UNITED24 - Make a charitable donation in support of Ukraine!

Military

Maritime Support Force - Is The S.O.S. Too Late?
AUTHOR Major Thomas A. Heffner, USMC
CSC 1990
SUBJECT AREA Intelligence
                        EXECUTIVE SUMMARY
THE MARITIME SUPPORT FORCE - IS THE S.O.S. TOO LATE?
     The U.S., as  a maritime power,  has long recognized  and
depended on the dual  functions of its maritime  support force
as  it  relates  to  contributing  to  national  security.  In
peace,  we  rely  upon   the  merchant  marine  for   economic
viability  and support;  in  war  we  turn  to  this  force to
transport   military  reinforcements   and  sustenance.   This
connectivity  was cited  by  General  Eisenhower  who  stated,
"When final  victory is  ours, there  is no  organization that
will  share the  credit  more  deservedly  then  the  American
merchant marine."
     However,  even though  various  government  programs have
been implemented in an  attempt to maintain a  healthy support
force,  the results  have  been  poor. Today's  maritime force
has declined  to a  point where  its existence  is threatened.
Though the  U.S. is  still the  largest economic  trader, only
four percent of  the material is  carried by U.S.  flag ships.
Today the U.S. ranks 10th in  the world in size of fleets  and
has no ships under construction.
     Recognizing the potential of a dwindling maritime  force,
the government , via  the Military Sealift Command,  created a
reserve force of  merchant ships for  recall in an  emergency.
While  the  National  Defense  Reserve  Fleet  and  The  Ready
Reserve Force  have acquired  ships, they  are plagued  with a
fleet of near obsolete ships, in poor condition, and which  in
all  probability could  not  mobilize  as  planned  or needed.
     But the  current condition  of both  the government owned
fleet  and the  commercial fleet  did not  happen over  night.
The  maritime  industry  has   long  been  troubled  by:   the
elimination   of  government   subsidies,   the   closing   of
shipyards, the loss of guaranteed cargo hauling programs,  and
a shrinking  pool of  mariners. These  problems, when  coupled
with the degraded reliability of the reserve fleet, produce  a
serious challenge for the nation.
     The challenge  facing the  nation is  what size/shape the
merchant  marine  support  force  should  be.   Unfortunately,
though  establishing a  connection between  the support  force
and  the nation's  well  being,  it is  the fiscal  constraint
which  will influence  the  size  of  the  force.  In  today's
deficit   reduction  atmosphere,   the   likelihood   of   the
government  spending  $2.0  billion  annually  to  rescue  the
maritime support force is dim.
     Therefore,  though  many  recognize  the  historical  and
contemporary role of the  maritime support force, both  to the
economy  and the  larger  maritime  strategy  pursued  by  the
nation, the condition  continues to worsen.  Consequently, the
deteriorated maritime support  capability may very  well prove
to  be   the  "Achilles   Heel"  to   the  nation's   defense.
THE MARITIME SUPPORT FORCE: IS THE S.O.S. TOO LATE?
                        OUTLINE
THESIS STATEMENT.  The national security in recent years of
the U.S. is directly linked to the ability of its maritime
support forces, (i.e. naval strategic fleet, merchant
marine fleet, and shipbuilding base) to project and sustain
combat forces overseas; however careful analysis reveals
the current maritime situation to be an "Achilles Heel" to
the national defense.
I.   INTRODUCTION
     A.   National Security And Maritime Policy
     B.   U.S. Merchant Marine: Past And Present
II.  ORIENTATION OF FEDERAL MARITIME FLEET
     A.   Military Sealift Command
     B.   National Defense Reserve Fleet
     C.   Ready Reserve Force
III. PROBLEMS PLAGUING THE MARITIME FORCES
     A.   Government Financial Support Programs
     B.   Shipyard Reduction
     C.   Military Useful Ships
     D.   Cargo Preference Legislation
     E.   Manning Deficits
IV.  SIZING U.S. MARITIME FLEET FOR DEFENSE
     A.   Current Level
     B.   Epansion
     C.   Maintenance Of Existing Capability
     D.   Planned Shrinkage
             
THE MARITIME SUPPORT FORCE - IS THE S.O.S. TOO LATE?
