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9. Locate W1 on the main logic board and cut through the join point ofthe two triangles, as shown in Figure 3.W2 W1Solder pointCut here 1 mm minimumMON10. Locate the two triangles designated as W2 and connect them with asoldering iron using a small drop of solder, as shown in Figure 3.11. Locate the 28-pin I.C. designated as MON (in Figure 3) at location D19on the printed circuit board.12. Carefully remove the MON IC. using the I.C. extractor and replace itwith the new ROM. Make sure that pin 1 is oriented correctly by liningup the notch on the end of the I.C. with the end of the socket with thewhite dot. Make sure all pins are aligned with holes in the socketbefore applying pressure.Installation Procedure 3

MaritimeProfessional2446Credit: FARO3D Laser Scanning is helpingmaritime designers and builderswith effi ciency gains.18 | InsuranceWhen is a Ship Not a Ship? Does your insurancecoverage fi t your operation?By Christopher Cooke16 | Maritime M&AFinancial Crisis to Present Day: Why the wildride for company valuations?By Harry Ward24 | Training & RecruitmentShipyards get creative in their approach to fi nding,training and keeping qualifi ed shipfi tters.By Joseph Keefe30 | OpinionWe Need to Save Our Ships.By Matt Paxton43 | Energy is the AnswerDamen looks offshore energy - both traditionaloil and gas as well as wind - to build its future.By Eric Haun46 | 3D Laser ScanningFARO 3D laser scanning allows you to work indetail with 3D model shots of machinery spaceswith increased accuracy and reduced costs.By Daryl Johnson49 | Decision Support ToolsTechnology can drive risk management as maritimeprofessionals optimize security.By Luke Ritter52 | Boundaries, Standards& Business of IntegrityAs maritime security evolves, so too is the need forincreased and standardized professionalism in theranks of Private Mari-time Security Companies.By Charlie Butterworth43244 I Maritime Professional I 4Q 20138 | Editor’s Desk9 | The List58 | Statistics60 | Editorial Calendar61 | Shipyard Directory64 | Advertiser’s Index

MaritimeProfessionalMarPro ContributorsChristopher CookeChristopher Cooke is Vice President of General Liabilityfor XL Group’s North America Marine business.Daryl JohnsonDaryl Johnson is a registered Professional Engineer inWashington State. He has 30 years of management, engineeringand design experience in the refi ning, power,marine, process and integrated chip industry. He establishedSummit Engineering and Design, LLC in 1998 andwas fi rst introduced to 3D laser scanning in 2001.Randy KullmannRandy Kullmann is Vice President at CDM Smith. Kullmannhas over 27 years of experience in consulting,engineering, construction and operations. His experiencespans all aspects of water treatment and he has beenleading CDM Smith’s marine services, including compliance,information and safety management, as well aswater treatment.Robert KunkelRobert Kunkel, President of Alternative Marine Technologies(Amtech), is currently serving as the technicaladvisor to Alterna Capital Partners, a private equity fi rm,Mid Ocean Tanker Company of Norwalk CT and variouslending institutions around the world.Barry ParkerBarry Parker, bdp1 Consulting Ltd provides strategicand tactical support, including analytics and communications,to businesses across the maritime spectrum.Luke RitterLuke Ritter is Principal at Ridge Global, the internationalstrategic consulting fi rm founded by former Secretaryof Homeland Security Tom Ridge. Mr. Ritter leads RidgeGlobal’s maritime practice, Flag Bridge, and is the coauthorof Securing Global Transportation Networks(McGraw Hill).Christopher R. SchulzChristopher R. Schulz, P.E., is Senior Vice President atCDM Smith. Chris Schulz has over 30 years of experiencein the planning and design of water treatment facilitiesin the United States and throughout the world.He served on the expert review panel for the USCG’sShipboard Technology and Evaluation Program (STEP),which evaluated prototype ballast water treatment systemsin shipboard environments.Harry WardWard leads the transportation and logistics practice atThe McLean Group, based in the Washington, DC area.He has executive management experience in the marineindustry and focuses on mergers and acquisitionsfor mid-sized companies.MaritimeProfessionalURL www.maritimeprofessional.comEmail trauthwein@marinelink.comProductionNicole Ventimiglianicole@marinelink.comCorporate StaffVladimir Bibik, ITRhoda Morgan, Sales AdministrationMark O’Malley, Public RelationsEsther Rothenberger, AccountingSubscriptionKathleen Hickeymarprocirc@marinelink.comEditorJoseph Keefekeefe@marinelink.com+1 704 661 8475Web EditorEric Haunhaun@marinelink.comBlogger Roster @ MaritimeProfessional.comLead CommentatorU.S. EastU.S. WestBrazilMumbaiHong KongPublisherJohn C. O’Malleyjomalley@marinelink.comAssociate Publisher/Editorial DirectorGregory R. Trauthweintrauthwein@marinelink.comVP SalesRob Howardhoward@marinelink.comCopyright © 2013 New Wave Media. Maritime Professional (ISSN 2159-7758) volume3, issue 4 is published quarterly (4 times per year) by New Wave Media, 118E. 25th St., 2nd Floor, New York, NY 10010. Periodicals postage paid at New York,NY and additional mailing offices. POSTMASTER: Send address changes to: MaritimeProfessional, Maritime Professional 850 Montauk Hwy. #867 Bayport, NY 11705. Publishersare not responsible for the safekeeping or return of editorial material. All rightsreserved. No part of this publication may be reproduced or transmitted in any formor by any means mechanical, photocopying, recording or otherwise without the priorwritten permission of the publishers.MemberHQ 118 E. 25th St., 2nd FloorNew York, NY 10010 USAJoseph KeefeDennis BryantMartin RushmereClaudio PaschoaJoseph FonsecaGreg KnowlerTel +1 212 477 6700Fax +1 212 254 6271ISSN - 2159-7758USPS # 005-893Advertising SalesTerry Breesebreese@marinelink.com+1 561 732 1185Frank Covellacovella@marinelink.com+1 561 732 1659Mitch Engelengel@marinelink.com+1 561 732 0312Mike Kozlowskikozlowski@marinelink.com+1 561 733 2477Dawn Trauthweindtrauthwein@marinelink.com+1 631 472 2715Jean Vertuccivertucci@marinelink.com+1 212 477 67006 I Maritime Professional I 4Q 2013

EDITOR’S DESKAker Rhymes with “Soccer”In an extraordinary end to an unusually buoyant year for U.S. shipyards, a flurryof new blue water, commercial orders flooded into Tier I shipbuilders in the 4thquarter of 2013. As the year comes to a close, the biggest problem facing U.S.builders was solving the quandary of how to find, train and ultimately retain qualifiedshipfitters to toil on the vessels sitting on those fat backorder books. While these arenominally ‘good’ problems to have, they are problems nonetheless. Industry is, nevertheless,finding imaginative ways to adapt existing human resources models as a wayto cope. Within the pages of this edition, you’ll find out how and why.Small and large, brown water or blue water, East Coast, West Coast and Gulf Coast,everyone is busy. And, while the newbuild and replacement work going on in the OSVand inland sectors was perhaps easy enough to predict in a rebounding economy, theblue water commercial revival was not. U.S. yards are now accomplishing the seeminglyunthinkable: flourishing in an environment that does not necessarily include asteady diet of government, Coast Guard and/or Navy hulls.Leading the charge to redefine American shipbuilding is Aker Philadelphia Shipyardand its youthful CEO, Kristian Rokke. Riding an enviable backlog of pure commercial,deep draft hulls that stretches all the way to 2018, Rokke and his managementteam are not resting on their laurels. Nor have they forgotten from where theycame: the nadir of 2011, when their total workforce shrank to just 300 employees.The completely modernized shipbuilder – already negotiating for more options withexisting customers – has succeeded in this location where others could not. Utilizinginnovative partnerships, public/private financing and profit sharing deals, Aker gladlyshares risk with closely aligned customers. Arguably the model for the market that itserves, the story of Aker’s remarkable resurgence begins on page 32.Perhaps more interesting than the shipbuilding revival itself has been the seed fromwhich the entire upswing has emanated. The so-called ‘shale boom’ and the superchargedenergy production of the lower 48 states has changed not only global shippingpatterns, but also redefined demand for U.S. tonnage in any number of vesselcategories. Within these pages, Barry Parker’s simultaneous look at energy and shippingexplains how the equation of the energy transportation business and the countlessvariables that form the sum of its whole, are changing.Finally, I can’t look at success and the maritime markets without also noting thatthis edition marks our third full year of publishing Maritime Professional magazine.Our fully audited subscription list, coupled with the Web site of the same name, combineswith our in-depth coverage to create industry’s best business journal. As wetackle the most interesting and compelling aspects of today’s maritime markets, I’malso mindful that we need to raise the bar even further. That we have the opportunityto do that is in large part due to the support and input of readers – like you. Join us in2014 for more of the same.Joseph Keefe, Editor | keefe@marinelink.comDownload our AppiPhone & Android8 I Maritime Professional I 4Q 2013

THE LIST People & Companies in This EditionA, B, CA.P. Moller-Maersk ........................ 16Aker Shipbuilding ... 8, 14, 33, 34, 35,................................. 36, 37, 38, 39American Bureau of Shipping......... 23American Petroleum Institute ......... 12Amtech .................................. 41, 42Andersen, Nils .............................. 16APT ............................................. 20Araltec SL .................................... 16Arcus Infrastructure Partners......... 16ARES Security Corporation ............ 49AVERT ............................. 49, 50, 51Baltic Exchange ........................... 12Bollinger Shipyards ................. 26, 27Brisbane, Port of .......................... 16Brostrom AB ................................ 16Butterworth, Charlie................ 52, 53Clapham, Scott ...................... 34, 37Colby College............................... 34Crowley Maritime........ 34, 37, 38, 39Cooke, Christopher ...................... 18D, E, FDaewoo (DSME/DSEC) ..... 20, 22, 23Damen Shipyards ............. 43, 44, 45Defense Acquisition University ....... 20Dow Jones Shipping Index ....... 16, 17Edda Accommodation ................... 41EIA ........................................ 10, 12Energy Transfer Partners .............. 10EXXON Mobil ................................ 34Eymard, Jerome ..................... 26, 27FARO ............................... 46, 47, 48Forth Ports PLC ........................... 12G, H, I, JGeneral DynamicsNASSCO .................... 20, 21, 22, 23Goliath Crane ............................... 34Gulf States ShipbuildersConsortium ...................... 26, 27, 28Harris, Fred ................................. 22Harvey Gulf Marine ....................... 39Highclere, LTD ........................ 41, 42IMO ................................. 54, 55, 58Ingalls Shipbuilding ................. 27, 28Irving Oil ...................................... 10Johnson, Daryl ....................... 46, 47Jones Act ............ 12, 19, 34, 37, 39K, L, M, N, OKirby Corporation ......................... 16Kongsberg Maritime ............... 41, 42Kullmann, Randy ........................... 54Kunkel, Robert ............................. 40Kyriacou, Stelios .......................... 58Larson, Parker ........... 20, 21, 22, 23Laurtizen Offshore A/S ................. 41Lehman Brothers .................... 16, 17Lloyd’s Register............................ 53London School of Economics ........ 34Lotshaw, John .................. 27, 28, 29Macondo ..................................... 40Maersk Tankers ............................ 16MAN ............................................ 42Mass. Inst. Of Technology ............. 20Matson ...................... 34, 35, 38, 39McClean Group LLC, The .............. 36McClone, Matt ........................ 26, 27Moody’s ....................................... 39Murray, Senator Patty ................... 30Nat’l Maritime Education Council ... 24,........................... 25, 26, 27, 28, 29Navigator Holdings, LTD ................ 17NCCER ...................... 25, 26, 27, 28P, Q, RParker, Barry ........................... 8, 10Paxton, Matt ................................ 30Petrobras .................................... 44PVI .............................................. 53RBN Consulting ............................ 10Ritter, Luke .................................. 49Robert, Peter ............................... 45Rokke, Kristian 8, 14, 34, 35, 37, 38,Rolls Royce .................................. 42Ross, Wilber ................................ 17Ryan, Senator Paul ....................... 30S, TSchulz, Christopher ...................... 54Seacor Holdings ........................... 20SeaRiver ...................................... 38Severn-Trent de Nora .................... 56Shipbuilder’s Council of America 24, 30SOLAS ........................................ 53Summit Engineering and Design 47, 48Theisen, Jeffrey ...................... 34, 38TOTE, Inc. ............................. 20, 22Tradesmen International ......... 25, 26,............................................. 27, 29Trafi gura ...................................... 10TRG Holdings AS .......................... 34Tsakos Energy Navigation ............. 10U, V, WUNCLOS ...................................... 53United Kingdom AccreditationService ........................................ 52U.S. Coast Guard .............. 8, 23, 39,.......................... -43, 54, 55, 57, 58U.S. Dept. of Energy ............... 10, 12U.S. Department of Defense ......... 51U.S. Department of Labor ............. 19U.S. Dept. of Homeland Security ... 49U.S. Department of Transportation 38U.S. Merchant Marine Academy ..... 20U.S. Navy .............. 8, 30, 31, 34, 39U.S. Outfi tters .............................. 42van Os, Jan ...................... 43, 44, 45Virginia Ship Repair Assn ............... 29Voith............................................ 42VT Halter Marine........................... 39Ward, Harry ................................. 16Warton School, the ....................... 34Wä rtsilä ...................................... 58World Wide Supply ........................ 44www.maritimeprofessional.com | Maritime Professional | 9

InsightsBy Barry ParkerEnergy & ShippingWith “America’s Energy Renaissance” oil trade patternsare changing. The impact is far reaching, but not easily defined.Ship spotters around the Hudson River, which snakesnorth from New York towards Albany, have been abuzzsince the middle of the year when the medium range(MR) tanker Afrodite, owned by Tsakos Energy Navigation,has been sighted regularly. The 2005-built 53,000 deadweightvessel commenced a two-year charter to Irving Oil, at a rate of$16,000/day, topped off by a profit-split. The Afrodite, alongwith a sister vessel, are hauling crude oil produced in the Bakkenfields, in North Dakota. Since U.S. producers are not permittedto export crude oil, the limited quantities sent to Canadaare one exception granted by the U.S. Department of Energy.Along the U.S. Gulf Coast, around Corpus Christi /Aransas,the seascape there has also changed; tanker watchers have seenhordes of vessels lining up, waiting their turn to load cargoesof refined products destined for Europe and South America.As pipeline expansions and re-routings bring crude oil intoCorpus and Houston, inbound capacity grew by nearly 1.5Mbd in 2012 and 2013, according to RBN Consulting, basedin Houston. These consultants anticipate a further growth of1.9 Mbd in 2014 – 2015, much coming from the Eagle Fordand Permian Basins in Texas.Symptomatic of all the optimism is a move by oil traderTrafigura, which recently announced plans to spend $500 millionto increase capacity at its export docks at Corpus Christi,in conjunction with the conversion of a gas pipeline by EnergyTransfer Partners that will move 100 Kbd to the port fromEagle Ford – some 80 miles inland.Game ChangerWords like “game changer,” “tectonic shift” and “new paradigm”have all been applied to developments that were underway,albeit under the radar, in late 2009, as energy pricesratcheted upwards, following the financial upheavals of a yearearlier. Simply put, at sustained oil prices above $80/barrel,recently fine-tuned hydraulic fracturing technologies and enhancedhorizontal drilling capabilities have enabled extractionof oil and gas from “tight” rock formations including shale.The Energy Information Administration (EIA), part of theU.S. Department of Energy (USDOE) said, in a report releasedin mid November, “U.S. crude oil production averaged7.7 million barrels per day (bbl/d) in October. Monthly estimateddomestic crude oil production exceeded crude oil importsin October for the first time since February 1995, whiletotal petroleum net imports were the lowest since FebruaryMedium range tanker Afrodite has created a buzz, as it has been sighted regularly alongthe Hudson River. What’s the excitement for a 2005-built 53,000 dwt ship? It has commenceda two-year charter to Irving Oil, at a rate of $16,000/day, topped off by a profitsplit,hauling crude oil produced in the Bakken fields, in North Dakota.(Source: Tanker “AFRODITE” by Christina Sun)10 I Maritime Professional I 4Q 2013

