Marine Log June 2018 by Marine Log

arine oG M L www.marinelog.com

R e p o r t i n g o n M a r i n e B u s i n e s s & T e c h n o l o g y s i n c e 18 78

June 2018

Ready or NOT

Recovery efforts continue in Puerto Rico as new hurricane season looms YEARBOOK & MARITIME REVIEW Hurricane Relief: SEACOR Supports Recovery

MARITIME CARES: Paying It Forward

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CONTENTS

21 Departments

Features

2E ditorial We Can Do Better

Navy Shipbuilding Alluring, but Expensive Could the Navy reach its goal of a 355 ship fleet?

World Shipbuilding Prolonged Slump South Korea’s government pumps new life into its shipyards

Corps Gets Funding Boosts in FY 2018 and FY 2019

9 Wellness Column Better Brain Series Part I: Shrinkage, Expansion and Marbling

SHIPPING Slippery Slope An influx of tonnage weakens tanker freight rates

Tugs & Barges Small Scale Coming in a Big Way Development of LNG bunkering infrastructure piques interest in LNG-fueled vessels

16 Inside Washington Bill Looks to Spur Construction of U.S.-Built LNG Carriers

Hurricane Relief Seacor’s Seabees are a Force for Recovery in the Caribbean Following Hurricanes Irma and Maria, SEACOR and its group of companies swoop into help Plus: Storm Relief: The Role of Training Ships

43 Newsmakers Saltchuk Group Names Tim Nolan President & CEO of TOTE, Inc.

Ferries When Blue Turns Green Washington State sets its sights on meeting emissions target

Cruise Shipping Cruising Leads the Way As passenger numbers grow, so too does the orderbook

Maritime Cares Paying It Forward We take a look at some of the ways the industry gives back to the local, global and medical community

4 Industry Insights 6 Marine Innovations 8 Inland Waterways

Cover: FEMA/Lee Snyder; Left, top: Hyundai Merchant Marine; Right, top: Shutterstock/Dalo Collis

10 Update isher Island Ferry Takes Shape F Admiral Schultz Takes Helm at the USCG • President Trump Reinstates Iran Sanctions • •

44 Tech News World’s First LNG-Fueled Fishing Trawler to be Powered by MAN

48 Safety First The Digital Seafarer: A Jack of All Trades

June 2018 // Marine Log 1

EDITOR’S COLUMN

MarineLoG JUNE 2018 Vol. 123, NO. 6 ISSN 08970491 USPS 576-910 Subscriptions: 800-895-4389

Tel: +1 (402) 346-4740 (Canada & International) Fax: +1 (402) 346-3670 Email: marinelog@omeda.com PRESIDENT Arthur J. McGinnis, Jr. amcginnis@sbpub.com PUBLISHER & EDITOR-IN-CHIEF John R. Snyder jsnyder@sbpub.com Associate Publisher Jeff Sutley jsutley@sbpub.com

We Can Do Better

s we prepare for another hurricane season, Americans in Puerto Rico are still suffering, trying to put their lives back together 9 months after they were shattered by Hurricane Maria. Now comes a report in the New England Journal of Medicine by Harvard that the actual death toll in Puerto Rico could be 70 times the official estimate of 64—roughly 4,645. What’s even more heartbreaking is that the study points out that the mortality rate remained high months after Hurricane Maria had passed and one third of the deaths were attributed to delayed or interrupted health care. The devastation wrecked by Hurricane Maria was of historic proportions, but there are real lessons to be learned, especially from FEMA’s woeful response. We can do better. Better preparation, better planning, and better response saves lives. In “Storm Relief: The Role Training Ships Play After Natural Disasters,” Tom Bushy, who sailed for two decades as Master of an academy training ship, provides his insight into one piece of the emergency response puzzle: How FEMA could better utilize and activate academy training ships in natural disasters. As Bushy writes, “The ships help support FEMA’s efforts by providing shelter, food, beds, and supplies to those in affected areas, but the ships aren’t usually activated right away. Delays in crewing, supply deliveries and the process for activating the ships can hinder efforts.”

On the flip side, in “SEACOR’s ‘Seabees’,” we highlight some of the herculean efforts undertaken by multiple divisions of SEACOR in providing relief to Puerto Rico, the U.S. Virgin Islands, Florida, and Texas. SEACOR’s Trailer Bridge unit, along with Crowley Maritime, and TOTE were all recently honored by The Seamen’s Church Institute with Humanitarian Awards for their relief efforts in Puerto Rico. Jones Act carriers delivered tons of medical supplies, food, water, clothing, fuel, and generators within days of the disaster. And don’t miss, “Maritime Cares: Paying It Forward,” in which we highlight just a few of the charitable efforts undertaken by marine businesses. Their efforts range from raising awareness and donations to fight cystic fibrosis or cancer to providing medical care around the world to lending a much-needed helping hand to overwrought seafarers. We only have the space here to barely scratch the surface, but the hope is that you will contact us with your company’s story or, better still, inspire you to pay it forward by starting your own charitable cause.

John R. Snyder Publisher & Editor jsnyder@sbpub.com

PRICING: Qualified individuals in the marine industry may request a free subscription. For non-qualified subscriptions: Print version, Digital version, Both Print & Digital versions: 1 year, US $98.00; foreign $213.00; foreign, air mail $313.00. 2 years, US $156.00; foreign $270.00; foreign, air mail $470.00. Single Copies are $29.00 each. Subscriptions must be paid in U.S. dollars only. COPYRIGHT © Simmons-Boardman Publishing Corporation 2018. All rights reserved. Contents may not be reproduced without permission. For reprint information contact: PARS International Corp., 102 W 38th St., 6th Floor, New York, N.Y. 10018 Phone (212) 221-9595 Fax (212) 221-9195. For Subscriptions, & address changes, Please call (800) 895-4389, (402) 346-4740, Fax (402) 346-3670, e-mail marinelog@omeda.com or write to: Marine Log Magazine, Simmons-Boardman Publ. Corp, PO Box 3135, Northbrook, IL 60062-3135.

2 Marine Log // June 2018

CONTRIBUTING EDITOR Paul Bartlett paul.bartlett@live.co.uk European EDITOR Charlie Bartlett charlie.bartlett@runbox.com WEB EDITOR Nicholas Blenkey nblenkey@sbpub.com Art Director Nicole Cassano ncassano@sbpub.com Graphic Designer Aleza Leinwand aleinwand@sbpub.com MARKETING DIRECTOR Erica Hayes ehayes@sbpub.com PRODUCTION DIRECTOR Mary Conyers mconyers@sbpub.com REGIONAL SALES MANAGER Elaina Crockett ecrockett@sbpub.com SALES REPRESENTATIVE KOREA & CHINA Young-Seoh Chinn corres1@jesmedia.com CLASSIFIED SALES Jeanine Acquart jacquart@sbpub.com Circulation DIRECTOR Maureen Cooney mcooney@sbpub.com CONFERENCE DIRECTOR Michelle M. Zolkos mzolkos@sbpub.com

Marine Log Magazine (Print ISSN 0897-0491, Digital ISSN 2166-210X), (USPS#576-910), (Canada Post Cust. #7204564; Agreement #40612608; IMEX Po Box 25542, London, ON N6C 6B2, Canada) is published monthly by Simmons-Boardman Publ. Corp, 55 Broad St. 26th Floor, New York, NY 10004. Printed in the U.S.A. Periodicals postage paid at New York, NY and Additional mailing offices.

POSTMASTER: Send address changes to Marine Log Magazine, PO Box 3135, Northbrook, IL 60062-3135.

MANAGING EDITOR Shirley Del Valle sdelvalle@sbpub.com

CONFERENCE ASSISTANT Stephanie Rodriguez srodriguez@sbpub.com CONTRIBUTORS Michael J. Toohey Waterways Council, Inc. Emily Reiblein Crowley Maritime Corporation emily.reiblein@crowley.com Capt. Matthew Bonvento Good Wind Maritime Services goodwindmaritime@hotmail.com Simmons-Boardman Publishing CORP. 55 Broad Street, 26th Floor, New York, N.Y. 10004 Tel: (212) 620-7200 Fax: (212) 633-1165 Website: www.marinelog.com E-mail: marinelog@sbpub.com

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INDUSTRY INSIGHTS WELCOME TO Industry Insights, Marine Log’s quick snapshot of current trends in the global marine marketplace. The VLCC market remains oversupplied with tonnage, but one tool that might be used to limit capacity is slow steaming, says VesselsValue’s Court Smith. Below is historical laden and ballast average speed for VLCCs. It has also been a tough time for global shipbuilders. As shown in this month’s infographic, the average newbuild price for a 180,000 dwt bulker in 2017 was ($44 million)—half of what is was in 2008 ($88 million).

Offshore Rigs Operating in the U.S. GOM (on or about May 1 of respective year)

Slow Steaming Ahead for Tankers? Laden & Ballast Average Speed 15

2013 2014

53 33

2015

2016

2017

Jan 2018

Apr 2018

Jul 2017

Oct 2017

Jan 2017

Apr 2017

Jul 2016

Oct 2016

Jan 2016

Apr 2016

Jul 2015

Oct 2015

Jan 2015

Apr 2015

Jul 2014

Oct 2014

Jan 2014

Apr 2014

Jul 2013

Oct 2013

Jan 2013

Apr 2013

2018 9

Source: VesselsValue

Source: Baker Hughes

World Shipbuilding Snapshot Top Five Shipbuilders, By Output

180K Bulkers Priced to Sell?

Top Greek Shipowners, By Fleet Value

7,809 HHI, Korea J. Angelicoussis $7.6 Billion

5,936 DSME, Korea 5,633 Shanghai Waigaoqiao

G. Economou $7.17 Billion

Shipbuilding, China

G. Procopiou $5.63 Billion

4,951 Hyundai Samho, Korea

P. Livanos $2.7 Billion

4,651 SHI, Korea

N. Martinos $2.49 Billion

$44 Million

(1,000 DWT) Source: Clarksons

Source: Clarksons

Source: VesselsValue

Recent Contracts, Launches & Deliveries Qty

Type

Owner

Austal USA, Mobile, AL

USS Tulsa LCS (16)

U.S. Navy

2108-2Q

Chesapeake Shipbuilding, Salisbury, MD

Cruise Ship Constitution

ACL

2108-2Q

Gladding-Hearn, Somerset, MA

33m, 320 PAC Ferry

Rhode Island Fast Ferry

2019

Gulf Craft, Franklin, LA

600 PAX High-speed Ferry

Seastreak, LLC

Master Marine, Bayou, La Batre, AL

1,600 HP Towboat

Waterfront Services, Inc.

2108-2Q

Metal Shark, Jeanerette, LA

45+ Knot Patrol Boats

Dutch Carib. Coast Guard

2108-2Q

Shipyard

Source: Marine Log Shipbuilding Contracts

4 Marine Log // June 2018

Est. $

$13.0

Est. Del.

2108-2Q

Marine Innovations Alfa Laval Moatti 290 HCO Filter Technology Approved by MAN Diesel & Turbo Alfa Laval’s Moatti 290 filter for hydraulic control oil (HCO) has been approved by MAN Diesel & Turbo on its modern two-stroke engines. The redundant filter is manually cleanable and can be used during maintenance, initial oil cleaning or when new oil is added. The continuous backflushing is performed in the automatic filter stage, with a cleanable surface-filter cartridge used to provide redundancy—eliminating the need for disposable filters and reducing cost over time. www.alfalaval.com

Blue Guard Innovations Launches New Smart Bilge Pump Switches with Integrated Oil Sensors and Alarms Blue Guard Innovations has developed the BG-One, a solid-state bilge pump switch with integrated oil and fuel detector designed as the first line of defense against oil and fuel discharge. The BG-One is an order of magnitude more reliable than mechanical float switches and has a built-in alarm function. Designed to prolong bilge pump life, it will operate in any 12 or 24 Vdc power system with maximum switching capability of 20 Amps. www.bluebgi.com

Bomin Group Launches Compliant Ultra-Low Sulfur Fuel Oil to Meet 2020 Sulfur Cap Global supplier and trader of marine fuels, the Bomin Group, has announced it will deliver Ultra-Low Sulfur Fuel Oil (ULSFO) to vessels calling the Amsterdam-Rotterdam-Antwerp region. The ULSFO product is 0.1% maximum sulfur and complies with MARPOL Annex VI regulations in current designated Emissions Control Areas (ECAs), as well as the global sulfur cap limit (0.5%) that will come into force in 2020. The fuel will be delivered by certified barges employed in the region by Bomin. www.bomin.com

Steamship Historical Society of America Debuts New Interactive, Educational Website The Steamship Historical Society of America (SSHSA) has launched a new interactive and educational website, STEAMing Into The Future. The site shares the organization’s vast archives and gives students the chance to work with primary sources related to the country’s transition from sail to steam in the early 19th century. The site also includes full lesson plans for teachers. The Warwick-based nonprofit was assisted by grants from the National Maritime Heritage Grant Program and the Heritage Harbor Foundation. www.shiphistory.org

TOTE Maritime Launches Mobile App for Customers TOTE Maritime has introduced a new mobile application as part of its online customer service platform. The app is the first in the U.S. domestic trade to offer a single platform for customers to access real time shipment data. The TOTE Portal mobile app allows customers to access their shipment information from anywhere using any device. Among its features is Equipment Status Information; Watch List Capabilities with Automatic Notification; Arrival & Departure Shipment Details; Voyage Calendar; and One Touch Access to Customer Service. www.totemaritime.com 6 Marine Log // June 2018

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inland waterways

Corps Gets Funding Boosts in FY 2018 and FY 2019

8 Marine Log // June 2018

Administration request, and $5 million more than the FY18 enacted level. There is report language in the House bill that states that it is not the intent of Congress, but if the Corps decides to fund an economic re-evaluation of the Navigation & Ecosystem Sustainability Program (NESP), it must be completed by January 1, 2020. WCI recognized the strong, bipartisan

The very positive FY2019 House funding was on top of the signing into law of the FY2018 Omnibus bill. leadership of House Appropriations Committee Chairman Rodney Frelinghuysen (R-NJ) and Ranking Member Nita Lowey (D-NY), and Energy & Water Development (E&WD) Appropriations Subcommittee Chairman Mike Simpson (R-ID) and Ranking Member Marcy Kaptur (D-OH) for these strong funding outcomes. At press time, the Senate was expected to mark up the bill by the end of May. The very positive FY2019 House funding was on top of the good news in March of the passage and signing into law of the FY2018 Omnibus Appropriations Bill. After the House passed the bill by a vote of 256-167,

Michael J. Toohey President/CEO, Waterways Council, Inc.

