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Frost&Sullivan MI: High Speed Vessels_Apr 2013


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New Market Insight (MI) from Frost & Sullivan, High Speed Vessels: The Future of Naval Logistics, finds that the Joint High-Speed Vessel (JHSV) offers notable project budget efficiency. It has allowed the U.S. Navy to quickly gain a cost-effective and operationally efficient capability, while minimising project production outlays and financial risk.

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Frost&Sullivan MI: High Speed Vessels_Apr 2013

  1. 1. April 2013Dominik Kimla, Industry Analyst – Aerospace, Defence & Security“50 Years of Growth, Innovation & Leadership”High Speed Vessels:The Future of Naval Logistics
  2. 2. High Speed Vessels:The Future of Naval LogisticsMarket Insight© 2013 Frost & Sullivan Page 2IntroductionWith three-quarters of the planet covered by water; the most dynamically developing region,Asia Pacific (APAC), both in terms of economy and military strength, spread across the PacificOcean; and the intense situation in the region over the North Korean nuclear program andintensive armaments efforts of China, military planners need to be prepared for the potentialworst-case scenario. Undoubtedly, due to geographical conditions of the region, any militaryoperation in APAC will have to contain a substantial naval logistic component. In this context,one of the most essential issues for decision-makers and commanders is to sustain militaryoperations in a more cost-effective and efficient way, whilst improving missionresponsiveness. Due to the fact that currently every military branch, including the Navy, hasto navigate within the framework of defence budget constraints and time pressure, thefollowing Market Insight provides a brief analysis of the U.S. Joint High-Speed Vessel (JHSV)concept as a potential (though partial) solution to naval logistics challenges in the APACregion.The JHSV is a joint programme of the U.S. Army, Navy and Marine Corps to sustain a fast andefficient sea transport for troops and equipment. With an aim to provide an intra-theatrelogistics solution, the decision-makers at the Pentagon chose a low-cost, commercial off-the-shelf platform offered by Austal, an Australian-based shipbuilding company. The JHSV is aversatile, modular, aluminium catamaran-style hull.The main advantage of the multihulls vesselis a substantially larger deck area compared to a monohull ship, increased transverse stability,and higher average speed.From a military logistics point of view, the JHSV is capable of transporting a company size unitwith equipment, a full infantry battalion (as a troop transport), or 635 tonnes of payload, andtransport it in-theatre within 1,200 nautical miles of range at an average 35 knots, almosttwice as fast as current ships. It can offload the logistics at even the most basic portsinfrastructure. This makes JHSV an essential tool for logistics support of various operations,including rapidly deploying response forces to distant areas, transporting cargo at high speedinto an active operating theatre, conducting relief operations in small or damaged ports,responding to natural disasters, providing humanitarian assistance, and participating inmultinational operations and counter-piracy missions. Furthermore, JHSV is able to interactwith cargo ships at sea, providing logistics scalability and force projection over a largercombat footprint. Also, the shallow-draft capabilities of JHSV give it multi-sea access andincreased littoral operations, which are particularly important assets in the APAC region,where there are many areas with shallow waters. Finally, the JHSV will also support the U.S.sea-basing concept, wherein it will be used as a vital instrument to transport troops andcargo from sea base to ports or areas of operation.
  3. 3. Procurement Shift: Low-Cost & Commercial Off-the-Shelf ApproachThe Joint High-Speed Vessel programme is based on proven commercial technology ofAustal’s commercial high-speed vessel: MV WestPac Express (HSV-4676). The catamaran is ahigh-speed ship built by Austal in 2001 and chartered for the Marine Corps LogisticsPrepositioning Ship Program by Military Sealift Command. The ship was extensively used,demonstrating fast-deploying abilities for both troops and cargo. Based on the operationalexperience from MV WestPac Express and other high-speed vessels such as HSV-X1 JointVenture, HSV-2 Swift, and USAV Spearhead (TSV-X1), the Pentagon selected Austal USA andgranted a contract for the Joint High-Speed Vessel in 2008.The direct consequence of a low-cost, commercial off-the-shelf approach is the projectbudget efficiency. Based on the MV WestPac Express concept, the Navy quickly gained a cost-effective