No no reason whatsoever. It just adds to the $7bn they already get from carrying household goods around.
If I understand the nature of the GHG Contract it is a one stop shop where ARC handles the complete move. Not just the carriage over water. I am assuming the $7 billion relates to the full 9 year potential (if all options are exercised) of the contract as well.
Correct me if I am mistaken.
You’re slightly mistaken—if all options are exercised its 20 billion over nine years:
Reads to me like ARC, a US shell Corp of Wallenhuis, basically, will own the shipments of of all household goods, and handle all aspects of moves through managing subcontractors. For ships, this means all the international HHG shipments bid across multiple MSP cargo preference ships will be gone, and the ARC outfit will own all transport. Kind of a blow to other operators but there will likely be lots of horse trading, with one notable exception considering ARC ships and routes—unless the contract specifies otherwise and preserves a US ship preference the household goods that would otherwise have to be shipped from Korea on a US flag container ship contracted by a DOD transport office would only have to be shipped on a mnt container ship with transport purchased by ARC or a sub.
I was never under any illusions otherwise. What is the point you are trying to make?
This took some days for me to want to reply to.
You make some bold assumptions about my background.
No, just no. Do you always just buy American? Do you always hold someone’s love of country over their head like that?
The rest of what you wrote reads to me as completely incoherent.
So I would have hoped you recognized the opening as somewhat of a rhetorical device attempting to show that from a certain perspective different than yours this proposal to scrap US build requirement appears just as incoherent as as you find my argument. But since you took offense I’ll moderate myself and delete that.
No, as much as I would prefer to I don’t always “buy American” but that has nothing to do with my argument. My premise is that no carriers seem to be having problems building ships in the US to move all the cargo between US ports. My premise is I don’t believe there is some pent up demand for typical jones act cargo that is not being moved for lack of bottoms. My premise is a ship is not a commodity good and for now US shipbuilding provides good jobs directly and indirectly.
I don’t know about holding anything over anyone’s head but yes I do believe absent some further explanation of how cargo volumes are going to mysteriously increase to the point of requiring increasing total numbers of ships and the therefore actual new jobs some claim will be the result. If the change does not do that then the chief beneficiaries will be ship owners in all their glory whether mom and pop or bank backed / foreign backed. So the trade off is lower operating costs for them, few if any new sea going jobs and lost shipbuilding jobs.
So yeah I don’t think the law should be changed. I’m open to hearing how this is going to increases fleet size / jobs but just saying “I can buy toys, appliances and tools from China, Mexico or wherever so why can’t I by my ships there” is a not a good enough reason right now.
I saw the rhetoric and thought it was assinine. I can argue with every industry in these United States needs some sort of protection. What should be protected and at what cost? I can understand protecting American labor, the emotion it elicits. How could another, fellow American not want to protect American jobs?! It is disingenuous of you to want to force on the American people your, our, industry at their expense?
Everyone here recognizes that US shipbuilding is down. Is it 100% because of the Jones Act? Probably not. Can you lay any blame at the Jones Act? Absolutely. I’ll give it more blame than not. But you cry of some doom and gloom scenario where more Americans would be on the street if the American shipyards hold a monopoly on US shipbuilding. This will not happen, it is sensationalist at best and dishonest at worst.
Repealing the US shipbuilding requirement wouldn’t mean the evaporation of American jobs, it would stretch the building and supplying of American ships across the globe. I have beaten this horse dead above.
In 2020 the US shipbuilding requirement only benefits the few at the expense of the many.
What else can we do to protect or create American jobs? Follow the lead of Oregon and New Jersey and require that only gas station attendants can pump gas? Give the guys working the excivators spoons?
Applying this to ships, should the new Panama Canal be destroyed because smaller ships mean more crews which mean more jobs. Should ships in American service only carry 20000mt of bulk cargo at a pop? American service roros only carry 500 cars? We recognize this as ridiculous. Should we force all non-American cars out of the United States? Will you only ride
It is actually a good enough reason right now. It will now and always be a good enough reason in an actual free market.
How many companies manufacture TVs and computer screens in the US? None. Is this a good thing?
A huge percentage of our medications are produced foreign, especially in China. Is this a good thing?
Most US producers of rare earth minerals shutdown because of much cheaper Chinese competition. Is this a good thing?
Should we shutdown US oil production because it’s cheaper and better for our local environment to buy foreign oil?
Should we replace American school teachers with smarter, better educated, Indian school teachers who will work for half the money?
Where does this insanity stop?
