Youre an idiot.
Thanks, Colin.
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Pure and simple, money. As one of my profs at TMA used to chant in his History of American Seapower class, “no money, no honey.” By the raw numbers, wages have gone up, BUT taking into account for inflation, mariners haven’t really seen any real growth in wages since the 80’s really (not just a maritime issue though).
That and when OS’s are making the same or less than an entry level shore side job, there’s not much incentive to start a career at sea. Even more offputting to the current generation is that there are so many backwards companies that don’t want to invest in modernizing the creature comforts aboard ship. (My previous ship had a 256k vsat connection that even struggled to load Gmail for the company’s email account, nevermind being accessible to the crew for contact with home. Hell, the tanker I was on in the early 2000’s at least had the option to buy globe wireless cards to get text-only emails)
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Just killing more American jobs.
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I appreciate the reply.
As I read it, the delta payments for Opex are for the Interim foreign-built vessels, while the Capex are for construction costs of new built US vessels, with $450mil appropriated before a single vessel enters service. I don’t read where there would be payments after construction to cover ongoing Capex costs, nor offset for Opex once in operation, though I suppose that could fall under “any other support payments needed to make a vessel commercially viable in foreign commerce”. And in theory the actual construction cost differential vs foreign should decrease over time as the order book increases and the yards have to become competitive and should become more efficient.
In addition to the $11 billion over 10 years for that SCV program, there’s a separate $2B for a similar construction offset for vessels which wouldn’t be part of that program. Again, I would hope that a significant increase in construction (and consistent order book growth), and investment in yards through another section, would necessarily lead to lower build costs.
As for the 250, that is a not to exceed number, and while a lofty goal I too see that as exceeding difficult to achieve for a variety of reasons. But the way the bill is written, it could be as few as 130 (10/yr yr3-5, 20/yr yr 6-10). I suspect you may have some numbers at hand on the average annual operating cost difference for US vs Foreign flagged vessels? How far off would $8mil be, or $16mil for 130 ships?
For Crewing, you are not crazy for your skepticism, but the current state of the US fleet necessarily leads to lack of interest and mariners moving to shoreside industries. If there were more ships, and more opportunities to move up, I think it is plausible that not only would there be more interest in the industry, but also more mariners staying in it.
I would hope any JA reform would come after seeing a successful fleet built. Obviously a main point of contention is Cabotage, which SHIPs doesn’t directly address as it seems the focus is on building the foreign-commerce fleet. Though I think there’d be less uproar from the maritime industry if, when an emergency domestic waiver had to be granted, it could be granted to US vessel from that fleet instead of an FOC.
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I think we have different interpretations of the language. On pages 71 and 85 the bill refers to “capital support payments” for covering the higher capital costs of using US-built ships in the SCF fleet. These are on top of the “annual operating support” payments.
Not sure where your $450 million figure comes from. As I see it, the bill expands the small shipyard grant program to $100 million and then throws in another $250 million annually for all shipyards for a $350 million total. But these funds would be for shipyard modernization and purchasing equipment (I think) rather than explicitly covering the delta in US vs foreign construction costs.
In addition to the $11 billion over 10 years for that SCV program, there’s a separate $2B for a similar construction offset for vessels which wouldn’t be part of that program.
FWIW here are the numbers I came up with for FY 2025-34 after going through the bill:
$50 million for operations of the Maritime Security Board
$20 million for the FMC
$300 million to DOT/MARAD
$300 for USCG administrative expenses
$11 billion for the Strategic Commercial Fleet
$4.116 billion for the Maritime Security Program
$94 million for the Cable Security Fleet
$1.74 billion for the Tanker Security Fleet
$2.5 billion in shipyard subsidies
$1 billion in small shipyard grants
$1 billion for a “revolving loan fund” for shipyards (basically Title XI as I understand it)
$500 million for a research and innovation partnership (think this is related to the proposed United States Center for Maritime Innovation)
$20 million for the Merchant Marine Career Retention Program
$210 million for a PR campaign to encourage people to seek employment in the merchant marine and shipbuilding
$1.02 billion for King’s Point
$100 million for state maritime academies
$1.2 billion for state maritime training ship operations
As for the 250, that is a not to exceed number , and while a lofty goal I too see that as exceeding difficult to achieve for a variety of reasons.
Given the funding, I see that 250 figure as wishful thinking. This bill should be debated with real numbers, not pie-in-the-sky thinking. Either the support payment appropriations need to be increased, or the bill’s supporters should stop touting that number.
I suspect you may have some numbers at hand on the average annual operating cost difference for US vs Foreign flagged vessels? How far off would $8mil be, or $16mil for 130 ships?
This 2020 GAO report placed the opex delta at $7 million (said the $5 million MSP payment covered 71% of the delta). I’ve heard well-placed rumors that more recent estimates place the gap at $9-10 million.
I would hope any JA reform would come after seeing a successful fleet built.