Mark Ostbloom/USACE

n May 16, the House Appropriations Committee approved, by a vote of 29-20, the Fiscal Year 2019 Energy and Water Development and Related Agencies Appropriations bill. The legislation provides annual funding for the U.S. Army Corps of Engineers, national defense nuclear weapons activities, and other programs under the Department of Energy (DOE), and related agencies. The bill will next go to the House floor. Very favorable, the $44.7 billion total funding is $1.5 billion above FY18 enacted levels and $8.17 billion above the President’s budget request. The House bill provides overall funding for the Corps of Engineers at $7.3 billion, an increase of $451 million above the FY18 enacted level of $6.8 billion. The bill provides $3.3 billion for navigation programs, projects and studies, including $1.6 billion in funding from the Harbor Maintenance Trust Fund (HMTF) and full-use of estimated annual revenues from the Inland Waterways Trust Fund (IWTF). The Construction account received $2.3 billion or $1.3 billion more than the President’s FY19 request, and is $200 million more than the FY18 enacted level. The Corps’ Operations & Maintenance (O&M) account received a record-level of $3.8 billion in funding, which is $700 million more than the Administration’s request for FY19, and is $200 million more than the FY18 enacted level. Inland O&M received $810 million, a $50 million increase above the President’s budget request for FY19. The Investigations account received $128 million or $45 million above the FY19

the Senate approved it 65-32. The Omnibus bill included record funding for the Corps in the FY2018 Energy & Water Development section at $6.83 billion, an increase of $789 million from FY2017 appropriated funding, and a 36% increase above the President’s FY2018 budget request of $5.002 billion. The FY18 Omnibus bill included: • Full-use of estimated annual IWTF revenues, plus additional balances from the IWTF with at least $399 million to be made available for priority navigation projects in FY2018, a 128% increase over the Administration’s request of $175 million. • The Constr uction account received $2.085 billion, more than doubling the $1.02 billion proposed in the FY2018 budget request. • The O&M account increased to $3.63 billion or 17.1% above the initial budget request of $3.1 billion. • The Investigations account was allocated $123 million, up 43% from the President’s request of $86 million. • H M T F w a s f u n d e d a t $ 1 . 4 b i l l i o n , 50% above the President’s request of $933 million. • On NESP, due to the earmark constraints within Congress, the Assistant Secretary of the Army (Civil Works) will have the ability to provide additional investigation dollars to preconstruction engineering and design (PED), but at press time the Corps had not yet released its work plan (due May 23). • The bill did not include a 10-year, $1.037 billion user fee to be paid by commercial operators on the inland waterways. The proposal was included in the President’s FY2018 budget request and was strongly opposed by WCI. We also look forward to the development of Water Resources Development Act (WRDA) legislation for 2018 ahead. At press time, the House Transportation & Infrastructure Committee had planned to mark up the bill known as “America’s Water Infrastructure Act of 2018” on May 23. The Senate Environment and Public Works Committee had scheduled its mark-up on May 24. www.waterwayscouncil.org

Wellness Column

Better Brain Series, Part I: Shrinkage, Expansion and Marbling Marble Tending The future of a healthy brain lies in decreasing shrinkage, preserving your existing marbles and growing neurons. Here are a few considerations:

s we age cognitive decline becomes a foremost concern. Every time the keys wander off, we are forced to confront questions about the health of our marbles and if they are going to last us into old age. The brain is the three-pound organ made mostly of water and fat. It has a billion neurons that send signals throughout the body to create action, inaction, form and function. In school you learn that we only use 10% of our brains, and that the brain only grows until adulthood—both lessons are incorrect. Research now shows that we use most of our brain, and it can grow and renew until the day we die.

Shutterstock/vitstudio

Brain Shrinkage A foremost concern in brain health is shrinkage. The more the brain shrinks, the more we lose our marbles. Changes to our internal and external environment can cause shrinkage. Four main health risks that impact most lives either directly or by extension were studied by the University of California at Davis and several others: Smoking, diabetes, being overweight or obese, and high blood pressure. Researchers found that people as young as 35 years old with any of the four risk factors developed a condition in which areas of blood vessels in the brain became damaged and shrank. Interesting to note that the risk factors of cognitive decline also appear to be the same for heart disease. The heart and head appear to decline together.

Expanding the Brain When it comes to brain expansion, exercise is key. Aerobic exercise increases blood flow to the brain, strengthens connections between

blood vessels and cells, and enhances the growing environment. Studies have shown that distance running can be one of the best ways to create neurogenesis (brain growth) in the area of the brain that accounts for memory and learning, the hippocampus. At the University of British Columbia, researchers identified that aerobic exercise boosts the size of the hippocampus. In other studies running

The future of a healthy brain lies in decreasing shrinkage, preserving your existing marbles and growing neurons. was compared to interval training, weight lifting and other forms of exercise. Nothing compared to running to spark hippocampus growth by double or triple. The positive effects of exercise on the brain appear to include slower endeavors too. In 2010 the University of Pittsburgh followed exercise and brain size of 78 year olds over nine years. They then compared brain sizes with the amount of walking done per week by each adult. Those who walked an average of 72 blocks or more per week increased areas of signaling and processing in the brain. They also had reduced episodes of cognitive decline after 13 years.

1. Sugar and Carbohydrate Intake: If you have not reduced or eliminated foods that spike insulin unduly, here is another reason why it may be considered. One study in Neurology (64(10):1704-11) published in 2006 says high HbA1c glucose testing numbers were associated with decreased brain volume. Individuals with a higher median level (5.6 percent) experienced rates of brain atrophy that were twice as high as those in the lowest HbA1c level (4.4 to 5.2%). Those in the “high” bracket had smaller brains. While exercise can help moderate glucose in the blood by using it up, nothing can save your brain from a diet too high in carbohydrate. 2. Exercise: Healthy brains need exercise. One reason it may work so well to enhance the brain is identified in the October 2011; journal of Physiology & Behavior. This study shows that brain-derived neurotropic factor (BDNF) secretion increased with aerobic exercise. This protein gets produced more rapidly during exercise and leads to the development of new neurons in the brain, aids survival of neurons already there and speeds-up their signaling to enhance cognitive function. Lack of BDNF has been seen in Alzheimer’s patients and other brain deteriorated states. The Physical Activity Guidelines for Americans identifies that we should aim for between 20-25 minutes a day of something moderate (with a few sessions of weightlifting in there to sustain mobility and build muscle). Walk, run, skip, it’s all going to help preserve your three-pound mound from shrinkage. Cognitive decline can be mitigated and even reversed. Next month we will continue with foods to enhance brain power. Nothing in the article constitutes medical advice, all medical advice should be sought from a medical professional. Emily Reiblein

Crowley Maritime Corporation, Labor Relations-Union Wellness Programs/ Operations Integrity

June 2018 // Marine Log 9

Update

Fisher island FERRY takeS shape Other recent jobs at St. Johns Ship Building include the delivery of 25 ft truckable tug Iron Horse. This is the most recent of SJSB’s “Iron Series” of truckable tug boats. These versatile workhorses are a staple for the marine construction industry. In addition, the research vessel OCearch is on drydock at the shipyard for repairs. St. Johns Ship Building is also nearing completion of another 190 ft landing craft for Caribbean cargo transportation. Beyond that, St. Johns Ship Building announced that it recently closed a contract with The Vane Brothers Company, Baltimore, MD, to convert the last two tugs of the Elizabeth Anne series to ATB-style vessels to better accommodate Vane’s existing fleet. The class was designed by Entech Designs, LLC, Kenner, LA.

Former OW Bunker Singapore CEO Found Guilty, Sentenced to 18 Months in Jail L a r s M ø l l e r , the former CEO of

OW Bunker’s Singapore unit, Dynamic Oil Trading, has been found guilty of violating section 299 (1) of the Danish Criminal Code and has been sentenced to 18 months in prison in relation to the bunker trading firm’s bankruptcy. OW Bunker was the world’s largest bunker trader when it collapsed in November 2014, following a loss of $275 million and bankruptcy filing. The loss included a $125 million hit from fraud. 10 Marine Log // June 2018

Møller was charged last year with gross breach of trust after he allowed the OW Bunker subsidiary to provide credit totaling $156 million to trading partner Tankoil, exceeding the approved credit limit. By granting the credit, the court says, Møller contributed to the company’s bankruptcy. He was not authorized to grant such a credit and according to the Danish court, a significant part of the Tankoil transactions were not entered into OW Bunker’s accounting system.

BIZ NOTES Evac Acquires Cathelco In a move that will expand its reach in the market, provider of integrated waste, wastewater, and water management systems, Evac has acquired Cathelco, manufacturer of ship equipment and offshore installations. Under the plan, Cathelco’s pipework anti-fouling, hull corrosion protection, fresh water generation, and ballast water treatment systems will become part of the Evac Complete Cleantech solution— further enabling Evac to expand its Cleantech solution portfolio, as well as open up new ballast water treatment systems (BWTS) business opportunities. The acquisition has ver y clear advantages according to Evac Group CEO and President Tomi Gardemeister, who said, “A n e x t e n d e d C l e a n t e c h system of fering, together with an enlarged sales and ser vice network, will allow us to offer a more comprehensive range of solutions and ser vices to our customers.”

St Johns Ship Building

St. Johns Ship Building (SJSB) , Palatka, FL, recently announced that it is on schedule with the construction of two 152 ft x 52 ft ferries for Fisher Island. Designed to transport 30 vehicles, the first ferry is scheduled for a December 2018 delivery to Fisher Island. The hull was rolled over on May 26. “As owner’s representative for the Fisher Island Ferry Project, S&Y Marine Corporation has been very impressed with the work at St. John’s Ship Building,” says Shaun L. Preacher, Owner’s Representative, S&Y Marine Corporation. “The production and build is on schedule, the workmanship is first rate, and the work force is very professional. At its current pace, the two ferries will be delivered on schedule and as planned,” adds Preacher.

Everyone’s Talking About the Future of Hybrid Vessels. We’re Building It. We all know the advantages that hybrid technology offers. Fuel savings. Reduced emissions. Silent operation. But while others are discussing these benefits, Derecktor is delivering them. Our first hybrid cat using the BAE System’s HybriGen® system was delivered in 2014, our second in 2017, and our third will launch later this year. Fact is, we’re the only U.S. yard to have more than one hybrid build to its credit. So call Micah Tucker at 1-914-698-5020. Find out how, at Derecktor, action speaks louder than words.

CUNY I

HARBOR HARVEST HYBRID – TO BE COMPLETED 2018

SPIRIT OF THE SOUND

311 East Boston Post Road | Mamaroneck, NY 10543 914.698.5020 | www.derecktor.com

Update

Admiral Karl Schultz, the 26th Commandant of U.S. Coast Guard, Takes the Helm There’s a new Commandant at the helm of the U.S. Coast Guard. Earlier this month, Admiral Karl Schultz relieved Admiral Paul F. Zukunft during a military change-of-command ceremony at U.S. Coast Guard headquarters, becoming the service’s 26th Commandant. Adm. Zukunft retires from the Coast Guard after 41 years of service. The U.S. Coast Guard says Zukunft’s leadership and vision were instrumental in increasing the pace of the Coast Guard’s recapitalization efforts—as he worked with Congress and both the Obama and Trump administrations to achieve funding for a number of programs including: the completion of the National Security Cutter program of record, the acquisition of the new Fast Response Cutters, funding for the Waterways Commerce Cutter and funding for the Offshore Patrol Cutter. Adm. Zukunft also ensured the agency received the necessary funding to begin the acquisition process for the first new polar icebreaker built for the United States in more than 50 years.

New Commandant Adm. Schultz previously served as the Coast Guard Atlantic Area Commander. In that role he was the operational commander for all Coast Guard missions from the Rocky Mountains to the Arabian Gulf—an area comprised of five Coast Guard districts and 40 states. “The Coast Guard remains a service that is trusted, respected, and valued by our citizens because of the tremendous leadership of Admiral Zukunft,” said Adm. Schultz. “ To Admir al Zukunft and Mrs. Fr an DeNinno-Zukunft, we salute and congratulate them on a remarkably successful tour as our 25th commandant.”

Last month, President Donald J. Trump made good on a campaign promise, pulling the U.S. from the Joint Comprehensive Plan of Action (JCPOA), more commonly known as the Iran Nuclear Deal. The move kicked off the re-imposing process of all U.S. sanctions against Iran. Trump issued a National Security Presidential Memorandum (NSPM) directing the Secretary of State and the Secretary of the Treasury to prepare immediately for the re-imposition of all of the U.S. Sanctions against Iran that were either lifted or waived in connection with the JCPOA. According to the Memorandum, the process would be accomplished quick, and no later than 180 days from the date of the memorandum. So what does this mean for the industry? According to the U.S. Treasury’s Office of Foreign Assets Control (OFAC), following the 180-day wind-down period, which ends on November 4, 2018, the U.S. government will re-impose sanctions on Iran, including on its port operators, shipping and shipbuilding sectors and its affiliates; sanctions on petroleum-related transactions; sanctions on foreign financial institutions; and sanctions on Iran’s energy sector. The U.S. 12 Marine Log // June 2018

also plans to reduce Iran’s crude sales. Container shipping giant MSC has already announced it will cease taking bookings from Iran. In an announcement, MSC said, “MSC Mediterranean Shipping Company S.A., like other major container shipping lines, has been taking booking for Iran-related trade after the 2015 JCPOA ... In consideration of the impending U.S. withdrawal from the JCPOA, and corresponding re-englargement of its sanctions program, we regret to inform you that MSC is ceasing to provide access to services to and from Iran.” MSC says that while it is no long accepting bookings for shipments to or from Iran, it will continue to carry legally acceptable cargoes during the wind-down period, more specifically for foodstuffs imports.

Top: U.S. Coast Guard photo by Petty Officer 1st Class Patrick Kelley/ Bottom: Shutterstock / Vytautas Kielaitis

President Trump Reinstates Iran Sanctions

Update

Port of Baltimore, PhilaPort Continue to See Strong Growth T H E P O R T S o f b a lt i m ore and Philadelphia continue to experience strong growth. PhilaPort (The Port of Philadelphia) recently welcomed the first of two super post-Panamax cranes, making way for larger ships at the port. The milestone is the latest in fulfilling Governor Tom Wolf ’s Port Development Plan that will see more than $300 million invested in the port’s infrastructure, warehousing and equipment. Development is slated to continue through 2020, with the deepening of the Delaware River, and is expected to generate an increase of more than $100 million in state and local tax revenues annually. “My administration is working hard to invest critical dollars in improvements at PhilaPort, so that we can create thousands of jobs and grow the economy in this region,” said Governor Wolf.

