Aker Philadelphia Shipyard said Wednesday it has won a contract to construct two 3,600 TEU Jones Act containerships for Matson Navigation Company.Aker says firm contracts are in place for the two vessels with a total value of $418 million. The vessels will be delivered in Q3 and Q4 2018.
The 850 foot long “Aloha” class vessels will be the largest Jones Act containerships ever constructed and will be utilized in Matson’s service from the U.S. West Coast to Hawaii. The vessels are capable of carrying a variety of container sizes and are able to operate at speeds in excess of 23 knots. The vessels will be built with dual fuel engines and will be ready for conversion to LNG propulsion.
“We have a proven track record of building containerships and are greatly looking forward to being partnered with Matson again,” said Kristian Rokke, Aker Philadelphia Shipyard President and CEO. APSI previously delivered four containerships to Matson between 2003 and 2006.
Matt Cox, Matson President and CEO, remarked, “Matson has been very pleased with the performance and operating efficiencies of the four containerships built for Matson by Aker. We’re confident Aker will once again deliver quality ships for Matson.”
Rokke continued, “The planned delivery dates for these new containerships allow APSI to continue to capitalize on tight oil opportunities by constructing eight product tankers between 2015 and 2017 while still positioning the shipyard for the renewal of the Jones Act container fleet. The winning of this order provides the shipyard significant backlog and valuable visibility out 2018, which is positive for our shareholders and other stakeholders as we expect to use this opportunity to further strengthen our competitive position.”
Aker Philadeliphia Shipyard is currently constructing two 115,000 dwt crude oil carriers for SeaRiver Maritime, Inc., Exxon Mobil Corporation’s U.S. marine affiliate. Both of these crude oil tankers are scheduled for delivery in 2014. Pursuant to the joint venture announced on August 9, Aker Philadelphia also has contracts for the construction of product tankers with Crowley.
My personal feeling is that this is a trickle down effect from the boom in the petroleum sector but I would like to hear what others think.
$209 million for a 3,600 TEU vessels is only a bit more what Maersk paid for the 18,000 TEU Triple E class ships. I was expecting Jones Act compliant ships to be somewhat more expensive, but that’s quite a difference considering that the salaries in South Korean shipyards are not considerably lower than in Europe or the US. Makes you wonder just how competitive Aker Philadelphia would be on the international market…
WOW!..that’s a 4x difference on a per teu basis which is way too high! Is the US yard that much less productive or is it that with so few yards in the US that can build these, that they don’t need to be so competitive? Then again, when you think that AIVIQ cost what a 3600teu containership costs makes the box carrier quite a bargain.
Still I am very happy with this news and hope there are still more ships to come!
I still can’t believe how much some of these tugs/osv type vessels cost when compared to regular ships. Hell even normal ATB combos aren’t even that expensive compared to some tractor tugs and supply boats!
There’s some economy of scale in the giant Maersk ships, but based on recent prices of smaller ships I’d say the vessels ordered from Aker Philadelphia are four times as expensive as 3,600 TEU container ships built overseas.
The higher price of specialized one-off offshore vessels is quite understandable as they have much more complex propulsion system and are full of specialized equipment whereas container ships, bulk carriers and oil tankers are relatively simple and straightforward, and can be built in long series (for example, in January 2013 there were 151 Mitsui 56 series bulk carriers in service and more on order).
That leaves Horizon lines to jump on board with fleet renewal, and the rumor of Crowley building container boats for the Puerto Rico run. Good to see money being reinvested into the shipping fleets.
[QUOTE=Tups;123860]$209 million for a 3,600 TEU vessels is only a bit more what Maersk paid for the 18,000 TEU Triple E class ships. I was expecting Jones Act compliant ships to be somewhat more expensive, but that’s quite a difference considering that the salaries in South Korean shipyards are not considerably lower than in Europe or the US. Makes you wonder just how competitive Aker Philadelphia would be on the international market…[/QUOTE]
YES. That is why I keep saying we need to be more competitive on the international market. It’s great that we have two new container ships coming to the Jones Act but we have to ask at what cost? If it doesn’t make business sense to be building these things because they cost SO MUCH MORE than what other people are paying for them then I can’t blame companies for not wanting to do business in the Jones Act.
