Repair Yard Detyens Taps into Key Niche Markets

Maritime Activity Reports, Inc.

December 21, 2016

  • (Photo: Detyens Shipyards)
  • “We do a lot of dredges; scows, cutter head dredges, and hopper dredges, too. It’s dirty, grunt work and that’s what we’re good at. Customers know that they can go to Detyens and might pay a little bit more, but it will be fair and the boat is going to leave on time. No question.”  – Detyens President D. Loy Stewart, Jr. (Photo: Detyens Shipyards)
  • (Photo: Detyens Shipyards)
  • (Photo: Detyens Shipyards)
  • (Photo: Detyens Shipyards) (Photo: Detyens Shipyards)
  • “We do a lot of dredges; scows, cutter head dredges, and hopper dredges, too. It’s dirty, grunt work and that’s what we’re good at. Customers know that they can go to Detyens and might pay a little bit more, but it will be fair and the boat is going to leave on time. No question.”  – Detyens President D. Loy Stewart, Jr. (Photo: Detyens Shipyards) “We do a lot of dredges; scows, cutter head dredges, and hopper dredges, too. It’s dirty, grunt work and that’s what we’re good at. Customers know that they can go to Detyens and might pay a little bit more, but it will be fair and the boat is going to leave on time. No question.” – Detyens President D. Loy Stewart, Jr. (Photo: Detyens Shipyards)
  • (Photo: Detyens Shipyards) (Photo: Detyens Shipyards)
  • (Photo: Detyens Shipyards) (Photo: Detyens Shipyards)

Location, location, location. Centrally located, experienced in a surprisingly wide range of disciplines, Detyens Shipyard has quietly ‘dredged’ up a niche in the highly competitive domestic repair and refit game.

 
Detyens Shipyards, located in Charleston, SC, has been repairing and converting commercial and U.S. government vessels since 1962. Although perhaps better known for its blue water, deep draft work, the firm boasts a deep portfolio of experience on vessels ranging from tugs and barges to tankers, bulkers, car carriers, container ships and cruise ships. And, if its primary attraction today is its geography, then from that advantage, several key niche business sectors have blossomed for the yard. 
 
In 1982, William J. Detyens sold the business to a small group of employees which included his son-in-law and the yard’s current owner, D. Loy Stewart. In those days, U.S. Navy and Government work provided the majority of its business, but in 1993, the Charleston area was dealt a major blow when the Defense Department’s Base Realignment and Closure Commission announced the closure of the Naval Station Charleston. Detyens Shipyards naturally felt the full impact of that decision.
 
Nevertheless, and just three years later, the Detyens group secured a long term lease on Charleston’s shuttered Naval Shipyard, moved its entire operation to that location and has operated continually from there ever since. Today, Detyens leverages three graving docks, enclosed shops for all crafts; eight 56-ton gantry cranes (on a continuous rail system); four tower cranes; rail access over 8,000 feet of deep water pier space and a dry dock for smaller vessels. Having successfully transitioned from a full menu of government work to one which includes an equal amount of private sector work, the yard today is always looking for additional sources of income.
 
Family owned and operated since its inception, the shipyard not only finds itself conveniently located midway between several key markets on the U.S. East and Gulf Coasts, but also in the nation’s 9th busiest port that has plans of its own for a rapid, and significant expansion. With a third container terminal planned and the groundwork laid to make the port the East Coast’s deepest, Charleston’s waterfront is arguably ready to explode. When it does, Detyens will be there to provide service to the vessels that will undoubtedly need it.
 
Diversified Client Base
Over time, the yard has successfully dry docked dozens of international vessels of all sizes and continues to bid in that highly competitive market, as opportunities arise. With a portfolio that is roughly split evenly between government and commercial jobs, and 98 percent focused on the repair sector, Detyens services a brown water portfolio that spans government operated NOAA vessels, the nation’s research vessel fleet, domestic dredges and a host of other shallow draft work.
 
According to Detyens President D. Loy Stewart, Jr., the Military Sealift Command is Detyens biggest customer, but the yard also works for virtually every other government agency (other than the U.S. Navy). On the commercial side, the yard’s workload is divided evenly between foreign and domestic vessels. Indeed, and before the price of oil took its dive, Detyens was performing a fair amount of Norwegian work – workboats transiting from the North Sea to the Gulf and back, as well as some vessels headed to West Africa. Location had a lot to do with that.
 
Also on the commercial side, this time in the domestic markets, Detyens found a welcome niche in the refit and repair of dredges. Stewart explains, “We do a lot of dredges; scows, cutter head dredges, and hopper dredges, too. It’s dirty, grunt work and that’s what we’re good at.” He adds, “Customers know that they can go to Detyens and might pay a little bit more, but it will be fair and the boat is going to leave on time. No question.”
 
Another niche for Detyens involves research vessels and NOAA fleets, some of which transit the Charleston area regularly and find the yard to be a convenient stop for both repairs and retrofit work. Recent work of note included the mobilization of the Atlantis before it head out to find the VDR from the ill-fated El Faro.
 
The dredging work, in particular, might have happened at first as a function of location, but it stays because Detyens gets the job done. Loy Stewart Jr. adds, “There’s a lot of dredging in the Gulf, and there’s a lot of dredging way up the East Coast. These vessels are constantly transiting. With dredges in particular, time is money. And so, we know that if a dredge is anywhere close, or on its way up or down the coast, we have a better than average chance of getting that work.”
 
Because today’s domestic dredging situation – whether storm related or maintenance dredging – is highly fluid, the typical dredge is often its way from one job to another. Often, Charleston, SC is on the way. As a result, Detyens’ dredging clients include Great Lakes Dredging, Norfolk Dredging, the Dutra Group, Manson construction and the U.S. Army Corps of Engineers. Getting that work is one thing; keeping it is another. And, that’s where the yard’s bonus, incentive and benefit package comes in.
 
