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US Merchant Marine:  Reviving A National Asset
CSC 1992
SUBJECT AREA General
				EXECUTIVE SUMMARY
Title:  US Merchant Marine:  Reviving A National Asset
Author:  Major R. W. Ingles, United States Marine Corps
Thesis:  With the decline and deterioration of the US
merchant marine over the last thirty years, the United
States should procure the vessels needed to revitalize
the US-flag merchant fleet which provides the strategic
sealift necessary to support our future transportation
in both peacetime and war.
Background:  The United States merchant marine is floating
in a sea of turmoil for reasons economic, political, and
international.  Since 1950, the fleet has fallen from
the largest and most modern in the world to the status
of a fifth-rate merchant power.  The resulting decline
of our merchant marine has been virtually self-inflicted,
caused primarily by Americans and not by forces outside
our shores.  An examination of US maritime activities,
as  witnessed in our last call to arms in the liberation
of Kuwait, reveals maritime shipping was a critical factor
in our buildup of offensive capability into the Persian
Gulf region.  However, multiple trips were required to
carry the fight to our opposition.  Had time not been
on our side, this gradual buildup would not have been
an option.  The total number of merchant ships now
available to our national defense is not sufficient to
guarantee our national objectives will be met.  The severe
and worsening shortage in vessels of all types required
to support our national security interests demands the
immediate attention of our political and private industry
leaders.  An action plan by these leaders for reviving
a devastated US-flag merchant fleet must be the call for
the 1990's and beyond.  No strategy or action can be
adopted, nor succeed, without the basic ingredient of
sound leadership.  Only through sound and aggressive
leadership can we sell the American public the need for
immediate funding and programs necessary to revive this
national asset.
Recommendation:  The United States should procure the
vessels required to revitalize the US-flag merchant fleet
which provides the strategic sealift necessary to support
our transportation in both peacetime and war.
US MERCHANT MARINE:  REVIVING A NATIONAL ASSET
			Outline
Thesis:  With the decline and deterioration of the US merchant
marine over the last thirty years, the United States should procure
the vessels needed to revitalize the US-flag merchant fleet which
provides the strategic sealift necessary to support our future
transportation in both peacetime and war.
I.	US merchant marine decline
	A.	Ships for national defense
	B.	Types and capacities required
	C.	Upgrading the fleet
II.	Perspective on the US merchant marine industry
	A.	Historical role
	B.	Present day concerns
	C.	Dwindling fleet
III.	National emergency resources
	A.	Military Sealift Command
	B.	Ready Reserve Fleet
	C.	Effective US-Controlled Fleet
	D.	National Defense Reserve Fleet
	E.	Foreign Flag Fleet
	F.	Crewing
IV.	Action plan for revival
	A.	Leadership
		1.	Political
		2.	Private
	B.	Procurement
	C.	Business efficiency improvements
US MERCHANT MARINE:  REVIVING A NATIONAL ASSET
     The sea serves as one continuous highway that
encompasses most of the Earth, about 75% of its surface.
In transport of significant quantity, where sealift is
an alternative, sea transport enables the highest sustained
rate of delivery.  The reason is capacity, not the transit
speed of the individual vehicle.  As a means of meeting
our mobility requirements for the defense agenda in the
1990's, the ability to project our power will underpin
our strategy more than ever. (1:114)  Our strategy demands
that we be able to move large capacities of material to
a crisis area at a pace and in numbers sufficient to field
an overwhelming force.
     Sea transportation is a crucial factor in national
defense as well as a key element of the Nation's economic
power.  It gives mobility to military personnel, equipment,
and supplies in peacetime and in wartime operations.
It is also critical to rapid mobilization and to providing
mobility for rapid deployment forces.  The requirements
for defense transportation are many and varied, because
the strategic frontiers of the United States now reach
to the Western Pacific, Central Europe, and other regions
far removed from the United States and because US forces
are deployed in distant and widely separated areas.
