreed to support $450 million of new debt to continue construction of the jackup rig Hercules Highlander.

Other losers for the month included Helix Energy Solutions. The Houstonbased company that provides subsea construction and other services to the offshore industry lost almost 20% in June. Helix announced in June that it had delayed delivery of the Q7000, a $350 million newbuild semisubmersible well intervention vessel, from mid2016 until July 30, 2017.

Marshall Adkins, director of energy research at Raymond James in Houston, told the Houston Chronicle in a June 12 report that the announcement

by Helix may indicate that the deepwater market might be 18 months away from rebounding.

“I think you’re in for a solid 12 to 18 months of fairly weak [offshore] activity as majors reconsider their deep-sea strategies,” Adkins said. “Everybody is totally rethinking their projects and the demand for rigs is waning.”

However, he added that there’s still a lot of oil and gas in deepwater, “it’s just taking a little while to get the costs down.” — David Krapf

6/11/2015 10:59:04 AM

www.workboat.com • AUGUST 2015 • WorkBoat

7/6/15 5:01 PM

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6/29/15 9:38 AM 7/17/2014 12:54:09 PM

Inland Insider Scrap exports are down

D

o you ever wonder what’s shipped back to China and Europe in all those otherwise empty marine containers that had been full of imports?

Statistics from major deepwater ports like the Port of New York and New Jersey show that waste and scrap make up the largest volume of exports.

The U.S. is a major world exporter of domesBy Kevin Horn tic waste and scrap. In addition, scrap metals are particularly important domestically to supply the Kevin Horn is new generation of steel manufacturing that relies a senior manon smelting rather than big blast furnaces. New ager with GEC Inc., domestic mini-steel mills have sprung up on the Delaplane, Va. He inland waterways to gain access to barge movecan be contacted at ments of scrap. khorn@gecinc.com.

Both railroads and barges are major transporters of export and domestic scrap. The markets, particularly exports to China and Turkey, major consumers of U.S. scrap metals, have been robust.

However, overseas scrap markets are changing and declining for U.S. suppliers of scrap. There are two reasons for this.

First and foremost is the decline of China.

Formerly a major consumer of U.S. scrap, China

Insurance Watch Who’s on your side?

S

By Gene McKeever

Gene McKeever is a marine insurance agent with Allen Insurance and Financial. He can be reached at 800-439-4311 or gmckeever@ allenif.com

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ince Hurricane Sandy the insurance industry — in particular the ocean marine insurance industry — has become less friendly when it comes to claims handling. As a result, I’ve taken some steps to help my clients through the daunting task of handling a vessel or property claim.

First, it appears that claim departments are under order to scrutinize all claims and to take every opportunity to minimize or eliminate payments on claims. Also, some claims people are misinterpreting what the policy says. I don’t know if this is because of a lack of knowledge or training or standing orders.

For vessel hull damage claims, ocean marine insurance claims people are hiring a lot more marine damage surveyors to be their eyes and ears.

As a result, my clients have been receiving some misinformation. This has namely come in the use of the word “betterment.” Betterment means depreciation. When I hear a surveyor use that

is seeing slower economic growth, which is likely permanent. Consequently, the large China scrap market for U.S. exports is slowing. Beyond China, U.S. scrap suppliers must find other overseas markets in a global economy that is seeing demand weaken.

Second, the U.S. dollar has strengthened against major world currencies. A strong dollar makes U.S. exports more expensive. Moreover, U.S. scrap exporters must compete with other nations who have weak currencies such as Russia and parts of Eastern Europe.

Domestically, lower prices for scrap are a boon for mini-mills that face low cost steel imports from China and other nations that are using exports to soften the reduction of its domestic consumption. Low cost steel imports, particularly through New Orleans, are important for the barge industry. Otherwise, the decline of scrap exports is a negative.

Scrap prices have declined to levels seen during the 2008 recession. There is evidence that scrap prices are likely to remain depressed. Fortunately, most railroads and barge lines have treated the scrap sector as volatile and not made major capital investments in equipment or facilities targeted at this declining market.

term, I politely explain to him or her that vessel policy claims are settled on a “new for old” basis.

This means no depreciation, thus no betterment.

That’s when that portion of the claim sometimes becomes unfriendly.

This brings up another point. Surveyors are the eyes and ears of the insurance company. They are not claims adjusters, unless they have a license to legally do so. Many surveyors discuss policy terminology that they’re not licensed to talk about.

In most cases, this creates another unfriendly situation.

When surveyors start picking apart a repair job with the repair facility it also creates a bad situation. In many cases it slows the repair process down. This is another unfriendly situation because a vessel’s sole purpose is to generate income.

When a vessel sits in a repair yard, it costs money.

In many of these cases, an ocean marine insurance agent can step in to smooth the process. He or she can explain coverages to claims adjusters, moderate between the repairer and the surveyor, and explain the process to clients — at no extra cost to the insured. www.workboat.com • AUGUST 2015 • WorkBoat

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Legal Talk

When an attorney seeks part of a salvage award

T

he Fourth Circuit Court of Appeals recently released a decision about an attorney who sought a salvage award related to the S.S. Central America. The 280' sidewheel steamer sank off the coast of the Carolinas in 1857 with about 15 tons of gold on board.

In 1988 the S.S. Central America was discovered and scores of insurers who’d paid out on the loss more than a 100 years earlier now wanted their share. Legal battles followed and just when you thought the waters were still, a law firm filed a claim.

The law firm had a long history of representing the business entities that discovered the ship in pursuing salvage rights. In 2013, an Ohio court placed

several of the companies into receivership and ordered the receiver to collect their property from all persons holding it, including the companies’ attorneys.

The law firm turned over 36 filing cabinets of materials and apparently convinced another individual to turn over photographs and videos related to the salvage.

Next, the lawyer from the law firm that had represented the salvors filed a claim in the admiralty action seeking a salvage award. The lawyer claimed he’d provided voluntary assistance in turning over the filing cabinets and other materials all of which were useful in the continuing salvage of the vessel.

Now that’s an interesting argument.

The story ends with the trial court dismissing the lawyer’s claim and the dismissal being upheld on appeal. As the Circuit Court explained, the lawyer was obligated to return the files to his clients under the applicable rules

of professional responsibility and principles of agency law, thus it was not a voluntary act. Without a voluntary act, one of the three legs of a maritime salvage claim is missing: peril, voluntary act and success.

John Fulweiler It’s easy to shake your head at this, but it was a unique argument that a lawyer believed in enough to not only press forward, but to expend the time and resources to appeal. I like the claim for what it represents and you should too.

John K. Fulweiler of Fulweiler LLC is a licensed mariner and maritime attorney.

He can be reached at john@saltwaterlaw.com or 1-800-383-MAYDAY.

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AUGUST 2015

NEWS LOG The Harvey Energy, the first LNG OSV Gulf Coast Shipyard built for Harvey Gulf, was delivered in February.

NEWS BITTS HERCULES TO FILE FOR BANKRUPTCY

Harvey Gulf International Marine

I

Oil price slide spurred on Gulf Coast shipyard sale

T

he tumble in oil prices over the past year was the main catalyst behind the sale of Gulf Coast Shipyard Group to Harvey Gulf International Marine (HGIM) in June.

“It was a combination of things,” said John Dane III, the former president and CEO of Gulfport, Miss.-based Gulf Coast Shipyard. “Our majority partner was looking to sell their share of the business after the downturn in oil prices, and the rest of us went along with that.” The sale price was not disclosed.

“I was kind of relieved. I’ve been doing this for 41 years,” said Dane. “We saw an opportunity to sell to [HGIM’s chairman and CEO] Shane [Guidry] and the Jordan group.” The Guidry family and New York-based private equity firm The Jordan Company acquired HGIM in 2008. The Gulf Coast purchase marks HGIM’s first move into the shipyard market.

Littlejohn & Co., a Greenwich, 18

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Conn.-based private equity firm, invested in Gulf Coast back in May 2013.

At the time, Littlejohn, which became Gulf Coast Shipyard’s majority partner, said that the yard had a strong backlog of orders, “and oil and gas drilling and production activity is expected to remain strong with demand for vessels serving this industry expected to continue.” When oil and gas activity weakened, Littlejohn wanted out.

With the sale, HGIM launched a new affiliate, Harvey Shipyard Group, to manage its new shipbuilding assets — Gulf Coast Shipyard and Trinity Yachts, New Orleans.

Gulf Coast Shipyard delivered the first of six dual-fuel OSVs to HGIM in February. Based on a design by Vard Marine, the 5,200-dwt, 310'×64' Harvey Energy has tankage for both LNG and diesel fuel. The boat was customdesigned to take advantage of LNG’s low cost while minimizing the fuel’s technological challenges. It’s also the

n June, Houston-based Hercules Offshore Inc. announced that it would file for bankruptcy, as part of a creditor-supported restructuring plan so the shallow-water driller can adjust to what company officials see as a continued down trend in petroleum prices and new jackup rigs entering the market. “Once our financial restructuring is completed, the new capital structure will provide a better foundation for Hercules to meet the challenges in the global offshore drilling market due to the down cycle in crude oil prices and expected influx of newbuild jackup rigs over the coming years,” Hercules president and CEO John T. Rynd said in a statement. The restructuring plan called for Hercules to enter Chapter 11 in July, followed by its noteholders exchanging $1.2 billion in debt for 96.9% of the company’s stock. That will deleverage Hercules’ balance sheet. The noteholders also agreed to support $450 million of new debt to continue construction of the jackup rig Hercules Highlander and other corporate purposes. The company has enough liquidity to meet its obligations to customers and vendors, Rynd said. Hercules has 27 jackup rigs, including the Highlander, and two dozen liftboats. Eleven of its 20 U.S. Gulf jackups are cold stacked. — Kirk Moore

first OSV certified to the new American Bureau of Shipping ENVIRO+ classification. Harvey Gulf is spending $350 million to construct its dual-fuel fleet.

