U.S. Shipbuilding Expansion
This blog highlights the ongoing growth of shipbuilding in the United States, including the increasing involvement of Korean shipbuilders Hanwha Ocean and HD Hyundai.
DLS Insights
The DLS is here to provide insights and comments on issues and topics as they relate to marine asset and appraisal
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What 2024 Financials Reveal About the Marine Industry’s Future
This overview explores select 2024, 10-K Annual Statements with a focus on each company’s assets and production, business performance, and indications of their expectations for 2025.
Bits-and-Pieces
In 1939, the U.S. Navy Research Laboratory began exploring the construction of a nuclear-powered submarine. By 1955, the USS Nautilus was at sea. Soon after, the USSR introduced the commercial cargo ship Lenin, followed by the U.S. launching the Savannah in 1959.
With a few exceptions - Germany’s NS Otto Hahn (1964) and Japan’s NS Mutsu (1969) - the world went to nuclear powered war ships. Russia, however, occupied a unique middle ground with a fleet of nuclear-powered icebreakers.
Opinions Agree on an Interesting Economic Year
Changes in the maritime industry are expected to occur due to geopolitical shifts during the year. These changes will influence economic reasoning and patterns. With 80% of the world’s raw and completed products moving via merchant vessels, changes affecting the maritime sector will impact product costs for consumers.
IT’S ALL UP IN THE AIR
The technical areas of maritime shipping increase rapidly with multiple ways of reducing emissions from dual-fuel engines and wind assistance and to computerized control of engines, wind assistance, and route planning. With these increasing technical advances, the certification and ongoing inspections of the systems grow more difficult. Technical advancements are also being made for vessel inspections. One of the fastest growing in all forms of vessel inspections is the use of drones.
Methanol: A Look at Owner’s Alternatives for Greening and the Movement of Bulk Cargoes throughout the World
Methanol has become the most popular alternative fuel for vessels in the global new build orderbook alongside LNG, but its high cost has kept operators from signing up for the fuel in the long term. The industrialization of technology and the commercial development for vessel fueling did not progress as quickly as expected.
Flotsam & Jetsam – A Look at Maritime Sections
With new GHG emissions regulations and corporate ESG concerns, designs and outfitting are now changing faster than they have over the previous 80 years. The propulsion and hull design of a ship in 2030 will be strikingly different, even than that of a peer ship built by 2020.
2023 10-K Annual Statements – Corporate Cliffs Notes
Today we look at the stats! I am digging into the 10-K reports for publicly traded companies relating to the marine industry to see what their numbers can tell us about the current state of profit and risk.
Hot Air?
U.S. offshore wind farms come up frequently in the news, often related to politics and with a list of players that seems to change monthly. The number and location of sites in this industry, fledgling in the U.S., is confusing. To help visualize what is happening, I found several websites with information on the U.S. Windfarms operators.
CURRENT BATTERY SCIENCE IN TRANSPORTATION and AN ONGOING LOOK AT INLAND
In September 2021, I looked at the growing use of Lithium-Ion batteries in forms of transportation. It was researched for my own education as well as for my readers. This blog will try to give basic information on the new generation of batteries and the systems that will be necessary for them to be used in various types of transportation as stored electrical power starts to take over from fossil fuels.
THE FUEL RACE REVISITED…and other subjects
The fuels of the future will be impacting everything that we do. They are already impacting commerce, from moving to more electric and natural gas-powered vehicles in cities, to the billions of dollars being diverted to research, development, production, and distribution of these alternative fuels.
A Look at Kirby Corporation and Inland Trends
While most vessel owners/operators keep their numbers under wraps, publicly traded companies, such as The Kirby Corporation, publish an annual report of their performance for shareholders. These reports are a wealth of information that can help us understand trends in our industry.
Kirby’s income increased over 2021 despite still dealing with the fallout of Covid-19 as well as low water conditions in the Mississippi River during the 4th quarter.
Cash, Coal, and Corporations
While corporate lenders, shippers, and charterers are moving towards more eco-friendly operations, problems with green financing are growing. Stricter lending requirements are going into effect faster than owners can produce their long-term compliance plans. Banks do not want to end up with loans on stranded assets that can no longer earn money to pay their debt. A vessel with a low level of compliance becomes essentially unemployable.
The Inland River Scene & Revisiting Tugboats 101
As we have seen in worldwide marine commerce, and in commerce in general, the inland trade has been bouncing around a bit like an EKG strip. Weather patterns and international conflict have affected the grain trades, coal trade, and inverted some of the petrochemical trade. The world economy has stifled steel production and shipping and has had a knock-on effect on coal and ores.
Looking into the Domestic Picture
I have been writing these blogs for two years now, analyzing the future of the marine industry. My intent is to help decision-makers address and prepare for forecasted changes. Now, I would like to shift my focus to various topics concerning domestic coastal, harbor, and inland marine operations.
