WorkBoat June 2015

Crew Comfort • Inland Overnight Cruises • Towboats/Barges ®

IN BUSINESS ON THE COASTAL AND INLAND WATERS

JUNE 2015

Push On

Business stays steady for barge operators.

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ON THE COVER

®

The Canal Barge towboat Caroline pushes a 30,000-bbl. tank barge JUNE 2015 • VOLUME 72, NO. 6

on the Mississippi River near New Orleans. Photo by David Krapf

FEATURES 30 Focus: Cruise Control Competition heats up in the inland cruise market.

36 Focus: Honorable Discharge Converted oil barge is now a platform for scientists to test new ballast water treatment systems.

40 Vessel Report: Newbuild Downshift?

New barge construction is finally expected to slow.

50 Cover Story: Liquid Diet Business is still steady for tank barge operators, mixed for the dry-cargo market.

30

BOATS & GEAR 44 On the Ways All American Marine delivers first of two 105'x33' water taxis to King County, Wash. Aries Marine takes delivery of second 4,000-dwt PSV from Leevac. Winninghoff response boat for Maine fire department. Foss christens first of three new 7,268-hp Arctic-class tugs. Kvichak awarded contract for two 400-passenger ferries for San Francisco.

58 Silent Running Reducing noise and controlling vibration are keys to crew comfort.

AT A GLANCE 10 10 11 12 14 16 18

On the Water: Read your local mariner notices.

Captain’s Table: The captain goes to Washington, D.C. OSV Day Rates: New offshore safety regs could mean more OSVs. WB Stock Index: Oil service stocks rebound in April.

Inland Insider: China has been a big game changer for cargo.

Insurance Watch: Can you insure your boat under a yacht policy?

Legal Talk: Work with the Coast Guard when they must investigate.

NEWS LOG 20 21 21 22 24 26

Hawaii may take another look at interisland ferry service.

Seattle mayor opposes port’s lease plan for Shell vessels.

Record profit streak for Kirby ends.

Opposition emerges to Florida port’s expansion plans.

Judge sets date for Bollinger-Coast Guard Island-class cutter trial.

Rhode Island wind project will be first in U.S.

www.workboat.com • JUNE 2015 • WorkBoat

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58 DEPARTMENTS

4 Editor’s Watch

8 Mail Bag 61 Port of Call 75 Advertisers Index 76 WB Looks Back

3

5/8/15 3:16 PM

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bout three years ago, moving crude oil from hydraulic fracking garnered scant attention from barge executives. In 2010, crude oil shipments from the Midwest to the Gulf were nonexistent. By the end of 2013, however, volumes were close to 5 million bbls. per month.

Some companies jumped in. American Commercial Lines invested $69 million in 35 new tank barges in 2012 and another $38 million in 2013. At the time, ACL’s CEO Mark Knoy said that with tank barge capacity in tight supply, the company was confident that it would quickly “realize the new earnings benefit of the new tank barges.”

He was correct.

It heated up so much that Trinity Marine Products revamped one of its tank barge facilities to add more production slots and converted its Caruthersville, Mo., hopper barge construction facility so it could build more 10,000-bbl. tank barges. The number of new tank barge deliveries in 2014 hit a record high of 344, topping 2013’s 336, according to River Transport News.

While good news for some, all this construction had Walter Blessey worried two years ago. The market was in equilibrium in 2013, but barge building was accelerating at a steady pace. Blessey, CEO of Blessey Marine Services, said at the time that the tank barge market could become overbuilt by 2014 or 2015. We are now starting to see a small overhang in the tank barge market, and many expect that new construction will finally soften.

But while companies like ACL and Kirby saw earnings from crude movements jump (Kirby reported record earnings in 2014), others stayed away,

David Krapf, Editor in Chief

believing that the market would soften, which it has.

Blessey stayed away and his company still posted its best year ever in 2014. He saw the demand for barges as a result of fracking as temporary. “We are spot players, and we stayed away and didn’t chance it. And now those that did are seeing barges turned back.”

Golding Barge Line also decided not to jump on the fracking bandwagon and has fared just fine. “Crude and fracking are volatile,” Austin Golding said. “We needed to stay with trade lines that were established.”

Amen. Sounds like good business to me.

dkrapf@divcom.com

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

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

by Diversified Business Communications.

Printed in U.S.A.

www.workboat.com • JUNE 2015 • WorkBoat

5/8/15 5:32 PM

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www.workboat.com

PUBLISHER

Jerry Fraser jfraser@divcom.com

EDITOR IN CHIEF

David Krapf dkrapf@divcom.com

TECHNICAL EDITOR Bruce Buls bbuls@divcom.com

SENIOR EDITOR Ken Hocke khocke@divcom.com

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

PRODUCTION DIRECTOR

ART DIRECTOR PRODUCTION ASSOCIATE

Doug Stewart

PRODUCTION ASSISTANT

Sokvonny Chhouk

PUBLISHING OFFICES

Remote Tracking, Monitoring and Diagnostic Solutions for Commercial Vessels & Fleets

Jenn Bailey Dylan Andrews

Main Office: 121 Free St., P.O. Box 7438 • Portland, ME 04112-7438 • (207) 842-5608 • Fax: (207) 842-5609

Southern/Editorial Office: P.O. Box 1348 • Mandeville, LA 70470 • Fax: (985) 624-4801

Subscription Information: (978) 671-0444 • cs@e-circ.net General Information: (207) 842-5610

ADVERTISING

ADVERTISING COORDINATOR Wendy Jalbert 121 Free St., P.O. Box 7438 • Portland, ME 04112-7438 (207) 842-5616 • Fax: (207) 842-5611 wjalbert@divcom.com

EASTERN U.S. AND CANADA

EUROPEAN SALES Kristin Luke (207) 842-5635 • Fax: (207) 842-5611 kluke@divcom.com

WESTERN U.S. AND CANADA

PACIFIC RIM SALES Susan Chesney (206) 463-4819 • Fax: (206) 463-3342 schesney@divcom.com

GULF / SOUTH U.S.

SOUTH AND CENTRAL AMERICA SALES Jeff Powell (207) 842-5573 • Fax: (207) 842-5611 jpowell@divcom.com

ATLANTIC / CENTRAL STATES Adam Shaw

ashaw@divcom.com (207) 842-5496 • Fax: (207) 842-5611 EXPOSITIONS (207) 842-5508 • Fax: (207) 842-5509 Producers of The International WorkBoat Show and Pacific Marine Expo www.workboatshow.com

EXPOSITION SALES DIRECTOR Chris Dimmerling (207) 842-5666 • Fax: (207) 842-5509 cdimmerling@divcom.com

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www.workboat.com • JUNE 2015 • WorkBoat 2/20/2015 2:17:02 PM 5/8/15 11:39 AM

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4/30/15 2:13 PM

More on rec boaters vs. commercial mariners

I

felt compelled to reply to WorkBoat’s March story, “Close Calls, Rec boaters are putting commercial mariners on edge.”

First and foremost the waterways belong to all users. In southwest Louisiana, we have a large volume of commercial, fishing and recreational traffic. The Lake Charles Sail & Power Squadron, along with other public agencies, teaches a NASBLA (National Association of State Boating Law Administrators) boater safety class and try to incorporate specific information on the inherent dangers of sharing the waterways with ships, barges and commercial fishing vessels.

We can only make boaters more aware. It’s up to all operators to be vigilant observers of the risks of operating in the waterways that we share.

Continued awareness of waterway risks is everyone’s responsibility, but unfortunately personal responsibility cannot be legislated.

Sheron Faulk Public Relations Officer Lake Charles Sail & Power Squadron Lake Charles, La.

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First LNG-powered container ship in the world is U.S. built

E

very year, car buyers and auto enthusiasts await the release of Detroit’s new models. It’s an exciting moment to see what some of America’s most innovative design and engineering teams can produce. But unlike cars, new models of U.S.-made shipping vessels don’t roll out every year.

From idea to service, new ships are usually 20 years in the making. So you can imagine how excited the maritime community was to see what rolled off the NASSCO (National Steel and Shipbuilding Co.) shipyard line in San Diego in April: the world’s first liquid natural gas-powered container ship.

The launch of this next generation of U.S.-made vessels, commissioned

by TOTE Maritime, was financed in part by a $324.6 million Title XI loan guarantee from the Maritime Administration (Marad). The new 764-foot Isla Bella includes a number of innovative technological advances. The key feature, of course, is that by burning LNG instead of diesel, it will significantly reduce harmful emissions.

The Isla Bella will be joined soon by a companion ship and is expected to enter service between the continental

U.S. and Puerto Rico.

But TOTE is not alone. Nor is Marad putting all of our support for greater sustainability in one basket. This past February, for example, we witnessed the launch of the first of six planned LNG-powered offshore support vessels built for Harvey Gulf International Marine.

From coast to coast, Marad is working diligently with stakeholders to promote adoption of advanced maritime technologies and best practices to reduce costs, minimize the maritime industry’s environmental footprint, and improve long-term sustainability in the maritime industry.

As a nation reliant on waterborne freight transportation, America is moving steadily forward on renewable energy and clean-fuel options while increasing shipping efficiencies that benefit American consumers. And Marad is in the wheelhouse, helping steer a steady course.

Paul “Chip” Jaenichen Administrator Maritime Administration Washington, D.C. Send letters to: MAIL BAG P.O. BOX 1348 Mandeville, LA 70470 workboat@cox.net

www.workboat.com • JUNE 2015 • WorkBoat

5/7/15 11:38 AM

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On the Water

Save your local mariner notices

O

By Joel Milton

Joel Milton works on towing vessels.

He can be reached at joelmilton@ yahoo.com.

ne of the reasons why mariners should read the U.S. Coast Guard’s Local Notice to Mariners (LNMs) each week is so we’ll be informed about events that can affect our operations and safety.

Items contained in LNMs include bridge construction or closures and other infrastructure projects, diving or survey operations, military exercises, boat races, fireworks displays, waterway restrictions or closures, temporary hazards, etc.

The list is extensive.

Once upon a time the Coast Guard physically distributed the LNMs by snail mail. Today they’re distributed electronically, published weekly by each district on the Navigation Center website (www.navcen.uscg.gov/?pageName=lnmMain).

You just download the ones you need and save them for future reference. You can also subscribe.

That’s the easy part. This is where it can get complicated. Today, many of us have to regularly show that we’re practicing due diligence in our

Captain’s Table Mr. Bernstein goes to Washington

W

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.

10

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e all have opinions about how government should work and how our elected officials should represent us. But how many of you have actually taken the time to meet with your representatives and voice your opinion?

Last month, I took part in the Passenger Vessel Association’s annual Congressional Fly-In in Washington, D.C. The group enthusiastically participated in more than 30 prearranged meetings with members of Congress, their staffs and key committee staffs. My daughter Terri and I met with both of our senators from Kentucky where we discussed issues important to the passenger vessel industry and those specific to our business.

Before we took to Capitol Hill, we were briefed by attorney Joan Bondareff of Blank Rome LLP, a prominent law firm with extensive maritime industry and government experience. She provided us with an in-depth look at how Washington works and covered many of the major issues currently facing Congress and the country.