“We feel LNG vessels of all sorts and sizes are the future of the business, and owning the yard makes sense from where Harvey is today and wants to be tomorrow,” Guidry said in an email.

HGIM now faces the same challenges that other Gulf shipyard owners do, but Guidry said that they are up

www.workboat.com • AUGUST 2015 • WorkBoat

7/1/15 9:13 AM

NEWS BITTS ing U.S. fleet of over-the-road vehicles that use LNG. As for Dane, he will still consult for HGIM and work with his partners at United States Marine Inc. building patrol boats. “My wife said, ‘You’re not going to be around the house all the time, are you?’ So, no, we have an office next to the shipyard where I’ll be. It just feels strange right now not having to be at the office for 7:15.”

— Ken Hocke

NMC beefs up customer service

T

he Coast Guard’s National Maritime Center (NMC) is trying out a real-time, person-to-person service for mariners seeking help with their credentials.

On July 1 the center began live online chat beta testing for mariners to talk directly to customer service agents

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T Halter Marine Inc. has named Jack Prendergast its new president and CEO. He replaces Bill Skinner, who retired after heading up VT Halter since April 2009.

Skinner previously served as president of Alabama Shipyard Inc. from 1989 to 1997 after its acquisition

by Atlantic Marine.

Prendergast, a retired Navy rear Prendergast admiral, joined VT Halter as an outside director in 2011 and was named executive vice president in 2012. After retiring from the Navy, he worked for Lockheed Martin for several years before joining VT Halter. Based in Pascagoula, Miss., Halter specializes in the design and construction of medium-sized ships.

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to it. “Our plan is to manage our way through this downturn while emerging as a continued industry leader in the LNG vessel space,” he wrote.

Guidry said that Gulf Coast Shipyard is the only yard with the experience and knowledge of building “these challenging vessels.” Also, he said the yard has not only established a working relationship with the Coast Guard, but has gained their trust. “Remember there are no CFRs for building these vessels and I can tell you, gremlins are everywhere when trying to get all regulatory bodies to agree on which path to take as it relates to new and uncharted territory,” Guidry said.

Next up for HGIM are plans to open a marine fueling station at Port Fourchon, La., in July to bring LNG as a marine fuel to the offshore and inshore industry. HGIM’s $25 million first construction phase will be capable of fueling Harvey Gulf’s fleet of dual-fuel OSVs and will accommodate the grow-

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and hopefully offer a timesaving option for what is often a laborious credentialing process.

The first phase of the program began June 8 with a Help Ticket feature — similar to the current 24/7 email system — which also provides a mechanism that permits the Coast Guard to more easily track a request to completion, said Jeff Brandt, NMC chief of mariner information.

Mariners also have the chance “to provide us with immediate feedback to our service, which so far has been very positive, he said.

Through late June, the NMC had logged about 20 help tickets a day — about 300 total — and still received several hundred direct e-mails daily, Brandt said. They expect the numbers to grow as people become more aware of the system.

Questions are similar to those received in direct emails ranging from form availability to detailed credential requirements.

For the online chat phase, mariners will talk directly to one of five agents (8 a.m. to 6 p.m. EST, Monday through Friday), be able to save a copy of their conversation transcript, and upload files during the chat. The Coast Guard will monitor volume and workload “in an effort to optimize the system,” Brandt said. While agents are logged into the live chat, the ticketing system will be unavailable but activated again when agents log out.

The Coast Guard will evaluate the chat system in early October to deter-

BALLAST

Crowley Maritime Corp.

CROWLEY EXPANDS PUERTO RICO SERVICE

C

rowley Maritime Corp.’s liner services group will add sailings between Pennsauken, N.J., and San Juan, Puerto Rico, this summer on a 580-series, triple-deck Ro/Ro barge.

The barge, capable of carrying 345 FEUs, will alternate between the South Atlantic and North Atlantic services and generate one southbound and one northbound sailing each month between Pennsauken and San Juan. Even with this change, all Crowley vessels operating on an accelerated schedule will be able to continue to provide four sailings per week between Jacksonville, Fla., and San Juan. Since mid-December, Crowley has created additional weekly cargo carrying capacity. Included in these enhancements was the addition of a new flat-deck barge capable of carrying up to 400 FEUs between Jacksonville and Puerto Rico.

Crowley has also ordered and begun placing into service more than 7,000 pieces of new cargo handling equipment.

mine the next step. — Dale K. DuPont

U.S. inland waterways and ports need a boost, studies show

I

n separate June reports issued a few days apart, the National Research Council and the Brookings Institution said the U.S. needs to make more improvements to the nation’s most heavily used ports and inland waterways.

The NRC report focuses on inland waterways, in particular the U.S. Army Corps of Engineers’ network of dams and locks and its $650 million annual operations and maintenance budget.

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Limited resources should be directed toward locks and facilities that are most critical to maintaining system reliability and performance, the NRC report said. Its conclusions revive the long-debated idea that barge operators — who already contribute to the Corps’ inland system by paying a federal fuel tax — should pay a more direct user fee on commercial traffic to help pay for the O&M budget.

“In a climate of constrained federal funds and with O&M becoming a greater part of the inland navigation budget, it is reasonable to examine whether beneficiaries could help pay for the system to increase revenues

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7/1/15 9:14 AM

for the system and improve economic efficiency,” according to the report, a product of an 18-month study by the NRC’s Transportation Research Board.

“This is not a new topic … It goes back to the 1940s,” said Leonard A. Shabman, a resident scholar with Resources for the Future, one of the report’s authors who has researched water and land management issues for the Corps and other groups.

“There has been a persistent pattern of opposition to raising costs to the users,” Shabman said at a Washington, D.C., event announcing the report’s findings. “The question is, what can we say that’s new?”

Decades ago “the problem was building locks to keep up with demand,” said co-author Michael Bronzini, a professor emeritus of engineering at George Mason University and cofounder of 3 Sigma Consultants, Nashville, Tenn.

Now, “three-quarters of the budget

goes to O&M,” Bronzini said.

But the report overlooks recent moves by Congress to better fund the inland system — including an increase in the fuel tax that barge operators supported and helped get through Congress, said industry officials who reviewed the report.

The report’s conclusion, which is based on 2013 data, “just misses the fundamental changes that have happened in Congress,” said Mike Toohey, CEO of the Waterways Council Inc. Water resources spending by Congress has increased inland capital investments from $269 million to $340 million over three years, Toohey said.

“We’ve gone from a major policy correction in 2014 to pouring concrete.”

About 70% of U.S. grain exports move by barge, and the system is key for moving chemical and petroleum products — giving it economic significance far beyond the report’s and Corps’ analysis of cargo by ton-

www.workboat.com • AUGUST 2015 • WorkBoat

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nage, said Craig Philip, an engineering professor at Vanderbilt University and former CEO of Ingram Barge Corp.

The Brookings report takes a much wider view of the entire U.S. transport system, including trucking, rail and air along with shipping. When it comes to ports, the Brookings authors sound a similar warning that there’s no coherent plan to prioritize deepening projects and infrastructure improvements. Too often, legislators just try to spread the money around.

“With smaller pots of funding to deal with, Congress often downplays the importance of certain ports for national trade, favoring geographic equity instead,” the report said.

With financial resources tight and a lack of a clear long-term freight strategy, U.S. producers and consumers operate at an economic disadvantage and fail to gain the best value from public infrastructure investment, the report said. — Kirk Moore

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Watermark Cruises

Capital Gain

Maryland operator handles 250,000 riders annually.

The Harbor Queen runs hourly tours of Annapolis and the Naval Academy.

A

nnapolis bills itself as “America’s Sailing Capital.” Maryland’s picturesque state capital on Chesapeake Bay is home to the U.S. Naval Academy and a vibrant yachting community. But there is little chance that the average visitor could get out on the water without access to a private boat.

That’s where Watermark comes in. “Between our tours and private charters in Annapolis and Baltimore and our water taxi service in Annapolis, we have approximately 250,000 riders each year,” said Debbie Gosselin, president of Watermark.

“Some people want a quick cruise to get their water fix and others are looking for a more timeluxurious experience. We have everything from a short hop on a water taxi to daylong excursions for the general public to enjoy.”

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Gosselin’s father, Ed Hartman, founded the business in 1972 as Chesapeake Marine Tours, offering a single sightseeing cruise. The next year he purchased the Harbor Queen, a two-deck, 297-passenger, 65' excursion boat that has become an Annapolis waterfront landmark. The Harbor Queen runs hourly tours of Annapolis and the Naval Academy on most days in the summer as well as evening dinner cruises and private events.

“My father was very interested in sharing his love of boating,” said Gosselin, who purchased the business from her father in 1999.

Annapolis has changed since Hartman began offering tours. The City Dock, a narrow cut leading to the foot of Main Street and the Market House, is no longer jammed with workboats loaded with oysters or crabs. Today, the dead end “Ego Alley”

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is lined with motor yachts, sailboats and all types of recreational vessels that can’t resist cruising by the bars and restaurants that line the dock. For captains of the Harbor Queen and the other Watermark boats that dock on the north side of City Dock, this presents an endless assortment of obstacles.

“In a very congested harbor like this we can have our hands full,” Rick Franke, a Watermark captain, said from the wheelhouse of the Harbor Queen.

“This boat is very light and has a lot of windage. It is basically like operating a giant shoebox with twin [Detroit] 6-71s.” Franke has been a fixture on the Annapolis boating scene since 1968 after returning from a stint running landing crafts in the Army. He retired as the director of the Annapolis Sailing School and now works seasonally for Watermark.

