John Garamendi

Congressman Garamendi Makes Bold Call to Support U.S. Merchant Marine

Rob Almeida
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January 14, 2014

John GaramendiCalifornia Congressman John Garamendi spoke at the National Maritime Strategy Symposium this morning and set an aggressive tone to revamp the maritime policy of the United States.

Recognizing that no real maritime policy exists for the United States and a dwindling fleet of 179 U.S.-flagged merchant vessels trading worldwide, he called for a unified voice while executing caution and judgement.

In his speech, he outlined the following pillars around which a U.S. Merchant Marine policy should be created:

1) We must continue to support the Jones Act – “It’s foundational for a vibrant U.S. Merchant Marine.”

2) “Need to recognize the U.S. Merchant Marine is a public private enterprise”

3) We must find new trades and new cargo to revitalize the U.S. Fleet

Oil and gas reserved within the United States are “strategic national assets. We should not squander or give it away, but there is some portion of that which could be exported,” he notes.

4) Made in America

If oil and gas is to be exported from the United States, “it must be on the bottoms of U.S. flagged ships,” said Garamendi.  “Made in America is fundamental to any U.S. maritime strategy.”

Meeting all of Congressman Garamendi’s pillars will be extremely difficult.

It must be recognized that the crude oil shipping market is a global market and with a current oversupply of large crude tankers worldwide, tanker rates are at historically low levels.  Building more tonnage at U.S. shipyards would result in expensive ships that would require high day rates in order to maintain profitable returns on investment (ROI).

Large crude and LNG carriers are not being built in the United States.

For VLCCs and Suezmax-sized ships, the technology is not necessarily a major factor, but rather the physical limitations from a shipyard perspective for such vessels.  Aker Philadelphia and NASSCO would likely be the only potential yards in the U.S which could support such large vessels.

NASSCO’s graving dock is only 174-feet wide and a 300,000 dwt VLCC could have a beam of 196 feet.  Not only that, but the width of the channel leaving San Diego bay might also be a factor.

San Francisco might also be a possibility, however in all cases, significant investment would be required.

For LNG carriers however, the technology is certainly a factor.

The fact is, most of the shipbuilding talent worldwide is located in the far east and recruiting professionals with LNG experience is an incredibly difficult thing to do.  Exasperating the issue is the difficulty in hiring non-Americans who are technical experts in LNG shipbuilding.

Some might argue that that talent can be home grown, however I would argue that building highly technical ships like LNG carriers isn’t something that can be simply relearned overnight and a policy to move this sort of shipbuilding to the U.S. needs to also include policy to make it easier for shipbuilders to hire the people who will enable them to accomplish the job.

The National Maritime Strategy Symposium this week is aimed at coming up with solutions to some of these issues and using the collective talent of the U.S. Merchant Marine industry to come up with a sustainable plan.

Have an opinion or solution to offer?  Please comment below.

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