"obscure" .... 'Jones Act'


#105

No arguing against this. In the pay gap the US CEO is the King by far, congratulations…

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#106

Yeah, no I’m not seeing it yet. I’m speaking strictly about the about the “innovation” aspect you raised.

There are many places from which to view the Jones Act.

  • Shipyards (these folks are also split into various categories that don’t always share the same interests)
  • Owners/Operators (Carriers)
  • Mariners
  • Material and service suppliers to operators
  • Cargo Shippers
  • Cargo Consumers

The way you used innovation it appears you are addressing the shipbuilding / design segment. Even though provisions of the Jones Act reserve shipbuilding of certain ships to US yards, of course the various US yards have to compete among each other to win these contracts. To the extent innovation helps them win contracts they will innovate (but I’m not exactly sure how you are defining innovation). If one of the mid/low tier shipyards screws you over, an owner will certainly turn to one their competitors next time. There is a need to compete. It’s just that it is a need in this particular domestic market not on the world stage. I think your notion of “guaranteed income” is really far out of alignment with the reality of mid/low tier shipyard business.

If my assumption is correct that you are referring to the shipbuilding industry I am going to further assume that by innovate you mean capable of producing new designs, new features or new methods of production to meet a demand. But isn’t any any incentive to “innovate” is balanced by contracts and backlog? It costs money and in most cases that money goes in the overhead bin.

Building Multicats (or developing other “innovative” designs) on spec without contracts is not how a shipyard prospers.

Remove the US built portion of the Jones Act and you will probably not only fail to enhance shipbuilding innovation but will probably eliminate it altogether. Other than USN / US Government new building resources would no doubt dry up. Of course some small topside repair firms and possibly even some commercial DD capability would be required for voyage and damage repairs to foreign built ships and barges being used in domestic trade. Perhaps the huge contraction of the industry / demand for commercial work might have a small positive effect on efficiency of the shipyard that survives but that’s pretty much a “re-arranging the deck chairs on the Titanic” sort of improvement.

These broad statements of eliminate the Jones Act and x, y, or z will happen or x, y. or z are the result of the Jones Act, really ignore many realities of the present situation in the US maritime industry. That crawler crane on a barge works. It’s legal and it’s paid for or cheap to build / outfit. Owners don’t contract for innovative ships just because they look nice.

The ship owner has to go out and sell the ship/service to a customer. The guy installing the wind generator, piling, dredging/waterfront construction is looking to get it done cheaply, safely and quickly. If a marine service provider can charge higher day rate to pay for one these things and it allows him to get the job done so much quicker that it comes in as low cost bid to his customer, he will go out and build one. See @tugsailor posts above.

I don’t know why the economics in Europe work out so these things are employable over there but I’m sure the economic realities are not the same as in the US. I don’t know so I won’t say BUT I get a kick out of hearing (especially from European’s) that destroying the US commercial shipbuilding industry will magically result in a healthy one rising from its ashes. All the costs of doing business will disappear, all the high labor costs will disappear, the entire regulatory framework within which they operate will disappear.

I’m not telling you anything you don’t know. A ship owner has to balance the cost of building it, crewing it and operating it along with the cost of the innovative design features. For a ship owner to afford an innovative design with bells and whistles and enhanced capability he has to have a customer willing to pay for it.

It’s also amusing to listen to how easily some would have us screw over our fellow citizens (just get rid of the US built part). Next will be just get rid of the US unlicensed crew part.

It is also amusing to listen to how backwards US shipyards are. To these folks I say “have you been in any lately?” The US commercial shipbuilding industry has developed and adopted many production improvements. And its not just mechanical things. Back in the late 80’s at a mid to upper tier yard trades foremen were carrying PERT charts in their back pockets and had to live up to schedule requirements. They had input to the schedule beforehand and so production rates were way more reasonable and less affected by interference from others than when a an office weasel with an MBA was running things in a top down manner. It was impressive to see. Just asking you compare apples to apples in this regard.

The Jones Act has done many things but I don’t believe “hobbling innovation” is one of them.