“The prevailing breeze in the summer is southwest here on the bay, so that blows us into the dock,” he said as he got underway away for a noon tour. “I use a sort of modified ferry maneuver to get away.” Franke swung the stern around, pivoted the bow on a well-rendered piling, then backed straight off and swung into the channel.

Franke is typical of the three dozen or so captains that Gosselin hires to run Watermark’s 13-boat fleet. Many are retired and want to share their passion for the water. “We are as much a hospitality business as we are a maritime business,” she said. “Customer service is our absolute top priority right along with safety.”

EXPANSION After Gosselin purchased Watermark from her father, she studied the market, looking for expansion opportunities.

She found that customers were interested in longer excursions, enough to support full-day “Day on Bay” cruises that she introduced. The Lady Sarah, built at Geo Shipyard in New Iberia, La., in 2005, is perfect for these cruises. The 65'×21'×9' vessel is powered by twin Caterpillar C-18 engines and can cruise at 18 knots. The Lady Sarah can cross the bay to the historic town of St. Michaels and provide guests with an afternoon of sightseeing before returning to Annapolis.

In 2009, Watermark expanded to Baltimore’s Inner Harbor. That’s when the Annapolitan II began offering excursion tours. Gosselin responded to a 2008 request for proposals from the city of Baltimore to provide a “maritime heritage vessel” for excursions in the waters around Baltimore. The result was the 149-passenger, 99'×28' Raven. Built by Scarano Boat Building, Albany, N.Y., in 2012, the Raven, powered by twin John Deere engines putting out 455 hp each, was designed to resemble circa-1900s steamers that once ferried passengers up and down the bay, with a plumb bow and arched windows. The Raven’s covered upper deck has a partially retractable roof.

The Raven has become a fixture in the Inner Harbor, and is popular with tourists who take the sightseeing trips out to Fort McHenry and private charters.

Dean Scarborough, Watermark’s

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The 149-passenger Raven was added to Watermark's Baltimore fleet in 2012.

security officer, said his passion is fulfilling Gosselin’s quest to beat the expectations of customers while providing for their safety and security. “I am looking to give every guest a ‘wow’ moment but also a safe trip,” he said.

He retired after a 30-year career on the water as a Maryland Department of Natural Resources police officer and joined Watermark in 2002. Scarborough creates and implements training and security plans for the fleet. “Our crews are trained to keep a close eye on every single passenger,” he said.

“A stray glass left on deck can easily become a hazard, so they are constantly policing. The same goes for the passengers. I have a deckhand stationed on each deck, moving around, interacting with everyone, and making sure they are having a great time but also making sure everyone knows they are being monitored.”

Back in Annapolis, with the summer now in full swing, the Watermark fleet of water taxis and vessels like the Lady Sarah and the grand old Harbor Queen are busy avoiding the throngs of boats that crowd the harbor.

“There are so many kayaks and paddle boards out now,” said Franke. “The stand-up paddlers are what worry me.

They are not maneuverable to begin with and many of the operators are just learning, so I need to be very careful around them. If I blow the horn I could scare them and they could fall.” www.workboat.com • AUGUST 2015 • WorkBoat

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Fireboats

Slower Burn

Sluggish market is still producing quality fireboats.

By Kirk Moore, Associate Editor and Ken Hocke, Senior Editor

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onstruction of fireboats at North American shipyards has slowed. In WorkBoat’s Annual Construction survey published in March, there were only eight fire and fire/rescue boats contracted for, under construction or delivered between March 2014 and February 2015. The previous year, the survey totaled 15 fire and fire/ rescue vessels. The number was 34 the year before that.

“There was definitely a blip in the market this year, almost entirely related to oil price,” said Bob Clark, contracts manager, MetalCraft Marine Inc., Ontario, Canada. “It has eased up somewhat based on oil settling at a reasonable price. However, without our foreign markets, the market would be looking pretty tight. The high U.S. dollar is a negative to foreign sales, considering the drop in many foreign currencies that could make a U.S. product almost 30% more expensive than a year ago.”

FIREBOATS In general, fireboats are built to last and tend to stay in service for a long time. That’s good news since the price tag for these boats has risen substantially because of the demand for high-tech electronics and the latest bells and whistles, a trend that can put new boats out of reach for some cities and municipalities.

“Our fireboats are about 55 years old. They’re kept in tip-top shape, but the systems are getting old,” said Raymond Guzman, deputy chief of administration with the San Francisco Fire Department.

The SFFD is having an 88'×25'×14'4" Super Pumper NFPA Type II fireboat built at Vigor Industrial, Seattle. The boat’s sophisticated crew protection and emergency capabilities are being paid in part with a port security grant from the Federal Emergency Management Agency. With delivery expected in the first quarter of 2016, the

MetalCraft Marine Inc.

New MetalCraft fireboat for the FDNY.

www.workboat.com • AUGUST 2015 • WorkBoat

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boat will be a major upgrade for the city and Bay Area.

Designed by Jensen Maritime, the vessel taking shape at Vigor’s Harbor Island yard will serve in San Francisco and San Pablo bays, and nearby inland waterways. It will also be capable of operations in the Pacific Ocean up to five miles offshore, according to Jensen. “They are in the process of fabricating the modules,” Guzman said.

“One or two of them are done now.”

The new steel and aluminum fireboat will have both normal and “superpumper” firefighting modes. Typically NFPA Type II fireboats are equipped with a minimum four fire monitors and eight manifold valves, and can pump 10,000 gpm. On this vessel, in normal mode, the three CounterFire ESF 300550 6,000-gpm pumps rate of discharge will be 18,000 gpm at 150 psi, through two 3,000-gpm and two 1,500-gpm Stang deck monitors and two Stang 1,500-gpm under deck monitors and 18

3" and 10 5" manifold valves, according to Jensen.

In super-pumper mode, the boat will move 6,000 gpm at 150 psi through the forward monitors and 8 3" manifold valves, and 6,000 gpm at 300 psi through 10 3" and 10 5" manifold valves.

The new fireboat will be equipped with three Cummins QSK19-M diesels, producing 750 hp each. Two will drive the conventional propulsion system and the third will be a dedicated pump engine.

In addition to its firefighting mission, the new SFFD boat can take on emergency medical services personnel for rescue and patrol duties. It will be equipped with CBRNE detection capabilities and self-contained breathing apparatus and local air supply ports to keep crews safe in hazardous conditions.

Clark said there is one constant when building fireboats that really adds to the

cost of the vessel. “The proverbial 10 pounds of gear in a five-pound bag,” he said. “This weight increase puts severe loads on the hull bottom surface area. In theory most boats should not plane at all. So you need more pounds of engines and more pounds of fuel, which then needs bigger water lines, larger exhausts, bigger batteries, etc. It is quite a spiral that can get out of hand at times.”

MetalCraft is currently building the William M. Freehan, a 66'5"×18'3" fireboat, based on the yard’s FireStorm 70 design, for the Fire Department City of New York.

When delivered in July, the boat will be able to pump more than 12,000 gpm.

“We took the 70 over to them,” said Clark. “The boat they wanted is quite a bit narrower than the usual FireStorm design because it has to fit on a Travelift. It’s a spectacular boat. It really is.”

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The vessel is powered by three Caterpillar C-18s, producing 1,150 hp each, connected to Hamilton Jet 403 waterjets through ZF 665 transmissions.

The new fireboat will feature two Darley ZSP 3000 fire pumps, one driven off the centerline engine and the other off a Cat C9 as a dedicated pump engine. Outlets throughout the boat will consist of a large Stang monitor on the cabin top capable of 5,500 gpm, twin

Elkhart Scorpions on the bow capable of 2,000 gpm each, and two Elkhart Spit-Fires on the aft deck capable of 2,000 gpm each. There will also be two 6" Storz fittings for land supply missions.

The vessel will also have a 20-kW genset providing power for all its needs including twin 100 HDT Hunter CBRN systems to keep the staff and potential patients protected during an emergency situation.

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San Francisco Fire Department

Fireboats

Vigor’s new fireboat for San Francisco will have a shallow draft and bowthruster to maneuver around San Francisco Bay’s shallows.

The FDNY is concerned about crew comfort, so the boat was fixed with Shoxs shock mitigating seats. “It’s really quiet,” said Clark. “The boat has a floating wheelhouse.”

FIRE/RESCUE Many of the boats used by municipalities to fight fires are multimission boats, with search-and-rescue operations being their biggest duty.

In April, Moose Boats, Petaluma, Calif., delivered two of its M2-35 aluminum outboard catamarans to the Port Authority of New York and New Jersey.

Built for patrol and emergency rescue response in the waters around New York’s LaGuardia and JFK airports, the 35'×13'6"×22" catamarans are driven by a pair of 350-hp Yamaha outboards.

Each M2-35 carries a self-contained Darley fire pump. For rescues, the boats can carry and deploy up to 20 life rafts, each holding 12 people, released out starboard side dive doors for fast deployment.

The boats, built for the Port Authority of New York and New Jersey, are similar to the four M2-35s the company built for the New York City Police Department for fire rescue, patrol, dive and recovery operations on the city’s waterways, said Stephen Dirkes, general manager at Moose Boats.

To get on the scene of an accident quickly, the new boats can hit 45 knots at top end. The cabin has shock-mitigating seats for the crew.

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On TheWays

ON THE WAYS

Tidewater Transportation & Terminals

Vigor completes first of three new 4,500-hp towboats

The Crown Point is the first of three new 102', 4,480-hp towboats being built for Columbia-Snake river operations.

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n June 27, Tidewater Transportation & Terminals officially welcomed the newest member of its fleet of river towboats, the Crown Point, during a christening ceremony at company headquarters in Vancouver, Wash.

