CEO, Drew Marine

Len Gelosa: Pres. & ECDIS Revolution:

Goodbye Paper Charts

Ballast Water Treatment:
The Time Is Now
January/February 2011

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Volume 15, Edition 1

C O nt E n ts

JANUARY/FEBRUARY 2011

3

THE MARITIME EXECUTIVE

8 | Executive Achievement

Len Gelosa

40

President & CEO, Drew Marine
by nichole williamson

Emerald Isle: The Prospects Really Are Greener
by barry parKer

12 | Washington Insider

President Obama and the New Congress Confront Budget and Regulatory Realities
by larry Kiern

44

Advances in Lifesaving Equipment
by marex staff

28 34

Case Study:

Carnival Corporation
by robert c. spicer

the world's biggest cruise line keeps getting bigger and better.

16 | MarEx OP-ED

50

Israeli Natural Gas: A Game Changer

The ECDIS Revolution
by art garcia

by michael J. economides

56

20 | Upgrades & Downgrades
by JacK o’connell

Reading the Tea Leaves: What to Expect in 2011
24

BWTS: It Doesn’t Have to Be a Four-Letter Word
by tony munoz

Executive Interview:

Micky Arison

62

Environmental Directory

From "Fun ships" to the Miami Heat, Carnival's dynamic leader knows what it takes to succeed in a big way.
by robert c. spicer

Why America Needs the Jones Act
by h. clayton cooK, Jr.

Half Page Vert

10/26/10

8:50 AM

Page 1

Tony Munoz :: tonymunoz@maritime-executive.com Jack O’Connell :: harvardjo@maritime-executive.com Nichole Williamson :: nwilliamson@maritime-executive.com Evan Naylor :: enaylor@maritime-executive.com Daniel Bastien :: dbastien@maritime-executive.com Brett Keil :: bkeil@maritime-executive.com Philipho Yuan :: fyuan@maritime-executive.com Clive Bullard :: cbullard@maritime-executive.com Carlos Dominicis :: cdominicis@maritime-executive.com Steven Gonzalez :: sgonzalez@maritime-executive.com Kristine Lowery :: klowery@maritime-executive.com
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editorial

Cruising into the New Year
on this edition’s cover. Carnival, the world’s biggest cruise company and a neighbor to the south in Miami, posted $14.5 billion in revenue in 2010 and net income of $2 billion. Its astounding growth and success are due to the company’s ability to define and cater to its clientele with a wide range of product offerings. Carnival carries over half the world’s cruise passengers, which naturally puts it in a class by itself. With the harsh winter pounding the Northern Hemisphere, the Carnival story will be a welcome antidote to the cold and snow – and maybe even encourage you to get away. And for those of you in the Southern Hemisphere, it’s not too soon to start planning your winter escape. Either way, Carnival and the rest of the cruise industry are waiting to serve you. This edition of MarEx is, as usual, filled to the brim with “Intellectual Capital.” In 2011, the IMO and USCG will finalize regulations on ballast water treatment systems for commercial vessels. Meanwhile, the states of Wisconsin, California and New York intend on raising the ante by implementing their own ballast water legislation with requirements 100 to 1,000 times stricter than the IMO’s. If your company is feeling the heat, then you need to read “BWTS: It Doesn’t Have to Be a Four-Letter Word.” Additionally, Electronic Chart Display & Information Systems (ECDIS) will become the order of the day in 2012. Returning contributor Art Garcia reviews the “ECDIS Revolution” as paper charts are soon to become a thing of the past. It’s time to go digital. In Washington, the political center of gravity has shifted and “Washington Insider” columnist Larry Kiern offers valuable insight on what the maritime industry can expect from the Administration and new Congress, which is very little. Columnist Michael Economides shifts our attention to the Middle East, where Israel’s energy situation has changed dramatically with the discovery of massive amounts of offshore natural gas. The “Professor of Oil” has penned another provocative and timely article for MarEx readers, which you won’t want to miss. Jack O’Connell has authored another excellent financial review of the marketplace in his “Reading the Tea Leaves,” his annual preview of the year ahead. His review of the winners and losers in 2010 reveals interesting bits of information about the players in the maritime markets. Royal Caribbean, SEACOR Holdings and Carnival Corporation were great stocks to hold in 2010, but what can we expect in 2011? Well, you’ll just have to read his article to find out, so enjoy. Hang on, we’re not done yet! MarEx has a few more intellectual morsels for your consumption. H. Clayton Cook, Jr., well-known Washington D.C. attorney, has written a gem on why the Jones Act is important to America. During the Deepwater Horizon incident, and seemingly for eons before, the Jones Act has been held up to scrutiny and criticism for causing all kinds of economic harm and being a hindrance to international commerce. Well, no matter what side of the subject you’re on, Mr. Cook is considered one of the top thinkers on the matter. Assistant Editor Nichole Williamson caught up with Len Gelosa, President and CEO of Drew Marine, for our “Executive Achievement” feature. The 100-year-old company transitioned in 2010 from Fortune 500 ownership to an extremely successful year under the private equity ownership of J.F. Lehman & Company. Drew Marine is a top player in global water and fuel treatment systems and continues to grow under the watchful eye of its new CEO. Long-time contributor Barry Parker points out that, while it might surprise some maritime executives (but certainly not MarEx readers), Ireland is fast becoming one of the world’s preferred sites for maritime businesses. The Irish Maritime Development Office (IMDO) was established in 1999 with a mandate to attract maritime companies to Ireland. Thus far players like Maersk, OOCL, MSC and CMA-CGM have set up shop there. Forget the fields of barley! Ireland is becoming a major force in the maritime industry under the leadership of Glenn Murphy, IMDO’s Director. Finally, when it comes to safety at sea, MarEx took an insider's look at some of the latest advances in safety equipment. There’s a lot of great photos and information here on some of the top companies in the business. If your company has ships and boats, we think this article is a must, so enjoy. The best to all of you in 2011, and we at MarEx promise to send you another year of maritime journalistic excellence. Mar Ex

Marex is honored to have Micky arison, Chairman & Ceo of Carnival Corporation,

JANUARY/FEBRUARY 2011

Tony Munoz
Editor-in-Chief

6

THE MARITIME EXECUTIVE

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JANUARY/FEBRUARY 2011

8

THE MARITIME EXECUTIVE

Len

The disTance from BoonTon To Whippany, new Jersey is only about six miles. in fact, the drive takes ten minutes at most. But its significance was big for century-old drew marine last september when it celebrated its first year under J.f. Lehman’s private equity ownership by christening its new Whippany headquarters. The new facilities, complete with offices and laboratories, were a shining symbol of the company’s new standalone status. The celebration marked the culmination of a year in which the company transitioned successfully from Fortune 500 ownership to having its own dedicated infrastructure and management systems, while at the same time building sales and maintaining customer loyalty. “despite a global recession which severely impacted the maritime industry, drew marine achieved strong results in its first year of independent ownership,” noted president and ceo Len Gelosa. “our brand, our people, our service and our product quality enabled us to deliver the superior performance our customers have come to expect in the 65 countries and 900 ports where we do business.”

Gelosa
President & ceo, Drew marine
enTer J. F. Lehman

By Nichole Williamson

The Back STory

it was in 1907 that J.f. drew founded drew chemical. The company started out in the vegetable oil business but soon added a water treatment line, focusing on the major problems of the day, which were in boilers. it wasn’t long before the company began to notice the need for the same solutions onboard ships. marine engineers were hired, and the newfound niche grew rapidly. By 1928 a separate marine

division was launched, focused exclusively on the maritime industry. drew marine and drew industrial, the two parts that comprised drew chemical, grew side by side over the years and were eventually acquired by ashland chemical in 1981. interestingly enough, Len Gelosa had left ashland the year before it acquired drew. he returned 11 years later as head of marketing for drew industrial. Two years later he was running that division, and in 2004 he was put in charge of ashland Water Technologies, which included drew marine. Looking back over the company’s history, Gelosa observed, “We have consistently adapted to our customers’ needs with new products and evolving technologies. for instance, when the arab oil embargo struck in the 1970s and sent bunker prices soaring, we launched a full fuel treatment product line to enable our customers to manage their fuel requirements as efficiently and cost-effectively as possible.” Welding and refrigeration products were added in the 1980s. When customers started having problems with ballast tank coatings, drew acquired a company that specialized in coatings. more recently, it added onboard testing devices, fuel homogenizers, and fire safety and rescue products. Gelosa notes, “We have evolved by focusing on the acute problems the industry is facing and focusing on operating efficiencies, the longevity of the vessel, and the equipment onboard.”

at the end of 2006 Gelosa retired from ashland, having done all he could to develop the water treatment business and seeking

Maritime solutions provider Drew Marine is thriving under new ownership and the steady hand of CEO Len Gelosa.
new challenges. He had no desire to take a top job with another big corporation but wanted to stay in the swing of things, and so he started a management consulting business to keep in touch with his clients. He also found time to do some of the things he’d always wanted to do, like coach an American Legion baseball team for boys aged 16 to 19. The long-time Yankees and football Giants fan also found himself attending more games than usual during this period and cheering his home teams on. It wasn’t long, however, before J. F. Lehman came calling. Ashland was in a period of reorganization and gearing up for a big acquisition. Drew Marine didn’t fit its changing strategy and so it was looking to sell it. J.F.Lehman, an investor in mid-market companies in maritime, aerospace and defense, whose namesake Chairman is the former Secretary of the Navy, was interested and enlisted the help of an expert on the subject, Len Gelosa. Following the completion of the deal in September 2009, Lehman asked Gelosa to serve as CEO, and he accepted.

EXECUTIVE ACHIEVEMENT
the two technologies that I’ve always remained very interested in.” The pairing of Gelosa with Drew Marine was a natural from the very beginning, since water and fuel treatment are Drew’s two biggest businesses. After some time on the technology side of things, the wouldbe engineer discovered a flair for business and moved on to marketing and sales, and then general management positions with several Fortune 500 companies, including Allied Signal and U.S. Filter. Gelosa says his sales and marketing experience made him “very customer focused and very appreciative of the fact that, in order for us to be successful, we had to supply value to our customers to help them be successful.” This regard for the customer’s needs is embedded in Drew’s culture with a particular focus on changing government regulations. The Clean Water Act, for example, gave Drew the opportunity to guide its clients through the compliance process using its patented products and services, including DREW WATCH™, a software application that monitors shipboard water treatment systems and makes recommendations on corrective actions as needed. Similarly, the company’s diesel performance and emission monitoring systems identify problems and enable customers to take corrective action to ensure air quality standards are being met. The introduction of low-sulfur fuel and its mandated use in Emission Control Areas around the globe opened up another whole area of opportunity for the company, and Drew was the first to offer its customers a full range of low-sulfur fuel services.

JANUARY/FEBRUARY 2011

9

ThE MakIng of a LEadEr, and a CoMpany

Gelosa is a New York City native with Bachelor’s and Master’s degrees in chemical engineering from CCNY. “Very early on I learned about water and fuel treatments,” he says, “and those are

THE MARITIME EXECUTIVE

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EXECUTIVE ACHIEVEMENT
“Low-sulfur fuel brings with it a whole new set of challenges for the operator,” notes Gelosa, “so we provide sampling, analytical, consultative and treatment services along each step of the way to make sure the customer is burning the fuel as efficiently as possible. And while we don’t supply the fuel, we do just about everything else to help the customer avoid potential problems.” the very best team possible, setting the direction of the company and then letting people do their jobs. The enthusiasm and professionalism of the 350 people who make up Drew Marine reflect the type of service a customer can expect from this organization. The respect and appreciation Gelosa has for his people are mutual. If the CEO defines a corporation’s culture, then Drew’s culture is one of respect and great passion – for employees, customers, and the company’s future. “We have consistently adapted with evolving technologies to changing regulatory requirements,”Gelosa says. The company has gone from supplying not just materials but whole solutions. The ability to continually adapt will be the key to Drew’s future success as well. Gelosa says the company’s new ownership has given him the freedom to realize its full potential – something he was unable to do at Ashland, where the competition for capital among the various divisions and other big-company strictures limited his ability to get things done. The future for Drew Marine indeed appears bright. Len Gelosa calls himself an engineer at heart who applies many of the “principles and mindsets of an engineer to the running of a business.” He adds, “I believe that all aspects of a corporation, from finance to manufacturing, are really a series of processes and very much driven by numbers. I take that approach, and it seems to Mar Ex work well.” We would have to agree.

“BEsT OUTCOMEs BUsInEss”

10

Gelosa says the company is in “the best outcomes business.” The outcomes may include oily water discharge compliance, protecting a vessel’s boiler or engine, monitoring heat exchanges and clean exhaust spaces, or ensuring crew safety. The array of applications, products, training and monitoring systems makes Drew Marine a full-service provider. The company has an unerring ability to diagnose the problem, identify the solution, and then provide the proper products, service and training to ensure that the problem is resolved. In a world that is becoming increasingly green, Drew Marine finds itself in the sweet spot. Gelosa says it is the combination of products and services that creates a solution that’s very specific to each customer. The focus on quality and results is something that hasn’t changed much since the business was founded more than one hundred years ago. When asked what the most satisfying part of his job is, Gelosa says, “Working with high-level professionals who are really excited about the opportunity of Drew Marine. It translates into providing value to our customers.” He sees his role as assembling

JANUARY/FEBRUARY 2011

Nichole Williamson is Assistant Editor of The Maritime Executive.

THE MARITIME EXECUTIVE

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washington insider
Written by Larry Kiern, Winston & strawn LLP

washingtoninsider
discretionary spending by approximately almost another $1 trillion. as the president’s $100 billion during what remains of bipartisan deficit commission report and the current fiscal year. The president other similar proposals establish, for the nahas shown a willingness to trim some tion to come to grips with its long-term debt programs as well, having offered proposals it must address the structural deficit, i.e., to cut $20 billion in his previous budget the material chronic disjuncture between and already agreed to a wage freeze for revenue and expenditures that threatens our federal civilian workers saving $2 billion nation’s fiscal integrity. over two fiscal years. but the administrabrinksmanship is threatened surtion’s position is that immediate deep rounding congressional action to raise domestic spending cuts are fundamentally the national debt ceiling. but the grand imprudent because they threaten job political compromise necessary to achieve growth and economic recovery, which it long-term debt reform appears illusive. notwithstanding the likelihood of heated contends must precede the major policy rhetoric, the nation is more likely to changes necessary to solve the nation’s long-term debt problem. The administramuddle through with modest reductions tion’s immediate priorities favor increased in some discretionary spending programs investment in the nation’s infrastructure, until the result of the 2012 election coneducation, and research programs. clusively resolves the prospects for greater history teaches that during periods of political power by the republican party, professed fiscal austerity the usual course which hopes to gain control of the u.s. is for each political party to propose cuts senate and the White house. to programs the other favors. notwithstanding ambitious proposals and with tax Key struggles ahead affect increases off the table, the likely outcome the Maritime industry this year is modest compromise to trim While maritime programs do not represome discretionary federal spending while sent a material portion of the deficit, they preserving both parties’ principal priorities. can be expected to be trimmed because When we step back and consider that the the new republican leadership will be current annual federal budget deficit tops searching diligently for any program to $1.3 trillion, the immediate budget-cutting cut that does not harm directly national proposals by both parties appear meager, or homeland security or its core constituespecially following both parties’ agreeencies. Maritime programs are also not ment in December to cut taxes and extend top-ranked by the obama administration. unemployment insuranceTTS_MaritimeExec_86x51 27/4/09 powerfulpm Page 1 to the tune of programs lacking 6:17 political con-

