WorkBoat July 2017

Barge Report • Harvey MPSV • Marine Finance ®

IN BUSINESS ON THE COASTAL AND INLAND WATERS

JULY 2017

Cover Charge Barge operators are dealing with too many bottoms.

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ON THE COVER

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JULY 2017 • VOLUME 74, NO. 7

Covered hopper barges on the Lower Mississippi River.

Photo by Brian Gauvin

FEATURES 22 Focus: Credit Check Banks are being very selective when lending to the commercial marine sector.

26 Vessel Report: Bottomed Out Barge operators are working off an equipment overhang.

34 Cover Story: Barge Glut Inland waterways operators are trying to diversify and shed barges to deal with the soft market.

BOATS & GEAR

26

30 On the Ways • Bay Welding delivers cat whale watcher to Alaska • Duckworth Steel Boats launches 78' research vessel for Florida • Landing craft-style research vessel for New Jersey • Corps christens All American-built hydrographic survey vessel • Nichols Brothers launches first of two 120' tugs for Kirby Offshore Marine • Metal Shark delivers six 45' patrol boats to Vietnam • Brunswick breaks ground on facility expansion

42 Role Player Harvey Gulf International takes delivery of a new MPSV that can handle several different deepwater missions.

AT A GLANCE 8 8 9 10 12 14 15

On the Water: Hurricane spin cycle — Part II. Captain’s Table: PVA ‘flys in’ to Capitol Hill.

Energy Level: When will there be good news offshore?

WB Stock Index: WorkBoat stocks gain over 2%.

Inland Insider: A new concept for peak oil.

Insurance Watch: Loss prevention is your friend.

Legal Talk: Preparing for a deposition.

NEWS LOG 16 16 17 18 19

Liquid and coal markets discussed at inland conference in St. Louis.

Coast Guard OKs existing Safety Management Systems for Sub M COIs. OSV operators fight back after CBP’s Jones Act reversal.

Congress likely to reject Trump’s waterways budget.

Fatigue and undermanning cited in fatal tug accident by NTSB.

www.workboat.com • JULY 2017 • WorkBoat

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42 DEPARTMENTS

2 Editor’s Watch

6 Mail Bag 45 Port of Call 51 Advertisers Index 52 WB Looks Back

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Too many bottoms

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ike the offshore industry, inland barge operators are working through a deep trough of soft demand, an overbuilt fleet and changing energy markets.

In this issue, we report on where the inland waterways industry is today, how it got there, and where it’s going as companies look to an uncertain future.

In her cover story on page 34, Washington correspondent Pamela Glass recounts the self-inflicted aspect of the downturn: too many barges built in anticipation of continued growth.

The big grain harvests met forecasts, but with too many bottoms chasing business during near-perfect river conditions, dry cargo rates hit three-year lows, analysts with Informa Economics told audiences at the Inland Marine Expo in St. Louis in May. Senior editor Ken Hocke has the details in this month’s barge market report on page 26.

Rapidly changing energy markets are a big outside factor weighing on the barge market. Coal saw a small bump in 2016, but experts are clearly warning that coal’s long-term economic prospects in the public utility sector are not at all favorable.

While domestic oil production remains high, barges are seeing less of it. “For every pipeline you hear about being protested, there are 30 or 40 projects that have been built,” said Informa consultant Alan Barrett.

That means less crude for tank barges. But analysts and operators are looking to future opportunities from some $100 million in petrochemical and refinery investments — another effect of high U.S. oil production — and

Kirk Moore, Associate Editor

ethanol producers looking to expand their export markets via the rivers to the Gulf Coast.

President Trump’s campaign talking point of $1 trillion in new infrastructure spending conjured hopes of waterway improvements, perhaps even a new boom in barged steel and aggregate for highways and bridges. But it appears now any plan is still far in the future.

Meanwhile, the barge oversupply could take five to six years to work itself out, Barrett cautioned. But as Pam writes, “barge companies are used to the cyclical nature of their business.”

“Good companies plan and weather the down cycle,” Tom Allegretti, president and CEO of the American Waterways Operators, told Pam. “This is a very resilient industry with resilient companies.” kmoore@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 17

by Diversified Business Communications.

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EDITOR IN CHIEF

David Krapf dkrapf@divcom.com

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Ken Hocke khocke@divcom.com

ASSOCIATE EDITOR

Kirk Moore kmoore@divcom.com

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CONTRIBUTING WRITERS

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www.workboat.com • JULY 2017 • WorkBoat

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The rules of the road

I

n the MailBag in the April issue, Capt. Charles Ricord asked a question about teaching a rules of the road course. There are no requirements for teaching such a course, except for the difficulties of “selling” the course to boaters.

The Coast Guard Auxiliary, of which I am a member, and the U.S. Power Squadrons, as well as the agency having jurisdiction in each state, teach courses that meet the standards of the National Association of State Boating Law Administrators (NASBLA). Some community colleges also offer these courses.

Many states and some insurance companies offer incentives for people to take the courses. For example, Maryland requires anyone born after 1972 that operates a recreational boat to have a wallet-sized card proving that they have taken a NASBLA-approved course. Unfortunately, once the state began offering the course online for free, demand for classroom courses declined. Some insurance companies offer a discount for taking the courses.

In many jurisdictions, however, there is no requirement for insurance on a recreational boat. The worst offenders you encounter are probably also the same people who couldn’t be bothered to take your proposed course, especially if there is even a nominal fee.

William M. Riley Marine Surveyor Maritime Alliance Group Inc. Baltimore, Md.

Educating rec boaters

I

read Capt. Charles Ricord’s Mailbag letter (“Wants more rec boater safety courses”) in the April issue.

As a senior passenger vessel captain (230-passenger sternwheeler, 15 years), 47-year member of the United States Power Squadrons and the current educational officer for the Knoxville Power Squadron, I have an answer for Capt. Ricord.

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A recent issue of the Coast Guard Proceedings magazine devoted all 95 pages to recreational boating safety, so the Coasties are acutely aware of the problem. Tennessee, like many other states, requires anyone born after a certain date to pass a boating test and the state supplies a 60-page booklet for instruction. I am a certified boating test proctor for Tennessee, which has no on-water practical test. The Power Squadrons has a 270-page boating course that we and many other squadrons across the U.S. teach. That course does have an on-water component but per agreement with the National Association of State Boating Law Administrators (NASBLA), it is not required for course completion.

The Coasties are encouraging us to teach the voluntary on-water portion of the course but there is a problem with their current regulations. This is where Capt. Ricord can be a big help.

The current regulations require at least a six-pack license to teach the on-water (passengers for hire unless it is free) portion of the course. The Coast Guard realizes that not every captain is a good recreational vessel instructor. The Power Squadrons require all of its instructors to take and pass a comprehensive instructor development course to become a USPS certified public course instructor. We must be recertified every four years to stay current on modern instructional techniques.

Some squadrons teach on inland lakes, not under Coast Guard jurisdiction, to get around the current regs.

Capt. Ricord can join the New Orleans Power Squadron by calling Don R. Ellis at 985-783-6656 and can get credit for our basic boating, seamanship, piloting and advanced piloting courses based on his captain’s license. I encourage all captains that want to help with this problem to go to usps.org > Join USPS > Squadron Locations to find the closest squadron and join. You can then help us educate the recreational boating public.

Capt. John C. Farmer Knoxville, Tenn.

OSVs as USCG cutters?

T

here is a shotgun marriage that needs to be arranged in the political arena.

There are dozens of new ABS, Jones Act-approved diesel-electric vessels that with slight modifications could meet all the challenges of the new Endurance-class USCG cutters.

There is an oversupply of new 260' diesel-electric DP-3 OSVs tied up in Louisiana because of soft demand in the oil patch. These OSVs have accommodations for over 30, most have 20-ton-plus cranes, heliports and can carry six high-speed Interceptor-class vessels with armaments on their rear decks.

The Coast Guard would provide the weaponry/munition personnel, the Interceptor crews, captains and engineers.

The boat owners would provide the main operational crews under longterm partially funded charters. This would save $450 million per vessel and put existing vessels and crews back to work.

The OSVs could be provided immediately with existing trained crews.

There is a new sheriff in town that promised to make all agency and branches toe the line and make their budgets a zero-sum game. The oil patch should muster a good fight for the logic of this obvious exchange.

Capt. Edward Von Bergen Pensacola, Fla. WorkBoat encourages readers to write us about anything that appears in the magazine, on WorkBoat.com or pertains to the marine industry. To be published, letters must include the writer’s address and a daytime phone number.

Send letters to: MAIL BAG P.O. BOX 1348 Mandeville, LA 70470 workboat@cox.net

www.workboat.com • JULY 2017 • WorkBoat

5/25/17 12:08 PM

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5/25/17 11:39 AM

On the Water

Hurricane spin cycle — Part II

L

By Joel Milton

Joel Milton works on towing vessels.

He can be reached at joelmilton@ yahoo.com.

ast month I discussed using multiple sources and/or means of getting your weather information, particularly those related to tropical cyclone reports and forecasts. You don’t want to be left in the dark at a critical time when you are trying to avoid a cyclone. Maps are first on the must-have list.

Humans are generally geared to understand and respond to information presented graphically, so looking at weather maps is most people’s first choice. Today that means that good internet connectivity is a must for timely access to the information needed in order to make good weather decisions, or salvage a situation that could get seriously worse.

If you know how to read, interpret and make decisions based on both the surface and the 500-mb upper level weather charts, available at NOAA’s Ocean Prediction Center (just click the tabs for Atlantic and Pacific Marine across the top of the map), it will put you on another level in your ability to use meteorological science to your

Captain’s Table PVA goes to Capitol Hill

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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ach year, my daughter Terri and I travel to Washington, D.C., to participate in the Passenger Vessel Association’s (PVA) Congressional Fly-In. The Fly-In allows us to take part in our legislative process and provides comments on issues that affect our industry and business.

This year, PVA scheduled more than 30 meetings with members of Congress and their key staff members. The goal was to focus attention on PVA’s legislative priorities for 2017 and beyond.

This year, we urged lawmakers to support the small vessel exemption from the EPA Vessel General Permit (VGP), to repeal the requirement for operators to begin keeping official logbooks, to allow more operators to take advantage of the Capital Construction Fund, to increase funding for ferries, and fund and reauthorize the Maritime Administration’s Small Shipyard Grant Program.

These issues are important to the passenger vessel sector and other segments of the U.S. maritime industry.

We also met with our Congressional delega-

advantage. If you are able to learn it on your own, “Heavy Weather Avoidance and Route Design: Concepts and Applications of 500 Mb Charts” by Ma-Li Chen and Lee Chesneau, is the best book I know of. Also, you would be well served by taking an advanced meteorology course.

As a backup, those same maps are broadcast via radiofax on HF frequencies that you can receive with your SSB radio and various combinations of hardware, software and a PC. You can get all the info at http://www.nws.noaa.gov/os/marine/radiofax.htm and give yourself another way to stay well informed. There’s also NAVTEX, and good oldfashioned voice weather broadcasts over VHF-FM and SSB frequencies.

Years ago, I used a mini tape recorder to record the scheduled HF forecasts while they were being transmitted, rather than waiting for the offshore zones I needed to come on then furiously scribbling notes that I hoped were accurate. Today you can just use your smartphone to record them.

And when it comes to tropical cyclones, regularly plotting them on a small-scale chart is the most prudent thing you can do. In our satellite age, you don’t ever want to be confused as to their exact location.

tion from Kentucky, which was a big bonus. We interact with these individuals when they are back home in our state, but it is good to enhance these relationships by also meeting with them in their Washington, D.C., offices.

