1/5/2014 Editor's Note: A year later, Congress has done nothing to improve our "sea lift" capacity and Senator McCain is still trying to kill the Jones Act, the underpinning of the surviving U.S. Merchant Marine.
1/11/2015: No Change
THE INCREDIBLE SHRINKING FLEET
America's Blue Water Merchant Marine
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| An American Merchant Marine Liberty Ship Steaming Alone during WWII Note Gun Mount on Bow
"Haze grey and underway " described not only our U.S. Navy during World War II but also the U.S. Merchant Marine. Our "blue water fleet" expanded rapidly first at about a ship a week then at one point to almost a ship a day and crews with them. The Jones Act fleet provided much of the manpower through transfer at first, later the U.S.Merchant Service (USMS) was organized to bring military like organization to the training effort. Some Jones Act officers were used to establish "The Catfish Navy" which manned landing craft, smaller patrol vessels, and submarines built in inland yards for their delivery trips to tide water via the pilot waters of the river system. The entire focus of the American Merchant Marine and shipbuilding industry was on war production and the delivery of beans and bullets to tidewater for blue water transit to our troops over seas. At the conclusion of the war the United States had the world's largest merchant fleet with over 5,000 ocean transport vessels. That would not last long.
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| THE USNS BOB HOPE MERCHANT MARINE MANNED NAVY OWNED SUPPLY VESSEL
THE AMERICAN BLUE WATER FLEET TODAY IS MINUSCULE AS A COMMERCIAL SYSTEM BUT GOVERNMENT EFFORTS HAVE BEN MADE TO KEEP IT ALIVE AS A NAVAL AUXILIARY. THE SYSTEM WE DESCRIBE TODAY WAS VIABLE ON JANUARY 16, 2013 BUT FACES AN UNKNOWN FUTURE FROM A CONGRESS DESPERATE TO CUT COSTS. THIS IS A CONGRESS WHERE HONORABLE DISCHARGES FROM MILITARY SERVICE AND MILITARY KNOWLEDGE ARE SCARCE AS HEN'S TEETH AND AN ADMINISTRATION THAT IS EQUALLY CLUELESS. THE OPPOSITION TO GUTTING THE MILITARY CAPACITY OF THE UNITED STATES IS SUPPOSEDLY THE REPUBLICAN PARTY WHICH HATES ALL FORMS OF SUBSIDY AND PROTECTION OF DOMESTIC INDUSTRY AND THE MERCHANT MARINE IS A HYBRID SYSTEM OF AN INDUSTRY AND A NAVAL AUXILIARY. NOTHING IS BEING DONE BY GOVERNMENT TO MAINTAIN THE COMMERCIAL VIABILITY OF THE MERCHANT MARINE SO WE WILL BEGIN OUR EXAMINATION OF THE STATUS OF THE BLUE WATER FLEET WITH A LOOK AT ITS' STATE OF NAVAL READINESS.
''Haze Grey and underway'' unfortunately still describes our blue water merchant marine fleet today. The blue water fleet fell into such a state of un-readiness after WWII that the "sea lift mission" was statutorily assigned to the U.S. Navy. Which actually builds and maintains transports like the USNS BOB HOPE manned largely by "CIVMARS" or civilian mariners, namely USCG licensed officers and certified seamen of the United States Merchant Marine, hired as civil servants of, or contractors to, the U.S.Navy. The U.S. Maritime Administration maintains a subsidy program for about 200 additional merchant ships in a strategic sea lift reserve. This national defense related effort and some U.S. aid reserved cargo programs have kept a tiny remnant of the American blue water fleet alive. Despite this tiny fleet the United States continues to operate the Federal Merchant Marine Academy at Kings Point New York and Five States operate federally subsidized four year maritime collages modeled in the image of the military model of Kings Point. Students at these academies who participate in the federal cadet program incur a five year "service" obligation which may be fulfilled by on board service in the Merchant Marine, including the Jone's Act fleet, active duty military service, or other service approved by the training institution. Some of these officers in recent days have found their way into the Jones Act fleet, but most avoid it due to the working conditions and pay which do not rival the typical shipboard conditions that they experienced during their training aboard large seagoing ships mostly manned by active maritime union members. One alternative that the maritime academies have approved on occasion in recent years with the shortage of actual traditional blue water merchant marine officer career opportunities for at least part of the service obligation is enrollment in a graduate program in naval architecture, or admiralty law.