President obama and the new Congress Confront Budget and Regulatory Realities
The hisToric republican victory in the u.s. house of representatives, combined with major gains by republicans in the u.s. senate in the congressional midterm elections, shifted rightward the political center of gravity in Washington. republican congressional leaders, buoyed by their victories, declared they were sent to the nation’s capital to, among other things, cut federal spending and rollback “job-killing” federal regulations. Despite this “shellacking,” however, president obama was quickly lifted by lame duck session legislative successes and a growing sense of the need for national civility following the tragic Tucson, arizona shootings. The president professes to have taken a different message from the election results, observing that his priority is to spur job growth through political compromise.
JANUARY/FEBRUARY 2011

12

THE MARITIME EXECUTIVE

a Collision of Political and Policy goals

Despite newfound calls for civility in political discourse, the professed goals of the president and the new republican leadership collide. simply put, immediate cuts to federal spending, including cuts to regulatory programs, will likely slow job growth in the short term, not spur it. Thus the political stage is set for conflict in the opening act of this political drama, with only modest compromise likely to result. republican congressional leaders launched proposals to trim domestic

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washington insider
stituencies present tempting targets. Predictably, Republican House leaders have seized upon proposals of the President’s bipartisan fiscal commission that affect constituencies they do not represent. For example, the new Chairman of the Joint Economic Committee, Representative Kevin Brady (R-TX), focuses on federal employee unions. He proposes cutting federal civilian employment by 200,000 jobs over the next decade while freezing federal pay for three years. He also proposes cuts in funding for the White House and certain surface transportation and education programs. But the conservative CATO Institute quickly criticized his proposal, which “only nibbles around the edges” while leaving business and farming subsidies, Medicare and Medicaid untouched. The net effect on the maritime industry of such cuts will be to make it even more difficult to get needed federal approvals, assistance, cooperation and funding. When the bureaucracy faces cuts, its timeworn response is that it simply lacks the resources. Another top target for the new Republican leadership are “job-killing” federal regulatory programs. Of particular importance to the maritime industry, the Environmental Protection Agency (EPA) and the Bureau of Ocean Energy Management Regulation and Enforcement (BOEMRE) are prime candidates. House Republican leaders prominently highlighted a challenge to EPA’s greenhouse gas regulations, but proposed cuts are likely for EPA generally, thereby stalling enforcement of the Clean Water Act and Clean Air Act as applied to vessels. Likewise, a core Republican constituency, the domestic petroleum industry, fiercely opposes the Administration’s new regulatory requirements on offshore drilling. BOEMRE will therefore face increased scrutiny from a skeptical Republican House and also face proposed spending cuts. For its part, the Administration will likely propose cuts to the U.S. Coast Guard just as it did last year. Despite the service’s stellar performance during the Deepwater Horizon incident, it has not proven a priority. In particular, the Administration’s budget may seek savings from the Coast Guard’s ship, aircraft and communications modernization programs because of the large appropriations involved and the primarily Republican shipbuilding and defense-contracting constituencies sponsoring it. A media report surfaced during the Administration’s internal budgetary process that the Office of Management and Budget might cut the service’s Offshore Patrol Cutter acquisition projected to save $400 million over its lifetime. Additionally, the proposal advanced by the Democratic-led Congress last year to increase funding for more Coast Guard marine safety inspectors lost its leading advocate, former Representative Jim Oberstar (D-MN), whose reelection bid failed. Therefore, this initiative presents a likely candidate for cutting by the new Republican House.

14

JANUARY/FEBRUARY 2011

new Maritime Challenges warrant increased Funding

Amid calls for budget cuts, the President’s National Oil Spill Commission report on the Deepwater Horizon incident published

THE MARITIME EXECUTIVE

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Proposed spending cuts threaten vitally needed maritime programs.
on January 11, 2011 calls for increased spending on federal programs to improve safety, environmental protection, and oil spill response. The Commission concluded that without such spending it will be impossible to restore public confidence in the ability of the industry to drill safely. The report provoked fierce opposition by the domestic offshore drilling industry, which decried this conclusion as unwarranted. This fundamental debate will feature prominently in upcoming congressional hearings. Meanwhile, the Administration is proceeding very cautiously with the knowledge that it will be held accountable by the electorate for any additional major oil spill associated with deepwater drilling. The Administration has already reversed its March 2010 decision to expand and expedite offshore drilling in U.S. coastal waters, specifically citing a shortage of resources and expertise to provide proper regulatory oversight and approvals. BOEMRE’s new rules enhancing drilling and workplace safety and spill response preparedness are being enforced irrespective of debate. Thus, in this critically important area of the nation’s economy, proposals to cut BOEMRE funding as part of a larger critique on “job-killing” regulations would likely only further delay offshore drilling projects, thereby frustrating potential job growth rather than aiding it. Likewise, proposals to cut Coast Guard funding appear painfully shortsighted. First, the Oil Spill Commission expressly recommended increased funding for the Coast Guard to bolster its capacity to respond to oil spills from deepwater drilling both in the Gulf of Mexico and Alaska. Second, with respect to Alaska, the record shows that the Coast Guard lacks adequate infrastructure, equipment and personnel to meet the pressing national priority to protect American interests in the newly opened waters of the Arctic Sea. Coast Guard Rear Admiral Chris Colvin, Commander of Coast Guard forces in Alaska, recently stated that “with 20 percent of the yet-to-be discovered oil, gas, and minerals remaining in the world in the Arctic, the U.S. can’t risk losing it. Bottom line is we are not accomplishing what [Presidents Bush and Obama] directed us to accomplish.” Coast Guard requests for additional funding, including a desperately needed new icebreaker, remain unmet. Third, the urgent need to replace the

washington insider

Coast Guard’s aging fleet of ships and outlook aircraft and upgrade sensors and commuConsidering the conflicting conclusions nications warrants funding, not cuts. The the President and the Republican congresservice’s ability to respond to national crisional leadership profess to have drawn ses has been seriously compromised by a from the midterm elections, the practical chronic failure to invest in its critical assets. political and policy realities of achieving Reports from the service are replete with those aims simultaneously will likely lead aging ship and aircraft casualties. Moreto modest compromise this year over conover, in these circumstances the service’s flicting budget priorities, leaving less fundheightened tempo of operations demanded ing for maritime priorities along with other by disasters like Deepwater Horizon, less politically powerful constituencies. Hurricane Katrina and Haiti’s earthquake Mar Ex presents serious risks to the safety of Coast Guard crews. These crews deserve the naLarry Kiern is a partner tion’s support, not its neglect. at Winston & Strawn Fourth, congressional hearings durLLP, an international law ing the 111th Congress exposed serious firm of 900 lawyers. His deficiencies in the Coast Guard’s marine practice concentrates on safety program. Then-Coast Guard Commaritime issues, includmandant Thad Allen acknowledged the ing legislative, regulatory, need for reform, proposed changes and and litigation matters. requested additional funding. Bipartisan Before joining Winston & Strawn, he was a support coalesced and additional funding Captain and law specialist in the U.S. Coast was appropriated in FY2009. An additional Guard who served as the Legislative Counincrease this fiscal year following the Deepsel and Deputy Chief of the Coast Guard’s water Horizon incident, however, was not Congressional Affairs Office. provided because of the political impasse over the omnibus spending bill. The Based on a valuable recent release of the service’s own highly critical report on the tragic sinking of the Alaska Ranger again highlighted a serious lack of marine safety resources. Consequently, increased funding to improve marine safety, including providing new marine inspectors, warrants approval by Congress. Without proper funding, the With unique heritages from both shipping and maritime marine safety reform services, Wilhelmsen Ships Equipment and Wilhelmsen measures enacted Marine Engineering are joining forces. into law in the Coast Combined with the reputable Unitor and Callenberg Guard Authorizaproduct brands, this provides a strong foundation for tion Act of 2010, the new company – Wilhelmsen Technical Solutions. including commercial fishing vessel safety, www.wilhelmsen.com/technicalsolutions will represent further unfunded burdens on a service that merits more funding, not less.

15

JANUARY/FEBRUARY 2011 THE MARITIME EXECUTIVE

BRAND

oped EconomidEs

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THE MARITIME EXECUTIVE

JANUARY/FEBRUARY 2011

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EnErgy has always bEEn at thE cEntEr of thE arab-Israeli conflict, creating alliances and influencing the policies of allies and adversaries alike. Israel, most of all, has had a very complex relationship with its neighbors, mainly Egypt, which has been a supplier of energy to Israel since the camp David accords in 1978. In the past few years and with a stunning announcement by noble Energy in late December, Israel’s energy situation has changed dramatically. with noble’s blockbuster leviathan gas discovery and 2009’s tamar discovery, Israel now enters the energy big leagues. leviathan and tamar are perhaps the largest purposeful gas discoveries in the world in each of the last two years, and Israel is likely to play a highly enhanced regional and geopolitical role as a result. Moreover, given the fact that the country has emerged as a global leader in many high-tech industries with a resultant expansion of energy usage, Israel may well become a trendsetter in the widespread use of compressed natural gas (cng) and electric vehicles. gas-to-liquids may not be far behind. without question the future of Israeli energy is tied to natural gas. starting in 2004, noble Energy, a houston-based independent oil company – relatively small but quite capable in deepwa-

Israeli Natural Gas: A Game changer

oped EconomidEs

By Michael J. economides

neighbors, Noa South, Nir, Or and Or South. These fields were discovered between 1999 and 2000. With the exception of Nir, the other fields are deepwater prospects between 2,300 and 2,550 feet. They hold an additional 1 Tcf of potential recoverable gas volumes, of which 70 percent is from the Noa fields. Because of its size, there are plans to tie Noa back to the Mari-B platform.

JANUARY/FEBRUARY 2011

The Big ones: Tamar and Leviathan

The first really big discovery came in early 2009, when Noble announced the discovery of a 5 Tcf field in a northwestern offshore block called Tamar. An appraisal well quickly followed the exploratory well and resulted in an increased estimate of the field’s potential gas in place to 8.4 Tcf, which was independently confirmed by Dallas-based Netherland, Sewell & Associates, Inc. Tamar is located at a total depth of 16,000 feet under 5,500 feet of water, 90 kilometers off Israel’s northwestern coast. Noble’s development strategy for the find is still in progress. Currently, Israel’s gas demand is about 350 MMcf/d. If production from Tamar reaches 1 Bcf/d, which it easily could, it would be nearly triple the amount needed for domestic consumption. Transporta-

17

THE MARITIME EXECUTIVE

We came up with something

NEW
ter, began gas production from the Mari-B field. This marked the beginning of Israel’s shift towards natural gas and away from coal and even further away from fuel oils. The Noble partnership consists of Noble Energy and three Israeli firms – Delek Drilling, Avner Oil Exploration, and Delek Investments.

Beginnings: Mari-B and Associated Gas Fields

Mari-B was first discovered by the Noble partnership in 2000 in 796 feet (243 meters) of water and a total depth of 6,830 feet (2,082 meters). Mari is part of a group of fields in the southern offshore waters of Israel in the Pliocene stratigraphic-structural play, part of the Pleshet Basin. Current gas-in-place estimates range from 1.2 to 1.3 trillion cubic feet (Tcf). In 2004 the field began producing from a production platform with 600 MMcf/d of capacity. The gas is sold to the Israel Electric Corporation and brought to Tel Aviv for power generation and to Ashdod for power and refining. Average daily production in 2010 was 330 MMcf/d from six wells. Noble has stated that the field can produce up to its rated capacity of 600 MMcf/d. There are other fields close by that can be tied back to the platform through a subsea network. These include Noa and its

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oped EconomidEs
tion of the excess gas for foreign consumption becomes the next issue, which will be addressed shortly. But the best was yet to come. In late December Noble Energy and partners announced that the Leviathan field, off the northern coast of Israel, contained at least 16 Tcf of recoverable gas, which would make it one of the largest offshore natural gas discoveries ever. Such a giant field, which may be followed by other discoveries, would certainly make Israel a prime candidate for natural gas exports. The United States Geological Survey has estimated that the Eastern Mediterranean may hold as much as 200 Tcf of ultimately recoverable gas.

CYPRUS
MEDITERRANEAN SEA

LEBANON
SYRIA

Leviathan Field Tamar Field

ISRAEL
JORDAN

JANUARY/FEBRUARY 2011

The economic Implications

EGYPT

18

Israel is a country that has had a tumultuous history, and its energy demand has always been in the immediate foreground. Since the nation’s establishment in 1948, it has fought six wars against its neighbors. With each war and, more recently, with each act of terrorism, one would expect Israel to descend into a darkness ever more difficult to transcend. Yet Israel has continued to expand its economy and make technological advances that revolutionized high-tech industries, agricultural products, and the defense establishment. Through lasting peace agreements with Egypt (1979) and Jordan (1994), as well as a commitment to peace with the Palestinians, Israel has ushered in a prosperous future.

In addition, there is little question that Israel is the most stable democracy in the region and the only Mideast country that does not limit free speech. It has an independent judicial system with a strong rule of law, one that does not shy away from convicting a former president, as it did in December. There is also a thriving market economy and, with the country’s growth in the past decade, the government has reduced its role to allow for increased market competition. The main industries include high-tech equipment, pharmaceuticals, software, telecommunications, metal

THE MARITIME EXECUTIVE

oped EconomidEs
products, and military technology and equipment. Israel has the fifth highest GDP per capita in the Middle East, trailing only four oil-rich nations. Countries like Saudi Arabia, Iran, and Egypt fall well behind on the basis of this metric. The prospect of becoming a natural gas exporter has huge implications, not only in terms of reducing Israel’s energy imports and dependence on potential adversaries, but also in sheer economic benefit. Moreover, few countries are more capable of actually pulling it off and, at the same time, gaining considerable benefit from using natural gas in the transportation sector. Natural gas may bring Israel and Cyprus (and, by extension, Greece) into a natural alliance, and not just for the economic benefits. In a classic example of the old adage, “The enemy of my enemy is my friend,” the recent breech between Israel and Turkey brings the Greeks closer to Israel. A natural gas pipeline from the Israeli fields to Cyprus would be an obvious gesture of rapprochement. Such a pipeline would immediately benefit Cyprus, which is now in the process of making a decision to import highly expensive LNG, and could also become the vehicle for LNG liquefaction facilities and then LNG exports from Cyprus to natural gas-starved Europe, now suffocating under Russian natural gas imports. An alternative and substantial source of natural gas to Europe could provide what the ill-fated Nabucco pipeline is unlikely to ever deliver. Two LNG facilities on Cyprus, each with a capacity of 7 million metric tons, would amount to roughly 23 percent of Russian exports to Western Europe, which were 3.3 Tcf in 2009. Israeli natural gas, like almost everything else in that part of the world, has many more dimensions than the obvious. It’s a game changer in more ways than one. mar Ex

The Geopolitical Implications

JANUARY/FEBRUARY 2011

In geopolitical terms, Israel’s success in the energy arena is a game changer. The least worrisome eventuality would be a conflict with its northern neighbor, Lebanon, which is already claiming that the Leviathan prospect extends into its waters and is planning an exploration program off its coast. Further west, Noble already holds the only lease in Cypriot waters, which could prove a winner in exploring the outer reaches of the Levantine Basin. Israel and Cyprus are cooperating to define the borders of the continental shelf under the rules of the UN Convention on the Law of the Sea, under which a country has the right to explore and exploit natural resources within a distance of 200 nautical miles from its shores. The closest distance between Israel and Cyprus is 140 nautical miles and, according to international law, the boundary in such a case is set at the midpoint between the two countries.

Dr. Michael J. Economides is a Professor at
the Cullen College of Engineering, University of Houston, and Editor-in-Chief of the Energy Tribune. Benjamin Shlyabopersky also contributed to this article.

