Dakota Creek Industries lobbies for Jones Act waiver

The staff at Dakota Creek Industries in Anacortes, Wash., has been working around the clock to find ways to appease federal lawmakers following a mistake that has grounded the $75 million 264-foot catcher-processor America’s Finest.

The state-of-the-art vessel was supposed to be a big upgrade for the Fishermen’s Finest fleet but Dakota Creek used too much steel that was modified overseas in the boat’s construction to pass muster under the Merchant Marine Act of 1920.

Under the act, widely known as the Jones Act, a ship that works U.S. waters must be assembled in the United States by American workers, and all major parts of the hull must be made with American materials. There is an exception for parts bought abroad, but foreign-made materials are limited to 1.5 percent of a ship’s weight, under Coast Guard rules.

The shipyard had parts of the hull cut and bent in Holland before being processed stateside, and those parts ended up accounting for about 10 percent of the vessel’s weight, well above the allowed 1.5 percent. That work cost $275,000, or 0.4 percent of the projected total vessel cost of $75 million.

Now the yard has to seek a waiver that would allow the boat to fish in U.S. waters despite noncompliance with the act.

Dakota Creek has proposed buying a $700,000 cold-forming press machine — a machine that can bend unheated steel — that was used to form part of the ship’s hull overseas and bring it to the West Coast. The machine would be given to Seattle-based Seaport Steel and would be made available to boat builders throughout the region.

The shipyard and fishing company hope the purchase could help sway lawmakers and the American Maritime Partnership, a powerful coalition that represents the U.S. maritime industry.

“We are trying to work to resolve differences to make this situation acceptable to AMP,” said Dakota Creek owner Mike Nelson in an interview with the Skagit Valley Herald.
Without a waiver, the boat would have to be sold abroad at an estimated loss of $25 million. A briefing paper on the situation from Dakota Creek’s lawyers claims the loss could “eliminate two Washington companies (and) more than 500 highly paid and skilled trade jobs.”

In May, U.S. Rep. Rick Larsen added an amendment to the U.S. House of Representatives Coast Guard budget bill that waives the Jones Act requirements for America’s Finest. There has been no action in the senate on the situation yet.

Dakota Creek is still contractually obligated to deliver Fishermen’s Finest a Jones Act-compliant ship.

About the author

Samuel Hill

Samuel Hill is associate editor for National Fisherman.

  • nerkaorr

    oh my what a headache

  • John Dapper

    What BS. They used foreign manufactured steel and got caught. Almost 10 times the allowed weight. The yard management, naval architect and steel supplier know closely the weight of components. If they didn’t, the launched vessel would not ride correctly and maybe roll over. The point of the Jones Act is to ensure business for US steel makers so we have steel makers in times of national emergencies. The first thing companies do when they want a exemption is claim job losses. How many jobs were skipped having the steel formed in a foreign country? They got cheaper illegal components from a foreign supplier and now they are going to payoff some congressman to get an exemption.The whole thing stinks. If they don’t get an exemption, and have to sell their new vessel outside the US, every US steel boat builder will take notice. That’s how the law works.

  • Chris Jones

    It is not illegal to use foreign steel as long as no work is done to it. It must arrive into the country in common sizes. As stated in the article approximately 0.4% of the labor was done overseas in Europe. 150 jobs lost so far and the saga is not over.

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