and operationally efficient capability.The project did not require spending money onan expensive research and development phase or development of new technologies, inessence minimizing the project production and financial risk. Additionally, the expectedmaintenance cost of JHSV is assessed to be cost-effective, providing a low-cost solutionthroughout the life of the platform. The ship’s core crew is limited to 21 people and thevessel is powered by efficient MTU 8000 diesel engines, which are characterized by lowoperating costs and long service intervals. Additionally, limited crew on board translates intoa low life cycle cost for JHSV because personnel are the largest single life cycle cost.The perannum cost of one sailor is approximately $150,000. Due to the commercial approach, theprogram is running smoothly and on budget, which is particularly important with the currentdefence budget.However, some industry experts raised potential challenges with operation and maintenance(O&M) of aluminium-made vessels.There are few aluminium military vessels in line, thereforethe maintenance experience is rather limited among naval shipyards, but on the commercialside, aluminium ferries have been used for about 20 years without any significant issues.Market PotentialThe JHSV is, for now, primarily a U.S. concept, with the country ordering 10 vessels; however,according to Frost & Sullivan research, the market potential for high-speed logistics vesselsis substantially bigger. Over and above additional orders from the U.S. military, otherpotential customers can be found primarily in the APAC region. It is expected that the closestU.S. allies in the region—South Korea, Japan and the Philippines—are expected to follow theU.S. path and implement similar types of vessels into their fleets to keep up with the futurecommon air-sea operations of the U.S. Navy. Then the scattered island countries, such asIndonesia and Malaysia, will be potential customers for the high-speed logistics vessels.High Speed Vessels:The Future of Naval LogisticsMarket Insight© 2013 Frost & Sullivan Page 3
  4. 4. In the mid- and long-term perspective, this type of vessel would be an effective capability tohave for the European Union multinational, rapid humanitarian and crisis managementmissions conducted in the framework of Common Security and Defence Policy (CSDP).Additionally, from the European end-user perspective, it should be considered whether thehigh-speed logistic vessels, similar to JHSV, could be commonly operated/managed by fewnavies as a pooling and sharing asset across EU/NATO countries, securing critical sea routesand providing rapid-response logistical support in disaster-hit areas.On the industrial side, a similar concept was proposed by Rolls-Royce: Fast Naval LogisticShip and Intra-Theatre Logistic Ship. Potential European customers interested in high-speedvessels could look for a solution offered by domestic companies, such as Rolls Royce, or havework-sharing agreements between international suppliers, such as Austal and select Europeanshipyards.ConclusionThe Joint High-Speed Vessel is an interesting example of a low-cost, commercial solutionapplication in a naval environment. Due to budget constraints, it is expected that naviesaround the world will be leveraging COTS solutions and other commercial approaches morefrequently to provide the necessary naval capabilities.From the operational perspective, JHSV is a versatile tool that can be used to provide logisticsupport in various types of missions, including humanitarian relief, counter piracy missions,and rapidly deploying forces in-theater for military operations. Frost & Sullivan understandsthat the introduction of JHSV will enable enhanced and rapid naval operations. This isconsidered a tactical advantage, which in the mid and long term, could lead to adoption offaster surface combatants similar to Littoral Combat Ship or the Austal’s Multi-Role VesselTrimaran concept capable of operating at the same level into naval fleets.High Speed Vessels:The Future of Naval LogisticsMarket InsightAbout Frost & SullivanFrost & Sullivan, the Growth Partnership Company, works in collaboration with clients toleverage visionary innovation that addresses the global challenges and related growthopportunities that will make or break today’s market participants. For more than 50 years,we have been developing growth strategies for the Global 1000, emerging businesses, thepublic sector and the investment community. Is your organisation prepared for the nextprofound wave of industry convergence, disruptive technologies, increasing competitiveintensity, Mega Trends, breakthrough best practices, changing customer dynamics andemerging economies?Contact Us: Start the discussionCONTACT US +44 (0) 20 7343 8383 • •