Armed with this information and specific talking points from PVA, we headed to Capitol Hill. Here

administrative procedures. Mariners are subject to internal and external auditing (Ship Inspection Report Program (SIRE) inspections, internal company audits, vetting by clients, U.S. Coast Guard UTV “inspections,” port state control inspections, etc.), and it’s a “show me the money” culture.

Disorganization simply looks bad and hurts your prospects for promotion.

My method of proving due diligence is simple.

I save each weekly LNM for our current operating areas (usually some combination of the 1st, 5th, 7th and 8th Coast Guard Districts) with their proper number in a separate folder for each district, and I keep them on the desktop of our computer.

That way, the LMNs are quick and easy to use and readily available to show to an inspector.

How do you prove that you’re actually reading them and utilizing the information? I just open them in Adobe Acrobat and use the highlighting tool to emphasize anything relevant to us in fluorescent yellow, often leaving the file open as a tab on the bottom of the computer screen. I print only when necessary.

This method recently received a positive review from an inspector. are some of the key topics we covered: • Defend the Jones Act. The maritime industry and Congress must stand together to defend our long-term interests and fight back against attempts to modify the law.

• Endorse a risk-based system for survival craft. Some in Congress would like to institute a one-size-fits-all approach to out-of-water lifesaving for U.S.-flagged passenger vessels. We urged Congress not to go down this path, and continue to let the Coast Guard base such decisions on risk and local operating conditions.

• Provide funding for U.S. ferries.

• Support the Coast Guard’s marine inspection mission. Our strong working relationship with Coast Guard inspectors has contributed to the passenger vessel industry’s excellent safety record.

Without adequate funding, the Coast Guard cannot continue to work effectively with our industry.

• Help ease regulation. The cumulative effect of uncoordinated regulations is a heavy burden for small business. We must take steps to get relief.

My day on Capitol Hill was fascinating and productive. It was a chance to see our government at work and to get our message across.

I encourage you to experience this for yourself.

You will not regret it.

www.workboat.com • JUNE 2015 • WorkBoat

5/8/15 4:14 PM

APRIL 2015 DAY RATES, FLEET UTILIZATION VESSEL TYPE

OSV Day Rates New offshore regs and OSV operators

By Bill Pike

I

n April, the Department of the Interior released two new sets of regulations aimed at ensuring safe and responsible offshore oil and gas development in the wake of the Macondo tragedy and Shell’s 2012 troubled Alaska offshore drilling program.

The first set of regulations is aimed at drilling operations in the Gulf of Mexico. The proposed rule addresses well control with measures designed to improve equipment reliability, building on enhanced industry standards for blowout preventers and technology.

The rule also includes reforms in well design, well control, casing, cementing, real-time well monitoring and subsea containment.

AVERAGE DAY RATES MAR. '15

APR. '15

UTILIZATION

APR. '14 APR. '15 APR. '14

SUPPLY (DWT) The new 1,999 & below $14,613 $ 9,462 $14,830 90% 90% Alaska regu2,000-2,999 $22,828 $18,524 $24,900 100% 68% lations cover 3,000-3,999 $30,924 $27,812 $31,318 100% 88% offshore 4,000-4,999 $30,750 $30,750 $32,000 100% 100% explora5,000 & above $39,644 $35,700 $39,589 100% 100% tion drilling CREWBOATS operations in Under 170' $ 3,835 $ 3,694 $ 4,716 84% 57% the Beaufort 170' & over $ 7,372 $ 6,082 $ 8,010 87% 82% and Chukchi SOURCE: WorkBoat survey of 32 offshore service vessel companies. seas planning areas.

The new regs are a combination of ance with the new regs is not onerous performance-based and prescriptive and is unlikely to slow drilling activity. standards to codify and further deThe new Alaska regs may be beneficial velop current Arctic-specific operafor the OSV market. The provision for tional standards. Specifically, the new prompt access to source control and regulations require operators to submit containment equipment should transregion-specific oil spill response plans, late into more vessels being required have prompt access to source control for standby in case of an accident. and containment equipment, and have a And the requirement to immediately relief rig available to drill a relief well provide a relief rig to drill a relief well in the event of a loss of well control. will require additional OSVs. While The new regulations in the Gulf the benefits may not be overwhelming, should not impact offshore service vesit is clear that Alaska operations will sel owners much. The cost of complirequire more vessels when it resumes.

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5/8/15 4:10 PM

WorkBoat Composite Index Stocks rebound in April

INDEX NET PERCENT COMPARISONS 3/31/15 4/30/15 CHANGE CHANGE Operators 357.47 390.58 33.10 9.26 Suppliers 2812.76 2851.88 39.13 1.39 Shipyards 1810.19 1730.45 -79.74 -4.40 Workboat Composite 1729.69 1762.90 33.21 1.92 PHLX Oil Service Index 190.12 222.58 32.46 17.07 Dow Jones Industrials 17776.12 17840.52 64.40 0.36 Standard & Poors 500 2067.89 2085.51 17.62 0.85

T

he WorkBoat Composite Index gained 33 points in April, erasing the 32-point dip in March. For the month, winners topped losers by a 2-1

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ratio.

Operators rebounded in April, also gaining 33 points, or just over 9%.

The top percentage gainers were all from the oil service sector: Tidewater, Ensco, Transocean and Diamond Offshore. The PHLX Oil Service Sector Index rose a whopping 17%.

Transocean had a solid first quarter, with an adjusted net income of $398 million or $1.10 per diluted share. The company’s fleet revenue efficiency was 95.9% and ultradeepwater efficiency was 97.2%, the highest since mid-2009. The company currently has 10 high-specification ultradeepwater floaters under contract in the U.S. Gulf of Mexico.

However, Terry B. Bonno, senior vice president, marketing, said in the company’s May 7 earnings call with analysts, that the market continues to be “very challenging.”

“The low commodity price environment, corresponding reduction in customer budgets, and overcapacity in the global floater and jackup fleet are negatively impacting utilization and pricing in every market around the world,” he said. “There’s currently very little visible 2015 demand, and over the last quarter only a few fixtures have been executed in all asset classes.

“Despite the unfavorable market conditions, we do see ... opportunities emerging for 2016 and 2017 programs in the U.S. Gulf of Mexico, South America, West Africa, the Black Sea and India. Indeed, recent discoveries in Romania, U.S. Gulf of Mexico, and India are increasing the likelihood that we may see incremental rig demand emerge from these regions in the medium term.”— David Krapf STOCK CHART For the complete up-to-date WorkBoat Stock Index, go to: www.workboat.com/ workboat-index.aspx

www.workboat.com • JUNE 2015 • WorkBoat

5/8/15 4:10 PM

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Inland Insider China is the big game changer for cargo

T

he domestic energy revolution could be a game changer for freight transport providers that are heavily energy dependent like rail and barge.

But there is another significant revo-

lution that has been playing out for the past three decades that has redefined many world economies, particularly for commodities such as coal, iron ore, copper, etc.

I am talking about China’s economic transformation from an undeveloped society to a world-class manufacturing, technology and trading partner. In the last 30 years, China has grown into a major consumer of raw materials to feed its industrial expansion and world

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w w w. d av i d c l a r k . c o m

trade in such items as steel, coal, electronics, etc.

The world responded to China’s growing appetite for raw materials and commodities by making investments to significantly exBy Kevin Horn pand production capacity. China has seen double-digit and high single-digit annual economic growth for over two decades. Until recently, the strong growth seemed endless and unstoppable, which is precisely the problem.

China’s economic growth engine is slowing and there is a world supply chain out there built to feed its continually growing demand. The result is that we are now seeing world surpluses of raw materials and commodities that previously served the steadily growing China market. Moreover, there is no other developing nation that’s ready to step in and take up the slack from China’s slowing growth and consumption.

We are now seeing a global oversupply of production capacity as well as raw materials and commodities that are now chasing smaller markets. Prices are depressed for these sectors and likely will remain that way for a long time, perhaps a decade, depending on how quickly higher cost producers and their capacity are eliminated.

The barge industry will only be marginally affected by these developments, but this is hardly a rosy picture for U.S. raw materials and commodity exporters in the global market.

Together with a strong dollar, the U.S. should expect very competitive export markets for commodities such as coal. In these instances the barge industry will be negatively affected.

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

www.workboat.com • JUNE 2015 • WorkBoat

4/22/15 1:42 PM

5/8/15 4:10 PM

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Insurance Watch Can you insure your boat with a yacht policy?

C

lients often ask if they can insure their commercial vessels on yacht insurance forms because they’ve

heard that those policies have broader coverage. It’s a good question, and the answer is a firm maybe.

Just what is a yacht form? The insurance industry uses the law of large numbers to make money by insuring as many of what the numbers tell them to insure. How do you get a large number of boat owners to buy your insurance?

You make the policy as generic as possible and throw in some goodies like personal effects coverage, pollution

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liability, uninsured boater coverage and towing assistance.

These all sound great, but personal effects are already covered by your

By Gene McKeever homeowners insurance.

Pollution coverage is liability only and most personal boats carry very little fuel and literally no heavy oil products so the insurance industry is willing to take that chance. Uninsured boater insurance? I have never seen a single claim made on that coverage.

This is a fact: Yacht policies take all or at least most vessels that apply for coverage. This one-size-fits-all coverage approach allows insurers to fill their coffers.

Now let’s look at the commercial hull and P&I forms for real commercial vessels. First of all, the commercial hull insurance form is actually a separate policy from the liability form or Protection and Indemnity (P&I). Is the hull form a take-all type of insurance?

No. Each vessel is underwritten by a knowledgeable ocean marine insurance underwriter who asks for a lot of documentation while considering if the hull is a good risk.

The types of vessels and what they do for work are varied.

Then, depending on what equipment is on the vessel, the policy may need to be what’s called “manuscripted” to add or take away coverage that needs to apply correctly.

The same underwriting treatment goes for P&I. The policies need to be tailored to the exact work of the vessel, the crew and any others aboard the vessel.

Cargo is another consideration.

Gene McKeever is a marine insurance agent with Allen Insurance and Financial. He can be reached at 800-4394311 or gmckeever@allenif.com

www.workboat.com • JUNE 2015 • WorkBoat

5/8/15 4:10 PM

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4/30/15 2:13 PM 2/26/15 8:26 AM

Legal Talk When the Coast Guard comes calling

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asualties are inevitable in the marine industry. Accidents and injuries to crewmembers, vessel collisions, groundings and pollution incidents occur on a daily basis. Except for the most minor events, all these incidents must be reported to the Coast Guard.

When a maritime casualty is reported, the Coast Guard must conduct an investigation. The nature and extent of the investigation depends on the severity of the casualty. The Coast Guard’s role may be limited to the collection of information, or it may send personnel to visit the vessel, interview witnesses and conduct more in-depth inquiries to determine the cause of an accident and prevent repeat incidents. The primary goal of the Coast Guard is to promote

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safety, and its investigations are usually remedial, intended to address legal violations and prevent future occurrences.