Effective and sufficient sealift is a major part
of the broad field of transportation distribution.  Men
and material must be moved and distributed to military
operational areas as dictated by the commander.  This
movement and distribution must meet operational necessities
and accommodate industrial mobilization.  Sealift
transportation is an essential element to our
sustainability in conflict wherever and whenever it may
occur worldwide.
     As a result of a national lack of understanding of
ships at sea, the United States faces a fundamental crisis
at sea.   Our US-flag merchant marine is experiencing
heavy weather for reasons economic, political, and
international. (9:29)  The US is the biggest international
trader in the world, importing and exporting the greatest
volume of goods of any nation.  Yet, this maritime nation,
biggest of all shippers, has little or no direct control
over the transportation used to move its goods.  More
importantly, providing the strategic sealift required
to support our national objectives and interests in time
of conflict is steadily declining.  With the decline and
deterioration of the US merchant marine over the last
thirty years, the United States should procure the vessels
needed to revitalize the US-flag Merchant Fleet which
provides the strategic sealift necessary to support our
future transportation in both  peacetime and war.
The high seas and ocean shipping have been critical
to the Nation's security and economic well-being from
the earliest days of our history.  One of the first acts
of the Congress in 1789 was directed toward the promotion
of US shipping, trade, and industry, and toward the
development of an American merchant fleet. (17:21)  Since
1950, the US merchant marine has fallen from the largest
and most modern in the world to the status of a fifth
rate merchant fleet.  The resulting decline of our merchant
marine to its present tragic condition is virtually
self-inflicted, caused primarily by Americans and not
by forces outside our shores. (7:44)  To identify the
root causes of the failure of US-flag liner shipping,
we need to recognize that this situation to a great extent
has resulted from what the United States did to itself,
not from what other countries have done to us.
     An examination of US maritime activities reveals
a bleak picture.  As witnessed in our last call to arms
in the defense of Kuwait, maritime shipping was a critical
factor in our buildup of offensive capability in the
Persian Gulf region.  However, multiple trips were required
to carry the fight to our opposition.  Had time not been
on our side, this gradual buildup would not have been
an option.  The total number of merchant ships now
available to our national defense is not sufficient to
guarantee our national objectives will be met.  A severe
and worsening shortage in vessels of all types, needed
to provide the logistic and strategic support for our
national security interests, demands our immediate
attention.
     In 1970, the US-flag merchant fleet consisted of
843 ships of various types.  Of this figure, only 552
comprised the active fleet.  By 1987, almost 10 years
later, the active commercial merchant fleet was down to
369.  Unless this declining trend is reversed, the number
of active vessels will shrink to about 220 by the year
2000. (5:7)
     Just as alarming as the negative statistics regarding
total numbers of vessels, the types and capacities of
ships required to meet our current military and commercial
demands is also alarming.  The majority of this aging
fleet consists of bulk carriers and aging freighters.
Many have outlived their usefulness and are fast becoming
dinosaurs in an age of new technology, quicker off-load
activities, and containerization.
     There appear to be two needs of the military services
for limited war readiness that are not being met
qualitatively by the merchant marine.  First, a
satisfactory method of carrying and discharging wheeled
and tracked vehicles, and, second, a small ship (450-foot
length, not over 20-foot draft, 3000-to 5000 ton capacity)
that can be used to transport cargo overseas at a fast
rate of speed (20 knots) and discharge rapidly (in eight
hours) in small harbors and/or beaches having slopes
steeper than 1 to 15. (14:47)  This technology exists
today with strategic lift (also called fast sealift)
vessels capable of meeting both transport needs at speeds
in excess of 20 knots.
     The US shipping industry falls further behind daily
in numbers of ships, capacity of ships, and age of ships.
As long as the US maintains the status of a maritime nation
and engages in trade and commerce abroad, the greater
part of goods and products will be carried by ships at
sea.  As long as the US finds it necessary to project
power forward to operational theaters of war, ships will
be required to transport weapons, equipment and personnel.
