WITH its new fast ferry – the five-storey, 86-metre Spirit of Ontario 1 – officially clocking 46.5 knots, or 86.2 kilometres an hour, Austal is primed to flex some muscle in the US.
Next month the $A80 million catamaran will be delivered to its new owner/operator, Canadian American Transport Systems, in upstate New York, where it will service a new high-speed car and passenger ferry route between the US and Canada.
But while the vessel’s design is pretty much standard fare for the successful Western Australian shipbuilder, the CAT contract is a lot more strategic than just the sale of a ferry or maybe two.
Firstly, the international operating route conveniently allows Austal to sidestep American laws requiring that cargo moving between US ports be carried in vessels that are US-owned, built and crewed.
That makes it Austal’s first direct sale into the North American market.
Secondly, but perhaps more importantly, as Austal eyes off lucrative US Navy contracts for the first time it will have a big, high-speed example of its work strategically located in the northern US.
Although the US Navy has already heaped praise on Austal’s high-speed theatre support vehicle, the 101-metre Westpac Express, this vessel is based in Japan and not readily available to US military decision-makers.
“It’s going to operate in the area where the potential military orders are for us,” Austal chairman John Rothwell said.
“The boat will be right under the noses of the American defence people.”
And this may have something to do with the use of four 11,000 horsepower, MTU Detroit Diesel engines in the Spirit’s stern.
“It has the largest diesel engines that have ever been made for us – so it is going to be a particularly good demonstrator for us,” Mr Rothwell said.
En route to Rochester, Austal’s US subsidiary Austal USA will parade the high-speed vessel through prime US Naval territory, including waters in and around Hawaii, Washington DC and New York.
Austal is keen to flaunt its talents in the US after Austal USA, which has struggled to gain a foothold, recorded a $12.9 million loss last financial year.
“[Austal USA’s loss] last year was a little heftier than we expected and we have made a change in management there,” Mr Rothwell said.
“It was always going to be negative for a few years, but the prize is pretty big at the end of it.
“And that’s what the target has been since day one; the reason why we went to the US was to try and win defence work.”
Despite the loss, Austal USA was recently one of three bidders short-listed by the US Navy to submit an advanced design for its new Littoral combat ships.
If selected, the deal could eventuate into part of a lucrative 60-boat contract falling Austral USA’s way and put paid to Austal’s ‘greenfields’ US venture.
However, not forgetting CATS, the deal is not just about the US Navy.
Carrying 774 passengers and 238 cars, the Spirit of Ontario 1 will open up the newest border crossing between the United States and Canada in 50 years and is planned to cut travel time between the two countries by 50 per cent.
This is why Austal is banking on the new US/Canadian route proving profitable – increasing the likelihood of CATS contracting Austal to build another vessel, as well as encouraging the interest of other potential American clients.
Although American law prevents Austal selling its ferries into the domestic market it is understood the preventative law – the Jones Act – was discussed in the US/Australia free trade negotiations, albeit at a lower priority than other issues.
At this stage the implications for Australian ship exporters remain unclear.
But in what may be a sign of better times ahead, Austal USA last month announced it had signed a conditional agreement with an American firm to supply two large high-speed ferries for a proposed inter-island service in Hawaii.
