Now that we have the Cato Institute chiming in, I would say it’s time for a new thread. I don’t think I have the necessary permissions to move the other relevant posts from the ‘SHIPS Act’ thread to here, if someone wants to do that, that’d be great.
And yet these businesses stay in business…how is that? It’s because they don’t depend on building commercial ships. But I get it, I take blame for not being specific in my assertion about shipyards. I’m referring to large COMMERCIAL shipyards in the business of building large, ocean-going COMMERCIAL ships would go out of business on day one if the US build requirement were removed. I guess I assumed that would be implied, but apparently not.
@cpgrabow, rather than cutting/pasting each of your points that I take issue with, I think our differences can be summed up as follows: Your arguments for abolishing the US build requirement are all economic. I will fully admit your points are valid from an economic standpoint.
What you and other advocates of unrestrained capitalism don’t care about (to a novice, I would say ‘what you don’t understand’, but I know you fully understand this topic) is the reason for the JA as a whole (which vitally includes the US build requirement) is NOT economic.
I agree that arguments can be made that the results are not good enough/we can accomplish the goals of the JA better. Abolishing the US build requirement is the exact opposite of that. Any and all attempts to call for that need to be recognized as the existential threat to the USMM that they are.
Ok…I said I wasn’t going to copy/paste your points, but this one is particularly egregious:
‘It follows’ because look around…what other high labor cost country allows cheaper foreign built vessels to ply their coastwise routes but requires their high-cost domestic seafarers? (And if you CAN cite one, please also include the other, many more numerous counter examples).
Once again, I agree with you as things stand today. The difference is that you advocate giving up and becoming completely at the mercy of “countries of concern” as the SHIPS Act refers to them. I say we need to fight for what little autonomy we have now and expand upon it.
Agree completely. Continue to be beholden to china or not. We all have to decide which side of this trade-off we want to be on.
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How many large US yards are commercial only? Only reason Philly isn’t bankrupt is due to the NSMVs and some govt repair work (and Hanwha bought them for access to government contracts). NASSCO has no commercial orders. Keppel is the only yard I can think of that’s strictly commercial and they are a total mess, with each of their vessels suffering from cost overruns and huge delays.
So is having a smaller and older fleet worth keeping Keppel in business? Again, look at the trade off and explain to me how this makes sense.
What you and other advocates of unrestrained capitalism don’t care about (to a novice, I would say ‘what you don’t understand’, but I know you fully understand this topic) is the reason for the JA as a whole (which vitally includes the US build requirement) is NOT economic.
Sure, allegedly it’s for national security. But how does having a smaller and older fleet than would otherwise be the case bolster national security? And can someone please make the case that the JA is the most effective and efficient means of meeting national security needs?
The difference is that you advocate giving up and becoming completely at the mercy of “countries of concern” as the SHIPS Act refers to them. I say we need to fight for what little autonomy we have now and expand upon it.
Is South Korea a country of concern? Japan? Our NATO allies? Not sure what you are proposing here, but if you want a 100% US-built ship down to every nut and bolt, the costs will be extreme. Think US-assembled ships are costly now, just wait until they are 100% US-built. And what will that do to the demand for domestic shipping?
‘It follows’ because look around…what other high labor cost country allows cheaper foreign built vessels to ply their coastwise routes but requires their high-cost domestic seafarers? (And if you CAN cite one, please also include the other, many more numerous counter examples).
Sorry, not familiar with other countries’ citizenship requirements. But I know that here in the USA you can use foreign-built aircraft, yet I’m not aware of foreign crewing. So again, not apparent to me how one follows from the other.
Agree completely. Continue to be beholden to china or not. We all have to decide which side of this trade-off we want to be on.
I sometimes imagine a meeting of Chinese high command, where they bat around ideas for how to sabotage the US merchant marine and American coastwise commerce. One person speaks up, “What if we could convince every country in the world to refuse to sell the Americans new vessels? It would wreck their merchant marine and sabotage their domestic supply chains!” Then, of course, another notes that there is no need to lift a finger as Americans have already done it to themselves via the Jones Act.