Insights1991.” Enhanced drilling and hydraulic fracturing have madethis possible. Crude oil produced in Eagle Ford reached 400Kbd barrels/day by late 2013 - more than double its levels oftwo years ago. In November, the USDOE was forecasting thatcrude produced in the Bakken region would exceed 1 Mbd,nearly triple the pace of 2011. The USDOE added, “EIA forecastsU.S. crude oil production will average 7.5 million bbl/din 2013 and 8.5 million bbl/d in 2014.”The International Energy Agency (IEA), representing a consortiumof developed countries, looks for the U.S. oil (includinggas liquids and condensate) production to reach 11.6 Mbdin 2020 (compared to 9.2 Mbd in 2012 ), exceeding that ofSaudi Arabia. During the upcoming decade, China is forecastto become the world’s largest oil importer. But, what does allof that actually mean?Energy’s Net ImpactParticipants in the maritime business, ranging from fueltraders to ship spotters, have seen a multitude of impacts. IncreasedU.S. oil production has already led to reduced importsof crude oil; most dramatically, imports of crudes from WestAfrica (the same type of “light” oils characteristic of shaleoil) have been reduced. These shipments (typically moving inSuezmax or VLCCs, have instead moved to Europe and Asia.VLCC shipments inbound from the Middle East (except forSaudi Arabia) have also declined. Imports into PADD 3 (theU.S. Gulf Coast) have dropped from a high of 7.9 Mbd in June2005 to as low as 3.9 Mbd in February 2013. As imported oilhas become more attractively priced (with a falling Brent –WTI spread), imports into PADD 3 rose up to 4.9 Mbd laterin 2013.Since 2005, product imports have fallen from 4 Mbd downto a rate of 2 Mbd. Exports have risen from around 1 Mbd to3.3Mbd, as the U.S. has become a net exporter of products.Perhaps the most vivid glimpse into the changing tradescan be seen in the North Atlantic marketplace for MR tankershauling refined products. Two important routes, Rotterdam/New York and Houston / Amsterdam are both widely followedand closely analyzed by oil traders and shipowners. In the pasttwo years, PADD 1 (East Coast) products imports have fallenfrom 1.6 Mbd down to 0.8 Mbd, while exports (llargely fromPADD 3 representing the Gulf Coast) exports have risen from1.5 Mbd to nearly 3.5 Mbd.The actual time charter equivalent (TCE) hires experiencedby operators of vessels in these trades have mirrored the US-DOE statistics. Using calculations provided by the Baltic Exchange,which evaluates these routes (and many others) on adaily basis, shown in the graph, daily hires for the Rotterdam/ New York route, with gasoline as the main cargo, have fallensteadily in 2013. The route now described as “the new fronthaul”for such vessels, exports of diesel from Houston andCorpus Christi, to Amsterdam, has seen rising hires throughoutthe year. Indeed, it has bolstered the daily posting on theBaltic Exchange’s “MR basket” for a notional tanker making14 knots on 36 tons /day of IFO consumption. Industry analystsestimate that daily results for “Eco-tankers” would likelybe around $3,000/day higher. For example, if the Baltic basketshows $22,000/day, a 2013 built Eco-tanker (which wouldconsume far less fuel) would likely return $25,000/day to itsowners.Without a doubt, the Energy Renaissance has, in part, alsofueled the robust rebound of domestic, commercial blue watershipbuilding. And not a moment too soon. Sequestration fearshave some big shipyards scrambling to shift their governmentbacklogs to something a little more balanced. But, the currentsituation belays the notion that U.S. yards cannot survive withouta steady diet of Navy and/or government work. Beyondthis, the energy renaissance has some Jones Act freight ratessoaring to record highs. For the time being then; so far, so good.Unanswered QuestionsEnergy issues and attempts at forecasting go hand in hand;a number of important issues- with an unpredictable locus ofgeopolitics, environmentalism and economics are looming inthe future. Though this article has emphasized the here andnow – with a focus on movements of refined petroleum products,natural gas (found alongside crude oil and condensates inshale formations) is also part of the story. Beginning as earlyas 2016, the U.S. will begin exporting LNG from a handful ofnewly approved terminals in the Gulf Coast. Observers shouldbe watching the willingness of the USDOE to continue grantingapprovals for exports, as well as the efforts of domesticconsumers of natural gas (led by chemical producers whobenefit from its availability and low price) to stymie continuedexport growth. Some twenty additional applications aresaid to be in the works.Other questions worth asking concern crude oil exports –presently prohibited (unlike refined products such as dieselfuel and gasoline), with a handful of exceptions. The AmericanPetroleum Institute (API), a trade association led by majoroil companies, has publicly stated that it supports a fresh lookat the applicable rules, and will be aiming for the eliminationof restrictions on exports of crude oil. But, loosening crude oilexport controls could also have the unintended effect of endingthe most pronounced U.S. domestic shipbuilding cycle inthree decades.12 I Maritime Professional I 4Q 2013

www.maritimeprofessional.com I Maritime Professional I 13

InsightsAker Shipbuilding CEO Kristian Rokke, for example, embracesthe “direct exposure to the shale boom and … the risk/reward of the investment.”Any loosening of crude oil export limits and/or a softeningof the Jones Act would therefore likely spell an end to thekinds of creative newbuild deals emanating from Aker that alsohelp to sustain the current shipbuilding boom. A variation onthis approach is the suggestion that the U.S. export light crudes(produced from shale), in an agreed swap for supplies of heavycrudes- suitable for many U.S. refineries.Tanker trade patterns over a longer period are also highlyuncertain. Attendees at numerous industry events and symposiumshave heard that product movements are set to grow,which in the short term, appears to be the correct call. Overtime, as drilling techniques successfully finetuned in NorthAmerica spread across the globe, major “importers,” notablyChina, thought to be a big component of VLCC demand in thecoming decade, may have their own versions of the EnergyRenaissance. Likewise, LNG trades may be impacted by vastamounts of shale gas thought to exist in China, but also inAlgeria and Argentina.Another set of questions, presently without real answers,concerns the move of offshore oil exploration and productioninto deeper waters. Like “tight oil,” tapping offshore reservesbecomes economical at higher oil prices. But, with vast newhydrocarbon supplies available onshore, will moves into inhospitableregions (for example, the Arctic reaches) and ultradeepwaters continue to be viable? And, if not, is the OSVbuilding boom for the expected deepwater play also sustainable?And, of course, the big elephant in the room is the priceof crude oil – with futurists wondering what might happenin the event of a prolonged lowering of the prices across theentire hydrocarbon barrel.In the end, there will be benefactors and casualties as theultimate outfall from “America’s Energy Renaissance.” Moreimmediately, it is changing the equation of the energy transportationbusiness and the countless variables that form thesum of its whole.Source: BDP1 Consulting14 I Maritime Professional I 4Q 2013

InsightsBy Harry WardMaritime M&A:Financial Crisis to Present DayWhy the wild ride for company valuations?The financial crisis and global recession that began in2008 had a major impact on almost every major worldindustry. Its effects can be examined by analyzing historicaldata and trends for the highly cyclical maritime industry,including both public company values and mergers andacquisitions (M&A) transaction records. All major stock indicesand deal metrics fell in concert at the outset of the crisis,which is usually marked by the collapse of Lehman Brotherson September 15, 2008. Over the ensuing five years, individualsegments such as ocean shipping, marine terminals and offshoreservice vessels experienced varying market fluctuationsand recovered at different rates for different reasons.Boom to BustFigure 1 shows the effects of the crisis as the boom turned tobust from 2007 to 2009, with decreasing M&A deal flow andoverall reduced company valuations. The red numbers on thegraph in Figure 1 represent the average multiple of operatingearnings, or EBITDA (Earnings Before Interest, Taxes, Depreciationand Amortization) for each year. The EBITDA multipleenables us to compare transaction values by adjusting outnon-cash items such as depreciation, and financial variablessuch as interest payments that can change from buyer to buyer.Until late 2008, the deal environment was decent, with dealssuch as Maersk Tankers’ $1.3 billion acquisition of SwedishBrostrom AB. At the time, Maersk CEO Nils SmedegaardAndersen was cited as saying that A.P. Moller-Maersk A/Swas ready to grow via acquisitions of shipping companies.However, by the middle of the following year, stock priceshad dropped across the board and Maersk fell 60% from its2008 high to 2009 low.Market dysfunction caused by the financial crisis resultedin a very low number of maritime deals in 2009, of whichmany were marked by relatively low valuations. In March of2009, the Dow Jones Shipping Index (see Figure 2) hit alow EBTIDA multiple of 2.8X, meaning that the collectiveaverage multiple for the public companies that constitute thatparticular Dow index were trading at that low valuation. Laterin the year, Araltec SL of Spain bought a $112 million stakein Kirby Corporation (NYSE: KEX) at an opportune timewith an EBITDA multiple of 6.7X. Since that time, Kirby’sstock price is up 280% and the dominant US inland and coastalliquid product carrier trades today at an expansive multipleof 11.1X EBITDA.Trending Upward: with caveats …In 2010, the market began to trend upward in completeddeals, and stock prices had begun to rise steadily in anticipationof a market recovery. By Feb 2010, the Dow Jones ShippingIndex was up 58% from its low point just a year earlier,and the stocks in the index traded at a very generous multipleof 8.9X EBITDA. The large gyrations evident in Figure 2show that publicly-traded shares often experience more pronouncedswings than those of private companies. Toward theend of 2010, the pace and value of deals had picked up in bothlarge shipping and ports deals. In November, a consortium ofinvestors acquired the Port of Brisbane in a $2.8 billion dealwith a healthy 16.3X multiple.Moving into 2011, deal multiples continued to rise overalland we saw a significant jump in the overall weighted averagemultiple for the year (Figure 1). Much of this was driven bya number of large port and port services deals, including twoin Hong Kong and China with multiples north of 40X. A bitcloser to home, Forth Ports PLC of the UK was acquiredby Arcus Infrastructure Partners in a $1.3 billion deal thatyielded a 14.9X multiple. However, it was during this periodthat the impact of excessive building and overcapacity in theocean shipping markets became clear. New ship deliveries thathad been booked during the boom in 2007-2008 continued onschedule, despite the slowing recovery in demand for internationalbulk and container transport. These conditions put pressureon carriers, and we can see a significant drop in the DowJones Shipping Index beginning in April, 2011.Recovery and a Look AheadIt wasn’t until 2012 that the wild market fluctuations beganto steady out a bit, though at stock and deal values somewhatlower than pre-crisis levels. From this point, the most noticeabletrend is the divergence of company performance and valuesamong the various maritime sub-segments. The sustainedseparation of public company values in the past few yearsincludes containerships, drybulk, tankers and inland/offshorecompanies. Energy-focused companies in the inland/offshoreworkboat market have outperformed all larger shipping segmentsby a wide margin, while oceangoing tanker stocks havefared better than cargo and bulk carriers.On the acquisition front, Kirby Corporation has been themost prominent player in the inland and coastal segment, withsix acquisitions since 2008 totaling about $800 million. Themost interesting story among the larger carriers has been the16 I Maritime Professional I 4Q 2013

workings of distressed asset investor Wilbur Ross. Mr. Rosshas set his sights on the shipping sector, having acquired 44%of liquefied gas carrier Navigator Holdings LTD out of theLehman Brothers bankruptcy for $110 million in 2012. Helater increased his equity position to 60% of Navigator, whichwas recently valued at about $1 billion after a successful initialpublic offering (IPO).Today, Mr. Ross and other investors see the potential forstrong returns in the shipping sector. As the world economyseems to be slowly improving, international trade is increasingand the industry remains very fragmented. Despite poorperformance over a longer period, containership stocks havemirrored the strong performance of the S&P 500 in 2013, anddry bulk carriers have bested the returns in all other maritimesegments through November. The shale petroleum and frackingbooms have driven increased demand for shipping in theUS, and Gulf of Mexico oil production continues to drive theoffshore market. Barring a major macroeconomic setback,maritime companies and deal flow are poised for a solid showingin 2014.Figure 1Figure 2www.maritimeprofessional.com I Maritime Professional I 17

InsightsWhen is a Ship Not a ShipBy Christopher CookeDoes your insurance coverage fit your operation?No business likes to hear the word “denied” from their insurancecompany. But when a business purchases an insurancepolicy, it enters into a contract that carefully outlines what insuranceprotection is being offered to the business, and what isnot. To avoid being caught off guard, it is especially necessaryfor marine businesses, and those that provide service to them,to make sure their insurance coverage fits their operations, andthe scope of work they are providing.Consider the hustle and bustle of a shipyard operation. It is afacility on or around a waterway, and filled with people comingand going. Some of those people are shipyard employees,others can be the crew of vessels being repaired, and many ofthe others are the numerous subcontractors performing variousoperations such as cutting or welding, engine installationand testing, electronics installation, or ship joinery.To minimize their liability, most shipyards require each subcontractorto maintain liability coverage, and provide a certificateof insurance to assure that those companies or individualcontractors working on their premises have the required insurancecoverage. Because of the diversity of work being performedon site, how does a business assure that the insurancecoverage that they require is the coverage that is really whatis need? There are definitely exceptional insurance challengeswhen working on, or around waterfront – for any type business.Complex Operations Demand Tailored Risk AssessmentsIn fact; the uniqueness and complexity of marine operationshave prompted very industry-specific tailored insurancecoverage(s) to address maritime risks. Contractors providingservices to various industries might not be aware of the nuancesinvolved in covering marine risks or might not evenconsider the work they are doing to be marine-specific. Theymay also assume that their standard general liability or workerscomp policies will respond just fine. These assumptions,however, could prove costly in the event of a claim.So when is a ship not a ship? Here’s an example: A dieselengine manufacturer put engines in a ship being newly built.When the engines are test fired, a cylinder head blows throughthe engine case and the ensuing fire destroys the ship. Theengine manufacturer presents the claim to their Ship RepairersLegal Liability insurer. Ship Repairers Legal Liability coverageprovides protection against property damage to vesselsin their care, custody and control for the purpose of beingrepaired. The claim, however, is rightfully declined. Why?According to maritime law, a ship is not a ship until it haslaunched and put to its intended use (which usually meansit has been delivered to the owner). In this instance, this shipwas being built and had yet to be delivered, or put to its intendeduse. Therefore, it was not covered by the Ship RepairersLegal Liability policy. So you need to ask yourself, do youwork on new ships being built? Or maybe you work on the occasionaldiesel truck or crane. Does your Ship Repairers LegalLiability policy have an “Other Work” endorsement, whichprovides coverage for similar types of work on other thanships? Perhaps you work at other people’s repair facilities?Does your Ship Repairers Legal Liability policy have a scheduleof premises that coverage is subject to? Does your policyhave a “Travelling Workman’s” endorsement, which providedcoverage for your work at other than scheduled premises?Defining the Law – and the RisksWork performed on or around the water often falls into awhole other jurisdiction than many businesses are used to– maritime law. Even though they might not consider themselvesmarine businesses, if they are working on a ship or nearnavigable waters, they may very well be considered a marineoperation that requires particular marine insurance protection,not offered by standard policies.Workers compensation coverage offers a prime example.If employees are performing an operation around navigablewaters, state-mandated workers compensation would not applybut rather Longshore and Harbor Workers’ compensationwould. The Longshore and Harbor Workers’ CompensationAct (LHWCA), enacted in 1927 provides employment-injuryand occupational-disease protection to approximately 500,000workers who may suffer bodily injury on the navigable watersof the United States, or in adjoining areas. It provides compensationto an employee if an injury or death occurs uponnavigable waters of the US - including any adjoining pier,wharf, dry dock, terminal, building-way, marine railway orother adjoining area customarily used by an employer in loading,unloading, repairing, dismantling or building a vessel.While originally enacted to protect workers engaged in stevedoringand ship building operations, the act has been expandedto encompass nearly any employee or company whosework takes them on “navigable waters.” That can includemarine contractors, diving contractors, service companiessupplying equipment “on the water” and ship repair operations.And, it works entirely different than standard workerscompensation coverage. While workers compensation is state18 | Maritime Professional | 4Q 2013

egulated, longshore claims fall under the jurisdiction of theUS Department of Labor and more severe penalties and legalramifications can be imposed for noncompliance.When working on a vessel, individuals are typically coveredwith the Merchant Marine Act of 1920, more commonlyknown as the Jones Act. The Jones Act is a federal act, whichprovides benefits – similar to Workers’ Compensation – to employeeswho are working on a US-flagged vessel, which can bedefined as anything from a small watercraft to a larger tanker.Specific CoverageMarine insurers have developed marine general liabilitycoverage for a variety of business risks that are either excludedor under-insured in GL policies. Marine general liabilitypolicies provide general liability coverage, and additionallyproperty damage coverage for property in your care, custodyand control. The c,c,c coverage sections of the policy can betitled Marina Operators, Wharfinger Legal, Stevedores Legal,Terminal Operators Legal, among others. Again, the rightquestions must be asked in order to define the proper policies.Is coverage limited to ships, or private pleasure-type watercraft,or marine cargoes? Is coverage marine operations specific?Is coverage location specific?Quite simply, there is no blanket insurance coverage thatprotects everything equally. And that is not a bad thing. Nobusiness wants to pay for insurance coverage they do notneed. Instead, their real aim is to buy insurance coverage thatfits their individual needs.For marine businesses, navigating the various insurance policiescan be like moving through murky water. It can be especiallychallenging for businesses unfamiliar with maritime lawthat still significantly guides marine operations. With the experiencethey bring from servicing various marine operations andkeeping a close eye on case law and legal precedent in marinecoverage litigation, specialized marine insurance brokers andinsurance carriers can provide some valuable guidance to assureinsurance coverage fits the operation and or work at hand.Because there are times that a ship may not be a ship, everybusiness wants to be sure its insurance coverage is insurance coveragethat is right, reliable, and appropriate to the expected risks.www.maritimeprofessional.com | Maritime Professional | 19

