philly shipyard

TOTE Launching Jones Act Shipping Service to Hawaii with Philly-Built Containerships

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August 17, 2017

Photo: Philly Shipyard

TOTE Maritime has emerged as the mystery shipping company who has signed a Letter of Intent for the construction of up to four containerships at Philly Shipyard for a new Jones Act shipping service between the U.S. mainland and Hawaii.

TOTE announced its plan to establish the new Hawaii service on Thursday, providing details on both the new containerships as well as its effort to secure terminal space in Honolulu. 

The LOI, first announced by Philly Shipyard in July, calls for the construction and sale of up to four environmentally friendly containerships custom built for the Hawaii trade. At the time, Philly Shipyard could only reveal the buyer as a leading blue chip Jones Act operating company, but it said that the vessels would be based on a similar design as two TEU Aloha-class containerships it is currently building for Matson, Inc.

With the new service, TOTE will be competing against Matson and Pasha Hawaii, the only two carriers currently providing Jones Act service to and from Hawaii following the collapse of Horizon Lines.

Initial construction calls for two 3,700 TEU containerships with options to build two additional vessels. The ships are scheduled to be delivered in early 2020 and 2021. Construction of the vessels has already started in order to ensure the target delivery schedule is met. 

Beginning this week, TOTE has also started conversations to secure the new deepwater Kapalama Container Terminal (KCT) in Honolulu. 

“Timing is critical for construction of new ships for Hawai’i and a commitment for terminal space in Honolulu is needed to move the new venture forward,” TOTE said in a press release announced the new service. “New environmental regulations taking effect in 2020 necessitate replacement of aged ships currently operating in the trade. As planned, the new vessels from Philly Shipyard will enter service in early 2020 and 2021, just in time to meet the deadline and maintain trade capacity.”

For more than 40 years, TOTE and its operating companies have provided dedicated service to Alaska and Puerto Rico. In recent years, the company has committed more than $600 million to convert its ships to run on natural gas, making its fleet the most environmentally friendly in the United States.

“TOTE is excited to bring our best-in-class service to the people of Hawai’i,” said Anthony Chiarello, President and CEO of TOTE. “TOTE’s presence on the islands will provide market stability and introduce new environmentally advanced vessels that will greatly benefit the islands.”

Philly Shipyard is a leading U.S. commercial shipyard constructing vessels for operation in the Jones Act market. It has so far delivered 27 vessels in its nearly 20-year history, including four vessels for use in the Hawaii containership trade which were delivered in 2003-2006. Currently, Philly Shipyard is building one 50,000 dwt tanker for a subsidiary of Kinder Morgan, Inc. (Hull 028) and two 3,600 TEU containerships for use in the Hawaii trade for Matson Navigation Company, Inc. (Hulls 029 and 030).

“Philly Shipyard is very excited to have TOTE as its partner under the LOI and fully supports the efforts to introduce new vessels into the Hawai’i containership trade to replace aged ships in time to meet new environmental regulations,” remarked Steinar Nerbovik, PSI’s President & CEO.

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