Matson paying such a high price could potentially be setting more of a NEGATIVE precedent than a POSITIVE one. If I were a company like Crowley right now thinking about building new box boats I would be looking at that price tag and thinking about taking my business elsewhere. American shipyards are just TOO DAMN EXPENSIVE. Blame it on labor unions, outdated technology, whatever you want, the fact is the system is BROKEN and we cannot survive under present conditions.
[QUOTE=PaddyWest2012;123892]YES. That is why I keep saying we need to be more competitive on the international market. It’s great that we have two new container ships coming to the Jones Act but we have to ask at what cost? If it doesn’t make business sense to be building these things because they cost SO MUCH MORE than what other people are paying for them then I can’t blame companies for not wanting to do business in the Jones Act.
Matson paying such a high price could potentially be setting more of a NEGATIVE precedent than a POSITIVE one. If I were a company like Crowley right now thinking about building new box boats I would be looking at that price tag and thinking about taking my business elsewhere. American shipyards are just TOO DAMN EXPENSIVE. Blame it on labor unions, outdated technology, whatever you want, the fact is the system is BROKEN and we cannot survive under present conditions.[/QUOTE]
You sound like one of those John McCain types when you talk that way. Of course it costs more to build ships in the US but guess what…the freight rates will support that added cost and the ship operating companies still make a profit. Yes, the consumer ends up paying a certain percentage more for goods transported by a Jones Act qualified vessel but I don’t see people starving in Alaska, Hawaii and Puerto Rico or not building new houses or not driving new cars with petroleum carried by Jones Act tankers.
[QUOTE=c.captain;123866]WOW!..that’s a 4x difference on a per teu basis which is way too high! Is the US yard that much less productive or is it that with so few yards in the US that can build these, that they don’t need to be so competitive? Then again, when you think that AIVIQ cost what a 3600teu containership costs makes the box carrier quite a bargain.
Still I am very happy with this news and hope there are still more ships to come![/QUOTE]
Its the cost of shipping all the Korean workers over to build it???
lol
[QUOTE=c.captain;123895]You sound like one of those John McCain types when you talk that way. Of course it costs more to build ships in the US but guess what…the freight rates will support that added cost and the ship operating companies still make a profit. Yes, the consumer ends up paying a certain percentage more for goods transported by a Jones Act qualified vessel but I don’t see people starving in Alaska, Hawaii and Puerto Rico or not building new houses or not driving new cars with petroleum carried by Jones Act tankers.[/QUOTE]
I certainly didn’t mean to pull out a John McCain song and dance. There’ll be no repealing the Jones Act on my watch, that’s for darn sure! What I mean is, as good of a job as our shipyards seem to be doing now, compared to past years, there are still things that are fundamentally wrong with their operation, which need to be fixed. No matter how well a business is doing it can ALWAYS do better. That’s half the whole point of capitalism.
I accept the need to for unions to protect workers’ rights. Having worked for some downright crappy bosses and downright crappy companies that is a concept that I understand on a personal, rather than conceptual level. With that in mind though I still believe that the unions are hurting the shipyards. I understand that no matter what we do we will never ever be able to build a ship for the same price as the $0.10 per hour Koreans, but we have a responsibility as capitalists to always try and keep our costs as low as possible. Lower overhead is better for the manufacturer as well as the consumer.
Our shipyards can be as productive as they like but the simple facts are that they are inefficient, out of date, and only exist because of a law that protects them. Could you imagine an American Maritime Industry in which we didn’t need to be protected because people would [I]rather[/I] do business with us than with other countries like Korea? That is the future that I strive for, not repealing the Jones Act to force the industry to change, but encouraging the industry to change on its own for the better, while still keeping the Jones Act in place for a rainy day.
[QUOTE=lm1883;123909]Exposing our shipbuilding industry to predatory markets is not capitalism and it sells out your fellow tax paying American. While we are at it, we could remove those super costly gringo sailors, train engineers, and even better airline pilots. Think of how competitive we would be! Then, we can all bitch at the unemployment office while our locality is raising taxes because those great revenue streams are gone.
Infrastructure costs money. Education for our kids costs money. Social security costs money. Defense programs cost money. Need I continue?Offshoring industry displaces or removes tax revenue, especially at the local level. To make up for incongruence, taxes are usually raised and standard of living decline. If I have to sell you on that take a drive down the NY thruway and stop in every town or city. Go on a lovely holiday in Youngstown, Ohio, or Flint, Michigan.
