U.S. SHIP REPAIR

U.S. yards emerge as major players in cruise ship repair sector

Noordam in dry dock at Bender

Over the last decade, North American shipyards have become major players in the $1 billion cruise ship repair market. That's the good news. The bad news is that funding for U.S. Navy ship repair and maintenance--still the largest ship repair segment by dollar amount in the U.S.-continues to decline. Preliminary results from a Marine Log Ship Repair Survey also indicate that demand generated by other sectors--towboats, tugs, barges; offshore supply vessels and drilling rigs, oceangoing dry cargo ships and tankers rose slightly. More results of the survey will be posted on www.marinelog.com.

OVER ONE-THIRD OF CRUISE SHIP REPAIR MARKET

First the goods news. During 1999, North American shipyards performed 36% of the 120 of global cruise ship repairs and conversions, according to Jay Carson of San Diego-based consultant Steller Carson Associates, LLC. Based on publicly available information, Carson estimates the global cruise ship repair and conversion market in 1999 was some $1 billion.

According to Steller Carson Associates, the largest segment in cruise repair was scheduled drydockings, with a total of 73 in 1999. These typically can last about two weeks and have an average estimated cost of $4.9 million. Typically, subcontractors and material provided by the ship operator represent three-quarters of the project value, with the balance going to the shipyard.

Carson points out that U.S. shipyards are now trusted with scheduled dockings, and are preferred providers for ships homeported in North America--a significant shift from a decade ago. He says dry dock space is booked well in advance--sometimes as much as six months. He adds yards are also seeing more warranty dockings as a result of the cruise ship building boom.

Refits and overhauls were the second largest segment of the cruise ship repair sector in 1999. These jobs can last a month or more and had an average estimated cost of $16 million, according to Steller Carson. The value of refits is driven by the the extent of the refurbishment of passenger accommodations and public spaces by non-shipyard joiner contractors, interior designers, electronics suppliers, etc.

Cascade General, Portland, Ore., for instance, performed refits on two Princess Cruises ships, the Crown Princess and Regal Princess, last year. The Crown Princess was in for 21 days at the yard, and work included an extension of the Lido Cafe, upgrade to the ship's atrium, and a new thruster. The Regal Princess was in the yard for 12 days in September 1999 for a hotel refit, blast and paint job, and deck extension work.

Cascade General is also involved in the conversion of the overnight coastal cruise ship Columbia Queen for Delta Queen Steamboat. Work on the vessel began at Nichols Brothers Boat Builders, Whidbey Island, Wash. Delivery of the 218 ft x 60 ft Columbia Queen is expected next month.

Besides Cascade General, other key North American ship repairers include: Atlantic Marine, Inc., Mobile, Ala.; Baltimore Marine Industries, Inc., Sparrows Point, Md.; Bender Shipbuilding & Repair Co., Inc., Mobile, Ala.; Newport News Shipbuilding, Newport News, Va.; United States Marine Repair through its NORSHIPCO, Norfolk, Va., Southwest Marine and San Francisco Drydock units; and Vancouver Shipyards, Vancouver, Canada.

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