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US flag deepsea fleet, smooth sailing or California Dreamin'?

US flag deepsea fleet, smooth sailing or California Dreamin'?
The 2014 US maritime season has opened with activity on several fronts. In Washington, DC the Maritime Administration (MARAD), under its new Administrator Chip Jaenichen, hosted a three-day symposium on US maritime strategies going forward. The output of the meeting will then provide input into a broader plan, for a “National Freight Network” being prepared by MARAD’s parent organisation- the US Department of Transportation. These meetings provide a new chapter in an old and heavily re-worked story.

Jaenichen, in his keynote remarks, he described a strategy of enabling different segments, in a highly fragmented business, to work together. “The maritime anchor chain is no stronger than its weakest link, and this why we need to pull together in a joint effort,” he told session attendees, using phrases such as “systematic collaboration”.  

However, the vision and the reality deviated very quickly, in spite of new paradigms that there are. Responding to input from participants, MARAD chose to focus on an old theme- growing the US flag fleet in foreign trade, including one Congressman from California posturing for circa 1970s protectionist measures regarding possible U.S. crude oil exports. Links to national security loom large, in these dialogues.

The Administrator said that more meetings on other topics would occur during the year. A few different wrinkles this time around include the advent of LNG fuelling, in the face of increasing regulatory costs. Anytime a “game changer” exists, there is always the possibility that the economics could shift in the direction of reducing the comparative disadvantage of US flagged vessels in foreign trades. Jaenichen seems to grasp this, the Congressman probably does not. 

Carriers in the Jones Act container trades are taking steps in the direction of LNG powering, while builders of qualified MR size product tankers are also preparing for a later conversion to LNG fuelling. MARAD’s  Marine Highways initiatives, a subject for future symposia, also provide opportunities for MARAD to move forward (rather than look backward to legislation from 1920, 1936, 1970 and 1984).  

The legislative branch of the US government (Congress) has been doing good things for the inland waterway sector, dogged by dark clouds and disappointment every year with reduced funding, this year has begun with bright sunshine. The Waterways Council Inc (WCI), which represents users of the waterways, such as the big towing companies, in Washington DC, expressed its support of funding decisions by Congress. According to the WCI, appropriations of nearly $5.5bn, for lock and dam maintenance, spearheaded by the U.S. Army Corps of Engineers, has increased by almost $750m from the previous year, a 16% increase- which is not bad for troubled times. The deeper nuances are also positive, with the Federal government agreeing to take a bigger cost share of the Olmstead Lock and Dam project, on the Ohio River- near its confluence with the Mississippi, to come out of the general US Treasury.

And, closer to home in The Port of New York and New Jersey, where bridges are much in the news, work has now begun on a closely watched infrastructure project- building a raised roadway on the 1930’s vintage Bayonne Bridge. An increased air-draft will allow larger vessels, circa 8,000 – 12,000 teu, to move into the docks at Port Elizabeth and Port Newark. This project, which continues to be slowed down by environmental concerns, will benefit from delays in the expansion at the Panama Canal. As noted in Seatrade Global recently there are many uncertainties as to how much cargo will move through East Coast ports as a result of improvements at Panama, but New York – New Jersey will be ready.