Foreign-built floating dry dock arrives for Jones Act work in Hawaii

by Michael Hansen, Hawaii Shippers Council, May 30, 2017

The Honolulu Star-Advertiser published on May 30, 2017, a news article, “Floating dry dock to arrive offshore,” reporting that a foreign-built floating dry dock is arriving to Honolulu for local ship repair company Marisco Ltd. with their facility at the Hawaii State Kalaeloa Barbers Point Harbor (KBPH).

It may seem ironic to the average observer that foreign-built floating dry docks are allowed to operate domestically under Jones Act cabotage, which requires among other things commercial vessels employed domestically to be U.S. built. Especially as the foreign-built dry docks are used to construct and repair U.S. built Jones Act eligible vessels.

The U.S. federal agency charged with enforcing the maritime cabotage provisions of the coastwise laws of the U.S. is the U.S. Customs and Border Protection (CBP). The CBP in several ruling letters (most recently on August 1, 2008) has determined that floating dry docks are in fact vessels (they are typically registered with the U.S. Coast Guard). However, there is no specific cabotage law applying to floating dry docks as for example there are for such vessels as dredges, which must be U.S. built to operate domestically.

However, there are restrictions. The most recent CBP ruling letter also dealt with the issue of whether or not a foreign built floating dry dock could be used to move hull sections a short distance within a harbor. The CBP determined that would be violation of Section 27 of the Merchant Marine Act of 1920 as it would constitute the transportation of merchandise by a vessel not eligible for the coastwise trade.

The CBP August 1, 2008 held, “The dry dock described above constitutes a "vessel" for purposes of 46 U.S.C. § 55102. The transportation of merchandise by a non-coastwise-qualified vessel as described above constitutes a violation of 46 U.S.C. § 55102.”

The bottom line is that a foreign built floating dry dock can be used in the domestic commerce of the U.S. providing its not moved from one domestic place to another with merchandise on board.

Key excerpts:

A ship carrying a giant concrete-and-steel . . . . . [floating dry dock] will be an unusual nautical sight to see off Honolulu International Airport today.

Local shipyard Marisco Ltd. said the ship and its cargo — a dry dock 454 feet long and 150 feet wide — are expected to arrive today.

Bringing the dry dock to Hawaii from Indonesia, where it was built, will be the White Marlin, a 712-foot-long ship carrying the dry dock on its low-slung and submersible deck.

Marisco said the White Marlin will be anchored off the airport for a couple of days before the dry dock is transported to Kalaeloa Harbor on or about Thursday.

The floating dry dock will be the largest in Hawaii under private ownership and will allow the owners of some large vessels to do maintenance and repair work locally instead of sending vessels to the mainland, according to John Stewart, Marisco’s vice president of operations. Larger dry docks exist at Pearl Harbor.

Marisco expects the new dry dock, named Paleke Nui, will generate additional business requiring 40 more workers.