So why don't we build cruise and cargo ships anymore?

[just Warren]

I have a feeling that this topic has been addressed here before but I don't want to necro a thread.

Reason had an article on the Jones Act and how it screws over HI and PR.

The thing is these problems would disappear if there were ships built here that could handle the needs of these places.

So why dosen't America have a shipbuilding industry that can do it?

[KD5NRH]

The thing is these problems would disappear if there were ships built here that could handle the needs of these places.

"Owned and crewed" is still an issue; look at what Hawaii and PR are not that far out of the way for.  PR would be an easy stop for most of the traffic to the rest of the Caribbean, and the north and east coasts of South America, except that a ship going from any of those places to/from the US mainland can't stop in PR due to the Jones Act.

Hawaii, well, there ain't a whole heck of a lot in the South Pacific for the size of it, but we've got the same issue; a non-US-flagged ship can't take a load from California and stop off in Hawaii on its way to Fiji/Kiribati/anywhere else.  It's ridiculous; like saying that unless you reside in Texas, have a Texas DL and a vehicle registered in Texas, you can't visit two Texas cities on the same trip.

[Firethorn]

So why dosen't America have a shipbuilding industry that can do it?

The Jones Act also screws over Alaska, by the way.

The Simple answer is "Money".

More complex, it is that everything ended up more expensive than elsewhere.  That and unions. 

Ship builders were/are unionized and therefore expensive and lazy(less productive) compared to workers in the orient.  Steel workers, and ships use a lot of steel, same deal.  Cheaper to build where you can get cheaper steel AND cheaper workers.  US safety and environmental regulations aren't necessarily bad, but still increase expense. 

We retain some building capacity because of the Act, but it also allowed builders to get lazy.  So not only are our labor costs higher today, we have less automation available, so not only is our labor more expensive today, as well as components, building a ship domestically requires more labor.

And really, I understand the desire to retain the ability to build ships domestically, but I don't see a good way to fix the problems so that we're even within 10% of competitive.

[MechAg94]

The Jones Act also screws over Alaska, by the way.

The Simple answer is "Money".

More complex, it is that everything ended up more expensive than elsewhere.  That and unions.  

Ship builders were/are unionized and therefore expensive and lazy(less productive) compared to workers in the orient.  Steel workers, and ships use a lot of steel, same deal.  Cheaper to build where you can get cheaper steel AND cheaper workers.  US safety and environmental regulations aren't necessarily bad, but still increase expense.  

We retain some building capacity because of the Act, but it also allowed builders to get lazy.  So not only are our labor costs higher today, we have less automation available, so not only is our labor more expensive today, as well as components, building a ship domestically requires more labor.

And really, I understand the desire to retain the ability to build ships domestically, but I don't see a good way to fix the problems so that we're even within 10% of competitive.

I have heard US flagged vessels have additional regulations they have to follow versus vessels flagged in other countries even if they operate out of US ports.  Been a while since I saw anything on that.  I think some of it was environmental requirements was a piece of it.

I think the best way to fix it is to get the govt out of it as much as possible and let the companies running it and hiring people figure it out.  Subsidizing the industry seems to definitely NOT help.  

[Fly320s]

So why dosen't America have a shipbuilding industry that can do it?

Taxes.


I don't think the ships have to be built in the US, only registered and crewed in the US.  Building ships in other countries is just plain cheaper than building in the US.  The same with registration.  Panama gets a bunch of ships registered there because it is cheaper.

Edit:  I just checked, yes the ships must be US built, however that is defined.  There are only three US shipyards building commercial vessels, but all of those vessels are designed overseas.  The US shipyards really just assemble the pieces.

[HankB]

It's not just large ships - it's yachts, too. If you recall, under Bill Clinton a big tax was slapped on private yachts built here in the USA - the stated philosophy was "soak the rich."

Result?

Rich people bought their yachts elsewhere, and by many estimates at the time around 60,000 jobs - people involved in building yachts - were lost permanently.

[Scout26]

It's not just large ships - it's yachts, too. If you recall, under Bill Clinton a big tax was slapped on private yachts built here in the USA - the stated philosophy was "soak the rich."

