Without the JA there would be no deep sea shipbuilding. This point made in various ways.
My reply is, with the JA there is near zero deep sea non- government now. I don’t understand how so many can be such stanch advocates for a program that empirically does not work. I would like someone to directly address how support of a failed program makes any kind of sense.
If the US build requirement is abandoned- just a matter of time until the US crew requirement is done away with.
Well I don’t have a crystal ball- but I can look at history and see that the current US fleet is small and getting smaller. So it seems to me the options are keep the status quo for a minuscule number of berths or take our chances of significantly more berths on reflagged ships- I take the latter
Need JA for inland yards
I need some help here- not an area I know much about- my uneducated view is there is enough competition in this segment to drive efficiency- but don’t really know
National defense- skills -
Again I believe this point has merit- and again the current system is a failure at meeting this need, while at the same time being unfairly implemented. Make the case in congress- and if you get votes- fund it directly
It all economic
Yes it is- sorry. I love ships - have since I was a boy, all I ever wanted to be was a sailor. But there is no esoteric reason to build a commercial ship- they are economic tools and they only exist to make money. Period full stop. Smart people with economic drives have found creative ways to avoid the JA requirements- mostly due to the extraordinary capital costs- and that will continue
You can have a Cabotage Law with the “US owned, US crewed” without the “US built”.
That MAY force the US shipyards to modernize and find ways to compete for US commercial contracts.
Maybe they could do something similar to what NW European yards has done; buy or set up “hull building yards” in nearby lower cost countries.
Entire hulls, or hull blocks, are transported to outfitting yards in NW Europe were the machinery, cables and other equipment are fitted, tested and commissioned.
Here is one example:
That would secure the domestic trade jobs for US Mariners.
If US yards still need subsidies that should be openly and above board.
If these yards efficiently build vessels, they don’t need the Jones Act’s protections as they can compete in the world market. The build requirement’s is premised on the inefficiency and uncompetitiveness of US yards (with attendant harm to vessel operators and domestic shipping).
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.
This would be an extremely common-sense move. The JA’s prohibition on foreign-built LNG/LPG carriers, heavy lift vessels, wind turbine installation vessels, etc. generates zero business for US yards while harming coastwise commerce and the demand for US flag shipping. Why are we doing this?
Well those impwdiments are largely not in place for blue water foreign trading bottoms and are that maritime sector in vibrant?
Because even with the removal of the build requirement US-flag shipping is still far from competitive with internationally-flagged vessels. But this has little applicability or lessons for coastwise commerce where such vessels are prohibited. The logic here isn’t difficult: allow Americans to obtain ships at 1/4-1/5th the US price and you’ll get a larger and more modern fleet.
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.
It would wipe out US-flag domestic deep sea trades for sure. Which is why I have advocated for an expansion of subsidies to US flag shipping to ensure the country has access to sufficient sealift. But this isn’t terribly relevant to the topic at hand, which is the build requirement.
Using Peurto Rico as a supposed case in point, I believe the argument of the JA negatively impacting the island is patently false
Why do you believe that forcing Puerto Rico to pay dramatically higher shipping costs — and effectively barring the island from US LNG and LPG due to a lack of JA-compliant gas carriers — has no negative impact? How can that possibly be the case?
Besides national security, I would say it is as much about preserving and building sea seaging skillsets, engineering technologies, generational knowledge,
If it’s needed, then subsidize it. In any case, given the JA’s miserable performance in preserving the domestic shipping and shipbuilding sectors, it’s done a terrible job in meeting these goals.
No American company can compete, nor should they try, with China,
or much of the Third World.
No enforced environmental rules. No labor laws. No OSHA. No worker’s comp. No health insurance. A low standard of living for workers. Workers are simply expendable. No lawyers. No liability.
Competition with China and the Third World is not a level playing field for American companies.
Shutting down US manufacturing and foreign sourcing everything at the lowest possible upfront cost from China and the Third World is not a winning industrial, economic, or national security strategy.
The US has too many welfare programs that enable too many people to lead work optional lifestyles. We need to cut back on welfare and expand “workfare” that leads to family wage jobs.
For a lot of good reasons, it will always cost a lot more to manufacture in the US.
