September 30, 2024 The Right Shipwright

Volume 27 | Issue 3

Florida Gulf Coast-based ESG designs and constructs world class vessels for national defense and commercial clients.

Click here to read the complete illustrated article or continue below to read the text article.

Back in 1976, Brian D’Isernia couldn’t find a shipbuilder to get the type of vessel he wanted for his commercial fishing fleet. So he started Eastern Shipbuilding Group (ESG) to spec, design, and build the ships he wanted.

Today, Florida panhandle-based ESG is one of the most diverse shipbuilders, the only Tier 2 shipbuilder capable of fulfilling naval Tier 1 construction projects, with a portfolio of over 350 vessels delivered for both commercial and government customers, the largest private sector employer in northwest Florida, and the 2017 recipient of the U.S. Department of Homeland Security Small Business of the Year award.

ESG engineers and builds a variety of large and complex commercial ships, encompassing fishing vessels, ferries, tugs and tugboats, fireboats, offshore supply vessels, and special vessels such as dredge barges. Most recently, the shipwright was selected to construct four new escort tugs for Saltchuk Marine, with delivery expected in 2026. Another new contract is with the Fisher Island Community Association to construct the FALCON vehicle passenger ferry to provide safe and comfortable transportation to Fisher Island residents. And last May, ESG launched the 302-foot passenger and auto ferry LONG ISLAND for eventual operation by the Bridgeport and Port Jefferson Steamboat Company for transit across Long Island Sound.

On the government side, ESG was selected to design and build first-in-its-class 360-foot Heritage Class Offshore Patrol Cutters (OPCs) for the U.S. Coast Guard, the largest single contract awarded in the history of the service. OPCs can deploy independently or as part of task groups, serving as a mobile command and control platform for surge operations such as hurricane response, mass migration incidents and other events, as well as help regulate and protect emerging commerce and energy exploration in Alaska.

While work had just started in 2018, Category 5 Hurricane Michael caused significant damagenot only to the shipyard, but to the homes of ESG workers. As a tribute to the dedication of ESG and its workforce, construction still resumed shortly thereafter and the first OPC, the USCGC Argus, launched last October.

In a modification to the original contract, ESG was awarded a large addition of scope for the design, installation, and integration of the Multi-Mode Radar (MMR) and AEGIS Baseline 9G weapon system. This implementation speeds delivery and reduces additional costs that would have been incurred to retrofit the weapons systems.

Citing recent studies, ESG estimates this Coast Guard Contract alone will create 10,304 direct, indirect, and induced jobs from 2016 to 2028.

Impacts from this job creation will be felt not just throughout Florida, but across the U.S.

In July, ESG in a strategic partnership with Royal IHC won a $257 million fixed price contract from the U.S, Army Corps of Engineers (USACE) to design, construct, test, and deliver a new medium class hopper dredge vessel. The highly automated hopper dredge will enter the USACE’s Ready Reserve Fleet to provide for safe, reliable, effective, and environmentally sustainable waterborne transportation systems for vital national security, commerce, and recreation needs. The vessel will replace the 57-yearold Dredge McFARLAND based in the Corps’ Philadelphia District.

Tier 1 Business Systems

“Tier 1 shipyards are directly part of the government’s naval shipbuilding industrial complex,” CEO Joey D’Isernia explains. “We’re unique as a Tier 2 commercial shipyard that our business systems are DCMA (Defense Contract Management Agency) and DCAA (Defense Contract Audit Agency) certified, making us the only Tier 2 shipyard able to properly manage complex defense contracts. Other shipyards don’t want to go through the certification process and aren’t interested in government defense work. That makes us well-positioned to meet the rising demands of future Navy and Coast Guard projects.”

In anticipation of future work, ESG most recently commenced the second phase of significant infrastructure improvement at its government facility. The work includes constructing 1,000 linear feet of additional bulkhead and berthing space and increasing the total launch way length to over 500 feet to accommodate larger vessels. These infrastructure enhancements further increase ESG’s capabilities to build and deliver multiple ships per year and support future Department of Defense (DOD) shipbuilding goals.