In  a 1984  memorandum  to  the  Secretary  of the  Navy,
Admiral James D. Watkins, the Chief of Naval  Operations,
stated "it is timely  that Strategic Sealift be  formally
recognized as  a distinct  Navy function  along with  Sea
Control  and Power  Projection."1  The  Strategic Sealift
Planning  and  Operations  Doctrine  of  the  U.S.   Navy
defines Strategic  Sealift as  "the capability  to deploy
and  sustain  military  forces  wherever  needed  through
afloat prepositioning, sea movement, and delivery  ashore
of ammunition,  equipment, supplies,  petroleum products,
and personnel."2  The preceding  reveals one  of the less
glamorous,  but  very   important  elements  of  the  big
picture  of the  U.S.  Maritime  Strategy  ---  STRATEGIC
SEALIFT. It  does not  involve very  many uniformed naval
personnel, compared with the other naval unions:  sealift
shipping is  crewed by  civilians, either  civil servants
in  the  case  of  many  Military  Sealift   Command(MSC)
nucleus   fleet  ships   or   employees   of   commercial
firms(i.e. Merchant Marines).
     Every president since World War II has asserted  his
support of a strong U.S. sealift capability, but for  the
most  part such  statements  have  been little  more than
rhetoric.  The problems  plaguing  the  nation's Merchant
Marine  fleet are  not  new.  However, in  an environment
where contingency plans  have as a  premise "come as  you
are," the lack  of a viable  merchant fleet becomes  more
sensitive. The national security  in recent years of  the
U.S. is directly  linked to the  ability of its  maritime
support  forces,(i.e.  naval  strategic  fleet,  merchant
marine  fleet, and  shipbuilding  base)  to  project  and
sustain combat forces overseas; however careful  analysis
reveals  the   current  maritime   situation  to   be  an
"Achilles Heel" to the national defense.
     NATIONAL  SECURITY AND  MARITIME  POLICY.  America's
security  is tied  to  its  military  strategy  which  is
designed: to retain  U.S. political identity;  to protect
the  U.S., including  its  allies;  to  enhance  economic
security;  and   to  encourage   international  stability
supportive of  the vital  interests of  this country  and
its allies. A supporting  foundation to this strategy  is
a  maritime infrastructure  capable  of  providing global
strategic  mobility.  America  has  long  recognized  the
ability  to  reinforce  and  resupply  forward   deployed
forces  is  essential   to  execution  of   its  military
strategy.  Further, that  while airlift  is the  quickest
and  most  flexible  of   our  mobility  assets,  it   is
strategic sealift  which will  inevitably carry  the bulk
of our  reinforcement and  resupply in  any crisis.  This
position is  supported by  the experiences  of the  Korea
and Vietnam wars in  which "97 percent of  all equipment,
ammunition, and  other supplies  and consumables used by
the  U.S. was  carried  to  the combat  zone by  ships."3
     Accordingly, the  U.S. has  had a  long track record
of  implementing  legislation  in  an  attempt  to   more
clearly  alighn its  maritime  policy  with the  security
role  such policies  are  designed  to support.  This was
first seen  with the  Merchant Marine  Act of  1920 which
formally recognized the auxiliary role of merchant  ships
in wartime  and during  emergencies. The  act stated that
"the  U.S.  shall  have  a  merchant  marine  capable  of
serving  as a  naval and  military auxiliary  in time  of
war."4  This  same  legislation  created  a  construction
loan fund which  made available low-interest  capital, in
the  hope  of  stimulating  shipbuilding.  It  did   not.
     Some  years later  President Roosevelt  incorporated
in the Merchant Marine  Act of 1936 a  more comprehensive
set  of   initiatives  to   develop  and   encourage  the
maintenance  of  the   merchant   marine  force    through
favorable  tax   laws.  Through  a  series   of   special
non-taxable capital reserve funds, operators of  merchant
ships were encouraged to deposit earnings to ensure  that
monies  were available  for  vessel  replacement. Thereby
attempting   to  ensure   long-term   viability   of  the
subsidized fleet.
