TheWorl dsLargestCi rcul ati onMari neI ndustryPubl i cati on TheI nformati onAuthori tyfortheGl obal Mari neI ndustrysi nce1939A U G U S T 2 0 1 2MARITIMEREPORTERANDENGINEERING NEWSM A R I N E L I N K . C O MTheShipyardEditionInsightsJan Kees Pilaar MD, Blohm + VossU.S. ShipbuildingNSRP: Navy & Industry PartnerProfileLife, Business & Future of John Dane IIIGovernment UpdateShipping & SanctionsMarket ReportLNG Growth DriversFast CraftVibration MitigationShipboard Waste ManagementTerragon Enviro & The Next STEP PreviewShipping Insight 2012COV1 MR AUG 2012:COVER PAGE.qxd8/13/20122:20 PMPage 1COV2,C3&C4 MR Aug 12:COV2,C3&C4 MR May.09.qxd8/7/20121:29 PMPage 1MR#8(1-9):MR Template8/7/20122:31 PMPage 12 Maritime Reporter & Engineering News(Photo: Blohm + Voss)14 INTERVIEW: ANDREW MAK, COO, TRIYARDSWithyardsinVietnamandHouston,TRIYARDSisaspecialistinabroad spectrum of engineering and fabrication solutions.by Greg Trauthwein16 SHIPPING & SANCTIONSEconomic sanctions, imposed by national and international govern-ments for a variety of political reasons, can be snare traps for un-suspecting maritime enterprises.by Dennis L. Bryant18 LNG MARKET PROSPECTS TO 2016Douglas-Westwoods new LNG Market report examines newprospects for liquefaction & regasification (import) terminals andLNG carriers.by Murray Dormer, Douglas-Westwood22 EXPORT CONTROL REFORMInter-agency effort to reform the U.S. export control regime has re-sulted in specific proposals to transfer oversight to the Departmentof Commerces Bureau of Industry and Security (BIS). by Barbara Linney & Kevin Miller, Miller & Chevalier 24 MARITIME ... OR NOT?What constitutes a Maritime Contract under U.S Law & why you shouldcare.by Thomas H. Belknap, Jr., Blank Rome26 SHAKE, RATTLE & ROLLStudy of effects of whole body vibration on crew and passengersaboard fast craft.by John Haynes30 WAVE ADDED RESISTANCEMARIN unveils some secrets of wave added resistance.by Patrick Hooijmans32 MARINE INSURANCE: READY FOR THE WORSTMarine insurance and making effective catastrophe plans for hurri-cane zones.by Kirk Rider & Charlie Pugliese34 TORQUE MARINE IPSWhile many view investments in new technology as an expense, rulesregardingemissionreductioncanactuallypaybackviafuelcon-sumption reductions.by Peter Pospeich40 THE CORVUS POWER PLAYCorvus Energy has created a revolutionary battery for the maritimemarket, a power source with power density, longevity and durabilitythat has led to the companys rapid ascension.by Greg TrauthweinALSO IN THIS EDITION10 EDITORIAL74 BUNKER FUEL MANAGEMENT76 MARINE ELECTRONICS86 PEOPLE & COMPANY NEWS94 PRODUCTS106 BUYERS GUIDE107 CLASSIFIEDS112 ADVERTISERS INDEXSUBSCRIPTION INFORMATIONOne full year (12 issues) $73.00; two years (24 issues)$105.00 in U.S. (Canada & Mexico also)Rest of world one year international $120.00; two years$174.00 including postage and handling. For subscrip-tion information:Email: mrcirc@marinelink.comwww.marinelink.comTel: (212) 477-6700 Fax: (212) 254-6271 ON THE COVER44Pictured on the cover is anAustal USA aluminum welderworkingonUSSIndepend-ence (LCS 2). Thirty pagesof Shipyard coverage startson page 44.contentsWelcome to Hamburg!The SMM 2012 sets to convene again in Hamburg, Germanyin early September, and pictured here is an indelible sight onthe Hamburg waterfront, the Blohm + Voss Repair in Ham-burg on the River Elbe.On the occassion of our SMM edition, and in conjunctionwith our Shipyards coverage, MR interviews Jan KeesPilaar, managing director, Blohm + Voss, starting onpage 44.(Photo Credit: Lewis Communications)MR#8(1-9):MR Template8/13/20121:11 PMPage 2MR March 12 # 1 (1-8):MR Template2/29/20125:07 PMPage 34 Maritime Reporter & Engineering NewsNEW YORK118 E. 25th St., New York, NY 10010Tel: (212) 477-6700; Fax: (212) 254-6271e-mail: mren@marinelink.com Internet: www.marinelink.comFLORIDA 215 NW 3rd St., Boynton Beach, FL 33435Tel: (561) 732-4368; Fax: (561) 732-6984MARITIMEREPORTERANDENGINEERINGNEWSPUBLISHERS John E. OMalleyJohn C. O'Malleyjomalley@marinelink.comAssociate Publisher & EditorGregory R. Trauthweintrauthwein@marinelink.comContributing Editors Dennis L. BryantEdward LundquistCorrespondents Joseph Fonseca, IndiaKeith Henderson, The NetherlandsGreg Knowler, ChinaClaudio Paschoa, BrazilPeter Pospiech, GermanyEditorial Consultant James R. McCaul, President, International Maritime Assoc.PRODUCTIONProduction ManagerIrina Tabakina tabakina@marinelink.com CORPORATE STAFF Manager, Accounting ServicesEsther Rothenberger rothenberger@marinelink.comManager, Public RelationsMark OMalley momalley@marinelink.comManager - Marketing Jocelyn Redfern jredfern@marinelink.comManager, Information Vladimir Bibik bibik@marinelink.comTechnology ServicesCIRCULATIONCirculation Manager Kathleen Hickey mrcirc@ marinelink.comSALESVice President of Sales & MarketingRob Howardhoward@marinelink.comSales Administration & Office ManagerRhoda Morgan morgan@marinelink.comSales & Event Coordinator Michelle Howard mhoward@marinelink.comClassified Sales Manager Dale L. 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For subscription information:Email: mrcirc@marinelink.comwww.marinelink.comTel: (212) 477-6700 Fax: (212) 254-6271POSTMASTER: Send address changes to: Maritime Reporter 118 East 25th Street, NewYork, N.Y. 10160-1062.Maritime Reporter is published monthly by Maritime Activity Reports Inc. Periodicals Postage paid at NewYork, NYand additional mailing offices.MR#8(1-9):MR Template8/13/20121:12 PMPage 4MR#8(1-9):MR Template8/7/20122:46 PMPage 5(Photo: Vigor)60 SHIPYARDS WEATHER THE STORM (AGAIN)Large or small, domestic or foreign, many shipyards have hauntingly familiar tales. They work in a notoriously cyclical markets which can wreakhavoc on attracting and retaining top talent; and capital intensive, demanding steady investment to stay safe, compliant and efficient, no matterthe health of a particular years balance sheet. Through it all, though, you arguably will not find a more resilient or resourceful brand of business. 44 JAN KEES PILAAR, MD, BLOHM + VOSS by Greg Trauthwein48 NSRP: NAVY, INDUSTRY PARTNER by Edward Lundquist68 ABG SHIPARD Insights on the largest private shipyard in Indiaby Joseph Fonseca46 ASRY EXPANDS OFFSHORE OPS Bahrain-based yard invests $188m in upgrades.49 SMART GROWTH AT MARINETTE MARINE Wisconsin yard doubles size over few short years. by Edward Lundquist52 LIFE, TIMES, BUSINESS & FUTURE OF JOHN DANE III by Susan Buchanan54 THOMSON JOINS SEASPAN AS VP, PROGRAM MANAGMENT 56 FIRST OF FOUR GPA 688SC PSVS LAUNCHED FROM DETROIT BRASIL LTDA58 AUSTAL USA CONTINUES BUILDING NEXT-GENERATION USN WARFIGHTERS64 OFFSHORE INLAND: MOBILE & CAPABLETopside service and repair work around the world.70 NORTHEAST SHIP REPAIR Two yards in Boston and Philadelphia by Rhonda Moniz72 SHIPBUILDING WITH A VIGOR Vigor is gearing up to double in size in the coming five years.Digging inwith a VigorVigor, already a major driver in theconsolidation and expansion of ship-building operations on the U.S. WestCoast, has plans to double its size infive years.Read Vigors story on page 726 Maritime Reporter & Engineering NewsThe Shipyard Edition64contents5246MR#8(1-9):MR Template8/13/20121:14 PMPage 6MR#8(1-9):MR Template8/7/20123:15 PMPage 7BLOG MARITIME PROFESSIONAL.COMDrought + Reduced Drafts = DisasterBut, thats only one-half of the story. As the U.S. Army Corps of En-gineers (USACE) sees its budget slashed, an already overtaxed andcrumbling inland waterway system takes another body blow. The truevalue of the American marine highway is about to become painfullyobvious.When both National Public Radio (NPR) and the NBC Nightly Newsboth highlight a growing crisis on the nations inland rivers in the sameweek, its a sign that that the lifeblood of this island nations most valu-able asset its collective commercial waterfront has finally reachedthe big time in terms of public awareness. That it must happen only asa function of the lack of available water that threatens to bring trafficon the rivers to a grinding halt shouldnt be a surprise to anyone. Al-ready, in some areas, traffic is being limited to one-way passage dueto the rapidly dropping water levels.Even as Mark Mestemacher, co-owner of Ceres Barge Line, was being quoted on NPR as saying that river lev-els near East St. Louis had deteriorated to three-foot levels all the way from 20-feet just two months, the droughtthat has gripped much of the nations mid-section showed no signs of letting up. With river levels already push-ing record lows, the crisis only underscores the needed maintenance on domestic river locks, dams and other in-frastructure. Unfortunately, and at the same time, the USACEs proposed budget has been slashed by about 5percent for the coming year.According to some estimates, for every foot of draft lost by seven typical river barges, another similar bargemust be loaded to make up for the lost cargo. And, American Waterways Operators (AWO) President TomAllegretti recently noted that every one-inch loss of water decreases the carrying capacity of a single bargeby 17 tons of cargo. Losing one foot of draft results in a loss of 204 tons of cargo capacity per barge. He added,When you consider that a typical tow on the Upper Mississippi or Ohio Rivers has 15 barges, a one-foot lossof draft will decrease the capacity of that tow by 3,000 tons, Allegretti stated. Also according to AWO, the low-water levels resulting from severe drought conditions in the Midwest are astark contrast to the historic flooding of 2011 but share the same potential for significant economic consequences.The 350-member trade association represents the nations tugboat, towboat and barge industries. Allegretti in-sists, The implications of the drought conditions and low-water levels are a one-two punch for the economy, im-pacting both the agricultural community and one of the major modes of transporting agricultural and otheressential products. This, added to the already miserable condition of aging inland infrastructure is, without adoubt, the recipe for economic disaster. Sadly, few Americans appreciate the realities of the day. They may andvery soon be in for a rude awakening. Allegretti and his AWO staff have been working closely with the U.S. Coast Guard and Army Corps of Engi-neers through the River Industry Executive Task Force (RIETF) to assess the impact of the low water and findways to keep commerce moving safely. Curiously, AWOs efforts on behalf of its membership coincide with theU.S. Department of Agricultures declaration that more than 1,000 counties in 26 U.S. states are natural-disas-ter areas as the ongoing drought grips the Midwest. The edict from Washington means that farmers and ranch-ers in an area that encompasses about 30 percent of entire country are now eligible for low-interest loans to helpthem weather the drought and related issues caused by it. The USDA is even changing procedures to allow claimsto be processed faster and easing other rules to make life easier for ranchers. To my knowledge, no