Page 30: of Marine News Magazine (June 2016)

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SHORTSEA SHIPPING

The Future of Shortsea

Shipping and

Domestic ‘Markets’

Bob Kunkel asks:

Can Domestic Shipping Become

Our Industry’s Farmer’s Market?

By Robert Kunkel rriving at the Farmer’s Market this morning I made crystal balls to determine how the current set of down mar- the decision to grill some hand cut rib eye with kets can or will affect future growth in our domestic trades.

A fresh vegetables and potatoes later that evening. I Kinder Morgan, now reportedly ranked as the highest searched several of the local farm kiosks to ? nd the mix pro? le Jones Act ? eet tanker build out of the decade with

I wanted and then reached into my pocket to pay for my eight MRs on the water and eight newbuilds in various stag- choices. The price for all this local fare is not competi- es of construction and delivery, recently looked to sell a 50% tive with Cosco or Walmart, but I know the vegetables are stake in their domestic ? eet operation. The fortune tellers organically grown without chemicals and the local beef is are eager to report a new valuation point based upon the of- grass fed. The price point may not be right but the effort fers received. Considering the current spread between a Ko- supports local business and the farmers who work hard to rean built 50,000 deadweight product tanker and the same provide us sustainable products and quality. design (built U.S.), it obvious that we build to the market.

Why not follow that thought process to create the future There is no doubt the fall of energy prices and the ex- of domestic shipping? port of U.S. crude has affected the domestic tanker mar- ket. Where reports of $115,000 per day period charter rates fueled new building contracts and a rush to provide

The Jones Act Discussions

MR capacity for crude movements Gulf to Northeast some

The Jones Act ‘debates’ were alive and well the ? rst quar- ter of 2016. Low energy prices, U.S crude export, the age of years ago, few remember that the market was $45,000 per day when the ? rst NASSCO deliveries and the American

U.S. domestic container vessels and the falling levels of pe- riod charters in the medium range tanker market fueled new Phoenix were under construction not two years before media reports. As a result, the fortune tellers gazed into their that. The current market today hovers around $60,000 to

June 2016

MN 30

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