General Dynamics NASSCO and TOTE Inc. sign deal for two ships, with option for three more

MEMBERS OF LOCAL 1998 (National City, Calif.) will be involved in constructing advanced container ships powered by liquid natural gas (LNG), following a deal reached by General Dynamics NASSCO and TOTE Inc. late last year. The two companies inked a contract last December for the design and construction of two double-hulled, 3,100 TEU vessels serving the Jones Act market (trade involving shipping between U.S. ports).

NASSCO says the 764-foot-long containerships are expected to be the largest ships of any type in the world primarily powered by LNG.

“This project breaks new ground in green ship technology,” said NASSCO President Ed Harris. “Securing this contract has been a real team effort and will help sustain the jobs of the talented skilled tradesmen and women in our workforce.”

L-1998 President Robert Godinez stated that a decision by lodge members to accept a bonus last year rather than wage increases helped ensure the shipyard would be competitive as it sought to win the TOTE contract. He said the union will enter negotiations for a new five-year contract later this year.

Construction of the first containership is scheduled to begin in the first quarter of 2014, with delivery to occur by the fourth quarter of 2015; the second ship will be delivered in the first quarter of 2016. The contract between NASSCO and TOTE Shipholdings, Inc., a subsidiary of TOTE, Inc., includes an option for three additional ships.

The vessels will be designed by DSEC, a subsidiary of Daewoo Shipbuilding & Marine Engineering (DSME), located in Busan, South Korea. NASSCO has partnered with DSEC previously for the design and construction of five State-class product tankers which currently operate in the U.S. Jones Act market. All of the containerships will be constructed at the NASSCO shipyard in San Diego.

The vessels will operate on either fuel oil or gas derived from LNG, which will significantly decrease emissions while increasing fuel efficiency as compared to conventionally-powered ships, according to NASSCO. The LNG-powered containerships will also include a ballast water treatment system, making them the greenest ships of their size in the world, the company says.

The ships will operate between Jacksonville, Fla., and San Juan, Puerto Rico.