Modifying the Jones Act should only be undertaken after a thorough examination of where we are and where we want to go is completed. In other words having a cogent national maritime policy. In other words having all things on the table. Everybody’s ox is going to get a little gored. This used to be the purpose of MARAD. They used to have an R&D function. They used to have leadership. They used to be funded.

Someone once proposed for inclusion on a list of grand truths about life the statement “It’s more complicated than that”. With the Jones Act that is certainly the case.


#107

Hell chief. You’ve got my vote


#108

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#109

Exactly, our non-U.S. friends tell us if we overthrow the current regime it will lead to a worker’s paradise. A lot of U.S. mariners would be betting their paychecks. What about the non-U.S. forum members, what are they betting? Nothing. They don’t have a dog in this fight, they just think they know better how the U.S. maritime industry ought to be run.


#110

In terms of what is on the line…

Here is a 2013 MARAD study on The Economic Importance of the US Shipbuilding and Repair Industry. MARAD SY Economic Study

Ref page E2.

It showed at that time 107,240 jobs due to direct activity AND a total of 402,010 jobs when they also consider jobs from indirect and induced operations. Similar order of magnitude if you look at it from labor income or affect on GDP point of view.

Doesn’t that suggest wholesale proposals to repeal this or that based on some jack asses cause celebre is exactly how to make it worse not better?

In other words writing off the US commercial shipbuilding effort has quite a knock on affect. If you’re a welder and live in one these ports or even own the taco stand near the shipyard I’m sure it will be cold comfort to know the old way has to be eliminated so potentially a new yard located several states away might be able to compete with a Korean yard (subsidized by its government) building grain barges. Delivered by the dozens on FOC heavy lift ships. You might even be able to move your self to that city and apply for a job as long as you accept less than minimum wage and can speak whatever language the current crop of guest workers that is also applying for those jobs. At least it would give you something to think about as you are in line for unemployment or retraining to learn javascript.

Also - the Jones Act does not require owners to operate inferior pieces of junk. It doesn’t even explicitly make it any easier to do that. Allowing that is a function of first an foremost the attitude and ability of the ship owner/operator AND the flag state. The El Faro was allowed to skate in terms of material condition. Not because it was old but because the standard of condition that was maintained. Tote, USCG and ABS all had a hand in letting that go on and on. It’s shameful even if not the reason it sank.


#111

Yes they will innovate but the Jones Act forces them to innovate in a restricted way. ATBs for example, and the hybrid carriers taking 53 foot boxes - again unique to the NA network but worthless anywhere else. In the end the yards have few customers, and there is probably a degree of them buying in work on occasions much as happens in construction. Sadly the days of Lykes Lines, Farrell have passed and the yards are producing for purely domestic vessels.

The yards are no doubt competent but these days, unless you are a leading yard, (Damen, Tsuneishi) a lot of innovation and design is brought in. design bureaus such as BMT, Deltamarin, SSSI etc. Once a yard has a library of vessels standardisation and production costs fall dramatically. Building in ones and twos doesn’t pay long term.

Once established some yards do - Damen can sell you a tug or a Multicat off the shelf. Agreed many yards in Batam and China have come unstuck as they had speculative builds of poor quality, building floating scrap. If you have a Mercedes product then you can sell on reputation and service.

Geographically there will always be demand for repair yards. The hard bit is for the advanced top tier yards to become attractive to the international ship owner. China will build to quality or total crap, the owners and bureaus will ensure quality for quality owners… Kobe Steel have invested in automated welding systems for ship modules - surely the US with all its tech can do similar streamlining processes?

Agree the crawler and barge is a cheap and regulatory avoiding solution, but is it flexible and time saving? Between the USCG Regs, which are bewildering to me as a humble outsider, and the Act it has led to cheap compromises that aren’t necessarily safe. How many barge accidents are there - are they subject to class survey?

Agree to some extent with tugsailor - I worked with some US Skippers offshore in Asia and found them all good boat handlers. However, re the wind industry where innovation required it whole new vessel types have evolved.with huge employment potential.

The US once had a great ship building industry - but building a restricted number of ships for a restricted, almost finite number of customers wanting ships of very few designs doesn’t, IMHO, lead to a healthy situation. The UK yards went down that route and disappeared, some are now recovering adopting new techniques and practices. I don’t know how unionized the US yards are but modern yards management and labour co-operate as the must both co-exist.

