Mobile's Maritime Renaissance

By Greg Trauthwein
Wednesday, January 22, 2014

Timing, they say, is everything. Cliché, for sure, but BAE System’s strategic decision a few years ago to buy, invest and reinvigorate newbuild and repair operations in Mobile, Alabama, seems poised to pay off handsomely as the U.S. maritime market faces a historic rebound.
 

As the energy profile of the United States changes, so too do the prospects for it commercial shipbuilding and repair sector, which virtually overnight has enjoyed an influx of new construction orders and general maritime business. The ATB and tank barge markets were long-thought dead, but with vast new sums of oil and gas in both the offshore and land-based being produced, so too comes the need to transport the goods to refinery and market, as well as the need to feed the inland energy production frenzy born from hydraulic fracturing, or Fracking.
Shipbuilding and repair in Mobile, Alabama is certainly not novel, as Mobile holds a long and proud tradition. While rich in history, this is not a story of looking back, rather forward, starting three years ago when BAE Systems took over the yard in Mobile and enacted a revitalization of a storied shipbuilding and repair facility that continues in earnest today.
“The main batteries of our business are the capital investment in piers, dry docks and cranes,” said Vic Rhoades, Director, BAE Systems’ Mobile, Alabama shipyard. Since the acquisition in July 2010 we have invested nearly $30m in capital improvements, and anticipate spending $10m over the next 24 months.
Upgrading the new construction facilities with robotics and automation, and investing in people has been one of our big successes.”

Repair & Conversion Coexist
“We have two business approaches here: one is repair and conversion and the other is new construction,” said Rhoades. “Both co-exist equally in the yard. Our repair business is 70% commercial; 30% other government, specifically MSC, MarAd and Coast Guard,” as well as others. Predictably, the repair business is dominated by domestic Jones Act carriers, with about 15% of the shipyard’s repair business coming from international carriers.
But as anyone in the ship repair and conversion business can attest, it is always a delicate balancing act to plan workload on the repair side of the house: when times are bad, owners tend to require bare bones work to keep ships in good regulatory order. When business is booming, owners want to keep assets in the market earning money, not sitting in drydock for maintenance and repair.
In assessing the impact of the global economic meltdown of 2008 and lingering tough economy through 2012, Rhoades offered this: “As an industry, it made us stronger. Smaller players and those without the financial wherewithal disappeared, and those that remained came back stronger. This business is not for the weak at heart: it’s cyclical, it’s feast or famine, difficult to level load; today we don’t have enough people, tomorrow I don’t have enough work due to the operators charter and repair schedules.”
If running an efficient and effective repair yard were not difficult enough, running newbuild and repair operations in the same facility is traditionally a difficult act, too. “There is a reason why companies don’t do both … and that’s because it is very difficult to do,” Rhoades succinctly summarized.  “I am not sure we have a secret. It’s two different mind-sets (on both accounts). On the repair side, it’s about fixing what is pre-existing (similar to taking your car to a mechanic), and it doesn’t necessarily have to be brand new when it is done,” Rhoades said. “The work can be spec’d to that level but the owners normally decline due to cost. Owners want quality and timely repairs. On the newbuild side, everything is fit and finish, prim and proper … it is a higher level of completion. It’s like buying a brand new car. It is difficult to make the transition from one side to the other. It’s a different mindset of how you go about your day’s work.”
While Rhoades maintains there is no secret to success, he does admit that the cornerstone to the company’s future lies not necessarily in machinery or space, rather people.
“The primary strength of our shipyard is without question our highly skilled workforce. Our employees commitment and professionalism are what makes us successful. The labor market on the Gulf Coast is very challenging. We compete daily with Tier 1, 2 and 3 yards for skilled labor.  There isn’t enough qualified personnel to go around. We’re currently bringing in people from out of town. Long-term we’re working with the state to establish educational grants, develop an apprenticeship program and trying to focus the school system on reinvigorating the blue collar workforce at a junior high level.”
One key to finding and retaining good people is maintaining a steady log of business, and with the addition of the new construction business BAE Systems aims to do just that. The formula to date appears successful: when Rhoades came onboard three years ago when BAE Systems acquired the yard, the workforce was just shy of 500; today the workforce is 850 full time and 200 temporary employees.

New Emphasis on Newbuild
While BAE Systems continues to make a number of tangible investments  in its Mobile facility, perhaps the most significant was the resurrection of its new construction business, bringing back Gene Caldwell as its director of new construction. Caldwell is well suited for the task at hand, given the ripe markets before him and the high level of investment from BAE Systems.
“I still see the PSV and oil and the energy circuit driving business,” Caldwell said. “The Macondo incident effectively drained everything in the Gulf, so a lot of companies are in rebuilding mode.” Newbuild targets for Caldwell and his colleagues are numerous, from vessels for the transportation of crude oil, including ATBs and tankers. Also, the market for multipurpose vessels, well intervention and well ops, as well as ROV support could be strong, according to Caldwell. “We thought the ATB building was done for awhile, but today we are fielding quite a few inquiries. (In fact) our newbuild sweet spot is the ATB market,” said Caldwell. “ATBs based on our history of building them here; PSVs fall off nicely from there, and then the specialty vessels, with our diversity of labor talent.”
While the current newbuild orderbook is diverse and impressive, the core revolves around energy, specifically the shale gas boom and its dramatic impact on the business and that of energy transportation in general. “They get it (oil) down to the Gulf of Mexico refineries (from the pipeline) and the refineries can’t handle all of the volume, hence the need for the tankers to transport it to other refineries when it comes out of the pipeline,” said Caldwell.
It is the newbuild side of the business that essentially is “carrying the water” today, as repair business dips as vessels stay in the market working. Current new construction business includes:

  • Two dump scows for Great Lakes  Dredge & Dock
  • Trailing arm dredge for Weeks Marine
  • A second Platform Supply Vessel for GulfMark.: The 300-Class DP2 PSVs for Gulfmark were designed by MMC Ship Design and Marine Consulting, Ltd. of Poland and will be based on similar PSV currently under construction for GulfMark abroad. The vessels will be U.S. flagged and will support the anticipated future demand in the Gulf of Mexico offshore market and other areas around the world and will be delivered in 2014.

