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SCA Weekly Report | July 31 - August 4, 2023

Shipbuilders Council of America

20 F Street NW, Suite 500

Washington, DC 20001

www.shipbuildersusa.org

 

 

SCA Weekly Report | July 31 - August 4, 2023

 

 

ANNOUNCEMENTS

 

*Please note that there will not be a Weekly Report next Friday, August 11, 2023*

 

 

2023 SCA Fall Meeting Registration Now Open

 

 

The SCA Fall General Membership Meeting will take place October 11-12, 2023 at the Sheraton Portland Sable Oaks.

 

As part of the event, GD Bath Iron Works has generously offered a tour of their shipyard to our group. Please note that security information will be required to attend the tour. 

 

SCHEDULE OF EVENTS

Wednesday, October 11

  • 11:00 AM - 1:00 PM: INDUSTRY PARTNERS COMMITTEE MEETING
    • Open Session: 11:00 AM - 12:00 NOON
    • Closed session: 12:00 NOON - 1:00 PM (Industry Partners Committee Members Only)
  • 1:30 PM - 4:00 PM: EXECUTIVE COMMITTEE MEETINGS (Board Members Only)
  • 4:00 PM - 5:00 PM: BOARD MEETING (Board Members Only)
  • 5:30 PM - 7:30 PM: WELCOMING RECEPTION & EXHIBITS REVIEW (All attendees welcome)
    • Sponsored by the American Equity Underwriters

 

Thursday, October 12

All attendees welcome

  • 6:45 AM - 7:30 AM: BREAKFAST
  • 7:30 AM - 11:30 AM: SHIPYARD TOUR OF GD BATH IRON WORKS
  • 12:00 NOON: LUNCH
  • 1:00 PM - 2:30 PM: SCA STAFF PRESENTATIONS
  • 2:30 PM - 5:30 PM: GUEST SPEAKER SESSION
  • 5:30 PM - 7:00 PM: GENERAL MEMBERSHIP RECEPTION & EXHIBITS REVIEW
    • Sponsored by Signal Mutual
  • 7:00PM - 8:30 PM: MEMBERSHIP DINNER

 

HOTEL ROOM BLOCK

SCA has secured a room rate of $199 per night at the Sheraton Portland Sable Oaks. Reserve your room HERE

 

EXHIBITION HALL

The exhibition hall encourages greater interaction between SCA shipyard and partner members, offering the opportunity for members to demonstrate their product or services directly to potential customers.

 

If you are interested in exhibiting at this event, please review the Exhibitor Packet HERE.

 

 

Save the Dates: Upcoming SCA Meetings

 

2023 SCA Fall General Membership Meeting: October 11-12, 2023 | Portland, Maine

2024 SCA Winter General Membership Meeting: February 7-8, 2024 | Coral Gables, Florida

 

NAVY NEWS

 

Navy Awards Multi-Year Contracts for Nine Flight III Destroyers

The Navy yesterday awarded multi-year construction contracts for nine DDG 51 class destroyers. Three will be built at GD Bath Iron Works, Bath, Maine, one each in FY 2023, 2024, and 2026. Six will be built at Huntington Ingalls Inc.’s Ingalls Shipbuilding, Pascagoula, Miss., one in FY 2023, one in FY 2024, two in FY 2025, one in FY 2026, and one in FY 2027.

 

Both multi-year contracts include options for engineering change proposals, design budgeting requirements, and post-delivery availabilities. They also includes options for the construction of additional DDG 51 class ships. These may be subject to future competition. Therefore, says the Navy, the dollar values associated with the multiyear contracts “are considered source selection sensitive information and will not be made public at this time.”

 

A NAVSEA statement says the contract options for additional ships over the next five years provide the Navy and Congress flexibility to increase DDG 51 build rates, if authorized and appropriated

 

The destroyers are being procured in a Flight III configuration, relying on a stable and mature design while delivering critical Integrated Air and Missile Defense capability with the AN/SPY6(V)(1) Air and Missile Defense Radar. The Navy’s first Flight III destroyer, USS Jack H. Lucas (DDG 125), was delivered by HII Ingalls in June 2023.

 

Navy Extends Service Lives of Four Destroyers

Naval Surface Force Atlantic announced this week that the Navy is extending the service lives of four Arleigh Burke destroyers.

 

USS Ramage (DDG 61), homeported in Norfolk, VA, and USS Benfold (DDG 65), based in Yokosuka, Japan, have been extended by five years to FY 2035 and FY 2036, respectively.

 

USS Mitscher (DDG 57), also homeported in Norfolk, and USS Milius (DDG 69), homeported out of Yokosuka, have been extended by four years to FY 2034 and FY 2035, respectively.

 

These extensions follow the March 2023 extension of USS Arleigh Burke (DDG 51) by five years through FY 2031.The extension puts each destroyer beyond their estimated service life of 35 years.

