High Shipping Costs Are Here to Stay, Says Bloomberg
By Henry Ren (Bloomberg) Stubbornly high shipping expenses for businesses are getting sealed into contracts for the next 12 months, forcing companies to pass the extra costs on to consumers....
By Wes Goodman
(Bloomberg) — The latest U.S. Littoral Combat Ship to arrive in Southeast Asia is combat ready, according to a senior Navy officer, after a series of mechanical snafus cast doubt on the ability of the vessels to operate effectively in shallow coastal waters.
The USS Coronado is “ready to go do its job,” said Rear Admiral Don Gabrielson, Commander of Task Force 73 and Singapore area coordinator, adding operation, maintenance, design and training issues have been addressed. “Every ship has maintenance issues. Any time you take a new class of ship and you have a new model for taking care of the ship and training the crew, there are going to be things that you learn.”
“It’s crossed many miles of Pacific Ocean to get here all by itself,” he said on Sunday on board the ship in Singapore.
The Coronado is the first deployment of an independence-variant Littoral Combat Ship to Southeast Asia and the third overall in the class. It has a larger flight deck than other LCS vessels and greater fuel capacity. It will use Singapore as a maintenance hub and carry out drills with countries in the region.
The ships, designed for the kinds of shallow coastal waters that surround many islands and reefs in Southeast Asia, are a spearhead for the U.S. military rebalance to the region, a key part of the Obama administration’s bid to balance China’s greater military and economic clout. Still, they have been confronted with equipment breakdowns and harried crews, with the Navy now moving to revamp the $29 billion program.
Issues with LCS maintenance haven’t set back the U.S. presence in Southeast Asia, Gabrielson said. “There’s a huge amount of demand for the Littoral Combat Ship by every nation out here in terms of exercise and integration.”
The ship, built in two versions by Lockheed Martin Corp. and Austal Ltd., has been criticized for its reliability flaws, limited combat power and uncertain ability to survive in combat. The service is using its first ships for more extensive testing, reducing the rotation of crew members and de-emphasizing the swapping of missions and equipment that was supposed to be a hallmark of the vessels.
Two of the first vessels experienced propulsion-system failures, in December with the Milwaukee and in January with the Fort Worth. The Fort Worth was sidelined in port in Singapore for eight months. Two more vessels experienced failures in July and August.
The U.S. is targeting to have four of the vessels in Southeast Asia in coming years, Gabrielson said. The presence of the LCS is not meant to send a specific message to China, he added. “It’s not a message to anyone other than what is going on in this part of the world matters to the whole world.”
China claims the bulk of the disputed South China Sea, where its military buildup and land reclamation have created tensions with some Southeast Asian nations. It has also sparked friction with the U.S. amid a broader tussle for influence between the two powers in the western Pacific.
The risk of a clash in the South China Sea lies with non-military ships, Singapore Defence Minister Ng Eng Hen said earlier this month, as China deploys more heavily armed coast guard vessels in the disputed waters.
Singapore has joined other nations in the region and the U.S. in warning the reliance on fishing boats and coast guards to assert territorial claims in the South China Sea raises the prospect of an incident. It’s a key shipping lane that carries as much as $5 trillion in trade a year.
China has used its so-called white hull fleet to chase and shoo ships including fishing boats from other countries away from the reefs it claims.
© 2016 Bloomberg L.P
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