General Duane H. Cassidy, USAF, former Commander-in-Chief,
US Transportation Command, provided this testimony before
the US Senate:
        Perhaps the most disturbing situation
        I have encountered since assuming
        command of US TRANSCOM is the deter-
        ioration of the US Maritime industry
        and the implications for national
        strategy.  Strategic sealift capacity
        is encountering a steep, rapid decline
        which we must immediately seek to check.
        We rely upon the civilian transportation
        to join with us to project national
        powers overseas.  The health of the
        commercial transportation carriers is
        as important to our warfighting
        capability as is the readiness of our
        combat forces.  They go hand in hand.
     What is the situation today?  To gain a perspective
on the US Merchant marine industry, it is imperative to
examine its past, present, and future role.  By any
standard of measurement the US has the greatest global
maritime commitments, naval and commercial, in the world.
Besides promoting commerce, an additional purpose of the
merchant marine is to aid in national defense.  Maritime
capabilities impact upon national security in two ways.
First, maritime capabilities are historically significant
attributes of defense capabilities, consisting of a
threefold linkage of naval power, a shipbuilding base
essential to support a navy, and a merchant or transport
fleet (both government and private).  Second, these
industries make meaningful contributions to economic
well-being, not only through employment, investment and
technological advances, but also by assuring a stable
trading environment immune from embargoes or cutoffs that
might result from excessive reliance on foreign shipping.
(6:5)
     There are many ways in which the merchant marine
can contribute.  Primarily, in both peace and war, the
merchant marine transports most of the material to support
military forces.  Such material may be destined for support
of either US or allied forces and will be carried by ships
from the Military Sealift Command, Ready Reserve Fleet,
Effective US Controlled Merchant Fleet, Foreign Flag Fleet,
and, in a worse case scenario, National Defense Reserve
Fleet.  Each of these resources has its drawbacks and
dilemmas.
     The requirements of World War I and World War II
caused large increases in ship construction and
enlargements of the merchant fleet.  Generally, the US
has not maintained a high degree of competitiveness in
ocean shipping since the Civil War.  In 1900, US foreign
trade tonnage only amounted to 9 percent carried by US-flag
ships. (17:22)  In 1936, legislation was passed to
establish a solid base for US-flag shipping and to ensure
minimal dependence on foreign shipping in times of national
stress and emergency.  Known as the 1936 Merchant Marine
Act, this policy declaration prescribes that the Nation's
merchant marine shall be:
1.	Sufficient to carry its domestic water-borne
	commerce;
2.	Sufficient to carry a substantial portion of
	its water-borne foreign commerce;
3.	Sufficient to provide shipping service on the
	essential trade routes for maintaining the flow
	of the domestic and foreign water-borne commerce
	at all times;
4.	Capable of serving as a naval or military
	auxiliary in time of war or national emergency;
5.	Owned and operated under the US flag by US
	citizens insofar as practicable;
6.	Composed of vessels constructed within the
	United States;
7.	Manned by US citizens; and
8.	Serviced by efficient American-owned facilities
	for construction, repair, and insurance. (17:24)
     The historical role and function of the US merchant
marine remains basically the same as it has since 1936
with few modifications.  What has changed is the
competitive nature of the industry facing stiff competition
from the world market.  The decline of the US-flag fleet
became particularly noticeable in the 1960's as foreign
carriers increasingly took over the movement of goods
in US foreign trade and as the US shipbuilding industry
became less competitive.  The share of the overall foreign
trade carried by US-flag ships fell from 21.6% in 1958
to only 7.8% in 1967. (17:26)  Furthermore, about
three-fourths of the US merchant marine ships were now
20 years old or older. (17:26)
     With the US rapidly dropping out of the competitive
and lucrative commercial market, another concern is the
weakening of our strategic lift.  The act of 1936 was
federally promoted through subsidies and meant to build
a fleet of primarily civilian-owned and operated US-flag
merchant fleet.  This act was considered to be a strategic
imperative in support of our maritime policies.  The
merchant fleet must not only be capable of carrying tonnage
requirements, but it must also have the proper mix of
ships to transport vital imports and exports and to meet
the Nation's emergency military needs.
