US COMMERCIAL NEWBUILD ACTIVITY WANES

After a decade and a half of prolific, commercial shipbuilding production arising from the renewal and revitalisation of the ‘Jones Act’ fleet engaged in domestic trade, injecting much-needed, environmentally circumspect, efficient capacity into a generally time-served fleet, US yards’ merchant vessel workload is now in steep decline.

The investment cycle is drawing to a close, with liner service upgrading largely fulfilled and with the influx of new tanker tonnage, in 2015-2017 particularly, suppressing freight rate development and providing less inducement to further ordering.

VT Halter Marine put down a new marker for the industry last year with the delivery of the world’s first LNG-fuelled combination container/ro-ro (con-ro) carrier, the 26,400 dwt El Coqui. Two such vessels, forming the Commitment-class and based on a blueprint developed by Wartsila Ship Design, were booked from the Pascagoula yard in Mississippi for Crowley Maritime’s shipping and logistic services linking Jacksonville, Florida, with Puerto Rico.

El Coqui and sistership Taino, which undertook her maiden voyage in January 2019, provide a very high degree of payload flexibility, accommodating the full range of boxes from standard 20ft and 40ft units to 45ft and 53ft wide-body, high-cube containers, and up to 300 reefers, for an overall intake corresponding to 2,400 TEU. In the aft section of the hull, the enclosed, ventilated and weather-tight ro-ro garage decks can take approximately 400 cars and multifarious vehicles and wheeled equipment.

The gas-injected, MAN 8S70ME-C8.2-GI main engine produces 26,160kW for a speed of 22 knots. In common with multiple US commercial newbuild projects over recent years, the two-stroke engine is an import, having been manufactured by prolific Japanese licensee Mitsui Engineering & Shipbuilding. Crowley’s new con-ros commanded a per-ship price of US$213.5m. They will be bunkered from a shoreside LNG fuel depot at Jacksonville’s Talleyrand Terminal under an agreement with Eagle LNG Partners.

General Dynamics’ NASSCO yard at San Diego, California, has been a prime mover in Jones Act fleet revitalisation, having delivered a total 21 product tankers, crude carriers, container vessels and ro-ro trailerships since 2003. Today, naval work predominates in its current orderbook. Commercial shipbuilding activity is expressed in a single contract, whereby two con-ros of approximately 51,000 dwt, booked to Matson Navigation’s account, are scheduled for completion in the fourth quarter of 2019 and second quarter of 2020.

As the Kanaloa-class, the Lurline and Matsonia will be of comparatively deep draught (11.5m), providing slots for 3,500TEU containers and aft garaging for 800 vehicles or breakbulk cargo within main dimensions of 265m x 34.8m. Commanding a total price of US$511m, the 23-knot duo will be fitted with LNG dual-fuel propulsion machinery and will supersede three diesel-powered boxships on scheduled service between Hawaii and the US mainland.

Pasha Hawaii has entrusted Texas shipbuilder Keppel AmFELS with two fully-cellular vessels of 2,525 TEU capacity for assignment to the Jones Act trade linking the mainland with the Hawaiian archipelago. Each ship’s loading permutations will include 500 containers of the 45ft size, and sockets will be provided for up to 400 refrigerated units.

A dual-fuel two-stroke MAN main engine of the 7S80ME-GI Mk9.5 type, equipped with exhaust gas recirculation (EGR) to meet IMO Tier III emission levels, will drive a fixed pitch propeller for a maximum speed of 23 knots. The four-stroke auxiliaries will also be from MAN’s dual-fuel portfolio. Pasha Hawaii expects to run the ships fully on LNG from the outset.

The Brownsville yard is scheduled to deliver Pasha’s newbuilds in the first and third quarters of 2020, as replacements for older, steam turbine vessels acquired through the 2015 takeover of Horizon Lines’ Hawaii trade lane business. Keppel AmFels was established in 1990 as a wholly-owned subsidiary of Keppel Offshore & Marine of Singapore, thereby gaining access to the Jones Act market.

The second of two Aloha-class, LNG dual-fuel containerships for Matson Navigation is, at the time of writing, the sole remaining vessel on order at Philly Shipyard, which has produced 29 Jones Act tankers and boxships since 2003. Handover of Matson’s latest 3,600 TEU newbuild is expected during the opening quarter of 2019. She will follow the 2018-commissioned Daniel K. Inouye, the largest cellular boxship ever constructed in the USA, into the owner’s service between the western seaboard and Hawaii. Each vessel is priced at US$236m.

The Aloha-class had provided the template for up to four 3,700 TEU boxships figuring in a letter of intent (LOI) signed by the Philadelphia yard with TOTE Maritime’s July 2017, calling for deliveries through 2020 and 2021. However, TOTE let its LOI expire on 31 January 2018, and Philly subsequently cancelled the project.

Philly has since been endeavouring to ensure production continuity, but an absence of new business has compelled lay-offs on a large scale. Discussions have been under way with an undisclosed, potential buyer for the construction and sale of two 50,000 dwt-class product tankers for operation in the Jones Act trades, with targeted deliveries in the final quarter of 2020 and first quarter of 2021. The vessels would be substantially similar to the series of eight 50,000 dwt tankers previously built by the yard for Crowley and Kinder Morgan. One of the differences in specification is the upgrading of the main engines from IMO Tier II to to Tier III NOx emissions standard.

In the longer-term, the shipbuilder is seeking to diversify beyond its established commercial vessel markets. Options being pursued by the yard address US requirements for a polar icebreaker and a cadet training ship.

The federal budget includes US$300m to support the construction and equipping of a 160-metre vessel that will begin the replacement of the country’s ageing fleet of state maritime academy training ships.

