not sure what tariffs will do long term to steel prices, but we can see it has gone up over the past 3 months. It could affect fixed contracts if it goes high enough.
is the backlog mostly price fixed, or do they have any inflation protection clauses?
" future on the cost side remains uncertain. But with better priced contracts moving forward and shipyard capacity likely full, they can focus on adding profitable backlog as they now have the pricing power."
"The big losses in 2022 and 2023 stem from the surge in steel prices during that period, affecting their fixed price contract with the Navy to build eight YRBM barge"
it is mostly fixed with commercial contracts having some provisions that protect them from steel prices to some extent but not labor from my understanding. Government contracts do not have that provision.
I remember some years ago they took a big hit on their first (and last) LNG barge. Given the ramp up in LNG I have been wondering if they will attempt another since they have some experience now.
I don't see why not. They are probably one of the few that can build it with their experience. DOE removed the barriers around LNG usage for marine fuel so it could expand LNG bunker barge constructions
I would hope they wouldn’t take on a project like that for the time being considering how disastrous it was the first time. Not quite convinced one build is enough to know how to do it fast and efficiently again. It’s certainly much less riskier than a complete new build but still adds too much uncertainty for me.
I agree. But I highly doubt Conrad would not take on such a project because that is where their reputation is at. And they are only one or two LNG barges away of getting the next one to be profitable. Maybe we will see another 2010-2014 with LNG barge construction.
Hi, new to the the industry. Did you hear the Odd Lots episode on the Jones Act? In the podcast, it was mentioned that many ships go to China and find creative ways to perform maintenance on the vessels. What's your take? Why will the maintenance be capture by American shipyards?
Have not listened to it but thank you for bringing it to my attention. Will give it a listen soon. Regarding maintenance, that segment is not a big focus on my thesis so have not really given it much thought. It also matters what kind of ships are being repaired in China. For inland barges, they rarely leave the US inland waterways so American shipyards capture that maintenance.
Do you foresee that tariffs will also cause steel prices to go up which will affect the fixed price contracts ?
not sure what tariffs will do long term to steel prices, but we can see it has gone up over the past 3 months. It could affect fixed contracts if it goes high enough.
is the backlog mostly price fixed, or do they have any inflation protection clauses?
" future on the cost side remains uncertain. But with better priced contracts moving forward and shipyard capacity likely full, they can focus on adding profitable backlog as they now have the pricing power."
"The big losses in 2022 and 2023 stem from the surge in steel prices during that period, affecting their fixed price contract with the Navy to build eight YRBM barge"
it is mostly fixed with commercial contracts having some provisions that protect them from steel prices to some extent but not labor from my understanding. Government contracts do not have that provision.
I remember some years ago they took a big hit on their first (and last) LNG barge. Given the ramp up in LNG I have been wondering if they will attempt another since they have some experience now.
I don't see why not. They are probably one of the few that can build it with their experience. DOE removed the barriers around LNG usage for marine fuel so it could expand LNG bunker barge constructions
I would hope they wouldn’t take on a project like that for the time being considering how disastrous it was the first time. Not quite convinced one build is enough to know how to do it fast and efficiently again. It’s certainly much less riskier than a complete new build but still adds too much uncertainty for me.
I agree. But I highly doubt Conrad would not take on such a project because that is where their reputation is at. And they are only one or two LNG barges away of getting the next one to be profitable. Maybe we will see another 2010-2014 with LNG barge construction.
Hi, new to the the industry. Did you hear the Odd Lots episode on the Jones Act? In the podcast, it was mentioned that many ships go to China and find creative ways to perform maintenance on the vessels. What's your take? Why will the maintenance be capture by American shipyards?
Have not listened to it but thank you for bringing it to my attention. Will give it a listen soon. Regarding maintenance, that segment is not a big focus on my thesis so have not really given it much thought. It also matters what kind of ships are being repaired in China. For inland barges, they rarely leave the US inland waterways so American shipyards capture that maintenance.