Moans about Jones
What three words make some Australian shipbuilders hopping mad and Australian designers jump for joy? The Jones Act.
"It's a curse of a thing," says Max Bamber Mayes, market research and development manager for WaveMaster International, a leading fast ferry builder In Henderson, Australia. "We've been bashing heads, first with the EC [on subsidies] and now with the U.S. While we don't have a language barrier [in the U.S], what we do have is the Jones Act."
The Jones Act, or the Merchant Marine Act of 1920, requires vessels for the U.S. domestic cargo trades to be built at U.S. yards. (Click here to get the full text of the Act). The Passenger Vessel Act of 1886 points (46 App. U.S.C. 289; 19 CFR 4.80a) places the same restrictions on the transport of passengers between U.S. ports
Recent attempts at removing or watering
down the U.S.-build provisions in the law have stalled on Capitol
Hill. For instance, a House-Senate conference committee working
on the Defense Authorization Bill for Fiscal Year 2000 declined
to include in the bill a waiver that would have allowed two Russian-built
ferries to operate on a run between Portsmouth and Newport, R.I.
The ferries would have been part of a market study under a $900,000
funding under the Transportation Equity Act for the 21st Century
(TEA-21).
"Just mentioning the Jones Act makes
the hairs on the back of my neck stand up. It's not so much the
impact on just us, but the whole [Australian fast ferry] industry,"
says Bill Harry, president of Sabre Catamarans International,
Spearwood, Western Australia, and acting chairman of the Western
Australian Shipbuilders Association. "We're all bitter about
the Jones Act. Sure, you could say we could license our designs.
We've had to beat back U.S. shipyards for a number of years.
In the end, though, we'd just be shooting ourselves in the foot
by creating another competitor."
Image Marine Group marketing manager Mark
Stothard perhaps best exemplifies the frustration among builders.
"It stinks," he says flatly. "It's not only kept
Australian yards out, but it's kept American yards behind."
The Henderson shipyard specializes in building aluminum-hulled
vessels between 40 m to 50 m long.
At press time, Image's parent, Austal Ships,
was reportedly close to striking a technology transfer agreement
with a shipyard in the Gulf of Mexico.
Similar plans may be afoot at Austal's
chief rival, Incat Tasmania. "It hasn't really impacted
us that much," says Robert Clifford, Incat chairman. "Our
attitude is that it's there, just deal with it." One way
of dealing with the Jones Act, would be to "find a potential
partner to build the smaller vessels that we are not currently
building," according to Richard Lowrie, Incat sales and
marketing manager. "We're not going to buy any yards in
the states. We have no interest in a yard like Kværner
Philadelphia. Why buy a conventional yard designed for steel-hulled
ships? We build in aluminum. If we were going to open a shipyard,
we would need a green field."
Incat already has a 50-50 venture in the
Chinese shipyard Incat Afai.
In a statement to Marine Log, the Australian
Government called the Jones Act, "anachronistic legislation,"
saying it not only denies access to its industry, but also "imposes
a cost on U.S. consumers and producers." It cites a 1999
International Trade Commission report that calculates the "cost"
of the Jones Act to U.S. consumers at $1.3 billion. While U.S.
builders have called the ITC study "tragically flawed,"
the Australian government says that it will "continue to
press for reform ... to allow access to the U.S.market for its
world class price competitive fast ferries."
NO PROBLEMS, MATE
While the Jones Act may have acted as a barrier to international
builders, it has 
had
no such effect on Australian design houses. "I love it,"
declares Ben Hercus, marketing manager for International Catamaran
Designs Pty. Ltd., Sydney (INCAT Designs-Sydney). "For us,
it's been a marvelous thing. We've been able to work with two
U.S. yards. It's nice to have protection against technology like
Austal's and Incat Tasmania's," he adds.
Ben Hercus: The Jones Act?
"I love it!"
"If it wasn't for the Jones Act, Australian
yards would be exporting boats all over [the U.S.]," comments
Brett Crowther, managing director, Crowther
Multihulls, Sydney. Adds Crowther, "There's enormous
potential for what we do. Our type of product hasn't hit the
ground yet and I think there's a niche for us."
Crowther designs are licensed to several U.S. builders
Crowther recently announced licensing agreements with builders
Kvichak Marine Industries, Seattle; Gulf Craft, Inc., Patterson,
La.; and Bay Ship & Yacht Co., Alameda, Calif. This month,
Kvichak will deliver the first of its Crowther designs to Hawaiian
operator Captain Andy's Sailing Adventures. The aluminum-hulled
boat is a 20 m, 100-passenger excursion catamaran.
"We're definitely excited by [the
agreement]," says Gulf Craft's Scotty Tibbs. "We already
have customers expressing interest. Our view is 'why reinvent
the wheel.' Crowther already has a proven hull design. We think
the cat design can even be used for crewboat applications to
increase cargo capacity."
Gulf Craft has built some 375 hulls since 1965, including a number
of whale watch vessels. One of the latest is the 130 ft Whalewatcher,
which sails from Cape Cod Bay, Mass.
Crowther's agreement with Bay Ship &
Yacht is for a design that specifically meets the needs of a
customer, says Bay Ship president Bill Elliott. "This is
a real good project for us to get our feet wet, " says Elliott.
"Right now, we do quite a bit of the maintenance and drydocking
for the ferries in the Bay Area."
Among its latest projects was the extensive overhaul of the SWATH
research vessel Western Flyer.
Bay Ship would build the 149-passenger,
30-knot aluminum-hulled catamaran at a dedicated facility at
Alameda Point Naval Air Station. If the market proves out, Elliott
says additional hangars at the facility would allow for the expansion
of under-cover building facilities.
Meanwhile, Advanced
Multihull Designs Pty. Ltd. (AMD), Sydney, is looking for
a new licensee in the U.S., according to company managing director
John Szeto. Currently, AMD licenses its designs to Dakota Creek
Industries, Anacortes, Wash., and Freeport Shipbuilding &
Marine Repair Co., Inc., Freeport, Fla. Dakota Creek has built
AMD design ferries for California and Washington State.
"We see [fast freight marine service] coming in the pipeline,"
says Szeto. He says new 60 m, 40+ knot vessels will make it possible
to switch high-priced cargo, such as fresh produce, electronics
or just-in-time delivery goods, from air transport to sea transport.
INCAT Designs-Sydney has been the most
successful of the fast ferry technology partners in the U.S.
and Canada with some 50 hulls ordered (see accompanying table).
Hercus says, "Things have turned around remarkably in the
U.S. Gladding-Hearn is one of the top ferry builders in the world.
And Nichols isn't far behind."
INCAT Designs is working with Gladding-Hearn on the design of two 72 m, 325 passenger/75 car fast ferries and another 56 m, 400 passenger ferry for Hydrolink LLC. The Wisconsin investment group wants to implement high speed service between Milwaukee, Wis., and Muskegon, Mich., on the Great Lakes. The waterjet-powered vessels would reach speeds of 40 knots. Hydrolink was said to be exploring the use of Title XI loan guarantees to finance the project. The company has "had discussions" with the Maritime Administration, but has not applied for any guarantees, according to MarAd's Mitchell D. Lax, director, Office of Ship Financing. The order could have a value in excess of $50 million. While controversy has swirled around the project, clearly it would be a major breakthrough in fast freight ferry service in the U.S. ML