This can't be the explanation, because the US has never offshored construction. You can't offshore construction. It's a service business that requires being on-site.
I can see how environmental policy could accelerate this phenomena, but surely the asymmetry of labor costs and cheaper/faster shipping is reason enough to offshore labor? Economical shipping seems to be the enabler, and miserly humans, as ever, the cause
Wrong! We want data from offshore so we can model what happens when the system moves over land. Also, shipping is valuable and has humans who can drown.
I bet the reason is that it's hard to become a vet and labor mobility is limited. We need to make it impossible for the government to regulate many things (not "remove regulation", but make it physically impossible in the future even if they wanted to). Maybe airlines need to step in to facilitate travel from many places to intentionally created hubs for certain kinds of cervices and Canada and Mexico: if someone can take a $400 ticket to a "city of dentists" or "city of vets" offshore where there are thousands of practices and fix their teeth for 5% of US price, there won't be a market for this kind of price gouging.
Or in fact, make it actual offshore. On converted container ships outside the territorial waters. Where regulation just does not apply.
Very old idea. People wanted to host trading floors on rigs or tankers in international waters in the 90s so they could avoid tax and regulation. Not sure if anybody actually did it. Possibly due to latency? Or regulation?
Raw materials were already being shipped in. I imagine there was more waste from industry than there were British raw materials being used. So moving industry offshore should result in a reduction in shipping.
Provided it’s being moved to source of the raw materials. Which, I imagine, is often not the case.
That has everything to do with lower cost of labour overseas.
Without the requirement for US ships to go from one US port to another, the shipbuilding industry would still be dead, and you'd have a dead shipping industry with it. You would have foreign-flagged crews moving cargo with foreign-built ships, against which you'd have zero recourse, in the event of disaster.
There have been significant issues building offshore wind farms because the speciality ships used to construct these behemoths are not built by US shipyards. There have been some discussions of sailing these vessels all the from from Europe and operating them out of ports in Canada to get around the Jones Act, but the inefficiencies are obvious.
Perhaps democrats could be persuaded into abolishing this rule on the basis of furthering green energy efforts.
Honestly as a maritime nation, I don't quite understand why the UK isn't leading on launching from barges: with so much coastline, there are potential spaceports all over the country, with associated potential employment opportunities etc. etc. And with such restricted space the nimbyism here is always going off the scale. Far better to neutralise these people by moving it offshore.
"overseas oil, even after shipping costs, is often cheaper than domestically-produced crude + domestic shipping cost" (emphasis mine).
One reason that domestic shipping cost is so high is that 1920 Jones Act[0] prohibits shipping between US ports with non-US ships. This drastically reduces competition and increases prices. Hawaii are particularly hit by this, with estimate $1800 per year per family in extra cost [1].
I share the same feelings. The thing is that these foreign companies won't ask the US for permission. And if it's profitable, they will (eventually) do it.
Yes, such ships will likely have to stay away from the US territorial waters, but there's plenty of routes where this won't be a problem.
As for tight margins: fuel costs represent 50%-60% of overall costs ([1]) and if these expenses are replaced with CapEx (hopefully, benefiting from economy of scale), then the tight operational margins suddenly become amazing, and there's a room for quality.
>is the Jones Act really the thing standing in the way?
It obliges some pretty ridiculous transport and installation methodologies to construct wind farms that just don't exist anywhere else on the planet. This adds significant cost, complexity, and risk and makes US offshore wind farms more difficult and more expensive to build. So much hinges on contorded legal interpretations of what counts as a "coastwise point" and how that relates to "trade" between two of those points in the US.
In Europe, a specialized heavy lift crane ship or jack-up can sail into port and take on multiple foundations, transition pieces (the part between the foundation and turbine), or turbines and sail to the wind farm and install one after the other as fast as the weather permits. And to protect those foundations another specialized ship can come either before or after (or both) and place rock as efficient as possible. And a cable-lay vessel can come along and cut trenches and lay cable all with its own specialized subsea tooling. This is literal decades of development of best practice in terms of cost and efficiency.