19

THE MARITIME EXECUTIVE

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20

Upgrades downgrades
It’s always fun to look back at the year just ended and pick out the winners and losers. sometimes you even learn something along the way. who was it who said, “those who do not remember the past are condemned to repeat it”? the Harvard philosopher George santayana comes to mind, but I’m sure savvy MarEx readers know the answer. In any event, taking a moment now and then to review the recent past – and especially the year just ended – can be a valuable exercise and often lead to useful conclusions about what to expect in the year ahead. which is why we reserve the first column of the year to do just that. It was, for the record, another good year for investors. not as good as 2009, when gains averaged 28 percent, but we’ll take it anytime. looking at broad market measures, the Dow was up 11 percent in 2010, the s&P 500 13 percent, and the nasdaq 17 percent. Global markets did even better, with first prize going to argentina, up 52 percent on the year, followed closely by Indonesia at 46 percent and chile at 38 percent. It was, in fact, hard not to make money. Everywhere you looked there were flashing green lights. commodities, in particular, did well, as china’s appetite for everything that comes out of the ground knew no bounds. we all know about gold prices, which finished above $1,400 an ounce, but how about silver? the bridesmaid metal gained a whopping 84 percent and closed the year above $30. copper, aluminum, iron ore and coal all rose, with the red metal leading the way. Down on the farm, crops reached multiyear highs with the price of corn up 52 percent, wheat 47 percent and soybeans 34 percent. of course the drought in Russia had something to do with that, but it’s also becoming clear that the global economy is on the mend and global demand is growing.

Reading the Tea Leaves: What to Expect in 2011
By Jack O’Connell

Capital Link Maritime Index (Jan. 1, 2010 – December 31, 2010)

Missing the Boat

alas, shipping stocks missed the boat again last year, although the readers of this column no doubt managed to beat the averages. Despite some notable exceptions, shipping was among the market’s worst-performing sectors. as measured by the capital link Maritime Index, which tracks the 41 publicly listed u.s. maritime stocks, these stocks rose just seven percent in 2010, marking the third consecutive year they have underperformed. the lone exchange traded fund devoted to shipping, the Guggenheim shipping Etf (sEa), formerly (and better) known as the claymore/Delta Global shipping Etf, eked out a two percent gain on the year. looking at individual segments of the market (as measured by the various capital link indices), tanker stocks were up a meager four percent on average; container stocks fell one percent, and drybulks fell eight percent. not an encouraging – or rewarding – performance, by any measure. there were a number of reasons for this underperformance. Most obvious was the huge supply of new ships that came on the market – a record number, in fact – increasing the already intense competition for cargoes and exerting downward pressure on rates. another was the finan-

cial difficulties experienced by companies that had overextended themselves in the boom years by ordering too many new ships and then found themselves unable to pay for them. It didn’t help any that the value of these newbuildings had in the meantime plunged from the time they were originally ordered to the time they were finally delivered. this squeezed corporate balance sheets and led to many a liquidity crisis as companies struggled to meet loan deadlines.

there were some bright spots, however, and the cruise industry was one of them. carnival corporation (nysE: ccl) – featured on the cover of this edition of MarEx – saw its stock price gain 46 percent in 2010 on top of a 30 percent increase in 2009. It also started paying a dividend again, a sure sign of improving health. Royal caribbean cruise lines (nysE: Rcl), carnival’s main competitor, did even better, registering an 86 percent gain on top of last year’s 84 percent rise. Rcl ’s results were boosted by the launch of the world’s two largest cruise ships, the oasis of the seas in late 2009 and the allure

Winners and Losers

Will shipping stocks finally break out of their three-year slump?
wINNERs
Royal Caribbean Cruises (RCL) Knightsbridge Tankers (VLCCF) ship Finance (sFL) seacor Holdings (CKH) Carnival Corporation (CCL) Teekay (TK)
Sources: Capital Link, Wall Street Journal

LosERs
+ 86% + 68% + 58% + 53% + 46% + 43% Aegean Marine (ANw) Genmar (GMR) Genco (GNK) overseas shipholding (osG) Diana (DsX) Navios Maritime (NM)
Sources: Capital Link, Wall Street Journal

- 62% - 54% - 36% - 19% - 17% - 13%

JANUARY/FEBRUARY 2011

of the Seas in 2010. If you were smart enough to hold both of these stocks, you should probably be writing this column. Another big winner in 2010 was Seacor Holdings (NYSE: CKH) of Fort Lauderdale, FL, which rewarded shareholders with a 53 percent gain including a special cash dividend of $15 per share paid in December. Seacor operates a diversified portfolio of businesses but is mainly an offshore supply vessel company. Its Environmental Services Division scored big with the cleanup of the Macondo well blowout. Topping the list of losers was Aegean Marine Petroleum (NYSE: ANW), a company mentioned often (and usually favorably) in these pages, whose stock collapsed 62 percent in 2010 on the heels of an overaggressive expansion program and unexpectedly fierce competition. Aegean is one of three Peter Georgiopoulos companies to make our hit parade for 2010, the others being tanker operator General Maritime (NYSE: GMR), down 54 percent, and drybulk carrier Genco Shipping & Trading (NYSE: GNK), off 36 percent. It was a stunning reversal for Aegean and Genco, which were among the year’s best performers in 2009, and testifies to the cyclical nature of the maritime industry. Also falling from grace in 2010 was Tsakos Energy Navigation (TNP), a major carrier of crude oil and refined products, whose stock declined 32 percent despite rising oil prices and higher global energy demand. Tsakos’ conservative chartering strategy and steady-as-shegoes approach could not overcome the impact of falling freight rates and higher financing costs, and it began reporting quarterly losses for the first time in its history. The company nonetheless main-

tained its dividend, albeit at a reduced rate, and certainly looks undervalued at its current price of $10 per share. Similarly, other well-managed companies like Diana Shipping (NYSE: DSX) and Navios Maritime (NYSE: NM) could not escape the impact of depressed drybulk rates and saw their stocks tumble by 17 and 13 percent, respectively. Oddly enough, that whipping boy of the drybulk sector, DryShips (Nasdaq: DRYS) managed to lose only six percent in 2010, beating the average eight percent decline for the sector as a whole. DryShips is now toying with a foray into the tanker sector.

21

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THE MARITIME EXECUTIVE

OutlOOk fOr 2011

Here’s what we know now: In a year of global economic recovery and strong demand for oil and other commodities, most shipping companies struggled to break even. Why? Because freight rates remained stubbornly low due to the vast oversupply of tonnage. Too many ships chasing too few cargoes. Those companies that managed to do well were either in the cruise line business or had unusually strong balance sheets. Will things change in 2011? Probably not. Despite the fact that (a) the economic recovery will continue and perhaps even accelerate, (b) the price of oil could be at or above $100 a barrel by the time you read this, and (c) global E&P spending is expected to be up another 11 percent in 2011 (on top of last year’s 11 percent rise), don’t expect any miracles from shipping stocks. The unending influx of newbuildings will see to that. And while the absolute number of new ships will not approach the levels of the last two years, it will be sufficient to keep freight rates – and the prices of maritime

JACKO’CONNELL
equities – depressed. Investors are better off looking elsewhere for profits. As we pointed out in these pages a year ago, shipping stocks tend to sink faster than almost everything else in a falling market and recover more slowly than everything else in a rising market. In other words, they’re the first to fall and the last to recover, a kind of FOLI situation, as they might say in accounting – first out, last in. Only in a raging bull market, such as we had from 2002-2007, do they dramatically outperform, and a raging bull market is not something that is even remotely in the cards for 2011. On the other hand, following the theory that the cup is always half full, now might be the ideal time to get in. These stocks are cheap. Get’em while you can. new hires. Many are boosting dividends instead, a far more welcome way of rewarding shareholders than stock buybacks. With the extension of the Bush tax cuts, dividends will continue to be taxed at preferential rates for two more years – a strong incentive. Moreover, the yield on many dividend-paying stocks exceeds what you can get on Treasurys and other fixed income investments. There’s a famous strategy called the “Dogs of the Dow.” You may have heard of it. It means buying the 10 highest yielding stocks in the Dow Jones Industrial Average (there are 30 stocks in the DJIA). They’re called “dogs” because the high yield suggests they didn’t appreciate much in the year just ended and therefore lagged the market. Last year the ten “Dogs of the Dow” had a total return (price appreciation + dividends) of 21 percent, versus 14 percent for the entire Dow. How do you like 21 percent? For your guidance, the Dogs are (with their yields in parentheses): AT&T (5.8), Verizon (5.5), Pfizer (4.6), Merck (4.2), Kraft (3.7), Johnson & Johnson (3.5), Intel (3.4), DuPont (3.3), McDonald’s (3.2) and Chevron (3.2). If you insist – despite all of the above – on buying shipping stocks, go right ahead. There are lots of high-yielding equities in that universe too. Let’s dub them “Dogs of the Deep.” I’ll even name some for you (yields once again in parentheses): Capital Product Partners (11.0), Teekay Tankers (10.0), Genmar (9.3), Navios Maritime Partners (8.1), Knightsbridge (7.2), Teekay Offshore Partners (6.7), Nordic American Tankers (6.4), Ship Finance (6.2), OSG (4.7), Horizon Lines (4.0). There. Now you’re all set. You’re welcome. Happy New Year, and happy investing! MarEx

JANUARY/FEBRUARY 2011

Jack o’Connell, the senior editor of this

22

PlAying the Dogs

Here’s another idea: dividend stocks. Companies are sitting on tons of cash. They’re making money hand over fist and reluctant to spend it on things like plant and equipment and, heaven forbid,

magazine and a former maritime executive, is a private investor who may own shares in some of the companies mentioned in his columns. The views expressed in this column are his and his alone and are not in any way to be construed as investment advice.

THE MARITIME EXECUTIVE

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Why America Needs the
By H. Clayton Cook, Jr.

24

JoneS ACt
The Jones AcT is periodicAlly criTicized by ricArdiAn economists and certain elements in U.s. society and by non-citizen maritime interests seeking to penetrate the U.s. market. however, it serves as an incentive to maritime sector investment by providing a barrier to entry for lower-cost foreign carriers that are not subject to the same wage, labor and environmental regulations as U.s. shipbuilders and operators.

THE MARITIME EXECUTIVE

Legal Precedents and the Concept of “Dual Use”

“The Jones Act is an essential feature of U.S. national security policy as it provides required capacity to support national security needs and avoid complete dependence on ships controlled by foreign nations. Since the U.S. maritime position in international trades has declined significantly in the last three decades, the Jones Act is the primary market for U.S. shipyards and operators, and its maintenance is key to American Shipping Company’s continued success.”
– AmeriCAn ShiPPing ComPAny Web Site

The reservation of the economic benefits of the nation's domestic waterborne commerce to U.s. citizens owning and operating vessels built in the United states was first introduced by the continental congress and later incorporated in our navigation Act of 1817 (1817 Act). our "Jones Act," section 27 of the Merchant Marine Act of 1920, now codified as section 55102 of Title 46 of the United states code, is simply its most recent form. in the post-World War ii world, we have seen similar reservations of commercial opportunities for U.s. citizens, with broad support in both republican and democratic circles, in the outer continental shelf lands Act of 1953, the Fishery conservation and Management Act of 1976, the law of the sea, exclusive economic zone proclamation of 1983 (eez), and the American Fisheries Act of 1998. in economic terms, the Jones Act is neither a U.s. nor an international anomaly. Worldwide, eez national-build requirements are widespread. consider the current situation in brazil. The first naval battle of our War of independence involved the June 1775 seizure of the hMs Margaretta by two patriot-armed commercial sloops in waters adjacent to Machias, Maine. The importance of the commercial vessel and privateer fleets commissioned by the continental congress and by the individual states was manifest in both the revolutionary War and the War of 1812. The 1817 Act simply confirmed the importance of this U.s.-owned and U.s.-built "dual-use" tonnage. commercial vessels were converted to war time use by the Union and the confederacy. president Theodore roosevelt’s Great White Fleet required the support of commercial colliers. in the run-up to and during World War i, the U.s. found itself lacking vessels for its commercial trades and its north Atlantic wartime requirements. The shipping Act of 1916 and the Merchant Marine Acts of 1920 and 1936 were intended to prevent a recurrence of these problems. The 1916 Act addressed U.s. citizenship. The 1920 Act dealt with the role of our domestic trades in meeting these objectives with its section 27 U.s.-build requirement. The 1936 Act required U.s. ownership of U.s.-built vessels for participation in Maritime Administration (MArAd) "differential subsidy" programs that allowed the U.s.-flag owner to approximate the operating and capital costs of lower-cost foreign competitors with reserve funds to provide a tax "neutrality." The Merchant Ma-

jones act

Aside from its strategic importance, a revitalized maritime industry would boost the struggling U.S. economy, relieve highway congestion, and create badly needed jobs.
rine Act of 1970 extended the differential subsidies to the international bulk trades and provided a revised Capital Construction Fund (CCF) tax-deferral program for the liner and bulk trades and Great Lakes and non-contiguous domestic services. The 1936 Act helped to support our U.S. shipyards in the run-up to World War II. The 1970 Act ushered in a decade of U.S. shipyard expansions and series productivity improvements. The decade witnessed new vessel concept designs by U.S. naval architects and marine engineers for container, LASH and Ro-Ro vessels. These were built by U.S. shipyards, financed by U.S. banks and leasing companies, and proven as first-in-service designs by U.S. and international carriers. The designs for these 1970 Act dual-use vessels incorporated national defense features funded by the U.S. In the 1980s, "subsidies" became politically unfashionable. Following the Reagan Administration's termination of the differential subsidy programs and unable to compete in operating or capital costs, U.S. international fleet operators who had provided the Department of Defense (DOD) with access to the majority of its dual-use tonnage sold their fleets to foreign shipping lines or simply ceased international operations. With the termination of these programs, the shipyards that had been the largest private sector employers in Massachusetts (General Dynamics in Quincy), Pennsylvania (Sun Shipbuilding & Dry Dock in Chester) and Maryland (Bethlehem Sparrows Point in Baltimore) were closed. Other yards on the East, Gulf and West Coasts were downsized or converted from commercial to military production, and the jobs associated with the supplier infrastructure simply disappeared. Today, our U.S. shipyards build few large commercial vessels. The lack of multiple-vessel series contracts and volume purchases of ship components makes new vessels significantly more costly than foreign builds. Yet the U.S. shipbuilding industry remains strategically important and cannot be sustained by military orders alone. Recent foreign-partnering, series-production successes at the Aker yard in Philadelphia and National Steel & Shipbuilding in San Diego have confirmed that these yards can build commercially priced vessels for the Jones Act market.

The merits of maritime alternatives to highway-based truck transportation are well recognized. The urbanized northeastern seaboard of Jean Gottmann's Megalopolis is well-suited to Atlantic Coast Ro-Ro services that would provide a water alternative to highly congested Interstate 95 and Interstate 81. This “highways to waterways” shift can bring more fuel-efficient transportation, lower highway and bridge maintenance charges, and improved air quality and safety. The Energy Independence and Security Act of 2007 contained provisions establishing a formal marine highway program within the federal government. The act required the Department of Transportation (DOT) to establish a program for the designation of transportation projects to mitigate landside congestion and the designation of water transportation routes as extensions of and alternatives to the existing surface modes. Special attention was to be given to coastal corridors. But the act failed to provide funding. Congress and the Administration have provided modest amounts for the America's Marine Highway (AMH) Program, which have been used for shipyard grants and port infrastructure improvements. However, private sector entrepreneurs are the real “drivers,” and the program must attract these to succeed. Successful alternatives to highway transport require frequency of service and multiple-vessel fleets with individual vessels costing $100 to $200 million and a fleet in the $1 billion range. Attracting this type of investment in the private sector will be difficult, if not impossible, and provides an obvious basis for the use of MARAD Title XI financing guarantees and other U.S. government assistance.

america’s Marine Highway

25

JANUARY/FEBRUARY 2011 THE MARITIME EXECUTIVE

Rebuilding america’s shipyards

The U.S. shipbuilding industry serves both military and commercial markets, and it cannot be sustained by either market standing alone. When shipyards close – with skilled workers laid off and efficiencies and institutional knowledge lost – they are not easily reconstituted. In Louisiana, the state’s largest private sector manufacturing employer, Avondale Shipyard – having been converted from commercial to military construction to survive – now faces closure when it completes its current U.S. government contracts in 2012. Today, DOD and DOT are engaged in a project to develop and design, and see to the construction and operation of, a series

jones act
of dual-use vessels that will be both commercially viable and capable of meeting a portion of DOD's military sealift needs. The project envisions a Ro-Ro vessel that can be constructed in series, benefitting from shipyard learning curves and quantity purchasing to reduce the per-ship costs for prospective owners. The I-95 corridor is at the heart of this, and one of the main attractions is the use of LNG dual-fuel engines with DOD paying for the increased costs as "national defense" features. If successful, this DOT/DOD project will meet the objectives of both DOT’s America’s Marine Highway Program and DOD’s Strategic Sealift Program. It will help sustain and perhaps revitalize the struggling domestic shipbuilding industry that is essential to the construction and repair of the DOD fleet. This important effort would not be possible without Jones Act protection. Will it succeed? I look at Saltchuck's TOTE and its successful Portland-to-Anchorage Ro-Ro service with NASSCO 2003-built, $150 million Ro-Ros. TOTE has publicly stated that an I-95 corridor Ro-Ro service with U.S.-built Ro-Ros would be feasible if more favorable shore-side labor agreements could be achieved. So I am optimistic.

