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During 1982, the U. S. merchant shipping industry experienced the same economic pains that afflicted the nation and most of its overseas trading partners: unemployment of both ships and mariners; severe competition from foreign sources; rising costs and declining revenues; and significant overcapacity (or “overton- naging,” to use the commercial term). Added to this catalog of woes was the de facto rejection of whatever policy the federal government has had concerning the place the merchant marine should occupy in the nation’s economic and security plans.
Budgetary support for the construction-differential subsidy has been eliminated, and stringent restrictions have been imposed on the operating-differential subsidy. A protracted effort in Congress to modernize the regulation of shipping in the foreign commerce of the United States was negated at the last minute when the Senate failed to take action. It was significant, in the opinion of many observers, that the White House made no attempt to assure passage of this legislation.
The authority granted in 1981, and extending through 1982, for American owners to build or modernize ships in foreign yards and still qualify for operating- differential subsidy resulted in a number of contracts for new construction and conversion. Congressional action extended this authority until 1 October 1983.
At the corporate level, there were notable developments. Three established steamship companies were involved in changes of ownership; two new maritime ventures were announced; realignment of contracts with the government was sought; and one conglomerate “spun off” its ship-operating subsidiary.
It was an interesting year.
Lower Manhattan provides the backdrop as the Waterman LASH ship Benjamin Harrison heads to sea. Built in 1980, she can carry 80 lighters and 119 containers.
Subsidies in a Depressed Market
Shipping is a cyclical industry which serves the needs of commerce, and therefore is unable most of the time to control those factors which bring about either prosperity or depression. The harsh truth of this statement was especially manifest in 1982, when worldwide ship charter hire and liner-service rates were (and continue to be) depressed to uneconomical levels. In full awareness that the reasons for this malaise defy brief analysis, it may be said that one of the explanations lies in the simple fact that there are too many ships in existence at a time when the need for cross-ocean transportation is either stagnant or declining. In particular, this is demonstrated by the tanker fleets, which have been augmented by new construction while significant reductions in requirements for petroleum and its derivatives have been experienced, with a corresponding curtailment of cargoes. It is a sad commentary that, worldwide, dozens of new tankers have been delivered to owners only to
LCJJU11CU W1I Ji
the 71 national-flag ships in lay P
tankers. nrovisi°nS
About 1972, pursuant to the pr ^
of the Merchant Marine Act ° ^ American investors began t0 ., ’ c0n-
construction-differential su s the
racts, tankers to be reSls e'r. ,pnt
fUUlU cumins “ - p __
ie first of the big carriers pad
red, however, a major rec and
ripped the world’s tanker in j-ltable rere was no opportunity ° . j0 use mployment in international trau . ^ he ships in the protected ornnprrnission t was necessary to obtain P for rom the Maritime Adminis ^ 12, eriods limited to six mont s jjy in nd to repay the construction veSsel lirect proportion to the tim®. Appl'" vas engaged in interstate ser mad6
>e placed immediately in48 of eported on 31 October 1982 tha
hi ted States. They were confident^,
' ‘ the tin'6
deliv"
lllltU Jiatva. 1 , n
ue lucrative freight rates rould continue indefinitely. By
ations for domestic °Per*lt'0 ,ue build' .s the ships were received tro . or0us :rs, always accompanied ny
teste
Supremn a Vision handed down by the was uDhP, .°u" in June 1982, the legality and acn, • ■ °’ Pay'n8 hack the subsidy utestip , lr!n§ Ihe right to serve the do- 1C trades ' -
payment Wlth a 20
the Court nto ‘he matter.
built bvsd'p the Stuyvesant, also at the f0eatra'n Shipbuilding Company the fiurPlcr Brooklyn Navy Yard, was sUbjeCt of v ^e' ^'s vessel became the bly simi| ‘ligation of a nature remarka- W'as ear lhat in which the Stuyvesant Court 0fr°l e£l- In September 1982, the ^minisi Ppea*s criticized the Maritime Ure to arf311011 Very sharP!y f°r 'ts “fail- acc°unt m resP°nsibly,” or to take into S ft'. te impact that the entry of the Womj h f6 'nto l*16 Alaskan oil trade
C°mPlicatcvi °n °,lher shiPPing- A highly stHTn,i„.i- an(l “leveraged” transaction
nee and chartered them to
protests f l
who a r°m unsut>sidized owners ships (.SSei,tC<^ ’^at they had built their subsidin h 6 ^3S'S ’^e nurr,her of un-
Cor>ipet T eSSe^S whh which they would into th6 '1C unar|ticipated introduction Was a t protected trade, they claimed, astro,,, eve'0Pnient with potentially dis-
Whe reSUltS'
aPprovp!t p16 Maritime Administration StuyVetae recluest of the owners of the Constn,rto rePaY the full amount of the 'nteresn 10n. subsidy ($27 million, plus > a civil suit was filed by the pro-
but the method used for ■giving a promissory note year life—was questioned, and °f Appeals was directed to look
round- leveraged transactior
Cver. vv,ln8 Ihe refund of subsidy, how tankCras allowed to stand, and the tiestic r.aS Permitted to operate on do-
OtherTtteS; ■
transportj' Carr'ers have been engaged in ttent’s pna 8min under the govern- ves.seis and,| for Peace programs. These lng-diffCrdr>' hulk carriers draw operat- charge j, entlal subsidy payments if they ’telly, thp <lPen.market charter rates. Ini- teraPted t l^ar'time Subsidy Board at- °i simii 0 match each ship with a vessel 'ty On tbecaPability under foreign regis- !’'fferCnc„Sanie route, and to compute the iJni>atisfaC|S ln Cost' This proved to be c'ried to . or-v> and in May the board de- t|'red Un(,Se as the criterion ships regis- S were m Siberian flag, because ae most 6 m°st mrmerous and offered ?ayment Slgn*ficant competition. Each flcation frUSt de accompanied by a certi- °re'gn-fla0rn tde hoard that substantial C°untered ^T^°mPetition had been en- "e'V system f'rst Payment under this cove."38 aPProved for 12 owners ^4 to i978°perations during the years
fta’esLinp 1?"^ and 1977, the United Uh*sidy acS Company built 14 ships with
y assistanc -
the Navy’s Military Sealift Command (MSC). Some of the cargo carried while under these charters originated in and was delivered to U. S. ports, and therefore the Maritime Administration pressed a claim for repayment of a proportion of the construction subsidy. The amount involved was $2.5 million. The Court of Appeals ruled in May 1982 that the government acted properly in seeking the refund, and observed that the shipowner should have demanded that the charter party include a clause prohibiting MSC from using these ships in interstate transportation or, if they were so used, to idemnify the carrier in the event repayment of subsidy were demanded by the government.