If you think that you must be an expert on the legislative process to participate in a Fly-In, think again. Many maritime trade organizations such as PVA also conduct Congressional visits for their members. Staffs from these associations do a great job in preparing their members in advance so that the meetings on Capitol Hill go smoothly.

I am pleased that less than a month after the PVA Congressional Fly-In the Senate Commerce Committee approved the 2017 Coast Guard Authorization Bill. In the bill are three things that we lobbied for during the Fly-In: the official logbook revision, continuation of the Small Shipyard Grant Program, and an exemption from the VGP for small commercial vessels.

Terri and I always come away from the annual Fly-In with a sense of accomplishment and pride in our government and our elected legislators.

I encourage you to take part in similar Fly-Ins hosted by your trade organizations. It will be an experience that you will value. www.workboat.com • JULY 2017 • WorkBoat

6/1/17 8:37 AM

Energy Level Still waiting for good news offshore

By Bill Pike

I

am more than ready to write something positive about the offshore energy market and day rates in this column. While there is a glimmer of hope, right now the chances are slim that this will happen soon.

The glimmer of hope is the increase in U.S. exports of crude to Asia that is coming primarily from the Gulf of Mexico. According to the UPI, federal data shows that total U.S. crude oil exports have averaged 767,000 bbls. per day (bpd) so far this year, compared with the 509,000 bpd for the last 10 weeks of 2016. The increase is in response to the perception that the Middle East is cutting back on exports as Asian demand continues to rise.

That’s about it for the good news.

For offshore, there was more bad news. U.S. energy firms upped the active rig count in mid-May for the 18th week in a row, as expectations of increasing crude prices (up to about $50 bbl.) motivated producers to increase monthly shale production to its highest level since mid-2015, according to the Baker Hughes Rig Count. U.S. shale production is expected to increase again in June (for the sixth consecutive month) to around 5.4 million (bpd), according to the U.S. Department of Energy’s Energy Information Agency (EIA). Further production increases are in the making as shale drilling continues to increase over the next couple of years.

Analysts at Simmons & Co. and energy specialists at investment bank Piper Jaffray forecast that the total oil and gas rig count would average 862 in 2017, 1,067 in 2018 and 1,184 in 2019, according to the UPI.

The impact of shale exploration and production on offshore operations continues to be felt. And it’s not just lower day rates for OSV and rig operators.

It’s the chances of maybe not making it at all.

That surely ran through the minds of the folks at Gulfmark Offshore Inc. On May 16, Houston-based GulfMark announced that it would restructure through Chapter 11. The next day, Tidewater also filed for Chapter 11.

We feel for GulfMark and Tidewater and other financially constrained workboat owners that see no relief on the horizon.

Editor’s note: In April, we suspended our monthly offshore service vessel day rates and fleet utilization report due to the depressed U.S. Gulf offshore market. We plan on launching the new WorkBoat Gulf of Mexico Index in an upcoming issue. Stay tuned.

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6/1/17 8:37 AM

STOCK CHART

WorkBoat Composite Index

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

Stocks up over 2%

T

he WorkBoat Composite Index posted a 41-point increase in April, or 2%. Despite gaining ground, losers topped winners 18-10. All indices were up for the month except operators. The Operators Index posted a 1.78% loss.

Winners included KVH Industries, Deere & Company, Raytheon and

INDEX NET PERCENT COMPARISONS 4/28/17 5/31/17 CHANGE CHANGE Operators 318.38 312.71 -5.67 -1.78 Suppliers 3016.07 3102.89 86.82 2.88 Shipyards 2431.49 2528.15 96.65 3.98 Workboat Composite 1850.70 1892.25 41.55 2.24 PHLX Oil Service Index 153.42 138.66 -14.76 -9.62 Dow Jones Industrials 20940.51 21008.65 68.14 0.33 Standard & Poors 500 2384.20 2411.80 27.60 1.16

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Offshore service companies lost ground in April. Hornbeck Offshore lost over 50%, Ensco fell 21%, and Diamond Offshore lost 20%.

Offshore service vessel operators Tidewater and GulfMark filed for Chapter 11 bankruptcy in May. Tidewater closed at 73 cents a share on May 31. GulfMark was delisted by the New York Stock Exchange in April.

Tidewater was notified by NYSE in May that it had fallen below the listing standard that requires companies to maintain an average closing price per share of at least $1 for 30 consecutive trading days. Tidewater has until Oct. 18 to regain compliance. After restructuring is complete, it is expected that Tidewater will remain a publicly traded company and its common stock will continue to be listed for trading on the NYSE. “As we continue to navigate this unprecedented industry downturn, we are pleased that we have reached an agreement which should allow Tidewater to significantly reduce its debt burden and provide sound financial footing for the company’s future,” Jeffrey Platt, president and CEO of Tidewater, said in a prepared statement. “We believe that successful completion of our restructuring will provide the necessary liquidity and operational flexibility for Tidewater to continue to operate at lower levels of activity until offshore drilling activity recovers and more reasonable levels of vessel utilization and day rates are restored.”

— David Krapf

www.workboat.com • JULY 2017 • WorkBoat

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5/25/17 11:40 AM

Inland Insider Peak oil is not peak oil

I

n the 1990s, oil forecasters began to talk about peak oil, which is when maximum world oil production is reached and production starts to gradually decline.

Supply side technology forecasts for peak oil envisioned the period

around 2030 as the time when world oil production and supply would cease to increase and begin to decline.

Correspondingly, world oil demand forecasts called for continued growth in consumption, much of it based on the expectations of an emerging middle class of consumers in Asia. Forecasts of continued increases in world oil demand, fed by industrializing Third World countries, would result in skyrocketing world oil prices after peak oil

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production was reached. We saw some indication of these high oil prices with $147 bbl. in 2008 as a precursor of much higher prices.

Then technology and economics changed the

By Kevin Horn relevance of peak oil supply.

First, drilling technology enabled oil prices to implode particularly for the U.S. Oil prices dropped from a range of $100 bbl. to around $50 bbl. today.

The world economy slumped in 2008 and oil consumption growth virtually ceased. Economic recovery has been slow and the touted industrialization of Third World countries with sharply increased consumer demand for oil (automobiles) has not occurred.

Now, a new concept of peak oil demand has appeared. Peak oil demand projects the time frame when world oil demand will decline. If supply-based forecasts are tenuous, demand-based forecasts are even more dubious. Many peak oil demand forecasts rest on assumptions about substitute energy supply, such as electric automobiles, to replace carbon energy sources.

Peak oil demand projections vary considerably more than previous peak oil supply projections. Peak oil demand projections range from 2045 to 2060.

These projections are based on some important and questionable changes in technology, just as peak oil supply projections 20 years ago assumed no changes in drilling technology.

Peak oil demand projections likely won’t have much impact on the brownwater sector other than to suggest that prior concerns about the supply and cost of oil are now largely moot.

The costs of oil-based energy technology will remain relatively stable until new energy substitutes are proven.

Kevin Horn is a senior manager with GEC Inc., Delaplane, Va. He can be contacted at khorn@gecinc.com.

www.workboat.com • JULY 2017 • WorkBoat

6/1/17 8:38 AM

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Insurance Watch

Loss control can be your friend

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shipyard we work with was visited recently by a loss control manager for the insurance company that writes its USL&H (U.S. Longshore and Harbor) coverage. It was a good visit all around.

The shipyard and insurance company have had a business relationship for many years. Recent losses at the yard required the insurance company to make some large payouts, which resulted in an increase in the yard’s premium. This is not good for either party.

A USL&H premium is based on payroll as well as the jobs performed by company employees. The larger the

workforce, the more the company will pay. Loss experience is then factored into the premium calculation. The more claims, the higher the premium. It is very easy to forget about the claims that have been paid and then come down with a bad case of sticker shock when your premium is due.

For many years the attitude at shipyards has been to “get the job done.”

This is viewed as a positive work ethic but it is important to include the word “safely.” A claim expense does not stop at the medical bills. The indirect costs from a claim due to work stoppage, extra paperwork, corrective actions, lost time worked by injured, etc., can add up to an additional 66% of unseen costs to a shipyard.

In the case of our local shipyard, the loss control manager was able to present a spreadsheet showing the past five years of claims, breaking things down to what part of the body was injured, what job was being performed at the

time of injury, and how much each injury cost. A subsequent tour of the yard found spots for the safety director to focus

By Chris on to help prevent Richmond future accidents.

The suggested changes were made and a follow up visit was scheduled.

The insurance company’s loss control manager provided valuable guidance to help reduce injuries at the workplace. By working to create a safer work environment, the yard employees will suffer fewer accidents, the insurance company will have fewer claims to pay, and the shipyard’s USL&H premium will go down.

Chris Richmond is a marine insurance agent and licensed mariner with Allen Insurance and Financial. He can be reached at 800-439-4311 or at crichmond@allenif.com.

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www.workboat.com • JULY 2017 • WorkBoat

6/1/17 8:40 AM

Legal Talk Preparing for the mighty and salty deposition

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deposition is a form of discovery.

Discovery is the process before a trial where each side exchanges documents and takes depositions to “discover” the full extent and depth of the other side’s positions.

The deposition usually takes place in a lawyer’s office and the witness testifies under an oath, which is given by the court reporter. If you are a deposition witness, take the time to meet with your lawyer beforehand to understand the pitfalls presented by a deposition.

Indeed, what may be perceived as a chummy conversation can spell disaster for your claim or defense. Against that seascape, here are eight points to consider when preparing to be deposed.

First, dress appropriately. Ask your

attorney for guidance, but I wouldn't wear shorts. Second, don’t make friends at a deposition. The attorney asking the questions may want you to think that they are your new friend, but that’s only to get you to let your guard down. Third, only answer the questions asked. Always remember that this isn’t a conversation and you generally should answer the questions asked in the most succinct and accurate way.

Fourth, don’t get angry. An angry witness is one that’s lost control and may say something that’s not accurate.

Let your attorney get angry. Fifth, control the tempo of the deposition. If you need a drink of water or bathroom break, ask. Sixth, be truthful and accurate. “You’re under oath” is all I have to say on that point. Seventh, don’t guess.

You want to be accurate and truthful, and guesses and assumptions are like taking a big tack away from the wind and into unknown currents.

Finally, pace yourself. The impor-

tant questions tend to come toward the end of depositions when you’re tired, so remain vigilant right up to the time the attorney across from John Fulweiler you says: “Well, I guess that's all the questions I have.”

What you know about testifying is probably limited to what you’ve seen on television or the movies. That won’t help you much. There tend to be few opportunities for your lawyer to “save” you by objecting to questions.

Yes, certain questions may be objectionable, but most good attorneys will avoid asking objectionable questions meaning you’re pretty much on your own.

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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JULY 2017

NEWS LOG NEWS BITTS EXISTING SMSES OK’D FOR SUBCHAPTER M

Scania USA

T

Chem Carriers’ towboat Sam Hays pushes tank barges on the Mississippi.

Tank barge and coal markets discussed at inland conference

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ipelines have captured much of the new flow from U.S. oilfields, contributing to lower rates in an overbuilt tank barge fleet, but industry analysts see growth potential in the liquid market from chemicals and ethanol.

