Navieras deal to result in net job gain for AMO

Navieras deal to result in net job gain for AMO

Purchase of rival by Sea Star will lead to new role for trailerships manned by AMO

      Sea Star Line will buy Navieras de Puerto Rico, one of its rivals in the busy intermodal U.S.-Puerto Rico trade.
      The acquisition, which will add three working ships to the Sea Star Line fleet and eventually result in additional jobs for American Maritime Officers, was approved by a federal judge in New York April 22 after no other U.S.-flag companies offered to buy the troubled carrier. Court approval was necessary because Navieras and its owner, the Holt Group, filed last year for reorganization under Chapter 11 of the U.S. bankruptcy code.
      The transaction, reportedly worth $32 million, will bring five Navieras Lancer-class containerships and cargo terminal leases in San Juan under the Sea Star Line banner. Of the five ships, only three--the Guayama, Mayaguez and Humacao--are active. The remaining two will be kept in layup pending disposal.
      The Guayama, Mayaguez and Humacao will join Sea Star Line's El Morro and El Yunque in expanded round-trip service between U.S. East Coast ports and Puerto Rico, the Dominican Republic and the U.S. Virgin Islands.
      The El Morro and El Yunque are operated for Sea Star Line by Interocean Ugland Management Corp., or IUM, which employs AMO members in all licensed positions on the vessels.
      IUM will operate the Guayama, Mayaguez and Humacao as well, but those vessels will employ the licensed unions now aboard them--the Marine Engineers Beneficial Association, the International Organization of Masters, Mates & Pilots, and the American Radio Association.
      Under agreements reached in April, the MEBA, MM&P and ARA will man the Lancer-class ships until the vessels are withdrawn permanently from service because of their age. The Guayama, Mayaguez and Humacao are said to have no more than two years of trading life remaining.
      "With about 35 years at sea behind them, the Guayama, Mayaguez and Humacao have about had it," said AMO National President Michael R. McKay. "It's sad--no one here wants to see U.S.-flag ships with no options before them and no replacements on order, especially with the American merchant fleet in steady decline since the end of World War II. No one here wants to see licensed officers without jobs, no matter what union those officers belong to."
      When the Guayama, Mayaguez and Humacao are no longer seaworthy, the El Morro and El Yunque will be joined in the Southeast-Caribbean service by at least two of the three roll-on/roll-off trailerships now operated under AMO contract by IUM in round-trip service between Tacoma, Wash., and Anchorage, Ak. Those ships, the Westward Venture, Great Land and Northern Lights, are owned by Totem Ocean Trailer Express, or TOTE, an investor in Sea Star Line.
      TOTE will replace the Pacific Northwest trailerships in that trade with the larger roll-on/roll-off ships Midnight Sun and North Star, now under construction at National Steel and Shipbuilding Co., or NASSCO, in San Diego. The Midnight Sun and North Star, scheduled for delivery next October and in May 2003, will be operated by IUM, and they will be manned in all licensed positions by AMO.
      "That's significant because, when TOTE placed its newbuild order with NASSCO, the fate of the Westward Venture, Great Land and Northern Lights was uncertain," said McKay. "We knew one of the three would be held in reserve for the Washington-Alaska shuttle run, but we didn't know what would happen to the other two. We were looking at an even exchange of jobs--two ships in, two ships out. But now we know that at least four and maybe even all five of the TOTE ships will operate for the rest of their service lives with AMO members aboard, whether in the Southeast or the Northwest."
      Once the purchase of Navieras is completed, Sea Star Line will be the largest carrier in the U.S.-Puerto Rico market, which is also served by Crowley Maritime, CSX Lines and Trailer Bridge Inc. The trade is governed by the 1920 Jones Act, which holds all domestic waterborne commerce for vessels owned, built, flagged and manned in the U.S.
      "I would like to think we will be able to provide a more complete service to the customers of Navieras," Sea Star Line President Mike Shea told a reporter. "We will be offering five sailings a week instead of three, a larger container service and a ro-ro service. With five sailings a week, we will also be offering more to our existing customers."

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