 

Smith Issues Interim Marine Corps Guidance as Nomination Hold Drags On

Acting Commandant Gen. Eric Smith this week published a Marine Corps force guidance letter affirming the service will continue on its Force Design 2030 trajectory and outlining accelerated modernization, naval integration and organic mobility as warfighting priorities.

 

The four-page letter -- which broadly sketches service values and goals, leaving room for a future Commandant’s Planning Guidance -- is intended to serve as an interim “reference point” for the Marine Corps until the Senate confirms an official 39th commandant, the document states.

 

Smith’s nomination to the post has been stalled by Sen. Tommy Tuberville’s (R-AL) blanket hold on military nominations and promotions over opposition to the Pentagon’s leave and travel reimbursement policies for servicemembers seeking abortion services. In the meantime, Smith is filling both the Marine Corps’ No. 1 and No. 2 positions.

 

Navy Plans Industry Day on Medium Landing Ships

An industry day will launch Aug. 31 in Washington for vendors to learn about the Navy's plans to build medium landing ships (LSMs).

 

The goal of the industry day is to discuss LSM requirements with industry members and gather market research, according to a notice published Monday.

 

Participants are invited to connect with program managers, engineers and directors from Naval Sea Systems Command (NAVSEA) headquarters. There will be briefings on technical, sustainment and cybersecurity requirements, among other issues, as well as a Q&A session.

 

The industry day aligns with the Navy’s plans to acquire its first LSM in fiscal year 2025, at a projected cost of $187.9 million.

 

OFFSHORE WIND NEWS

 

BOEM Selects Central Atlantic Wind Energy Areas

The Bureau of Ocean Energy Management (BOEM) has finalized the selection of three Wind Energy Areas (WEAs) off the coasts of Delaware, Maryland, and Virginia that could support between four and eight gigawatts of energy production. The three WEAs total approximately 356,550 acres.

 

“BOEM values a robust and transparent offshore wind planning process, which requires early and frequent engagement with Tribal governments, the Department of Defense, NASA, other government agencies, and ocean users” said BOEM Director Liz Klein. “We will continue to work closely with them, and all interested stakeholders, as we move forward with our environmental review.”

 

The finalized WEAs are the latest development in the Biden Administration’s pursuit to deploy 30 GW of offshore wind energy by 2030.

 

IN THE NEWS

 

Vice Admiral Thomas Backs Jones Act

During a recent hearing conducted by the House Transportation and Infrastructure Subcommittee on Coast Guard and Maritime Transportation, Vice Admiral Paul Thomas, Deputy Commandant for the Coast Guard for Mission Support, expressed backing for the nation’s freight cabotage law.

 

As part of a question-and-answer session July 27, U.S. Rep. Salud Carbajal (D-California), the subcommittee’s ranking member, asked Thomas, “… where would the Coast Guard vessel procurement be without the Jones Act and the sustained commercial business that the shipyards have?”

 

Thomas replied, “The Coast Guard has long recognized the significance of the Jones Act in ensuring our national security in several different ways. One of those is ensuring we retain an industrial base that can build and service our ships. Our ships are getting larger. We are now in competition with the Navy for dry docks. We need to invest in our own capabilities at our Coast Guard yard, but we certainly need the Jones Act to remain in place so we retain that capability as a nation.”

 

Second LNG-Powered Container Ship Joins Pasha Hawaii Fleet

The dual-fuel LNG-powered vessel, Janet Marie, has arrived at the Port of Long Beach in California and is set to embark on its maiden voyage to Honolulu, Hawaii. The vessel is part of the Ohana class and is one of the two new container ships powered by LNG built at Keppel AmFELS. Janet Marie joins Pasha Hawaii’s fleet serving the Hawaii-Mainland trade lane, along with the first Ohana-class vessel, George III, which commenced service in August last year.

 

After an inaugural visit to Long Beach, Janet Marie will proceed to Hawaii and dock at the Port of Honolulu, its designated home port. Just like George IIIJanet Marie has been operating on LNG since its first day of service. These new Jones Act vessels exceed the emissions standards set by International Maritime Organization for ocean vessels in 2030 and incorporate energy-saving features such as a state-of-the-art engine, an optimized hull form, and an underwater propulsion system featuring a high-efficiency rudder and propeller.

 

LNG Shipping Rates Poised to Sail Past $200,000 Per Day

Traders are poised to shell out more than $200,000 a day to ship liquefied natural gas in the coming months as tankers grow scarce ahead of winter, when demand for the heating fuel peaks. Tanker supplies are increasingly tight because traders are using the ships as floating storage in a bet that LNG prices will rise as the weather turns colder.

 

Volatile shipping rates can eat up margin for an LNG trader looking to cash in on higher winter prices, and rising transportation costs ultimately can mean higher prices for buyers in Europe and Asia. The number of LNG vessels floating on the water for at least 20 days also rose in late July, with 42 vessels tracked by Bloomberg. That’s 27% higher than the same time a year earlier.

 

 

 

If you have any questions, please do not hesitate to contact the SCA staff.