Well…nevermind then.
Irregardless, nobody cares how much ocean the oil saw, as long as the same number that left the shore tank went back in.
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Apparently the owners of that cargo, (or maybe the seller, if that is not the same) doesn’t think that will work. Whether because of the JA or because of the ban on Russian owned ship, or whatever else reason there may be.
OSG is returning 3 of it’s bare bone charter ships back to the owners at the end of this year. Many of it’s other jones act tankers are off long charter and doing spot market.
There is actually and over capacity of jones act tankers.
Where is that occurring?
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Hearing reports that a Jones Act waiver is all but a done deal now - allow US production/SPR releases into US East Coast and West Coast refineries. More political than market - but no shock there.
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I don’t know much about the tanker market. I seem to recall hearing awhile ago that there are Jones Act tankers and ATBs laid up due to insufficient demand for oil transport. Has this changed?
Many, if not all have returned to service.
give or take the US East Coast is importing 500,000 - 700,000 bbls a day of light crude. If memory serves the Jones Act tankers Philly tankers are at best 400k ships. Basis a 15 day round trip usg/phil they deliver say 25,000/day for round numbers. - We would need 20 or 30 of them to displace all the imports.
Building those ships would be less expensive than an aircraft carrier or a herd of LCS scamships and actually contribute something to the economy and national security.
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At US shipbuilding prices it is not economic. Cheaper to export US from the US Gulf oil on foreign flag ships to Europe - East. And import crudes from WAF, Europe, Russia to the US East Coast.
Rather than a Jones Act waiver for foreign built, foreign flag, foreign crewed tankers, I’d rather see a waiver for foreign built, to allow companies (with government financing) to go out and buy tankers and reflag them US into the Jones Act trade for a limited time (perhaps 5 years).
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How much money does an aircraft carrier or an LCS contribute to the economy? Are they “economical” or just a gift to contractors that get repurposed as campaign contributions?
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It depends on the economic value one places on national defense or our ability to project power.
I agree - I think some plan to allow non-us build ships, but us crewed would be a boom for US seaman.
Phillyship built several classes of tanker. There were 14 - 46K ton Product tankers, 8- 50K ton Product tankers, and 2-115 ton Aframax Crude Oil tankers. The last 2 would be roughly 750,000 bbls (at 95%).
I think the 2 aframax’s ( 115 dwt) that Exxon built are in ANS service on the west coast.
That’s correct. SeaRiver sold them to Crowley and renamed them the Washington and California. Still plying the ANSCO trade.
ATC still has the ~18 year old Alaskan Frontier laid-up in Malaysia…
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Philly ships are 330-350k bbls. The two 750k are on the West Coast.
I’m frequently amazed how/why even our own industry, US Mariners, let alone the public, do not understand the difference between “Jones Act” shipping and trade lanes that serve the international trading routes.
As a Hawaii resident I am exceedingly frustrated at how the anti-Jones Act crowd leap at the opportunity to further confuse the general public about how bad our industry is, that those of us employed aboard ships are overpaid, and our shipyards can’t build anything anymore.
Here’s a taste:
https://www.grassrootinstitute.org/2022/03/shipping-security-more-jones-act-shibai/
You can review the Grassroots website for a plethora of ant-Jones Act articles, at least weekly, if not more.
Now, to address the post by @texastanker
The Jones Act trade lane is specific to those routes between Hawaii, Alaska, Puerto Rico and US coastal ports. It also includes the trading of US ships between US ports, regardless of where they go (ie, through the Panama Canal to/from the west coast an to/from the Gulf coast or east coast).
A perfect example relative to today’s Russian oil issue. There are a fleet of US ships, owned by POLAR TANKERS, that load crude at Valdez, AK and discharge that oil at a handful of US west coast ports. On average throughout the year, history shows us those same ships will take a trip down to the offshore moorings at Honolulu, Hawaii. We might see them 5 or 6 times a year. For perspective, we get about 6-8 tankers a month here with raw crude. So on the whole, the POLAR TANKER fleet does not transport a significant amount, taken in total.
When anyone talks about US ports receiving oil from ANY tanker from a foreign origin, that has nothing to do with the Jones Act trade. Those who are considering why more US flag ships are not engaged in the carriage of foreign oil from foreign ports (a consideration for ANY cargo), need to realize, US shipowners will forever be competing against the low ball cost of foreign operators, who are subsidized beyond our wildest imaginations.