Agree 50%. However the Act means there are a limited number of customers and a limited set of trades then there will be careful cost balancing and a desire to stick to proven designs. However there are innovative owners, Wagenborg, China Naviigation, Oldendorf, Maersk who are willing to take a long term, counter-cyclical view and build ships for the next twenty years, not the past. If you build it, they will come.

Most times they get it right, occasionally they get it very wrong.

https://wikiswire.com/wiki/Probo_Baro

Wrong, I would like to see a healthy and competitve US shipping industry. The regulation and legislation is unique and has strangled evolution or the full adoption of STCW and other international regulations, MLC for example.

I have sailed past US yards and stood by vessels under construction in Korea,Japan and China. The organisation of Japanese yards is amazing, the Koreans learnt fast and China has two or three tiers of yards. Maybe half a dozen top notch yards - yards is the wrong word, they are ship factories. Perhaps the closest the US had in modern times was Halter Marine(Yes I have sailed on one)

I respectively beg to differ, it has created a self limiting pool of ships and customers with limited ship types.

Certainly agree that it is complicated and needs looking at in its whole. However the decline in the US fleet is undeniable and the knock on effect will adversely affect the yards, the mariners - the only ones who profit are the owners, as always.


#112

The Jones Act and its impacts are widle misunderstood.

Part of the Jones Act provides a civil court mechanism for seamen to obtain compensation for illness or injuries, instead using the land based workers compensation system and health insurance. I think seamen would be much much better off with mandatory health insurance and workers comp. Its the vessel owners, the insurance companies , and the lawyers that fight to keep this part of the Jones Act the way it is, because it’s cheaper for the owners and insurance companies, and more profitable for the lawyers. If owners had to provide health insurance and participate in workers comp, the claims would be smaller, but every seaman would insured, and automatically collect workers comp. With the Jones Act the potential claims have a much higher cost, but the process takes years and most seamen are desperate for cash and settle for peanuts.

The part of the Jones Act that requires US built, owned, financed, and crewed vessels has nothing to do with lack of innovation, quality of vessels, etc. Congress enacts many other laws and authorizes the USCG, MARAD, EPA, IRS, OSHA, and numerous other agencies to make a never ending blizzard of regulations. In some cases, 50 states, and 100’s of cities can adopt additional, more stringent regulations.

The development of ATBs, and for that matter the coastal tug and barge trade, is not a result of the Jones Act. It is mostly because USCG regulation allow a tug with a crew of 4 men to carry the same cargo as a ship with 30 men. In addition to the smaller crew size, the USCG regulation provide for limited licenses (CoCs) for tugboat captains and mates that are relatively easy to get. On a significant portion of the tug fleet the USCG does not require any credentials for the deckhands and deckhand/engineer at all. Up until now, tugs have not required USCG inspection, a COI, or Class. Many tugs are exempt from loadline requirements. Tugs normally do not require pilots. These reduced capital, operating cost, and crewing requirements are the reason we have over 6000 tugboats. The reason we have fewer ships in the Coastal trade is that they cannot compete with tugs on cost. It has nothing to do with the Jones Act.

If the Jones Act were repealed today, the US coastal trade would be flooded with foreign built, foreign crewed vessels. Some of them would be superb, but most would be 3rd world junk, because they would be cheaper. Because the US owners already have the equipment they need, it would just be flagged out and foreign crew would replace Americans as quickly as they could be trained to the work that is unique to the US. Just as Americans are the 5th largest owners of foreign flag ships in the World, Americans would own probably 95 percent of the foreign flag vessels in the US coastal trade.

But even without the Jones Act all these newly flagged out vessels would require American pilots. There would not be enough pilots. It would take many years to create enough new pilots. Due to immigration laws, foreign seamen would have a difficult time flying to the US to join a vessel, they might be required to get work visas for vessels that work within the US, and the would probably be required to pay income tax. In some cases, such as vessels working in New York City, they would have to pay federal income tax, state income tax, and city income tax. foreign crew might not be allowed ashore. After the first half dozen serious incidents involving ships fro Bumfukistan, USCG Port State Control would be forced to inspect every foreign vessel frequently and thoroughly. Foreign flag coastal vessels might have to do crew change in Canada, Mexico, or the Bahamas. Inland and river vessels would not be able to do that.

