We don't need MARAD (Change My Mind)

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.

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Somewhere I posted a link to a list of U.S. flag ships. The 3.1 million is not to operate the ships but to pay the difference in cost to run a U.S. flag (and crewed) ship compared to FOC. If they differential goes away the ships would be quickly reflagged out of the U.S. fleet. I believe most of them are on mostly commercial runs.

The ship has to be under “effective U.S. control”, there is no requirement they be U.S. built. There is a requirement that they be “militarily useful”

That’s been suggested, that along with a merchant marine “reserve” to supply crew. But keeping ships in operation is cheaper. They come with crews and all the supporting infrastructure, training etc.

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That’s good to hear. The anecdotal information I’ve seen says these ships are carrying mostly government/DOD cargo, which has to go on US flagged ships anyways.

Concur wholeheartedly; bringing ships out of mothballs is a massive undertaking, and it’d be far easier if we had a healthy merchant marine already on hand.

FUCK this frustrates me!!

Stop splitting pennies!

$396M IS NOTHING!! That’s about half the cost of a single drillship built overseas!!

Sounds like a DEAL to me! A 2003 Government Accountability Office study put the price tag at the Naval Academy $275,000

Yes! And that’s 60 ships for less than half the cost of ONE F-35C fighter!

The Jones Act is under constant attack. NOTHING in it is “guaranteed” as long as members of congress work to kill it.

WE ALREADY DID THAT… most of MARAD’s Ready Reserve Fleet is foreign built.

EVERYTHING you listed for 1/10th the cost of a single Navy ship that you guys don’t even have projectiles for. To me that sounds like the #1 best value proposition in all of the armed forces today!!

That’s a ‘passionate’ reply - which can be good, except I’m not really trying to destroy MARAD.

And you go immediately wrong when you try to compare to the Navy. Yes, the ZUMWALT is useless. Yes, it’s a big hole in the ocean that money is being thrown into. So what? The federal budget isn’t decided by racking and stacking every expense and then deciding which has the most merit.

If you were going to pick a budget fight, why not look at MARAD’s parent, the Dept. of Transportation? Most of their money (and they have a lot too!) goes to the highways.

But you’re so focused on what the numbers are that you’re not looking at what the numbers are saying. The SAVANNAH expense more than any other stood out to me. You want to talk about comparisons? For the cost of containing atoms inside one rust bucket I can buy three SM-3 ballistic missile interceptors. Or grow the MSP by 15%.

My point in all of this is that you guys preach to the choir all the time about the merits of the merchant marine, and especially the strategic sealift piece. I did a few minutes of armchair analysis that some congressional aide or thinktank sycophant could come up with to save a cool $400 million.

If you want MARAD to help you guys haranguing Adm. Buzby’s email account isn’t the answer, you need to help MARAD sell yourselves. It has to go beyond dodging U-Boats 75 years ago. Now I don’t have the answer for how, mind you, but I am telling you what the all the landsmen out there see.

(If I were forced to take a guess, probably moving/consolidating MARAD would be the most beneficial. Roll up MARAD, USCG, NOAA, and the Federal Maritime Commission into a new independent agency, perhaps upgrading the US Maritime Service into a proper uniformed service.)

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Why is it that in the old money for guns or butter argument (from my old economics class) that guns usually wins even though for the price of one gun you can get so much more butter?

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Bad enough when the guns work right cough Zumwalt cough.

The N/S Savannah is in MARAD’s lap because no one else wants to deal with the issues of nuclear decontamination. Thus it has become a White Elephant that no other entity really wants let alone pay for. Yes it is a “historically significant ship” but one that is in a country that is not particularly maritime minded. Should it be kept for people to see, tour, enjoy, and learn from is a good question. Or should it be towed to Brownsville and tied up next to the aircraft carrier Enterprise?

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From Todays Tradewinds - make of it what you will

Liberty Global hires ex-Marad chief Jaenichen

Former chief of the main agency in charge of US commercial shipping plans to expand Liberty’s trade lanes.

June 5th, 2018 13:28 GMT

by Michael Angell

Published in Liner

Liberty Global Logistics has brought on Paul “Chip” Jaenichen, the former head US regulator for commercial shipping, to lead the company’s US flag business.

Jaenichen was to lead the US Maritime Administration (Marad) in 2014 and served until 2017. Previously, he served as deputy administrator from 2012 to 2014.

He went to Marad after a 30-year career in the US Navy where he served as captain of a fast-attack submarine, a commodore of a submarine squadron, and deputy chief of legislative affairs.

US maritime chief Jaenichen vows to stand by Jones Act
Read more  .
This will be Jaenichen’s second foray into the private sector as he was previously with HMS Global Maritime in New Albany, Indiana.