Designed by CT Marine, Edgecomb, Maine, and built

by Vigor Industrial, Portland, Ore., the new 102'×38'×11' towboat is powered by a pair of Tier 3 Caterpillar 3516C main engines, each rated at 2,240 hp at 1,600 rpm. The main engines turn matching Reintjes WAF873 reverse-reduction gears (7.455:1) and 92"×100" fixed-pitch, 5-bladed stainlesssteel propellers in CT28 kort nozzles. The engines are connected to the gears by Centalink torsional couplings.

Electrical power is provided by two Cat C7.1 Tier 3 generator sets, each 480v, 200 kW at 1,800 rpm.

The new boat is the first of three identical towboats for Tidewater’s barge operations on the Columbia-Snake River System. The Granite Point and the Ryan Point are currently under construction in Portland.

Because these boats operate on a river system that stretches 465 miles from the Pacific Ocean at Astoria, Ore., to Lewiston, Idaho, the boats often encounter high winds and extreme currents. To facilitate safe and efficient operations in these conditions, the boats have enhanced steering systems with four free-hanging steering rudders and four free-hanging flanking rudders.

Larry Bartel, a Tidewater captain, said the boat has “tre30

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mendous rudder power” that can turn around a loaded tow “precisely and swiftly.”

The new boat is also quiet in keeping with the company’s focus on crew comfort and endurance. Noise Control Engineers, Billerica, Mass., developed the sound and vibration control package that includes Christie and Grey engine mounts and comprehensive acoustic insulation. Noise levels register at less than 60 dB in the accommodations areas during vessel operations. “It is the quietest tug I have ever piloted,” said Bartel.

Deck machinery includes seven Patterson WWP 65E-7.5, 65-ton electric winches with pilothouse remote controls and local push-button control stations on the main deck. Each winch is wrapped with Samson 1 3/8" Turbo 75 synthetic line.

Schuyler Rubber Co., Woodinville, Wash., provided fendering for the push knees and D-rubber for around the perimeter.

Variable frequency drives were used for all major rotating machinery applications to minimize power consumption.

LED lighting is employed for both interior and exterior applications.

Engine room fire protection is provided by a Kidde NOVEC 1230 suppression system.

In the wheelhouse, floor-to-ceiling windows all around provide enhanced visibility, a trademark design feature from CT Marine. www.workboat.com • AUGUST 2015 • WorkBoat

7/1/15 12:09 PM

Gladding-Hearn delivers pilot boat to Cape Fear

A

t the end of April, GladdingHearn Shipbuilding, Somerset, Mass., delivered the Cape Fear Pilot III, a 52'×17'×4'8" pilot boat, to the Wilmington-Cape Fear Pilots Association in Southport, N.C. Gladding-Hearn has delivered scores

Gladding-Hearn

The Crown Point is the first selfpropelled vessel to be built at Vigor’s Portland shipyard in many years. The yard has built several barges over the past decade and does a lot of repair work, but newbuild boat construction is new for this facility. Christian Townsend, who along with his father, Corning Townsend, designed the Crown Point class, said the yard has done an outstanding job. “Their work is some of the best I’ve even seen,” he said. — Bruce Buls

New 52' pilot boat for Cape Fear pilots.

of pilot boats, but this one marks a milestone in the company’s history.

It’s the 400th boat Gladding-Hearn has built since the boatyard opened in 1955 — 77 of those have been pilot boats.

The company’s first pilot boat was a steel 48 footer. “It was a 10-knot launch for the Delaware pilots,” said Gladding-Hearn’s Peter Duclos.

“Building small steel boats in 1955 was kind of a novel thing. Most of them were wood, including the launches.”

The problem with wood launches

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was that most didn’t last long after coming up hard a few times against the side of a steel ship. But a steel launch wasn’t without its problems — sparks.

When a steel pilot boat went up against the steel hull of a gasoline tanker “they were scared to death it would ignite the whole thing,” said Duclos.

Rubber made it possible to use steel pilot boats, specifically “the large rubber fendering sections in the 1950s,” said Duclos. Equipped with rubber fendering, the early steel pilot boats

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On TheWays

BOATBUILDING BITTS

Snow & Co.

he U.S. Navy has exercised an option on its contract for 11-meter rigid inflatable boats (RIBs) with Willard Marine, requesting five more RIBs in addition to the 10 that the Navy had ordered in 2014. Willard will provide three 11-meter open center console boats powered by twin Cummins QSB6.7 380-hp engines, and two visit, board, search and seizure boats outfitted with twin Cummins QSB6.7 480-hp engines. Both RIB versions will be paired with HamiltonJet HJ292 waterjets.

Austal USA, Mobile, Ala., christened the Navy littoral combat ship Gabrielle Giffords in June. The LCS is a 419'×99' aluminum trimaran, capable of being outfitted with reconfigurable payloads (mission packages) which can be changed to support mine countermeasure, anti-submarine and surface warfare New 20' boom deployment boat. missions at speeds

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up to 45 knots. This is the third LCS in Austal’s 10ship, $3.5 billion block-buy contract awarded to Austal in 2010. Also in June, Austal held a keel-laying ceremony for the Manchester (LCS 14). This ship is the fifth LCS built at Austal.

The littoral combat ship USS Seattle’s Snow & Co. Gabrielle Giffords (LCS 10) has designed and built two was launched at Austal USA 20'×8' aluminum containin February. ment boom deployment boats. The relatively flat-bottom boat has just 5° deadrise for shallow-draft work. Protecting the hull is a 4" highdensity polyethylene pipe collar with 2" of polyethylene foam cushion behind it. For towing there’s a 4" pipe post and a flip down stainless steel push knee for pushing booms. The first boat has a 90-hp Honda outboard. The second boat will have a 135-hp FNM Marine diesel, ZF 45 reversing gears and an Almarin 185 jet.

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Fire up the 200 horsepower Mercruiser pump and the remote controlled bow monitor of the 370 Justice pumps 1250 GPM of water that you can control from the helm. She affords access to confined spaces like marinas while her shallow draft negotiates skinny water that keeps bigger fireboats at bay. Equipped with an optional dive door, she also functions as a convenient platform for rescue and recovery. When your department needs a fleet of boats but your budget doesn’t stretch that far, the 370 Justice kicks ash.

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On TheWays worked well for a while, but by the late 1970s, the Delaware pilots said 10-knot boats would no longer do the job. So Gladding-Hearn took a look at the designs of C. Raymond Hunt Associates and decided to adopt the company’s high-deadrise, deep-V hull.

“Since 1977, we’ve built very few boats that weren’t Hunt deep-V boats,” said Duclos. The first Hunt-designed pilot boats were still built out of steel but they made 18 knots. It didn’t take

long before 18 knots was considered slow. That was the driver for the next step: building pilot boats out of aluminum.

“Then not much changed,” said Duclos. “We were building aluminum versions of the steel boat.” That lasted until the late ’90s. “That’s when we said, ‘we’ve been doing this for a long time. We have a lot of ideas to make things better. If we can’t do it, we’ve got to give it up.’ ”

The search for something different resulted in the first St. John’s-class pilot boat built for the Cape Fear pilots in 1998. That design morphed into Gladding-Hearn’s Chesapeake-class pilot boats. “So, today, we have two classes in the 50-foot range,” said Duclos. Both are designed by C. Raymond Hunt.

The Cape Fear Pilot III is the newest St. John’s-class pilot boat. With a pair of 479-hp Caterpillar C-18 main engines bolted to Twin Disc MG- 5114A, EC300 QuickShift gear boxes that spin 33", 5-bladed wheels, the boat hits 23 knots loaded.

The boat has wide side decks, heated exterior handrails to prevent ice formation in the winter, and a boarding platform on the roof. Inside the wheelhouse are three Llebroc pilot seats and a helm seat. The fo’c’sle has a settee, galley, two bunks and an enclosed head. If a pilot goes into the water, there’s a recessed platform at the stern with a winch operated davit to pull him out.

The next design change at GladdingHearn is currently being built. It’s a 53-foot pilot boat for the Tampa Bay Pilots Association with a Volvo-Penta IPS drive system. Positioning the drives on the bottom of the hull means it’s 20% to 30% more efficient than a standard inboard, the superstructure can be moved aft and there’s a large foredeck.

“The pilots will go faster, burn less fuel and be more comfortable,” Duclos said.

— Michael Crowley

Geo delivers 65' research vessel to Texas A&M

I

n June, New Iberia, La.-based Geo Shipyard delivered a $2.3 million 64'9"×21'6"×9'3" research, academic and training vessel to Texas A&M University at Galveston, Texas. Designed

by Roger Fyffe, the aluminum catamaran Trident has a 4'3" draft.

“This is the first new boat they have had built in 40 years,” said David LeCompte, Geo’s vice president. The university and its marine vessel operations manager, Capt. Allan Post, “were 34

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pleased to take delivery of this spacious research catamaran.” It can operate 24 hours a day for up to five days in between port calls.

Texas A&M said in a release announcing the contract with Geo last year, that this “Swiss Army knife of a vessel will allow us to travel up to 200 nautical miles from shore in a variety of mission configurations.”

The vessel features a large 240 sq.ft. dry/computer lab, spacious aft deck which holds a wet lab counter with a deep sink with fresh and salt water taps and a fresh water shower. The rear cargo deck measures 375 sq. ft.

Also on deck is a DT Marine Products DT303EM survey/trawl winch and an aluminum A-frame, two-ton knuckle boom crane with a 22'6" maximum reach, fire pump with two fire stations, and a 4.6-meter inflatable RIB. There is also “a spacious pilothouse, a well laid out galley and mess dining area,” said LeCompte.

Geo Shipyard

On TheWays

Aluminum catamaran research vessel for Texas A&M.

Main propulsion comes from twin Scania D1-13-070M 13-liter diesel engines, producing 500 hp each. The mains are connected to 32"×42" ZF 4-bladed nibral wheels through ZF 360 marine gears with 2.48:1 reduction ratios. For added maneuverability, the Trident was fixed with two Wesmar V2, 23-hp thrusters. The propulsion package gives the new research vessel a top speed of 23 knots and a cruising speed of 18 knots.

