Specialties Cornerstone of Canadian Market

Monday, June 12, 2000
The past decade was a tough one for the Canadian shipbuilding market. It was a decade that produced a decline of both employment and decline of newbuilds, many of which were contracted in the late 1980s still awaiting construction. This unfinished business was concentrated mostly on various military projects that had been thought out but were never actually followed through. It is estimated that by the time the 1990's came to a close that Canadian yards had experienced the worst decade since postwar times with total sales declining by about 50 percent since 1991. In addition, total employment in the industry has broken off by about 50 percent from 12,000 workers in 1990 to today's figure of 5,000.

It has been reported that these figures, while they are grim, are not a reflection of the Canadian maritime industry as a whole, but merely the shipbuilding community's staggering unemployment and economic rates. Some may find that in these trying times, they are better suited for employment in a field that would deem more productive, despite the industry's relatively high wage pay out.

Customarily, shipbuilders around the world would fall back on their government and national carriers for sustainment, but alas, this is no longer an option. All shipbuilding countries must construct vessels for export, as well as for their own use. For instance, government policy states that government fleets must be renewed and repaired in Canada, while this is good news for the country's shipbuilding arena in that owners will not call upon outside yards, the maintenance of the country's government fleets alone cannot sustain the industry.

In revitalizing this industry, Canada's strengths lie within the construction of high-value specialty vessels, such as ferries, ice breakers, naval craft, offshore support vessels and barges. The vessels are an intricate portion of the country's economy, as they can be marketed internationally. In fact, it has been noted that Canadian shipyards have experienced a government assisted rationalization that has lowered their capacity by 40 percent - furthering the industry as much better suited to future market prospects.

To further implore Canadian companies to build their fleets and Canadian yards, other means of revenue could be dedicated to Canada's Coastal Trading Act, which states that the owner of a ship constructed or purchased internationally must pay a 25 percent tariff (except as provided under NAFTA), to have their vessel fly the Canadian flag, as well as operating in the country's domestic trade. This tariff, combined with the additional Capital Cost Allowances shown in the Income Tax Act and Regulations provide the only policy tools.

According to Les Holloway, executive director, Marine Workers Federation, the Canadian maritime industry is important to the country's infrastructure and sovereignity.

Holloway feels that more pressure needs to be placed on Canada's federal government to get the wheels spinning on an industry that is in dire need of set policies and procedures. He will, in fact be presenting his argument to a federal committee comprised of all political parties regarding a pending bill titled: Bill C.213 - Calling For A National Shipbuilding Policy. At press time, the committee was gearing up for a second reading on this bill.

Touting itself for the production of quality products, the Canadian maritime industry has strived to further its means for the past 10 years, despite a downturn. The industry recently experienced a successful run with its patrol frigate construction program, which could most probably be the mold for a premiere vessel on the cusp of the latest technology. This program has led to Canadian industry as holding automation and system integration skills that are top-of-the-line. The industry also has the means to develop, design and build specialty vessels for niche markets. Specifically, naval architect Robert Allan who completed the design last year for a new escort tug for Norwegian tugowners Johannes Ostensjo dy AS. The tug, which incorporates many unique hull form developments is currently being built at Astilleros Zamakona of Spain. The company also created a low manning design that features many new components in the development of a high-performance ship-assist tug for Brusco Tug & Barge of Longview, Wash., which will be delivered during the fourth quarter 2000.

While the overall aura within Canadian shipbuilding seems to be industry downturn, the yards have not let up in terms of competition. Canadian chargeout rates are comparable to the U.S. and Japan, and in some instances less than European competitors, but higher than Korea and China. On another hand, labor costs, after converted into U.S. dollars are typically lower in Canada than in the U.S. when dealing with most industry aspects. It has been estimated that the average total hourly labor costs in Canadian shipbuilding are $5 per hour less than in the U.S. The country's labor costs are low in terms of its competitors, with hourly costs standing at 50 percent less than German yards and 40 percent lower in Japan. Despite the downturn in business, Canadian yards successfully completed some technically challenging projects. Canada Steamship Lines (CSL) has fared well, with CSL Niagara (one of MR/EN's Great Ships of 1999) and the M.V. Rt. Hon. Paul J. Martin - two seamax vessels that are the largest Canadian ships to be constructed for the Great Lakes-St. Lawrence. Paul J. Martin is also noted as the second (including CSL Niagara) of a three part forebody joining to be built by Port Weller as part of a $100 million fleet reinvestment program by CSL. Consortium Acquires Davie A U.S. consortium comprised of Syntek Technologies and Transnational Capital Venture attained Davie Industries of Levis, Quebec, Canada.

Located on the St. Lawrence River near Quebec City, the shipyard had previously been functioning under a trusteeship for the past two years, resulting from a failure of its previous owner, Dominion Bridge Corp. of Montreal. Despite this, Davie has managed to remain fully operational with successful completion of refit work for the Canadian Navy, upgrade work on the oil production platform P-36 for Petrobras in Brazil, as well as damage repairs on the cruise vessel Norwegian Sky. The consortium's transaction will readily lift all constraints to Davie's recent activities. Irving Shipbuilding Appoints New President Irving Shipbuilding elected Alastair J. Bisset as its new president with responsibility for its divisions and affiliates, Saint John Shipbuilding, Halifax Shipyard, East Isle Shipyard, Dartmouth Marine Slips, Fleetway Inc. Atlantic Quality & Technical Services, Shelburne Repair and Steel & Engine Products. Bisset, who began his career in the shipbuilding industry in 1982, held various positions with Vickers Shipbuilding from 1986 to 1994 and was sales director for A&P Falmouth from 1994 until 1998.

