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A U.S.-flag shipping disaster

Investigators begin probe into the sinking of El Faro off coast of the Bahamas.

   The loss last month of the TOTE Maritime Puerto Rico ship El Faro, with its crew of 33, is the worst shipping disaster to hit a U.S.-shipping company in decades.

   “I know of no other merchant vessel flying the U.S. flag that has been of this proportion” since the Marine Electric went down in 1983, said Robert Frump, who chronicled the sinking of the bulk carrier off the coast of Virginia during a winter storm in his book, Until the Sea Shall Free Them: Life, Death and Survival in the Merchant Marine. That incident claimed the lives of 31 of the ship’s 34 crew members.
   “It shows that even with modern ships, the sea is still a dangerous place,” said Douglas B. Stevenson, director of the Center for Seafarers’ Rights at the Seamen’s Church Institute.

   El Faro, whose name means lighthouse, departed Jacksonville, Fla., for San Juan, Puerto Rico on Sept. 29, and went missing in the early morning hours of Oct. 1. On Oct. 7, the U.S. Coast Guard ended its search, believing that, barring a miracle, the 28 U.S. citizen crew members, along with five Polish shipyard workers who were preparing the ship for upcoming work in a shipyard, had died.

   At around 7:30 a.m. on Oct. 1, as the El Faro was approaching the eyewall of Hurricane Joaquin, the ship reported losing propulsion and had a 15-degree list. The crew reported the ship had previously taken on water, but the flooding had been contained.

   Coast Guard Capt. Mark Fedor said if the crew abandoned ship at that time it would have been into a “Category 4 hurricane with up to 140 mile-per-hour winds, seas upward of 50 feet, visibility basically at zero. Those are challenging conditions to survive.

   “The worst spot for any ship to be in is when you are disabled and you have lost all propulsion, you have no means to move that vessel. You become very susceptible,” he explained.

   “The vessel we know is carrying 391 containers, so it had a lot of topside height to it where the winds and waves can hit it and 294 trailers and automobiles below deck. It was heavy, it was weighted down and we also know the vessel had a list to it, meaning it was leaning over about 15 degrees because they had some water intrusion earlier. That just increases the danger of the situation they were in to be able to survive,” Fedor added.

   According to Frump, once it was underway, the El Faro should have been able to handle 20- to 30-foot waves, but if there was a motor failure and the ship had taken on water and “was listing at the same time then it’s too easy to imagine what happens, which is a roll, and the same thing that happened to the Marine Electric.”

   Philip Greene Jr., president and chief executive officer of TOTE Services, said “What is regrettable is that the vessel became disabled in the path of the storm and that is what led ultimately to the tragedy.” Greene is a retired Navy rear admiral and former superintendent of the U.S. Merchant Marine Academy at Kings Point, N.Y.

   Tragically, the El Faro was about to be replaced on its run to Puerto Rico by the newest containership in the U.S. fleet, the Isla Bella, a LNG-fueled ship that the National Steel and Shipbuilding Co. shipyard in San Diego was getting ready to deliver to TOTE. The Polish shipyard workers were on the El Faro because it was going to the Grand Bahama Shipyard for modifications prior to it being redeployed to TOTE’s operation on the West Coast, where it operates ships between Tacoma, Wash., and Anchorage, Alaska. It was to act as a short-term replacement, while those Alaska ships receive new engines also capable of using LNG fuel.

   Both the Coast Guard and National Transportation Safety Board will conduct investigations into the El Faro casualty.

   Anthony Chiarello, president and CEO of TOTE Shipholdings, said the TOTE companies, part of the Saltchuk conglomerate, plan to work collaboratively with the agencies to find out what happened to El Faro.

   The NTSB investigation is likely to take 12-18 months to conclude, but the agency may issue an accident docket in six to nine months in which it will reveal information gleaned from its investigation.

   The NTSB has wide-ranging investigative interests and powers, including the ability to issue subpoenas and hold public hearings if it desires. It said TOTE, the Coast Guard and the American Bureau of Shipping will be “parties” to the investigation. Parties certify that “no information pertaining to the accident, or in any manner relevant to the investigation, may be withheld from the NTSB by any party or party participant.” NTSB Vice Chairman T. Bella Dinh-Zarr said the agency usually gets good cooperation, since its purpose is to determine the cause of the accident and make recommendations to improve safety.

