Deal in the Works to Bring Mammoth Cruise Ships into the Bay

When the Queen Mary 2 steams into Pier 27 on Feb. 4, she will truly lord over the Embarcadero.

The QE2 towers above Pier 35 on her recent visit to San Francisco. Photo by: Joel Williams

By JB Powell
Published: February, 2007 

When the Queen Mary 2 steams into Pier 27 on Feb. 4, she will truly lord over the Embarcadero. At 1,132 feet long and over 200 feet high, the Cunard Lines’ flagship will be the biggest passenger liner ever to docked in San Francisco. But officials at the Port of San Francisco and BAE Systems, the new owner of San Francisco Ship Repair, are hard at work to bring more mega-sized cruise vessels into the Bay. In as little as six to eight months, San Franciscans could see a steady stream of newer, larger cruise ships, as well as aircraft carriers, pass beneath the Golden Gate for maintenance and repair.

Bay Crossings has learned of ongoing negotiations between the Port of San Francisco, BAE Systems, and the two biggest cruise ship companies in North America, Royal Caribbean International and Carnival Cruise Lines, to expand the Port’s dry dock facilities to handle so-called post-panamax cruise ships. The QM2 and Royal Caribbean’s new Freedom Class vessels qualify as post-panamax, too large to fit through the Panama Canal. The Port owns the land and the two floating dry docks at Piers 68 and 70 and leases them to BAE, a British defense contractor who bought out the previous tenant, United Defense Industries, in 2005. The firm also runs shipyards in San Diego, Hawaii and Norfolk, VA.

They [Carnival and Royal Caribbean] have expressed an interest to us to lengthen and widen [our facilities], said Gerry Roybal in the Port’s Maritime Division.

The Port’s drydock #2 is already the largest floating dry dock on the West Coast. Carnival, Royal Caribbean and other major cruise ship companies currently use it for the majority of their west coast dry docking operations. But, according to Roybal, it would need six to eight months of renovation to handle the new class of mega-ships coming into service.

For the cruise companies to make the commitment [to deploy post-panamax ships on the West Coast], they have to have a post-panamax dry dock facility up and running within a year and a half, Roybal said. Federal law mandates that all commercial vessels sailing in American waters must be dry docked twice every five years for routine maintenance as well as for safety and performance testing. Because the newer ships are too large to sail through the Panama Canal, the cost of hauling them all the way to the East Coast or Asia for these mandated dry dockings would be prohibitive.

A facility in Victoria, BC is technically large enough to fit these monster vessels, but it is a so-called graving as opposed to a floating dry dock like those at Piers 68 and 70. Rather than raising a ship to the surface to work on it, graving dry docks keep ships on the floor of the harbor and simply pump out the water, making them impractical, and probably unsafe, for ships the size of the Queen Mary 2. In addition to these concerns, the cruise industry would prefer to perform repairs and maintenance in San Francisco because of The City’s increasing importance as a port of call.

Cruise ship traffic in San Francisco has doubled in the past four years to nearly 100 visits and 250,000 passengers per year.

Along with that increase in dockings, cruise ship repair and maintenance has become an important aspect of BAE’s business. Last year, eight cruise ships went into dry dock at BAE’s yard. By contrast, in the year 2000, only one passenger vessel put in for maintenance. Each cruise ship contract, generally, brings in between one and five million dollars. BAE’s lease agreement with the Port of San Francisco awards the Port 3.3 percent of the yard’s revenue in rent. Over the last five years, the Port has reaped an average of just over one million dollars per year from that agreement.

For Roybal and the Port of San Francisco, expanding their dry dock facilities is an important step to continue attracting cruise companies to The City. The logic [of expanding our facilities] is, they’ll be launching more cruises in and out of San Francisco because [it will be] easier for them to take their ships off-line for maintenance here.

Military ships are BAE’s other main client in San Francisco. Ira Maybaum, the facility’s president and general manager, wrote by email, In the past few years, [we have had] a fairly even split between government and commercial work. In the fall of 2006, the Military Sealift Command ship USNS Rainier went into dry dock for a 94-day renovation that was worth almost seven million dollars. Roybal believes expanding dry dock #2 could have the added benefit of luring larger military ships, even aircraft carriers, into San Francisco for repair.

The negotiations are still in the very early stages, despite the cruise company’s insistence on having the larger dry dock ready within a year and a half. According to Roybal, Carnival and Royal Caribbean have indicated a willingness to invest their own money into the deal, but the terms of such an agreement have not been worked out.

Officials at Carnival and Royal Caribbean could not be reached for comment.

The Queen Elizabeth 2 slipped into San Francisco Bay under the cover of darkness early in the morning of Jan. 24. It brought some unwanted cargo: a highly contagious norovirus, which infected over 250 of the 1,600 passengers onboard. Most passengers had recovered their health by the time the QE 2 arrived at Pier 35. The 963-foot ship stayed in port for less than a day. Her royal sister, Queen Mary 2, the largest passenger ship in history, will dock in San Francisco on Feb. 4. Photo by: Joel Williams