IInterviewMARPRO PROFILEParker LarsonDirector of Commercial ProgramsGeneral Dynamics NASSCO Shipyard, San Diego, CABy Joseph KeefeWhen we caught up with NASSCO’s Parker Larsonin December, he had only just been promoted toDirector of Commercial Programs at the sprawlingSan Diego, CA shipyard. Previously NASSCO’s ProgramManager for Commercial Contracts, he no doubt played alarge role in the recent high profile deals won by NASSCO,in particular the two 3,100 TEU LNG-powered containershipsfor TOTE, Inc. Additionally, he was responsible for design,planning, and construction of over $1B in commercial newconstruction work at NASSCO that includes four 50K DWTproduct tankers for APT, two 50K DWT product tankers forSeacor Holdings, and the design contract for the conversionof two TOTE Orca Class trailerships to operate on LNG. Theimpressive commercial backlog promises to keep him evenbusier for the foreseeable future in his new role.Starting his career at NASSCO in 2003 as a Production Associatefor the Ship’s Management Team, Larson then movedinto roles of increasing responsibility including ProductionArea Manager on the T-AKE program for the Navy, DeputyProgram Manager on the PC-1 product tanker program forAPT, Manager of Commercial Engineering Projects, and ProgramManager in Business Development & Strategic Planning.Larson’s love for shipbuilding began with his educationalexperience(s).Parker attended the United States MerchantMarine Academy in Kings Point, NY, graduating magna cumlaude with a Bachelor of Science Degree in Marine Engineering& Shipyard Management. Along the way, he also receiveda Master of Science Degree in Oceans Systems Managementfrom the Massachusetts Institute of Technology in Cambridge,MA where he wrote his thesis on LNG infrastructure in theUnited States. Parker has spent the past two years developinghis knowledge of LNG propulsion in the commercial marketplace.He also completed the Program Manager’s Course atthe Defense Acquisition University in 2009.Along the way, Larson has served in several shipyard rolesincluding production, engineering, business development, andprogram management. Directly involved in the transformationof NASSCO’s business model for commercial new constructionthrough collaboration with Daewoo (DSME/DSEC) startingin 2006, he naturally hit the ground running in his new role.Nevertheless, MarPro convinced him to slow down in December,if only briefly, to get his take on all things shipbuilding.Reflecting on his chosen career path, Larson told MarPro,“Shipbuilding, as a facet of the maritime industry, is an incrediblysatisfying career path. There are very few careers inthe world where you can design and construct such a finelyengineered product and then watch it become an operationalentity that lives on for 30+ years. For me, being part of thatprocess is uniquely special.”Perhaps the most interesting part of Larson’s CV is his knowledgeof LNG and how that eventually could play a big role inthe construction of the containerships and trailerships. As hewas promoted to Director of Commercial Programs at NASS-CO earlier this year, that experience and knowledge base nodoubt didn’t hurt him on his climb up the food chain. More thanLarson’s job billet will change as he assumes a new role. He explained,“In addition to the program management responsibilitiestied to NASSCO’s existing commercial new constructionbacklog, I have direct production interface. For example, I willmanage the commercial ship management team which serves as20 | Maritime Professional | 4Q 2013

the production organization responsible for the delivery of eachcommercial vessel. Additionally, I will be continually engagedin business development given my direct experience with LNGpropulsion and commercial program execution.”As his career evolved, Larson has been witness to and a partof the many changes in shipbuilding, particularly on this sideof the pond. Even in the midst of the most profound shipbuildingrevival in this country has seen in some time, over the pastdecade, NASSCO has shifted its commercial shipbuildingbusiness model. Larson says, “Prior to the mid-2000s, we designedand procured all material for our new construction projectsat NASSCO. In 2005, NASSCO partnered with DaewooShip Engineering Company (DSEC), a subsidiary of DaewooShipbuilding & Marine Engineering (DSME), to collaborateon international projects. DSEC became the lead design andprocurement agent and we lead the efforts to integrate DSEC’sdesign into NASSCO’s shipyard’s planning, purchasing, andconstruction processes. Leveraging the world-class commercialdesign standards and purchasing power from DSME hashelped NASSCO become more competitive in the Jones Actshipbuilding market.”Also during that time frame, NASSCO also adjusted its approachto construction schedules. Today, NASSCO does not cuta single piece of steel until the ship design is fully complete anda large portion of planning effort is finalized. NASSCO’s Directorof Commercial Programs insists, “This ensures we identifyand address risks in new-construction programs as early as possible.As a result, we have reduced the construction cycle timesand improved quality in our past three new-build programs.”As Jones Act shipbuilding sees what can only be describedas a robust and arguably unexpected revival, we asked Larsonhow long this trend – a cyclical boom, really – can continue.Enthusiastically, he replied, “As more domestic oil and gasis recovered, there is increased demand to move the productbetween U.S. ports, which invokes the Jones Act and drivesthe need for additional tonnage in the market. With NorthAmerican Emission Control Areas (ECAs) in 2015 (addressingSOx), Tier III regulations in 2016 (addressing NOx), andan Energy Efficiency Design Index (EEDI) currently in place(addressing CO2), ship owners need to evaluate their existingpropulsion plants onboard. Ship replacement can be a costeffectivemethod to address these increasingly stringent emissionregulations. There are still several ships in the U.S. coastwisefleet that are more than 30 years of age operating withwww.maritimeprofessional.com | Maritime Professional | 21

MARPRO PROFILErelatively inefficient power plants. This tonnage will need tobe replaced over the next 5-10 years.” Clearly, Larson, likeother U.S. blue water builders, remains bullish on the marketsfor the near term.Despite all the good news, however, a key ‘knock’ on U.S.yards has always been that they cannot compete with foreignbuilders in terms of efficiency, costs and a raft of other metrics.Larson’s boss, Fred Harris, on the other hand, has alwaysbeen a big believer in emulating the Korean art of the seriesbuild technique. Larson shares his enthusiasm. “Over the pastseven years, NASSCO has learned a lot from our partnershipwith the expert shipbuilders at DSME and DSEC. As a resultwe’ve made several facility improvements, including anew blast and paint facility, usage of transporters and updatedground outfitting process lanes. We’ve seen a positive impactto both our commercial and government shipbuilding programs.”He continues, “A key metric we follow is completingthe design prior to starting construction. This becomes moreimportant when building a series of ships. A shipyard must getthe lead ship right or the impact of change will permeate negativelythroughout the entire class of vessels. Changes madeonce construction has started impacts the design and directlyaffects the supply chain, schedules and quality.”Larson, without neglecting his other responsibilities, clearlyhas a passion for the TOTE ship projects. That’s only natural,especially considering his affinity for LNG and the intendedpropulsion of this new class of vessel. He explained, “The TOTEships are 764-foot-long, 3,100 TEU LNG-powered container-NASSCO is arguably one the the nation’s more progressive shipyards,with a healthy Navy and Commerical orderbook, including pioneering workin building state-of-the-art LNG-powered tonnage.22 | Maritime Professional | 4Q 2013

ships, which are setting a new benchmarkin green ship technology. When completedthey are expected to be the largest ships ofany type in the world primarily poweredby liquefied natural gas.”NASSCO and Larson approachedthese ships like any other program. Afteridentifying the risks associated with thedesign, procurement, and construction,each one of those metrics was addressedthrough execution of a risk managementplan. Larson adds, “For example, it is paramountthat we work closely with UnitedStates Coast Guard (USCG) and ABSto understand any regulatory and designchallenges associated with the LNG fuelgas system, from arrangement configurationto hazardous zone definition to trimand stability calculation. We have workedclosely with USCG and ABS personnelsince the outset of the program in conjunctionwith DSEC and our equipmentsuppliers. This program is on track andthe design will complete on time beforethe end of 2013.”We finished up by asking about the 600pound gorilla in the room – concerns overthe potential cutbacks from the federalgovernment and shipbuilding programsas a function of the ongoing sequestrationbattles. That discussion has NASSCO’sChief commercial executive square inthe middle of it. For his part, Larson likeswhere the yard is sitting, saying only,“NASSCO has a well-balanced portfoliowith commercial new construction, governmentnew construction, and U.S. Navyrepair projects. This provides NASSCOthe ability to shift resources when the allocationof work changes between eachbusiness segment.” Nevertheless, keepingthat portfolio balanced going forwardcould be Larson’s biggest challenge. Helikes his chances of doing just that.As NASSCO launches a new era for itsupgraded facilities, filled with a fat backlog,Parker Larson is arguably the perfectcandidate to lead the firm’s commercialsector as it takes on some of the most excitingand cutting edge shipbuilding projectson the planet. And, there’s no placeelse he’d like to be.

TTrainingTRAINING & RECRUITMENTBeyond ShipbuildingDomestic shipyards get creative in its approach to finding,training and keeping qualified shipfitters.By Joseph KeefeThe domestic, U.S. shipbuilding boom is here: blue water,brown water, offshore support, inland, and exportmaritime security platforms, too. The robust comebackhas just about everyone on this side of the pond very happy;unless of course, you are in the ‘human resources’ departmentand find yourself scrambling on a daily basis to recruit, trainand retain qualified help to competently build all those orderson your fat backlog. That said; these are good problems to have.According to the Shipbuilders Council of America (SCA),private shipyards in the United States support 402,000 jobs and36 Billion in GDP. Even with those staggering numbers theshipyards are still faced with a severe skilled worker shortage.Issues facing the industry include an aging workforce, lack ofindividuals entering the trades, a dearth of training opportunitiesand the rapidly rising cost of recruiting, hiring, testing, andtraining. There are answers out there. You just have to knowwhere to look. Many shipyards have done just that.Resources for Human Resources ProfessionalsFor starters, the National Maritime Education Council(NMEC) is a Gulf Coast-based group seeking to standardizeand improve craft training within the maritime industry.As the spearhead for efforts to standardize and provide credentialsfor shipyard workers, backed by a coalition of 20+industry trade groups and companies, what the NMEC doesnext could well be the template for industry human resourcesdevelopment that we have been thirsting for.The NMEC is funded by its members and a financial commitmentis involved based on a company’s headcount. Thereare five investment levels in addition to an annual membershipWhile shipbuilding is booming across nearly every sector in the United States,there remains a serious need for talented workers across several trades.(Tradesmen International credit)24 | Maritime Professional | 4Q 2013

fee. There are also membership levels foracademic institutions and affiliate organizationssuch as equipment manufacturers,suppliers, trade associations, etc. Thefunds collected are utilized to develop industrydriven, modularized, craft specificstandardized curriculum and assessmentsto meet the demands of the industry.Through NCCER, the NMEC has programsthat can be utilized to recruit andenhance the image of the shipbuildingand repair industry and generate nationalexposure. NCCER is a not-for-profit501 (c)(3) education foundation createdby the construction industry to developstandardized curriculum with portablecredentials and to help address theskilled construction workforce shortage.NCCER is recognized by the industry asthe training, assessment, certification,and career development standard for theconstruction and maintenance craft professional.And now, those standards arecoming to the waterfront.Another equally attractive way forshipyards to reach the Promised Land iscontract with a group such as TradesmenInternational. Tradesmen is recognizedfor their ability to supply contingent labor,but it is their consultative services– particularly Labor Productivity Consulting– that has gotten notice by constructionbusinesses. That tried-and-trueformula, using a contractor’s historicallabor data, enables companies to determinewhat their optimal permanent orcore workforce total should be, and isalso being applied to help the nationalshipyard industry. In essence, clients areultimately able to run their businesseswith a leaner permanent payroll and,through close interaction with Tradesmen,are capable of supplementingtheir core employees with Tradesmen’shigh-caliber craftsmen only as workloadwarrants it. The goal is two-pronged:substantially increase workforce productivityand project profit margins.This bottom line gain gets put back intogrowing the business, providing enhancedbenefits for their employees andkeeping up with technology.www.maritimeprofessional.com | Maritime Professional | 25

TRAINING & RECRUITMENTWeeks Marine, Inc.PORT ENGINNERSJR PORT ENGINNERSwww.weeksmarine.compecov@weeksmarine.com985-875-2575Tradesmen: National Coverage &a Skilled, Diverse WorkforceAccording to Matt McClone, Tradesmen International VicePresident Workforce Development, the key advantages of engagingTradesmen as a staffing partner is rooted in their abilityto meet the distinct trade requirements of shipyards, beginningwith their national team of shipyard coordinators: formermariners, merchant captains, shipbuilding professionals, navalofficers, and enlisted men. “With these insights, they havethe unique ability to understand the unique and dynamic needsof the shipyard industry. That, along with our national reachincluding a permanent presence in 36 port cities allows us toaccess a very large pool of skilled marine craftsmen and provideuniform service in all shipyard locations.”Tradesmen International’s screening process is stringent: aminimum of two interviews; skill-testing using MOCode testsand available hands-on testing; verification of a minimumthree years of experience; reference checks with a minimumof three employers; background checks that meet client standards;drug testing as required by the client; E-Verification toprove U.S. Citizenship; a valid driver’s license and reliabletransportation verification and confirmation of PPE and appropriatetools-of-the trade ownership. Not just anyone gets towork under the Tradesmen umbrella.Arguably the ideal fit for a cyclical industry such as shipbuilding,Tradesmen’s biggest challenge is often just educatingthe clients to understand the benefits and importance ofchoosing the right staffing firm. McClone Adds, “With thesevere shortage of skilled craft professionals weighing onthe industry’s shipyards, the emphasis is not on convincingshipyards to include a variable labor partner into their staffingsolution; the recession did a good job of explaining that tothe shipyards. The recession certainly opened the door for ourbusiness model but it also flooded the market place with staffingfirms, temp agencies, and similar companies. It’s importantthat shipyards choose the right firm researching the company’shistory, treatment of employees, standards of businessand overall ethical standards. Can the firm do what they saythey will and stand behind their employees? We can, and do.”Today, Tradesmen International’s strong suits include shipyardand yacht trades; both repair and new construction. Thefirm prides itself on its ability to staff all size marine projectsranging from extremely specialized mega yacht constructionprojects that may only require a handful of niche craftsmento large repair jobs that require several hundred craftsmen ina short amount of time. McClone calls it “local presence andnational reach.”Bollinger BelievesAccording to Bollinger Shipyard Human Resources ManagerJerome Eymard, Bollinger’s primary reason for becominginvolved with NMEC was to actively support an associationwhose initiative is to address a major concern of theshipbuilding and repair industry; namely, workforce development.Eymard told MarPro in November, “Bollinger has beena member of Gulf States Shipbuilders Consortium (GSSC)since 2008 and we were involved in the GSSC’s creation ofthe NMEC to address industry workforce development issueson a national level, so we were a member of the NMEC fromits inception in 2012.”The NMEC/NCCER curriculum models offers flexibilitywith training. For example, member organizations can takessteps through the NCCER to become an approved accreditedtraining sponsor and/or assessment center. With these options,companies can rate their current workers through assessmentsin order to identify areas for skill improvement. The assessmentsin turn determine what modules workers would need tocomplete in order to attain a higher classification. Also, companiescan utilize their NCCER accredited local technical andcommunity colleges to train their existing workers and extendthe training to high schools to generate new skilled workersfor the industry.Bollinger’s Eymard explains further, “Overall, we will use26 | Maritime Professional | 4Q 2013

the NMEC program to supplement our existing training programs.With the availability of a nationally recognized maritimecurriculum, we can recruit new workers into our companythat will be well-rounded and knowledgeable in the workwe perform. These individuals can aggressively move quickerwith on the job programs in addition to advancing their skilllevels with after-hour NMEC courses.”Today, Bollinger’s greatest need is for pipe fitters and shipfitters. Eymard adds, “Overall, we will need all crafts rangingfrom welders, fitters, marine electricians, operators, etc.in order to build the next generation of skilled workers for theindustry.” And, he says, “We are also actively participating insupplying subject matter experts for the creation of new curriculumand we are communicating with regional industry associations,informing them of the NMEC’s initiatives in orderto generate interest among other shipbuilders/repairers.”National Maritime Education Council (NMEC):A Template for SuccessJohn Lotshaw is the Gulf Coast Director of Training andWorkforce Development at Ingalls Shipbuilding, and is responsiblefor training all of Ingall’s craft personnel. Beyondthis, he also serves as the inaugural chair of the National MaritimeEducation Council (NMEC). As the spearhead for effortsto standardize and provide credentials for shipyard workers,backed by a coalition of 20+ industry trade groups and companies,what he and the NMEC do next could well be the templatefor industry human resources development that we havebeen thirsting for.The new shipyard workforce development effort on the GulfCoast is an exciting concept. The initial efforts at standardizedcurriculum development were started with a post-KatrinaDepartment of Commerce grant in 2006. The Alabama, Mississippiand Louisiana Manufacturing Extension Partnerships(MEPs) joined together with gulf coast shipyards to formthe Gulf States Shipbuilders Consortium (GSSC). Lotshawexplains, “After considerable effort and three years of developmentGSSC rolled out the Shipfitting Boot Camp. Theprogram has been very successful with a 100% rate of employmentfor graduates.”GSSC wanted to expand the curriculum and credentialingeffort from a regional to a national effort, launching what wasnamed the Lighthouse Campaign to raise funds. NMEC wasestablished in March of 2012 with 12 founding members representingthe shipbuilding and ship repair industries. NMECwill, says Lotshaw, “… work from a common set of definitions,defining exactly what each craft does, documentingeach craft’s required skill sets, and based on those skill sets,developing curriculum and assessments that ensures craftsmenwho are certified through the system can perform to industrystandards.”“With the severe shortage of skilled craftprofessionals weighing on the industry’sshipyards, the emphasis is not on convincingshipyards to include a variable laborpartner into their staffing solution; therecession did a good job of explaining thatto the shipyards. The recession certainlyopened the door for our business model butit also flooded the market place with staffingfirms, temp agencies, and similar companies.It’s important that shipyards choosethe right firm researching the company’shistory, treatment of employees, standardsof business and overall ethical standards.”Matt McClone, Tradesmen InternationalVice President Workforce Developmentwww.maritimeprofessional.com | Maritime Professional | 27

TRAINING & RECRUITMENTA key part of the NMEC effort is its partnershipwith the National Center for ConstructionEducation & Research (NCCER).At the time of its inception,NMEC was searching for best practices toimplement its vision, they looked at whatNCCER was doing in industrial construction,pipeline and power line curriculumand credentialing.John Lotshaw, Gulf Coast Director ofTraining and Workforce Development,Ingalls Shipbuilding, and chair of the NationalMaritime Education Council.A key part of the NMEC effort is its partnership with theNational Center for Construction Education & Research (NC-CER). At the time of its inception, NMEC was searching forbest practices to implement its vision, they looked at what NC-CER was doing in industrial construction, pipeline and powerline curriculum and credentialing. Lotshaw adds, “We foundthat when NCCER was formed as a non-profit education foundationin the early 1990’s, those industries were facing thesame challenges that the shipbuilding and repair industry isfacing now. Their model is effective, efficient, and has mademeasurable impacts related to safety, profitability and workforcedevelopment in those industries. We were offered theopportunity to partner with them and build on their success.”Already in place is a secure National Registry where crafttraining, assessment records and credentials are available forreview by potential employers (with applicant approval), and aproven track record. Hence, with NMEC standardization, andregardless of where the individual receives training, employershave assurance that persons with this credential are well trainedand have the skill sets they need. Lotshaw further insists, “Partneringwith NCCER gives our industry the best bang for thebuck and the quickest, surest pathway to meeting our goals.”The Shipfitting curriculum at NMEC addresses – and standardizes– one of the most in-demand skills in the business.(Tradesmen International credit)28 | Maritime Professional | 4Q 2013

Lotshaw defines shipfitting by saying, “Think of shipfitting ascarpentry with steel or aluminum. A skilled shipfitter knowshow to read a blueprint, measure accurately, and how to cut andjoin metal for form different structures. He understands basicmetal working and is familiar with maritime terminology.”GSSC’s successful shipfitting boot camp program and theshipfitting curriculum were the precursors to and the mainreasons behind the establishment of NMEC. During the program’spilot period, the boot camp was offered three times andgraduated 31 entry-level shipfitters. Instructors used and vettedthe shipfitting curriculum during the pilot. Lotshaw adds,“The outcomes were impressive. In addition to 100% placementof its graduates, after employment, employers reportedsavings on initial training costs and declines in probationaryreleases, disciplinary actions, and absenteeism. Perhaps a betterindicator of employer satisfaction, though, is the fact thatemployers wanted more workers trained under the model usingthe curriculum. As a result, it has been adopted by at leastthree community colleges and one for-profit training provider,and the interest in the program continues to grow.”Common Goals: Different VehiclesOne of the reasons NMEC was formed and then partneredwith NCCER was to create a national approach to training, assessment,and credentialing. NMEC and John Lotshaw reasonthat the common skills sets required of craft workers in themaritime industry do not vary based on the region of the countryand the curriculum used to train workers should not either.Today’s NMEC membership of 20+ organizations includesseveral trade associations, including GSSC and the VirginiaShip Repair Association and some larger, Gulf Coast-basedshipyards. Once the programs have had time to prove theirmettle and get benchmarked, that’s expected to grow.Two levels of pipefitting completed this fall and two levelsof shipfitting have been added to the curriculum. Lotshawsays, “We haven’t started marine electrical, or coatings, orother crafts that also need to be addressed. Our ability to dothat is dependent on the industry’s coming together and supportingthe initiative.”Whether home-growing talent or engaging contract skilledlabor from organizations such as Tradesmen International,the goals should be the same: producing skilled craft workersby offering individuals industry exposure and the opportunityto choose a career in shipbuilding/repair as early as highschool, and offering them a career path through industry-andcraft-specificcurriculum in order for them to be work-readyat point of graduation and/or after additional training in thecommunity colleges. It’s all an important building block ingenerating a pipeline of skilled workers into the shipbuildingindustry. And, it’s here now. Take your pick.

