Vinik Marine: Interview With A Different Kind Of Maritime Startup
by John Konrad (gCaptain) gCaptain believes the future of our industry will be shaped by startups… but few realize that important new maritime startups come in all shapes and sizes including analog companies that are recycling decades-old equipment. One such company is Vinik Marine.
During the summer of 2004, a year after graduating from SUNY Maritime with a degree and a Mate’s license, Mike Vinik purchased the old rustbucket of a tug GOTHAM and founded Vinik Marine. It took 9 months of crawling through the sludge in the bilge, replacing frozen pipes, repairing cylinders, sleeping on cold winter nights aboard a vessel with no hot water and no heat before the GOTHAM ran but, once it did, word spread. Today Vinik Marine operates a powerhouse of a company with a fleet of six tugboats ranging from 1,000 to 7,200 horespower.
Last week gCaptain was honored to sit down with Captain Mike Vinik, founder of Vinik Marine… an entrepreneur who Vince Rose calls “the nicest guy in New York Harbor”.
What is Vinik Marine?
Vinik Marine is a tugboat company we started to provide nearly any marine service needed, including but not limited to towing and assistance to vessels and companies.
With a small fleet of vessels of various sizes, we are able to provide a broad range of services.
Vinik Marine has organized and designed floating advertisements, tandem towed barges from NY to the gulf, provided floating fireworks shows, completed over ten thousand tug/barge and ship assists and thousands of general barge tows. We’ve salvaged boats from storms and provided search and rescue as well as body recoveries for local emergency services.
We imagine that boat restoration is expensive. How did you raise the money to restore the first one?
We purchased our first tug with one of those zero percent interest credit card checks they send you in the mail. From there I sketched out a Business plan on a few sheets of paper to try to convince the bank to provide us with a small Business loan. They approved my application and actually were concerned that I wasn’t asking for enough money. As long as I had a few jobs every few days I was just able to cover expenses. The problem was that I worked on call and didn’t have a schedule, which meant I was available 24/7 and could never afford to turn down a job.
What is the biggest obstacle to company expansion? Time, money, people or the availability of historic vessels?
Predicting what work we will have is certainly the biggest obstacle. We don’t have steady contracts and mostly all of the work we have is spot market tows and assists with little or no notice. I often joke that the more notice we have the less likely it is to happen as planned. We often get calls for jobs that never come to fruition and it is difficult to schedule crew and maintenance, or plan cash flow accordingly. Even anticipating when we get paid for completed jobs is difficult. We often have to lay out large sums of money for fuel and crew for a tow that we may not have anticipated and have to wait for payment long after the job has been completed.
My favorite working boat of all time is William Francis Gibbs’ famous fireboat Fire Fighter? Do you have a favorite vessel from the past?
I certainly have a few favorites. As far as ships go, The SS UNITED STATES is my absolute favorite. I would love to explore it and I can only imagine what that blue ribbon cruise must have been like to have experienced. Hopefully she has a future other than the breaking yard or reefing. Some of my other favorites were the tugs EVENING TIDE and NORWEGIAN SEA. Most of all my favorite boat has always been the PENN NO. 6. My first tug, the DOROTHY ELIZABETH, was the fastest boat in NY for 30 years. And, even it had trouble keeping up while assisting he PENN NO. 6 while it was pushing a light 120,000 barrel barge. I cannot believe that I would ever be fortunate enough to call the number six my own!
Do you believe the time is finally right for short sea shipping to be successful in New York?
Absolutely!! Take one look at the cross BRONX, BQE, or any of Manhattan at any hour of the day. Rush hour starts at 0500 every weekday and doesn’t end until 2000. It’s approximately 100 times more expensive to ship large quantities of cargo over the road than over the water. The problem I see is that we no longer have the infrastructure needed to efficiently load and offload cargo onto vessels and the maritime industry is only losing more waterfront each and every day. Even the general public doesn’t support the preservation of the maritime industry‘s use of waterfront.
Look at Hoboken for an example. They have a piece of property which was owned by “Union Drydock” which has been a shipyard for decades. The property was recently purchased by NY Waterway, the largest privately-owned ferry company, to continue to be used as a shipyard. Now the town is claiming eminent domain to try to turn it into a park. It is the ONLY piece of Hobokenwaterfront that isn’t currently a park. It is also the ONLY property that is suitable for this ferry company to maintain its current fleet of vessels.
I assume the issue is if you ask any member of the general public if they would prefer a park or shipyard, they will vote park every time!
How can historic vessels possibly compete with the bigger and stronger dynamically positioned vessels other tugboat companies are investing in?
As technology improves, the US maritime fleet has traditionally been slow to respond. A tug basically pushes or pulls. There are of course tractor tugs, and tier IV engines, but at the end of the day it’s entirely up to maintenance and demand which determine how long a boat can be kept in service. There are fleets of boats in the Great Lakes working daily that are over a hundred years old! Some oil companies now require chartered vessels to be less than 30 years old.
I don’t believe the newer vessels built during the last 10-15 years will see sixty years of service. Steel isn’t as good as it used to be because it’s been recycled too many times, and newer engines need more maintenance than the older engines. Therefore I still find it cost-effective to run older well-maintained vessels.
What was your biggest failure? How did you pull your company through it?
I salvaged a barge in Edgewater, NJ. It had been sunken for about 3-4 years and took 13 months to complete. It was a “no cure no pay” quote, which meant I didn’t get paid until I completed the job. Shortly after I started I realized it would not be cost-effective to complete, but I had already invested too much to give up and walk away from it. Although I did complete the salvage at a loss, I learned a lot.
What has been the biggest challenge to your success?
Time management. Operating a tugboat company is a full-time job and most CEOs do it from the office but I am very hands-on and often captain the vessels. We also restore boats and own barges and equipment. In my spare time, I volunteer as a rescue diver and have young children.
With so much on my plate time management becomes a major challenge. Between family, our company, and the other extra-curricular activities I’m in, I have a hard time juggling. Somehow with the support of my wife, family, crew, friends, and colleagues, it seems to work out.
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