The Jones Act tanker charter market will now be a duopoly? OSG and Fairwater (Crowley/Seabulk). Consolidation isn’t usually a good thing for customers or workers…
The article doesn’t touch on the significance of this, as it’s basically the press release, any thoughts?
They’ll just drive OSG into the ground and then it’ll be a monopoly.
Interestingly enough, American Petroleum Tankers (APT, Kinder Morgan) is going to retain Crowley as their technical and crewing manager for the time being. Fairwater LLC will have nothing to do with APT’s 16 vessels, for now. I’m wondering how this will hurt the AMO guys when it comes time to negotiate since it used to be Seabulk Tankers (SEACOR) vs Crowley when it came to pay. Interesting times ahead.
The article says “The joint venture will also provide crewing and technical management for an additional 21 third-party owned vessels.”. Technically it doesn’t say what type of third party vessels, but I read that as including the APT Kinder Morgan and such because there aren’t any other JA tankers out there to get to that number (11+21= 31).
The OSG(Alaska Tanker), Chevron & Polar tankers make up the rest of the total JA tanker fleet.
I have it on good authority from someone who works for one of these companies that the APT Kinder Morgan fleet will not be included in this combining of fleets. This being told to the fleet from the VP of one of the operating companies.
So is the legacy of the Jones Act in 2023 is the US now has 2- 3 tanker companies, and 2 - 3 large ship shipyards?
You gonna include the jobs for US citizen mariners that wouldn’t otherwise exist in your legacy statistics? I mean, you are posting in the “professional mariner” section of the forum after all.
Perhaps your posts and thoughts would be better suited to the “How can we further outsource American jobs and infrastructure so my company can make more money” section.
Over 10,000 Jones Act tugs and towboats.
More Jones Act fishing boats.
Hundreds of small shipyards.
In terms of jobs, deep draft shipping (Jones Act and foreign going) accounts for a very small portion of US Mariner jobs.
Sorry - mine was a flippant and snarky take.
A touch more thoughtful take to your point. I don’t believe it is a given if the US build requirement aspect of the JA has added or subtracted US seafaring jobs. Not trying to dig up this stale argument again - just addressing your reply.
Thanks - IMO geography not the JA has more to do with small shipyards and fishing fleets.
That may not be well informed opinion - just a quickly reasoned one
Without the Jones Act, most of the tugs, barges, OSVs and fishing vessels would be foreign built.
Without the Jones Act (Magnussen Act too) many of the tugs, barges, OSVs, and larger fishing vessels would be foreign flag with foreign crews.
The last count that I saw indicated that there are only around 100 deep draft foreign going US flag ships that employ about 6000 crewmen, assuming two crews per ship.
As I recall the count on Jones Act ships was something like 70 ships probably employing something like 3000 men, assuming two crews.
About 10,000 tugs probably employ around 100,000 men, assuming two crews
There must be at least 100,000 fishing vessels.
I don’t know how many OSVs, ferries, small passenger, and misc vessels there are, but its got to be thousands.
The last figure that I saw indicated that there are somewhat over 50,000 mariners with an MMC.
For many tugs, and most small passenger vessels, only the master and mate are required to have a MMC. Most fishing vessels do not require any MMC.
The Jones Act does a lot more than protect 70 ships and 3-5 shipyards.
Probably the most inspiring comment I’ve seen in a long time on why you need to get towing credentials.
Is not what you snark-ally commented on in your previous post, it was the Jones act as a whole.
I still have never heard you, @cpgrabow , or the other anti-US build advocate on here (whose name escapes me at the moment) tell us how it’s a good idea to put our domestic yards out of business, then what exactly is the plan if (when) conflict with China cuts off our access to East Asian shipbuilding??
What good is having 50000 MMC holders with no way to build ships for them to support our forward deployed forces??
A few thoughts:
That example isn’t unique. Back in 2015 one of Philly Shipyard’s execs said that at least half of the ~1,000,000 parts that go into a ship are imported. Philly has even imported steel and bulb-flats from South Korea. Veteran-class tankers built by the yard required 500 containers and 25 bulk shipments each from South Korea. NASSCO has said that South Korea is its primary supplier.
So fears about Asian reliance strike me as describing the status quo.
