A new framework for the U.S.-flag fleet

Sea Power, May 1997 by Kelly, Edward V

Edward V Kelly is vice president of American Maritime Officers and chairman of the Navy League's Merchant Marine Affairs Committee.

In many ways, last year was a good year for the American maritime industry. The National Shipbuilding Initiative (NSI) enacted in 1993 produced solid results. For the first time in more than 30 years, American shipyards are building ships for export, as well as for American owners.

In addition, the Clinton administration succeeded in establishing a new framework for the continued operation of U.S.flag merchant ships in the nation's foreign trade. On 8 October 1996, following overwhelming bipartisan approval by the Congress, the president signed the Maritime Security Act into law.

"The Maritime Security Act will protect American jobs and maintain a U.S. presence in international maritime trade, ensuring that vital imports and exports are delivered in both peacetime and wartime," the president said at the time. "The Act reaffirms our nation's resolve to maintain a strong U.S.flag presence on the high seas for our continued national security and economic growth."

In addition, through a partnership among the Maritime Administration, the Defense Department, and the American maritime industry, the administration put in place the new voluntary intermodal sealift agreement (VISA) program-which provides, in advance, for the availability of intermodal transportation systems to meet the nation's future military contingency needs.

The picture was not quite as bright for the Maritime Administration itself, however. During the fiscal year that began last October, MARAD instituted several cost-savings measures to meet its own reduced operating budget, eliminating its marketing program, downsizing other programs, closing field offices, and carrying out a reduction in force. Agency region and headquarters operations staffing was cut by 17 percent; since 1981, these activities have been cut by more than 60 percent.

A "Continued Commitment"

That is the backdrop for the president's funding request for MARAD activities during the next fiscal year.

"MARAD's FY 1998 budget request reflects the president's continued commitment to our nation's maritime activities," said Maritime Administrator Vice Adm. Albert J. Herberger, USN (Ret). "It also reflects the importance of sealift readiness and a strong U.S.-flag fleet, strengthened commercial shipbuilding, maritime education and training, and a seamless transportation system."

The Navy League has long supported a strong and viable U.S.-flag Merchant Marine and U.S. shipbuilding industry as vital components of America's overall strength at sea, and has recognized that the Maritime Administration's work has been critical in keeping both the administration and the Congress focused on how essential these industries are. In its annual Policy Resolutions, the League has stated emphatically that Congress should provide the funds needed for the agency to continue to carry out its important mission.

Following is a summary, based on Admiral Herberger's recent testimony before the Oversight Panel on the Merchant Marine of the House National Security Committee, of the administration's fiscal year 1998 budget request for the Maritime Administration.

Maritime Security Act

The new maritime security program (MSP) authorizes the establishment of a maritime security fleet, owned and operated by U.S. citizens and crewed by American seafarers, to meet U.S. national security sealift requirements and provide a competitive presence in America's international commercial trade.

The maritime security fleet of modern commercial ships with their supporting intermodal transportation systems will be available in time of war and national emergency to provide critical sealift support to the Department of Defense by carrying supplies and sustainment cargoes to U.S. armed forces deployed overseas.

After consultation with the Department of Defense's Transportation Command (USTRANSCOM), MARAD selected 47 ships, operated by 10 carriers, for participation in the MSP. All 47 ships were enrolled in the program as of 21 January 1997.

The MSP fleet includes 21 large containerships, 15 medium-sized containerships, five LASH (lighter aboard ship) vessels, three combination container-RO/RO (roll-on/roll-off) vessels, and three car/truck carriers with a total capacity of 128,661 TEU containers and 1.4 million square feet of RO/RO capacity.

The Maritime Security Act authorizes a 10-year program, funded at $100 million per year. Appropriations of $54 million are required for FY 1998. When combined with an expected FY 1997 carryover of $36 million, this will allow obligations totaling $90 million in support of the operation of 45 vessels. (Although the maritime security fleet is composed of 47 vessels, several of the vessels participating in the program remain under operating differential subsidy (ODS) contracts, soon to expire, and are therefore not included in the appropriation.)

In addition to maintaining a U.S.-flag fleet, the MSP also ensures the continued availability of trained U.S. citizen mariners to crew the government-controlled fleet. Without a U.S.-flag merchant marine, the current pool of qualified and reliable U.S. citizen crews would disappear. The U.S. government relies entirely on civilian U.S. mariners to crew the Ready Reserve Force (RRF) and other government sealift ships during a military contingency; these citizen crews thus serve critically important national defense interests.