11 minute read
Human Capital - Career Trends
INDUSTRY REPORT
SHIPBUILDING
Danilo Dias COO, Hayman-Woodward
Danilo Dias COO, Hayman-Woodward
Danilo Dias, COO
The Economic importance of the U.S. private shipbuilding, repairing industry and ports.
INTRODUCTION
United States' ports play a key role in supporting the economy and global trade.
A robust port system supports a nation's economic development and international commerce. The operating landscape is evolving quickly and will continue over the foreseeable future, affecting supply chain efficiency and competitiveness directly.
There is a greater need for ports to be competitive, efficient, and sustainable while maintaining a high degree of safety and security. As hubs connecting ocean going vessels with landside operations and transportation (rail, trucking, inland transloading facilities, etc.) in an increasingly integrated global economy, ports are more important than ever.
These operations need to be coordinated across the supply chain to optimize port, rail, and road activities and speed trade to its ultimate destination – whether in the United States or around the world.
INDUSTRY DEFINITION The U.S. private shipbuilding and repairing industry is comprised of establishments that are primarily engaged in operating shipyards, which are fixed facilities with drydocks, and fabrication equipment. Shipyard activities include ship construction, repair, conversion, and alteration, as well as the production of the prefabricated ship and barge sections and other specialized services. The industry also includes manufacturing and other facilities outside of the shipyard, which provides parts or services for shipbuilding activities within a shipyard.
In 2019, the U.S. private shipbuilding and repairing directly provided 107,180 jobs), $9.9 billion in labor income, and $12.2 billion in gross domestic product, or GDP, to the national economy. Including direct, indirect, and induced impacts, on a nationwide basis, total economic activity associated with the industry reached 393,390 jobs, $28.1 billion of labor income, and $42.4 billion in GDP in 2019.
NATIONAL IMPORTANCE AND GOVERNMENT INITIATIVES
The development and implementation of programs and policies that support this fleet, enhance its economic viability, and enable it to compete for a larger share of America’s foreign trade are extremely important to our ability to support the economic and military security of our country.
The U.S. Merchant Marine, the Nation’s port system, and supporting industries (collectively referred to as the U.S. maritime industry) integrate our economy with a vast global maritime supply chain system that moves more than 90 percent of the world’s trade by tonnage, including energy, consumer goods, agricultural products, and raw materials.
These industries, vessels, infrastructure, and personnel also play critical roles in national security, supporting our Nation’s ability to provide sealift for the Department of Defense (DoD) during times of war and national emergency.
U.S. Ports and Marine Terminals Public ports in the United States play an indispensable role in local and regional economies throughout the nation.
Ports, in any nation, support the competitiveness of a country's economy by facilitating the movement of goods. They also strengthen relationships with local communities, and in some cases with Indigenous communities.
Ports generate business development and provide employment to more than 13 million Americans, which includes those that work at the ports themselves and those employed in global trade and import/export support services.
The U.S. shipbuilding and ship repair industry is a major component of the Nation’s maritime supply chain; essential for sustaining one of the world’s largest navies, a Coast Guard that protects thousands of miles of U.S. coastline, and the domestic commercial fleet.
PORT INFRASTRUCTURE DEVELOPMENT PROGRAM
A number of automation technologies and innovations at ports could help enhance monitoring to improve the competitiveness and fluidity of U.S. supply chains.
Examples include: data gathering blockchain and distributed ledger systems internet of things artificial intelligence (AI) autonomous vessels and vehicles automation in terminal facilities, and radio frequency identification (RFID)
The use of technology for performance monitoring through the sharing and managing of data could improve the trade logistics process, supply chain efficiency, and competitiveness, and enable enhanced inter-port cooperation.
THE U.S. NEEDS TO PROVIDE MARKET STABILITY
To grow and develop the next generation of shipyard workers, U.S. shipyards require market stability across sectors so that companies can make the required investment in their people and facilities to meet demand.
Training and re-training are an important part of supporting career advancement in automated and modern port environments. A stable workforce and good relationships between unions and employers are key to making sure port and supply chains operate normally. Workforce retention was identified as a need for ports located outside of urban centres.
The domestic commercial market is sustained by the Jones Act. For nearly 100 years, the federal law, Section 27 of the Merchant Marine Act of 1920, known as the Jones Act has restricted water transportation of cargo between U.S. ports to ships that are U.S.-owned, U.S.-crewed, U.S.-registered, and U.S.-built. Justified on national security grounds as a means to bolster the U.S. maritime industry. The law was presented as a plan to ensure adequate domestic shipbuilding capacity and a ready supply of merchant mariners to be available in times of war or other national emergencies. The idea was to provide market certainty and stability, to ensure the existence of a domestic shipbuilding and ship repair industrial base. The Jones Act restricts non-qualifying vessels from operating in inland waterways and from transporting cargo between two U.S. ports — an activity known as “cabotage.” Most governments have some form of cabotage restrictions. In fact, only Gambia, Dominica, Guatemala, and Belize do not.
The Organisation for Economic Co-operation and Development (OECD) distinguishes between two general types of cabotage restrictions: those that completely exclude, without exception, foreignflagged ships from all cabotage activities, and those that partially exclude foreign-flagged ships by extending broad exemptions through trade agreements or narrow exemptions for limited forms of cabotage.