The Human Element
For Detyens employees, especially; time is money. That reality is manifested in the prominently displayed ‘thermometer,’ just outside the main gate. Loy Stewart explains the policy, saying, “We pay a bonus the payday before Thanksgiving to every hourly employee. The employees get the number of hours that’s on that board, and it’s updated every month. And, that bonus is based on only two things: Did the ship leave on time? and Was the customer happy? According to Stewart, if those two goals are met, employees receive one half of one percent gross sales on any job. Stewart adds, “It doesn’t matter if the shipyard made a dollar, lost a dollar, it doesn’t matter. They get a half a percent of the gross sales, and it’s equated to their hourly rate.” Similarly, if a ship is late leaving the yard or a customer says, ‘I’m never coming back here again,’ whatever was going in, half of that comes out. That, according to Stewart, rarely happens.
 
In September, Detyens had 500 full-time employees and additionally was using about 300 skilled and unskilled temporary workers. Beyond that, another, say 350 subcontractors were engaged in what Stewart describes as turnkey” work; tank-blasting and tank-cleaning, in particular.
 
Full time employees receive what amounts to all but free healthcare. Self-insured for their healthcare requirements, Detyens healthcare program is arguably the best in South Carolina, and without a doubt, one of the best employee bargains in the country. Perhaps the best part of that plan is that the clinic is located right on the property. It features two doctors, a nurse practitioner, a chiropractor, and a pharmacist staffing an on-site pharmacy. A direct bill relationship with several specialists – for MRIs, CAT scans, colonoscopies, mammograms, X-rays, bloodwork – is in effect and costs employees nothing to use.
 
It isn’t hard to imagine why the yard remains a non-union shop. In fact, says Stewart, “There isn’t anything a union could offer these workers that we aren’t already providing.” And, up until last year, Detyens was actually providing healthcare for some on-site subcontractors (whose coverage, like everyone else’s, had gone through the roof), until it was discovered that the practice wasn’t allowed under federal law. In the end, Stewart insists, “So, to keep our employees healthy, we offer this. It’s virtually free.” Beyond this, Detyens focuses on preventative care as well. “We’re treating for high blood pressure, cholesterol, diabetes … these things that just weren’t being done for the worker. Now, we’re educating and teaching. Just because you finished your vial of medicine for diabetes doesn’t mean you don’t have it anymore. You have to continue to treat. We feel that we treat our employees right and that if we take care of them, they will take care of us, just like our customers.”
 
Ups and Downs
The nature of repair work is anything but certain. That said; while the oil crunch barely impacted the Detyens bottom line, the inconsistent and irregular nature of the government work did. “We didn’t see an issue with it (oil). Sure, maybe some ships put off some of the conversion work, but we kept working. Now, the last couple years, it has been a lot more volatile; not necessarily attributable to any one thing,” explained Stewart, adding, “On the government side – they just didn’t have anything for two or three months. Now, just this last month, they had their whole fleet of oilers in our shipyard.”
 
In late 2015, however, the pain on the waterfront caught up, even with Detyens. For the first time in 55 years, they were forced to let some people go. And, as painful as that decision was, the yard is now back at full strength, working consistently. Aside from the three MSC TAO’s only recently completed, Detyens has performed work on five vessels for one German containership firm in just this year alone.
 
Locally, a dredging firm, Marinex Construction, has also sent a lot of business, as well.
 
On the horizon, other opportunities are also on the Detyens radar. As the domestic offshore wind business finally comes to life – especially here on the U.S. East Coast – the potential for putting new life into laid-up OSV tonnage presents very real refit opportunities as operators struggle with Jones Act requirements for wind farm tonnage. To that end, Stewart promises, “For the wind farm service vessels, we’re a one-stop shop. You come here, you can get everything done; you’ll get it done as quickly and as cost effectively as possible. That’s for sure. We guarantee it.”
 
Another area that possibly looms large for Detyens – and the global shipyard community at large – is the recent ratification of the IMO’s ballast water convention. And, while it’s anyone’s guess as to when the U.S. Coast Guard will approve its first OEM technology for domestic waters, it’s also no secret that ballast water equipment installations will likely be timed with regular drydocking or yard visits. 
 
Separately, and always looking for new ways to provide service, the new HLB-1 drydock accommodates vessels up to 10,000 tons, or in other words, arguably the perfect size for a myriad of brown water jobs. Measuring 400 by 82 feet between the wing walls, the new drydock has fully occupied since it was put into service in April. A U.S. Coast Guard hull and more than one research vessel has been serviced in a very short period of time. D. Loy Stewart Jr. explains, “It’s been fully occupied. And, it’s very efficient. We’re really setting up an area for the smaller customers that don’t want to get lost in a big shipyard.”
 
The Detyens Promise
Unlike a lot of yards, most of what Detyens accomplishes, they do in-house, right on the premises. Very little gets shipped out to another contractor. Stewart explains, “We’re right here. There’s an electric rewind shop. And, probably the biggest machine shop on the East Coast is in the yard. And, we’re wide open. There are no secrets. We don’t just want their money now – we want it 10 years from now.”
 
Tying all that together, the Detyens website lays out the simple, but effective motto of the company: “Customer before Company, Employee before Owner, Family before Self and Safety above All.” D. Loy Stewart. Jr. puts it best when he says, “That’s what we go by. It’s like a three-legged stool. We’ve got employees, customers and the facility. If you don’t take care of all three, you don’t need the other two.” It’s a philosophy that’s worked well for 55 years and if D. Loy Stewart Jr. has his way, Detyens Shipyards will still be at the job, long after he is gone. 
 
 
(As published in the November 2016 edition of Marine News)
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