TOTE Receives $324.6m Title XI Loan Guarantee
New vessels will create jobs, increase amount of cargo moved between Florida and Puerto Rico
U.S. Transportation Secretary Anthony Foxx today announced the approval of a $324.6 million Title XI loan guarantee to TOTE Shipholdings, Inc., to finance the construction of two container ships that will utilize liquefied natural gas (LNG) as propulsion fuel. The Title XI Loan Guarantee program promotes the growth and modernization of U.S. shipyards and the U.S. merchant marine by ensuring the U.S. vessels are manufactured in U.S shipyards by U.S. workers.
“This is proof-positive that when we work to build America’s green energy economy, we can directly support the creation of meaningful jobs, supporting the President’s goal to strengthen America’s middle class,” said U.S. Transportation Secretary Anthony Foxx. “This one action significantly decreases emissions, supports jobs from one coast to the other, bolsters the Nation’s manufacturing base, and continues growing our economy.”
The vessels will be constructed at National Steel and Shipbuilding Company (NASSCO) in San Diego, California. Construction of the vessels will generate 600 jobs at NASCCO, support companies throughout the nation that supply the materials and equipment, and once in service, the two new vessels will provide for 60 new U.S. merchant mariner jobs.
As dual fuel vessels, primarily operating with LNG, but with light diesel as needed, the vessels will be the most environmentally friendly containerships in the world, with engines that reduce the discharge of particulates to well below the levels mandated by the U.S. Environmental Protection Agency.
“The shipbuilding industry contributes more than $36 billion to our national economy,” said MARAD Administrator Paul ‘Chip’ Jaenichen. “The Obama Administration remains committed to our shipping industry, which does more than just create jobs and new opportunities, but also strengthens local economies.”
Expected to be delivered in 2015 and 2016, TOTE will operate the vessels in Jones Act trade between the Port of Jacksonville and Puerto Rico, transporting containers, automobiles and other cargoes. The ships will provide greater efficiencies and increase the available volume of refrigeration equipment used for shipping, which is critical to ensuring pharmaceuticals, produce, and other products vital to the residents of Puerto Rico are delivered in the best possible condition.
The Title XI program guarantees the repayment of loans, obtained in the private sector by ship owners, for the construction reconstruction, or reconditioning of vessels in U.S. shipyards. MARAD currently guarantees approximately $1.7 billion in U.S. shipyard projects.