With regard to U.S. shipyards closing, among the large yards there are only two I think that would be vulnerable if the build requirement went away: Philly Shipyard (which would already be bankrupt had it not been for MARAD giving it the NSMV contract) and Keppel AmFELS (which delivered its two boxships 3 years late and $50 million over budget, and is also seeing big delays and cost increases on the WTIV it is building). Majority of the major US yards don’t engage in commercial shipbuilding (EB, BIW, NNS, HII) or have it as more of a side interest (NASSCO, Bollinger Mississippi) and thus wouldn’t be that impacted.
But I think what you really need to ask yourself is whether having a smaller and older fleet than would otherwise be the case is worth the tradeoff of building 2-3 ships per year (being generous) that are heavily reliant on imported components and foreign know-how. Being able to build and repair ships is good. But it’s also good to have a large, modern fleet when hostilities commence. which the build requirement discourages. And on the build side, any conflict with China better be long before any new merchant ships come online given the very long construction times of U.S. shipyards. I’m sure those timelines can be sped up a bit, but I don’t think anyone should expect a repeat of WWII where ship construction times were measured in weeks.
So purely from a national security perspective–leave economics aside–does the build requirement make sense? Is the trade-off I described worth it?
You are only talking about a handful of huge shipyards.
You fail to address the hundreds of small shipyards that build for the Jones Act trade.
You do make a good point that large uS shipyards building large commercial ships and military vessels need to becom a lot less reliant on foreign products.
US shipbuilding needs to be scaled back up and the US supply chain for components needs to be rebuilt.
The US needs to become a lot more self sufficient.
You’re right, I didn’t address the many smaller yards out there because the question was posed in the context of national security and a US-China conflict. I’m just not sure how relevant some of those smaller yards are going to be in such a scenario. But if you want my thoughts about domestic shipbuilding more broadly in the context of repealing the US build requirement, see here: How Would Jones Act Reform Impact U.S. Shipbuilding? | Cato at Liberty Blog
As for making the US more self-sufficient, sure, you can try to do that. We could make the Jones Act even more restrictive and require every single part of the ship to be US-built. But at what cost? US-built ships are currently 4-5x the world price. Can you imagine how expensive they would become if the supply chain had to be entirely domestic? 5-6x the world price? More? What would that do to the fleet? These are the kinds of trade-offs I don’t think people are giving enough thought to.
BTW, one more thing: where are we going to get the labor for all of this envisioned increased shipbuilding? U.S. shipyards are struggling to attract enough skilled labor as is. Philly Shipyard explicitly mentioned this in their Q2 SEC filing, and it’s not hard to find other examples of other yards complaining.
Sir, you are an economic scholar by trade. You know very well that the national labor shortage is not limited to shipyards. Don’t frame this shortage as uniquely maritime in nature by naming Philly’s SEC filing.
The scenario is not hypothetical. The US and China are at war, but not in the traditional sense. Dr. Mike Sfraga phrases it well with these quotes: "U.S. adversaries seek to weaken “the international order that underpins a free and open maritime domain.” and that China’s game is “characterized by a long-term, methodical strategy to exert influence and power in a calculated fashion”
All of the shipyards are relevant to national security, because the whole transportation ecosystem is.
The concern of Chinese influence in trade extends from here in the US (port gantry crane equipment being in the news lately) to our Allies and other countries. Notably China’s belt and road program.
Also, because you suggest that the JA should be removed because parts are sourced from around the world, lets take a look at 2 examples of government shipbuilding. SUNY Maritime’s new training ship was built on time and on budget in the US with US steel etc. and built during the pandemic when parts were hard to come by, especially foreign ones. In the same economic conditions, Australia’s new icebreaker was built by a Dutch company in Romania. They had major problems with it and could not get parts to put it in service. Blamed it on being hard to source parts around the world. They had to charter other vessels to meet their maritime needs while they waited.
You are right. The U.S. is world class when it comes to building smaller vessels. Regarding the deep-sea Jones Act, our large shipyards are hopelessly inefficient. and wildly expensive. Without the JA U.S. build requirement, the American deep-sea fleet would be much bigger, more modern and safer.
U.S. builders of deep-sea vessels are very expensive, to the point that we have unserved Jones Act trades such as container feeder vessels on the USEC. A waiver for the JA US build requirement should be granted to allow these ships to be built overseas. US shipyards would not be losing business they don’t have.
And what would the reason be for your waiver request?
“Dear Congress, the law you passed makes it difficult for my company to make a profit. Request a waiver to the law.”
Good luck with that.