     More recently the Merchant  Marine Act of 1970,  and
later amendments, consolidated the special reserve  funds
into a single capital construction fund which served  the
same  purpose as  earlier  accounts.  The  1970  act also
made most segments of the merchant marine fleet  eligible
for tax treatment previously only accorded to  subsidized
operators.  In an  effort  to  control the  high cost  of
supporting a merchant marine fleet, the act also  indexed
wages; set  upper limits  on subsidizes;  and established
new  crew limits  for  vessels.  The  act  envisioned the
results  being a  300 ship  building program  over a  ten
year period.  However, fewer  than 200  ships were  built
by 1980.
     U.S.  MERCHANT MARINE:  PAST  AND  PRESENT.  In  the
past,  as trade  prospered,  the  various sectors  of the
maritime community  were tied  together on  the basis  of
profitability. Since  1936, this  profitability has  been
based  on  the   government's  decision  to   attempt  to
maintain  the maritime  industry  through  subsidization.
For decades, as the  industry was challenged by  overseas
competitors,  U.S.  government  subsidies  continued   to
cushion and  insulate the  well being  of the  operators.
With  the   Construction  Differential   Subsidy(CDS)  in
force,  U.S.  shipping  purchased  new  ships  that  were
constructed   in   U.S.   yards.   Similarly,   Operating
Differential   Subsidies(ODS)  have  been  provided   to
certain  U.S. flag  flying  ships.  Thereby reducing  the
wage  costs   encountered  by   owners  of   U.S.  ships.
     However, the  trend has  been a  gradual decline  in
the  effectiveness of  these  subsidies  in the  last few
decades,  with  a  marked  drop-off  during  the   Reagan
administration.  Entering   into  office   with  policies
favoring both  strong national  security and  free trade,
his  administration   sought  to   reduce  or   eliminate
subsidies  to U.S.  industries that  otherwise could  not
compete.  Specifically, in  the  maritime  area, the  CDS
for  private shipyards  was  deleted  in  1982.  The  ODS
continues, but in reduced form.
     Thus, as  a result  of market  features and  current
policies,  U.S. commercial  capabilities,  both  shipping
and   shipbuilding,continue   to   decline.   For    most
Americans however,  there is  little appreciation  of the
continued  decline of  the U.S.  maritime industries  and
the larger implication of  this decline for the  national
defense.  In   part  this   perception  is   due  to  the
un-glamorous  nature associated  with  this  industry and
the support  role it  does. Yet,  a quick  review of  the
following  facts highlight  just how  severe the  current
situation is.
     * In 1970 the U.S. had 18 major shipping  companies.
Each operated  five or  more ships  with a  total of more
than  430 ships  in  service.  Today  by contrast, there
are four major companies, with  a total of 88 ships  that
operate in the foreign trade.
     * U.S. is the  largest trading nation in  the world,
yet "our merchant marine  only carries  four percent  of
our ocean going trade."5
     * In 1980  "142 ocean going  ships were being  built
in  19 different  U.S.  shipyards.  Today there  are only
nine  shipyards  in  business  -  all  for  the  Navy."6
Presently  there are  no  ocean  going  commercial  ships
under construction in the U.S.
     * The U.S.  merchant fleet now  ranks 10th in  world
wide  ships   owned  -   the  Soviets    are  number  two.
     * The average age of an American merchant marine  is
50 years, and rising.
Further,  projections  are  that  the   decline  in  U.S.
maritime industries  will continue.  While arguments  can
be  made regarding  the  impact  of  this  decline,  U.S.
history  has  shown   "the  well  established   need  for
American flag shipping to serve as a reliable vehicle  in
meeting  the  nation's  economic  and  security  needs."7
     The   preceding  briefly   addressed  the   national
security aspect  of the  maritime force  and the  current
state  of the  industry. Though  recognizing that  during
the Reagan administration the active duty USN fleet  grew
significantly, it  must be  remembered that  the bulk  of
the  sealift required  to sustain  contingency war  plans
consist   of  other    government   owned/merchant  marine
shipping.  The U.S.  government  owns  an  active  and  a
inactive maritime fleet.  The active fleet  is controlled
by the MSC,  while the inactive  fleet is managed  by the
Maritime  Administration(MARAD).  Accordingly,  a  proper
orientation of the federal maritime fleet must include  a
detailed  discussion of  the  MSC,  the National  Defense
Reserve Fleet (NDRF),  and the  Ready Reserve  Force(RRF).
