THE JONES ACT
U.S.-flag blue water operators embrace LNG as fuel; a new player in the Hawaiian market could emerge Compiled by Marine Log Staff
lue water tonnage in the Jones Act trade has gotten a lot greener in the last few years. That’s been driven in large part by the stricter emissions requirements of the North American and U.S. Caribbean Emissions Control Areas. Since 2015, U.S.-flag shipping companies American Petroleum Tankers (APT), Crowley Maritime, Kinder Morgan, SEA-Vista, and TOTE have added 16 vessels—product tankers or containerships—that are either capable of burning Liquefied Natural Gas (LNG) as fuel or are LNG-Ready. LNG-Ready means that the ships have been classed as being designed with the possibility of retrofitting them at a minimum cost in the future to burn LNG. And IMO’s 0.5% Global Sulfur Cap is just on the horizon. In the coming years— based on the current order book and announced plans—another 15 dual-fuel and LNG-Ready newbuild vessels could join the U.S.-flag fleet. Among those building or near ordering are Matson Navigation, Crowley Maritime, APT, and a potential new entrant into the Hawaii trade. This past May, Honolulu-based Pasha Hawaii selected the Keppel AmFELS shipyard in Brownsville, TX, to move forward with a potential contract to build two
2,525-TEU dual fuel containerships for the Hawaii trade. When consummated, the contract would contain options for two more sister vessels. Pasha Hawaii says it is in the process of finalizing contract specifications. At press time, a Pasha Group spokesperson said that there was no update on the contract process.
Philly Shipyard’s Monkey Wrench One thing that could have thrown a monkey wrench into the negotiations was the announcement by Philly Shipyard, Inc. (PSI), Philadelphia, PA, that it had begun construction of up to four new, dual-fuel containerships based on the Aloha Class for new entrant into the containership trade between the U.S. mainland and Hawaii to operate these vessels. The formation of that new entrant is being promoted by Philly Shipyard. Deliveries of the new ships would be planned for 2020 and 2021. The announcement came after The Pasha Group said it had selected Keppel AmFELS for its new containerships. Philly Shipyard was the other shipyard shortlisted by The Pasha Group to potentially build its boxships for Hawaii. Presently, says Philly Shipyard, “this trade route is serviced by only two carriers
and is reliant in part on a group of near end-of-life steamships.” One of those carriers is Matson, which is building two 3,600 TEU LNG-fueled Aloha class containerships at Philly Shipyard. Designed by KOMAC (Korea Maritime Consultants), those Hulls, 029-030, are scheduled for delivery in 2018 and 2019. Philly Shipyard says that the four new ships it is now starting work on “will be the direct continuation of the [Aloha Class] series” and that “the operational benefits offered by series production with familiar ships, coupled with its historical access to vessel financing, places PSI in an advantageous position to build vessels for a new cargo liner service between the U.S. mainland and Hawaii.” The shipbuilder says it has a successful track record of promoting the formation of new vessel owners in the Jones Act market, such as American Shipping Company and Philly Tankers. Philly Shipyard says it is presently engaged in advanced discussions with a major U.S. shipping operator about establishing a new, financially strong carrier with a fleet of modern vessels to be built by PSI to support commerce between the U.S. West Coast and Hawaii. Several prominent investors July 2017 // Marine Log 17