Record Year for Port of Baltimore

REQUIRE

Meanwhile, down in Baltimore, the Maryland Port Administration announced that 2017 was a record year for the Port of Baltimore’s public and private marine terminals—with the port handling 28.4 million tons of cargo in 2017, the most in 38 years

(since 1979) and the third-highest tonnage in its history. The 38.4 million tons of cargo handled was valued at $53.9 billion. “The Port of Baltimore continues to be a leading economic engine for our state, supported by tens of thousands of hardworking Marylanders,” said Governor Larry

Hogan. “The port is a great example of our Administration’s commitment to ensuring that Maryland remains Open for Business.” The Port of Baltimore generates about 13,650 direct jobs, and 127,600 indirect jobs. Its also responsible for nearly $3 billion in personal wages and salary, and more than $300 million in state and local tax revenues. Last year, the port handled 10.7 million tons of general cargo—marking the second year in a row that more than 10 million tons of general cargo came through the Port of Baltimore’s public terminals. Earlier in the year, the Port of Baltimore added six new Rubber-Tired Gantry cranes to move and stack containers from larger Neopanamax containerships at the dock. The six new cranes augmented 16 others already in service at the port. In 2017, the port handled 596,972 containers, an 11% increase over the record set in 2016. Since the expanded Panama Canal opened in 2016, the port has experienced double digit growth in its container business. The port ranks first for autos and light trucks; first for RO/RO heavy farm and construction machinery; first for imported sugar; and second in exported coal.

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June 2018 // Marine Log 13

Update

Tidewater, Crosby Tugs on Track to Meet Subchapter M Requirements exceed the increasingly stringent industry requirements for towing vessels.”

Crosby Tugs selects ABS to Meet Subchapter M Compliance

The U.S. Coast Guard has issued the

first Subchapter M Certificate of Inspection (COI) to a West Coast (PACAREA) tug/towboat operator. Tidewater Transportation and Terminals, Vancouver, WA, was issued the COI for its towing vessel, Crown Point. The vessel, specifically built for operation on the 465-mile Columbia-Snake River System, is the first of three custom-built, state-of-the-art river towboats built for Tidewater Transportation and Terminals by Vigor’s Portland, OR, shipyard in 2015. Under the new USCG regulation, more

than 5,500 U.S.-flagged towing vessels will need to be compliant and meet Subchapter M requirements by July 20, 2018. Tidewater, which operates the largest barge transportation and terminal network on the Columbia-Snake River system, says its fleet is ready to meet industry requirements. “We operate under a safety management system that puts the health and safety of the public, our environment, and our employees first,” says Bill Collins, Tidewater’s Director of Environmental, Health, Safety and Security (EHS&S). “All of our tugs meet or

Meanwhile, down in Louisiana, Crosby Tugs has chosen ABS Nautical Systems’ NS Workboat mobile compliance software to help its fleet meet Subchapter M requirements. NS Workboat is available on smartphones and optimized for tablets. Its intuitive nature allows for data to be easily inputted. Its cloud-based functionality and offline work modes makes its possible to automatically sync the ship to the office when connectivity is available. The NS Workboat features pre-built ISM data sets that include planned maintenance jobs; meeting, inspection and drill jobs; and an inspected equipment list, allowing quicker implementation of its Subchapter M compliance plan. ABS Nautical Systems says the solution will always keep clients one-step ahead since the cloud-based applications enable rapid deployment of software— always giving clients the latest version to help meet regulations.

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14 Marine Log // June 2018

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GD Bath Iron Works Lays Keel for Future USS Daniel Inouye (DDG 118) General Dynamics Bath Iron Works,

Bath, ME, has laid the keel of the future USS Daniel Inouye (DDG 118). The ship, which is over half completed, is named in honor of Senator Daniel Inouye, a Medal of Honor recipient for heroism during World War II. Senator Inouye represented Hawaii in the U.S. Senate for 50 years and was posthumously awarded the Presidential Medal of Freedom. The ship’s sponsor was the wife of the

late senator, Irene Hirano Inouye, who authenticated the laying of the keel by striking welding arcs onto the steel plate. Mrs. Inouye noted her late husband worked hard to ensure the U.S. military had the most formidable equipment and called the ship a fitting tribute to his legacy. “ This unit is a massive example of what we can accomplish here at Bath Iron Works, with people working together in a great enterprise,” said Ed Kenyon, DDG 51

Program Manager for Bath Iron Works. “Over the coming months, we will continue to apply the knowledge and expertise honed over the decades. Daniel Inouye will be a true and steady vessel, the pride of our Navy,” he added. The USS Daniel Inouye (DDG 118) is just one of seven DDG 51 destroyers in the pipeline at Bath Iron Works. The Arleigh Burke-class destroyer provides multi-mission offensive and defensive capabilities.

Metal Shark Delivers Patrol Boats to Dutch Caribbean Coast Guard T h e D u tc h Caribbean Coast Guard (DCCG) has commissioned four high-speed patrol vessels for the island of Curacao. The patrol boats, the first to be delivered to the DCCG under a 12-boat order, were designed in-house by Metal Shark and built at the company’s Jeanerette, LA, facility. The vessels, based on Metal Shark’s 38 Defiant monohull, are powered by two Cummins QSB6.7 diesel engines coupled with Konrad 680B counter-rotating dualprop stern drives, and will reach top speeds in excess of 45 knots.

“With their fully enclosed pilothouse, shock-mitigating seating, and the durability of welded aluminum construction, these patrol boats represent a significant capabilities upgrade for DCCG, especially in the rough sea conditions prevalent off the coast of Curacao,” said Henry Irizarry, Vice President of International Business Development, Metal Shark. The vessels will patrol the territorial waters of Aruba, Bonaire, Curacao, St. Eusatius, St. Maarten, and Saba. Metal Shark has established itself as a provider of patrol vessels for governments

around the world. “By the end of the year,” says Metal Shark CEO Chris Allard, “Metal Shark vessels will be operational in the militaries of over 50 countries worldwide.”

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inside washington

Bill Looks to Spur Construction of U.S.-Built LNG Carriers

an the United States’ rise to the top of the world’s energy producers be leveraged to revitalize the American shipbuilding industry a n d American merchant marine? U.S. Senator Roger Wicker (R-MS) thinks so. Senator Wicker last month filed legislation that would set aside a small portion of U.S. exports of LNG and crude oil that would be required to be transported on U.S.-built, U.S.-crewed crude or LNG carriers. The legislation, the “Energizing American Shipbuilding Act,” was also introduced in the House of Representatives by U.S. R e p re s e n t a t i v e J o h n Garamendi (D-CA).

“This bill would strengthen our shipbuilding industry and would recognize the importance of having more American-flagged ships to transport our growing exports of oil and natural gas,” said Wicker. “China, India, and other nations are investing heavily in their shipbuilding capacity. The United States must keep up.” According to the U.S. Energy Information Administration’s Annual Energy Outlook 2018, liquids and natural gas production in the U.S. will continue to grow through 2050. The U.S. is set to be a net exporter of natural gas before 2020, although the level of LNG exports is uncertain. Starting in 2024, the bill would require 2% of LNG exports to be carried on U.S.-built, U.S-crewed, U.S.-flag LNG carriers. By 2040, 15% of LNG exports would be reserved for U.S.-flag vessels. There are currently no U.S.-flag LNG carriers and the last time one

was built in the U.S. was 38 years ago, in 1980. Sixteen LNG carriers were built at U.S. shipyards from 1977 to 1980. Six are still active in foreign trading. About 80% of LNG carriers have been built by South Korean shipyards. U.S. shipyards would be faced with a number of challenges in constructing LNG carriers, including technology transfer, certification in building the containment systems, major upgrades to facilities, available dockage, and training of shipbuilders. A report by the GAO from 2015 estimates that a U.S.-built LNG carrier might cost two to three times that of one built in South Korea. It estimated costs then to be about $400 million to $675 million for a U.S.-built LNG carrier. Since transport makes up a large portion of the cost of LNG, notes the GAO, it could result in making LNG produced and exported from the U.S. less competitive.

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U.S. Senator Roger Wicker (R-MS)

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NAVY SHIPBUILDING

ALLURING, BUT EXPENSIVE By Nick Blenkey

have to tell you that this is the most exciting time I have seen in my 30-plus years in shipbuilding,” Mike Petters, President and CEO, of Huntington Ingalls told analysts in a May 3 conference call following release of the company’s first quarter 2018 earnings report. Petters has good reason to feel excited. The actual size of the Navy in recent years has generally been between 270 and 290 ships. However the Navy’s FY2019 budget submission includes proposed increases in shipbuilding rates that are intended as initial steps for increasing the size of the Navy toward a goal of a fleet with 355 ships. Indications are that Congress is prepared to give the Navy what it wants . . . and maybe some more, including a number of non-battle force ships. The 355-ship goal is the result of a force structure assessment (FSA) completed in December 2016 by the Chief of Naval Operations to determine the correct balance and mix of ships needed to address the evolving responsibilities of the Navy. In addition 18 Marine Log // June 2018

to the FSA, the Navy also sponsored three independent studies of alternative fleet architectures, the findings of which were assessed and incorporated into the 355-ship architecture. The Navy calls the 355-ship fleet, “The Navy the Nation Needs,” or NNN. In its FY 2019 Annual Long-Range Plan for Construction of Naval Vessels, the Navy says the NNN shipbuilding plan puts the Navy on a path to 326 ships by FY2023 and 355 ships by the early 2050’s. A Congressional Research Service (CRS) report released in April says that the 30-year (FY2019-FY2048) ship building plan includes 301 new ships, or an average of about 10 per year. To achieve the 355-ship force-level goal, CRS estimates 57 to 67 ships will need to be added to the Navy’s FY2017 30-year shipbuilding plan. Part of that can be achieved by extending the service lives of existing ships beyond currently planned figures or reactivating recently retired ships. The CRS report cites Navy officials as saying that the Navy has decided to extend the service lives of all DDG-51 destroyers to 45

years, allowing the Navy to achieve a total of 355 ships by the 2030s. What’s important to note is that service life extension programs (commonly called SLEPS) are expensive and they, too, will require shipyard capacity. All of this raises the questions: If this is “The Navy the Nation Needs” can the nation afford it? And will Congress pay for it?

Shipbuilding Costs The Congressional Budget Office (CBO) estimates that, over the next 30 years, meeting the 355-ship goal with new ship construction alone would cost an average of $26.7 billion annually (in 2017 dollars). Combining that shipbuilding program with SLEPs for some existing ships to achieve a 355-ship fleet faster would cost an average of $27.5 billion annually; the costs for those SLEPs would be concentrated over the next 10 years. If the Navy was kept at its current size, shipbuilding costs would average $22.4 billion annually. By contrast, if funding for the

NAVY SHIPBUILDING

The 355-ship fleet maybe the Navy the Nation Needs, but can it afford it? fleet was kept at roughly historical levels, shipbuilding costs would average $16.8 billion per year. Additional shipbuilding funds are only a fraction of the total costs needed to achieve and maintain the Navy’s 355-ship fleet instead of the previously envisaged 308-ship fleet. CBO estimated in 2017 that, adding together both shipbuilding costs and ship operation and support (O&S) costs, the Navy’s 355-ship fleet would cost an average of about $11 billion to $23 billion more per year in constant FY2017 dollars than the 308-ship fleet. This figure does not include additional costs for manned aircraft, unmanned systems, and weapons.

FY 2019 Budget Request Right now, nobody in Congress is howling too much about the cost. The two-year budget deal signed into law by President Trump both funds the Pentagon to the tune of $1.4 trillion for this year and next, and suspends controversial budget caps mandated by the Budget Control Act.

Though those caps will come back in FY20 and FY21, when the political and budgetary climate could be very different, for the moment Congress looks to be in the mood to go along with at least the early part of the Navy’s five- and 30-year plans. As a first step, the Navy’s FY2019 budget request seeks funding for the procurement of 10 new ships, including two Virginia-class attack submarines, three DDG-51 class Aegis destroyers, one Littoral Combat Ship (LCS), two John Lewis (TAO-205) class oilers, one Expeditionary Sea Base ship (ESB), and one TATS towing, salvage, and rescue ship. The House Armed Services Committee (HASC) has already passed its version of the FY 2019 National Defense Authorization Act. It not only includes the 10 ships the Navy requested, but also adds three battle force ships: one Ford-class aircraft carrier and two additional LCS. The HASC also specifically authorizes the procurement of CVN-81, the fourth Fordclass aircraft carrier and recommends long lead time material funding in fiscal year 2019 for two additional Virginia-class submarines in fiscal years 2022 and 2023.

Enter The Champ Outside of the battle force, the HASC also authorizes the Secretary of Defense to enter into a contract for 10 foreign-built, used sealift vessels concurrent with a plan to construct 10 new sealift vessels. And it limits Military Sealift Command FY 2019 expenditures until the Secretary of the Navy has entered into a contract for two vessels and has completed the requirements documentation for the construction of the Common Hull Multi-Mission Platform (CHAMP). According to a May 7, FedBizOpps announcement of an Industry Day and Request for Information, the CHAMP will be “a domestic common-hull design to replace aging mission specific sealift and auxiliary designs to reduce life cycle costs, leverage reconfigurable force packages and stabilize the industrial base.” Built to ABS Rules and USCG regulations using Commercial-Off-The-Shelf (COTS) systems and equipment, the ship will be able to support Roll-on/Roll-off (RO/RO) movement of combat equipment and expanded missions through the use of force packages.