“We think the (liquids) market is starting to show some signs of recovery,” Chaz Jones, a transportation analyst with Informa Economics, Memphis, Tenn., said at the Inland Marine Expo (IMX) held in St. Louis in May. “But I’m not sure you are going to see crude come back on the rivers.”

Some $100 million in future refinery and chemicals investments will drive that trend, along with ethanol manufacturers in Nebraska and Iowa looking to grow their export markets via the Mississippi River and Gulf Coast, Jones and other industry observers said.

When it comes to crude oil, “we just don’t see a lot of it,” said Dan Lester, commercial manager for the 16

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Watco Companies LLC, operators of terminals and short-line river and rail transport. But Watco has “a fairly positive outlook” on liquid transport markets, and in recent years acquired 55 terminals from Kinder Morgan.

Watco has looked at old coal terminals along the Mississippi that have the potential to be converted to ethanol shipping — those with existing railroad tracks, and space to build storage tanks, said Lester.

“These are spots where we see an opportunity to make that happen,” he said. Ethanol will not replace the lost crude oil volume, but “it can definitely supplement what’s out there.”

For dry cargo, an oversupply of covered barges and good weather in 2016 drove down inland barge rates to record lows (see “Bottomed Out,” page 26).

“Last year we had near-perfect conditions and rates were at three-year lows,” said Alan Barrett, a senior con-

owing companies with an existing Safety Management System (SMS) will be cleared to obtain initial Subchapter M certificates of inspection for their vessels, the Coast Guard said in May. A May 24 policy letter told Coast Guard marine inspectors and the towing industry that existing, approved SMS systems can be used for the granting of initial certifications of inspection (COI) prior to the ongoing adoption of new Towing Safety Management Systems (TSMS) under Subchapter M. Operators whose SMSes are up to standards “will be deemed in compliance with TSMS requirements,” the letter said.

The guidance aims to reconcile a gap between the time companies get their new TSMS ready and bring their vessels into compliance, as the clock ticks toward full compliance in July 2018.

Vessels that have not had safety audits within three years will still need to be reviewed by third-party organizations or companies with their own qualified inhouse auditors. — K. Moore

sultant with Informa. “Unless we get some rationalization” those rates will not come back up, absent weather or river conditions that tie traffic up.

Optimistic grain forecasts led operators to add some 790 new barges in recent years, Barrett said. The U.S. Department of Agriculture’s grain forecasts panned out, but with good weather and river conditions, the “effective fleet size” performed as if there were 1,500 more barges available, said Informa senior vice president Ken Eriksen.

The coal market was also discussed at IMX. Barge shipments of coal showed an unexpected bump recently after bad weather in Australia sent Asian buyers shopping in the U.S., www.workboat.com • JULY 2017 • WorkBoat

6/5/17 2:12 PM

OSV operators fight Jones Act reversal

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.S. Customs and Border Protection officials pulled back an anticipated policy change to disallow transport of subsea oil equipment on foreign-flag vessels in the Gulf of Mexico. But domestic offshore operators are working to get the Trump administration on their side.

“At a time when our administration is focused on ‘putting America first’ we

Max Hardberger

and the Trump administration’s energy policies have given the industry some breathing space.

“What Trump has done is slowing that decline” that accelerated under the Obama administration’s policies, said Hans Daniels, a longtime analyst with Doyle Trading Consultants, Grand Junction, Colo., a boutique energy research firm specializing in coal.

But ultimately “it’s all about economics,” Daniels said at IMX. Natural gas and wind power are “encroaching more and more” on utility companies’ electrical generation, where coal once held a 50% market share.

Coal’s share is now down to 30% to 35%, depending on seasonal demand, Daniels said. “Supply and demand are already balanced, but stockpiles are masking that,” he added. Daniels predicted “some volatility will return” with more demand for export coal and weather stresses on power companies as they work through those stockpiles.

But with 50 gigawatts (GW) of coal-fired power generation already retired out of 325 GW since 2012, the long-term industry prospects are clear, he said.

“There’s still a lot of coal plants that will go away,” Daniels said. “There’s just no motivation” to build new coal power plants instead of “a natural gas plant you can build for half the price.”

“Depending on where you get your news, Trump is going to be around for one year, or eight years,” Daniels added. “Nobody is going to build a coal plant for that window.” — Kirk Moore

U.S. OSV operators say new MPSVs like the recently delivered Harvey Sub-Sea, can handle all subsea oil equipment transport work needed in the Gulf of Mexico.

believe that this administration will enforce the American rule of law and not let foreign companies be put first above American companies and workers,” Aaron Smith, president and CEO of the Offshore Marine Service Association, said in an email.

In a letter to the White House, Harvey Gulf International Marine chairman and CEO Shane Guidry touted his company’s new multipurpose support vessel (MPSV) Harvey Sub-Sea (see story on page 42) as evidence U.S.-flag operators are well equipped to handle all work in the Gulf.

Some $2 billion of investment and 31 vessels “ends the debate as to whether the U.S. Jones Act fleet of MPSVs is capable of doing work that foreign vessels have been doing illegally in the Gulf for many years,” Guidry wrote.

“The Harvey Sub-Sea has the size, crane capacity, deck space, accommodation, equipment, and stationkeeping capability equivalent to, or better than, her foreign competitors … if there is a MPSV job needed in the Gulf, she can do it.”

The history of CBP Jones Act rulings in the oil patch dates to 1976 with offshore construction vessel operations, and the question of whether wellhead and other equipment counted as cargo under the Jones Act or as exempted

www.workboat.com • JULY 2017 • WorkBoat

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“vessel equipment.”

The so-called “Christmas tree case” of 2009, when CBP determined that a subsea valve assembly being transported to a well site on a foreign-flagged vessel qualified as vessel equipment, inspired U.S. operators to actively push for an overall review of the policy.

That years-long campaign by OMSA and its allies seemed headed for victory when the CBP announced Jan. 18 its intent to revoke past Jones Act rulings on non-U.S. flag operators transporting oilfield equipment.

That spurred intense lobbying from international operators and oil companies to keep the status quo, an ensuing debate that led CBP to extend public comment on the proposal beyond 60 days, to April 18.

In a May 10 statement, Glen Vereb, CBP’s director of border security and trade compliance, noted that more than 3,000 comments poured into the agency.

And based on those comments, CBP concluded that the agency’s notice of proposed modification and revocation of the various ruling letters relating to the Jones Act “should be reconsidered,” Vereb said.

The American Petroleum Institute, which said that a new CBP policy would hurt the overall Gulf of Mexico 17

6/1/17 10:11 AM

repeatedly in Congressional hearings in May. “While CBP’s recent decision is disappointing, the law of the land (the Jones Act) and the facts continue to stand on our side,” Smith said.

API exaggerated the impact that the CPB’s rulings revocation would have on heavy lift and pipe-laying operators, according to OMSA. The association said that an API-

Corps of Engineers/Lee Roberts

industry, hailed it as a win.

“By rescinding the proposal, CBP has decided not to impose potentially serious limitations to the industry’s ability to safely, effectively, and economically operate,” said API Upstream Director Erik Milito.

But CBP has not made a final decision, and the continuing efforts of U.S.flag operators are having an effect in Washington, where the issue came up

Almost $200 million has been spent so far toward the $775 million Chickamauga lock replacement in Tennessee.

funded report falsely argued that the revocation of these letter rulings would disrupt offshore drilling activities because of its impact on heavy lift and pipe/reel-lay operations.

“This statement is widely inaccurate as the 2017 notice was carefully drafted to have no impact on these operations,” Smith said. — K. Moore

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proposed $1 billion in new waterway user fees over 10 years is unlikely to survive on Capitol Hill, as is a potential 16% cut in Corps of Engineers funding, as Congress moves to protect existing projects and hears from industry advocates.

“We’re hopeful that Congress will reject it,” Mike Toohey, president and CEO of the Waterways Council Inc., said of the Trump administration’s call for $100 million annually in user fees.

“This was proposed under Obama and Bush 43. It’s the same OMB (White House Office of Management and Budget) that pushes on and keeps recommending this.”

Interestingly, the Trump administration’s proposed Corps budget is $1 billion more than Obama last proposed, but still $1 billion below Congressional intent, Toohey said. Even as OMB put that cut forward, Congress moved to set a record level of funding, $6.038 billion for the Corps. www.workboat.com • JULY 2017 • WorkBoat

6/1/17 10:17 AM

line taxes, the waterway fee is unlikely to get any traction, he said. — K. Moore

NTSB cites fatigue in N.Y. tug sinking

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he tugboat Specialist was undermanned and its crew fatigued from struggling with a large crane barge, before hitting a construction barge and sinking at the Tappan Zee Bridge on

“I don’t believe there is a funding line in the budget that more U.S. senators ask to increase than the U.S. Army Corps of Engineers,” said Sen. Lamar Alexander, R-Tenn., primary author of the 2017 Corps funding package and chairman of the Senate Appropriations Energy and Water Development Subcommittee.

Subcommittee members worked to ensure increased funding under the restructured Inland Waterways Trust Fund — without additional fees on towboat operators beyond the diesel fuel tax, which went from 20 cents per gallon to 29 cents in 2014.

So the administration’s proposal for $100 million to be raised annually by a waterways user fee came as a surprise to industry and Congress, after the earlier attempts under Obama and Bush went nowhere.

“One thing we flagged is the revenue stream is exactly what comes in from the 29-cent tax. So we assume it is a doubling” of fees on the industry, Toohey said. “More troubling is they don’t propose to spend any of that on the inland waterways.”

“What this administration forwarded is not what’s going to happen,” Roger Bernard, a policy analyst with Informa Economics, said at the Inland Marine Expo in St. Louis in May. “We’re in an era now where you’re looking at lawmakers trying to put a budget together while being fiscally responsible … user fees are never easy to get through Congress.”

But like increasing road tolls or gasowww.workboat.com • JULY 2017 • WorkBoat

WB_Newslog_LINO.indd 19

New York’s Hudson River last year, according to the National Transportation Safety Board.

The 84', 2,400-hp tug Specialist sank within seconds of the March 12, 2016 accident. All three men on the vessel died, including Paul Amon, who was piloting the tug.

A day before the allision, the Specialist, operated by New York Marine Transport Inc., Montauk, N.Y., was moving the crane barge Weeks 533

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south on the Hudson, contending with gusty winds and difficult conditions.

Logbook entries from the Specialist recorded a grounding, and the tow being spun around in mid-river despite full throttle, leading investigators to suspect the tug was underpowered for its initially solo assignment.

The company dispatched a second tug, the 1,800-hp Realist, while Weeks Marine also sent the tug Trevor upriver to assist with its barge. After meeting up late in the day March 11, the trio moved the barge downriver, with the Specialist on the starboard hip and acting as the lead tug.

“As the vessels approached the bridge construction area, after first giving a favorable report that there was adequate room, the mate of the Specialist (Amon) radioed that there was not enough clearance between the tow and the spudded N181 at pier 31.

He told the other tug operators, ‘it’s looking tight, go left [east],’ and then,

The tug Specialist after it was raised from the Hudson River in New York.

‘go hard left,’ ” just before the impact, the NTSB report said.

AIS data showed the tugs and barge had increased speed an hour before the allision, moving at around 8 knots “at a time when caution should have been of utmost importance given the ongoing construction near the bridge,” investigators wrote.

Investigators said that the probable cause of the collision and tug sinking was inadequate manning, resulting in a fatigued crew navigating three tugs with obstructed visibility due to the size of the crane on the barge they were towing and the location of the tugs alongside the barge. — K. Moore

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5/25/17 11:40 AM

Marine Finance

Credit Check Banks are being extremely selective when lending to the marine sector.

