#1 Passenger vessel post-Covidrevival begins

For passenger vessel operators, 2021 has not been as bad as 2020, when Covid-19 slammed this workboat sector the hardest of all.

Government mandates are in flux, vessel capacities curbed, extra safety precautions persist and corporate business is barely visible.

What’s more, the return of passengers has been tempered by the rising cost of food, fuel, insurance, workers — nearly impossible to find — and supply chain problems. Operators are spending more than usual advertising for help, accelerating raises, paying more, and running vessels themselves. Some raised their prices to close margins after years of keeping them steady.

While the Passenger Vessel Association (PVA) has not projected 2021’s losses yet, the estimate for 2020 stands at between $5 billion and $10 billion. PVA pushed for the $2 billion Coronavirus Economic Relief for Transportation Services (CERTS) program designed to support private passenger and pilot vessel companies, among others, who have lost 25% or more of their annual revenue because of Covid.

Operators have received about $362 million in federal CERTS grants. “We are urging Congress to establish a second round of CERTS grants in 2022 as a result of the lingering effects of the pandemic,” said John Groundwater, PVA executive director. “In addition, we are working with Congress to get an amendment which would make CERTS grants, including those already awarded, non-taxable.”

Any positive news would be welcome.

“As long as the pandemic starts getting under control and the government doesn’t shut businesses down, I think things are going to get better,” said Capt. Rick Fryan, owner of the 131'×38'×11', 1,000-passenger Goodtime III, Cleveland.

Last year, total passenger load was down 94% from 2019. In 2021 it is down 53%. “This year, there’s no social distancing requirement. That in itself was the big problem with last year,” said Fryan, the third generation of the family sightseeing business.

His biggest challenge was finding help. “It was very frustrating. People would make appointments and not show,” he said.

Capt. William Lozier, owner/operator of Memphis Riverboats, also a third-generation family business, faced the same challenges. “We can’t find people to do the work. I’m literally running boats,” he said.

Supplies are a problem, too. “It’s hard to even get deliveries. I try to order what I need two weeks out, just in case they don’t have it,” Lozier said. And he keeps three weeks of stores instead of seven days. “The wait time is unbelievable.”

As for social distancing, “You can’t have six-foot on a boat, I don’t care how you do it,” said Lozier. Before the pandemic, 90% of his business was from out-of-town or overseas. Now, 90% are locals “just looking for something to do.”

The future “all depends on three factors — fuel prices, food prices, and labor,” he said. “It’s not just us. Everybody’s feeling the impact of this. You just have to roll with the punches.”

For Cuttyhunk Ferry Co., New Bedford, Mass., this year is “closer to normal numbers,” said Capt. Jono Billings, owner of the 76'6"×22'×7'4", 149-passenger vessel Cuttyhunk, which like most other ferries was allowed to keep operating.

“This year was a huge change over last year. We suffered a lot with passengers and freight all of last year,” he said. Business was off 30% from 2019. This year it’s down 5%. “We’re getting there.”

Billings said he was lucky with crew this year. His biggest challenge was New England weather.

Onboard, “people were super responsible. We had no issues. A boat ride isn’t a democracy. When there’s a mask mandate, it’s a mandate,” he said. Mask wearing is required the entire trip. And summer guidelines on his site noted, “We are unable to provide distancing as wind, weather and crew interaction changes continually.”

Overnight cruise companies have resumed sailing and depending on local rules may require passengers and crew to be vaccinated. Some require Covid tests before sailing as well as temperature checks when boarding.

Two of the major overnight lines are making changes for the future, as 2022 marks a decade since the river rivals started offering regular overnight journeys on U.S. rivers.

Before the next season, American Cruise Lines’ (ACL) four paddlewheelers will be redesigned and renamed similar to others in its fleet of 15 vessels that sail inland and coastal waters. The changes follow the introduction of the 328'×60'4" American Melody and its new interior design, part of Guilford, Conn.-based ACL’s new, five-ship modern riverboat series.

American Queen Steamboat Co. and sister brand Victory Cruise Lines are now joined under the American Queen Voyages name. In late September, the new brand said it was opening a headquarters office in Fort Lauderdale, Fla., with more than 100 jobs. The old headquarters was in New Albany, Ind. — Dale K. DuPont

#2 Covid-related worker shortage

Like many other industries during Covid times, the inland barge sector is feeling the pinch of a tight national labor market. Companies continue to post jobs for an array of shoreside and vessel positions, but the candidates aren’t materializing.