You can cut ‘welfare’ to nothing and no one will learn the skills needed to build ships as it’s expensive and if you don’t have good credit no one will loan the money for the training. The average family income on the US is about $80,000/yr with two people working and two children. The average CEO income is over $880,000/yr not counting the stock bonuses which brings their average pay to $17,000,000/year
This year Singapore Airlines gave a bonus to all their employees equal to 8 months of their salary. This was based on the profit the airline made for the year.In the USA this would never be done that profit would go to the CEOs and stockholders. But you’ll notice a difference if you ever fly on Singapore Air, the service is great as they all have skin in the game.
Not sure I get the logic here. Is your point that if US companies bought 20 ships a year from Korea, Japan and China- our entire manufacturing ability would be compromised?
Is exactly what Cato’s ultimate goal is. They’re trying to play the ‘what’s best for national security’ angle because the ‘it’s best for corporate profits’ angle is more difficult to win hearts and minds. That’s why we gotta be careful with things like:
Just because that aspect doesn’t directly affect your segment of the industry isn’t a good reason to throw it under the bus.
Remember the billboards Cato funded up and down I-95? Their hashtag was #endthejonesact. It wasn’t #endthedomesticbuildrequirementforvesselsover10000gt
Make no mistake… these vultures want it all… YOUR yards, YOUR vessels, and YOUR job included.
If you don’t try, how do you know? Free competition has been the American mantra for the last 70-80 years. Now, when somebody is able to competing with the US it is no good?
Are we talking about Bangladesh here, or the world in total?
EU rules stops US export of a lot of food products because they don’t meet the EU standard. (Apples to apples) Are you still just comparing US vs. Bangladesh standard?
Have you looked at EU welfare programs, or just Bangladesh welfare programs?
Compare apples and apples, not just what suites your opinion.
In reply to the above, I like the ‘interim ship’ concept contained in the SHIPS Act a lot as long as there is some enforceable provision to ensure a US built replacement vessel is ordered.
As far as direct changes to the domestic build provision of the Jones Act, any change would have to pass the test of ‘does this change make our domestic shipbuilding capability stronger than it currently is?’ If yes, great… if no, then not acceptable.
Removing the domestic build requirement as a stand alone change falls completely, squarely, and totally into the unacceptable category.
I can’t think of any way that this can be done, other than some direct subsidies for US Shipyards. Which I am not opposed to. But not sure how anyone could commit to any future replacement build with no guarantee that such a ship could be built or at what cost to build it.
I support your intention- but I don’t see it as a practical yet.
If you don’t want to commit then you don’t get to participate.
The company would be contacting with a shipyard to build the vessel… why would they have doubts regarding whether it could be built?
Regarding price, there would be a contracted price just like any other build in any other yard. That contract would have provisions regarding price and cost over run contingencies… no different than any other newbuild contracting process.
I could envision a system where there was a reflagging cost, combined with an income tax on profits for companies that buy foreign tonnage, that can be used to subsidize US yards- not a complete thought here. But something like that seems a fair way for those benefiting directly from the foreign purchases to subsidize the US yards
Even if it has NOT been removed, what has it done to improve US domestic shipping?
How many military useful ships has been delivered from US shipyards in 2024?
How many are scheduled to be delivered in 2025, 2026, or even in 2027? (Google it)
Get real, US shipbuilding; is not competitive and will not be if there are no major changes to the present (lack of) system.
They need a solid “chick” in the ar*s to get them on the right track.
PS> It is NOT cheaper labour that is needed, it is less greed on the top.
If European yards can compete on building complex ships, US yards should too.
US companies regularly compete successfully against Chinese firms, which is why the US is the world’s #2 largest manufacturing country. US manufacturers exported $1.4 trillion worth of goods in 2021 (most recent data I can find). With efficient domestic shipping we’d probably manufacture even more.
Time frame? So let’s say I entered a 5 year charter for a foreign built ship- that had to be replaced with a US built ship at today’s cost and availability- that deal will not happen
Let’s call it a 10 year deal- no yard will give you a price for 10 years away- you would be giving the yards a blank check- that deal doesn’t happen either