The long-mooted scheme sponsored by the US Maritime Administration (MARAD) is a response to a critical shortage of US mariners and the need for a new class of training vessel that reflects the technologies embraced by the latest and forthcoming fleet additions. Given its outfitting intensity and technical sophistication, and the prospect of a succession of such orders over the coming years, the project is of considerable significance to the shipbuilding industry at a time of dwindling orderbooks for large, non-military vessels.

The case for public funding is strengthened by the proposed design concept, which offers a high degree of operational flexibility as a national security multi-mission vessel (NSMV). Developed by Herbert Engineering Corporation of California, the new generation will provide an enhanced capability, while fulfilling a central role in seafarer training.

In training ship mode, the NSMV will accommodate a maximum 600 cadets, plus up to 160 crew, faculty staff and other personnel , with surge capacity for humanitarian and emergency relief missions, whereupon as many as 1,000 people will be accommodated.

Under a government directive, MARAD is required to entrust the build and project management to an entity other than MARAD. The chosen party, designated the vessel construction manager (VCM), will be tasked to contract with a qualified US shipyard and ensure that commercial best practices are utilised in delivering the initial NSMV on time and on budget. A series of five vessels is contemplated, and it is understood that delivery of the lead ship is sought in time for the 2022 summer sea training programme of the State University of New York (SUNY) Maritime College. The newbuild will replace the Empire State VI, originally commissioned in 1962 as a cargo liner and converted for her present role in 1989.

A diesel power and propulsion system has been nominated, based on four gensets delivering approximately 16,000kW, with two 4,500kW propulsion motors giving a maximum speed of 18 knots. The specification also provides for a retractable, combi-type bow thrusters that will act as a manoeuvring, tunnel thrusters in the up position, and as a 1,450 ‘take-home’ propulsion device in the drop-down mode.

The shipbuilding sector is hoping for the materialisation before too long of a contract for a heavy polar icebreaker. The Coast Guard is looking towards construction starting during the 2019 fiscal year, with a view to service entry in 2023.

The operational US polar icebreaking fleet currently consists of just two vessels, dating from 1976 and 2000, respectively, and concerns as to whether the country has adequate capabilities to carry out its responsibilities and ensure a presence in the Arctic and Antarctic have focused policymaker attention on an investment strategy. In March 2018, under an integrated programme, the Coast Guard and Navy released a request for proposals for the advance procurement and detail design for the USCG’s heavy polar icebreaker, with options for detail design and construction of up to three such vessels.

Key performance parameters include an ability to break through 2.4m of ice at three knots, and to negotiate ice ridges up to 6.4m. A maximum endurance of 90 days is sought, and high degree of mission flexibility is required.

An inter-governmental agreement has enabled the USCG to test and validate multiple models of polar icebreaker at Canada’s National Research Council (NRC) premises in St John’s, Newfoundland, applying different hull designs and propulsion configurations. NRC has the wherewithal to model a wide range of conditions, including first-year and multi-year ice, pack and ridge ice, and glacial ice. The Coast Guard and Navy will conduct additional modelling at the Carderock Division of the Naval Surface Warfare Center in Bethesda, Maryland, work to evaluate icebreaker open-water performance.

Development of a varied fleet to meet the requirements of the offshore windfarm sector is in prospect under plans implemented by Aeolus Energy of Orlando, Florida. The company recently signed an agreement with Ulstein Design & Solutions for the design of a service operations vessel (SOV), as a customised version of the Norwegian firm’s 95-metre SX195 type. The newbuild to be contracted will constitute the initial investment in a range of vessels, including cablelayers, accommodation and crew transfer vessels, all of which will be constructed and flagged in the USA under the Jones Act regime.

Italian-owned Fincantieri Bay Shipbuilding at Sturgeon Bay, Wisconsin, has augmented its workload through a contract for the construction of a 35,000 dwt self-unloading bulk cargo barge, to be deployed throughout the Great Lakes region. Scheduled to be phased into duty in mid 2020 with VanEnkevort Tug & Barge of Escanaba, Michigan, the 225.5m-long newbuild will incorporate a ballast water treatment system engineered for Great Lakes conditions to Environmental Protection Agency (EPA) standards.

VanEnkevort’s fleet of self-discharging barges services mining, steel, and construction industries on the Great Lakes. The company has been involved in the conversion and/or ownership of five of the seven ATB units trading within the system.

Meanwhile, VT Halter Marine’s Pascagoula yard is building North America’s first-ever ATB unit designed for LNG bunkering and supply. The tank barge will provide containment for 4,000m3 of LNG within a hull envelope of 98.8m x 19.5m x 9.9m, and is due to be handed over during the first quarter of 2020. The barge will be handled in push mode by a 39m tug powered by 3,800kW GE 6L250 medium-speed diesel engines and a Z-drive propulsion system.

The ATB contract was awarded by Q-LNG Transport on the strength of a long-term deal with Shell Trading covering the delivery of LNG bunker fuel to various ports in Florida and the Caribbean.

Conrad Industries’ Conrad Orange Shipyard in Texas completed a groundbreaking project in 2018 in support of the US marine industries’ uptake of LNG fuel. The 71m LNG bunker barge Clean Jacksonville, fitted with a single GTT Mark III Flex membrane tank of 2,200m3 capacity is the first such US-built vessel. She has been assigned to the bunkering of TOTE Maritime’s Marlin-class, LNG dual-fuel containerships engaged in the Jacksonville/San Juan(Puerto Rico) service since delivery in 2015/2016.

While much of the shipbuilding industry is occupied with naval and agency work, boosted by a clutch of new contracts sealed towards the end of 2018, large commercial vessel business hinges on revived demand for capacity in the domestic traffic.