This cannot be accomplished, however, without the help of the United States Government. While I strongly believe that it is in the national security interest of our Government to have a strong merchant marine and maritime industry, it is not what I believe that matters. It is what you in Congress, and what the Administration think and believe that matters. Should you determine that it is in our national security interest to have a commercial fleet of militarily useful ships -- owned, built, crewed, and controlled by Americans -- to serve as a military auxiliary in times of war and national emergency, a financial investment will be required. A simple band-aid, like the extension of the existing Maritime Security Program or the changes MSP shipowners recommend, will neither save nor foster an American merchant marine to meet our nation's sovereign military requirements in time of war and national emergency. As this chart demonstrates, in 1980, the U.S. merchant marine fleet engaged in international commerce numbered 165 American owned, American built, and American controlled ships, employing 13,313 American merchant mariners. Today, the active fleet numbers 45 ships, employing 2,600 mariners. Similarly, in 1980 there were 22 shipyards engaged in the construction of oceangoing commercial and naval ships employing 140,000 people. Today, there are just eight shipyards employing 59,000. US Merchant Marine Total Ships US Built Ships US Owners 200 1990 2000 2002 US Sailors in ODS/MSP 1980 1990 2000 13,313 5,444 2,689 Source: U.S. MARAD -- 6/4/02 Today, ninety-nine percent of the ships in the MSP fleet are foreign-built, and 87 percent are foreign owned. It is just a matter of time until there will be only two – and quite possibly - just one company left in this fleet. These companies are Neptune Orient Lines of Singapore and Maersk of Denmark. The current MSP program has not achieved the intended objectives. By all measurement, the U.S. merchant marine is worse off today than 10-20 years ago. If Congress reauthorizes the existing MSP program, the Department of Defense will have no say in the types of ships these companies enroll in the MSP program. They may have little or no military utility, and there will be no assurance that when the going gets tough that these ships will be available to the Department of Defense. To address these serious deficiencies in the Maritime Security Program, we propose that the Department of Defense pay for the design and construction of ships over a multi-year construction period. The general types, tonnage, and numbers of each ship type would be identified by the Transportation Command, in consultation with the Maritime Administration, to meet DOD sustainment lift requirements. Under this program, DOD would request proposals annually from U.S. citizen ship operators for commercial ships meeting the general description and functionality required by DOD. The U.S. citizen operator would enter into a contractual agreement with DOD, based on the design selected by the operator, to lease the commercial vessel over a twenty-year period. DOD would then pay for the construction of that ship in a U.S. shipyard. Lease payments by the operator to DOD would commence on the date of delivery of the vessel. The lease payments to DOD would be based on the international bareboat charter rate for a comparable vessel. Lease payments to DOD could be made on a monthly basis. While the contractual length of the lease would be for 20-years, the contract could either be at a fixed rate for 20 years, or alternatively, provide for an annual adjustment of the lease payment to reflect any increase or decrease in international charter rates. 5 This program is a win-win-win for commercial U.S. ship operators, DOD, U.S. crews, and U.S. shipbuilders. U.S. operators, which are sinancially hard pressed to invest in new ships – no matter where they are built -- would have access to ships at international prices, without having to finance the up-front capital investment. Under this program, the Department of Defense would own the ships ensuring their utility and availability in times of emergency. This program would strengthen the U.S. defense shipbuilding and repair industrial base, and create thousands of long-term jobs for skilled craftsmen essential to building both commercial and naval ships. While DOD would have to finance the construction of the fleet, it would realize savings in the costs of naval ships. Shipbuilding generated by this program would enable us to achieve series production in our shipyards and supplier base. Increased production would drive down the unit cost of ships and ship systems under this program as our workforce becomes more efficient with each ship of the same design we produce. This building program would foster insertion of commercial technologies and manufacturing processes in naval shipbuilding |