JANUARY/FEBRUARY 2011

26

Persuasive economic Benefits

I’m sometimes told that a particular project cannot succeed because the cost of the Jones Act vessel is some multiple of the cost of a similar foreign vessel. But isn't the real test whether the vessel's fully financed cost will fit into a business plan that will provide acceptable returns to investors? When I inquire about this and the use of MARAD programs to reduce the vessel’s fully financed costs, I am often told that “No, no, the computations have not been done because the U.S. price is just too expensive.” So I wonder about the relevance of these foreign shipyard price comparisons and view them with some skepticism. Critics are fond of saying that the Jones Act only benefits a small number of unionized shipyard workers. But the U.S.-build requirement benefits workers in both union and non-union shipyards and component manufacturing jobs across the U.S. It benefits employees at naval architect firms and ship classification societies, in ship broker and ship insurer firms, and at banks and ship financing and law firms. And it protects the substantial federal, state and local tax revenues involved. The American Shipping Company’s Web site catalogs the current Jones Act benefits as “$14 billion in annual economic output and 84,000 jobs in U.S. shipyards, 70,000 jobs working on or with Jones Act vessels, and over 39,000 vessels of all sizes representing an investment of $30 billion.” A 2010 PriceWaterhouseCoopers

study for the Transportation Institute concluded that, for the most recent year for which information was available, the Jones Act was responsible for 499,676 Jones Act-related jobs, $100.3 billion in economic output, and $11.4 billion in federal, state and local taxes. So on this benefits issue I am a bit of the view that, while everyone is entitled to their own opinions about the merits of the Jones Act, they are not entitled to their own Jones Act “facts.” Critics also say that the Jones Act stifles domestic trade vessel investment. But I believe the very opposite is true – that the Jones Act provides an attractive investment environment in which barriers to entry are high and investor returns are reasonably assured. I look to the more than $5 billion in Jones Act trade renewals and expansions of the past decade as evidence of this proposition. And I look to the $1.2 billion Aker Philadelphia Shipyard/Overseas Shipholding Group petroleum tanker project as evidence of the Jones Act trade's attraction to thoughtful non-citizen investors such as the Oslo-based, predominately Norwegian-owned American Shipping Company, which considers the Jones Act to be “key to American Shipping MarEx Company’s continued success.”

THE MARITIME EXECUTIVE

H. Clayton Cook, Jr. is Counsel to Seward & Kissel LLP and a former General Counsel of the Maritime Administration.

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CARNIVALCORPORATION

28

Carni
C O R P O R A T I O N
The world’s biggest cruise line just keeps getting better.
By Robert C. Spicer
Our cover story this issue focuses on the world’s largest cruise line and its dynamic leader, Micky Arison. Founded in 1972 with one ship by Micky’s father, Ted Arison, Carnival today operates ten distinct brands and a total of 98 vessels. It reported revenues of $14.5 billion in fiscal 2010 and net income of $2.0 billion. It carries roughly half of all global cruise passengers and has its headquarters in both Miami and London. In this Case Study we will examine the origins and growth of one of the world’s most innovative organizations. It is a story of innovation and creativity that created a unique vacation experience for people of all ages and economic backgrounds. In the accompanying Executive Interview, we will explore the personal story behind the success story.
HUMBLE BEGINNINGS
From its inception in 1972 as a subsidiary of American International Travel Service, Carnival has grown steadily under the leadership of first Ted and then Micky Arison. Its first vessel, the TSS Mardi Gras, famously ran aground on its maiden voyage from the Port of Miami. From such humble beginnings are great enterprises made. Ted Arison purchased the company from AITS in 1974 for $1 and the assumption of the company’s $5 million ($21.5 million when adjusted for inflation) in debt. Micky Arison became the Reservations Manager and began working with his father to develop new sales strategies. Through the successful implementation of more affordable pricing and all-inclusive packages, Carnival Cruise Lines was able to grow, acquiring existing tonnage to meet the needs of an expanding market.

THE MARITIME EXECUTIVE

JANUARY/FEBRUARY 2011

CARNIVALCORPORATION

ival
The Coral Princess at sea.

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JANUARY/FEBRUARY 2011 THE MARITIME EXECUTIVE

In 1975 Carnival purchased the Empress of Britain and entered her into service as the TSS Carnivale. In 1978 came the S.A. Vaal, which underwent a $30 million refurbishment before entering service as the Festivale. At the time she was the

largest and fastest vessel sailing from Miami to the Caribbean. By 1980 the company’s steady growth led to the announcement of a newbuild vessel, the Tropicale, which would enter service in 1982. The announcement stunned the cruise industry – it was the first newbuild in years – and sparked a shipbuilding boom, fueling the future growth of the industry. In another first, the company in 1984 began advertising on network television. This first-of-its-kind advertising featured Kathie Lee Gifford (then Johnson) as the spokeswoman for the A L L P H O T O S C O U R T E S Y C A R N I VA L C O R P O R AT I O N company.

CARNIVALCORPORATION
Growing consumer demand, fueled in part by the new TV ads and the popularity of the sitcom “Love Boat,” led to the debut of the 46,052-ton Holiday in 1985, the 47,262-ton Jubilee in 1986, and the 47,262-ton Celebration in 1987. By then Carnival had earned the distinction of “Most Popular Cruise Line in the World,” a title it holds to this day. class and the first passenger vessel to exceed 100,000 tons. She was the largest cruise ship in the world at the time. In 1997 Carnival Corporation acquired 50 percent of Costa Cruises. The Italian-based operator was Europe’s leading cruise company and was fully acquired three years later. In 1998 Carnival Cruise Lines introduced the seventh Fantasy Class Vessel, the Carnival Elation, and for the first time entered a new vessel into service on the West Coast. That same year saw the eighth and final Fantasy Class vessel, the Carnival Paradise, enter service, and the acquisition of a 68 percent stake in Cunard Line, the prestigious operator of the world-famous Queen Elizabeth 2. Carnival purchased the remaining 32 percent the following year and acquired full control of Seabourn as well.

GOING PUBLIC AND FUNDING GROWTH

JANUARY/FEBRUARY 2011

In 1987 the company went public under the direction of Micky Arison, selling 20 percent of its stock and generating $400 million, which would be used to promote further expansion through the acquisition of existing tonnage. The company’s first and most notable purchase was Holland America Line in 1989. The purchase also included Westours, which would later be renamed Holland America Princess Alaska Tours. Carnival launched the Fantasy, the first and namesake vessel

“FUN SHIPS” AND THE PRINCESS MERGER

The last two years of the twentieth century saw the launch of the

30

THE MARITIME EXECUTIVE

The Carnival Cruise Line’s Carnival Dream heading back to sea.

of an entirely new class, in 1990. Upon entering service she became the first new cruise ship to be placed on three- and four-day Bahamas cruises out of Miami. The Fantasy Class would be so successful that Carnival would eventually construct seven more, making it the most ships in one class ever built. In 1992 Carnival purchased a 25 percent stake in the ultra-luxury Seabourn Cruise Lines. At the time Seabourn consisted of two 208-passenger, all-suite vessels. Carnival’s ownership of Seabourn increased to 50 percent in 1996 and full control in 1999. Seabourn’s fleet was eventually expanded to four with the construction of two new 450-passenger vessels. The third Fantasy Class vessel, the Carnival Sensation (the Carnival Ecstasy had been launched in 1991), was introduced in 1993. She was followed by the Carnival Fascination in 1994, the same year that Carnival’s parent company was renamed Carnival Corporation to distinguish it from its flagship brand, Carnival Cruise Lines. The fifth and sixth Fantasy Class ships, the Carnival Imagination and Carnival Inspiration, were launched in 1995 and 1996. Carnival Cruise Lines also introduced the Carnival Destiny in 1996, the first of an entirely new

Fun in the Atrium aboard the Carnival Dream.

second Destiny Class vessel, the Carnival Triumph, in 1999 and the third, the Carnival Victory, in 2000. In 2001 came the first of a new class of vessel, the 88,500 ton Carnival Spirit. Setting new standards for the industry, the Carnival Spirit became the first new “Fun Ship” ever positioned in the Alaska and Hawaii markets.

CARNIVALCORPORATION
Following the trend of new development it had started, Carnival introduced three new ships in 2002: a second Spirit Class vessel, the Carnival Pride; the third Spirit Class vessel, the Carnival Legend; and the debut of the 110,000-ton Carnival Conquest, unveiling yet another class for the growing company. A year later the second Conquest Class vessel, the Carnival Glory, began her year-round, seven-day cruises from Port Canaveral, Florida. Carnival Corporation took its expansion efforts to a new level in 2003 with the completion of the merger with P&O Princess Cruises, a merger that included Princess Cruises, P&O Cruises, AIDA, P&O Cruises Australia, and the tour operator Princess Tours. The combination of Carnival and Princess marked the creation of the first truly global cruise company, Carnival Corporation & plc. In 2004 the Carnival Miracle, Carnival’s fourth Spirit Class vessel, began a series of voyages from Jacksonville, Florida, the first “Fun Ship” to operate out of this facility. That same year Carnival Cruise Lines launched its third 110,000-ton Conquest Class vessel, the Carnival Valor, which became the largest “Fun Ship” to offer year-round, sevenday cruises out of the Port of Miami. In 2005 a

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fourth 110,000-ton Conquest Class vessel, the Carnival Liberty, was launched, becoming Carnival’s first Mediterranean cruise option. The fifth Conquest Class vessel, the Carnival Freedom, joined the fleet in 2007 and also served the Mediterranean market, offering stops in the Greek Isles and Turkey. Carnival brought another new class of vessel to market in 2008: The 113,000-ton Carnival Splendor introduced the line’s first twelve-day cruise program in Northern Europe. Carnival further expanded its European operations when it finalized a joint venture with Spain’s Orizonia Corporation in 2008. The multiship joint venture created a new company called Iberocruceros to serve the Spanish cruise market. Carnival acquired 100 percent of Iberocruceros in 2009, which marked the debut of yet another ship: The 130,000-ton Carnival Dream became the largest “Fun Ship” ever constructed. In 2010 six new vessels were added, including Cunard Line’s much-anticipated, 2,068-passenger Queen Elizabeth, which was christened by Her Majesty Queen Elizabeth II in October. Carnival intends to launch two more 130,000-ton ships in the near future: The Carnival Magic is scheduled to enter service in Europe during the spring of 2011 and the Carnival Breeze in the spring of 2012. have continued to improve for both our North American and European brands, particularly for our peak summer season,” noted Micky Arison. “We are optimistic these positive trends are an indicator of a strong ‘wave’ season, our heaviest booking period, which begins in early January. Given the recent cold weather and snow, particularly in the northern U.S. and Europe, there is no better time to book a cruise vacation.” With a fleet of 98 ships in operation and 10 new vessels scheduled for delivery between now and May 2014, Carnival is well positioned to lead the way as MarEx cruise industry traffic rebounds from recession lows.
Wet and wild aboard the Carnival Fantasy.

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JANUARY/FEBRUARY 2011

AN IMPROVING WORLD ECONOMY MEANS EVEN BETTER TIMES AHEAD
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MICKYARISON

JANUARY / FEBRUARY 2011

34

The dynamic young leader and founder By Robert C. Spicer of Hornbeck Offshore Chairman & Chief Executive Officer, talks about his vision for the future and keeping the company “one step ahead.” MarEx: There is a plaque with a picture of your father, Ted Arison, in the lobby of

Carnival Corporation

Micky Arison

THE MARITIME EXECUTIVE

The dynamic leader of the world’s largest cruise company speaks out on the influence of his father, the future of Carnival and the industry, and the Miami Heat.

Carnival’s Miami headquarters. I am always impressed when I see that plaque because it reminds me of the great things people can do at any age. Your father was in his early fifties when he formed Carnival. How did he influence your business thinking and your leadership style? Arison: Ted was the ultimate optimist. He launched Carnival Cruise Lines in 1972 after the breakup with his partner in Norwegian Caribbean Lines and watched as many of his employees joined NCL. Nevertheless, he was determined to remain in the cruise business and was optimistic that Carnival would be successful although it wasn’t so apparent from the beginning. My father created a wonderful, familylike atmosphere at Carnival and lived by the credo of hiring good people and letting them do their jobs – and we strive to live up to this philosophy to this day.

MICKYARISON
My father created a wonderful, family-like atmosphere at Carnival and lived by the credo of hiring good people and letting them do their jobs – and we strive to live up to this philosophy to this day.
MarEx: Carnival has a famous and important story in its history that is remembered by all those who were there in the beginning. It’s the grounding of the TSS Mardi Gras on her maiden voyage. What was that experience like and how did it help bring the Carnival team together? Arison: My memories of Carnival’s early years are quite vivid. I remember being on the bridge wing of the Mardi Gras when it ran aground on a sandbar outside the Port of Miami in 1972, garnering worldwide media attention. With the media monitoring the ship’s radio communications, my father and Meshulum Zonis, his trusted confidant and Senior Vice President of Operations, began communicating in Hebrew to avoid having their conversations intercepted and reported by the press. With the help of the tides, the Mardi Gras was eventually freed. However, the struggles continued, When the ship arrived in San Juan we were unable to get credit to buy fuel, so we had to empty the cash registers to pay for fuel for the return trip to Miami. MarEx: I have always been amazed at the Carnival story. Your father created an entirely new industry from the ashes of the dead transatlantic liner era. He envisioned a unique kind of vacation experience that would be available to the average family and that you then built into today’s Carnival. How did he come up with the idea? Arison: My father believed that cruising was such a wonderful vacation that it should be made available to everyone, not to just the well-heeled, as it was back in the 1970s. He thought by creating a fun onboard environment that Middle America could afford, Carnival could carve out a niche in the cruise market. He obviously was correct as within 15 years we went from the back of the pack to the world’s largest and most successful cruise company. MarEx: Carnival has always had an exceptional and dedicated management team with longevity who helped grow the company into the largest cruise ship operator in the world. When you first assembled your own management team, what attributes did you look for? Arison: At Carnival Cruise Lines I really inherited most of the senior management team from my father when I was named president in 1979. He had hired very talented and dedicated people in whom I had a great deal of trust. With some of the other brands we’ve acquired over the years we made a number of management changes and conducted searches to make sure we had the right people leading these companies. We were looking for bright, trustworthy people of integrity who had

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JANUARY / FEBRUARY 2011

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MICKYARISON
…it only takes one big success to be a successful entrepreneur.
demonstrated excellent management skills in previous positions. Some had a cruise industry background while others came from the outside. MarEx: Looking back, could you ever imagine Carnival would become the industry powerhouse it is today? Arison: Very early in the creation of Carnival we had no grand scheme – it was really just about survival. My father bought a second ship, the Carnivale, so that just in case something happened to our first ship we wouldn’t be out of business. When I took over the Carnival presidency in 1979, our revenues were $44 million with earnings of $12 million. I didn’t have a grand scheme either, but I knew we had a winning formula with our “Fun Ship” philosophy. By the 1980s when we were launching the Tropicale – the first new cruise ship in many years – and debuting the cruise industry’s first national TV ad campaign, we were on our way to becoming a cruise industry innovator and leader. But we knew that a Carnival cruise wasn’t for everyone and that there was tremendous potential in other segments of the market in North America and beyond. We ultimately developed a strategy for becoming a global operator. We looked at launching new brands but ultimately decided on acquisitions. That started with the purchase of Holland America in 1989 and continued with Seabourn, Costa and Cunard until 2003 when we completed the P&O Princess merger. By then, we were truly a global company with some of the world’s most successful and respected cruise brands in our portfolio. MarEx: Early in your career you worked in Reservations and helped develop new sales strategies with your father. You worked in most of the other departments as well. Which one did you enjoy most? Arison: I was bitten by the cruise bug very early and knew there was no other business I wanted to be in. All of the positions I held gave me a greater understanding of how the business works. My very first job on board was as a cruise staff member, and it helped me understand the challenges that shipboard employees face each and every day. I really enjoyed Reservations though because working there felt like you always had your finger on the pulse of the company. Even today, we get pretty detailed reservations reports from our 10 brands. MarEx: Innovation is defined as the creation of something new. Your father created a new business and put tens of thousands of people to work, maybe hundreds of thousands if you count all the related industries surrounding Carnival. Why was he so innovative? Was he like that in his other ventures also? Arison: My father was very entrepreneurial and an optimist in a “glass half full” kind of way. No matter what happened, he wasn’t afraid to take chances and follow his instincts. Not all of his ventures turned out as well as Carnival, but it only takes one big success to be a successful entrepreneur. MarEx: What is the greatest lesson you learned from your father?

