If OSG Provides the Berths, Will They Come?

The Overseas Shipholding Group (OSG) this week pledged to make berths on its international vessels available to U.S. cadets aspiring to become merchant officers. The public-private partnership, in part just one more product of MARAD Chief Sean Connaughton’s sweat equity, is certainly unique and promises to make available a wider range of platforms for American cadets. That’s a good thing. I certainly hope, however, that no one comes away from this week’s meeting in Castine with the feeling that this type of pact comes anywhere close to solving any of our current manning crisis issues. Far from it.

The commercial experience, at least in theory, far outweighs anything that can be offered by the American-style training ship. As someone who experienced both methods of training, way back when, I think that I can speak from a position of authority on the subject. For those who do choose to go to sea, the MARAD / OSG partnership is welcome news. On the other hand, with so few of our maritime academy graduates actually choosing to go to sea in this day and age -- and far fewer remaining there for more than five years -- the net effect of extending additional cadet billets to more of them may have limited value.

The full range of maritime disciplines continue to cry out for officers; here and abroad. In response, the union trade schools, commercial training centers and other Coast Guard-approved facilities are ramping up in a big way to answer the bell. The maritime academies themselves are successfully rolling out continuing education opportunities for mariners, and doing a pretty good job, as well. The result has been a range of innovative programs to foster recruiting, retention and a superior method of vocational training not seen before in this country. And these programs are thriving as individuals not able to previously find a crack in the system are flocking to learn a new skill and start a lucrative career. A key facet of many of these programs is a focus solely on the maritime aspect of training -- a vocational approach not unlike that which has been employed overseas for years. The early returns are in and the results are especially promising.

Meanwhile, at the maritime academies, enrollment is up and graduation rates have never been better. Beyond this, the opportunities available to cadets at these schools are as wide as the sky is blue. And that’s part of the problem. At my alma mater, they boast 100% job placement, at starting salaries which average around $60,000 per year. The Massachusetts Maritime Academy (MMA) also lists at least six undergraduate degrees, of which, I recognize only two as pure seagoing tracks. The balance of the curriculum appears to be of a non-core nature, designed to get you a degree, but has limited relevance to the shipping world. Mass. Maritime is a fine school, to be sure, but it bears little resemblance to that from which I graduated from in 1980.

A visit to the Taylor’s Point campus in the fall of 2007 was an eye-opener. The academy features state-of-the-art simulators, fully renovated dormitories and a host of teaching aids we could only dream of -- just 27 years ago. My guess is that a road trip to all of the other schools of this genre would yield a similar cornucopia of advantages. Nevertheless, and despite a shrinking number of U.S. flag commercial platforms, the schools can’t keep up with the demand for mariners even with the increased enrollments. Let’s face it: it’s got nothing to do with the quality or quantity of training at these institutions -- something that is getting better every day -- but more to do with what they’re selling.

With my 25th reunion looming large in the windshield in the fall of 2005, I dusted off the 1980 MMA year book and began thumbing through it. Out popped an old, 8x10” glossy photo of my Youngie (Freshmen) platoon. As I scanned it to see who I could recognize, I realized that just 6 of 22 individuals from that group had actually graduated with the original class. After four years, we had, as a class, done a bit better than that, of course. But, we still lost just over thirty percent of our total student body to attrition. A few others took the scenic, extended five-year plan. Interestingly, ADM Richard Gurnon, President of MMA told me on Tuesday that the academy has today the highest four-year graduation rate in the Commonwealth at 71.5%; roughly equivalent to our performance almost three decades prior. So, not much has changed -- or has it?

Richard Gurnon says, “We consider retention to be a business at Mass. Maritime.” He’s clearly proud of a graduation rate that dwarfs the national averages, and far outpaces that of other New England state colleges who collectively average only a 51% four-year graduation rate. The school is literally booming; busting at the seams. A record freshman class of 330 students entered the Academy in September.

The bright statistics have a darker side, however. By ADM Gurnon’s calculations, MMA has only about 60% of its cadets in license track. So, using his statistics, in four years, Mass. Maritime will graduate about 236 cadets, of which just 142 will have bothered to sit for a license. Back in 1980, the graduation day program listed 175 cadets, all of whom were license-track candidates. Of course, there were only two majors available to this class: Marine Transportation or Marine Engineering.

In 1980, we were going to sea, and if we didn’t, it was because we entered the marine workforce during one of the most pronounced downturns that any industry has endured during the twentieth century. There just weren’t any ships. This week, Sean Connaughton described his limited prospects in 1983 upon graduation from King’s Point, “There were almost no seagoing jobs available due to a downturn in the U.S. economy and maritime industry. As a result, I, along with many others, entered the service or sought whatever maritime-related positions were available.”