The fate of the operating-differential subsidy program is the subject of considerable speculation. United States Lines requested a contract to cover its service between South Atlantic ports and Northern Europe, and also to expand its subsidized service to the Middle East. This was denied, because there were no funds available or under consideration for appropriation. The Seaway Lines, of Elk Grove, Illinois, proposed to establish a year-round service from Great Lakes ports to Canadian ports on the St. Lawrence Seaway, but was rebuffed for the same reason. American Heavy Lift Company, a joint enterprise of the Gulf Oil Company and Hansa Lines of Germany, built two ships with subsidy assistance in 1978 and 1979, but was denied operating subsidy in 1982.
Cargo preference, as will be discussed below, has been important to American shipping for decades. In 1980, according to the Maritime Administrator, Admiral Harold E. Shear, U. S. Navy (Retired), the seven subsidized liner companies “derived an average of 16% of total revenue from government-impelled cargoes. For some carriers [especially the unsubsidized operators], these cargoes represent the difference between operating and going out of business.”
Cargo Preference
The reservation to American-flag carriers of a fixed percentage of the nation’s waterborne commerce brought forth arguments pro and con during the year. These discussions mounted in intensity as the possibility came closer to reality that the Code of Conduct for Liner Conferences, drawn in 1974 by the United Nations Council on Trade and Development (UNCTAD), would be put into effect. As of 16 June 1982, 53 countries controlling 20.6% of the world’s tonnage had officially approved the document. Of major importance was the provision in the code that 40% of a nation’s liner-type ’cargo would be reserved for each of the direct trading partners, and the remaining 20% would be available to “third-flag” carriers—that is, ships registered in nations other than the trading partners.
Within the American industry, opinion on the code was divided. Sea-Land Service, unsubsidized operator of the largest fleet under U. S. registry, opposed it, while the seven subsidized carriers favored ratification. The voices of shipowners who depended on cargo reserved for vessels of U. S. registry and transported at rates predicated not on world conditions but on the higher cost of operating American ships, were raised in support of the basic premise of cargo preference. Some carriers urged that, as an alternative to the code, bilateral agreements be negotiated between trading- partner nations (for example, between the United States and Brazil) in which a stipulated percentage of trade would be set aside for the ships of the partners. As 1982 closed, final decisions both on the UNCTAD code and cargo preference had not been reached.
Cargo preference (sometimes called “flag discrimination”) is not an imagined problem. In August 1981, the government of Paraguay announced that on 1 December 1981 all cargo destined to that country would be restricted to ships of Paraguayan registry. The effective date was postponed first to 19 December 1981 and then to 19 March 1982. As a result of U. S. diplomatic correspondence, which pointed out that an agreement in existence since 1859 assured access by American ships to Paraguayan cargo, the decree was withdrawn by Paraguay because “full reciprocity” of trade existed between the nations.
In November 1982, Delta Steamship Lines followed the October example of Coordinated Caribbean Transport to demand that the Federal Maritime Commission suspend the tariffs of Venezuelan- flag carriers in trade with the United States. The basis of this demand was that Venezuela was enforcing “restrictive laws, regulations, decrees, and penalties” against ships of other national registries, in violation of Section 19 (b) of the Shipping Act of 1920, and had caused substantial losses of cargo to the American carriers. The commission notified Venezuela on 9 December 1982 that it was examining the various courses of action open to the U. S. Government should Venezuela carry out its intention to enforce its cargo preference laws.
The issue was complicated by the re-
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5 of ^
lauonai --- Act
:d States is the ShlPP^|cantly irl
. Although amended signi1slatioo this venerable piece o 0us
quest of privately owned steamship companies in Venezuela for their government to act in their behalf to prevent application of the threatened restrictions by the United States. A newspaper account dated 14 December 1982 commented that Venezuelan-flag carriers had been hurt by diminishing tonnages of cargo and had cut rates drastically in the effort to attract business. These carriers, as a consequence, had lost revenue, and therefore urged their government to enforce the existing laws concerning use of national- flag ships.
A showdown was averted by an agreement at the government level that the complaining U. S. carriers could have access to cargo otherwise reserved for Venezuelan ships. Technical problems developed early in 1983, however, and they will require further consultations between the governments in order to bring the dispute to a final resolution.
On 19 January 1982, the president of the Republic of the Philippines signed an executive order, effective 22 July 1982, reserving at least 80% of Philippine import and export cargo to vessels of Philippine registry and those of the bilateral trading partner. The remaining 20% was left for third-flag carriers. On 16 November 1982, four U. S.- and two Philip- pine-flag carriers filed an equal access agreement with the Federal Maritime Commission in Washington, and urged its approval to prevent disruption of the commerce between the two nations. Third-flag carriers, who would be limited to 20% of the tonnage moving in this trade, protested vigorously against approval. The preponderance of shipper comments urged disapproval of the agreement, because it threatened the continued presence in the trade of competitive third-flag carriers with good service and reasonable rates.
It is significant that the third-flag carriers are citizens of nations which have ratified, or signified their favorable intentions toward, the UNCTAD code. The disinterested spectator would be forced to the conclusion that the code was acceptable to European operators so long as it had no effect on the individual carrier concerned, but any reduction in trade volume should be ruled as improper flag discrimination. This was the argument advanced by Sea-Land Service in its statement advocating that the code be rejected. At year’s end, the controversy had not been settled.
