Plans for four new Tote containerships to serve Hawaii are being pushed back, after the company’s assessment of Honolulu port facilities found more upgrades and improvements will be needed.
That means Seattle-based Tote and Philly Shipyard Inc. (PSI) will not renew a letter of intent for building the four dual-fuel capable liquefied natural gas ships when the agreement expires Jan. 31. The Philadelphia shipbuilder say they have suspended most work on the project — but intend to resume “when there is more clarity regarding the new order situation and related capital requirements.”
Tote and shipyard officials announced the venture in August 2017, with plans to build the new dual-fuel ships modeled on the two Aloha-class 3,600-TEU containerships that Philly Shipyard is building for Honolulu-based Matson Inc.
Those 853’x115’x38’ vessels will be delivered before a 2020 deadline to replace aging ships in the Hawaii trade that can no longer meet Marpol air emission standards. The entry of Tote into Hawaii would inject new competition into the Jones Act trade, and a potential shipping rate war according to some industry observers.
In September 2017 the Hawaii Department of Transportation agreed to set aside Honolulu Piers 1 and 2 and exclusive use of and adjacent 45 acres for Tote use, beginning in 2020 with the new service.
But on Jan. 26 Tote officials announced their preliminary study of the site infrastructure “indicated that upgrades and improvements will be required to accommodate the new operations … Due to the scope and timing of the upgrades and improvements,Tote will not renew the letter of intent (LOI) with Philly Shipyard that expires on Jan. 31, 2018.
“Tote continues to be open to working with the Hawaii Department of Transportation to update plans and a timeline for access to a Honolulu deep water terminal that would allow commencement of Tote’s service to Hawaii.”
Philly Shipyard was to deliver the first two ships for Tote in 2020 and the second pair in 2021. Noting Tote’s intent to continue working with Hawaii state officials, shipyard officials said they will be ready to start work again on the ships.
“Accordingly, PSI is exploring alternatives in order to secure contracts and financing for these vessels. In addition, PSI is continuing to pursue potential new construction projects for other types of Jones Act vessels.”