“ESG investments are in support of the Navy’s initiative to expand its industrial base so as to better meet the demands of our national defense strategy, specifically to respond to potential threats from China,” D’Isernia notes. “There are obvious concerns about the U.S. military’s readiness should conflict break out in the Pacific; furthermore, the consolidation of shipyards in the U.S. is raising further concerns about production capacity. ESG has the capabilities and experience to help meet these demands of the USN and USCG moving forwards.”

Continual Investment

He adds that continual investment in shipyard facilities is something ESG has done since “the ground up.” D’Isernia explains that, “Shipbuilding has long lead times and new contracts are always adding requests for additional capabilities, notably improved technologies, electrification and greater fuel efficiency. You just can’t sit with what you have and expect to remain competitive.”

ESG operate three shipyards, two in Panama City and one in Port St. Joe., accounting for about 400 acres of operations comprising about 4000 linear feet of bulkhead on the Gulf Coast. The shipbuilder currently employs 1500 direct and subcontract employees, up from about 750 in 2018, with expectations of adding new positions as it wins new contracts.

Like any manufacturer, finding both trades and professional talent is challenging for ESG, though it has a geographic advantage. “The primary industry in the Gulf Coast is tourism, “D’Isernia notes. “The only other major shipbuilders are in Mobile, Alabama, about three and a half hours to our west, and to a lesser extent Jacksonville four hours to our east. Consequently, there’s not much job movement in our immediate area. ESG is insulated from competition by our geographic separation from other shipbuilding labor markets.

However, there is still a need to cultivate a skilled talent pool. “We look to partner with trade schools, high schools, colleges, and universities, state and local agencies, to interest people in rewarding shipbuilding careers,” D’Isernia says. “We also recruit nationwide for both tradespeople and professional categories. Right now we estimate that in the next 18 months we’re going to need to expand our workforce to close to 1800.”

Full Staffing Mitigates Risk

Every manufacturer requires sufficient staffing. But in shipbuilding, full and capable staffing is key. “For customers, it mitigates risk” D’Isernia says. “These are complex, custom projects, requiring a highly skilled and knowledgeable workforce. ESG customers can be confident we have experienced people who can do the job correctly.”

D’Isernia adds that, like other manufacturers, ESG is employing robots or other automation where it can, but shipbuilding remains a labor-intensive craft. “Automation was traditionally seen as a way to reduce your labor force, but these days it’s a tool to help address the shortage of skilled labor. We do have robotic welding and an automated panel line to utilize as practical, but shipbuilding is one of the last customized fabrications. Every vessel is uniquely different. It’s not like where you can automate a process because you are making the same widget over and over again.”

He does note that the ability for ESG shipyards to handle multiple projects at once is an advantage. “Every vessel build is going to have lag times, so it’s important that we always have the flexibility to work on many various designs as needed.”

Value Add

He adds that while price is often a primary determinant of RFPs, even government contracts take into account a mix of factors. “One of the grading criteria in addition to price is past performance and how delivery represents the best value.” D’Isernia says. “Generally, there are four to six prime factors considered in awarding a contract.”

While ESG continues to grow with both commercial and government awards, the company is embarking on a new expansion. “We’re looking to make full service repairs a bigger piece of our business,” D’Isernia says. “As part of a $55 million investment, currently dredging at our Gulf County location to eventually accommodate ship repairs. We’re about three to four years out to completion.”

As indicative of its commitment to quality and on-time delivery, ESG is ISO 9001 certified. All ESG facilities are also ISO 14001 certified. “There’s a big push towards to reducing ship emissions and moving away from diesel to LNG (Liquid Natural Gas) and hybrid battery technologies,” D’Isernia says. “We are proud to be leaders in this move towards reduced and even zero emissions. We have invested in the necessary equipment, processes, and procedures to minimize our environmental impact.”

He adds, “Our customers depend on us to get the job done and deliver the results they need. In particular, we look forward to working with the Navy and Coast Guard to better prepare our fleets to counter the growing threats of our adversaries. At the same time, today’s commercial vessels are equally sophisticated and important to ensure safe water transport. Selecting the right shipyard is crucial for any ship owner. ESG is a proven reliable partner with a record of successful engineering and construction of large, complex ships, on-time and on-budget.”

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