Ice Breakers, Training Ships And More The Navy Budget is not the only vehicle through which the Government buys ships. The 2,232-page omnibus spending measure just signed into law by President Trump earlier this year provides the Maritime

Administration with $300 million for the National Security Multi Mission Vessel Program (NSMMV). The vessels are designed to replace the aging fleet of training vessels at the nation’s maritime academies and to support the Federal Emergency Management Agency (FEMA) in times of national emergency. The first ship is intended to replace SUNY Maritime’s elderly Empire State VI. Next in line, should it make into FY2019 would be a new ship for Massachusetts Maritime Academy. The Coast Guard acquisition program is, of course, a whole other subject and is funded through the Department of Homeland Security budget. The Coast Guard’s acquisition program of record (POR) calls for procuring eight National Security Cutters (NSCs), 25 Offshore Patrol Cutters (OPCs), and 58 Fast Response Cutters (FRCs). The Coast Guard’s proposed FY2019 budget requests a total of $705 million in acquisition funding for the NSC, OPC, and FRC programs. However, the biggest ticket item on the Coast Guard’s shopping list is the Polar icebreaker replacement project. A May 23, 2018 report from the CRS says that the Coast Guard and Navy now believe that three heavy polar icebreakers could be acquired for a total cost of about $2.1 billion, or an average of about $700 million per ship. The integrated Navy USCG polar icebreaker program office achieved a milestone Feb. 21, 2018, when it received approval from the Department of Homeland Security to advance to the next phase of the acquisition life cycle. The Coast Guard released its draft heavy polar icebreaker system specifications in a request for information (RFI) on April 4, 2017. The request seeks questions, comments and feedback related to heavy polar icebreaker technology risks, sustainability, producibility, and affordability. The question now is whether Congress will come up with the funding for the polar ice breaker program. According to the CRS, issues for FY2019 for the program include, inter alia, whether to approve, reject, or modify the Coast Guard’s FY2019 acquisition funding request; whether to use a contract with options or a block buy contract to acquire the ships; whether to continue providing at least some of the acquisition funding for the polar icebreaker program through the Navy’s shipbuilding account; and whether to procure heavy and medium polar icebreakers to a common basic design. June 2018 // Marine Log 19

NAVY SHIPBUILDING The Elephant In The Room The Columbia submarine program is the elephant in the room. Originally known as the SSBN (X) program and the Ohio Replacement Program (ORP), the Columbia class vessels will replace the Ohio-class Trident submarines as they reach the end

20 Marine Log // June 2018

of their service lives (set to begin retiring in 2027). Unless the Columbia sub is funded, the United States will lose the most credible element of its nuclear deterrent. The program has already required substantial research, development funding and

advanced procurement; The CRS repor ts that the Navy has requested $3.8 billion for the Columbia Class submarine in its FY2019 budget. Within this total, $514.8 million is allocated to submarine development, $256.1 million to advanced nuclear power systems, and $3 billion to advanced procurement. The Navy initially estimated that each submarine in this program could cost $6 billion to $7 billion in FY2010 dollars. Now, though, the CRS says it expec ts the first submarine to cost $14.5 billion, with $8.8 billion in construction costs and $5.7 billion in non-recurring engineering work. Subsequent submarines are expected to cost $9.8 billion dollars. “T here has b e e n wid e s p read agreement...that the costs associated with the Columbia class submarine could undermine the rest of the Navy’s shipbuilding budget,” says a CRS report. Congress has set up a mechanism to protec t the main shipbuilding budget by establishing a National Sea-based Deterrence Fund. Money placed in the fund will be available for the design, construction, purchase, alteration, and conversion of “national sea-based deterrence vessels.” The legislation also states that the Secretary of Defense has the authority to transfer up to $3.5 billion into the fund from unobligated funds in the DOD budget. The CRS report notes that “most experts agree that, without increased appropriations, this fund may protect the Navy’s shipbuilding budget from the costs of the Columbia class submarine, but that it would not really solve the DOD’s problem, because the money for the fund would have to come from other portions of the Pentagon budget.” Never theles s, notes the CRS, the Navy continues to support the Columbia class submarine as it s highest priority, with Admiral John Ric hard s o n, t he Chief of Naval Operations, noting that the ballistic missile submarine force is “foundational to our survival.”

world shipbuilding

Slump Prolonged

Compiled by Marine Log Staff

Top: Hyundai Merchant Marine / Bottom: Ministry of Oceans and Fisheries

South Korean government looks to pump new life into domestic shipyards with massive ship purchase program

lobal demand for new ships— bulkers, tankers, containers, LNG and LPG carriers, and other vessels—was 18.8 million gross tons in 2016 and 42.6 million gross tons in 2017—a fraction of the demand of 81.6 million gt in 2014 and 77.2 million gt in 2015. The prolonged shipbuilding slump over the last few years has taken its toll on shipbuilders, particularly those in Asia, where about 85% of the world’s commercial ships are built. Japan, China, and South Korea have all had to restructure their shipbuilding capacity. Some South Korean yards are hanging by a thread. According to IHS Markit, South Korea emerged as the leading international shipbuilder with orders for new ships (100 gt and over) of 170 vessels at 18.6 million gt, followed by China with 408 vessels at 15.1 million gt, and Japan with 192 vessels at 2.3 million gt. Table 1 on page 22 provides additional details on the new ship orders placed worldwide in 2017.

In an effort to throw its shipbuilding industry a lifeline, the South Korean government is supporting domestic shipping companies through a ship purchase assistance program. This past April, South Korea’s Minister of Oceans and Fisheries Kim Young-choon announced a five-year plan under which the government would support South Korean shipping companies place orders for 200 ships at South Korean shipyards by 2020. The new orders would come in the form of 140 bulk carriers and 60 container ships, using investment and guarantees from the Korea Ocean Business Corporation (KOBC) that’s set to start in July. Calling it a comprehensive measure to revive the shipping and shipbuilding industries, the minister said the “golden time” to revitalize them may soon expire due to fierce international competition and strengthened environment-related regulations, among other things. The shockwaves of Hanjin Shipping’s

bankruptcy in 2016 are still reverberating through the Korean shipping and shipbuilding industry. Minister Kim Young-choon (pictured below) reportedly told economic ministers at a recent meeting that “sales of South Korea’s shipping industry were cut by over 10 trillion won, and the tonnage of the deep sea containers has been cut in half,” by

June 2018 // Marine Log 21

world shipbuilding Hanjin Shipping’s demise. One of the local shipping companies that will revitalize and expand its fleet under the 5-year program is Hyundai Merchant Marine (HMM). It will triple its current capacity of 330,000 TEU under the program. Last month, HMM selected three South Korean shipbuilders who will build the 20 eco-friendly mega containerships it is to order under its “Capacity of 1 Million TEU Strategy.” Under the program, HMM intends to order a total of twelve 23,000 TEU and eight 14,000 TEU mega containerships. Since sending out a Request for Proposal (RFP) to shipbuilding companies on April 10, HMM has considered all the conditions for newbuilding including delivery date and price of new ships suggested by shipbuilders, and finally selected three shipbuilders to sign a Letter of Intent (LOI) for the 20 new vessels. The orders will go to South Korea’s three biggest shipyards, which have all had to undergo “self-rescue” efforts, which include disposal of non-core assets, employee layoffs, and optimization of production capacity. Seven of the 23,000 TEU ships will be built at Daewoo Shipbuilding and Marine Engineering (DSME) and five at Samsung Heavy Industries (SHI). All eight of the

14,000 TEU ships will be built at Hyundai Heavy Industries (HHI). The 23,000 TEU containerships are expected to deliver from the shipyards in the second quarter of 2020. The 14,000 TEU containerships will be delivered in the second quarter of 2021.

South Korea’s three biggest shipyards, DSME, SHI and HHI, have all had to undergo ‘self rescue’ efforts

In its most recent presentation to investors last month, DSME reported that its financial improvement program had resulted in an operating profit for 2017 of 733 billion won, up from a loss of 1.51 trillion won in 2016. The profit was despite lower sales of 11,102 billion won in 2017, versus 12,819 billion won in 2016.

As of the end of April, DSME had a total backlog of 96 ships, drill rigs, and production facilities on order valued at $22.7 billion. The backlog includes 74 commercial vessels valued at $12.61 billion, seven offshore vessels valued at $6.38 billion, and 15 naval ships and vessels valued at $3.76 billion. Distressed shipbuilder STX Offshore & Shipbuilding was able to secure an order for four MR2 product tankers with ClearOcean Tankers, a joint venture between Gunvor Group, Oceangold Tankers, and Maas Capital. ClearOcean also entered into a contract with China’s Daehan Shipbuilding for two LR2 product tankers. All six of the contracted vessels will be delivered during the first half of 2019, and will be eco-friendly and scrubber-ready. Clearlake Shipping, Gunvor’s whollyowned shipping division, has entered into long-term time charters for the vessels and Oceangold Tankers is also acting as construction supervision and technical manager of the vessels. Based on data from Clarksons, South Korean shipbuilding groups HHI, DSME, and SHI account for a 25.8% market share by deadweight tons of 99.14 million dwt of new ships delivered in 2017.

Table 1 - Worldwide New Ship Orders (GT in 1,000) Japan

S. Korea

China

Europe

Other

World Total

Year

#Ships GT

#Ships

2013

571

13,804

551

35,452

1,417

43,925

157

1,422

836

8,597

3,532

103,200

2014

604

19,314

340

24,594

1,164

31,372

161

2,038

619

4,282

2,888

81,600

2015

599

22,218

273

23,321

740

24,932

148

2,328

580

4,401

2,340

77,200

2016

183

2,519

5,780

277

6,653

102

2,586

393

1,262

1,044

18,800

2017

192

2,293

170

18,594

408

15,090

166

3,316

352

3,367

1,288

42,659

Table 2 - Worldwide Ship Completions (GT in 1,000) Japan

S. Korea

China

Year

#Ships GT

#Ships

2013

540

14,588

386

24,504

1,073

25,903

159

1,111

931

4,374

3,089

70,580

2014

522

13,421

343

22,595

914

22,707

166

1,320

1,018

4,575

2,963

64,618

2015

520

13,005

358

23,272

949

25,160

152

922

891

5,137

2,870

67,566

2016

514

13,309

359

25,035

824

22,355

165

1,537

681

4,187

2,543

66,422

2017

489

13,036

288

22,175

778

23,786

184

1,609

646

4,768

2,385

65,374

Source: Shipbuilders Association of Japan/HIS Markit World Shipbuilding Statistics

22 Marine Log // June 2018

Europe

Other

World Total

Shipping The Stena Sonangol Suezmax Pool is comprised of about 25 efficient suezmax tankers, including the Stena Superior

SLIPPERY SLOPE

Influx of newbuilds weakens tanker freight rates, but increased scrapping sends positive signal

t’s a story you’ve heard countless times before. An oversupply of tonnage in the market driven by an influx of newbuilds is weakening tanker freight rates this year. On an equal weighted average, respected brokerage and research consulting firm McQuilling Partners, Inc. notes that Time Charter Equivalents (TCEs) declined about 70% in the first four months of the year as compared to the same period in 2017. McQuilling says that utilization dropped from 63.2% to 60.5%—and believes that downward pressure on utilization is likely to persist through the remainder of this year as new tankers are delivered to the world fleet. “We are beginning to see indications that this pressure may last longer-term as the current orderbook continues to expand this year,” says McQuilling.

Stena

More Newbuilds Ordered Year-to-date, McQuilling has recorded significant growth in newbuild tanker

contracting when compared to recent years. Through April, McQuilling says 81 tankers were on order (excluding chemical IMO I or II designated), a level somewhat comparable, but still above 2014, when the first four months saw 77 tankers on order. Increased ordering has largely been driven by the Very Large Crude Carrier (VLCC) and MR2 tanker sectors, as 31 vessels were contracted in each sector, peaking in March. In total, McQuilling says 40 Dir t y Petroleum Products (DPP) tankers were placed on order: 31 VLCCs, six Aframax (80,000-120,000 dwt) tankers and three Panamax (55,000-80,000 dwt) tankers, with no Suezmax (120,000-200,000 dwt) ordered. McQuilling says ordering for VLCCs in March was particularly heavy, with 18 newbuilds ordered. It estimates that 215 VLCCs will “hit the water between 2018 and 2022, averaging 54 additions per annum, higher than the 51 expected for this year.” Just this past May, the Board of Directors

of Maersk Product Tankers approved the order of six of 10 LR2 tankers from China’s Dalian Shipyard stating that “the current market makes the investment attractive because it offers competitive asset prices. The fleet renewal will help to sustain a competitive fleet that is meeting customers’ demands and retain a strong market position in the LR2 segment.”

Reading the Tea Leaves In reporting its first quarter of 2018 results, Frontline Ltd., one of the world’s largest operators in the VLCC and Suezmax tanker markets, did post a loss amid weaker spot freight rates, but pointed to positive signs in the market. “The spot rate environment was weak in the first quarter as inventory draws impacted a freight market that was already suffering from high fleet growth,” said Frontline Management AS CEO Robert Hvide Macleod. “While there are encouraging signs that June 2018 // Marine Log 23

Shipping seaborne crude volumes may soon increase as a result of changes by OPEC and a slowing trend of inventory draws, the market is not yet factoring in upside potential,” he said. In its results, Frontline did note the increased number of VLCC deliveries this year, but said the number of crude oil tanker newbuilding orders was lower in the first quarter of 2018 than in the prior quarter, and “we expect newbuilding ordering to slow further in the near term. Newbuilding prices have increased driven by steel costs and constrained shipyard capacity.” For the quarter, Frontline took delivery of two VLCCs, the 300,000 dwt Front Empire (built by Japan’s Japan Marine United Corporation) and the 300,000 dwt Front Princess (built by Korea’s DSME), and one LR2 tanker, the 111,000 dwt Front Polaris (built by China’s New Times Shipbuilding). Frontline controls a fleet of 63 tankers, 46 of which it owns. It has two other VLCCs under construction.

Demolition on the Rise One factor that had Frontline’s outline positive for the future was a “near record pace” in scrapping. Frontline says broker reports indicated that there were 22 VLCCs scrapped so far in 2018 and additional VLCCs have been sold for near-term scrapping. “Consistently high scrap prices, combined with a very weak freight market, have compelled owners of older tonnage to dispose of their vessels at a near record pace. If the pace of scrapping continues, the global VLCC fleet will see negative growth in 2018. The surge in scrapping is a positive factor that will help to reduce net fleet growth, but it will likely take some time before the market rebalances.” Frontline also pointed to the end of OPEC and non-OPEC production cuts, which had resulted in reduced the demand for

24 Marine Log // June 2018

crude oil tankers. “There is a historic relationship between crude oil inventory levels and freight rates, with periods where rates rise as inventories build and decline as inventories are consumed. Despite the persistence of a weak rate environment, cyclical changes are underway, and until then Frontline remains sharply focused on maintaining our cost-efficient operations and low breakeven levels.” In April, McQuilling also observed an increase in scrapping as well as a 17% rise in steel scrap prices over 2017, jumping to an average of $434/LDT (light displacement ton). McQuilling reported that 18 VLCCs were removed from the trading fleet. McQuilling also cites GMS, the world’s largest cash buyer of ships for recycling, “we have seen roughly 25 VLCCs reported sold for demolition year-to-date and activity is likely to remain healthy over the balance of the year for the tanker segment, given freight rates remain relatively weak and scrap prices remain elevated.” Through the balance of 2018, McQuilling expects to see strong tanker scrapping activity, but thinks that the pace is likely to slow. “Currently, we forecast another 77 clean and dirty tankers to exit the global trading fleet this year with 11 of those being VLCCs. Freight rate weakness is likely to persist through the remainder of the year until we see a significant reduction in fleet supply relative to tanker demand, a more promising story in the years to come.” VesselsValue’s Court Smith, however, does suggest there is a tool at VLCC owners disposal that they could use to limit capacity: slow steaming. “The VLCC markets have staged a modest recovery ahead of market speculation that OPEC may relax production cut discipline and rising bunker prices which are providing a negotiating point for owners,” writes

Smith. “The VLCC market remains oversupplied with tonnage, but there are other tools at the immediate disposal of owners. The average speed of the VLCC fleet has not dropped to the levels seen in historical data in the high oil price environment and low earnings of 2013. Slowing ships down further could help reduce the supply of available vessels.” Data from VesselsValue, a U.K. ship valuation provider, says that VLCCs had a laden and ballast average speed of 11.8 knots in April 2018, up from 11.2 knots in October 2014.

