The End of the U.S. Merchant Marine?

Published Mar 15, 2013 11:13 AM by Denise Krepp

The U.S. Merchant Marine fleet will be dead in ten years. Food aid lobbyists will convince Congress to eliminate the cargo preference requirements which mandate that government impelled cargo be shipped on U.S. flagged and U.S. crewed vessels. The current Administration will support these cuts to better promote its wind, solar, and nuclear energy programs. The U.S. maritime community must convince  Congress and the Administration that cargo preference and the U.S. mariners who transport this cargo are vital to our national security if it is to avoid this grim prognosis.

The U.S. flag fleet's demise is starkly highlighted in Netflix's new series, "House of Cards".  In the show, a Philadelphia shipyard employing over 10,000 people closes without a flicker of concern from the President or Congress. The blithe indifference to angry, unemployed shipyard workers is contrasted by the high-level concern expressed to a teacher's strike. The teacher strike is viewed as extremely volatile political damage that must be successfully resolved; the same angst does not apply to the perceived simple shipyard closure.

Sadly, real life politicians appear to be following the lead of their Netflix counterpart. Last summer, the Senate voted 74-19 and the House of Representatives voted 373-52 to cut the food aid cargo preference mandate from 75 percent to 50 percent.  According to the American Maritime Officers, this middle of the night decision, put 16 ships, 640 seagoing jobs, and 2,000 jobs in related sectors at risk. These are the same crews and ships that the Department of Defense uses to transport military equipment and personnel.  Congress had not held any hearings on this subject. The Administration did not oppose it. The massive maritime cuts inserted under a section titled “offsets” were viewed as a simple political decision not worthy of open, transparent discussion.

The shocking cuts are a complete reversal of Congress and the Bush Administration's earlier support for the cargo preference program.  In 2008, the House of Representatives voted 392-39 and the Senate voted by Unanimous Consent to expand the scope of the program to include other federally financed programs. The following year, President Obama signed into law the American Recovery and Reinvestment Act; legislation mandating several new federally financed initiatives designed to spur economic growth.  The two new laws should have created additional maritime jobs.

Sadly, the Department of Energy (DOE) in the first Obama Administration told applicants that cargo preference did not apply to its billion dollar alternative energy program.  DOE's position created confusion within the maritime and energy industries; resulting in Congressional hearings during the summer of 2010.  Then Chairman of the House Transportation and Infrastructure Coast Guard and Maritime Transportation SubCommittee questioned Maritime Administrator Matsuda about the steps the Administration was taking to determine if the cargo preference rules applied.  

According to then Chairman Cummings, it “doesn't sound like super, super rocket scientist stuff.”  The Congressman didn't understand why the Administration didn't support the Maritime Administration's assertion that the cargo preference rules applied.  The sentiment was shared by many in the maritime industry who lost opportunities to be part of the Administration's recovery efforts.  These men and women didn't understand why the Administration would give millions of dollars to alternative energy companies but not support the transport of the purchased items on U.S. vessels.

This year, according to Politico, the Obama Administration is considering writing a check for food aid instead of shipping grain and other crops on U.S.crewed ships.  An Oxfam representative called this decision on the organization's website a “bold and important step” which would “break the stranglehold of special interests in the US who profit from the current rules, regulations, and red-tape governing food aid programs.” Oxfam is a special interest group. It's mission is to right the global wrongs of poverty, hunger, and injustice; the majority of whom do not live in the United States.  The organization's mission does not appear to take into consideration the thousands of U.S. mariners who would be unemployed if the Administration decides to take this “bold” step.

The current food aid program is a win-win for everyone.  It creates jobs in the United States and ensures that U.S. vessels and crews are available for the the Department of Defense during times of conflict.  In a recent letter to the Office of Management and Budget, the Navy League reminded the Obama Administration that the program provides employment for over 33,000 Americans, $1.9 billion in economic output, and $ 23 million in household earnings.  The Navy League is a special interest group which represents the U.S. maritime community.  The difference between the Navy League and Oxfam in this battle is that it represents U.S. jobs in a time when people are still struggling to overcome the losses created by the Great Recession.

Bold decisions in a time of economic austerity should be welcomed. We need to cut spending; these cuts however; should not be borne solely by the U.S. maritime community.  The Administration should not destroy U.S. jobs merely because the food aid lobby wants a bureaucrat in a random office to push a button instead of having U.S. grain transported on U.S. crewed ships to those in need.  The cuts should be evenly distributed across the various interests and all interests should be included in the decision making process. 

The best way to ensure that Congress and the Administration have all the facts is for the U.S. maritime industry to work with farmers and others to better educate our leaders.  Congress must understand that cutting the cargo preference program like they did last year was more than an offset.  Similarly, the Administration must understand that simply writing checks can put thousands of people out of work.

The U.S. maritime industry should leverage the alumni associations of the U.S. Merchant Marine Academy in addition to the six state maritime academies (Texas, New York, Maine, Massachusetts, California, and the Great Lakes) to better educate Congress and the Administration.  Thousands of men and women have graduated from these institutions over the past seventy years.  They make up the senior leadership of the U.S. maritime industry and they employ thousands more people in Congressional districts across the country.  The shipyards in Maine, California, Virginia, Mississippi, Louisiana, and elsewhere also employ thousands of people who will be negatively impacted by Congress' decision. 

The mass education is for one single purpose – Members of Congress and the Administration must see the eyes of the individuals who will lose their jobs if cargo preference is completely eliminated.  It is easy to create an offset in the middle of the night.  It is even easier to cut an agency's budget in a nondescript Washington, DC office building.  It is not that easy to look a person in the eye and tell them that the preservation of the U.S. maritime industry is not as important to our national security as feeding a starving child overseas or creating the newest alternative energy solution.  These face-to-face meetings must occur now if the U.S. maritime industry is to survive. -MarEx

K. Denise Rucker Krepp is a homeland security, transportation, and energy expert who began her career as an active duty Coast Guard officer in 1998.  After September 11th, Ms. Krepp was part of the team that created the Transportation Security Administration and the U.S. Department of Homeland Security.  Ms. Krepp joined the House of Representatives Homeland Security Committee in 2005 and drafted the maritime and surface transportation sections of the Implementing Recommendations of the 9/11 Commission Act of 2007.  She also wrote Detour Ahead: Critical Vulnerabilities on America’s Rail and Mass Transit Security Programs (http://hsc-democrats.house.gov/SiteDocuments/20060801153711-86476.pdf).  Ms. Krepp served as Chief Counsel at the U.S. Maritime Administration and Special Counsel to the General Counsel at the U.S. Department of Transportation during the first Obama administration.  She is currently a private consultant and professor at The George Washington University and Pennsylvania State University.  Ms. Krepp is also on the Board of Directors for The Infrastructure Security Partnership.

The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.