New company launched by towing industry veterans

Busy days in the tug industry naturally lead to the establishment of new tug companies. This time it’s a classic start-up story courtesy of Dominique and Rachel Smith, both veterans of the towing industry. They have established a one-boat towing company called TradeWinds Towing LLC, based in St. Augustine, Fla.

As of early June, Trade-Winds had just completed its first towing assignment with its newly acquired 2,400-hp, twin-screw, shallow-draft tug Miss Lis with reasonable prospects for continued towing assignments in the coming months. So far everything is working for this 6-month-old company operated by a brother and sister who literally grew up on tugboats and in an entrepreneurial environment.

Dominique and Rachel Smith are two of the five children of Latham and Elsbeth Smith, founders of Smith Maritime in Green Cove Springs, Fla. Their father is especially well known in the maritime industry for producing a series of uniquely designed triple-screw towing vessels that have ranged over all three U.S. coasts and across oceans on innumerable towing assignments, including several with Dominique as captain.

“My father is an excellent naval architect and tugboat man, and I learned a lot from him over the years, especially since I grew up on one of the tugs,” said Dominique Smith. “What I learned from my father was as much about engineering as anything else,” he added. “I was down in the engine room as soon as it was safe to be there, and I’ve kept my head in tugboats all of my life. A good basis in engineering is something that carries me through countless situations today in a very valuable way. I think it’s so important for a captain on these smaller tugs to have a good sense of machinery
and engineering.”

Dominique first attained a 100-ton captain’s license at 21, after complaining endlessly that all of his sea time accrued before the age of 16 (there was a lot of it) was not counted by the Coast Guard. Today the 31-year-old captain turned business owner holds a 1,600-ton license with towing endorsement and a world of associated worries.

In between working for his father’s company, he recently put in three years as vice president and general manager of McAllister Towing and Transportation Inc. of Baltimore. He has also been employed by Resolve Marine Group and a few other towing companies.

“My brother has always been more of a risk taker,” said Rachel Smith, 44, who previously worked as fleet manager for the family company, as well as managed a liner service for TransAtlantic Lines. She is currently working toward her master’s degree in marine policy at the University of Rhode Island.

“My brother might look at this differently and in a more practical way, but for me the hardest part was just getting up the nerve to actually do this. I had to sell all of my stocks in savings and make a huge financial commitment, and that is definitely something that gets me to worrying. I worry about a lot of things. Doing something like this is definitely not for the faint of heart.”

The brother-sister duo has thus far invested more than $1.5 million in their venture. More than two-thirds of that went toward the purchase and preparation of the new tug, Miss Lis, named after Dom-inique’s wife Elisabeth. They located their tug through the brokerage firm Marcon International and purchased the 82-foot vessel (ex-Kari-A, ex-Marine Pioneer) from “Andy” Anderson of Anderson Tug & Barge Co. in Seward, Alaska.

A week after taking ownership of the vessel in early February, Dominique and his new crew were en route from Alaska to Louisiana. Three weeks of refurbishment during March at A&M Dockside Repair in Morgan City, La., (including installation of air conditioning, Schuyler bow fendering, turning blocks for push gears on the aft deck and rebuilding the Detroit Diesel main engines) and Dominique and his crew were ready for their first towing assignment.

Miss Lis, a handsome, low-profile vessel with a flying bridge in the Northwestern style, picked up a 180-foot barge loaded with new refinery equipment at Baton Rouge, La., and towed it to Port Reading, N.J. The job came through United Tugs of Cut Off, La., and Canal Barge Co. of New Orleans.

“That’s the way it is for many companies with small tug fleets,” said Rachel. “Most of your best customers tend to be other tug companies or barge operators that need a way of taking care of their overflow work. And right now, as it happens, there’s plenty of overflow work all over the Gulf.”

With Dominique acting as captain, Jim Miller as first mate (and next captain), George Walker as engineer and Nick Sanders as AB/deck hand, the tug made the voyage without incident, despite having to spend two or three days weather-bound in Port Canaveral, Fla.

With a fuel capacity of 45,000 gallons, the tug burned about 1,750 gallons a day, maintaining an average towing speed of about 8.5 knots. The voyage took about 12 days including time spent weather-bound.

Miss Lis, built in Seattle for coastwise towing in Alaskan waters, goes about its work with a single-drum National towing winch loaded with a couple thousand feet of 1 3/4 -inch wire. It also has pneumatic towing pins, a stern roller and a wire hold-down mechanism on the aft deck. On the other end is a bow winch for barge or ship-assist work. The winch also handles the 1,000-pound anchor mounted on the bow.