Towns like that are great examples of tax
debasement, or what happens when labor is offshored.
Our jones act simply creates a domestic free market unto itself, retains industry and reflects the cost of doing business in America. Matson building their ships overseas would have been great for Matson. Matthew Cox could have given himself a bonus for saving all that money on construction cost. What would be wonderful about that? Well, the Chinese recoup subsidies paid to the yard, and when Mr. Cox fills up his car, or goes out to dinner,he supports the only economy left.[/QUOTE]
I’m really not talking about sending any kind of jobs offshore, much less shipbuilding jobs. I’m talking about making american industry better than international ones. I believe that that can be done without outsourcing. I CAN SO HAVE MY CAKE AND EAT IT TOO!!!
[QUOTE=PaddyWest2012;123901]I understand that no matter what we do we will never ever be able to build a ship for the same price as the $0.10 per hour Koreans…[/QUOTE]
I don’t know about the current situation, but in 2004 labor costs were only about 17 percent lower in South Korea than in the US. In addition, this article states that “rumor has it that the salaries here [in South Korea] are close to the level of yards in England and the United States”. Based on that, I’d say the key issues in the US shipbuilding industry are productivity and efficiency, and in my eyes there’s no excuse for that. For example, they say that building a heavy icebreaker for the USCG would cost in excess of $1 billion and delivery would take up to 10 years. Despite being a government vessel, how can it be so expensive?
[QUOTE=PaddyWest2012;123910]I’m really not talking about sending any kind of jobs offshore, much less shipbuilding jobs. I’m talking about making american industry better than international ones. I believe that that can be done without outsourcing. I CAN SO HAVE MY CAKE AND EAT IT TOO!!![/QUOTE]
The US will never be able to compete on a dollar for dollar basis with the Far East when it comes to merchant shipbuilding so there is no way US yards can attract foreign clients for export business even with all the technology available. Remember the “Double Eagle” tankers NNSB tried to build? Frankly, I am just happy to have Aker Philly, Halter and NASSCO out there able to build deepsea merchant ships for the Jones Act trade. I hope someday there might be more and that we will build really large offshore support vessels in the US like well intervention ships and pipelayers and get the foreign vessels out of the GoM. Those vessels themselves would be high value specialized ships which I believe we have the capability of doing at a price equivalent with the North Europe yards of Norway or the Netherlands. Those are the vessels I want to see US built and all it takes is legislation to disincentive the future use of those foreign ships like Technip’s DEEP BLUE. Levy a tax on those foreign ships to work in the GoM which would not apply to a US built vessel and overnight you will see orders placed!
[QUOTE=Tups;123911]I don’t know about the current situation, but in 2004 labor costs were only about 17 percent lower in South Korea than in the US. In addition, this article states that “rumor has it that the salaries here [in South Korea] are close to the level of yards in England and the United States”. Based on that, I’d say the key issues in the US shipbuilding industry are productivity and efficiency, and in my eyes there’s no excuse for that. For example, they say that building a heavy icebreaker for the USCG would cost in excess of $1 billion and delivery would take up to 10 years. Despite being a government vessel, how can it be so expensive?[/QUOTE]
BANG. You got it buster. That is what I am trying to say. The problems with our shipyards that put other countries’ heavy industries leaps and bounds ahead of ours are inexplicable and inexcusable. It’s hurting everyone. It hurts the American people as consumers because commodities costs are higher, as mentioned above by C.Captain, and it hurts the American people as tax payers because the federal government is shelling out a billion dollars for an icebreaker that’s not worth a quarter of that in anyone else’s shipyard.
Don’t MOVE the shipyards off shore, FIX the ones we have right here!!!
There’s a very good chance that Manoa and Mahi Mahi will go by the wayside (deep lay-up) and then they get rid of steam ships Kauai and Maui (alternated in and out of service for many years now) and Lihue as well. Spending so much time inside ECA and CARB zone gets pricey on LSFO. They may still keep Lurline and/or Matsonia to meet Christmas rush and have extra RO/RO tonnage. I don’t think it’s a net gain, just an equal swap or maybe even a minus one, but that’s a numbers game b/c you are talking about getting rid of ships that aren’t always running.
I’m sure those big decisions are already being tackled b/c all of Matsons’s fleet is US built, but I don’t think they are receiving any MSP for any of those recently built Aker ships (Maunalei, etc.), but I’m not poisitve.