2022 US Shipbuilding Report
It’s a common story in the U.S. shipbuilding industry today. A piece of equipment that used to be available for delivery on short notice—maybe in one or two weeks—now must be ordered months or more in advance, and it costs double. Add to this rising steel prices and the labor issues that have pervaded nearly all industrial sectors since the early days of the pandemic, and it’s clear that business is far from usual for American shipyards.
Bollinger Shipyards president and CEO, Ben Bordelon, speaking as chairman of trade group the Shipbuilders Council of America (SCA) during a February 2021 House Transportation and Infrastructure subcommittee hearing on the impact of the coronavirus pandemic on the maritime industry, said shipbuilders have been finding it difficult to navigate labor issues and supply chain disruptions. “Managing supply chain disruptions became essential to mitigating production delays because of the pandemic. The biggest drivers of schedule and cost impact have been increased rates of absenteeism—sometimes as high as 30% at some [SCA] member yards—unexpected loss of supervision and delayed equipment deliveries due to supply chain challenges.” He added that these issues and “other COVID-related costs” have “impacted every area of our business, from our workforce and finance teams, to our technical infrastructure.”
One year later, many of these challenges remain, according to shipyard execs like Peter Duclos, president and director of business development at Gladding-Hearn Shipbuilding, Duclos Corporation, who has four newbuild and six repair/refit projects ongoing. “Material lead times is a real problem and it’s adding to our delivery times,” he said. “We have done preordering on speculation of common products in advance of contracts to mitigate this problem, but there is some risk to that. The bigger problem is material cost for projects that were priced in early-mid 2021 with major expenditures occurring in 2022/2023. Pricing for materials have increased from 10% to 100%, and average about 25%.”
But there’s good news. Despite the various challenges, there’s plenty of business to be had, both in established and emerging corners of the market.
The dredge building boom that was underway even before the arrival of COVID-19 is still going strong and is expected to continue on the wings of the recent historic Infrastructure Investment and Jobs Act (IIJA), which includes much needed funding for a long list of port, coastal and inland waterway dredging projects.
Meanwhile, Brownsville, Texas shipyard Keppel AmFELS is building a new trailing suction hopper dredge (TSHD) for Manson Construction Co. Once completed, the 15,00-cubic-yard capacity Frederick Paup will be the largest dredge in the U.S. Not to be outdone, Callan Marine last summer released a tender package to build a 16,000 cubic yard hopper dredge, Admiral Nimitz. Other hopper dredges known to be under construction currently include one each being built by Eastern Shipbuilding and Conrad Shipyard for Weeks Marine and Great Lakes Dredge & Dock Corporation (GLDD) respectively, both scheduled for 2023 deliveries.
A number of cutter suction dredges are also being built, including Callan Marine's General Marshall at DSC Dredge in Reserve, La. for handover in late 2022; and Mike Hooks' Lorraine at SPI/Mobile Pulley Works in Mobile, Ala. and Southwest Shipyard in Galveston, Texas, for scheduled delivery in the first quarter of 2022.
Another promising area for U.S. shipbuilders is America’s newly forming offshore wind industry, which will require a fleet of new vessels to help build, service and eventually decommission the wind farms due to sprout up in U.S. waters, first along the East Coast, but also in the U.S. Gulf, Great Lakes and Pacific Ocean.
In November 2021, crew transfer vessel (CTV) owner/operator American Offshore Services ordered two CTVs from Blount Boats in Warren, R.I., with plans for further expansion. It was also announced that Senesco Marine in North Kingstown, R.I. will build three CTVs for sister company WindServe Marine, both part of the Reinauer Group. In October, Gladding-Hearn Shipbuilding in Somerset, Mass. said it secured an order to build an Incat Crowther-designed CTV for U.S. offshore wind farm developer Mayflower Wind. In the years ahead, it's expected that dozens of CTVs will be built as part of a new fleet of Jones Act compliant vessels required to support the construction and long-term service of new offshore wind farms.