Two Westerbeke gensets, sparking 33 kW of electrical power each, handle the ship’s service power responsibilities.

Capacities include 2,444 gals. of fuel and 325 gals. potable water.

Controls are ZF Cruise Command and the steering system is from Kobelt.

There are accommodations for 12 crew and scientists, featuring 12 beds in three staterooms and two full heads with showers.

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www.workboat.com • AUGUST 2015 • WorkBoat

7/1/15 12:09 PM

Miracle Marine delivers ‘floating fire hydrant’

I

n April Miracle Marine Inc., Potosi, Mo., delivered one of its landing craft fire/rescue boats to a Missouri fire protection district, equipped with a diverter waterjet drive and power plant built to the latest Tier 5 emission standards.

“Our unique niche in the market is we can arrive on location in slow water and begin pumping,” said boat builder Curtis Dzuba, whose company specializes in aluminum fire, rescue, patrol, dive and salvage boats from 20' to 40'.

The latest is a 25'×9'2" flat bottom landing craft that has a 12"-18" draft

depending on the load, with a hydraulic loading ramp for rescues or to ease the use of hoses from pumper trucks on land. “Technically, it’s a floating fire hydrant,” Dzuba said.

New fire/rescue boat for the Mascoutah Delivered to the Rural Fire Protection District.

Mascoutah Rural Fire Protection District, Fayetteville, Mo., the boat’s engine as a water pump saves 30 sq. ft. waterjet is designed to keep out debris up forward, 2,000 lbs. and as much as when the crew is operating in floodwa$100,000, which would be the additers. tional cost for a larger boat with a sepaThat’s an advantage over outboardrate drive and pump power, he said. driven boats that fall prey to fouling in A diverter valve forward sends water high waters, Dzuba said. Main propulto the 610-gpm fire monitor. In its pure sion comes from a Kodiak Marine fire hydrant mode, the engine can move aluminum block 6.2-liter LS3 V-8 1,050 gpm through a 1'5" hose or up to engine producing up to 410 hp.

3,500 gpm with a 5" connection.

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Bruce Buls

Y E A RBO O K

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7/6/15 2:46 PM

A

t this time last year, the market was continuing to rebound from the recession that officially began in late 2007. But that all came to a halt late last year when oil prices began to lose ground. For OSV operators, rates and utilization began to dip and cold stackings began to pick up (see page 48). Shipyards on the Gulf Coast with strong energy ties began to lose ground as they worked off OSV backlogs. Other yards with more diverse orderbooks have

Some shipyards hurt by low oil prices

Industrial and Harvey Gulf International Marine (HGIM) to raise the stakes. But that’s what they did this year.

In March, Portland, Ore.-based Vigor and aluminum boatbuilder Kvichak Marine Industries in Seattle, announced a merger. For Vigor, the expansion continues having also added Oregon Iron Works, Todd Pacific Shipyard and Alaska Ship & Drydock in recent years.

“It’s not about getting bigger. It’s about getting better,” said Frank Foti, Vigor’s president. “The cross pollination will definitely improve our genetics.”

“Kvichak will go on the way it has been, and everybody here will go on with what they’ve been doing,” said Keith Whittemore, Kvichak’s president.

“It’s all very complimentary and very exciting.”

In June Harvey Gulf announced that

By Ken Hocke, Senior Editor

T

he past 12 months have been eventful for the shipyard industry. Two West Coast yards merged, a major U.S. Gulf offshore service vessel operator bought the Mississippi shipyard that is building its dual-fuel OSVs, an East Coast yard is building the first crew transfer vessel for the offshore wind farm industry in the U.S., and many Gulf shipyards are feeling the effects from depressed oil prices.

“The drop in the price of oil has had an impact, a little more so on the repair side, but the great story about the oil patch is that there are still boats on the order books,” said Matthew Paxton, president, Shipbuilders Council of America, Washington, D.C. “We’re still building the best boats on the market.”

That is true for some of the bigger yards with multivessel contracts that were signed several years ago, but several smaller yards are feeling the pinch.

“I had to layoff some of my guys, and I’m afraid if it doesn’t pick up, I’m going to have to do it again,” Joseph Rodriguez, president, Rodriguez Shipbuilding, Bayou La Batre, Ala., said. “It’s tough, but we’ll just pray that something else comes in, that’s all.”

But Paxton said the next 12 months could signal more opportunities for shipyards. “Lifting the crude oil export ban will definitely influence what’s going on out there,” he said.

Construction of offshore service vessels in the Gulf have slowed.

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it had purchased Gulf Coast Shipyard Group, which includes Gulf Coast Shipyard, Gulfport, La., and Trinity Yachts, New Orleans, and created a new affiliate, Harvey Shipyard Group.

“These shipyard acquisitions will position Harvey Gulf as America’s only builder, owner, and operator of dual-fuel (diesel/LNG) offshore supply vessels and allow us to pass along the savings of lower operating costs and environmental protection to the marine transportation industry,” Harvey Gulf Chairman and CEO Shane J. Guidry said in a statement.

John Dane III, Gulf Coast Shipyard Group’s president and CEO, announced his retirement in an email to the industry. “I sincerely feel the companies are in good hands with the team we have assembled over the years and the new owners,” Dane said.

Dane said the sale was the result of

David Krapf

BOLD MOVES If the shipyard industry were a poker game, one wouldn’t expect Vigor

fared much better. Tug operators continue to build at a slow but steady pace (see page 47), and inland barge operators continue to plug along, with many benefiting from the stronger economy (see page 42). Passenger vessel operators are coming off a decent year and are even more optimistic this year as leisure and corporate business continue to improve amid strong advance bookings for the 2015 summer season (see page 50).

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Despite the drop in oil, many shipyards from coast to coast are staying busy.

classification. Harvey Gulf is spending $350 million to build its dual-fuel fleet.

Yet Harvey Gulf’s new dual-fuel OSVs are not the only first-of-a-kind vessels being worked on in U.S. shipyards. It’s not even the only LNG project under way.

Down in Morgan City, La., Conrad Industries signed a contract to build the first dedicated LNG bunker barge in North America at its Orange (Texas) shipyard.

The 232'×48'8"×15'8" bunker barge was designed by Bristol Harbor Group, Bristol, R.I., with significant input from Conrad and GTT, the French company that developed the LNG cryogenic membrane containment technology being used for this project.

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FIRST CLASS Gulf Coast Shipyard delivered the first of six dual-fuel OSVs to HGIM in February. Based on a design by Vard Marine, the 5,200-dwt, 310'×64' Harvey Energy has tankage for both LNG and diesel fuel. The boat was customdesigned to take advantage of LNG’s low cost while minimizing the fuel’s technological challenges. It’s also the first OSV certified to the new American Bureau of Shipping ENVIRO+

Ken Hocke

a combination of things, with the main one being the decline in oil prices.

“Our majority partner was looking to sell their share of the business after the downturn in oil prices, and the rest of us went along with that,” Dane told WorkBoat. The sale price was not disclosed.

Dane will still consult with HGIM and work with his partners at United States Marine Inc. building patrol vessels.

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by stainless steel.

Conrad spokesman Robert Sampey said the company did an analysis of an existing 304' hull for LNG storage capacity. With C tanks, the capacity was about 3,000 cu. meters. With membrane tanks, the capacity was 4,200 cu. meters, a 40% increase in volume.

“Its really exciting for us and for the industry,” said Sampey. “It’s a big deal to get the first one on the books and to get cranking on it. I think a lot of people were waiting on this first one to get cranked up.”

The new 232' barge will have a capacity of 2,200 cu. meters. It will feature an innovative bunker mast design, called REACH4, which was developed by GTT for simple and safe LNG transfer. Construction of the new LNG bunker barge is expected to be completed early next year.

Conrad has exclusive rights to GTT membrane technology in North America.

On the East Coast, Blount Boats landed a contract with Rhode Island Fast Ferry for the construction of a new 69' crew transfer vessel for Deepwater Wind to serve the first U.S. ocean wind farm off the coast of Rhode Island’s Block Island. With contractors already building foundations for the turbines, the boat is scheduled for delivery April 1, 2016.

“They’re very specialized boats. You can’t just put a square bow on a crewboat,” Marcia Blount told WorkBoat earlier this year.

The Warren, R.I.-based shipyard began exploring the European wind farm market in 2011, going to trade shows and consulting with European turbine builders like Siemans and boatbuilders that serve the industry. “It was really the turbine manufacturers’ call” on the best boat designs for delivering crew to the monolithic wind towers, based on experiences in the challenging North Sea, Blount said.

The Blount team was most impressed by designs from South Boats IOW in the United Kingdom. South Boats was an early supplier to the European offshore wind industry and has the largest market share with about 85 crew transfer vessels delivered.

YEARBOOK: INLAND WATERWAYS Another steady year for barge operators

By Kirk Moore, Associate Editor

T

he shakeout from lower oil prices that began last year gathered steam in the first quarter, as barge operators who rushed to fill earlier demand from the increase in U.S. hydraulic fracturing output scaled back their expectations for the rest of the year.

Coal carriers saw domestic demand continue to fall, as fracked natural gas continues to make inroads in new

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WASHINGTON INFLUENCE The now-perennial budget skirmishes between Congress and the Obama administration saw legislators restore funding for most of the U.S. Army Corps of Engineers projects cut by the executive branch. A renewed warning about the Corps’ operation and maintenance budget came in a June report by the National Research Council, suggesting that a recent fuel tax increase supported by operators and shippers is not enough and a new user fee for barge operators should be considered.

That would be a mistake, at a time when U.S. commodity exports are competitive in part because of low transport costs and growth could add another 14 billion tons of new freight to the inland system in coming years, Mike Toohey, CEO of the Waterways Council Inc., said after reviewing the council report.

