Skip to comments.Senate Bill Would Require U.S. Flag Ships to be U.S. Built [Shipping]
Posted on 07/10/2009 3:26:58 PM PDT by Vince Ferrer
Five words would change law, have big impact on ocean carriers and shippers
All U.S.-flag ships in international commerce would have to be built in the United States if language approved July 9 by the Senate Commerce, Science and Transportation Committee becomes law.
Shippers of government-impelled cargo such as food aid, project or military cargo that require U.S. flag vessels for transport would likely incur higher rates. Experts said it would be impossible to calculate how much, but owners would have to recover the higher relative cost of building a ship in the U.S.
The change spelled out in five words also would affect carriers in the Maritime Security Program, which requires U.S. flag vessels, but allows the re-flagging of foreign-built ships.
The Maritime Administration Authorization Act of 2010 calls for an amendment to the language in Title 46, Sec. 50101 of the U.S. Code, which covers policies and objectives for the U.S. merchant marine.
The law states that for the national defense and development of import and export foreign commerce, the merchant marine should "provide shipping service essential for maintaining the flow of the waterborne domestic and foreign commerce at all times."
To do that, the law says ships should be capable of being part of navy auxiliary fleet, and be U.S. owned and operated. It continues, the fleet should be "composed of the best-equipped, safest, and most suitable types of vessels and manned with a trained and efficient citizen personnel."
The Senate bill would add "constructed in the United States" after "vessels" in the last clause.
The Jones Act already requires U.S.-built ships in trades to Hawaii, Alaska, Puerto Rico and Guam, the Marad bill goes farther. U.S. flag operators in foreign trades now have the option of re-flagging foreign-built ships.
Joe Cox, president of the Chamber of Shipping of America, estimated that 200 of some 800 vessels owned by chamber members are U.S. built. The chamber is made up of U.S. shipping companies, overseas and Jones Act, which operate under mix of U.S. and foreign flags.
Cox said a company would have to make the business case to replace a foreign-built ship with a U.S.-built one.
"A company would have to run the numbers. 'How much income are we getting from this trade? How much would it cost us to replace our ship with a U.S.-built ship? Does it make economic sense?'" Cox said. "This bill could have unintended consequences."
Officials at the Commerce Committee did not return an inquiry for comment. The bill still requires full Senate approval. Marad's authorization has not been taken up by the House.
I can bet that not having more U.S. built ships is one of them.
Yup. Protectionism in the form of tariffs didn’t work out so well before the Great Depression. This is more of the same garbage, as will be the results...
Oh great let’s kill what little is left of the US Civil Shipbuilding industry. I BLANKING HATE CONGRESS!
The problem will liberals is their fondness for exploding cigars. They NEVER consider the consequences of their moronic actions.
But, maybe this will put US shipbuilders to work building ships. A strong nation ought to be able to build its own ships, and its own cars, and its own tanks, and planes, and TVs.
parsy, who is southern
I was going to say
Sen. Reed Smoot would live this, Sen Willis Hawley, maybe not so much.
The net effect - loss of American jobs and a blow to an already weak economy, well, that would be the same....
A short history lesson and note the role weak banks played in this soap opera
"At first the tariff seemed to be a success. According to historian Robert Sobel, "Factory payrolls, construction contracts, and industrial production all increased sharply." However, larger economic problems loomed in the guise of weak banks. When the Kredit-Anstalt Bank of Austria failed, the global deficiencies of the Smoot-Hawley Tariff became apparent.
U.S. imports decreased 66% from US$4.4 billion (1929) to US$1.5 billion (1933), and exports decreased 61% from US$5.4 billion to US$2.1 billion, both decreases much more than the 50% decrease of the GDP.
According to government statistics, U.S. imports from Europe decreased from a 1929 high of $1,334 million to just $390 million during 1932, while U.S. exports to Europe decreased from $2,341 million in 1929 to $784 million in 1932. Overall, world trade decreased by some 66% between 1929 and 1934."
Anything else the central planners should make us build?
We should develop an aggressive plan on what we'd like to manufacture in the US through the force of government over the next five years. We'll call it the American "Five Year Plan."
“This bill could have unintended consequences”
We’ve tried this before, at least a variation of it, called The Magnuson Act.
This act called for US flag ships to have US crews and captains on them.
Cost of shipping stuff on US flag vessels went up. People preferred shipping on ‘flag of convenience’ ships due to the lower costs.
Result - US shipping industry nearly disappeared.
This new act of repeated historical ignorance, if they choose to repeat it, will simply kill what shipping industry remains.
I guess we won’t need American Bureau of Shipping any more. All those retired Coasties can go to work for DNV instead (or Lloyds).
Congress should stop trying to participate in markets. See Amendment number 10 of the Constitution.
The unions have destroyed the U.S. Merchant Marine.
Maybe a bunch of wind turbines. Personally, I’d like to get in on the unemployed poet thing that I am sure will be coming forth any day now. They can pay me to write poetry. Then when that runs out, the can pay me to play guitar and sing.
Seriously, though, I see where you are coming from, but our economy is headed for a Greater Depression IMHO, and the whole economy is going to be shaken up from top to bottom. Might as well bring our jobs back home while we are at it. After hyperinflation hits, we aren’t going to be able to spend internationally anyway.
parsy, who notes we haven’t built any cargo vessels in a couple of years.
Unintended consequences scare me too. But our manufacturing base has been sent overseas. When we need cargo ships, say in a war with China, and all the cargo ships have been made in China, we are probably going to have some issues.
I don’t see this as economic as much as I do a security issue. Like making cars and trucks. Some things a nation has to be able to do, damn the costs.
parsy, who may be all wrong on this
Shippers of government-impelled cargo such as food aid, project or military cargo that require U.S. flag vessels for transport would likely incur higher rates.
There would be higher rates, and reduced capacity. I suspect there would be a modest uptick in US shipbuilding, but some of the workers now moving government-impelled cargo on non-US-flag vessels would be out of work -- there will not be a 1-for-1 build-out of US-vessels.
Your economy is headed for a Greater Depression because of demented Government protectionism - of which this is a prime example.
“Bringing the jobs home” = welfare, tariffs, protectionism and economic destruction.
*Exactly* the same things were tried 80 years ago, and America crashed and burned.
What have we got to lose.
You may be right. I don’t know for sure. But what I do know is that we can’t continue to be a nation of stockbrokers and sellers of $5 cups of coffee, and feng shui consultants, and fast food burger flippers, and all the other “frippery” jobs we have degenerated into the last 30 years.
We have shipped our manufacturing base overseas and IMHO, if all we end up doing is making our own stuff and selling our own stuff to ourselves, we’d be better off than what we have allowed to happen.
parsy, who once again says he may be wrong
That’s what I’m thinking. What we have been doing isn’t working. Our younger generation is turning into a pack of metro-sexuals who sit around twittering and texting. Maybe our young men need to get real jobs, and our young women back into homes raising babies for the most part.
parsy, who is getting cranky as he ages.
Excellent! Then we can pass an “Anti-Dog-Eat-Dog Rule,” and “The Equalization of Opportunity Bill.”
A far as I know, the last commercial ship built in the US was the "Resolute" Feb 1980, at BIW.
“there isn’t much of a shipbuilding industry in the U.S” ya know why...Goofy Union Rules, More goofy Regulations AND TAXES!
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