Directly pertinent to the financial health of a small segment of the U. S.
merchant marine was the decision Department of Energy that bne ajc cargoes of oil purchased for the jn
Petroleum Reserve must be transpo ships of U. S. registry. The Prima^ ed get of the new order was the 01 Pr from foreign sources; by en orci s preference requirement, U. • were
would double the tonnage they transporting. The assurance o tional cargo was welcome news ^
owners, because the pipeline ac Isthmus of Panama was opened m ^ of 1982. This affected negative]ly (Q
quirement for canal-sized tan ^
move oil in the Alaska-East <■ re
United States tanker ownerss 0f stricted economically to two ad-
employment for their ships- re.
vantage of Public Law 480, serves one-half of the cargoes o tural surplus to American bottom eS
are available), these ships f°.Untuejr set- when there was no demand tor waS vices as oil carriers. The altern ^ 0f to transport petroleum betwee the United States (a trade restricted s ^
,807 to u. Si-buiit UT e-^;#
U. S.-operated vessels). 1 Cc ()oO tons ers, ranging in size up to ’ , Alas- deadweight, were asslS" ,, R"aUse the kan oil to the “lower 48. d . a big ships could not transit . vVas fair-sized fleet of smaller v ^ose
engaged in the transshipmen ^ re
cargoes destined to Atlantic a . eijne fineries. In late October, t c^|tjl0Ugh across Panama was °Pene.ar„DaCjty, i‘
operated initially at reduce ntj,s to
was expected within a cw ^ pe- handle approximately the qua troleum carried by cana'S‘fLced in‘°
Just how many ships would Pc n0t
i„„..„ of the pipeline n
,e of the basic laws regiaIa^nJf
national waterborne comm ^ 0f
, mis vcuc y enOi
nost obsolete, given th ^ en-
res in world shipping regu*a
decades. A billto ’ revise r
f international liner s ipP poreign in the United States lerce” was introduced y /\uguSt
Gorton ot wasnmg^- . „
88
BOOZ AIIl-N & 1IAM1ITON INC.
A House bill, reprcsc „ mI11it- :t of years of work by ,t'pjspieries’ , Merchant Marine and
Proceedings
Biagtyj , eJ,ed. Representative Mario the fail ^'S co**eague Walter B. Jones rePortpH°'fln® day’ The House biH was "An 17avorably and, as H.R. 4374, ocean c l° ™Prove tbe international the 1 j .Hn,lmerce transportation system of
35oS s,a,“-"---------------------- ••-----------
■ iicts-ThpSrnaP hkelihood of new coi ? 'V Underrecorc* °f merchant ships acti rSin-lS?8^0” on 1 Novembi ^crican . f- f '1 shows the plight of tl , Nine sh' lpbuilding industry.
A'J'lder of !l7^ds Itncluding Levingsto I, abama iu; • ^ carr’er listed above)
r'T A nu5?re l)b exploration and dri Educed ihbCr °f firms in the Gulf stal w (j, e seagoing craft required e man-made islands. A me
"“lue islands. A m< ,C(j ardized workboat has be , Ver recent years, and exa yPe are to be found throu:
Review 1983
Table 1. U.S. Merchant Ship Construction as of 1 November 1982
2 American President ships
3 Exxon tankers
2 Falcon tankers
1 tug-barge (Amoco)
4 tug-barges (First-Fifth Tug-Barge)
3 tank barges (Coastwise Shipping)
1 coal-burning collier (New England Electric)
1 roll-on/roll-off containership (Waterman) 1 bulker (Asco Falcon I)
1 products tanker (American Tankships)
2 products tankers (American Trading Transportation Company)
1 product tanker (Union Carbide)
1 barge (MarAd)
1 roll-on/roll-off containership
2 waste incinerator ships
was passed by a vote corner- on >5 September 1982. The
Was not'0" bl11 in the Senate (s- 1593) CommeaCt6<^ uPon b>' the Committee on Senatorbecause of the opposition of The )e„- 0Ward Metzenbaum of Ohio, the 97th p1'00 d‘ed 'n committee when timber 1982 ^rCSS adj°urned 'n late Ge_
nearer'c^0r ^e8’slative task was brought tllodemi°,n^'et'on w'th the rewriting and States c'h10" °b 3'de 46 of the United 'Vas accn° eiTh- multiyear undertaking ate (^Qro ^p ished by the staff of the Sen- Wast0remittee on Commerce. The goal 'late inHaiTan®e statutory material, elim- acr°ss se ebCn<^cnt statements that cut clarify ,uVe|ra' categories of interest, and kttactrnem angua§e °1 the existing law. 'ng 19^3 Pr°bah,y W'H be sought dur-
ed States'1’ Upbuilding in the Unit feast or fhaS been characterized b;
a timPar'’ne-’’ Unfortunately, 1981 ^rcial . i,° ser*°us famine for the com Were unde 1Pbuilders' Vcry few vessel Was the ef Construction; of vast concen ,■ termin order book resulting fron l;'l subsidt*.IOn °P construction-differen lessels infrt Pro8rams- Except for thosi ^Cre n ed l°r the domestic trade
ira, ~~'
Nine __
of
jo » usiicu auu
,!Usy uon'str, lss'ss'PPi, and Texas , Se 'n off, u Ctlng platforms and rigs
If
1 Cs,
'he UJ ue rouna tnrot
'he m d uStaunchly build to w Vfa' theSe n CSt har»dling by man >> rangeCfangoin8 chcsel-pow,
a gth’have aKr°m 175 to 200 fee s^11 depth ,beam of 35 to 40 feet,
Tt9” 'Uvestm3 t0 15 feet- They re lr^e lan>,. ,1Cnt of $5 million e:
1)9 ^orK rSh,pyards. typified by 1 ' ’ mgalls Shipbuilding Co
/ Naval -
Avondale Shipyards (New Orleans)
Bath Iron Works (Bath, Maine)
Bay Shipbuilding (Sturgeon Bay, Wis.) Bethlehem Sparrows Point (Baltimore, Md.)
General Dynamics. (Quincy, Mass.)
Levingston (Orange, Texas)
National Steel (San Diego, Calif.)
Newport News Shipbuilding & Dry Dock Corp.
Norfolk Shipbuilding Pennsylvania Shipbuilding Tacoma Boat (Tacoma, Washington)
ration, and General Dynamics faced a bleak future at the beginning of 1983. Only the Navy’s program offered any hope of contracts, but competition for the available business from that source was severe. One company, however, seemed to have found a formula which led to profit. Todd Shipyards Corporation had a contract to build 30 frigates for the Navy, and it also had a number of repair yards which kept busy. With courageous optimism, Todd purchased the San Francisco facilities of Bethlehem Steel Company’s shipbuilding division, paying $14 million for the plant and $2 million a year for land rent. Sun Oil Company, in contrast, sold its shipyard in Chester, Pennsylvania, to the Levingston interests.
