AMO endures pandemic, but monitors potentially harmful economic conditions

American Maritime Officers has endured the COVID-19 pandemic financially, but our union administration is monitoring coronavirus economic consequences that could force ships into layup because of weak domestic demand for essential cargoes.

The AMO operating and savings account balances continued to increase as of May 19 as revenue rose through membership dues and applicant initiation fee payments.

AMO investment account losses linked to the pandemic in the devastating first quarter of 2020 were reduced from 14 percent at the height of the record-breaking Wall Street crash to 6 percent by May 19. For perspective, consider that the investment market indices were down by 30 percent at one point in the first quarter.

But several Midwest steel mills have since halted or reduced production because of weak demand, which in turn resulted in proportionately slack demand for taconite - the iron ore pellets that account for most of the cargoes hauled in domestic markets by the U.S.-flag Great Lakes bulk fleet.

By May 19, six Great Lakes vessels - five in the American Steamship Company fleet and one with Central Marine Logistics - had been withdrawn from service for indefinite stretches.

Meanwhile, some industry analysts were warning of declining demand for petroleum products in Jones Act tanker markets, citing below average shipments in March, April and May. One account said domestic demand for petroleum products had declined by 30 percent in April.

Idle ships mean fewer jobs for AMO members and proportionately fewer employer contributions to AMO Plans, the benefit funds that serve all AMO members and their families so well.

We are holding steady - for now. We anticipate marking 2021 as our union's seventh consecutive year with no membership dues hike or an increase in membership applicant initiation fees, but AMO will adjust as necessary and do everything we can to remain prosperous and to minimize the economic impact of COVID-19 on our jobs and on our benefit funds.

The good news here - all things considered - is that no proposed Jones Act waiver, exemption or outright repeal has had traction in Congress or in the administration as the Jones Act approached its June 5 centennial. Legislation targeting the Jones Act in the Senate and in the House of Representatives has languished since 2018.

We will keep all AMO members informed throughout what all Americans hope is a limited crisis, with economic revival on the near horizon.

Thank you.

Paul Doell
May 21, 2020