By Dale K. DuPont, Correspondent

I

n mid-May, two offshore service vessel operators sought Chapter 11 bankruptcy protection expecting to eliminate a combined $2 billion in outstanding debt.

Both New Orleans-based Tidewater Inc. and Houston-based Gulfmark Offshore Inc. signed restructuring agreements with lenders allowing them to keep operating through what Tidewater CEO Jeffrey Platt called an “unprecedented industry downturn.”

Nowadays, offloading debt seems to be more popular than taking it on. Money is available though deals are scarce. Underwriting standards are tighter. And lenders are modifying existing loans to extend maturities and give operators breathing room.

“Banks are primarily hiding. They don’t want

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to do any deals in the marine space,” said Larry Rigdon, a veteran of the OSV industry. But for old, solid clients, they would still consider some lending against contracts. “The banks have plenty of money, but it’s their view of the marine trade.”

Hedge funds and private equity companies are sitting in the background looking to put cash to work to buy up distressed assets, he said.

“In today’s market, it’s virtually impossible to get any bank financing for a boat company,” said Charlie Tizzard, executive vice president and chief financial officer of crewboat operator SeaTran Marine LLC, New Iberia, La. No one has the necessary cash flows based on day rates and utilization.

Interest rates are in the 4% to 5% range. Some non-banks are quoting 6.5% to 9% while other

David Krapf

Some lenders have seen a spike in the growth of financing for large ATBs.

www.workboat.com • JULY 2017 • WorkBoat

5/25/17 12:01 PM

All American Marine

GOOD CREDIT WANTED Bankers say they are doing deals but selectively.

“We are lending into the marine space but on a client by client basis,” said Ronnie Evans, Key Bank’s national director of commercial marine finance in Baton Rouge, La. “It’s not an industry thing. It’s really driven by their credit. My pipeline is probably as big as it’s ever been. … We’re just trying to find the right deals.

“Most of the deals both today and in the past were really credit-driven,” he said. “Rates are still very competitive.”

2016 was a tough year with “most clients prepping for a downturn.”

“Generally speaking, Stonebriar has been pretty selective in relation to maritime prospects we’re considering,” said Kyle Parks, senior managing director, head of direct originations for Stonebriar Commercial Finance, Plano, Texas. They’ve been relatively active on the intracoastal and inland side.

“It starts with quality operators,” he said. Their borrowers have had good

GulfMark Americas

sources can be 10% or above. Terms are generally between five and 10 years with longer amortizations possible.

Advances range from 60% to 100% of cost or fair market value.

Gulfmark Offshore was one of two OSV operators who signed restructuring agreements with lenders in May.

charters and quality credit.

“Since the fourth quarter of 2014, there’s been a general tightening of the belt and capital is less easy to secure,” Parks said. “It’s gotten tougher for everybody, regardless of the trade they might be in.”

Wells Fargo Equipment Finance Co. (WFEF) “remains active in the inland and coastal waterways sector, tugs, towboats, tank barges, hopper barges, dredging and marine construction,” said Charlie Lee, senior vice president of WFEF’s marine specialty unit. And he has seen a spike in the growth of large capacity ATBs. As for the offshore market, he said,

Red and White Fleet was satisfied with the financing it arranged for their 128'x30' hybrid-electric 600-passenger aluminum monohull vessel scheduled for delivery next spring.

www.workboat.com • JULY 2017 • WorkBoat

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it has always been cyclical, but “the depth and duration of the recession in energy markets was not predicted by anyone, and this market continues to struggle for OSVs, PSVs and specialty/ post-production vessels with lending to this niche being very tight. However we are active and supportive of this space.”

Lenders who haven’t left the Gulf of Mexico completely are “working with a select number of operators in certain niche markets,” such as inspection, maintenance and repair (IMR) vessels, Lee said. “On the inland side, 30k tank barges and open hopper barges have been in an oversupply condition for several years impacting valuations and loan advances.

“When crude was $100 a barrel it was one lender versus another to try and win huge offshore supply vessel financings,” Lee continued. “Today with crude sub-$50 a barrel, both clients and banks are being much more conservative.”

VESSEL MODIFICATIONS Mitchell LeMasters, senior international account manager, Caterpillar Financial Services Corp., a captive lender that provides funding for vessels outfitted with Cat engines, sees 23

5/25/17 12:01 PM

Marine Finance “operators trying to keep their boats as utilized as possible at the highest day rates as possible.” The operators also are looking at possibly modifying coldstacked vessels for new uses.

“It’s still a very tough market from an operator’s standpoint, and the marine lending industry is still very challenging,” said LeMasters, who primarily covers the Gulf Coast. Standards and terms have changed little the past few years, “which doesn’t mean it’s easy credit. Each deal is judged on its own merits.

“There is some activity in the coastal tug segment replacing tugs and maybe a little on the inland waterways with pushboats,” he said, especially with the new EPA Tier 4 regulations that took effect Jan. 1.

Most of the prospective buyers who come to Bob Beegle already have financing lined up. However, buyers are scarce because they don’t have jobs for the equipment. The number

of crewboats, OSVs and tugs for sale is near an all-time high, said Beegle, president of Marcon International Inc., Coupeville, Wash., a brokerage that specializes in tugs, barges, pushboats and oilfield vessels worldwide.

And the actual sale prices of all vessels and barges they’ve handled so far this year averaged 75.82% of asking prices compared to 2016’s 91.7% — a likely indication of how realistic sellers are being.

“My gut feeling is that money is probably still available for creditworthy clients and that money probably isn’t as cheap as it was,” he said.

“When money stays cheap for too long, we end up overbuilding.”

From at least one operator’s point of view “all the banks want to do a deal. Then you start peeling back the onion, and they want this and this,” said Thomas Escher, president of Red and White Fleet, a San Francisco tour boat company. “There’s money out there.

“Since the fourth quarter of 2014, there’s been a general tightening of the belt and capital is less easy to secure.”

Kyle Parks, senior managing director, head of direct originations, Stonebriar Commercial Finance They don’t want any risk. You just have to take the time and know what you’re doing.

“I think we’re pleased with the way this has come out,” he said, referring to financing for their 128'×30' hybridelectric 600-passenger aluminum monohull vessel scheduled for delivery from All American Marine in late spring 2018.

“The bank needs to make money, but I need to make a reasonable return for my shareholders.”

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Barges

Bottomed Out Barge oversupply is being worked off.

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

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here is no shortage of barges across the U.S. In 2016, more than 1,000 barges, both inland and coastal, were delivered — good for the shipyards, but not good for the barge industry since it adds to an already overbuilt market.

An overbuilt market, mild winters and sluggish demand from several sectors, particularly coal and crude oil, have backed the inland barge industry into a corner, causing a drop in utilization. Though crude oil deliveries have rebounded slightly in 2017, there are still too many barges chasing too little cargo.

In 2016’s fourth quarter, crude oil deliveries to the Gulf Coast from the Midwest (1.327 million bbls.) were down a whopping 67% from the fourth quarter of 2015 (3.994 million bbls.), according to the U.S. Department of Energy.

River Transport News reported in the fourth quarter that quarterly crude shipments were at their lowest level since the third quarter of 2010 (794,000 bbls).

Tank barge owners are getting the message.

In 2016, boatyards built a total of 112 new tank barges, down from 251 in 2015.

“So far this year for inland and coastal tank barges, there have been 35 built,” said Sandor Toth, RTN’s publisher. “I’d say it looks like, maybe, 60 or so for the year.”

Houston-based Kirby Corp., the largest inland tank barge company in the U.S., has seen a bit of a turnaround in inland barge utilization, especially when it comes to black oil. The company’s inland barge utilization numbers were in the high-80% to low-90% range during the first quarter of 2017, as

David Krapf

The inland market is overbuilt and many barges are idled.

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Ken Hocke

TOO MANY DRY BOTTOMS On the dry side, the domestic coal industry continues to decline. Coal shipments by barge along the inland waterway system came in at 100.5 million tons in 2016, as opposed to 112.3 million tons in 2015, down 10.5%, according to Department of Energy statistics.

Dry cargo operators did not get the message in 2016 that the industry was overbuilt. Jumbo hopper barge deliveries last year increased by 10.6%, with deliveries of almost 1,000 new barges.

Using Coast Guard data and its own construction survey, RTN found that barge operators took delivery of 973 new jumbo hopper barges, the biggest number of new deliveries since 2012 (1,076).

Most of the 1,000 barges delivered last year were built at Trinity Industries, Jeffboat, and Brownsville Marine Products. Trinity led the way,

Ken Hocke

opposed to the mid-80s range during the fourth quarter of 2016.

Kirby took delivery of only a single 30,000-bbl. tank barge during the first quarter of 2017, while retiring 17.

Earlier this year, Kirby Chairman Joe Pyne said the company believed that the inland market was moving “slowly” towards supply and demand balance.

More than 1,000 barges, both inland and coastal, were delivered in 2016.

building 660 of the jumbo hopper barges, according to RTN’s survey. Jeffboat built 192 and Brownsville Marine 121.

Ingram Marine Group, Nashville, Tenn., took delivery of 310 new jumbo hopper barges in 2016, the most by any inland barge company.

In 2017, the oversupply message has been getting through. “There’s been about 100 or so [dry-cargo barges built] this year, so far,” Toth said in late May. “That’s down big time.”

The building slowdown is something the inland industry needed to do. “For the rest of the year, it should be the same or less,” said Toth. “It’s bad news for the shipyards, but the yards knew

The inland industry has an equipment overhang.

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this was coming.”

Late last year, Trinity closed its Port Allen/Brusly, La., boatyard, laying off almost 300 workers. The company closed its Madisonville, La., yard the year before, putting more than 300 out of work.

“Trinity’s backlog was smaller at the end of March 2017 ($110 million) than it was at the end of 2016 ($120 million),” said Toth. “Going forward, it looks like more of the same, if not softer.”

ATB NEWBUILDS Articulated tug-barges (ATBs) have been a game changer in the coastwise petroleum transport trade, replacing many of the more expensive domestic tankers, which require a larger crew.

While construction of ATB tank barges has slowed significantly over the last several years, they are still keeping shipyards on the West Coast, Gulf Coast and the Great Lakes busy.

Here are some new coastal tank barges that have been delivered or are under construction.

• Vane Brothers, Baltimore, recently added the purpose built 361'×62', 53,000-bbl. asphalt barge Double Skin 510A to its fleet. The DS-510A is the second newbuild asphalt barge delivered to Vane Brothers by Conrad Deepwater South, Amelia, La. The DS-510A double-hull tank barge utilizes a sophisticated thermal heating system that keeps asphalt at approxi27

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Barges

SUBMERSIBLE DECK BARGE DEBUTS

Weeks Marine

O

ne of the past year’s more unique barge projects was Weeks Marine’s conversion of a deck barge into the 250'x75'x16' submersible caisson launch barge JG Burke.

The 5,000-ton capacity work platform was designed to handle caissons, watertight chambers that enable construction of pier foundations and the like. The JG Burke has the capability to function as a transport and heavy lift ro/ro barge, fitting into a niche between drydocks and heavy lift ships.

Upon completion, the JG Burke immediately left for its first job with McNally Construction to build an $80 million wharf for the Canadian military at Halifax, Nova Scotia.