U. S. -Built Vessels
American President Lines put the President Lincoln into transpacific service in November 1982. She was built at the Avondale shipyard in New Orleans, where her sisters, the President Washington and President Monroe, were launched in April and August, respectively. Designed to cruise at 25 knots and to carry 1,250 containers, each 40 feet long, these ships are powered by Sulzer/ Allis Chalmers slow-speed diesels of 43,200 brake horsepower. They are 860 feet long overall, with a beam of 105 feet, nine inches, and a 35-foot draft. The crew numbers 22. As partial payment for these three ships, reported to have cost $120 million each, the company turned in to the Maritime Administration the 17- year-old President Polk and the 20-year- old President Eisenhower for a total credit of $13.6 million. The President Lincoln and President Washington were sold by American President Lines to the Bank of America for $70.9 million and $72 million, respectively, and then leased back by the operator for 25 years. Earlier in 1982, the company sent the President Grant, President Hoover, and President Tyler, which had been purchased for $40.5 million from Pacific Far East Lines when that company was liquidated in 1979, to Japan to have their container capacity increased.
American President Lines also experimented during 1982 with a container 45 feet long, to supplement the standard 20- and 40-foot boxes. Reports indicate that the larger containers meet many needs of the company’s clients. Further to improve its container traffic, the company demonstrated in June that with proper coordination it could deliver cargo from Yokohama, Japan, to New York City in 11 days, compared with standard service time of 15 days. The containers from Yokohama were unloaded in Seattle and placed on an intermodal train in less than eight hours, and the train completed the transcontinental run in three days, nine hours, 24 minutes. No final decision on instituting the high-speed service on a repetitive schedule had been made at year’s end. In addition to the three new ships, American President Lines’ fleet consisted of 16 containerships, five multipurpose vessels, and 40,000 containers. When the investment in improved shore facilities is added to the cost of the new
93
The President Washington is one of three large new containerships put into service recently by American President Lines. Below are her Sulzer diesel engines, built under license by Allis-Chalmers.
ship program, the total reaches almost $600 million.
Among the new ships either contracted for or delivered during 1982, the collier being built by General Dynamics at Quincy, Massachusetts, probably garnered maximum attention because she was the first coal-burner to be constructed in an American shipbuilding yard in more than 20 years. The 36,000-ton (deadweight) vessel will be powered by a steam turbine supplied with steam from a boiler using mechanically stoked coal for fuel. Her $67.8 million cost represents a joint venture by New England Energy, Inc., and Keystone Shipping Company of Philadelphia. She will be time-chartered to New England Power and operated by Keystone. Delivery is scheduled for April 1983.
Year by year, more uses are discovered for seagoing barges, especially in the coastwise and nearby offshore trades. Beker Shipping Company of Greenwich, Connecticut, for instance, acquired for coastwise service a barge of 42,000 tons capacity to carry phosphate rock and other bulk commodities. Self-unloading equipment installed in the barge discharges cargo at the rate of 4,000 tons per hour. The overall length of the barge is 610 feet; the cargo space takes up 495 feet. Fourteen hatches are opened and closed with a self-propelled traveling gantry crane which moves from bow to stem. A deep notch in the stem permits locking to the barge of the 7,200-brake- horsepower tug that is to provide the motive power.
Bath Iron Works launched what was described as the “largest American built barge” on 18 February 1982. Built for California and Hawaiian Sugar Company, the barge is 643 feet long, 84 feet wide, and has a deadweight capacity of 37,000 tons. She will be propelled by a twin-hulled catamaran tug that will lock into a notch at the stem. Tug and barge represent an investment of $46 million and will be used to haul raw sugar from Hawaii to the refinery in California.
During 1982, Matson completed the $42 million conversion of its roll-on/roll- off steamer Lurline into a combination container and vehicular cargo carrier. A 126.5-foot midbody was inserted, bringing the length of the ship to 826.5 feet and raising her capacity to almost 1,200 containers, each 24 feet long. In addition, 225 automobiles and oversized rolling stock can be transported by the “new” vessel, which returned to the Califomia- Hawaii service on 2 July 1982.
Matson also announced in June that it was installing shipboard fuel sensors which would produce annual savings in fuel costs estimated at $900,000. Fuel optimization systems costing about $75,000 each were added to the boilers of six steamers and were expected to reduce fuel consumption by 5,000 barrels per ship per year. The system measures the efficiency of combustion and automatically adjusts the flow of air into the oil burners to maintain peak efficiency. The sensor also measures the performance of the steam plant, setting off an alarm when unbumed hydrocarbons accumulate to a degree that threatens an explosion. The mechanism is part of a fleet-wide conservation program adopted by Matson in 1979. Older vessels have been replaced by new fuel-efficient ships, and all
bottoms have been coated with s ishing antifouling paints. Sate i ^ ^jps gation systems enhance contro 0 at sea. Altogether, including t”e.n the ing of fuel conservation activi1 jurjng company expected that savings ,oI) 1982 would amount to about $ and- Mooremack Lines’ contalI"aS rebreak-bulk carrier Mormacvego ^ delivered to her owners in ^ePteI!j-arnpa. American Shipbuilding Co., §)ie
Florida, after a major enlarger^ _ be was the first of four company s V lengthened from 550 to 665 j tons increased deadweight from 1 > roSe to 13,100 tons; container cap5here also from 199 20-foot units to 628. is space for 200,000 cubic tee ollt bulk cargo. The Tampa yard c w'ith
the same work on the Mormaca por 9 redelivery to the owners sc^, Uvard, 'n January 1983. The Lorain Sh'W Canada, has a contract to e e alterations to the MormaclynX . 0t- ery, 15 October 1983) an j983)- macrigel (redelivery, 15 ApnmaCaHa‘r The Mormacdraco and the are to be enlarged, but no sc ^ total been announced at year s en ' j,e $4^ cost of the program was sat million. ,, oVert°n'
Notwithstanding the wor \vere
nage in tankers, nine new ° under construction for U. 5.- tion as of 1 August 1982. ^f.eSap^e the Eileen Ingram and the $1°"''
Trader, both powered by d W
speed diesel engines, were e ^ in ing the late summer and eany February, the motor tanker SbiP'
son was completed by Avon a yards. She is designed to carr2’of liqUiJ structural modification, car8oe „0rcm^ chemicals or petroleum pro “ aI1d Pr-V oil. Newport News Shipbui i . c0ni- Dock Company delivered its ^e{0\c& mercial ship in two years. qqo ton® tanker Chemical Pioneer, o ’ jte. * deadweight, is actually a co
C°ck
O&let
(Continued on p°8e
The U. S. Merchant Marine in 1982 (Continued from page 96)
mated that foreign costs are now
ac-
tltf
we*
quired by Phoenix, and towed
oil when
2,000 cubic meters of cargo
• ers- The
engaged in transporting contain waS Korean yard’s price for eac\Jj cn they reported to be $35.5 million- janU'
are delivered in October 198- a ^et ol ary 1984, the ships will join 1 c 0 ABC Containerline, which 1 [ja. United States, Europe, and Aus ^al On 27 December 1982, a tra ei
al
union and the relations between > ^as cipals. An out-of-court sett e*VujCh d* reached in February 1983 by c()St o» union agreed to assume the u re\e^c the shipbuilding program and
new forebody was built and attached to the rehabilitated stem of the container- ship Sea Witch, which was seriously damaged in a collision and fire in New York Harbor in 1975. Exxon Corporation commissioned the Exxon Maine, a seagoing tug of 3,900 brake horsepower. She is intended to tow the Exxon Bayway, a barge of 13,830 tons and 148,800-barrel capacity, on northerly voyages from Boston to Maine and on southbound trips from Boston to New York.
