Lowering the Boom

Marine Log just gave us this article: “House panel told: U.S. commercial shipyards are booming”

“SEPTEMBER 10, 2014 — ‘The state of the U. S. commercial shipyard industry is the strongest it has been in decades,’ Matthew Paxton, president of the Shipbuilders Council of America (SCA), today told the House Subcommittee on Coast Guard and Maritime Transportation.

“Mr. Paxton was testifying at a hearing on America’s domestic maritime industry with a special focus on how the industry is responding to America’s surging domestic energy production.

“Mr. Paxton said that the state of America’s commercial shipbuilding industry is strong, more vibrant than ever, and that U.S. shipyards are experiencing dramatic growth as a result of the shale oil revolution and record levels of new construction orders and deliveries.

“‘Our industry, which includes thousands of businesses supporting vessel construction, is a vibrant manufacturing sector employing hundreds of thousands of Americans in all 50 states,’ Mr. Paxton said. ‘Commercial markets are witnessing a boom not seen in decades, representing billions of dollars in new investments to our economy. This is all while American shipyards continue to deliver the largest and most sophisticated Navy and Coast Guard in the world.’” —

This was Mr. Paxton’s chance to tell those big spenders in Congress to send some of their billion dollar giveaways to the foundering shipbuilding industry in this country. But he blew it.

“Shipbuilding …”, he called it. “Booming …”, he called it. It’s neither. It’s boatbuilding, not shipbuilding. And it’s not booming, it’s stagnating – and it has been stagnating for decades.

Want to know what “booming” looks like? Here’s what “booming” looks like, and it isn’t taking place in U.S. shipyards:

• Ships Monthly (September 2, 2014) – “Japan’s NYK Line has ordered eight 14,000 TEU boxships from the Kure Shipyard of Japan Marine United, all for delivery between February 2016 and January 2018.”

• MarineLink.com (September 9, 2014) – “In the container market, the Scorpio Group are understood to have placed an order with Samsung H.I. for 3 + 3 19,200 TEU container carriers. The delivery of the firm vessels is provisionally scheduled to begin from mid 2016. The options will be delivering into 2017.”

• SeaNews Turkey (September 12, 2014) – “One of Japan’s major shipping companies, “K” Line, has ordered five more 14,000 TEU boxships at an undisclosed price from Imabari Shipbuilding, bringing to 10 the total of ultra-large ships the company has on order.”

• SeaNews Turkey (September 14, 2014) – “SINGAPORE’S Asiatic Lloyd has taken delivery of the Asiatic Summer, the second of two 9,034 wide-beam neopanamax containerships ordered from Hyundai Samho shipyard.”

• SeaNews Turkey (September 14, 2014) – “China Shipping Company Lines (CSCL) has taken delivery of the CSCL East China Sea, seventh of eight 10,036-TEU vessels ordered in China in October 2011 for US $ 94.3 million each.”

• JOC.com (September 15, 2014) – “Neptune orient Lines said on Wednesday it placed an order for 10 new container ships with capacities of 8,400 20-foot equivalent units.”
Those 39 vessels would have created more than 3 million jobs in this country, Mr. Paxton, and if you had urged that subcommittee to subsidize our foundering shipyards we could have submitted winning bids for those ships.

Oh, but we don’t subsidize shipbuilding! … is the protest you’ll hear on Capital Hill. That’s where you’re wrong. We subsidize shipbuilding – big time.

Where do you suppose we get the money to build our super carriers and cruiser-size submarines? If that’s not subsidizing, nothing is.

$ 94 million for a 10,000 TEU container ship? That’s just about what a U.S.-built container ship would cost, so where did the “experts” get the idea that we can’t compete with overseas yards?

We not only could compete, but we’re building vessels that are much more sophisticated than any now being built in those overseas facilities – none of which could duplicate the complexities our shipbuilders have woven into those super carriers and cruiser-size submarines mentioned above.

But everyone is aware of that. Even Mr. Paxton had that in mind when he noted that, “Commercial markets are witnessing a boom not seen in decades … all while American shipyards continue to deliver the largest and most sophisticated Navy and Coast Guard in the world.”

Note the connection between Mr. Paxton’s reference to U.S. warship construction and his statement that, “Shipyards also have a big impact on their local communities and the country at large. With more than 300 facilities located in 27 states, and a supplier base that can be found in all 435 Congressional Districts, each direct job leads to almost three indirect jobs nationally.”

That “connection”, of course – those Congressional Districts and constituents – sheds some light upon the generous awards doled out by the Department of Defense every month.

A pity that our unemployed millions don’t have the influence that “constituents” have.

And Mr. Paxton’s statement that “… each direct job leads to almost three indirect jobs nationally’” applies only to boatbuilding. Each direct job in shipbuilding, on the other hand, would lead to sixteen indirect jobs. Like we said, more than 3 million jobs, not just “hundreds of thousands”.