     MILITARY SEALIFT  COMMAND. The  MSC was  established
in  1949. Its  primary mission  is to  "meet the  sealift
requirements of the armed forces in a national  emergency
and  a  nonmobilization   contingency,  as  well   as  in
peacetime."8 An  ancillary MSC  mission is  management of
the Naval Fleet  Auxiliary Force, comprised  of dedicated
sealift  assets of  the  MSC  force  that  provide direct
support  for power  projection  of  the  U.S.    Examples
are: oilers; stores ships; and ocean surveillance  ships.
The MSC  executes its  mission through  the employment of
sealift forces  originating from  two principal  sources:
the U.S.  government owned  ships and  the U.S.  merchant
marine  fleet. The  Navy's  sealift  program attempts  to
complement,  rather  than   compete  with  the   civilian
maritime  industry.  The  MSC  contracts  for  commercial
services,  hires merchant  crews,  and  maintains support
vessels that  are not  available in  the private  sector.
This program as  defined by the  Navy is "to  ensure that
sufficient assets are  available to meet  pre-positioned,
surge and  resupply requirements."9  In summary,  the MSC
force is those ships on duty on a daily basis,  supplying
U.S. forces around the world.
     NATIONAL DEFENSE  RESERVE FLEET.  In reserve  to the
MSC is  the NDRF.  "The NDRF  was created  at the  end of
World War  II by  mothballing a  large number  of Liberty
and  Victory ships."10  The  MARAD  acquired these  ships
after  the war,  ultimately  reaching  a level  of "2,277
vessels  in 1950."11  However, over  time, older  Liberty
and  Victory   ships  were   sold  for   scrap  or  other
non-transportation    purposes.     By    "October   1986
approximately  272 ships"12  remained  in  the NDRF.  The
original idea was to  preserve them all in  a operational
state to allow a speedy reactivation in time of  national
emergency.  Accordingly, NDRF  ships  are  outfitted with
dehumidification  and anti-corrosion  equipment, and  are
presumed  to take  no  more  than  20  days to  activate.
However, MARAD conducted a  study in 1976 that  concluded
these  ships are  in such  poor condition  that it  would
take    a  minimum    of    30-40   days    to  activate.
     Compounding the physical  deterioration of the  NDRF
ships is  the lack  of repair  capacity available  to fix
these ships. Most of the  vessels in the NDRF as  well as
requiring   activation  maintenance,   undoubtedly   need
significant   upgrades   to   handle   today's   cargoes.
However, a  Congressional committee  stated "the  base of
shipyards,  repair facilities,  and industrial  suppliers
is currently inadequate to  meet the needs envisioned  in
a outbreak  of conflict."13  Thus, it  is very reasonable
to assume   that it  would take  much longer  than the  40
days estimated by the  1976 study to mobilize  the fleet,
if at  all. Because  something had  to be  done, the  RRF
was created in 1976.
     READY  RESERVE FORCE.  The  RRF,  composed  of  post
World War  II ships,  is a  portion of  the NDRF  that is 
maintained in a higher  state of readiness than  the rest
of the NDRF. The force  consists of ships that are  to be
ready   to  embark    cargo  5,10,   or   20   days  from
notification.  These ships  are  also  managed by  MARAD,
but   the  difference   is   that   overhaul  and   major
maintenance has been done and continues, to ensure  rapid
deployment.
     The  RRF   includes  many   ship  types,   including
tankers,  freighters, container  ships,  barge  carriers,
and   roll-on/roll-off(RO/RO)   ships.    Notable    new
additions to  the RRF  are the  T-AVB aviation  logistics
ship,  the T-ACS  auxiliary  crane  ship,  and  the  T-AH
hospital ship. In  total the RRF  contains 78 of  the 272
ships within the NDRF.  While the development of  the RRF
would appear to have brighten an otherwise dark  picture,
there remain many problems plaguing the maritime  support
force.
     The MSC and its subordinate agencies, NDRF and  RRF,
are charged with the responsibility of providing  sealift
as part of the  strategic mobility for the  armed forces.