such relief isbeing contemplated for workboat operators on inland rivers. Im happy to be proven wrong on that point. Let meknow. The latest weather forecasts do not promise any appreciable amounts of precipitation, meaning that themassive drought impacting the nations heartland will continue to wither crops and dry up rivers. As consumersare warned about the impending price increases for corn and beef, little is being mentioned about the state of thetransport industry and infrastructure that eventually gets this product to market. That the farming industries getrelief is no surprise. Maritime businesses accustomed to seeing reduced funding from Washington for their con-cerns shouldnt be surprised, either.The worst drought in 50 years is scorching about two-thirds of the nations land area and has had a similar ef-fect on the nations waterways. That mainstream national media outlets are giving airtime to highlight the lattercondition is heartening. NBC Nightly News yesterday even dubbed the Mississippi River as Americas MaritimeSuperhighway. If only they knew the truth about how super it could really be, given more emphasis in Wash-ington on a daily basis. Maybe DOT and Marad was watching last night. No, probably not.With no relief in the weather expected for the balance of the summer, Americans are about to learn (the hardway) as to the critical nature of inland waterways, and for that matter, the greater domestic waterfront as a whole.Mother Nature will, of course, have a big hand in that educational experience. But the ongoing neglect in termsof policy decisions and dearth of financial support from inside the Beltway is perhaps the bigger story.As we hear about the massive disaster relief getting ready to be heaped upon farmers and ranchers (and Imhappy that they will get it) Im also reminded of a bumper sticker that Ive seen more than a few times in my trav-els. The Slogan reads something like, It will be a wonderful time when the military industrial complex has tohold a bake sale in order to make ends meet. Typically, it is an educational advocacy group that puts this sort ofmessage out. Maybe it is time for the domestic maritime industry to do the exact same thing. Joseph Keefe is the lead commenta-tor of MaritimeProfessional.com.Additionally, he is Editor of both Mar-itime Professional and MarineNewsprint magazines. He can be reached atjkeefe@maritimeprofessional.com orat Keefe@marinelink.com. Maritime-Professional.com is the largest busi-ness networking site devoted to themarine industry. Each day thousandsof industry professionals around theworld log on to network, connect, andcommunicate.MR#8(1-9):MR Template8/13/20122:12 PMPage 8MR Oct. 10 # 1 (1-8):MR Template 10/4/2010 10:00 PM Page 710 Maritime Reporter & Engineering NewsFounder: John J. OMalley 1905 - 1980Charles P. OMalley 1928 - 2000Maritime Reporter/Engineering News (ISSN # 0025-3448) is published monthlyby Maritime Activity Reports, Inc.118 East 25th Street, New York, NY 10010.Mailed at Periodicals Postage Rates at New York, NY 10199 and additionalmailing offices.Postmaster send notification (Form 3579) regarding undeliverable maga-zines to Maritime Reporter/Engineering News, 118 East 25th Street, NewYork, NY 10010.Publishers are not responsible for the safekeeping or return of editorial material. 2011 Maritime Activity Reports, Inc.118 East 25th Street, New York, NY 10010tel: (212) 477-6700; fax: (212) 254-6271ISSN-0025-3448USPS-016-750No.8 Vol.74MemberBusiness Publications Audit of Circulation, Inc.www.marinelink.comMARITIMEREPORTERANDENGINEERINGNEWSAll rights reserved.No part of this publication may be reproduced or transmitted in anyform or by any means mechanical, photocopying, recording or otherwise without theprior written permission of the publishers.Gregory R. Trauthwein, Editor & Associate Publishertrauthwein@marinelink.comEDITORIALWhile it certainly is true that shipyards large and small, near and far, have been in some form ofstruggle mode since the financial collapse and lingering stagnation since 2008, as alwaysthere are pockets of prosperity to be found and the truly strong shall survive. As most of youknow, the pockets of prosperity today reside offshore, as in the offshore energy business. Off-shore technology, more succinctly the evolution of technologies that allow oil majors to more quickly, effi-ciently and cost effectively discover and recover oil and gas, continues to evolve at a rapid rate. With theevolution comes a bigger, stronger and more capable breed of Offshore Service Vessel, such as the first of fourGPA 688SC PSVs designed by Guida Perla & Associates and launched in Brazil from Detroit Brasil Ltd.Regular readers of our pages recognize that August is Maritime Reporter & Engineering News traditionalShipyard edition, a fitting end to the dog days of summer and introduction to the busier days and months ahead.To that end we present here more than 30 pages of coverage on shipyard activity from around the world, viapersonal interview with industry leaders and overviews of innovative yard of every conceivable shape and size.In particular, I would like to extend gratitude to Jan Kees Pilaar, Managing Director Blohm + Voss inHamburg, Germany, for taking the time to provide thoughtful insight and commentary to not only his ship-yards endeavors, but to the maritime market as a whole. I met with Mr. Pilaar on the sidelines of the Con-necticut Maritime Associations (CMA) Shipping 2012 back in March, where he agreed to the interview for thisedition. Seeing that this is the edition that will distribute at the upcoming SMM 2012 exhibition in Hamburg which for those of you have never had the opportunity to attend is hands-down the largest and best ship-building and marine technology show in the world it is only fitting that Mr. Pilaars interview serves as theinformal kick-off to our shipbuilding coverage, starting on page 44.While the vast majority of our shipbuilding coverage is dedicated to commercial matters, contributing editorEdward Lundquist on page 48 provides MR readers with a most insightful view of the National ShipbuildingResearch Program, the program by with the Navy and the industry partner for research and the sharing of cost,risk and reward in the never-ending quest to reduce the total cost of ownership. Connie Bowling, the NavysNSRP Program Manager, Naval Sea Systems Command, informs MR readers with the story of a roboticwelder created in a basement workshop as a modest NSRP project involving a small business and the Univer-sity of Tennessee.Bowling says four shipyards are now employing the welder for use on the Navys DDG1000, DDG 51, LPD 17, the Coast Guards National Security Cutter, and tank barges, and others are purchas-ing the system to introduce at their yards.Weve saved 88% reduction in setup time, 93% reduction in re-moval/disassembly time and 30% reduction in total time on the job. And thats just the easily measured stuff.In conjunction with the NSRP story Lundquist was able to visit the Marinette Marine, which has been on afast-track growth plan in conjunction with its successful bid in the Littoral Combat Ship program, among oth-ers. According to Scott A. Wellens, the company is doubling the size of its physical plan in just a few short years.These are just a sampling of ship construction companies on the move. The historic $33B Canadian Navy shipconstruction contract has both Irving & Seaspan investing heavily in infrastructure, equipment and people;Vigor Industrial on the West Coast has been a major player in the consolidation of shipbuilding power, is amajor player in the burgeoning Alaska market and is set to double its size in the coming five years; and IndiasABG Shipyard the largest private shipyard in India under the guidance of Maj. Arun Phatak is expand-ing, too, preparing to open a new shipyard in Calcutta, he reports to our Joseph Fonseca in Mumbai. Read about, and better yet, report back to us on your experiences in the current market, for coverage in ourpages.MR#8 (10-17):MR Template8/13/20123:07 PMPage 10MR#8 (10-17):MR Template8/7/20122:58 PMPage 1112 Maritime Reporter & Engineering NewsAs the marine industry professes the need to groom the nextgeneration of top level technical talent, organizations such asCIMAC are leading the way.The third staging of the CIMAC CASCADES seminar foryounger engineers and students took place at the ETH SwissInstitute of Technology in Zrich, Switzerland earlier thissummer. Organized by the CIMAC National Member Asso-ciation (NMA) in Switzerland, the Division Combustion En-ginesoftheSwissMechanicalandElectricalIndustries(Swissmem), the event was considered a considerable suc-cessbyallattendees.Inwhatmaybecomethestandardframework for a CASCADES event, the seminar itself waspreceded by a visit to a member companys facility. Wrtsilinvited CIMAC delegates to view its Diesel Technology Cen-ter in Winterthur, site of research and development on large2-strokediesels.Theviewingofthefacilitywascomple-mented by an exhibit from a further CIMAC and SwissmemMemberCompany, ABBTurboSystemsbasedinBaden,Switzerland. Rounding off the first day was a boat trip withdinner on Lake Zrich. In total more than 100 delegates and officials from 12 coun-triessigneduptoenjoytheprogramoflivelyandtopicalCASCADES presentations around the central theme oftheefficiency,lowemissionsandflexibleperformancemade possible by state-of-the art electronic managementonmodernlargeengines.Followingwelcomeaddressesfrom Yashiuro Itoh, CIMAC President and Oliver Riemen-schneider, Chairman of the Swissmem Division CombustionEngines,ProfessorKonstantinosBoulouchos,headoftheETHs Aerothermochemistry and Combustion Systems Lab-oratory, gave an excellent Keynote Speech. His theme wasthe differences, but principally the unexpectedly strong sim-ilarities between large and small engines, and the consequentpotential for universally valid R&D work. Asrequestedbytheorganizingcommittee,eachofthespeakers, after fulfilling their topic obligation, expounded onthe challenges, motivations and rewards of undertaking vitalR&D projects early in their careers. In an especially interest-ing aspect, speakers stressed the differences between theo-retical work in an academic environment and real worldexperience where the yardstick of economic viability has tobe applied to every finding and proposed engine modifica-tion. The decision regarding the Best Paper was difficult inthe view of the high standard of all the presentations. The de-cision finally fell in favor of the paper Interfacing Thermo-dynamicsandControlsTheApplicationofCombustionPressure Sensors from local presenter Alex Weber, ProjectEngineer Pressure Sensors Engines at Kistler Instruments. Hewas rewarded with a Certificate and free entry to the 2013CIMAC World Congress to be held in Shanghai, China, fromMay 13-16, 2013. CIMAC recognized Swissmem for orga-nizng the 3rd CASCADES and all the presenters for their ex-cellent contributions: Melanie Hubacher, ABB Turbo Systems, Switzerland