The study finds that building coastal ships in foreign yards could save about 40% of the capital cost of the Ro-Ro ships and 60% for the Lo-Lo ships. However, due to subsidized financing by the Federal Government for using US shipyards, the savings in capital cost would only amount to 13%, 11%, or the equivalent of a mere 4% reduction in the total door-to-door shipping cost for the three case studies.
Because of this minor cost reduction, along with other structural factors, the study concludes that exempt coastal services in all three case studies are uncompetitive with truck and, especially, intermodal rail services. Intermodal rail services in the US are provided by double-stack railcars and long unit-trains reaching 500+teu.
The researchers believe that the study’s findings can be generalized to conclude that coastal shipping of containers and trailers in the US has dim prospects. These findings call into question the much-publicized Marine Highway Program of the US Department of Transportation, Maritime Administration, designed to promote coastal shipping; they also undermine the call to modify the Jones Act – as long as subsidised financing is provided by the Federal Government.
