How to Buy a Cruise Ship

Tim MurphyOne of the areas in shipbuilding that takes place far from the public eye is financing cruise ship deals. For obvious reasons, Holland America Line doesn’t like to discuss specific figures for all the stuff that goes into building a cruise ship. After all, they wouldn’t want their competitors to find out what they paid for the buttons on the captain’s uniform, right?

ENB sat down with Tim Murphy, director of budgets and planning for Holland America Line, and talked about cruise ship financing in very general terms.

“First, you make an economic decision about whether you need a new ship,” Murphy said. “Then you negotiate a price with the shipyard. Generally, you then make a down payment, usually in the range of 5 percent. Then there is a series of staged payments while the ship is being built, with a final big payoff at the time the ship is delivered.”

Murphy said that Eurodam is being financed by Holland America Line through Carnival Corporation’s ownership of the company. “We are in the enviable position that we can self-finance a new cruise ship due to our parent company’s strong blanace sheet and solid cash flow,” he said.

Another of Murphy’s areas of responsibility is warranties. A cruise ship is a very large, complex machine made up of lots of smaller systems and moving parts, and just like with a new car, the owner is going to want warranties for a set time period in the event that there are problems with any parts or systems.

“Pretty much everything on board that’s not a consumable, like light bulbs and that kind of thing, is under warranty for a year,” said Murphy. “Larger, more complex and more critical systems like the engines or water treatment plant would have an extended warranty.”

Before the line takes possession of the ship from the shipyard, any outstanding warranty issues are negotiated and a pre-delivery list of things that still need to be done such as painting, laying carpet or other cosmetic finishes is made and the shipyard is obligated to finish those tasks as soon as possible.

On the day of the actual delivery, Holland America executives including President and CEO Stein Kruse, Fincantieri representatives including Chairman Corrado Antonini and usually Carnival Corp. Chairman Micky Arison gather in the Crow’s Nest Lounge to review the contract and sign the ownership paperwork.

Then, a Holland America exec on a cell phone says, “Transfer it,” and a Fincantieri exec on a cell phone across the room says,”Ricevuto,” and the transfer from the cruise line’s account into the shipyard’s account of several hundred million dollars begins. After that, there are handshakes and congrats all around, a champagne toast is made and a new ship enters the Holland America Line fleet.

Rijkaart: Eurodam Construction on Schedule

Pieter RijkaartENB recently participated in an interview with Pieter Rijkaart, director of newbuilds for Holland America Line and Blog Board member. He had just returned from the Marghera shipyard and we were eager to hear his impressions of how the construction was progressing:

Well, I actually arrived back in Seattle yesterday, and the day before I left the yard I had a walk over the ship … not only for looking at how far along the ship is, but also the standard of the ship. And I must say, I’m quite satisfied with both the standard and the progress of Eurodam.

The progress is very important for us in order to determine if the ship will be ready on the date that she’s supposed to be delivered to us. I’m actually extremely satisfied. They’re moving very fast and I’m quite optimistic that the ship will be finished on the date of delivery.

Chief Officer Weighs in on a Heavy Topic — the Anchor and Mooring Gear

Eurodam’s chief officer and Blog Board member Andre van Schoonhoven sent us some new photos and some very technical information on the ship’s anchor and mooring gear:

The mooring equipment is an important part of the ship’s equipment, since it’s used for tying up the ship in port, which is the whole idea of cruising. It also had to be finished before the float out, to tie the Eurodam up at the fitting-out pier.

The anchor-handling equipment is not yet completely finished. Below is a photo of the roller assembly, which still needs to be welded to the deck. The chain (or anchor cable) will roll over this, and it leads the cable from the hawse pipe (the pipe leading from the deck to the anchor housing in the hull) to the cable lifter (or gypsy). The gypsy is visible in the background and is driven by an electromotor. This is the same electromotor that drives the mooring winch next to it via an additional gear. That gear makes the gypsy turn slower than the winch, however, at much greater strength.