Hiring managers have had to be creative — or perhaps a bit desperate — by offering incentives to attract new hires and convincing existing workers to stay. They post on various social media and maritime platforms and have also been asking employees to share job links on their social media accounts, offer bonuses to employees who make successful referrals, and go to high schools and community colleges to extoll the advantages of a maritime career. Hiring managers have also been recruiting military veterans, and posting help wanted banners outside their offices.

But this has had only mixed results, with entry-level positions the most difficult to fill. Some operators report that they can’t hire and retain people fast enough to keep up with the quit rate. U.S. workers continue to leave their jobs in record numbers.

So why is it so tough to fill vacancies and keep workers on the job?

Oscar Harrell, vice president of operations at Ingram Barge Co., Paducah, Ky., said workers are seeking a better work-life balance. After a stressful year of working non-stop through the Covid-19 pandemic, maritime workers are reassessing what they want out of their jobs, how much they want to earn, and how they weigh the pros and cons of certain professions.

Mariners are seeing that with a national job shortage, wages in other industries are going up, and this balance may be better elsewhere. They could go home every night after work, rather than be out on the river for a 28-day stint.

“When you go past places that are asking less from their people from a labor and quality of life standpoint than we are, and they can’t find people, you’re going to be a second or third choice and that’s where we are right now in this national labor shortage,” Austin Golding, president of Golding Barge Line Inc., Vicksburg, Miss., said at a WorkBoat webinar earlier this year.

This is posing a big challenge to inland barge lines as they try to make their industry stand out in a competitive job market. Management at both big and small barge companies are looking hard not only at how they recruit and what they pay but also at whether work schedules onshore and on the boats can be adjusted or varied to be more accommodating to workers.

“Culturally we have to resell ourselves to the next group of employees and position ourselves from a wage standpoint that’s going to be more attractive. That doesn’t necessarily mean more money, but maybe a different work schedule, different benefits, but probably more money to be honest,” Golding said. “The base wage that we offer is a lot less competitive than it used to be. You’ve seen wages increase in a time when the market doesn’t support wage increases.”

Golding also said that if a tankerman doesn’t see a clear path toward the wheelhouse or to another position that offers more income, “they’re going to look at other professions that bring them home more. When we ask somebody to be gone for 28 days and take 14 off, or they are on for 28 and off 28, it’s a lot to ask in the current life that we all know now. So, we’ve got to get creative on how we sell our industry and how we promote it, not as a static job, and find a way when (economic) conditions improve to make room within our rates to improve the wage for our men and women on the water.”

Golding added: “But right now if the supply of deckhand applicants doesn’t improve, we’re short. If there’s Covid exposure, we must replace our crews, and there are people at home dealing with death and illnesses. They don’t want to come back and we must make arrangements for them to be home. It’s the most difficult time our HR department has ever had in our company’s existence.”

Peter Stephaich, chairman and CEO of Campbell Transportation Co., Houston, Pa., said his company has had similar experiences in the western Pennsylvania job market.

“We have a very good package of benefits, very broad and generous,” Stephaich said at the WorkBoat webinar. “We’re going to have to give a lot more money. But try going out and getting rate increases from your customers in this market, it’s just not going to happen, so it’s going to come out of your margin. It’s a difficult situation, but you’ve got to run the boats, and you’ve got to deliver under your contracts.”

Jennifer Carpenter, president and CEO of the American Waterways Operators, said operators face a longer-term challenge to “make sure we’re prepared to make ourselves attractive to advance and train the next generation of mariners, especially minorities and women.”

“We need to make sure we’re telling the story of great opportunities of this industry and the opportunities that exist for advancement for someone who doesn’t have a college degree,” she said. “Our members are asking the questions of what do we need to do to assure a supply of people that makes this industry go.” — Pamela Glass and David Krapf

#3 Communications breakdown big factor in liftboat tragedy

On the afternoon of April 13, 2021, the 265-class, 175' liftboat Seacor Power owned by Seacor Marine left Port Fourchon, La., bound for the oil-and-gas lease area Main Pass Block 138 in the Gulf of Mexico. A weather report emailed to the vessel at about 7 a.m. that day predicted afternoon winds at 9 to 12 knots from the southeast with 3' seas.

Later that morning and into the afternoon a series of seven special marine warnings forecasted possible tropical storm-force winds — 39 miles per hour or greater — and possibly high waves. Unfortunately, the liftboat’s crew never received those emails.