The WASP Sting
WASP, or Wind Assisted Ship Propulsion, remains a hot topic in the maritime industry as key players contemplate their strategy towards lowering greenhouse emissions. This plays into the same conversation as alternative fuels.
Primary corporate entities behind wind power are COSCO, MOL, Cargill, and K Line. It is not surprising that three of these are large Asian shipping companies that have had several decades of experience in wind assist.
Skinning A Cat Part 2
I have written several blogs on the hottest subject in the green battle: the fuels of the future and how they are being received by ship owners and operators. LNG is still a shaky option because of its current high cost and nowhere near zero-emissions
Skinning A Cat
This 2-part blog looks at various ways to potentially reach mandated GHG emission levels aside from new construction, and what this new technology means to marine surveyors, appraisers, and lenders.
Who’s In Charge Here?
As pointed out in past blogs, technology is advancing at a swift pace powered by ecological regulations and ESG investments; however, laws (particularly Admiralty laws) can’t advance at such a pace.
The state of maritime law as it pertains to these new areas of the marine industry is very important to lenders, lessors, and marine underwriters. What does the insurance policy cover and who is/are the beneficiaries? How can a lender protect their position? Here are some things to consider:
What To Do About CO2
In many previous articles, I have written about the marine industry reacting to the CO2 emission reduction standards required for 2030, 2040, and the final Zero Emissions of 2050. These articles have been about the competition among alternate lower emission fuels (such as LNG and ammonia), changes in hull designs (to include rudders and propellors), improvements in dual-fuel engines, wind assist, and how all of these changes will be funded.
Another Look at the Fuel Gauge
First, a look at the current leader, LNG. Even though the World Bank came out against LNG encouraging owners to skip LNG and concentrate on hydrogen-based fuels. We’ll get into hydrogen as a fuel later in this edition. The World Bank’s reasoning is that LNG is not that clean because of methane slip. Methane slip is not a term we hear too often
BITS AND PIECES
With rapid technology changes and the endless flow of fascinating R&D press releases, some of the updates I wrote just three months ago are already old news. As one purpose of this blog is to help people not entirely in the maritime industry to keep up, here are some of the latest innovations (or proposed innovations) in maritime design and marketability
MY GREEN IS BETTER THAN YOUR GREEN
I’ve been writing a lot about the ecological movement and the greening of merchant ships. DLS Marine is deeply involved in the appraisal side of the marine survey business and a good number of the readers of this blog are involved in maritime lending or insurance. The greening of the world’s fleet involves huge amounts of money.
The Fuel on the Hill
Petroleum is still here and will be prominent, although fading, for a few more decades. Due to an interesting combination of world events and reactions to these events, the oil industry has new life. Oil is closing in on $100 a barrel in some areas.
In Honor of 2021
As we begin a new year, I’d like to do a recap on the topics I discussed in 2021. Just about every subject matter has shifted, some like a glacier and others at, for the marine industry, flank speed
The U.S. and Short Sea Shipping
Ships, on a cost-per-ton mile, are the most efficient way to move large quantities of material, raw or finished. But ships are useless unless they have somewhere to load and unload cargo.
White Oil
The growth of lithium for use in batteries is phenomenal, as the number of products using lithium-based batteries grows in addition to the size of these batteries.
Do Green Ships Have a Nuclear Future?
The amount of money being put into meeting the 2050 air cleanliness goals of the Paris Accords and the IMO is staggering. Every week we read more news items and long reports on studies and research and experiments on new technology.
So, What About Offshore Wind Farms?
We are headlong into the new world of wind power. Not so new if you consider that Hero of Alexandria (20 AD-70 AD) invented a windmill that pumped a bellows attached to a pipe organ. (And he invented the first vending machine – it dispensed holy water). The first windmill to provide electricity was built in 1887 by a Scottish inventor, James Blyth, to power his home.
Will the U.S. Join the Green Wave?
This month I look at the new administration’s first proposed bill that affects the oceans and shipping, an intro to a new cargo carriage idea that is not so new, and how diesel exhaust scrubbers are currently doing in the marketplace.
LNG Is Here: How Is It Impacting The Industry?
Where is LNG as the fuel of choice for the maritime industry? DLS Marine Surveyor Norm Laskay discusses the current switch to LNG, its impact on air cleanliness, and the ever-important roles of crew members, surveyors, appraisers and classification societies.
Do appraisal methods commonly used internationally meet acceptable standards?
The standards that are taught in academia are the three approaches to value. They each have strengths and weaknesses. In the absence of comparable sales, and even with comparable sales being available, lenders have gone to the income approach or, Discounted Cash Flow (DCF) method.
Will Staycations Save the Domestic Day Cruise Passenger Business?