The Corps’ choices for spending its $650 million annual O&M budget must be prioritized, with the most funding going to the highest-value locks and dams, the NRC concluded.

Other political pressures are entering into those decisions. One outcome was the permanent closing of the Upper St. Anthony Falls Lock and Dam at Minneapolis, Minn. Mandated by Congress with the Water Resources Reform and Development Act of 2014, the closure 44

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David Krapf

power generation and older coal-fired plants have trouble competing.

Last year was “the likely peak” for domestic crude oil movements by barge, driven by the need of oil companies to move crude from the Dakota Bakken fields and to a lesser extent from Canada, said Brent Dibner, president of Dibner Maritime Associates in Chestnut Hill, Mass. But the growth of pipeline networks, driven by expanding production, “are ultimately easing a very tight situation” for the producers.

Overall, it was a good year for barge operators. “For large barge operations 2014 was a more orderly year,” said Dibner. “The rates were extraordinary.

We had very high rates due to high costs, things like ice and high water, and strong demand.”

Overall, it’s been a good year for barge operators.

was ostensibly to control expansion of the invasive Asian carp population in the upper Mississippi.

But critics suspected the closure comes from local pressure to redevelop the riverfront, forcing businesses that ship sand and gravel aggregates and scrap metal to turn away from the river, adding 21,000 more truck trips a year onto the highways, according to a Corps assessment.

Along with domestic crude oil, the record 2014 U.S. corn crop of 14.2 billion bushels helped make 2014 a good year for operators. Early spring assessments by the U.S. Department of Agriculture projected the fall 2015 corn harvest may be down around 4% from last year’s but foresaw overall increases in both U.S. available supply and exports through 2016.

The strong U.S. dollar relative to other currencies could work against other U.S. agricultural products overseas, the USDA’s Economic Research Service reported in its May 28 outlook for U.S. farm exports.

“The expansion in North American oil supply is likely to slow in 2015.

Nonetheless, U.S. prices for crude oil and natural gas are expected to continue to be below world levels in 2015. This, and the stronger dollar are expected to provide U.S. oil refiners, farmers, manufacturers, fertilizer producers, and farm product exporters a lower cost environment in 2015,” the agency reported.

But world events can always come out of left field, and farmers and shippers alike could be surprised by another economic crisis, say in Greece or Ven-

ezuela, which “could trigger a world growth slowdown and a sharper rise in the dollar, hurting U.S. farm exports,” the report warned in conclusion.

Even amid the oil supply glut and lower prices, barge operators expanded their operations to meet demand from refiners in 2014. But demand began to drop off in the fourth quarter of 2014, when barge shipments of crude from the Midwest to the Gulf dropped 57% according to River Transport News, an industry newsletter.

At the end of April, David Grzebinski, CEO of Houston-based Kirby Corp., the nation’s largest barge operator, said the company was revising downward its projections for 2015 inland business, based on first quarter results.

“Because of some uncertainty in crude oil volumes and the large number of 30,000-barrel barges built over the last few years, industry utilization for 30,000-barrel barges is not as strong and rates are under some pressure.

After four straight years of improved earnings, the market has forced a pause in our record financial performance,” Grzebinski said in a statement.

There is a striking range of opinion and dissonance among analysts, industry observers and government agencies about where oil will go in the coming years. While the USDA report echoes the sentiments of industry players prepared for slower going through 2015, the U.S. Energy Information Administration projects longer term growth in U.S. production, chiefly from inland shale oil and deeper offshore wells.

“Total U.S. oil production is project-

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ed to increase 23% between 2014 and 2020. After 2020, tight oil production declines, as drilling moves into lessproductive areas,” the EIA reported in June.

Coal tonnage continued to decline, both for domestic use and exports of metallurgical and steam coal, from record peaks in 2014. By the end of 2015 the EIA expects Appalachian production will fall another 13%, with

declines of 4% and 6% in the Midwest and West — a total decline of 70 million short tons.

After a cold and snowy winter in the upper watersheds, high water made spring 2015 navigation difficult on some reaches. That contributed to some minor allisions and other mishaps, like the breakup of a 21-barge tow March 29 at Natchez, Miss., when the river was running at a 49' stage.

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GOOD NEWS Going forward, the prognosis is again steady for barge operators.

It looks like the oil trade may already be rebounding, said Mark Knoy, president and CEO of American Commercial Lines, Jeffersonville, Ind. “We’ve been very busy. Everything we have has been working,” said Knoy, whose company operates 350 tank barges with 5.5 million bbls. of capacity and over 1,500 dry cargo barges.

“Some of the renewals have come back.

There seems to be strong demand.”

One change is less crude oil coming through the Midwest, but more condensates from the Marcellus and Utica shale oil plays, Knoy said.

“Grain demand still seems to be strong,” and more covered barges are being built, Knoy said. Industry observers say that’s driven by global demand for food commodities, hence USDA predictions of a continued strong export market for U.S. farmers. For the domestic market, barge transport for building materials is on an upswing with the economy, Knoy said.

“Coal has been soft, and I think it will remain soft” with prices substantially off what they were a couple of years ago, he said.

Spring 2015 brought one surprise to the coal trade: indications that Europe, particularly Germany, may be back in the market for low-sulfur U.S. coal.

Europe is feeling the pinch after the post-Fukushima closing of nuclear plants was followed by rising tensions with Russia over Ukraine.

That created more uncertainty about obtaining natural gas supplies from the East, and has Germany looking to coal again.

“But in the long run, there are 11:14 AM limits to how much [U.S.] coal can go east,” Dibner said.

The Gulf coastal trade is more competitive now, too, with tug-barge combinations and coastal tankers moving more cargo from Corpus Christi, Texas, to refineries along the Gulf Coast.

Those vessels are supplying refineries deeper in Louisiana too by unloading at the Gulf buoy terminals into pipelines to onshore, Dibner said.

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YEARBOOK: TUGS Tugboat market keeps plugging along

By Max Hardberger, Correspondent

T

he past year has seen steady progress in the business and technology of tugboats. Construction has also stayed steady.

Tugboat designer Robert Allan Ltd. (RAL), Vancouver, British Columbia, updated two of its previous designs for customers. The first is the 78'1"×30'4" ship-assist tug Bo Brusco, delivered in late 2014, the second tug in a new series based on previous RAL designs for Brusco Marine. According to RAL’s Jim Hyslop, the new Brusco tugs have bigger engines to handle the larger, heavier Rolls Royce Z-drives, and heavier scantlings “to stiffen them up.”

Another RAL design, the 80'×36' Z-drive ship-assist tug Lela Franco, was delivered to Harley Marine Services by Seattle’s Diversified Marine Industries. A sistership to the Michelle Sloan, the design is a modification of one that RAL provided to Harley 10 years ago, but, like the Bo Brusco, is bigger, wider, and more powerful. The modified hull design features an additional 6' of beam and a smaller skeg.

“In ship assist, the way to handle more horsepower is with more beam, up to a point,” Hyslop said. “This is true for both Z-drives and conventional tugs. The wider beam also let us reduce the size of the skeg, with reduced drag and increased maneuverability.”

The ship-assist market also saw the October 2014 delivery of the 96'×36'×15' Z-drive Eric M. McAllister, built by North Kingston, R.I.-based Senesco Marine for McAllister Towing and Transportation’s Cape Cod Canal operations. The previous vessel built to this Jensen Maritime Consultants (Seattle) design, the Buckley McAllister, also built by Senesco, was named one of WorkBoat’s Significant Boats of 2014. With a primary purpose of escorting tugs and tank barges carrying fuels and other potentially pollut-

ing fluids in environmentally sensitive waters, the design had to be foolproof.

For example, in the unlikely event that the main hydraulic winch motor were to fail, the vessel has a 30-hp electric backup motor.

With a dozen new designs on the drawing boards and 50 tugs under construction to RAL designs worldwide, according to Hyslop, the firm’s

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At the smaller end of the tug market, Rodriguez Shipbuilding of Bayou La Batre, Ala., managed to stuff 1,980 hp into a 70'×29' lugger-style, model-bow tug drawing only 6'6" in light condition. The low-profile, general-purpose tug Captain Nedo C was designed to

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NEW TERRITORY The last year has seen the emergence of CNG as a significant cargo for inland transportation, but CNG-fueled tugboats may be next on the horizon.

Technology Associates Inc., New Orleans, has designed a true hybrid ship-assist tug that relies on electric power from its battery banks while on standby or underway and on the extra muscle diesel engines provide during those brief periods when a lot of power is needed.

“Ship assist is perfect for a hybrid vessel,” said Anil Raj, president of TAI. “It uses the best of both worlds, and while on standby at the dock it can recharge its batteries with cheap grid electricity rather than diesel.”

Raj noted that the only practical difference between this design, which his company is offering in 80', 90' and 120' lengths, and present diesel-electric Z-drives, is that energy is stored in electric as well as combustible form.

The year has also seen the entry of a U.S. tug company into the Arctic market. Much has been written about global warming and the opening of once-icebound Arctic sea passages, but Foss Maritime of Seattle has taken the practical step of providing tug services for naval, governmental, and private vessels venturing into these waters. The first of three Arcticclass tugs, the 132'×41'x18' Michele Foss, was delivered in March from the company’s Rainier, Ore., shipyard, and soon departed for her first assignment, escorting oilfield sealifts from South Korea to the Alaskan Arctic. The vessel is not only ice-class, but meets the new ABS Guide for Building and Classing Vessels Intended to Operate in Polar 48

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Bruce Buls

meet the needs of a customer working the shallow waters of Gulf Coast estuaries by spreading its horsepower across three Cummins QSK19-M diesel engines producing 660 hp each.