Foreign-Built U. S. Ships
As part of the Reagan Administration’s effort to reduce government expenditures and to give greater freedom to commercial enterprise, support of the U. S. mer-
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chant marine through construction- and operating-differential subsidy has been placed under critical scrutiny. Authority was granted for U. S. shipowners to build ships in foreign yards, place them under U. S. registry, and obtain operating-differential subsidy. The program was approved in mid-1981 only for the remainder of that year and the whole of 1982. Extension of the privilege until 30 September 1983 was authorized by the 97th Congress.
Taking advantage of the opportunity to acquire vessels without having to wait for congressional appropriations for shipbuilding, United States Lines Company contracted with Daewoo Shipbuilders of Korea to construct 14 containerships at a reported overall price of $770 million. These ships, which are to be 949 feet, ten inches long, and to have capacity for 4,148 20-foot containers (or their equivalent), will be the largest containerships in the world when they come into service. The terms of payment, as reported in the public press, required that United States Lines pay 20% of the purchase price and provide a letter of guarantee from a consortium of six banks covering the next 50% of the cost. The remainder was to be financed from the shipyard’s own funds.
Other operators which requested permission to build or modify vessels abroad were Delta Steamship Lines, which applied on 22 January 1982 for authority to modernize six ships in British yards (nullified by a later decision to offer Delta Lines for sale); First American Bulk Carriers, which sought to build two very large dry bulk carriers in Korea; the Phoenix Group, asking permission to convert two liquefied gas carriers into oil/bulk carriers; and Ogden Marine, which in August proposed to build two dry bulk carriers in foreign yards.
The “build abroad” plan was opposed by the shipbuilding and steel-making workers’ unions. That it has curtailed construction activity in the United States is undeniable; it also must be acknowledged that owners are able to acquire new tonnage at more favorable prices than would have been possible even with construction subsidy, which is limited by law to 50% of U. S. costs. It has been esti
about
40% of the U. S7 level. Another.^-,, ment to contract with foreign bui ^ the more generous credit arrange that are offered. , nD€ra-
Sea-Land, as an unsubsidize F j„ tor, has built a total of 20 new s ^ European and Far Eastern Y1* s.^ 0 these vessels have been register^ ^ j United States, and are manned Y citizen mariners. . pgoe-
Among the rebuilding activities. ^ nix Group's conversion of the gas carriers is outstanding. r(js.
were constructed by Avondale S *P New Orleans, but their gas tan ^ defective and the ships were reje the purchasers. After being idle 0 months, two of the three hulls w
Hyundai yard in Korea, where * jdiy to be rebuilt into combination oi jg(it. bulk carriers of 135,000 tons dea The cost of the project is reporte been $20 million per ship- . Qot- The First American Bulk Carr' gn- poration, owned 75% by the Ma , °b
gineers Beneficial Association a cg{po- by ABC Containerline, a Belgiaa ^sl,ng ration, ordered two ships from ^orea- Shipbuilding Company, Ltd., 0 g 1,81® The vessels will have a capacity 0 containers 20 feet long (inclu 1 ^ to refrigerated units). They will e ^ carry 40,000 tons of bulk c not reported that a lawsuit had keeanefici against the Marine Engineers ^ capi" Association by one of the Be g r[jjie- talists involved in ABC Con aanci-“ The suit concerned both the ^ tfic share expected to be contribuU-^^ priO'
This is what Sea-Land's former SL-7 containerships will look like after being converted for use as rapid deployment cargo ships to be operated by the Navy’s Military Sealift Command.
I •' ,vuv mcy II1UNI uc
""ashdow U nuc2ear~Hi(>logical-chemical shock r»n syslcrn and use certain * res,s'ant materials.
vo s- —auuiuaiu, me con- Havyforth ky 9lc Department of the ‘aties 0f e conversi°n to military auxil- chased fr °UJ buSe containerships pur- 'V°rthy gi'1 $ea"Land Service were note- eive,i ,'Pyards on the three seacoasts
ai
■and p , Sol (T-AK-287) (ex-Sea- ‘HipbuilH; U‘n^’ to National Steel and Plet'on bv^n 1’’ San D*ego, lor com-
USNsVr VUne ,984-
Land Tra/h Umm (T-AK-288) (ex- delivered , ’ a'so t0 National Steel, to be ^84 0 'He Navy on 31 October
t'v° shin^ C°St of conversion of these Four!! Was $85.5 million.
