• ITVI.USA
    15,536.540
    74.080
    0.5%
  • OTLT.USA
    2.754
    0.002
    0.1%
  • OTRI.USA
    20.490
    -0.180
    -0.9%
  • OTVI.USA
    15,507.170
    69.970
    0.5%
  • TSTOPVRPM.ATLPHL
    3.300
    0.000
    0%
  • TSTOPVRPM.CHIATL
    3.140
    0.190
    6.4%
  • TSTOPVRPM.DALLAX
    1.590
    0.150
    10.4%
  • TSTOPVRPM.LAXDAL
    3.330
    0.020
    0.6%
  • TSTOPVRPM.PHLCHI
    2.170
    0.020
    0.9%
  • TSTOPVRPM.LAXSEA
    4.080
    0.130
    3.3%
  • WAIT.USA
    125.000
    -1.000
    -0.8%
  • ITVI.USA
    15,536.540
    74.080
    0.5%
  • OTLT.USA
    2.754
    0.002
    0.1%
  • OTRI.USA
    20.490
    -0.180
    -0.9%
  • OTVI.USA
    15,507.170
    69.970
    0.5%
  • TSTOPVRPM.ATLPHL
    3.300
    0.000
    0%
  • TSTOPVRPM.CHIATL
    3.140
    0.190
    6.4%
  • TSTOPVRPM.DALLAX
    1.590
    0.150
    10.4%
  • TSTOPVRPM.LAXDAL
    3.330
    0.020
    0.6%
  • TSTOPVRPM.PHLCHI
    2.170
    0.020
    0.9%
  • TSTOPVRPM.LAXSEA
    4.080
    0.130
    3.3%
  • WAIT.USA
    125.000
    -1.000
    -0.8%
American ShipperShipping

Maritime strategy years overdue

Government Accountability Office says a study laying out a national plan still has not been completed despite a 2015 deadline.

    A congressionally mandated Department of Transportation study laying out a “national maritime strategy” is now more than three years overdue, according to a report released by the Government Accountability Office on Wednesday.
   Although there was a statutory deadline of February 2015 for the national maritime strategy to be submitted, DOT has not issued it. A draft developed under the Obama administration is now being reviewed by the current administration, but no timeline for finalizing it has been established, said GAO.
    GAO said according to data from the Maritime Administration, the number of large U.S.-flag ships engaged in international trade has declined from 199 vessels at the end of 1990 to 82 at the end of last year.
    Ships in cabotage trade moving cargo between points in the U.S., including those trading between the contiguous 48 states and ports in Alaska, Hawaii and Puerto Rico, are protected from competition by the Jones Act. But U.S. ships in international trade must compete with those employing lower cost ships built overseas and employing foreign seafarers.
    Stakeholders told GAO there are two primary challenges in sustaining the internationally trading U.S.-flag fleet for national defense needs.
    “According to U.S. Maritime Administration (MarAd) officials, the additional cost of operating a U.S.-flag vessel compared to a foreign-flag vessel has increased — from about $4.8 million annually in 2009 and 2010 to about $6.2 to $6.5 million currently,” said GAO.
    The operators of 60 U.S. flag ships in international trade receive a stipend under the Maritime Security Program (MSP) to help offset that higher cost, in exchange for offering to make their ships available during time of war or national emergency.
   Congress increased the MSP stipend from $3.5 million per vessel for fiscal year 2016 to $4.99 million per vessel for fiscal year 2017.
   MarAd officials told GAO the increase has temporarily stabilized the financial situation of MSP vessel operators. However, MarAd officials stated trends in operating costs and government cargo suggest this will remain an ongoing challenge.”
   GAO also noted government cargo volumes reserved for haulage on U.S.-flag vessels have fallen in recent years.
   In general, cargo preference requirements specify that certain percentages of all U.S. government cargo, military and otherwise, must be carried on U.S.-flag vessels, to the extent the vessels are available at reasonable rates.
   Current law requires that 100 percent of military cargo be transported on U.S.-flag vessels, noted GAO, while a minimum of 50 percent of the gross tonnage of all other government civilian cargo, such as food aid or freight sent to overseas embassies and consulates, is to be transported on privately owned, commercial U.S. flag vessels. In addition, cargoes financed by U.S. agencies, such as through loans from EXIM Bank, have been congressionally directed to be transported on U.S.-flag vessels.
   GAO noted, Officials at USAID and the EXIM Bank have raised concerns that the higher shipping costs that result from cargo preference requirements have had a negative effect on their missions. … For example, USAID officials stated that for each $40 million increase in shipping costs, its food aid reaches 1 million fewer recipients each year.
    A second challenge for the U.S. merchant marine is a “a potential shortage of U.S.-citizen mariners available to crew the government-owned reserve fleet during a crisis is a challenge. DOD counts on mariners working on U.S.-flag vessels to crew this fleet when activated. A MarAd working group recently estimated a shortage of over 1,800 mariners in the case of a drawn-out military effort, although it also recommended data improvements to increase the accuracy of the count of available mariners.”
    GAO said without establishing a timeline to complete the national maritime strategy, “DOT continues to delay providing decision-makers the information they need to determine how best to address the challenges facing the U.S.-flag fleet.”

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.

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