As domestic energy production rapidly increases, so, too, does the cargo transported by the Jones Act Fleet. As we have been reporting, orders for large tanker and container ships crop up weekly, and the Department of Transportation says that United States shipyards are the busiest they have been in nearly twenty years.
So what does this say about the Jones Act? Well, according to Paul Jaenichen, acting maritime administrator at the Department of Transportation, in his presentation at the TradeWinds Jones Act Shipping Forum last week, “America’s Jones Act fleet will benefit from this new and abundant cargo source,” he said. “When domestic cargoes are moving, U.S. ships are moving them. The Jones Act works.”
Jaenichen also conveyed that the U.S. maritime industry contributes $46 billion to domestic economy. Currently in the U.S., 15 tanker and container vessels are either under construction or under order. The United States is closer than it’s been in nearly 20 years to reaching energy independence due to the gas and oil that is extracted from shale.
Recently, the rates for hiring tankers here in the United States reached a record of $100,000 per day for a one-year charter. Bob Flynn, president of MJLF & Associates in Connecticut, predicts, “We need another shipyard or two,” he said. “It wouldn’t surprise me if the next boil on this market pushed rates up to $85,000 a day, sustainable, five-year deals.”
Opponents of the Jones Act have become increasingly vocal about their desire to squash the law; however, with numbers like this coming out of U.S. shipyards, it’s unlikely we’ll see the Jones Act eliminated any time soon.
