NEW ORLEANS – The shipyard business is a pretty good one to be in – at least for the moment.
Demand is strong in almost every sector from offshore service vessels to patrol boats.
“I continue to be very optimistic about our industry,” said John Dane III, president and CEO of Gulfport, Miss.-based TY Offshore and Trinity Yachts, the keynote speaker Wednesday at the Seventh Annual Shipyard Day at the International WorkBoat Show. Business should be good for the next few years especially with the U.S. on track to be the world’s largest oil and gas producer by 2020 and deepwater set to have a long run.
But he tempered his optimism with caveats and concerns ranging from threats to the Jones Act and a shortage of skilled workers to government regulations and budget deficits.
On the deepwater side, 183 rigs are under construction worldwide with 63 options through 2016. “The rigs are all going to need boats,” Dane said then ticked off a list of recent newbuild announcements from companies such as Edison Chouest Offshore, Tidewater Inc., Hornbeck Offshore Services and Harvey Gulf International. “It’s a pretty exciting time to be in the shipyard business.” He estimated that 61 dynamic positioning OSVs are being built in the U.S.
Crewboat and tug builders “are pretty well booked,” Dane said, while there’s no real capacity for floating rigs, spars and floating production platforms – “an area we’re missing out on.” The inland market is a mix of good and bad news, Dane said. On the plus side, barge shipping is attractive from a cost perspective and fracking has generated a new market for tank barges.
The downside is a lack of progress on a waterways bill, the drought that’s hurt barge traffic, Coast Guard inspection requirements that add to costs and reduced coal shipments due to lower natural gas prices.
Overall, Dane said, “My biggest concern is repeal of the Jones Act,” the law that requires goods moving from one U.S. port to another to be on U.S. built, owned and crewed vessels.
He’s also worried about the possibility of higher taxes. If investment tax credits disappear, operators might not be ordering boats. And he’s well aware of competition from abroad.
But, “our biggest problem today is the lack of skilled workers,” Dane said.
A recent Trinity job fair attracted 140 applicants. They hired seven people. — Dale K. DuPont