A small but intense low-pressure system passed through the area later that afternoon, creating hurricane-force winds of 80-90 mph and seas offshore of 7' to 9'.

By midafternoon, Seacor Power had motored into the teeth of the system.

The liftboat capsized approximately eight miles south of Port Fourchon with 19 crewmembers aboard. Six crewmembers were initially rescued and six were recovered unresponsive during the rescue effort.

Coast Guard boat and aircrews, local agencies, and good Samaritans searched for a cumulative 175 hours, covering more than 9,200 sq. nautical miles over the course of six days before suspending the search for the remaining seven crewmembers April 19.

The 265-class Seacor Power was a three-legged liftboat with a 49'×29'×5' working pad. It had a cargo deck capacity of 491 LT and a clear area of 11,000 sq. ft. It was outfitted with two cranes, port and starboard, each 185-ton capacity with 120' boom.

In August, the Coast Guard convened a hearing to look into what caused the Seacor Power to capsize. The National Transportation Safety Board (NTSB) was also part of the hearing.

The commanding officer of the Coast Guard’s Communications Command testified that a “connectivity issue” kept the liftboat from receiving the severe weather emails from the Global Maritime Distress and Safety System.

“We have these issues maybe once a year, and it’s very limited,” Cmdr. Vince Taylor, the Communications Command’s commanding officer, testified. “It just happened to be this is the date that it happened.”

But it wasn’t just the Seacor Power that didn’t receive the warning. Vessels throughout the Gulf of Mexico lost their connection with the system.

Taylor’s testimony lines up with that from two of the six survivors of the accident. Both Dwayne Lewis, an independent contractor working for Talos Energy, the owner of the offshore structure Seacor Power was trying to get to, and the boat’s first mate, Bryan Mires, testified that they weren’t aware of a severe weather warning and that neither was the boat’s captain, David Ledet, who was among those who lost their lives.

Lewis testified that he was sleeping when the storm hit. He was awakened, he said, “when the boat rolled.” Now trapped and unable to leave by the doorway, his only chance was the window in his cabin. He and another man used a fire extinguisher to break the window and get out.

Prior to the hearing, the NTSB had learned that as the Seacor Power transited the open waters of the Gulf, the squall passed over the liftboat. With visibility dropping and winds increasing significantly, the crew decided to lower the liftboat’s legs to the seafloor to hold the vessel in position until the storm passed. The crewmember at the helm attempted to turn the Seacor Power into the wind as the legs began to descend. Before the turn was completed, the liftboat heeled to starboard and capsized.

NTSB investigators also learned that several people were able to escape onto the exposed, port side of the deckhouse. High winds and seas that had built to 10' to 12' prevented rescuers from reaching those who remained on the liftboat. Some were washed into the water, and six were eventually rescued.

The NTSB and Coast Guard continue to investigate the accident.

“Today marks the conclusion of this public hearing, but it does not mark the end of our work as a Marine Board of Investigation,” Coast Guard Capt. Tracy Phillips, chairwoman of the board, said. “We will continue to collect and review any evidence that may be submitted in the future. We will also begin our transition to the analysis phase of this investigation, and then later start compiling our report.”— Ken Hocke

#4 Gulf Island-Bollinger deal headlines year of acquisitions

Dealmakers have been busy this year, snapping up everything from shipyards to marine electronics, reflecting the brisk pace of the broader market.

A combination of factors are at work — a lot of cheap money and record low-interest rates. “Sellers recognize this is a window open right now, and asset prices have never been higher,” said John Deysher, president and portfolio manager of Pinnacle Value Fund, New York.

Calling it a transformational transaction that improves its risk profile, in April, Gulf Island Fabrication Inc., Houston, sold the bulk of its shipyard division to Bollinger Shipyards LLC, Lockport, La., for approximately $28.6 million.

Gulf Island will focus more on the specialty fabrication business and eliminate the risks associated with long-term contracts that represent about 90% of the current shipyard backlog. The risk/reward aspect of the shipyard business is uncertain given the low margins, “competitive landscape, significant bonding requirements, and negative impact on cash flow” when facilities are underused, CEO Richard Heo said in a conference call.

In a news release, Bollinger said the deal cements its position “as the largest American privately-owned and operated shipbuilder in the United States,” and creates opportunities “to better serve and deepen its relationships with key defense and commercial customers.”

The sale includes Gulf Island’s shipyard division property and assets in Houma, La., including all four of the division’s drydocks, ranging from 1,500 to 15,000 short tons. In addition, the transaction includes the long-term contracts and all related obligations for the construction of three research vessels for Oregon State University and five towing, salvage, and rescue ships (T-ATS) for the Navy.