Elias Brli, Design Engineer Wrtsil, Switzerland Markus-Christian Meier, Engineer, Thermodynamics De-partment MAN Diesel & Turbo, Germany NoraViktoriaSanta,Engineer,ThermodynamicsandFluid Systems Department MTU Friedrichshafen, Germany Marcos Gutierrez, Project Manager DUAP, Switzerland Kevin Whitley, Applications Engineer Woodward Gov-ernor, The Netherlands Alex Weber, Project Engineer, Pressure Sensors Engines,Kistler Instruments, Switzerland KojiEdo,DeputyManager,DesignSection,MarineDiesel EngineMitsubishi Heavy Industries, Japan.NEWSFendercares Rowlands Carries the Olympic TorchOn Wednesday July 4, Paul Rowlands, Mar-keting Executive for Fendercare Marine wasgiven the honor of being an official OlympicTorchbearer and carrying the flame throughFakenham, Norfolk. Paul was nominated tocarry the torch in recognition of hisfundraising efforts, following the death ofhis daughter, Alice at just 15 days old in2007. Alice was born six weeks early andwith a rare liver condition, neonatal he-mochromatosis, at the Norfolk and NorwichUniversity Hospital in September 2007.After just five days she was moved to KingsCollege Hospital in London where she died.After her death, Paul, his wife Miranda andson Sam set up the Alice Rowlands Memo-rial Society (ARMS) to raise money for theRonald McDonald House Charities (RMHC),which provides accommodation for familieswhose loved ones are in hospital miles fromhome. To date the family has raised almost50,000 for RMHC through their websitewww.justgiving.com/teamrowlandsThe (flash) Mob RulesMassimo Bernardo, Chairman of CruiseVenice Committee: Our intention was notto give a trial of strength against thosewho intend to close the harbour to largecruise ships. Rather we wanted to send anurgent call to Venice as a whole. It is neces-sary to understand the importance of sup-porting over 3,000 jobs, the income ofhundreds of households, but above all thecultural interest which Venice is able toraise: in Venice, a cruise begins preciselywith a visit to the city itself.A flashmob to support Venice cruise indus-try. More than 600 people responded.Seminar for Younger Engineers3rd CIMAC CASCADESVesselsValue.comVesselsValue.com provides data drivenship valuations for tankers, bulkers andcontainerships. These graphs showhow vessel value depends on age forthe major types. Vessels are assumedto have typical size and specificationfor age and high built quality at a toptier shipyard. Towards the Elastic Engine: Developing Major Engine Systems in the Digital AgePresenter MC Meier, MAN Germany. The Award Winner: A. Weber, Kistler.MR#8 (10-17):MR Template8/13/20129:17 AMPage 12August 2012 www.marinelink.com 13MR#8 (10-17):MR Template8/7/20123:01 PMPage 1314 Maritime Reporter & Engineering NewsWhile you are geographically diverse, what do youcount as the core strength of the TRIYARDS brand?Mak We have several key competitive strengths thatposition us to take advantage of opportunities we see inour industry. First, we ensure the quality of our prod-uctsandachievetheengagementofourcustomersthrough our core values of Responsiveness, Innovationand Excellence. Second, we have a leading market po-sition in Southeast Asia for the construction of selfel-evating,self-propelledunitsandhaveestablishedasignificant track record, having delivered six self-ele-vating units over the past four years, with an additionaltwo newly designed self-elevating units being built foruse in deeper waters to be delivered by 2014. As thedemand for self-elevating, self-propelled accommoda-tion and construction units continues to grow globallyfollowing the increase in offshore construction activ-ity and the aging of offshore infrastructure, our strate-gic focus on the construction and fabrication of suchunitswillcontinuetobeoneofourkeystrengths.Third, our yards in Vietnam possess strategic advan-tages. The yards are within a major shipbuilding clus-ter, strategically-located along the South China Sea.The yards also have sheltered fabrication facilities toallow for year-round production in all weather condi-tions. The facilities benefit from a skilled labor force(including naval architects and engineers, who havesignificant production efficiency) and access to lower-cost labor. In addition, the local government is sup-portive of the shipbuilding industry.Looking at the past 12 months (or future 12 months)please provide to us details on what you consider to bethe two or three most important contracts?Mak TRIYARDS has clinched a new $77m order for aspecialized offshore unit, strengthening its position inthe Southeast Asian offshore engineering and fabrica-tion market. The contract also adds to TRIYARDS fastgrowing order book. Jobs in hand include two self-el-evating, mobile offshore units and the Lewek Constel-lation - an ice-class, deepwater multi-lay vessel withheavyliftcapability-whichisamongthemostad-vanced construction and pipelay vessels globally in itsclass.How is TRIYARDS investing in its yard to make it moreefficient?Mak Our strategic objective is to establish our Groupas one of the leading self-elevating units and platforms,offshore support and construction vessels and offshoreequipment fabrication yards in Vietnam and the wholeof Southeast Asia. We plan to achieve our objective byexpanding the Groups product range of self-elevating,self-propelled accommodation and construction units,offshore support and construction vessels. We are alsolooking to expand into new product categories and de-veloping our own equipment product line and brand-ing, and constantly strive to upgrade our fabricationcapabilities.What do you consider to be the top challenges of running an efficient, profitable industrial constructionbusiness today?Mak The two top challenges of running an efficient,profitableindustrialconstructionbusinesstodayarekeeping ahead with technology to ensure that productsbetter meet the needs of the industry, and building anoptimal organization with the right talent. With our em-phasis on Responsiveness, Innovation and Excellence,TRIYARDS is at the forefront of innovation that re-sponds to industry needs. Our Lewek Constellationwill be the crowning glory of TRIYARDS. It will beone of the most technologically-advanced construc-tion vessels in the world when ready, and will add toTRIYARDS track record for delivering quality prod-ucts. Recruiting and retaining talent is a global chal-lenge. In order to ensure that TRIYARDS remains acompetitive employer, we have structured systems ofgrooming all who come through our doors. One of themost essential roles I have is to ensure that our peopleare trained and prepared for a rewarding career withus. This will always be one of managements priorities.It is only with the right talent that any industrial con-struction business can thrive.INTERVIEW FIVE MINUTES WITH ANDREW MAK, COO, TRIYARDSBy Greg Trauthwein, editorQSome of our readersmaybe unaware of theTRIYARDS brand. Can you give to us anexecutive overview ofyour facilities globally?TRIYARDS offers a broad spectrum of engineer-ing and fabrication services that are marketedunder the TRIYARDS brand. The company oper-ates out of its two yards in Vietnams Ho ChiMinh City (TRIYARDS SSY) and Vung Tau (TRI-YARDS SOFEL), as well as another in Houston,Texas, USA (TRIYARDS Houston). TRIYARDSSOFEL, the vessel construction yard, was estab-lished along Vietnams Dinh River at Dong XuyenIndustrial Park in 2009. TRIYARDS SSY is in-volved mainly in carrying out medium to heavysteel fabrication work as well as providing equip-ment manufacturing services to a wide range ofindustries. TRIYARDS Houston produces equip-ment such as cranes, A-frames and winches,which can be installed on the self-elevating unitsand offshore support and construction vesselsfabricated in Vietnam.LEFT: Triyards COO Andrew Mak. Above, Triyards Saigon shipyard.MR#8 (10-17):MR Template8/8/201210:49 AMPage 14MR June12 # 3 (17-24):MR Template6/11/20126:43 AMPage 1916 Maritime Reporter & Engineering NewsEconomic sanctions, imposed bynational and international gov-ernments for a variety of polit-ical reasons, can be snare trapsforunsuspectingmaritimeenterprises.Forthemaritimeindustry,portcallsinany nation against which sanctions havebeen imposed should be undertaken withcaution.As this article illustrates, thereare additional ways to run afoul of eco-nomic sanctions, but trading in a prohib-ited manner with a sanctioned nation isthe most common.Fromthemaritimeperspective,eco-nomicsanctionscomeinthreeflavors.First,therearesanctionsthatapplydi-rectly to the maritime industry.An ex-ample is the United States regulation thatstates:Novesselthatentersaportorplace in Cuba to engage in the trade ofgoodsorthepurchaseorprovisionofservices,mayenteraU.S.portforthepurpose of loading or unloading freightfor a period of 180 days from the date thevesseldepartedfromaportorplaceinCuba.You cannot get more direct thanthat.Thesecondflavorofeconomicsanc-tions is those that apply indirectly to themaritimeindustry.AnexampleistheUnited Nations Security Council resolu-tionthatprohibitstheexporttoIranofspecific materials for nuclear enrichment.Involvement in such prohibited exporta-tionswouldsubjectthevesselanditsowner to potential administrative or judi-cial action.The third flavor of economic sanctionsis those that would not in usual circum-stancesapplytothemaritimeindustry.An example is the UK regulation freez-ing the funds of persons engaged in theNorth Korea nuclear weapons program.The freezing of funds, by itself (as op-posed to the actual export to North Koreaof nuclear material), does not directly im-pact the maritime industry.The governments that tend to imposeunique economic sanctions are relativelyfew.The United Nations Security Coun-cil (UNSC) imposes the broadest sanc-tions.Theseapplytoallpersonsandentities world-wide.Actual enforcementis left up to individual nation states, butthese sanctions tend to be quite effectiveinachievingtheirimmediategoal(thelong-termgoalisoftenmoreelusive).Currently, there are UNSC sanctions ap-plicable to the Democratic Republic ofCongo;CoteDIvoire;theDemocraticPeoplesRepublicofKorea(NorthKorea); Eritrea; Iran; Lebanon; Somalia;Sudan; and individuals and entities asso-ciated with the Taliban and/or Al-Qaida.Various nations have institued sanctionsintended to implement, in one form or an-other, sanctions adopted by the UNSC.The European Union (EU) has adopteda number of economic sanctions.Mostof these sanctions are targeted at humanrightsissues.ArecentEUsanction,though,directlyandindirectlyimpactsthemaritimeindustry.On23January2012, an EU Council Decision was prom-ulgatedthat,amongotherthings,pro-hibits (effective 1 July 2012) the import,purchase, or transport of Iranian crude oiland petroleum products by any person orentity subject to EU jurisdiction.This isa wide-ranging sanction that applies notonly to the carriage of Iranian crude oiland petroleum products as cargo, but tothe purchase of such items as bunkers de-rivedfromIraniancrudeoil.Variousbunker suppliers world-wide have