Tuesday, May 28, 2013

Home Grown Vessels Only for Domestic General Cargo and Container Shipping Lines

Applications for Shipyard Grants Now Closed
Shipping News Feature

US – Protectionism it seems has its costs, those familiar with the short sea general cargo or container feeder trades around the North American coastline or who may have read some of our earlier articles* will know of the Jones Act, that piece of legislation loved by many at home and derided by others, mostly overseas, which enshrines in law the principal that vessels trafficking in the domestic cabotage market have to be as homely as Mom’s apple pie. The Act decreed that shipping lines on these routes must utilise not just US flagged ships but ensure they have been built in the country and are crewed by natives and operated by US citizens.

The Jones Act, or to give it it’s correct title, the Merchant Marine Act of 1920, was introduced following the Great War and has been amended subsequently as needs demanded, gradually whittling away at the original format which was to protect the native merchant fleet and ensure there would always be a powerful, patriotic presence at sea in times of conflict.

The reality is of course that, with so many vested political interests wanting to maintain the principles of the Act and the consequential higher costs, sometimes it is necessary to supply state aid in order to sustain it. Recently the government released close on $10 million for the purpose of assisting smaller shipyards, many of whom struggle to continue to build suitable vessels given the high cost of native labour.

The Small Shipyard Grant Program, aims to fund up to ten companies to the tune of around $1 million each with the purpose of furthering the production of American built tonnage and applications for the grants closes today with the suspicion that the offer for up to 75% of project funding will have resulted in heavy oversubscription (as has been the case previously).

So far the government has invested over $150 million in the program as part of the Department of Transportation Recovery Act which allocated $150 billion to fund surface infrastructure projects. Shipbuilding and repairing provides employment for well over 100,000 US citizens and America it seems has no intention of outsourcing the construction of its ships to cheaper suppliers further East.

* For further background type Jones Act into the News Search Box

Photo: Courtesy of US Department of Transportation Maritime Administration