Foss making large investment in tractor tugs for heated West Coast markets

You can’t help but be impressed by the expansion plans of Foss Maritime, its parent company and West Coast sister companies. They are pumping out a series of new tractor tugs destined for work in two of the busiest and most competitive ports in the United States.

Mikioi is the first in a series of 5,000-hp tractor tugs ordered by Foss Maritime. The tug was built at a shipyard in Rainier, Ore., owned by Foss’ parent, Marine Resources Group.
   Image Credit: Courtesy Hawaiian Tug & Barge

Foss, owned by Seattle-based Marine Resources Group, is in the midst of a program that calls for the construction of seven 5,000-hp z-drive tractors at the MRG-owned shipyard in Rainier, Ore. Even at the modest price of $5 million per tug, it amounts to more than a $35 million investment in highly competitive ports where the action is fast, operating costs are high and margins are slim as a stretched length of hawser.

The first tug in this series, Mikioi, has already been delivered to the MRG affiliate Hawaiian Tug & Barge for service in Honolulu. The next two, according to Foss officials, are slated to fly Foss colors. The tugs will be pushing around container vessels and tankers in the neighboring California ports of Los Angeles and Long Beach. After that will come four more tugs to be operated by AmNav Maritime Services, which currently has operations mostly in San Francisco, but could be expanding elsewhere.

These Robert Allan-designed Dolphin-class tugs are 78 feet long overall, with 5,080 hp, enough to handle a wide range of ships, including the largest container vessels, currently rated at better than 8,000 standardized container units. The tugs will be powered by twin Caterpillar engines linked to azimuthing Rolls-Royce stern drives. On deck will be fore and aft Markey winches.

The building program will keep Foss on top of the heap as the largest operator of tractor tugs in the United States (17 by the end of 2006, all on the West Coast). It will also ensure that Los Angeles/Long Beach and San Francisco continue as ports with the most tractor tugs (16 or more each projected for 2006).

These are amazing numbers when you consider that most other major ports have only a handful of tractor tugs. In the Port of New York, there are typically three, with similar numbers in the Houston area (four now with two more under construction) and only two in New Orleans (with more under construction). Two other busy ports with plenty of tractors are Norfolk, Va., with nine (most assigned to the Navy base or nearby LNG terminal) and Tampa with eight tractors working on commercial ship docking. Because of the U.S. Navy base in San Diego, Edison Chouest has nine or 10 tractor tugs based there. The Seattle and Puget Sound area has its share of tractors as well, but nowhere do we see the concentration of these expensive tug assets — nor the mania for more — as in L.A./Long Beach and San Francisco.

L.A./Long Beach, with combined container traffic of something like 13 million TEUs, attracts some of the world’s largest container vessels and also receives its share of tanker and general freight. U.S. trade with Asia surged roughly 15 percent in 2004 with similar gains forecast for 2005, and much of that container traffic comes in through L.A./Long Beach and other West Coast ports.

Still, with 16 tractor tugs operating in the two big Southern California ports by this time next year, plus a number of conventional tugs, it’s a hotly competitive market for the three major operators there: Foss, Crowley Maritime and Harley Marine Services.

While ships have gotten larger and more demanding, fees for ship-docking services have not kept pace, according to industry operators. The way things are shaping up, it looks like the market is only going to get more competitive in the near future.