Lexington Institute: National Security Requires U.S.-Flag Fleet, U.S. Mariners


October 2018


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In a recent article written by Daniel Goure, Ph.D., vice president at the Lexington Institute think tank, the U.S-flagged fleet received high praise for the crucial role the American maritime industry plays in the nation’s defense.


In the article, Goure stated, “Support for a U.S.-flagged commercial sealift fleet is one of the few economic areas where the U.S. government, Republican and Democratic administrations alike, has practiced what amounts to industrial policy. And rightly so. The maintenance of a viable and reliable capability to move military-relevant cargoes around the world in support of U.S. forces abroad is critical.”


The Lexington Institute is based in Arlington, Virginia. On its website, the organization states, “It is the goal of the Lexington Institute to inform, educate, and shape the public debate of national priorities in those areas that are of surpassing importance to the future success of democracy, such as national security, education reform, tax reform, immigration and federal policy concerning science and technology. By promoting America’s ability to project power around the globe we not only defend the homeland of democracy, but also sustain the international stability in which other free-market democracies can thrive.”


Goure continued, “Recent assessments of the U.S. industrial base have identified several critical vulnerabilities that could compromise the military’s ability to conduct high-intensity warfare. One of these is the ability of the U.S.-flagged sealift fleet to meet the transportation demands created by the overseas deployments and operation of large combat formations in a war zone. Simply put, the U.S.-flagged sealift fleet has been allowed to erode to the point that it is of only barely sufficient size and capability to meet the demands created by relatively small contingencies such as those conducted in this century in Southwest Asia.”


The article quoted Gen. Darren McDew (USAF), who recently retired after serving as commanding officer of the U.S. Transportation Command. During his time at the agency, McDew stated, “An aging organic sealift fleet coupled with a reduction in U.S.-flagged vessels threatens our ability to meet national security requirements. The U.S.-flagged fleet has been in steady decline since World War II as a result of decreasing demand and the rising cost of the U.S.-flagged fleet compared to international fleets. In 1951, 1,288 U.S.-flagged ships were registered in the United States. In 1990, the fleet was down to 408 ships, and in 2013 just 106. Today, 82 U.S.- flagged ships operate in international trade, representing a 25 percent reduction in just the last 5 years. .... If the fleet continues to lose ships, a lengthy, mass deployment on the scale of Desert Shield/Desert Storm could eventually require U.S. Forces to rely on foreign-flagged ships for sustainment.”


Goure then outlined the basic duties of the Maritime Administration (MARAD) before talking in detail about their important programs: “Two of MARAD’s main tools for assisting the U.S. commercial fleet are the Maritime Security Program (MSP) and the Voluntary Intermodal Sealift Agreement (VISA),” he wrote. “These programs are designed to assure the availability of sufficient U.S. commercial sealift capability and the supporting infrastructure to sustain U.S. military operations overseas in an emergency.


“The MSP provides supplementary funding, currently $5 million per ship annually, for a specific number of U.S.-flagged, privately owned ships which conduct international commerce but which are available under agreement to respond to Department of Defense (DoD) requirements during war and national emergencies. Currently, the MSP fleet consists of 60 vessels in a mix of container ships, roll-on/roll-off carriers, and heavy lift platforms. The VISA program is similar to MSP insofar as it too is a partnership between the U.S. government and the maritime industry to provide the DoD with assured access to commercial sealift, terminal facilities, and supply chain management services to support the emergency deployment and sustainment of U.S. military forces. VISA participants commit to providing a graduated level of carrying capacity to DoD based on a threestage activation system. In return, these participants receive preference regarding the transportation of DoD cargoes in peacetime. VISA allows DoD access to a broader range of vessels than are in the MSP, including tankers.”


He then talked about another important program, saying, “A third way that MARAD ensures the availability of a U.Sflagged sealift fleet is through the cargo preference program. This program mandates that U.S. government shippers use U.S.-flagged ships, if available, to transport 50 percent of any oceangoing cargo that either directly or indirectly involves the government. Except in wartime, food aid cargoes are the single greatest source of preference cargoes. Removing or even reducing the 50 percent preference would be highly damaging to the U.S. commercial transport fleet.”


He continued, “Because the cargo preference program can necessitate that U.S. government departments and agencies pay higher shipping prices, it has led to some intra-governmental tensions. The U.S. Agency for International Development has argued that it should be allowed to ship more food aid on foreign carriers to stretch its budget. There are reports that even some DoD agencies responsible for the movement of bulk supplies have sought to circumvent the cargo preference requirements.”


The article concluded, “The cost of MARAD’s programs to support a viable and effective U.S. commercial sealift capability amounts to a small fraction of the projected $65 billion it would cost the government to replicate this capacity and the intermodal infrastructure and global cargo networks provided to the DoD by privatesector MSP participants. For a relatively small expenditure, a critical national security capability can be maintained.”


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