The Coast Guard has law enforcement authority and can issue subpoenas, conduct searches and make arrests. The outcome of a Coast Guard investigation depends on the nature and severity of the offense. The agency will pursue license revocations or civil penalties for safety and regulatory violations that threaten safety at sea. In the most serious cases, a Coast Guard investigation may be referred to the U.S. Department of Justice for potential criminal prosecution.

If mariners or operators finds themselves the subject of a Coast Guard investigation, it’s best to cooperate with the investigating personnel. However, because the results of the investigation can have serious implications on one’s livelihood or business, prompt guidance from legal counsel can be a critical step in making sure your rights are

not compromised.

This is particularly important if the Coast Guard has identified you as a party-in-interest.

This designation preserves your right to legal representation during the course

By Daniel J. of an investigation Hoerner and during any follow-up formal proceedings.

While accidents and violations are an inseparable part of the industry we work in, safety and legal compliance can be achieved by the industry and Coast Guard working together.

Daniel J. Hoerner is a maritime attorneywith Mouledoux, Bland, Legrand &Brackett LLC. He can be reached at 504-595-3000 or dhoerner@mblb.com.

www.workboat.com • JUNE 2015 • WorkBoat

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COMPILED AND EDITED BY KEN HOCKE, SENIOR EDITOR

WorkBoat file photo

NEWS LOG

Hawaii Superferry ran into a number of environmental problems in Hawaii before it went bankrupt.

Hawaii may revisit interisland ferry service

H

awaii may take another stab at interisland ferry service — perhaps with a system similar to Washington state’s.

Six years after the star-crossed Hawaii Superferry shutdown, state senators in April approved a resolution asking the Hawaii Department of Transportation to look into the prospects for re-establishing ferry service.

“At the very least, we owe it to all Hawaii residents to revisit the feasibility of a ferry system,” Sen. Michelle Kidani, who sponsored the measure, said. “I believe that the Superferry was a wonderful asset for our communities.”

The resolution, which cited Washington State Ferries — the largest in the U.S. — as well as systems in Alaska, New Zealand, and Australia/ Tasmania, said the study should em20

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phasize compliance with the state's environmental protection laws. The report also should consider costs, revenues, financing options, harbor infrastructure and vessel design and capacity and be completed before the next legislative session.

Hawaii DOT director Ford Fuchigami said in written testimony that his agency supports the resolution’s intent but doesn’t have the money to do the study. An environmental impact statement alone would cost about $1 million.

He also said a state-operated system wasn’t financially feasible now, but a private company might operate the service provided fuel costs are low, there is a good mix of passenger and vehicle rates, “and winter sea conditions are factored in developing the business plan.”

Hawaii Shippers Council president Michael Hansen said his organization supports the broad intent of the resolution, but he suggested the state handle only port and terminal facilities and not “the highly specialized role of vessel owner and operator, which the private sector can accomplish much more efficiently.”

He also raised issues such as regulatory approval and coastwise trade laws, and noted the council formed an interisland ferry working group last October.

Hawaii Superferry began operations in 2007 with one of two 350', 44,000hp, aluminum catamarans built at Austal USA in Mobile, Ala., with $140 million in Title XI loan guarantees.

On its first trip to the island of Kauai, the Alakai faced protesters who blocked the entrance to Nawiliwili

www.workboat.com • JUNE 2015 • WorkBoat

5/6/15 3:38 PM

NEWS BITTS KIRBY’S RECORD PROFIT STREAK ENDS

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ncertainty over crude oil production, prices and barge utilization have put the brakes on Kirby Corp.’s fouryear run of record profits, causing the largest U.S. inland tank operator to release a cautious outlook in its first quarter earnings report in April. But Kirby officials say that this does not represent a collapse in the oil transport market that was seen in 2008-2009, and that the situation will improve once crude prices stabilize and the expected additional barge volumes from refined products and petrochemicals come on line.

Specifically, Kirby said that revenues in its marine transportation services were down 4%, to $420 million, from the first quarter in 2014, inland term contracts renewed flat in the first quarter, and its diesel engine services business is operating in a “very challenging environment” due to softness in the OSV activity in the Gulf, necessitating a 40% cut in the workforce. — Pamela Glass

Harbor. After that incident, the boat ran only between Honolulu and Maui.

In 2008, the vessel went into drydock for repairs to its auxiliary rudders.

While there, a tug moving the ferry lost power, damaging the ferry's hull and requiring an extended drydock stay.

In 2009, the Hawaii Supreme Court ruled that legislation permitting the Alakai to run without a completed envi-

ronmental review was unconstitutional.

Hawaii Superferry ceased operations, and the company declared bankruptcy a few months later.

In 2012, the Alakai and the Huakai, which can carry up to 836 passengers and 282 cars or 65 cars and 28 40' trucks, were transferred to the Navy by the U.S. Maritime Administration for $35 million. — Dale K. DuPont

Opposition grows to Shell’s Seattle plans

T

he Port of Seattle’s interest in being the staging area for Shell’s Arctic drilling fleet is coming under a lot of fire.

The port commissioners’ decision in February to lease Terminal 5 to Foss Maritime for the specific use of Shell’s offshore equipment has been challenged by environmental groups as well as the city of Seattle. In early May, the city’s Department of Planning and Development, which has authority over the port property, determined that on-site moorage and maintenance of drilling equipment requires an additional use permit. Terminal 5 is currently permitted as a cargo terminal.

Seattle Mayor Ed Murray strongly opposes the use of port property for Shell’s operations. In a statement released following the announcement that an additional permit would be required, Murray said, “While requiring a new permit may not stop the port’s plans, it does give the port an opportunity to

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‘At the very least, we owe it to all Hawaii residents to revisit the feasibility of a ferry system. I believe the Superferry was a wonderful asset for our communities.’

Hawaii state Sen. Michelle Kidani pause and rethink this issue.”

Murray’s objections are environmental. “This is an opportunity for the port and all of us to make a bold statement about how oil companies contribute to climate change, oil spills and other environmental disasters, and reject this short-term lease.”

Other opponents to Shell’s presence in Seattle were planning public demonstrations, notably a “Festival of Resistance” in mid-May during which a flotilla of “kayaktivists” and other boaters were to muster in Elliott Bay near Terminal 5 to demonstrate their opposition under the banner of “sHell No!” The Coast Guard has established temporary safety zones and a Voluntary First Amendment Area near Terminal 5 for the planned in-water demonstrators.

A 500-yard safety zone will be in place around the Noble Discoverer, Blue Marlin, Polar Pioneer, Aiviq and other associated vessels while underway. A 100-yard safety zone will be in place

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The Island-class cutter Matagorda was one of eight 110-foot cutters to be stretched to 123'. The cutter was taken out of service in 2006.

Alaska politicians are up in arms about the opposition to Shell’s intentions to drill again this year. Resolutions in both houses of the Alaska Legislature urged Seattle and the state of Washington to stop interfering with economic development in Alaska.

Foss and Shell planned to begin Seattle staging operations in mid-May. — Bruce Buls

Date set for Bollinger’s false claims trial

T

he Coast Guard has to hang on to three out-of-service cutters at the heart of the federal case against Bollinger Shipyards over the stretching of the vessels until November.

U.S. District Judge Sarah Vance, New Orleans, set trial for April 2016 in the dispute in which the U.S. Justice Department alleges that the Lockport, La., yard lied about the hull strength of

U.S. Coast Guard

the Island-class patrol boats. The vessels, which Bollinger originally built under a contract awarded in 1984, were stretched from 110' to 123' at a cost of $80 million under the Coast Guard’s Deepwater project and then deemed unseaworthy. The judge’s recent scheduling order set specific times and limits

including: the trial will last eight days, each side will have 23 hours to present its case, each side can call only three expert witnesses, and they must meet with an outside mediator this July.

In addition, the vessels must be inspected by Nov. 6. All eight stretched Island-class cutters were decommis-

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sioned in 2007. In 2010, two were transferred to Naval Surface Warfare Center Dahlgren Division and three others were scrapped at the Coast Guard yard in Baltimore, a spokesman said. The remaining three are at the Maryland yard until November, “after which the Coast Guard may dispose of the vessels,” the spokesman said. Of the original 49 boats in the Island-class,

41 are still in service.

The U.S. filed suit in July 2011 under the False Claims Act, seeking $38.6 million in non-contract damages, which could be tripled to total nearly $120 million. Bollinger, now majority owned by Galliano, La.-based Edison Chouest Offshore, has declined in the past to comment on an open case.

When the suit was first filed, the yard

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t is small compared to the massive projects predicted just a few years ago, but Deepwater Wind’s fiveturbine, 30-megawatt project in Rhode Island state waters is first out of the gate for the East Coast offshore wind energy industry.

Gov. Gina Raimondo and the state’s congressional delegation gathered with Deepwater Wind officials in May at Quonset Point to mark the start of work. Gulf Island Fabrication of Houma, La., is fabricating bases for the turbines, which will stand off Block Island 12 miles from the Rhode Island mainland when complete in late 2016.

4:01 PM As the host community, Block Island will get most of its power from the turbines, cutting islanders’ power costs 40% by eliminating most of the one million gallons of diesel fuel needed to run generators every year. A cable will deliver the rest of that power to the mainland grid.

The project is being financed with $290 million from Societe Generale SA and KeyBank NA. Providence, R.I.-based Deepwater Wind is principally owned by the D.E. Shaw group, a New York investment firm that is putting up another $70 million.

After all the false starts, offshore wind boosters hailed the Rhode Island startup.

“The Bureau of Ocean Energy Management has designated a wind management area off the coast of Rhode Island and Massachusetts that has the potential to generate as much as 9,000 megawatts of clean wind power,” Mary Anne Hitt, who runs the Sierra Club’s “Beyond Coal” energy campaign, wrote in the Huffington Post April 28.

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5/8/15 4:59 PM

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Whether you’re powering an offshore craft, a sea-worthy container vessel or an on-board generator set, you won’t find a better source for reliable marine engine power than Caterpillar. In addition to a wide selection of marine engines that range from 205 to more than 6,500 bhp, Louisiana Cat offers: • Factory trained technicians • Fully equipped facilities • Factory authorized warranty repairs • Performance analysis reports • Preventive maintenance programs • Electronic diagnostics • 24-hour emergency parts and service Call our toll free number below to learn more about our Caterpillar products and services.

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4/30/15 2:13 PM 7/17/2014 12:54:09 PM

Deepwater Wind

“If we are able to harness that wind, it means power for 700,000 homes and 43,000 offshore wind-related jobs on the East Coast by 2030.”

Deepwater Wind’s start and Virginia’s winning of federal permits for an offshore pilot wind project puts the two states out in front of other East Coast states. Beset by a decade of intense local resistance, the Cape Wind project for 130 turbines off Massachusetts suffered a crippling blow when two of its big potential power customers backed out of their deals in January.

Deepwater Wind has a joint venture, Garden State Offshore Industry, to develop 350 MW of wind power east of Cape May, N.J., with local utility Public Service Electric & Gas. The venture began with preliminary approval from New Jersey’s Board of Public Utilities in February 2014 to begin environmental studies.