Until you can prove this, instead of just asserting it, it’s just wishing. There is no reason to believe any of the tens of thousands of US shipbuilding and related jobs would survive a change in the build laws. People will take the cheaper option in big capital spending, building expenses like ships. The shipbuilding industry is basically an exercise already in maximizing foreign resources to make (sometimes more appropriate to call ‘assemble’) US ships from foreign design and components as long as it doesn’t go too far like that fishing vessel in Washington. There’s a limit to how much, and while less US content means less for US shipbuilders and related industries, as Jefferson once said to Madison on securing approval for the amendments to the Constitution that would become the Bill of Rights, half a loaf is better than none.
How do you know this will have a disastrous impact on those jobs—-ITBs/ATBs. Why do we have so many and the world so few? Because under US Manning rules, it’s cheaper. The companies will seek the cheaper options in the same market with the rules. They prove this over and over.
Plus there is no new impulse of water trade that will suddenly be more cost advantageous than other modes already in use. Want more ships—building more routes, like offshore work.
It’s so tiring to see the same arguments over and over… mariners seem to think that if they kick out the shipbuilders out from under the shared umbrella of protectionism that is the JA, there’ll be more room for more mariners. They justify pushing them out into the rain as some kind of deserved punishment for ‘failing’ at capitalism or something while ignoring that their own jobs suffer from the same impact of protectionism. Mariners can seek and obtain Mariner employment pretty much anywhere in the world, or make it a cheaper market here by taking lower wages, shipyards have to deal with supplies, facilities, labor, environmental they are more constrained to specific regulated markets, protectionism forces them to invest and benefit those markets nothing forces the Mariner, they choose beneficial situations with regard to their marketability, training, improvement, price point. Operating costs and labor are why there are so many barges… efforts to remove the shipbuilding provision are just efforts to make the barges and tugs and fishing vessels cheaper. With the plentiful world market of shipbuilding—many of which are subsidized—there is no way US yards will survive, won’t happen all at once, but it will—because you can’t just will away all the actual cost issues for the US market.
Whatever the merits of shipbuilding protectionism—which the US has had in some form basically since founding—removing it (and that’s the question, not if it’s good, but if removing it is good) will certainly have lasting detrimental impacts and its current existence has and continues to force a lot of money into communities that more Mariner jobs won’t (if that would result which it won’t). Removing it doesn’t make more room under the umbrella, it just shrinks the umbrella, the same people trying to close it completely will then start shrinking it further by question crewing citizenship provisions as Cato Institute already has.
Looking forward to the next thread on the same damned thing in another few months… Happy Fourth everyone!
Why are so many of the US shipyards that build ships for the Jones Act market (and for the US Navy) owned by subsidiaries of foreign shipbuilders?
Why are so many of the ships that fly the US flag owned and operated by subsidiaries of foreign shipping companies?
My point is simply this, you wrote:
As the USCG and Class DO go to shipyards both foreign and domestic what scheme do you imagine and what should they do that that are not already doing?
Commercial ocean shipping today is mostly as a part of larger cargo networks. In my experience the non-Jones Act U.S. flag ships mostly get their cargo from those commercial networks with either an occasional mixed load with some or mostly government cargo or from time to time all government cargoes.
Without being a part of one of companies with the large network it’d be very difficult if not impossible to survive on government cargo alone. My experience with RO/RO anyway. I assume it’s more or less true on the container side as well.
Couple of responses here. First, the snarky one:
Why are so many oil and gas companies that operate in Norway subsidiaries of foreign companies?
Cabotage is and has always been about military logistical capacity. Can we transport troops, can we feed and arm them, can we repair our ships, can we build new ones. Foreign investment in US yards and ship operating companies doesn’t have any negative affect on those key components.
Sure, Maersk isn’t a US company. But if a war breaks out, that won’t help them keep their MSP ships out of it.
Sure, Aker isn’t a US company. But when the Navy comes knocking they’re not going to be able to pack up the yard and take it home to Norway
Not only snaky, but rather stupid. Norway (like USA) have foreign companies investing in their oil and gas industry because they practice a Free Market policy. (What did you think was the reason??)
The question was; why are foreign companies putting ships under US flag? Not what is the reason US need merchant ships?
Same with US shipyards.Foreigners own a large number of the yards that is able to build ocean going ships in the US and make good profit from it. Why don’t US investors find it interesting to put their money into US shipyard?
Why would Aker take anything from Philly Shipyard and move it to Norway?
BTW; They sold out of their Norwegian yards several years ago.
