John McCain now wants to repeal the US build requirement for tankers in the coastwise trade. Why? What is he trying to accomplish? Why would he care? What effect would this have?
I wonder if the term “tanker” in this new McCain proposal would also includes ATBs? If it doesn’t, wouldn’t foreign built tankers be cheaper to own and operate than US built ATBs?
Given all the tankers and ATBs that have already been built or are being built, is there a need for any more Jones Act tankers? Given the decline in Alaska oil production, and that oil can now be exported, don’t we need less tankers?
Dropping the US build requirement would be really unfair to the shipyards, especially Philly, and to the owners who have recently built new tankers, like Crowley.
How much would this drop the price of gas at the pump?
What companies specifically would benefit from this? Who is lobbying McCain for this?
[QUOTE=tugsailor;178055]Dropping the US build requirement would be really unfair…to the owners who have recently built new tankers, like Crowley.[/QUOTE]
That was my thought exactly. I’d be really pissed off if I just built Jones Act tankers then McCain gets that through.
[QUOTE=tugsailor;178055]How much would this drop the price of gas at the pump?[/QUOTE]
To play devil’s advocate, this is the supposition that the opponents take on the jones act, saying it is an ineffective way to support the U.S. shipbuilding industry, as it drives up shipping costs, increases energy costs, stifles competition, and hampers innovation in the U.S. shipping industry. As a result, U.S. built and flagged vessels lose part of their competitiveness in international markets, with its cheaper and more modern vessels.
I would say some revision, not elimination might be needed.
To further expand on this, foreign companies carry more than 80 percent of traffic in American international liner commerce.
For a numbers perspective, in 2000, the U.S. Jones Act–eligible fleet consisted of 193 ships compared to 90 in 2014.
[QUOTE=Lone_Star;178059]
How good is the Jones act doing?[/QUOTE]
That’s a strawman question. Traitors like McCain have created the legal environment where American based companies can use American owned but foreign flagged ships and crews to effectively hijack American trade.
Even our own government will use a FoC carrier in preference to government owned, American manned, ships to carry military and government cargoes.
If Traitor McCain was fighting to protect the working people of the nation that made him a “hero” he might deserve his pension. A pension which no doubt he will collect along with the payoffs from lobbyists and those who profit by selling off America.
Just imagine for a moment, if we ran the military the way McCain wants to run the merchant marine, he would not have been shot down and made a hero, it would have been some 3rd world pilot flying a foreign built aircraft and we wouldn’t even know his name. The nation would be better off.
He, like many of his ilk, is owned and manipulated by foreign interests. You would be surprised (or maybe not) by how much campaign money trickles into the US from abroad, all laundered.
He’s already managed to force through 11th hour legislation that allowed the sale of chunks of the American West to foreign copper mining concerns. He won’t be happy until he’s sliced and diced and julienned the American shipping industry and replaced us all with foreigners from the third world, working for peanuts. To appease his masters.
[QUOTE=Lone_Star;178059]To play devil’s advocate, this is the supposition that the opponents take on the jones act, saying it is an ineffective way to support the U.S. shipbuilding industry, as it drives up shipping costs, increases energy costs, stifles competition, and hampers innovation in the U.S. shipping industry. As a result, U.S. built and flagged vessels lose part of their competitiveness in international markets, with its cheaper and more modern vessels.
I would say some revision, not elimination might be needed.
To further expand on this, foreign companies carry more than 80 percent of traffic in American international liner commerce.
For a numbers perspective, in 2000, the U.S. Jones Act–eligible fleet consisted of 193 ships compared to 90 in 2014.
How good is the Jones act doing?[/QUOTE]
Why is there this glaring difference in container rates between cargo to US ports and other parts of the world: http://en.sse.net.cn/indices/scfinew.jsp
With the exception of WA/Lagos the rates to US is two or three times that to Europe and South America etc.
Not directly related to the Jones act, or cost of operating US flag ships relative to others, since there are hardly any US flagged Container vessels trading international and in open competition. Those that do are owned by Maersk, NOL/APL etc. and are US flag because they carry US Gov. Preferential cargo and is part of US military preparedness. (Not for free I assume)
PS> I’m NOT trying to spite anybody, or whatever. I genuinely do not know the reason. Is it heavy port dues, high stevedore cost, slow turnaround, or congestion (like in Lagos)?
