Crowley and Seacor coastal tanker and barge Jones Act joint venture

Two leading names, Crowley Maritime, privately owned, and Seacor, previously public but in private hands since early 2021, announced a combination of the two companies’ deepsea tanker and barge fleets, to be named Fairwater Holdings.

When the deal closes, expected in early 2024, the new entity will be headquartered in Fort Lauderdale, Florida. Dan Thorogood, long-time head of the tanker and barge activities at Seacor- which had been absorbed into investor American Industrial Partners (AIP) two years ago, will be at the helm.

According to a statement issued regarding the newly-formed Fairwater, “It will include 20 ocean-going, articulated tug-barges and 11 tankers, many under long-term charter. The joint venture will provide crewing and technical management for an additional 21 third-party owned vessels.”

The fiercely competitive coastwise tanker business has benefitted from consolidation. Both Thorogood, and Tom Crowley, chair and CEO of the eponymous US maritime provider, offered statements, with Crowley referring to an alignment of two companies’ strategies.

Seacor absorbed the tug/ barge fleet from privately held US Shipping Corp (USSC), during the Summer of 2021. Its chartering office- which had been handling operations for USSC, located in Fairfield, Ct. (outside New York City) will remain an integral part of the operation. AIP is also a part owner of Great Lakes shipowner Rand Logistics, though it sold off part of its stake to an entity linked to Private Equity investor Oaktree Capital, also in 2021.

While both Seacor and Crowley are active in other segments outside of coastwise tankers, including ship assist, as well as container shipping in the Caribbean region, the coastal tanker/barge segment has lately been receiving considerable flack from anti-Jones Act forces, who maintain that tanker transportation along the US coasts might be done at lower cost by international flag vessels. A combined presence might offer cost savings through synergies, but, more importantly, presents a very strong player in a still fragmented marketplace.

Major competitors include Kirby Corporation (NYSE - KEX”, Overseas Shipholding Group (NYSE - OSG), Kinder Morgan (NYSE – KMI), with its American Petroleum Tankers subsidiary, and a number smaller barging entities. Oil company Chevron (NYSE - CVX) also maintains a presence in the Jones Act sector.

The sector has seen a number of other recent developments. The ownership of ten tankers on long-term charter to OSG, and to competitor Keystone Shipping, will be moving from a Norwegian investor to an affiliate of Maritime Partners LLC, a New Orleans based bareboat charter specialist.

Also, during the summer months, Crowley had formed a joint venture with Stena, and Seacor’s Seabulk Tankers had linked with Torm, both in efforts to participate in the new Tanker Security Program (TSP), where US-flagged, but not US built, therefore not Jones Act compliant, tankers will be eligible for subsidies from the US Department of Transportation. The vessels, in US foreign trades, would be available, if needed, for national defense.

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Crowley and Seacor merging coastal tanker and barge fleets in Jones Act joint venture