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MICKYARISON
We’ve been operating in China under our Costa brand since 2006. While there are challenges with any new source market, China is a growing cruise region with tremendous potential.
Arison: The best lesson I learned from my father was to hire good people to run your businesses, give them the support they need to be successful, and let them do the jobs you hired them to do. MarEx: In 1978 Carnival acquired the S.A. Vaal, which underwent a $30 million refurbishment before entering service for Carnival as the Festivale. At the time she was the largest and fastest vessel sailing from Miami to the Caribbean. Compared to today, however, she was a small ship. What is the optimal size of cruise ships in your view? Do you see larger ships entering the marketplace or will the next generation be scaled down? Arison: The optimal size ship is different depending on the market segment. For a luxury brand such as Seabourn, smaller, low-density ships in the 32,000-ton range are a better fit whereas contemporary operators such as Carnival or Princess build higher-density ships in the 130,000 to 140,000-ton range. That’s not to say we wouldn’t build ships a little larger for these brands, but I would not expect any quantum leaps. Our largest ship currently is the Queen Mary 2 at 150,000 tons, and it is unlikely we will build anything larger than that. MarEx: Carnival is recognized for carrying more passengers than any other line in the world. Yet the market has been mostly North American and European-based. Do you see a more aggressive outreach to market China in the near future? Arison: There is a tremendous opportunity in China. We’ve been operating in China under our Costa brand since 2006. While there are challenges with any new source market, China is a growing cruise region with tremendous potential. MarEx: Carnival has multiple distinct brands offering service in North and South America, the United Kingdom, Germany, Italy, France, Spain and Australia. How large do you see the Carnival fleet becoming during the next decade? Will the number of ships level off? Arison: The cruise industry went through an incredible period of growth in the 1990s/2000s, and there was simply no way that it could maintain that pace for an extended period of time. For Carnival, we don’t envision introducing more than two to three vessels a year on a corporate-wide basis. In fact, we have 10 new ships scheduled to enter service between now and 2014, which works out to two to three ships a year for the corporation.

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JANUARY / FEBRUARY 2011

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MICKYARISON
Emission Control Areas (ECAs) …will require us to use a higher grade of fuel, which currently is some 15 to 20 percent more expensive than the fuels used today. …demand will increase so supply availability could be an issue too.
MarEx: When you go to sleep at night what is your biggest worry? Arison: The things that have the most potential to hurt our company are things we have no control over. I learned long ago that we can only worry about the things we can control. MarEx: What do you see on the horizon as the biggest challenges to the cruise industry generally and Carnival specifically? Arison: Emission Control Areas (ECAs) are going to be a challenge for the entire shipping industry. ECAs will require us to use a higher grade of fuel, which currently is some 15 to 20 percent more expensive than the fuels used today. And with all of shipping required to comply, demand will increase so supply availability could be an issue too. ECAs could have wideranging impact, including on ports of call and homeports. We’ll need to generate higher pricing to offset at least a portion of the expected increase in fuel costs. MarEx: Business is about risk. What is the biggest risk you took in growing Carnival? Arison: Probably the biggest risk we took was undergoing such a rapid expansion in the 1980s – introducing four new ships in a period of five years, nearly tripling our capacity – that it propelled Carnival Cruise Lines from a middle-of-the-pack brand to the world’s number one cruise operator. We were betting that the market was ready for expansion, and obviously we were right. MarEx: Do you have any plans for turning over the helm soon? Arison: Right now I have no plans on going anywhere. I still really enjoy the cruise business and my job. When that time comes, however, there is plenty of great talent within our company to fill my shoes. MarEx: Finally, the answer we all need to know: As the owner of the Miami Heat, when do you think we will see the next Heat championship? Arison: Can you ask me this question in June? I’m superstitious so I’m not going to make predictions, but this team is really fun to watch. MarEx: Fair enough. And thanks for a great interview. Robert C. Spicer is a former cruise line executive and Chief Engineering Officer in the U.S. Merchant Marine. He is currently working toward a Doctor of Education degree in Organizational MarEx Learning. He may be reached at rspicer@gseacs.com.

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Emerald Isle: THE PRosPECTs
By Barry Parker
JANUARY/FEBRUARY 2011

40

REAllY ARE GREENER
Some of the best brains in shipping are choosing Ireland for their base. Here’s why.

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THE MARITIME EXECUTIVE

The IrIsh MarITIMe DevelopMenT offIce (IMDo) was established in 1999 for the express purpose of promoting shipping in Ireland, and it is reaping rewards. according to Glenn Murphy, IMDo’s Director, Ireland has been successful in attracting international businesses across a range of industries because of its skilled workforce and attractive taxation arrangements for cross-border transactions. he added, “Because we are an island nation, with a long maritime tradition, we have built up a special expertise in shipping. There are currently 10,000 people employed in the shipping industry in Ireland.” The roster of liner companies with an Irish presence includes, for example, Maersk, oocl, Msc and cMa-cGM.

Ardmore And d’Amico

In line with IMDo’s efforts to go beyond the mainstay shortsea and ferry companies connecting Ireland to Britain and the continent, ardmore shipping, a specialist in the product tanker sector, set up shop in cork this past summer. Its ceo and founder, Tony Gurnee, is an ex-U.s. navy officer and citibank honcho and the cfo who took Teekay public in the mid-1990s. The chairman of the Board is reg Jones, III, the one-time head of transportation banking at Goldman sachs, who now

runs Greenbriar equity Group, a private equity powerhouse in transportation. Greenbriar, whose funds have logged investments from notables such as the Bill & Melinda Gates foundation, has worked with Irish financiers on other portfolio deals as well. ardmore, running several modern product tankers fixed out on time charters, is building an organization that draws on the talent pool available in Ireland. The expertise of ardmore’s top operations man, Mark cameron (also a Teekay veteran), in emission rules and “green” fleet practices hints at the direction in which ardmore will add value in the increasingly regulated e.U. and elsewhere. The big boys who contract out to demanding customers in the oil business have taken notice. The Japanese-built (2004), Marshall Islands-flagged, oil/products carrier ardmore seamaster (46,000 dwt., ex-formosa 12), for instance, is on charter to the listed Danish operator norden and trades in the norient product Tankers pool, a norden venture run jointly with cyprus-based Interorient ship Management. Tony Gurnee’s new entity is in the company of other wellknown international shipping entities that have chosen to operate from Ireland. D’amico International Tankers, a subsidiary of d’amico International shipping, is based in Dublin, where it maintains chartering and operations offices. Glenda Internation-

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JANUARY/FEBRUARY 2011 THE MARITIME EXECUTIVE

al, a joint venture between d’Amico and the commodity behemoth Glencore International, operates nearly three dozen vessels in the Glenda Pool with headquarters in Dublin. D’Amico is also partnered with Mitsubishi Corporation and operates tankers in High Pool Tankers out of Dublin. More than merely a postal address, the Dublin-based entity’s signature is on time charters with oil majors and more than $200 million of debt with international shipping banks.

Show Me the Money

Not surprisingly, the Irish maritime cluster includes a formidable ship finance component. Paul Packard, Head of Maritime Industries at the Bank of Ireland, observed, “We believe there remain good opportunities for shipping companies to consider

relocating to Ireland.” Although not currently seeking new international ship finance business, Bank of Ireland provides senior and junior debt (on a limited basis) along with offerings to hedge financial, energy and freight risks. Packard added, “We believe that the combination of an E.U. jurisdiction in the Eurozone with English as the first language and an attractive tonnage tax remains as compelling as ever.” A recent arrival on the Irish maritime finance scene has been Northern Shipping Funds (tied to the well-known Northern Navigation), a leasing company that provides niche financing for shipowners. Perhaps due to the mid-2000s commodity price boom and public market interest in shipping, maritime companies have increasingly borrowed from the toolkit of structured finance, where deal architecture is optimized to benefit legally from differ-

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ent regulatory and taxation regimes. Catherine Duffy, a Partner at Dublin-based lawyers A&L Goodbody, sits at the nexus of aircraft and maritime finance, heading her firm’s practice in both areas. She described a conscious effort on the part of the Irish government to create an environment conducive to international finance and leasing in the field of aviation through the establishment of the Shannon Free Airport Zone and subsequently the International Financial Services Centre in Dublin. Many of the fiscal and other incentives associated with those initiatives are now embedded in Irish domestic law and facilitate cross-border financing and leasing on a general scale and particularly in assets like aircraft and ships. Duffy explained that she was a member of a committee advising the IMDO following its establishment in 1999 and acknowledged that efforts to attract shipping companies have moved at a slower pace than aviation. But she is quick to point out that “There is no reason why the Irish finance and leasing incentives that have been so successful with aviation could not work for shipping.”

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Jim Healy, Director of the accounting firm KPMG’s transportation practice in Dublin, has also worked closely with the IMDO. He explained the tax advantages of doing business in Ireland and the two main choices available to companies considering moving there: the normal tax regime, where a 12.5 percent tax rate applies, or the tonnage tax regime, where taxes are assessed based on a vessel’s net tonnage and irrespective of profitability. For regular taxpayers, the ability to depreciate maritime assets over eight years for tax purposes and a capital gains tax rate of 25 percent enable shipping companies to build up cash. The Irish tonnage tax, which is sanctioned by the E.U., offers a permanent saving, unlike the tax “deferral” possible with accelerated depreciation. Companies electing this method of taxation are not subject to capital gains. It’s very competitive compared with other, more restrictive tonnage tax regimes for reasons that include no connection to national cadet training programs and the ability to lease vessels in under various financial arrangements. Importantly, the vessels need not be flagged in Ireland, and the tonnage tax can also apply to ship managers without a requirement that they own the vessels. Beyond seagoing boxships, tankers and drybulkers, other segments that qualify include ferries, passenger ships, and certain vessels in the towing, salvage and offshore support areas. The numbers themselves, with annual tax bills based on the vessel’s net register tonnage, sell the advantages: Healy cited $10,000/ year as the tax liability for a Suezmax tanker and about half that for a Panamax bulk carrier. IMDO’s Murphy pointed out that the interaction of a 12.5 percent corporate tax rate, which he said was “the lowest in the E.U.,” with the Irish tonnage tax offered potent benefits for shipowning companies. “Under some circumstances,” he stated, “shipowners are effectively paying under two percent in taxes.” He emphasized that the 12.5 percent rate will remain despite recent widely reported problems in the Irish financial markets.

THE MARITIME EXECUTIVE

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The Nexus BeTweeN aviaTioN aNd shippiNg

KPMG’s Healy is adamant that Ireland’s network of international

ING, OFFSHORE ENERGY, PORTS & OCEANOGRAPHY • N FOR SHIPPING, SHIPBUILDING, OFFSHORE ENERGY, POR EmErald IslE HIBITION & CONFERENCE FOR SHIPPING, SHIPBUILDING OCEANOGRAPHY • NEVA EXHIBITION & CONFERENCE FO SHORE ENERGY, PORTS & OCEANOGRAPHY • NEVA EXH tax treaties, which has been so attractive to aircraft owners, would PING, be equally applicable for vessel-owning companies. Healy works SHIPBUILDING, OFFSHORE ENERGY, PORTS & OCE closely with financiers, lawyers, and vessel owners on structuring & CONFERENCE FOR SHIPPING, SHIPBUILDING, OFFSHO deals and says there is no withholding required on lease payments RAPHY • NEVA EXHIBITION & CONFERENCE FOR SHIPPIN out of Ireland, or on rents coming in from a charterer based in most of the jurisdictions which have signed a reciprocal ENERGY, PORTS & OCEANOGRAPHY • NEVA EXHIBITION tax treaty Confirm your position in with Ireland (more than 50 countries). Healy noted, “The favorSHIPBUILDING, OFFSHORE ENERGY, PORTS & OCEANOG the Russian market at... able tax treatment on aircraft leases works the same way for vesFERENCE FOR SHIPPING, SHIPBUILDING, OFFSHORE ENE sels.” Building on the example of the Irish lessor, Healy described the attractiveness to providers of both debt and equity: Because EXHIBITION & CONFERENCE FOR SHIPPING, SHIPB NEVA there is usually no withholding tax on either interest payments or dividends coming out of Ireland when the recipient isPORTS & OCEANOGRAPHY • NEVA EXHIBITION & CONFE situated 2011 within the tax treaty network, financiers have the flexibility to OFFSHORE ENERGY, PORTS & OCEANOGRAPHY • N bEr ING, PtEm fund their operations in the most suitable manner. 23 SE , 20 FOR SSiA Another ongoing but less well-known success story from the SHIPPING, SHIPBUILDING, OFFSHORE ENERGY, POR ru rg, aircraft sector may also be applicable to shipping. A&L GoodHIBITION & CONFERENCE FOR SHIPPING, SHIPBUILDING rSbu EtE St. P body’s Catherine Duffy is Chair of the Legal Advisory Panel to OCEANOGRAPHY • NEVA EXHIBITION & CONFERENCE FO the Aviation Working Group to the 2001 “Cape Town ConvenSHORE tion.” The Convention (officially the United Nations Convention ENERGY, PORTS & OCEANOGRAPHY • NEVA EXH on International Interests in Mobile Equipment) provides for an PING, SHIPBUILDING, OFFSHORE ENERGY, PORTS & OCE international and uniform set of rules and remedies applicable to 43 & esinterests in mobile assets listed on the international registryCONFERENCE FOR SHIPPING, SHIPBUILDING, OFFSHO tablished under the Convention. The Convention is to be read in • NEVA EXHIBITION & CONFERENCE FOR SHIPPIN RAPHY conjunction with protocols specific to particular types of mobile ENERGY, PORTS & OCEANOGRAPHY • NEVA EXHIBITION equipment. The aircraft protocol was the first to be put in place and has been up and running since 2006. The protocol SHIPBUILDING, OFFSHORE ENERGY, PORTS & OCEANOG in respect of rolling stock followed with space on its way. There is provision for a protocol on shipping too, butFERENCE FOR SHIPPING, SHIPBUILDING, OFFSHORE ENE it has been slow to get off the ground. The Convention does not over- EXHIBITION & CONFERENCE FOR SHIPPING, SHIPB NEVA TWENTY YEARS DEVELOPMENT ride the parties’ ability to contractually agree to the terms of their PORTS & OCEANOGRAPHY • NEVA EXHIBITION & CONFE OF THE RUSSIAN COMMERCIAL financing; but it does, through a series of rights and remedies MARITIME INDUSTRIES ING, OFFSHORE ENERGY, PORTS & OCEANOGRAPHY • N applicable to an interest registered against the aircraft, introduce an element of certainty, making financing more accessible and FOR SHIPPING, SHIPBUILDING, OFFSHORE ENERGY, POR less costly. Describing the successful uptake in the aviation sector, HIBITION & CONFERENCE FOR SHIPPING, SHIPBUILDING Duffy pointed out that “A uniform code of rights and remedies OCEANOGRAPHY • NEVA EXHIBITION & CONFERENCE FO ONTACT: that apply does not take away from the provisions that are already there. It enhances the ability to do business.” In the context of . Box 68, Ipswich, IP7 7ZY, UK SHORE 41628 • E-mail: info@dolphin-exhibitions.co.uk Ireland, she said, “For a Contracting State where it has in the past ENERGY, PORTS & OCEANOGRAPHY • NEVA EXH nstec-neva.com been difficult or expensive to raise finance, the Convention would SHIPBUILDING, OFFSHORE ENERGY, PORTS & OCE PING, apply onal Organisers: and make it easier and more cost-effective to raise money. & CONFERENCE FOR SHIPPING, SHIPBUILDING, OFFSHO n Management Ltd., Monaco The same benefits could apply to the shipping sector if they were to put together a protocol.” RAPHY • NEVATHE 11TH NEVA EXHIBITION EXHIBITION & CONFERENCE FOR SHIPPIN ENERGY, PORTS & OCEANOGRAPHY FOR & CONFERENCE • NEVA EXHIBITION PuttIng It all togEthEr SHIPBUILDING, OFFSHORE SHIPBUILDING,& OCEANOG All of these factors have contributed to Ireland’s ability to attract SHIPPING, ENERGY, PORTS new business. A 2006 transaction in which BNP ParibasFERENCE FOR SHIPPING, SHIPBUILDING, OFFSHORE ENE financed OFFSHORE ENERGY, 12 vessels for the liner giant CMA-CGM included an Irish borNEVA EXHIBITION & CONFERENCE FOR SHIPPING, SHIPB rower in the capital markets and a dozen special-purpose Irish PORTS & OCEANOGRAPHY shipowning entities, which then put the vessels on bareboat char- & OCEANOGRAPHY • NEVA EXHIBITION & CONFE PORTS ters to CMA-CGM. In Tony Gurnee’s deal, individual specialING, OFFSHORE ENERGY, PORTS & OCEANOGRAPHY • N purpose Irish LLCs chartered the tankers to Ardmore, which then Contact Dolphin Exhibitions: leased them to users such as Norden. FOR SHIPPING, SHIPBUILDING,Fax: +44 1449 741628 Tel: +44 1449 741801 • OFFSHORE ENERGY, POR With the global reach of bluewater vessel operators and E-mail: info@dolphin-exhibitions.co.uk HIBITION & CONFERENCE FOR SHIPPING, SHIPBUILDING ship’s service providers, who operate amid increasing regulatory Web: www.transtec-neva.com scrutiny, Ireland has proven to be an excellent base of operations. OCEANOGRAPHY •