But, total reliance upon the government owned portion  of
the   maritime  force   is  not   feasible.  Former   MSC
commander,  Vice  Admiral   Piotti  estimates  "that   95
percent of  the dry  cargo and  99 percent  of the liquid
cargo needed to  sustain land combat  must go by  sea."14
Yet, over  the last  decade or  more, scores  of articles
and reports have been  written regarding the ailing  U.S.  
flag merchant marine fleet.  To better grasp the  present
condition of this fleet,  an overview of the  significant
problems  plaguing   the  merchant   force  is   detailed
     GOVERNMENT   FINANCIAL    SUPPORT   PROGRAMS.    The
financing of ship construction  and their operation is  a
long  standing  problem.  Various  financial  incentives,
designed to promote the  merchant marine fleet have  been
played with  since the  creation of  the Merchant  Marine
Act of 1936. Soon  after President Reagan took  office in
1981  he directed  a  review  of  the  two major  subsidy
programs,  the Operating  Differential  Subsidy(ODS)  and
the Construction Differential  Subsidy(CDS). The ODS  was
designed to  subsidize the  higher prices  of ships built
in  U.S. shipyards.  Though honoring  existing long  term
ODS contracts,  the President's  review directed  that no
new  applications  for  ODS  be  approved.  Additionally,
neither of the Reagan/Bush administrations earmarked  any
funds   in   their   budgets   for   the   CDS   program.
     Another  important  incentive  the  government   has
eliminated is the  favorable tax laws  previously enacted
to  assist U.S.  flag  shipping.  The Tax  Reform Act  of
1986  substantially increased  the  tax  burden  of  U.S.
vessels  engaged   in  foreign   commerce.  Specifically,
"depreciation  periods   were  doubled   from  5   to  10
years"15,  investment  tax   credit  rules  became   more
restrictive,  foreign  sourcing  of  income  rules   were
narrowed,  and  the  alternative  minimum  tax  law   was
applied. Most foreign  countries do not  impose a tax  on
their  ships involved  in  international  commerce. Thus,
to impose additional taxes on U.S. operators involved  in
foreign  commerce  is   to  handicap  their   efforts  to
accumulate   capital   needed   for   ship   replacement.
     It  is somewhat  difficult  to  quantify the  impact
resulting   from   discontinuation   of   the   preceding
incentives. However,  one tangible  benefit from  the CDS
program  was  the  work  generated  in  commercial   U.S.
shipyards. Additionally, CDS  resulted in a  shipbuilding
base  being maintained  above  a  level  associated  with
"Navy  only" construction,  and thus  available to  serve
the  national security.  Likewise,  the  benefit  derived
from the  ODS program  may have  come from  the continued
existence of companies now  in business, that might  have
gone   bankrupt  if   ODS   had   not   been   in  force.
     SHIPYARD REDUCTION.  Concurrent with the
elimination of  incentives has  been the  decline in U.S.
shipyards  and ship  repair  facilities.  The last  eight
years  has  seen  the  loss of   "75  shipbuilding/repair
firms, the loss of approximately 52,000 skilled  shipyard
workers"16, and  the contraction  of shipyard  suppliers.
Retired  Rear  Admiral   Denton,  former  U.S.   Senator,
testified   "that  based   on  recent   studies  of   our
industrial base the  nation's shipbuilders will  never be
able to effectively offset the sealift losses which  will
invariably occur during  combat."17 Specifically, at  the
end  of   1989  there   were  no   merchant  ships  under
construction in  American shipyards  and only  nine yards
building ships greater than 400 feet in length - all  for
the U.S. Navy.  The general impact  has been the  reduced
capabilIty  of  the  shipbuilding  industry  to   support
mobilization   in   time   of   a   national   emergency.
     MILITARY USEFUL SHIPS.  Closely associated with  the
lack  of shipyards  is  that  many  of  the  ships  being
procured by  U.S. operators  are not  military useful  in
their present form.  Ship types and  their design are  as
important  as   ship  numbers   for  strategic   sealift.
