Philly Shipyard starts construction of modern containership fleet for the Hawaii trade
Philly Shipyard, Inc. (PSI), a wholly-owned subsidiary of Philly Shipyard ASA, has initiated construction of up to four new, cost-effective and environmentally friendly containerships with deliveries in 2020 and 2021, and is actively promoting the formation of a new entrant into the containership trade between the U.S. mainland and Hawaii to operate these vessels. Presently, this trade route is serviced by only two carriers and is reliant in part on a group of near end-of-life steamships, the company said in its press release.
In line with its business strategy, PSI has a successful track record of promoting the formation of new vessel owners in the Jones Act market, such as American Shipping Company and Philly Tankers.
PSI is presently engaged in advanced discussions with a major U.S. shipping operator about establishing a new, financially strong carrier with a fleet of modern vessels to be built by PSI to support commerce between the U.S. West Coast and Hawaii. Several prominent investors and lenders in the U.S. shipping market have expressed interest in taking part in this opportunity. In addition, a highly regarded maritime leasing company has issued an indicative offer with preliminary terms for a bareboat charter structure.
PSI has retained former senior U.S. shipping executives with significant experience in the Hawaii containership trade to assist with the initiative. These executives include John Keenan, who served in various key leadership roles at Horizon Lines, including as President and Chief Operating Officer from 2007-2011.
When strict MARPOL/ECA emissions regulations take effect in 2020, several of the older steam powered vessels serving the Hawaii trade route today will be out of compliance without substantial, costly modifications. Even if these aging steamships are modified, they would be less reliable and carry significantly higher operating costs than modern vessels in areas such as fuel consumption and manning and maintenance requirements.
PSI believes these circumstances create a unique opportunity for a new Jones Act carrier to enter the Hawaii containership trade with a fleet of cost-efficient and eco-friendly container vessels built by PSI. Furthermore, unless these new ships enter the Hawaii trade route starting in 2020, local commerce may be adversely impacted by the new emissions standards.
For these reasons, PSI has begun construction of a new fleet of containerships, with planned delivery dates for the first pair in 2020 and the second pair in 2021. In order to support this timetable, PSI has commenced design work and procurement activities. The vessels are being designed to address the present market trends for larger sized containers, faster transit times and LNG fuel. PSI has initiated placing orders and making financial commitments on long-lead items.
These modern containerships will be the direct continuation of the series of two similar 3,600 TEU Aloha class containerships with expected deliveries in 2018 and 2019 that PSI is presently constructing for the Hawaii containership trade.
About Philly Shipyard:
Philly Shipyard is a leading U.S. commercial shipyard constructing vessels for operation in the Jones Act market. It possesses a state-of-the-art shipbuilding facility and has earned a reputation as the preferred provider of oceangoing merchant vessels with a track record of delivering quality ships. Philly Shipyard is listed on the Oslo Stock Exchange and is majority-owned by Aker Capital AS, which in turn is wholly-owned by Aker ASA. Aker is a Norwegian industrial investment company that creates value through active ownership. Aker's investment portfolio is concentrated on key Norwegian industries that are international in scope: oil and gas, fisheries and biotechnology, and marine assets. Aker's industrial holdings comprise ownership interests in Aker Solutions, Kvaerner, Aker BP, Aker BioMarine, Ocean Yield and Akastor.
Philly Shipyard has delivered 26 vessels in its nearly 20 year history, including four vessels for use in the Hawaii containership trade which were delivered in 2003-2006. Currently, Philly Shipyard is building two 50,000 dwt tankers for a subsidiary of Kinder Morgan, Inc. (Hulls 027 and 028) and two 3,600 TEU containerships for use in the Hawaii trade for Matson Navigation Company, Inc.