Bloomberg is running another bullshit anti-Jones Act article today.
I think we should all send this shipley guy that wrote this a nasty gram.
the big bad jones act is the perfect scapegoat and is whats standing in puerto rico’s way of fixing themselves. what bullshit!
Control the narrative and you control the outcome.
From today’s Tradewinds:
Jones Act vessels expected to diminish through 2022
Almost 15 ships may be scrapped over next five years due to age of overall fleet, analysts say.
December 12th, 2017 21:33 GMT by Michael Juliano
Published in TANKERS
The Jones Act fleet of 94 vessels is expected to lessen by seven ships through 2022, thanks to escalated scrapping activity, Arctic Securities analysts say.
Product tankers should move up to 50 vessels from 48 ships this year while articulated tug barges (ATB) are expected to drop to 37 from 46, Andreas Wikborg and Jo Ringheim said.
“Considering the age distribution of the fleet, it’s quite clear that we’ll likely see an uptick in scrapping activity going forward,” they wrote in a note to clients.
The average of the fleet is 13 years old, with average tanker and ATB ages of 16 years and 10 years respectively. One-fifth of the active fleet is more than 30 years old, and these ships are expected to be scrapped upon coming out of service in the near future, they wrote.
“We find a complete halt of new orders in the Jones Act trade as unlikely over the period, but expect scrapping to to outpace deliveries in the period through 2020,” they said.
Product tanker ordering is expected to be limited until 2019 with deliveries set two years to three years out, in great part due to a weak rate environment.
“We would need to see time-charter rates of $60,000 to $65,000 per day in order to justify a return on investment,” Wikborg and Ringheim wrote
The scrapping of 13 vessels over the five-year period is expected to be offset by the delivery of one tanker in 2020, two tankers in 2021 and three tankers in 2022.
I don’t know who to believe, but can ALL these institution be wrong?:
With the TransAlaska Pipeline operating at only one quarter of capacity due to reduced oil production, it’s no surprise that the old tankers in the Alaska trade are not being replaced. There is no need for replacements. Especially, with changes to the law that now allows US crude oil to be exported. Exports go on foreign flag ships. Eventually, all of the Alaska crude will be exported on foreign flag tankers.
A lack of pipeline capacity was putting a lot of Texas Eagle Ford Shale crude onto tankers and ATBs in Corpus Christi for transport to Louisiana and the East Coast refineries, but once oil exports were allowed, that crude oil is now being put onto foreign flag tankers for export.
Allowing oil exports has caused a decline in Jones Act tanker and ATB rates, and fairly quickly idled some Jones Act ATBs causing crew layoffs. Exports appear likely to increase. So, it’s no surprise that old units are being scrapped rather than Coldstacked. Replacements are unnecessary.
Pipeline capacity is increasing. Domestic oil consumption is decreasing due to a shift to LNG power plants, cars with better fuel economy and hybrid and electric cars, warmer weather, conservation, improved efficiency, etc. Less domestic oil transport by barge will be necessary in years to come.
The economics of oil transport, perceptions of safety, insurance costs, etc., now appear to be trending away from large ATBs toward tankers, such as the dozen new tankers built at Philly Shipyard. Large ATBs have fallen out of favor, fewer new units will be built.
It will be interesting to see where new regulations and client requirements go, and whether smaller Jones Act tankers will be built to replace the existing fleet of aging mid-sized ATBs. An increase in the Subchapter M manning requirements for ATBs, and a decrease in the manning requirements for increasingly automated tankers is likely. I expect to see more small tankers and fewer mid-sized ATBs in the future.
It is likely that dual mode ATBs (push in good weather / tow on the wire in bad weather) will continue to eat into the marketshare of traditional wire tugs and smaller oil barges, and freight barges as well.
Yes. They can all be affected by the same bias and thus omit critical data.
OK, they may be wrong, but how do I know that all you who defend the Jones Act tooth and nail are right?
Could reality be somewhere in between??
They have largely correct information on the Jones Act.
Have you ever bothered look into beyond what the anti Jones Act side claims? The pro Jones Act people on here (that provide actual arguments) are actually the middle ground.