The old main Aker Shipyard in Oslo is now a trendy bar and restaurant area:
I did write that, you confirmed it.
Congratulations! We are now both enlightened on the facts of the matter and can move on.
I can say the same of the pro-US shipbuilding requirement.
Over here in economic reality it has been done. We can replace “shipbuilding” with any other heavy industry in the US and it has been done. Auto manufacturing didn’t disappear with Toyota coming to America. Boeing didn’t disappear when Airbus came to America. GE trains didn’t disappear when Siemens trains came to America. If anything, more foreign investment, and more jobs, came to America.
In 1980 candidate Ronald Reagan was quoted:
Japan is part of the problem. This is where government can be legitimately involved. That is, to convince the Japanese in one way or another that, in their own interests, that deluge of cars must be slowed while our industry gets back on its feet…
Read the whole article. That quote is 40 years old. US auto manufacturing
Boeing did requested taxes against its competiton in 2017
On April 27, 2017, Boeing petitioned the U.S. Department of Commerce to impose antidumping and countervailing duties for a total of “at least” 159.91% on Bombardier’s C Series commercial jets…Boeing claims that Bombardier is charging Delta Air Lines a price 41% less than the production cost…
Bombardier is a Canadian company. If anybody here seriously believes that an American worker at Boeing is at a competitive disadvantage to a Canadian worker, they are only admiting that the American worker needs protection against their ineptitude.
But Bombardier gets subsidies! You didn’t mention that!
Cato doesn’t seem to be attacking the American manning requirement for American trade. I very seriously doubt that would ever go away, Jones Act or not. I actually support some form of cabotage laws, in that American citizens should be given preferrential treatment of job vacancies in the United States. That American worker should be afforded the opportunity to outfit themselves with the best equipment available, and often times that equipment is foreign sourced. At the end of the day though, a man’s best competitive advantage is the ability to work for less.
Here is another angle on this. Should Jones Act like protections be applied to every American industry? Should only Boeing planes be allowed to operate between US airports? Should American auto manufacturers be given a monopoly on American car transportation? Going further, should Americans only be allowed to buy and use US electronic devices (Apple)? I would hope that most people reading this will view all of the above scenarios as ridiculous, so why not see the US shipbuilding requirement as just as ridiculous? I am losing sight of why as time progresses.
What turned me against the US shipbuilding requirement? America’s Finest.
This is why doing new threads for the same old points is annoying…
The rest of your post on ‘economic reality’ is absurd. You seem to think that repealing the build provision won’t trash remaining yards and grow new ships and Mariner positions suggesting a bunch of capital and untapped market will handle the loss of constraint on new builds of cheap and foreign, while not decimating shipyards. That’s not gonna happen.
All those things you would tout as economic wonders happened like auto manufacture in a structured trade and interventionist approach like NAFTA. The US did attempt to introduce a way to level international playing field issues on shipbuilding, given like airplanes it’s often subsidized if not straight up nationalized in other countries. That was the OECD Shipbuilding Party Agreement. Was being pursued by US, but then they walked away.
In December 1994, the Commission of the European Communities, and the Governments of Finland, Japan, the Republic of Korea, Norway, Sweden and the United States signed the Final Act of the “Agreement Respecting Normal Competitive Conditions in the Commercial Shipbuilding and Repair Industry”. The Agreement was scheduled to enter into force on 15 July 1996 after all Parties to it had concluded their national ratification procedures. However, the United States has still not ratified the Agreement, and as a consequence, the Agreement is not yet in force. The goal of the Agreement is to establish, in a legally binding manner, normal, i.e subsidy and dumping-free, competitive conditions in the shipbuilding industries of OECD countries. In this way, it will provide a “level playing field” for nearly 80 per cent of the world shipbuilding industry.
The negotiations on the Agreement were launched by the US Government in the autumn of 1989, in the framework of the OECD Council Working Party on Shipbuilding. The intention of the US Government was to create a new discipline for all government support to shipbuilding.“
Yes but Maersk Lines Limited (MLL) sure is. They own those MSP ships outright and cannot take orders from the parent company in order to take the MSP money from the government.
Snarky, bugge, snarky. It means I was asking the question specifically to rile you up.
We’re alright with Aker running a shipyard in America in the same way that you’re alright with Exxon running a refinery in Norway.
As far as whether US investors are interested in putting their money into US shipyards…I don’t know how to tell you this, but they are, and they do.
NASSCO just finished building the largest Jones Act container ship in history. That ship is also owned and operated by an American company