The Jones Act Ripple Effect: The Matson Project

The introduction of new tonnage into a Jones Act trade almost always creates a ripple effect that impacts other US-flag markets and sectors. The stone that caused the most recent ripple was thrown when Kvaerner Philadelphia Shipyard decided to build containerships without a buyer. This move resulted in Matson’s announcement last week that they had agreed to adopt the orphan ships, which, in turn, caused Seabulk to breathe a sigh of relief because Kvaerner didn’t build product tankers for competitors such as American Heavy Lift or Keystone.

Financing is never far from new ships, and the most recent ripple resulted in Caterpillar Financial Services closing a lucrative bridge loan for Kvaerner and either JP Morgan or Citibank probably being awarded a mandate to sell another $200 millions worth of Title XI bonds.

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