U.S. ships owners sue over foreign rebuilds

U.S. ships owners sue over foreign rebuilds Overseas Shipholding Group and Crowley Maritime Corp. have joined with the Shipbuilders Council of America in an action against the U.S. Coast Guard over its decision to permit a Jones Act tanker to be modified in China.
   The complaint, filed earlier this week in U.S. District Court in Alexandria, Va., said the Coast Guard’s National Vessel Documentation Center improperly granted an endorsement for coastwise trading to the motor tanker Seabulk Trader, owned by Seabulk Energy Transport Inc., even though it had double sides added in China instead of at a U.S. shipyard.
   “Since the beginning of the nation, our domestic shipping trades (or “coastwise” trades) have been reserved to vessels built in the United States in order to provide a supply of suitable vessels and trained mariners to promote the commercial interests of the country and to serve as a military auxiliary in time of war or national emergency,” the suit alleges. “Consistent with this rule, a vessel that has obtained coastwise trading privileges and is later rebuilt must be rebuilt entirely in the United States in order to retain coastwise trading privileges.”
   Crowley and OSG say they are spending billions of dollars to build new double-hull tankers that will meet the requirements of the Oil Pollution Act of 1990, which mandate a phase out of single-hull tankers.
   The suit contends that “other companies, however, are skirting the law by constructing double hulls on existing vessels in foreign shipyards.” Ships that are retrofitted overseas will compete with those built or modified at higher cost in the United States, they complain.
   The suit said earlier this year Crowley also filed an administrative appeal of preliminary rebuild determinations made by the Coast Guard covering other ships owned by Seabulk, Keystone Shipping and U.S. Shipping Partners.
   The tanker owners and Shipbuilders Council ask the court to invalidate the Coast Guard ruling that allows the Seabulk Trader to move oil in the coastwise trade and prevent the Coast Guard from relying on it in the future when making rulings about other vessels.
   Ironically, the Coast Guard is also under fire from a union that represents shipyard workers over its approval of the way in which tankers are being built for OSG.
   The Metal Trades Department of the AFL-CIO claims that product tankers being built by the Aker Philadelphia Shipyard for charter by OSG are “kit ships” with too many components being manufactured overseas.
   The union has also sued the Coast Guard and the documentation center over their approval of the ships for coastwise trading.