Maritime Partners expands acquiring Maersk’s US-flag tanker fleet

Maritime Partners LLC, a New Orleans-based packager of funds owning US assets is acquiring US Marine Management LLC (USMMI) from Maersk Line, Limited. This represents a move for the financier into the realm of vessels deployed on charters to the US government.

USMMI is headquartered in Norfolk, Va, where Maersk runs its US flag activities. Maersk’s two dozen US-flagged container vessels and ro-ro’s in the Maritime Security Program, or MSP, are not part of this deal.

As described in a release from Maritime Partners LLC, “USMMI is engaged in chartering US flag tanker and military support vessels, owned and operated by USMMI, to the Military Sealift Command (MSC), a division of the US Navy, and the operation and maintenance (O&M) of US government-owned vessels. USMMI currently operates a fleet of five US-0flagged vessels, including one owned maritime support vessel, three owned tankers, and one bareboat chartered tanker, and one O&M contract supporting US Army training watercraft in Japan.”

In recent years, Maersk had been de-emphasizing its tanker activities for the MSC, including selling off vessels that had been under MSC charters.

Most recently, USMMI was awarded an operating agreement for the US Maritime Administration’s (MARAD) newly launched Tanker Security Program (TSP). MARAD, in describing the programme, says: “The TSP will provide the Department of Defense with assured access to 10 US-registered product tank vessels that may be used to supply the armed forces with fuel during times of armed conflict or national emergency.”

USMMI has entered into an agreement to purchase an MR tanker, which will fulfill the TSP’s stated objective of enrolling ten vessels in the program. Previously, MARAD had announced that three TSP deals had been struck with each of Overseas Shipholding Group, a Crowley-Stena joint venture, and a Seabulk-Torm linkup.

The Military Sealift Command uses private operators to manage vessels deployed moving cargo -typically fuels, and military equipment - for the US Navy. Earlier this year, MSC announced the award of a one year time charter, with optional periods that could extend the contract out to 2028, for one of USMMI’s tankers the MR Pohang Pioneer, a non-Jones Act vessel, which had been flagged into the US registry in late 2021.

Earlier in the summer, Maritime Partners LLC announced a blockbuster deal, where one of its investment funds acquired the tanker leasing business from Oslo-linked AMSC in a ten ship deal worth $747 million. All of these tankers are Jones Act compliant - US owned/ operated, but also U.S. built-unlike the USMMI vessels. These vessels, in turn, are on long term bareboat leases to OSG and to subsidiaries of Keystone Shipping.

Across maritime (or other transportation-related) assets, where multi-year contracts or flows of funds surround maritime assets, the move towards more “institutional” ownership, which includes private equity, pension funds and family offices, makes sense. The Jones Act tanker leases in the AMSC deal all have firm terms running thru 2025, with some having options out to 2029.

Maritime Partners also owns a large inland barge fleet, chartered out under bareboat arrangements to major operators. Notably, it purchased a fleet of more than 1,000 boats/ barges from owner J. Russell Flowers, in 2021 and had absorbed the fleet of M/G Transport Service. Maritime Partners is a real player in the fragmented world of US vessel owners; recent regulatory filings show that American Rivers Fund, LLC (one entity linked to Maritime Partners) and several smaller funds, have placed some $1.1 billion, raised from more than 500 investors, since 2018.

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Maritime Partners continues expansion acquiring Maersk’s US-flag tanker fleet