OOp/EdOPINIONWe Need to Save Our ShipsBy Matt Paxton“We must show the world, both ourenemies and our allies, that our Navyand its ships will continue to have apositive influence abroad and providea stabilizing presence on the seaswherever it is needed.”Matt Paxton, President of theShipbuilders Council of AmericaAmerica’s Navy is arguably the most powerful in theworld, and the most immediate threat it faces may notbe from China, Russia or Iran, but Congress. The useof sequestration as a budget reduction tool has resulted in aclumsy cost-cutting approach that will continue to have disastrouseffects into the next year and beyond, as the nation’snaval fleet will not be able to be maintained or repaired. Theultimate hypocrisy of this Congressional budget technique isthat deferred maintenance on ships costs a lot more when itdoes not get done and will actually shorten vessel lifespan andcost the taxpayer much more in the coming, as these shipsmust leave service and need to be replaced prematurely.Our nation’s leaders must immediately address the disastrouseffects of indiscriminately cutting core shipbuilding andrepair functions that keep this country safe and secure. Thiscritical maintenance is not only vital to national security, butit supports thousands of jobs and local economies. This iswhy the Shipbuilders Council of America (SCA) is issuing an“SOS” to Congressional budget conferees, led by RepresentativePaul Ryan and Senator Patty Murray, to “Save Our Ships.”The United States Navy plays a critical role around the worldby providing a stabilizing presence to keep the seas free andopen, which in turn allows global commerce to thrive. But thefleet relies on regular maintenance and repairs by the nation’sshipyards to extend the life of these strategic and costly assets.Sequestration’s funding cuts will force the Navy to reduceits vessel maintenance periods by fifty percent in fiscal year2014 and threaten the health of America’s shipyard facilitiesthat perform this critical maintenance. This drastic reductionin scheduled service calls will force the industry into a criticaljuncture and push it toward potentially massive layoffs. Theloss of these jobs will ripple across the country because America’sshipbuilding and repair industry is made up of a networkof parts and equipment suppliers from across all 50 states.These layoffs will leave America with a lost generation ofskilled workers while stifling innovation from reduced researchand development spending. Workforce reductions willalso mean higher prices for new assets like naval vessels becauseof forced consolidation in the defense industry and reducedcompetition. A shipyard or supplier that closes becauseof program cancellations will not be there when the Navy isready to build new ships again.Sequestration will not only damage our nation’s shipbuildingand repair industry, it will cripple America’s naval fleet. Deferralof one maintenance period at the 10-year point in a vessel’slifespan will shorten its overall service by about five years. Asthese vessels are retired early without ready replacements, thefleet will shrink by 30 to 40 ships over the next 30 years, leaving30 | Maritime Professional | 4Q 2013

our nation with a decreased global presence.This poses a dire threat to the futureof U.S. naval operations because a smallerfleet will hobble America’s ability torespond to critical global missions andcrises. A weakened U.S. naval presenceabroad makes delivering humanitarianaid more difficult while also increasingthe potential length and cost, in dollarsand lives, of future conflicts. Recentevents in Syria, Libya and the Philippinesunderscore the need and importance ofa stabilizing American naval presencearound the world.The Navy’s surge capacity has alreadybeen significantly diminished becauseof sequestration according to the Chiefof Naval Operations, and the situationwill only get worse. Because of currentbudget cuts, the Service is no longer ableto deploy multiple aircraft carrier strikegroups simultaneously around the world.Previously, it had multiple strike groupswith the ability to respond just days afterbeing called up, where now it currentlyhas only one. The last time the Navy’svessel numbers were this low was in1916, before World War I. The Navy hassaid it will take years to recover from thecurrent budget cuts required by sequester,without taking into account the nextround happening in January.These proposed cuts must be immediatelyreplaced with targeted reductionsbefore sequestration damages our nation’sship repair industry beyond recovery,shortens the overall life span of thevessels in our sea services, and leavesAmerica without a robust and vibrant navalfleet. Maintaining these vessels, andretaining a capable and experienced U.S.workforce is vital to America’s nationaland economic security. We must showthe world, both our enemies and our allies,that our Navy and its ships will continueto have a positive influence abroadand provide a stabilizing presence on theseas wherever it is needed.www.maritimeprofessional.com | Maritime Professional | 31

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The Aker Wayfrom Surviving to ThrivingAker’s comeback story isn’t yet over, but the middle chapters certainlymake for compelling copy. The nation’s market leader in blue watertankers and containerships looks aft to (painful) lessons learned andat the same time, ahead for additional opportunities.By Joseph Keefewww.maritimeprofessional.com | Maritime Professional | 33

AKER PHILADELPHIA SHIPYARDAker Philadelphia Shipyard (Oslo: AKPS) is thesecond-largest commercial shipbuilder in theUnited States, having built more than one-half ofthe large ocean-going vessels in the US marketsince 2003. The key word in all of that is “commercial.” AkerPhiladelphia is a Jones Act builder, and was hit hard in thewake of the recent financial crisis. At the nadir of the marketcrisis, the company was forced to make more than 700 layoffs.In February 2011, Pennsylvania and Philadelphia taxpayerstook a significant gamble, infusing $42 million into thecompany to build two oceangoing petroleum product tankerson spec. The gamble – Aker prefers to call it ‘market vision’– paid off handsomely in August 2012 when Aker sold thetwo ships to Crowley. Since then, it’s been fair winds and followingseas for the Philadelphia-based shipyard. Figuring outwhat comes next requires a look back. How Aker (it rhymeswith “soccer”) went from merely surviving to its current conditionof thriving is therefore one of the more interesting maritimestories of this year; if not the entire decade.First time visitors to Aker’s Philadelphia operation immediatelynotice the massive, modern 660 metric tonne, 64 meter(210 feet) tall Goliath crane. Only slightly less impressive isthe gleaming infrastructure, reflecting a shipyard that has beencompletely refurbished and in some places, rebuilt from theground up. Established first in 1801 – with a rich history withNavy work at its heart – the yard waseventually was closed in 1996. Withseveral starts and stops and hiccupsalong the way, the location is now, likemany other American yards, a thrivingbeehive of activity. In late November,MarPro traveled to Pennsylvania for afirsthand look at this pure commercial,Jones Act builder.Market ConditionsA booming shale crude oil industryhas created high demand for US-flaggedships for the coastwise transport of oil,gasoline and chemicals. Since the successfulsale of the spec ships, AkerPhiladelphia has landed contracts fortwo petroleum tankers for Exxon Mobilaffiliate Sea River, as well as a $500million agreement to build and share inthe operation of up to eight additionalproduct tankers for Crowley. And inNovember, Aker also inked a deal withMatson for two 3600-teu Jones Act containerships– the largest ever to be builtin the United States. The contract priceMy AdviceKristian RokkePresident & CEO, AkerQuality“Pleased, but never satisfied.”Government/Navy Work“We offer value to our customers by focusing100% on commercial projects.”Foreign flag newbuild bids“Our attention is directed toward the Jones Act,but; never say never.”Repair Work“We have been approached, and there is potential,but our current focus is on newbuildings.”was reportedly $418 million for the pair, with deliveries quotedfor the 3rd and 4th quarters of 2018.With four of the Crowley tankers firmly contracted and bothparties looking hard at the additional four options, these areheady times for Aker. The shipyard’s solid backlog and strongcash position have pushed its stock price up more than 30times its market low in mid-2012. Despite the large run-upin market capitalization, the company’s debt load and TotalEnterprise Value (TEV) to EBITDA ratio both seem to be reasonable,as compared with its peers. That said; major risksinclude cancelled contracts and changes to the Jones Act, neitherof which seem to be likely in the current political andeconomic environment.Steering the ShipJust 30 years old, Kristian Rokke joined Aker PhiladelphiaShipyard in 2007. Prior to that, the Aker CEO held various roles,including SVP Operations and Senior Shop Manager within theshipyard and has experience from offshore service and shipbuildingfrom several companies in the Aker group. A BoardMember of TRG Holding AS, which owns 66.7% of Aker ASA,Rokke is currently completing his MBA at The Wharton Schooland has also studied economics and mathematics at Colby College,London School of Economics, and Political Science at theNorwegian School of Management (BI).Joining Rokke is Scott Clapham, SVPProjects and Business Improvementsand Jeffrey Theisen, the firm’s ChiefFinancial Officer. Together, they havehelped engineer the shipbuilding giant’sremarkable turnaround, and they havedone so in an arguably unconventionalstyle. As a management team, the trio isremarkably closemouthed, but Rokke,in his own quiet, understated manner,summed up some key metrics in the boxto the left.The Aker Way: Lucky or Prescient?Kristian Rokke eagerly looks ahead towhat will come next. He told MarPro inNovember, “Our order backlog gives usa golden opportunity to strengthen thecommercial edge of our shipyard andputs us in good position for whatevercomes next.” According to Aker’s CEO,the shipyard’s success in recent yearshas as much to do with Aker’s attitudeas anything else. He insists, “We believedin the product tanker market andput our own money behind that belief.”34 Maritime Professional I 4Q 2013

“We’re proud to be playing an important part in ourcountry’s oil boom, but at the same time, we remainhumbled by the events of 2010 and 2011. Today weare seizing opportunities like never before, but we willnot forget the lessons taken from those difficult”times.We will build off the past, but not be tied to it.Kristian Rokke, President and CEO, AkerRokke also describes his firm as nimble, creative, and opportunistic.Giving credence to that position, some of the dealsput together by Aker in order to survive and indeed thrive,have not been uncomplicated. For example, the recent Matsondeal is a straight sale, but others were not.When Aker built the two product tankers on spec, it waswidely considered by most analysts as “a leap of faith.” No one,of course, could know what would come next, and so soon. Or,perhaps the Aker management team did. The public/privatemove, as a minimum, took courage. The yard had previouslybuilt 14 product tankers for OSG and then went from 1,200 employeesto roughly 300 in the space of one year. Now lookingback from a more comfortable perch, Rokke explains, “We’reproud to be playing an important part in our country’s oil boom,but at the same time, we remain humbled by the events of 2010and 2011. Today we are seizing opportunities like never before,but we will not forget the lessons taken from those difficult

AKER PHILADELPHIA SHIPYARDSource: The McClean Group LLC36 I Maritime Professional I 4Q 2013

times. We will build off the past, but not be tied to it.”In a nutshell, Aker had to put into place the public/privatepartnership in order to build hull numbers 17 & 18. These, inturn, yielded hull numbers 19 and 20 – the SeaRiver hulls.Scott Clapham, SVP Projects and Business Improvements,told MarPro during the same visit, “We aim to keep the equipmentand the yard moving and working.” But, unlike otherstrying to do the same thing elsewhere, Aker had to prove itsmettle up front by building the spec hulls. Eschewing a largershort term payoff, the Crowley profit-sharing deal set up thelong term benefit of a deeper Crowley relationship and withthat, the longer term viability of the shipyard.Hull numbers 17 and 18 involved profit sharing. And, whileRokke might have a lot of faith in the product tanker market,he certainly couldn’t have known that just as these hulls hit themarket that Jones Act freight rates would turn decidedly north,yielding some of the best numbers ever seen in this market.More opportunistic creativity would follow. Next came the jointventure; with 49 percent Aker / 51 percent Crowley ownership(IAW Jones Act compliance), a deal which began to increasecash flow consistent with the steady business. Aker’s CEO added,“We have a history of being creative to maximize opportunitiesfor our stakeholders. The spec vessels are examples of that.”Rokke explains the big picture even further. “It was by successfullydelivering on our commitments to American Shipping/OSGthat put us in position to build the spec vessels.”And the spec hulls were important in that Aker chose a provenhull design from Korea, something that would appeal to riskaverseJones Act potential buyers. Eventually, the spec boatswere sold for $90 million each and a profit-sharing arrangement.Rokke adds, “Our long term belief in the market has ourshipyard in a position to succeed.”Today, with Aker riding the meteoric climb in its stock (3,500percent in comparison with the SP 500 over the same timeframe),Aker’s joint venture with Crowley is just one more reason forRokke to be optimistic. “We will also contribute significantamounts of capital to the project with Crowley in the driver’sseat. It gives our shareholders direct exposure to the shale boomand we like the risk/reward of the investment. It is a partnershipthat we are very excited about. Crowley is first-class operatorand we build quality ships. That adds value for the end user.”SMITH BERGER MARINE, INC.OFFERS A COMPLETE LINE OFBest Practices: Here, Abroad and Internally at Aker“Our goal is to always be better today than we were yesterday.”That’s Kristian Rokke’s stock answer to queriesabout what Aker is doing better than the rest of the JonesAct shipbuilding market and what Aker – and the rest of theU.S. shipbuilders – need to do to catch up with their foreigncounterparts. He added simply, “We focus on delivering onour commitments to the customer.” That entails taking ‘bestpractices’ from other yards around the world, including Ko-SAFE - RELIABLE - ECONOMICALSmith Berger Marine, Inc. builds a full range of Shark Jaws for AnchorHandling Tug Supply vessels. Standard ratings are 100, 200, 350, 500and 750 metric tons and all units have Quick Release at the rated load.Smith Berger flexibility allows us to customize our equipment to suit theoperating characteristics of your vessel. Third party certification, loadtests, release tests and load monitoring systems are available options.Rely on the 100 year history of Smith Berger to outfit your vessel withour rugged and dependable equipment.SHARK JAWS • TOWING PINS • STERN ROLLERSSmith Berger Marine, Inc. 7915 10th Ave., S., Seattle, WA 98108 USATel. 206.764.4650 • Toll Free 888.726.1688 • Fax 206.764.4653E-mail: sales@smithberger.com • Web: www.smithberger.com

AKER PHILADELPHIA SHIPYARDrea. Nevertheless, it was clear that Aker mostly closely alignsitself with a more European model.Locally, the Aker shipyard has a very European feel to itsatmosphere. This extends from the style of furniture in thereconverted office spaces to the distinct Norwegian accentsthat can sometimes be heard in the hallways. A small percentageof Aker’s approximate 1,200 employees are in fact fromEurope. Rokke declined to quantify that number, but it wasclear that these involved management visas and the process oftaking lessons learned from both European shipyards as wellas its own Norwegian parent. And, he added, “We have alsolearned a great deal from our sister companies, both in themarine and oil and gas sectors.” Aker Solutions, for example,has deep marine roots.“We have put a high emphasis on harnessing best practicesfrom other shipyards around the world since our start-up. Forexample, in 2005 we pioneered a partnership with the Koreanshipbuilding industry which we continue to refine and developtoday.” Aker, he said, emulates some aspects of German automationand parts marking. He added, “We have invested over$400 million in our facilities from the beginning. It starts withan efficient shipyard set up and layout to optimize shipbuildingprocesses, work flow and material logistics. We meldedbest practices from many shipyards and ended up with a worldclass facility that we’re proud of.”Asked about improvements in efficiency achieved over timeinvolving the economy of scale afforded by repeat, seriesbuildexperience, Rokke again declined to be specific, sayingonly, “We have gone from delivering one ship annually to ourpresent capability of producing three annually in a relativelyshort time period.” Rokke’s bottom line is simple: come 2018,Aker will be proven across multiple ship classes. At that point,he says, business should take care of itself. That remains tobe seen.At Aker, best practices also extend to giving virtually 90percent of all shipyard employees off during the holidays(26-31 December), something which Aker says allows themto do necessary equipment maintenance and upgrades. It alsomakes for a happier shipyard worker. Jeffrey Theisen, thefirm’s Chief Financial Officer, told MarPro that Aker had investedas much as $350 million in its workforce, includingtraining. All steel work is done in-house, with multiple plasmacutters and heavy assembly lines. Today, Aker can build vesselsup to 116,000 tons DWT and 43 meters beam.Finally, and with regard to the joint venture and profit sharinghulls, we asked Aker if these close relationships createdextra incentives to do a better job and perhaps, a more motivatedshipyard employee. Aker executives deny that this is thecase, saying that their workforce does the same job on everysingle hull and regardless of the terms of the deal. And, whileit shouldn’t make a difference, it probably does. Especiallywhen people know that the hull they are working on might beleaving the yard, but it won’t leave the bottom line. That’s nota bad thing.The Rally: Sustainable or Cyclical?The U.S. Department of Transportation recently said that 15commercial tankers are on order or under construction at theAker Philadelphia Newbuilding Backlog – November 2013Hull Number Client Type / DWT Delivery19 SeaRiver Aframax Tanker / 115,000 Q2 - 201420 SeaRiver Aframax Tanker / 115,000 Q4 - 201421 Crowley Product Tanker / 50,000 Q3 – 201522 Crowley Product Tanker / 50,000 Q4 – 201523 Crowley Product Tanker / 50,000 Q2 – 201624 Crowley Product Tanker / 50,000 Q3 – 201625 – 28 Crowley Product Tanker / 50,000 (*) OPTIONS …29 Matson Containership / 3600 TEU Q3 - 201830 Matson Containership / 3600 TEU Q4 - 201838 | Maritime Professional | 4Q 2013

