VES-3-24-RR:IT:EC 115591 GG
Mr. Michael F. Minogue
ECM Maritime Services, LLC
64 Danbury Road
Wilton, CT 06897-4406
RE: 46 U.S.C. App. 883; coastwise transportation of merchandise; lightering; towing; barges.
Dear Mr. Minogue:
This is in response to your letter, dated February 5, 2002, which was written on behalf of your client, the Torvald Klaveness Group (“Klaveness”) of Oslo, Norway. You present several scenarios proposed by Klaveness and ask that their feasibility be confirmed.
FACTS:
Klaveness is a foreign flag vessel owner engaged in the worldwide shipment of a variety of cargoes on all types of vessels. Recently, other shipping interests have solicited Klaveness’ assistance in resolving certain problems encountered in discharging bulk coal cargoes in various U.S. ports. The problems involve draft limitations and inadequate shore handling installations. Klaveness has proposed a two-phased solution.
Under phase one, bulk coal cargoes will be imported into U.S. ports from foreign ports on board gearless panamax vessels of 65,000-75,000 DWT. These panamax vessels will be foreign flag bulk vessels with approximately 70,000-73,000 m/t of coal on board. Each arriving vessel will anchor off a U.S. port. Klaveness will then anchor an empty foreign flag handymax belt-transloader vessel of approximately 50,000 DWT alongside the panamax vessel. This handymax vessel will be used to lighter the coal from the panamax vessel, either directly to U.S. owned and operated barges or first to itself and then to the barges. During this entire
operation, the handymax vessel will remain anchored at its original
position and will not move. The barges will then be towed to the shore facility to be offloaded by the shore cargo handling equipment.
Phase two, whose initiation is contingent upon the success of phase one, eliminates the use of barges. Under this plan, the handmax vessel will load coal from the panamax vessel onto itself up to its maximum load capacity. As a result, the panamax vessel’s draft will have been reduced to the extent that it can now proceed to the berthing facility. The handymax vessel will also proceed, under its own power, to the berth, where it will moor first. The panamax vessel will then moor alongside the handymax vessel on its outboard side. The handymax vessel will discharge the balance of the coal cargo on board the panamax vessel and then will discharge its own cargo loaded during the lightering at the anchorage.
ISSUE:
Whether the transportation of coal as described in phases one and two of the proposed operation is permissible under the coastwise laws.
LAW AND ANALYSIS:
Title 46, United States Code App., section 883 (46 U.S.C. App. 883) in pertinent part, prohibits the transportation of merchandise between points in the United States embraced within the coastwise laws, either directly or via a foreign port, or for any part of the transportation, in any vessel other than a vessel built in and documented under the laws of the United States and owned by persons who are citizens of the United States.
Customs has held that the use of a non-coastwise qualified crane or derrick vessel to load and unload cargo is not coastwise trade and does not violate 46 U.S.C. App. 883, provided, that any movement of merchandise is effected exclusively by the operation of the crane and not by movement of the vessel, except for necessary movement which is incidental to a lifting operation while it is taking place. However, movement of merchandise while it is aboard the vessel or suspended from the crane, even between two points within a harbor, which is neither necessary nor incidental to a lifting operation by the crane would constitute coastwise transportation of merchandise within the purview of
46 U.S.C. App. 883.
We can discern no reason to distinguish between lightering by means of a crane or derrick vessel and lightering through use of a handymax belt-
transloader vessel, such as the ones described above, provided the same restrictions on movement apply. The only permissible movement that we
can contemplate would be such “necessary movement which is incidental to a conveyor operation while it is taking place”. We will now examine the effect of these rules on the operations described in the two phases.
With respect to phase one, it is our understanding that the handymax vessel will remain stationary during actual lightering operations, with the only movement being effected by the operation of the conveyor belt. Upon removal from the panamax vessel, the coal will be placed either on the handymax vessel and then onto U.S. owned and operated barges, or directly onto the barges. A tug will then tow the barges to the shore. In view of these facts, the handymax vessels under consideration may be used in the described manner without consequence under the coastwise merchandise statute, 46 U.S.C. App. 883. The coal may then be towed to shore, provided both the tug and the barges are coastwise qualified.
The operations described in phase two present more of a problem. To recapitulate, Klaveness proposes that the use of the barges and tugs be eliminated, and that both the panamax and the handymax vessels proceed under their own power after lightering to the berthing facility. There, the handymax vessel would unload the remaining cargo from the panamax vessel as well as its own cargo conveyed from the panamax vessel at the anchorage. So long as the lightering operation were to take place at a point within the 3 mile territorial waters of the United States, the described movement of coal aboard the handymax vessel from the place of lightering to the shore would violate 46 U.S.C. App. 883. This is because it would constitute a movement of merchandise on a non-coastwise qualified vessel between two coastwise points, with such movement not being necessary or incidental to the conveyor operation. The proposed movement of the remaining coal still on board the panamax vessel from the place of anchorage to the shore, would, however, be allowed.
HOLDING:
The handymax vessel may be used in the manner described in phase one without consequence under the coastwise merchandise statute, 46 U.S.C. App. 883, provided that both the tug and barges are coastwise qualified.
In contrast, if lightering transpires within the territorial waters of the United States, the proposed use of the handymax vessel to move the coal as described in phase two would constitute a violation of the coastwise laws,
because it would involve the movement of merchandise on a foreign flag vessel between coastwise points.
Sincerely,
Larry L. Burton
Chief
Entry Procedures and Carriers Branch