New GAO report spanks MarAd hard for not doing its job!


#1

oh isn’t this just lovely…a government that simply doesn’t give a shit and is happily sitting on its ass while our merchant marine sinks into the depths. oh but talk about killing KP and putting that money into fixing this mess and hear the howls start!

U.S.-Flag Fleet Faces Higher Costs, Fewer Cargoes

By MarEx 2018-08-08

The U.S. Government Accountability Office has released a new report on the challenges facing the U.S.-flag deep sea fleet, including rising operating costs and a declining number of qualified American mariners. GAO urged the Department of Transportation to formalize a national maritime strategy to respond to these challenges, as requested by Congress in 2014.

Rising costs

Costs are rising for U.S.-flag operators, according to DOT’s Maritime Administration. MARAD officials told GAO that the difference in opex between a U.S.-flag ship and a foreign-flag ship has risen from $4.5 million per year in 2009 to as much as $6.5 million per year today. For 60 ships, this additional expense is offset by the Maritime Security Program (MSP), which provides an annual subsidy of $5 million to enrolled U.S.-flag vessels. The MSP appropriation has risen by 40 percent in recent years, helping to stabilize the financial situation of participating operators, but MARAD expects that rising opex will be a continuing challenge.

MSP offers significant advantages for the federal government, according to MARAD and DOT. It is a low-cost way to procure U.S.-flag tonnage and to keep a young fleet, as the program is limited to vessels of less than 25 years of age. GAO found that over the last twelve years, operators have replaced 70 participating vessels, usually with newer and more capable equipment. These vessels are typically foreign-built, widening the pool of options to include new and used ships from around the world.

In addition, program participants - like the U.S. division of leading ocean carrier Maersk - are required to provide the U.S. military with access to their full transportation network, including terminals and intermodal facilities worldwide. The cost of replicating these benefits with an owned fleet and owned infrastructure would exceed $60 billion, according to one estimate.

Cargo preference shipments in decline

Since MSP does not cover all of the additional cost of reflagging and operating a vessel under the United States registry, operators rely upon federal cargoes to make up the remaining gap, multiple firms told GAO. Commercial cargo alone does not have high enough rates to maintain the financial viability of U.S.-flag vessels, these operators said, since they have to compete for this business with foreign flag ships.

Under cargo preference requirements, government-financed cargoes must be shipped aboard U.S.-flag commercial vessels, even if the cost is higher than comparable foreign-flag vessels (with exceptions). GAO found that 1.4 million tonnes of government cargo were shipped on MSP vessels in FY2016, but this number has been falling. Military cargoes are down by half relative to 2004 levels, and food aid cargoes have fallen by two-thirds (below).

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One operator told GAO that they flagged out five of their vessels because federal cargo volumes are no longer high enough to support the additional expense of remaining in the U.S.-flag fleet. MARAD warned that a continued decline may lead to further reductions in the number of U.S.-flag vessels, and could affect the financial viability of vessels in the MSP.

Additionally, GAO pointed to a potential shortage of civilian mariners in the event of an activation of the reserve fleet and a long-running sealift operation. A MARAD working group recently estimated a shortfall of over 1,800 mariners in the case of a drawn-out military effort, though it acknowledged that there are questions about the count accuracy for the number of available seafarers.

National maritime strategy

GAO noted that in 2014, Congress asked the Department of Transportation and MARAD to develop a cohesive national maritime strategy, including measures to make the U.S. flag fleet more competitive and to sustain the merchant marine. While the previous administration created a draft strategy, DOT has not yet formalized a plan, and it declined to give GAO a timeline for delivering a final product.

However, MARAD is evaluating ways to achieve Congress’ intent, GAO noted. MARAD officials told the office that they are examining a variety of ways to bolster the fleet and the merchant marine, including means to reduce the compliance cost of flagging-in a foreign vessel; removing the steep penalty for making repairs to a U.S.-flag ship at a foreign shipyard; mandating additional cargo preference requirements; further increasing the MSP subsidy; or paying for mariner training in exchange for a promise to serve in a national emergency. However, MARAD and DOT officials said that they are not yet ready to propose actions to address any of these issues.


