TOTE suspends construction of four newbuilds at Philly Shipyard
U.S. shipping company TOTE said it will not move forward with its Letter of Intent with Philly Shipyard, Inc. (PSI), which called for the construction of up to four containerships custom-built for the Hawaii trade. "The plans to enter the U.S. mainland to Hawai'i containership service are on hold as a result of its Phase 1 technical review of Piers 1 and 2 in Honolulu Harbor. As a result of this delay, TOTE and Philly Shipyard will not extend their Letter of Intent (LOI), which is set to expire on January 31, 2018," said a press release. The LOI, which was signed by TOTE and PSI in July 2017, contemplates the construction and sale of up to four state-of-the-art, cost-effective and eco-friendly vessels, with planned deliveries for the first pair (Hulls 031-032) in 2020 and the second pair (Hulls 033-034) in 2021. Due to the scope and timing of the required upgrades and improvements to Piers 1 and 2, the LOI will not be renewed. The project to build Hulls 031-034 as containerships is being put on hold. PSI is suspending substantially all construction-related activities on these vessels, including design, planning and procurement work. As previously disclosed, PSI has placed orders for all major long-lead items for the first pair. If these orders were to be cancelled, then the cancellation costs would be substantially lower than the value of the orders placed. PSI has delivered 28 vessels in its 20 year history, including four vessels for use in the Hawai'i containership trade which were delivered in 2003-2006. Currently, PSI is building two 3,600 TEU containerships for use in the Hawai'i trade for Matson (Hulls 029-030).