With a Pullmaster towing winch on the stern and the capability to be rigged as a pusher, the in-house design showcases Rodriguez Shipbuilding’s ability to meet specific market needs.

The 80'x36' Michelle Sloan and a sistership were designed by Robert Allan Ltd.

Waters. In keeping with the environmental sensitivity of its area of operation, the vessel was designed without ballast tanks (to avoid the possibility of invasive species transfer) and with a hydraulic system able to operate on biodegradable hydraulic fluid.

YEARBOOK: OFFSHORE Weak offshore market sees more cost cuts

By Bill Pike, Correspondent

A

s 2015 passed the midway point, offshore service companies continue to make significant adjustments to operate in a low oil price environment, resulting in improved performance in some offshore operations.

David W. Williams, CEO of offshore driller Noble Corp., summed it up in the company’s first-quarter earnings call.

“We entered 2015 well aware of the formidable industry challenges resulting from the combination of lower crude oil prices, reduced upstream spending by customers and excess offshore rig capacity. In the face of weaker industry fundamentals, we remain focused on efforts to capture additional cost reductions and improve operating efficiencies to maintain healthy contract drilling services margins while upholding high operational standards,” he told analysts.

In the face of cost reductions of 30% or more mandated by offshore operators, service companies that have

adopted this strategy have, for the most part, seen performance improve from last year’s depressed market. Companies that haven’t, especially in shallow water, are likely to land in financial trouble or be the target of mergers and acquisitions.

The continued low oil price environment has led to equipment layoffs as activity has contracted at the same time several new rigs and vessels have entered the market.

In the drilling sector, for example, Noble Corp. retired three semisubmersibles in the fourth quarter of 2014.

Ensco, another major offshore driller, discontinued operations of five floaters and two jackups and put them up for sale. In part, these layoffs were due to the low oil prices, weakened demand and the large volume of new rigs that have entered the market.

Noble averaged approximately $2.1 billion per year in capital expenditures over the last three years, primarily on newbuilds. That capex rate is expected to decline to $585 million this year with only one remaining vessel, the jackup Noble Lloyd Noble, expected to be delivered in mid-2016.

OVERHANG Ensco recently took delivery of Ensco DS-9, an ultradeepwater drillship delivered to the Gulf of Mexico, and Ensco 110, a premium jackup.

Many other drillers have upped the ante with newbuilds. If the older drilling units displaced in the market by the newbuilds cannot move out of the market fast enough, the oversupply will

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drive utilization and day rates down.

Jeremy Thigpen, president and CEO of Transocean, noted at the company’s annual meeting in May that ultradeepwater units had a worldwide utilization rate of 92%, while utilization rates for deepwater, midwater and high-spec jackups stood at 87%, 84% and 88%, respectively. For companies with older iron, the utilization rate is much less.

Rigzone calculated in mid-June that the overall rig utilization rate in the Gulf of Mexico was just 34%, down from 53% a year ago. Some drilling companies have been especially hard hit. Hercules Offshore has cold stacked 11 of its jackups, cut 1,800 employees, and said it planned to file for Chapter 11 bankruptcy in July.

The idling of old vessels and the delivery of new vessels in the OSV market mirrors the larger Gulf market.

At the end of 2014, Tidewater’s active fleet comprised 242 “new” vessels (average age of 6.6 years) and only 18 “traditional” vessels, chief investment relations officer Joseph M. Bennett, said at the Scotia Howard Weil Energy Conference in New Orleans in March.

The steady stream of new OSVs has created an oversupply. Earlier this year Aries Marine Corp.’s operations manager, Pete Romero, said that “the biggest problem is that there are just too many boats in the Gulf.”

That was seconded by Matt Rigdon, CEO of Jackson Offshore Operators.

“There are just too many boats in the market,” he said.

The current oversupply has created a “trickle down” environment where new, larger deepwater boats that enter the market drive the current generation boats down a tier which, in turn, drives the previous generation down a tier, and so on. The result is that smaller, shallow-water vessels are forced out of the market.

This trend is reflected in day rates and utilization rates. At the top of the heap, latest generation deepwater vessels (4,000 dwt, 290' and over) have seen utilization rates and day rates stabilize, more or less, according to Richard Sanchez of IHS Petrodata.

Older generation deepwater vessels (240'-280', DP-2) have seen a continued decline in day rates, falling to below $20,000 from the mid-$20s.

Unlike the latest generation deepwater vessels, previous vessel classes have significant excess fleet capacity and lower utilization rates, with most of these OSV owners each holding one to two available vessels, according to

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Sanchez.

Although the deepwater market has not fallen nearly as much as the shallow water market, operators continue to exert pressure to lower costs, which in some cases have fallen more than 30%, while at the same time reducing their commitment to new deepwater developments.

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YEARBOOK: PASSENGER VESSELS Passenger vessel market expects more growth

By Dale DuPont, Correspondent

N

ew Orleans Steamboat Co. has reached several significant milestones. This year marks the 40th anniversary of the Natchez, its steel 236'×40'×7'9" steamboat that cruises the Mississippi. And with tourism and travel up substantially, business has surpassed pre-Katrina numbers of 10 years ago, CEO Gordon Stevens said.

Passenger counts on the Natchez 50

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Jackson Offshore Operators

UGLY TRUTH The shallow-water market is not pretty. Traditional 180'-190' boats are being replaced by 205' DP-1 vessels that have been forced out of the deeperwater markets. Many owners are operating vessels in shallow water at cost, said Sanchez. And, since shallow water is now predominately a gas play, the potential for a market turnaround with rising oil prices is not good.

With a glut of shale gas on the market, and additional shale gas ready to hit the market, activity in shallow water has taken a big hit. The jackup rig count on the shelf has fallen from 25 to 35 to about 10 in the last four to five years. If analysts’ are correct, another year or two of depressed oil and gas prices could spell disaster for a number of companies that operate on the shelf.

The crewboat market is suffering just as much. One Gulf crewboat executive, who asked not to be identified, is experiencing a 50% utilization rate at day rates averaging $3,300. He said he “is trying to stay optimistic about the future,” pointing out that for cash-rich oil companies, now is a good time to step up their presence in the market and negotiate long-term contracts at favorable prices. Some independent operators are already doing this.

One bright spot is Mexico. An offering of 14 shallow-water blocks in Mexican waters will take place soon, with awards announced in July.

Vessel owners say there are too many boats in the Gulf.

increased 10% in 2014 over 2013 and so far this year, they’re up another 11% through May, he said. In the spring and fall, “we’re sold out a lot.”

“Dinner cruises have really grown tremendously in the last couple of years, and the foreign travel business is very strong in New Orleans,” Stevens said.

ON THE REBOUND His sentiments seem to be echoed by other passenger vessels operators who weathered the recession as business rebounded ever-so-slowly. Sightseeing trips are picking up, overnight river cruising is taking off, markets such as Cuba and Hawaii may be re-opening, and ticket prices are inching up.

“It was another hard winter, and people are looking to get outside,” said Jim Evans, senior vice president of sales and marketing for Chicago-based Entertainment Cruises, which has 30 vessels in cities primarily along the East Coast and Chicago.

“Things are picking up. Corporate spending is improving, and the general consumer market seems to be performing better,” he said. “Dinner cruises are performing really well this year.”

He’s optimistic about the rest of the year. “We see really good general public demand right now,” Evans said.

Doris Armacost of McCall Lake Cruises on Payette Lake, McCall, Idaho, operates on a much smaller scale, but she’s optimistic, too.

“We’re a growing company,” said Armacost, who with her husband, Bret, started the business in 2013. “It appears people are more out in abundance com-

pared to the last few years.”

McCall operates the 62', 85-passenger Idaho, built in 1983 by Finney Craft of Idaho and since refurbished.

“The public cruises are definitely taking off,” Armacost said. She has also seen an increase in weddings and other private events.

Across the country in New England, it has been a good spring. “Ridership does appear to be up on all of our services,” said Alison Nolan, principal, Boston Harbor Cruises.

With 47 vessels offering commuter service as well as sightseeing and other cruises, the company will carry just under three million passengers this year — about half are commuters. The company added two vessels this past winter.

“We’re seeing a strong influx consistently here of international visitors,” especially from Asia and Latin America, Nolan said. “We feel positive it will be a good year.”

Cold on the East Coast slowed some spring traffic but Memorial Day weekend was great for Fire Island Ferries Inc., Bay Shore, N.Y., which operates 23 vessels.

“The last few years have been very good,” said general manager Capt.

Dave Anderson, who also is president of the Passenger Vessel Association (PVA).

They just applied to the local government for a rate increase, which amounts to about 2% a year since they haven’t received a boost for six years.

“Our expenses have gone up like everybody else’s have,” he said.

Others have raised prices already, noting food costs have soared more

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NEW MARKETS In terms of new markets, the Treasury Department this spring granted licenses authorizing passenger ferry service between the U.S. and Cuba.

The companies also must get Cuban government approval before service

New Orleans Steamboat has seen business surpass pre-Hurricane Katrina levels and is considering expanding its fleet.

David Krapf

than fuel.

But what’s really keeping people up at night, Anderson said, is the out-ofwater safety craft issue.

The Coast Guard Authorization Act, which passed the House and was sent to the Senate, requires operators to have survival craft that keep passengers from being immersed in water if their vessels are built or significantly altered after January 2016 or if they operate in cold water.

The wording is less restrictive than a 2010 law that required all operators by this year to provide the more expensive craft to keep people completely out of the water. PVA contended that the onesize-fits-all approach in the original legislation made no sense and was not justified by the casualty history. A 2012 law delayed the start until 2016 and required the Coast Guard to compile data on everything from casualties to costs.