Gradual Strengthening Sweden’s Concordia Maritime believes there will be a gradual strengthening in the market starting mid this year. That belief led the tanker company to participate in three relatively young, 158,000 dwt Suezmax tankers chartered in by Stena Bulk. The vessels were built in South Korea between 2012 and 2014. “We continue to act based on our belief in a progressively stronger market from autumn 2018 onwards,” says Concordia Maritime CEO Kim Ullman. “By chartering in the three Suezmax tankers, we also strengthen our presence in the crude oil tanker segment and continue to increase our earning capacity. The weak market means that we could enter into the contracts at favorable terms. In purely operational terms, we know the vessels well, as they have earlier been employed in the Stena Sonangol Suezmax Pool,” says Ullman. The contracts for the three tankers are for 12 months, with an option to extend until the end of 2019. Afterwards, they will once again be employed on the spot market through the Stena Sonangol Suezmax Pool, which is controlled by Stena Bulk and the Angolan state oil company Sonangol.

TUGS &Feature BARGES

Q-LNG is building the first ATB LNG bunker vessel at VT Halter Marine

Small Scale Coming in a

BIG WAY

Development of LNG bunkering infrastructure critical to expanding interest in LNG-fueled vessels By John R. Snyder, Publisher & Editor in Chief

VT Halter Marine

s the implementation of IMO’s 0.5% global sulfur cap draws closer—it goes into effect January 1, 2020—vessel operators will have to carefully weigh their compliance options and the potential cost implications of those strategies. The compliance choices aren’t vast: Switch from fuel oil to Marine Gas Oil, use exhaust gas scrubbers when you burn High Sulfur Fuel Oil or try an alternative fuel such as Liquefied Natural Gas (LNG) or methanol. While many ship operators are expected to switch to MGO, there could be limited availability of 0.5% sulfur fuel, perhaps initially only in major bunkering hubs such as Singapore, and the ports of Amsterdam, Rotterdam, and Antwerp. At Posidonia 2018 in Athens, Greece, early this month, DNV GL reported that there has been a dramatic rise in interest in emission reduction systems, especially scrubbers. As of May 2018, the total number of vessels either ordered or installed with scrubbers stood at 817—a jump of nearly 300 vessels in a space of only a few months, according to DNV GL. “This increase is due to several factors, but the trend is clear,” says Stine Mundal, Head

of Section for Environmental Certification at DNV GL – Maritime. “At the same time, we are seeing that bulk and container vessels are the segments with the most installations, overtaking cruise vessels which had been the early adopters. This indicates that owners are making their solution decisions now and many are choosing scrubbers to comply with emissions restrictions.” At the Marine Log Tugs & Barges 2018 Conference & Expo, this past May in Philadelphia, several presenters discussed the development of small scale LNG bunkering infrastructure—which will play into ship operators’ decisions to opt for LNG as a marine fuel to meet emission regulations. Speaking at Tugs & Barges 2018, Aziz Bamik, General Manager, GTT North America, Houston, TX, pointed out that there are currently 120 LNG-fueled ship and vessels in operation and another 134 on order or under construction—up from 100 in operation and another 101 on order or under construction in February 2017. Right now, there are 46 ports around the world that are supplying LNG and six bunker vessels supplying LNG as fuel. One of the newest will be the Clean Jacksonville, the first LNG transport barge in the U.S.—and first

of its type in the world—is nearing commissioning at Conrad Orange Shipyard in Orange, TX. Designed by Bristol Harbor Group, Bristol, RI, the 232 ft x 49 ft bunker barge has a single GTT Mark III Flex technology membrane tank with a capacity of 2,200 m3, with the ability to transfer LNG at 500 m3/hr. The Clean Jacksonville will support bunkering of TOTE Maritime’s two Marlin Class LNG-fueled containerships. LNG bunkering began at the Port of Jacksonville, FL, on January 9, 2016, with the fuelling of the first of those ships, Isla Bella. TOTE worked with its supply chain partners JAX LNG and Clean Marine Energy and other commercial partners and stakeholders in a phased approach to develop LNG bunkering. Prior to the commissioning of the Clean Jacksonville, The TOTE ships have been refueled using truck-to-ship LNG bunkering. The truck-to-ship bunkering operation uses ISO containers via a transfer skid. The skid system allows four chassis mounted ISO containers to be simultaneously offload LNG to the Marlin Class ships within 6 to 8 hours. The JAX LNG liquefaction plant under development is owned by JAX LNG, a partnership between Pivotal LNG, a wholly June 2018 // Marine Log 25

TUGS & BARGES

owned subsidiary of Southern Company Gas, and NorthStar Midstream, LLC (a joint venture of Oaktree Capital and Clean Marine Energy). Jacksonville is also home to Eagle Partners liquefaction facility. LNG from Eagle LNG’s new plant will fuel Crowley Maritime’s two new 2,400-TEU Commitment Class, combination container/roll-on rolloff ConRo ships being built by VT Halter Marine in Pascagoula, MS, for the U.S. mainland to Puerto Rico trade. In April, Crowley completed a successful “fill-up” of Crowley’s El Coqui. We’ll discuss Eagle LNG Partners and Crowley Maritime’s LNG bunkering operations more in the second part of this article next month. Bamik said one of the main lessons learned in the construction of the Clean Jacksonville “is that in order to insure that your project goes correctly, the owner needs to enter a front end engineering design (FEED) before signing a contract with the shipyard and cutting steel. We are currently developing a next generation of bunker barges for U.S. trade and vessels. We’ve developed self-propelled vessels for the Europe trade and we are ready to make some adaptations for them to operate in the United States.” Bamik focused on a new concept—an 8,000 m3 capacity LNG bunker barge that will feature two tanks. “As I speak, we are lining up stakeholders to develop the preliminary design and once we have this package we will engage with the U.S. Coast Guard. We will also present that package to shipyards. We’re going to incorporate all of the lessons from the first LNG bunker barge project. I think it’s a great opportunity to move forward on the next step,” he said. Globally, Bamik said GTT was already in the process of developing the next generation of fueling arm for ports in Japan that intent to increase of LNG bunkering operations. The new generation bunkering arm, said Bamik, will be able to transfer LNG at 1,100 m3/hr—almost twice the rate of the existing arm. GTT is also tackling the training aspect of operating an LNG bunker barge. It developed a simulator based on the design 26 Marine Log // June 2018

features of the barge to train the crew on operations such as receiving LNG from trucks or at a terminal, delivering LNG to a Type C tank. The idea is to make available training via a simulator in your office or at a training center. We were able to bring the training to people who need this. At Tugs & Barges 2018, Dave Waller, President of naval architectural firm Waller Marine, Inc., Houston, noted that his firm has been working on small scale LNG in relation to floating power plants in the Caribbean since 2010. “We were talking to PREPA—the Puerto Rico Electr ic Power Author ity—and utilities in the Dominican Republic and Jamaica to supply LNG and floating power plant. Based on that we designed a series of LNG ATB RV, which is a regas vessel. ABS gave us an AIP for these units. We decided a series of these units from 4,000 up to 30,000 cubic meters. “The whole idea is to reduce the virtual pipeline of LNG in support of mainly power plant to the islands of the Caribbean. We got a long way with PREPA and I just wish it had happened because we had put in floating units some of those might have survived and Puerto Rico might be in better shape than it is today.” Waller added, “We are now starting to reap the benefits of earlier work on LNG bunker barges.” Waller noted that cruise shipping “is pushing LNG fuels in a big way.” There are at least 17 LNG-fueled cruise ships planned to come into service between 2018 and 2026, according to Marine Log data. Waller Marine is the designer of what will be the first LNG Articulated Tug Barge unit (ATB) in the world. Now under construction at VT Halter Marine in Pascagoula, the LNG bunker barge will have a 4,000 m3 capacity. “She’ll initially operate out of Florida serving the cruise ships in Port Canaveral and Miami,” said Waller. The ATB will load at the Elba Island LNG plant near Savannah, GA. Shell Trading (US) Company has finalized a long-term charter agreement with newly formed The ATB is owned by Q-LNG

Transport, LLC, a new U.S.-flag company owned 70% by Harvey Gulf International Marine CEO Shane Guidry and 30% by Harvey Gulf. The ATB will operate under a long-term charter contract with Shell Trading (US) Company. Previously, New Orleans-based Harvey Gulf International Marine built and chartered the first LNG-fuel platform supply vessels in the U.S. to support Shell operations in the Gulf of Mexico. The ATB unit, which will be constructed to meet the requirements of the International Gas Carrier (IGC) code. The bunker barge will have a length of 324 ft, beam of 64 ft, and depth of 32.6 ft. The tug will have a length of 128 ft, beam of 42 ft, and depth of 21 ft. Q-LNG says that the project will rely heavily on collaboration between VT Halter Marine and Wärtsilä, which will be delivering a large scope of equipment to the project. Wärtsilä’s deliverables for the barge include all of the cargo handling, cargo control, and cargo containment system as well as the PMS and automation onboard. The supply for the tug includes all of the bridge navigation, communications, and dynamic positioning equipment as well as thruster, PMS and automation. Meanwhile, Waller Marine is designing an 8,600 m3 capacity LNG bunker barge in response to a Request for Information (RFI) from Shell. “We’ll soon find out the selection,” says Waller. The selection process will narrow down the short list of project competitors to two, who will then be required to provide “a lot more definition into the design”, he says. Ironically, Waller Marine is also working the other side of the IMO 0.5% global sulfur cap equation. Waller Marine is developing a floating refinery that will be used to produce ultra low sulfur fuels in the India Ocean. The project leverages the company’s extensive knowledge base of designing the world’s largest floating power plants. “About 35,000 ships traverse the Indian Ocean every year. Our client saw huge opportunities to supply bunker fuels to those ships during those voyages,” said Waller.

TOTE Maritime

A skid system allows four chassis-mounted ISO containers to simultaneously offload LNG to the Marlin Class ships within 6 to 8 hours

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Hurricane Relief The Sea Chem-1 helped transport 8 million gallons of diesel to Puerto Rico following Hurricane Maria

SEACOR’s “Seabees” Are A Force for Recovery in the Caribbean

ore than eig ht months since Hurricanes Irma and Maria made landfall in the Caribbean, the recovery efforts continue as another hurricane season looms. One company that is keeping a close eye on the 2018 Atlantic hurricane predictions is SEACOR Holdings Inc. (SEACOR), a South Florida-based public company (NYSE: CKH). With interests in risk management and emergency response services, crisis management, transportation, and logistics, SEACOR gets one of the first calls when natural disasters strike. SEACOR, 28 Marine Log // June 2018

through its diverse subsidiaries, has been actively involved in almost every significant disaster response effort occurring in the United States since the 1990s. Witt-O’Brien’s, SEACOR’s crisis management and response business, is no stranger to working in the Caribbean. Charles Fabrikant, Executive Chairman and CEO, noted that one of its response units’ earliest assignments was triggered by a very large oil spill off the coast of Puerto Rico, “We launched our business in the early 1990s. One of our first major deployments was to Puerto Rico in 1994 when the Morris J. Berman, a

single-hull barge, released 750,000 gallons of heavy grade oil.” The shipping industry has worked hard and has been successful in improving its safety and environmental standards, and pollution incidents are increasingly rare occurrences. Insulating communities from natural events, however, presents an insurmountable challenge. Nature is beyond our control, but preparation helps. Commenting on the devastation from last September’s storms Fabrikant added, “I am heartened that SEACOR’s response group and logistics savvy were able to assist the islands and their residents.”

SEACOR/Paul Johnson

By SEACOR Crisis Response Solutions Team

Hurricane Relief SEACOR, in addition to helping out in Puerto Rico and the USVI, deployed people in Florida and Texas to assist those impacted by the 2017 hurricanes.

Witt O’Brien’s/Len Kaufman

Tailored Applications Across Diverse Assets SEACOR’s ocean transportation and logistics businesses are one of the key links in the logistics supply chain that supports nearby Caribbean islands. Its vessels and those of its affiliate Trailer Bridge Inc. service the Bahamas, Turks & Caicos, Dominican Republic, and Puerto Rico from Florida. The instant access to logistics experts and ability to source assets provides Witt-O’Brien’s cadre of emergency response specialists with a seamless opportunity to help island communities jump start their recovery effort. SEACOR’s asset base and knowledge facilitate delivering solutions customized for the impacted group of islands. SEACOR’s regional shipping line and logistics service linking South Florida to the Bahamas and Caribbean, SEACOR Island Lines, coordinated the first relief deliveries to the Islands, showing up with supplies for the USVI as soon as conditions permitted after Hurricane Irma. The Norma H was chartered-in by SEACOR and loaded with critical cargo sourced from Puerto Rico not yet hit by the storm. The supplies sourced by SEACOR personnel included lumber, tarps, generators, bottled water and canned food. After Hurricane Maria passed, a SEACOR owned asset, the Bahamas Express, designed to dock in areas where there is either a draft limitation, limited or no shore-side port infrastructure proved invaluable to support the initial deliveries of relief supplies and equipment necessary to repair critical infrastructure. The Bahamas Express remained active in the region supporting cargo operations for FEMA between the USVI and Puerto Rico through March 2018. Also in response to Hurricane Maria, Trailer Bridge, mobilized to take on relief cargoes. This Jones Act liner service with facilities in Jacksonville, FL, and San Juan, PR, has moved over 100 million pounds of relief goods, including thousands of specialized power restoration assets, containers of donated supplies for churches and schools, and equipment to support the rebuilding efforts in Puerto Rico and the Virgin Islands. The storm hit Trailer Bridge close to home. Trailer Bridge spent over $1 million insuring that the families of its 26 Puerto Rican based employees had a generator, fuel, water, food, and daily necessities so personnel could execute critical missions to support other families of Puerto Rico.

