What are the economic benefits of an expanded US-Flag?


#1

If you have an answer to this question, please post below. Your feedback is requested by MarAd.


#2

Increased private sector jobs.


#3

Secretary of Commerce Herbert Hoover-

"We must have ships if we would expand our exports on sound lines, and we must have them as auxiliaries to our national defense . . . .
To secure export markets we must have some sound proportion of American controlled shipping to assure us against combinations in rates which would prejudice our goods in competitive markets. Nor have our merchants been without experience of finding that the transport of our goods in foreign bottoms has been taken advantage of by our competitors to learn details of our trade connections.

It is just as important to the farmer to be guaranteed reasonable rates of sea transport as of land freight. The real security is an American-owned merchant marine.

It is simply a truism to say that we must have an American Overseas Merchant Marine.

There is only one protection of our commerce from discrimination and from combinations which would impose onerous freight rates. That is to maintain upon these trade routes the regular operation of very substantial shipping under the American flag."


#4

And from 1906 but just as true about the modern shipping market as it was then-

Secretary of State Elihu Root, 1906

“We are living in a world not of natural competition, but of subsidized competition. State aid to steamship lines is as much a part of the commercial system of our day as state employment of consuls to promote business. It will be observed that both of these disadvantages under which the American shipowner labors are artificial; they are created by governmental action-one by our own government in raising the standards of living and wages, by the protective tariff; the other by foreign governments in paying subsidies to their ships for the promotion of their own trade. For the American shipowner it is not a contest of intelligence, skill, industry, and thrift against similar qualities in his competitor; it is a contest against his competitors and his competitors’ government and his own government also. Plainly, these disadvantages created by governmental action can be neutralized only by governmental action, and should be neutralized by such action.”


#5

Would someone who has a little more time currently than I do, post about the many economic benefits of short sea shipping. Thanks


#6

I won’t take credit for these words, but from Wikipedia in short sea shipping:

“The main advantages promoted for this type of shipping are alleviation of congestion, decrease of air pollution, and overall cost savings to the shipper and a government. Shipping goods by ship (one 4000dwt vessel is equivalent to between 100-200 trucks) is far more efficient and cost-effective than road transport (though the goods, if bound inland, then have to delivered by truck) and is much less prone to theft and damage.”


#7

please remind the panel that the Merchant Marine Act 1936 remains the LAW OF THE UNITED STATES OF AMERICA!

AN ACT

To further the development and maintenance of an adequate and well-balanced American merchant marine, to promote the commerce of the United States, to aid in the national defense, to repeal certain former legislation, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

TITLE I – DECLARATION OF POLICY

SECTION 101.[B][U] It is necessary for the national defense and development of its foreign and domestic commerce that the United States shall have a merchant marine[/U][/B]
    (a) sufficient to carry its domestic water-borne commerce and a substantial portion of the water-borne export and import foreign commerce of the United States and to provide shipping service on all routes essential for maintaining the flow of such domestic and foreign water-borne commerce at all times
    (b) capable of serving as a naval and military auxiliary in time of war or national emergency,
    (c) owned and operated under the United States flag by citizens of the United States insofar as may be practicable, and
    (d) composed of the best-equipped, safest, and most suitable types of vessels, constructed in the United States and manned with a trained and efficient citizen personnel. 

[U][B]It is hereby declared to be the policy of the United States to foster the development and encourage the maintenance of such a merchant marine.[/B][/U]

which means [B][U]JOBS AND SHIPS…SHIPS AND JOBS![/U][/B]


#8

[QUOTE=rob;128169]If you have an answer to this question, please post below. Your feedback is requested by MarAd.[/QUOTE]

Pardon the cynicism but my take on MARAD asking that question places it in the same league as the CG and other transportation industry regulators that have, for 75 years or more, been asking for advice on how to reduce fatigue related accidents. Asking the question makes it look like they care, like they might actually do something.

The fact is that all the answers have been supplied to them for years. Every study by every group capable of conducting a study has already given them an answer. The truth is that they would like a different answer to the same question. They don’t like the reality because it doesn’t support the people who support MARAD and its appointed leaders. If MARAD really existed to promote American maritime supremacy and to promote American transportation security, they wouldn’t have to ask, they would be able to clearly and honestly tell the American people why MARAD exists. As it stands, even those of us who earn our livelihood in the American maritime industry cannot explain why MARAD exists but we do know that if not for the Jones Act, the American mariner and his ship would not exist because MARAD would have sold us out years ago.