ORdc‘r/\,ilnCr^ne 'rHm *ts obligations. c°ntract Mar'ne’ *nc > was authorized to Heavy i ,W'tb Hhikawajima Harima carrjers 1° ustr'es to build two dry bulk Hon ThJapan at a total cost of $54 mil-
deadweihShlpS Wil1 be of 42'290 tons speed di^ s'n8*e screw, with slow- holds f6Se s' "PHey will have five cargo Earned t°Ur crancs, and will be
fitted u ;?|Cany Heavy ores. They must be
of conversion to military auxil- d fron”U<I Huge containerships pur- ty. <
rCceived\k ;--------- “ l,,,cc 51
USNc n awards> as follows:
Land M ,apella (T-AK-293) (ex-Sea- Hu>ldins/p<a,,'b t0 Pennsylvania Ship- nia. Conv °*nc> Chester, Pennsylva- 30 JUne iq^s’on was to be completed by lion. 84; the price was $50.3 mil- CTSNs a
Lancl Gall ntares (T-AK-294) (ex-Sea- fhc., N„ to Avondale Shipyards,
'sh the co r'Cans’ which agreed to fin- Phce of t"Voersi0n on 30 June 1984, at a
USNs 8'3 million-
l
Sh
■Sea- to be
°Ur m ■uuuun.
L46 feet i°re of'Hese 33-knot ships, each hav*11?. an<3 ^5 feet, 6 inches in are . e Heen acquired by the Navy ^e . . ln five-day ready reserve by ^Ptonrint;"116, Administration pending '°r their 0°° .tbe Congress of funds r'e$. Avrman|VerS'0n t0 'military auxilia- bV° more 3 6 baS 'He option to convert Petinsylvn ’• Wb‘|e National Steel and °Ption to c"13 $Hipbuilding each has an 0nvert one ship when money is
available. The ships are moored in Philadelphia and San Francisco. Tentative dates for completion of conversion of these ships are as follows:
USNS Altair (T-AK-291) (ex-Sea- Land Finance), 28 February 1986 USNS Denebola (T-AK-289) (exSea-Land Resource), 28 February 1986
USNS Pollux (T-AK-290) (ex-Sea- Land Market), 30 June 1986 USNS Regulus (T-AK-292) (exSea-Land Commerce), 28 February 1986
These ships have been assigned to MSC, which will place them under operation by American shipowning companies following competitive bids for this managerial activity. When in full service, the ships will have crews of 75 men each (including the Navy complement); while on standby, they will be kept in readiness by teams of 15 specialists in charge of four ships.
In addition to the eight vessels purchased from Sea-Land Service for integration into its prepositioning force, the Navy chartered from Waterman Steamship Corporation one 23,590-ton (deadweight) roll-on/roll-off ship, with option to charter two more of the same type, for a period of five years. The ship will be converted to meet Navy specifications at National Steel’s San Diego yard. Delivery to the Navy is set for 30 September 1984. Charter hire for the first ship will be $124.8 million for the five-year term.
General Dynamics has contracted with the Navy to build two ships, also to be chartered for five years, at a total cost to the government of $272.6 million. Title to the ships will remain with General Dynamics. They will be registered in the United States and manned by U. S. crews. These two ships will be available to the Navy by 30 September 1984.
Maersk Lines, of Denmark, also signed a contract to transfer three ships from Danish to U. S. registry, to convert them to meet Navy specifications and U. S. standards, and to operate them for five years at a total cost of $465.4 million. The conversions are being accomplished by Bethlehem Steel. The first of two ships arrived at the Sparrows Point,
Maryland, yard on 3 January; the second is due 31 October 1983. One ship entered the Bethlehem yard at Beaumont, Texas, on 17 January 1983.
Each of these three contracts gave MSC the option to acquire additional ships. On 17 January 1983, it was announced that one more ship would be chartered from Waterman; three new ships would be built by General Dynamics; and the Maersk contract would be augmented by two ships. The overall cost of these increments was estimated to be $716.6 million.
In January 1982, the Military Sealift Command invited proposals from the commercial shipping industry to build five tankers of 25,000 to 35,000 tons deadweight for charter to the command for an initial period of five years. The ships are not to be more than 615 feet long, nor to be broader than 90 feet; loaded draft is to be restricted to a maximum of 34 feet. Either steam or diesel propulsion may be used to drive the ships at a cruising speed of 16 knots with a radius of 12,000 miles. On 4 October, MSC announced that—subject to clearance by Congress—it proposed to award a contract to Ocean Carriers, Inc., of Houston, to build and charter to the command two tankers of 29,500 deadweight tons. The ships will be built by American Shipbuilding Co., of Tampa. The contract contains the option, valid until 1 April 1983, to build three more identical ships. The value of the firm contract is $104.1 million for the five-year period. Charters are fixed for five years, with the option to renew for three additional, but individual, terms of five years each. The first ship must be delivered by November 1984; the second is to be in service by January 1985. If the option to build the other three tankers is exercised, those vessels are to be completed during 1985. These tankers will be operated for MSC by Ocean Carriers.
The award of this contract provoked a challenge from Bay Shipbuilding Company, of Sturgeon Bay, Wisconsin, which protested that the bid from American Shipbuilding contained technical flaws, that the Tampa facilities were capable only of repair work, and that Amer-
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tainerships, which now form the™of
of U. S.-flag liners, at locations devo.^
the necessary specialized fact i1veS. iliary cranes to be fitted on exis ^
iy»l, me Maritime twOtalllC
proved construction subsidy or,,at[i Iro” ers ordered by Falcon from --o0tracts Works at a cost of $71 milli°n- ced in for two similar ships were P j]able Korea, because funds were n0 Qotc to subsidize domestic construe eSted troversy arose when Falcon slibsi' permission to substitute the . s for the dized and two foreign-built s 'P four older ships under charter to
and to transfer the displace . aCt o' coastwise service. Fearing the < ^ jini' four more vessels competing 0 jn the ited number of oil cargoes m°.V* t protected trade, the independen ^ operators filed suit in danaard Tbe against the Maritime Subsidy “rnis£,P operators charged that it was
ican’s proposal to fabricate components in Nashville and Lorain (Ohio) and assemble them in Tampa was “unorthodox and uneconomical.” Final action on the award had not been taken by the Congress by year’s end.