AKER PHILADELPHIA SHIPYARDnation’s shipyards, with half as many additional options are legitimatelyin play. The biggest commercial shipbuilding boomthat the domestic industry has seen in more than three decadesis being fueled, in part, by domestic crude shipments that havesurpassed 600,000 barrels per day. And, although the so-calledTier II yards – those building smaller but equally importanthulls – are also busy, producing wave after wave of OSV’s, inlandbarges and maritime security hulls of one sort or the other,it is also true that shipbuilding is a cyclical industry.As U.S. yards enjoy fat backorder books, foreign yards lookon enviously as the foreign registered tanker and containershipmarkets continue to exist in an overbuilt, and overcapacitymode. Can the domestic boom last, and if so, for how long?Aker is clearly betting that it will, at least in terms of the JonesAct markets. In the near past, Aker has built 14 product tankersand 4 containerships. Rokke insists, “There are many goodshipyards in the U.S., but we are the market leader in those sectors.”And, why not? Where others worry about sequestrationand the loss of government dollars, Aker simply concentrateson what it does best. Its current backlog extends to 2018; notincluding options. Unanswered is what happens then.Nominally, Aker has so far dispelled the notion that the bigU.S. yards can only survive on a steady diet of U.S. government/ Navy hulls. And, the federal government has its favoritesto build large Navy vessels, destroyers and Coast Guard hulls.Those relationships are unlikely to change and it is also unlikelythat nuclear newbuild or refit work could come to Philadelphia.The risks alone to the city and for a Navy that sometimes needsto put vessels out to sea as soon as is possible, seem to precludethat option. Aker will therefore continue down the Jones Actnewbuild path; perhaps dipping their toes tentatively into therepair market when (and if) the going gets thin.It has been a wild ride. Employment at Aker went fromabout 1,000 in 2010, down to 300 in 2011 and now, back up toalmost 1,200 today. In total, the company has won orders for$1.5 billion, and has tripled in size since 2011. As other U.S.yards look to rebalance their portfolios to include a greaterpercentage of commercial work, Aker already has theirs exactlywhere they want it.Separately, U.S. blue water shipbuilding continues to heat upon all fronts. As MarPro went to press, Crowley placed yet anothershipbuilding order. Interestingly, and despite the reportedlyclose relationship with Crowley, Aker didn’t get the recent conroorder. That award instead went to VT Halter Marine, probablybecause Crowley apparently wasn’t willing to wait as long asMatson for their deliveries. Certainly, they weren’t about to getin line behind Matson, whose ships won’t arrive until 2018.Good relationships aside, business is business in the worldof marine transportation. Aker’s innovative partnerships andprofit sharing deals may well be the wave of the future whenit comes to fleet replacement and expansion plans. That’s becausewhile some private operators – like Harvey Gulf, for example– can afford to finance their own newbuild plans on thebacks of Moody inspired credit lines, others cannot. Closerties between builders and operators, each sharing the risks associatedwith operating U.S. flag tonnage in cabotage trades,will naturally follow. That’s just one way to go from “surviving”to “thriving.” It’s also the Aker Way. – MarPro.The Product Tanker Florida was built for Crowley.www.maritimeprofessional.com | Maritime Professional | 39

SHIP CONVERSIONSConverting for the MarketDeepwater Offshore Presents New Opportunities for Accommodation Vessels.By Robert KunkelThe U.S. Gulf of Mexico, offshore Brazil and WestAfrica have recently been tagged as the “GoldenTriangle” of deepwater oil exploration. An interestinglabel, considering a triangular definition of success,prosperity and influence was last associated with SoutheastAsia’s opium and heroin trade. But, oil can (perhaps)be described as industry’s opiate and with that said thisaddiction proves interesting with new geopolitical and economicpatterns deepwater exploration and production isdeveloping. No doubt, oil as we once knew it, is changing.The Changing LandscapeNigeria and Angola are leading African offshore and alsodeveloping a reputation as the continent’s oil, gas explorationand production hub since the first explorations in the CongoBasin in 1994. Deepwater oil exploration in offshore West Africahas boomed, and the region has become one of the importantareas in the world due to a collection of discoveries inrecent years showing production growth from 58.9% in 2001to 78.3% through 2011 when compared to worldwide fields.Nigeria’s oil reserves were estimated to be approximately37.2 billion barrels as of 2010, while proven natural gas reservesreached 185.3 trillion cubic feet during the same year.Understanding both Nigeria and Angola have been OPECmembers since the seventies, deepwater offshore developmentin this leg of the triangle can have a long lasting impact on themarket, particularly in the Middle East. That success has onecaveat: dealing with the “political” landscape of West Africaand its lack of qualified labor. And that issue may determine ifthe “Golden Triangle” is indeed isosceles when looking to balancethe deepwater boom between the three geographic areas.Any analysis of the new “Golden Triangle” is not completewithout a mention of natural gas and oil being produced outof the shale fields in the United States. Though these new discoveriesare not “offshore,” they will have significant impacton the deepwater oil market in the U.S. Gulf and the country’sability to become energy independent. CNG prices havedropped 40% in the last year due to excess supply of the fueland an inability to export the commodity from the UnitedStates. Reports are circulating of reduced costs of chemicalmanufacturing, industrial manufacturing and energy productionas this new source is developed and Deepwater offshorewill continue to grow to support those onshore discoveries.That growth brings increased requirements for support vessels,equipment and labor capable of remaining on stationfurther offshore. The current support system for shallow wateroperation – where workers are housed on shore and transportedby crew boat and helicopter to the rigs – has reached itsoperational limits. You need to look no further than the flurryof OSV vessels being constructed for this trade that also put apremium on bed space and have, as a result, increased the sizeof these vessels measurably.New Requirements Call for New SolutionsWhile the United States wrestles with the concept of shortsea shipping and its myriad of vessel types capable of supportingthat market sector – RoPax, RoRo and Feeder containerships– Europe has found a new market to sell off their firstand second generations of these so-called Roll-on, Roll-offpassenger vessels into the Offshore oil fields. The ships areconverted to provide DP2 and DP3 positioning systems, cabinsand facilities for 400 plus men and equipment for transferringthat maintenance labor back and forth from the rigs on adaily basis.The accommodation vessel market experienced a periodof significant stress following the global financial crisis andMacondo Blowout which significantly impacted offshore developmentsand their associated oil companies. However, themarket has begun a recovery due to buoyant oil prices whichin turn restore market confidence and a corresponding increasein deep offshore activity in new locations. As a result, vesseldemand is expected to show strong and consecutive growththrough 2017, with vessel utilization increasing by 32% comparedto the periods working through 2008-2012.The ConversionThe offshore accommodation mono-hull conversion is notan easy task and is affected by the regional dynamic of thevessel market; water depth and environmental conditions.Regulatory factors such as vessel age, cabin habitability and40 | Maritime Professional | 4Q 2013

SHIP CONVERSIONSHighclere Ltd, the new owners of the Bluefort, has recently completed continued conversion upgradesto their 141 meter, 450 man vessel in Naples, Italy with the help of Alternative MarineTechnologies (Amtech).cabotage requirements are also a consideration. Sponsons areinstalled to meet two compartment damage and stability andalso to soften motion. Offshore cranes ranging from 50 to 200metric ton lift capability are added to allow delivery and transferof equipment. Heave compensated telescopic gangwaysare installed to deliver the maintenance labor from ship to rig.Most important is the development of the Dynamic Positioning(DP) plot and the required bow and stern thruster powerneeded to meet the environmental conditions of the location.In that market, Kongsberg Maritime is a regular player.The European locations in the North Sea are generally consideredto require the most advanced DP systems in the worlddue to harsh weather and water conditions. On the other hand,North America and Latin America have historically requireda large supply of low specification accommodation barges focusedon shallow water and limited dynamic positioning. Highspecification assets for the growing deep and ultra-deepwatermarket have moved towards semi-submersible rigs with severalnew construction projects being developed in Singaporeand China. The large gap between high and low specificationlocation requirements has therefore created the market that themonohull conversions look to fill with reduced capital and operationalexpense.Laurtizen Offshore A/S was first to deliver the Dan Swift,a 150 meter European RoPax converted to an accommodationsupport vessel with cabins for 256 offshore workers and11,000 kW of thruster power designed to maintain positionon location. Edda Accommodation followed with the deliverywww.maritimeprofessional.com | Maritime Professional | 41

SHIP CONVERSIONSof the Edda Fide in 2011, capable of handlingover 600 men offshore and stationkeeping capabilitypowered with five Voith propellers of12,500 kW and two 1450 kW bow thrustersforward. Highclere Ltd, the new owners of theBluefort, has recently completed continuedconversion upgrades to their 141 meter, 450man vessel in Naples, Italy with the help ofAlternative Marine Technologies (Amtech).Kongsberg Maritime attended to make recommendationsto improve the vessel’s DP Plot.U.S. Outfitters of Jacksonville, Florida attendedto renew and upgrade 70 plus cabins andRolls Royce and MAN attended for continuedoverhauls and repairs to the thruster and propulsionengines.Up NextThe next generation Offshore AccommodationVessel (OAV) with examples designed bySalt Ship Design, are 155 meters long and willhave a total accommodation capacity exceeding800 persons, all housed in one or two mancabins. The vessel standard now requires a livingspace of “executive standard” and includesoffice space as well as recreation areas, suchas a modern gym, sauna, two swimming pools,conference rooms and an auditorium. Existingvessels will likely need to continue to upgradetheir conversions to meet or exceed these standards.These vessels will provide constructionsupport and additional living quarters for supportpersonnel during commissioning, maintenanceand decommissioning of offshore installationsworldwide and are now being designedfor operating in the Arctic.In a case where the market defined the demand,vessel conversions are meeting thegrowing needs of a burgeoning offshore market.And this can include a variety of requirements.In the United States, for example, notone offshore wind farm – in stark contrast tothe dozens in and around Europe – has yet tobe constructed. That said, when the first onedoes go into construction, the speedy completionof the project will be paramount. Thatmight mean the need to keep labor on sitefor extended periods of time. Regardless ofthe reason for an offshore labor presence, theday of the OAV has arrived. Converted or fitfor purpose, the advantages are many and thedrawbacks, few.Bridge deck modified to comply with ECDIS and DP2 stationkeeping.Rolls Royce thrusters; Kongsberg controls.42 | Maritime Professional | 4Q 2013

SHIPBUILDINGDAMENEnergy is the AnswerAs Damen looks offshore, the market leader in standardized hulls, spec series buildtechniques and (arguably) quality too, also spreads its wings into new markets.By Eric HaunIf Damen Shipyard’s standardized hulls are the hallmarkof its existence, then providing customers with a provenand reliable product, based on years of research and thewell-oiled ability to produce these hull forms on spec,economically and in series, is the rock upon which that considerablereputation was built. Today, the prolific shipbuilderand renowned designer of reliable hull forms is poised to onceagain export its dependability and knack for innovation asit plots international growth in a number of targeted marketsectors. Jan van Os, offshore director at Damen, points to anumber of niche markets in which the company sees its bestopportunities, including offshore, offshore wind, ports, dredging,security, yachting and of course conventional and hybridtugs. In U.S. markets, Damen is well known as the designer ofthe hull form for the U.S. Coast Guard’s Sentinel Class Cutter.Based on the Damen Stan 4708 patrol vessel, the design waschosen by a risk-averse Coast Guard leadership in the messywake of several high profile hull failures. Damen remains inthe hunt for the Coast Guard’s Offshore Patrol Cutter (OPC)sweepstakes, as well. Of late, however, Damen has exhibitedan increased focus on the offshore sector, an area traditionallyfilled with specialty, built-for-purpose tonnage.www.maritimeprofessional.com | Maritime Professional | 43

SHIPBUILDING“We see opportunities globally, that’s ournature and way of doing business … Weknow our place in the offshore market,and because we also know what we wantand what we’re capable of, we will”moveup in a gradual and modest way.Jan van Os,Offshore Director, DamenLooking OffshoreDamen currently collects just 10 percent of its $1.8 billionannual turnover from its offshore division, but with severalnew offerings catering to the offshore sector, that seems likelyto change. That’s because the company has launched severalnew offshore designs in recent years, ranging from PlatformSupply Vessels, Construction Support Vessels and Fast CrewSuppliers to Offshore Carriers and Heavy Lift Vessels.And just as with tugs and other workboats, Damen upholdsits worldwide approach; the company’s increased offshoreproduction is not limited to region. “We see opportunitiesglobally, that’s our nature and way of doing business,” van Ossaid. “However, there are some marked opportunities in SouthAmerica, Western Europe and Scandinavia, a few North Africancountries, South Africa (where we have Damen Shipyards CapeTown and a Service Hub), Australia and Singapore.” And, becauseDamen often partners with other builders to supply designmodels, the opportunities available to the Netherlands-basedbusiness probably exceed that which is immediately evident.Damen’s plans for a steady growth and development in theoffshore sector incorporate “more advanced technologicalniches,” van Os said, but still maintain a standardized productionapproach. “You’ll probably see us moving from PSVsfor simple transport/supply jobs etc., via lighter/undersideof-marketOSVs/OCVs and via rather serious AHTSs andFIRMs, to more high-end OSVs/OCVs, subsea support/constructionvessels etc.—but all in good time.” He adds, “Weknow our place in the offshore market, and because we alsoknow what we want and what we’re capable of, we will moveup in a gradual and modest way,” van Os continued, emphasizing“quality for clients first.”A major point of focus for Damen’s offshore series is itsPSV 3300, the first of which, World Diamond, was built inDamen’s Galati yard and delivered in June 2013 as part ofa six-vessel order from Norwegian company World WideSupply (WWS). The 3300, one of five Platform Supply Vesselofferings from Damen, features long, more efficient hullshape, diesel electric propulsion, dynamic positioning (DP2)capabilities and increased crew comfort amenities. The fifthPSV for WWS, World Opal, was delivered in November. Fourof the PSV 3300s secured long term contracts for Petrobras,while the remaining two are expected to operate in the NorthSea under the spot charter market.Opportunity is Blowin’ in the WindDamen has also made strides in offshore wind, bringing standardizationto a specialty market that desperately needs it – andwith good results. Damen delivered 25 FCS 2610 twin axe catamaransin 25 months and is currently building them for stocksas orders continue to come in. With the success of the 2610,Damen is now producing a smaller version, the FCS 2008. Ina market categorized by specialty, Damen is essentially creatingvessels that can be standardized, yet fit in with other vesselranges or even other markets. “We have high hopes for the44 I Maritime Professional I 4Q 2013

World Diamond is a strong card in Damen’s Offshore hand.Walk to Work vessel,” said van Os, referringto a new class of vessel aptly coinedthe Wind Farm Service Vessel (WSV).The purpose of the vessel is to supportand accommodate turbine maintenancecrews at sea and allow them to ‘Walk-to-Work.’ After industry-wide consultation,the vessel has been designed from firstprinciples to provide on-site work facilitiesand accommodation for 45 maintenancepersonnel plus 15 crewmembers,for voyages of up to one month. Additionally,he said, Damen is building anoffshore carrier for Van Oord in a pipelayingoutfit for windfarms.Peter Robert, Damen’s business developmentmanager offshore wind, said,“The Damen W2W can as well be usedin the Offshore Oil & Gas business, becausewe have foreseen a suitable tankarrangement in order to service the unmannedplatforms in the North Sea.”Robert further explained that Damenalready possesses a number of offshorewind products, including the Twin Axe2610, 2008; DOC-range (based on thisdesign, Damen is currently building acable layer for Van Oord); a dedicatedArray Cable layer; and a Damen Walkto Work vessel.” Next to be added tothe company’s portfolio, Robert said,are a Maintenance Jack-Up for offshorewind, in addition to further looking intoinstalling foundations with a free floatingvessel on dynamic positioning, removingJack-Ups from these kind ofactivities.Proven Methods for a Changing MarketAs far as Damen is concerned, it reallydoesn’t matter what the market brings.Its time-tested standardized hull system,bolstered by the firm’s solid series buildrecord, will produce results for anyniche. As new Damen products gearedtoward offshore operation emerge, thegroup will continue to challenge themodes of niche builders in the specialtyoffshore sector. “Over time, we can sayto have set a new Damen Standard, likewe have done with our tugs and otherworkboats,” van Os said. Few would arguewith his logic. Arguably, fewer stillcan compete with Damen’s results.