beenendeavoring to establish protocols to en-sure that their bunkers are not associatedwithIran.Shipownersandoperatorsshould institute procedures to avoid pur-chasing bunkers in situations where thesource of the petroleum is questionablein this respect.Australiahasadoptedvariousau-tonomous (or unilateral) economic sanc-tions.Manyofthesesanctionsaresimilar to UNSC sanctions.Possibly themostuniqueAustralianautonomoussanctionprohibitsthesupply,sale,ortransfer to Fiji of arms and related mate-rial. Japanhasvariousrestrictionsrelatedprimarily to end-use controls on militar-ily sensitive goods and technologies.Anexport license is required for exportationof such goods and technologies and willnot be granted where the end user is onthe prohibited list.TheUnitedKingdom(UK)hasim-posedeconomicsanctionsthatmostlycontroltheexportofarmsandcertaindual-use items.Financial sanctions alsoapplytotransactionswithterroristor-ganizations such as Al-Qaida.The United States has by far the mostextensive unilateral sanctions programs.CountriesthataresubjecttoUSeco-nomicsanctionsinclude:Belarus;Burma; Cote dIvoire; Cuba; the Demo-craticRepublicoftheCongo;Iran;Lebanon; North Korea; Somalia; Sudan;Syria; Yemen; and Zimbabwe.In addi-tion, there are sanction programs relatedto counter narcotics trafficking; counterterrorism;non-proliferationofnuclearmaterial; the rough diamond trade; andtransnational criminal organizations.Vir-tually all trade with North Korea or Iranby persons subject to the jurisdiction oftheUnitedStatesisprohibited.Mosttrade with Cuba is also prohibited.Im-ports into the US of Burma (Myanmar)origin goods is largely prohibited.MosttradewiththeGovernmentofSyriaoranyone involved with the Government ofSyria is prohibited.US persons are pro-hibited from engaging in any transactionsor activities related to the petroleum orpetrochemical industries of Sudan with-out prior US authorization.One less known way to run afoul of USsanctions is to deal with a blocked ves-sel.A blocked vessel is a vessel that isowned or controlled by a nation, entity,or person that is itself subject to sanction.Persons subject to US jurisdiction shouldavoid buying, chartering, booking cargoon,orotherwisedealingwithblockedvessels.There is a list of blocked vessels,but it is not well-publicized and is subjectto change without prior notice.Oneoftheproblemsregardingthesanctions programs is that there is oftennoadvancenoticeofimplementation.One day a particular activity or trade isauthorized the next day that activity ortradeissubjecttoasanction.Govern-ments imposing the sanctions invariablydo a poor job of announcing and explain-ing the sanctions.This is not to say thatthey dont make the information public,buttheyoftenissueobscurenewsre-leases and post the information electron-icallyonwebsitesthatarefrequentedonly by a select group of persons.Thus,unless a particular sanction is wide-rang-ing, it may be an extended period beforetheinformationiswell-knownandun-derstoodbythemaritimeindustryandotheraffectedgroups.Ifcompliance(ratherthanpunishment)isthegoalofthese governments, it behooves them todo a better job of disseminating useful in-formation concerning those sanctions toall who might be affected thereby.Members of the maritime industry mustalso do their part.They must work to fol-lowdevelopmentsrelatedtoeconomicsanctions.They also must adopt and im-plement programs to reduce the risk ofnon-compliancewithapplicablesanc-tions.Havingareasonablesanctionscompliance program will go a long wayto convincing an enforcement agency thatany non-compliant event was truly acci-dental as opposed to negligent or inten-tional. GOVERNMENT UPDATEShipping & SanctionsDont run afoul of economic sanctions ... or elseDennis L. Bryant, Maritime Regulatory Consulting,Gainesville, FL, Tel: 352-692-5493Email: dennis.l.bryant @gmail.com MR#8 (10-17):MR Template8/9/20123:11 PMPage 16MR#8 (10-17):MR Template8/7/20123:10 PMPage 1718 Maritime Reporter & Engineering NewsDouglas-WestwoodsnewLNG Market report examinesnewprospectsforliquefac-tion & regasification (import)terminals and LNG carriers, looks at thetechnology underlying the LNG businessand presents market forecasts for activityin the sector over the 2012-2016 period.A Shift in Geographic FocusDuring the 2006-2010 period much ofthe LNG export construction activity wasfocused on the Middle East, in particularQatar. The next five years will see a shiftin regional focus to Asia and Australasia,wherethereareanumberofterminalsplanned or under construction. Australiawill dominate Australasian expenditureduringthisperiod;investingaround$60bn. Papua New Guinea will also seedevelopmentasthecountrymovesto-wards its first LNG terminal in 2014.AustralasiaAustralia has three operational LNG fa-cilities North West Shelf, Darwin LNGand Pluto, offering a combined export ca-pacity of 24 mmtpa. There has been dis-cussionaroundtheexpansionoftheDarwin and Pluto projects; however, thiswill be dependent on whether substantialgas discoveries are made, and thereforeis not expected within the forecast period. ThenearbyAsianconsumermarketsoffer the highest gas prices of any region,with an average price of $15 per millionBTU. This, coupled with large coal-bedmethane (CBM) reserves has led to con-siderable investment in Australian exportinfrastructure. There are currently sevenfacilities under construction in the coun-try;theseareexpectedonstream2014-2017 and will provide an additional 49mmtpa capacity. Notably, Australia cancontribute a further 46% capacity with anumber of potential projects to come on-stream beyond the forecast period.Australianprojectscanbesplitintothree categories onshore terminals thatsourcetheirgasfromoffshorefields,CBM to LNG export projects and Float-ing LNG (FLNG).A potential downside to unconventionalgas as a key feedstock is that CBM hasnever been liquefied into LNG on a scaleas large as the one proposed. Issues withproductionsuchascost,applicationorpracticality may reduce the level of an-ticipated supply.FLNGThekeydriversofthefloatinglique-faction sector are the desire to monetisestranded offshore gas fields and the rela-tive high costs of an onshore liquefactionterminal.A modular design allows theFLNG vessel to be built in lower cost en-vironments then towed to location. Posi-tioning the liquefaction facility on fieldreduces the requirements for costly up-streamfacilitiesandlongpipelinestoshore which would be required for an on-shore development.Australasia was the first region in theworld with an approved FLNG liquefac-tion project Shells 3.6 mmtpa Preludefloater which is expected to be onstreamin 2017. Offshoregasfieldsanddeepsubseatrenchessuchasthe TimorSea Trenchwhich render pipelines impractical makethisregionakeyfocusareaforFLNGprojectdevelopers.OtherFLNGprospectsinthisregionincludeGDFSuez/SantosBonapartedevelopment;PTTsplanstomonetizeitsCashandMaplefieldsandWoodsidesSunriseproject.Papua New GuineaExxonMobil will invest $4.5bn to bringthe countrys first liquefaction plant on-stream within the 2012-2016 period. Thisfacility has generated discussion around anumber of other projects amongst Oper-ators; however topographical and secu-rity related factors may potentially limittheirprogressionduetotheassociateddifficulties and costs. Offshore liquefac-tion has been suggested as a possible al-ternative solution to this. Asia ChinaChinaislookingtoincreasegasim-ports to sustain growing energy demand,aswellasanalternativetocoalinre-sponse to global pressure to reduce emis-sions and concerns over coal dependenceand supply. Furthermore, the continuedrise in the price of crude has significantlyincreased demand for LNG as a suitablesubstitute for meeting the countrys en-ergy needs. China currently has six proj-ects under construction; these include thefirst phases of the Zhuhai and Tangshanprojects. Chinas reward of LNG expan-sion projects and new developments willprovide an additional 18 mmtpa in importcapacity. JapanJapan will see eight new LNG importterminals come onstream between 2012-2016 as the country seeks to cover the en-ergy deficit following the shutdown of itsnuclear power stations; the last of whichwas powered down in May 2012. As a re-sult, the country has imported 27% moreLNGwhencomparedwithMay2011.Therearecurrentlyfivenewdevelop-ments and a storage tank project due on-streambetween2012and2016.This,coupledwiththeYoshinouraterminal,whichcameonstreamearlierthisyear,LNG MARKET UPDATELNG Import & ExportGrowth to be Driven by Activity in the Pacific Basin The LNG carrier Amali was delivered Daewoo Shipbuilding & Marine Engi-neering Co. Ltd. (DSME) to BGC of Brunei in August, 2011.(Photo courtesy DSME)LNG Market Forecast 2012-2016Global LNG Capital Expenditureby Region 2012-2016Source: Douglas-Westwood, World MR#8 (18-25):MR Template8/8/201211:07 AMPage 18August 2012 www.marinelink.com 19MR#8 (18-25):MR Template8/7/20122:04 PMPage 1920 Maritime Reporter & Engineering Newswill give Japan an additional import ca-pacity of 13 mmtpa. This excludes TokyoGassHitachiprojectwhichmaycomeonstream at the end of the five year fore-cast, adding around 3 mmtpa in importcapacity. Indonesia & Malaysia Indonesia is one of the worlds largestLNG exporters and has three operationalliquefaction plants Arun, Bontang andTangguh. The biggest challenge that thecountry faces is whether it is able to bal-ance long-term declining natural gas pro-duction with a growing consumption inits major cities.Sincebecominganexporterin1983,Malaysia has increased production to be-come the largest LNG exporter in the Pa-cific region. However, similar to demandtrends in Indonesia, Malaysia has experi-enced rising gas consumption in its urbanareas, leading it to seek LNG imports. RussiaRussia is currently the only LNG ex-porter in Eastern Europe & the FSU, ex-porting from the Sakhalin II facility. It iscurrentlylookingtoexploitLNGasameans of supplying gas to Asia, and to re-duce its dependency on European gas de-mand. However,LNGtransportfromtermi-nals slated for the North and North Westareas of the country would be hamperedbyiceconditions,requiringtheuseofspecialized vessels similar to those em-ployed on the Sakhalin-II facility.North America USARecent developments in unconventionalproduction such as shale gas will see asignificant shift in the US as the countrymoves from an importer to an emergentplayerintheLNGexportmarket.Gasprices in the US are currently less than $3per million BTU; arguably these pricesare unsustainable, falling below the costof production. Furthermore, exposure toglobal markets will reduce excess supplyand could drive up domestic prices. TheUSiscurrentlysettobringtheSabine Pass project in the Gulf Coast on-stream at the end of 2016. The develop-mentinvolvestheconstructionofproduction trains in existing import facil-ities, and will have a total export capacityof8mmtpa. Thecompleteprojectwillcost$3.9bnandisdesignedforfurtherexpansion with trains 3 & 4 due onlinebetween 2017 and 2018.One potentially limiting factor for USexportsisthestageofunconventionalproduction. At