To respect the intent of John’s “how can MARAD help mariners” thread, I started this one to make the devil’s advocacy for getting rid of MARAD altogether.
Since I am approaching this issue as an outsider, I looked at MARAD’s budget to see where its money is spent:
MARAD FY19 Budget Request: $396M
Ship Disposal Program: $30M ($28M for NS SAVANNAH)
US Merchant Marine Academy: $74M
State Maritime Academies: $24M ($22M for School Ship Maintenance & Repair)
MARAD Operations and Programs: $53M
Maritime Security Program: $214M
MARAD is spending fully 7% of its budget on maintaining a ship that was decommissioned before I was born. It’s spending more on maintaining SAVANNAH than it is on all of the state maritime academy training ships put together. Give that thing to the Navy and run it through the Ship/Submarine Recycling Program. Lord knows how many historical ships I shaved with this morning, what’s one more?
USMMA is another expense we can do without. $74,000,000 to train 1,000 midshipman. That’s $74,000 per mid per year. Farm these guys out to the state academies or the other service academies. Everyone keeps saying there aren’t any jobs anyways, why keep pouring more new 3/Ms and 3/AEs on the fire?
Turn responsibility for the training ships over to MSC.
The Operations and Programs (overhead) goes away without MARAD.
Which leaves the last and largest piece of MARAD’s budget, the Maritime Security Program. MSP is there to secure the emergency wartime sealift that the merchant marine claims as its raison d’etre. According to my research MARAD is allowed to enroll 60 ships in the program, and the FY16 maximum payment that could be received was $3.1M (which would work out to $186M, not $214M). Now my question is this: are companies really keeping their ships flagged US and making them available for wartime service for this paltry sum, or is it rather that it’s a free subsidy for something these companies would be doing anyway? A third of these ships are owned by Maersk Ltd., which is not some mom-and-pop outfit. Do they need this $50-$60M per year to stay afloat? And are we going to pretend that these ships don’t spend the majority of their time carrying DOD/GOVT cargo now, and that they wouldn’t take charters in the event of war anyways?
The Jones Act guarantees that there will always be some level of merchant marine. Serving Hawaii, Puerto Rico, etc. means that there will be some baseline need for oceangoing vessels in US service. And as long as MSC is focused more on the oiler business than ferrying DOD cargo, the government will let enough charters to maintain these “private” businesses.
Now I don’t really hate MARAD, and I don’t necessarily think they should close USMMA. But again, as an outsider, I think the MM leans on this nostalgic view of Liberty Ships convoying across the Atlantic and can’t fathom why no one else thinks they are vital to the nation and the national defense. In the 70s as the initial wave of Japanese cars came into the country, the automakers responded by going to Congress for protectionist tariffs. The tariffs didn’t work, and the domestic auto industry continued to lose market share. It wasn’t until they improved their product that they were able to recover.
Strategic sealift is important, but it isn’t everything. If that was the only reason to keep MARAD we could take their $400M budget and start buying used ships on the international market and storing them in James River. They may not be US built, but if we get in a no kidding shooting war that our current reserve fleet can’t cope with then country of origin really won’t matter.
If you want to have MARAD do anything, have them help you improve your value proposition.