DESIGN TECHNOLOGY3D Laser Scanningfor the Marine IndustryFARO 3D laser scanning allows the Chief Engineer or Project Manager to work in detailwith 3D model shots of machinery spaces with increased accuracy and reduced costs.By Daryl JohnsonThe time to install a Ballast Water Treatment (BWT)System or maybe an Exhaust Gas Scrubber is rapidlyapproaching. Or, perhaps, you are an inland vesseloperator watching the subchapter M drama withgreat interest. In all of these cases, most vessels have limitedspace in which to install these items. That said; as the regulatoryuncertainty with regard to the impending regulationsdissolves, the high cost of installing these systems will not goaway – unless, of course, emerging technologies can ease thatpain somewhat. Fortunately, and just ahead of the regulatoryenforcement, comes FARO’s new 3D Laser Scanning system.Even without new environmental requirements, the marineIndustry is in great need of applying emerging technologieslike 3D Laser Scanning to a myriad of new tasks. Tens ofthousands of aging vessels will soon need equipment retrofits,most of which involves navigating narrow, tight, and limitedspace areas. Even for those owners who have archives oforiginal drawings, those general arrangement depictions maynot accurately reflect the current situation on a given vessel,especially one which has been around for a while and seen itsshare of repair yard insertions. Hence, equipment retrofit istypically extensive, costly, time consuming, and fraught withmeasurement errors. It doesn’t have to be that way.Old SchoolThe typical approach when performing ship checks is tobring designers and/or engineers on board where, using tapemeasures, they record measurements of the existing systemsand spaces. These measurements are then used in developingscope and construction documents. However, the uncertaintyof the measurements requires allowances be included to accountfor discrepancies between the measurements and reality.These allowances can be expensive and/or prevent theinstallation of new equipment in a certain location becausethe space was considered too small, when in fact there wasadequate clearance. Or, conversely, maybe not enough at thetime of installation.3D Laser ScanningA better approach involves scanning ship spaces with a 3Dlaser scanner to create a very detailed and accurate 3D pointcloud model. Today’s high speed laser scanners are quite suitablefor this purpose as they can take tens of millions of measurementsin just a few minutes. Scans are taken from variouspositions in order to provide sufficient coverage around equipment.The scans are then registered together to bring them allinto the same coordinate system. Done properly, with the latestFARO Focus3D scanner, the laser scan data can be accurateto within 3 mm over 10 meter distances.Benefits of using 3D laser scanning:• Laser scanning can often be done while the ship is inoperation.• Vibration is one of the few limitations.• Measurements: more comprehensive and precisecompared to hand measurements.• Reduces or eliminates the need for follow-up site visits.• Design work can be carried out in offi ce & within thecreated 3D Point Cloud Model.• Data allows larger portion of new or replacement pipespools to be pre-fabricated in shop @ lower cost.• Data increases number of bolt-up tie-ins & reducesfi eld welds, reducing shipyard costs & downtime.46 I Maritime Professional I 4Q 2013

DESIGN TECHNOLOGYWith all these benefits, the use of 3D Laser Scanning, despiteits availability, nevertheless has not become a mainstreampractice in ship repair and retrofit operations. Thereasons why come down to three main issues. These includecost of hardware, capability and difficulty of use, computingpower limitations and inconsistent workflow and software solutions.Fortunately, most of these issues have been addressed,as depicted below:1. Hardware Cost and Difficulty of UseUntil recently, laser scanning equipment was cumbersome(multiple components with total weight over 150 lbs) expensive($150,000+), requiring highly skilled crews to operate.With the recent offerings from FARO, however, the new Focus3Dscanners weigh in at just 12 pounds, at about one-thirdthe cost and are similar in operation to a high end digital camera.The new scanners can, with one person, take significantlybetter measurements in one day than a ‘ship check’ team canaccomplish in a week’s time. More significant, perhaps, is thatevery vessel can perhaps justify having a scanner on board, allowingthe Chief Engineer or Project Manager to direct workin detail within 3D model shots of his machinery spaces. Withthis approach, the cost required to obtain accurate measurementshas been greatly reduced – and can be accomplishedfrom far out to sea, well in advance of the repair procedure.2. Computing Power LimitationsAnother barrier to wide acceptance of 3D Laser Scanning wasthe huge data sets that bog down computers and made it difficultfor managers to visualize their projects in the 3D PointCloud. Autodesk ReCap and Bentley Pointools among othershave and are making great strides to overcome this barrier.3. Difficult Workflow and Software SolutionsThe next limiting factor is the work flow and software that allowsCAD Designers to work directly in the 3D Laser ScanPoint Cloud model and apply statistically valid algorithms tothe point cloud data for feature extraction of system componentssuch as piping, structure, and more. The software available onthe market to meet this need has grown considerably over thelast few years and is available from such companies as Kubit,Innovmetric, Edgewise and Kohera3D – just to name a few.“We Haven’t the Money, So We’ve Got to Think”It was Ernest Lord Rutherford who is credited with saying,“We haven’t the money, so we’ve got to think.” A renownedPhysicist, Rutherford proved time and time again that thinkingsaves money, but what drove him was his love of solving problemsin more efficient and cost effective ways. The new 3D laserscanning technology is the perfect fit for this way of thinking.In 2007, Summit Engineering and Design, LLC moved toFARO scanners and at the same time, began to develop softwaresolutions so CAD designers could work directly in thePoint Cloud model. Summit had learned the hard way that thefurther away from the Point Cloud the designer was removed,the more likely simple, yet costly design mistakes would bemade. Data sets were needed that (a.) AutoCAD could handle,(b.) would allow clients to direct their project scope, and (c.)allow all to see the progress of the design efforts. Ultimately,this led to the ability to isolate (or classify or segment) theLayered and decluttered 3D Point Cloud modelused to visualize and define scopeNon-layered 3D Point Cloud model of machineryspace to be retrofittedwww.maritimeprofessional.com | Maritime Professional | 47

DESIGN TECHNOLOGYpoint cloud model into individual layers where they could beworked with in AutoCAD and visualized in Navisworks.By loading high resolution “corridors” or volume boxes of specificareas within the point cloud model, this provided designerswith the detail they needed to “thread the needle” on tight piperoutings while at the same time maintaining reasonable stabilityand performance speeds of the CAD system. In other words, theperfect tool for that tight ballast water treatment retrofit.But even with all these options, designers were still tracingand eyeballing the new design over the scan data. In response,Summit developed statistically valid feature extraction algorithmsto give the designers “Basic Modeled Parts” which includedsuch things as cylinder fits, pipe centerlines, face offlange and top of steel locations. These Basic Modeled Partsprovided “snap-to-points” in AutoCAD. In addition to theseBasic Modeled Parts, it was discovered that loading high resolution“corridors” or volume boxes of specific areas within thepoint cloud model also provided designers with the detail theyneeded, while at the same time maintaining reasonable stabilityand performance speeds of the CAD system.Design & Retrofit – The Way ForwardAlthough it is possible to continue using the “brute force”methods of the past, 3D Laser Scanning has emerged as avaluable and accessible technology that will continue to makemeasurable strides in the shipyard industry, and beyond. But,if you’ve got all the time and money in the world, and youdon’t like to think too much, then continue on as before.The AuthorThe FARO scannerfeatures portability,light weight equipmentand a surprisinglyaffordableprice tag.Daryl Johnson is a registered Professional Engineer inWashington State. He has 30 years of management, engineeringand design experience in the refining, power, marine, processand integrated chip industry. He established Summit Engineeringand Design, LLC in 1998 and was first introduced to 3D laserscanning in 2001.New Equipment installed in 3D Point Cloud model. Note: a clash was resolved during installationand the tight clearances necessitated that the pump was shoehorned in under the stairway.48 I Maritime Professional I 4Q 2013

SSecurityMARITIME SECURITYBehind the Curtain – Decision Support ToolsBy Luke RitterTechnology Can Drive Risk Management as Maritime Professionals Optimize SecurityThe job responsibilities of MaritimeProfessionals inevitablyinclude the requirement tounderstand risks, analyze options forrisk mitigation, and make strategic andtactical decisions to ensure the viabilityof the enterprise. Business leadersmust also do this while balancing goalsand objectives related to profi tability,and return on investment. But how doyou get that done? Today, promisingdecision support tools that enable executivesto simplify the process of riskmanagement – and reduce the time andcost associated with those tasks – arenow on the market.A Decision Support System (DSS) canbe defi ned as “a computer-based informationsystem that supports businessor organizational decision-making activities.”These so-called decision supportsystems, or decision support tools,are designed to support various planningfunctions within the managementand operations layers of a business enterprise.A DSS is typically most usefulwhen an operational environmentis dynamic, and metrics used to drivebusiness decisions are rapidly changingand not easily specifi ed in advance.The maritime domain clearly fi ts thisdescription.Every senior executive in the maritimeindustry, with strategic risk managementresponsibility, should have accessto these kind of tools that facilitatethe decision making process.What Constitutes Business Risk?Vulnerability is a physical featureor operational attribute that rendersan entity, asset, system, network, orgeographic area open to exploitation,or susceptible to a given hazard.Marine managers must continuallyevaluate natural and man-maderisks that have the potential to disruptoperations, or threaten employees,fixed assets, assets in transit,proprietary data, or even the environment.Maritime assets that aretypically considered to be “critical,”are those transportation networks orsystems that support core businessfunctions, and if lost, could resultin catastrophic damage to an enterprise.We also know that risk exposurehas two primary elements that mustbe considered when pursuing riskmitigation strategies: Likelihoodand Consequence. Likelihood issimply an estimate of the potentialthat a disruptive event will occur.Consequence of a disruptive eventtakes into consideration the impactthat the event has on business operations.These metrics are often easy to define,but can be much more difficultto actually calculate.The amount of risk exposure that anorganization is willing to accept, as anormal course of business, is referredto by the insurance industry as “riskappetite.” Tolerance for risk exposurecan vary greatly from one companyto another within the maritime industry.When executive decision makersfocus on risk management, it is notuncommon to find that a company’sexposure to risk is not aligned withthe actual policies, plans and proceduresin place for risk mitigation.This is where decision support toolscan play an important role.When executives have access tointuitive, easy to use software toolsthat manage and manipulate data,they can expose gaps, establish focuspoints for minimizing their firm’s exposure,and pursue risk managementstrategy options that emphasize securityoptimization.Optimization is the KeyThe Quality Management movementultimately boiled down acomplex methodology for continualincremental improvement into asimple, four-word chain that is easyto recall:PLAN / DO /CHECK / ACTAlthough the steps required to implementthese organizational managementinitiatives are complex, theunderlying process is simple. Themost effective decision support toolsfor security and risk managementuse this same basic model. ARESSecurity Corporation, for example,has a decision support tool on themarket called AVERT.This solution has been validatedby the U.S. Government, has beengranted a Safety Act designation bythe U.S. Department of HomelandSecurity, and is currently being employedto protect some of the mostsensitive critical infrastructure assetsin the United States. The AVERTtool uses a similar, fundamental processto produce results that optimizesecurity posture:www.maritimeprofessional.com | Maritime Professional | 49

MARITIME SECURITYCHARACTERIZE /SYNTHESIZE / ANALYZE /OPTIMIZE‘Characterize’ is a starting point that establishes a baseline,for an existing security posture, by modeling a firm’s currentrisk environment. The AVERT tool creates a detailed, 3D modelof an asset that need to be protected. Interview “wizards”are used in this solution to guide users through the process ofinputting facility diagrams, terrain details, critical areas, andexisting security and risk management features. Drag and dropfunctions allow decision makers to select features from a certifiedlibrary of more than 50,000 security resources. This toolalso helps users establish a ‘Concept of Operations’, for riskmitigation, that can be tested and validated in follow-on steps.Without the help of a decision support tool like this, expertstypically have to build a baseline profile manually. These toolssave time, and money, and allow for non-expert users to participatedirectly in the risk management process, from the start.‘Synthesize’ has to do with testing various risk mitigationoptions using simulated incidents and threat profiles. Once abaseline profile has been established, a decision support toolcan simulate both natural and man-made hazards, as well asother operational disruptions that have the potential to resultin losses. One size does not fit all when it comes to risk mitigationstrategies. Decision support tools can become a “forcemultiplier” for decision makers by enabling users to virtuallyconfigure and test hundreds of different options. The AVERTtool, for example, uses probabilistic algorithms and MonteCarlo analysis to identify and quantify a wide variety of securityvulnerabilities and mitigation choices. Maritime securitydecision makers need to know where and how vulnerabilitiesare most likely to occur. It is essential to understand how existingsecurity systems will respond to different threats, andwhere the best opportunities may exist to enhance security.Decision support tools use the power of modern computingto sort through the myriad of variables and options, and thenpresent the results in a way that facilitates decision making.‘Analyze’ is the area where the best decision support toolsreally shine. Simply presenting reams of analytical data is notnecessarily useful. And data does not become “intelligence”until it is analyzed and disseminated. AVERT combines quantitativeanalysis with comprehensive visualization tools andintuitive output such as graphs, heat maps, pie charts, andScreenshot depicting a particular attack path along with billboards and shot traces. Shot traces show in redshots from adversaries and blue, shots from guard force. The billboards can be accessed to detail what happenedat the particular point in the simulation and is used to analyze the attack and response.50 | Maritime Professional | 4Q 2013

When executive decision makers focus on risk management, it is not uncommon to find thata company’s exposure to risk is not aligned with the actual policies, plans and procedures inplace for risk mitigation. This is where decision support tools can play an important role.When executives have access to intuitive, easy to use software tools that manage and manipulatedata, they can expose gaps, establish focus points for minimizing their firm’s exposure,and pursue risk management strategy options that emphasize security optimization.cost-benefit tables to present decision makers with actionableintelligence. Using this tool, reports can be produced that provideexecutives with specific information related to things likecritical detection points, probability of interdiction success,total cost of ownership, and overall system effectiveness.‘Optimize’ is the phase of the process where decision supporttools can truly provide a real return on investment. Sincethe best decision support tools are designed to present executiveswith meaningful decision points, the emphasis should beon quality and validity of the output, not necessarily quantity.AVERT, for example, generates extremely accurate metrics,reports, and visualizations that are derived from a security librarythat has been accredited by the U.S. Department of Defensefor assessment of nuclear storage facilities.In order to ensure that decisions are made that support securityoptimization, executives must have access to accurateinformation. Expected results of specific risk mitigation initiatives,as well as the associated cost of those upgrades, are bothimportant metrics to be considered. Maritime professionalsthat have the ability to accurately and efficiently prioritize riskmitigation options, using expected performance and cost data,have a true advantage in the market place.Show me the MoneyBusiness leaders with risk management responsibility needa tool that can help validate the effectiveness of a proposedsecurity solution, before you actually invest in that solution.That tool should provide a way to rapidly conduct “what if”analysis related to the various threat profiles that your businessis exposed to. That same tool should facilitate the clearcommunication of the value proposition associated with a specificplanned maritime risk management initiative. If you andyour team are not so equipped, then it may be time to investigatedecision support tools.The AVERT tool, used as an effective decision support system,has paid for itself many times over in some recent implementations.A U.S. Government agency used this tool to evaluatea planned security upgrade that was budgeted for, but notyet procured. The analysis showed that this planned investmentwould not actually have resulted in any substantive increasein overall security effectiveness at the facility. The investmentwas cancelled, and AVERT was credited with total cost avoidanceof $5 million. Similarly, a major U.S. port recently usedAVERT to validate the design basis of a planned security upgrade,eventually resulting in a successful maritime securitygrant award of $5.5 million. Separately, a private power generationfirm recently used the AVERT tool to reduce their annualsecurity assessment budget by as much as 30 percent.Marathon, Not a SprintThreats to businesses in the maritime domain are increasing,and at an alarming rate. Consequently, the costs associatedwith security and risk management also continue to increase. Ithas become more difficult than ever for maritime professionalsto optimize security posture, and ensure business continuity.Every successful company employs practical managementsystems as the foundation for managing critical business functions– risk management should not be an exception. Decisionsupport tools have been used to support financial managementfunctions in business for decades. Once they are incorporatedinto a firm’s standard management approach, decision supportsystems can become a trusted and reliable asset. Where riskmanagement is concerned, this is definitely the case. As operatingconditions and threat profiles change, these tools can beused, over and over, or even on a continual basis, to comparevariables, evaluate options, and work through to a “best-fit”answer, leaving nothing to chance. Decision support toolsprovide a proven method to continually assess risk, analyzemitigation strategies, manage security budgets, and optimizesecurity posture based on predicted effectiveness.In today’s global maritime domain, where all-hazards risksare persistent and pervasive, and can cause immediate and devastatingimpacts if improperly addressed, effective risk managementmust be designated as a core business function. Byusing decision support tools to systematically invest in risk mitigationinitiatives, maritime professionals have an opportunityto pursue return on investment, and create value for their firms.www.arescorporation.com/security/products/avert/www.maritimeprofessional.com | Maritime Professional | 51