However, recent trends in the shipping industry have  led
to increased containerization  of cargoes for  intermodal
transport. This standardization  of cargo containers  and
the  container ships  built  to  handle  them  has caused
problems  for military  sealift  planners.  Specifically,
"container ships  are built  with cells  rather than with
holds and decks  as in freighters  of the past."18  These
cells enable  containers to  be stacked  and unstacked by
automatic cranes. Cargo  loading or unloading  which used
to  take days  using  pallets  and stevedores,  now takes
hours. Unfortunately, a  large portion of  military cargo
is  not containerized.  Within the  limited inventory  of
U.S.  commercial  shipping,   there  exists  nearly   100
container  ships.  These  ships  lack  the  older   cargo
handling gear, and would be incapable of offloading  such
military items as  helicopters, trucks, tanks,  artillery
pieces,    and   other    unique   outsized    equipment.
     CARGO    PREFERENCE    LEGISLATION.    Because    of
inequities in the world shipping market and in an  effort
to  ensure  adequate   shipping  existed  on   U.S.  flag
vessels,  The Merchant  Marine  Act  of 1936  established
cargo preference policies.  In  general,  these policies
were applicable  to all  military shipments,  "50 percent
of Export-Import Bank shipments,  and 50 percent of  U.S.
aid  shipments."19 However,  in recent  years one  factor
has significantly reduced the success of this  incentive.
Specifically, the allocation of cargo was dependent  upon
the  availability of  U.S.  ships,  at reasonable  rates.
With that loophole,  policymakers have been  inclined not
to enforce the existing policy because of its high  cost.
     MANNING  DEFICITS.  The  preceding  problems   dealt
with  issues  which   could  through  a   combination  of
legislation and proper procurement, be corrected,  albeit
at a  cost. However,  the manning  of ships  is a problem
which  perhaps cannot  be  so  easily  corrected.  As was
shown earlier,  the MARAD  working closely  with the U.S.
Navy's sealift  planners has  been acquiring  many of the
older type ships for  the NDRF/RRF. These ships  are less
modern  and require  a  pool  of mariners  experienced in
equipment no longer used  on today's ships. Thus,  as the
size  of the  NDRF/RRF  grows,  the  number  of qualified
seamen to  man these  ships decreases  and their  average
age  increases. The  seriousness  of  this situation  was
summed  up  by  Senator  Stevens(D-AK)  who  wrote  "that
manning  is the  most  serious  challenge facing  sealift
strategy."20
     Recently  the  Commission  on  Merchant  Marine  and
Defense  documented the  manning shortage.  Specifically,
the number of  mariners dropped from  "48,000 in 1960  to
13,400  in   1987."21  Still   further,  The   Commission
discovered that there  would be a  mobilization shortfall
of  "1,400 merchant  seamen  to  meet  the  total sealift
requirement  in   a  single-theater   conflict  today."22
Possibly even more frightening is the projection made  by
the   Transportation  Institute,   a  maritime   industry
research and education organization, which estimates  "by
the year  1992 a  seafarer deficit  after mobilization of
15,000."23 The  bottom line  is that  even if  sufficient
shipping  existed "DOD's  limited  policy  objectives may
not be met."24
     Given  the  linkage of  strategic  sealift   to  the
nation's security, the composition of the force, and  the
problems   plaguing  the   industry,  let   us  turn   to
addressing the  size of  the maritime  force. The current
Defense Guidance for  1990-1994 specifies "that  the U.S.
strategic  mobility assets  must  continue  to  meet  the
requirements  of a  global  conventional  war."25 And  as
indicated previously, the bulk of the lift will come  via
sealift.
     CURRENT LEVEL. At the  outset it must be  recognized
that  the  current  inventory  of  government  owned  and
merchant marine ships  will not be  adequate to fill  the
sealift  needs  of  the  nation  at  war.  "In  1950  the
privately owned  U.S. merchant  fleet consisted  of 1,170
ships,  the largest  fleet in  the world."26  Owing to  a
variety  of political  and economic  conditions the  U.S.
fleet  has steadily  declined  to  a "1987  level of  369
active ships."27 Further  the President's Commission  has
stated "that  an additional  455 ships  would be required
just  to support  a Southeast  Asia theater  conflict."28
     In sizing a maritime  force it is perhaps  better to
view  the choices  based  on  levels  of  capability  the
various   provide.  These   levels   include   expansion,
maintenance  of  existing  capability,  and  managing   a
planned  shrinkage. Regardless  of  the  option  pursued,
the    key    elements    should    ensure    efficiency,
effectiveness, and feasibility.