However these cadets fulfill their initial five year service obligation many graduates of these academies don't remain in the military, shipboard, or sometimes even in the maritime industry. The programs do however produce a large number of career Navy, Coast Guard, Marine Corps, and Army Transportation Corps career officers, classification society surveyors, maritime agencies civil servants, port administrators, longshoring and stevedoring industry executives, and steam ship agency personnel, not to mention admiralty lawyers, and naval architects. Through the U.S. Coast Guard's "Certificate of Continuity " program, and "related industry ashore" license renewal service time credits, we actually have a large reserve of junior to mid grade deck and engineering officers licensed for the "Blue Water" trade and available in a national sea lift emergency. What we would lack in an emergency would be the kind of experienced and seasoned Masters, Chief Officers, and Chief Engineers that we would like to see in command of our ships. However, our World War II experience suggests that by waiving certain experience and examination requirements, experienced mid grade officers may be quickly promoted to the top two positions with little ill effect. We appear to have an adequate "reserve" of junior officers to fill out the watch.
Seventy five percent of an American ship's crew must be made up of certified Able Seamen. Note that we use the legal term "Able Seamen" vice the popular but inaccurate "Able Bodied Seamen". In American law today there is no such thing as an "Able Bodied Seamen". The law recognizes "Able Seamen" and "Ordinary Seamen". Both must meet the same physical standards, but able seamen have higher experience requirements and must undergo an extensive competency examination. The blue water American Unions maintain schools that can speed up the production of able seamen (AB) and qualified members of the engine department (QMED) such as the Harry Lundeberg School of Seamanship in Piney Point Maryland.
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http://www.youtube.com/watch?v=s5BOECmM3ug (Link To Harry Lundeberg School video)
There are also two year public technical college programs on East, West, and Gulf Coasts focused on the Jones Act Fleet. Jones Act ABs and QMED's are fairly transferable to the traditional blue water trades. Jones Act Fleet officers frequently have tonnage or route restrictions on their licenses, but the law already provides for mid grade cross over points with additional examination into the "blue water trades". Over all it appears that we have the training infrastructure and reserve capacity to fill our manpower needs if the blue water fleet was forced to expand rapidly in a national emergency.
Our ship building capacity is another matter. "First Tier Ship Yards" is a term often used to describe those ship yards with the capacity to construct commercial vessels and war ships in sizes of at least 50,000 gross tons. The number of "First Tier Ship Yards" in America has shrunk drastically. Since the end of WW II they have been starved for commercial work. Since the end of the Reagan plan for a 600 ship Navy the First Tier Yards have been sinking. So far naval shipbuilding plans appear adequate to keep a very few yards open and capable of producing our major combatant ship types. There was some help for these yards in 2011 and 2012 from the Jones Act sector but that is not likely to continue, in our first report on the blue water trades we noted:
" In our two previous reports on Jones Act Fleets and their "Second Tier Shipyards" we reported relatively robust health. However our report was based largely on the performance of the WORKBOAT INDEX of common stocks. We did not notice until the global maritime trade picture began to emerge that the Jones Act fleet's relatively few large ocean transports mostly in the Continental U.S. to Puerto Rico, Alaska, or Hawaii trades had a positive effect on larger American ship yards. New Alaskan crude oil tankers for the Prince William Sound to U.S. West Coast trade helped keep the order books in certain of the larger U.S. ship yards out of the red. Unfortunately the larger vessel Jones Act fleet took a hit in the U.S.-Puerto Rico Jones Act trade where three of four carriers are in trouble and the Commonwealth Government is calling for a review of the effect of the Jones Act on the Puerto Rican economy."
We believe that the common sense approach to the effects of Jones Act on the economies of our non contiguous states and territories is a reasonable subsidy of American flag carriers serving these out lying places flying the American flag. We should do this first for their security, in the event of a military emergency where an enemy attempts to cut off our non contiguous territory from our mainland, only the American Merchant Marine will remain committed to supply these places from sea. If allowed to die out commercially, they simply won't be there when needed and they can't compete against open registry shipping able to man their ships with third world crews at third world wages and living conditions. We can't subsidize an American Merchant Marine capable of competing with these open registries in global trade, but we must maintain our capacity to service our out lying territory our selves. Subsidies for the over seas transport support of our off continent territories is just good common sense.
