Yes, but those are Jones Act US built barges.
The ships were built in Korea.
Correct sir, as you stated before. They found the money.
I’m jumping into this discussion late in the game. But as a person born and raised in Hawaii, and with the JA trade to these islands being at the very crux of this issue, while working in this industry all my adult life, the debate is near and dear to me personally. I do what I can ‘publicly’ in providing support for the JA in my submissions to local media here. But the general consensus with most Hawaiians is, they want to dump the JA tomorrow.
I recently met and had a long discussion with a fellow islander who owns/operates a large freight forwarding business here in Honolulu. He had many questions for me and I learned a ton from him as well. Inside freight/shipping business that I never knew. This guy agrees with me, that repeal is NOT the answer.
Bottom line? Repeal of the Jones Act will NEVER lower the cost of retail prices for the consumer.
I choose those words carefully.
Freight rates or prices to move containers (or any other cargo) is one issue. Retail prices are VASTLY different. Cato Institute writers, Heritage Foundation Academics, and ALL the other anti-Jones Act crowd out there ASSURE ALL WHO WILL LISTEN … that the cost of living in Hawaii, Puerto Rico, and Alaska will be far cheaper if we just got rid of that damn JA. But they cannot prove that RETAIL PRICES will go down. Instead, they point to published freight rates of US shipping in comparison to international shipping rates. BTW, the Transpacific freight index is currently the highest it’s ever been and will continue.
But these anti-JA can’t prove the connection to lower retail prices and therein lies the rub. It’s why all the “studies” and reports are inconclusive.
To Jon Konrad, I have a comment to you personally about ship finance that I would like to provide, that I won’t state publicly here on this board. If there is a way we can communicate off this board, that’d be great (maybe DM on IG account??)
Meanwhile, the ship finance issue is something I had not heard about before. Out here, standing on the bridge of multiple Jones Act ships talking to various Captains… I did not ever get the impression that GETTING the money was hard. It’s just the terms of the deal that seemed the issue. So not sure about what the banks are saying (or owners).
More to say about the whole thing later. But for now, we must understand and accept these realities;
- We will never be cheaper at building ships than China. Never. Neither are the Europeans. Give up trying to BUILD cheaper ships.
- We will NEVER be cheaper at operating ships than Eastern European labor. $400/month for an AB, they are cheaper than the Chinese as far as I’ve been told.
- Other countries subsidize their maritime industries in a big way. We do not. Never will.
Solutions??
Americans have to find a way through tax credits or ANY other financial incentives to give owners and operators a REASON TO BUILD AN AMERICAN HULL. And for shipyards to ALSO FIND WAYS TO DECREASE THEIR COSTS. It isn’t easy. It needs to be a joint effort by the entire industry, the military, congress, and private sector.
The Jones Act is a national policy. It’s not bad or wrong. Where we’ve screwed ourselves is the punitive regulations and tax/fees we have created the last 100 years that incentivized Americans (or others) to go offshore and build/operate foreign fleets. We have to reverse those specific things to bring more hulls back under our flag and use American labor.
The MONEY savings effort must be there to be successful. Otherwise, without any incentive, no corporation or individual will WANT to even bother with the effort.
Of course, lowering prices for the consumer was never the point.
That depends upon your perspective.
For residents of Hawaii (and Puerto Rico) the entire ‘pitch’ of the anti-Jones Act crowd is to get local residents to support and to pressure their congressional representatives…based entirely upon the mythical premise that doing so will lower retail prices for the consumer.
That allegation is not true, nor can that be proved. Dozens of studies, reports, theses, and all documented ‘efforts’ to ATTEMPT to make this direct correlation have failed. It cannot be done.
Whatever the REAL intent of repealing the Jones Act in your opinion is, I’d be happy to hear it. But don’t discount the point I make as it is exactly the effort that the CATO Institute and HERITAGE FOUNDATION continuously make in order to garner public (non-maritime citizens) support in repealing the Act.
I agree and that was my point. The abolition of the Jones Act for Puerto Rico or Hawaii will increase profits but not lower consumer prices. These guys don’t fight to save consumers money, everyone knows that. Geez… are the Heritage and Cato guys like some consumer protection outfits?
They are covering their ass, not yours.
Most cargo entering PR arrives on foreign bottoms, just like everywhere else. JA cargo is a small part of it. But the gaslighting of an largely ignorant public will continue apace.
Most of the public is very unaware how much cargo is not JA related.
Does the US really need a 51st state?
This article touches on the Jones act and PR’s economy while reporting that the republican party is in favor of statehood and that Trump is also in favor.
If PR is a net loss, what is its strategic importance?
He must have changed his mind, because he considered cutting them loose after Hurricane Maria.
If all the money sent there went to the right places, it would be an asset.
This is the best answer.
I think further that in strict commercial, non-US govermnet contracts should allow foreign capital to flow in more than it is now.
The domestic built requirement doesn’t have to be abandoned permanently. Only suspended until the yards can catch up. Repair and maintenance work on foreign builds in the JA would get them started on that path.
The sun was shining here this morning and my car started easily.
Look, DSD clone, will you please stop peppering every thread with your platitudes and “me too” crap.
There is no shortage of American capital, in fact, thanks to hedge funds and fintech America is now #1 in ship finance.
The problem is that the new big money funding sources are fast moving, highly complicated technical and legal instruments that simply can’t exist under federal programs which would tie them to federal bureaucracy and red tape.
That doesn’t mean they must exist outside of the law - the majority of these new instruments are incorporated in New York (or London) and are subject to New York State (or uk) law which the feds can (but typically don’t) investigate and control.