present, the US is exploit-ing sweet spots; however,as these di-minish and the production moves into thenext phase, there could be a significantrise in costs and decline rates of wells.This could potentially limit the long-termexporting aims of the US and Canada. Overall,capitalexpenditureintheglobal LNG market is expected to growto $169bn between 2012-2016. Asia willbe the main driver in import terminal de-velopments,andisforecasttoinvest$31bn during this period. TheglobalLNGbusinesswillseegrowth and recovery in a number of sec-tors. Expenditure on liquefaction facili-ties will exhibit the highest level growthinglobalexpenditureovertheforecastperiod, a large proportion of which willcomefromAustraliandevelopments.Furthermore, growing demand for importterminalswillseeregasificationCapexincrease to represent 20% of global ex-penditure.Followingasharpdeclinethrough 2010-2011, the LNG carrier mar-ket will begin to recover from 2012 on-wardswithCapexexpectedtobeover$30bn.Australian Projects by Date Onstream (2012-2020)Name Operator Type Capacity (mmtpa)Pluto LNGWoodside Offshore to Shore 4.3Greater Gorgon LNGChevron Offshore to Shore 15Queensland Curtis LNGBG Group CBM8.5GLNG Santos CBM 7.8APLNG APLNG CBM 9Wheatstone LNG Chevron Offshore to Shore 8.9Ichthys Inpex Offshore to Shore 8.4Prelude FLNG Shell FLNG 3.6Browse LNG Woodside Offshore to Shore 12Bonaparte FLNG GDF Suez FLNG 2.5Cash Maple FLNG PTT LNG FLNG 2Arrow LNG Arrow Energy CBM8Gladstone LNG LNG Limited CBM1.5Source: Douglas-Westwood, World LNG Market Forecast 2012-2016LNG MARKET UPDATELNG Market SummaryGlobal LNG Capital Expenditure 2007-2016Source: Douglas-Westwood, World The AuthorMurray Dormer sits within Douglas-Westwoods Research team where hisprincipal activities include quantitativeanalytics and macro-economic analy-sis, competitive analysis and supplychain mapping. He has a degree inBusiness Administration from the Uni-versity of Kent.The ReportWorld LNG Market Forecast 2012-2016 - the latest edition of The WorldLNG Market Report highlights LNG fa-cilities capital expenditure over the2012-2016 period. Expenditure, $BMR#8 (18-25):MR Template8/10/20124:26 PMPage 20MR#8 (18-25):MR Template8/8/201211:27 AMPage 2122 Maritime Reporter & Engineering NewsLEGAL BEATExport Control ReformIn the Shipyard, will it Simplify Regulation of the Supply Chain? Overthepastyear,theinter-agencyefforttoreformtheU.S.exportcontrolregimehasresultedinspecificpro-posals to transfer regulatory oversight ofvariousitemsandtechnologyfromtheDepartment of States Directorate of De-fense Trade Controls (DDTC) to the De-partmentofCommercesBureauofIndustry and Security (BIS).This trans-ferofjurisdictionisintendedtobeac-complished by a restructuring of both theU.S.MunitionsList(USML)andtheCommerce Control List (CCL).Underthecurrentregime,exportsofdefensearticles,defenseservices,andtechnicaldatalistedontheUSMLareregulated by DDTC pursuant to the In-ternational Traffic in Arms Regulations(ITAR),whileitemsandtechnologylisted on the CCL are regulated by BISunder the Export Administration Regula-tions (EAR).Although the ultimate goalof export reform is to merge the two listsandcreateasinglelicensinganden-forcement agency, the current proposalsrepresentaninterimstepdesignedtorelax controls on defense articles that theAdministration believes no longer war-rant control under the ITAR.Of particular interest to the shipbuild-ingindustryaretheproposedamend-ments to USML Category VI (Vessels ofWar) and Category 8 of the CCL (Ma-rine).USMLCategoryVIwouldbeamended and restated in its entirety, andtheITARdefinitionofVesselsofwarand special naval equipment subject toITARcontrolwouldbenarrowed.AmendmentstoUSMLCategoryXX(SubmersibleVessels,Oceanographicand AssociatedEquipment)alsohavebeen proposed (including transfer of sub-marinestothiscategory).Simultane-ously, Category 8 of the CCL would beexpanded to include several new ECCNs(Export Control Classification Numbers)thatwouldcontrolarticlespreviouslycontrolled under USML Categories VI orXX.One of the most vexing aspects of thecurrent export control system is that allspecifically designed or modified com-ponents, parts, accessories, attachments,and associated equipment for ITAR con-trolled vessels and related technical dataand defense services are subject to ITARcontrol even if they are substantially sim-ilar to items and technology subject to theEAR that could be exported freely on anNLR(NoLicenseRequired)basis.Underthecurrentreformproposals,many such items will be transferred to theCCL and subject to somewhat more le-nient export licensing requirements, butthe new regulations will not completelyeliminate design intent criteria.In certain instances, jurisdiction or thelevelofcontrolorbothwillturnonwhetheravesselorotheritemisspe-cially designed a term that, unlike thecurrent specifically designed terminol-ogy, which was not defined, would haveacommondefinitionunderboththeITAR and the EAR.The most recent pro-poseddefinitionofthenewtermisin-tended by the Administration to achieve atotal of nine objectives and requires a se-quential analysis of up to eight standardsenumeratedinthedefinition,whichinturn is modified by six to nine explana-tory notes, depending upon whether theEAR or ITAR version of the definition isbeing applied.While at first glance thestructure of the definition may appear tobelie at least one of the nine objectives(i.e., that the definition be easily under-stood and applied), application of the de-finitions catch and release formula inthedefinitionwillinfactdrawsomebright lines.Among other things, parts,components, accessories or attachmentsthat were or are being developed for usein or with both USML and non-USMLitems, or that were or are being developedwith no reasonable expectation of use fora particular application, as well as singleunassembled parts that are of a type com-monlyusedinmultipletypesofcom-moditiesnotenumeratedoneithertheUSMLorCCLwillbeexcludedfromITAR controls.The new Category VI will cover com-batants, vessels that are armed or specif-ically designed to be used as a platformformunitionssystems,thosewhichin-corporate mission systems and certainother enumerated vessels, including thosewith nuclear propulsion systems and de-velopmentalvesselsdevelopedundercontractswiththeDepartmentofDe-fense.Other vessels of war specially de-signedforamilitaryuseandnotenumeratedontheUSMLwillbecon-trolled under the EAR (e.g., certain aux-iliariesandunarmoredandunarmedpatrol craft with mounts or hard pointsfor firearms of .50 caliber or less).As re-formed, Category VI likewise will coveronlyapositivelistofspecifictypesofvessel and naval equipment components,parts,accessoriesandattachmentsthatwillcontinuetowarrantITARcontrol(such as certain hulls or superstructures,propulsion systems, and shipborne auxil-iary and active protection systems).Onthe other hand, many specially designedsystems will transfer to the CCL, includ-ing ship service hydraulic and pneumaticsystems,internalcommunicationssys-tems, potable water storage systems, andsoon).Acomprehensiverecitationofvessels, components and related technol-ogy that will remain subject to the ITARorbeshiftedtotheCCLisbeyondthescope of this article, but both shipyardsandtheirsuppliersshouldfamiliarizethemselves with the proposed rules to de-termine how their products and those oftheir customers and suppliers will be af-fected.Implementation of the new rulesMR#8 (18-25):MR Template8/9/20123:04 PMPage 22willrequiremanyshipyardsupplierswhoseoperationscurrentlyaresubjectexclusivelytotheITARtofamiliarizethemselves with the EAR in order to en-sureexportcomplianceunderthenewregime.However,formostsuppliers,ITAR compliance will remain a priority,insofarastheywillcontinuetorequireaccess to technical data directly related toITAR controlled vessels and componentseven if their own products become sub-ject to CCL controls.Therefore, the endresult of export reform will be that manyintheshipyardsupplychainwillbeforced to master both the ITAR and EARcontrolregimes.Furthermore,asteeplearning curve will be imposed even forthose whose operations already are sub-ject to both the ITAR and the EAR, giventhatthereformproposalscontemplatenumerousamendmentstotheEARli-cense exceptions in order to avoid the in-congruous result of tighter controls underthe EAR for items previously subject tomorepermissiveITARexemptionsincertain circumstances.Shifting of items to the EAR will not,however,completelyeliminatecurrentITAR restrictions on exports and re-ex-ports to arms embargoed countries (in-cludingChina)orCongressionalnotification requirements.Inordertoavoidtheadditionalcom-plexities that an immediate effective datewouldimposeonthedefenseindustry,the Administration has proposed a phasedimplementationplan.Licensesandagreements issued prior to publication ofthefinalruleforeachUSMLcategorywill remain valid for up to two years fromthe effective date.Other transitional pro-visions address licenses in process at thetime of publication and through the ef-fective date of the final rule.The transi-tion plan also contemplates interim reg-istration fee relief for those who will nolonger be required to register with DDTCas a result of the new rules although, asnoted above, as a practical matter regis-tration will still be required in order toemployforeignnationalsorengageinoffshoreprocurementwhereaccesstoITAR controlled technical data related tothe vessel is involved, even if the regis-trants own products have transitioned tothe CCL.Registrants will, however, ben-efitfromlowerregistrationfeesasli-censing volume declines due to transferofpreviouslylicensedexportstotheCCL.Additional proposed rules are con-templated,butwhilethepublicationofproposed rules continues, the Adminis-tration hopes to begin phasing in trans-fersfromtheUSMLtotheCCL.Thenaval vessel and marine categories willnot, however, be the first categories to berevised, so it will be next year at the ear-liest before a more sensible if not sim-pler reformed export control approachis implemented in the nations shipyards.August 2012 marinelink.com 23The AuthorsBarbara Linney (blinney@milchev.com)is a member of the Washington D.C.law firm of Miller & Chevalier.KevinMiller is an International Trade Special-ist in the firms International Depart-ment, concentrating in the areas ofexport controls, economic sanctions,and defense security.NotesThis article reflects developments through July27, 2012, the date of submission for publication.The views expressed herein are those of the au-thor, do not necessarily reflect the opinion of thefirm or other members of the firm, and should notbe construed as legal advice or opinion or a sub-stitute for the advice of counsel.1 The authors overview of the export reformprocess can be found in the May 2011 edition ofMaritime Reporter (U.S. Export Control Reform:What It Means for Shipyards).The authors analysis of the challenges faced byshipyards and their suppliers under the currentsystem can be found in the April 2009 edition ofMaritime Reporter (Complying With U.S. ExportControls). MR#8 (18-25):MR Template8/8/201211:12 AMPage 2324 Maritime Reporter & Engineering NewsLEGAL BEATMaritime ... or Not?The fine line between what constitutes a Maritime Contract & what does not Hereisamultiplechoicequestion:which of the following contracts is con-sidered to be a maritime contract underU.S. law? (a) a shipbuilding contract (b) a ship-sale contract(c) a ship-repair contract, and/or (d) a ship mortgageYou will be forgiven if you simply triedto apply logic in answering this questionandguessedthatallfouraremaritimecontracts.Ifyouknowyourmaritimelaw, however, then you should have an-sweredthatcanddaremaritimecontractswhereasaandbarenot.Or, at least, that is the current state of thelaw.Why might this matter?In the first place, it may impact whetheraclaimcanbebroughtinthefederalcourts or whether it must be asserted instate court.Federal courts possess onlylimited jurisdiction, meaning they canonly hear cases that are within the scopeof their constitutionally defined jurisdic-tion.If the dispute involves a maritimecontract, a claim may be brought in thefederalcourtunderitsadmiraltyandmaritime jurisdiction.If it is a non-mar-itime contract, however, then it may onlybe brought in the federal court if the di-versity rules are met, meaning that theclaim must exceed a certain amount andbebetweencitizensofdifferentstates.Importantly,claimsbetweennon-U.S.citizensdonotmeetthediversityre-quirement, whereas the courts admiraltyjurisdiction has no similar citizenshiplimitations.Asecondimportantissueisthatthemaritimelawhasrelativelypermissiverules allowing for pre-judgment attach-ment of assets in support of a maritimeclaim,whicharenotavailabletoclaimants on non-maritime claims.Thisright is principally defined by Rule B oftheFederalRulesofCivilProcedure,SupplementalRulesforAdmiraltyorMaritimeClaims.Underthatrule,aparty may obtain an attachment of the de-fendantspropertylocatedinadistrictwherethedefendantisnototherwisefound merely by asserting a prima faciemaritimeclaim. Thisisalowpleadingthreshold, and Rule B can be a very pow-erful toolparticularly useful in an in-dustry where the business is internationaland assets are transitory.Athirdandrelatedissueiswhethermaritime liens can arise out of a breachof a contract.Such liens can create pow-erful priority and enforcement rights bothasagainstthevesselownerandthird-party claimants who may be seeking toenforce their own claims against the sameassets.No maritime lien can arise fromthe breach of a non-maritime contract.How did this happen?How is it that a contract to build or sella ship is not a maritime contract whereasa contract to repair or mortgage a ship isamaritimecontract? Theanswergoesbackatleastasfaras1857,whentheUnitedStatesSupremeCourtdecidedPeoplesFerryCompanyofBostonv.Beersand said this about a shipbuildingcontract:So far from the contract beingpurely maritime, and touching the rightsand duties appertaining to navigation, (onthe ocean or elsewhere,) it was a contractmade on land, to be performed on land.In 1918, the Court of Appeals for the Sec-ondCircuit(encompassingNew York,Connecticut, and Vermont) held in TheADAthat a ship sale contract was not amaritime contract.The court cited no au-thority for the rule nor articulated any ra-tional for the holding; nevertheless, theholding stuck and has been widely fol-lowed,intheSecondCircuitandelse-where.For whatever their original merit, com-mentators have long criticized these rul-ingsasdefyinglogicandasbeinginconsistent with international practice.As the eminent admiralty author CharlesL. Black, Jr. wrote in Admiralty Jurisdic-tion: Critique and Suggestions,regard-ing the determination of what contractsaremaritime:Theattempttoprojectsome principle is best left alone.Thereis about as much principle as there is ina list of irregular verbs.Others have de-scribed the analysis as inconsistent eveninitsartificiality,asproduc[ing]bizarreresults,outcomesthatwarpthefabric of admiralty jurisdiction,or, moreto the point, as simply unfortunate. MorerecentdecisionsfromtheSupremeCourthaveraisedsomehopeamong scholars that these rulings are sus-ceptibletobeingoverruled.InExxonCorpv.CentralGulfLines,Inc.,theSupreme Court reversed a longstandingbrightlinerulethatagencycontractscould never be maritime contracts.Thatcourt ruled that the nature and subject-matter of the contract at issue should bethe crucial consideration in assessing ad-miraltyjurisdiction. AndinNorfolkSouthern Railway Co. v. James N. Kirby,Pty. Ltd.,the Supreme Court held that amulti-modalbillofladinginvolvingocean carriage was a maritime contractgovernedbytheCarriageofGoodsbySea Act even as to damage occurring ontheover-landlegsofthevoyage.Ac-cordingtotheKirbycourt,theinquirywas whether the contract had reference tomaritimeserviceormaritimetransac-tionin sum, was it sufficiently saltyin nature to involve the courts maritimejurisdiction.In 2008, a United States District judgein New York felt sufficiently emboldenedby these rulings to conclude that ExxonandKirbysupportthedemiseoftheholdinginThe ADAandruledthataship sale contract was a maritime contractand, consequently, that a claim thereun-der would support a maritime pre-judg-ment attachment. That court wrote acontract for the purchase of a launchedship has a distinctly salty flavor, forthe sole purpose of a ship is to sail and[maritime] commerce requires a vessel,sailors, and ship fuel, and there is simplyno justification for including contracts forthe latter two requirements in admiraltyjurisdiction while excluding contracts forthe former. Other judges in the Southern District ofNewYorkdeclinedtofollowthenewcoursechartedbyKalafrana,however,finding instead that nothing in Kirby andExxonsupportedtherulingthatTheADAhadbeenreversedsubsilentio.And in December 2009, in Primera Mar-itime Ltd. v. Comet Fin. Inc.,the SecondCircuit thwarted a similar assault on theship-constructioncontractrule,thoughperhaps not without providing a glimmerofhopeforthoseaspiringsomedaytochange the rule:[Plaintiff] is correct topointoutthattheconceptualapproachtaken in [Exxon and Kirby] suggests thatmodern principles disfavor per se admi-ralty rules based on the site of the con-tracts formation or performance.Still,theSecondCircuitconcludedthatitshandsweretied:UntiltheSupremeCourt declares that contracts for ship con-struction are maritime in nature, disputesarising from such contract will not giverise to the federal courts admiralty juris-diction.ConclusionIt is probably just a matter of time be-foretherightcasegetsbeforetheSupremeCourtthatwillallowittore-assessthesejurisdictionalquestionsinlight of modern developments.And onemight surmise that if the Supreme Courtis willing to take a critical look at its ear-lier rulings, it would be hard pressed todefendtheminlightofitsrulingsinExxon and Kirby and in light of the wide-spread criticism of the current doctrine.Ofcourse,aswelearnedjustrecentlywith regard to its ruling on the heath carelegislation, the Supreme Court is full ofsurprises.So, we will have to wait andsee what happens.The AuthorThomas H. Belknap, Jr., partner atBlank Rome, concentrates his practicein the areas of international commer-cial and insurance litigation and arbi-tration, with a particular emphasis onthe maritime industry. Email: TBelk-nap@BlankRome.comHow is it that a contract to build or sell a ship is not a maritime contract whereas a contract to repair ormortgage a ship is a maritime contract?The answer goes back at least as far as 1857, when the UnitedStates Supreme Court decided Peoples Ferry Company of Boston v. BeersMR#8 (18-25):MR Template8/8/201211:13 AMPage 24MR#8 (18-25):MR Template8/10/20121:54 PMPage 2526 Maritime Reporter & Engineering NewsThe professional maritime sectorrecognizes the need to reducethe effects of Whole Body Vi-bration (WBV) but this is not astraightforward process for those operat-ing planing craft. These vessels can ex-pose crews and passengers to high levelsofrepeatedshockandvibrationwhichhas been shown to increase the risk of in-jury. In flat sea conditions there is vibrationfromtheengine,gearboxandshaftbutthe crew and passengers are not exposedto harmful vibration. All fast boat opera-tors know that waves change everything.Waves can be wind-blown and build upin a few minutes but WBV exposure onplaning craft is usually caused by contin-uous 'hammering' from short steep seasor wind against tide conditions. Repeatedshock on planing craft is usually causedby random 'hits' from head sea impacts,crossingseasorovertakingfollowingseas.Professionalmaritimeorganizationsuse planing craft to perform a wide rangeofoperations.Thetasksperformedbypersonnelafterafastboattransitareoften physical and include ship boarding,law enforcement, sea rescue and more re-cently wind farm maintenance. The con-sistent objective is that boat crews are notinjuredandpassengersarrivesafelyattheir destination ready to perform a task. Millions of workers around the worldareexposedtomechanicalvibrationtransmitted to the whole body through in-dustrialseating,flooringanddecks.WBVcanaffectback,neck,kneesandjoints. Fast boats are a challenging work-place and the UK MCA Marine GuidanceNote, MGN 353 titled Control of Vibra-tion at Work states that, Whole body vi-bration may be most apparent in smaller,fast craft such as fast rescue boats, RIBsor work boats, particularly when operat-ing in choppy conditions.Forexampleanyoneonboardapilotcutter at planing speed needs to be awareof vibration at sea. Although the onboardtasks are not physical for pilots there isthe ladder climb. A pilot may have diffi-culty climbing and will be less effectiveonboard ship when suffering from backpain or a recurring injury aggravated bythecuttertransitinroughconditions.Cognitive ability for navigation and de-cisionmakingalsoneedstobeconsid-ered after any open sea transit.However,theneedforawarenessofWBV issues is not limited to small ves-sels.AccordingtoCommanderChrisPratt, MBE AFNI, of UK Border Agency,WBV risks can apply to many ship typesand in many work areas. For these rea-sons, a developed professional awarenessoftheseissuesappliesthroughoutthemaritime environment. Big ship peoplecannotberuledoutasmanylargeshiptypes now carry fast rescue craft. If any-thing, these people should be primary tar-getsastheyusetheseboatslessoftenthanthemainworkinggroupsdo.Forthese reasons, they are probably far lessaware of the issues and risks.To highlight these issues FRC Interna-tional hosted the WBV & H-SURV Sem-inars at the RNLI Lifeboat College, PooleUK,on10th&11thJuly2012.Theseseminars attracted over 50 delegates frommaritime sectors including military, SAR,governmentagencies,portauthorities,police, and commercial operators. Boatbuilders, specialist equipment manufac-turers and naval architects also attended.The WBV seminar is internationally rec-ognizedbyTheNauticalInstituteandCaptain Harry Gale, Technical DirectoroftheInstitute,wasinattendanceforboth days.FRC Director John Haynes AFNI, whointroduced the seminars said, stoppingfast