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No and no. As I stated in the other thread, once missiles and torpedoes are launched, the tonnage exports from those countries (close proximity to china) to the US will = 0.
And the three Matson builds that you mentioned earlier when their cost fit your argument but don’t mention now when their existence goes against this argument…but I digress…
Also, why does Phillyship even exist? I know as soon as they opened, Matson built 4 ships there and OSG about 10…does that yard even exist without the US build requirement in the JA?
I’ll try to make this as simple as possible: the number of US shipyards capable of building ocean going, sealift suitable ships currently = X with the capacity to build Y tons/year. Without the US build requirement, both X and Y would be smaller. Can we agree on that?
Has anyone said that? I would counter with asking you to make the case that making changes that would lessen our already inadequate shipbuilding capacity is the most effective means of meeting national security needs.
It follows because the purpose of the JA is to ensure our sealift ability domestically. If the law is changed such that we can’t domestically supply our own ships, it’s a pretty easy argument to make (by the likes of the Cato Institute) that since we can’t even make our own ships, why are we maintaining this expensive labor force? Like I said, look around to the path our peer countries (UK, Canada, Australia) have taken.
I’m not sure why you think the airline industry is an apples-to-apples comparison for this. Particularly passenger airlines where the voting public would be face to face with the foreign pilots and crew. I can’t imagine that would fly (sorry for the pun). Mainly because, if your focus groups showed it would fly, Cato would be out there beating the drum to gut that industry of US jobs as well. I mean, it would be a cost saver right? So why not?
Which, if true, means we won’t be able to build ships given US shipyards’ heavy dependence on imported parts and components. Which means any notions that the JA’s US-build requirement removes US dependence on foreigners for its shipbuilding needs are illusory. So we’re getting substantial downside (an older and smaller fleet) with minimal upside.
And the three Matson builds that you mentioned earlier when their cost fit your argument but don’t mention now when their existence goes against this argument…but I digress…
I didn’t mention them because without the NSMV contract and repair work the Matson contract never would have materialized as the yard would have already been bankrupt.
But to your point: yes, without the build requirement US shipyards wouldn’t assemble large oceangoing commercial ships. Production would go from about one per year this decade to zero. Among the large shipyards, this would prompt AmFELS to close. Other big ones (NNS, HII Pascagoula, BIW, NASSCO, Bollinger MS) would probably stick around thanks to government contracts.
So the question is whether having one additional yard (which takes 5 years to build a small containership) is worth having a smaller and older commercial fleet when a conflict breaks out. Seems like a poor trade-off to me.
Has anyone said that? I would counter with asking you to make the case that making changes that would lessen our already inadequate shipbuilding capacity is the most effective means of meeting national security needs.
If people aren’t saying that — a tacit admission the JA is not the most effective and efficient means of meeting national security needs — then it only strengthens the case for the law’s repeal or substantial reform. As for shipbuilding, again, evaluate the trade-off. Is a smaller and older fleet in exchange for one additional shipyard a good deal?
Finally, if there is important national security value to preserving domestic commercial shipbuilding then it should be subsidized and paid for by all Americans directly and transparently, not through JA protectionism that disproportionately burdens a small percentage of Americans with costs that are opaque and difficult to measure.
If the law is changed such that we can’t domestically supply our own ships, it’s a pretty easy argument to make (by the likes of the Cato Institute) that since we can’t even make our own ships, why are we maintaining this expensive labor force?
That seems like a strained and weird argument. Because we can’t build sealift ships then the mariners on them shouldn’t be American? I don’t get the connection there, and I suspect I’m not alone.
As for airlines, that seems like a far better comparison than whatever is happening in other countries. And it’s not apparent to me that Americans — who routinely fly foreign airlines on international trips and have no problem with foreigners in other capacities — would have a big problem with a foreign citizen crew.
But before we go any further, I have to ask: is there any evidence that could convince you that the JA — or merely the build requirement — is a bad deal? Exactly how bad would things have to get for you to concede that the law no longer makes sense? Because if there is no answer, and this is all just faith-based JA religion, then I’m not sure how much point there is to this exchange.
Merry Christmas!
