How This Billionaire Family Is Succeeding Despite The Collapse Of The American Shipping Industry

Forbes

28-07-2025

T he tanker American Energy is 900 feet long with a black hull; its bridge reaches the height of a ten-story building. Jutting out of the top deck are the squared-off corners of the ship's enormous liquefied natural gas storage tanks—painted a turquoise that complements the waters of the port of Peñuelas, on the southern coast of Puerto Rico. There, in June, the ship—owned by Jacksonville, Florida–based shipping company Crowley Maritime—made its first delivery to the island of 35 million gallons (130,000 cubic meters) of super-chilled (to minus 260 degrees Fahrenheit) liquid natural gas (LNG) sourced from American shale frackers. That's enough in one shipment to generate the electricity to power 80,000 homes for a year, says Tom Crowley Jr., the 58-year-old chairman and majority owner of Crowley Maritime.
American Energy is a new ship for Crowley, but despite its gleaming appearance, it's far from new. It was built in 1994 and was headed to the scrap heap before Crowley picked it up last year for an estimated $25 million. Why would he invest in this ship, when on any given day a dozen bigger, newer, more efficient tankers are loading up on American LNG to export to the world? Conversely, why can't one of the hundreds of other modern megatankers filling up on LNG in Louisiana or Texas just make a stop in Peñuelas?
The answer is the Jones Act. Otherwise known as the Merchant Marine Act of 1920, it requires vessels transiting from one U.S. port to another be built in the U.S., be crewed by Americans and fly the Stars and Stripes. Or get a waiver.
Jamel Toppin for Forbes
It turns out a waiver was needed in the case of American Energy, which was built in France. Crowley got the ship approved as a Jones Act vessel only after finding a loophole—a 1996 law that allows ships built abroad before 1996 to be used in Jones Act trade. 'We were concerned we wouldn't find a single one,' he says.
This is nonsensical. You shouldn't have to divert an old ship from the junkyard on a technicality so that a U.S. territory can get deliveries of the same product we've been selling to Europe and Asia for years. But it's a prime example of how Crowley has learned to navigate the shallow shoals of regulatory hazards in one of the world's most unforgiving hard-asset businesses. Of the 125 vessels Crowley owns, 112 are Jones Act–compliant, making it, with $3.5 billion in revenue, the biggest in this niche. By sticking to this protected swim lane, Crowley—who along with his immediate family owns some 80% of the company, worth an estimated $1.5 billion—is able to steer clear of shipping whales like Denmark's Maersk ($56 billion revenue) and China's Cosco ($32 billion). 'Though it doesn't drive the company, Crowley says, 'the Jones Act is something we operate within.'
In 1892 Crowley's grandfather, Tom Crowley, then 17, used all his savings (about $80) to buy an 18-foot Whitehall rowboat. When a big ship dropped anchor in San Francisco Bay, he'd row out with supplies. After the great earthquake of 1906, Crowley helped A.P. Giannini's Bank of Italy (which later became Bank of America) protect cash and securities by stuffing them in milk cans anchored on a Crowley boat in the harbor.
The founder's son, Thomas Bannon Crowley, took over the company in the 1940s and helmed it through World War II and postwar growth into Alaska and the Caribbean. Their ships carried material to build out Prudhoe Bay and the Trans-Alaska Pipeline. After the Exxon Valdez spill in March 1989, Crowley invested $1.5 billion to retrofit its fleet of smaller tankers to add double hulls.
When his dad died in 1994, Thomas B. Crowley Jr. was 27, a graduate of the University of Washington with a passion for computers. In the three decades since, he has fought the purported family-business curse (from shirtsleeves to shirtsleeves in three generations) by standing up to longshoremen's unions, dumping the company's San Francisco Bay ferry business in 1997 and quickly selling off Crowley's South American shipping line after international trade negotiations went sour. And he leveraged his fleet's protected Jones Act status to win contracts with the U.S. Agency for International Development managing emergency shipments of disaster aid like Ebola medicine to Liberia and frozen chicken to Cuba. Luck has also played a role. Crowley's last big USAID contract ran out last year, so he wasn't hurt when the Trump administration killed the aid agency and most of its programs. How to Play It
Patrick Welsh for Forbes By William Baldwin Ocean shippers have a habit of going bankrupt, a consequence of high debt ratios, inelastic supply and volatile demand. The better way to invest in the movement of heavy goods across the seas is to bet on the future of liquefied gas. (Yes, gas is heavy: A ship typically carries at least 70,000 tons of it.) Cheniere Energy runs LNG export operations. Pembina Pipeline is a diverse fuel hauler with a new liquefied-propane dock in Canada. EQT Corporation is a gas producer interested in sending as much gas as possible abroad. All three are reasonably priced, with enterprise values between 10 and 14 times earnings before interest, taxes and depreciation. William Baldwin is Forbes' Investment Strategies columnist.
Even Jones Act supporters like John McCown, who used to operate a container shipping business and is now at the Center for Maritime Strategy, admit it adds 20% to shipping costs, but that 'more than pays for itself in terms of the national security benefits of having a ready merchant fleet.' If the law were repealed, McCown would expect lower-cost global giants to quickly subsume all the routes between Puerto Rico, Hawaii, Guam, Alaska and the mainland.