Trailer Bridge’s leadership coordinated closely with government agencies and nonprofits in their efforts to restore power and provide relief, including, but not limited to, FEMA, United States Coast Guard, United for Puerto Rico, United States Marine Corps Reserve Toys for Tots Foundation, and other local government municipalities, agencies, and churches in Puerto Rico. Trailer Bridge’s customers also pitched in with hundreds of shipments of goods. SEACOR also played a key role to keep Puerto Rico’s hospitals and other critical care centers supplied with diesel as the island utilized generators for months after the storms

If disaster strikes, we stand ready to help them respond and recover quicker and stronger hit. Leveraging available in-house assets and expertise, SEACOR provided a bespoke solution to FEMA transporting approximately 8 million gallons of diesel to the island and functioning as a floating fuel depot. The Fort Lauderdale operations group outfitted the SEA Power/SEA Chem-1, one of SEACOR’s tank vessels, with specialized connections and hoses enabling it to discharge directly into trucks. The vessel loaded 1,749 delivery vehicles directly in San Juan harbor for

onward distribution to essential service facilities and other in-need communities. Harnessing its uniquely wide network in the transportation and logistics space, SEACOR also helped to source third-party equipment such as helicopters, fast supply vessels, accommodation barges and other equipment. SEACOR’s former offshore marine division, SEACOR Marine Holdings Inc. (NYSE: SMHI), was able to support urgent requirements for restoring telecommunications by moving technicians and light vehicles and equipment with the group’s newest fast supply vessel, the Liam J McCall, covering the 1,500 miles from Tampa to San Juan at 25 knots in just under two and half days.

Powering Recovery In addition to the immediate need for food, water, and shelter in the wake of widespread natural disaster it is critical to restore power and communications. SEACOR’s clean energy subsidiary, CLEANCOR Energy Solutions, coordinated with Trailer Bridge for the delivery of water trucks that were necessary to quickly facilitate the delivery of potable water to citizens. CLEANCOR also delivered, installed, and maintained fleets of standby generators for customers in the USVI and Puerto Rico. Bibiana Ferraiuoli, President of the Ricky Martin Foundation, commented, “The Ricky Martin Foundation is more than grateful to CLEANCOR for their prompt response after the devastation caused by Hurricanes Maria and Irma in our beloved Puerto Rico. After natural disasters, children and youth are more vulnerable to exploitation. Hence, the generator that was installed and maintained by CLEANCOR in Centro

June 2018 // Marine Log 29

Hurricane Relief

Tau for our energy supply was vital in supporting the basic needs of the families and the communities in Loiza that rely on our school functioning for their children’s education and the other charitable activities that are based there.” CLEANCOR, led by CEO Jeff Woods, remains active in Puerto Rico with a range of commercial and industrial customers to design, build, operate, and maintain private power plants and backup systems for improved energy resiliency.

From Rapid Response to Long-Term Recovery Although SEACOR’s position in transportation and logistics is prominent and well known, many of its peers and institutional investors are not aware that Witt O’Brien’s is a SEACOR subsidiary. The Witt O’Brien’s name is well known in the disaster world: its team has helped clients respond to every major U.S. disaster in the past two decades. Witt O’Brien’s team of full time personnel have been counseling ship owners, oil companies, and pipeline owners for years,

helping them prepare for oil spills. Its network of crisis management professionals assist public sector officials and private sector executives prepare, respond, and recover from natural disasters and other crisis events. Following the 2017 hurricanes, Witt O’Brien’s was initially called on to help over 40 communities address their immediate need to clear debris from their roads and infrastructure across Texas, Florida, Georgia and the USVI. Witt O’Brien’s not only ensures the debris removal is done safely and accurately, but also helps clients comply with the complex standards mandated for Federal cost reimbursement. Once the rapid response phase is complete, Witt O’Brien’s works with governments and businesses as their long-term recovery advisor. Witt O’Brien’s work in the USVI is a clear example of how it accelerates recovery and helps communities build back stronger. First, it helped Governor Kenneth Mapp achieve his goal of 90% power restoration by Christmas. It has also helped accelerate FEMA- and HUD-funded recovery programs, and are still overseeing emergency housing repairs. “We are proud to team with the USVI and other communities on this historic recovery effort,” said Tim Whipple, Witt O’Brien’s CEO. “Our mission is to help our clients be crisis-ready. But if disaster strikes, we stand ready to help them respond and recover quicker and stronger.”

Expecting the Best. Prepared for the Worst. The 2018 Atlantic hurricane season has begun. Hopefully it won’t rival last year’s harrowing mix of large hurricanes, but whatever the season brings, SEACOR will once again be ready to lead the response, relief, and recovery efforts to support the Caribbean region.

Firm supply. Flexible solutions. Pivotal LNG and JAX LNG are committed to providing customers with liquefied natural gas supply 24 hours a day, 365 days a year. Contact us

pivotallng.com | 713.300.5116 | info@pivotallng.com |

30 Marine Log // June 2018

Ian Stevenson

to design a flexible, cost-effective fueling solution for your fleet.

Hurricane Storm Relief The community of Miñi Miñi in Loíza, Puerto Rico, flooded after Hurricane Maria

Storm Relief The Role Training Ships Play After Natural Disasters

FEMA / Yuisa Rios

By Commodore Thomas L. Bushy, USMS (Ret.)

hen a natur al disaster hits in the U.S. the Federal Emergency Management Administration (FEMA) kicks into high gear, helping to allocate first responders, pre-position logistical supplies and cascade efforts into the affected zone to help promote expedient recovery to affected citizens. But when the disaster is larger than what’s expected, the holes in FEMA’s planning become glaringly apparent. An important element of FEMA’s recovery efforts is to find emergency housing for personnel, responders, and tradesmen that come into affected areas. Housing is one thing, but feeding them and providing them with sanitary facilities can be a burden. When Hurricane Katrina roared into Louisiana and Mississippi in August of 2005 it resulted in catastrophic flooding that submerged much of New Orleans and the surrounding areas. FEMA responded and found a vast area so devastated that any concept of rapid remediation was hopeless as there was no shelter, no gasoline, and no food stores. In 2012, Superstorm Sandy created a similar situation in New York and

New Jersey, albeit in a much smaller area but among the nation’s most populated. By the time Hurricane Harvey descended upon Texas in September of 2017 FEMA was ready. The administration had worked hand-in-hand with state agencies and law enforcement to hit the ground running. However, Mother Nature had other plans, following Harvey with a 1-2 punch in the form of Hurricanes Irma and Maria—the former in Florida and the latter on the U.S. Virgin Islands and Puerto Rico. The Hurricanes caused all planning to unravel. No one anticipated the level of destruction that would happen 1,500 miles from the U.S. mainland—Puerto Rico was in the dark (at press time, eight months after the storm made landfall, there was still parts of the island without power), with no services such as electricity, refrigeration, or fuel available.

Activating the Training Ships State Maritime Academies (SMA) operate federally owned ships under a memorandum of agreement with Department of Transportation (DOT) Maritime Administration (MARAD) that can be used in times of emergencies.

State University of New York (SUNY) Maritime College’s Empire State VI has been activated four times over its more than 50 years in service. The Empire State VI was activated in 1993 to support troop activity in Somali—the only time an SMA ship engaged in troop support—and three other times to support emergency relief. The ship was dispatched to New Orleans for Hurricane Katrina, remained in homeport but utilized in 2012 for Superstorm Sandy, and in Florida then San Juan for Hurricane Irma and Hurricane Maria in 2017. The training ship State of Maine of Maine Maritime Academy saw service in Hurricane Katrina. And Massachusetts Maritime Academy’s Kennedy provided services in Superstorm Sandy, as well as Hurricane Harvey and Hurricane Maria. The T.S. General Rudder of the Texas A & M Galveston Campus – or Texas Maritime Academy – was utilized for Hurricane Harvey in their homeport. The ships help support FEMA’s efforts by providing shelter, food, beds, and supplies to those in affected areas, but the ships aren’t usually activated right away. Delays in crewing, supply deliveries and the process for activating the ships can hinder efforts. June 2018 // Marine Log 31

Hurricane Relief A Hurricane Makes Landfall These days, hurricanes don’t sneak up on you— most everyone knows approximately when a significant storm is going to arrive at their front door. FEMA and MARAD do too. But when it comes to use of the School Ships it is always a wait and see reaction. Everyone in the U.S. knew Texas had been drastically flooded – it was covered continuously on 24/7 cable news networks—but it took FEMA five full days to make the call and execute funding to MARAD. The exact reasoning for this delay is vague, but it surely came from FEMA personnel on the ground, Washington HQ, and FEMA Region decision-makers. As did how much money was to be allocated to the relief effort. Sure, there are staff at MARAD and the SMAs that have the past experience in getting the ships up and running quickly. It is called a “turbo-activation.” Despite ship familiarization visits in Florida (FEMA Region 4), and reports to Texas (FEMA Region 6), it appeared nobody knew what to do with the ships. There can be plenty of latitude in this accusation, especially since the ships were weeks away and FEMA Region 6 was in crisis management. By the time, Kennedy docked in Ingleside, TX, there already was temporary housing.

In fact, Kennedy moored in Texas for six days and only had nine FEMA folks come aboard to live. While Kennedy was moored in Texas, Empire State VI arrived in Key West. Once docked there it was utilized slightly more by FEMA. Key West may not have been the right place, but again, like Texas and Kennedy, getting a dock was an afterthought, and Key West had an available U.S. Navy dock. But all was not lost on MARAD’s ships and FEMA – Hurricane Maria crushed Puerto Rico on September 20. Before that time, FEMA had Kennedy pack up and head for Region 4. But again, the plans changed and Kennedy was ordered to St. Thomas, but just before arrival it was diverted to San Juan. About a week after arriving in San Juan, in came the Empire State VI. Both ships were well utilized in assisting the people of Puerto Rico. The Kennedy did not return to its homeport until November 17 after providing thousands of “bed nights,” meals, loads of laundry and showers.

How Can We Make It Better? To facilitate an effective response and assist the first responders, FEMA and MARAD should have the following steps clearly articulated in memorandums of understanding: • FEMA and MARAD should have

previously stipulated that activation costs will be guaranteed based upon past utilization costs, plus inflation. This could be addressed by a Congressional amendment to the Antideficiency Act (1992): • MARAD staff will contact effected ports to confirm previously established docking locations for the School Ship(s); • An automatic pre-activation of School Ships when hurricanes are deemed a serious risk. This will authorize the SMAs to begin the first phase of activations; • General Agents will stand-up their operations and personnel departments, as well as local ship husbanding services in the effected ports, to prepare for the “go” assignment. Once the storm makes landfall, and services of the School Ships are recognized as needed, the next phase will begin with: • SMAs and MARAD Surveyors immediately begin the turbo-activation – with (or without) the full authorization of funding from FEMA as previously agreed; • The GA’s immediately orders contractual crewing agents (unions) to man the ships to previously determined crew manning levels ; • GA’s execute contracts to previously determined service providers and authorize order of food/ consumables for 30-day activation; • GA’s place orders for linens and other consumables that have been determined useful in past relief activations; • SMA’s prepare voyage plans including sailing times, arrival at interim ports, and ETA at final destination. Also, full communications plans are reviewed and updated; • SMA’s can organize local labor support – usually cadets – to store the ship; While these preparations are in progress FEMA and MARAD will authorize full funding based upon a 30-day activation. Once executed MARAD will direct the ships to get underway as soon as possible, which by this time will be less than 24-hours. Obviously, many of the above recommendations are contrary to normal government contracting and cross-agency funding because of the Antideficiency Act. But the facts are clear that for the School Ships to be effective, they must get to the effected area quickly. The sooner that can be accepted as fact, the sooner help can be on the way. Author’s Bio: Commodore Thomas L. Bushy, USMS (Ret.) retired from Massachusetts Maritime Academy in January of 2017 after 36 years as a marine transportation professor, and nearly two decades as Master of the academy training ship. In September 2017 Bushy was called out of retirement to command the T.S. KENNEDY in response to Hurricane Harvey.

32 Marine Log // June 2018

Ferries The largest gas-guzzlers in the WSF fleet could soon go green

When Blue Turns

Green

Conversion of Jumbo Mark II ferries to hybrid could shrink Washington State’s maritime industry’s carbon footprint

Shutterstock/ Dalo Collis

s one of the largest ferr y operators in the world, Washington State Ferries (WSF) has a high profile with the public and in the marine industry. So when WSF does something, people stand up and take notice. As we previously reported, Washington Governor Jay Inslee signed a transportation measure that contained funding of $600,000 to develop a Request for Proposal (RFP) to convert its three WSF Jumbo Mark II Class vessels to hybrid electric propulsion. Earlier this year, two feasibility studies were completed by Seattle-based naval architects and marine engineers for WSF regarding the conversion of Jumbo Mark II Class ferries and the related dockside infrastructure. The Hybrid System Integration Study performed by Elliott Bay Design Group (EBDG) examined the feasibility, technology, and costs involved in converting the three ferries, the M/V Wenatchee, M/V Tacoma, and M/V Puyallup, to hybrid electric propulsion. The study estimated the

cost to convert the three 460 ft x 90 ft ferries. The real benefits of the project would be substantial fuel savings and to the environment, significantly slashing particular matter, NOx and SOx emissions. Concludes the study: “WSF produces 67% of WSDOT’s total emissions and the three Jumbo Mark II vessels emit 26% of WSF’s share of carbon emissions. Given the late 1990’s emissions standards that the Jumbo Mark II diesel engines were required to meet, the emissions savings is likely even greater in regard to NOx, SOx, and diesel particulate matter. This project would have enormous impact in meeting the 2020 emissions targets.” In 2009, state agencies were directed by the legislature to reduce greenhouse gas emissions and report these reductions to the Department of Ecology. This requirement is part of the State Agency Climate Leadership Act that sets a goal for agencies to reduce their emissions: • 15% below 2005 levels by 2020. • 36% below by 2035. • 57.5% below by 2050. Each agency is required to come up with

strategies to meet their reduction goals. Upgrades at the docks and the utilities in Seattle, Bainbridge, Edmonds, and Kingston, where the boats operate, would be no small cost either. The WSF Medium Voltage Shore Power Feasibility Study by Glosten examines the charging infrastructure needed to recharge the ferries dockside, as well as costs to the utility for power, and battery replacement. Glosten estimated it would cost $6.91 million to upgrade each terminal.