Anybody have a good explanation??
[QUOTE=ombugge;178082]Why is there this glaring difference in container rates between cargo to US ports and other parts of the world: http://en.sse.net.cn/indices/scfinew.jsp
With the exception of WA/Lagos the rates to US is two or three times that to Europe and South America etc.
Not directly related to the Jones act, or cost of operating US flag ships relative to others, since there are hardly any US flagged Container vessels trading international and in open competition. Those that do are owned by Maersk, NOL/APL etc. and are US flag because they carry US Gov. Preferential cargo and is part of US military preparedness. (Not for free I assume)
PS> I’m NOT trying to spite anybody, or whatever. I genuinely do not know the reason. Is it heavy port dues, high stevedore cost, slow turnaround, or congestion (like in Lagos)?
Anybody have a good explanation??[/QUOTE]
The answer is the absolutely outrageous cost of the ridiculously overpaid US Longshoremen.
The way to save US consumers money on shipping costs has nothing to with the Jones Act. It’s long past time to trim back the power and cost of the Longshoremen.
The reason that we do not have “short sea” shipping in the US, The reason that we do not have very many barges carrying anything but oil on the East Coast, is because the grossly undereducated, anti-technology, anti-efficiency, overstaffed, and absurdly overpaid Union thugs known as Longshoremen make it cost prohibitive.
That is why container rates from Asia to the US are twice as high as the should be. Most of the cost is in US Longshoremen.
Also, this why Maresk is building a huge new terminal in Mexico with rail connections into the US. This will give them an enormous competitive advantage. I suspect that US flag container shipping will be completely gone in a few years. Killed off by US Longshoremen.
[QUOTE=tugsailor;178086]The answer is the absolutely outrageous cost of the ridiculously overpaid US Longshoremen. [/QUOTE]
Yeah sure … the terminal handling charges for a 40 footer are about $100 more in the US than in Japan or India.
Contact McCain, I am sure he would fight to reduce American longshoremen’s wages to those in India or some other country as long as he gets a percentage of his handler’s savings.
[QUOTE=Steamer;178104]Yeah sure … the terminal handling charges for a 40 footer are about $100 more in the US than in Japan or India.
Contact McCain, I am sure he would fight to reduce American longshoremen’s wages to those in India or some other country as long as he gets a percentage of his handler’s savings.[/QUOTE]
Isn’t it lovely to watch working-class Americans throw one another under the bus while the rich bastards sit back and laugh?
[QUOTE=Steamer;178104]Yeah sure … the terminal handling charges for a 40 footer are about $100 more in the US than in Japan or India.
Contact McCain, I am sure he would fight to reduce American longshoremen’s wages to those in India or some other country as long as he gets a percentage of his handler’s savings.[/QUOTE]
Prove it. Where did you get that $100 more figure? How do you explain container rates to the US being double or triple the rate to Europe?
If you read the more neutral and objective papers about the jone’s act, they make it out to be that the savings with foreign crews probably would not be that significant by time they have to play by all of the US’s labor rules regarding alien labor and pay taxes on business done in the US.
The GAO identified tax laws as one area of laws that would impose additional costs on foreign shipping companies. In particular, the GAO asserted that “[i]ncome generated by foreign corporations operating foreign-flagged vessels in domestic trade could be taxable.”39 Referring to the Internal Revenue Code’s special provisions concerning “transportation income,”40 the GAO asserted that transportation income “attributable to transportation that begins and ends in the United Sates” would be “treated as income derived from sources in the United States.”41 As long as no exemptions applied, the GAO concluded that such income would be taxable.42 Foreign shipping companies would also incur additional costs as a result of labor laws applied to coastwise operations, according to the GAO. Although the GAO could not be certain “which labor laws would apply if the Jones Act was repealed,” the agency asserted that minimum wage laws and collective bargaining under the National Labor Relations Act may cover “[c]rews of foreign-flagged vessels engaged in U.S. coastwise trade.”43 In addition to wages, the GAO also considered the effect of immigration laws on foreign vessels’ operating costs in coastwise trade; in particular, it noted that the “difficulty of obtaining work visas” might require foreign operators to “hire U.S. citizens, which would greatly increase their costs.”44 The final category of laws that the GAO concluded might affect foreign vessel operators’ expenses was employee protection laws. Opening coastwise trades, “might subject [foreign-flag] operators to costs associated with merchant mariner benefits and protections.”45 By entering domestic commerce, foreign vessels would likely be exposed to foreign seamen’s “legal remedies in the U.S. courts for personal injury and death,” and thus face additional litigation-related costs, including potential awards and court judgments.46
[QUOTE=tugsailor;178111]Prove it. Where did you get that $100 more figure? How do you explain container rates to the US being double or triple the rate to Europe?[/QUOTE]
Why don’t you compare US and European costs?