If the Jones Act were repealed, most US shipbuilding and repair facilities would close rather quickly. Owners would buy relatively cheap used vessels on the world market. Virtually all new vessels would be foreign built.
Foreign owners would be low bidders on many coastwise contracts.
US Owners would reflag to Flags of convenience and American officers and crew would be gradually replaced with low wage Mexicans, Hondurans, others from the third world. Same with the offshore oil field. US wages would be driven down very quickly. US maritime academies would be converted to liberal arts colleges.
All this is incredibly obvious to anyone that thinks about repealing the Jones Act for a minute. That’s why it will never be allowed to happen.
Pretty much agree with what you said tugs. Do you think the Jones Act should be updated/amended in some form or fashion?
Other countries have cabotage laws and shipyards, but without the “built by” clause. How can that be??
Oh I know; they have unqualified seamen (better know as “3rd world villagers”) operating old and unsafe ships and underpaid shipyard workers building inferior ships of low standard. The whole thing being managed by unscrupulous and greedy Owners that don’t care about anything but the next quarterly profit. When you add in hidden subsidies from corrupt Governments, incompetent maritime authorities and classification societies to oversee the lot, you have a recipe for disaster.
Did I mention that such unprotected system leave little incentive to improve the standard and build better, safer and more efficient ships to compete with the outside world??
i have a question for you @ombugge and if you have been asked this in the past I apologize for you having to repeat yourself.
keep in mind I have no idea what the cost of living is, or has been for you throughout your career and such, at your various countries of residencies compared to the USA.
have you lived comfortably on the wages you’ve made over your years at sea? have the wages been commesurate with your education and experience? how did this match up with your american counterparts?
the reason I ask is one of my biggest concerns is without the jones act myself and my fellow american merchant mariners will end up being forced to work for wages that our filipino, indian, etc counterparts work for. so we should sacrifice our livelihoods for what some people say is ‘the greater good’? and we are just the tip of the iceberg of how this would affect our economy. am i wrong?
I think it would be too risky to open up the Jones Act to changes. While I might favor some changes, such as allowing certain percentage of foreign built ships, say 25%, I wouldn’t want to take the chance the lobbyists and Congress might change it to 75%. Nor would I want to take the chance of allowing foreign crewing.
"Oh I know; they have unqualified seamen (better know as “3rd world villagers”) operating old and unsafe ships and underpaid shipyard workers building inferior ships of low standard. The whole thing being managed by unscrupulous and greedy Owners that don’t care about anything but the next quarterly profit. When you add in hidden subsidies from corrupt Governments, incompetent maritime authorities and classification societies to oversee the lot, you have a recipe for disaster.
Did I mention that such unprotected system leave little incentive to improve the standard and build better, safer and more efficient ships to compete with the outside world."
Take out the first 16 or so words and you have just summed up the US ship building business. In fact there would be no US shipbuilding without US military and other government subsidies. Back when the OSV business was booming in the US Gulf of Mexico it was hard to find a US citizen in the yard of many of them.US flagged ships built by foreign workers in US yards? Cut out the middle man and build them overseas. Hell, most US flagged ships aren’t owned by US citizens anyway.
Whew ! It took long enough but finally you “get it”.
Glad to see you have seen the light.
I have lived most of my life in Singapore, which is presently rated as the most expensive country in the world, followed closely by Norway.
My way of life doesn’t lend itself easily to what you are talking about, I presume:
From 1959 until 1970 I was on Norwegian flag ships, from Deckboy to Chief Officer and paid Norwegian standard wages, which was good compared to European level, but I presume low by US standard at the time.
Except for a short spell as Navigator for a US mud boat company in 1970 (being paid less then unlicensed US skippers) I sailed as Master on Singapore flag ships until 1974. The wages was good but, since I lived in Singapore, I had no interest in comparing with US or Norwegian wages, or living costs.
In 1974 we had the shipping crises and I joined the Offshore Oil & Gas industry as Freelance Marine Consultant and Surveyor on day rate comparable to what others were making in the industry in S.E.Asia or in Europe. (I don’t know about US)
As Master on an American owned drillship in 1978-80 the wages and conditions were the same for any nationality. (Americans incl.)