The consortium Fishermen’s Energy has a federal Department of

Marking the start of work on the Deepwater Wind project are (left to right) Rhode Island Gov. Gina Raimondo, Deepwater CEO Jeffrey Grybowski, U.S. Sen. Jack Reed, D-R.I., Congressman David Cicilline, D-R.I., and U.S. Sen. Sheldon Whitehouse, D-R.I.

Energy commitment for $47 million to support a Block Island-sized project of five turbines in state waters off Atlantic City, N.J. However, state utility regula-

tors withheld approval of that plan, saying it’s a bad deal for ratepayers, and a state appeals court is reviewing the decision. — Kirk Moore

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5/6/15 3:38 PM

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4/30/15 2:14 PM

Inland Overnight Cruising

Cruise Control More boats and companies are targeting the inland overnight cruise market.

By Dale K. DuPont, Correspondent

U

n-Cruise Adventures’ 88-passenger S.S. Legacy is operating on the Columbia Snake River System this year from April through November rather than just the spring and fall as in the past — a testament to the popularity of the itinerary. And next year it will offer eight tours focusing on wineries, up from four this year.

The Seattle-based company, which started in 2000, now is competing with three other overnight cruise vessels on the northwest rivers. “There’s certainly been more demand,” said CEO Dan Blanchard, noting that his 192'×40' vessel can make 15 knots on a good day with no headwind.

Across the continent, Blount Small Ship Adventures originally scheduled two 16-day trips from Rhode Island to Chicago. Then they decided to add two more, and all four are sold out.

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“It’s a cool American bucket-list trip a lot of people love to do,” said Nancy Blount, president of the Warren, R.I., company.

With new boats and refurbished older ones, allinclusive packages, winery and bourbon distillery tours and more, operators are increasingly betting big on a U.S. rivers and waterways renaissance that really ramped up three years ago. What’s more, global behemoth Viking River Cruises, which had been mulling a move for a while, earlier this year announced it would be dipping its vessels into U.S. waters, mindful of all the U.S. build, crew and ownership requirements.

Existing operators say they welcome the new rival, figuring they’ll all benefit from its marketing muscle even if Viking might be priced a bit lower than others.

Peter West Carey

There’s more demand for Un-Cruise Adventures’ 88-passenger S.S. Legacy.

www.workboat.com • JUNE 2015 • WorkBoat

5/8/15 11:49 AM

American Cruise Lines

“They will be a formidable competitor,” said Rod McLeod, a respected cruise industry veteran who’s worked for major foreign-flag lines as well as an early version of the Delta Queen Steamboat Company. “They are a prolific advertiser, and they have a strong base of cruisers who have cruised with them before in Europe.

“The globalization of the cruise industry represents enormous opportunities for operators at every level,” he said. “As a destination market, the U.S. is relatively untapped.”

While the bulk of the travelers are North Americans, U.S. cruises increasingly attract passengers from Western Europe, Australia, New Zealand and South America.

And turmoil elsewhere in the world might make the U.S. even more attractive.

“For convenience reasons, a lot of people are staying in the U.S. and Canada,” said Cindy Anderson, owner

American Cruise Lines recently christened the 150-passenger paddlewheeler American Eagle, which will operate on the Mississippi River

of USA River Cruises, a Vancouver, Wash.-based travel agency, who’s seen “incredible growth” in demand for river travel. “A lot of Baby Boomers are reaching the age where they don’t want to go overseas.”

She expects Viking’s U.S. products to sell out quickly. “We already have

past passengers on the waiting list,” she said. But new boats aren’t necessarily more of a draw than older ones with a history. “It’s a mixed bag.”

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www.workboat.com • JUNE 2015 • WorkBoat

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5/6/15 11:57 AM

Inland Overnight Cruising

DELTA QUEEN TO SAIL AGAIN?

T

The Delta Queen Steamboat Co.

he Delta Queen is sitting at a private slip in Houma, La., being worked on and waiting to see if she gets congressional permission to sail.

“Our priority is to get the legislation done and get her cruising again,” said Cornel Martin, former company executive who heads a group of investors that bought the vessel earlier this year. “Our goal is to protect and preserve her.”

A bill (H.R.1248), sponsored by Rep. Steve Chabot, R-Ohio, and 15

The Delta Queen, tied up in Houma, La.

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others, would exempt old vessels operating on inland waters from current fire hazard restrictions if the owners annually renovate at least 10% of the areas not made of fire-retardant materials. Built in 1926, the National Historic Landmark has a steel hull and a wood and steel superstructure. Kept alive with a series of exemptions, she stopped sailing in 2008 when Majestic America Line shut down.

The bill has been referred to committee, where there is no current plan for a vote, a spokesman said. Similar legislation passed the last session in the House on a 280-89 vote but died in the Senate. A Chabot spokesman said they are cautiously optimistic a leadership change there will bolster its chances.

Meanwhile, “we’re weatherizing the boat,” Martin said, since she was laid up a long time as a dockside hotel in Chattanooga, Tenn. “The hull’s in perfect shape.”

Martin said they need $1.2 million to $1.5 million for the work, with funds coming from the principals and donations. Another $3.8 million is needed for the marine side, which will come from commercial financing if the legislation becomes law.

If it doesn’t, they would consider operating her as a dockside hotel, but that’s “Plan B,” Martin said.

— D.K. DuPont

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to a 460-passenger paddlewheeler.

American Cruise Lines (ACL) recently christened the 150-passenger paddlewheeler American Eagle, which will operate on the Mississippi River — the most popular of all lines’ itineraries. Guilford, Conn.-based ACL also plans a new fleet of 200-passenger riverboats with “a more contemporary design,” said Charles Robertson, who heads ACL and Chesapeake Shipbuilding in Salisbury, Md. They might sail waters such as the Sacramento, Missouri and Potomac rivers, with the first vessel due out in 2017.

“Business has been good,” he said.

“Our load factors have been high.” And the market outlook is “pretty good, obviously, because I’m building more vessels.”

American Queen Steamboat Co.’s (AQSC) American Queen underwent a $2 million refurbishment for its fourth season. They’re planning more sailings to Nashville, Tenn., and Chattanooga,

David Krapf

Inland Overnight Cruising

Blount Small Ship Adventures’ Grande Mariner, docked in Chicago.

Tenn. “We were oversubscribed on Nashville,” said Ted Sykes, president and COO of the Memphis, Tenn.-based line that also operates the American

Empress on the Columbia and Snake rivers. Next year, they’re offering a grand voyage — back-to-back cruises from Minnesota to New Orleans then

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back to Minnesota. “We had several people who did that on their own,” he said.

Demand is well ahead of where they were the same time last year, and they’re doubling their regional sales force from five to 10, he said. Cruise prices for 2016 are being adjusted to match demand and the seasons.

Viking’s entry into the market is “a reaffirmation of what we set out to do four years ago,” he said. The impact will be “incredibly positive.”

The Delta Queen’s new owners are doing some maintenance work and hope to have the historic vessel sailing again next year. (See sidebar, page 32.)

Viking said it would launch six Mississippi River vessels over three years starting in late 2017 from its U.S. homeport in New Orleans. The 300-passenger vessels, expected to cost $90 million to $100 million each, will be U.S.-built, -crewed and -owned by Tennenbaum Capital Partners, a Los

Angeles-based investment management firm, and time-chartered to Viking, the company said.

Switzerland-based Viking, which has 60 vessels that cruise rivers in Europe, Russia, China and Southeast Asia, would not comment on its plans beyond the original announcement.

Operators say Gulf or East Coast yards are the most logical ones to build Viking’s vessels given the proximity to the Mississippi.

“We’ve been working with them, and we think it’s a good project for us,” said Dan Gaiennie, vice president of business development and engineering for Leevac Shipyards LLC, Covington, La. Requests for bids went out in January and were due back mid-March, he said.

“Any number of yards could do it, including ourselves,” Robertson said.

“We’d be happy to do it.”

Operating cost differentials for U.S.-

'Business has been good, our load factors are high, and the market outlook has been pretty good, obviously, because I’m building more vessels.'

Charles Robertson American Cruise Lines and foreign-flag vessels are mainly in the higher costs for U.S. hotel staff — waiters and room stewards. In addition, the ships are smaller and fares often include amenities such as drinks and shore excursions. Seven- to nine-day cruises can start at several thousand dollars.

Travel agent Anderson tells passengers that even though the prices are higher, it’s a more intimate trip “and you’re supplying U.S. jobs” and helping the economies of U.S. ports.

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Ballast Water Test Barge

Honorable Discharge

Barge puts ballast water treatment systems to the test.

By Kathy Bergren Smith, Correspondent

T

he Port of Baltimore markets itself as the farthest inland seaport on the East Coast, touting its location close to the manufacturing centers of the Midwest.

But the port is also located in the center of the research and governmental hub surrounding Washington, D.C., on the ecologically diverse Chesapeake Bay. This makes it a natural location for marine research.

The partnership between the environmentally progressive Maryland Port Administration (MPA) and local research institutions has yielded many valuable projects, but perhaps none have such far-reaching consequences to the shipping industry as what is affectionately known as the “MERC barge.”

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TEAM EFFORT On a quiet pier on the Patapsco River, scientists from the University of Maryland Center for Environmental Science (UMCES) work with colleagues from the Smithsonian Institution and other academic research facilities to test new technologies for treating ship’s ballast water. This team is part of the Maritime Environmental Resource Center (MERC), a collaboration supported by the MPA, the Maritime Administration, U.S. Coast Guard and other maritime interests. Their work will have a big effect on shipbuilding as the fight against invasive species that “hitchhike” in ballast tanks of ships becomes codified into regulation.

“Invasive species can be devastating to the environment and the economies of waterways,” said Gregory Ruiz, a leading expert on the subject at

MERC

The project began with the conversion of a retired oil barge into a 150'x50'x8' platform, with two 310-cubic-meter tanks that mimic ballast tanks on a ship.

www.workboat.com • JUNE 2015 • WorkBoat

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Kathy Bergren Smith

to regulate discharges from ships 300 gross tons and above. Smaller vessels, less than 79', were excluded. EPA’s ballast water management regulations are meant to complement Coast Guard requireDuring pumping, all water is sampled ments that were drafted for numbers of live plankton. by congressional order.

Indeed, much of the language relating to ballast water manbefore shipping lines spend millions agement in the VGP is identical to the of dollars to install them. So far, about Coast Guard regulations.

50 systems have been approved by The Clean Water Act is meant to countries to meet the IMO convention, restrict the discharge of pollutants into but the U.S has approved none. That is U.S. waterways from facilities like where the MERC barge comes in. power plants and sewage treatment plants. Applied to shipping, a new TEST BARGE set of complex variables emerge. The The Coast Guard has approved pollutants are now potential invasive MERC as part of the first independent species and the discharges are wildly team for evaluating the efficacy of variable. Ships travel around the world proposed ballast water management picking up water with all sorts of difsystems before they receive Coast ferent organisms, salinity levels, temGuard certification for use on ships. A peratures and turbidity. Thus, a simple neutral third party made up of scienwater treatment system may work in tists carefully test the proposed ballast some conditions but not others. systems.

