In September the owner asked the USCoast Guard (USCG) to determine whether the 2,361-teu Horizon Enterprise,Pacific (built 1979), Trader(built 1973) and Navigator(built 1972) would be eligibleto operate in the US cabotage trade if the work were performed overseas.
Late last week the USCG’s NationalVessel Documentation Center confirmed that the project did not pose a threat tothe Jones Act credentials of the ships “under currently applicable law andpractice” since they would “not be deemed to have been rebuilt foreign”.
The determination letter did, however,note the scope of work submitted for review “did not account for thepossibility of other structural steel repairs” that the owner might like toperform at the same time in an effort to avoid further downtime.
Industry observers claim the risk offailing what have come to be known as the “major component” and “critical part”tests would increase, for instance, if hull plating were replaced by a foreign shipyardduring the conversion process.
The USCG addressed these and otherissues at length earlier this year when Horizon sought a similar preliminaryforeign rebuild determination afterannouncing plans to repower the 2,653-teu HorizonReliance and 2,172-teu Horizon Spirit (both built 1980).
At the time the Charlotte, NorthCarolina-based operator of 15 containerships said it planned on submittingpricing requests to six domestic shipyards and an equal number overseas but hasnot spoken publicly about the outcome or identified the contenders by name.
When it became clear that theconversions would likely take place overseas many US shipbuilders blastedHorizon upon learning that the US Maritime Administration had pledged nearly$1m to the repowering of the Horizon Spirit.
Since the agency is at the forefront ofthe fight to protect domestic shipowners and yards from low-cost foreigncompetitors and many shipbuilders see LNG power as their next meal ticket at atime when government contracts are hard to come by, few were surprised by thereaction.
Nearly all of the containerships underconstruction in the US are to be equipped with dual-fuel engines and many forecastersexpect to see demand for LNG power to continue to soar in the years ahead as aresult of the rising cost of diesel and increasingly stringent emissionsstandards.
Advocates like Anthony Chiarello of TOTE,which inked two dual-fuel boxships in the US late last year, are quick to pointout that gas power is particularly attractive to Jones Act owners since theirships typically spend more than a third of their time in North America’semission-control area.
You can read the US Coast Guard's determination letters in full by clicking on the links located under the Related Media section to the right of this article