Result?

Rich people bought their yachts elsewhere, and by many estimates at the time around 60,000 jobs - people involved in building yachts - were lost permanently.

Yep, the Luxury Tax.  Which serves as an outstanding example of the Law of Unintended Consequences.   Soak the Rich boomeranged and nailed all the little guys.


And RE: The Jones Act.  Yes, it just needs to end.   Trump waived it after the Hurricane hit PR, so that we could get supplies/aid down there quicker.

[Firethorn]

I think the best way to fix it is to get the govt out of it as much as possible and let the companies running it and hiring people figure it out.  Subsidizing the industry seems to definitely NOT help.  

The current situation is that if the Jones act goes away or is substantially neutered that our domestic shipbuilding industry will be gone tomorrow.  It is that bad.

Now, whether it is still worth it to pay the price to keep those three shipyards open with the associated jobs, that is a bit of a different question.

[MillCreek]

Are the US shipyards that build commercial/cargo vessels the same ones that build defense vessels?  If so, I can see government action to retain a certain level of domestic ship building capability so as to be able to ramp up for defense reasons.

[charby]

So why dosen't America have a shipbuilding industry that can do it?

This gives one opinion.

https://www.enotrans.org/article/the-similarities-between-the-decline-of-commercial-shipbuilding-industry-and-the-future-of-the-aviation-industry/

Also what is going to happen when China starts to build commercial large airplanes?

[KD5NRH]

The current situation is that if the Jones act goes away or is substantially neutered that our domestic shipbuilding industry will be gone tomorrow.  It is that bad.

Now, whether it is still worth it to pay the price to keep those three shipyards open with the associated jobs, that is a bit of a different question.

Compare it to cars; sure, Japan took a lot of manufacturing jobs, but more cars on the road means a *lot* more mechanics.  And while one can easily start their own shade-tree mechanic business, it's a lot harder to manufacture cars in the back yard.  That means corporate wage slaves become greasy entrepreneurs instead.

[Fly320s]

Compare it to cars; sure, Japan took a lot of manufacturing jobs, but more cars on the road means a *lot* more mechanics.  And while one can easily start their own shade-tree mechanic business, it's a lot harder to manufacture cars in the back yard.  That means corporate wage slaves become greasy entrepreneurs instead.

I don't think so.

The ships will be maintained overseas as well.  It is all about taxes.

[dogmush]

I don't think so.

The ships will be maintained overseas as well.  It is all about taxes.

There's a fair amount of commercial dry docks and vessel maintenance/repair in the US.  Every decent sized port has a couple shipyards.

All the ship building places I know of are DOD oriented, but that's likely just because that's why I would know about them.

[MillCreek]

Also what is going to happen when China starts to build commercial large airplanes?

Something that we are watching with keen interest in Boeing country.

[charby]

Something that we are watching with keen interest in Boeing country.

NPR has been poking around a bit about that, especially the other day with the tariff announcements.

[KD5NRH]

The ships will be maintained overseas as well.  It is all about taxes.

Oh sure; when one of them breaks down in rural Missouri they're just going to call for a tow all the way back to China.

[makattak]

Oh sure; when one of them breaks down in rural Missouri they're just going to call for a tow all the way back to China.

 

[French G.]

I remember this from when I lived next to the Newport news yard. http://www.economist.com/node/128750

[Firethorn]

Oh sure; when one of them breaks down in rural Missouri they're just going to call for a tow all the way back to China.

Ships are already big heavy duty equipment with a fair bit of redundancy.  We already fly a lot of our commercial planes down to Mexico to be maintained there.

What is left in the USA is often legacy equipment that hangs around mostly for emergency fixes.

As in, put just good enough of a patch on the problem to reach the cheap yards.  And they may not get a tow back to China, Korea, and such, but a tow down south to, say, Panama?  That's in reach.

[Fly320s]

We already fly a lot of our commercial planes down to Mexico to be maintained there.

My company has used shops in Canada, Mexico, Panama/Honduras/Central America(I forget which country), and all over the US.  I guess we use whichever shop has the right combination of price and availability.