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 Today


The Maritime Industry's original and most viewed E-News Service

Maritime Reporter May 2016 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

NASSCO Lays Keel for Jones Act Tanker Liberty

U.S. shipbuilder General Dynamics NASSCO hosted a keel laying ceremony on Thursday, May 26 for the Liberty, one of three new ECO Class Jones Act tankers under a

DSC Dredge Receives President’s E-Star Award

DSC Dredge, LLC, based in Reserve, La., has received the 2016 President’s “E-Star” Award for exports.   In a ceremony held on May 16, 2016, at the U.S. Department

TT Club Reports Robust Financial Results for 2015

TT Club has announced its financial results for the year ended December 31, 2015, and AM Best affirms its A- (Excellent) rating for the 10th consecutive year.   Knud Pontoppidan,

Shipbuilding

CBP, AMO Unveils New Interceptor Vessel

U.S. Customs and Border Protection (CBP) Air and Marine Operations (AMO) and SAFE Boat International celebrated the unveiling of AMO’s newest coastal interceptor vessel (CIV) Thursday.

Seaspan Acquires Eighth 14000 TEU Vessel

Seaspan Corporation (NYSE:SSW) announced today that it accepted delivery of a 14000 TEU containership, the YM Width. The new containership, which was constructed at CSBC Corporation,

NASSCO Lays Keel for Jones Act Tanker Liberty

U.S. shipbuilder General Dynamics NASSCO hosted a keel laying ceremony on Thursday, May 26 for the Liberty, one of three new ECO Class Jones Act tankers under a

Ship Repair & Conversion

Hansa Offenburg, Hansa Drakenburg Sail Scale-free

Leonhardt & Blumberg was founded in 1903 and has managed more than 180 vessels, the majority of which were general cargo vessels and bulk carriers. Today the company

Haven Marine Signs Service Contract with Svitzer

Haven Marine Services informs it has signed a five year contract with Svitzer which will see the yard service the requirements of Svitzer’s vessels within the Bristol Channel and Irish Sea areas.

BWTS Refit for Netherlands Naval Vessels

The Defense Material Organization has awarded three contracts to Goltens Worldwide’s Green Technologies business unit for the engineering and turnkey installation

Workboats

Bay Shipbuilding Delivers ATB to Moran

Fincantieri Marine Group’s Fincantieri Bay Shipbuilding (FBS) has delivered the Articulated Tug Barge unit (ATB) Barbara Carol Ann Moran and the 110,000-barrel

Tech & Design Solutions for Modern Workboats

EPA Tier 4 regulations (for engines of 804 hp and higher) and propulsion advancements have many manufacturers and vessel designers changing course to adapt to new requirements and customer demands.

Seacat Services Secures Burbo Bank Charter Deal

DONG Energy has awarded  offshore energy support vessel operator Seacat Services with the supply contract for all crew transfer services at its 258MW Burbo Bank

Energy

Strike In France: Implications for Tanker Demand

After the oil industry suffered from a severe drought in Venezuela, forest fires in Canada and rebel attacks on oil installations in Nigeria, it is now facing

Floating Storage Flattens Fortunes of $50 Crude

The prices of WTI and Brent crude briefly rose above $50/bbl during intraday trading on Thursday, the highest level seen since the end of July 2015, giving traders a brief moment of optimism,

GloMEEP Project Forges Ahead with Train-the-Trainer Workshop

A global Train-the-Trainer workshop on energy efficiency has been delivered in China (23-27 May), preparing the personnel needed to cascade knowledge on energy

News

Deployment: The Transpacific Trade Steps Up To The Plate

In 2015, it was the Asia-Europe route which was the focus of changing deployment trends, says Clarksons Research.   This year, it is the Transpacific trade which

US Navy Updated Zika Virus Infection Guidance

Navy Medicine released updated Zika Virus Infection guidance in NAVADMIN 121/16, May 26, communicating current information, travel precautions, and risk reduction

CBP, AMO Unveils New Interceptor Vessel

U.S. Customs and Border Protection (CBP) Air and Marine Operations (AMO) and SAFE Boat International celebrated the unveiling of AMO’s newest coastal interceptor vessel (CIV) Thursday.

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Navigation Offshore Oil Pipelines Pod Propulsion Port Authority Ship Electronics Ship Simulators Sonar
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: 0.3423 sec (3 req/sec)