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HQ 116191

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April 15, 2004

VES-3-RR:IT:EC 116191 GOB

CATEGORY: CARRIER

Richard T. McCreary
Executive Vice President
VT Halter Marine, Inc.
P.O. Box 3029
Gulfport, MS 39505-3029

RE: 46 U.S.C. App. 883; Coastwise transportation of merchandise

Dear Mr. McCreary:

This is in response to your letter of March 29, 2004 with respect to the proposed launch methodology of the PHTL Car Carrier.

FACTS:

You describe the proposed methodology as follows:

The PHTL Car Carrier will be launched, in part, using a roller-skid method designed by Heer Dry Dock Inc. This method will allow for the transfer of the vessel from a concrete building slab, located within the VTHM Pascagoula facility, onto a floating dry-dock anchored pier-side .

The proposed floating dry-dock, Bollinger Dry-Dock No. 5, will be provided by Bollinger Gulf Repair LLC, 3900 Jordan Rd., New Orleans, La 70126. This dry-dock is foreign built.

Specifically, the skid out procedure begins with the installation of skid beam rails that will be positioned on the building slab and on the deck of Dry-Dock No. 5. Once the skid rails are in place, a series of transport rollers and transfer cars are positioned under the car carrier at predetermined support locations and blocked tight against the exterior hull surface. At this time, the temporary blocks used to support the vessel during the construction process are removed and the weight of the car carrier is transferred to the roller skid system. With the dry-dock pre-positioned pier side and anchored off its southeast corner, the vessel is now ready for transfer.

The transfer process begins as the vessel is slowly pulled from the onshore position, along the transfer rails, onto the dry-dock. The transfer process is accomplished by using a winch, located at the far-most, off shore end of the dry dock, to pull the vessel to its on dock, launch position.

Once the vessel is located completely upon the dry-dock the car carrier is ready to be launched. At this time, due to the limited water depth at VTHM’s pier side, the dry-dock would be pivoted about it’s southeast mooring line, remaining continuously anchored during the entire launch process, into the Bayou Casotte Ship Turning Basin. At this location, the Basin provides a water depth in excess of 40 feet, which is required to carry out a safe launch. The dry-dock is then ballasted down allowing the car carrier to float free and be towed back pier side, completing the launch process.

The dry-dock is then pumped out and pivoted back, along it’s southeastern anchor point, to its original position. At this time, the anchor and line will be retrieved, all skid rails and other launch gear will be removed and the dry-dock readied for transport in a light condition back to New Orleans, La.

ISSUE:

The applicability of 46 U.S.C. App. 883 to the movement of merchandise, as described above.

LAW AND ANALYSIS:

Generally, the coastwise laws prohibit the transportation of passengers or merchandise between points in the United States embraced within the coastwise laws in any vessel other than a vessel built in, documented under the laws of, and owned by citizens of the United States. A vessel built in, documented under the laws of, and owned by citizens of the United States is said to be “coastwise-qualified.” The owner of such a vessel may obtain a coastwise endorsement from the U.S. Coast Guard.

46 U.S.C. App. 883, the coastwise merchandise statute often called the "Jones Act," provides in part that no merchandise shall be transported between points in the United States embraced within the coastwise laws, either directly or via a foreign port, or for any part of the transportation, in any vessel other than a vessel built in, documented under the laws of, and owned by citizens of the United States.

The coastwise laws generally apply to points in the territorial sea, which is defined as the belt, three nautical miles wide, seaward of the territorial sea baseline, and to points located in internal waters, landward of the territorial sea baseline.

U.S. Customs and Border Protection (CBP) has long held that the use of a stationary, non-coastwise-qualified crane vessel to load and unload cargo or construct or dismantle a marine structure is not coastwise trade and does not violate the coastwise laws provided that any movement of merchandise is effected exclusively by the operation of the crane and not by movement of the vessel, except for necessary movement which is incidental to a lifting operation while it is taking place. However, the movement of merchandise while it is suspended from the crane, even between two points in a harbor, which is effected by a movement of the vessel which is neither necessary nor incidental to a lifting operation by the crane would constitute the coastwise transportation of merchandise within the purview of 46 U.S.C. App. 883. See, for example, HQ 106351 dated November 1, 1983 and HQ 113858 dated April 4, 1997.

In HQ 115630 dated March 25, 2002, we held that where lateral movement of the entire floating crane/barge was required to lift and place its load, such activity constituted the coastwise transportation of merchandise because it exceeded movement necessary and incidental to a lifting operation.

In HQ 115881 dated April 21, 2003, we considered a number of scenarios. One of the scenarios was described and analyzed thusly:

. . . before launching the truss section, mooring lines at a fixed length would be attached to the port stern corner of the barge to secure that corner of the barge over its original footprint. The bow of the barge would then be rotated approximately 10–30 degrees on the axis created by the mooring lines to create a launch angle at which the deep water pit could accommodate the full length of the truss section when launched. Once its barge is rotated on its axis to a favorable angle, the truss section would be launched into the deep water pit. When this process is broken down, it is clear that an illegal coastwise movement will occur as discussed below.

The steps described herein would constitute a violation of the coastwise laws because the 10–30 degree rotation that will be made to move the truss to a more beneficial angle from which to launch the truss section, will be accomplished through rotation on a fulcrum point as opposed to a rotation that will occur on an axis. A rotation that occurs on a fulcrum as opposed to an axis inherently involves the movement, self-propelled or not, of the barge while an axis allows for the barge to remain stationary while rotating in a pivoting (as opposed to swinging) motion while remaining in one spot. The permissible use of crane barges that pivot involves bases/barges that remain stationary while pivoting. The H-627 launch barge . . . will swing on the fulcrum point created by the mooring lines attached to the port stern corner of the barge. It will swing a 10-30 degree angle and then launch the truss section into the deepwater pit. Again, since the truss section will be laden and unladen at different points, such transportation effected by H-627 is a violation of 46 U.S.C. App. 883.

After a careful consideration of the matter at issue, we find that the proposed activity would result in a violation of 46 U.S.C. App. 883 in that it would involve the transportation of the vessel by movement of the foreign-flag dry-dock. The activity proposed here is not the same as the activity of the crane barge described above (see the first sentence of the first full paragraph p. 3) in that the dry-dock here will move in a manner which significantly exceeds the permitted incidental movement of a vessel on which a crane is stationed. As opposed to the crane barge situation where merchandise is moved by the action of the crane (with possible incidental movement of the stationary vessel), the merchandise here is proposed to be transported by movement of the vessel pursuant to its rotation on a fulcrum point. As discussed in HQ 115881 above, this is activity proscribed by 46 U.S.C. App. 883.

HOLDING:

The proposed activity described in the FACTS section would involve the transportation of merchandise between coastwise points by a non-coastwise-qualified vessel. Accordingly, that activity would be violative of 46 U.S.C. App. 883.

Sincerely,

Glen E. Vereb
Chief

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