Growth Chart

9/1/2007

By Bruce Buls, Technical Editor

To hear all the talk, you'd think that we're in the midst of the biggest surge in the history of modern tug construction.

We may well be.

Marcon International , Coupeville, Wash., published a market assessment last spring from Jack Gaston, who described it as a tug building "frenzy." In a recent Marcon newsletter, company president Bob Beegle took issue with Gaston's choice of words because it implies irrationality. "The newbuilding 'flurry' we see," wrote Beegle, "is due to a number of factors that normally do not all come into play at the same time" that include congested ports with increasingly large ships and tankers, new and expanding LNG and oil terminals, and large, new OPA '90 double-skin barges that require high-horsepower tugs to handle them. "If you mix all of this into a pot and stir in an aged fleet and relatively inexpensive worldwide financing, you can begin to see less 'madness' and more rational reasons for the surge in [worldwide] newbuildings."

CYCLES

Barry Griffin, a manufacturer's representative for Markey Machinery , Seattle, and Puget Sound Rope , Anacortes, Wash., has been working with tug owners and builders for over 20 years. He agrees that the boom is unprecedented, and attributes it to three factors - war, metal fatigue in the marine environment, and technological improvements.

World War II, in particular, according to Griffin, contributed greatly to the tug building cycle. After the war ended, many ships and tugs built for the war entered the commercial market. Then, 20 to 30 years later, the tugs had to be replaced, which increased tug construction in the late 1960s. Now, many of those tugs have reached the end of their useful lives and are being replaced in turn. Added to that are the significant advances in technology that make new tugs so attractive: powerful, compact engines, Z-drives, and sophisticated equipment like render-recover winches.

There is also the growth factor referred to by Beegle. As the country imports more manufactured products and crude oil, the ports are jammed with ever-larger containerships and tankers.

"It's a matter of energy," said Griffin. "You can't handle these ships any other way [than with powerful, modern tugs]. They're very large, they're very 'windy' as they don't have much draft versus their height, and they're often carrying dangerous cargo."

Successfully competing for ship-handling business requires the right equipment. "Everybody is positioning themselves," said Griffin. "Who's going to have a share of the market? You can use these contracts to get the equipment. And if you build good tugs, they're going to be making money for you for 30 years."

One company that is still profiting from equipment built 30 years ago is Wilmington Tug , Wilmington, Del. In 1977, company president Hick Rowland built the first Z-drive tug in the country, the Tina . Chris Rowland, Hick's son and company treasurer, said they replaced the Z-drives and repowered the Tina in 2005 and now "she's basically a brand new boat and is still a fantastic boat for us. We're lucky that we're here on the Delaware River in fresh water, so the hull is in perfect shape."

Late last year, Wilmington took delivery of its latest tractor tug, the Sonie , an 80 '× 32 SSSq Z-drive designed by Robert Allan Ltd. and built by Washburn & Doughty .

Early next year, Wilmington Tug will get its sixth tractor tug, another 80-footer designed by Robert Allan.

Rowland said his company handles about 50 percent of the crude oil tankers that come up the Delaware to the area's seven refineries. "The number of ships is down," he said, "but the tonnage is up. The ships and tankers are bigger." With the larger tankers, in particular, the need for more tugs has also grown.

"Sunoco has four of the seven refineries here on the river, and for their VLCCs that come in - which we handle - they require an escort of three tugs for the last 15 miles of the transit, and that's not something they were forced to do, it SSRq s just something that they decided that they ought to do, SDRq Rowland continued.

"For years, the oil industry said 'safety first,' but now instead of just preaching safety, they really are looking to improve safety across all areas, so we've had some benefit from that."

ATB GROWTH

Another segment that's undergoing impressive growth is articulated tug-barges for the Jones Act refined petroleum transport market.

Crowley Maritime Corp., Jacksonville, Fla., has been investing heavily in ATBs, which the company now operates on all three coasts. In August, Crowley christened the Resolve and Barge 650-3 , the seventh ATB combo in the company fleet. A pair of Wärtsilä heavy-fuel engines producing 9,280 hp powers the 135 '× 42 SSSq x24 SSSq tug. The barge measures 587 '× 74 '× 40 SSSq and has a capacity of 185,000 bbls. Intercon connectors join the tug and barge.

Built by VT Halter Marine , the latest Crowley ATB will be followed by seven more, which will give Crowley a total of 14 by late 2010.