Engineers are creating new technoloThe MERC test barge project began gies to treat ballast water onboard ships with the conversion of a retired oil and meet the impending regulations. barge. Dr. Mario Tamburri, the MERC But someone needs to independently team leader, consulted with Seattleverify if any of these systems work based Glosten Associates to create a one of a kind, mobile testing platform.

Baltimore-based McLean Contracting cut the oil barge down to create a 150'×50'×8' platform. On deck, two 310-cubic-meter tanks mimic ballast tanks on a ship.

“People ask why we didn’t just use tanks of the existing barge,” said Tamburri. “We need a highly controlled environment so we designed these tanks with all the structure on the outside, unlike a tank in a barge, so we can get every drop of water out of it.”

Developers and vendors who feel that they have a viable solution to the ballast water treatment problem install their systems on the barge. Two 310-cubic-meter-per-hour pumps pump George Smith, a Smithsonian scientist, acts as the operations water from Baltimore Harbor and other manager on the barge. Smith and others take great care to locations in the bay straight into one correctly collect samples of the water as it is pumped. tank — untreated water — and at the

www.workboat.com • JUNE 2015 • WorkBoat

WB_Focus_BallastWaterBarge_LINO.indd 37

Kathy Bergren Smith

the Smithsonian. For example, he said the zebra mussel, which has wreaked havoc in the Great Lakes, probably arrived by “hitchhiking” in a ship’s ballast tank. The mussel (in nearly microscopic larval form) was sucked into a ship’s tank as it took on ballast in a distant port and then arrived in the Great Lakes when the ship discharged its ballast.

In an effort to address the worldwide invasive species problem, the International Maritime Organization (IMO) drafted a convention in 2004 and the Coast Guard established discharge regulations in 2012 that require treatment of water onboard ships to kill off the plankton found in ballast water. Many countries have adopted the IMO convention, and it is just a matter of time until all ships will be required to treat their ballast water before discharge.

The Environmental Protection Agency (EPA) Vessel General Permit covers 27 incidental discharges including deck wash, gray water and, most importantly, ballast discharge. In fact, it was ballast water discharge that drove the EPA to get involved in maritime matters in the first place. After the California federal district and appeals courts ruled that the EPA’s exclusion of vessels from the Clean Water Act was unauthorized, EPA created the permit

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Ballast Water Test Barge independent data source for the U.S. Coast Guard to determine which treatment systems will be certified.”

In order to pass muster, a treatment system must meet these standards five times in a row under three different salinity conditions. The barge is towed to the mouth of the bay, essentially in the Atlantic Ocean, for one set of tests.

The candidate system is then installed and tested onboard an actual ship over the course of six months.

Katherine Ziombra, a water quality specialist from At the end of the day, treatUniversity of Maryland Center for Environmental ment systems that pass the Science, tests samples.

MERC tests will be approved by the Coast Guard and will become the industry standard. on the very cutting edge of technolThe scientists on the MERC team do ogy that will protect the future of our not take their positions lightly. waterways,” said Katherine Ziombra, “It is very rewarding to work a UMCES water quality and quality alongside this diverse team of experts control specialist.

Kathy Bergren Smith

same time, into a second tank after it runs through the treatment system being tested (treated water). It is held for two to five days and then is pumped out of both tanks. During pumping, all water is sampled for numbers of live plankton.

“We take great care to correctly collect samples of the water as it is pumped,” said George Smith, a Smithsonian scientist who acts as the operations manager on the barge. Samples are then handed off to specialists from the MERC team who work quickly to identify the various types of plankton in both the treated and untreated water.

“This team is a collaboration of dedicated, highly skilled professionals,” said Janet Barnes, a UMCES scientist and the program’s coordinator. “We have biologists, chemists, toxicologists, and engineers working to meet very exacting quality-control standards that are on par with medical or pharmaceutical research, because we are the

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Towboats/Barges

Newbuild Downshift?

Construction of towboats and barges continues, but is expected to slow.

By Ken Hocke, Senior Editor

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A

fter several years of record revenues for many barge operators, mainly in the liquid market, a speed bump has finally emerged on the inland waterways.

Coal shipments are down, raw materials for domestic steel have dwindled, and the oversupply of domestic crude oil is keeping some people awake nights. And things could get worse before they get better.

“We still need to take a few body blows for coal,” said Sandor Toth, publisher of the inland waterways market newsletter River Transport News. “We’ve taken body blows already for crude oil.”

In early May, the price of oil topped $60 bbl. for the first time since December, but crude stocks remained high. “I follow this closely and crude

stocks remain way up week after week,” said Toth.

“I guess everybody is holding back waiting to sell.”

CAUTION FLAG In spite of the problems facing the inland barge industry, construction of barges and towboats has remained healthy over the past year. Some of the new vessels are part of contracts that were signed before the price of oil went south, though not all of the new towboat construction was targeted at the oil market. Still, over the next 12 months, experts expect new towboat construction to slow.

The number of new tank barge deliveries in 2014 hit an all-time high of 344, an increase of eight over 2013’s 336, a 2.4% increase, according to RTN. Because of a rise in orders

Gulf Coast Shipyard Group

30,000-bbl.-capacity barges continue to be the most popular inland tank barge size on order but 10,000-bbl. barges are gaining in popularity.

www.workboat.com • JUNE 2015 • WorkBoat

5/8/15 12:50 PM

Horizon Shipbuilding Inc.

New 80' towboat from Horizon Shipbuilding for Florida Marine Transporters.

quarter. Consolidated revenues for the 2015 first quarter were $587.7 million compared with $589.2 million a year earlier. The company said that demand across most products Kirby hauls was still at healthy levels. However, the “decline in crude oil prices and anticipated decline in production has put some pressure on industrywide utilization and pricing,” David Grzebinski, Kirby's president and CEO, said in a statement accompanying the first quarter

Horizon Shipbuilding Inc.

for 10,000-bbl.-capacity barges, the industry saw a drop in total capacity for new bottoms. Though 30,000-bbl.capacity barges continue to be the most popular size on order, 10,000-bbl. barges are gaining in popularity. In 2013, 91 10,000-bbl. barges were built as compared to 117 in 2014, according to RTN. Toth said he did not expect the record-breaking building trend of the last three years to continue in 2015. “I think it’s going to be softer,” he said.

“We’ve been on an incredible run.”

The leaders in the numbers bought and built categories in 2013 retained their top positions in 2014 — Kirby Corp., Houston, ordered the most, 61, and Trinity Marine Products, Madisonville, La., built the most, 148, according to RTN. Toth couldn’t say how much of an effect the drop in the price of oil would have on barge deliveries going forward because of the uncertainty of oil prices.

“I honestly don’t know,” he said.

Kirby saw net earnings for the first quarter ended March 31 of $1.09 per share, the same as the 2014 first

Aerial photo of Horizon Shipbuilding with three towboats under construction for Florida Marine Transporters.

INLAND PORT BETS ON CONTAINER ON BARGE

Paducah Riverport

T

he concept of transporting goods via container on barge along the inland waterways system has been tried in the past. The idea seems like a can’t miss proposition, but each attempt has ended in failure.

In Paducah, Ky., the Paducah-McCracken County Riverport Authority thinks that the time has finally come for intermodal river transportation. In fact, they’ve put money on it. The Paducah Riverport has invested more than $4 million on a new 200-ton Linden Comansa flat-top tower crane, the largest in North America. It has a lift capacity of 53 tons up to 100' from the tower, and a boom that stretches 250', which enables the crane to work two barges at once.

“When you look at a commodity like coal and compare it to moving 54 to 72 containers to Paducah in the same amount of time, well the coal wouldn’t pay nearly as much,” said Ken Canter, Riverport’s executive director. “The Panama Canal expansion, we believe, is going to put more cargo on the river system.”

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WB_VR_Towboats_LINO.indd 41

In March, Ingram Barge Co. and Riverport tested the logistical viability of container-on-barge transport. The port’s new crane loaded empty intermodal containers onto an Ingram barge using a container handling attachment donated by Greenfield Products. Ingram’s 68'x26', 1,600-hp towboat Miss Shirley transported the barge and the containers to the Port of St. Louis and back to Paducah for unloading. The test was a success, officials said.

“Currently our nation’s highways and railways are operating near full capacity, while our inland waterways are vastly underutilized,” Dan Mecklenborg, Ingram’s senior vice president and chief legal officer, said in a prepared statement on the test run. “We know there is substantial room to grow in transporting goods on the rivers with minimal investment.”

A standard jumbo hopper barge can accommodate up to 81 empty or 50 loaded TEUs (20-foot equivalent units), or 36 empty or loaded FEUs (40-foot equivalent units). A towboat on the Mississippi River from St. Louis to New Orleans can push tows of up to 40 barges, which is 3,240 empty or 2,000 loaded TEUs or 1,440 empty or loaded FEUs. “When you look at the labor problems the West Coast ports are having and the problems with the railroads, why would you want to fool with that when you can bring the cargo this way?” Canter asked rhetorically. — K. Hocke

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Towboats/Barges WorkBoat’s latest annual Construction Survey published in March, there were 68 new towboats and pushboats under contract, under construction or recently delivered over the 12-month period between March 2014 and February 2015, compared to 61 the year before.

Florida Marine Transporters (FMT), Mandeville, La., has signed multiple boat contracts with several shipyards over the past decade. One of those yards, Horizon Shipbuild-

Ken Hocke

results. “Inland term contracts renewed essentially flat during the quarter, but we are experiencing slight negative rate pressure in the second quarter and expect this to continue while the market absorbs any excess equipment.”

Kirby’s inland marine transportation business maintained tank barge utilization in the 90% to 95% range.

Meanwhile, new towboats and pushboats continue to hit the market at a steady pace. In fact, according to

New fleeting towboat for Carline Companies features Z-drive propulsion.

ing, Bayou La Batre, La., recently delivered the second of three 2,100hp, 80'×33'×10'6" towboats, the Chip Steibing, to FMT as part of a contract awarded in 2013. The new towboat will be used on the intracoastal waterways and inland rivers. Horizon has also delivered 120' and 140' towboats to FMT during the past eight years.

Travis Short, Horizon’s president and general manager, said the FMT contracts have provided the capacity to “take the company and its employees to a higher level of capabilities and confidence in our ability to deliver some of the finest towboats on the river.

Shipyards need customers to survive in our industry. However, shipyards need partners like Florida Marine Transporters to prosper.”

The Chip Steibing is powered by twin Caterpillar 3508C diesels, each rated at 1,050 hp at 1,600 rpm. Three John Deere 4045 engines power three 99-kW, 208 VAC, 60 Hz, generators for service power needs.

Short said he sees the multiple boat contracts giving way to smaller contracts. “I see multiple orders decreasing and the stronger companies adding new vessels, but at a pace of one to two vessels at a time,” he said. “As a builder I am appreciative of what the brownwater business has brought to our company but see inland operators taking a more conservative approach as compared to recent years.”