Jones Act-compliant service operations vessels (SOV) will also be needed to support this emerging industry. Ørsted and Eversource have taken the lead, contracting with Edison Chouest Offshore for construction of an SOV at several of its yards in the Gulf Coast. Crowley, having teamed up with established European offshore wind player ESVAGT, is awaiting the results of a bid and could be close to announcing an SOV order.
Facing an anticipated global shortage of wind turbine installation vessels (WTIV), Dominion Energy, the owner of the Coastal Virginia Offshore Wind (CVOW) project, has opted to order a Jones Act compliant WTIV—the first ever—from Keppel AmFELS. Charybdis is scheduled for delivery in 2023. In another first, Great Lakes Dredge & Dock recently announced that it is moving ahead with the construction of a Jones Act compliant wind farm scour protection/rock installation vessel, which is being built at Philly Shipyard for delivery in late 2024. The deal includes an option for a second vessel.
Business in U.S. passenger vessel construction was solid prior to COVID-19, but this sector was hit hard by the coronavirus pandemic, and plans for new orders were shelved or in some cases totally scrapped. While it may be a long while until build activity returns to pre-2020 levels, there are glimmers of hope, such as U.S. river and coastal cruise shipping company American Cruise Lines’ recently announced plan for 12 new identical sister ships to be built by Chesapeake Shipbuilding in Salisbury, Md. The first two Project Blue ships are already under construction and are due for delivery in 2023.
Green vessel technologies like alternative fuels and electrification are also generating opportunities for U.S. shipyards and their suppliers. Notably, Bellingham, Wash. yard All American Marine recently completed SWITCH Maritime's Sea Change, the U.S.’ first zero-emissions, hydrogen fuel cell-powered, electric ferry. Washington State Ferries’ next five Olympic class ferries to be built by Vigor will be WSF’s first hybrid-electric newbuilds, in line with plans to make America’s largest ferry fleet emissions free by 2050. The first vessel, Wishkah, is expected to enter service in 2024. Nearby, Skagit County Public Works and Seattle-based vessel designer Glosten have developed an all-electric double-ended vehicle and passenger ferry to replace the Guemes. A yard has yet to be selected. Glosten is also working with Seattle-based Bieker Boats to develop a carbon fiber hydrofoil ferry. Elsewhere, the Alaska Marine Highway System (AMHS) is in the process of selecting a U.S. shipyard to build a Glosten-designed replacement for its 57-year-old ferry Tustamena. Also out for bid is a 190-foot hybrid-electric passenger/vehicle ferry designed by Elliott Bay Design Group (EBDG) to operate between Manhattan and Governors Island.
In more good news for ferry builders and their suppliers, the U.S. Department of Transportation's Federal Transit Administration (FTA) recently awarded $45.3 million in grants to help buy, repair and modernize ferry boats and terminals. The San Francisco Bay Area Water Emergency Transportation Authority (WETA) will receive $3.4 million to construct a new zero-emission ferry. The Casco Bay Island Transit District in Portland, Maine, will receive $3.6 million to replace a passenger ferry nearing the end of its useful life, with a new ferry equipped with a diesel electric hybrid propulsion system. Kitsap Transit in Kitsap County, Wash., will receive $7.7 million to replace a diesel vessel with a new, environmentally friendly battery-electric passenger-only ferry and necessary charging infrastructure to carry passengers across Sinclair Inlet, between Port Orchard and Bremerton.
The green trend is also driving business in the workboat market, with several hybrid-electric and alternative fuel vessel projects currently ongoing as the maritime industry continues to develop and implement new technologies for cleaner vessel operations. Duclos said Gladding-Hearn is seeing “lots of interest hybrid and all electric vessels of all kinds”, and that, “We will definitely be seeing some of these for the right applications.”