#9

A little known fact that I learned today was that Adam Smith, the great great grand-daddy of modern economics, and one of the foremost economic minds in human history, was a strong proponent of Jones-Act-like laws, EVEN THOUGH he was the world’s strongest critic of “mercantilism”. Mercantilism is the hampering of international free trade through protectionist policies on a national level (like the Jones Act, for example), in the interests of promoting one’s own domestic markets. While this is agreed by economists the world over as a bad idea, Adam Smith STILL asserts that “Navigation Acs” (i.e. the Jones Act) are a GOOD idea.

In other words, you can have your free trade, buy all the chinese crap your heart desires, BUT AT LEAST LET IT BE TRANSPORTED BY YOUR OWN PEOPLE. It doesn’t just make economic sense, it’s also in the best interest of the national defense. I bet all those free markets and international trade will do you a lot of good after the Chinese and/or the North Koreans have marched right across the country from California to Virginia because we couldn’t mobilize an adequate defense in time BECAUSE WE DIDN’T HAVE ANY DAMN SHIPS TO DO IT WITH. We can’t make people build and/or buy their manufactured goods here at home, that window of opportunity has come and gone, but a smaller problem to fix for the national good would be to bolster the transportation sector of the American economy by at least moving those goods by American means, not someone else’s.

God, why can’t these idiots understand these simple concepts? Why?


#10

[QUOTE=PaddyWest2012;128208]
God, why can’t these idiots understand these simple concepts? Why?[/QUOTE]

Because those idiots are paid not to ask too many questions or say no to those who hold the checkbook for those with the power to institute change.

No sitting MARAD director or the politicians who hold the power to force MARAD to defend and promote American interests (as opposed to their own and those of their overseers) would profit from a robust American maritime industry.

MARAD is an example of a corrupt but invisible to the public administration that quietly goes about the business of ignoring its charter in order to serve its real masters.


#11

The same economic benefit as with anything else. Americans need good paying jobs to contribute to the US economy and the government needs ample tax revenue from people who are working.

The counter argument that American mariners are too much more expensive than third world mariners makes no sense at all. Any job in the US (or serving the US) could be outsourced to third world labor to reduce costs. Why is it that we do not employ cheaper Congressmen and Senators from the third world to reduce costs? Why not hire cheap third world labor for the military? Why not hire cheap third world doctors to reduce healthcare costs? Why not hire cheap third world truck drivers?

Remind me again. Who is it that these government employees represent?


#12

[QUOTE=tugsailor;128232]The same economic benefit as with anything else. Americans need good paying jobs to contribute to the US economy and the government needs ample tax revenue from people who are working.

The counter argument that American mariners are too much more expensive than third world mariners makes no sense at all. Any job in the US (or serving the US) could be outsourced to third world labor to reduce costs. Why is it that we do not employ cheaper Congressmen and Senators from the third world to reduce costs? Why not hire cheap third world labor for the military? Why not hire cheap third world doctors to reduce healthcare costs? Why not hire cheap third world truck drivers?

Remind me again. Who is it that these government employees represent?[/QUOTE]

I think the only serious response that your argument would garner is simply that the industry is already so small, and the economic impact of our employees so little, that the whole thing is just a mute point and should be done away with entirely in favor of higher corporate profits as a result of cheaper shipping costs from cheaper foreign shippers. I’m not saying you’re wrong, I’m just saying if you took that to Washington your horse would be dead before it was out of the gate. Frankly, I don’t like that either… :frowning:


#13

[QUOTE=rob;128169]If you have an answer to this question, please post below. Your feedback is requested by MarAd.[/QUOTE]

These gentlemen clearly answered that question.

What I want to know is why the top 2 officials at MARAD aren’t even f$#€£g mariners?

That’s not directed at you Rob; it’s just ludicrous to think that MARAD gives a damn about US shipping or US mariners when neither of them even knows the business.


#14

[QUOTE=tugsailor;128232]The counter argument that American mariners are too much more expensive than third world mariners makes no sense at all. [/QUOTE]

That American labor is too costly is the worst argument any of the treasonous bastards can ever make. Just for grins go out and get a price to ship a box to or from Hong Kong /San Francisco. Get that quote from any shipping agency.

The price is no less expensive on a Chinese owned and subsidized bottom than on an American ship. The only difference is where the crew payroll savings go … they go into the pockets of those who say Americans are paid too well, that’s where. The argument against the American mariner and the American ship is specious bullshit, it is nothing but greed and political payoffs to Congress and MARAD lackeys.