Only way JA changes get implemented is if they are paired with financial assistance for the maritime industry. Otherwise they will block any changes.
I got the $450 from the appropriations for years 1 and 2, before the first required minimum number of vessels starts to be required in year 3. (I’m not saying I’m understanding that correctly.)
I think we have different interpretations of the language. On pages 71 and 85 the bill
Ok I see what you are saying. I’d just note that p85 refers back to applications covered under p71, and part (ii) on p71 specifically says the capital costs associated with construction of the vessel. I guess if this is intending to cover capital construction costs expensed over the entire term of the program, then it would remain a large use of the appropriations over years the vessel is in operation. That’s not how I’ve seen construction progress payments made though.
That $8-10mil opex difference seems to ring true when based on a useful report referenced in a footnote in the link you provided, particularly accounting for inflation since 2010 (even though US mariner wages have not kept up with inflation).
It will be interesting to see if there are any amendments added in committee related to JA reform. Of course we’ll probably have to wait for that until after a re-introduction in the 119th Congress since the 118th ends next week and there isn’t a snowballs chance in hell this even gets considered by the 12 committees it was referred to between now and then. Makes me a little curious why they introduced it at the end of Dec instead of waiting until Jan.
I got a laugh out of this one- The American Phoenix story is part cautionary tale, part farce. I lost track of how many companies got bankrupted and how many hundreds of people lost their jobs and homes just so a Coonass pet store owner with a cowboy hat full of ego and bullsh*t could build a ship for a faceless and nameless investment bank to buy at 30 cents on the dollar.
As criticized as CDS Construction Differential Subsidies were and regardless of the intention of Reagan when he ended them in 1980, they churned out ~75 ships per year. As a total financial ignoramous, can anyone however tell me/us a better pragmatic way forward than bringing back both CDS and ODS programs and tweeking them as needed and providing incentives to make them work? I see it as the only possible way to at least salvage anything resembling a shipbuilding industry minus the ridiculous beaurocratic cost overrun and anti-commercial mentality of the naval contracts.
yea - agree CDS could work. But in my defense - I see these as very much direct subsidies - just paid to the buyer as opposed to the shipyard
Only a handful of years since WWII did annual production ever exceed 25. Most years it was about 15-20. In 1980, the year before CDS was defunded, there were 11 ships delivered. https://www.cato.org/blog/subsidies-misplaced-shipbuilding-nostalgia
It seems that a French-built LNG tanker is being brought under the US flag to transport LNG from Sabine Pass to Puerto Rico (https://www.tradewindsnews.com/gas/crowley-buys-secondhand-steam-turbine-lng-carrier-for-americas-business/2-1-1761179). This is permissible thanks to language in the 1996 Coast Guard Authorization Act that allows foreign-built vessels constructed before the legislation’s passage to transport LNG and LPG from US ports to Puerto Rico provided they are registered under the US flag. So, thanks to this Jones Act exception the US flag fleet will expand by one ship, more US mariners will be employed, and Americans in Puerto Rico will gain access to US LNG. Can supporters of the build requirement explain why this is a bad thing or should be opposed?
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If you have tried to fix something for 50 years and don’t succeed, maybe time to try something else?:
Or maybe just find somebody else to blame for your problem?:
Anybody care to fact check that last statement?
Tried to extract a data set from S&P Sea-web using categories “tankers”, “bulk carriers”, “dry cargo/passenger” and “offshore” built between 1/1960 and 1/2028 (projected) and gross tonnage above 500 GT. There’s certainly room to improve the query, filtering and post-processing, but this should give you an idea of how the number of hulls built in the US has changed over the years.
After World War II, American commercial shipbuilding was at its peak and led the world in output and tonnage. As noted in a 1985 article, “Thirty years ago, U.S. shipyards built most of the world’s fleets.” In 1975, the U.S. was building more than 70 commercial ships annually. Within a few years, however, the U.S. commercial shipbuilding industry had almost vanished.
From here: FreightWaves Classics: America’s commercial shipbuilding industry is nearly gone
What the heck happened in 1982? Last gasp of CDS?
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ANS crude oil is a major explainer
How to expand this foreign built allowance while simultaneously mandating the new build of U.S. built LNG tanker for every foreign flag-in is the long term question. Is the only workable path forward by using a foreign flag-in tied to a US construction requirement for said vessel replacement in say 5-7 years for the flag-in and simultaneously using a CDS and ODS to enable the replacement to be built in the first place. Difficult road forward when the MM has degenerated this far. Thankfully we are allowed to flag-in for non-Jones Act trade or we would all be out of work. Originally at the start of our maritime history, that was not allowed.
Not even close: https://www.maritime.dot.gov/sites/marad.dot.gov/files/2022-06/maradannualreport1975.pdf
More here: https://www.cato.org/blog/subsidies-misplaced-shipbuilding-nostalgia
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No, it wasn’t: Google Books
More here: https://www.cato.org/blog/subsidies-misplaced-shipbuilding-nostalgia
