Matson Navigation Co. informed investors this week that its long-term investment plans include construction of two vessels in a U.S. shipyard, touching off a new debate about the Jones Act and its impact on everyone from shippers to consumers.
Matson is a U.S.-flag carrier that serves the mainland trade with Hawaii and Guam. Matson also has one service that calls in Hawaii, Guam and China before returning to the mainland.
Matson spokesman Jeff Hull said construction of the vessels likely would occur in three to five years. Matson hasn’t sought permission from the board to have the vessels built, and company executives have no imminent plans to approach the board, Hull said.
Plans to build the ships in a U.S. shipyard prompted the Hawaii Shippers Council, which represents cargo interests, to repeat its concern that this Jones Act requirement inevitably results in higher prices for consumers in Hawaii because U.S.-built container ships can cost five times as much as vessels built in Asian yards.
The Jones Act is a U.S. law that stipulates vessels engaged in the domestic trades, such as the mainland-to-Hawaii trade, must be built in U.S. shipyards and manned by American crews.
In a letter to members of the council, President Michael N. Hansen said the ships, be they cellular container vessels or combination roll-on, roll-off/lift-on, lift-off, could cost $200 million each. That would be five times the cost of similar vessels built in China, Japan or South Korea, he said.
Matson hasn’t developed designs for the vessels, nor has it chosen the shipyard in which the vessels will be built, Hull said.
The Hawaii Shippers Council on previous occasions has urged Congress to exempt from the build-in-America Jones Act requirement self-propelled vessels to be deployed in noncontiguous U.S. trades. Hansen said carriers engaged in trades such as mainland to Hawaii and Guam must charge higher freight rates to recover the additional costs of building vessels in the U.S.