The United States is among 11 countries that fully exclude foreign vessels without exception. The other countries that fully exclude foreign-flagged ships from cabotage are Belgium, China, Colombia, Estonia, Greece, Indonesia, Italy, Lithuania, Sweden, and Turkey.
Perhaps one crucial example of the impact of port modernization and automation is a $14 billion port-modernization plan in Singapore that will most likely result in the world’s largest automated port by 2040. It will double the capacity of the current port, which is already the top port in the world for trans-shipments. City state’s plan for a highly automated port with double the existing capacity offers a strategy for easing global supply chain congestion, according to Bloomberg, Singapore's $14 Billion Mega-Port Takes Aim at Shipping Chaos, on June 28th, 2022.
Increasing the use of automation would assist longshoremen, truck drivers, dock workers, and others as they work to deliver America’s goods. Automated technologies appropriate for this environment already exist, and in many places are already in use. The ports at Rotterdam in the Netherlands and Melbourne in Australia are also examples of forward-thinking shipping hubs that have enjoyed greater efficiency due to advanced technology solutions.
Only four U.S. ports are among the top 50 busiest ports in the world and no U.S. port is in the top 10. Many U.S. ports also have bridge or depth limitations that restrict their ability to receive the larger, post-Panamax vessels that are the future of ocean shipping.
Source: OECD STRI Regulatory Database, http://www.oecd.org/tad/services-trade/services-trade-restrictiveness-index.htm.
SEAPORTS ARE VITAL TO THE UNITED STATES ECONOMY
Port authorities are governmental entities that own facilities at one or more ports. While the role of port authorities in port operations varies, most ports can be categorized as Operating Ports or Landlord Ports.
Operating Ports own and construct port facilities, own cargo handling equipment, and hire labor to move cargo through port premises. At these operating ports, stevedores hire dockworkers to move cargo between ships and the dock.
Landlord Ports, on the other hand, own the land and wharves of a port and lease these premises to our partners in the Marine Terminal Operator industry.
Our nation’s seaports deliver vital goods to consumers, facilitate the export of American-made goods, create jobs, and support local and national economic growth. Ports also play a crucial role in our national defense—a point acknowledged through the designation of 17 of our nation’s ports as ‘‘strategic seaports’’ by the Department of Defense.
The reality is that less than 2 percent of America’s foreign trade is carried on U.S.-flag vessels. Until this is changed, the current manpower shortage will not be erased. While it may sound overly simplistic, without cargoes, vessels don’t sail, and mariners don’t have jobs.
This not only means funding and support for the programs and policies currently in place, including the cargo preference laws, the Maritime Security Program, and the newly authorized tanker security fleet, but also requires strong and innovative action on the part of our industry, Congress, and the administration.
The US Department of Defense's emphasis on maritime operations is anticipated to generate steady demand for new naval vessels.
On June 16th, 2022, President Joe Biden signed into law S. 3580, the “Ocean Shipping Reform Act of 2022,” marking the first major change to federal regulations for international container shipping in more than two decades as his administration attempts to reign in rising inflation.
Recognizing the critical role American ports play in the global economy, President Biden’s Bipartisan Infrastructure Deal includes an unprecedented $17 billion to improve infrastructure at coastal ports, inland ports and waterways, and land ports of entry the border.
Safe and secure seaports are fundamental to protecting our borders and moving goods. Maintaining federal support and control of seaport security is critical to ensuring our nation’s homeland security. Protecting critical transportation assets like seaports from cyber threats is vital.
Infrastructure investments in America’s seaports and their intermodal connections – both on the land and on the water – provide opportunities to bolster our economy, create and sustain jobs, enhance our international competitiveness and pay annual dividends. Strong and sustainable federal investment in seaport-related infrastructure is critical to the economic health of our nation.
New Jersey. The Port of Los Angeles, known as America’s Port, is the busiest port in the U.S. It was founded in 1907 and is governed by the Los Angeles Board of Harbor Commissioners. The Port of Long Beach was founded on June 24, 1911. Today, the Port of Long Beach is the second busiest port in the U.S., with approximately $200 billion in trade moving through annually, according to the Port of Long Beach's official website. The third busiest port in the U.S. is the Port of New York and New Jersey. Due to heavy maritime activity in the Hudson and East rivers in the early 1900s, the two states agreed in 1921 to create the Port Authority of New York to develop and modernize this port.
Danilo Dias is a Global Chief Operating Officer at Hayman- Woodward and a Board member of some USA and Brazilian companies. He is a seasoned executive with more than 30 years in Consulting, Oil & Gas, Manufacturing, Telecommunications, Retail, Technology, and green industries. Danilo Dias, an experienced executive in the transport, telecoms, and energy sectors, served as President, of Smiths Detection Brasil Ltda. from 2011 to 2018, and as Latin America and the Caribbean Managing Director Latin America and the Caribbean Managing Director at Vision- Box from late 2018 to 2020. Smiths Detection provides threat detection and security screening technologies for ports and borders that limit illegal activities, without affecting global trade. Vision-Box is a multinational technology company headquartered in Lisbon, Portugal, dedicated to improving the quality, convenience, efficiency, and security in government services, travel, border control, and all smart facilities. He is MIT Sloan, author, and start-up mentor at Ross Business School, New York University, Michigan University, and Rice Business School.