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CONSTRUCTION ACTIVITY AT WORKBOAT YARDS

On TheWays

ON THE WAYS

All American Marine

All American delivers first of two 105-foot water taxis

The Sally Fox carries passengers between Vashon Island and downtown Seattle.

Compiled and edited by Bruce Buls, Technical Editor

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I

n March, All American Marine, Bellingham, Wash., delivered a new 105'×33' Teknicraftdesigned aluminum catamaran to the King County (Wash.) Marine Division and is well along with a second.

The first boat, the Sally Fox, began operating on its commuter run between Vashon Island and downtown Seattle in April. The Subchapter K passenger vessel has interior seating for 250 with 28 additional outside seats on the upper aft deck.

Racks on the aft deck hold up to 26 bicycles.

The sister vessel, the Doc Maynard, is scheduled for delivery this fall and will run between West Seattle and downtown.

Power for the new water taxis is provided by pairs of Cummins Tier 3 QSK-50s, each rated at 1,800 hp at 1,900 rpm. With ZF 5055 gears and 46"-dia., 5-bladed propellers, service speed is 28 knots at 78% power, according to All American CEO Matt Mullett.

“King County didn’t want a hydrofoil [like on many Teknicraft designs] because they were concerned about debris in Elliott Bay, but they wanted

28 knots at 90 percent power,” said Mullett. “By the time they added more things, it was going to be 28 knots at 96 percent power.”

Concerned about this fuel burn and the possibility of liquidated damages from not meeting performance specs, the boatyard and Teknicraft finetuned the hull using computational fluid dynamics, as they had done with other recent vessels. “Using CFD modeling, we were able to achieve 28 knots at 78 percent power, which is saving King County about $43,000 a year, compared to the contract rate,” said Mullett.

The Sally Fox is also the first boat built to new structural fire protection guidelines. Called the 5A Space Performance Guidelines, the new rules were hammered out by the Passenger Vessel Association and the Coast Guard. They provide suitable fire protection in low-fire-load spaces and help keep weight down for high-speed passenger boats.

Mullett said his company also worked closely with the Access Board when building the new ferries to make sure they comply with all pending Americans with Disabilities Act (ADA) regulawww.workboat.com • JUNE 2015 • WorkBoat

5/6/15 3:23 PM

— Bruce Buls

Leevac delivers second of two 4,000-dwt PSVs to Aries Marine

L

eevac Shipyards, Jennings, La., delivered the 270'×56'×21'6", DP-2 platform supply vessel Ram Country to Aries Marine, Lafayette, La., in late April. The new diesel-electric PSV is the sistership to the Ram Nation, delivered by Leevac to Aries last November.

The Ram Nation and Ram Country were the first PSVs built to Leevac’s LDS 270 DE design, but the shipyard received a lot of input from Aries.

“This has been a great collaboration,” Dan Gaiennie, Leevac’s vice president, business development and engineering, told attendees at the PSV’s christening at shipyard’s Lake Charles, La., facility.

“Aries putting their ideas and thoughts together with our ideas and thoughts on the design of these boats really worked out well.”

Court Ramsey, Aries president, echoed Gaiennie’s remarks at the christening. “The back and forth during the design phase was first class and a lot of fun to be part of,” he said. “It worked out well.”

The true value of any PSV is how

Ken Hocke

tions. The cabin includes a designated area for people with disabilities, as well as a large ADA-compliant toilet.

“We could have built a 98-footer, but instead we built a 105-footer,” said Mullett. “ADA issues were one of the key concerns and another was roominess. We didn’t want to pack people in like a cattle car.”

Riders seem to appreciate the space and the other attributes of the new boat.

All American has a letter from a crossSound commuter who handles procurement contracts for King County’s bus division. “Your attention to detail, and clear concept of, and focus on craftsmanship is not only impressive, but much appreciated from my highly critical eye and work history point of view.

Too bad you’re not in the bus building business as well.”

The Sally Fox was funded almost entirely by federal grants.

The Ram Country is the second of two diesel-electric, 270' PSVs for Aries Marine.

much product it can haul to the offshore facilities it services. Ram Country’s tankage includes 261,400 gals. of fuel; 426,300 gals. drillwater; 75,400 gals. potable water; 8,490 cu. ft. bulk material; and 12,580 bbls. liquid mud.

The PSV’s rear cargo deck measures 172'×48'6" and can carry up to 2,000 LT of freight.

Main propulsion comes from four 3516C Caterpillar generators, producing 1,825 kW of electrical power each.

The Siemens Blue Drive integrated electrical system controls the vessel’s power management, machinery, alarms and propulsion. The Cat generators power a pair of Schottel 2,500-kW SRP 2020 SP, 4-bladed, 106"-dia. Zdrives and a pair of 1,180-kW Schottel bowthrusters.

The Siemens Blue Drive system, introduced by Siemens in 2011, also helps reduce emissions of NOx and greenhouse gases. When compared with dual-fuel offshore service vessels with the same operating profile, greenhouse gas emissions can be reduced by up to 27%, according to Siemens.

Siemens brought its own crew in to install the Blue Drive system, but Leevac’s workers helped integrate that system with the other features of the new boat.

One of the unique features of the boat is that it has a central corridor instead of corridors port and starboard, and the bow has a more European look to it than most other PSVs that operate

www.workboat.com • JUNE 2015 • WorkBoat

WB_OTW_LINO.indd 45

in the Gulf of Mexico.

The 4,000-dwt Ram Country is fully SOLAS, so it can work anywhere in the world.

The boat is ABS classed Maltese Cross A1, ACC Offshore Support, DP-2, FiFi 1 and USCG-certified Subchapters I and L, SOLAS, Worldwide Operations.

— Ken Hocke New Winninghoff response boat for Maine fire department

A

pril 11 was a festive day in Saco, Maine, as the fire department hosted an open-house event to welcome the department’s newest addition — a 26'1"×10' aluminum multimission response boat.

It’s been three years since the department had a boat, and 500 people showed up to look over the rescue boat with “Saco Fire Department” and the number “5” painted in bright red along each side of the hull.

The new boat was built at Winninghoff Boats, Rowley, Mass., and delivered to Saco on March 31. Jack Winninghoff, the boat’s builder, said he’s been building this style of boat since the mid-1980s, from 20' long up to about 50'. “It’s basically a Cape Ann [Mass.] sea skiff with a modified V-hull” with 14° of deadrise at the transom.

It will be used for search-and-rescue missions involving boats and people in 45

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On TheWays

BOATBUILDING BITTS

46

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Kvichak Marine Industries

n April 13, Foss Maritime, Seattle, christened the first of three new Arctic-class tugs at the Foss Waterway Seaport in Tacoma, Wash. The Michele Foss’s first assignment will be an oilfield sealift this summer from South Korea to the Alaska Arctic. Designed by Glosten Associates, Seattle, the 130' tug is powered by a pair of Caterpillar C280-8 diesels for a total of 7,268 hp with Reintjes reduction gears. Bollard pull is 100 MT. Markey Machinery supplied the tow winch. The tug is ABS Ice Class D0, as well as SOLAS and Green Passport. The boats are being built at Foss’s Rainier, Ore., shipyard.

Another Pacific Northwest boatbuilder, Kvichak Marine Industries (now part of Vigor Industrial), has been awarded a The Michele Foss is the first of contract by the three new Arctic-class tugs for Water EmerFoss. gency Transportation Authority in San Francisco for two aluminum 400-passenger ferries. The 135'×38' catamarans are designed by Incat Crowther in Australia. Propulsion will be provided by twin MTU 12V4000 M64+ Tier 3 engines rated at 1,950 hp at 1,830 rpm coupled with ZF 7600 reduction gears.

An exhaust aftertreatment system will also be included.

Nichols Brothers Boat Builders, Freeland, Wash., has been subcontracted to build the bolt-on superstructures.

The two companies also collaborated on the construction of four slightly smaller catamaran ferries for WETA a few years ago. The newest ferries will be the 700th and 701st vessels built by Kvichak.

Vane Brothers, Baltimore, has taken delivery of the 3,000-hp Kings Point, the 10th of 14 Sassafras-class tugs. The 94'×32'×13' tug, like its sisters, was built at Chesapeake Shipbuilding, Salisbury, Md. Twin Tier 3 Caterpillar 3512 main engines power the tug. One new development on the Kings Point and subsequent tugs, is the use of “soft-core” panels and heavy, fire-rated doors. The panels combine steel with thermal, acoustic insulation for a safer and quieter living environment for the crew.

Bristol Harbor Group, Bristol, R.I., is completing the detail design of a 399'×74'×30'/80,000-bbl. ATB tank barge (Gulf Carrier) and a 120'×40'×18'6" twin-screw tug (Gulf Venture) that are being built under ABS survey at Conrad Shipyard, Amelia, La. The ATB will be operated domestically and internationally by John W.

Kvichak and Nichols Brothers to build a pair of aluminum catamarans for San Francisco Bay.

Stone Oil Distributor, Gretna, La. Computational fluid dynamics (CFD) and finite element analysis (FEA) were used extensively in the design effort. FEA was used to assess structures in both the tug and barge that support the Intercon coupler system. CFD analysis was used to determine the calm water resistance of the combined unit and to optimize the tug forebody and the stern rake geometry of the barge.

Master Boat Builders, Bayou La Batre, Ala., recently delivered a 201'×48'×16', DP-2 offshore supply vessel to Galliano, La.-based C&E Boat Rentals. The Elk’s capacities include 112,000 gals. of fuel; 4,280 bbls. of liquid mud; and 5,300 cu. ft. of bulk mud in four tanks.

The rear cargo deck measures 146'×40' and can carry 800 LT of freight. Twin Caterpillar 3512C diesel engines, rated at 1,911 hp at 1,600 rpm each, provide propulsion power. The Cats connect to 82"×70", 5-bladed, BRZ Rolls-Royce Hung Chin propellers through Twin Disc MGX-5600 transmissions with 5.04:1 reduction ratios. Ship’s service power is handled by two Cat C32 parallel operating gensets, sparking 910 kW of electrical power each. The OSV has also been fitted with three Omega 1160 thrusters driven by a 450-hp electric motor through frequency drives. Master Boat also delivered another 201'×48'×18' OSV to Seacor in April. The Seacor The Kings Point is the newest Sassafras-class tug built by Chesapeake Shipbuilding for Vane Brothers.

Vane Brothers

Foss Maritime

O

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Chief’s capacities include 139,758 gals. of fuel; 5,000 bbls. liquid mud; and 4,500 cu. ft. bulk mud in four separate tanks. The DP-2 OSV is powered by two Cat 3512C diesels, producing 1,911 hp at 1,600 rpm each.

There are four Schottel thrusters: two SST-1FP, 600-hp bowthrusters and two SST-170FP, 300-hp sternthrusters.