In the past the tug had been extended in length and made more capable with the addition of Nautican nozzles and a triple-vane rudder system. The tug’s primary power comes from a pair of Detroit Diesel 12V-149 TI diesels with Twin Disc gears and Rexroth air controls with shaft brakes. Its wheelhouse electronics include Furuno radar, ComNav autopilot, Nobletec/Admiral electronic charting system, SEA radios, and Telaurus satellite communication and e-mail system.

The yacht-like flying bridge is what makes Miss Lis really stand out on the Gulf and Atlantic coasts. Functionally, the flying bridge is a means of providing an elevated control station with full visibility, especially useful for barge work. But aesthetically, the flying bridge adds an appealing dimension to the tug’s profile and is often a pleasant place for the tug’s crew to escape.

“It’s nice to get out of
the wheelhouse once in a while,” said Dominique. “You can’t help but enjoy being up there, so long as the weather is nice. On our recent trip up the East Coast, I would take my morning tea up there and enjoy the scenery. It’s a great spot to just relax and enjoy the many views of the ocean.”

On that topic, Rachel said she suggested to her brother that the deck chair that appeared on the flying bridge be put away when potential customers come to inspect the vessel.

“No one would ever think we’re running a yacht here, even if there is a deck chair in one of the lockers,” said Dominique. “As a new company, we go to extremes to conduct ourselves in the most professional manner that we can. We are consciously modeling our company as a progressive tug company trying to work with the many rules and regulations as much as we possibly can. That’s the wave of tugboating for the future. The last thing we would want would be to be seen as a maverick one-boat operator. That’s not the way to acc-ommodate our customers, and it’s not a good way to attract the best crewmembers. I want to be able to go to bed at night, either on board or at home, knowing that our tug is as legal and professionally operated as we can possibly make it.”

The company is working toward becoming a member of the American Waterways Operators with participation in its Responsible Carrier program, according to Rachel.

Aside from dealing with the shoreside paperwork of a towing company, Rachel and Dominique are also faced with handling all the sales and marketing efforts for their new company. Sales, however, is what they consider to be their strong point.

“My brother and I feel as if we know everyone in this industry, since we’ve both been in it for 15 years,” Rachel said. “Right now the work may be coming to us because the market is so active. But during a lean time, I’ll just get on the phone and call everyone, and keep my ears to the ground for who has a heavy-lift job coming up or who might have a newbuild coming off the ways that needs to be towed somewhere. There are many different markets. It’s getting on the phone like that, to me that is the fun part. That’s the thrill of the hunt. And my brother is good at it, too. We do have different strengths, of course, but both of us happen to be pretty good at the sales end of things. We actually enjoy that part.”

The next step for TradeWinds Towing will be the acquisition of a second tugboat, according to the company founders. “It might take a year or two, but as soon as we can get this vessel running firmly in her tracks and establish patterns of cash flow and dependability, we plan to begin looking for another boat,” said Rachel. “Of course finding a boat like this in the current environment is not easy,” she added. “To find the Miss Lis we were looking all over the lower 48 states, and there was very little available and everything that is available is either tired or overpriced or both. In the busy market we have today, anyone with a decent twin-screw tug is not going to be too eager to sell it.”

Finding another boat, in fact, could become another of the major challenges facing this new company. Of course once an appropriate tugboat is located and an approximate price is determined, then the partners will need to return to the Jacksonville bank that provided initial financing to convince their lending officers of the continued worthiness of the overall project.

“Within a year or two we hope to be getting into that stage,” said Rachel. “And how things go in making that transition to a slightly larger and more efficient company will be a big test of our success as a new company.”

The market for tugs is extremely tight. Anyone looking for a decent twin-screw tugboat on the used-equipment market had better have a fat checkbook and be willing to move fast. It is simply not a market in your favor.

“It’s a tough buyer’s market nowadays,” said Brian Peterson, veteran brokerage expert with Seattle-based Marcon International. “Even if you are willing to go for a 3,000-hp tug that is maybe 40 years old with a recent rebuild you are still probably going to get into the $2 million bracket.”

Shipyards across America have a backlog of orders for new tugs, while usage rates for OSVs, anchor handlers, offshore tugs and workboats of all kinds are at near-record levels, according to industry reports.

“The shipyards are full, so you can’t build a new tug unless you want to get in line to wait,” said Peterson. “As long as vessels are earning good money with the active market, owners are not going to be very eager to sell.”                •

By Professional Mariner Staff