In the US that's not possible.
The foreign heavy lift crane vessel can still do the lifting offshore - but, generally speaking, it can't go to port in the US and pick up anything to install offshore because, the US port is "coastwise point" A and the seabed offshore is point B and that counts as "coastwise transport." So that's where feeder barges come into play. The crane ship (or jack-up) sits offshore, more or less stationary (it's permitted to rotate, because that's technically not transport from point A to point B) and components are brought out by tug and barge. Not to mention the embarrasing physical state of & significant lack of fit-for-purpose cargo barges in the US...
The foreign cable lay vessel can still lay cable between two US points (there's an exception), but it can only make the trench to do so by "jetting" or "fluidizing" the soil because "cutting" or mechanically doing so would be dredging, and that's not allowed by any foreign vessels. If the soil conditions don't allow that, then a 2nd US-flagged vessel has to come. Huge cost increase, and again more complex, multi-stage operations.
The rock protection also gets a lot more complicated, depending whether it's US or non-US rock and depending on the foundation design needs to be installed before, or after, or both before & after the foundation itself is installed. It's a huge puzzle with potentially excessively expensive logistics.
All of this is possible & reality, but it's so much more complex, costly, and difficult. It's many more puzzle pieces to fit together accounting for tight supply chains, high weather risk & impact, and global competition where it's just a lot easier to do things elsewhere.
One of my previous (job) tasks was to monitor larger vessels, and analyze where they'd end up getting torn apart.
Turns out western shipping companies don't like paying western prices for that kind of work, and try to sneak the vessels down to India, Bangladesh, etc. where that kind of work is much cheaper. But with cheaper prices comes a host of issues, from the environmental effects, to human workers actually performing the dangerous work.
Sometimes these things can fail spectacularly - like when they try to sail or tow the vessel, end up drifting to land, and create huge oil spills.
You are both true & making good points. It sounds like another "offshoring" idea then.
The bigger problem from my POV is that the old folks they serve are being treated as "steady state", when in fact their conditions are often deteriorating. And, when Grandma dies, will her family have to wait 1-2 weeks for her ship to return to port for a proper family gathering & funeral? Stinky...
"1. No need for ocean bed fixation hardware.
2. Ultimately lower tons of steel & cement per MW (not true now, but coming).
3. Much lower EPC costs. Build in port, tow to destination. (No jack-up ships.)
3. Lower O&M (tow back to port)
4. Better wind resource, meaning higher AEP per year (amortizing capex over more MWH).
5. Better wind resource also means higher capacity factor -> increased value, slower value deflation.
yes they are legitimate goal even for pursuing only profit. supply chain on shore is maybe in some way more reslilent, with especialy in geopolitics. job creating is leading to more prosperousing in society and more customer. also maybe these things are reduce likelihood of being smacked with unfortunate regulating.
I find it interesting that we look at at the shipping operating costs, decide they are too high compared to other countries without breaking down which countries we are comparing to.
Doubly so since foreign shipping has a myriad of problems such as companies suddenly not paying their workers and abandoning their vessels to outright slavery.
Lastly, we keep talking about how minimum wage needs to be increased and how this would have minimum impact on prices. Yet here we are talking about how we should deregulate because the cost is too high.
That if one is trying to reverse offshoring of manufacturing, one needs to make it in companies' best economic interests.
Make it more profitable (or at least net neutral) to manufacture onshore or nearshore.
A key start to it would probably be to (a) implement a carbon tax on all goods that enter the US via international maritime trade, according to the footprint of their transportation, (b) use the proceeds exclusively to fund a recapitalization of US merchant shipping [0] (new generation lower emission design construction and operation).
Preferably in cooperation with the EU.
Modernizing the provisions of the Jones Act [1] to support US shipbuilding and flagging for inter-national oceanic trade would be a good start.
Merchant shipping, like energy, is a pillar that a country's economy rests on, and shipyards are dual-use heavy economic assets with direct military implications.
A reason for not doing it offshore could be just that it's cheaper to do onshore. We live in a capitalistic system after all
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