Washington Welcomes Delegation from Norway Converting the three WSF Jumbo Mark II Class vessels to electric propulsion will put the fleet on the cutting edge of maritime clean technology—not only in the U.S., but also globally, points out classification society DNV GL. Earlier this month, Washington State officials welcomed a delegation from Norway to share and learn from the acknowledged global leaders in the maritime clean-tech sector. Key participants in the collaboration event included the Washington State June 2018 // Marine Log 33

Ferries Department of Transportation (WSDOT) and WSF, Commerce, Port of Seattle, NCE Maritime Clean Tech Cluster, the Norwegian Maritime Authority, Norwegian Embassy, and industry leaders, including DNV GL and the Confederation of Norwegian Enterprises. Among the Washington State officials meeting with the Norwegian delegation was Roger Millar, Secretary of Transportation, for the WSDOT. The engine conversion is expected to take place during normal maintenance time, avoiding disruption of passenger services, WSDOT officials said. The project is also expected to save up to $14 million in ferry operating costs. “We’re anticipating that the hybrid conversion is going to pay for itself in the fuel saved,” Millar said. “It’s going to reduce our greenhouse gas emissions by about a third, and it paves the way to converting the rest of our fleet to either a hybrid technology or an all-electric technology.” As the initiator of the Green Coastal Shipping Program — the Norwegian public-private partnership founded in 2015 — DNV GL shared lessons learned on the success factors for early markets to establish an effective green shift, as well as “cluster” models for collaboration. The company also provided insights from its role as the Technical Advisor to the NOx Fund, a model public-private policy

mechanism that has funded many of the emission reducing innovations. The Washington Maritime Blue initiative builds upon a similar vision and framework as the Norwegian models. Led by the Washington State Department of Commerce, the initiative aims to make Washington State home to the nation’s most sustainable maritime industry by 2050 and bring together industry, workforce, government, labor, technology, research, financial and education sectors into a unified, sustainable “maritime cluster.” When the initiative was launched earlier this year, DNV GL was engaged by Commerce to facilitate and provide expertise to the project. “We are looking forward to building a collaborative partnership between the Norwegian Maritime Clean Tech and our growing Washington Maritime Blue clusters,” said Joshua Berger, the Governor’s Sector Lead and Director of Economic Development for Maritime. “As we develop into a center of excellence for maritime innovation these types of relationships are critical for knowledge and tech transfer for growth,” said Berger. Based on their successful track record,” he added, “DNV GL can clearly support us and our stakeholders as we move forward in a coordinated and visible process.” The conversion of the three Jumbo Mark II Class ferries will lead the way for electrification of the entire fleet. The electrification

program, an accelerated demonstration project of Washington Maritime Blue, will significantly cut emissions, improve reliability, save money and virtually eliminate the engine noise that can disturb marine wildlife such as orcas. During the visit, the delegation, including Norwegian Ambassador to the U.S. Kåre Aas, toured the ferry Tacoma and discussed the plans under Gov. Jay Inslee’s Washington Maritime Blue initiative to bring the fleet into the era of sustainable, low-carbon and low-cost operations. With extensive experience in maritime battery technology and shore side charging, DNV GL shared its recommendations for a holistic approach to establish onshore “microgrid” charging stations with battery storage systems for optimized infrastructure for ferry electrification. Along with other leading Norway delegate companies and organizations, the insights shared will help to establish Washington State’s leadership role in U.S. maritime and energy sustainability. “Bringing the Norwegian delegation to Washington marks a significant step forward for Washington Maritime Blue and its transition to a cluster organization,” said Freddy Friberg, Regional Manager for DNV GL – Maritime Americas. “These collaborations bring invaluable insights on how maritime clusters can drive the innovation necessary for success.”

New Seastreak High-Speed Commuter Ferry Part of NY Harbor Resurgence Ferry service is undergoing a renaissance in New York City and last month it crowned its queen when Seastreak, LLC, Atlantic Highlands, NJ, commissioned the 600-passenger M/V Seastreak Commodore, the largest U.S. Coast Guard Subchapter K high-speed ferry operating in the U.S. Built at a cost of some $13 million at Gulf Craft, Inc., Franklin, LA, the sleek Seastreak Commodore is the “centerpiece of a $30 million program to bring Seastreak into the 21st century,” said Seastreak Chairman James R. Barker. The program started with upgrades to the Seastreak Wall Street and Seastreak New York, and is continuing with the Seastreak New Jersey (currently being refit at a shipyard in Louisiana), and the Seastreak Highlands. Additionally, a keel has been laid at Midship Marine, Harvey, LA, for a second Commodore Class boat

34 Marine Log // June 2018

similar to the Seastreak Commodore. Propulsion for the aluminumhulled catamaran is supplied by four MTU12V4000 M64, EPA-compliant, Tier 3 diesel engines, that drive four KaMeWa 63S4 waterjets supplied by Rolls-Royce. Karl Senner, LLC, Kenner, LA, supplied four Reintjes WVS 730 reverse reduction gearboxes that allow for back-flushing the waterjets. The bridge features advanced bridge navigation equipment, supplied by Furuno USA. NYC Ferry Resurgence With an overall length of 147 ft 8 in, beam of 39 ft 5 in, and draft of 5 ft 4 in, the Seastreak Commodore dwarves the new 149-passenger ferries being operated by Hornblower’s NYC Ferry. Mayor Bill de Blasio has drawn praise (for the most part) for the establishment of the NYC Ferry service, which carried 3.7 million passengers on four routes

during its first year in operation. With two more routes launching this summer, the city projec ts passenger numbers could reach 9 million by 2023. The popularity of the service has been such that Mayor de Blasio announced on May 3—almost one year to the day of the launch of the NYC Ferry service—that the city was going to invest another $300 million for new 350-passenger boats, improvements to piers and docks, and a second homeport. N e w Yo r k C i t y ’s D e p a r t m e nt of Transpor tation is also building three 4,500-passenger iconic orange Staten Island Ferries at Eastern Shipbuilding in Panama City, FL, at a price of some $300 million. Meanwhile private investors such as Circle Line are upgrading their fleets to tote tourists around the harbor and Manhattan and the Trust of Governors Island has ordered a new steel-hulled ferry from Blount Boats, Warren, RI.

Cruise Shipping MSC Cruises recently took delivery of the MSC Seaview

Cruising

Leads The Way As passenger demand grows, so too does the orderbook

ast month, the Cruise Lines International Association (CLIA) updated the official global cruise industry numbers confirming that the ocean cruise industry not only grew, but also surpassed 2017 projections. CLIA says 26.7 million cruise passengers boarded a cruise ship in 2017, beating out the projected 25.8 million. The growth represents a 6.3% increase from the year before. The largest growth came from Asia, which experienced a whopping 20.5% increase over 2016. North America, which once again boasted the largest passenger volume with 49% of passengers—representing more than 13 million ocean cruise passengers— saw a 5% increase over the previous year, followed by Europe’s 2.5% growth, carrying nearly seven million ocean cruise passengers (26% of the volume), according to CLIA.

MSC Cruises

Orderbook While passenger growth increases, so too does the orderbook for new cruise ships. According to the latest Seatrade Cruise Orderbook, there are a total of 99 ocean going cruise ships currently on order with

Compiled by Marine Log Staff deliveries this year through to 2027, at a total orderbook value of $57 billion. The most ships in the pipeline will go to Viking Cruises, which has 12 ships on order at Fincantieri. MSC Cruises is a close runner up with eight ships on deck. As we were going to press, the latest member of MSC Cruises’ fleet, the MSC Seaview, was delivered by Fincantieri. Liquefied Natural Gas-powered cruise ships are also increasing in numbers with 17 new cruise ships on order or under construction. Among the cruise lines that have gone the LNG route are AIDA Cruises, Carnival Cruise Line, Disney Cruise Line, MSC Cruises, P&O Cruises, Ponant and Royal Caribbean International. The first LNG-powered cruise ship, the AIDAnova, will be delivered this November.

Eye on Growth One region that could potentially see an increase in cruise passenger traffic over the next few years is the Arabian Gulf Region. The Government of Dubai, the largest and most populous city in the United Arab Emirates (UAE), has a vision in

mind—make Dubai a major regional maritime tourism hub. To that end, Dubai-based holding company, Meraas has signed a strategic partnership with Carnival Corporation to develop and open the Dubai Cruise Terminal by 2020. According to Dubai Tourism Vision 2020, Dubai hopes to attract 20 million visitors a year to the region. Establishing the city as a cruise hub would help it reach its goal. Under the agreement, the companies will collaborate across several strategic areas including port development, terminal management and new cruise developments. Dubai Harbor will be home to two cruise terminal buildings, spanning a total of 30,000 m2, joined by a single quay of about 1 km, capable of accommodating three cruise ships and 13,200 passengers. Plans are also in the works to double vessel capacity, by adding two additional terminal buildings. According to CLIA, by 2030 more than 40 million people worldwide are expected to travel on a cruise ship. At a local level, that could potentially translate into more than AED1.5 billion ($408 million) to Dubai’s economy by 2030. June 2018 // Marine Log 35

Cruise Shipping

Source: Seatrade Cruise Orderbook/Marine Log

Cruise line

Vessel

Shipyard

GRT

Lower Berths

Est. Delivery

Est. Cost ($ in Mil)

AIDA Cruises AIDA Cruises AIDA Cruises Carnival Cruise Line Carnival Cruise Line Carnival/CSSC/CIC Capital Celebrity Cruises Celebrity Cruises Celebrity Cruises Celebrity Cruises Costa Asia Costa Asia Costa Cruises Costa Cruises Coral Expeditions Cunard Crystal Cruises Crystal Yacht Expeditions Crystal Yacht Expeditions Disney Cruise Line Dream Cruises Hapag-Lloyd Cruises Hapag-Lloyd Cruises Holland America Line Holland America Line Hurtigruten Hurtigruten Lindblad Expeditions MSC Cruises MSC Cruises MSC Cruises MSC Cruises MSC Cruises MSC Cruises Mystic Cruises Norwegian Cruise Line Norwegian Cruise Line Oceanwide Expeditions P&O Cruises Ponant Ponant Ponant Ponant Ponant Ponant Ponant Princess Cruises Princess Cruises Regent Seven Seas Cruises Ritz-Carlton Yacht Collection Royal Caribbean International Royal Caribbean International Royal Caribbean International Royal Caribbean International Saga Cruises Saga Cruises Scenic Silversea Cruises Star Clippers SunStone/Aurora Expeditions SunStone TUI Cruises Viking Cruises Viking Cruises Viking Cruises Virgin Voyages

AIDAnova LNG -powered ship Unnamed Carnival Panorama 2 LNG-powered ships 2 unnamed ships Celebrity Edge Celebrity Flora Celebrity Beyond 2 Edge Class Ships Costa Venezia unnamed Costa Smeralda LNG-powered ship Coral Adventurer unnamed Diamond-Class Crystal Endeavor 2 Endeavor Class ships 3 LNG-powered ships 2 Global Class Ships Hanseatic Nature Hanseatic Inspiration Nieuw Statendam Pinnacle 3 Roald Amundsen Fridtjof Nansen National Geographic Endurance MSC Seaview MSC Bellissima MSC Grandiosa Meraviglia Plus 2 Seaside EVO Class ships 2 World Class Ships 4 World Explorer ships Norwegian Encore 4 Project Leonardo Ships Hondius 2 LNG-powered ships Le Laperouse Le Champlain Le Bougainville Le Dumont Dâ&#x20AC;&#x2122;Urville Le Bellot Le Surville LNG-powered ship Sky Princess 2 Royal Class Ships Seven Seas Splendor unnamed Spectrum of the Seas Quantum 5 Oasis 5 2 Icon Class ships Spirit of Discovery Spirit of Adventure 2 Scenic Eclipse Ships Silver Moon Flying Clipper Greg Mortimer 3 Ships 2 Mein Schiff Ships Viking Orion Viking Jupiter 10 ships 3 ships

Meyer Werft Meyer Werft Meyer Werft Fincantieri Meyer Turku Shanghai Waigaoqiao STX France De Hoop STX France STX France Fincantieri Fincantieri Meyer Turku Meyer Turku Fincantieri/Vard Vung Tua Fincantieri MV Werften MV Werften MV Werften Meyer Werft MV Werften Fincantieri/Vard Fincantieri/Vard Fincantieri Fincantieri Kleven Werft Kleven Werft Ulstein Verft Fincantieri STX France STX France STX France Fincantieri STX France WestSea Yard Meyer Werft Fincantieri Brodosplit Meyer Werft Fincantieri/Vard Fincantieri/Vard Fincantieri/Vard Fincantieri/Vard Fincantieri/Vard Fincantieri/Vard Fincantieri/Vard Fincantieri Fincantieri Fincantieri Astillero Barreras Meyer Werft Meyer Werft STX France Meyer Turku Meyer Werft Meyer Werft Uljanik, Croatia Fincantieri Brodosplit China Merchants HI China Merchants HI Meyer Turku Fincantieri Fincantieri Fincantieri Fincantieri

180,000 180,000 180,000 133,500 180,000 133,500 117,000 5,739 117,000 117,000 135,500 135,500 180,000 180,000 5,000 113,000 65,000 25,000 25,000 135,000 204,000 16,100 16,100 99,500 99,500 21,000 21,000 12,300 154,000 167,000 177,000 177,000 169,380 200,000 9,300 167,800 140,000 5,590 180,000 10,000 10,000 10,000 10,000 10,000 10,000 30,000 143,700 143,700 54,000 24,000 168,000 168,600 227,000 200,000 55,900 55,900 17,085 40,700 8,770 8,000 8,000 111,500 47,800 47,800 47,800 110,000

5,000 5,000 5,400 3,954 5,200 4,000 2,900 100 2,900 2,900 4,200 4,200 5,000 5,000 120 3,000 800 200 200 2,500 5,000 230 230 2,650 2,650 530 530 126 4,140 4,500 4,900 4,900 4,560 5,400 200 4,200 3,300 180 5,200 184 184 184 184 184 184 270 3,560 3,560 738 298 4,180 4,180 5,497 5,000 972 972 228 596 300 180 180 2,894 930 930 930 2,800

November 2018 Spring 2021 2023 Autumn 2019 Spring 2020/2022 2023, 2024 Autumn 2018 Spring 2019 Spring 2020 Autumn 2021/2022 Winter 2019 Winter 2020 October 2019 Winter 2021 Winter 2019 2022 Winter 2022 Summer 2020 2020, 2021 2021, 2022, 2023 Spring 2020, Q4 2021 April 2019 October 2019 November 2018 2021 July 2019 Summer 2019 Winter 2020 May 2018 March 2019 October 2019 September 2020 2021, 2023 2022, 2024 2018, 2020, 2021, 2022 Autumn 2019 2022, 2023, 2024, 2025 Spring 2019 Spring 2020, 2022 June 2018 September 2018 June 2019 September 2019 June 2020 September 2020 June 2021 October 2019 2020/2022 Spring 2020 Autumn 2019 Spring 2019 Autumn 2020 Winter 2021 Spring 2022, 2024 June 2019 August 2020 August 2018, 2020 Autumn 2020 Summer 2018 August 2019 2020, 2021 Spring 2019, 2023 June 2018 February 2019 2021 through 2027 2020, 2021, 2022

$1,000 $1,000 $1,000 $676 $1,100 $750 $875 $60 $875 $792/$830 $676 $676 $1,000 $1,000 $65 $830 $456 $200 $200 $900 $1,000 $200 $200 $518 $518 $130 $130 $135 $953 $1,032 $850 $850 $1,071 $1,125 $121 $1,087 $851 $85 $1,100/$1,222 $130 $130 $130 $130 $130 $130 $270 $676 $676 $479 $210 $1,010 $970 $1,425 $1,590 $330 $330 $142 $371 $110 $100 $100 $515 $308 $308 $308 $690

Total Ships: 99

Total Lower Berths: 230,627

36 Marine Log // June 2018

Total Orderbook Value: $57 Billion

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Maritime Cares

PAYING IT FORWARD We’re proud to kick off our Maritime Cares series wherein we’ll highlight some of the ways the maritime industry has given back to the world—whether it’s a local community effort, raising funds for cancer research, or helping seafarers cope with life at sea.

