Thoughts on … The US Flag

This is not a topic that I have dealt with professionally since I sailed for Mobil Oil on one of their last Jones Act tankers, the Seminole. 

Ever since I attended a Short Sea Conference held at SUNY Maritime earlier in the fall, I have been thinking about this sector of shipping.  One of the underlying themes was the need for a robust Jones Act fleet, especially when talking about supporting the goals of MARAD and the 'America's Blue Highway' goal. 

This was also at the forefront of last weeks’ 49th annual AOTOS (Admiral of the Ocean Sea) Award held last week in NYC. The need for a strong US fleet and Jones act capacity in times of conflict was the focal point of many of the speeches.   

The biggest counterargument is the cost of Jones Act is especially prohibitive.  While we cannot change the costs of these new buildings perhaps there is a way around it.  

Although I have been away from the US flag side of the business, these are the same arguments I have heard since my days at SUNY. So, what can we do about it?

This idea, while not perfect, could serve as a catalyst to build the Jones Act fleet and at the same time maintain a level of expertise within the domestic commercial shipbuilding program.

I would suggest the following. If company ‘A’ buys a US built, Jones Act suitable tonnage at $100 M, then that company gets $100 M in credit to buy non-US built tonnage to be reflagged and recrewed US. Depending on the cost of the non-US built ship, this could be as many as five ships. To be clear: Not $100 M from the US treasury, but credit to buy that same value in the non-US built assets.  This will allow company ‘A’ to expand their fleet and at the same time support the US shipbuilding industry. This also supports the State and Federal Maritime schools. Further, there could be incentives (or obligations) to perform the annual and intermediate surveys in US yards. This will keep skills and expertise in our shipyards.    

An immediate upside would be the ability for a firm to start a liner service that can support MARAD’s goals of creating a short – sea highway and all the noted benefits.  One of the biggest benefits was environmental in nature. One such impact that is worth repeating from the conference at SUNY is what Ed Whitmore of the Norfolk Tug Company had to say about fuel consumption:

·      A barge can move a ton of cargo 647 miles on a single gallon of fuel,

·      Trains can move a ton of cargo 477 miles on a single gallon of fuel,

·      For trucks that number is 145 miles.

Perhaps this idea is too simple. Perhaps there will be too many headwinds. One side will say ‘you are trying to get rid of ship building jobs’ and the other side continues to say, ‘it still not free trade.’  I am sure there are a million arguments to be made, but I think that this idea could be a bridge of sorts. 

Maybe I am na?ve but perhaps this idea will inspire another idea and that would be the one that can get people from both sides to agree on a way forward to preserve our ‘fourth arm of defense’.