SIC 4499
WATER TRANSPORTATION SERVICES, NOT ELSEWHERE CLASSIFIED



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.

NAICS Code(s)

532411 (Commercial Air, Rail, and Water Transportation Equipment Rental and Leasing)

488310 (Port and Harbor Operations)

488330 (Navigational Services to Shipping)

488390 (Other Support Activities for Water Transportation)

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 of Shipping (U.K.), Nippon Kaiji Kyokai (Japan), and the American Bureau of Shipping (U.S.). 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 has begun to implement "enhanced surveys" for tankers and bulk carriers, vessels with the greatest potential for loss.

In recent years, many ship repair companies have been hesitant to work on some vessels, fearing they will be held liable for any subsequent malfunction. Moreover, underwriting agencies have become more cautious of paying claims that have been the result of poor maintenance rather than damage caused by an accident. This wariness has created an environment wherein ships needing repairs are more likely to be relegated to the scrapheap.

The uncertainty of the ship-repairing sector kept many companies from expanding. San Diego, California's private ship-repair industry received $238 million from the U.S. Navy in 1998. Although the 1999 budget was $260 million, the locals are still recouping from the slag following 1997's $282 million. The private ship-repair industry takes in about 40 percent of U.S. Department of Defense work, the other 60 percent going to public shipyards. In 1998, it was 34 and 66 percent. The same was not true in the Norfolk, Virginia area, where the Navy paid private companies $942 million for ship maintenance work in fiscal year 1998, as opposed to only $417 million going to the Navy shipyard. At Puget Sound, Todd Pacific Shipyards of Seattle entered a $100 million multi-year contract with the Navy in 1999 for alteration and repairs on aircraft carriers, representing the first such contract award to private industry.

Another area of this industry was salvage, both of cargo and vessels, a sector served by the American Salvage Association. Traditional salvage jobs were becoming 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, the salvors in the 2000s 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 were expanding to offer diversified services such as diving, heavy lift, 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 was directed toward security. But as of late 2003, salvors were awaiting regulations that would standardize the industry. Among such regulations would be a stipulation that ship owners must contract with a U.S. salvage company in order to do business in the United States.

The clear industry-wide leader in the early 2000s was Edison Chouest Offshore Inc. of Galliano, Louisiana. The company was founded in 1960 and doubled in size from 1993 to 2003. It posted 2001 revenues of $392 million and 2,000 employees, far outpacing any of its competitors.

In second place was Houston-based Sonsub Inc. with $75 million in 2001 revenue and 500 employees. Next was Fleet Yacht Charters of Boston, with $41 million in revenue and 100 employees. Other notable companies in the industry were Houston-based Biehl International Corp. with $29 million in revenue, and Tampa-based A.R. Savage and Sons Inc., with $21 million in revenue.

SIC 4499 Water Transportation Services, Not Elsewhere Classified

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 U.S. flag dredging fleet in 2003 was comprised of approximately 409 pipeline dredges, 144 mechanical dredges, and 21 hopper dredges. The largest purchaser of marine dredging services was the federal government, through the Army Corps of Engineers. The maintenance-dredging budget runs from $220 to $260 million annually. New dredging work each year will add another $50 to $180 million. Shore protection services, environmental clean-up, and wetlands restoration are slow-growing corollary dredging trades, with the exception of shore protection, which jumped from $25 million to about $90 million in 2003.

Further Reading

Baker, Deborah J., ed. Ward's Business Directory of US Private and Public Companies. Detroit, MI: Thomson Gale, 2003.

"Edison Chouest Offshore," 22 March 2004. Available from http://www.chouest.com .

Glass, Pamela. "Salvage Industry Needs Standardized Framework." Workboat, November 2003.

Smith, Kathy B. "Marine Undertakers: For Salvors, It's Now Environmental Protection First, Property Second." Workboat, August 2002.

The Transportation Institute. Industry Profile: 2004. 20 March 2004. Available from http://www.trans-inst.org .

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