#2

Good read, I don’t believe we have a National maritime strategy. I believe if left to its own devices our government will get rid of the jones act and MARAD will go away leaving the military to find its own transportation ( lowest bidder)

I would like to see how the government accounting office came up with their numbers.


#3

and then this released on the same day for Christ’s sake!

just try reading this cover page without gagging!

this from the same nation which once had the greatest merchant fleet in history. a nation which was “the” global maritime powerhouse is now turned into an empty, hollowed out shell of its former self…

All MarAd cares about is their precious “gem” Academy instead of the actual merchant marine that miserable farce of a money sinkhole is supposed to serve. A POX UPON MARAD AND ALL ASSOCIATED WITH ITS LAME AND USELESS HOUSE!


#4

It’s explained in the full report.


#5

WOW I threw up a little.

Same quote can be used for US industry in general. We gave it all away and it’s not coming back anytime soon if at all.


#6

Thanks for the link.


#7

This doesn’t seem to have got much exposure. Anyone who hoped the swamp-dweller-in-chief to support the USMM should chew on this for a while. He even claims to “'love” his uniformed friends, f’ing disgusting excuse for an American.


#8

So Buzby…you came up with yet again another “new course” for your hallowed USMMA but where is this “US Merchant Marine Strategic Plan” the Congress asked you to develop? Four years and still nada…a big ZERO from you guys! Btw, care to comment on the GAO’s report which clearly shows your failing as leader of your Administration in its mandated purpose of fostering the US Merchant fleet? You can’t say you haven’t been there long enough to at least formulate a plan and to have started implementing it? What are you or your Administration doing which is in any way making the industry bigger, better, more modern or more competitive? Have you simply been too focussed on the ceaseless troubles at KP (since that place seems to be the sole cause for MarAd’s existence these days.) that you just don’t have the energy to deal with what is truly a national calamity? The GAO certainly made clear your inability to do anything meaningful to fix a situation which borders on a great national security shortcoming. Helluva job you’re doin there Brownie!

Further, can I ask if you even give two micro givashits beyond that stupid idiotic joke of an “academy” we both happen to have graduated from? To you that school by itself alone validates MarAd’s purpose but to me, that place without having a strong and vibrant US flagged merchant fleet is irrelevant and a waste of funds to everyone except the myriad of self interests who endlessly suction money from the taxpayer in keeping their ricebowls always heaped up nice and full.


#9

But new icebreakers would be a challenge to Putin seizing control of the Arctic and Cheeto will never so much as bleat when it comes to Russia when Vlad has the “pee tape” to still drop on the table some day.


#10

I guess the Cheeto plan is to monitor the arctic from space. I wonder if new Space Command junior officers will come from the Space Cadet Corps?

All this pretty much confirms the Cheeto is living in an alternate universe.


#11

And don’t forget that they’ll need their own service academy for those space cadets to earn their booster rocket pins.


#12

It just so happens there is a slightly used campus available:


#13

so to get this thread back on track…

we know that someone at MarAd reads these posts so I must ask why the silence from them? Mark Buzby once had promised to talk with John when he had called for MarAd to do more yet as far as I know, that conversation never took place?

I am making this same call to MarAd to say something here. us American mariners are ground zero in this decline in the US merchant fleet. we are the men and women who will be called upon to man the RRF if there is a mobilization yet we are not finding opportunities to work in our chosen profession and even the GAO says there will be a shortfall in manpower should that mobilization occur. I feel that MarAd owes the US citizen seafarer community as well as the Congress some explanation as to what their plan is to ensure there is enough of us qualified mariners available should there be a national emergency requiring a 1990 sized surge sealift.