     The dwindling capabilities of the US Merchant Marine
to meet national security needs in a major emergency are
questioned by many analysts, particularly the ability
to meet immediate ship tonnage requirements with present
resources.  Although the US is the world's largest ocean
trader, the US Merchant Marine now ranks tenth in both
number of ships and deadweight tonnage among merchant
fleets of the world.  Much needs to be done to reverse
the alarming deterioration of this nation's maritime
industries and to strengthen the sealift component of
the national defense effort.  If the trend is not reversed,
the US will face certain disaster by the year 2000 in
its ability to respond to national security requirements.
     The US merchant fleet, though limited in numbers
of ships and tonnage capacity, draws its resources from
several sources during national emergency.  Each source
has drawbacks and dilemmas which, when combined, add up
to a no win situation.
     The Military Sealift Command (MSC) operates only
about thirty sealift vessels.  These assets are government
owned and operated.  The chief rationale for maintaining
a government-owned fleet is the quick response capability
it presumably would have in today's world of instant
crises. (18:122)  By being controlled by the US government
they are virtually dedicated towards missions involving
our national security.  One main element of the MSC mission
is to provide contingency sealift support for military
forces worldwide. (3:11)  Most of the ships are employed
in full-time support of maritime pre-positioning programs
conducted by the Army, Air Force, and Marine Corps.
     The limitation of MSC shipping is that there just
isn't enough to support the amount of supplies, equipment,
and ammunition that should be afloat to meet multi-theater
commitments.  MSC shipping was designed for initial
response in a theater for a quick strike action, not long
and sustained support of Corps level operations.  More
than $7 billion has been invested on the sealift
improvement effort to provide maximum transport capability
and medical support with minimum delay.  For this amount,
the following MSC ships have been purchased or long-term
leased:  13 maritime pre-positioning force, 13 afloat
pre-positioning force, 8 fast sealift, 2 hospital, and
2 aviation logistics support. (2:9)
     The Ready Reserve Fleet (RRF) is also very limited
in size (about ninety ships).  This program was devised
to improve the response mechanism in time of crisis.
Under this program, those commercial carrier companies
who enroll ships and desire to carry defense cargo must
agree to make half of their ships available for call up
under certain mobilization conditions.  However, as was
seen in the prolonged Vietnam war, the diversion of
merchant ships from commercial to defense purposes greatly
weakened an already poor and non-competitive US-flag
merchant marine.  One of the lessons learned during Desert
Shield/Desert Storm was the need for more sealift.  We
moved more equipment than has ever been moved in history
in the same time period.  But problems for sealift included
not enough roll-on, roll-off  capability in the RRF. (8:8)
     The Effective US Controlled Merchant Fleet (EUSC)
is owned by US citizens or corporations.  These ships
are licensed and fly the flag of other countries.
Sometimes called the "runaway fleet," these ships are
not always available to our contingency and operational
responsiveness and often the commitment of the assets
becomes embodied in heated political debate for their
use.
     Not readily available to the US merchant marine,
is the Foreign Flag Fleet.  These assets operate
voluntarily and, often, political drawbacks exist,
especially in those instances where perceived interests
of the foreign nations (in which the ships are owned and
registered) do not coincide with those of the US.  If
these assets are to be called upon, the development and
bonding of a strong coalition with agreed-upon goals must
have the priority of all concerned.
     The last asset available is the National Defense
Reserve Fleet (NDRF).  Primarily made up of the mothballed
"Liberty" ships from the World War II era, the NDRF ships,
which now average 45 years of age, might be better
candidates for razor blades needed by troops rather than
sealift support. (10:38)  The disadvantage with this
program is they are now limited in number (only about
two hundred ships) and would require an extensive
activation process.  The majority of these ships are too
slow and would require expensive technological upgrading
of propulsion, navigational, and electrical systems.
Additionally, by the standards established today for
tonnage capability, is it worth the taxpayers dollars
to revive this antiquated and rusting fleet?
