• ITVI.USA
    13,809.570
    -6.010
    0%
  • OTRI.USA
    21.480
    0.000
    0%
  • OTVI.USA
    13,784.050
    -7.950
    -0.1%
  • TLT.USA
    2.810
    0.000
    0%
  • TSTOPVRPM.ATLPHL
    2.480
    -0.170
    -6.4%
  • TSTOPVRPM.CHIATL
    3.070
    -0.210
    -6.4%
  • TSTOPVRPM.DALLAX
    1.370
    -0.090
    -6.2%
  • TSTOPVRPM.LAXDAL
    2.280
    -0.210
    -8.4%
  • TSTOPVRPM.PHLCHI
    1.900
    -0.070
    -3.6%
  • TSTOPVRPM.LAXSEA
    2.720
    -0.270
    -9%
  • WAIT.USA
    127.000
    0.000
    0%
  • ITVI.USA
    13,809.570
    -6.010
    0%
  • OTRI.USA
    21.480
    0.000
    0%
  • OTVI.USA
    13,784.050
    -7.950
    -0.1%
  • TLT.USA
    2.810
    0.000
    0%
  • TSTOPVRPM.ATLPHL
    2.480
    -0.170
    -6.4%
  • TSTOPVRPM.CHIATL
    3.070
    -0.210
    -6.4%
  • TSTOPVRPM.DALLAX
    1.370
    -0.090
    -6.2%
  • TSTOPVRPM.LAXDAL
    2.280
    -0.210
    -8.4%
  • TSTOPVRPM.PHLCHI
    1.900
    -0.070
    -3.6%
  • TSTOPVRPM.LAXSEA
    2.720
    -0.270
    -9%
  • WAIT.USA
    127.000
    0.000
    0%
American ShipperShippingTrade and Compliance

MarAd, U.S. Transcom warn about Merchant Marine decline

Maritime Administrator Paul Jaenichen, Sr. told the House Subcommittee on Coast Guard and Maritime Transportation he sees the United States moving from “amber” to “red” on the national security scale if additional ships are lost.

   Officials from the Maritime Administration and the U.S. Transportation Command sounded the alarm about the declining capabilities of the U.S. Merchant Marine in testimony at two separate congressional hearings on Tuesday.
   Paul “Chip” N. Jaenichen, Sr., the Administrator of the Maritime Administration told the Subcommittee on Coast Guard and Maritime Transportation of the House Transportation and Infrastructure Committee that the number of U.S.-flag ships engaged in foreign commerce has fallen from 106 at the beginning of 2012 to 77 today.
   Jaenichen said the drop in the number of ships reflects both a 40 percent drop in the total amount of food aid cargo and a 75 percent drop in cargo from the Department of Defense (DoD) over the same period.
   The decrease in military cargo reflects “the smaller footprint that we have overseas in basing, but also the smaller number of troops that are stationed overseas,” he said.
   Jaenichen was pressed by Rep. John Garamendi, D-Calif., on how the U.S. Merchant Marine has been affected by the decision to reduce the amount of food aid that must be carried on U.S.-flag ships.
   President Obama’s Fiscal Year 2017 budget “proposes to modify the current P.L 480 Title II food assistance program to change the way food aid is delivered around the world, specifically to allow flexibility (25 percent of total budget) for interventions such as local and regional purchase to reduce the average cost per beneficiary, making it more efficient and reaching more people in crises,” Jaenichen’s written testimony explained.
   Jaenichen said six to 12 ships have left the fleet as a result of those changes to food aid policy since 2012, with U.S.-flag dry bulk ships most affected.
   “Many of those ships are being laid up right now,” he said, and another four to six ships could stop trading. Each ship has 20-25 billets, so that could affect the 40 to 50 mariner jobs per vessel.
    And what is the risk to U.S. national security?, Garamendi asked.
   Jaenichen compared the situation to warning lights.
   “If we lose additional ships, I’m putting it from a mariner availability standpoint today, I’d put us in the amber range. I have probably a delta of about four ships before I go to the red. So I am concerned about the number of mariners that are available to fully man government reserve sealift fleet in a time of either conflict or in humanitarian crisis and fully had to activate them.”
   Jaenichen noted that the MarAd budget request includes $25 million to mitigate the impact of changes in food aid programs. The funds would be used to reserve mariner employment on U.S. commercial vessels and “identify other innovative means to encourage retention of U.S. mariners and vessels.”
   Elsewhere on Capitol Hill, General Darren W. McDew, the commander of the U.S. Transportation Command, told the Readiness Subcommittee of the House Committee on Armed Services that he was concerned about both the number of ships in the U.S. flag fleet that trade internationally and the Maritime Security Program, which provides a stipend to operators of 60 U.S. flag ships in international trade.
   The president’s budget request asks for $186 million for that program, or $3.1 million for each of the 60 ships, $24 million less than in the budget that was enacted in 2016. The House last year voted to increase MSP funding to $5 million.
   “We ought to have a dialog about how important is a U.S. international fleet,” said McDew.
   He said the military is dependent on the merchant marine to “deliver what we call a decisive force. I can deliver an immediate force anywhere on the planet tonight. But to deliver a decisive force, it takes a fully-fledged, competent maritime fleet maritime fleet and that’s what the MSP provides us.”
   Jaenichen noted that there are currently just 57 ships in the MSP program, but that MarAd recently approved one vessel to enter the program and is in the process of filling the remaining two vacancies.
   “Without mariners we don’t have a capability and I believe that US credentialed mariners is important,” said McDew.
   Also during the Subcommittee on Coast Guard and Maritime Transportation hearing, Rep. David Rouzer, R-N.C., asked Admiral Paul F. Zukunft, the commandant of the U.S. Coast Guard, about the amendments to the Safety of Life at Sea treaty that will require shippers to provide the “verified gross mass” of containers before they are loaded on ships, noting that exports, especially of agricultural commodities and steel are vital to the nation’s economic prosperity.
   Zukunft said the Coast Guard does enforce SOLAS guidelines by inspecting ships for compliance and will detain ships if they are not in compliance, but that “foreign carriers are pretty much all in compliance today.”
   “I am not seeing a sky falling,” he said. “But we need to make sure there are not unintended consequences which is why we are continuing to reach out to the many exporters.”

Chris Dupin

Chris Dupin has written about trade and transportation and other business subjects for a variety of publications before joining American Shipper and Freightwaves.