Tag Archives: Royal Caribbean

Cruise Lines Could Face Major Drydock Challenge Following Hurricane Damage

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Grand Bahama Shipyard

The cruise industry could be looking at a monumental impact to their operations following Hurricane Dorian if the Grand Bahama Shipyard’s capacity is taken offline or further limited following an April incident.

The go-to-yard for drydocks and refurbishments in the cruise industry is partly owned by both Carnival Corporation and Royal Caribbean Cruises.

It is ideally located in the Bahamas, meaning little out-of-service transit time on the way to or from various deployment regions, including the Caribbean in the winter.

The yard is regularly used by cruise vessels from almost all cruise lines for mandatory class drydocking and refurbishment work.

There are few alternatives for big vessels in the region. Shipyards in Newport News, Virginia, and Mobile, Alabama, both have facilities that can handle larger vessels but are generally used for naval purposes and are known to be well booked ahead of time.

Deytens, located in South Carolina, has also played host to the expedition and luxury ships and mid-sized vessels over the years.

Costs at U.S.-based facilities are also higher, and there are challenges in bringing in skilled labour and large amounts of the hotel and marine supplies from foreign countries that are needed for large scale refurbishments, which often see spending of up to $3 million per day in supplies and labour.

With reported widespread damage in Freeport, operations to the yard could be impacted. Housing both permanent and temporary workers could prove challenging unless accommodation vessels are brought in.

Another expensive option could be the Boka Vanguard, a semi-submersible heavy transport vessel operated by Netherlands-based Boskalis, which helped provide a platform for emergency repairs to the Carnival Vista earlier this year.

In Curacao, Damen Shipyards offers a drydock option and has plenty of cruise experience.

Cruise lines could also choose to wet-dock their vessels at industrial piers just about anywhere. The upside being the vessel would be empty and available for hotel refit. Crane access could be limited making logistics of getting supplies off and on the ship challenging.

However, classification societies require ships to come out of the water at regular intervals for inspection.

The most likely option, however, is the regular drydock facilities in Europe. The question is whether they have available space when needed, and the impact of moving ships that were scheduled to drydock in the Bahamas to Europe, mixing up some itineraries and deployment.

Cancelling a scheduled drydocking for the third or fourth quarter of 2019 or early 2020 and replacing it with a normal sailing would also pose challenges with a short booking window.

Royal to deliver 20,000 meals daily to Grand Bahama

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Devastation in the Abacos, northern Bahamas
Damage caused by Hurricane Dorian.

Royal Caribbean Cruises Ltd. has forged an ambitious plan to deliver 20,000 meals a day to Grand Bahamas residents who are labouring to recover from Hurricane Dorian.

The first ship, the Empress of the Seas, is scheduled to arrive on Sept. 4 with 10,000 cold meals, which will be tendered in for distribution ashore. Thereafter, the plan is to raise the number of meals to 20,000.

Following the first effort by Empress, the Symphony of the Seas and the Celebrity Equinox will both be visiting Grand Bahama on Friday.

Each day, Royal will take one of its ships headed for the Bahamas or the Caribbean and divert it for several hours to deliver on the commitment.

Richard Fain, chairman and CEO of RCCL, said paying guests won’t notice any difference in the foodservice on board, but the itineraries will be tweaked for the near future so that a sea day may be substituted for a certain port call or vice versa.

Fain said the plan was hatched mid-morning on Wednesday as company officials considered how they could best provide relief.

“It’s hard to get your hands around what total devastation is like,” Fain said in an interview. “You don’t even know what the issues are.”

But one certain thing, Fain said, is that people need to keep eating, and many no longer have the means to feed themselves.

“If the refrigerator is out if the stove won’t turn on, what do you do? They need good, warm healthy food. Now they may not be receiving our normal cruise line fare, but they will think this is the best dinner they’ve ever had,” Fain said.

Royal Caribbean will cook the food in its ships and coordinate with a cargo operator that will be delivering water and canned goods separately. The distribution will be handled by the Bahamian government, by churches, by the Bahamas Feeding Network, a Nassau-based entity that has a long-term partnership with RCCL, and by chef Jose Andres’ World Central Kitchen.

Fain said that the plan is still coming together and that given the chaotic post-storm conditions in Freeport, will have to be modified as needed.

“There are going to be problems, but we’re determined to figure it out,” Fain said.

The tentative plan also calls for kitchen equipment to be brought to Freeport to begin making meals onshore at the Grand Bahama Shipyard, where there’s an existing kitchen for 500-600 employees, and at the kitchen at the Grand Lucayan Resort.

The cruise industry view of Trump’s order to leave China

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Image result for royal caribbean in china

With President Trump “ordering” U.S. companies via Twitter to leave China, and suggesting they return home, one wonders what would happen if he turned his attention to the cruise firms headquartered in Miami.

Could he “order” them to bring their Shanghai-based ships back to U.S. waters? Or to stop building their $1 billion ships in Europe?

Of course, the first obstacle is that none of these companies are legally incorporated in the U.S. But set that aside for a minute. They’re certainly American companies in other respects.

Norwegian Cruise Line Holdings CEO Frank Del Rio appears to have beaten Trump to the punch by ordering home the Norwegian Joy to sail in Alaska this summer alongside its doppelganger, the Norwegian Bliss.

Of course, Del Rio acted for business reasons and not out of any animosity towards China or need to chastise Chinese leader Xi Jinping for raising tariffs.

If Royal Caribbean International or Princess Cruises did pull their ships from China, they would probably be rewarded on Wall Street, which has a much easier time analyzing profits in the short term than investments for the long haul, which the China market needs.

But the cruise ship example shows how perverse the strategy of “finding an alternative to China” can be for many industries. Calling home the ships in the China market doesn’t mean they would sail from Seattle to San Diego full of happy Americans.

In fact, American law would prohibit them from being used that way. The ships would go back into the international mix of itineraries that have some ships departing from Miami and New York, but others from Barcelona and Southampton.

The kingly notion of imposing tariffs and directing private business decisions from the throne was losing viability when economist Adam Smith attacked it in the 18th century. It may have some political appeal but in economic terms, the world has passed it by.

For the same reason, building big cruise ships in America – no matter the cost – makes no particular sense either.

As many companies manufacturing in China are finding out, the key in the 21st century to making things reliably and at market prices is an intelligent and at least somewhat skilled workforce and a robust network of proven contractors that can accommodate just in time delivery.

That’s what the European shipyards that make cruise ships have. And by operating within the framework of the European Union they can bring to bear a workforce that while not as large as China’s is larger than the U.S’s.

Yes, China may be cheating on some of the economic terms and conditions that make free trade a win-win proposition. But going back to the idea that each country should manufacture everything on its own makes about as much sense as booking your next cruise on the Nina, the Pinta or the Santa Maria.