     In addition to the drawbacks and dilemmas each of
these fleets pose, the entire merchant marine industry
suffers from a shortage of qualified personnel.  The
shrinkage of seafaring personnel in the civilian sector
is down to 29,000 people dependent upon 13,000 billets.
(16:50)  In an industry that operates 24 hours a day,
every day of the year, this shortage takes its toll in
readiness.  Of national defense interest, periods of
national emergency or war can impose exceptional
operational demands on ships, or their small crews may
not have the versatility required of joint naval-merchant
operations. (16:50)  Moreover, many of these personnel
are of foreign descent and who cannot be compelled by
the US to enter combat areas.  Some personnel, for example
those from NATO countries, may be called to service by
their own nations.
     Both the Merchant Marine Act of 1936 and the Seaman's
Act of 1937 contain provisions limiting the use of alien
seaman on American-flag vessels.  On the subsidized
vessels, all unlicensed (i.e., non-officer members except
stewards) crew are required to be US citizens.  On
non-subsidized vessels in the coastal and non-contiguous
trades (i.e., Hawaii and Alaska), some non-citizens are
permitted, but all non-citizens must be resident aliens.
Ever since the nineteenth century, American citizenship
has been required of all officers on US-flag merchant
vessels.  With such legal restrictions hampering the
effectiveness of the labor force, it is necessary to draw
upon a merchant seaman reserve to compensate for any loss
of foreign descent. (12:6)
     Over the past ten years, the US has invested heavily
in upgrading strategic sealift capabilities.  However,
the merchant marine structure has been the victim of
neglect despite this modernization effort.
     An action plan by our leaders for reviving a
devastated US-flag merchant fleet must be the call for
the 1990's and beyond.  There is no question that the
merchant marine industry as a whole remains a vital element
in meeting national security needs.  During Desert
Shield/Desert Storm, over 3,035,387 short tons of cargo
and 2,758 passengers were transported from ports of
embarkation in the United States and Europe to ports of
debarkation in the Gulf region.  This was accomplished
with over 459 shiploads.  However, only 179 of these
vessels were of US registry.  The remainder were provided
by European, Korean, Japanese, and Kuwaiti vessels.
     Private ownership is still very much the underlying
principle of a viable merchant marine, as stated:
          The dilemma of the American Merchant
          Marine grows out of the fact that
          it is a private industry required
          to perform a public function. . . .of
          providing a service adequate for the
          water-borne commerce of the United
          States and one capable of serving
          the nation as a naval and military
          auxiliary in time of war or other
          national emergency.  It was clearly
          indicated in present law (Merchant
          Marine Act, 1936) that Congress
          designed to preserve private
          ownership "insofar as practicable"
          and recognized that the cost to the
          taxpayer was not to be regarded as
          a gratuity but as an investment
          by the government to assure the flow
          of its domestic and foreign water-borne
          commerce and the immediate availability
          to the nation of an auxiliary fleet in
          time of trouble.
                        US Maritime Commission, 1937
     Had our political leadership and US maritime community
acted accordingly through the years and really believed
in its context, the US-flag merchant fleet would not be
in its present deplorable state. (11:44)  It is through
the statement of private ownership "insofar as practicable"
that the fleet will be saved.  Through strong and
aggressive leadership by our elected officials and the
corporate leaders of the merchant marine industry, the
US should procure and man the vessels needed to revitalize
the  US-flag merchant fleet.
     Over the last decade or more, much has been written
about a devastated US-flag merchant fleet.  Presidential
candidates have suggested in their campaign orations
that something must be done to salvage it.  But the
situation has grown steadily worse and the US-flag merchant
fleet dwindles in size and American shipyards continue
to go out of business. (11:44)  General Robert H. Barrow,
former Commandant of the Marine Corps, once commented:
          In order to achieve maritime
          superiority there is a compelling
          need to produce ships, military and
          civilian, so we may maintain freedom
          of the seas, provide deterrence at
          sea, and project that power from the
          sea should deterrence fail.  Equally
          compelling is the need to enhance our
          strategic mobility and sustainability
          to ensure that when force presence is
          required, we can respond rapidly
          and with credibility.