“It was a long-overdue move,” said Deysher, whose fund is invested in Gulf Island. “It was a smart thing to do.”

Another noteworthy shipyard deal was the sale of All American Marine (AAM) to British Columbia-based Bryton Marine, builder of aluminum commercial, recreational, and adventure boats.

Bellingham, Wash.-based AAM, known for its aluminum vessel design and manufacturing, produces highly specialized vessels such as high-speed catamarans, monohull cruise boats, research vessels, and passenger ferries. Bryton’s portfolio includes Brix Marine, EagleCraft, Duckworth, KingFisher, Northwest, and Weldcraft boats.

“I was very particular about how I wanted to go about selling the business,” said Matt Mullett, All American owner, and CEO. Anyone just looking at the bottom line should look elsewhere, Mullett said, adding that he was getting inquiries at least once a week, mainly from brokers, which he didn’t pursue.

He had gotten to know Bryton Marine’s CEO Byron Bolton, “and over the years I was pretty impressed with our common goals” and his record of retaining employees. Plus, said Mullett, who’s 69, this was a good time to make a transition.

“The company is on a really good trajectory,” especially in the area of non-diesel propulsion options, he said. This summer All American and vessel owner SWITCH Maritime, Norwalk, Conn., launched Sea Change, the first hydrogen-fuel-cell-powered electric passenger vessel in the U.S.

Other deals include:

• Brunswick Corp. bought Navico, a manufacturer of marine electronics and sensors, for $1.05 billion. The acquisition adds brands Lowrance, Simrad, B&G, and C-MAP to its Advanced Systems Group (ASG).

• Two Naval architecture firms changed hands. Houston-based S&B Infrastructure Ltd. acquired Technology Associates Inc. (TAI), New Orleans. “This acquisition strengthens our capabilities to design and build even larger government and commercial maritime projects,” said Daniel Rios, S&B Infrastructure president. TAI will continue its operations as TAI Engineers LLC, and founder Anil Raj will remain as the president of TAI and manage day-to-day operations.

• Leidos Holdings Inc., a science and technology company in Reston, Va., acquired Gibbs & Cox Inc. for approximately $380 million in cash. Arlington, Va.-based Gibbs & Cox, which specializes in naval architecture and marine engineering, will operate as a wholly-owned subsidiary and be combined with Leidos’ maritime systems division.

• Private equity firm American Industrial Partners in April completed a $1 billion deal taking Seacor Holdings Inc. private. Fort Lauderdale, Fla.-based Seacor gets “access to additional growth capital and financial flexibility,” Charles Fabrikant, executive chairman, and CEO, said announcing the transaction. In August, Seacor bought U.S. Shipping Corp., Edison, N.J., which has two tankers and four ATBs that haul petroleum and chemicals. Terms were not disclosed.

• SEA.O.G Offshore, Seattle, merged with Crosby Tugs to focus on the offshore wind industry. Crosby, based in Golden Meadow, La., offers offshore and inland marine towing, dredging, and rock placement services along the Gulf Coast and beyond. SEA.O.G specializes in offshore tug and barge operations in renewables. The newly combined fleet has 130 inland and offshore tugs and towboats, and a fleet of over 400 barges. — D.K. DuPont

#5 Bouchard Transportation’s end nears

The Bouchard Transportation Co. saga appears to be finally winding down after a judge in August approved the sale of $245 million of the company’s assets. The 103-year-old company had filed for bankruptcy in September 2020.

From humble beginnings, Bouchard Transportation, Melville, N.Y., grew to a fleet of 25 double-hulled barges and 26 tugs that operated in the U.S., Canada, and the Caribbean. On its website, Bouchard referred to itself as the nation’s largest independently-owned ocean-going petroleum barge company. At one time it had an estimated enterprise value of $1.2 billion.

The company’s fortunes started going downhill after an Oct. 20, 2017, accident when the ATB barge Buster Bouchard/B No. 255 with a cargo of crude oil exploded off Port Aransas, Texas, killing two Bouchard employees.

The National Transportation Safety Board, in a May 9, 2019, posting, determined the explosion and resulting fire could have been avoided with “effective safety management systems, proper vessel maintenance, and thorough regulatory examinations.” The source of ignition was flammable vapor that formed in a void. The barge sustained more than $5 million in damage and was scrapped.

