History
In 1997, Gudmundur Kjærnested decided to start a shipping company to serve the Iceland route. Then an Icelandic citizen, educated in the United States, and having worked at Van Ommeren shipping for seven years, he was familiar with the route and its history. Kjarnested is a citizen of Iceland and U.S. resident alien who was married on May 20, 2000 to U.S.-national Margaret Elizabeth Bozzi. He is also president of Atlantsskip in Reykjavik, Iceland. Kjærnested's college roommate at Babson College, Brandon C. Rose, an American who came from an affluent family whose yearly business revenues were estimated at $200 million per year. Rose offered to back the company, and together they started the two companies TransAtlantic Lines LLC and TransAtlantic Lines Iceland in February 1998. The two were originally even partners in both ventures, and are also the primary owners of the Icelandic company TransAtlantic Lines-Iceland EHF (TLI). Shortly thereafter, they accepted an offer from shipping company American Automar to purchase 51% of the company, along with a never-exercised option to buy 51% of another Icelandic company largely owned by Kjærnested, Atlantsskip.
The company made several preparations to bid for the Iceland contract. Rose secured a million-dollar letter of credit from the State Bank of Long Island to back early operations. The company did not yet own any ships, but did secure four letters from U.S. shipping companies pledging to supply vessels sufficient to cover the charter requirements. One of the pledged vessels was the supply boat Native Dancer.
Eight bids for the 1998 U.S.–Iceland run were solicited by the Military Traffic Management Command on 30 January 1998, and six bids were received. Observers speculate that the bids were from the Icelandic company Eimskip, Dutch shipping company Van Ommeren, Atlantsskip, TransAtlantic Lines, and TransAtlantic Lines Iceland. In September 1998, the Military Traffic Management Command awarded 65% of the Iceland contract to TransAtlantic Lines Iceland, the lowest overall bidder, and the remaining 35% to the TransAtlantic Lines LLC, the lowest bidder among American shipping companies. The portion awarded to TransAtlantic Lines LLC had a cumulative total value of $5,519,295 and was set to expire by 31 October 2000.
Within a month, TransAtlantic re-flagged Juno to the United States and renamed it Geysir at the Port of Jacksonville. In response to the awards, the government of Iceland lodged a protest with the U.S. State Department, arguing that "TLI was not a true Icelandic shipping company" and "lacks the necessary experience, technical capability, financial responsibility, and material connection with Iceland" Shipping companies Van Ommeren Lines (USA) and Eimskip of Iceland, which had previously serviced the Iceland route, sued the United States protesting the award. The district court found for Van Ommeren and Eimskip, requiring the Army to restart the bidding process. TransAtlantic appealed the decision, and on 11 January 2000 the Court of Appeals reversed the lower court's decision, finally securing the contract for TransAtlantic.
On June 13, 2001, the company won a contract with an estimated cumulative value of $16,738,001 for dedicated ocean liner cargo service from Jacksonville, Florida to U.S. military installations in Guantanamo Bay, Cuba. This contract extended until June 30, 2004. The government announced the requirements for the charter on the World Wide Web on December 4, 2000, and seven bids were received. Military Traffic and Management Command in Alexandria, Virginia, is the contracting activity. The company uses the tugboat Spence and its barge the Guantanamo Bay Express make the twice-monthly trip between Jacksonville and Guantanamo Bay. Each leg of the trip takes approximately 4 and 1/2 days and covers approximately 1,000 miles (1,600 km).
On November 11, 2004, while leaving Mayport, Florida en route to Guantanamo Bay, Cuba, the tow wires connecting the tug and barge parted, causing the barge to run aground. At the time of the accident, the vessels were experiencing thirty knot wind gusts and 12-foot (3.7 m) seas. Extensive bottom damage and breaches to all port side voids were reported. The barge was refloated and delivered to the owners the following day. The vessels were owned by Pac-Atlantic Marine Leasing, LCC at the time.
In 2004, Carsten Rehder affiliate company Rehder & Arkon bought MV Steamers Future in April 2004, and renamed her MV Baffin Strait. Rehder & Arkon chartered her for 6 months to Mariana Express Lines, and sold her to TransAtlantic Lines in late October 2004. TransAtlantic Lines bought her for US$6.3M.
MV Baffin Strait is one of Military Sealift Command's seven container ships and is part of the 28 ships in the Sealift Program Office. Since 2004, the ship, often referred to as the 'DGAR shuttle,' has been chartered to deliver 250 containers each month from Singapore to Diego Garcia. The ship carries everything from fresh food to building supplies to aircraft parts, delivering more than 200,000 tons of cargo to the island each year." On the return trip back to Singapore, she carries recyclable metals. In 2004, TransAtlantic Lines outbid Sealift Incorporated for the contract to haul cargo between Singapore and Diego Garcia. The route had previously been serviced by Sealift Inc.'s MV Sagamore which was manned by members of American Maritime Officers and Seafarer's International Union. TransAtlantic Lines reportedly won the contract by approximately 10 percent, representing a price difference of about $2.7 million.
As a result of winning this contract, the US Navy gave the Baffin Strait the hull classification symbol (T-AK W9519). The T-AK series symbol is given to the seven container ships chartered by MSC but owned and operated by contractors. The Baffin Strait's current charter runs from January 10, 2005 to September 30, 2008 on a daily rate of $12,550 under contract number N00033-05-C-5500.
In 2006, TransAtlantic bought the MT Bonito, then registered in Sweden, from Donsö Shipping KB for $13,000,000, and renamed it MT TransPacific. On 20 July 2006, the U.S. Navy’s Military Sealift Command announced the charter for the Transpacific. The charter, which commenced 1 October 2006, is a one-year firm-fixed-price contract of $6,879,520 with additional reimbursables. The contract includes three additional one-year option periods and one 11-month option period which can total $25,589,458 plus additional reimbursables.
In each charter period, the government has the right to cancel after 60 days with 10 days notice. After each initial 60-day period, the government can cancel the charter with 30 days notice. The end of the base period of the charter is September 2007, and the charter will last until August 2011 if all options are exercised. This contract was competitively procured with more than 85 proposals solicited and three offers received.
The charter had previously been held by MV Montauk, operated by Sealift Incorporated. Sealift Incorporated protested the charter award with the Government Accounting Office (GAO), claiming that TransAtlantic Lines understated its fuel-consumption costs. The GAO denied this protest, as well as an additional technical complaint about what business entity actually employed crewmembers.
On 27 October 2006 the District Court of Guam ordered TransAtlantic Lines to post a cash security of $310,000 to take possession of the vessel from Guam Industrial Services. TransAtlantic Lines posted the bond and took possession of the ship.`
On 3 February 2009 the United States Transportation Command awarded TransAtlantic a $15,078,334 contract to carry cargo between the United States and the terminal in Praia da Vitoria, Azores. This contract, serviced by the Geysir, is expected to be completed by 29 February 2012, and was a 100 percent Small Business Set Aside acquisition with two bids received.
As of 2010, TransAtlantic Lines owns and operates 5 vessels, including one tug-and-barge combination. Four of these vessels are chartered by the Military Sealift Command, and perform duties such as delivering cargo to U.S. military activities in Diego Garcia and Guantanamo Bay, Cuba. TransAtlantic Lines has no collective bargaining agreements with seagoing unions.
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