U.S. Shipping Partners LP, Edison, N.J., a relatively new player in the oil transport business, took delivery recently of its first ATB, the Freeport/Chemical Transporter . Designed by Guarino & Cox , Covington, La., the 12,000-hp, 150 '× 46 SSSq tug pushes the loaded, 521 '× 72 '× 41 SSSq , 140,000-bbl. barge at 14 knots. (See page 34.) U.S. Shipping Partners plans on adding four more ATBs, with the tugs being built at Eastern Shipbuilding Group , Panama City, Fla., and the barges at Bay Shipbuilding in Sturgeon Bay, Wis.

Overseas Shipbuilding Group Inc., New York, is also expanding its ATB fleet in a big way after purchasing Maritrans ' fleet of 21 ATBs and handysize product tankers last year. Bender Shipbuilding & Repair Co. Inc., Mobile, Ala., and its affiliated company, Tampa Bay Shipbuilding and Repair , are in the process of building six 12,000-hp tugs and six barges that will each carry up to 342,000 bbls. of petroleum products.

Other companies that have recently added new ATBs or have ATB newbuilding projects in the works include Bouchard Coastwise Management Corp., Penn Maritime , Vane Brothers , Moran Towing Corp., and Reinauer Transportation .

"The ATB market still looks pretty darn good," said Sal Guarino, a partner at Guarino & Cox. "We still get lots in inquiries. And it appears that people are talking about bigger and better ones. They're several projects floating around for large tugs and barges. We've already done one that's 240,000 barrels, and I think it's OSG that's doing 350,000.

"I think this will be a good market until all single-skin barges are eliminated."

Bob Hill of Ocean Tug & Barge Engineering , Milford, Mass., is also busy designing ATBs for a variety of clients, mostly oil transporters. He would like to extend the concept, however, to other industries, including the offshore oil and gas business. He envisions one tug working several barges that get shuttled between land and the offshore platforms.

"Having multiple barges for each tug was the original idea for ATBs that were going to make them the cat's meow," said Guarino. "You could drop a barge off and pick up a load while the light one is being loaded. Originally that's what ATBs were supposed to be for, but really they're just rule-beaters now."

SHIP ASSIST

While ATB activity is certainly eating up plenty of shipyard slots, it's ship-assist and tanker-escort tugs that comprise most of the current boom in tug construction. For example, Nichols Brothers Boat Builders , Freeland, Wash., just delivered the Valor , the first of five 6,800-hp, 100 '× 40 SSSq Z-drive harbor/escort tugs. Originally constructed for BayDelta Maritime , San Francisco, the tug has been painted red-and-white after being chartered by Crowley Maritime. BayDelta originally ordered two of the 100-footers, and Crowley will be chartering both. The second will be delivered in December.

Minette Bay Shipdocking Ltd. in Prince Rupert, British Columbia, is purchasing the third of the 100-footers. The final pair will be taken by BayDelta to replace the two chartered by Crowley.

The new tugs were designed by Jensen Maritime Consultants . In addition to the five boats at Nichols, Seattle-based JMC has designed a 96 '× 34 SSSq ship-assist tug for McAllister Towing , New York, six of which have been built at Eastern Shipbuilding. Two more are on the way.

Jonathan Parrott, president of JMC, said that McAllister is also looking at something similar to the tugs currently being built at Nichols, only a little larger (104 SSSq × 42 SSSq ) and slightly more powerful (7,000 hp).

Four of JMC's 96-footers have also been built at Eastern for E.N. Bisso & Son and four for Seabulk Towing .

Moran Towing has also jumped on the bandwagon and is having a JMC-designed 86 '× 36 SSSq Z-drive built at C&G Boat Works , Mobile, Ala. Moran is also continuing its newbuild program with more ship-assist/escort tugs designed and built at Washburn & Doughty, which is also building a pair of ATB tugs for Moran, a first for both companies.

Another JMC project that demonstrates the current strength of the tug market is the development of a 3,000-hp, 74 '× 30 SSSq tug being built by Great Lakes Towing , Cleveland. Known more as a tug operator, Great Lakes will build the tugs both for themselves and for other operators. The design can be built with either Z-drives or conventional twin-screws.

Regarding the future of the tug market, Parrott said, "I think the frenzy will die out, but I think it will be a pretty solid market probably for another four to five years. Then we'll see. We've got lots of tractor and harbor tugs being built, but the industry still needs some line-haul boats. SDRq

Griffin agrees with the prospect of more conventional ocean tugs. "I think we're going to see the rebirth of the traditional oceangoing tug. All the major companies are talking about big ocean-class towing vessels and have a boat or two on the drawing boards."

No matter what the region or the application, tug companies all across the U.S. are prospering and investing in a new generation of boats and gear in order to stay competitive. As Chris Rowland at Wilmington Tug put it, "We're always looking to grow. You've got to always keep growing. As soon as you don't, that's when the other guys catch up to you."


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