   The board has put together a multi-disciplinary team to investigate every aspect of the El Faro accident.

   The NTSB arrived in Jacksonville as the search was still underway, compiling data, interviewing the master of El Faro’s sister ship, El Yunque, as well as relief crew members and the TOTE employee who received the last communication from the ship. Dinh-Zarr has invited the public to contact the NTSB if they think they have any information relevant to the investigation.

   Dinh-Zarr said any debris from the ship would be inspected. She indicated the NTSB is coordinating with the U.S. Navy to obtain equipment to locate the ship and recover the voyage data recorder which will contain both voice recordings from the bridge and basic navigation information such as course and speed.

   She said on Oct. 8 that she expected the Coast Guard to begin the process of trying to locate the ship and its black box within weeks.

   While the ship is believed by the Coast Guard to be at a depth of about 15,000 feet, it has a contract with Phoenix International Holdings that has recovered black boxes and material at similar depths, for example, a U.S. Air Force F-16 aircraft from over 16,400 feet of sea water in 2012. (The Titanic, in contrast, is at about 12,500 feet.)

   “Our objective is not just to find out what happened, but why it happened, so that we can prevent it from happening again,” she said.

   Weather and the routing of the ship will be one focus of the investigation, and Dinh-Zarr said the NTSB had a meteorological team looking into the casualty.

   Others are likely to be the age, condition, and construction of the ship, as well as the stowage of cargo onboard.

   Built by Sun Shipbuilding in Chester, Pa., the El Faro was launched in 1974 as the Puerto Rico and delivered in early 1975 to the Puerto Rico Maritime Shipping Authority. It was sold to Totem Trailer Express in 1991, when it was renamed the Northern Lights, and lengthened with a new midbody in 1993 by Alabama Shipyard in Mobile. After operating in the Alaska trade, the ship was sold to Sea Star Line, which is now known as TOTE, in 2006 and renamed El Faro.

   “It’s easy to speak in hindsight. But most ships are considered over age at 20,” Frump said.

   Germany’s Hapag-Lloyd, for example, announced in March it would sell or scrap 16 ships that it described as “old ladies,” including former flagship vessels such as the Heidelberg Express and Bonn Express that were built as recently as 1988. Those ships were sent to shipbreakers in Turkey.

   “On the basis of what I know, you’ve got to wonder why you are sending a 40-year-old ship into the path of a hurricane,” Frump added.

   The U.S. merchant fleet has many older ships.

   “There are 192 American-flag ships today, most of them in the coastal trades or carrying government and Food for Peace cargoes,” Frump said in a recent blog post. “Of those 192, nearly half — 97 of them — are 20 years or older, the normal lifetime of a ship. Past this age, ships are insured as ‘overage.’” Of those 192 ships, 74 are 30 years or older, and 24 are 40 years or older, according to Frump.

   “There are different theories about where it’s safer to ride out a hurricane, whether it’s in harbor and anchorage or whether it’s at sea. One thing’s for sure, if it were at anchorage in Jacksonville and the crew and the officers were in a motel, you would know where the crew and the officers were,” he added.

   The Coast Guard told American Shipper that vessels were not ordered out of Jacksonville.

   “Had the weather deteriorated rapidly she would almost certainly have proceeded to sea anyway, because the last place you want to be is in port if the weather is going to get extremely bad… You can do a lot of damage and the captain of the port may very well have ordered you to sea,” Peter Swift, a consultant and trustee for the Maritime Industry Foundation, who sailed for 21 years, finishing as master before coming ashore and working for both P&O Group and Overseas Shipholding Group, told American Shipper.

   “Your object is to get out to sea and have plenty of sea room in which you can maneuver,” Swift said. “Obviously, the master would instinctively look for the safest place… You had a very experienced American captain from Maine and American officers and crew. They’re fine seamen.”
“Oftentimes, ships will put to sea when a typhoon or a hurricane is pending,” said Charles Cushing, one of the country’s foremost naval architects.

