Interview: Steinar Nerbovik, President & CEO, Philly Shipyard
Philly Shipyard won a high-profile contract when TOTE Services awarded the deal to build up to five new ships, the National Security Multi-Mission Vessel (NSMV). We caught up with Steinar Nerbovik, President & CEO, Philly Shipyard for insights on the deal.
While many companies globally fight to stay in business through the COVID-19 pandemic, Philly Shipyard received a huge deal late last month: the contract to build up to five NSMV ships, a contract that has been one of the most closely watched and hotly contested U.S. shipbuilding deals in recent memory. This shipbuilding contract extends beyond steel plate and machinery, with NSMV State-Class training ships designed and built to provide a state-of-the-art training vessel that will provide at-sea training for up to 600 cadet-midshipmen at a time from the six state maritime academies.
The initial award (two firm orders + three option ships) is valued at approximately $630 million, escalating to $1.5B if all five ships are ordered and built in series.
“First, we were honored to be selected by TOTE to build these vessels, and for the opportunity this provides to further diversify our business into government and commercial shipbuilding,” said Nerbovik. “I believe our track record of on-time, on-budget deliveries, plus having delivered more than 50% of all large Jones Act ocean-going vessels in the last 20 years, have all opened the door for us to be a strong contender.”
Today Philly Shipyard has approximately 300 employees (a mix of its own and subcontractors), but with the new deal to build the State-Class series it expects to re-constitute its full workforce with up to 1,200 employees during 2021.
Since 2003, Philly Shipyard has delivered 30 commercial ships, including (3) CV 2600 Container vessels; (1) CV 2500 Container vessel; (14) MT-46 Product Tankers; (2) MT 115 Aframax Tankers; (8) MT 50 Product Tankers; and (2) 3600 Container Vessels. Aside from the contract to build the pair of NSMVs, it currently is working on a dry docking contract for the FSS Pollux.
In preparing to build the State-Class ships, Nerbovik said “the biggest investment we can make, and will make, is in our people. If we look back, in 2019, we leveraged the strong partnerships we have with our unions, and signed a new four-year collective bargaining agreement which is effective through January 2023. During that time, we also invested in maintaining a core staff of highly skilled technical employees from each department that have been able to swiftly move into action with the new NSMV contract.”
While the COVID-19 pandemic has impacted nearly every industry, Nerbovik said production at the shipyard has been able to remain operational. “Like most others, the COVID-19 pandemic has influenced the way we are operating, and we have been diligently following the guidelines from the CDC, as well as from all Federal, State and local directives. Notwithstanding, operations are continuing and ongoing projects are moving forward.”
The Build Plan
According to Nerbovik “design, purchasing and planning activities and have started and will continue,” while production will commence on the first ship in 2021. Deliveries for both vessels are expected in 2023.
While Philly Shipyard is adept at the commercial shipbuidling process, this ship design differs substantailly in two key areas when compared against the ships it has traditionally built. “People and accommodation,” said Nerbovik. “Most commercial vessels have 20-30 people on board.
The NSMV will potentially have hundreds of people on board at any one time, and in addition to the accommodations, there is space for classrooms, dining areas, and all of the required spaces to actually operate the vessel. Add to that, the specific requirements related to a helicopter pad, RoRo and container storage, and hospital rooms, the result is a ship that requires much more “outfitting” and detail than most commercial builds.”