Companies that comply with the Jones act requirement to use US made ships and US crews (paid US wage rates) are at a disadvantage. Do they cut prices and profits to match the competition? Or do they sit back and let others take the business at international rates?
River cruises in the US are expensive due to the Jones act. Does this let them hire low cost foreign crews? Can they offer discounts from list “for the duration?”
Who are the winners and who are the losers? Is there an investment opportunity?
3 Likes
If you read some of the arguments of the proponents of the extension of the waiver, the biggest argument is
- This is a temporary change that is handling additional cargo and routes. As an example, they gave an example of Phillips needing to transport crude oil from Texas to East Coast refineries.
In terms of who benefits, I will suggest the main beneficiary will generally be a larger tanker entity that has logistics and some capacity. On the dry bulk side, it would likely be an owner with barge operations, and for container shipping owners generally smaller size vessels to complete runs in the Carribean, to Hawaii, to Alaska from US mainland.
Here is Google’s Answer to the question.
Matson looks interesting.
Under the Merchant Marine Act of 1920 (the Jones Act), any goods shipped between U.S. ports must be transported on ships that are built in the U.S., flagged in the U.S., and crewed by U.S. citizens. The leading shipping companies operating these vessels span across container transport, energy logistics, and the inland waterways: [1, 2]
-
Matson, Inc.: The premier Jones Act carrier for ocean container shipping. Matson operates the largest containerships in the domestic fleet, predominantly serving Hawaii, Alaska, and Guam from the U.S. West Coast. [1, 2, 3, 4, 5]
-
Crowley: A massive maritime logistics company that handles a significant portion of the Puerto Rico and noncontiguous trades. Crowley provides government logistics, petroleum transport, and operates major LNG bunker barges. [1, 2]
-
Fairwater Holdings: Formed by the integration of Crowley and SEACOR Holdings’ fleets, this joint venture operates one of the largest Jones Act-compliant petroleum and chemical tanker fleets in the U.S. [1]
-
Kirby Corporation: The nation’s largest domestic tank barge operator, playing a dominant role in the transport of petrochemicals, refined petroleum products, and black oil along U.S. inland waterways. [1, 2, 3]
-
Pasha Hawaii: A major maritime carrier specializing in containerized and roll-on/roll-off (Ro-Ro) freight, operating between the mainland U.S. and the Hawaiian Islands. [1]
-
Maritime Partners: One of the fastest-growing players in the domestic maritime space, focusing heavily on vessel leasing for the inland marine sector. [1]
-
TOTE Maritime: Operates dedicated ocean container services linking the U.S. mainland with Puerto Rico and Alaska.
It’s interesting that Kirby is s major tank barge operator. Major refined oil products—gasoline, fuel oil, jet fuel—move in product pipelines. Refineries make them continually. They are stored in tanks and then campaigned in the pipelines.
Chemical products often move by barge. Rivers, locks and dams, inter-coastal waterway allow barges to reach much of the eastern US. I’m familiar with methanol. Most is made from natural gas on the Gulf Coast and then shipped by barge to large tanks in major cities. All suppliers supply the tanks and orders in the region are shipped from the nearest tank.
Now we know who owns the barges. Shipping by barge is cheaper than by rail.
Railroads do not own tank cars. They are leased. Warren Buffett is reportedly a major investor in one supplier of railroad tankcars. Must be a steady business.
1 Like