Seabulk's new Robert Allan Ltd.-designed electric-hybrid tugboat, Spartan, was delivered in January from Master Boat Builders' (MBB) Coden, Ala., shipyard. The yard’s president Garrett Rice recently told Marine News that MBB sees growing interest in hybrid- and fully-electric tugs as operators work toward decreasing or in some cases removing emissions from their operations. In December, Master Boat Builders started building Crowley’s eWolf, the first all-electric ship assist tug in the U.S. The 82-foot harbor tug is expected to be completed and ready for service in mid-2023 at the Port of San Diego.
A first of its kind methanol-to-hydrogen fuel cell powered towboat is set to hit the water in 2023. The Hydrogen One is being developed by owner Maritime Partners in cooperation with naval architecture firm EBDG and hardware suppliers e1 Marine and ABB.
Another emerging opportunity for U.S. shipyards in the “green” realm is liquefied natural gas (LNG) bunkering barges like the one currently under construction at Fincantieri Bay Shipbuilding for Crowley. Set to be delivered in late 2023, the barge will be the largest of its kind in the U.S. and will be operated under long-term charter to Shell. Bay Shipbuilding is also building another noteworthy vessel, The Interlake Steamship Company's recently launched Mark W. Barker, the first new Great Lakes bulk carrier to be built in nearly four decades. The 639-foot laker is expected to be completed and underway in Spring 2022.
Facing a shortage of commercial shipbuilding projects, a number of U.S. shipyards have turned to government work to keep busy, and several of these yards are now hard at work building, or jockeying to build, vessels for the U.S. Coast Guard (USCG) and U.S. Navy. Of note, the USCG is soon expected to select shipyards to design and construct its new river buoy and inland construction tenders as part of the waterways commerce cutter (WCC) program. In total, the Coast Guard plans to acquire 16 river buoy tenders, 11 inland construction tenders and three inland buoy tenders to replace its aging inland tender fleet.
Another closely watched Coast Guard build program is the Heritage Class Offshore Patrol Cutter, the first four of which are being built by Eastern Shipbuilding Group in Florida. The Coast Guard has called the OPC its “top acquisition priority”, and it intends to order 25 of the vessels in total. Eastern has bid for the second stage of the build program and is believed to be competing with yards such as Bollinger, Austal USA and Huntington Ingalls Industries’ Ingalls Shipbuilding. Stage 2 contracts could be awarded as soon as Spring 2022.
Pascagoula, Miss. shipbuilder Halter Marine has been awarded contracts to build the first two U.S. Coast Guard Polar Security Cutters to replace the Coast Guard's existing fleet of heavy icebreakers. Construction on the first PSC kicked off in 2021 with delivery planned for 2024, while work on the second vessel is expected to be completed by September 2026. Halter Marine, which has an option for a third PSC, is also building the U.S. Navy’s fifth Auxiliary Personnel Lighter–Small (APL(S)) 67 Class berthing and messing barge as well as oceanographic survey ship (T-AGS 67).
Fincantieri Marinette Marine in Marinette, Wis., which is currently building the Freedom Class littoral combat ships (LCS), has been awarded the first two of up to 10 Constellation-class guided missile frigates (FFGs), a new series of warships for the U.S. Navy. The lead ship is planned for delivery in around 2026. Mobil, Ala.-based Austal USA has four Independence-class LCS currently under construction, with two Expeditionary Fast Transports also under construction and a third under contract. In October, Austal USA was awarded a contract to build a pair of Navajo class Towing, Salvage, and Rescue Ships (T-ATS) for the U.S. Navy, the first contract for Austal’s new steel construction facility. Gulf Island Fabrication and Bollinger Shipyards have also secured contracts to build Navajo class ships. Bollinger, which has 11 shipyards in Louisiana, was four additional USCG Sentinel-Class Fast Response Cutters (FRC) in 2021, bringing the total number of FRCs awarded to Bollinger up to 64 vessels since the program’s inception.
Another significant government build program is the series of five training ships known as National Security Multi-Mission Vessels (NSMV) that Philly Shipyard is constructing for the U.S. Maritime Administration (MARAD). The ships will be operated by the state maritime academies, and the first is scheduled to be delivered to SUNY Maritime College in 2023.