Let’s all try not to obfuscate the issue at hand. As an industry and as a labor force within this industry, we need to “help” the public and politicians especially, understand what we are up against. Here’s a reality check: THE USA WILL NEVER BE ABLE TO BUILD SHIPS AS CHEAPLY AS SOUTH KOREA OR CHNA. NEVER.
Until the Federal gov’t starts to shovel bucket loads of cash at US shipbuilders, it’ll never happen. As a nation, we need to find other “operational or tax/financial incentives” to MAKE a shipowner consider building in the USA and operate his/her ship under US flag.
Back to the Jones Act trade lane. There is only so much cargo to be carried between the ports of Honolulu and the west coast. Period. You can manage this route with about 20-25 ships at the most given the current cargo demands. Also in light of the given routine daily operation, some hulls in dry-dock, and a few in lay-up/stand-by status. After that, it doesn’t matter how many MORE hulls you have ‘available’ as the cost of operating ships when the route is “overcapacitized” (as the Asia-Europe run was a few years ago, yes?) maintains itself while revenue goes down.
People in Hawaii can’t get this in their heads. Nor our politicians. They demand MORE competition, in the false belief that retail prices will go down if more people are offering a shipping service. My contention (based on discussions with local freight forwards and shippers here) is that initially freight costs might go down, but over the long haul, they rise again when the shipowners all see they are losing money in their competitive efforts to maintain market share. Reminder; freight rates do NOT equal retail prices off the shelf. That’s another misleading concept all too many people get confused by.
This is EXACTLY what we saw a few years ago when owners were building mega box ships to lower their per unit costs, 10 hulls at a time for cheap in China and South Korea … but there simply was NOT the cargo demand (yet) for all this capacity. Owners ran their ships at a loss, daily. This lasted for a few years.
Any discussion about bringing in more oil from “other than” US ports, has nothing to do with the Jones Act.
Discussing the merits of building more ships to move crude oil (or refined products) between US ports needs to consider that pragmatic reality of what specific routs/ports? Honolulu Harbor has a limiting draft of 40’ max and even less at most berths. Currently, a 600’ handli-sized clean product tanker is the best we can do for shipping jet fuel, gas, diesel, and ethanol. Aframax and Suez max tanker bringing crude here have to stay offshore at deep water SPM type moorings to offload. They enter our harbor empty of cargo, only to load bunker fuel or repairs.
Could we have/build more US flag ships on the Valdez-Honolulu trade lane? Absolutely! No doubt. As a nation, we need to ask ourselves “How can we make the charter costs for the refinery lower to compete between US and foreign hulls?” Thats the $64,000 question.
Finally, just a few years ago, pre-covid, during a large two day long maritime conference I sat next to a person representing a cargo carrier here in Honolulu. I learned an incredible amount from our conversations. One factoid was, one carrier brought in about 5000 containers a week. Thats it. That number slowly and steadily rises each year over a long period of time. There are definitely seasonal variations. But overall, there are only so many boxes to be shipped to Hawaii every week.
And then all those empty boxes have to go back to the west coast. THAT s something everyone always forgets. Freight rates = a “round trip” not just one way.
When you start taking away those boxes from one carrier and splitting the 5000 boxes between four or five carriers, the “cost” of running the ship is the same. But the revenue they earn is far less. Thats a problem for ANY carrier, foreign or US based.
And do this same service with “just in time” delivery … never mind the bad weather, we demand the boxes arrive exactly when you told us they’d be here. ALWAYS! No excuses!
Simply building more container ships or tankers FOR THE JONES ACT TRADE LANES does not mean there will be cargo readily available to fill them up. The reality is actually quite the opposite.
The trick is maintaining a competitive balance, a fair freight rate for the public in Hawaii (in this example), while allowing a reasonable return for the shipowner. No matter what we as an industry do, no matter how well intentioned we may be, the public is NEVER satisfied. It’s NEVER enough for them.
Want to get rid of the Jones Act? Be careful what you wish for, you may get it.
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Kapena - apologies - I read through this a few times, but I do not really understand the points you are making well enough to respond. I don’t want to be impolite and ignore your reply, but I am not quite grasping the argument you are making.
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