The conversion project started in July 2015 when McNally, a Weeks subsidiary based in Hamilton, Ontario, got together with Weeks, Cranford, N.J., and JMS Naval Architects, Mystic, Conn. Construction started that fall, The 5,000-ton capacity work with a McNally team platform was designed to headed by Greg handle caissons.

Burke, the company’s vice president of construction, working alongside Weeks personnel.

McNally “had a small barge they used to build caissons” and had been considering building a large barge, said Weeks’ John Devlin Sr., who headed up the project at Weeks’ Greenville yard in Jersey City, N.J. The idea was for a larger barge to fabricate caissons that could partially submerge and float off the caisson to be moved into position and set.

When JMS designer David Forrest proposed the concept of removable wing walls, Weeks president Richard Weeks had an idea — ­ pontoons.

“Rich said, ‘We have those in our inventory.’ They were built for the FDR Drive,” a New York City highway project that Weeks worked on in the early 2000s, Devlin said.

Weighing 75 tons each, the steel tanks now rest in hinged mounts at each corner of the barge. That met “the principal challenge with this vessel … so that you have the ability to remove the wing walls [the pontoons, in this case] and place them onto the 75-foot wide deck for transiting to a work site via the 78-foot wide locks of the St. Lawrence Seaway,” Forrest said.

At the work site, the buoyancy tanks are reattached, and the barge has a clear working deck of 150'x65' with access from three sides.

Originally built in the 1980s for Brown & Root as an ABS oceangoing deck barge, the former Weeks 246 got its makeover at the

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Greenville yard. Workers there installed 1,600' of internal piping running from each compartment to a 16" sea chest header pipe. Two 16" gate valves on the port and starboard sea chests supply water through the pipeline, varying from 6" to 12" in diameter.

The system, controlled from an operator’s station and valve manifold 20' above deck, floods and de-ballasts compartments at the same rate, keeping the barge level all through roughly 90-minute cycles of submergence and surfacing.

The barge can submerge to a depth of 18' over deck so the newly built caissons can be installed. — Kirk Moore

mately 300°F so that the highly viscous liquid flows more easily. The new tank barge operates at a pumping rate of 8,000 bbls. per hour (bph) with a loading rate of 10,000 bph.

• Fincantieri’s Bay Shipbuilding, Sturgeon Bay, Wis., delivered a 110,000-bbl. ATB tank barge to Moran Towing. The yard is also in the middle of an ATB construction contract that includes two 155,000-bbl. oil and chemical tank barges for Kirby. In addition, the yard is building a 155,000-bbl. oil and chemical tank barge as part of an ATB for Plains All American Pipeline and a 185,000-bbl. oil and chemical tank barge for an ATB for AMA Capital Partners.

• Gunderson Marine is building two 430'×76'×27' ATB barges for Harley Marine Services. Designed by Elliott Bay Design Group, the barges’ state-of-the-art nitrogen gas generators will inject nitrogen into all cargo www.workboat.com • JULY 2017 • WorkBoat

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Photo: Chris Miller/csmphotos.com

Vane Brothers

Vane Brothers’ new 53,000-bbl. asphalt barge Double Skin 510A.

compartments maintaining an inert or “oxygen deficient” environment which increases the safety of the barge. The system adds another level of protection to the transportation and handling of petroleum products. The tank barges feature twin IMD 413IC-800JD pumps that will be powered by Detroit Diesel pump engines and twin John Deere 99kW, three-phase, Tier 3 auxiliary engines.

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CONSTRUCTION ACTIVITY AT WORKBOAT YARDS

On TheWays

ON THE WAYS

Bay Welding Services

Bay Welding delivers whale watcher to Alaska

49' outboard cat for Alaska whale watching.

B

ay Welding Services has built a lot of boats — for passenger vessel service, law enforcement, oil response, commercial fishing, etc. — but they’ve all been monohulls.

That’s not to say the Homer, Alaska, boatyard hasn’t wanted to build a catamaran.

“We’ve been slow to that market because we wanted to be very deliberate how we did it and find the right customer,” said Eric Engebretsen, Bay Welding’s general manager. That customer turned out to be Juneau Tours LLC, who needed a whale watching boat that would operate out of Juneau, Alaska.

Bay Welding worked with Coastwise Corp., Anchorage, Alaska, to design the 49'6"×17'6"×2' Atlin, an aluminum catamaran high-speed passenger boat capable of carrying 49 passengers and three crew. “Coastwise has a long history with high-speed aluminum catamarans,” said Engebretsen.

“Their partnership was key to the boat’s success.”

Juneau Tours wanted a minimum speed of 32 mph with a full load of passengers. They got that and more. The 1,400hp Atlin has a top speed of 49 mph at 5,900 rpm and cruises at 32 mph at 4,600 rpm fully loaded. That’s with four F350 Yamaha outboards mounted on the transom.

The engines are a notable feature on the Atlin. They were 30

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the power choice primarily for maintenance reasons. Being a tour boat, the Atlin will be making three to four trips a day.

“So downtime is a key factor in [Juneau Tours] profitability,” said Engebretsen. “Any lost day is tens of thousands of dollars in lost revenue.”

A cost analysis was made between outboards and diesel inboards and the “simplicity factor of outboards was such a major component that it tipped the scale costwise.”

If a diesel inboard needs to be repaired or replaced, the Atlin could be out of action for an extended period of time.

But with “two or three outboards sitting in the warehouse, you can do an engine swap overnight and not miss a trip.”

Engebretsen said. In the end, “the push was to build the biggest outboard-powered cat possible.”

Passenger seating is on the main deck, with additional viewing areas over the main deck, at the stern and at the bow. The extra large cabin windows are Diamond Sea Glaze bonded glass. The glass, without a window frame, is glued to the outside of the cabin where it presents a “clean looking” appearance. “It was a first for us,” said Engebretsen. “There are things to learn on the installation but after that it’s a pretty nice product to have.”

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an identical boat for Juneau Tours at the end of the summer, with delivery scheduled for May 2018.

— Michael Crowley

New 78' research vessel will be delivered later this year.

Duckworth Steel launches research vessel for Florida uckworth Steel Boats, Tarpon Springs, Fla., christened and launched the 78'×26'×10.3' research vessel W.T. Hogarth in late May. Designed and engineered by Boksa Marine Design, the coastal-class research vessel will be delivered later this year to the Florida Institute of Oceanography (FIO).

With a 6'6" draft, the $6 million vessel will be a necessary upgrade for student scientists, replacing the nearly 50-year-old Bellows which had served as a floating laboratory for 35 years.

The new research vessel will be longer

Boksa Marine Design

D

and wider than its predecessor, offer more working space, including separate

wet and dry labs, have a larger work deck, a separate galley, and more com-

BOATBUILDING BITTS

I

n May, Corps of Engineers Philadelphia District christened the H.R. Spies, a 64'10"×24'10"×4'10" aluminum hydrographic survey catamaran built by All American Marine, Bellingham, Wash. Designed by Teknicraft Design Ltd. with machined aluminum hydrofoils, the Spies can hit 31 knots at top end, propelled by a pair of Caterpillar C18 Tier 3 engines turning 1,001 hp at 2,300 rpm each. With controls by Glendenning, two ZF MGX-5136SC gears transmit power to Michigan Wheel 38.5" propellers. Ship’s power comes from two Phasor Marine 34 kW120/240-volt generators. For its survey sounding work the Spies carries a Reson 7125 deployable strut multibeam transducer, an Odom CV300 Echo deployable strut, and a Klein 3075

All American Marine

Hydrographic survey boat for the Corps’ Philadelphia District.

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towed sonar, controlled with a DT Marine 302 M sonar winch. The Spies will work primarily in the Delaware River and Chesapeake and Delaware Canal, providing current channel depth information to the port and maritime community. Wheelhouse electronics include Furuno radars, NAVnet TZTouch, GPS and AIS. There is a galley and head with two crew bunks, and tankage for 1,500 gals. fuel and 105 gals. potable water. The house is lit with LED lighting, and the bottom treated with environmentally friendly International Intersleek 900 foul release paint. — K. Moore Also in May, Nichols Brothers Boat Builders, Freeland, Wash., launched the first of two 120'×35'×19'3" twin-screw tugboats for Kirby Offshore Marine.

The Mount Baker has joined Kirby’s fleet while its sistership, Mount Drum, will be delivered in November.

The tugs will be the third and fourth vessels Nichols has delivered to Kirby in the last year. Designed by Seattlebased Jensen Maritime Consultants, the tugs are fully ABS classed and Coast Guard Subchapter C compliant, as required at delivery, according to shipyard officials.

Two Caterpillar 3516C diesels, producing 2,447 hp at 1,600 rpm each, provide main propulsion. The main engines, with Reintjes reduction gears, turn two Nautican fixed pitched propellers with fixed nozzles. Ship’s service power comes from two John Deere 6090AFM85 generator-drive engines. Deck machinery includes

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On TheWays

Former presidential yacht is now a tour boat.

Metal Shark

one TESD-34 Markey tow winch, a CEW-60 Markey electric capstan, and one M&S Marine Solutions tow pin. Also, Nichols is scheduled to deliver the first of two 100-passenger U.S.-flag coastal vessels to Lindblad Expeditions Holdings Inc. in June. — K. Hocke Louisiana boatbuilder Metal Shark delivered six 45' aluminum military patrol boats to the Vietnam coast guard in May. The new patrol boats will be used for law enforcement missions focused on smuggling, illicit trafficking, piracy and armed robbery against ships, and illegal fishing. The boats, built at Metal Shark’s Franklin, La., waterfront shipyard, are powered with twin Caterpillar C-9 diesel engines mated to HamiltonJet waterjets. Urethane-sheathed, closed-cell foam collars

by Wing provide impact protection during alongside maneuvers or while docking. Metal Shark’s Defiantclass design is currently in service with the Coast Guard, Navy, and the militaries of U.S. partner nations worldwide. — K. Hocke Bay Ship and Yacht, Alameda, Calif., recently completed maintenance drydocking of the 165'×23'9" former presidential yacht, Potomac. The Potomac As-

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Bay Ship and Yacht

Nichols Brothers Boat Builders

120' twin-screw tug for Kirby.

sociation owns the national historic landmark. Once the presidential yacht of Franklin D. Roosevelt and years later owned by Elvis Presley, the yacht currently plies the waters of San Francisco Bay as a special events, weddings and school education tour boat. The boat was built at Manitowac Shipbuilding Co., Manitowac, Wis., in 1934, beginning its life as the Coast Guard cutter Electra with a crew of 45. The Potomac has a running speed of 13 knots thanks to its twin Winton 6-158 diesel engines that produce 1,349 hp each and turn 3-bladed props. — K. Hocke Brunswick Commercial & Government Products (BCGP) has broken ground on a facility expansion at the company’s Edgewater, Fla. headquarters. The expansion includes a new large-boat building with added manufacturing space and other facility improvements.

The new 10,500-sq.-ft. facility will be located on the east side of the commercial boats manufacturing campus and will increase the company’s manufacturing capacity by 50%. The addition will also include improvements to the company’s 45' patrol boats for Vietnam coast guard. existing 23,000-sq.-ft. main assembly building. — K. Hocke Conrad Industries Inc., Morgan City, La., announced that for the quarter ended March 31, its net income was $119,000 and earnings were two cents a share. That compares to net income of $2.6 million and earnings of 49 cents a share during the first quarter of 2016. Conrad’s backlog was $183 million on March 31, 2017, compared to $216.5 million on Dec. 31, 2016, and $189.9 million on March 31, 2016.