craft operations is not a realistic op-tion, but making them safer is essential.TheinternationallyrecognizedFRCtraining and qualification structure sup-ports competence based interoperabilitybetweenbothindividualsandprofes-sionalmaritimeorganizations.Theob-jectiveisthatagenuinebestpracticeapproach helps crews to remain safe andhealthy. Besides prolonging the career ofboatoperatorsthisapproachleadstoamore effective organization.DrTrevorDobbinsledthetechnicalpresentations by assessing the current sit-uationandhowtheFRCWBV&H-SURV Seminar can support the fast craftindustry worldwide. Throughout the twoday seminar Dr Dobbins included variouspapersco-authoredwithexpertsfromaround the world. New tools developedto assist the professional sector includetheHSCMotion AnalysisGuideandasimple 4x4 Risk Assessment. He had re-cently presented new concepts to the USFAST CRAFT & VIBRATIONVibration MitigationWhole body vibration affects crew & passengers on fast craft(Photo courtesy FRC International)Fast boats are a challenging workplace and the UK MCA Marine Guidance Note,MGN 353 titled Control of Vibration at Work states that, Whole body vibrationmay be most apparent in smaller, fast craft such as fast rescue boats, RIBs orwork boats, particularly when operating in choppy conditions.MR#8 (26-33):MR Template8/8/201211:54 AMPage 26August2012 www.marinelink.com 27MR#8 (26-33):MR Template8/7/20123:50 PMPage 2728 Maritime Reporter & Engineering NewsNavy, at the HiPer Craft 2012 conferencein Norfolk VA, and passed on what arenowbecomingglobalviewsonbothwhole body vibration and health surveil-lance. This evolving knowledge and gen-uinebestpracticeunderpinnedthetwoday program.Specialist manufacturers gained a lot ofnewknowledgefromtheevent.DavidPrice, from Tampa Yacht Manufacturing,said, This is probably the best seminaron any subject I have ever been to. It hasbeenopenandveryinformative.EnduserorganizationsattendingtheWBVandH-SURVSeminarswerekeentoknow what steps others are taking to ad-dress the issues of WBV and health sur-veillance.AlanCartwright,HeadofMarine Engineering for the Port of Lon-don Authority, said, What I found mostuseful about the WBV seminar was dis-cussion with practitioners and providers,also the presentation, from Dr Tom Gun-ston, about vibration measurement.Dr TomGunstondeliveredadetailedpresentation on the technical aspects ofRS (Repeated Shock) and WBV (WholeBody Vibration)analysis.Hisindepthunderstanding of ISO and internationalmeasuringmethodsandtheresultingmetrics highlighted glaring errors in cer-taininternationalorganizationsmathe-matics and measuring methods. There areongoing debates from academics aroundthe world regarding the use of rms andVDV for the assessment of vibration ex-posure to people on boats. Impact CountIndex and the USN Ride Severity Indexwere discussed along with the develop-ment of ISO 2631 Part5 (Sed-8) update. WBVisamajorconsiderationintheU.S.formilitaryboatbuilders.NavalSurface Warfare Command will assess allfuturecraftforoperatorexposuretoshocklevelsthatcouldcausemuscu-loskeletal, boat-related injuries. The latestcombatant craft requirements refer to thestandard Sed-8, which relates to a dailyexposure dose over eight hours.The Human-Boat-Interface (HBI) is thetechnical name for how crews and pas-sengers come into contact with the boat.Certaindesignsofsuspensionseatinghave feet off the deck, but generally thereare three points of contact. Hands are incontactthroughahandhold,orforthehelmsmanthroughthewheelandcon-trols.Feetareincontactwiththeboatthrough the deck. The backside is in con-tact with the boat through the seat base.Depending on the seat height and design,itmaybecarryingmostofapersonsbody weight. Fast boat operators need toconsider, what happens if the seat or sus-pension mechanism is damaged or bro-ken.It is now possible to measure vibrationonboatsbyusingaccelerometersanddata loggers. But how much vibration istoo much vibration for the human body?That is a question that academics aroundthe world have considered at length. TheUK Health and Safety Executive (HSE)consider Exposure Action Value (EAV)andExposureLimit Value(ELV)tobethe most relevant. The Exposure ActionValue is a daily amount of vibration ex-posureabovewhichactionneedstobetaken to control exposure. The ExposureLimit Value is the maximum amount ofvibration a person may be exposed to onanysingleday.Insimpletermsthegreater the exposure level, the greater therisk and the more action will need to betaken to reduce the risk.The WBV & H-SURV seminars deliv-ered informative presentations that wereenhanced by audience participation. OndayoneJohnHaynesusedaSWOTanalysisapproachtodiscussUKMCAMariners Guidance Notes. These MGNsneed to be read by operators to assist inunderstandingEAV(ExposureActionValue) and ELV (Exposure Limit Value)as part of compliance with the EC Vibra-tion Directive, July 2010. The discussionshowed that the numbers are difficult tocomplywithandmanyattendeeswereeager to know more about the metrics. The seminar introduced various inno-vative concepts. Development of the sus-pendeddeckwasdiscussedasanovelmeans of delivering shock mitigation tothe entire deck area. This could be used toprotect personnel, console, controls, sen-sitive equipment and payload. Integrationintoanexistingboatdesignhasbeenprovenandtrialsareunderway.JamesGlover,managingdirectorofDYENA,discussed the various hardware optionsthat are currently available for recordingvibrationandacceleration.Heintro-ducedasmallwaterproofblackboxwith built in GPS that is designed as a vi-bration exposure recorder on boats.To close day two of the seminar FRCTraining Director Jon Hill AFNI referredto his military experience operating fastboats and said, WBV is a global prob-lem and the injury statistics are growing.WBV awareness is relevant to all sectorsaffected by this major health and safetyissue. FRC International have developedspecialist WBV Awareness Courses, rec-ognized by The Nautical Institute, withthe objective of understanding that WBVexposure affects all planing craft. Theseshort courses define and benchmark bestpracticeandprovideaconsistentap-proach to WBV compliance for the pro-fessional maritime sector. For further information:FRC International WBV Awareness Courses www.frc-wbv.comEC Vibration Directive & Mariners Guidance Notes www.vibrationdirective.com FAST CRAFT & VIBRATIONThe AuthorJohn Haynes, AFNI, is Operations Di-rector of FRC International and a pre-senter of WBV courses. He is aYachtmaster Ocean and AdvancedPowerboat Instructor. Subject matterexpertise includes high speed craftconsultancy, product development andspecialist training.Email:j.haynes@frc-int.com(Photo courtesy FRC International)MR#8 (26-33):MR Template8/8/201211:55 AMPage 28August 2012 www.marinelink.com 29MR#8 (26-33):MR Template8/7/20123:59 PMPage 2930 Maritime Reporter & Engineering NewsModel tests for the evalua-tionofshipdesignsshouldnotonlybeper-formed in calm water butalso in waves. MARINs new Depressur-ized WaveBasin(DWB)helpsunravelsome of the mysteries of wave added re-sistance.A ship is usually designed with a focuson its performance in calm water. How-ever,operationalconditionsshouldbetaken into account, including added re-sistance due to waves because it is an im-portantfactorintheeconomicalperformance of a ship. Thesustainedspeedinstormcondi-tions should be investigated but also thepower increase in typical service condi-tions. And with the trend for an increas-ingshipsize,thelatterbecomesevenmoreimportant.Inaddition,upcomingregulations such as EEDI require a verycarefulcorrectionfortheaddedresist-ance during speed trials. Using large ship models in a 240x18x8m towing tank can make the differencewhen trying to understand the secrets ofwaveaddedresistance.IntheDWBalargeshipmodelofa VeryLargeCon-tainer Ship of about 350 m for instance,can be tested at a model scale ratio of 1 to30. InourSeakeepingandManeuveringBasin(SMB)thescaleratiotypicallydoubles, which means that a 1.5 m wavefor the ship would require a 2.5 cm wavein the SMB and a 5 cm wave in the DWB.Thisincrease,incombinationwithin-creased measurement accuracy, improvesthe prediction of wave added resistancein typical service conditions.AfurtherbenefitoftheDWBisthatonly one large ship model is used to per-form calm water resistance and propul-siontests,cavitationobservations,hullpressure measurements and wave addedresistance tests for mild to severe weatherconditions. When well prepared, all thetests can be conducted within one week.A ship model can be chosen with largepropeller models with a diameter of about300mm, reducing significant scale effectsonpropellerbladecavitationandpro-peller thrust and torque. This provides ahigh level of accuracy when measuringfor instance the wave added resistance. Inthis way MARIN expects to unveil someof the secrets of wave added resistance.EYE ON DESIGNWave Added ResistanceMARIN Unravels Secrets of Wave Added Resistance(Image: MARINThe AuthorPatrick Hooijmans is project managerat the Ships department of MARIN, theMaritime Research Institute Nether-lands. MARIN offers simulation, modeltesting, full-scale measurements andtraining programs, to the shipbuildingand offshore industry and govern-ments. Email: p.hooijmans@marin.nl MR#8 (26-33):MR Template8/8/201211:56 AMPage 30MR#8 (26-33):MR Template8/7/20124:17 PMPage 3132 Maritime Reporter & Engineering NewsMost every company knowsitshouldhaveaplantodealwithcatastrophe.Thatsespeciallytrueforshipyards and vessel owners who oftenply their trade in hurricane zones, whereweather can rip apart a lifetime of workovernight,makeconfettioutofassets,and leave disarray in its wake.Emergencyplanscanbesimpleorcomplex,dependingontheneedsofaspecific business. There are a number ofresources to help business owners createcustomized plans, including online tem-plates,detailedguidelinesandmodeldocuments. A companys insurance agentandcarriercanalsoserveasusefulre-sourcesforbusinessestryingtodeter-mine what should be in a plan, and howtobestpositionthemselvestorecoverquickly if disaster strikes. Aplanbyitself,however,isnotenough. Acompanythatmakesaplanand sticks it on a shelf has taken only thefirst step toward preparing for a catastro-phe.Basedonextensiveexperiencecleaningupafternaturaldisastersovermany years, insurance carriers have no-ticed that some businesses bounce backquickly while others have a difficult timerecovering. Those that survive most oftenare the ones that have gone beyond mak-ing a plan, taking extra precautions andthinking through worst-case scenarios.A Plan Is Only As Good As Its ExecutionThe story of one shipyards experiencewithHurricaneKatrinademonstrateswhy having a plan is not always enough.With the storm approaching, a designatedcrew followed the shipyards emergencyplan, taking two spud barges and a breast-ing barge deep into a marshy area awayfromtheanticipatedpathofthehurri-cane.Upon arrival at the designated spot, thecrewrealizedithadnotbroughttheproper lines to secure the breasting barge.With the storm approaching