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U.S. Shipbuilding Is Highest in Almost 20 Years on Shale Energy

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September 18, 2013

Image: Aker Philadelphia Shipyard

Sept. 18 (Bloomberg) — U.S. shipyards are the busiest in almost two decades as surging domestic energy production increases cargoes for the merchant fleet, according to the Department of Transportation.

Fifteen tanker and container ships are on order or under construction in the U.S., with options for “many more,” Paul Jaenichen, acting maritime administrator at the department, said at the TradeWinds Jones Act Shipping Forum in New York. That’s the biggest boom in almost 20 years, he said.

The U.S. is the closest in decades to achieving energy independence because of oil and gas extracted from shale rocks, Jaenichen said. The Jones Act requires cargoes being shipped between U.S. ports to be carried on domestically built vessels with American crews. The maritime industry contributes $46 billion to the country’s economy, according to Jaenichen.

“America’s Jones Act fleet will benefit from this new and abundant cargo source,” he said. “When domestic cargoes are moving, U.S. ships are moving them. The Jones Act works.”

Hire rates for tankers in the U.S. rose to a record $100,000 a day for a one-year charter, Bob Flynn, president of shipbroker MJLF & Associates in Stamford, Connecticut, said at the forum.

“We need another shipyard or two,” he said. “It wouldn’t surprise me if the next boil on this market pushed rates up to $85,000 a day, sustainable, five-year deals.”

– Isaac Arnsdorf, Copyright 2013 Bloomberg.

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