But of course coming forward and making a statement here would require having courage and it is the Maritime Administration we are talking about here. Their appropriation from the Congress doesn’t include any funding to be courageous. I rather believe they can only afford to be sniveling.


#14

Outside the beltway, shame might be an excuse for not wanting to talk about it. But, as is more and more disgustingly obvious every day, shame is so foreign a concept to that crowd that few if any of them would even recognize it.

As long as they obey their lobbyist handlers, their paychecks don’t bounce, and the lights stay on at KP they tell each other (and us) they are “serving” the public.


#15

this from Marine Log

The Department of Transportation (DOT) has drafted but not issued the national maritime strategies mandated by Congress. The strategies are intended to address U.S.-flag vessels’ competitiveness and ensure the long-term viability of U.S.-flag vessels and U.S.-citizen mariners. According to DOT officials, a combined draft strategy was developed under the previous administration but is now being reviewed by the current administration. DOT has not established a timeline for finalizing the strategy even though it was to be completed by 2015. Without establishing a timeline to complete this required strategy, DOT continues to delay providing decision-makers the information they need to determine how best to address the challenges facing the U.S.-flag fleet.

so Buzby, I am being harsh on you because you are the man in charge of your agency and thus the C/O of it. You are a Navy man so know the failures of the crew are the failures of the master. The GAO is making clear there are failures there at MarAd…in fact quite serious failures which jeopardize the Nation’s security. If you do not like the draft plan for the US merchant marine developed by your predecessor you have had more than adequate time to formulate a new one and get it to the Congress as they have requested. The failure on your part to do this one simple task is a rather blatant admission on your part to not be an effective Administrator. You are not able to produce a plan yet alone implement one and all for money or lack of it. I can well imagine the White House pissing and moaning when the DoT says they need money to do anything which is not allocated to building the Prezident’s precious “border wall” yet here I must once again point out that the annual operating budget plus capital improvements appropriated for the USMMA would certainly add ships to the MSP and I for one clearly say that the MSP provides more towards National Sealift security than KP ever could. That option however falls on ears that refuse to hear it so how about diverting the money appropriated for new state academy training vessels and simply buy replacement vessels secondhand off the global market? I have said here before that excellent Ro/Pax vessels can be had for ten cents on the dollar in Europe. The government purchased Ro/Ro ships from foreign sources for the RRF before. No new precedent here but standard operating procedure. Several hundred million can be saved and diverted to MSP.

lastly cargo preference. I won’t get into food aid cargoes but will say that as the former commander of the MSC why you believe the Nation is better served using foreign ships to move DoD cargoes than US flagged ones? Yes, the US ships cost more but we are talking National defense here and that alone should end the debate. Why are foreign flagged ships used to carry DoD cargoes anywhere on the planet?


#16

I would love to see this answered honestly. I’m sure it’s a function of cost but how is the value quantified we are talking about national defense.


#17

This thread started out interesting then made a HARD LEFT into communist “Drumpft is not muh President!!!” RREEEEEEEEEEE land.

Oh well.


#18

Compared to all those times when you didn’t dump a load on the last President (who also was every bit as lame when it came to US maritime policy as the current one)

However we now have a man on the Oval Office who talks very tall talk about US military strength and how he supports our armed forces explicitly yet does nothing regarding that critical 5th branch without which global force projection is impossible and who’s MarAd Administrator is more concerned keeping his precious alma mater afloat that the fleet is is duty bound to support. You tell me which you believe is more necessary to National security…KP or more US flag ships and their crews?


#19

Im on board with you about shutting KP down. The other 4 or 5 state schools can more than handle the load.


#20

Ridiculing a baby Mussolini wannabe who is trashing every institution that has kept Americans free from fascism and a totalitarian dictatorship is a long ways from “hard left” or communism. The people who worship the Cheeto most are the ones who are already losing the most of what little our system had to offer them. Be very careful what you ask for.