     EXPANSION.  The  idea  of  expanding  the   merchant
marine force is in all likelihood, unfeasible because  of
political  and budgetary  limits.  This  would require  a
major  effort to  gain support  from all  sectors of  the
U.S., as the structural  realities that put the  maritime
industries in  their present  condition would  have to be
altered.  Furthermore, the  constraints  imposed  by  the
Gramm-Rudman-Hollands   deficit   reduction   law    make
significant  budget  initiatives  virtually  out  of  the
question.  Additionally,  in  the  absence  of  a   major 
threat(i.e.  Russia) or  a  military  conflict,  policies
that  would expand  U.S. maritime  capacity are  likewise
not feasible.
     MAINTENANCE OF EXISTING  CAPABILITY. The concept  of
maintaing the existing level of capability is becoming  a
more difficult  proposition than  in past  years. With  a
general consensus that the industry is in a decline,  the
cost  variable again  plays  a  significant role  in this
option. The  Congressional Budget  Office(CBO) assigns  a
average "ODS value of $2.3 million per ship per  year."29
For 15-20 ships, the  annual cost for this  policy ranges
from $34.5  to $46  million. For  a construction subsidy,
whether in a CDS type package or direct  procurement(i.e.
purchase  of ships  by MSC),  the CBO  has estimated  the
cost  to range  from "$60  to $100  million per  ship."30
Total costs  to sustain  a shipbuilding  program at  this
level range  from $1.2  to $1.6  billion. Based  on these
approximations, in  aggregate, direct  financial policies
to maintain current  capabilities will cost  between $1.5
to $2.0 billion annually.  The question which must  again
be  asked   is  whether   it  is   efficient,  effective,
feasible, or in the interest of national security to  pay
this   cost  in   sizing   the   fleet  at   this  level.
     PLANNED  SHRINKAGE.   Because  a   decline  in   the
maritime industries seems  inevitable, this broad  option
of  managing a  planned  shrinkage  is  perhaps  the only
realistic  one.  That   is,  a  smaller  maritime  base,
consisting of  the most  viable sectors  of the  maritime
industry,  should survive.  As  with  the other  options,
the  elements used  could  include  direct  and  indirect
subsidizes, cargo preference reform, reform of tax  laws,
and  direct government  ship procurement.  Suffice it  to
say  the  general  costs  outlined  under  the  preceding
option are merely scaled down.
     CONSTRAINT.  As  was  indicated  earlier  the   most
pressing constraint  in selecting  what option  to choose
in sizing the  force is the  fiscal constraint. With  the
deficit a  real issue,  there is  little likelihood  that
new  spending   policies  will   be  approved.   This  is
especially true because  past and present  policies, such
as ODS and CDS, have  done little to prevent the  current
condition from developing. It  has been stated that  "the
greater  the percentage  of  the  gross national  product
that an industry comprises,  the more clout it  is likely
to   have."31  According  to    Data   Resources   Inc.,
shipbuilding will  "constitute less  than 0.5  percent of
GNP in 1987."32 Further,  the Bureau of Labor  Statistics
showed  "overall  shipyard  employment  in  1985  at  159
thousand   versus  875   thousand   in   the   automotive
industry."33  Thus,  until  such  time  as  the  maritime
industry   generates   enough   economic   or   political
clout(i.e. through  its number),  the fiscal  reality of
attempting to significantly change the present  situation
will remain the primary constraint.
     The  interdependence   between  a   viable  maritime
support  force capability  and the  national defense  was
reaffirmed by  President Reagan  who in  May 1986  stated
"the  dual roles  of  the  merchant marine  in trade  and
defense  remain crucial  to  our  national  interests."32
Yet  rhetoric aside,  the  actual  status of  our sealift
capacity   is being   eroded  by   the  elimination   of
government support  programs, the  dwindling capacity  of
the  shipbuilding base,  the  demise  of military  useful
ships,  and  the   ever  shrinking  pool   of  seafarers.
Accordingly,  the deficient  condition  of  our  maritime
strategic sealift capability, may  very well prove to  be
the   "Achilles   Heel"   to   the   nation's    defense.