The Jones Act is just a very small piece of the US regulatory puzzle.


#113

Pretty sure the pilot associations for the various ports could handle things regardless with the number of pilots currently on their rolls. I would imagine the smaller traffic would be handled the same as many foreign ports I’ve worked out of, in that they make the run with you once to make sure you’re not an idiot, and then just leave you to it after that. I’m sure they’re still getting paid for it, but they aren’t using manpower on it.


#114

Just put into the new Cabotage Law; “US flag and US crews in US territorial waters and for trade between US ports”.
Others have such laws.


#115

They would be licking their lips thinking about the higher quantity of jobs being split amongst their membership. I doubt they’d increase their membership numbers at all. More members mean more mouths at the trough and thus less money taken home per pilot. Not trying to knock American pilots associations, but this is their most common business model.


#116

A UCCG license as Master or Mate automatically included the right to “serve as pilot” on your own vessel under 1600 GRT, even if you have never been to that port before. Tugs towing or pushing oil barges over 5000 GRT require a USCG license and a certain number of trips , usually 12, and regency on the route. Some very large barges require an actual license as Pilot endorsed for the route. Those are the federal rules.

Since a foreign officer does not have and cannot obtain, unless he becomes a US citizen, a US license, they would not be able to 'serve as pilot."

With a few exceptiions, such as Canadian tugs, all foreign flag vessels in the US, not only require a federal pilot, but also a state pilot (the state pilots are also federal pilots). The state pilot associations are small, but powerful. Of course there are no state pilots available for the Mississippi River above Bator Rouge, and various other inland waters.

Foreign mariners cannot get Twic cards either.

The regulatory obsticals to foreign flag, foreign manned vessels routinely operating in the US coastal trade go far beyond the Jones Act.


#117

I don’t know if you didn’t read what I said or if you just ignored it, but I was referring to the fact that many ports I’ve worked regularly out of overseas (which according to the Sailing Directions are “pilotage compulsory”) waive the requirement for a pilot with some regularity. Should there be a similar situation in the US ports, I’d imagine the ports would wind up doing the same thing.


#118

Really? Filipinos make as much as Americans?

You’re being intentionally dense. Every argument against the Jones Act includes the claim that the cost of American crews is too high.


#119

Really? Since when does the Jones Act say only one company is allowed to operate on any given route? I didn’t realize Crowley and Tote were actually the same company!!! Wow, what a revelation you’ve given us!


#120

I believe that massive conglomerate includes Matson and Pasha as well. Bastards


#121

OK, maybe I should have said “everybody else”, but I guess you understood what I meant.

PS> Surprised you didn’t use “Bangladeshis”, or more general; “3rd world villagers” for comparison.

Again you are being deliberately dense. The claim against the Jones Act by your fellow Americans are that US mariners are too expensive to hire.

My argument is that they are NOT. (When you compare to other developed countries, where the actual cost of hiring is even higher then in the US, all benefits, social costs and sundry other expenses that come on top of the “day rated” pay check)
In other countries there are coast if you lay off Mariners on permanent employment. They cannot just be fired without cause. Termination compensation for someone with a long service record can amount to many moths pay.

PS> Stop using “Bangladeshis”, or more general; “3rd world villagers” for comparison.


#122

Yes, it is actually the claim and it is actually true.

That’s your problem, the comparison needs to be Americans vs those that would be hired to replace us, Filipinos, Mexicans, Bangladeshis, etc.

Why? Who do you think would be hired for the job if the Jones Act was eliminated? NOT a fucking Norwegian (or anyone else from the developed world).


#123

What about (quoting one of my old captains here) “offbeat brand motherfuckers”? Always seemed to get the point across of where he stood on the issue.


#124

@ombugge this is the kind of job ad that is prevalent now. The Master is getting US deckhand pay and they only want low wage nationalities.