In any war of attrition, with our presently shrunken Navy, these yards would be severely stressed to keep up with naval losses and would not be capable of rapidly producing an expanded sea lift fleet. Fortunately many of our "Second Tier Yards" which previously focused on commercial vessels of 1600 gross registered tons or less are increasing capacity into the 3,000 gross registered ton range in order to meet demand for larger "Deep Water" Offshore Service Vessels and coast wise unit tows. These yards are capable of building viable sea lift capable small transports. The advantage of expanding sea lift capacity by small transport is limitation of losses in any war of attrition at sea. The disadvantage is larger crew requirements and greater overall fuel consumption. We are in a weak, but adequate condition to support expanded ship building in a national emergency that features a prolonged requirement to support large forces in the field in two separate theaters of operations in the face of some losses of transports and war ships at sea.
" In our two previous reports on Jones Act Fleets and their "Second Tier Shipyards" we reported relatively robust health. However our report was based largely on the performance of the WORKBOAT INDEX of common stocks. We did not notice until the global maritime trade picture began to emerge that the Jones Act fleet's relatively few large ocean transports mostly in the Continental U.S. to Puerto Rico, Alaska, or Hawaii trades had a positive effect on larger American ship yards. New Alaskan crude oil tankers for the Prince William Sound to U.S. West Coast trade helped keep the order books in certain of the larger U.S. ship yards out of the red. Unfortunately the larger vessel Jones Act fleet took a hit in the U.S.-Puerto Rico Jones Act trade where three of four carriers are in trouble and the Commonwealth Government is calling for a review of the effect of the Jones Act on the Puerto Rican economy."
We believe that the common sense approach to the effects of Jones Act on the economies of our non contiguous states and territories is a reasonable subsidy of American flag carriers serving these out lying places flying the American flag. We should do this first for their security, in the event of a military emergency where an enemy attempts to cut off our non contiguous territory from our mainland, only the American Merchant Marine will remain committed to supply these places from sea. If allowed to die out commercially, they simply won't be there when needed and they can't compete against open registry shipping able to man their ships with third world crews at third world wages and living conditions. We can't subsidize an American Merchant Marine capable of competing with these open registries in global trade, but we must maintain our capacity to service our out lying territory our selves. Subsidies for the over seas transport support of our off continent territories is just good common sense.
In any war of attrition, with our presently shrunken Navy, these yards would be severely stressed to keep up with naval losses and would not be capable of rapidly producing an expanded sea lift fleet. Fortunately many of our "Second Tier Yards" which previously focused on commercial vessels of 1600 gross registered tons or less are increasing capacity into the 3,000 gross registered ton range in order to meet demand for larger "Deep Water" Offshore Service Vessels and coast wise unit tows. These yards are capable of building viable sea lift capable small transports. The advantage of expanding sea lift capacity by small transport is limitation of losses in any war of attrition at sea. The disadvantage is larger crew requirements and greater overall fuel consumption. We are in a weak, but adequate condition to support expanded ship building in a national emergency that features a prolonged requirement to support large forces in the field in two separate theaters of operations in the face of some losses of transports and war ships at sea.
SO IN CONCLUSION OF OUR ANALYSIS ON THE DEFENSE READINESS OF THE AMERICAN BLUE WATER MERCHANT MARINE WE FIND IT WEAK BUT ADEQUATE FOR OUR IMMEDIATELY FORESEEABLE NEEDS ON JANUARY 16, 2012. UNFORTUNATELY THE CONDITION OF THE SERVICE IS SUCH THAT ANY FURTHER NEGLIGENCE ON THE PART OF THE CONGRESS OR THE WHITE HOUSE COULD ELIMINATE THE SERVICE AS A VIABLE NAVAL AUXILIARY.
THE COMMERCIAL VIABILITY OF THE BLUE WATER SECTOR OF THE AMERICAN MERCHANT MARINE.