                                   
                                ENDNOTES
1.   Captain Wayne P. Wilcox, "Strategic Sealift: A Nayy
          Function,"  Proceedings. (April 1987), p.99
2.   Wilcox, (April 1987). p.99
3.   Edgar L. Prina, "The Possibility of Military Defeat,"
          Seapower, (December 1987), p.26
4.   Clinton H. Whitehurst, The U.S. Merchant Marine, (Naval
          Institute Press, Annapolis, MD, 1983), p.26
5.   General Duane H. Cassidy, "United States Transporta-
          tion Command," Defense Transportation Journal,
          (April 1989), p.31
6.   Admiral Carlisle A. Trost, "SOS For The Merchant
          Marine," Defense 89, (March/April 1989), p.115
7.   Prina, (December 1987), p.29
8.   Whitehurst, (1983), p.115
9.   Major Bradley E. Smith, "Maritime Challenges To Sus-
          taining The Force,"  Military  Review  (September
          1989), p.25
10.  Wilcox, (April 1987), p.100
11.  Wilcox, (April 1987), p.100
12.  Wilcox, (April 1987), p.100
13.  Prina, (December 1987), p.26
14.  Smith, (September 1989), p.21
15.  Peter J. Finnerty, "Maritime: U.S. Merchant Marine
          Still Sliding," Seapower, (January 1989), p.84
16.  Prina, (December 1987), p.34
17.  Prina, (December 1987), p.34
18.  Wilcox, (April 1987), p.102
19.  Whitehurst, (1983), p.108
20.  Commander Paul L. Higgins, "Manning The Future,"
         Proceedingsù (February 1989), p.36
21.  Finnerty, (January 1989), p.81
22.  Higgins, (February 1989), p.36
23.  Rodney W. Carlisle, Sovereignty For Sale. (Naval
          Institute Press, Annapolis, MD, 1985), p.58
24.  Captain Russell S. Hall, "United States Merchant
          Marine, Past, Press and Future," Logistics
          Spectrum, (Winter 1989) p.21
25.  Third Report of The Commission on Merchant Marine And
          Defense: Findings of Fact And Conclusions, U.S.
          Government Printing Office  (September 30, 1988)
          p. 9
26.  Wilcox, (April 1987), p.100
27.  Prina, (December 1987), p.33
28.  Prina, (December 1987), p.33
29.  Robert Hilton, Paula J. Pettavino and Harlan K.
          Ullman, U.S. Maritime Industries: Down For The
          Third Time?, (Center For Strategic And Inter-
          national Studies, Washington, D.C., 1987), p.24
30.  Hilton, Pettavino and Ullman, (1987), p.24
31.  Whitehurst, (December 1987), p.158
32.  Hilton, Pettavino and Ullman, (1987), p.18
33.  Hilton, Pettavino and Ullman, (1987), p.l9
                                 BIBLIOGRAPHY
Carlisle, Rodney W., Sovereignty For Sale, (Naval Institute
     Press, Annapolis, MD, 1985)
Cassidy, Duane H., "United Transportation Command," Defense
     Transportation Journal, (April 1989)
Finnerty, Peter J., "Maritime: U.S. Merchant Marine Still
     Sliding," Seapower, (January 1989)
Hall, Russell S., "United States Merchant Marine, Past,
     Present and Future," Logistics Spectrum, (Winter 1989)
Higgins, Paul L., "Manning The Future," Proceedings,
     (February 1989)
Hilton, Robert; Pettavino, Paula J., and Ullman, Harlan K.,
     U.S. Maritime Industries: Down For The Third Time?,
     (Center For Strategic And International Studies,
     Washington, D.C., 1987)
Prina, Edgar L., "The Possibility of Military Defeat,"
     Seapower, (December 1987)
Smith, Bradley E., "Maritime Challenges To Sustaining The
     Force," Military Review, (September 1989)
Third Report of The Commission on Merchant Marine And
     Defense: Findings of Fact And Conclusions, U.S.
     Government Printing Office, (September 1988)
Trost, Carlisle A., "SOS For The Merchant Marine," Defense
     89, (March/April 1989)
Whitehurst, Clinton H., The U.S. Merchant Marine, (Naval
     Institute Press, Annapolis, MD, 1983)
Wilcox, Wayne P., "Strategic Sealift: A Navy Function,"
     Proceedings, (April 1987)



NEWSLETTER
Join the GlobalSecurity.org mailing list