The decline in Department of Defense (DoD) cargo being shipped to war zones in Iraq and Afghanistan is rapidly shrinking the ranks of the U.S.-flag fleet in overseas trade, and is even putting pressure on the 60 ships of the Marine Security Program (MSP).
The shrinking American commitment in the Middle East has led to a precipitous decline in DoD-impelled cargo, which appears to be returning to the levels of the 1990s. After maintaining a U.S.-flag fleet of more than 100 ships for most of the 2000s, the number of privately owned American ships working in foreign trade was down to just 81 as of January, a Maritime Administration (MarAd) official told Congress in February. By comparison, at the beginning of 2012, there were 101 ships in the U.S.-flag fleet in overseas trade.
At a hearing in late February before the House Transportation Committee’s Subcommittee on the Coast Guard and Maritime Transportation, MarAd Acting Administrator Paul N. Jaenichen testified that U.S. Transportation Command’s budget for DoD-impelled cargo is at 50 percent of what it was two years ago.
“That’s a significant challenge for (the U.S.-flag fleet), and we’re seeing their exodus because of the lack of government-impelled cargo and other cargo opportunities,” he said. “Over the last three-year period we’ve lost 25 percent of the U.S.-flag fleet and that corresponds to about 2,200 mariner jobs that have been lost as a result.”
Jaenichen testified that his agency is working to create a national maritime strategy with policy fixes that could ease or reverse the decline. Subcommittee members pointed out that he had missed a deadline to provide a copy of the strategy. Jaenichen said it was still unfinished. A MarAd spokesperson did not respond to queries about when the strategy, which is being fashioned out of input collected by MarAd from members of the industry, labor unions and other stakeholders, would finally arrive.
Rep. Elijah Cummings, a Maryland Democrat and former chairman of the subcommittee that quizzed Jaenichen on the declining numbers, told Professional Mariner that a lack of impelled cargo followed by slipping numbers of U.S.-flag vessels is nothing new. This cycle, however, may be more dire than previous, he said.
“With the steep decline in military cargoes we have recently experienced, that cycle appears to have begun again,” Cummings said. “This time, however, our U.S.-flagged oceangoing fleet is quickly approaching an inflection point.”
Cummings said an immediate solution must involve enforcement of cargo preference programs. In the longer term, there needs to be a greater awareness and appreciation by policymakers of the value of the U.S. Merchant Marine and the Maritime Security Program (MSP).
The committee’s ranking member, Rep. John Garamendi, a California Democrat, told Professional Mariner that the government needs to be more active in looking for new opportunities for cargo.
While a fully funded MSP would, in theory, guarantee the continued maintenance of at least a 60-ship U.S.-flag fleet, experts on Capitol Hill said the lack of DoD-impelled cargo is increasing pressure even on vessels in the program as the cost of maintaining the U.S.-flag status is growing more than the subsidies from the MSP program and there is no DoD cargo to make up the difference. Additionally, a 50 percent decline in cargo preferences for food aid means there are scant other opportunities for additional cargo for U.S.-flag vessels.
MarAd said all current participants in the MSP have committed to it through 2025.