     The US has lost the competitive edge and spirit.
To build and man the vessels required, the procurement
process needs a jump-start from the top of our political
system.  Leadership in resolving the nation's maritime
problems and pushing for adequate funding begins at the
White House.  As an initial step in reversing the downward
trend in the US maritime industries, the President, by
executive order, needs to state what our national maritime
policy is.  He should reaffirm the need to build a strong
and viable merchant fleet, relate that need to national
security and defense requirements, and assign
responsibility to the applicable federal agencies to take
the requested actions.
     For immediate effect, the President should issue
a National Security Decision Directive to all federal
departments and agencies concerned to take all steps within
their current authority and discretion to pressure and
begin the rebuilding of the US-flag merchant fleet. (4:23)
It is up to the President to decide what, if anything,
can be done to help the US merchant marine and ensure
that adequate wartime sealift is available.  Only he can
break the stalemate that has prevented action to address
the strategic sealift needed for our security, with the
essential first step being the reaffirmation and
restatement our national maritime policy.
     In addition to executive branch action, Congress
needs to implement a procurement and charter program which
would lead to the construction of commercially viable
yet military useful container Roll-on/Roll-off and dry
and liquid cargo ships suitable both for mobilization
requirements and for commercial endeavors as well.
According to former Senator Jeremiah A. Denton, a retired
Navy admiral:
          The United States must build back
          to a balanced US-flag fleet of at
          least 650 active and ready reserve
          merchant ships as a norm.  Some of
          the ships could initially be procured
          on a competitive worldwide basis.
          But, to provide the shipyard industrial
          base from which adequate mobilization
          is possible, a sustained domestic
          shipbuilding program of at least 12
          merchant ships per year is needed.
     What is the cost in terms of dollars for this build-
up?  According to The Commission on Merchant Marine and
Defense, in a letter from its chairman Senator Denton,
an allocation of $13 billion in federal expenditures over
the next 11 years would be required.  The letter further
explains this proposal would build 244 merchant ships,
of which 194 would be built in the United States.  This
would generate more than 43 billion dollars in gross
national product and create 100,000 new jobs. (11:46)
     This "action plan" as provided by the commission
merits serious consideration and prompt action, not only
by the President and Congress but by the American people
as well.  The time has come to go ahead at full speed
and act decisively to put this plan into effect.
     To put this plan into perspective, consider the
estimated cost of $300 billion per year in current defense
expenditures.  It would seem that the cost of such a
proposed revival is a small fraction of the total defense
budget over the next 11 years.  With recently announced
drawdowns in troop strength and cancellation of big ticket
items, such as further production of the B-2 bomber and
the Seawolf submarine, it appears very affordable to bail
out a sinking US-flag merchant fleet.
     Our private sector leadership also has equally
challenging responsibilities.  While the federal government
is initiating and spearheading a joint public and private
effort to rebuild the US-flag merchant fleet, leaders
within the merchant marine industry must search for ways
to improve business efficiencies.  Acknowledging that
the principles of economics and sound business practices
dictate a natural desire to minimize costs and maximize
profits, from their perspective the best solution to the
nation's maritime ills might be those that use the
principles of economics to advantage.
     Solving the problems of the US-flag merchant fleet
are a recognized necessity and there is an unprecedented
opportunity for effective solutions that could be
implemented in the immediate future.  One has to wonder
why previous administrations and private sector leadership
could have pledged their souls to preserve national
security, and yet allow our ocean lifelines to come under
almost complete control of foreign interests.
     There are several options that can be followed to
correct the problems and ultimately reverse the decline
of our merchant marine.  However, none of these strategies
for action can be adapted, nor will they succeed, without
the basic ingredient of sound leadership.  After all,
the best definition for leadership is a simple one:
"leadership is leading." (7:48)  In fostering a merchant
marine, then, the United States has the opportunity to
show the world how ocean shipping can become vastly more
economical through improvements both in technology and
in methods of operations. (13:1)  Now that would be
leading!
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