'At the heart of it is that America needs to be able to run ships,' Crowley says. In 2017 he won his biggest contract, with the Department of Defense, to manage the logistics of shipping 300,000 pieces of equipment annually (the contract was renewed in 2024 at $2.3 billion for seven years).
After Hurricane Maria devastated Puerto Rico and its power grid in 2017, Crowley moved 40,000 power poles, 7,000 transformers and 10 million miles of cable to the island. Even in the best of times, Puerto Rico's grid is unreliable, and Crowley began hearing the same message from the pharmaceutical factories and food distributors who wanted to invest in their own gas-powered microgrids to ensure redundant electricity supplies: 'You've got to figure out a way to get American LNG to Puerto Rico.' And why not? 'The U.S. has an infinite supply,' he says.
From nothing a decade ago, the U.S. now exports 12 billion cubic feet of gas per day, 9% of domestic production. But none of it was going to Puerto Rico because not a single Jones Act–compliant LNG tanker existed anywhere in the world, at any price.
Crowley initially moved smaller amounts of LNG in insulated cargo containers offloaded onto trucks, but this was extremely inefficient. The company contracted with Fincantieri Bay Shipbuilding in Wisconsin to build a 400-foot LNG-carrying barge that it now uses in Savannah, Georgia's harbor as a mobile filling station for ships. But it wasn't big enough to go to San Juan, and the last time an American yard had built a large LNG carrier was 50 years ago.
The U.S. used to be a shipbuilding powerhouse. By 1776, timber from eastern American forests outfitted a third of the ships in the British Royal Navy. During World War II the U.S. built more than 5,000 ships. Now that's down to fewer than 10 per year, totaling less than 1% of global oceangoing tonnage. Today, supported by state subsidies, protectionist laws and cheap labor, China is the biggest shipbuilder with a 50% share, followed by South Korea and Japan.
Crowley would like to build American, if it makes sense. Two of his ships, the six-year-old El Coquí and Taíno, are hybrids that carry both containers and vehicles between Jacksonville and San Juan, and were built in Pascagoula, Mississippi. El Coquí' s captain, Nick St. Jean, says the LNG-powered propulsion system has been highly reliable and easier to maintain than older diesel-fueled steam engines, and with 40% lower carbon emissions.
Crowley competitors Matson Shipping and Pasha Group each recently sent an aging U.S.-built, Jones Act–compliant vessel to Asia to have their old engines replaced with efficient new ones that run on LNG. Matson says the overhaul cost $72 million, which is more than the price of a new Chinese ship. For now, American Energy is still powered by steam turbines.
Not all of Crowley's ships meet the requirements of the Jones Act. He chartered his newest four container ships (to run routes from Florida to Central America) from Hyundai's Mipo yard in South Korea. The company also had to acquire non-U.S.-built roll-on/roll-off ships to satisfy the specifications of the Defense Department contract. 'We needed them quickly, so we bought foreign,' Crowley says. Listacle All In The Family
The Crowleys aren't the only clan breaking the three-generation curse. Here are a handful of big businesses that go way back—and are still run by their founding families. Zildjian (cymbals) • Fifteen generations
Zildjian Founded in Constantinople in 1623 by an Armenian alchemist who discovered the perfect alloy for musical cymbals while trying to make gold, the company moved to Massachusetts in 1929. It's now chaired by 14th-gen Craigie Zildjian, who was its first female CEO. Yuengling • Six generations Billionaire Dick Yuengling lords over America's oldest brewery, founded in 1829 by his great-great-grandfather; his four daughters are execs. Smucker's • Five generations Jerome Monroe Smucker started the jelly-and-jam maker as a small Ohio cider mill in 1897. His son and grandson took it public in 1959; now fifth-gen Mark Smucker is CEO of the $8.7 billion (sales) business. Wegmans • Five generations The beloved East Coast grocery chain began with two brothers selling produce from a pushcart in 1916; now fourth-gen CEO Colleen Wegman has expanded it beyond 100 locations.
*Based on the latest generation to hold an executive role at the company.
Jones Act critics such as Colin Grabow at the Cato Institute argue that if the purpose of the law was to protect and incentivize a strong domestic shipping fleet, it has objectively failed and should be scrapped. He says Crowley's ploy of cleaning up an old French-built tanker and calling it American Energy 'demonstrates the gains that can be realized when Americans are provided even a partial reprieve from the Jones Act.'
Crowley did make one recent American-made addition to the fleet: an all-electric tugboat called eWolf, built by Master Boat Builders of Coden, Alabama. The 82-foot tug boasts 70 tons of towing capacity. Now working in San Diego's harbor, it cost about $35 million, double the price of a traditional tugboat. Zero emissions is nice, but the tug has a limited range. Even after getting $13 million in subsidies from the San Diego Air Pollution Control District and U.S. Environmental Protection Agency, Crowley says he can't justify buying another one.
In time, decision making will fall to the fourth Crowley generation, including a daughter who works in insurance in London and son Bannon Crowley, 27, who oversees harbor tugs in Jacksonville. 'I've been a steward of this,' the current Crowley boss says. 'I'm trying to teach them the same kind of stewardship.'
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