After the incident, Bouchard Transportation worked to improve its operations, including reporting, training, inspection, oversight, and overall compliance with rules and regulations relating to health, safety, and environmental matters, Matthew Ray, a managing partner at Chicago’s Portage Point Partners and restructuring officer for Bouchard, said in Oct. 12, 2020, filing with the Bankruptcy Court for the Southern District of Texas, Houston Division.

However, the American Bureau of Shipping, Bouchard’s classification society, canceled its contract with Bouchard at the end of 2019 and the Coast Guard pulled Bouchard’s document of compliance certification.

Without those certifications, Bouchard’s customers went elsewhere and so did its cash flow. The pandemic made things worse by reducing demand for coastal petroleum barge service. As losses and debt grew, crew payments were not met, and Bouchard filed for Chapter 11 bankruptcy in the Southern District of Texas to block foreclosure sales of its tugs and barges.

Bouchard said it would continue normal operations with debtor-in-possession financing while it went through operational restructuring. But it became clear to the court that the company should be broken up and liquidated rather than continuing to operate.

In addition, the bankruptcy court removed the company’s owner, Morty Bouchard III, who had led the company since 1992, replacing him with Portage Point’s Ray.

On Aug. 5, 2021, U.S. Bankruptcy Judge David Jones in Laredo, Texas, approved the sale of Bouchard Transportation assets for $245 million. Seventeen tugs and 12 barges were sold to JMB Capital Partners, Westminster, Md., for $115.3 million, and eight tugs and 10 barges were sold to Rose Cay GP LLC for $130 million.

Bouchard lawyers said at the hearing that they were investigating an alternative restructuring program.

The company traces its beginnings to 1918, two years after Capt. Frederick E. Bouchard salvaged two ships that were involved in July 30, 1916, Black Tom explosion in New York. That explosion was caused by German agents destroying munitions that were to be shipped to U.S. allies prior to the U.S.’s entry into World War I. About $20 million of military goods was destroyed. For Bouchard’s heroics, the U.S. government gave him a monetary award.

Capt. Frederick E. Bouchard used the money to start Bouchard Transportation Co., which began shipping coal. — Michael Crowley

#6 Full sail for offshore wind

The political whiplash between the Trump and Biden administrations was in blazing neon lights with the speedy approval in May of the 800-megawatt Vineyard Wind project off southern New England.

Alongside the Biden goal of building 30 gigawatts of offshore wind generation by 2030, Vineyard Wind was seen as the starting gun for more project approvals by the federal Bureau of Ocean Energy Management — and even more expansion of proposed wind lease areas in the New York Bight, before the first projects finish environmental review.

In the chaotic last weeks of the Trump administration during December 2020, Trump appointees at the Department of Interior sought to junk Vineyard Wind’s entire application. Now BOEM has ambitious goals for working through environmental reviews of other proposed wind projects from southern New England to the Carolinas.

“Offshore wind is a critical component of this administration’s commitment to confronting climate change, creating thousands of good-paying union jobs, and jump-starting our country’s transition to a cleaner energy future,” Interior Secretary Deb Haaland said in announcing a review of the Kitty Hawk Wind project off North Carolina.

At the American Clean Power Association’s offshore wind conference in mid-October, Haaland announced plans for up to seven new offshore wind lease sales by 2025, from Maine to the Gulf of Mexico and in the Pacific off California and Oregon.

Those future leases would be in the Gulf of Maine, the New York Bight and the mid-Atlantic to the Carolinas, the Gulf of Mexico, and off California to Oregon. Both Maine and the West Coast would require floating installations.

With the Biden administration flashing more green lights, wind developers and suppliers began laying down infrastructure and investments to support Northeast and mid-Atlantic projects.

Mayflower Wind, developers of a planned 804-megawatt offshore wind project near the Vineyard Wind tract, announced on Oct. 14 an agreement with Gladding-Hearn Shipbuilding/Duclos Corporation, Somerset, Mass., for the design and construction of a Jones Act-compliant hybrid battery diesel-electric crew transfer vessel.

“The design of this world-class CTV utilizes technologies that will provide significant fuel savings and emissions reductions, including the use of lithium-ion battery energy storage to create a hybrid vessel that will be a bridge to full electrification,” according to a statement from Mayflower.

The specification and design process will begin if Mayflower is awarded another contract under the next Massachusetts procurement for offshore wind. Mayflower is a 50/50 joint venture between Shell New Energies US LLC and Ocean Winds and holds an offshore wind lease area with the potential to supply over 2,000 megawatts to New England.

