Wednesday, April 08, 2020
Hawai'i Free Press

Current Articles | Archives

Saturday, May 23, 2015
A Tale of Two Fleets: Canada Reforms its Version of Jones Act
By Michael Hansen @ 7:44 PM :: 3093 Views :: Jones Act

by Michael Hansen, Hawaii Shippers Council

The Detroit Free Press reported on May 18, 2015, the ongoing and robust renewal of the Canadian flag shipping on the Great Lakes due to a change in Canadian Law that allowed Canadian shipowners to acquire foreign-built ships and import them for operation in domestic Canadian trade without payment of duty. 

The article contrasts the new modern ships being added to the Canadian flag with the ageing and inefficient US flag Great Lakes fleet, noting that the US shipowners are prevented by the Jones Act from acquiring lower cost foreign built ships and domestic shipbuilding costs are too high to justify ordering newbuildings from US shipbuilders.  This situation on the Great Lakes could easily be described as a “Tale of Two Fleets.”

Key excerpts:

Seven new freighters have entered the Great Lakes trade since 2012. Another ship has been launched and is fitting out; four more are being built; and two more are on order.

They all have a couple of things in common: They're Canadian ships, and they were built overseas.

Such numbers of new freighters haven't been seen on the Great Lakes in years, said shipping experts.

"The current building boom of lake freighters, especially on the Canadian side, is unprecedented since the opening of the St. Lawrence Seaway in 1959," Skip Gillham, who has written the "On the Lakes" column in the Times Herald for 43 years, wrote in an email.

Roger LeLievre, editor and publisher of guidebook, "Know Your Ships," said Algoma Central Corp. and Canada Steamship Lines are ordering new freighters.

A change in Canadian law helped spark the shipbuilding boom, LeLievre said.

"A few years ago, Canada repealed its tax on building ships overseas," he said. "That, combined with not having any major shipyards on the Great Lakes in Canada, drove shipbuilding overseas."

He said he has been told that shipping lines can have three ships built in China or other countries for what it would cost to have one built in Canada.

"Canadian shipyards are virtually closed," Gillham said.

"They turn to China and Croatia, which allow ships to be built at a competitive market price, and sail them to the Great Lakes for service.

Debbie Murray, director of policy and regulatory for the Canadian Shipowners Association, said the government lifted an import duty of 25 percent in 2011.

"We couldn't afford to build ships here No. 1, and then No. 2, the government is looking to use shipbuilding capacity for navy vessels and Canadian Coast Guard vessels," she said.

"The bottom line was the import duty was lifted," she said. "That generated considerable investment by our membership."

She said the new freighters represent an investment of about $1 billion.

The building boom is partially in response to environmental regulations and the need to increase fuel efficiency, said Frank "Freighter Frank" Frisk at BoatNerd.com in Port Huron.

"They couldn't refit the older boats with the equipment that's required," he said. "They opted to have new boats built."

Gillham said both Algoma and Canada Steamship Lines needed to replace their "fleet of 50-year-old freighters.

"They also wanted more efficient ships and more environmentally friendly ships," he said. "The new ones are more automated and need less crew, and that keeps costs down.

"They also employ the latest pollution reducing technology and are much more fuel efficient."

Smith said the new ships are far more advanced than their older counterparts.

"The ships will have diesel engines that will use heavy marine fuels, but are equipped with integrated exhaust scrubbers, which will remove 97 percent of sulphur oxides from exhaust streams," he said.

"With the optimized hull form, larger size and better speed, we expect the ships to be 45 percent more efficient per cargo tonne mile than their predecessors."

The Canadian building boom is not being mirrored on the U.S. side, where most shippers opt to maintain or refit their existing ships.

That's because federal law doesn't allow American shippers to contract with overseas shipyards, LeLievre said.

"The U.S. fleets cannot do that," he said. "In this country we have something called the Jones Act.

"In order to sail and carry cargo between U.S. ports, the ship has to be built in the U.S. and crewed by U.S. sailors."

Since U.S. carriers can't go overseas to build new ships, they're keeping the ones they have.