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New research vessel for state of New Jersey

A

32'×12'×2' aluminum catamaran with a landing craft-style bow ramp is a big step up for New Jersey state environmental workers, who will use the Robert C. Shinn Jr. as a research buoy tender and platform for coastal water and sediment sampling.

Kanter Marine, St. Thomas, Ontar-

Capt. Ken Hayek aboard aluminum catamaran buoy tender for New Jersey.

New Jersey Department of Environmental Protection

fortable arrangements for berthing.

“The W.T. Hogarth will be a welcomed addition to FIO’s fleet that will provide exciting new technical capabilities to enable world-class research and educational opportunities that help Florida understand and preserve its critical marine environment,” FIO Director Philip Kramer said in a statement announcing the christening.

Anticipated missions for the new vessel will include a variety of overthe-side operations including the study of marine life, affects of pollution, water sampling, bioacoustics, sediment coring, fisheries research and more.

Main propulsion for the new research vessel will come from a pair of Caterpillar C18 ACERT diesels, producing 600 hp at 1,800 rpm each. The Cats will connect to Wärtsilä 41" wheels through two ZF 200A marine gears.

The propulsion package will push the boat through the water at a running speed of 10 knots.

Capacities will include 6,862 gals. of fuel oil and 1,382 gals. fresh water. The rear cargo deck will measure 22'×25'6".

The boat will also have accommodations for four crewmembers and 10 research scientists.

“It’s an exciting day,” said Boksa Marine president Nick Boksa. “She got her feet wet for the first time and floated perfectly on her lines.”

The W.T. Hogarth is named for William T. Hogarth, who recently retired after a 50-year career that included serving as FIO director and director of the National Marine Fisheries Service.

He also led the scientific response to the 2010 Deepwater Horizon oil spill.

— Ken Hocke

io, Canada, custom built the $215,000 vessel to state Department of Environmental Protection specifications. The Shinn will service new networks of monitoring buoys in Barnegat Bay and the Sandy Hook-Raritan Bay region near New York Harbor.

The DEP’s Bureau of Marine Water Monitoring checks for pollution that can affect public health on shellfish beds and swimming beaches. Most of its fleet are trailerable small boats similar to a Carolina Skiff, so the Shinn is a major new capability.

“We used to use aids to navigation (state buoy tenders) and we were tied to their schedules — and they were slow,” said Bruce Friedman, DEP director of water monitoring and standards.

With twin Evinrude E-Tech 250-hp outboards, the Shinn can hit 40 mph at top end, said Capt. Ken Hayek.

“I had 2,500 pounds, four people and 200 gallons of gas on board and did 30 mph,” Hayek said. With its 2' draft and ramp bow, the boat is suited to get around New Jersey’s shallow back bays.

In the wheelhouse is a Simrad radar and GPS suite, a Lowrance Link-8 VHF radio, and controls for the ramp which can also be lowered and raised from a forward station. On deck, a Fassi Micro 25 knuckle-boom crane

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provides the muscle for lifting up to 1,100 lbs. through a door in the port side gunwale.

The data buoys collect water-quality information including temperature, oxygen content, turbidity, and chlorophyll levels — key indicators of environmental stress in Barnegat Bay, located off the coast of Ocean County, N.J., where the DEP is in the midst of a years-long restoration program.

In summer, fouling can reduce the accuracy of buoy instruments, so frequent maintenance is one of the boat’s missions.

Having that “continuous data” sent automatically every hour is a big help in protecting the state’s growing shellfish industry and beach tourism, said Dan Kennedy, the assistant DEP commissioner for water resources.

The boat is named for Bob Shinn, who was New Jersey’s longest serving environmental commissioner from 1994 to 2002. Shinn elevated coastal water protection during his tenure and was a mentor to the generation now working at the agency.

“When Bruce Friedman said ‘We gotta name a boat,’ there was only one answer,” Kennedy said.

— Kirk Moore

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Barge Glut

Operators are diversifying and idling, retiring or selling

The inland barge industry is plagued by weak demand and too much equipment.

WB_CoverStory_LINO.indd 34

Brian Gauvin

equipment to deal with soft demand.

6/1/17 9:28 AM

By Pamela Glass, Washington Correspondent

OVERBUILT Anticipating sustained demand for petroleum products and grains, many in the industry either went on a vesselbuilding binge or converted too many barges from open to covered service to capture growth in the grain market.

The number of inland barges increased 2.8% in 2016, with the dry fleet up 2.5% and liquid fleet up 4.5%, according to Informa Economics Barge Fleet Profile released in March. At the end of 2016, 1,070 new barges were added to the overall fleet while 591 were retired. The number of covered barges increased the most since 1995, open barges declined, and the number of tank barges hit a new record.

But the market did not produce the demand for barges as industry had hoped for, and a spike in grain shipments failed to offset a deep dive in coal shipments. The result has been a glut of idled barges, negative balance sheets, and companies scrambling for alternative business.

Overbuilding can be linked to the industry’s failure to “learn the lessons

Gregory Thorp

T

hree years after going gangbusters, the U.S. barge industry is struggling through one of its worst down cycles in recent memory, with business off in just about every sector and a sustained recovery not expected for at least another year or longer.

On the liquid and dry sides, operators have found themselves in a period of slumping demand made worse by declining revenues from low barge rates, a sluggish world economy, a drop in the oil market, and collapse of the coal market that was once the bread and butter for much of inland river commerce.

And this spring, the industry had to deal with the consequences of extensive flooding and traffic stoppages along the Mississippi River that caused costly delivery delays.

A big part of the industry’s woes are self-inflicted, as operators misread the market.

Companies are diversifying away from the shrinking coal market.

of previous cycles. We overbuilt when promising markets didn’t materialize as we expected,” said Thomas Allegretti, president and CEO of the American Waterways Operators, Arlington, Va. “There are too many vessels chasing too little cargo. This remains a very challenging time for our business.”

Mark Knoy, president and CEO of American Commercial Barge Line (ACBL), said that several significant events converged at once. “Everyone was chasing the energy renaissance.

There was a lot of strong demand, then oil prices went down and pipelines opened sooner than expected,” he said.

“Steel was slaughtered by foreign dumping. There was a drought in 2013, so 2014 grain shipments were strong, and the dry and liquid fleets were right-sized for the business. Since then, 2,300 hopper barges and 500 to 600 tankers were added (helped by cheap steel and accelerated depreciation for equipment) and then demand went in the opposite direction.”

Meanwhile, coal shipments, squeezed by the closure of many coalfired utility plants, cheap natural gas and environmental regulations, continued a sharp decline — falling 10.6% in 2016, according to River Transport News. A mild winter meant less road salt was carried by barge, and less demand for energy products. Favorable river conditions also meant barges could make quick turnarounds, which was the equivalent of adding another

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1,000-2,000 barges to the rivers.

“We woke up and all of a sudden, the fleet was overbuilt,” Knoy said. The industry knew a slowdown was coming, “but it came quicker than we had thought.”

PLANNING NEEDED Barge companies are used to the cyclical nature of their business. The strong ones with good management and balance sheets and a diversified portfolio tend to survive the rough patches, while weaker inland players sell out or consolidate.

“Good companies plan and weather the down cycle. This is a very resilient industry with resilient companies,” Allegretti said.

Companies have reacted by diversifying their business and customer bases, idling, retiring or selling equipment, putting off newbuilds, reducing workforces, taking the time to repair vessels, and updating training and landbased operations like IT systems and accounting.

Kirby Corp., the largest tank barge operator “took significant cost-cutting measures” during the first few months of 2017, Kirby Chairman Joseph Pyne said in reporting the company’s firstquarter 2017 earnings in April. Kirby’s revenue from its marine transportation division dropped 11% at the end of last year. The company removed 56 barges from service in 2016, and plans to take out another 36 this year — nearly 10% 35

6/1/17 9:28 AM

Gregory Thorp

of its fleet.

Nashville, Tenn.-based Ingram Barge laid off 47 employees in February. Although the privately held company did not state the reason, it’s widely viewed as related to a drop in business moving grains, coal and other bulk goods along the Mississippi and other rivers.

ACBL’s Knoy said his company “looks to take costs out of our business everyday,” adding that ACBL, like other barge companies, “are doing the same amount of work for less revenue.

We’re moving product at a cheaper price. Everything got renewed at lower prices.”

Finding new business is a challenge in this market. RTN reported in March that “barge operators indicate that there’s very little interest in any new business beyond product already moving under long-term contract.” One exception, the newsletter writes, could be opportunities to barge semifinished

Operators have essentially put a halt to barge newbuilds, which should eventually help bring the market into balance.

steel slabs from the Lower Mississippi to the Midwest.

Nonetheless some companies have found work in the nascent containeron-barge market, providing services for offshore wind farm construction or expanding beyond barging into maritime services such as vessel cleaning or consulting. For operators in the Ohio River

area, new business is expected from Shell Chemical’s planned construction of an ethane cracker plant that will rely on river transportation. Plus, rising petrochemical and LNG exports will be growth areas for tank barges.

Anticipating continued declines in coal movements, Campbell Transportation Co. Inc., Houston, Pa.,

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5/25/17 11:41 AM 2014-09-30 09:14

DIVERSIFYING AWAY FROM COAL

W

Campbell Transportation/Art Innamorato

ith coal shipments in a free-fall, barge companies that have depended on the commodity must get creative.

And carriers that planned ahead a few years ago, gambling to diversify their business while still hauling coal, are in the best position to survive today’s tough inland barge climate.

Five years ago, Campbell Transportation Co., Houston, Pa., realized it was heading into the eye of the coal storm, with the energy market being shaken up by drilling for natural gas reserves right in their backyard. Located near the Marcellus and Utica gas reserves, it wasn’t hard to see that natural gas was going to put coal’s feet to the fire and the company needed to be ready.

Having little confidence that the coal business would return, CEO Peter Stephaich worked with board members to reinvent CTC. They essentially created a new company that continued its traditional barging services, while adding a number of other maritime business lines under its logo.

Diversification took several different directions: geographic, product lines and customer base. The transition has demanded patience and new financial commitments, Stephaich said, as well as a bit of chutzpah needed to risk going into the unknown. “We’re trying to grow our company in a distressed market,” he said.

CTC invested heavily in new personnel, training, and equipment upgrades and replacements. It overhauled accounting and IT systems

CTC’s crane services changing out the conveyor belt at the Bruce Mansfield plant on the Ohio River.

whose business was once dominated by coal hauling, embarked on a plan five years ago to diversify away from this shrinking market. CTC expanded its geographic reach beyond northeast Pennsylvania, and got into liquid and grain transport, crane and construction services, barge cleaning and repairs and towboat construction. (See related story above.)

IS THE WORST OVER? By all accounts, a slow rebound is expected for all barging sectors, but 38

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and moved into training and compliance as well as construction and crane services, offering specialty loading and unloading operations.

Campbell now operates four shipyards and a marine construction company.

CTC ventured into the liquid market, transporting oil, gas and petrochemicals. It also jumped into the grain market. CTC invested in covers for its open barges and is operating in the hub of grain barging, the Mississippi River.

For the liquid market, expensive vessel upgrades were needed to meet higher compliance and safety requirements. But this would be a good investment, CTC reasoned, as ethane crackers were being developed near them in the Pittsburgh region. Campbell currently uses some of its upgraded boats to move tank barges along the Ohio River for third parties.