St. John Shipbuilding is the largest of the yards in the Irving group, and is completing the final stages of its second 1,174-teu containership Kent Sprint. Halifax Shipyard is preparing to deliver the second UT722 Atlantic Hawk to Atlantic Towing Limited. In addition, East Isle Shipyard completed the 10th in a series of 4,000-hp Z-drive tugs. Autoship, PAI Join Forces Autoship Systems Corp. (ASC) and Port Automation International (PAI) have formed a marketing partnership.

Per the agreement, PAI will market ASC's load planning software solutions to their customers. Beneficial to PAI customers is that they will now be allowed to electronically extend the logistics chain from port to carrier. In turn, ASC's customers will receive more accurate, complete and timely cargo information.

Combining their expertise, the two companies will focus on selected ports worldwide that handle container traffic, break bulk and RoRo vessels. Separately, Autoship recently introduced Release 8 of its Autoship hull design program. The software release, which includes supporting documentation, a new help system and new online user's manual, also boasts Library of Parts marine equipment that will enable the user to quickly finish a detailed model of the fully outfitted vessel. Thordon Compac Bearings Used For Algonova Refit Despite a tight delivery schedule, Thordon Bearings was able to convert the oil tanker Algonova to a Thordon Compac water lubricated propeller shaft bearing at Heddle Marine in Hamilton, Ontario. "This was the first vessel at Algoma Tankers where we used Thordon in the stern tube," says Eric Height, marine superintendent-engineering at Algoma. Since the stern tube was now shorter than the previous bearing (2:1 vs. 4:1 L:D ratio), the only modification to the existing stern arrangement was a ring in the housing to prevent the bearing moving forward. In addition, Fincantieri has ordered Thordon's Compac system for three vessels in P&O/Princess Cruises' Grand Princess series newbuild program, with an option for a fourth Thordon system. MV Paul J. Martin Christened At Port Weller Canada Steamship Lines christened M.V. Rt. Hon. Paul J. Martin at Port Weller Drydocks at the Lake Ontario entrance to the Welland Canal. The vessel is the newest addition to Port Weller's fleet joining CSL Niagara as one of two Seamax vessels - the largest Canadian ships ever constructed for the Great Lakes-St. Lawrence.

Paul J. Martin is the second part of a forebody trio to be built by Port Weller as part of a $100 million fleet reinvestment program by CSL.

Measuring 740 x 78 x 48 ft. (225.5 x 23.7 x 14.7 m), the vessel required 6,000 tons of steel, and a new hull was constructed and joined to the engine room portion of M.V. H.M. Griffith. Paul Martin is designated as the second ship to be constructed to the St. Lawrence Seaway's new maximum size allowances, and boasts the most technologically driven, self unloading system available. The vessel holds the ability to unload cargo rates up to 5,445 tons per hour. The third vessel of this $100 million contract is scheduled for a 2001 delivery. CSL holds options on two additional vessels with Port Weller Drydocks delivery in 2002 and 2003. Construction Contract Awarded For New Z-Drive Tug Brusco Tug & Barge, Inc. of Longview, Wash. has awarded a construction contract for a new 78 ft. (23.8 m) Z-drive tug to Diversified Marine, Inc. of Portland, Ore. This new tug is the seventh in the series of the ASD 23/35 high-performance, low-manning tug design developed by Robert Allan Ltd. (see illustration page 57), and incorporates several new features reflected in the ongoing development of this class of modern high-performance ship assist tug. The most significant change to the design is the increase in power installed in this tug design since its initial development more than 20 years ago. As a consequence of the higher power, the beam of the tug has been increased to provide greater stability, and the fendering system has changed significantly to reflect both the higher power, and changes in fender and hawser technologies. During the two decades of development and refinement to this particular Robert Allan Ltd. design, six tugs were built and are presently operating in Canada and the U.S. The tug is powered by two Detroit Diesel Model 12V4000 diesel engines, each rated at 1,800 bhp driving Ulstein Model 1350H Z-drives. Markey Machinery Co. is supplying the hydraulic towing winch, which has a "render recover" feature. Fleet Technology Completes Option Study Fleet Technology Limited concluded an option study for the Canadian Navy's proposed Logistics Support Vessel. The study, which was performed under contract to the Navy, examined various vessel types and mixes to satisfy the current Naval requirements, seeking a variety of capability and cost solutions.

As prime contractor, Fleet Technology was supported in the project by BMT Defence Services Limited and Fleetway Inc. Fleet recently completed its premiere year of operations as an affiliate of the BMT group of companies. BMT holds a 30 percent stake in the otherwise Canadian privately-held company. During its first year of operations, FTL has included BMT Defence in the work on concept designs for the new Canadian Navy ALSC, while recently, the staff from FTL has contributed to BMT Ship Design in England for work on cable ship conversions. Fleet is responsible for the development of the design and class approval process for a unique floating coal transfer station based on a semisubmersible hull. Named the SST or Sea Spider, the vessel has been developed by Massachusetts-based Semi-Submersible Transshipper (SSTI). Following Class approvals, Fleet was called upon by the owner to assist with engineering support for the delivery voyage from Shanghai to Berau transshipment site off Borneo. The company initially considered a wet tow, but abandoned this notion when it was determined that a dry tow, using a barge involved the least risk. The SST has since been successfully commissioned and is expected to be a prototype for future, similar vessels.

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