 

(As published in the January 2014 edition of Maritime Reporter & Engineering News - www.marinelink.com)

  • Balancing newbuild and repair in the same shipyard is the task of Gene Caldwell, Director of New Construction.

    Balancing newbuild and repair in the same shipyard is the task of Gene Caldwell, Director of New Construction.

  • Vic Rhoades, Director, BAE Systems’ Mobile, Alabama shipyard.

    Vic Rhoades, Director, BAE Systems’ Mobile, Alabama shipyard.

Maritime Reporter July 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

Ghana to Roll out Shipping Training

Ghana is considering establishing modalities to compel shipping companies to introduce a training regime which ensures that their local staff gain professional qualifications in shipping.

Kayaktivists Poised To Launch Blockade Of Shell Icebreaker

A small group of protesters and activists are gathering at the Cathedral Park boat ramp in Portland, preparing to stay for a 24-hour vigil as they wait for Royal Dutch Shell Oil's ice-breaker ship,

KEP Marine Unveils KMGBL

KEP Marine – the manufacturer of type approved displays, computers and peripherals, announced  the release of the affordable, high-quality KMGBL Glass Bridge Light Displays.

Shipbuilding

BAE Systems Awards Software Contract to SENER

The Spanish company SENER, Ingeniería y Sistemas S.A has closed a contract with U.K.-based BAE Systems PLC for the integration between FORAN CAD/CAM System and

New Research Vessel for University of New Hampshire

All American Marine, Inc. (AAM) has entered into a contract with the University of New Hampshire (UNH) for the design and construction of a new aluminum catamaran research vessel.

Self-lubricating Bearing Polymer: Safe, Easy to Machine

Many plastics and metallic alloys present machining challenges as some deform and are difficult to maintain exacting tolerances, while others require strict and

Ship Repair & Conversion

BAE Systems Awards Software Contract to SENER

The Spanish company SENER, Ingeniería y Sistemas S.A has closed a contract with U.K.-based BAE Systems PLC for the integration between FORAN CAD/CAM System and

Self-lubricating Bearing Polymer: Safe, Easy to Machine

Many plastics and metallic alloys present machining challenges as some deform and are difficult to maintain exacting tolerances, while others require strict and

Barcelona Yacht Repairer Adds New Shiplift

Yacht service, refit, repair and maintenance yard Marina Barcelona 92 (MB’92) has awarded a contract to Pearlson Shiplift Corporation (PSC) for the design and supply

Energy

Kayaktivists Poised To Launch Blockade Of Shell Icebreaker

A small group of protesters and activists are gathering at the Cathedral Park boat ramp in Portland, preparing to stay for a 24-hour vigil as they wait for Royal Dutch Shell Oil's ice-breaker ship,

Idreco Delivers Dredger for Hydro-Dam in Congo

Idreco (International Dredger Constructions) of the Netherlands informs it has designed, built and installed its second dredger, an ISD 600 with a digging depth of 30 meters,

Offshore Wind Shift to Drive Vessel Services Cooperation

Evolving procurement processes for U.K. Round 3 offshore wind farms will require a greater number of work streams, personnel with new and differing skills, and

Dredging

Idreco Delivers Dredger for Hydro-Dam in Congo

Idreco (International Dredger Constructions) of the Netherlands informs it has designed, built and installed its second dredger, an ISD 600 with a digging depth of 30 meters,

Work Begins on $1.6 bln Container Terminal at Jebel Ali Port

DP World Chairman Sultan Ahmed Bin Sulayem announced the start of construction work on a brand new container terminal at Jebel Ali Port, Dubai.   Phase 1 of the

Korea Plans Big for Busan Port

Port of Busan aims to handle 13 million TEU of trans-shipment cargo by 2020 ranking it number two in the world.    A long-term vision and strategy to develop

News

Ghana to Roll out Shipping Training

Ghana is considering establishing modalities to compel shipping companies to introduce a training regime which ensures that their local staff gain professional qualifications in shipping.

Kayaktivists Poised To Launch Blockade Of Shell Icebreaker

A small group of protesters and activists are gathering at the Cathedral Park boat ramp in Portland, preparing to stay for a 24-hour vigil as they wait for Royal Dutch Shell Oil's ice-breaker ship,

New Productivity Record at Khalifa Port

Khalifa Port Container Terminal, KPCT, set a new productivity record by handling 2615 moves in just under 13 hours on the 9,365 TEU CMA CGM Thames which called into Khalifa Port on Tuesday 21st July.

 
 
Maritime Careers / Shipboard Positions Maritime Security Maritime Standards Naval Architecture Pipelines Pod Propulsion Ship Electronics Ship Simulators Shipbuilding / Vessel Construction Winch
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.3495 sec (3 req/sec)