Over 200 leaders from the maritime community converged on Washington last week to offer their opinions and ideas on how to craft a national strategy that will seek to strengthen and expand all aspects of the U.S. maritime industry.
Organized by the Maritime Administration, the first-ever National Maritime Strategy Symposium brought together shippers, operators, labor, academics and government officials for a free-flowing discussion of how best to rebuild the declining U.S.-flag fleet and sustain its future in global trade, domestic transportation and national security.
Three days of speeches, presentations and workshops outlined the reasons for the fleet’s decline, identified the challenges to rebuilding — ranging from tax impediments to worker training — and scoped out a list of possible government actions that should be taken to maintain the fleet’s health and assure jobs for mariners into the future.
Emerging as key components of a strategy were support for the Jones Act, easing regulatory burdens, and creating incentives to grow the fleet by a yet-to-be determined number by a yet-to-be determined target date.
It’s now the job of Marad officials to synthesize the information and over the coming year, with the help of additional public discussions across the country, develop a strategy that can be accepted by the industry, the Obama administration and Congress. Officials realize that this is an extremely ambitious project that must address many difficult, structural problems of a diverse industry. A similar undertaking has not been tried since Richard Nixon was president in 1970.
The need for a new, fresh look at the U.S. fleet is timely and urgent, industry and government leaders said. The number of U.S.-flag vessels has dropped from the peak of 1,242 ships in 1951 to 179 today, a number that makes the U.S. less competitive internationally and less able to respond in national emergencies. The situation has become more urgent of late, with decreases in cargo preferences, the draw-down of the military from overseas conflicts, and continued competition from low-cost international shipping competitors. Today, only 2 percent of international trade is carried on U.S.-flag ships.
A challenge also lies ahead for the maritime industry. In order to have a national strategy, labor unions and companies from divergent sectors will have to put aside their parochial interests and competitive natures and work together toward a common goal. There was general agreement that a lot must also be done to educate the general public about the benefits that maritime transportation brings to the national economy and to the daily lives of consumers.
“It’s not enough to have great ideas, other initiatives have not prevented the fleet from falling,” Paul “Chip” Jaenichen, acting Marad administrator, said at the close of the conference. “Other ideas have been addressed and pursued without success. The question is how to bring these ideas to fruition and take the next step.”
He said some of the issues discussed need urgent attention and can’t wait until a national strategy is in place - which officials say could take a year or longer to complete. These will have to be tackled in a different way, perhaps through congressional legislation.
Rep. Duncan Hunter, R-Calif., chairman of the House Coast Guard subcommittee, said in remarks that his panel is preparing two maritime bills that will address some of the more immediate concerns. He said these would include provisions to improve cargo preference and give Marad enforcement ability to stop other federal agencies from circumventing cargo preference laws, reducing federal regulatory burdens imposed on vessel owners, and improving job access for Coast Guard and Navy veterans wanting to enter the maritime sector.
Here are some of the highlights of the discussion:
- It’s not all bad news, some maritime sectors are thriving. Growth is seen in the energy sectors, especially transport of LNG. Shipyards are busy building tankers, small passenger vessels and offshore supply vessels.
- Federal support for the Jones Act is essential for a healthy future of the U.S.-flag fleet.
- Federal support is needed to publicize and promote the maritime industry to the general public and encourage young people to enter the trades.
- Cargo preference laws should be properly enforced.
- The highest levels of government — all the way up to the president — need to affirm publicly and without reservation the importance of the merchant marine and the jobs done by mariners.
- Education and training should be targeted to growth areas of the industry. While opportunities on flag ships in international trade are limited, job growth is seen in the inland waterways and in offshore and energy markets, and training should reflect this shift. One maritime executive suggested a comprehensive review of the use of state and federal maritime academies and other training institutions.
- Funding should continue for the federal Title XI ship financing loan guarantee program.