IInsightsMARITIME SECURITYBoundaries, Standards and the Business of IntegrityBy Charlie ButterworthAs maritime security evolves, so too is the need for increased and standardized professionalism in theranks of Private Maritime Security Companies.In many respects, the maritimesecurity industry is still in adolescence.The growing pains associatedwith speed of expansion haveled to disparity in terms of acceptablebehavior and confusion over appropriateconduct. This disparity is echoed inthe PMSCs themselves - there are thosewho strive to lead the way in terms ofprofessionalism and others who struggleto keep up with reasonable minimumstandards. Although some ownersmay be happy to accept a moreliberal approach to maritime security,when it comes to deploying men withguns on ships, there is no room for allowingimmaturity. The stakes are toohigh.What the industry continues to needare clearer boundaries and standards.This, coupled with an ethos of integrity,is central to securing the confi denceand respect of the shipping market,not least so for those shipowners andoperators who understand the tangiblevalue attached to reputation.Fortunately, there continues to be adetermination to professionalize theindustry; the ISO/PAS 28007 standard,as well as amendments to German lawprovide clear examples of how privatemaritime security is maturing.ISO/PAS 28007In the short history of privatemaritime security there has neverbeen one universal standard; a definitivebenchmark that comprehensivelyencapsulates every aspect ofa private maritime security company(PMSC) and how it should be deliveringits services effectively. Untilnow, that is.Initiated in 2012, ISO/PAS 28007(annexed to the ISO 28000 SecurityManagement System) was formulatedwithin six months, making itsestablishment one of the fastest inISO history. However, that speed isin no way reflective of the depth ofthe standard, but rather the necessityof an internationally recognizedstandard to support ship owners andoperators in effectively evaluatingPMSCs. It sets the benchmark forPMSCs who want to demonstrateto the international community thatthey, and the operatives they supply,are of the right quality to legally,safely and effectively guard commercialshipping on the high seas.ISO 28000 is a risk based qualitymanagement system for the securityof operations and activities conductedby organizations. ISO 28007 setsout guidance for applying ISO 28000to PMSCs and key components fallinto two main groups; managementof the security system and proceduralaspects. Management of thesecurity system includes areas suchas security risk assessments, clearlydefined management responsibilities,internal audits of operations,and legal and other regulatory requirements.Procedural aspects encapsulaterules of authority, contractorselection, screening and vetting,training, authorizing licensing offirearms, prevention of incidents, incidentmanagement and emergencyresponse, investigation and reportingof incidents, procedures for detainment,identification, interface withcrew and familiarization.The United Kingdom AccreditationService (UKAS) is the solenational body recognised by governmentto assess evaluating organizations,such as certification bodies,against international standards.UKAS has been appointed to assesscompanies offering certification toISO/PAS 28007, verifying that theyare using competent assessors withthe correct qualifications and thatrigorous and tested auditing processesare followed. The importanceof thorough and independent assessmentagainst recognized standards(UKAS accreditation) is key to theconfidence of the shipping market.It is vital that auditing standards arenot undermined and that PMSCs arenot tempted by a certification bodythat is not internationally-accredited.UKAS began assessment of thecertification bodies’ in June and aimsto complete the pilot project by theend of the year. This will allow appropriatetime for those certificationbodies taking part to train its auditorsto the rigorous requirements demandedby ISO/PAS 28007. In themeantime ship owners can continueto work with the ISO/PAS 28007document as guidelines to indepen-52 | Maritime Professional | 4Q 2013

dently assess the competency of PMSCs.PVI is one of the few PMSCs involved in the pilot schemeand is working through the process with Lloyd’s RegisterQuality Assurance (LRQA). As a subsidiary of Lloyd’s RegisterGroup Limited, LRQA clearly has strong foundations inthe maritime industry and is one of three global managementsystem certifiers participating in the pilot.Ultimately, ISO/PAS 28007 is all about risk assessment. Ithas been specifically created for ship owners and operators tosupport them in deciding whether or not the risk that they aretaking has been properly evaluated, calculated and assessed.This can only be welcomed.German AccreditationAlthough the ISO/PAS 28007 represents a landmark in theprofessionalization of PMSCs and will represent the foundationfor future due diligence, certain Flag States continue toadopt their own procedures to determine which companies areapproved to protect vessels sailing under that Flag. Panama,Malta, Belgium, Croatia, Greece, the Netherlands, Luxembourg,Italy, the UK and Cyprus, for example, all have particularrequirements for the utilization of PMSC services and from1 December 2013, Germany will join that group. Changes toGerman law will mean that only licensed PMSCs will be ableto provide security services onboard German-flagged vessels.The updated German regulations are more stringent thanany other existing standard and go beyond those of the ISO28000/28007 certification. It may well be, therefore, thatmany maritime security companies will not afford the timeand resource to achieve this mandatory accreditation.The German regulations require companies not only to demonstratedue process, but also to evaluate the implementationof those processes. PMSCs are asked to, amongst other things,submit standard operating procedures and company documentationfor scrutiny by the authorities. They also place greatemphasis on training standards, for example obtaining knowledgeand skills relevant to the German public. This includescomprehensive knowledge of German civil and criminal laws– such as width and limits of right of self-defense – crisishandling, de-escalation techniques, the secure handling ofweapons and equipment, as well as weapons law and foreigntrade law of Germany, and of the relevant harbour and coastalstates. In addition, they require the PMSC’s Privately ContractedArmed Security Personnel (PCASP) to conduct andevidence regular firearms training.PVI is committed to obtaining a license from the GermanAuthorities to enable it to place its PCASP on German-flaggedvessels. It is undertaking the additional training in-house andhas employed independent German legal experts to ensure theaccuracy of the German legal training requirements.Whilst there have been questions over the necessity for suchcomplexity in the German regulations, what is being set outto achieve is obvious; mitigation of risk in an area where thestakes are high. BAFA and the Polizei Hamburg are proactiveand knowledgeable in their approach, providing direction andsupport to interested PMSCs and the German Governmentshould be praised for its attempt to not only regulate this maturingindustry but ultimately keep seafarers safe.As the maritime security industry gradually matures and therisks presented by anything less than an exemplary approachbecome readily apparent, it stands to reason that ship ownersand operators are becoming increasingly discerning in theirchoice of security partner. This is why accreditation that recognizesand rewards legal compliance, professionalism, qualityand excellence is to be applauded and embraced.The AuthorCharlie Butterworth is In House Counsel to PVI and has been abarrister since 2003. She has become one of a few specialistmaritime security lawyers experienced in advising on the lawrelating to shipping and piracy, insurance risk and alleviation,relevant aspects of public international law, rules of the useof force at sea, flag state law and regulation, internationalconventions such as UNCLOS; SOLAS as they relate to therights of individuals and matters of legal jurisdiction.www.maritimeprofessional.com | Maritime Professional | 53

RRegulatoryBALLAST WATER TREATMENTThe New Ballast Water Management Regulation ComethReady or not, here it comes. Are you ready?By Christopher R. Schulz & Randy KullmannIn March 2012, the U.S. Coast Guard (USCG) amendedits regulations on ballast water management by establishingstandards for the allowable concentration of marineorganisms in ballast waters discharged in ports and coastalareas of the United States. The new regulation includes proceduresfor independent testing and approval of ballast watertreatment (BWT) systems to be installed on ships to meet thesestandards. According to the USCG, the new requirements willbe more effective than ballast water exchange (i.e., fl ushingour ballast water and replacing it with mid-ocean water whilein transit) in controlling the introduction and spread of nonindigenousspecies (NIS) in waters of the United States. Therequirements of the Ballast Water Management (BWM) Regulation(Federal Register, Vol. 77, and No. 57), treatment optionsto meet these requirements, and what ship owners shouldbe doing now to comply should all be key concerns for today’socean operators.BWM Regulatory SummaryApplicability: The regulation applies to all U.S. and foreigncommercial vessels equipped with ballast tanks that dischargeballast water into U.S. waters, operate outside the U.S. ExclusiveEconomic Zone (i.e. more than 200 nautical miles fromU.S. shorelines), and practice ballast water exchange. It alsoapplies to ships that do not operate beyond the EEZ but takeon and discharge ballast water in more than one Captain of thePort Zone and are larger than 1,600 gross register tons. U.S.Department of Defense or USCG vessels, crude oil tankersengaged in coastwise trade, or vessels that operate exclusivelywithin one USCG Captain of the Port Zone are exempt fromthe regulation.Implementation Schedule. The new requirements will bephased in for different types of vessels, as follows;• New Vessels (commissioned on or after Dec 1, 2013):on delivery• Existing Vessels ( 5,000 cubic meters ballast watercapacity): 1st dry dock after Jan 1, 2016Time extensions may be granted by the USCG case by caseif the ship owner or operator can document that BWM regulatorycompliance is not possible. However, extension requestsmust be made at least 12 months prior to the scheduled implementationdates cited above.Ballast Water Discharge Standard: The ballast water dischargestandard replaces ballast water exchange to significantlyimprove protection of ecosystems within U.S. waters.The requirements, based on organism size and use of indicatororganisms, are equivalent to the IMO discharge standard adoptedby other countries:Size-Based Organisms:• For organisms >= 50 um (zooplankton):< 10 organisms per cubic meter (applies to zooplankton)• For organisms < 50 um to >=10 um: < 10 organismsper milliliter (applies to phytoplankton)Indicator Organisms:• < 1 coliform forming unit (CFU) Vibrio cholera per 100 mL• < 250 CFU Escherichia coli per 100 mL• < 100 CFU enterococci per 100 mLAs noted in the BWM regulation, the USCG plans a “practicabilityreview” no later than January 1, 2016, to determinewhether an even tighter discharge standard is warranted basedon available treatment technologies for shipboard applications,environmental impacts and cost.Ballast Water Management Requirements. To meet the newdischarge standard, a seagoing commercial vessel must employone of the following BWM methods:• Install and operate a BWT system approved by theUSCG to meet the regulation’s ballast water dischargestandards at all times.• Install and operate an alternative management system(AMS) that has been type-approved by a foreignadministration in accordance with testing requirementsof the International Maritime Organization (IMO), forup to five years from the BWM compliance date for thatparticular vessel.• Only use water from a U.S. public water system forballast water provided that the ballast tanks have beenpreviously cleaned and no seawater subsequentlyintroduced into ballast tanks or supply lines.• Discharge of ballast water to an onshore receptionfacility for treatment.For most vessels, only the first two methods will be feasiblefrom logistical, safety and operating cost standpoints. And becauseof the tight regulatory implementation schedule, it is anticipatedthat most vessels will install an AMS for short-term54 | Maritime Professional | 4Q 2013

(less than five years) compliance,and vessels with previously installedBWT systems (to meetforeign IMO-based dischargestandards) will seek an AMS determinationfrom the USCG tocontinue to operate those systems.Note that systems with AMS approvalwill become USCG typeapproved BWT systems if theycan meet land-based and shipbasedtesting requirements.Reporting Requirements: Theoperator of a vessel must maintainwritten records on the ship’sballast water management operations,essentially the same asthat required for ballast waterexchange. This requirement canbe met by using the Ballast WaterReporting Form from the IMOballast water management guidelines. Monitoring records mustbe kept for at least two years. The regulation does not specifyrecord-keeping requirements for operating BWT systems, butit is expected that this information will need to be provided toUSCG inspectors upon request.Enforcement and Penalties: Vessels will be subject toUSCG inspections, which will include sampling and analysisof ballast water discharges and examination of documents todetermine compliance with the BWM regulation. In addition,every vessel will be required to have a specially designed samplingport at each overboard discharge point for use by USCGinspectors for collecting representative ballast water dischargesamples. Sampling procedures for shipboard inspections arestill under development by the USCG and will be posted onits website when available. The owner or operator of a vesselwho violates the BWM management or discharge standard requirementsis subject to a civil penalty up to $35,000 per day.BWT System Approval Procedures: The manufacturer ofa BWT system must apply to the USCG for type-approval.The application must detail the design, shipboard installation,component testing and O&M system requirements, and presentresults of land-based and ship-board testing by a USCGacceptedIndependent Lab. Land-based testing must meetthe requirements of the Generic Protocol for Verification ofBallast Water Treatment Technologies (called ETV Protocol),published by the U.S. EPA Environmental Technology VerificationProgram in September 2010. Land-based testing willdetermine if the BWT system can reliably meet the dischargestandard for prescribed challenge water conditions. Shipboardtesting must be performed for at least six months to demonstratethat the system will meet the discharge standard whenoperated in a shipboard environment.A manufacturer may also submit existing data from typeapprovaltesting by a foreign administration, and work with aUSCG-accepted Independent Lab to evaluate data and fill anydata gaps by having the system tested in accordance with theETV Protocol. If the BWT system is approved by the USCG,a certification number and approval certificate will be issuedto the applicant specifying acceptable ballast water quality uptakeconditions (e.g., freshwater, brackish water or seawater)and engineering parameters for operating the system.BWT SystemsThe global market for BWT systems is predicted to grow toover $34 billion through 2020 in response to IMO and USCGbasedballast water discharge regulations (Frost and Sullivan,2012). BWT systems are now manufactured by dozens ofcompanies around the world, including traditional suppliersof marine equipment, suppliers of municipal water and wastewatertreatment equipment, and shipbuilders. As of November2013, 35 BWT systems have received IMO-type approvalfrom foreign administrations, and 28 of these have been acceptedinto the AMS program by the USCG.As shown in Figure 1 above, these systems include varioustreatment technologies and combinations but are typically arrangedto provide two stages of treatment: (1) physical solid-liquidseparation to reduce sediment and remove larger organisms,and (2) disinfection to kill or inactivate smaller organisms. Thewww.maritimeprofessional.com | Maritime Professional | 55

BALLAST WATER TREATMENTdisinfection processes can be further classified into physical orchemical treatment processes. The latter may involve residualcontrol to meet discharge limits for active chemical substancesor physical enhancement technologies to improve treatmentperformance.As shown in Figure 2, the global market for BWT systemsis dominated by two treatment technologies -- UV and electrochlorination.These are manufactured by 26 equipmentsuppliers and compose 85% of the approximately 1,500 IMOtype-approved BWT systems installed to date. The basic processtrains are generally described above.UV Disinfection: This is a two-stage treatment processwith a pressure-rated filter unit (typically with micron-rateddisks or membrane elements) to remove sediment and largerorganisms, followed by a UV disinfection unit to inactivatesmaller plankton, bacteria and viruses. No chemicals are requiredto operate the system. During ballasting, water is typicallyprocessed through both the filter and UV stages as wateris pumped into the ballast tanks. Solids captured by the filtersare discharged at the ballasting location. During de-ballasting,the filter is typically bypassed and water is treated by the UVunit only before discharging overboard.Electrochlorination: This is a two-stage treatment processwith a micron-rated pressure filter or strainer followed by anelectrochlorination unit. The latter is essentially an on-demandchemical system, which uses electrolytic cells to generate asodium hypochlorite (bleach) solution from seawater and electricity.Some treatment systems pump the entire ballast waterflow through the electrolytic cells, whereas others use a smallslipstream to generate a concentrated hypochlorite solution,which is then recombined with the main flow. During ballasting,water is processed through both the filter and electrochlorinationunit as water is pumped into the ballast tanks. A chlorineresidual (or residual oxidant) is maintained in the tanks fora minimum contact time (typically a few days) to improve disinfectionand eliminate regrowth of organisms during transit.(Image courtesy of Severn-Trent deNora)Shipboard installation ofelectrochlorination systemfor generating sodium hypochlorite.56 | Maritime Professional | 4Q 2013

During deballasting, a neutralization chemical (e.g., sodiumbisulfite) is added to the water to remove the oxidant residualas it is pumped overboard. Note that this type of system cannotbe used in freshwater areas such as the Great Lakes because itrequires salinity for hypochlorite production.Complying with the New RegulationsThe new BWM regulation will increase costs for ship owners/operatorsto evaluate, install, operate (including additionalrecord-keeping) and maintain BWT systems with regulatorycompliance dates, starting now for new build vessels and atthe next scheduled dry-dock for many existing vessels. Theymust therefore quickly become familiar with the new requirements,risks of non-compliance, and necessary steps to bringindividual ships or fleets into regulatory compliance.For owners/operators of seagoing commercial vessels,most important will be to select an appropriate type-approvedBWT system that is compatible with the ship’s existing ballastwater system and can be operated to ensure compliancesafely by the crew. Key design considerations for BWT systemselection include:• Ballast pump capacities and operating pressures• Ballast tankage volume (if required for disinfectioncontact time)• Available space for the BWT equipment• Uptake and discharge piping arrangements• Chemical storage location (if required)• Discharge sample location (for USCG inspection use)• Ship routes (and associated ballast water quality conditions)• Integration of the BWT system controls into the ship’sballast control system• Training requirements for crew members.BWT system selection is made more complicated in thatthe USCG has not type approved or certified any systems yet,although it plans to over the next year or two. In the meantime,AMS-accepted systems must be used with only a fiveyearregulatory compliance horizon, with no certainty thatthey will ultimately be approved by the USCG for long-termcompliance with the BWM regulation.Given the complexity and uncertainties of the BWM regulatoryrequirements, tight implementation schedule, system installationchallenges, and the myriad of BWT systems on themarket, many ship owners are hiring a qualified engineeringfirm to assist in selection of the most appropriate BWT systemand work with the selected equipment supplier to design andinstall the BWT system on a particular ship or fleet. The planning,engineering and installation of the BWT system needsto be carefully coordinated with the vessel drydock projects.

SStatsSTATISTICSBallast Water Treatment: Decisions, Decisions …The IMO’s Ballast Water Convention will enter into force12 months after 30 countries representing 35 percent of theworld’s tonnage have ratified it. Today’s tally exceeds this,totaling 38 countries – a reflection of the international community’sresponse to the impact of invasive species. Total tonnage,however, stands at 30 percent; short of the requirement.According Dr. Stelios Kyriacou of Wä rtsilä Water Systems,a key driver for operators deciding to move forward in thisenvironment was the U.S. Coast Guard announcement confirmingthat performance discharge standards identical to theIMO’s D2 discharge standard would be adopted with an effectivedate of 21 June 2012. The USCG also said that any systemthat has an IMO Type Approval certificate issued by or on behalfof a non-US flag administration could be accepted underits Alternative Management Systems (AMS) provisions, havingbeen previously subject to a USCG assessment. Approximately9,000 foreign-flagged vessels visit US ports every year.Compliance with ballast regulations is now mandatory for all.BWT system selection is made more complicated in that theUSCG has not yet type approved or certified any systems. Inthe meantime, AMS-accepted systems must be used with onlya five-year regulatory compliance horizon, with no certaintythat they will ultimately be approved by the USCG. Kyriacoualso said, “Although the overall implementation schedule hasbeen protracted, the US position and introduction of the VesselGeneral Permit (VGP) from 19 December 2013 will acceleratethe need to comply. Shipowners are acting now tofind and secure the most effective installation.” Key designconsiderations for BWT system selection include:• Training Requirements• Ballast tankage volumes• Available Space onboard• Piping arrangements• Chemical Storage (if needed)• Discharge Sample Location• Ship routes (and associated ballast quality conditions)• Integration of BWT controls into ballast control systems• Ballast pump capacities / PSIGThe game is moving in one direction: vessels must meet theIMO D-2 standard – which is numerically equal to the U.S.standard. For most, this can only be achieved through the useof technology. There’s no silver bullet – no single solutionwill be suitable across all ship types, sizes and environmentalconditions.The Coast Guard’s AMS list – as of November 2013 – isdepicted below:58 | Maritime Professional | 4Q 2013

Notes:1An AMS accepted for use in freshwater must be tested at a practical salinity unit (PSU) concentration of less than 1 PSU ([x] < 1PSU).2An AMS accepted for use in brackish water must be tested at a PSU concentration between 10 and 20 PSU (10 PSU < [x] < 20 PSU).3An AMS accepted for use in marine water must be tested at a PSU concentration between 28 and 36 PSU (28 PSU < [x] < 36 PSU).www.maritimeprofessional.com | Maritime Professional | 59

2014 Editorial CalendarQ1 The Energy Edition:Exploration, Production & TransportationWhether it’s oil, gas, wind or tide, no market sector endures more scrutiny orenjoys greater rewards than does offshore energy. Is gas the question, the answer, or both? Changing business models Evolving roles & responsibilitiesModern command & controlPublish: March 2014Mar. 17-19 / Stamford, CT Mar. 20 / New YorkMay 7 / Houston, TXMar. 10-13 / Miami, FLQ2 successful maritime operation. Technology & techniques to keep ship, crew and cargo safe Linked up and onlineWhen prevention isn’t enough Protecting your businessPublish: May 2014PosidoniaJune 2-6 / Piraeus, Greece May / New YorkJune 17-19 / New YorkQ3 As mariners at sea are increasingly tasked to pull double duty, MarPro examinesthe products, systems and technical solutions designed to lighten the load.Publish: Regulations tighten ... againLife after MLC 2006Driving change by design Selection, management & operationsSept. 9-14 / HamburgOct. 22-24 / HoustonOctober / StamfordQ4 EditionBlue water, Brown water, Deepwater & Offshore Oil & Gas:Shipyards are the bellwether of market trends. LNG, distillates or dieselAre you ready? * Bonus: MaritimeJobs.com *Publish: Dec. 3-5 /New Orleans, LAFeb. 2015 / Arlington, VAFeb. 24-26,2015 / SFO* The publisher reserves the right to alter this calendar. All featuresare subject to change in light of industry trends and developments.