   “Obviously 40 years is old, without a doubt,” Swift added. “But you know age is sometimes over concentrated on because it really depends how much it’s been maintained. Sometimes you hear about modern ships having major accidents. But some of the older ships, they were built like battleships. I don’t think one should get over carried away by the age of ships.”

   Cushing echoed those observations, saying “I don’t think age per se is a criterion of seaworthiness. If you maintain the ship and that ship would have been scrutinized by ABS and the Coast Guard, and TOTE is a first-class company. So it’s not a bottom feeder, it’s an A-1 company and it was manned by experienced people. This is an American ship, not a third-world operation.”

   But the casualty could add ammunition to critics of the Jones Act, which includes politicians and shippers from Puerto Rico.

   The Jones Act, or 1920 Merchant Marine Act, includes provisions that restrict carriage of goods between points within the United States—including Puerto Rico, Hawaii, and Alaska—to ships that are built in U.S. shipyards, registered in the United States, and crewed by Americans.

   Critics of the Jones Act, particularly the requirement that vessels be built in the United States, say it vastly increases the cost of replacement vessels.

   A March 2013 resolution by the Hawaii House of Representatives stated, “U.S. deep-draft ship construction is typically three or more times the cost in Japan and South Korea,” and a Congressional Research Service study last year said, “Domestically built tankers are about four times the price of foreign-built tankers.”

   In September, a report released by the Working Group for the Fiscal and Economic Recovery of Puerto Rico established by the commonwealth’s Gov. Alejandro García Padilla claimed an exemption for the commonwealth from the Jones Act would “reduce transportation costs and increase competitiveness.”

   But the “build America” provision has a history that stretches back to the very first U.S. Congress.

   The third law passed by Congress in 1789 “imposed a tax on foreign vessels operating in the domestic trades at a rate that, as a practical matter, precluded them from competing with the domestic merchant marine in those trades. In 1817, Congress expressly prohibited foreign vessels from operating in the coastwise trades,” according to a 1990 article by Robert L. McGeorge in the Northwestern Journal of International Law and Business.

   Because U.S.-built and crewed ships are far more expensive than those that are constructed in overseas shipyards and crewed by foreign nationals, the Jones Act fleet contains many older vessels.

   The 2013 Hawaii resolution said “the average age of the Jones Act containerships employed in the coastwise noncontiguous domestic trades is 28 years compared to the international average of 12 years for containerships, and international maritime insurance data clearly shows that ship accident rates correlate to the age of ships spiking after 20 years.”

   But that has changed dramatically in recent years as large numbers of tankers have been built for the booming U.S. oil industry and major operators to Puerto Rico and Hawaii have either constructed or ordered new ships.

   In addition to TOTE, which is building two new ships for the Puerto Rico trade at NASSCO and retrofitting its Alaska ships so they can burn cleaner LNG:

  • Pasha Hawaii put into service a new container and roll-on/roll-off ship, Marjorie C, between the West Coast and Hawaii in May.
  • Crowley has V.T. Halter in Pascagoula, Miss., building two LNG-fueled container/ro-ro ships for its Jacksonville-San Juan route.
  • Matson saw Aker Philadelphia Shipyard begin construction on the first of two containerships for its service between the West Coast and Hawaii.

   The Puerto Rico trade has also been the target of U.S antitrust investigators in recent years.

   Sea Star Line, TOTE Maritime Puerto Rico’s predecessor, the defunct Horizon Lines, and Crowley have all paid fines for participating in a price-fixing conspiracy, and six executives from Horizon and Sea Star, including the former president of Sea Star, reached plea deals or were convicted and given jail sentences. A Crowley executive was acquitted.

   Steamships like El Faro and El Yunque may have also seen their lives extended as a result of an exemption to a requirement that ships operating in the so-called environmental control area, or ECA, burn low-sulfur fuel.

This article was published in the November 2015 issue of American Shipper.

Chris Dupin

Chris Dupin has written about trade and transportation and other business subjects for a variety of publications before joining American Shipper and Freightwaves.