On 3 June 1982, MSC announced that it had requested proposals from commercial ship operators to assume operational responsibility for three small petroleum products tankers. The USNS Nodaway (T-AOG-78), USNS Alatna (T-AOG-81) and USNS Chattahoochee (T-AOG-82) have been manned by civil service personnel for many years, whereas the 18 other tankers in the fleet owned by MSC are operated under contract by commercial firms. No decision as to the contractor had been announced at the end of 1982.
The close relationship between MSC, as the logistical support force of the
Navy, and the U. S. maritime 1 as the source of additional shippmt ^ bility in time of national emergen1- 'ip evidenced once again last Apri ■ ment is being developed to an 0 . rity
diary cranes to De nucu h ds are
sels are being designed, and me ^ being devised to assure ship r cannot tion of military impedimenta be placed in containers. jqaVy
It is almost axiomatic that tm- ,
relies on the merchant marine t0 <• warof its logistical capabilities in time national emergency. In the pas ’ j to tioning by the government has [n
obtain the required augmena, ,[t)jnjs- August, however, the Maritime ^titration, as the agency design3 e sdjp-
dle mobilization and organization ^ ping, proposed a comprehens con- system by which ship opera ° ”orjtjes tainer suppliers, and port a .(y of would be directed to ‘ give P defense service and equipment use to t ^e.” agency for a specified perio said, Adoption of the new system, 1£,uiring would reduce the likelihood o ^ die more ships than were nee e nCed emergency. No schedule was a a|. for definitive action on the Pr°P c0ni- Because of the scarcity o tj0nal mercial business (that is, in dvjtieS trade not related to governmen ^(SC or relief programs), every actio aSpir- is subject to the closest scrutiny ^ an ing contractors who failed 0during award. This was demonstra e 1982 by the wrangling over two ^ Approximately ten years ag toas troleum carriers of about 3 > ^r0rld deadweight were built by Fa c .ef to Shipping Corporation for cceived MSC. None of these vessels idy. In construction-differential su s ap-
1981, the Maritime Subsidy » „v-
the European ports of Bremerhave^.^
gati°r dies i( ierica( the
but will not indulge in
rate cutting. mmoarf
The United States Lines Comp f£ four ships employed in its B’ ■ m. ‘1 , These vessels
to-Europe service. These
under an operating-differential [n
contract which would expire m ^ the June 1982, the company aPp ’“Lp this Maritime Subsidy Board to co ^ yeaiv contract to one lasting only H the
but covering 19 ships, and 'nV°. llUnill1 payment by the board of a mat1 ^ $165 million to the operator- eIn- ; the & _„red
comP1
for
the movement of grain from ^ the Middle East under the g° -c Food for Peace program ( 01
480) and the requirements 1 U. S. vessels to transport these a„ in ties. Because the owners retai^ sSjbhj terest in vessel earnings, it ^va_ fjnahfi according to Reading’s c„t,out officer, that they would realm 0f th million during the ten-year
19*3
. Review
plication” of subsidy for assistance to be granted to vessels which would be used to haul military cargoes rather than working in the foreign trades. The suit was dismissed in June 1982, when the U. S. District Court in Washington, D.C., ruled that the subsidy-built ships would be beneficial to the U. S.-flag fleet, and that there was no prohibition in the Merchant Marine Act of 1936 against subsidized ships carrying military cargo. The court also noted that the four ships built without subsidy were qualified to enter the domestic trade at the expiration of the charter to the Military Sealift Command, a fact which had to be recognized by the plaintiffs.
Corporate Developments
Because it posed new interpretations of both law and contract provisions, a proposal submitted to the Maritime Administration’s Maritime Subsidy Board by Crowley Marine International, of San Francisco, to purchase Delta Steamship Lines, of New Orleans, from its corporate parent. Holiday Inns, was both controversial and challenging. On 29 April 1982, Holiday Inns, which had owned Delta since 1969, announced plans to sell the steamship subsidiary. On 1 September, Crowley submitted its offer to the Maritime Subsidy Board for approval—a necessary step because Delta held operating-differential subsidy contracts. A purchase price of $96 million was to be paid to Holiday Inns, and the subsidy contract, which was binding until 1997, was to be terminated in 1987 by the government paying Crowley a settlement of $525 million. Despite considerable opposition, the board on 21 December 1982 approved Crowley’s purchase offer but withheld until 1983 its decision on the “buy out” of the subsidy. Incidental to obtaining approval of the deal, Crowley agreed to 11 conditions set by the board. One of these required that Crowley arrange immediate divestment of its Vene- zuelan-flag shipping operation. It also was stipulated that no subsidy funds would be channeled into Crowley’s domestic shipping services.
On 15 November 1982, trade journals carried the news that Lykes Brothers Steamship Co., of New Orleans, was to be acquired from LTV Corporation, of Dallas for the price of $150 million. The purchaser was the Interocean Steamship Corporation, the principal stockholders of which are members of the Lykes family and four senior executives of the Lykes Lines. No changes were contemplated in the subsidized services maintained by Lykes, and the proposed purchase was welcomed by LTV Corporation, so approval by the Maritime Subsidy Board was almost a foregone conclusion. Transfer from LTV to Interocean was fixed tentatively for February 1983. In effect, this returns control of Lykes Steamship to the Lykes interests, which have been involved in shipping for many decades. The company was sold to LTV in 1977, primarily because the purchaser wished to gain control of Youngstown Sheet and Tube Corporation, which had been acquired several years earlier by the Lykes corporation.
Moore-McCormack Resources, Inc., released the information on 9 December 1982 that it had agreed to sell its steamship subsidiary, Moore-McCormack Lines (known in the trade as Mooremack Lines), to McLean Securities, Inc., for $30 million in cash and 300,000 shares of preferred stock in McLean, redeemable over a five-year period. McLean will assume between $50 million and $60 million of Mooremack debt. It is expected that the ship line will become a privately held property of McLean Securities; the Mooremack name will not be preserved. According to the news report, “apparently” plans were to continue the existing services of the line to the east coast of South America and to South and East Africa. Because Mooremack Lines is subsidized, the sale must be approved by the Maritime Administration. Labor unions were not expected to protest, because both McLean (which is the holding company for United States Lines Company) and Mooremack had contracts with the same unions. Transfer of ownership to McLean was effected in late January 1983.