MARPRO Q4 SHIPYARD RECRUITMENT DIRECTORYAUSTALAustal is a global construction andrepair company producing commercialvessels for international use. Itsmain products include passenger andfreight ferries, luxury yachts and militaryvessels. Austal’s current careeropportunities include EngineeringJobs, Fabrication Jobs, Pipe Jobs,Production Control Jobs and ProductionManagement.1 Dunlap Drive, Mobile,Alabama 36602T: +1 251 434 8000W: austal.com* See Our Ad On BACK COVERBLOUNT BOATSBlount Boats, Inc. is a full-serviceshipyard located in Warren, RhodeIsland specializing in design,construction and repair of steel andaluminum vessels up to 220 feet.Current needs include AluminumShipfitters, Marine Electricians.461 Water St.P.O. BOX 368Warren, RI 02885Human Resource Manager:Julie BlountT: 401.245.8300F: 401.245.8303E: julie@blountboats.comDAMENDamen is a family-owned internationalshipyard group performingdesign, construction and repairin a number of market segments.Explore Damen careers at career.damen.com.Industrieterrein Avelingen West 20,4202 MS Gorinchem,The NetherlandsT: +31 183 65 49 84W: damen.comDONJON SHIPBUILDING & REPAIR,FOSS MARITIMEFoss Maritime’s two Pacific Northwestshipyards in Seattle, Wash. andRainier, Ore. provide full service fromnaval architecture and marine engineeringto vessel design, constructionand repair. Each fully equipped shipyardfeatures a team of highly skilledengineers and craftspeople. To learnabout Foss’ open positions.T: 800.562.2711F: 206.270.4899E: fossjobs@foss.comW: www.fossmaritime.com/aboutfoss-maritime/careers/GENERAL SHIPREPAIRBAYONNE DRYDOCK & REPAIRAND GMD SHIPYARDBayonne Drydock & Repair Corp.and GMD Shipyard Corp. compriseNew York Harbor’s largest drydockfacilities.100 Military Ocean Term St.,Bayonne, NJ 07002T: 201-823-9295/9296E: jobs@bayonnedrydock.comW: bayonnedrydock.com* See Our Ad On Page 13BAY WELDING SERVICES, INC.Family-owned Bay Welding, creatorof Bay Weld Boats, is a customaluminum fabricator in the Northwestwith more than 30 years experiencein new boat construction, customfabrication and rebuild/repower.Drawing upon the local workforce,Bay Welding hires an average of 10workers, all of whom have practicalexperience in maritime fields, diversespecialization and are precisionoriented.P.O. Box 534, Homer, AK 99603T: (907) 235-5103F: (907) 235-8603W: bayweldboats.comCHESAPEAKE SHIPBUILDINGIn operation for more than thirtyyears, Chesapeake Shipbuilding isa designer and builder of inlandwaterway or ocean service commercialships up to 375 feet in length.Chesapeak specializes in the designand construction of passengervessels, tugboats, ferry boats, etc.The company is currently hiringWelders, Fabricators/Ship Fitters,Marine Engineers, Millwright/OutsideMechanist, Foremen and ShipSuperintendents.710 Fitzwater Street,Salisbury, MD 21801T: (800) 784-2979F: (410) 742-3689W: chesapeakeshipbuilding.comCONRAD INDUSTRIES, INC.In the marine construction andrepair industry since 1948. Thecompany designs, builds, andoverhauls tugboats, ferries, liftboats,barges, offshore support vessels,and other steel and aluminumproducts. Conrad services for thecommercial, energy, and governmentmarkets. We also provide bothrepair and new construction servicesat four shipyards located in southernLouisiana and Texas.1501 Front Street,Morgan City, LA 70380T: 985-384-3060F: 985-385-4090W: conradindustries.comDonjon Shipbuilding and repairssupported by an experiencedshipyard management team that hasworked in the business for decades.Donjon performs shipbuilding andbarge construction, vessel conversion,repowering and drydock,repair and maintenance as well assteel fabrication and assembly.220 E. Bayfront Parkway,Erie, PA 16507T: (814) 455-8121W: donjonshipbuilding.com* See Our Ad On Page 21EASTERN SHIPBUILDING GROUP,With two yards in Panama CityFla., Eastern builds everything fromOffshore Supply Vessels to Tugs,Inland Pushboats, Ro-Ro/PassengerFerries, Inland Transport Vessels,Barges, Fireboats, Research Vessels,Offshore Construction Vessels, HighSpeed Passenger Vessels, FishingVessels and more. Eastern regularlyhires shipfitters, structural and pipewelders and trainees, equipment operators,pipefitters, quality assurancetechnicians, material handlers, outsidemachinists, marine electricians,painters/sandblasters, carpenters,warehouse/shipping and receiving,inside machinists, etc.13300 Allanton Rd;Panama City, FL 32404T: 850-874-0208E: hr@easternshipbuilding.comW: easternshipbuilding.comSHIPYARD PROJECT MANAGERPOSITION AVAILABLEWe are a small family owned shiprepair yard operating two 1,000ton drydocks. In addition to thedrydock work, we service oceangoingships at the loading docks in thePort of Baltimore. Our industrialdivision, Baltimore Metal Works, operatesour machine and fabricationshops. We just finished constructionof a new 1,000 ton fl oatingdrydock. With our new drydock,we are expecting our business toexpand and we are looking for anEstimator/Project Manager.Description:• Seeking a Project Manager/ Estimatorto manage ship repair jobs.• Works closely with Customers,Yard Manager, USCG and ClassificationInspectors.• Provide direct management andoversight of subcontractors.• Prepare bids, change orders,invoices and negotiate pricing withcustomers.HR Contact: Cary LynchE: cary@generalshiprepair.comW: generalshiprepair.comGREAT LAKES SHIPYARDWanda Reddy, Human ResourcesManager4500 Division AveCleveland , OH , 44102-2228T: 216-367-8139F: 216-621-7616E: hr@thegreatlakesgroup.comwww.maritimeprofessional.com | Maritime Professional | 61

MARPRO Q4 SHIPYARD RECRUITMENT DIRECTORYGULF COPPERHORIZON SHIPBUILDING, INC.IRVING SHIPBUILDING INC.MAY SHIP REPAIR CONTRACTINGGulf Copper was founded in 1948and over the years, diversified toservice the commercial marine,offshore, shipping, oil and gas,petrochemical, power generation,construction and transportationindustries. In 1998, Gulf Copper becamean employee-owned company,retaining talented people skilled invarious trades including welders,fitters, machinists, electricians andlaborers, among others. Customersinclude major and independentoffshore drilling rig contractors,offshore oil and gas operating andservice companies, national oilcompanies, major U.S. commercialship operators and U.S. governmentand military. Gulf Copper is nowhiring a Senior Estimators/Plannerand Machinist Foreman.7200 Hwy 87 East,Port Arthur, TX 77642T: 409-989-0300E: hrcorp@gulfcopper.comW: gulfcopper.comGUNDERSON MARINE BARGESGunderson Marine conducts steelfabrication, full-service engineering,production and financial solutions,with an emphasis is on ocean-goingbarges, including conventional deckbarges, double-hull tank barges,railcar/deck barges, dump bargesand barges for aggregates andother heavy industrial products.4350 NW Front AvenuePortland, Oregon 97210T: 503.972.5700F: 503.972.5985E: hrgund@gbrx.comW: gbrx.comJOHN BLUDWORTH SHIPYARD, LLCJohn Bludworth Shipyard is a fullservice facility with a workforce ofmore than 100, providing design,new construction and repair servicesfor inland or offshore vessels.3101 Navigation Blvd., CorpusChristi, Texas 78403-2441T: (361) 887-7981F: (361) 887-6014E: info@jbludshipyard.comW: jbludshipyard.comHorizon designs, constructs andrepairs ships, boats and barges upto 300’ in length and 1500 tonslaunch weight. Our target andproven customer base includes theoffshore oil industry, cruise anddiving industry, tug and bargeoperators, and specialized craftfor the United States and foreigngovernments.13980 Shell Belt Road,Bayou La Batre, AL 36509T: 251.824.1660F: 251-824-1664careers@horizonshipbuilding.comW: horizonshipbuilding.comINTERNATIONAL SHIP REPAIR &MARINE SERVICES, INC.Periodically looking for All ShipyardCrafts, Superintendents, Foremen,Leadermen Safety Professionals, Pipefitters,Marine Electricians, Shipfitters,Certified Welders, Estimators/Contract Administrators.Human Resources Department1616 Penny Street,Tampa, Florida 33605T: (813) 247-5273F: (813) 241-6608W: internationalship.comLEEVAC SHIPYARDS, LLCSince 1913, LEEVAC has builta wide range of vessels andworkboats for virtually every aspectof the maritime industry. Over theyears we have designed, manufacturedand launched a large varietyof vessels and barges up to 600 feetin length – and our launch systemhas the capability of handling vesselsup to 700 feet.Charlie ButlerHuman Resources ManagerP.O. Box 1190Jennings, Louisiana 70546T: 337-824-2210Part of J.D. Irving companies,Irving Shipbuilding specializes inthe design, build and repair ofdrill rig upgrades and conversion,offshore fabrication and industrialmanufacturing. The company alsoprovides an array of engineeringservices, facility services and projectmanagement expertise throughits affiliate Fleetway Inc. Currentopenings include Buyer, Local 28;HR Coordinator; Data Management;Manager, Major Subcontracts; ProjectDirector – Artic Offshore PatrolShip Program (AOPS); Sr. Buyer;Supply Chain Manager, In-ServicePrograms and VP Operations.3099 Barrington Street, Halifax,Nova Scotia, Canada B3K 5M7T: (902) 423-9271W: jdirving.com/careersKVICHAK MARINE INDUSTRIESIn operation for more than 30 years,Seattle-based Kvichak Marine,designs and builds aluminum vesselsfor patrol, search and rescue, firefighting,survey, transporting pilots,transporting passengers or generalworkboats. Kvichak is currentlyaccepting resumes for welders and aproject lead engineer.469 NW Bowdoin PlaceSeattle, WA 98107T: 206-545-8485F: 206-545-3504E: hr@kvichak.comW: kvichak.comMARINE BUILDERS, INC.Marine builders inc. operates asa full-service marine constructioncompany. It offers a complete lineof vessels, which include workboats,barges, tugs, dry docks andexcursion vessels. The company isa provider of a wide array of products,such as workboats, truckableworkboats, and passenger vessels.3303 Industrial Parkway,Jeffersonville, IN 47130T: 812.283.5603F: 812.283.9628E: mic@marineworks.comW: marineworks.comMay Ship Repair has three Drydockswith capacity for ships up to 300’and service on steel fabrication,welding and piping; undertakecomplete overhauling and repairingof auxiliary machinery and machineparts of all kinds.Now hiring welders, estimators,foreman.3075 Richmond Terrace, StatenIsland, NY 10303T: (718) 442-9700F: (718) 273-7255E: adam@mayship.comW: mayship.comNICHOLS BROTHERSBOAT BUILDERSWashington-based Nichols Brothersspecializes in steel and aluminumnew construction, repair and majorconversions. Open positions includeSupervisor Marine Painter, ProductionWelders and Marine Painters.5400 South Cameron Rd.,Freeland, WA 98249T: (360)331-5500F: (360) 331-7484 Attn: HumanE: applications@nicholsboats.comW: nicholsboats.comSEASPAN SHIPYARDSSEASPAN has full-service shipyardsin Vancouver and Victoria, BritishColumbia for commercial buildsand cruise ship repairs. Current jobopenings can be seen at careers.seaspan.com50 Pemberton Ave., North Vancouver,BC, Canada V7L 2R2TEL: 604.988.6361FAX: 604.990.3290hrsea@seaspan.comseaspan.com* See Our Ad On Page2562 | Maritime Professional | 4Q 2013

MARPRO Q4 SHIPYARD RECRUITMENT DIRECTORYSENESCO MARINE, LLCSNEED SHIPBUILDINGVIGOR INDUSTRIALVT HALTER MARINESenesco Marine LLC is a Northeastbuilder of double-hulled barges,tugboats and other vessels, alsooffering repair work and dry dockservices.10 MacNaught Street,North Kingstown, RI 02852-7414T: 401.295.0373W: senescomarine.com* See Our Ad On Page 21SILVER SHIPSIn business since 1985, Silver Shipsmanufactures custom aluminumboats from 21-65 feet in length.Silver Ships provides the militaryand municipalities, as well as commercialusers, with work and patrolboats.9243 Bellingrath Rd.,Theodore, Al 36582T: (251) 973-0000F: (251) 973-2711W: silverships.comSneed Shipbuilding, Inc. offers adiverse array of services, from newvessel construction to repair. Sneedis always looking for dedicated andtalented individuals to join our team.We recruit for the following positions:Welder, Fitter, Combo, Painter,Mechanic, Machinist, Marine Electrician,Carpenter.17112 Market St.Channelview TX, 77530T: (281) 862 2266F: (281) 862 9184W: sneedshipbuilding.comTALLERES NAVALES DEL GOLFOEstablished in 1995, TNG, based inthe Port of Veracruz, offers integralfabrication and ship repair servicesin the Gulf of Mexico.Islote de San Juan de Ulúa S/N,C.P.91800,Veracruz,Ver.México.T:(52) 229 9892500F:(52) 229 9892510W: tnghph.comVigor Industrial is a provider ofshipbuilding, ship repair and industrialservices, with operations inOregon, Washington and Alaska. Alist of current openings can be foundat vigorindustrial.com/jobs.5555 N. Channel Ave.,Portland, OR 97217T: 503-247-1777F: 503-247-1620E: info@vigorindustrial.comW: vigorindustrial.comWILLARD MARINEWillard Marine is a leader in compositeboat manufacturing with over50 years of experience. Repeat customersinclude the U.S. Navy, CoastGuard, and foreign governments.1250 N. Grove Street,Anaheim, CA 92806T: 714-666-2150E: resume@willardmarine.comW: willardmarine.comVT Halter Marine is s shipbuildingsubsidiary of VT Systems (VTS)that specialize in ship design,construction, and repair and offercomprehensive packages coveringshipbuilding projects from blueprintto blue water. All Shipyard CraftPositions currently have openings atall three facilities in southern Mississippi.VT Halter is also seeking adockmaster and buyer.Attention: Recruiting900 Bayou Casotte Parkway,Pascagoula, MS 39581T: (228) 696-6756F: (228) 696-6763E: hr@vthm.comW: vthaltermarine.comwww.maritimeprofessional.com | Maritime Professional | 63

Advertiser IndexPage Company Website Phone#31 ABS Americas www.eagle.org Please visit us onlineC2 AIG www.aig.com Visit our website11 American Chemical Technologies, Inc www.americanchemtech.com (517) 223-0300C4 Austal USA www.austaljobs.com Please visit us online15 Baier Marine Company Inc. www.baiermarine.com (800) 455-391713 Bayonne Drydock & Repair Corp. www.bayonnedrydock.com (201) 823-929553 Belcotech Dupont www.belcotech.dupont.com (973) 884-470045 Blank Rome www.blankrome.com Please visit us online31 Boll Filter Corporation www.bollfi lter.com (284) 773-820029 Click Bond Inc www.clickbond.com (775) 885-800025 Decision Sciences International Corporation www.decisionsciencescorp.com (571) 252-848023 Don Jon Marine www.donjonshipbuilding.com (814) 455-644257 Ecochlor www.ecochlor.com (978) 298-14639 Geobrugg North America LLC www.geobrugg.com (505) 771-40805 GTT www.gtt.fr +33 0 1 30 234 7891 Hyde/Calgon www.calgoncarbon.com (412) 787-67003 KVH Industries www.kvh.com (401) 847-3327C3 Maritime Professional Training www.mptusa.com (954) 525-10147 Mid Ocean Tanker Company www.midoceanmarine.com Please visit us online19 National Maritime Eduction Council www.maritimeeducationcouncil.org (251) 445-899825 Seaspan ULC www.seaspan.com Visit our website21 Senesco Marine www.senescomarine.com (401) 295-03737 Severn Trent De Nora www.severntrentdenora.com Please visit us online37 Smith Berger Marine Inc. www.smithberger.com Please visit us online35 Society of Accredited Marine Surveyors www.marinesurvey.org (800) 344-907715 Starr Marine www.starrcompanies.com Please visit us online35 Virginia Ship Repair Association www.virginiashiprepair.org Please visit us online26 Weeks Marine www.WeeksMarine.com Visit our website37 Worley Parsons www.worleyparsons.com Please visit us online64 I Maritime Professional I 4Q 2013