011 A2 EV N

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THE MARITIME EXECUTIVE

Clearly, the smart money agrees.

marEx

Barry Parker writes frequently about maritime matters.

LifesavingEquipment

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Advances in Lifesaving Equipment
When it comes to safety at sea, these companies have what it takes.

Survitec's Seasava liferaft.

By MarEx Staff

It all began wIth the TiTanic. the sinking of the world’s greatest ship on april 10, 1912, taking with her 1,517 victims – many of them rich and famous – galvanized the media and focused worldwide attention on the issue of safety. the fact that the luxury liner was carrying just 20 lifeboats when she went down, enough for roughly half of her 2,227 passengers, only added to the uproar, stirring outrage and spurring demands for reform. Investigations followed on both sides of the atlantic. they found that many safety rules were simply out of date, such as the requirement that the number of lifeboats on board be based on a ship’s gross tonnage rather than on the number of passengers it could carry. by this antiquated measure the Titanic complied with the lifeboat requirement which, when tragedy struck, proved woefully inadequate. Investigators also learned that the ship had sufficient lifeboat space for all first-class passengers but not for the lower classes. In fact, most third-class passengers had no idea where the lifeboats were, much less any way of getting up to the higher decks where they were stowed. as a result of these and other findings, numerous safety improvements for ocean-going vessels were implemented, including updated lifeboat requirements, access throughout the ship for the movement of passengers, improved hull and bulkhead designs, new life-vest designs, the holding of safety drills, and better passenger notification in the event of emergency. today, safety has become big business, and there is no shortage of companies offering the latest and greatest in lifesaving equipment. here are a few of them.

LifesavingEquipment
Fassmer – “more Than one sTep ahead”

Germany’s Fassmer is a 160-year-old maker of everything from freefall lifeboats to housing for wind turbines. Its U.S. subsidiary, Fassmer Service America, is based in Miami, conveniently close to its biggest customers, and is run by General Manager Tim Klaybor. Klaybor says the SOLAS requirements for one- and fiveyear inspections of lifeboat equipment and especially the all-important onload release mechanisms are big business for his company. The U.S. subsidiary has established a Safety Management System to ensure that all work is done in accord with the highest standards and by certified personnel who are authorized to issue and sign the mandatory Certificate of Serviceability. “We offer our customers peace of mind,” said Klaybor, “and more importantly, we save lives.” Added Hans-Christian Mornhinweg, Managing Director of Fassmer Services Germany, who is responsible for worldwide after-sales service, “We like to stay more than one step ahead. For instance, you may have read that the IMO has pushed back the effective date for the implementation of new requirements for lifeboat onload release mechanisms. Well, our stainless steel hooks are already fully compliant with the newly drafted regulations, so our customers don’t have to worry.” The fifth-generation, family-run company outfitted the Norwegian Epic with 22 state-of-the-art lifeboats, each with a capacity of 292 passengers. These Space Age vessels are like nothing you’ve ever seen. On the Epic the loading and embarkation points for the lifeboats are the same, an unusual feature that makes it easier (and quicker) for passengers to board in time of emergency. In addition to lifeboats, Fassmer makes tenders and fast rescue boats, special ops vessels for the military, offshore survey vessels, and deck equipment like gangways, boarding systems, davits of all kinds and winches.

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JANUARY/FEBRUARY 2011

VIKING's Quick Donning Suit.

THE MARITIME EXECUTIVE

Viking – global saFeTy soluTions

Denmark-based Viking bills itself as “a market leader in marine and fire safety equipment,” and its five manufacturing facilities churn out marine evacuation systems, offshore evacuation and crew

transfer systems, liferafts, boats, lifesaving appliances, and protective clothing such as immersion suits, work suits, fire suits and lifejackets. It’s an especially big supplier to the military, where its inflatables, chute and slide-based evacuations systems, and immersion suits are in high demand both on the water and in the air. The company recently received final approval from the U.S. Naval Air Force to supply up to 4,500 of its PS4049 Quick Donning Suits. Designed specifically for use by U.S. military flight crews, the innovative suits will be employed on the P-3, C-130, E-6 and the new P-8. "We've been working closely with NAVAIR to deliver a suit that greatly improves the safety of naval airmen," stated Kurt Bertsch, Sales Director for the Americas. Bertsch is based in Miami, where Viking Life-Saving Equipment (America) is headquartered. Liferafts are another big item. They come in all shapes and sizes, including self-righting, and can be easily entered from the water. Viking’s six-person RescYou liferaft was instrumental recently in the rescue of a couple off the coast of New Zealand who had just completed a spectacular 10-1/2 month adventure

LifesavingEquipment

JANUARY/FEBRUARY 2011

Survitec's Marin Ark marine evacuation system.

Fassmer freefall lifeboats in triple installation.

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THE MARITIME EXECUTIVE

cruising from Port Townsend, Washington across the Pacific Ocean. The couple’s Golden Wave 42 Kattywompus unexpectedly hit a reef, quickly started taking on water and capsized. With a little help from an EPIRB (“Emergency Position-Indicating Radio Beacon”) and, of course, their Viking raft, the couple was located and quickly rescued. Viking’s innovative Shipowner Agreement service contracts have been a big hit with customers. They offer fixed-price services covering the life of the contract for liferafts, immersion suits, lifejackets and other required safety equipment at any of the company’s 270 servicing stations around the world. The latest to sign up was Stolt Tankers, a leader in the chemical tanker trade. The Stolt agreement provided for a liferaft exchange program to satisfy the carrier’s requirements for years to come. “The transparency offered by fixed price contracts and the convenience of one-stop shopping for all of a customer’s safety needs are key selling points for the Shipowner Agreement,” noted Bertsch.

can be stored in a single stowage unit. Since its acquisition by private equity firm Warburg Pincus last year, Survitec has been in a growth mode. Its latest purchase was U.S.-based Revere Supply, a leading distributor of inflatable liferafts, lifejackets and immersion suits. Revere’s product mix complements Survitec’s nicely and will enable Survitec to expand its U.S. presence.

acr electronicS – the Science of Survival

Survitec – Where Survival and technology Meet

Belfast-based Survitec has been around for more than 150 years. During that time, it has laid claim to a number of “firsts”: the first life preserver, the “Mae West,” in 1940; the first Submarine Escape Suit in 1952, and the first Marine Evacuation System in 1979. The company is built around a collection of market-leading brands like RFD, DSB and Beaufort. It serves a broad range of customers including the UK Ministry of Defence, the U.S. Navy, Shell, Lockheed Martin, Carnival Cruises, Royal Caribbean and Princess Cruises. Perhaps its most innovative products are Submarine Escape and Survival Systems and Marine Evacuation Systems (MES). The company pioneered the development of submarine escape technology in the 1950s, and its latest generation RFD SEIE (“Submarine Escape Immersion Equipment”) MK 11 – an ingenious whole body suit and one-man liferaft – enables free ascent from a stricken submarine without hypothermia and provides extensive protection for the submariner upon reaching the surface. In the last 15 years more than 30,000 SEIE suits have been supplied to over 20 navies around the world. The MES, introduced in 1979, involves sliding down a chute to an enclosed raft and is a viable alternative to lifeboats. The best-known MES, the Marin Ark, was introduced about ten years ago and encompasses two fully enclosed chutes and four fully-reversible liferafts, each capable of carrying more than 100 passengers. The entire system

The undisputed leader in the manufacture of EPIRBs (“Emergency Position-Indicating Radio Beacons”) and PLBs (“Personal Locator Beacons”) is Fort Lauderdale-based ACR Electronics. The company notes facetiously that it has been “Putting Vultures out of Business Since 1956” and that its vast selection of EPIRBs and PLBs represent “Your Best Last Chance.” Its products have been credited with helping to save thousands of lives over the years, including the crew of Apollo 13 in 1970. The company is, in fact, a major supplier to the military. Its survival beacons, hand-held VHF radios and Firefly emergency pocket strobes are standard gear for combat troops. For the marine market, in addition to EPIRBs and PLBs, ACR makes emergency VHF radios, manoverboard lights, strobe lights, and AIS (“Automatic Identification System”) and SAR (“Search and Rescue”) transponders. ACR’s products rely on GPS technology, which “takes the search out of search and rescue.” A worldwide network of polar-orbiting and geostationary satellites, together with Russia’s Cospas spacecraft, makes up the international Search and Rescue Satellite-Aided Tracking System known as Cospas-Sarsat, which has been credited with more than 28,000 rescues and relies on the 406 MHz frequency. The notification process – from the time the first signal is sent to when rescuers are dispatched – can take as little as three minutes with GPS embedded in the transmission. ACR is part of $3 billion Cobham plc, whose stock is traded on the London Stock Exchange and whose best-known product is the Aegis surveillance and fire-control radar system used on the newbuild Arleigh Burke Class of U.S. guided missile destroyers.

aMver – Saving liveS at Sea Since 1958

No article on lifesaving equipment and search-and-rescue technology would be complete without mention of AMVER, whose initials originally stood for “Atlantic Merchant Vessel Emergency Reporting” system but today mean “Automated Mutual Assistance Vessel Rescue” system. AMVER is a unique, computer-

LifesavingEquipment
based, voluntary global ship-reporting system used worldwide by search and rescue authorities to arrange for assistance to vessels in distress. More than 22,000 vessels of all sizes and shapes, from 140 nations, are enrolled in AMVER, which is based at the U.S. Coast Guard’s Martinsburg, West Virginia facility. Prior to departure, these vessels file a voyage plan with the AMVER computer center and then report in every 48 hours until arrival at their destination. In an emergency, the AMVER coordination center can identify vessels in the vicinity of the stricken vessel, which are then dispatched to the scene. AMVER began as an initiative of the U.S. Coast Guard, and it still remains under the Coast Guard’s umbrella. Its basic premise is to enable mariners to help mariners, regardless of nationality, and it couldn’t really begin until the advent of the Computer Age. In fact, AMVER’s history closely parallels the evolution of computer technology and, up until AMVER’s founding in 1958, there was no global emergency reporting system for the world’s commercial shipping fleet or its burgeoning airline industry. AMVER’s first computer, an IBM RAMAC (“Random Access Method Accounting Control”), relied on “dead reckoning” to determine the location of vessels. A Control Data mainframe followed in 1971 and from there the progression went roughly like this: vacuum tubes→punch cards→printed circuit board→microchip. This past September AMVER announced its most ambitious update yet – a new system using state-of-the-art Blade server technology to replace its aging Hewlett Packard

JANUARY/FEBRUARY 2011

Hook-testing on Fassmer onload release mechanism.

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9000 series. “With the number of enrolled vessels doubling in the last decade and a tripling in the number of daily messages sent to AMVER each day, it is imperative to keep our system in line with technological advances,” stated Ben Strong, AMVER’s Maritime Relations Officer. “We’ve come a long way from the Titanic, when ships passing within sight of the stricken vessel were unaware it had hit an iceberg and was sinking,” added Strong. “They apparently mistook distress flares for celebratory fireworks. Today we have satellite technology and GPS and EPIRBs and AMVER and, while we cannot prevent accidents at sea, we can maximize the efficacy of MarEx rescue operations.”

THE MARITIME EXECUTIVE

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ECDIS Revolution

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JANUARY/FEBRUARY 2011

THE MARITIME EXECUTIVE

The ECDIS Revolution

By Art Garcia

Like it or not, the age of paper charts for navigation is quickly coming to a close.

Clearly waiting on the horizon is the deadline for the iMo’s directive calling for mandatory carriage of electronic Chart Display and information systems (eCDis) by deepwater vessels. But there’s been no “fullahead” response by some shipping companies to meet the 2012 requirement to switch from paper charts to electronic navigation. Besides not making a move to install the new computerized system, some lines and individual owners haven’t yet addressed training the bridge crews that eventually will use eCDis. two years (well, almost) might seem adequate for carriers to prepare for a new age of all-digital bridges, and it may be for those who begin making their conversion moves soon; but as Jens schröder-Fürstenberg points out, “there’s a big gap between the iMo requirement and the eCDis knowledge of the people who have to operate the ship.” he’s head of the national applications Branch of the german hydrographic agency in rostock, a port city on germany’s Baltic Coast, and he should know. schröder-Fürstenberg also sees “problems” ahead in the tardiness of shipping lines in scheduling the training needed by their bridge personnel before the eCDis 2012 deadline for vessels of more than 500 dwt. “it’s clear the shipping industry must fulfill the carriage requirement and there’s no doubt it will,” he said. “the problem is not just having the systems on board in time but rather ensuring that the people who have to operate them are adequately trained. that’s the main issue – training.”