The blue water overnight passenger business is comatose. Will a vaccine make 2021 a profitable year? Or at least a break even year? Right now it looks like the industry might not even resume anything that might be called “service” until the second quarter of 2021.
Keeping Score – Are You Green Enough?
Maritime vessel owners and operators are being pressured by international authorities and port state regulations to comply with regulations forcing vessel operations to be “clean”. That is, sea transport producing greatly reduced greenhouse gas emissions, reduced spread of invasive bio species through ballast water treatment and clean hulls, and reduction of overboard wastes.
Is One Section of River Traffic Fading Away?
I recently received a question on the market for river service open hopper barges. The answer starts with information from the U.S. Energy Information Agency (EIA). EIA statistics show that the Capacity Weighted Average Construction Cost of solar voltaic generators has fallen about 50% between 2013 and 2018. Offshore wind generator costs are down 27% and natural gas 17%.
Staying Ahead of Technology
Looking into the not so distant future there are new concerns for surveyors, owners and lenders. LNG powered vessels are being launched almost weekly. There is also a push by engine manufacturers and shipyards to have standard fuel oil powered vessels retrofit to Liquefied Natural Gas.
Marine Business Owners: $11.5MM Estate Tax Exemption is at Risk
Potential pending changes to the estate tax starting Jan 1, 2021 could significantly impact net worth. While the window is closing there is still time for DLS Marine and The McLean Group to provide you with a business or estate valuation to lock in current exemptions and tax rates.
A Look at the Tier 4 World
Due to the price of oil and COVID-19, there are vessels in lay up all over the world. Taking a vessel out of service can be both a short term and long term decision. The short-term call is usually the simple – it will cost more money to run than it will make.
Modern Marvels Meets Deep Sea Salvage
Last September, the Korean cargo ship Golden Ray capsized outside of Brunswick, GA with over 4,000 cars on board. After months of preparations, Versamarine’s heavy lift vessel VB-10,000 will soon cut up and remove the Golden Ray from inside St. Simons Sound.
Vessel Lay Up…At What Cost?
Due to the price of oil and COVID-19, there are vessels in lay up all over the world. Taking a vessel out of service can be both a short term and long term decision. The short-term call is usually the simple – it will cost more money to run than it will make.
Kenner Hendrix Advances to Accredited Member of the ASA
DLS Marine is pleased to announce Kenneth “Kenner” Hendrix, NAMS-CMS has earned the Accredited Member (AM) credential in the American Society of Appraisers (ASA) under the Machinery & Technical Specialties discipline.
Long Green for Long-Lived Greens
DLS Marine surveyors and appraisers have always been current with what has been going on in the marine industry. As members of the National Association of Marine Surveyors (NAMS) and the American Society of Appraisers (ASA), it is necessary for all of us to learn and amass continuing education hours in order to renew our certifications.
Today it’s Cash Flow. Tomorrow Oil Flow?
On an adjusted dollar value basis oil hasn’t been this cheap in over thirty years. Fuel is the biggest single expense for vessel operators so this should be a blessing. Even the shock of IMO 2020 low sulfur fuel regulations have been greatly softened with the difference between high sulfur and low sulfur fuels dropping to a small gap. Only in today’s economic climate it is not the blessing it could be.
DLS Marine Builds Remote Survey Vehicle to Access Confined Spaces
A long-time customer of DLS Marine recently came to us with a knotty problem. The customer had 6 large pieces of marine equipment arriving at an East Coast port from the Middle East. The equipment was loaded on the cargo deck of a semi-submersible heavy lift ship.
NAMSGlobal Appoints Ave Boudreaux, Marine Surveyor for DLS Marine, as Treasurer for 2020-2022 Term
DLS Marine is pleased to announce that An International Association of Marine Surveyors (NAMSGlobal) has appointed Ave Boudreaux, Marine Surveyor for DLS Marine based out of Houston, as Treasurer for the 2020-2022 term.
DLS Introduces Marine Business Valuation Services
We are proud to announce a new strategic relationship with The McLean Group (TMG), one of the top middle market business valuation firms in the nation. Business owners in the marine industry can confidently rely on decades of marine asset appraisal and valuation experts.
IT’S THE ECONOMY (AND COVID-19 AND TECHNOLOGY AND REGULATORY CHANGES) STUPID
“It’s the economy, stupid.” James Carville coined this very famous and often quoted remark in 1992 when he pointed out during an election year that it was the economy that was most important to voters.
Bedlam in the Time of COVID-19
Bedlam is defined as a scene of uproar and confusion. The term comes from the St. Mary Bethlehem Hospital in England which long after its beginning became an asylum to treat the mentally ill.
Response to Coronavirus
We have been closely monitoring the impacts on our community and industry and are taking steps to keep our team, our clients and our community healthy. We have enabled all of our employees to work remotely through this period, but will still remain accessible 24/7.