The roller assembly is in the foreground and the gypsy is in the background.

The mooring lines are also sometimes called hawsers. The interesting thing is that this is one of the first things that became regulated in the shipping industry under influence of the class societies. Being able to anchor and moor ships safely, even in extremely adverse weather conditions, enhances safety, and that directly influences the insurance premiums charged.

Holland America Line is a member of the Lloyd’s Register class society. Lloyd’s printed the first Register of Ships in 1764 to give underwriters and merchants information about the condition of the vessels they insured and chartered. The top classification of A1, from which the expression meaning first class or top of the line is derived, first appeared in the 1775-1776 edition of the Lloyd’s Register.

The chain locker where the anchor chain is stored and the hawse hole through which the chain is fed.

The numbers, weights and sizes of the anchors, chains and hawsers are regulated by the tonnage for equipment, as obtained from the following formulae:

Tonnage under upper deck equals LxBxDxC/100, with C representing the coefficient of displacement taken at 0.8 of the molded depth, with 0.75 as a maximum (basically, how much the shape of the hull varies from true block form). Addition for superstructures equals lxbxdx0.75/150.

Thus, the class society (Lloyd’s Register in our case) uses these equations to arrive at the Equipment Number. You then use the EN to look up in a table exactly the number, sizes and weights for anchors, chain and hawsers for a ship.

Traditionally ships were anchored using large hemp hawsers called cables. In 1836 the use of iron chains had become so common in the English merchant service and their superiority so well recognized, that the underwriters ceased to charge a higher insurance rate for vessels using iron chain. In 1840 side welding of chain was introduced in England, and from that time English chains of 1-7/8 inches and larger have been side welded.

Lloyd’s Register of Shipping augmented its rules in 1846 so that thereafter all chains of classed vessels were tested and stamped on each end to indicate load capacity. In 1853 Lloyd’s rules made it mandatory that, before a vessel could be classed, the test of the chain cable had to be certified, and in 1858 Lloyd’s issued rules regarding the length and size of chain cable. Lloyd’s progressively stiffened their rules regarding methods of manufacture and testing, resulting in the Anchors and Chain Cables Act of 1899, which with only a few amendments is still the basis of present-day testing procedures.

Something is missing from this picture ….

Some more historical dates about chain anchor cables:
1808: Wrought-iron cables are first recorded. They were made by Robert Flinn, a blacksmith, and used on the ship Ann & Isabella.
1813: Iron cables are recorded with other particulars of the ship.
1834: Lloyd’s Register rules state the length of cable to be supplied, but do not mention sizes or tests, however, they call for a reduced length for iron cables compared to hemp cables at a 6:7 ratio.
1846: Rules specify that cable must have been tested and have the test load stamped on it. The surveyors were to see the certificates.
1853: Certificates of test of chain cables are required to be produced prior to classification.
1856: The rules state that the length and condition of chain cables were to be ascertained by removal from the locker at each special survey.
1890: Lloyd’s Register rules sets a table of minimum weights for cables.

Happy Thanksgiving

Eurodam News Blog is taking a well-deserved break over the four-day Thanksgiving holiday in the United States. We will return Monday, Nov. 26, with more news and info about Eurodam and the people who will compose its crew.

Meet the Chief Electrician

Chief Electrician
Ed van Weijen

As chief electrician of Eurodam, Ed van Weijen is responsible for all electrical systems on board, including the propulsion plant, automation plant, the 11-kilovolt main switchboards and the low-voltage distribution systems. He also looks after all electrical aspects for the hotel side, including the galley equipment and elevators, and he works with the information technology officer and broadcast technician on the shipboard broadcast and communication networks.

Van Weijen moved to the yard in June 2007 and essentially became the yard electrical project manager. Working hand-in-hand with Blog Board member Pieter Rijkaart and Eurodam Project Manager Henry Veringa, he is responsible for ordering all of the electrical components for the ship as well as overseeing the construction of the vessel, which includes the factory acceptance tests prior to delivery.