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I didn’t enter this exchange hoping to change your mind. I entered it to get you to lay out your/Cato’s anti US build requirement case for all to see. It’s clear that case is purely economics based, that is, it’s cheaper/better for business if we don’t have it. While that’s cool and all, the purpose of the JA (including the US build requirement) has nothing to do with what’s best economically.
Also I hope all take note of how the same cheaper/better for business argument used to advocate for killing US yards will be very easy to apply to US mariners. Unless of course we mariners trust the likes of the Cato Institute to look out for the best interests of American labor.
My advice is to recognize the divide and conquer strategy (we’re not coming after YOUR jobs, just those bad shipyards) for what it is and act/vote/call congress accordingly.
The centerpiece of my argument was based on national security and that the build requirement results in a smaller and older fleet. Any mention of economics was tangential. But I understand you have a script you must stick to.
If others reading this thread want a deeper dive on national security, you can find some relatively recent thoughts of mine here: U.S. Maritime Policy Needs an Overhaul - War on the Rocks
Happy holidays everyone!
Happy Holidays you Chinese troll!!!
Yes, someone making some pretty good arguments = Chinese troll. This forum continues to sink to ever lower levels, its extremely embarrassing.
My experience with American new build deep-draft vessels, is that, there’s nothing American about them. Designed in South Korea and pretty much built in SK. Sure the hull is fabricated stateside and thats about it. They completely lack any higher-level US input.
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This is good advice. I recommend all members of this forum read this linked article then decide for yourself if this is someone you want in your foxhole, or a fox trying to get into our hen house.
This is who we’re dealing with here:
Colin Grabow | Cato Institute
If you open that link, there is a listing of the articles he has written on Cato’s website. Recommended reading for all who have an interest in the USMM to get an idea of what we’re up against.
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That’s actually the problem…he’s not a chinese troll, he’s an American advocating for all this.
Now where he/Cato gets their funding and script to follow…that might warrant further investigation perhaps?
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Quick “research”, long read for those who are specially interested:
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Merry Christmas all - will chime in later- today I just want to wish you all a Merry Christmas
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Merry Christmas.
The gifts have been opened. So . . .
The Jones Act build requirement results in tens of thousands of jobs, a maritime industrial base, and supports thousands of small yards efficiently and profitably building smaller vessels for the Jones Act trade. Therefore, the Jones Act build requirement is essential.
I would favor some exceptions to the Jones Act build requirement for vessels over 10,000 GT, and certain specialized vessels (e.g. offshore wind) that are not currently being built in significant numbers in the US.
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Am I wrong to think that China, Japan, and South Korea’s shipbuilding capability is highly correlated with their governments investment into the industry?
I doubt Japan has much cheaper labor than we do. They just build ships way more efficiently.
What is wrong with “copying” the Japanese model to strengthen our shipbuilding capability? Is this partially what the SHIPS for America Act is trying to accomplish? It seems like the result would ultimately benefit the US from an economic and defense standpoint.
Open to criticism here as I’m not super educated on this subject.
Shipyards and the peripheral industrial base that supplies them are massive employers, and a source of skilled employees for other businesses. However, it requires enough shipyards building enough ships with the supporting industrial base to reach “critical mass” so that it becomes self-sustaining.
The US shipbuilding industry and its supporting industrial base probably fell below critical mass in the 1950s.
The US has also pretty much lost its steelmaking, machine tool industry, boundaries, and machine shops. In the 70s machine shops were full of American made lathes, milling machines (e.g. Bridgeport), etc. By the 90s , the machine tools were mostly Asian or Eastern European.
Up until the 1990s there were a lot of modest size machine shops all over the country. They did a lot of automotive machine work, military work, marine work, and work for local industry. Now, most of those machine shops are gone. Things are made overseas. Parts are no longer repaired, they are simply replaced with new parts from overseas.
The US no longer has the tools to make things on a large scale. Nor do we have the skilled workers to operate those tools.
Restoring American manufacturing and shipbuilding using American made tools operated by American skilled workers would be a really massive undertaking.
America’s strength during WWII was its ability to retool factories, move women (spare labor capacity) from the kitchen into the factories to build ships, aircraft and tanks in large numbers very fast. Could we do that today? Hell no!