In 2011, it bought a tank barge fleeting, cleaning and repair facility along the Ohio River in Congo, W.Va., which further expanded its reach into the liquid market. The overall goal is to be positioned to seize new opportunities for growth and respond to industry trends, Stephaich said.

One of those opportunities came in May when Campbell announced the purchase of 155 barges from American Commercial Barge Line and five identical towboats — four from ACBL and one from AEP River Operations — to move liquids on the Ohio River system.

“These vessels will improve our traffic patterns and by improving our density and frequency on the Ohio River, it will lower our unit costs,” Stephaich said.

When the sale is completed in June, Campbell will own and/or manage over 1,100 barges and 50 towboats on the inland waterways.

Stephaich said restructuring and sound financials made the purchase possible, allowing the company to grow in a very difficult market.

“Over the past five years, we’ve spent a lot of time and money to develop management teams, new IT and accounting systems, training. We built up the bricks and mortar of Campbell so that we could do a deal like this,” he said. “We are building the platform for the future.” — P. Glass

some will recover more quickly than others.

Things are moving in the right direction, AWO’s Allegretti said, as the industry has stopped ordering new barges, which contributed to overcapacity. “We’ve seen a break finally in construction of new barges and towing vessels,” he said. “The exuberance that fueled the construction renaissance has stopped, and that’s good. It moves us to the equilibrium that we need.”

Allegretti said it will take a while for the industry to digest the excess

capacity and “the challenging markets will continue through at least the end of 2017. Recovery won’t be immediate and won’t be monolithic,” he said.

“Some sectors may be easier than others.”

A key to recovery will be an uptick in demand for barging services, and this will be influenced by improvements in the U.S. and global economies that push up demand for barged commodities like grains, construction materials and energy products.

Allegretti is confident that demand www.workboat.com • JULY 2017 • WorkBoat

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for U.S. petrochemicals and crude oil will improve because the country is experiencing an “energy renaissance” in domestic energy production. “We feel that accelerated growth of the economy will mean an increase in cargo for our vessels, so we are optimistic in the long-term view.”

Knoy expects recovery in the dry barge sector to be slow as vessels transition out of the coal market. Despite a small uptick in coal exports at the end of 2016 and beginning of this year, and despite promises by the Trump administration to bring the coal industry back, Knoy and others are not banking on a coal revival.

“The decisions (to move off coal) were made years ago, and many utilities have closed,” he said. With natural gas prices low and emission regulations making coal less attractive, “I don’t see a lot of promise in coal.”

Although new vessel construction has slowed and there have been

Barge companies are not banking on a coal revival.

many barge retirements, there are still too many barges for current market demand, he said. “We need to achieve a 10 percent reduction in the fleet size.

Reducing supply is the answer.”

Ken Eriksen, senior vice president for transportation at Informa Economics, a Memphis. Tenn., market research and forecasting company that follows the barge market, also predicted

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another tough year ahead for the dry barge sector. He believes there will be a drop in grain and soybean exports, which in the past have boosted the industry through record harvests and strong global demand.

“The United States provided coverage for a small crop (in other exporting countries), but now South America is back with a vengeance and will compete with the United States going forward,” Eriksen said. “I think the industry should be preparing themselves for another difficult year until it turns around, maybe in 2018.”

There are some optimistic signs going forward, experts say. The energy industry is showing signs of recovering, which could lead to more barge demand, and if Congress and the Trump administration can agree on the terms and budget for a national infrastructure improvement program, that could also help boost demand.

A construction boom would mean more demand for barged steel, cement, sand, gravel and other construction products.

If an infrastructure plan is to help the national economy, improve the nation’s transportation needs and increase waterways traffic, it must be structured differently than the $866 billion stimulus plan under President Obama in 2009, according to Knoy.

“That initiative really didn’t move the needle for the barging industry,” he said. “The money went to balance state budgets rather than for shovel-ready projects.” www.workboat.com • JULY 2017 • WorkBoat

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Story and photos by Max Hardberger

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WB_BG_HarveySub_LINO.indd 42

W

hile plans for most deepwater offshore service vessels have been put on hold with the industry deep into a twoyear-and-counting drilling slump, Harvey Gulf International Marine is forging ahead with an ambitious construction program begun several years ago.

An important part of that newbuild program is the 340'×73' Harvey Sub-Sea, a 5,737-dwt multipurpose supply vessel (MPSV) that was delivered in April. The ENVIRO+ classed MPSV was launched in November 2015 at Eastern Shipbuilding Group’s Allanton, Fla., facility.

“We saw from the beginning that a vessel this big, this capable, would need to fill as many roles as possible given its cost,” said Chad Verret, executive vice president for Harvey Gulf, New

Orleans. “The amazing thing is how well it fills all of its roles.”

While those roles range from ROV support to marine construction to cable laying to subsea equipment installation and support, the Harvey Sub-Sea was custom-tailored by her designers, Vard Marine Inc., to fulfill her name’s mission: deepwater subsea support in the U.S. Gulf.

“Every capacity, every capability, has to be larger to service the deepwater oilfield,” Verret explained. “When your round trip is almost 500 miles, you need to carry everything necessary to install and support sea-floor installations and other subsea activities as well as rig support.”

Bill Lind, vice president of operations at Vard’s Houston office, explained the difficulties in adapting such a large, versatile vessel to existing Coast

All photos by Max Hardberger

The 9,000-hp Harvey Sub-Sea can handle ROV support, marine construction, cable laying, subsea equipment installation and support, and other tasks.

www.workboat.com • JULY 2017 • WorkBoat

6/1/17 9:16 AM

Guard regulations.

“When we started designing this vessel the SPS (Special Purpose Ship) Code (an international standard) was still a fairly new concept, and the Coast Guard did not recognize it. We had to work very closely with ABS and the Coast Guard with regards to probabilistic stability, or stability in case of damage.”

Lind emphasized the value of faceto-face meetings to overcome the challenges presented by the vessel’s various roles. “Our office is 20 minutes away from the ABS offices. You can’t expect people to open up a plan or a schematic on their computer monitors and right away identify a problem or area of concern,” he said. “But when we sat down together with the plans in front of us, we could identify conflicts and solutions much more rapidly.”

CRUISE SHIP COMFORT With quarters for 150 — 14 crew and 136 passengers — in 24 one-person and 63 two-person cabins, each with a private head, the Harvey Sub-Sea resembles a cross between a large supply/support vessel and a cruise ship. All staterooms have their own flat-screen televisions with access to satellite TV.

HARVEY SUB-SEA

Two Plimsoll marks are on the vessel’s hull, the upper one for U.S. operations and the lower one for international Special Purpose Ship operations.

The staterooms are fitted with natural-finish red oak fittings and furniture, the walls are lined with soundinsulating mineral-wool-core panels, and the main and “A” deck floors with Sikafloor Marine PK-90 sound-reducing flooring.

Passengers, as well as the crew, can enjoy movies and other programs in the vessel’s dedicated cinema room and lounge, workouts in the well-equipped gym, and personal internet access throughout the vessel on its KVH satellite internet system.

“A certain amount of bandwidth is SPECIFICATIONS

Builder: Eastern Shipbuilding Group Designer: Vard Marine Owner: Harvey Gulf International Marine Mission: Multipurpose support vessel Length: 340' Beam: 73' DWT: 5,737 (LT) Depth: 29'3" Maximum Draft: 24'6" Main Propulsion: (2) Schottel SRP 3030 azimuthing stern drive, FPP in nozzle, VFD motor, 4,489 hp Thrusters: (3) Schottel STT5 bow tunnel thruster, FPP in nozzle, VFD motor, 2,012 hp Ship’s Service Power: (4) Wärtsilä 6L32 generator engine, 3,170 kW Speed: 13 knots (maximum); 10 knots (cruise) Hull Construction: Steel Crew capacity: 14 Passenger Capacity: 136 Working Deck: 174'x72'6", 2,600-ton capacity, steel, with covered moonpool www.workboat.com • JULY 2017 • WorkBoat

WB_BG_HarveySub_LINO.indd 43

reserved to the vessel, but the system’s capacity beyond that is available to the crew and passengers for their personal use,” Verret said.

The luxury hotel feel is accentuated by the vessel’s VingCard reader system for all interior doors. “Carrying one plastic card for all doors makes my job a lot easier,” said Capt. Chris “Seafog” Fogg. “I’d hate to fall overboard with one of those old-fashioned key rings.”

Unlike cruise ship passengers, the passengers on the Harvey Sub-Sea have jobs to do, and one of the challenges the designers faced was fitting all these

Electronics: Raytheon Anschütz workstations; chart radar; X-band transceiver; S-band transceiver; Furuno FAX-408 weather facsimile; Raytheon Anschütz steering repeater; Saab R5 DGPS receiver; Raytheon Anschütz NautoPilot 5300; Interschalt bridge navigation watch alarm system; Skipper GDS101 echo sounder; JRC NCR-333 NAVTEX receiver; SAILOR deck stand MF/HF GMDSS radio system; SSAS Inmarsat Mini-C Sailor 6110 GMDSS; Kongsberg K-Pos DP-21, DPS-2; Kongsberg HiPAP 500 serial line/LAN; CyScan Mk4 laser Tankage (gals.): Diesel, 280,257; potable water, 116,247; drill water, 929,389 Ancillary Equipment/Systems: (1) National Oil Well Varco 250-ton knuckle-boom crane with active heave compensation; (2) 250-hp ROV/LARS systems; Helidex Offshore helideck; Ansul foam-dispensing fire monitor on helideck Classification/Certification: ABS †A1, HELIDK, Offshore Support Vessel (Heavy Lift), Circle E, †AMS, †ACCU, †DPS 2, NBLES, ENVIRO+, GP, UWILD, MLC - ACCOM, MLC 2006, SPS 2008; USCG certification: Subchapter I, Subchapter L; SOLAS Delivery Date: April 2017

43

6/1/17 9:17 AM

All photos by Max Hardberger

requirements into the vessel. Some of the answers were simple and ingenious.

For example, building a sunken pit into the wheelhouse solved the problem of too much ambient light on the surveyor’s computer monitors on the bridge.

One of the vessel’s most important missions will be ROV support, and the space devoted to that mission is considerable. Beside the vast ROV bay stretching the width of the vessel, with 32'6"-high roll-up doors on each side, there are four different interior rooms for ROV operations (online room, offline room, conference room, and a lounge).

“To handle the heat from the electronics in the online control room, it has its own dedicated air-conditioning system,” said Verret.

Two launch-and-recovery systems (LARS) allow operation of ROVs up to 250 hp, ranging to depths of 4,000 meters.

With so many systems at work, an integrated approach to monitoring and control is provided by the Wärtsilä electronics systems that coordinate power, maneuvering, and customersupport operations. The vessel’s DP-2 system controls the machinery. For main propulsion, there’s two Schottel SRP 3030 azimuthing fixed-pitch-propeller (FPP) stern drives, powered by variable frequency drive (VFD) motors, producing a total of 8,978 hp. There’s also three Schottel STT 5 fixed-pitchpropeller bow tunnel thrusters, powered

by VFD motors, that produce a total of

All photos by Max Hardberger

340' MPSV

The 250-ton knuckle-boom crane mounted on the afterdeck has the ability to work at depths of 13,000'.

6,035 hp. Four Wärtsilä 6L32 generators provide 12,680-kW of electrical power to the vessel’s 690-volt system.

The power package gives the vessel a top speed of 14 knots and a cruising speed of 12 knots.