After a soccer injury side-lined the Netherlands native, he earned a degree in electronics and a degree in electrical installations. Soon thereafter he joined Holland America Line and has been with the company for more than 15 years. In addition to sailing on all of the different class vessels as chief electrician, he has been involved with a number of newbuilds, including Ryndam, Veendam, Volendam, Zaandam, Zuiderdam and Westerdam.

When not at sea or in the yard, van Weijen splits his time between the Netherlands and the United States, but spends most of his time in Big Sur, Calif., with his girlfriend, Mary.

He says he enjoys teaching soccer to the local kids, splitting fire wood and working on his house. He’s also involved with the Monterey Jazz Festival, the longest running jazz festival in North America.

Sustainable Teak for Decking Comes from Thailand

Teak is a fast-growing, renewable resource. This is a forest of 2-year-old trees.
Not too long ago, we ran a post courtesy of Blog Board member and Eurodam Chief Officer Andre van Schoonhoven about how they install the teak decks on the ship. That prompted a question from a reader about where the teak decking comes from.

Andre found the answer for us: “The teak comes from Santi Forestry in Thailand, and is shipped under coding Green Point 5, which means it comes from an ISO-certified [International Standards Organization] plantation, where for every tree cut three new ones are planted and then later thinned out.”

Santi Forestry has been around since 1972 and focuses on the efficient use of harvested timber to extract the maximum product from the raw material as well as responsible environmental stewardship. Here’s how the company describes its practices on its Web site:

All of the products are manufactured from forest trees grown in managed and sustainable yield programs, preferably from Southeast Asian countries. Every shipment of logs is carefully inspected during the procurement process to identify and classify its origin, form, grade, and defects. Only logs from qualified sites with quality that meets our standards are selected.

SFG supports sustainable forest management and other forest conservation programs. We also support efforts in Southeast Asian countries that promote forest certification and development process, in line with ITTO, the Forest Stewardship Council, and ISO standard for sustainable forest management. In addition to protecting the source of our raw materials, the SFG’s quality production methods and ingenious product design ensure a minimum usage of the natural resource for maximum benefit.

Lifeboat Davits Put to the Test

Left, the weight is connected to the davit arms. Right, the breaks are tested.

Recently we performed both static and dynamic weight tests on all of Eurodam’s lifeboat davits to ensure they pass the SOLAS regulations (Safety of Life at Sea).

For a tender it is:
Maximum number of persons on board: 150
Weight of maximum number of persons: 150 x 75 kg (165.35 pounds) = 11,250 kg (24,802 pounds)
Fully equipped lifeboat: 12,350 kg (27,227 pounds)
Total: 23,600 kg (52,029 pounds)

The test is done at 1.1 times the weight they will carry to ensure the complete construction is solidly connected to the side of the ship (the davit arms themselves are tested at the factory at 2.2 times the weight they will ever have to carry — so much stronger).

The yard connected to the lower blocks a big steel box that is filled with water so it totals the desired weight: the weight of the box and the water 23,600 kg (52,029 pounds) multiplied by 1.1 = 25,960 kg (57,232 pounds).

The weight is read by the crane driver, who has a strain gauge in the control cab of the crane. He radios the information down to the people on deck. The crane then slacks its hoisting wire so the davits take the strain. This is called the static test.

For the dynamic test, the manual brake on the winch is lifted and the box is lowered the same way you would lower the lifeboat (or tender, in this case). The lowering speed is then measured, since this needs to be between .75 and 1.30 meters (2.5 and 4.3 feet) per minute. If the boat lowers too slowly or too fast, the centrifugal speed control brake needs adjusting.

Then, after about six seconds the manual brake is thrown back — full force — and the lowering stops. This is rather spectacular, with the box bouncing up and down, and the bulkheads where the sheaves are connected flexing back and forth. Nobody envies the man who has to operate the brake!