If the US wants to be secure and powerful with the ability to fight a large scale war for more than a few weeks, it needs a lot more than ships. It needs to become self-sufficient again with a large, modern industrial base capable of tremendous and fast production.
Will this ever happen? I doubt it.
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I have had the dateline to get a head start on recovering from the excess of daughters Christmas lunch. The statistics used in Mr Grabow are irrefutable. The European shipbuilders focused on what they were good at: cruise ships, offshore ships of specialist designs and ferries.
To outsiders articulated tug and barges and wire tug and barges are an abomination over a certain distance and certainly during the winter months at higher latitudes. I have long been an admirer of waterborne trade in US Inland waters.
The skills required of ship’s crews 60 years ago are no longer required by crews of today to move most cargo apart from specialist lifts.
The question of sharing foxholes among Allies might have been answered during WWII.
The Texaco Bombay was hit by a unexploded rocket which lodged in the electrician’s bathroom steaming up the Saigon River with avgas for US Forces during the Vietnam War. The complement, British officers + one Kiwi and Indian crew.
Skills 60 years ago.
Crew splice wire, Liverpool salvage and Admiralty for survey. clean hatches, brine bilges , repair and sew new hatch covers, general maintenance including at height on stages and bosun’s chairs. Strip down derricks and prepare for survey.
Deck Officers conversant with all types of cargo. Carriage temperature for different commodities and ventilation requirements. Grain calculations for stability, deep tank use for tallow etc. Repair of items such as gas detection and calibration. Yes this is hard to accept these days but we used to replace components in MSA meters and test them with a control gas. Heavy lifts (OK these were less than 200 Tonnes).
Navigation without position finding equipment except a dodgy radar and an even dodgier DF . On some ships no gyro.
Engineer Officers were all tradesman machinists with a 4 year apprenticeship and to get accepted for employment had to be employed in a heavy machine shop preferably involved in ship repair or building before obtaining. a 3rd engineers qualification.
The machinery required a lot more maintenance than today.
The master and chief engineer were more isolated from the office and had to make a lot more decisions on their own.
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I am entering this discussion late and with a limited background in cost analysis and US Mariitme policy writ large. Early in US timeline we had an even more drastic protectionist navigation law set which mandated even foreign trade involved US cargo ships had to be US built and manned. The discussion of the JA in reference to coastwise trade requirments is being debated. My observation that the CATO argumment against protectionism of coastwise trade produces a dependent inefficient, old and dying industry segement. Well those impwdiments are largely not in place for blue water foreign trading bottoms and are that maritime sector in vibrant? Absolutely not and virtually wholly dependent on the Martime subsidy programs for the 60+ militarily useful cargo, tanker and a few cable ship program. Scrapping the JA would simply wipe out US domestic shipping and there would be absolutely no tiny fallback program as exists for the foreign deep sea sector. Look at the Canadian foreign trading MM. Virtually non-existent. Applying the CATO argument, the foreign trading deep sea US maritime industry should be thriving considering the JA is not in the mix? Using Peurto Rico as a supposed case in point, I believe the argument of the JA negatively impacting the island is patently false and the central problem as highlighted after severla devastating hurricanes is the pathetic inability of the port authorities to effectively clear and transport cargo lodged for weeks at a time in the portsI may be a ardent mercantile capitalist, but I am not suicidal and wish the extinction of an entire transportation modality as CATO and the pariah capitalists on their payroll apparently support… Besides national security, I would say it is as much about preserving and building sea seaging skillsets, engineering technologies, generational knowledge, growing the next generation of seafarers as it is about maintaining and building viable shipping companies and business models. Selling out an entire way of life and seaging careers for a slightly higher bottom line is being blind.
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A post was split to a new topic: Off-topic from U.S build requirement
The U.S. build requirement acts as an indirect subsidiary to the shipyards. From an economics point of view that distorts the market and creates inefficiencies.
In principle, if assisting the shipyards is a national goal it would be economically more efficient to end or ease the build requirement and instead subsidize the shipyards directly.
Cato half-heartily endorses the idea here: Are Shipyard Subsidies a Good Idea?
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