Design of the vessel would occur during 2022-2023, setting the stage for building and launching the hybrid CTV in the mid 2020s, timing that would fit well with the start of operation of wind turbines by Mayflower Wind.

“Mayflower Wind aims to develop the most innovative, fuel-efficient CTV built in the United States,” said Michael Brown, CEO of Mayflower Wind. “Ensuring that this vessel is constructed at a shipyard in Somerset is a big boost to the Massachusetts maritime economy and launches this shipyard toward a new and growing market.”

Gladding-Hearn is the leading U.S. builder of offshore pilot boats, and shipyard president Peter Duclos has long prepared for the advent of the U.S. offshore wind market.

“They want to raise the bar of CTV design and have assembled an experienced team to do just that.” Duclos said in a joint statement with the developers. — Kirk Moore

#7 industry embraces hybrid, all-electric, Autonomous, etc.

The workboat industry is adapting to change. Environmentally, technologies such as all-electric propulsion systems and alternative fuel options are taking substantial amounts of particulate matter out of the air.

Meanwhile, AI-operated vessels will cut costs for operators by decreasing the number of onboard workers a company has to employ.

Sea Machines Robotics is out front in the workboat autonomous vessel industry. “Autonomy is taking hold faster on the waterways than it is on roadways,” Michael Johnson, Sea Machines CEO, said following the company’s successful completion in October of an ocean journey of more than 1,000 nautical miles around Denmark by a tug fitted with the company’s SM300 autonomy system.

Under the project name “The Machine Odyssey,” the autonomous tug Nellie Bly completed its journey in just 129 operational hours over 13 days. The program was commanded by Coast Guard-licensed mariners remotely stationed 3,000 miles away in Boston. “Our autonomous systems are already supporting vessel operations around the world in manned and unmanned capacities. We are rapidly retooling the marine industries with an advanced perception, self-piloting system, and connected vessel intelligence.”

The Nellie Bly employed first-of-its-kind AI-enabled, long-range computer vision as well as a sensor-to-propeller autonomy system, the Sea Machines SM300. Its technical features allowed for path-planning, active domain perception, dynamic obstacle, and traffic avoidance and replanning, depth sensing, and fusion of vectored nautical chart data. Of the 1,027-mile journey, 96.9% was accomplished under fully autonomous control and the SM300 successfully executed 31 collision-avoidance and traffic separation maneuvers.

Sea Machines also fitted the 27' unmanned surface vessel Proteus with an SM300 system for Huntington Ingalls Industries, Newport News, Va.

Proteus was equipped with commercial perception sensors, including GPS, AIS, depth transducer, radar and a camera enabling a 360° field of view. HII deployed a separate 51' dive boat during the demonstration to illustrate the SM300 system’s off-the-shelf solutions, including its obstacle avoidance capability and adherence to the International Regulations for Preventing Collisions at Sea.

HII officials said the boat performed exactly as expected.

At press time, SWITCH Maritime was waiting on final Coast Guard approval for its new 70'×25' aluminum catamaran that seats 78. Built at All American Marine, the high-speed commercial ferry is the first to use hydrogen fuel cells — these are Cummins HyPM R120 HD — to power its twin 300-kW electric traction motors from BAE Systems.

The Sea Change’s design was handled by a triad of engineering and operating experts from Incat Crowther (structural), Zero Emission Industries (hydrogen power), and Hornblower Group (systems).

“There needs to be, in general, a pretty significant fleet renewal in the U.S.,” Pace Ralli, SWITCH’s co-founder, and CEO, told WorkBoat. “Our objective is to make sure that that renewal is not dependent on more diesel-powered ferries that will last for another 30 years with diesel emissions. We want to help existing ferry operators adopt zero-carbon technologies.”

SWITCH also promises to help build the supply chain, whether it’s hydrogen or battery charging. “We have the ability to put together that infrastructure for the ferry operator as well.

The total cost of the first hydrogen-powered boat is around $10 million. Top speed is expected to be 22 knots. Noise and vibration will be minimal. Carbon emissions will be zero.

Once fully operational at All American’s facilities in Bellingham, Wash., the Sea Change was scheduled to be barged back to San Francisco Bay.

Crowley Maritime Corp., Jacksonville, Fla., will build and operate eWolf, the first all-electric powered harbor tugboat that can complete a job without expending a drop of fuel.