Links

TEXT "follow HawaiiFreePress" to 40404

Register to Vote

2aHawaii

808 Silent Majority

808 State Update AM940

ABCDEFG Blog

ACA Signups Hawaii

ACCE

ALEC

Alliance Defending Freedom

Aloha Life Advocates

Aloha Pregnancy Care Center

American Council of Trustees and Alumni

American Mothers of Hawaii

AMVETS-Hawaii

AntiPlanner

Antonio Gramsci Reading List

A Place for Women in Waipio

Astronomy Hawaii

Audit The Rail

Ballotpedia Hawaii

Better Hawaii 

Blaisdell Memorial Project

Broken Trust 

Build More Hawaiian Homes Working Group

CAFR Hawaii

Castaway Conservative

Children's Alliance Hawaii

Children's Rights Institute

ChinaTownWatch.com

Christian Homeschoolers of Hawaii

Citizens for Recall

Cliff Slater's Second Opinion

Coffee Break

CSIS Pacific Forum

DAR Hawaii

DeedySupport.com

DVids Hawaii

E Hana Kakou Kelii Akina

E Māua Ola i Moku o Keawe

Farmers For Choice Hawaii

FIRE

Fix Oahu!

Follow the Money Hawaii

Frank in Hawaii

Front Page Magazine

Frontline: The Fixers

Genetic Literacy Project

Get Off Your Butts!

God, Freedom, America

Grassroot Institute

Habele.org

Hawaii Aganst Assisted Suicide

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii Coalition Against Legalized Gambling

Hawaii ConCon Info

Hawaii Credit Union Watch

Hawaii Crime Victims' Rights

Hawaii Crop Improvement Association

Hawaii Debt Clock

Hawaii Defending Marriage

Hawaii Defense Foundation

Hawaii Families for Educational Choice

Hawaii Family Advocates

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federalist Society

Hawaii Federation of Republican Women

Hawaii Firearm Community

Hawaii Fishermen's Alliance

Hawaii Future Project

Hawaii Gathering of Eagles

Hawaii History Blog

Hawaii Homeschool Association

Hawaii Jihadi Trial

Hawaii March for Life

Hawaii Meth Project

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Right to Life -- Big Island

Hawaii Right to Life -- Oahu

Hawaii Shield Law Coalition

Hawaii Shippers Council

Hawaii Smokers Alliance

Hawaii State Data Lab

Hawaii Together

Heritage Foundation

HI Coalition Against Legalized Gambling

HIEC.Coop 

HiFiCo

Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Homeless Crisis

Honolulu Navy League

Honolulu Traffic

Horns of Jericho Blog

House Minority Blog

House Republican Caucus YouTube

HPACC

Hump Day Report

I Vote Hawaii

If Hawaii News

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

Investigative Project on Terrorism

Iowa Meets Maui

Jackson v Abercrombie

Jihad Watch

July 4 in Hawaii

Kahle v New Hope

Kakaako Cares

Kau TEA Party

Kauai Co GOP

Keep Hawaii's Heroes

KeyWiki

Land and Power in Hawaii

Legislative Committee Analysis Tool

Lessons in Firearm Education

Lingle Years

Malulani Foundation

Managed Care Matters -- Hawaii

Malama Pregnancy Center of Maui

Mauna Kea Recreational Users Group

MentalIllnessPolicy.org

Middle East Forum--The Legal Project

Mililani Conservatives for Change

Military Home Educators' Network Oahu

Missile Defense Advocacy

MIS Veterans Hawaii

Muslim Brotherhood in America

NAMI Hawaii

NARTH

Natatorium.org

National Christian Foundation Hawaii

National Parents Org Hawaii

National Wind Watch

New Zeal

NFIB Hawaii News

No GMO Means No Aloha

Northwest Economic Policy Seminar

Not Dead Yet, Hawaii

Now What I Really Think

NRA-ILA Hawaii

Oahu Alternative Transport

ObamaCare Abortion Hawaii

Obookiah

OHA Lies

Opt Out Today

OurFutureHawaii.com

Pacific Aviation Museum

Patients Rights Council Hawaii

PEACE Hawaii

People vs Machine

Pritchett Cartoons 

Pro-GMO Hawaii

P.U.E.O.

RailRipoff.com

Rental by Owner Awareness Assn

Republican Party -- Hawaii State

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

Robotics Organizing Committee

School Choice in Hawaii

SenatorFong.com

SIFE Remington

SIFE W. Oahu 

Sink the Jones Act

Smart About Marijuana--Hawaii

St Marianne Cope

State Budget Solutions Hawaii

State Policy Network

Statehood for Guam

Tax Foundation of Hawaii

The Harriet Tubman Agenda

The Long War Journal

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

Truth About Trade & Technology - Hawaii

UCC Truths

Union Members Know Your Rights

US Tax Foundation Hawaii Info

Valor in the Pacific

VAREP Honolulu

Waagey.org

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii

Yes2TMT