The Coast Guard concluded that carrying out-of-water survival craft in place of life floats and buoyant apparatus “is not anticipated to have a significant effect on vessel safety.” They also said it would cost $350.2 million over 10 years to replace life floats and other equipment and service and maintain new craft.

can begin, according to PVA. And Hawaii is taking another look at interisland ferry service, possibly with a system similar to Washington state’s.

Six years after the troubled Hawaii Superferry shut down, the state senate passed a resolution asking the state’s transportation department to explore prospects for re-establishing service.

Last year, Entertainment Cruises expanded its reach with the acquisition of Fort Lauderdale, Fla.-based Windridge Yacht Charters. They have since renovated the Windridge K to increase seating capacity from 66 to 95 (cocktail parties can handle up to 149 passengers) and moved dining to the first deck and the lounge to the second deck.

They originally were going to be charter only but added a couple of general public cruises around special holidays. As for growth plans, Evans said, “We had a good first year. We’re interested in expanding there.”

Builders are seeing pent-up demand for passenger ferries. “We hope that continues into the future,” Joe

Hudspeth, vice president of business development All American Marine told WorkBoat earlier this year. The Bellingham, Wash., company has delivered one of two 105'×33', 250-passenger aluminum catamarans for the King County Ferry District in Washington state.

Kvichak Marine Industries will build two all-aluminum 400-passenger ferries for the Water Emergency Transportation Authority (WETA), San Francisco. Gladding-Hearn Shipbuilding, Somerset, Mass., is building a 157', 493-passenger, threedeck high-speed ferry for Hy-Line Cruises, Hyannis, Mass. And Conrad Shipyard, Morgan City, La., was awarded a contract for a 384-passenger, 55-vehicle, 235'×64'×18'6" ferry for the Woods Hole, Martha’s Vineyard and Nantucket (Mass.) Steamship Authority (SSA).

And when asked about the prospect of adding to his fleet, New Orleans Steamboat’s Stevens said, “We are considering that strongly.”

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#FMMS2015 Register today at: www.navalengineers.org/FMMS2015

www.workboat.com • AUGUST 2015 • WorkBoat

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Safety

Accident Report Towing accidents highlighted in 2014 NTSB report.

By Michael Crowley, Correspondent

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n June 9, 2012, at about 5 p.m., the 105'×32' towboat Marguerite L. Terral was pushing 12 empty barges on the Mississippi River near Hickman, Ky., when the boat’s captain noticed flames coming out an engine room door. At the same time a fire alarm sounded.

The towboat had a fixed CO2 fire suppression system, but flames prevented the crew from activating the system near the engine room door. The system could have been activated from the steering gear room but wasn’t, allowing the fire to rage.

On March 21, 2013, the 93' tug Justice was coming into Buzzards Bay, Mass., when it grounded southwest of the Cape Cod Canal, ripping off the starboard azimuthing stern drive and losing more than 300 gals. of gear oil. Luckily, most of the oil stayed on the tug, but the cost to repair the

Justice was about $1.2 million.

On July 3, 2013, the Megan McB, a 65' towboat owned by Lacrosse, Wis.-based Brennan Marine, a new vessel that had only been in service a couple of months, was moving into the main lock of Lock and Dam 7 on the Mississippi River near La Crescent, Minn., to assist a tow. The pilot that climbed into the wheelhouse at 1 a.m. that day had never worked on the Megan McB and was not familiar with the boat’s electronic engine control throttles. This would prove to be deadly.

These are just three of the incidents from the National Transportation Safety Board’s recently released, “Safer Seas 2014, Lessons Learned from Marine Accident Investigations,” the NTSB’s annual compilation of accident investigations. This year it includes nine towing vessel accidents along

U.S. Coast Guard

The 93' tug Justice sits in drydock following its grounding in March 2013.

www.workboat.com • AUGUST 2015 • WorkBoat

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DEADLY AND EXPENSIVE The Safer Seas 2013 and 2014 reports are a much more instructive and user-friendly safety resource than what was previously available from the NTSB. For each accident there’s a summary of the incident, followed by a section on the probable cause.

Prior to 2013, the accident reports were not summarized in one volume.

“It was individual reports,” said Keith Holloway with the NTSB’s office of public affairs. “This is more of a summary form so folks can have a lessons learned accident investigation. It’s like a one-stop shop thing, instead of having to get individual reports.”

The 2014 edition added a summary section that focuses on elements found in more than one of the accidents investigated that would facilitate safety discussions for crews and companies. Four categories are in the 2014 summary: control system understanding, passenger safety during critical maneuvers, proper maintenance, and crew training.

The towing vessel accidents resulted in two deaths and three serious injuries.

Damage estimates for the 11 towing vessels came in at about $21.5 million.

COSTLY MISTAKES The Megan McB accident is a good example of what can happen when a towboat pilot is unfamiliar with operating systems in the wheelhouse.

The Megan McB was the only towboat in the Brennan Marine fleet with electronic engine control throttles.

The others had air engine throttles.

Each time the Megan McB’s engines were started, a station select button on the electronic control head had to be pressed, otherwise the throttles would not control the engines.

So when the main engines were temporarily shut down, the electronic

U.S. Coast Guard

with incidents from several other vessel categories.

According to the NTSB, among workboats, towing vessels are involved in the most accidents that had substantial damage, injuries or a fatality.

The azimuthing stern drive that was ripped off the bottom of the tug Justice when it grounded.

control head was deactivated. That’s fine as long as the pilot running the boat knows about the station select button. Unfortunately, in this incident, that was not the case because after the engines were restarted, they didn’t respond to the pilot because he hadn’t pressed the button.

A stronger than normal current due to heavy rain then swept the towboat into the nearby gate and capsized her.

The pilot and first mate escaped but the deckhand died and damage to the Megan McB was estimated at $500,000.

The NTSB determined that the probable cause of the capsizing was “the pilot’s unfamiliarity with the vessel’s electronic engine control throttles, which resulted in his inability to avoid gate No. 1 of Lock and Dam 7.”

Brennan Marine was also held responsible because of a “lack of effective procedures to ensure that the [Megan McB] was operated by a replacement pilot familiar with the electronic engine control throttles.”

In the fire aboard Terral River Service’s Marguerite L. Terral, a lack of training was found to be the culprit.

As mentioned earlier, the CO2 fire suppression system could have been turned on from the steering gear room but “no evidence indicates that the crew attempted to do so,” the NTSB said.

Because the crew hadn’t shut off the ventilation or closed the doors to the engine room, an attempt to use portable fire extinguishers to control the fire

www.workboat.com • AUGUST 2015 • WorkBoat

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didn’t work because oxygen was readily available to sustain the fire.

The crew abandoned the Marguerite L. Terral and climbed aboard one of the barges, shutting off the fuel supply before they left. Local firefighters and the crew from another towboat extinguished the fire about five hours after it broke out. Damages to the boat were an estimated $2.6 million.

The NTSB wasn’t able to determine the cause of the fire but said the reason the damage was so extensive was because of the “crew’s failure to set fire boundaries, shut down the ventilation, and use the onboard fire suppression equipment effectively.”

The grounding of Reinauer Transportation Companies’ towing vessel Justice appears to be another case of not completely managing wheelhouse operating systems. The mate was at the controls, running a course eastbound through the 500' wide channel, using the autopilot to control the port ASD to hold the course.

Around midnight, he realized the Justice was getting close to the channel’s west side and started to manually steer. Seconds later the tug grounded out, shearing off the starboard ASD before the boat could be docked.

The NTSB said that the probable cause of the grounding “was the mate’s ineffective use of the vessel’s autopilot to maintain a course . . . and his delay in taking manual control as the vessel approached charted hazards.”

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LOOKS BACK AUGUST 1965

• The new 600'×110' Guntersville lock, located at Tennessee River mile 349, nine miles downstream from Guntersville, Ala., opened to traffic in late June. The towboat Barry D. Rose locked through with 18 grain barges.

The tow only needed two lockages to pass through the new lock. A dozen lockages would have been required to pass through

the original lock. The $16.5 million lock was built by the Tennessee Valley Authority and is operated by the Army Corps of Engineers.

• Equitable Equipment Co. Inc., New Orleans, has delivered the 180'×48'×13' ferry barge Luquillo to Porto Rico Lighterage Co., San Juan, Puerto Rico. The barge, built at Equitable’s Madisonville, La., yard, was towed to San Juan by the 95' tug AUGUST 1975 Cabo Rojo, also

recently delivered by Equitable to Porto Rico Lighterage.

The ferry barge can accommodate 20 trailers. It is equipped with an anchor, anchor winch, proper running lights, and a Pacific pump driven by a Caterpillar D-311 diesel engine.

• Approximately 350 authorized designed to keep Congress and the pubwater resource projects have been reclic informed of the status of authorized ommended for cancellation due to lack projects that have not been funded for of economic feasibility, lack of local at least eight years. The cancellation support or the inability to meet present recommendation affects 44% of the and future needs, according to a report approximately 800 projects eligible for from the Corps of Engineers. The cost cancellation. to the federal government would be an estimated $1.5 billion. The action is in response to the Water Resources Development Act of 1974, and initiates AUGUST 1985 an annual review • Zapata Corp.’s dredging subsidiary, William-McWilliams Company Inc., and Bean Dredging Corp. agreed to merge recently. Bean will serve as managing partner of the new company, which will have 14 dredges and more than 100 support vessels. Headquarters will be in Metairie, La., where both companies are based.

• Blount Marine Corp. recently de68

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livered three dinner boats. The 200-passenger Bay Mist was delivered to Davis Park Ferry Company Inc., Patchogue, N.Y.; the 450-passenger Lady Baltimore was delivered to Harbor Cruises Ltd., Baltimore; and the 600-passenger Spirit of Boston was delivered to Holiday Cruises, Norfolk, Va. The vessel, which will operate in Boston Harbor, is the third Blount boat for the company. www.workboat.com • AUGUST 2015 • WorkBoat

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