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Old Ships Still Abundant in the Jones Act Fleet

Summary:
Four years ago today the United States suffered a horrible maritime tragedy with the sinking of the Jones Act-qualified containership El Faro. Caught in the midst of Hurricane Joaquin during its voyage from Jacksonville, Florida to San Juan, Puerto Rico, the ship was lost with all hands. Although investigations performed by the Coast Guard and National Transportation Safety Board largely assigned blame for the disaster to the ship’s captain for his failure to divert away from the storm, the El Faro’s advanced age also garnered considerable attention. Built in 1975, the ship was 40 years old when it slipped beneath the heaving waves. For an oceangoing ship that is ancient. A ship's useful life is commonly estimated to be anywhere from 20 to 30 years, and some observers place that figure

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Four years ago today the United States suffered a horrible maritime tragedy with the sinking of the Jones Act-qualified containership El Faro. Caught in the midst of Hurricane Joaquin during its voyage from Jacksonville, Florida to San Juan, Puerto Rico, the ship was lost with all hands. Although investigations performed by the Coast Guard and National Transportation Safety Board largely assigned blame for the disaster to the ship’s captain for his failure to divert away from the storm, the El Faro’s advanced age also garnered considerable attention. Built in 1975, the ship was 40 years old when it slipped beneath the heaving waves.

For an oceangoing ship that is ancient. A ship's useful life is commonly estimated to be anywhere from 20 to 30 years, and some observers place that figure even lower. U.S. Maritime Administrator Mark H. Buzby has testified before Congress that “in the commercial world it’s rare to see a ship beyond about 15 or 20 years.”

But ships long past their normal useful lifespan remain abundant within the Jones Act fleet. Just last week the Lihue, the world’s second-oldest containership at 48 years of age, was placed back in service by carrier Matson after being laid up for 11 months. And that’s not even the oldest Jones Act ship. The Chemical Pioneer, a vessel partially made from the charred hulk of a wrecked containership, was built in 1968. A general cargo ship, the Coastal Trader, was built in 1963.

The evidence goes beyond anecdotes. According to the Maritime Administration’s latest statistics, 30 of the 99 Jones Act ships in existence were built in 1994 or earlier. The Jones Act fleet’s nine general cargo ships average 35 years of age while its two dry bulk ships average 38. Jones Act containerships may seem like spring chickens at 24 years of age, but their youth is very much a Jones Act-specific context; their international counterparts average a mere 12.

Fortunately, a handful of new ships are on the way. Matson’s ships Lihue and the 1973-built Matsonia are set to be replaced by the Lurline, slated for delivery later this month, and another ship also named the Matsonia next year. Carrier Pasha Hawaii, meanwhile, will take delivery of two containerships next year. Even after removal of these elderly ships and the addition of new ones the Jones Act fleet’s containerships will still average at least 20 years of age.

And then the fleet will once again start to advance in age. No additional orders for new ships are on the books and, as maritime publication Marine Log reported in June, “nobody is seeing much of a market developing for further replacement oceangoing Jones Act containerships or tankers.” In other words, after 2020 it will likely be years until the next new Jones Act ship arrives. 

This reluctance to purchase new ships despite the fleet’s relative decrepitude is easily explained by the Jones Act’s prohibition on the use of dramatically cheaper foreign-built ships. Matson’s latest two ships have a reported price tag of $511 million for the pair. The construction of similar vessels abroad likely would have cost one-fifth as much. These high prices serve as a barrier to market entry, raise the cost of transportation, and result in U.S. mariners plying their trade aboard ships that should have been retired long ago.

Reform, if not outright repeal, is urgently needed.

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