The vessel employs a Jastrum split rudder steering system from Gulf Coast Air & Hydraulics in Mobile, Ala. Rodriguez Shipbuilding, Coden, Ala., is nearing completion of a twin-screw tug for Thomas J. Brown

Conrad is constructing an 80,000-bbl.

ATB for John W. Stone.

Master Boat Builders

On TheWays

The 201'x48'x18' Seacor Chief packs 5,000 bbls. of liquid mud.

and Sons Inc., Staten Island, N.Y. The 78'×30'×11' single chine, model bow tug will be powered by two Caterpillar C32 diesel engines, producing 1,000 hp at 1,600 rpm each. The Cats will connect to 79"×66", 4-bladed, stainless steel Kaplan wheels through Twin Disc gears with 5.46:1 reduction ratios. The tug will feature steel 1/2" bottom plate, 5/8" bottom plate under the stern, and 5"×3"×5/16" angle frames on 24" centers.

Tankage includes 27,000 gals. of fuel; 5,000 gals. fresh water; 350 gals. lube oil; and 350 gals. clutch oil.

Steve Kerner

New multimission response boat from Winninghoff Boats. The bow monitor was removed during training exercises.

the water and fires on shore, both up the Saco River and then out into Saco Bay “in conditions up to five-foot seas with three to four guys on her,” said David Pendleton, the department’s deputy fire chief.

For firefighting, there’s a 240-gpm 48

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Hale monitor on the bow powered by a Briggs & Stratton engine.

The wheelhouse has a bench seat for two people, a helm seat and a cutout in the dash where a crewman can stand as a lookout.

To facilitate in-water rescues, there’s

a dive door on the aft starboard side that folds down into the water with cables to bring it back up.

A severely injured person will likely be put on a backboard and brought into the wheelhouse. “Even though the bench seat is not long enough for a fulllength backboard, Winninghoff built a flip-up shelf that will catch the foot-end of the backboard,” said Pendleton. “It’s creative and should work for us.”

During sea trials, twin 150-hp Mercury 4-stroke outboards pushed the boat to 35 knots. Pendleton said that dual outboards were part of the design for the redundancy of two engines.

The 26-footer’s bottom plating is 1/4" 5086 H116 alloy. The topsides, deck and pilothouse are 3/16" 5086 and 5052 H32 alloys.

The Saco Fire Department is using its new boat on a seasonal basis, from April to November. Once the town’s floats are pulled, it will be kept on a trailer and “will be available to go into the water, as long as one of our two boat ramps isn’t iced over,” said Pendleton. — Michael Crowley

www.workboat.com • JUNE 2015 • WorkBoat

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4/30/15 2:15 PM

Liquid Diet Despite the drop in oil prices, business remains

The coal market has suffered, but tank barge operators had a good 2014.

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Campbell Transportation

steady for barge operators.

5/6/15 3:11 PM

By Pamela Glass, Washington Correspondent

W

hat’s been going on in the inland barge industry over the past few years recalls an iconic scene from the 1967 movie, “The Graduate.” Dustin Hoffman’s character is taken aside at a cocktail party and an ambitious business executive offers him some career advice: “I just want to say one word to you: Fracking. There’s a great future in fracking.”

Actually, the executive said “plastics.” But several tank barge operators went into full gear to respond to the growth in oil production from fracking, as energy companies looked for ways to get the product to refineries.

Three years ago, moving the byproducts of hydraulic fracking, especially crude oil, was barely a blip on the barge industry’s radar. Today crude oil, natural gas, fracking sand, condensate and fracking wastewater (if pending regulations go their way) have energized an already strong barge market, while offering companies a chance to expand or get into this new business.

Hydraulic fracking, which has tapped natural gas and crude oil that was previously inaccessible, has altered the entire liquid transportation market, analysts say.

Crude oil from fracking first showed up on the barge industry’s radar around 2011 when the technique took off, but the preferred modes of moving this

sensitive cargo were limited. Pipelines were either not available or had insufficient capacity and railcar capacity tightened up, became more expensive and suffered a few high-profile accidents. Tank barges emerged as an efficient, safe and economical option.

It also helped that many refineries are located near waterways.

This created a welcomed but unexpected bonus for inland tank operators who were willing and able to take it on, and commodity movements soared.

Some called it a tank barge renaissance.

MORE CRUDE BY BARGE The quantity of crude moved from the Midwest to refineries in the Gulf Coast rose tenfold from 2008 to 2013, according to the U.S. Energy Information Administration (EIA). There were also record movements of crude by barge in the Pacific Northwest from the Bakken formation in North Dakota that was delivered to California in 2014, according to Reuters, while crude activity through Albany, N.Y., to the Northeast also increased.

To meet this new demand from refiners desperate to use any means necessary to tap the nation’s shale oil boom, some barge operators expanded their fleets or got into the liquid business for the first time. A record 344 new tank barges were delivered in 2014, according to River Transport News (RTN), which tracks the barge industry.

The crude oil surge boosted already

‘Barge owners are actively building new equipment over the last few years because of crude coming to the river system.’

Ken Ericksen, Informa Economics healthy profits for several tank barge operators that tapped the new market segment.

Kirby Corp., Houston, the nation’s largest inland tank barge operator, reported record earnings in 2014, helped along by the combination of a strong existing liquid market in petrochemicals and the crude-by-barge demand.

Tank barge utilization at Kirby and other operators hovers at around 90%.

American Commercial Lines, another major barge line, expanded into the tank barge market to capture some of this business in 2013.

“There’s been a lot of momentum in this market,” said Mark Knoy, CEO of Jeffersonville, Ind.-based ACL. “There’s a lot of domestic crude production, and refineries are running at 95 percent.”

Barge companies have benefited in other ways. The pickup in crude production has meant lower oil prices, which in turn makes petrochemicals cheaper for export, thus keeping liquid barges in demand. Fracking also offers opportunities on the dry cargo

David Krapf

David Krapf

Blessey Marine stayed away from the crude oil surge and posted its best year ever in 2014.

Tank barge utilization is hovering at around 90%.

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30,000-bbl. tank barges have been ordered at a brisk pace in recent years.

A record 344 new tank barges were delivered in 2014.

David Krapf

side to move fracking sand and other equipment and supplies needed in the hydraulic fracking process.

Much of the increase in crude oil production has come from shale formations in the Bakken in North Dakota, the Eagle Ford in Texas, the Marcellus shale region in Pennsylvania and from western Canada. In its Annual Energy Outlook 2015, the EIA predicts that crude oil production will continue to rise through 2020 as oil prices recover from their steep decline.

Liquid barging “remains a very dynamic market,” said Ken Eriksen, senior vice president, transportation, industrials and energy at Informa Economics Inc., a Memphis, Tenn.-based agricultural and commodity/product market research company. “Barge owners are actively building equipment over the past few years because of crude coming to the river system.”

DEMAND SOFTENS But headwinds are developing, with strong indications that the crude-onbarge market is softening, as more of the business moves to railroads and pipelines that are coming into service and there’s been a pullback in crude oil production.

Barged shipments of crude from the

Midwest to the Gulf declined sharply in the fourth quarter of 2014, dropping 57.7% from volumes of the same period the previous year, RTN reported.

Some oil industry analysts expect U.S. production to level off at some point this year, which contrasts with the EIA predictions of continued growth.

Crude oil production remains high, Eriksen said, but “we’re not seeing a market for it, so it’s going into storage.

And as we build up an inventory of crude oil stock, we’ll see a slowdown in growth. We are storing crude oil at record levels.” As a result, he added, “we’ve seen assets (barges) parked in the Gulf.”

“The sudden burst of activity from 2011-2013 to move crude by barge has reached its peak and there’s clear evidence that demand has peaked, and people are beginning to reassess,” said Brent Dibner, president, Dibner

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David Krapf

Maritime Associates, a Chestnut Hill, Mass., consulting firm. He said that in addition to competition from pipeline and rail, barges are also feeling the squeeze from coastal petroleum tanker barges.

“They are all over the Gulf, and they compete with inland tank barges in a direct and significant manner.”

Dibner said that barge companies are ordering fewer barges and “are more sober” about investments. “This isn’t a tragedy, but after such an explosively good time, you must expect a point of resetting.”

New equipment being delivered now and in the future, he said, “will have to hustle” and accept lower rates. And companies can expect a lower return on assets and investments. This slowdown is reflected in contract renewal negotiations, he said, in which customers have alternatives and the carrier must be more accommodating to keep the business.

Demand for 30,000-bbl. barges has tapered off recently.

Kirby believes that crude production will drop, and it has reassessed the market going into 2015. The company’s first quarter report reflects “a downward revision to our inland marine transportation business,” David Grzebinski, president and CEO, said in a statement on April 29.

“Because of some uncertainty in

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

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

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5/1/15 10:08 AM

MIXED MARKET FOR DRY CARGO

Campbell Transportation

W

hile liquid operators enjoyed a surge in new business last year, it was a mixed picture for dry cargo operators.

Operators that moved grain in covered barges benefited from a record corn and soybean harvest in 2014. Demand was also strong for fertilizer, road salt, cement and aggregates and fracking sand, especially to shale production areas in Texas and Pennsylvania.

“It was a record year on the dry side, with significant harvests and demand throughout the year,” said Mark Knoy, CEO of American Commercial Lines. “We have invested in our dry cargo fleet and added 250 hopper barges on the covered side and 100 on the dry side, and we started to recoup the benefits of these investments in 2014. Our earnings were up 20 percent. This is good news and I think 2015 will be a strong year.”

A strong U.S. dollar that affects exports and bad winter weather has marred the start to Coal has taken a big hit, so 2015, but things are Campbell converted 50 of its expected to improve coal barges to grain last year. as another round of record harvests is expected later this year for the key crops. The USDA predicts that the international corn trade will be strong, and forecasts a record level of soybean exports, which could translate into a very good year for barged grain movements.

While grain was strong, the dismal situation for coal has created a

“I don’t think there’s anything wrong, it’s just that the uncertainty in this business makes operators want to kind of lock away their equipment and shippers take advantage of that,” Joseph Pyne, Kirby chairman, said during the company’s April 30 conference call with analysts. “The market will improve once crude prices stabilize and additional barge volumes from refined products and petrochemicals come to market.”

Pyne said it is not a broad-based market downturn, “but more a pause which has put the brakes on new inland tank barge construction, a very positive reaction, and gives the market some breathing room. And when this thing turns, it could turn pretty quickly. You could be back on an up cycle a lot quicker than you think. But we just need to kind of work through this malaise that’s out there and get the market 56

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highly volatile and difficult environment for the open hopper market.

“For dry open barge operators, the outlook for coal is very pessimistic,” said Ken Eriksen, senior vice president, transportation, industrials and energy at Informa Economics Inc., Memphis, Tenn. “The volumes we are moving are much lower, as exports are off especially to China, where steel production has peaked, and the economy is not growing as much as before. And policies of clean air are handcuffing the (coal) industry.”

In response, operators have had to re-tool their business plans, explore other markets and business lines, take equipment out of service and convert open barges to covered ones that can capture some of the growing grain market. So far, about 600 conversions have taken place, Eriksen said.