In choosing DP-2 over DP-3, Verret explained that it makes economic sense. “There aren’t too many OSVs with DP-3,” he explained. “It doesn’t offer any greater precision, only another level of redundancy. The Harvey Sub-Sea has multiple levels of redundancy already, and what’s a reasonable expense on a $700-million-dollar semisubmersible (drilling rig) isn’t necessarily a reasonable expense on a $100-million-dollar OSV.” In today’s cutting-edge OSV wheelhouses, color monitors and digital displays have replaced dials and gauges.

The 72'6"-dia. helideck is a prefabricated aluminum unit that’s rated for aircraft up to 12 tons.

44

WB_BG_HarveySub_LINO.indd 44

All vessel systems feed into bridge and engine-room touch-screen displays that allow operators to monitor all systems from both positions, including tank levels, valve positions, engine operating status, history, and PMS (planned maintenance system) records. Wärtsilä engineers ashore can even monitor the system’s performance remotely through the vessel’s internet connection.

“The redundancy is what impresses me the most,” said Chris Robinson, one of the vessel’s duty engineers. “You can get on the (control) panels and get just about whatever you want done in a number of ways. And the time saving could be critical. Being able to watch all the tank levels and engine data from here and then make control input immediately is a real safety feature.”

ADDED FEATURES The 250-ton National Oilwell Varco knuckle-boom crane on the afterdeck has the ability to work at depths of 13,000'. But the 220 tons of 100-mm runner wire on the electric-over-hydraulic winch would have presented a stability challenge if it had been located on the crane. The sheer size of the Sub-Sea provided the answer. A huge compartment, spanning the entire beam of the vessel, houses the winch and feeds the runner-wire up through the afterdeck. The winch is bolted directly to the vessel’s double bottom to get its weight as low as possible. www.workboat.com • JULY 2017 • WorkBoat

6/1/17 9:17 AM

For precision during subsea operations, the Wärtsilä control system can link to the vessel’s Kongsberg HiPAP 500 high precision acoustic positioning system, using up to 12 beacons on the seafloor to locate and fix on positions for risers, control platforms, and other seabed fixtures. A 24'×24' moonpool in the center of the aft working deck, fitted with a flush hatch to allow a continuous flat deck space, provides capability for saturation-diving support.

“We can fit a tower over the moonpool for well intervention,” Verret said. “This is another example of how well this vessel integrates its different missions. Without having the crane’s winch located deep in the vessel, we wouldn’t have had the stability for that kind of deck structure.”

Another feature related to the vessel’s multipurpose mission is the afterdeck itself, a 174'×72'6" flat steel deck, 1.5" thick, without wooden planking.

“Wooden decks with padeyes along the sides and in the center are fine for standard oilfield cargos like pipe and provision boxes,” Fogg explained, “but

you can’t use chain-binders for subsea equipment. These items are meant to be deep underwater for years, and you can’t afford to damage their coatings.

So you have to use straps, and straps require custom-welded padeyes right under the load.”

Safe and comfortable access to the vessel was a priority. A 24-person waiting room, with airline-type chairs and a TV, provides access to the helideck’s boarding stairs. An automated warning system monitors the vessel’s anti-heave system, and if the sea-state exceeds the system’s capabilities, a red light warns approaching pilots not to land, turning to green when the vessel is sufficiently stabilized for helicopter operations.

Access features also include the vessel’s ship-style accommodations ladders, fixed systems operated by electric motors that swing the ladders over the sides of the ship and lower them to the required height. “This is the only oilfield vessel I’ve ever seen with these,” Fogg said. “They sure make rigging for boarding a lot easier than manhandling a portable gangway over the side.”

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The second vessel in the Harvey Sub-Sea-class, the sistership Harvey Blue-Sea was launched at Eastern in April 2016, with an expected delivery later this year.

“It’s a competitive market,” Verret concluded. “The oil companies, especially the majors operating far offshore, are expecting more and more from the vessels they charter, and the Harvey Sub-Sea was built to deliver more, a lot more.”

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BAYFRONT MARINE, INC. WORLDWIDE VESSEL DELIVERY SERVICE EXPERIENCED PROFESSIONALS Licensed Masters, Engineers and Crews Call Mel or Diane Longo (904) 824-8970 www.bayfrontmarineinc.com

USCG License Software Affordable–Merchant Marine Exam Training

http://hawsepipe.net Freelance Software, 39 Peckham Place, Bristol RI 02809

401-556-1955 sales@hawsepipe.net

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www.workboat.com • JULY 2017 • WorkBoat

5/31/17 1:02 PM

PortofCall

Your Source For Employment, Equipment & Services

ADVERTISERS INDEX Advertiser Page

TRAINING

Mari2me Ins2tute of Technology 925 Cherry Street

CENTA Corporation.................................. 18

Panama City, FL 32401

Ahead Sanitation Systems Inc.................. 14

850-387-1829

Coast Guard Foundation.......................... 24

www.mitnavschool.com

Duramax Marine LLC............................ CV3

Diesel America West................................... 4

facebook.com/mitnavschool

USCG Approved Courses

Eastern Shipbuilding Group...................... 25

Farmer's Copper Ltd................................. 28 Furuno USA.............................................. 21 Hamilton Marine Inc.................................... 2

Basic First Aid, CPR & AED

Leadership & Managerial Skills

STCW (Basic Safety Training)

Radar Renewal

Able Seaman / Lifeboatman Limited

Exam Prep (500 / 1600 /

100 Ton Master (Upgrade)

T O A R (Towing Operator Assessment Record)

200 Ton Master (Upgrade)

Visual Communications (Flashing Lights)

Louisiana Cat.............................................11

Celestial Navigation

OUPV (Operator of Uninspected Passenger Vehicles)

Lubriplate Lubricants................................ 39

Hougen Mfg., Inc...................................... 45 Imtra Corp................................................ 45 3rd

Mate)

JMS Naval Architects................................ 20 John Deere Power Systems...................... 12 Karl Senner, LLC................................... CV4

Marine Machining & Mfg........................... 14 Metals USA - Plates & Shapes................. 20 Mitsubishi Turbocharger and Engine America, Inc.......................... 41 Motor-Services Hugo Stamp Inc................. 5 MTU............................................................ 3 Nautican Research & Development Ltd.... 45 Pacific Marine Expo.................................. 29 Passenger Vessel Foundation.................. 36 Power Panels, LLC................................... 40 Research Products/Blankenship............... 15 R M Young Company................................ 36 R W Fernstrum & Company.......................10 Scania....................................................... 37 Sheaves Inc................................................ 4 Thordon Bearings Inc............................ CV2 Thrustmaster of Texas.............................. 45 Volcanic Heater.......................................... 7 Wartsila Finland Oy Marine Solutions...... 13 Yanmar America......................................... 9 ZF Marine................................................. 19

N

W

Maritime TOAR Assessments

E

S

Providing Mariners with Solutions for USCG TOAR Requirements

www.maritimetoarassessments.com

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6/6/17 8:13 AM

LOOKS BACK JULY 1947

• Inland waterways tonnage for the first half of 1947 is well above the best wartime year and is on a pace to set an all-time ton-mile traffic record. Shipments of fuel oil and coal are especially tight, with all available equipment in use. Several barge lines report that they have had to turn down big cargo shipments because no equipment is available. The

record setting river and canal traffic is being made possible by the addition of the $150 million Defense Plant Corp. fleet. The DPC fleet consisted of over 1,000 towboats, tugs and barges. Every hull that was in good condition has been sold by the Maritime Commission, the sales agent for floating surplus war goods.

• On the cover are three 200-hp tugs built by Olson Marine ConstrucJULY 1957 tion Co. that left

the Beresford, Fla., shipyard on May 12 for China. The 85'×12'6" UNRRA 35, 36 and 37 are each powered by a Buda-Lanova 6-DCMR-1879 engine that develops 200 hp at 1,050 rpm. The engine is connected to a Twin Disc MG-201 gear.

• On the cover is the Hawkeye, two GM 100-kW gensets.

Midwest Towing Co.’s new 2,480-hp • Moran Inland Waterways Corp. towboat built by St. Louis Shipbuildhas opened a new office in Mount ing & Steel Co. The 150'×33' vessel Vernon, Ind. The company is affiliated will work in the Mississippi River coal with tug operator Moran Towing and trade. The towboat is powered by two Transportation Company Inc., New Cooper-Bessemer 4-cycle JS-8-T York City. diesels, each rated at 1,240 hp at 458 rpm. Through Falk reverse-reduction gears, the diesels turn 102", 4-bladed, steel wheels in Kort nozzles. The HawkJULY 1967 eye is equipped with • On the cover is the 90' crewboat Condor being loaded next to a 63' crewboat on the cargo deck of the 165' supply vessel Rig Engineer for transport to Alaska.

• Four oil companies have been issued permits by the Department of the Interior to gather geological data along the Atlantic continental slope. The companies, Humble Oil & Refining Co., 52

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Gulf Oil Corp., Mobil Oil Corp., and Chevron Oil Co., will gather information from beyond the 100-fathom curve under a program scheduled for completion this summer. The program, scheduled to begin in July, will use the California-based vessel Caldrill 1, which will take core samples from widely scattered Atlantic locations. In all, 21 core test sites will be sampled. www.workboat.com • JULY 2017 • WorkBoat

5/25/17 12:18 PM

DURAMAX®

SHAFT SEAL SYSTEMS

Engineered for Optimum Sealing Performance.

The DryMax™ seal is a robust, environmentally friendly, water-lubricated stern tube seal system. Engineered to accommodate the most axial and radial shaft movement of any seal design while eliminating wear on the shaft.

Reversible DuraChrome™ mating ring gives 2X the life extending drydock intervals

Keeps seawater out of your vessel and your bilge dry. The DryMax™ engineered nitrile rubber ring rotates with the shaft and creates a hydrodynamic seal with the DuraChrome™ mating ring.

Superior sealing and wear life. The proprietary rubber polymer seal ring and the DuraChrome™ alloy mating ring have been engineered to provide optimal sealing and long wear life.

Virtually maintenance free. An inflatable seal is built into the housing allowing seal inspection and primary sealing ring replacement at sea without dry docking.

MADE IN U.S.A.

DryMax™ is ideal for vessels operating in both brown and blue water. It accommodates shaft sizes and stern tubes up to 36".

MADE IN U.S.A.

The DryMax™ seal is also available as a rudder stock seal.

For more information on DryMax™ Shaft Seal or to purchase contact: Duramax Marine at 440-834-5400 or go to DuramaxMarine.com

Duramax Marine® is an ISO 9001:2008 Certified Company

Products And Knowledge You Trust 2016WORKBOATAd_8.125x10.875.indd 1 WB_CVRS.indd 3

p: 440.834.5400 f: 800.497.9283 11/4/16 11:45 9:33 AM 5/25/17

PROPELLING

EXCELLENCE

“Neale Marine is thrilled with the performance of our first set of Reintjes gearboxes supplied

by Karl Senner. The sales and service teams have been exceptional at addressing any of our questions or concerns throughout the vessel’s build process and after delivery. As the existing gearboxes on our 5 other operating towing vessels come up for replacement, we will happily consider Reintjes and the Karl Senner team for our needs in the future!”

– C.R. Neale III

Karl Senner, LLC is proud to equip the M/V Capt. C. R. Neale III with two REINTJES WAF 364 Reverse Reduction Gearboxes.

Karl Senner, LLC proudly represents:

(504)469-4000 WWW.KARLSENNER.COM WB_CVRS.indd 4

5/25/17 11:46 AM