If anyone in the US knew who or what MARAD is and what they are doing to America the meeting would have drawn as many protesters as a G8 conference.


#15

[QUOTE=Steamer;128510]That American labor is too costly is the worst argument any of the treasonous bastards can ever make. Just for grins go out and get a price to ship a box to or from Hong Kong /San Francisco. Get that quote from any shipping agency.

The price is no less expensive on a Chinese owned and subsidized bottom than on an American ship. The only difference is where the crew payroll savings go … they go into the pockets of those who say Americans are paid too well, that’s where. The argument against the American mariner and the American ship is specious bullshit, it is nothing but greed and political payoffs to Congress and MARAD lackeys.

If anyone in the US knew who or what MARAD is and what they are doing to America the meeting would have drawn as many protesters as a G8 conference.[/QUOTE]

Whether American mariners are that much more expensive than foreign mariners is still out for debate but I’m not sure if that’s quite what’s at issue here. In September 2011 MARAD put out a very detailed report on the cost analysis of U.S. ships vs. foreign ships. The numbers are truly shocking. Our operating costs are on average almost three times as high as foreign vessels, according to them. Given the status of our present fleet I’m inclined to believe those numbers are true.

It may not be the fault of the payroll but it cannot be denied that there are many, many reasons why using our ships is more expensive than using anyone else’s. The information contained within MARAD’s cost analysis report is a blueprint for the death of the USMM. If things don’t change dramatically in the next five to ten years then maybe 20 years from now there won’t be anything left at all.

Note: pages 5 and 6 of the report contain information regarding the cost of U.S. crews against foreign crews.


#16

MARAD reports should be viewed with considerable suspicion as they suit MARAD and its lobbyists more than the American Merchant Marine and American mariners.

Note that labor is consistently identified as the problem, and the high standard of living in the US as a secondary factor. Our standard of living is falling rapidly along with wages and benefits so that argument won’t be useful for much longer. As far as labor costs are concerned, why does MARAD or its lobbyists expect the American mariner to compete with displaced Asian villagers with respect to wages, or to live in 3rd world standards while those who set the rules for taxation and the costs of operation live like minor royalty?

If we need to cut costs to keep the maritime fleet we are obliged to maintain and require for our own security, then spread the costs fairly. Take the money squandered on KP, take the money paid to American owners of FoC fleets, and take the money wasted on maintaining private navies like NOAA for the benefit of a few bathtub admirals and their sycophants and apply it to building an American merchant fleet manned by Americans who have the same tax benefits as foreign mariners and the American owners of FoC fleets.

MARAD has become nothing more than a mechanism to transfer American taxes from a shrinking number of taxpayers to farmers, FoC fleet owners, foreign corporations and those who finance and support them.


#17

I know that MARAD isn’t our biggest ally in this fight but the data they shared shows such a drastic disparity between our fleet and foreign fleets that I believe it to beyond reproach. You can only massage data and statistics so far. I still have just barely enough faith in government agencies to believe that MARAD would not stoop so low as to outright makeup numbers just to suit their own purposes. I’m not saying they didn’t try to make the numbers look better for them, they probably did do some of that, but even without their help it is a fool’s folly to think that things in this industry are better than they are.

There are clearly reasons why people don’t want to do business with us, and to be completely honest not all of those reasons are completely unfair to us. Some of it is just that the Norwegians are bullies and stack the deck against at every chance they get, but other aspects of the several-decade-long downturn in our industry can only be attributed to things here at home. We cannot afford as an industry to go on denying the problems that exist and that bring us one step closer to demise every day. As the eminent paleobiologist, Dr. Mary Schweitzer, once said, “If you don’t believe the data then what the hell are you going to believe?”

In response to your assertion that the standard of living in this country, along with wages and benefits, is not a contributing factor, or at least not as much as MARAD would lead us to believe, I can only say that unfortunately I do not posses the empirical data to demonstrate the various ways in which that is wholly incorrect. The only solution that I can think of to offer is for you to turn on a television, open a newspaper, or read a magazine. Better yet just go sit quietly at any restaurant or cafe of your choosing and people-watch for a hour or so. While you’re sitting there and taking it all in try and think back to what that scene would have looked like 10, 20, 30, maybe even 40 years ago, or longer if you can manage it.