ECDIS Revolution
old School versus new

Some of the stalling reflects a resistance to go digital on the part of older captains and bridge crews. “They are very, very reluctant to give up their paper charts,” said Paul Welling, Sales Manager for Marine Technology at Transas USA in Fort Lauderdale, FL. Added George Toma, Transas’ President and General Manager in Bothwell, WA, near Seattle, “There’s a natural tendency to fight any sort of change where you already have a navigation officer with a high comfort level using paper charts.” “You see two generations,” agreed Mark Theissen, Vice President of Telemar Yachting in Fort Lauderdale. “There are the old school guys who are used to their way of navigation and then the new generation that’s more comfortable with computer systems. It’s sort of in their genes. The new officers coming on board are more accepting of ECDIS, whereas the old school captains tend to lean more to running the boat like they’ve been running it for years.” At the Maritime Institute of Technology and Graduate Studies (MITAGS) near Baltimore, an average of 50 to 70 students weekly attend a one-week ECDIS course, said Bob Becker, Business Development Manager. Each class has about 16 students. “We’ve seen an uptick in the number of people seeking training,” added John Brennan, head instructor, who has been teaching ECDIS at MITAGS since 2006. Students primarily are Second Mates looking to earn their Chief Mate’s license, and most are responsive to making the switch to digital navigation. “They don’t have any problem with it,” said Brennan. “Being younger, they’re more comfortable with electronics than we were. I try to emphasize ECDIS is a great tool, probably one of the best tools ever put on the bridge of a ship as far as situational awareness is concerned. Every mate who’s sailing should be looking to get this training. It’s mandated now; it’s coming and to be sailing on a ship with ECDIS and not having had ECDIS training, you’re worse off than you were before because now you’re putting your faith in a piece of equipment you really don’t know enough about. That can get you into more trouble than if you didn’t have it.”

JANUARY/FEBRUARY 2011

fitted with ECDIS. “What they’re trying to make sure of, though, is do they know how to use it properly,” said Mariner. “So while the number one concern is getting ECDIS on the ships that need it, the second is making sure their people are trained to use it.” Transas’ Toma has seen a more aggressive reaction to the ECDIS deadline. “We’ve found the response to be very positive

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THE MARITIME EXECUTIVE

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Meanwhile, “In terms of shipowners jumping in with their money and saying, ‘Yes, let’s pay cash for ECDIS,’ I’d say the response has not been very good,” stated Steve Mariner, Business Development Director for London-based Kelvin Hughes, maker of a “turnkey” ECDIS solution including hardware and software. “A lot of companies are deciding what they want to do and putting off the actual decision until nearer the 2012 date. I think they’ll be cutting it pretty close, but it doesn’t really surprise me,” he added. Given the economic downturn, companies can’t be expected to rush to spend large amounts of money to install ECDIS on their newbuilds and retrofits. “They’re not going to do it unless it’s absolutely necessary,” Mariner said. Companies will have to install the system “eventually, but not necessarily right now.” Blue chip companies, tanker operators like BP, Shell and Chevron, whose first objective is safety, already have the majority of their vessels

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ECDIS Revolution

JANUARY/FEBRUARY 2011

George Toma, President of Transas USA Inc.

Transas Navi-Sailor 4000 ECDIS console.

Kelvin Hughes ECDIS console.

52

overall,” he noted. “Many shipowners, from small tug operators and owners of large vessels to the U.S. Military Sea Lift Command, have jumped the gun on the mandated regulations and have already chosen to place ECDIS in their fleet, so by the time the deadline does hit, they’re already prepared. Typically, unless a product’s been mandated for safety purposes, you don’t see it going on board a vessel until it has to. But with ECDIS I’ve seen something different. I’ve seen a more proactive position with respect to not only placing ECDIS on board but in providing the training to use it.”

Transas USA, the $10 million company that’s a division of Transas Marine International of Gothenburg, Sweden, manufactures an IMO-approved ECDIS system called the MFD (Multifunctional Display) 4000 that includes core ECDIS software. It has the ability to integrate an entire bridge system with the company’s INS (Integrated Navigation System). The division provides training tools that include an ECDIS classroom simulator that provides a week-long IMO model course for ship’s officers for upgrading and endorsing their licenses with the ECDIS certificate. It also services its equipment. “If somebody wants to

THE MARITIME EXECUTIVE

PLAN NOW TO ATTEND
The Global Perspective: Norwegian o shore has attracted its share of global investors for good reason as the nation’s players have risen from modest beginnings to become world leaders in the sector. Many Norwegians point to innovation as the key, while others say speculative ordering has been the largest factor behind Norway’s success. But what do the international players think? Is Norwegian know-how providing the gateway to deepwater riches? But is Norway exporting its o shore advantage to tomorrow’s sector leaders? While the ipside of innovation is huge prices on assets, the ipside of speculation is over-ordering – so do the bene ts outweigh the damage? A high-level panel of well-known international business leaders, all with various ties to the Norwegian o shore arena, will bring their global perspectives to the sector. A series of short introductions will be followed by an open discussion. O shore Marine Broker’s panel discussion Technology and Innovation • Design, building and operating the next generation of PSV’s, AHTS and Subsea. • What do charterers want? • How to meet charterers needs before they know. • Getting ideas from the deck to the boardroom and then into new designs. • Innovation and the technology drain • Operating in ice – could Deepwater Horizon play out in the Arctic? O shore Marine as an Investment • Exploring the right business model for PSV operators • Achieving the right eet and balance sheet • Shareholder shudders – coining capital for white elephants? • Post 2008 recalculation of risk, is there any nancing for smaller, private investments?

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Photo: Bourbon

ECDIS Revolution
put ECDIS on a ship, we’re a one-stop shop,” noted Paul Welling. “What we see a lot of is, say, a ship needs new radars and it’s never had ECDIS. Then, of course, it makes a lot of sense to install ECDIS at the same time because if you’re going to rip the bridge apart anyway, you might as well do the whole thing.” Welling said many carriers are ready to adopt ECDIS because they see both safety Byron Stilwell, President of Telemar USA. and financial advantages: “You don’t have to carry paper charts anymore. You don’t have to have this laborious process of updating the charts and publications because it all goes into electronics. You download the updates and put them into your system and it takes seconds versus hours and hours of manually updating paper charts. It’s an enormous savings.” Order backlog is strong for Transas, which has more than 5,000 vessels equipped with its ECDIS systems. “We’re doing very well,” said Toma. “I would say we have more than 30 percent of the ECDIS market worldwide.” Cost of a Transas paperless modular or console system and a redundant backup is about $40,000. The IMO requirement is that, with a single ECDIS, a qualifying vessel can’t go paperless. It must have a fully redundant, dual ECDIS system and the ability to download and upgrade charts. Byron Stilwell, President of Telemar USA in Pasadena, TX, also sees the maritime industry’s response to the ECDIS edict as being very positive: “We have a number of clients that are already making plans to select OEMs (original equipment manufacturers) right now.” His company’s clients include ocean-going transporters, among them tankers, bulkers, container vessels and passenger ships. “We have some clients who are hesitating, but the vast majority of our clientele sees the value and advantages of ECDIS,” he reported. “A number of them have been single ECDIS users and are ready to go paperless. Most of our clients are fairly rapidly moving toward a dual paperless system as fast as they can. Other than some companies that are continuing to struggle from financial issues, we’re not seeing a lot of hesitation on this particular regulation.” In early 2011, Telemar’s orders already were up about 20 percent from year-earlier sales of $10 to $12 million. Stilwell projects volume of $13 million to $14 million this year. The company doesn’t get involved in training, relying instead on vendors. One of Telemar’s key vendors is Transas, which he describes as having “a phenomenal training ability, right here in the U.S.”

53

JANUARY/FEBRUARY 2011 THE MARITIME EXECUTIVE

Waiting for the Right Price

Telemar Yachting’s Theissen says yacht owners who are “very much forward-thinking and in tune with safety are jumping on the ECDIS requirement early and starting to outfit their large vessels. Then there’s the other batch that waits until the last moment, as with many regulatory requirements. We saw the same thing happen with the GMDSS (Global Maritime Distress Safety Sys-

ECDIS Revolution
tem) and AIS (Automated Information System).” The main reason for delaying installation is that some shipowners see more OEM players coming into the market and prices moving down substantially. “They kind of wait it out and let the manufacturers fight it out. They shop the price, let it drop as low as possible, then you see them come aboard,” Theissen said. “We’ve already seen prices come down a reasonable amount.” Telemar doesn’t manufacture ECDIS equipment. It’s a factory-trained dealer for Japanese company Furuno, JRC (Japanese Radio Corporation), Transas, ECDIS bridge display system from Kelvin Hughes. Maris and Kelvin Hughes. It’s authorized to sell the equipment Charts) running on ECDIS systems. It deals mainly with captains and trained to install it. and chief officers rather than yacht owners. “On the newbuild Bluewater Books & Charts in Fort Lauderdale does marine side, we’re starting to see, with hulls that are launching, a decent navigation outfitting for boats from 35 to 350 feet in length. acceptance of ECDIS, but it’s been slow up to this point,” Mann A major component of its business is the mega or superyacht said. “It hasn’t been a watershed moment where all of a sudden category. “ECDIS speaks to megayachts,” said Justin Mann, Vice every boat that’s coming out has decided to go with ECDIS.” Like the old saying goes, you can pay me now or pay me later. President. “Clients of ours are either building new vessels and MarEx considering going with the ECDIS environment or they’re retrofitting existing navigation systems with ECDIS.” The company Art Garcia covers technology for The Maritime Executive. is a retail seller and distributor of ENCs (Electronic Navigation

54

THE MARITIME EXECUTIVE

JANUARY/FEBRUARY 2011

Capital Link’s 5th Annual Invest in International Shipping Forum
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Organized by Capital Link, Inc.
Capital Link is a New York-based Advisory, Investor Relations and Financial Communications firm. Capital Link has made a strategic commitment to the shipping industry becoming the largest provider of Investor Relations and Financial Communications services to international shipping companies listed on the US and European Exchanges. Capital Link's headquarters are in New York with a presence in London and Athens. Capital Link is a member of the Baltic Exchange.

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56

THE MARITIME EXECUTIVE

BWTS:
bWTS:
The global mariTime indusTry is well aware that the proverbial clock is ticking for compliance with the international maritime organization’s (imo) ballast water management Convention. For companies operating in u.s. waters, u.s. Coast guard (usCg) regulations will basically mirror the imo Convention, but compliance with California, wisconsin and new york’s more stringent requirements will be difficult at best. like it or not, it’s time for vessel operators to get their houses in order and begin contemplating the right ballast water treatment system (bwTs) for their fleets. The imo has been addressing the issue of invasive species since the late 1970s as have the u.s. and many other maritime nations. both the u.s. and imo began legislatively addressing the issue in 1998 and set forth voluntary ballast water exchange (bwe) programs. in 2004, both the imo and u.s. mandated

JANUARY/FEBRUARY 2011

It Doesn’t Have to Be a Four-Letter Word
By Tony Munoz
bwe, and the imo adopted its ballast water management Convention, which is expected to be ratified by the required 30 member states this year. in the u.s., issuance by the usCg of the final rule for bwTs has been pushed back till april. additionally, states like California, new york and wisconsin are threatening to implement standards 100 to 1,000 times more stringent than the imo or u.s. standards.

The Mega-Dollar ProbleM

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The global invasive species problem is estimated to cost about $1.5 trillion worldwide annually in terms of control, clean-up, economic losses and environmental damage. The imo estimates losses to the u.s. economy from invasive species to be about $138 billion annually. since the late 1800s the great lakes bordering Canada and the u.s. have had over 180 nonindigenous species introduced into their waters. in the u.s., at least 21 billion gallons of ballast water are discharged annually. san Francisco bay is considered by scientists to be one of the most invaded ecosystems in the world and has become a virtual laboratory for invasive species. but invasive species is a global issue, and international shipping is the primary culprit. every country with a waterway is dealing with it, and governments are demanding that ships become environmentally safe in their waters. The cumulative investment required for some 50,000+ maritime vessels to install bwTs over the next decade is estimated to be about $34.3 billion. no question lots of bwTs manufacturers are trying to sell their wares, but earning approvals from the imo and usCg has not been an easy task. in fact, it has taken decades of scientific development to meet international standards.

BWTS
hiTChinG a ride: Since ancient man began exploring the world around him by water, a species of some sort has caught a ride and begun breaching the biogeographic barriers that had existed for millions of years. These invading creatures have altered the evolutionary process by competitive exclusion, displacement, hybridization and predatory behavior, all of which can and have led to the extinction of indigenous species. The invaders themselves have evolved and mutated and changed the biological environment – with grave consequences.
Hyde Marine has been involved with BWTS since 1996 when it partnered with the University of Michigan to study potential technologies. Hyde began testing equipment in 2000 when it installed a prototype on the Regal Princess. “Our company has been working with the USCG since 2000 and installed the Hyde Guardian system on both the Coral Princess and the Celebrity Mercury,” said Tom Mackey, the company’s Founder. “We are working very hard to be the first to be granted equivalency by the Coast Guard. Essentially, when the Coast Guard completes its ruling in April 2011, which is about the same time the IMO Convention is expected to be ratified, many of the IMO Type Approved ballast water treatment system that also meet USCG standards will earn a Certificate of Equivalency. While there are many different treatment systems, not all will earn certification.” one standard In the U.S, the proposed federal regulations are expected to be more stringent than the IMO’s. But states like California, Wisconsin and New York are pushing for much higher standards, as permitted under the Clean Water Act. Whether the technology exists to meet those standards (it doesn’t), or will exist by the time the standards are imposed, is anybody’s guess.

JANUARY/FEBRUARY 2011

Kjetil Leine, Vice President of Operations for Goltens.

BWT SCienCe BeCominG mainSTream

Who’S on FirST? ConvoluTed GovernmenT meSSaGeS

To ensure effective implementation of its regulations, the IMO has set a roadmap for shipowners to follow. Regulation D-1, the Ballast Water Exchange Standard, requires all ships to achieve a 95 percent efficiency rate and maintain an approved “Ballast Water and Sediments Management Plan.” Regulation D-2 sets forth performance standards and requires all ships to install ballast water treatment systems between 2014 and 2016. The performance standards limit discharges to fewer than 10 viable organisms of 50 microns or larger per cubic meter and fewer than 10 viable organisms of 10 to 50 microns per milliliter. Systems that use an “active substance” must be further approved and certified by the IMO member state. Regarding implementation, ballast water exchange is permitted until certain dates based on the ship’s age and ballast water capacity and, thereafter, it must have an approved onboard ballast water treatment system installed and running. Kjetil Leine, Vice President of Operations for Goltens, a global ship repair company, urges shipowners: “In order to meet the compliance schedules of both the IMO and USCG, it is vitally important to plan ahead. While it is tempting to wait, shipowners do not want to endanger their operations and should begin planning now. We foresee a major shortage in the market from 2015 to 2017. Moreover, there are about twelve systems that have received IMO approval and another seven or so in the pipeline. For most vessels, suitable systems exist, but some vessels will require an extensive makeover of the existing engine room and equipment may have to be relocated.” He adds that it’s in everyone’s interest to have the Ballast Water Convention ratified Alfa Laval's PureBallast 2.0 AOT. as soon as possible so that there is

Developing a BWTS that meets the requirements of the IMO Convention and can be scaled effectively to meet specific flow rates without undue complexity and space requirements is among the greatest challenges for manufacturers. In the case of a retrofit, the system must be designed for adaptability, and there are many special considerations, particularly on ships where a system must be installed in a hazardous area. In the case of a newbuild, and for some retrofits with smaller flow rates, it may be desirable to have the system skid-mounted at the factory and delivered as a turnkey system. Alfa Laval claims the first chemical-free BWTS approved by the IMO. “Our company has sold 120 units, and there are 30 in operation today. In fact, it’s now in its second generation, the PureBallast 2.0, which consumes less power,” says John Atanasio, President and CEO of Alfa Laval US. “The PureBallast 2.0 Ex version is ideal for tankers and other vessels with potentially explosive environments. It’s designed for Zone 1, group IIC and temperature class T4. These reinforced AOT units are equipped with temperature and fluid-level protection, ventilated and pressurecontrolled lamp drive cabinets, and cabinet placement outside the Ex zone. The unit is protected from explosion of gases in ballast water by elimination of the ignition source and designed to stop gas from entering from surroundings and can withstand an explosion from within without transmitting energy to the surrounds.” Roger Stevens, Environmental Business Stream Manager at Wil-

57

THE MARITIME EXECUTIVE

BWTS

CARTAGENA, COLOMBIA ♦ 23-27 MAY 2011

JANUARY/FEBRUARY 2011

Hyde Guardian BWT system onboard the Celebrity Mercury.