As explained in THE WAY OF THE SHIP (American Admiralty Books, Book of the Year 2012 http://www.amazon.com/s/ref=nb_sb_noss_1?url=search-alias%3Dstripbooks&field-keywords=THE+WAY+OF+THE+SHIP ). The commercial viability of American blue water merchant shipping decreases dramatically after every war time build up. Ever since post Revolutionary times our fleets have struggled in the face of cheaper foreign competition. There is a direct and historical correlation between improvements in the working conditions of American seamen and and the decrease in global shipping market share for American flag ships. America is not alone in this. All nations that don't subsidize their merchant marine and still enforce safe working conditions and living wages have very low market share of cargo, usually only government related or reserved national export cargoes. For the United States and other such nations the question of commercial viability is the question of a small surviving commercial nucleus around which a naval sea lift augmentation could begin, or around which an industrial revival might start if any sort of global labor laws improve the living , working conditions, and wages of all mariners to a Western standard. First tier national ship yards depend on large commercial vessel and naval vessel contracts. We may only be in as good a shape as we presently are due to a temporary break courtesy of a Jones Act Fleet development.
" In our two previous reports on Jones Act Fleets and their "Second Tier Shipyards" we reported relatively robust health. However our report was based largely on the performance of the WORKBOAT INDEX of common stocks. We did not notice until the global maritime trade picture began to emerge that the Jones Act fleet's relatively few large ocean transports mostly in the Continental U.S. to Puerto Rico, Alaska, or Hawaii trades had a positive effect on larger American ship yards. New Alaskan crude oil tankers for the Prince William Sound to U.S. West Coast trade helped keep the order books in certain of the larger U.S. ship yards out of the red. Unfortunately the larger vessel Jones Act Fleet took a hit in the U.S.-Puerto Rico Jones Act trade where three of four carriers are in trouble and the Commonwealth Government is calling for a review of the effect of the Jones Act on the Puerto Rican economy."
THE COMMERCIAL VIABILITY OF THE BLUE WATER SECTOR OF THE AMERICAN MERCHANT MARINE.
As explained in THE WAY OF THE SHIP (American Admiralty Books, Book of the Year 2012 http://www.amazon.com/s/ref=nb_sb_noss_1?url=search-alias%3Dstripbooks&field-keywords=THE+WAY+OF+THE+SHIP ). The commercial viability of American blue water merchant shipping decreases dramatically after every war time build up. Ever since post Revolutionary times our fleets have struggled in the face of cheaper foreign competition. There is a direct and historical correlation between improvements in the working conditions of American seamen and and the decrease in global shipping market share for American flag ships. America is not alone in this. All nations that don't subsidize their merchant marine and still enforce safe working conditions and living wages have very low market share of cargo, usually only government related or reserved national export cargoes. For the United States and other such nations the question of commercial viability is the question of a small surviving commercial nucleus around which a naval sea lift augmentation could begin, or around which an industrial revival might start if any sort of global labor laws improve the living , working conditions, and wages of all mariners to a Western standard. First tier national ship yards depend on large commercial vessel and naval vessel contracts. We may only be in as good a shape as we presently are due to a temporary break courtesy of a Jones Act Fleet development.
" In our two previous reports on Jones Act Fleets and their "Second Tier Shipyards" we reported relatively robust health. However our report was based largely on the performance of the WORKBOAT INDEX of common stocks. We did not notice until the global maritime trade picture began to emerge that the Jones Act fleet's relatively few large ocean transports mostly in the Continental U.S. to Puerto Rico, Alaska, or Hawaii trades had a positive effect on larger American ship yards. New Alaskan crude oil tankers for the Prince William Sound to U.S. West Coast trade helped keep the order books in certain of the larger U.S. ship yards out of the red. Unfortunately the larger vessel Jones Act Fleet took a hit in the U.S.-Puerto Rico Jones Act trade where three of four carriers are in trouble and the Commonwealth Government is calling for a review of the effect of the Jones Act on the Puerto Rican economy."