If Jones Act finance regulations and oversight were released from federal control and handed over to the states then the NY state legislature would work with wall street to incorporate these their rules in ways that allow US shipping companies to unlock these new revenue streams. Then rather than MARAD being a source of federal subsidy dollars they could provide federal oversight to state programs or, alternatively, the SEC could create a maritime oversight committee.
NB: I’m not saying this is a good idea, obviously the current wall street structure has some major flaws, I’m just saying that foreign investment is not needed and, even if we allowed foreign investment, they are not going to fund ships because they also use the same hedge fund and fintech strategies that American financiers are now using.
In short the #1 problem in terms of jones act ship finance, political action, and law is that our industry is tied to archaic mental models.
Right now 5 American technology companies account for over 25% of the s&p 500. There is a HUGE amount of capital and innovation expertise in our nation but NOBODY in the maritime community understands (or seemingly has any curiosity about) what is happening in the world around us.
And almost ever post in this thread contains old outdated ideas based on traditional and highly linear ways of thinking yet the success of the entire website this forum is hosted on is 
based on new technology (e.g everything you are reading lives in a distributed Cloud based content delivery network) and new business models (e.g collaboratively curated news aggregation).
P.S. I didn’t create any of the tools or business ideas that have made gCaptain the world’s most visited maritime website. All I really did is, I looked at how the technology news websites operated and I copy & pasted them into the maritime domain, then, when shit didn’t work right, I got in my car, drove up to Silicone Valley, sat down with super smart tech geeks, and asked them lots of really dumb questions.
Are you always this pleasant? I am staying on topic, you waste precious time you have left criticizing others. Have at it sir. I have big shoulders for your kinda stuff. Puerto Rico was in the topic, some of their top leadership has been indicted for misuse/fraud of very important funds of USA money directed to help them. John is correct that no matter what the investment stream is, the banks /politicians find ways to manipulate that stream. Shipping still suffers regardless.
There may be no shortage of American capital, but there is damn sure a shortage of American will and want in this. I read the transcript of your plea video, which included you quiping that you were mere blocks from a real estate mogul, and that shippers and real estate could go hand in hand to make more money.
I hear you, but it isn’t working. It is the same argument as to why can’t the US maritime industry attract the next generation of mariners from within these United States? There is just simply no will for it anymore. I applaud you for giving the good fight, hell I was the “Millennial mariner” for a while. Sure, I had to drop out of sailing and I take exactly 50% of the blame, but no matter where I worked, and I am now 28, there was no will for people to train me to move up and I was regularly the youngest guy on board by a decade or more. I busted my ass, I got training at my level from others, but I became so disheartened when I felt that my upward progression stalled that I looked eslewhere, and I have found a wonderful company as a vessel agent on the west coast. I would still be sailing today, gladly, if I felt that I could have continued upwards. I am further fully aware that my post history here does me no favors and paints a poor picture of me, but there is little capital, and more importantly, there is little new labor coming into the ranks. I regualrly handle Jones Act tankers and the crews on board are geriatric, compared to the foreign flagged vessels I would say that on average that the American Mariner (this is complete conjecture, take it with a grain of salt), is probably 15 years older than their foreign counterpart. I firmly believe that if the US maritime industry could attract more domestic labor that is representative of the realities in the Jones Act trade today then we would have much more interest and capital flowing to the ships.
The above may seem unrelated, but I beleive they are very related.
That won’t happen and you and I know this. Quoting the US Constitution:
Art. I Sec. 8:
To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes
Tenth Amendment:
The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.
Trade is expressly reserved to the United States, not the individual states
You may be able to make an argument with
Art I. Sec. 10:
No State shall, without the Consent of the Congress, lay any Imposts or Duties on Imports or Exports, except what may be absolutely necessary for executing it’s inspection Laws: and the net Produce of all Duties and Imposts, laid by any State on Imports or Exports, shall be for the Use of the Treasury of the United States; and all such Laws shall be subject to the Revision and Controul of the Congress.
No State shall, without the Consent of Congress, lay any Duty of Tonnage, keep Troops, or Ships of War in time of Peace, enter into any Agreement or Compact with another State, or with a foreign Power, or engage in War, unless actually invaded, or in such imminent Danger as will not admit of delay.
I know that the Congress has delegated many of its duties to the various states, but when the eventual patchwork of application of the Jones Act comes down in the individual states, and there will be extreme differences, what then? How much of a headache will it be for a shipowner of any flag to be aware of even more onerous jurisdictional regulations along the theoretically same country’s coastline. Environmental regulations, sure, that changes from CA >> OR >> WA >> AK, but that is so minimal compared to competing applications of the fundimental US maritime law applied to the states.
Well you need to go tell all this to MorganStanley, CitiBank, Amazon, Flexport, and the other multi-billion dollar companies which sue each-other in state court or private arbitration tribunals in-order to set legal trade precedents that declaw federal law.
Or you can remind the Supreme Court of their duty to uphold the constitution. Or the senate to reaffirm the constitution. Or you can ask the SEC to hire the big NY law firms who purposely complicate deals inorder to avoid federal court.
The unconstitutionally of modern business is all laid out right here: https://www.nybooks.com/articles/2020/02/13/how-big-law-makes-big-money/
You can quote the constitution all you want but you can not interpret those words and neither can I nor MARAD nor the Federal Maritime Commission. That is the job of the Supreme Court of the United States and the Supreme Court has ruled (both in a few actual rulings but more commonly in their refusal do you intercede at all and complicated transactions related to trade) that you are wrong. That states can in fact “regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.”
I personally agree fully with you and so does most of the US shipping community… which is a big part of the reason why we continue our slow decline.