This month, the U.S. Department of Transportation’s Maritime Administration (MARAD) announced $19.6 million in grant awards to 31 small shipyards in 15 states through the Small Shipyard Grant Program.
While we think this is a great start, it’s not enough. Why? Because we do not have enough modern shipbuilding capacity to meet our needs in the coming decade.
Some facts:
- The 2018 version of the U.S. Army Corps of Engineers publication of “Waterborne Transportation Lines of the United States” details the number of Jones Act vessels at 42,138: 9,310 self-propelled units and 32,828 non-self-propelled units1. Today, the average age of the Jones Act Fleet is 34 years old, and in 20 years, the vast majority of the Jones Act Fleet will be over 50 years.
- Further, our ECA Zone extends up to 200 miles from our coastlines2, which requires compliance to stringent environmental standards, and in 2020 the IMO worldwide pollution rules came into effect3.
- In June of 2016, Subchapter M of the U.S. Coast Guard’s regulations was signed into law4. This establishes new regulations and requirements for owners and operations of tugs and towing vessels, including vessel inspection, defining safety protocol and auditing performance against those standards. A Certificate of Inspection is required from the Coast Guard to maintain fleet operations.
Complying with recently signed and/or pending legislation, including the ECA Zone environmental standards, will be increasingly difficult given that 18,825 (45%)5 of the Jones Act fleet is more than 20 years old.
Today, the United States commercial market remains much the way it was 30 – 40 years ago. Many of our vessels have old technology, are fuel inefficient and can no longer cost-effectively comply with current regulations. Repair parts are becoming increasingly difficult to source and more expensive as time passes.
The reality is that there is not sufficient shipbuilding capacity in the United States presently to be able to mass-produce the number of vessels that our commercial fleets need to replace.
So, what’s the answer? More money for shipyards, much more money, is needed to upgrade our shipbuilding facilities to meet existing and coming demand.
“While the new administration has earmarked new funds to help our yards, we hope that the politicians can be persuaded to dedicate billions, not millions, to modernize our commercial yards,” said Percy R. Pyne IV, founding partner of Green Shipping Line.
If the United States is to remain a maritime nation, as well as to maintain our maritime academies and the U.S. merchant marine, we must modernize our outdated fleets by again mass-producing modern vessels to meet evolving maritime, environmental rules, legislation and insurance requirements.
The Chinese Government designated shipbuilding as a strategic industry and built more than 150 new modern shipyards over the course of ten years6. If they can, then we believe that the United States, once the premier producer of tonnage in the world, must up its game. We did it before in WWII when we produced more than 5,000 marine assets in three years7. We can and must do it again.
Sources:
1. https://usace.contentdm.oclc.org/utils/getfile/collection/p16021coll2/id/4696, Waterborne Transportation Lines of the U.S., 2018, page 57.
2. https://www.marineinsight.com/environment/impact-of-north-american-emission-control-area-eca-on-the-u-s-and-the-shipping-industry/
3. https://www.imo.org/en/MediaCentre/PressBriefings/Pages/34-IMO-2020-sulphur-limit-.aspx
4. https://www.americanwaterways.com/subchapter-m
5. https://usace.contentdm.oclc.org/utils/getfile/collection/p16021coll2/id/4696, Waterborne Transportation Lines of the U.S., 2018, page 62.
6. https://barwick.economics.cornell.edu/Yr21_20210310_ChinaShipyard.pdf, page 47
7. https://en.wikipedia.org/wiki/United_States_Navy_in_World_War_II