Water Transportation Services, NEC

SIC 4499

Companies in this industry

Industry report:

This classification covers establishments primarily engaged in furnishing miscellaneous services incidental to water transportation, not elsewhere classified, such as lighterage; boathiring, except for pleasure; chartering of vessels; canal operation; ship cleaning, except hold cleaning; and steamship leasing. Establishments primarily engaged in ship hold cleaning are classified in SIC 4491: Marine Cargo Handling; and those primarily engaged in the operation of charter or party fishing boats or rental of small recreational boats are classified in SIC 7999: Amusement and Recreation Services, Not Elsewhere Classified.

The miscellaneous water transportation services industry covers a variety of services related to water transportation. These include boat livery, except pleasure; commercial boat rental; canal operation; cargo salvaging from distressed vessels; chartering of commercial boats; dismantling ships; lighterage; operation of marine railways for dry-docking; marine salvaging; marine surveying, except cargo; marine wrecking; piloting vessels in and out of harbors; ship cleaning, except hold cleaning; ship registering, including surveying and classifying ships and marine equipment; and steamship leasing. These duties usually are performed dockside and include loading and unloading of railroad cars, trucks, barges and containers; building grain feeders; lashing and strapping cargo; and repairing shipping pallets. Cleaning crews wash and paint surfaces, clean oil tanks, take inventory, clean and wash decks, clean and check lifeboats, clean the quarters, and sort and check laundry. Additional services can be provided by towing and barge operators. Such work includes lighterage or the transfer of goods from ship to barge.

This industry also includes companies that repair, salvage, or scrap ships and organizations that conduct safety inspections, called classifications societies. The leading societies are Lloyd's Register Group (United Kingdom), Nippon Kaiji Kyokai (Japan), and the American Bureau of Shipping (United States). By the end of the 1980s, members of the maritime industry had become highly critical of classification societies for their reduction in standards, charging that the changes had led to increased passenger and vessel loss and the decline of maintenance standards throughout the world. In an attempt to prevent additional losses, the International Association of Classification Societies began to implement "enhanced surveys" for tankers and bulk carriers, vessels with the greatest potential for loss.

In the late twentieth century, many ship repair companies were hesitant to work on some vessels, fearing they would be held liable for any subsequent malfunction. Moreover, underwriting agencies became more cautious of paying claims that were the result of poor maintenance rather than damage caused by an accident. This wariness created an environment wherein ships needing repairs were more likely to be relegated to the scrap heap.

Another area of this industry was salvage, both of cargo and vessels, a sector served by the American Salvage Association. Traditional salvage jobs became fewer and farther between in the 2000s. Due to changes in regulatory laws after the Exxon Valdez oil spill and the Oil Pollution Act of 1990, salvors had a responsibility to the environment first. The focus was on keeping the contaminants on the vessel and out of the environment. In addition, many in this sector expanded to offer diversified services such as diving, heavy lifting, or surveying.

After the terrorist attacks of September 11, 2001, most of the money and attention in the water transportation industry in general and the Coast Guard specifically started to be directed toward security. The proposed budget for 2011 included $6.8 billion for the Coast Guard, $218 million for the Transportation Security Administration, and $300 million for the U.S. Customs and Border Protection port security grant program. The Maritime Security Program received $174 million annually in government funds.

Many harbors, such as that in San Diego, California, were logically important areas in the industry. According to the San Diego Business Journal, "San Diego's cluster of shipyards work on everything except aircraft carriers and nuclear vessels." In 2009 the area's shipyards billed $500 million to the U.S. Navy for repair and maintenance contracts.

One of the industry leaders in the early 2010s was Edison Chouest Offshore Inc. of Galliano, Louisiana. The company was founded in 1960 and doubled in size from 1993 to 2003. It posted revenues of more than $390 million in 2001 and had 2,000 employees. Another leader was Houston-based Saipem America, Inc. (Sonsub), which provided a variety of services to the offshore oil and gas industry, including maintenance and repair of remotely operated underwater vehicles (ROVs). Annual revenues for Sonsub in the early 2000s were around $75 million. Other notable companies in the industry were Houston-based Biehl International Corp. and Tampa-based A.R. Savage and Son, Inc.

A collateral but important component of the water transportation industry is the servicing and dredging of ports, channels, and marina ingress/egress waterways throughout the United States. According to the Transportation Institute, the largest purchaser of marine dredging services in the late 2000s and early 2010s was the federal government, through the Army Corps of Engineers. The maintenance-dredging budget ranged from $220 to $260 million annually, with new dredging work adding $50 million to $180 million a year. The U.S. flag dredging fleet in 2010 consisted of 270 pipeline dredges, 137 mechanical dredges, and 22 hopper dredges. Shore protection services, environmental clean-up, and wetlands restoration were slow-growing corollary dredging trades in the 2000s, with the exception of shore protection, which jumped from $25 million to about $90 million in 2003.

Shore protection and environmental clean-up became critical issues in April 2010 when an explosion on the offshore drilling rig Deepwater Horizon, leased by oil company BP and working off the coast of Louisiana in the Gulf of Mexico, caused the largest oil spill in history. The oil well gushed an estimated 1.5 million to 2.5 million gallons of crude oil a day into the ocean before it was contained in mid-July. By that time, hundreds of millions of gallons of oil had spilled into the ocean, causing severe damage to marine life and wildlife habitats, as well as the Gulf Shore's fishing and tourism industries. Hundreds of vessels, including world's largest oil-skimming ship, called a Whale, were participating in the clean-up efforts.

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