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Saturday, January 23, 2016
Jones Act Shipbuilding: Only the Price is American
By Michael Hansen @ 1:41 PM :: 2249 Views :: Jones Act

by Mike Hansen, Hawaii Shippers Council, January 22, 2016

General Dynamics (NYSE: GD) announced on January 22, 2016, that their NASSCO shipbuilding yard in San Diego delivered the second of two LNG-fueled cellular containerships to TOTE Maritime for their domestic Jones Act Puerto Rico service. Delivery means that ownership of the vessel has legally passed from the builder to the shipowner.

The newly delivered ship is the Marlin Class PERLA DEL CARIBE and intended for employment in TOTE’s regularly scheduled container service between Jacksonville, Florida, and San Juan, Puerto Rico. The first ship of the Marlin Class is the ISLA BELLA, which was delivered by NASSCO to TOTE on October 16, 2015.

The two newbuild Marlin class containerships will replace TOTE’s three aging Roll-On/Roll-Off (RO/RO) trailerships employed on its Puerto Rico service. That includes replacing the EL FARO, which sunk in Hurricane Joaquin off the Bahamas Islands with the loss of 33 crew on October 1, 2015, en route from Jacksonville, Florida, to San Juan, Puerto Rico.

Despite the claims in the General Dynamics press release regarding the state of the art ship design and construction at NASSCO, they do reference the assistance of their South Korean partner, Daewoo Shipbuilding and Marine Engineering (DSME).

DSME designed the Marlin Class containerships, built the main engines, and arranged the supply of much of the equipment installed on board. DSME engineers were on board for the sea trials of both Marlin Class ships….

DSME with revenues of US $14.78 billion (2013) is the second largest shipbuilding company in the world and one of the “Big Three” South Korean shipbuilders that dominate world shipping. The other two “Big Three” South Korean shipbuilding companies are Hyundai Heavy Industries and Samsung Heavy Industries. For 2015, South Korea produced 41.0% by gross tonnage of all oceangoing ships built in the world that year (Japan built 28.9%, China 24.0% and the rest of the world 6.2%).

General Dynamics press release key excerpts:

Today General Dynamics NASSCO, a wholly owned subsidiary of General Dynamics (NYSE: GD), delivered the world's second containership to be operated by liquefied natural gas (LNG), the Perla Del Caribe. The ship was delivered two months ahead of schedule and is the sister ship of the world's first LNG-powered containership, the Isla Bella, also built by NASSCO for TOTE Maritime.

"The Perla Del Caribe and the Isla Bella exemplify world-leading, innovative technologies being used to build ocean-going ships that are cost-effective, friendly to the environment and offer a competitive edge," said Kevin Graney, vice president and general manager at General Dynamics NASSCO. "NASSCO shipbuilders are proud to have successfully built the world's very first LNG-powered containerships."

The Isla Bella was delivered to TOTE two months ahead of schedule in October 2015. This Jones Act-qualified ship has been operating between Jacksonville, Florida, and San Juan, Puerto Rico.

As a complement to its government new construction business segment, NASSCO maintains an extensive history of commercial shipbuilding. Since 2005, NASSCO has delivered twelve commercial ships and currently has seven commercial ships in its backlog scheduled to be delivered between 2016 and 2017. For its commercial work, NASSCO partners with South Korean shipbuilding power, DSME, for access to state-of-the-art ship design and shipbuilding technologies.

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