Advocates For Consumer Rights

Element of Scale

The reason U.S. built ships cost so much more than foreign competitors is purely an element of scale. The following numbers refer to self propelled oceangoing ships over 1,000 gross tons:

The total Jones Act fleet stands at 92 ships.

Approximately 2 ships have been built on average in the US since 1990.

Japan builds at least 300 ships per year for export every year.

South Korea typically builds slightly more ships per year than Japan.

Mainland China, South Korea and Japan build over 90% of the worlds ships each year.

The U.S. builds less than 1% of the worlds ships annually. 

View the total U.S. Flag Fleet (09/25/2014) including workboats, barges and self propelled ships HERE

The following research was provided by Michael Hansen, President of the Hawaii Shippers’ Council. This data was presented by Hansen to the Hawaii Economics Association in 2014:

What is the true size of the national maritime industry? I mention this to provide perspective and because information regarding the scope of the national Jones Act industry can be misleading especially when used to justify maritime cabotage.

The Transportation Institute – the Jones Act industry’s leading think-tank – provides what are probably the most widely reported numbers.

They report the total U.S. flag fleet currently stands at approximately 39,000 commercial vessels. It’s a relatively large and impressive number of vessels.

However, the vast majority – around 85% of the 39,000 vessels — are inland river barges and the towboats that push them. The inland barge sector is not only the largest but the most competitive of the Jones Act industry with many players on both the construction and operating sides of the business. Although the operators in this sector strongly support Jones Act protections; they would likely thrive on a U.S. built U.S. flag basis without it.

Of the roughly 5,500 or so other vessels most are oceangoing tugs, barges, crew boats, supply vessels and Articulated Tug Barges – or ATB’s. These vessels are largely engaged in the mainland coastal trades and in support the offshore oil and gas industry. The level of competitiveness of the ocean workboat sector varies widely both on the construction and operating sides, but it is largely dependent on Jones Act protections especially in respect of the U.S. built requirement.

That leaves 181 vessels which are actually oceangoing self-propelled U.S. flag ships over 1,000 gross tons. That is, the kind of ships that actually carry most of the cargo in the interstate Hawaii and other noncontiguous trades. The noncontiguous trades also include Alaska, Guam and Puerto Rico.

Only 92 of these oceangoing self-propelled U.S. flag ships are Jones Act eligible. And, importantly, of that, approximately half are employed in the noncontiguous trades, provide most of the interstate lift capacity in those trades, and are of primary interest in assessing the impact of the Jones Act on Hawaii. This is the least competitive sector of the Jones Act industry on both construction and operating sides.

The other 89 oceangoing self propelled U.S. flag ships makeup what is known as the U.S. flag foreign trade fleet. These ships are all foreign built and about half are foreign-owned; and, as such, not Jones Act eligible. They are largely employed carrying U.S. preference cargo also called government impelled cargoes moving in the foreign trade. Those cargoes are reserved by law for U.S. flag ships and pay significantly higher freight rates than those charged by international shipping. Approximately 60 of these ships are paid an operating subsidy of $3.5 million per year to ensure their availability for military purposes.

The Transportation Institute and those who use their data typically say the U.S. maritime industry is responsible for a half million jobs. The U.S. Maritime Administration – or MARAD –recently reported total direct and induced employment attributable to the maritime industry is around 260,000 – about half as much.

Included in these total employment numbers is the Transportation Institute’s estimate of direct U.S. maritime employment of 82,040, which includes jobs the shipbuilding, ship repair, port services and shipboard sectors. This employment is generated by both U.S. and foreign flag vessel activity, especially in the port services sector. Based upon the fleet data, it is probably safe to assume at least half of this direct employment is in the inland river barge sector.

The total number of shipboard jobs on the larger self-propelled ships would be around 5,000, which would include those sailing aboard the non-Jones Act, U.S. flag international fleet.