The 82'×40'×17'9" tug, with 70 tons of bollard pull, advances Crowley and the maritime industry’s efforts toward sustainability and decarbonization, the company’s chairman and CEO, Tom Crowley, said.

The eWolf will feature a design that allows the vessel to operate fully electric with full performance capabilities — and zero carbon emissions.

Over the first 10 years of its operation, the new eTug will replace a conventional tug producing 178 tons of nitrogen oxide (NOx), 2.5 tons of diesel particulate matter, and 3,100 metric tons of carbon dioxide (CO2).

The new boat will be built at Master Boat Builders, Coden, Ala. — K. Hocke

#8 Ida dampens Gulf energy recovery

Nearly two months after Hurricane Ida made its destructive path across the Gulf of Mexico, operators were still picking up the pieces and working to restore production amid oil and gas prices at multiyear highs.

The Category 4 storm slammed Louisiana on Aug. 29 with sustained winds of 150 mph, leaving in its wake a severely damaged exploration and production infrastructure. According to federal data, in the immediate days after landfall as much as 96% of oil and 94% of gas production in the Gulf had been shut-in, making it one of the most disruptive hurricanes in 16 years. In predicting the storm would trim 500,000 bbl/day, the U.S. Energy Information Administration (EIA) lowered its September Gulf of Mexico oil production forecast to 1.2 million bbl/day. The EIA expected production to rebound in October to 1.7 million bbl/day, still below the pre-Ida average of 1.845 million bbl/day in July.

Leading deepwater producer Shell Offshore was particularly hard hit but had largely restored production by late September. The estimated 100,000 bbl/day from Shell’s Olympus floating production system resumed flow on Oct. 4, but the company said two platforms in the Mars deepwater corridor would remain offline until early 2022.

The storm hammered the main deepwater service and supply base of Port Fourchon, La., with wind gusts of more than 190 mph and 12' to 14' storm surges. Power had yet to be fully restored by mid-October.

The port is home base for much of the Gulf’s offshore service vessel fleet. While there have been no reports of vessel damages, downed communication networks has made availability a major issue, just as demand increased for platform inspections, repairs, and support for a modest post-storm resumption of mostly developmental drilling, said IHS Markit Senior Marine Analyst Richard Sanchez.

“They’ve been rerouting a lot of vessels out of Galveston (Texas), Mobile (Ala.), and other shore bases,” he said. “A month before the storm, I saw kind of a lull in vessel activity and felt like we might have hit a low in utilization, but things started bouncing back immediately after the storm.”

Sanchez said he has heard reports of short-term charter rates for 4,000-dwt PSVs from Port Fourchon spiking to $30,000 a day the week after landfall. “They’re just wasn’t a lot of immediate availability out of Port Fourchon. I don’t know if it’s going to translate into improved long-term rates, but I do see some improvements. My understanding is that long-term rates before the storm have been around $15,000 (day).”

All this comes as hydrocarbon prices reached highs not seen since 2013. West Texas Intermediate (WTI), the U.S. oil benchmark, hovered in the $80s/bbl in October, with Bank of America suggesting prices could hit $100/bbl this winter.

Provided that the strong commodity prices continue, confidence is growing that perhaps much of the Covid-driven doldrums of 2020 is over and the long-awaited recovery can get underway.

“Assuming oil prices remain constructive, we believe we will witness a robust offshore market recovery in 2022 and beyond,” Jeremy Thigpen, president, and CEO of major deepwater drilling contractor Transocean, said in a call just over two weeks before Ida.

“Things are moving in a positive direction, but partly because we’re coming off bottom,” said Sanchez. — Jim Redden

#9 Cybersecurity gets top-level treatment

After long being underappreciated in the C-Suite, measures aimed at heading off cyberattacks are getting widespread executive buy-in and have emerged as part and parcel of the maritime operational culture, according to a Coast Guard cybersecurity expert.

“There’s been a huge cultural change,” Hunter McWilliams, a founding member of the Coast Guard Cyber Command’s Maritime Cyber Readiness Branch (MCRB), said at a WorkBoat cybersecurity webinar held in October. “I wouldn’t say the questions have changed as much as I’m finally getting them.”

A number of costly security breaches over the past year has brought the economic impact of inadequately protected businesses to the forefront. New York-based Chainalysis, a self-described crypto-forensics firm, said North American entities shelled out $131 million in ransomware payments to cyber thieves between July 2020 and June 2021, highlighted by the $4.4 million ransom paid to restore operation of the Colonial Pipeline, the largest onshore network in the U.S., which had been disabled in May. For the particularly vulnerable maritime sector, cybersecurity standards put forth by the International Maritime Organization (IMO) and others, not to mention the Coast Guard taking a more active approach, have gone a long way to move awareness of the evolving risks from the computer room to the owners’ office.