It’s not just that we wear different clothes now than we did years ago, the public also asks more of society now than we ever have in the past. The average individual person wants more out of life, and quite frequently gets it. We are not, by any means, a humble people. Our standard of living has sky-rocketed as a result of dramatically increased expectations from daily life, which themselves come from the various messages that are thrown in our face every minute by mass-media. If you spent twelve hours a day watching the Kardashians loaf around their house(s!) then you’d want to live like that too. It used to be that people were content to be happy in their own right but now everyone wants what the next best person, or in many cases what the several next best people, have.

You asked why we should be expected to compete with displaced third-world villagers for our jobs. It’s because they can do our jobs. Every sea-boardering nation on the planet has a merchant marine force of its own. They are all different and they are all unique but because of things like STCW they all follow the same standards and they all march to the beat of the same drum. That’s not to say that some aren’t better than others, they certainly are, and they should be, but at the end of the day they all get the job done one way or another. As a business person with various bosses, shareholders, and a board of directors to answer to can you legitimately justify doing business with an American shipping firm whose costs outweigh a third-world shipping firm, who would perform the same tasks with the same diligence, by a margin of three-fold? Whatever you might think, the answer to this question is still no. You cannot justify that to anyone.

It must seem like I’m anti-U.S. Merchant Marine but I can tell you I most certainly am not. I whole-heartedly believe that this country needs a strong merchant fleet as a matter of survival politically, militarily, and economically but I do not believe that this should be achieved at the cost of making it more difficult to do business. Business have only one goal in mind, to make money, and the more you try to force them into unprofitable practices, like being required to use overly-expensive American ships, the more they will try to evade those practices. History shows that they will win. Just look where it’s gotten us so far. I do not think under any circumstances that we should just throw out the Jones Act and let the market seek an equilibrium of its own. We already know that won’t work because all of our manufacturing jobs have gone overseas. I do, however, believe that any attempts to restore the American fleet must be done with the strictest business sense in mind. This industry must compete and succeed against foreign markets in its own right, without government assistance, or it is doomed to oblivion and we might just as well call the whole thing off right now.

Having said all that, the final comment I would make is that I believe that your ideas about shifting the balance of money around in the public sector of the Maritime Industry would be a step in the right direction. I still believe that this industry needs to succeed on its own without government assistance but that kind of change doesn’t happen over night. Under the system we have now I believe it would be a good move to cull the herd of unnecessary expenses like KP and NOAA and re-route that cash into subsidizing construction projects that directly benefit the Jones Act. Such projects would include Matson and Crowley’s new ships, and most certainly NOT include Horizon Lines’ overseas engine refit projects.


#18

What about Canada??? Quite a bit of the crude they produce offshore moves on canadian-bottom’d shuttle tankers (JJ Ugland), and some even comes down to the US of A on Canadian bottoms. Big deal they’re foreign built, you can do that here obviously aka containerships, ro/ro’s and all kinds of other re-flagged nonsense.

Highly doubt a Canadian Mariner makes less then an American.


#19

[QUOTE=z-drive;128539]What about Canada??? Quite a bit of the crude they produce offshore moves on canadian-bottom’d shuttle tankers (JJ Ugland), and some even comes down to the US of A on Canadian bottoms. Big deal they’re foreign built, you can do that here obviously aka containerships, ro/ro’s and all kinds of other re-flagged nonsense.

Highly doubt a Canadian Mariner makes less then an American.[/QUOTE]

Aren’t all those Irving tubs Filipino through-and-through? That was my understanding anyway. It always bothered me that our own neighbors are bringing billions of dollars a year of petroleum product into our own backyards on ships that are built in Asia, crewed by Filipinos, and registered in the Marshall Islands. At least they’re owned by our neighbors but that doesn’t do anybody a whole lot of good, does it? Of course in a perfect world I’d like to see all that product come down to New England from St. John in American bottoms but since its Canadian product at least it wouldn’t bother me if they were Canadian bottoms.


#20

[QUOTE=z-drive;128539]What about Canada???
Highly doubt a Canadian Mariner makes less then an American.[/QUOTE]

Probably more considering benefits.

It is interesting too that an American CEO makes 354 times what his employees make while a Canadian CEO makes “only” 170 times as much. But the Canadian worker averages C$ 46.6k (42.6k US$) compared to the American worker who averages US$34.6K annually. 10 percent of Canadians are living in poverty, 15 percent of Americans are.

It isn’t the American mariner who is sucking the blood out of the nation’s treasury. Makes you wonder where the money is going, eh?