Giving back to the community is embedded in Harley Marine Services’ DNA. Since its inception in 1987, the company mission has been committed to service, a sustainable work environment and philanthropy in every market they operate. Auctioning off tugboat cruises became known as “Cruisin’ for a Cure,” as Harley Marine was able to raise funds for cystic fibrosis (CF) and type 1 diabetes. These cruises have yielded more than half a million for children’s charities, however, Harley Franco found other ways to bring awareness to these causes. When Harley acquired his first tug in 1990, he christened it the Alyssa Ann after his fraternity brother’s daughter who had CF. Subsequently, many of Harley’s tugs are named thoughtfully, either supporting charities, patients or champions in our community. When Harley Franco turned 60, he wanted to celebrate with people he worked closely with. He figured a day on the golf course 38 Marine Log // June 2018

could bring everyone together. In lieu of gifts, Harley asked that friends and colleagues donate to The Hank Kaplan Research Fund. Harley and his wife, Lela, were introduced to the fund by two dear friends to Harley Marine, Michelle Sloan and former CFO, Todd Prophet, who were battling breast and lung cancer at that time. Given Harley and Lela’s charitable nature, it made sense to turn the celebration into a benefit for the community. On the spot, donations totaled north of $75,000. Thus was born, the annual Harley Marine Fall Invitational. Each year, the fundraiser has exceeded the total from the year before amassing more than $3.5 million for the Swedish Cancer Institute. The aggregate has gone to The Hank Kaplan Research Fund, but also to help support underserved patients treated at Swedish. Harley Marine and Harley and Lela have worked hard to attract incredibly generous folks in the industry with unique tee prizes and an extremely positive atmosphere.

It has also been successful because they have underwritten the entire tournament over the last 5 years. This year, they have changed the model slightly by establishing a 501(c)(3) charitable foundation in efforts to streamline some of the business aspects of the tournament, but also to give it the flexibility to benefit other needy institutions. Over the years Harley Marine has benefitted a variety of charitable institutions. In addition to CF and type 1 diabetes, they have brought attention to ALS and Fanconi Anemia, a rare autoimmune disease. They have supported the Coast Guard Academy, Kings Point and Cal Maritime among other academic institutions, and are focused generally on education. In Seattle, they have benefitted Rainier Scholars and the College Success Foundation helping low-income students. All in all, Harley Marine has served as a model for philanthropy in the maritime community. www.swedishfoundation.org/ harleymarine

Harley Marine Services

Harley Marine Services’ Cruisin’ For A Cure

Maritime Cares

Mercy Ships: Hospital Ship Helps Save Lives How do you help people in developing

Mercy Ships / IPWP

nations who have little to no access to surgical care, lack clean water, reliable electricity, medical facilities and personnel? You could take the hospital to them, reckoned Don Stephens, founder of Mercy Ships. Amazingly, the idea of Mercy Ships was born in part from an overheard prayer in the midst of a hurricane: “Wouldn’t it be wonderful if there was a ship with doctors and nurses that could come in after such a disaster?” Don shaped that thought into the organization now known as Mercy Ships. He also felt challenged to be the voice for those like his own special needs son, those who cannot speak for themselves. The Africa Mercy is the world’s largest private hospital ship, staffed by over 400 volunteers from 40 nations. Launched in 2007, its conversion from a former Danish rail ferry resulted in a modern hospital onboard, covering approximately 1,200 square meters. The hospital is divided into quadrants: supply/services, five operating rooms, recovery/intensive care, and 80 ward beds. It contains a CT scanner, X-ray, and laboratory services. Families of crew live onboard. This global faith-based charity delivers state-of-the-art care within African port cities, providing a controlled, safe and clean environment for patients and its volunteer crew onboard. Many patients come to the ship rejected and downcast, victims of their ailments, ridiculed and shunned. The loving acceptance they feel on the Africa Mercy transforms their lives as much as the free surgeries they receive. Mercy Ships works to save lives now by offering free, world-class surgical care onboard the ship. And it works to save lives

in the future by offering medical capacity-building programs to better equip host nations to help their own people. Surgical procedures provided include cataract removal/lens implants, tumor removal, cleft lip and palate reconstruction, pediatric orthopedics, women’s health (including obstetric fistula repair), plastics and dental. These free surgeries are made possible by private donations, corporate partnerships and gift-in-kind within the medical, maritime and other sectors. Shipping companies such as Stena, MSC, Nor-Shipping, CLIA, MAN, Rolls-Royce, Carnival/Costa/AIDA and others are corporate sponsors. “Maritime professionals are also critical to the fulfilment of the mission of Mercy Ships and have been since the beginning, 40 years ago. Deck and engineering officers, engine ratings, electricians and others have volunteered their expertise to provide safe passage of our floating hospitals between ports. During field services, the surgeries we provide would not be possible without their continued service to maintain the ships, keeping all systems functioning and assuring the safety of all crew volunteers. The importance of their contributions cannot be overemphasized,” said Don. Maritime and engineering professionals onboard are passionate about their work, both on and off duty. In fact, some have contributed directly to patient care by helping manufacture specialized crutches and prosthetics for patients, items not easily obtained in Africa. Want to be involved in transforming lives? Consider being a maritime volunteer or inquire about gift-in-kind and corporate sponsorship. www.mercyships.org.

International Port Welfare Partnership “A content, fit and healthy seafarer is

a safer and more productive seafarer” so the saying goes. Yet “Life at Sea” has never been easy. Today’s seafarer has to be both physically and mentally fit to cope with the loneliness and isolation of working and living at sea. Larger, more specialized ships, smaller, multinational crews and shorter turnaround times can mean long hours, language and cultural barriers, and limited social interaction which can cause stress, as well as affect a seafarer’s emotional, spiritual and mental health. So, how can the shipping industry protect its greatest asset – its’ seafarers? The International Port Welfare Partnership Programme (IPWP) is a global initiative that aims to ensure seafarers “have access to shore-based facilities and services to secure their health and well-being” by encouraging countries and ports, worldwide, to establish Seafarers Welfare Boards to make sure services are “appropriate in the light of changes in the needs of seafarers that result from technical, operational and other developments in the shipping industry.” Meeting the needs of seafarers’ onboard is the responsibility of shipowners. Shore based facilities, such as the vast majority of seafarers’ centers, are, however, provided by maritime charities including Apostleship of the Sea, Mission to Seafarers, German Seamen’s Mission and the Sailors’ Society. These highly regarded international societies along with numerous local societies continue to provide a unique global network of facilities, welfare support and ship welfare visiting in nearly 500 ports. The IPWP aims to support and extend that network even further to include Seafarers Welfare Boards, worldwide. Known also as Port Welfare Committees, Welfare Boards support the organizations providing services and facilities that allow seafarers to make the most of their limited time ashore, in a safe, caring and welcoming environment. www.portwelfare.org June 2018 // Marine Log 39

Maritime Cares

Buddy Cruise: Creating A Lifetime of Memories In 2008, when siblings, Teresa and Jorge

Arnoldson, grew weary of attending Down syndrome walks and conferences with their parents to support their younger brother, Joseph with Down syndrome, they approached their parents with a unique idea —to sail away from it all. Literally. The pair imagined having a cruise, which would combine their family’s passion for ships with their need to create awareness, gather information, and connect with other families. Their parents, Jorge and Pamela Arnoldson, immediately knew their children were on to something. “It’s so hard for special needs families to find vacations that can accommodate the interest and needs of all family members. This just seemed like a great opportunity” said Pamela. An amazing idea was born, and Buddy Cruise was launched. Buddy Cruise is a 501(c)3 charity based near Tampa, FL,

providing educational opportunities, awareness, and advocacy for individuals with special needs and their families. Its main program is an annual conference at sea, which draws special needs families from around the world. There is something for all ages and abilities. In 2017, which marked the 10-year anniversary sailing of Buddy Cruise, the organization reached a record level of cruisers – 418. “We just keep growing, and a good portion of our cruisers come back every year – even during tough economic times,” said Jorge Arnoldson. Frequent and new cruisers who attend Buddy Cruise view it as a life-changing experience, where they and their special needs children and adults can participate in workshops, events, dances, and custom excursions. In addition to bringing special needs

families together, Buddy Cruise shines a light on disability awareness. One of the main events of the conference is an awareness walk, where Buddy Cruisers walk around the track on the ship and hand out t-shirts to recruit other passengers and crew to walk along with them. What’s most remarkable to the entire Arnoldson family is the connections that are formed on the voyage. Buddy Cruisers around the country come together throughout the year to reunite and help others. “A few years ago, a Buddy Cruise mother from Ohio had to take her daughter to Massachusetts for brain surgery. Another cruise family from Massachusetts, who barely knew them, came to the hospital to support her so she didn’t have to wait alone. That’s the kind of compassion and support we see in our Buddy Cruise family,” said Pamela. This level of kindness and connection coupled with the amazing experiences of cruising – the dining, seascapes, and exciting destinations – have made young Teresa and Jorge Arnoldson’s vision an opportunity of a lifetime for special needs families. Don’t miss the boat. Buddy Cruise 2018 will set sail on Nov. 4, 2018 from Galveston, TX, aboard Royal Caribbean’s Liberty of the Seas. This seven-night voyage will sail to Cozumel, Grand Cayman, and Falmouth. To join the fun, learn more, or donate call 877-239-2789, visit buddycruise.org, or contact Pamela at joinus@buddycruise.org.

Start Here

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KEYNOTE SPEAKERS

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The highly topical issues of safety, security and the environment set the theme for the 43rd annual Interferry conference in Cancun, Mexico this October 6–10. “The core themes of this year’s conference are of major significance, not just to the worldwide ferry industry but across society as a whole,” said Interferry CEO Mike Corrigan. “As such, we are very hopeful that Cancun 2018 will break last year’s record attendance in Split, Croatia, where we attracted 370 delegates from 27 countries.” Keynote speaker CDR Ben Lofstad, Director of the Shipping Centre in NATO’s Maritime Command. CDR Lofstad will address global terrorism trends and the potential impact on ferry operations, which will be further reviewed by the Interferry’s new Security Committee. Although no sector specific threats have been identified, the committee was formed as a precautionary response to recent events targeting the general public, and aims to ensure that the ferry industry becomes more visible on security issues. Interferry’s own expert members will play a prominent part at the conference – reflecting the year-round, high-level work undertaken by the association in consultation with authorities such as the International Maritime Organization (IMO), national administrations and other stakeholders. The Security Committee’s participation will include an update regarding ongoing discussions about ferry security within the EU, particularly in the context of a study project that will include several Interferry members. Keynote speaker Mark Sutcliffe, Director of the U.K.-based CSO Alliance – Maritime will also participate during the security session. Following six years in the British Army, Sutcliffe has worked

in the maritime industry for 25 years, progressing from roles in the U.K. ports of Hartlepool and Bristol to senior positions with Gearbulk, the Gulf Agency Company and Wilhelmsen Ships Service. Vancouver Fraser Port Authority President and CEO Robin Silvester rounds out the keynote speakers. The VFPA operates the Port of Vancouver, Canada’s largest port which is acknowledged as an industry leader on environmental sustainability, notably through the rolling Port 2050 initiative launched in 2010. The project is designed to identify various scenarios that could affect the port’s long-term future in terms of both challenges and opportunities, including supporting a shift to a lower-carbon economy that strikes the balance between sustainable trade, social factors and a healthy environment. Since 2016, this focus has evolved into a new vision – to make Vancouver the world’s most sustainable port. The speakers program will also feature a report from Interferry’s Domestic Safety Committee focusing on improvements in the developing world. In April, Interferry Regulatory Affairs Director Johan Roos and two other committee members took part in a dedicated workshop in Port Moresby, Papua, New Guinea – the latest stage of a commitment that previously involved direct engagement in the Philippines, helping to produce a dramatic reduction in incidents and fatalities over the past five years. The report will be supplemented by presentations from suppliers with safety-orientated technologies that can readily and cost-effectively be implemented in developing nations. In addition, the safety session will review Interferry’s input on RO-PAX fire precautions – largely through its IMO consultative status – following several high-profile incidents in recent years. This

work was again underlined by its key interventions at the fifth annual session of the IMO Ship Systems and Equipment sub-committee in March. Interferry gained support for a more generic and practicable approach to risk mitigation on existing ships, allowing for adaptations to the ship’s current systems rather than potential solutions more suited to newbuilds. The association has likewise established a strong track record of consultation and interventions on environmental issues, which will also be highlighted in Cancun. In April, the IMO Marine Environment Protection Committee confirmed the immediate application of a 20% correction in its Energy Efficiency Design Index (EEDI) calculation formula for RO-RO and RO-PAX vessels. The EEDI requires all types of new ships built for international operation to be more energy efficient than the average of existing designs in their respective trades. From 2016, based on concerns voiced by members, Interferry argued that even highly efficient newbuild designs were struggling to meet the sector-wide target, citing the diversity of such vessels. Alongside hydrogen fuel, ballast water management and underwater ship noise, Interferry plans to make shipbreaking and disposal a major element of the environmental session, with presentations and a panel discussion among operators and breaking yards on the legal, regulatory and ethical issues. The two-day conference takes place on Monday and Tuesday October 8-9 as the centerpiece of a comprehensive networking and social program that runs from October 6-10 and provides an industry-leading opportunity to gain practical guidance and valuable new contacts. Visit InterferryConference.com and follow @InterferryOrg on Twitter for complete conference information.