As the decade of the 1980s rolled onward, it didn’t get any better. By the time I’d been laid off in late 1985 from my job on a chemical tanker -- sent to scrap after the requisite grain run -- most of my classmates were already ashore. It was also clear that the maritime academies were going to have to shift gears if they were going to survive. At Taylor’s Point, MMA over the years survived several efforts to merge it into other institutions. And while it eventually emerged with its name intact, the primary mission of the oldest continually operating maritime academy in America had been inexorably altered. It is not alone in this metric.

Today, the collective product of the so-called maritime academies turns out a graduating class of which only about 61% choose to sit for a license. These numbers are clearly not enough, and despite the increased enrollments, those numbers are lagging or only barely keeping pace with the numbers being generated two decades ago. And, in some of these schools, I’m told that the capacity of the license track program is actually capped. Of the graduating demographic that opts for the license option, about 75% actually find their way onto a marine bottom. The percentage of those who are still there five years later is shockingly low. This particular reality simply could not be happening at a worse time.

At this week’s Subcommittee (Coast Guard and Maritime Transportation of the House Committee on Transportation and Infrastructure) oversight hearing on Mariner Education and Workforce, Connaughton also said, “We are now seeing a perfect storm in which the demand for mariners, particularly those who are licensed, is increasing while the supply may not be keeping pace.” He then went on to say that MARAD was in the process of developing revisions to existing regulations -- not updated in more than two decades -- that would allow academy graduates to meet their service obligations in the brownwater sector. That revelation had to be music to the ears of the offshore supply and tug and barge industries, both of which have been stung particularly hard by the lack of qualified mariners.

This was a good week for American mariners and the world maritime community at large. It IS a flat world. Some of those ‘offshored’ positions whose loss we mourn are coming back in the form of $150,000 per year Master’s positions on state-of-the-art LNG carriers. And I don’t care if they registered on Pluto. Maybe some of our guys (and gals) can get in on that ex-patriot pay advantage so long enjoyed by our foreign competition. At a minimum, the resurgence of the American merchant mariner on the world’s oceans is long overdue.

The job is only half done. It is true that in the space of just 18 months, we’ve seen the re-invention of Shortsea Shipping (America’s Marine Highway), the potential for the U.S. flag return to the LNG world, and now, cadet berths on foreign flag bottoms. But, we haven’t had this much action from MARAD in a couple of decades, so this is no time to stop and take in the view. According to my statistics, the FY-07 maintenance and repair budgets on the state academy training ships was about $2.1 million. I’m guessing that MARAD would like just a little more ROI than 60% participation from these schools in return. If so, I agree. At the GAO, they call it accountability. On the waterfront, it’s merely common sense. Failing that, there are certainly one or two NEW programs out there -- Coast Guard approved -- that would like to get in on this cadet action. I have it on good faith that one of these institutions includes a four-year technical engineering school, located in a traditional maritime port.

OSG’s new partnership with MARAD and the U.S. maritime academies is a wonderful gesture on the part of one of world’s largest shipping companies. And it comes without MARAD having to apply the arm-twisting made necessary by the congressional mandate to tie LNG terminal approvals to the use of U.S. seafarers. It’s also a smart business move as the manning crisis deepens. U.S. cadets who can identify with something they know are more likely to choose that option -- especially when it involves the unfamiliar environment of a foreign-flag bottom -- when it comes time to sort through the eleven job offers that they are sure to get in the spring of their senior year.

There was a time when the state maritime academies had to change in order to survive. They accomplished that task quite nicely and the fact that they are all still around is a good thing. It may be time for them to morph again into something closer to their original missions -- missions that have, to a certain extent, become a sidebar to their current existence. And it bears mentioning that companies like OSG, Suez Energy, Excelerate and others are more than doing their part to help train and then employ U.S. mariners. From the other end of the spectrum, we simply must do more to provide these mariners in greater numbers.

Don’t look now but I wouldn’t be surprised if a few more shipping firms sign on to the new cadet concept in the near future, too. If so, it won’t be long before the berths far exceed the supply of willing cadets. And so, aspiring shipping companies have to ask themselves, “If we build it, will they come?” If not, what then?

Click here to see the latest maritime academy enrollment, graduation and employment statistics.

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Joseph Keefe is the Managing Editor ofThe Maritime Executive and a 1980 (DECK) graduate of the Massachusetts Maritime Academy. He is solely responsible for the content of this editorial. You can reach him with comments, complaints, or anything else at jkeefe@maritime-executive.com.