This dry cargo sector is experiencing a downside of uncertainty, said Peter Stephaich, CEO and chairman of Campbell Transportation, Houston, Pa., which operates about 600 hopper barges and 40 towboats.

Squeezed by low natural gas prices and the closing of many coalfired power plants, coal barges are finding little work.

Campbell’s bread and butter has been moving coal to utilities and the steel industry, but Stephaich said his company has expanded beyond the upper Ohio River, doing coal business as far south as Memphis, Tenn. A few years ago, the company started a boatbuilding business.

Campbell also cracked the grain market last year by converting 50 coal barges. “In this sense it was a good year for us,” he said, “and we know we can always take the covers off if we need the barges on the coal side again.” — P. Glass

balanced.”

Not all tank barge operators jumped on the fracking bandwagon, wary of the boom’s staying power for barging and the risks of taking on too much debt for new equipment.

“I saw it as temporary demand,” said Walter Blessey, president of tank barge operator Blessey Marine Services, Harahan, La. “We are spot market players, and we stayed away and didn’t chance it. And now those that did are seeing barges turned back.”

Blessey had one of its best years ever in 2014, he said, because of economies of scale, equipment debt that was paid down, having all its vessels in operation, and being free from costly accidents by emphasizing safe operations.

“The bar has been raised for performance by our industry, and that has been our focus,” Blessey said, “safety, safety, safety. Even if a thimble full

of oil hits the water, it’s a major deal now.”

Some smaller tank barge operators decided to stick to what they do best.

“It was the premium operators who chased these jobs and made a lot of money,” said Austin Golding, thirdgeneration co-owner of family-owned Golding Barge Line, Vicksburg, Miss.

“Crude and fracking are volatile. We needed to stay with trade lines that were established. If I had 80 boats, I would have gone after it, but as a 20-boat small company, it didn’t make sense for me to put all my chips in this.

It was smart for a lot of larger companies, but my decision-making process is different.”

Nonetheless, the fracking boom provided indirect benefits to Golding. Competitors moved into crude oil transport, “creating a vacuum for us to fill,” he said.

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Crew Comforts

Silent Running

Making boats habitable starts with noise and vibration control.

By Michael Crowley, Correspondent

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P

ut a boat together, get it out there and make some money with it. That was what most companies did until the last decade or so.

The primary requisites were all practical: seaworthiness, power and equipment for the tasks at hand. Not a lot of thought went into creature comforts beyond bunks, a galley and a head.

One towing company, in the interests of saving money, pushed that laissez-faire attitude a little too far when it fired all its cooks. “A week later it was like a bloodletting,” said Christian Townsend with CT Marine, towboat designers based in Portland, Maine. “They lost captains and crew, half their people. It significantly pointed out that guys needed to be taken care of.”

These days, said Townsend, attitudes are changing and the goal for many companies is crew

retention. Since crews have a history of moving around a lot, “the nicer the atmosphere you can provide, the more likely you are to keep them there a long time,” said Townsend.

TVs, granite counter tops, tile floors, plush staterooms and Wi-Fi connections can be part of the crew retention effort, but the most important element should be noise and vibration control.

This was one of the driving forces behind Tidewater Transportation & Terminals new towboat, the 104' Crown Point, built at Vigor Industrial in Portland, Ore., and designed by CT Marine.

“We wanted to ensure we made a very concerted effort to produce a vessel that was quiet, comfortable and free of vibration,” said Marc Schwartz of Vancouver, Wash.-based Tidewater.

Rest by itself is important for anyone that works

Tidewater Transportation and Terminals

The Crown Point, a new Columbia River towboat, was designed and built for crew comfort by keeping noise levels low.

www.workboat.com • JUNE 2015 • WorkBoat

5/5/15 3:10 PM

ISOLATION MOUNTS Where do you start when it comes to building a quieter workboat? Ray Fischer at Noise Control Engineering, Billerica, Mass., which worked with

Noise Control Engineering

15 days straight, 12 hours a day, before time off. Beyond that, safety is a critical consideration. “The first thing to do if you want people to be safe,” said Schwartz, “is make sure they are well rested and feel good.” In other words, keep the noise down.

“The decibel level on the Crown Point is probably lower than what’s in my truck right now,” said Townsend.

Sound tests put the noise level in the low 60s and below in all the accommodations, according to Schwartz.

Decibel levels in the 60s are, in fact, the numbers that the American Bureau of Shipping advocates for the maximum acceptable level for crew accommodation spaces in its “Guide for Crew Habitability on Workboats.”

A Noise Control Engineering employee measures vibration levels above and below an isolation mount.

CT Marine and Tidewater on noise and vibration control recommendations for the Crown Point, said that one of the more efficient ways to eliminate noise is the use of vibration isolation mounts.

Isolation mounts on the engine and gearbox “take the noise out at the source,” said Fischer. In the case of

the Crown Point, the isolation mounts are from Christie & Grey Ltd., a U.K.-based company with offices in Fairhaven, Mass. The company not only provided isolation mounts for the engine but also for the exhaust system.

Christie & Grey engine isolators are a combination spring and rubber

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Crew Comforts

NOISY NUMBERS

W

orking in noisy environments affects long-term hearing. The Occupational Safety and Health Administration says exposure to more than 90 dB for eight hours causes some hearing impairment.

However, as Noise Control Engineering’s Ray Fischer points out, that is a number for shore-based workers who can get away from the workplace for 16 hours, allowing time for hearing to recover. It isn’t a standard that can be applied to a workboat.

The Coast Guard’s Navigation and Vessel Inspection Circular No. 12-82 puts the noise exposure limit at 82 dB. Above that you will have hearing problems, and there should be a hearing conservation program.

That seems to be for older boats, while the Coast Guard suggests 77 dB is the general level to shoot for on new boats with 70 dB in the accommodations areas.

The ABS Guide for Crew Habitabil-

ity On Workboats has tougher noise criteria for crew accommodation areas and workspaces for boats built to class and seeking the workboat habitability notation. The notation ranges from Habitability (HAB(WB)) to workboat Habitability Plus (HAB+(WB)) to workboat Habitability Plus Plus (HAB++(WB)), each with more restrictive noise levels. One example is the maximum acceptable noise rating for cabins. It goes from 60 dB to 55 to 50 dB depending on the category.

The open deck dB rating is a little higher: 75, 70, 70, and even higher for continuously manned machinery spaces: 90 dB. However, compared with a land-based office, “having something at 55 dB is noisy,” said Fischer. “The normal working environment is 45 dB. At night when you are sleeping, you are talking 35 to 40 dB.” — M. Crowley

design. The springs are the load-carrying element, and the rubber keeps the spring from wandering and the isolator properly aligned when a boat rolls.

Despite the isolation mount’s effectiveness at noise and vibration control, “it’s not something that’s easily accepted by the [workboat] industry,” said Fischer. “They prefer to have hardmounted diesels.”

He said that isolation mounts require a flexible shaft coupling, and the isolation mounts have to be replaced every seven years. Still, Fischer said, isolation mounts are “the right thing to do in terms of decibels per dollar.”

The offshore service vessel fleet has become increasingly interested in reducing noise, particularly in bowthrusters. “They are very noisy,” said Fischer. “They cavitate at low loads and introduce a lot of noise and vibration throughout the forward end of the ship.” The easy answer is to find a vendor that sells quiet thrusters.

They protect us. Every day. Every night.

And they need your support.

HHH Inspire leadership, learning and a legacy of service by supporting the brave men and women of the United States Coast Guard through the Coast Guard Foundation.

USCG photo by pA1 tom SperdUto

To learn how you can help, call (860) 535-0786 or visit our website at www.coastguardfoundation.org. Ask about our Boat Donation Program.

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www.workboat.com • JUNE 2015 • WorkBoat

5/5/15 3:11 PM

LOOKS BACK JUNE 1965

• A 53' experimental crewboat has been built by Sewart Seacraft Inc., Berwick, La., for United Aircraft Corp., East Hartford, Conn. The boat is a test and development platform for gas turbines, propellers, gears, controls and navigation equipment. The Eagle is a 55-mph prototype of crewboats that will operate up to several hundred miles offshore. The

crewboat is powered by a power turbine version of the JT12 aircraft turbojet.

Now called the FT12, the engine drives the Eagle, burns diesel fuel, and is rated at 3,200 hp for marine use.

• Port Everglades Towing, Fort Lauderdale, Fla., has taken delivery of the 100'×26'×16' ocean tug Paragon from Bludworth Shipyard, Houston. The tug is used for transporting phosphate rock. A typical tow for the Paragon is JUNE 1975 a 340' barge loaded

with approximately 10,000 tons of cargo on a run between Houston and Tampa, Fla. The tug is powered by a 10-cylinder Fairbanks Morse 38D diesel engine which turns a 3-bladed, 144'×108' Columbian bronze propeller.

• On the cover is the steamboat Natcirca-1926 steam sternwheeler towboat chez, the first commercial steam sternthat had pushed barges on the Mononwheeler built in the U.S. in the last 50 gahela River until 1965. New Orleans years. The 285'×44' vessel, which will Steamboat also used the Clairton’s operate as a sightseeing vessel in and 25'-dia sternwheel and 37' Pitman around New Orleans, was delivered in arms that connect the engines and the April to New Orleans Steamboat Co. paddlewheel. and built at Bergeron Industries, St. Bernard, La. The 1,600-passenger vessel is powered by a pair of 750-hp reciprocating steam engines that were taken JUNE 1985 off the Clairton, a • Tidewater Marine, New Orleans, has continued its scrapping program of obsolete offshore service vessels by selling 12 150' to 160' OSVs for use as fishing boats. In addition, Tidewater also sold the TWC 100, a 180' pipelaying barge, to Offshore Pipelines Inc., Marrero, La. The barge is equipped with a 100-ton pedestal crane.

• Despite falling crude oil prices and 76

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a glut of natural gas, 95 discoveries were reported in the Gulf of Mexico last year, a 51% increase over 1983.

Also, a record number of new exploratory wells were drilled in 1984. A total of 387 wells were drilled — 260 off Louisiana and 127 off Texas. The increase in activity was believed to be a result of the first area-wide lease sale in the Gulf two years ago. www.workboat.com • JUNE 2015 • WorkBoat

5/7/15 11:37 AM

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“We made the decision to go exclusively with Reintjes gears for Golding Barge Line and the Reintjes gears have served us extremely well.”

- Steve Golding, President

M/V Kate Golding Owner: Golding Barge Line Builder: Marine Builders, Inc.

Karl Senner, LLC equipped this vessel with: two REINTJES WAF 763 Reverse Reduction Gearboxes with Internal Hydraulic Shaft Brakes

WEST COAST Karl Senner, LLC. Seattle, WA (425) 338-3344

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EAST COAST Karl Senner, LLC. New York, NY (917)722-8118

PADUCAH SERVICE FACILITY Karl Senner, LLC. 2401 Powell Street Paducah, KY

GULF COAST HEADQUARTERS Karl Senner, LLC. 25 W. Third St. Kenner, LA (504) 469-4000

5/5/15 1:39 PM