OUR COMMERCIAL BLUE WATER FLEET:
During the 2 years the U.S. stock market delisted eight U.S. carriers including the venerable American Commercial Lines, and other well known carriers such as K-Sea Transportation Partners,and Trailer bridge. Continuing market uncertainties in Europe and elsewhere, and adverse economic pressures generally consisting of rising operating expenses and falling cargo availability and freight rates plagued much of the general cargo industry segment for the last 2 years and into the first quarter of 2013 with no real end in sight for the short term. Globally new ship deliveries in the general cargo segment exceeded trade growth and overall utilization rates for the world combined merchant fleet fell below 84% as reported in the 2012 R.S. Platou data base. Globally the container ship sector fared particularly poorly with nearly one fifth of the fleet severely under utilized. According to the Moore Stephens annual survey the average ship operating cost rose 3.8% in 2011 and is expected to double by 2015. Crew wages and the costs of lubricants lead the upward charge in operating costs while fuel costs continue to be almost unpredictable. There has been a general global decline in the asset value of ships and consequently the value of ship owning and operating companies.
So world blue water shipping is suffering poor economic conditions and U.S. blue water shipping companies have the poorest conditions for survival.
During the 2 years the U.S. stock market delisted eight U.S. carriers including the venerable American Commercial Lines, and other well known carriers such as K-Sea Transportation Partners,and Trailer bridge. Continuing market uncertainties in Europe and elsewhere, and adverse economic pressures generally consisting of rising operating expenses and falling cargo availability and freight rates plagued much of the general cargo industry segment for the last 2 years and into the first quarter of 2013 with no real end in sight for the short term. Globally new ship deliveries in the general cargo segment exceeded trade growth and overall utilization rates for the world combined merchant fleet fell below 84% as reported in the 2012 R.S. Platou data base. Globally the container ship sector fared particularly poorly with nearly one fifth of the fleet severely under utilized. According to the Moore Stephens annual survey the average ship operating cost rose 3.8% in 2011 and is expected to double by 2015. Crew wages and the costs of lubricants lead the upward charge in operating costs while fuel costs continue to be almost unpredictable. There has been a general global decline in the asset value of ships and consequently the value of ship owning and operating companies.
So world blue water shipping is suffering poor economic conditions and U.S. blue water shipping companies have the poorest conditions for survival.
Our present seagoing international trade commercial vessel count is 93. Our Jones Act count of vessels large enough to be pressed into this type of trade or in transocean support of military operations is 98. We are far below critical mass which may have been as high as 1,000 modern ships. For more details consider the information in the American Maritime Congress web site:
http://www.americanmaritime.org/merchant/
CONCLUSION:
The status of America's blue water commercial carrying capacity or naval sea lift capacity is moribund. Existing nice sounding Federal programs are rouge on a corpse. The now open 113th Congress is virtually bound to do more harm than good. The hope for a viable American Merchant Marine is now almost exclusively with the restorative capacity of the Jones Act trades. The Jones Act is under attack by lobbies for our non contiguous territories who have a legitimate economic complaint that could be easily addressed by some minor subsidies to certain Jones Act sectors. It is also under attack by perennial enemy Senator John McCain. The possibilities of any shipping subsidies of any sort getting through this Congress are somewhere between that of a snowball in hell and a heat wave on the dark side of the moon. Probably the best thing that we can hope for in 2013 is that this completely ineffective Congress and Administration will simply continue to fail to do anything except minor and temporary measures to avoid bankruptcy. Absent any really stupid moves by the government the Jones Act trades at least are starting 2013 with nicely positive economic indicators. The Blue Water trades are in the tank.
| From Maritime Analyst Namazu: I read this post and just had to make a comment. I would think any American citizen reading this would ask of themselves, "What can I do about this situation?" In all modesty I'd like to refer you to my post "NAMAZU FULLY LOADED, THE FUTURE OF AMERICA". What I suggested there would not only serve to help rectify the merchant marine situation but the whole collection of government imposed disorders. Visit your local Registrar of Voters office and re- register "Independent'. Neither political party is helping your country right now. You can do little between elections except this. But a massive shift in voter registration to independent would signal the newly elected and incumbents on both sides of the Aisle that you expect them to govern and not engage in pushing hidden agendas of party elites and engaging in intellectual debate over liberalism vs conservatism but to knuckle down and find pragmatic workable solutions to the nation killing mess that they and their predecessors of the last few years have made. The vote independently for the most pragmatic and honest candidates you can find with no ties to the big money interests regardless of party and especially when one is available with no party affiliation. |
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