and the yardanhourandahalfaway,therewasnotimetodoanythingotherthanusetheworn lines that were available. The spudswere dropped into place and the breast-ing barge was tied between the two spudbarges. Unfortunately, the winds were strongerthanthelines.Perhapseventheemer-gencylines,setasidebutforgotten,would not have been enough. The breast-ing barge broke free and was blown intoan interstate freeway bridge more than amile away, causing extensive damage anddisrupting traffic.Twentydaysandalmost$6millionlater,thebridgewasonceagainopera-tional. However, that was not the only ex-pense. When the waters receded after Katrinadied down, the barge was stranded in ashallow area until a canal could be dug toget it back to where it could be floated tothe yard. For Want of a Nail is an old proverbthat spells out the chain of circumstanceswhen a horseshoe nail comes loose, thehorse falters, a man is thrown, a battle islost and a kingdom falls. In this case, forwant of a good line, a barge was lost, abridge was disabled and a shipyard suf-fered. MARINE INSURANCEReady for the WorstTaking Emergency Plans for a Dry RunBy Kirk Rider, Ocean Marine Director, Risk Con-trol, &Charlie Pugliese,Ocean Marine Hull & Liabilities Practice Leader,TravelersMR#8 (26-33):MR Template8/9/20123:24 PMPage 324321Beyond an Emergency PlanSo what should a company do besideshaveanemergencyplaninplace?Thefollowing are four steps that can make adifference in how a company rides out astorm.TheEmergencyDrill.Atleastonceayear, the emergency plan should be re-moved from the shelf, dusted off and re-viewed for its continuing suitability. Inthe time since the plan was made, a com-pany may have added a different line ofbusiness, brought on new equipment tothe site, or even have new people in placewho have never seen the plan. By runninga table-top exercise with current staff ona regular schedule, the company can fa-miliarize everyone with the plans con-tent and determine if it still makes sense.The plan should also be incorporated as atopic into routine safety meetings and theorientationtrainingfornewhires.Ifastaff position has certain responsibilitiesin the plan, it is imperative that the personcurrently filling the job knows the dutiesin advance, so that any questions or is-suescanbeaddressedlongbeforeastorm hits.The Right Stores. In addition to havingan effective plan, a company should havethe right equipment on hand to carry outthe activities detailed in the plan. Whenastormisapproachingandeveryonerushes to buy generators, ropes and ply-wood, shortages can develop. It is far bet-ter to know what is needed, buy it aheadof time and store it in a state of readiness.Particularattentionshouldbepaidtochains,linesandotherequipmentthatface the wear and tear of daily use. Hav-ingnewequipment,freshandunused,stashed away in a designated locker thatis to be accessed only in emergencies is agood way to ensure that the protectionsput in place will be at top strength.BeyondtheZone.Effectiveemergencyplans usually provide an updated list ofsuppliers,whetheritisformanpower,fuel, equipment or water. These are oftenlocal vendors with whom the company isfamiliar or even those who are regularlyrelied on during normal business times.However,theplanshouldbereviewedwith an eye to what happens if a disastershuts down an entire city or region. Thelocalvendorsmayhavejustasmuchtroublegettingbackintooperationalmodeasthecompanydependingonthem. Instead, look farther afield evenseveral states away and establish rela-tionshipsinadvancewithalternativesources of supplies.Manpower Solutions. One aspect of dis-asterrecoverythatsometimescatchescompanies by surprise is the lack of man-poweravailable.Thisgoesbeyondtheobvious need for employees to take careof their personal situations, such as prop-erty damage or family concerns, beforethey are able to focus on work. The af-termath of a storm often creates cleanupjobswithsalariesthatarehigherthannormal local labor rates. A shipyard thatduring the year relies on a regular crewofhourlycontractorsmayfinditspooldrying up as these workers seek and takemore lucrative assignments. To addressthis issue, a company may want to planin advance for incentives (e.g., bonusesor temporary higher pay) or contractuallanguagethatwillkeeptheirregularworkers on the job. They may also con-sider seeking out companies that special-izeinplacingtemporaryworkersandincorporate those manpower sources intothe emergency plan in advance.A few calm hurricane seasons can lullshipyards and other marine operators intoforgetting about the emergency plans ontheirshelves.Butsuchplanscanonlyserve their purpose if they are current andeveryone is ready to carry out their as-signedtasks.Byworkingcloselywiththeir insurance agent and carrier, compa-nies can learn about and implement bestpractices that will give their emergencyplansamuchbetterchanceofhelpingthem ride out whatever storm comes theirway.MR#8 (26-33):MR Template8/8/201211:59 AMPage 3334 Maritime Reporter & Engineering NewsLedbycallstoreduceemissions(CO2, NOx, PM-values), while atthe same time increasing energyefficiency with a long-term eye onthe diminishing supply of fossil fuels, it isclearforallthatalternativesevenunder the aspect of higher investment costs will pay back in the future. Besideeconomicandsafety-relatedas-pects, more and more questions about envi-ronmentalprotectionaswellashealthhazards due to the emission of harmful sub-stances into the environment play an essen-tial role in shipbuilding.Unfortunately, hitting environmental tar-gets while maintaining efficient operationsis becoming ever more difficult with con-ventional drive systems, requiring costly ad-ditionalcomponents,suchasexhaustafter-treatment systems.Low operating costs, precise maneuveringand a high starting torque at lowest propellerspeed as well as a low-noise operation paysback in many respects.For these reasons, today more than everthereisacallforinvestmentinnewandemerging propulsion technologies to meetall criteria.Andthesementionedfactsopenthechance, with an innovative propulsion con-cept, to ensure the competitiveness of theshipping industry, further increasing exist-ing advantages.TorqueMarineIPSGmbH&CO.KGbased in Hamburg, has developed in 2010its High Torque Power Drive (HTP) aninnovative diesel-electric propulsion systemforallkindsofvessels,fromrivertocoastal to tugboats which is outclassingthe conventional systems with combustionengines, reduction gears and drive systems.The idea of diesel-electric ship propulsionsystem is nothing new: Already in 1838 Pro-fessorMoritzHermannJacobiexperi-mented on the river Neva in Russia with anelectric driven paddlewheeler.Ronald Schrder, Business DevelopmentManager at Germanischer Lloyd, addressesthe advantages of diesel-electric drive ap-plications: High redundance of the entire ship operation system High torque already at lowest propeller speeds Reduction of the initial ship building costsTECHNICAL FEATURE PROPULSIONTorque Marine IPSPrecise Maneuvering and 26% Fuel & CO2-Saving Gearless, diesel-electrical Torque-Drive System proves safe and reduces operating costs By Peter Pospeich, GermanyPartners in business: Thorsten Schramm (l), owner of Schramm Group, Brunsbttel and Claus-D. Christophel (r), GM of Torque Marine IPS.MV ENOK is worldwide the first motor vessel with a gearless, diesel-electricalTroque-Drive System. Inset: Rudi Koopmans (64) Captain of the vessel ENOk isabsolutely satisfied with the new Torque Drive.Two electrical driveunits combined on oneof the shafts.MR#8 (34-41):MR Template8/10/20122:15 PMPage 34MR#8 (34-41):MR Template8/7/20124:08 PMPage 35 Reduction of the operating costs Increase of transport security Reduction of pollutant and noise emissionWe, the GL, see a great potential withthis new HTP-Drive system for the ship-ping industry, he said. To reduce fuel consumption andemis-sion values, the development center forshiptechnologyinDuisburg,were,onbehalf of the German Federal Environ-mental Ministry, deeply engaged with thesubjectmanyyearsago.Theconven-tional diesel-electric drive could not ful-fillthepreconditions,e.g.weightandvolume reduction. Hence new possibili-ties had to be developed. The idea to develop something new inthis field kept me busy from this momenton, said Claus-D. Christophel, GeneralManager Torque Marine IPS.After extensive research and develop-mentwork,togetherwiththedevelop-ment center for ship technology, DST, inDuisburg,TorqueMarineIPSsuccess-fully converted in 2010 a twin-propellerriver freighter, MS ENOK, with a TorqueDriveSystem.Measuring84x9.5m,ENOKcanload1,500toofcargoataload draft of 2.86 m. ENOK is worldwide believed to be thefirstmotorvessel,whichhasbeenequippedwithapermanentmagnetmotor (PM drive) as a gearless electricaldirect drive.Since mid of 2010 the ves-sel runs in regular cargo service on Eu-ropean Waterways.RudiKoopmans(64),captainofthevessel is more than satisfied with the re-sults: Within five seconds I can bringthepropellerstoastandstill.Itsacomplete new world. Each second, wecan react faster, is more safety. Since14 years I am captain on this ship, butsuchanfantastichandlingwiththisnew Torque-Drive I never experiencedbefore. The power of the shaft is step-lessly available. Today we have a noiselevelinourcabinsofmeasured47dB(A). I dont want to have somethingelse anymore.The High Torque Power (HTP) Drive-ConceptThemodularsystemconsistsof,ac-cording to power requirements, encapsu-lated diesel engines with water-cooled,permanently excited generators in modu-lardesignandwater-cooledredundanttorque units, as well as weight and poweroptimized converters.Hence,fordiesel-electricoperationsmodernandcompacttorquedrivesareavailable,which,basedontheirlowpower-to-weight ratios, offer the follow-ing possibilities: Propulsion redundancy Extremely high torque which, via a shaft thrust bearing, is direct availableat the propeller, Low noise emission and Almost maintenance free operation. For the time being driving power pershaft and propeller up to a maximum of1,890 kWe are available. To drive gener-36 Maritime Reporter & Engineering NewsTECHNICAL FEATURE PROPULSIONView on one shaft: left the driveunit, in the middle the thrust bear-ing and no transmission.MR#8 (34-41):MR Template8/8/20123:13 PMPage 36ators (power producer/gensets) diesel en-gines are still indispensable; but alreadynowcombustionenginesoperatingonLNGareconsideredforfurthertorquedrives. And also fuel cell techniques willbe introduced in the future.The installations of the genset modulesareindependentofthepropulsionele-ments with the shaft drive units. Hence,further optimizations in ship building arevisible, e.g. engine compartment config-uration (shifting of the center of gravity)inrespectoftheshipsshallowwatercharacteristics, optimization of the pro-pellersbasedonthehigheravailabletorque. In the case at hand, two gensetshad been installed in the foreship and twoin the stern main engine compartment.Despite the fact that ENOK is an oldvessel, meaning it did not feature an op-timalhullformanditspropel