Designing Women Give Staterooms a New Look

Left to right: Nancy Burfiend, Devin Fitzpatrick and My Nguyen

When Seattle-based NB Design Group was awarded the project of furnishing Eurodam’s staterooms, not only was it the first time Holland America Line chose a design team from within the United States, but they also were given a key task: completely change the look from all of the other Holland America Line ships.

ENB recently sat down with Nancy Burfiend, owner and principal in charge of NB Design Group, to find out what approach she took and how she met the challenges of designing for a cruise ship.

Burfiend and her team, which includes My Nguyen and Devin Fitzpatrick, decided to go for a boutique hotel look with clean lines and simplified designs. They took a logical approach when choosing the décor.

“Inside staterooms should be light and airy, so we went with a blonde wood,” said Burfiend. “On the outside staterooms we went with a cherry wood that is more luxurious, and we used warm and inviting fabrics. Because the suites are the most expensive, we went with a dark wood that feels the most rich and sophisticated.”

The firm came up with nine schemes — three each for the inside, outside and suite stateroom categories. Once the selection was narrowed down to one for each category, the team put together color boards and computer-generated renderings of the staterooms.

Burfiend said because this was the first time NB Design had worked with a cruise line, the biggest challenge was becoming familiar with all of the International Maritime Organization regulations that govern construction materials, fabrics and fixtures. Fortunately, Nguyen had worked with Holland America in the past, so it wasn’t completely unfamiliar territory.

“To work within the regulations, we find things we like and then go to companies that can reproduce them in the fibers and materials we need to meet IMO standards,” said Burfiend. “A lot of the things in Eurodam’s cabins are custom-made here in the United States or in Europe.”

After minor revisions, the schemes were approved and the team began acquiring the fabrics and woods they needed. Burfiend said that when selecting decor for the staterooms, they also have to be sure that they are getting the best price, the items can be mass-produced and they are easy to assemble.

So when you’re resting comfortably in your stateroom aboard Eurodam admiring the décor, you have NB Design Group to thank for the relaxing, comfortable atmosphere.

Making Progress on the Lido

Despite the rainy weather, Blog Board member Andre van Schoonhoven managed to capture these images of the Lido area to show construction is progressing.

The midship pool was filled with water yesterday for testing. Once the tile and deck are in place we expect it will look more like a swimming pool and less like a cistern.

The aft Lido pool area, offering panaoramic views off the stern, is a popular place to relax. Once construction is complete, the scaffolding and canopy will be removed, and all of the other parts currently stored on deck will have found their place in the giant Eurodam puzzle.

The Lido Bar is located next to the midship pool under the magradome. Once complete, the bar will service guests at the pool area and have stools for those who choose to enjoy a beverage out of the sun.

It’s Official — Eurodam Naming to be Held in Rotterdam

This just in — Holland America Line will hold the official naming ceremony for Eurodam, July 1, 2008, in Rotterdam, the city where the 135-year-old Dutch company was founded.

The naming will be held near the company’s original headquarters, now the Hotel New York. A number of events and activities are being planned that likely will involve past guests, travel agents, former employees, local dignitaries and journalists, among others. The ship arrives June 29 for four days of celebration and departs July 2 on a three-day prelude cruise.

To reach Rotterdam for the naming, Eurodam will sail from Venice, Italy, to Southampton, England. Events will be held in both cities to showcase the ship. Fincantieri shipyard and Holland America Line will celebrate the ship’s completion in Venice. In Southampton, travel agents, past guests, media and local dignitaries will visit the ship during luncheons, overnights events and receptions.

A day after the naming ceremonies, Eurodam embarks on a prelude cruise and maiden voyage. The three-day prelude cruise departs July 2 sailing to Copenhagen, Denmark, and calling at Hamburg, Germany. The 10-day round-trip maiden voyage departs Copenhagen, Denmark, July 5 and calls at Oslo, Ålesund, Vik, Flam and Stavanger, Norway; Newcastle Upon Tyne, England; and Edinburgh (via South Queensbury) and Invergordon, Scotland. The cruises can be combined into a 13-day voyage.