Citingmeetings with representatives of the General Dynamics NASSCO shipyard in SanDiego, Benjamin Nolan of Stifel, a US investment bank, said freight rates willlikely remain firm in the foreseeable future as well.
“Beyond that,the outlook begins to become more hazy as additional capacity from existingyards or new entrants may increase production capabilities to the point atwhich supply surpasses demand,” he added in a briefing that followed a tour ofthe facility.
NASSCO,one of two US shipyards that are active in the construction of bluewatertankers, is currently capable of building five medium-range (MR) productstankers a year but told Nolan that it could ramp up production to as many asseven in the future.
“Given thegrowth in US oil production and the need for increased transportation withinthe Gulf Coast and East Coast, we estimate that between 10 and 20additional MR class vessels will need to be ordered to accommodate this growingdemand and fleet replacement through the end of the decade,” he added.
"Through thecombination of the existing tanker and containership orders as well aspotential orders for as many as 10 further tankers and four containerships bythe end of 2014, we believe available shipyard capacity should rapidly fillthrough 2016."
While Nolan andmany of his peers believe the future looks promising duein large part to the rapid development of North America’s vast shale oilformations, critics are quick to point out that the forecast would change ifthe US government were to pull the plug on an existing law that prohibits crudeexports to nations other than Canada and Mexico.
TheJones Act, which is detailed at length by the Fact Boxes and links located to the right of this article, is a reference to the Merchant Marine Act of 1920, a US cabotage lawthat requires coastwise commodities shipments to be transported by tonnage thatis US built, flagged, crewed and owned.
Stifeland NASSCO are among more than two dozen industry leaders that are scheduled to presentat the TradeWinds Jones Act Shipping Forum on Wednesday, 18 September 2013 at the New YorkYacht Club in Manhattan.