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58

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helmsen Maritime Services, noted that his company is second to none in terms of its global service network. “The performance of the BWTS can impact a vessel’s operations, which will require the ship to go 200 nautical miles offshore to do a ballast water exchange. This alone emphasizes the importance of having a wide-reaching and reliable service and support network,” he noted. Wilhelmsen’s Unitor BWTS received its Final and Type Approvals in 2010, thereby demonstrating its ability to meet the D-2 performance standards of the IMO Convention. Stevens added that “The USCG will announce its BWTS standards in April. This will pave the way for the rollout of the USCG Type approval program, but until then neither Unitor nor any other system can claim compliance.” Hyde’s Tom Mackey noted that more than 80 IMO Type Approved Hyde Guardian systems had been delivered or ordered with capacities ranging from 60 to 2500 m3/hr, including a ten-ship order for Suezmax crude oil tankers with three systems each. Earlier deliveries included the British Navy’s Queen Elizabeth Class aircraft carriers. “Even though the BW Convention Wilhelmsen's Type Approved Unitor BWTS. was not ratified and technologies were immature, it was decided to fit these warships with BW systems,” he explained. “A selection process was initiated and assessed by three groups – commercial, technical and support teams – who all conducted independent reviews. Two bids were commercially and technically compliant and the best perceived value was the Hyde Guardian.” A major sticking point for manufacturers and scientists is the concept of “equivalency” as many think it should be replaced with “comparability.” This was the intent of the original framers of the regulations, who envisioned the use of mathematical modeling and/ or calculations in scaling. The danger is that overly restrictive rules can result in unwieldy systems that are ineffective and vulnerable to performance issues. Even when the IMO Convention is ratified,

THE MARITIME EXECUTIVE

BWTS
certain port states may introduce more demanding standards. Newbuildings with keels laid during 2010 and later will need Typeapproved systems installed and operating when the ship is delivered. Existing ships will need to comply by 2016, and many before that. “The Wärtsilä BWT 500i is the first and only integrated BWTS to have both treatment steps, filtration and UV irradiation performed in the same housing,” offered Tom Nyman, General Manager, Water Solutions, Environmental Services for Wärtsilä. “The system is built for maximum efficacy while minimizing the required installation space. Trojan Technologies is responsible for the design of the system, which is based on its leading UV lamp technology and water treatment experience. We are presently at the IMO approval stage and expect full approval to be granted this year.” “The quality control and validation procedures utilized in most existing IMO certifications are unlikely to meet the U.S. requirements,” Nyman added. “We think equivalency with U.S. Coast Guard standards will be a major issue for most existing systems approved by IMO. As a result, we have chosen to conduct more comprehensive testing of our systems by land-based and/or shipbased methods, testing each model in our product suite to ensure compliance with both IMO and U.S. Coast Guard standards.” Alfa Laval’s Atanasio stated that “Our approach to BWT is determined not only by legislation surrounding it but also by the important demands of shipyards, vessel owners and ship operators. Our next-generation PureBallast 2.0 incorporates the full spectrum of installation and operational needs as well as lessons learned in

Wärtsilä BWT 500i.

years of full-scale, real-life operations at sea. The 2.0 system has a low lifecycle cost with few consumables and requires only minimal maintenance while running on 40 percent less power.”

JANUARY/FEBRUARY 2011

The QueST for STandardizaTion

60

Throughout its 50-year history, the IMO has addressed major global issues in order to standardize international regulations. Yet despite its significant efforts in this regard, some member states will have unilateral responses to regulations. The same is true in the U.S. as individual states claim authority to regulate their own waters under the Clean Water Act. The approval of a global ballast water treatment standard is only the latest case in point. But one thing’s for sure: If a vessel-operating company hasn’t seriously addressed the cost and conformance of its BWT policies and operations, the days of reckoning are upon you. MarEx

Executive.

Tony Munoz is Publisher and Editor-in-Chief of The Maritime

THE MARITIME EXECUTIVE

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EnvironmEntal Directory
ALfA LAvAL
Alfa Laval delivers ballast water treatment, fuel and lube oil separation, tank cleaning, bilge and oily waste water, heat transfer, desalination and oil filtering solutions dedicated to promoting a sustainable environment. Our services are available 24 hours a day, seven days a week to serve you best.

BLAnk rome mAritime
Blank Rome Maritime regularly advises vessel owners and operators, managers, charterers, and shippers on complex national and international environmental requirements that govern all transportation.  Our attorneys have been involved in many of the most significant pollution incidents of the past century, including the Amoco Cadiz, Athos I, Cosco Busan, Deepwater Horizon, Exxon Valdez, San Jacinto, Morris J. Berman, Torrey Canyon, Nepco 140, and Amazon Venture spills.
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JANUARY/FEBRUARY 2011

Alfa Laval inc. t: +1 215 443 4021 noreen.comerford@alfalaval.com www.alfalaval.com/pureballast

dnv
DNV, a leading class society and advisory services foundation offers a wide range of solutions and benefits for Cruise companies. DNV can help you in mitigating risks, lower air emissions, overcome environmental challenges, control noise and vibration, increase efficiency and lower fuel consumption, manage hull integrity and crew competence.

donjon mArine co., inc.
Donjon Marine Co., Inc. provides a broad spectrum of marine services, including dredging, marine salvage, heavy lift transport, tug/barge transportation, demolition, pollution control and remediation, shipbuilding and repair, as well as land-based metals recycling, demolition and landfill remediation/site management. Based in New York, New Jersey, and Erie, Pennsylvania, Donjon and its affiliates maintain offices, assets and personnel throughout the Northeast, with operations spanning the globe.
donjon marine co., inc. T: +1 908 964-8812 F: +1 908 964-7426 info@donjon.com www.donjon.com

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dnv T: +47 67 57 99 00 F: +47 67 57 99 1 1 DNV.Corporate@dnv.com www.dnv.com
THE MARITIME EXECUTIVE

drew mArine
Drew Marine is a leading marine supplier for ocean-going vessels recognized for quality and high performance in technology, support services, and supply solutions. Drew Marine focuses on providing solutions for water treatment, fuel management, cleaning, maintenance, repair, and safety.

GL AcAdemy
For fifteen years GL Academy, GL’s further training institute, has been offering seminars in the field of shipping and management systems. Each of our courses are offered as open or “in-house” seminars across the United States, supported by a global network of over 120 countries. Enhance your knowledge and develop your individual competences-and your scope of work will expand. As you progress, your company will progress with you.
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drew marine T: +1 973 526 5700 www.drew-marine.com

Hyde mArine, inc.
Hyde GUARDIAN® -  IMO Type Approved ballast water management. Robust and effective shipboard technology kills aquatic invasive species and reduces sediment.   Automatic filtration + UV treatment for any vessel. Chemical-free.  Low pressure drop.  Low power demand.  Easy maintenance. Compact and modular design for easy installation.  Affordable and reliable compliance worldwide.
Hyde marine, inc. T: +1 800 422 7266 T: +1 440 871 8000 x156 sales@hydemarine.com www.hydemarine.com

mArine PoLLution controL
Founded in 1967, MPC was conceived as a highly mobile, rapidresponse spill clean-up company.  It has evolved from the early years of oil pollution cleanup into a fully equipped and experienced company providing effective solutions to clients’ waste management, industrial services, spill response, and lightering requirements.

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BIC Alliance: One-stop shop helps your company grow

representing sellers, maximizing value for its clients. BIC Recruiting Since BIC Recruiting’s first placement in 1999, its focus has been on sales and marketing management, general management with P&L expertise and mid- and senior-level sales executives. By working with its investment banking affiliate, BIC Recruiting has expertise in the placement of C-level executives for employers in existing as well as new positions where mergers and acquisitions have occurred. BIC Recruiting grew fivefold in 2010. BIC Media Solutions BIC Media Solutions is a communication, training and event planning division within BIC Alliance. It offers custom publishing of books about individuals and organizations and sales and marketing training manuals. It also provides turnkey event planning services and training via seminars and keynote presentations. For more information on BIC Alliance, contact Earl Heard in Baton Rouge, La., at (800) 460-4242 or Thomas Brinsko in Houston at (281) 538-9996 or visit www.bicalliance.com.

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family owned and operated company since 1984, BIC Alliance’s mission is to “connect people in business and industry with one another for the betterment of all.” In a business setting, better usually means growth. When a company looks to grow, it can do so in three ways: an aggressive marketing plan, hiring the

right people and acquiring businesses (or obtaining capital for expansion). BIC Alliance Founder and CEO Earl Heard and his partner and son-in-law, Thomas Brinsko, have developed a unique business model to help businesses accomplish all of these growth opportunities. BIC Magazine BIC Alliance publishes the “BIC Magazine” (Business & Industry Connection) 10 times a year. BIC reaches 120,000 mid- and upper-level managers and executives in the refining/petrochemical, drilling and exploration, pipeline, marine, terminal, pulp and paper, power generation and heavy construction industries. IVS Investment Banking IVS Investment Banking is the merger and acquisition matchmaking, investment banking and recapitalization affiliate of BIC Alliance. Through relationships and interest from strategic buyers such as BIC Alliance members and the limited universe of private equity groups, IVS is able to run a “dual-path” when

BIC Alliance Founder and CEO Earl Heard, left, and his partner and son-in-law, Thomas Brinsko, have developed a unique business model to help businesses accomplish growth opportunities. BIC Alliance, along with its sister companies — IVS Investment Banking and BIC Recruiting — has recently begun to expand its presence in the upstream and maritime industries.

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With over 120,000 readers, BIC (Business & Industry Connection) Magazine is the Western Hemisphere’s largest multi-industry, multi-departmental energy publication. BIC Magazine targets key decision makers in the upstream, midstream and downstream energy sectors, as well as the power generation and pulp & paper industries.

Connecting Buyers and Sellers of Energy Related Companies
IVS Investment Banking offers complete investment banking services to help buy, sell or grow companies in the upstream, midstream and downstream energy sectors, as well as the power generation and pulp & paper industries. IVS has completed over $180 million in transactions since 2008.

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BIC Recruiting finds the most qualified candidates for our clients’ open positions including executive management, sales and marketing, plus other key positions in the upstream, midstream and downstream energy sectors. BIC Recruiting grew fivefold in 2010.

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BIC Media Solutions offers custom book publishing; training manual development; management, sales and marketing training; creative services; event planning; and keynote presentations on leadership, entrepreneurship, thinking outside-the-box, the “people secret”, the art of listening, and more.

For more information, contact Earl Heard in Baton Rouge at 800.460.4242 or Thomas Brinsko in Houston at 281.538.9996.

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EnvironmEntal Directory
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JANUARY/FEBRUARY 2011

Thordon
Global manufacturing leader of pollution free propeller shaft and rudder bearings. Fitted to over 2000 ships, Thordon seawater lubricated propeller shaft bearings eliminate stern seal oil leakage (no pollution risk), while offering excellent operational performance with reduced maintenance costs. Worldwide technical support through an extensive distribution and service network.

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WärTsilä
The Wärtsilä BWT 500i is the first and only integrated ballast water treatment system, where both treatment steps (filtration and UV irradiation) are performed within the same housing. The system is built for maximum efficacy while minimizing the required installation space. Trojan Technologies is responsible for the design of the system, which is based on Trojan’s world-leading UV lamp technology and water treatment experience.
Wärtsilä corporation T: +358 10 709 0000 F: +358 10 709 5700 www.wartsila.com

Wilhelmsen Technical soluTions
Wilhelmsen Technical Solutions is a global provider of cost efficient and fully engineered Environmental, Safety, HVAC-R and Power solutions. As part of our Environmental offerings we provide solutions for the management of water, waste, emissions to air and fuel efficiency that ensure customer’s regulatory compliance and operational efficiency.

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Wilhelmsen Technical solutions T: +1 95 45 85 58 00 wts.info@wilhelmsen.com www.wilhelmsen.com\technicalsolutions

Vice President of Sales and Marketing
W&O Supply, Inc. is the largest marine supplier of pipe, valves, valve automation services and fittings in the United States. We serve all facets of the marine community including U.S. and Foreign shipping companies, the U.S. Navy, cruise companies, barge owners, offshore rig companies and shipyards that build and repair vessels of all sizes. W&O is committed to being the premier supplier of total piping solutions to the marine and offshore industries. W&O is a wholly owned subsidiary of a large, European-based international industrial products distribution company, is seeking an experienced Vice President of Sales and Marketing. This position is located at the W&O corporate office in Jacksonville, FL. Responsibilities include but are not limited to: (1) Professional management, goal setting, account planning, with and for a direct sales force of approximately 20 spread out in North America and Europe.(2) Direct and coordinate sales and marketing functions, (3) Plan and coordinate public affairs and communications efforts, (4) Establish and implement short- and long-range goals, policies, and operating procedures, (5) Supervise the planning and development of marketing and communications materials, and (6) Promote positive relations with partners, vendors, and distributors. Qualifications include (1) 10+ years in sales and marketing with five in an executive-level position such as general manager or vice president, preferably in the marine industry, (2) Extensive experience at senior sales level in company with multiple branches in multiple states (3) International background with geographical expansion experience and (4) Excellent interpersonal, communications, public speaking, and presentation skills. We offer a very competitive salary and extensive benefit package. We are an equal opportunity employer and committed to a drug-free workplace. Send resumes to David Black: email david.black@wosupply.com or fax 904-899-4918. Visit our Web site at www.wosupply.com.

specialist
commercial shipping jobs
President - USA Tanker Company Vice President - East Coast USA Ship Owner Business Development Director - Canada Ship Owner Chartering Manager - Gulf Coast USA Tankers Vice President Chartering - East Coast USA Tankers DP Shuttle Tanker Chartering Manager - Gulf Coast USA Apply to commercial@faststream.us

technical & operations jobs
VP Engineering - North East USA Major Vessel Owner Sr. Manager Logistics & International Operations - West Coast USA Shipping and Logistics Company Procurement Manager - North East USA Major Shipping Line Port Engineer - Multiple Locations USA Tanker Engineering Opportunities Marine Terminal Advisor - Multiple Locations USA Seeking Tanker Chief Mates for Oil Major Apply to ports@faststream.us

marine jobs
Business Manager - East Coast USA OEM Manufacturer Project Manager - East Coast USA Cruise Line Subsea Sales Manager - Gulf Coast USA Oil & Gas Company Service Engineer - East Coast USA OEM Manufacturer Territory Service Sales - West Coast USA OEM Manufacturer Senior Sales Rep - Gulf Coast USA Power Generation Apply at marineengineering@faststream.us

oil & gas jobs
Territory Sales Manager - Gulf Coast USA Production and Manufacturing Territory Sales Manager - Mid West USA Production and Manufacturing Business Development Manager - Gulf Coast USA Power Plant Sales .Net/Sharepoint Developer - East Coast USA Oil & Gas Business Process Analyst - East Coast USA Oil & Gas Apply to offshore@faststream.us

Contact us now to find out more on 954-467-9611, email shipping@faststream.us or visit www.faststream.com