Jaenichen’s "career accomplishments and understanding of the intricacies of both the US flag and international shipping industry will be great assets for (Liberty) as we look to develop new trade lanes and expand the company’s global footprint.” said chief executive Philip Shapiro.

Jaenichen said, “I am thrilled to be joining Liberty’s Executive Management team. Together, we will work to continue to develop Liberty’s planned growth and expansion into new and diversified trade lanes while maintaining our reputation for innovation and outstanding customer service.”

I know your not, you wouldn’t be here otherwise. We appreciate your point of view and analysis… but that doesn’t me I have to like it. :wink:

Because, as I stated in my ar, MARAD doesn’t belong in DOT it belings in commerce (where it was for many decades) or DHS

I like it.

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Well actually- I would like to see the following:

  1. EXPANDING MARAD’s role to include ALL of the MSC Prepo and Sealift Vessels, Hospital Ships, Fast Expeditionary Force.

  2. Recreating a compartment in MARAD formed after the former War Shipping Administration take it away from MSC and put where it rightfully belongs- have that report directly to TRANSCOM

  3. Start Recapitalizing (by new design and shipbuilding) the entire Surge and Prepo Fleets- under Commercial Practice, under MARAD Control.

  4. Switch Mariner Security Clearance to MARAD by establishing a new Mariner Security Section

  5. Transfer all of the remaining Non Unrep (NFAF- Combat Logistics Force- whatever they call it this year) ships to MARAD.

  6. Start Scrapping the RRF and replace the vessels with MSP Slots. Let the Surge and Prepo ships carry added burden until a full scale call out- then utilize the VISA program

  7. Build three new Training Ships serving multiple Maritime Academies, leave the USMMA alone… have them bring back GMATS and other continuing and advanced ed programs

  8. Incentives for shipbuilding design and construction, heavy tariffs anytime a Foreign Flag vessel gets a waiver or works around Cargo Preference for the military…

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The last time I was able to tour her a few years back there was a placard stating something to the effect that the ship is property of Marad and the reactor is the property of the nuclear regulatory commission, or something like that. There is an irrevocable lease if I’m not mistaken that states the reactor cannot be completely dismantled until something like 2055. It’s a bit of a mess between government agencies, but I guess that’s what you get with a nuclear powered ship with a 1960’s era submarine reactor in it.

I have just solved the MARAD and USMMA problem and also resolved a long standing emotional trauma at the same time.

With the presidential announcement of the formation of the space force, Kings Point can be changed over to the Space Force Academy. Surely the money will flow in as if by a shunt to the US Treasury.

This will help me get over being called a space cadet a long time ago.

Here’s to you future space cadets!

PS - @john I would suggest Space Cadet T-shirt line (if it hasn’t been trademarked yet).


That’s cheaper than King’s Point’s $296,000…


Posted w/o comments:

I realize some are very passionate about keeping the USMMA, but isn’t it hard to justify when the state academies produce the same product at a fraction of the price?

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The question IMO, really boils down to whether or not the US is a maritime nation. If so it should endeavor to attract people nationally and not just a few coastal state schools. We are a country of 50 states plus territories, there are 6 states schools. The state schools can be a good deal if you are from that state or perhaps one of a number of adjoining states that have some sort of tuition agreement. I am not saying those schools can’t fill the bill but for it to work the (US) government would need to provid some sort of program/scholarships to attract people nationally and funnel them through the state schools. Something a lot more than the miserly stipend they currently offer to go ROTC at those state schools.

I would add that the figures quoted by @Alan_Newport might be misleading to some extent. State schools may receive $24M from MARAD but does that include the ROTC moneys the participants receive that come from the branch services, i.e., Navy? If not the cost to the government is actually higher.

Speaking of ROTC programs, the same (getting rid of) could be said for the other service academies as well.

ROTC may not pay much of a stipend, but it does cover all tuition costs. Depending on the school that can be a significant sum. Maybe you mean the Strategic Sealift Officer/Reserve program?

At any rate, I wouldn’t conflate DOD money with MARAD money; those ROTC scholarships are going to be spent somewhere, might as well be at a maritime academy. As for the $24M of MARAD money, 22 of that was going directly to training ship maintenance. I forget what the other 2 was for (and am too lazy to look it back up). But it was some sort of program.

I think the service academies should be under pressure by ROTC. If they aren’t out there being true centers of excellence and providing a product you can’t get anywhere else then they deserve to fall under the budget axe. In the same sense USMMA should be feeling heat from state maritime schools to justify itself by being more than another avenue to a military commission and delivering something of unique value to the merchant marine. I have no idea whether or not that is the case, but that’s how I would want it anyways.

Well they didn’t listen to all of my suggestions, but the Administration does have some changes in mind for MARAD (if it ever gets pushed through):