Since then I have mostly worked as a Freelance through my own Singapore and Norwegian companies, with some spells as employee in various companies in the Offshore industry in Singapore, Indonesia, Malaysia, Myanmar and in Norway.
Jobs have been varied as Rig Mover/Tow Master/Load Master, Marine Consultant, Marine Advisor and Marine Manager, until my retirement last year.
Have I lived comfortably on my earnings?? Yes, mostly, but with lean periods during low market spells.
Bloomberg just came out with another one. Wtf
The Jones Act Has Outlived Its Reason for Existing: Editorial
published Dec 14, 2017, 6:00:34 AM, by The Editors
(Bloomberg View) –
The costs of the Jones Act – the law requiring all maritime commerce between U.S. ports to be carried on ships built, crewed and owned by Americans – get too little attention. The toll is heavy, and the burden is unfairly distributed. But what if the law serves a vital purpose? Are these costs somehow justified?
Defenders of the law say it’s needed to sustain maritime industry – a sector that’s essential during national emergencies or wartime. Yet if this is the law’s purpose, it sure isn’t working.
In 1960, there were nearly 3,000 U.S.-flag oceangoing vessels – 17 percent of the world fleet. By 2016, there were 169 such ships – less than one percent of the global total. And of those, just 92 were Jones Act vessels carrying cargo between U.S. ports.
The oceangoing Jones Act fleet has shrunk by more than half since 2000. The ships tend to be older and less efficient and can be less safe. In October 2015, for instance, the 40-year-old El Faro, a cargo ship servicing Puerto Rico, sank in what the Coast Guard called “one of the worst maritime disasters in U.S. history.”
Other articles in this series:The Jones Act Costs All Americans Too Much
The U.S. shipbuilding industry has lost its competitive edge, and the number of shipyards that build large oceangoing vessels has steadily fallen. A coastal container ship can cost six to eight times more to build in the U.S. than in a foreign shipyard. Carriers for liquefied natural gas would cost two to three times as much as South Korean ships, and take much longer to build.
U.S. mariners are also much more expensive: Crew costs for U.S.-flag ships can be more than five times those of comparable foreign-flag ships. U.S. exporters rarely use them to ship goods overseas. Nearly nine out of 10 U.S.-owned oceangoing vessels over 1,000 gross tons fly a foreign flag.
To be sure, many factors contributed to the decline of the U.S. maritime sector. But one thing is clear: If Senator Wesley Jones were alive, he’d have to score his namesake law an economic failure. U.S. output has more than quadrupled since 1960, but the amount of freight carried by U.S. coastal shipping – an entirely protected market – has fallen by almost half.
Even the national security argument for the Jones Act fleet rings increasingly hollow. Foreign-flag ships safely make thousands of calls at U.S. ports each year. Although the U.S. military taps Jones Act vessels for sealift, it also regularly uses foreign-built and foreign-flagged ships for that purpose. In the huge military build-up preceding the first Gulf War, oceangoing Jones Act cargo ships played next to no role; in fact, foreign-flag ships carried more than one-quarter of the cargo. The Government Accountability Office has indicated that the U.S. may already have more than enough qualified mariners to meet the military’s sealift needs. And there is less overlap between the work of commercial and military shipyards.
More broadly, a buy-and-build-American approach doesn’t necessarily make America safer. Should the U.S. Coast Guard have to wait eight years and pay nearly $1 billion for a U.S.-built icebreaker when a Finnish shipyard could build one for about one-quarter of the time and cost?
Undaunted, Jones Act champions propose to make the law even more onerous. They’d like to tighten enforcement, expand the U.S.-flag merchant fleet by 45 U.S.-built ships, and mandate that U.S.-flag ships carry U.S. energy exports. This would make a bad policy worse – attacking the cost advantages of cheap U.S. oil and natural gas while failing to address the broader issues.
But give the Jones Act this much: Rarely has a law that costs so much and achieves so little survived so long.
Is this a fact, or is it conjecture?
If fact, how can one not ignore this price difference?