“A couple of years ago, this (cybersecurity) was not necessarily on most peoples’ radar,” said New Orleans-based attorney Fred Wogan, partner in the Jones Walker LLP maritime practice group. “Vessel owners and operators are now asking questions to make sure they’re compliant with the regulations. It’s been an interesting shift.”

The Coast Guard simultaneously issued two cyberthreat warnings in August, which illustrated how a security breach on the other side of the world can affect U.S. maritime operations. One involved a cyberattack that affected operations at South African ports, which use the same terminal operating system widely employed throughout the U.S. The other threat came from leaked Iranian documents that included research into how to remotely control ballast to sink a vessel.

Experts agree that the well-chronicled risks emerging as employees continue to work remotely — often from inadequately protected networks — to help reduce the spread of the still lingering Covid virus have put the spotlight on the bottom-line implications of a cyberattack. “There’s been a big culture shift in understanding that we’re far more (digitally) connected than previously and just understanding how your business, vessels, and facilities can be impacted by the interconnectivity of it all,” said McWilliams. “Things that people and organizations have taken for granted, like copy machines, printers, and other physical artifacts, all have a digital home.”

One thing McWilliams said that vessel owners and operators should also address is the “disconnect” between corporate information technology (IT) specialists and those in charge of the onboard operational technology (OT) networks, which are highly susceptible to hacks with potentially disastrous results. “As a member of the Maritime Cyber Readiness Branch, I can confirm that I have been privy to events that have caused an impact to vessel navigation and/or propulsion systems,” he said.

McWilliams also noted that the risks of a cyberattack are universal, be it a large multifleet company servicing deepwater oil and gas platforms or a small towboat company servicing the inland waterways. — J. Redden

#10 Jones act and offshore wind

March 29, 2021, was a curtain-raiser for companies anticipating the growth of the U.S. offshore wind industry. That was the day the Biden administration announced plans to build 30 gigawatts of offshore wind capacity by 2030.

Meeting that goal will require new manufacturing plants for offshore wind turbine components and new vessels to build and supply wind turbines

The first Jones Act-qualified offshore wind turbine installation vessel will be the Charybdis, currently under construction at the Keppel AmFELS shipyard in Brownsville, Texas, for Dominion Energy, Richmond, Va. The Charybdis will be a 472’x184’x38’, $500 million vessel, with accommodations for 119 people. It is scheduled for a late 2013 launching.

Dominion announced on June 1 that it would charter the Charybdis to Ørsted, a Danish global player in the offshore wind industry, and Eversource, New England’s largest energy company based in Boston.

Eversource has partnered with Ørsted on other U.S. wind farm projects. The Charybdis will be deployed out of New London, Conn., to support the construction of the Revolution Wind and Sunrise Wind projects, including installing foundations for turbines and transporting the current and next-generation turbines.

“A Jones Act-qualified installation vessel is a game-changer for the development of the U.S. offshore wind industry,” David Hardy, CEO of Ørsted Offshore North America, said earlier this year. “This investment will enable us to unlock the economic benefits of offshore wind, not just for the Northeast, but for the Southern states as well.”

Just how the Jones Act squares with this developing industry has not always been clear, even though offshore oil and gas industry operations have complied with the act, which requires shipping between U.S. ports or “points” be done by U.S.-built and -flagged vessels manned by U.S. crews.

However, a couple of recent federal enactments added some clarity to the relationship of the offshore wind industry and the Jones Act.

In January, Customs and Border Protection ruled that in accordance with the Jones Act, the entire U.S. seabed on the Outer Continental Shelf was “a point in the United States” for purposes of U.S. coastwise law. That includes all installations permanently or temporarily erected on the seabed.

Thus, an offshore wind installation on the OCS becomes a U.S port, and in keeping with the Jones Act, goods shipped between U.S. ports need to be on U.S.-built and manned vessels.

Granted, there have been Jones Act waivers, mostly in the case of a national emergency. Obviously, the Jones Act doesn’t totally exclude overseas companies from the U.S. offshore wind energy market.

Wind farm installations with Jones Act-qualified vessels are only bound to increase after the Biden administration announced on Oct. 13 that as many as seven offshore lease sales may be held by 2025. — M. Crowley