By the way, Japan has among the highest labour costs in the world, while India has among the lowest, so it makes no sense that the cost of handling a container in both countries are the same/similar, as you say.
Well it does, because Japan has among the least labour intensive and most automated container ports in the world and India doesn’t (Yet, but they are catching up)
All major container ports are using the same/similar cranes and straddlers etc. (Nearly all built by ZPMC in China) so it seams that the simple facts is that the higher the level of sophistication and automation of the ports the lower the cost. But this can be overturned by outdated labour laws and bureaucratic handling methods shore side. (Security and Customs etc.)
Why do you need a large labour force at the ports when the stuffing and un-stuffing of the containers are handled elsewhere?
That raise some questions:
What do these “unskilled” Longshoremen do? (Drive cranes, straddlers, trucks etc.?)
Do they handle lashing/un-lashing, or is that done by other Contractors?
[QUOTE=tugsailor;178111]Prove it. Where did you get that $100 more figure? How do you explain container rates to the US being double or triple the rate to Europe?[/QUOTE]
Google terminal handling costs for various ports around the world.
A lot of the costs are surcharges added on by the carriers.
Long time lurker, first time to post.
This topic interests me as I am fascinated by the container industry in general (and therefore a student at CMA).
I did a little digging and found this: http://data.worldbank.org/indicator/IC.IMP.COST.CD
According to that source (World Bank being pretty credible on by book), India is in fact on-par with the United States in terms of import costs of a TEU it seems, unless I am interpreting the day wrong.
The use of smaller ships on the US routes may have something to do with it as well.
Few if any US ports are able to handle the new mega ships efficiently, which means that the cost per unit for actual transportation is higher.
But this can only explain a few dollars per TEU, not 100-200%
[QUOTE=ombugge;178119]Why don’t you compare US and European costs?
By the way, Japan has among the highest labour costs in the world, while India has among the lowest, so it makes no sense that the cost of handling a container in both countries are the same/similar, as you say.
Well it does, because Japan has among the least labour intensive and most automated container ports in the world and India doesn’t (Yet, but they are catching up)
All major container ports are using the same/similar cranes and straddlers etc. (Nearly all built by ZPMC in China) so it seams that the simple facts is that the higher the level of sophistication and automation of the ports the lower the cost. But this can be overturned by outdated labour laws and bureaucratic handling methods shore side. (Security and Customs etc.)
Why do you need a large labour force at the ports when the stuffing and un-stuffing of the containers are handled elsewhere?
That raise some questions:
What do these “unskilled” Longshoremen do? (Drive cranes, straddlers, trucks etc.?)
Do they handle lashing/un-lashing, or is that done by other Contractors?[/QUOTE]
Union contracts limit automation to “preserve jobs”. The Longshormen have fought off loading containers directly on to trains in most ports. The containers have to be trucked our of the port. They have huge “gang” sizes with lots of guys standing around watching the crane operator and truck drivers.
Companies have moved a lot of the container stuffing and unstuffing to warehouses at “inland ports” where they can use non union labor. The longshoremen are too expensive. Longshoremen are also known for stealing too much.
The next time that Longshoremen go on nationwide strike and interrupt all the Christmas freight doing tremendous damage to the economy, I hope we have a strong President that will lock them out and bring in Filipino longshoremen to replace them. Enough is enough.
The whole benefit of containers is that they can be loaded and unloaded far away from the port whenever and by whoever. Longshoremen have been out of that equation for a long time.