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OSG is a major player in the international crude oil tanker market, the product carrier market and the U.S. Flag market, and has made a significant entry into the fast growing Liquefied Natural Gas (LNG) market. What all of these markets have in common is that they concentrate on the transportation of cargoes in bulk. This means that they involve homogenous commodities that are shipped in large volumes.
The bulk shipping industry today has its roots in the mid nineteenth century, when the first modern bulk carrier1 was employed in the coastal coal trade in England. The first tanker followed in 18862. While the LNG sector is more recent, natural gas in liquefied form has been successfully transported and used for 45 years.
The U.S. Flag segment is a niche market governed by U.S. cabotage laws. Most U.S. flagged vessels are covered under the Jones Act (Section 27 of the Merchant Marine Act of 1920), which requires that all cargo moving between U.S. ports be carried in ships which are U.S.-owned, U.S-built and U.S.-crewed. These rules are not unique for shipping. The same general principles are applied to other modes of transportation in the United States.
For more information contact Erik Broekhuizen.
1 The “John Bowes”, built in 1852, was the first iron-hulled, screw-propelled vessel specifically designed to carry coal between Newcastle and London. It could carry about twice the volume of cargo of a good sailing collier at the time.
2 The 2,700-ton Gluckauf is widely regarded as the first real tanker, a ship designed exclusively to carry oil. The vessel was owned by Wilhelm Anton Riedemann, a successful German shipowner, who was also the agent for the German subsidiary of Standard Oil. On her maiden voyage in 1886, she delivered a cargo of kerosene from Philadelphia to Geestemunde (today’s Bremerhaven) in Germany.
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