A different kind of proposal, also affecting an established but unsubsidized U. S.-flag ship operator, was made by GATX Corporation to its stockholders. Because it was only marginally interested in ocean shipping, GATX considered it desirable to “spin off” its ship-owning and ship-operating subsidiary, Marine Transport Lines, thereby making it a completely independent entity. Marine Transport has a fleet of 36 tankers and bulk carriers, many under U. S. registry. Officials of both GATX and Marine Transport were quoted as being in agreement that the scheme was economically feasible and operationally desirable. Stockholders approved the proposal, and the company became independent on 17 March 1983.
One new liner-service company was formed on 23 August 1982 and went into full-scale operation six weeks later. This was American Coastal Line, created in August as a joint venture of Cargo and
Ship Chartering Consultants t York City), Merchants Tcrm'"a ^h. agement Corporation (of Forth s Texas), and Salen Project/Liner ■
Inc. (of New York City). Tlus u -se() dized, non-conference carrier sa P.^ a the maritime community by caP major contract to transport military ^ between northeast United aiitl
(Norfolk, Baltimore, and New^ anJ
Felixstowe during the six mont s ^ ning in October 1982. Despite 1 sjn
initiated by American liner conlF ierican
Coastal Line from operating, ^llCc pany sailed its containerships’ ..]fl. Traveler and Amco Voyager, on ^ ^ a[1J augural voyages from New Yor jateS. if October 1982, the advertise^ ^ The ships are of World War year’s converted to carry containers. end, the company had comp ® ^ to <e' voyages with each ship. It p af rences; main outside the steamship con ^ ‘irrespofs
hat* Coast' vvei« subsidy
claimed that this would save ment at least $25 million as eaj. with paying about $5 milli°n Pe xjStini the remaining 18 years of *e e* d, contract. The application wasTransP°r and on 28 June the Secretary 0 refusin- tation supported the approval y to review the case. ^jiich *
An unusual arrangement Y retaifiC shipowner leased out a vesse ^ pub*1 a 20% interest in her earnings ^eaJ cized on 15 November 19$-- a<j opera,- ing Company, a sometime rai r o]
tor, paid the owners of t e c»r
Texas, a 36,000-ton deadweign |n tenet, an initial sum of $1 nlj 1 ^ sh'P turn, Reading gained contro . ate 1,1 for ten years. It planned to pa , 0fts f iL ♦ ^oin from Gm * .^t S
IA'y.
s.
s" ii!*«
Sjre •> " ” .. ■■»
The SS Independence, built in 1951 for transoceanic liner service, has recently been refurbished for seven- day cruises around the Hawaiian Islands.
^ERlCAN
fro;
=ase. At
HAWAII CRUISES
Princi
lm the
(1773-1838), developer of the first scientific navigation system; Robert Fulton (1765-1815), builder of the first successful steam-propelled vessel in the United States; Captain Alexander McDougall (1845-1923), designer of the “whale- back” ships on the Great Lakes; and Clifford D. Mallory (1881-1941), a prominent shipping executive in the first half of the 20th century.
The initial four ships chosen for inclusion were Fulton’s Clermont, built in 1807; Moses Rogers’s Savannah (built in 1818), the first vessel to cross the Atlantic using steam power; the Walk-in-the- Water (built in 1818), the first steamer on the Great Lakes; and the Priscilla (built in 1893), flagship of the Fall River Line in service between New York and Fall River from 1893 to 1937.
It is planned that one person and one ship will be inducted each year from each of the following categories: deep sea, coastwise, western rivers, and Great Lakes. All persons must be deceased, and all ships must no longer exist.
ycar s end, essential approvals aritimc Administration and
shin h'n,VOlvcd ‘n t*le construction of Acadia c.,n0t been obtained.
Cess> New vPmg Co’ of Lake Suc' Pr°ach (0 , ,0rk’ revealed a novel ap-
a !tlonal maritime enterprise. 11 Panned e(mP>er 198^’ ‘l announced that Service hr>t, ° estahl ish a weekly ferry and pCfn Port Newark, New Jer- Pnfida. ,,a. Sonv>lle/Port Everglades, We'Sht) rn]’]m® the 16,144-ton (dead-
f^*ch Acad- rroll-°ff Atlantic Bear, Iron, .. adla has an
cart true erat
trailer^rS,’ bc)at trarlcrs, and automo-
the
‘Acad’ , nuunite near,
r0ni the \/t'd■ . an option to purchase Carg° 0n ,,,an["ne Administration, any
t su On u/K i ^Ui'iiniairdiion, any rUchs, dn,. 66 s Would be carried: cars, fra,ed traii(,Car?> trailers, tank and refrig- -ailcrsrS,’ boat trailers, and automo- j! 0unted nn US. Wed as oversized cargo ':sfl'ng awheels. Rather than estab-
>edt„H?0lninodity tariff, Acadia
?'ed. An amarge a set rate per slot occu- i and 0rnobde would be carried for .^Ported f 4„°-f°ot trailer would be ri°ul<J be ch°r 8*,000. Oversized cargo kl^tsions "*[®ed 'n accordance with its .. ‘°re the rn. n aPPhcation was pending ,'0n Wherierstate Commerce Commis- r,nd the . . ^ Proposal was made public, ti'1'"- • , ntlme Administration was assist the company to fi-
tan
Delta Line vessels are classified as cargo-passenger ships, because they carry very substantial tonnages of both break-bulk and containerized cargo. The Constitution and Independence (built in Quincy, Massachusetts in 1951) carry 800 and 750 passengers respectively and no cargo. Because the ships had been sold by their U. S. owners to C. Y. Tung, of Hong Kong, special legislation was necessary to authorize them to trade between United States ports—a privilege lost when they were transferred to foreign owners and registry. These two ships were converted at no cost to the government for their new assignment. Cruise service depends entirely upon revenue from vacation travelers, and therefore is a venture fraught with risk in a time of business recession. The vessels began operation in 1980 and 1982. At the end of this latter year, they became the beneficiaries of a law which authorized tax deductions up to $2,000 per person for business personnel holding conventions on board passenger ships of U. S. registry. It was anticipated that this statute would provide the patronage needed to keep the Constitution and Independence in the inter-island cruise trade.
Outlook
lce the,
. P- OpeL, ___________
arch 19^3 °nS may begin as early as
ni . ^ me nil*. u vwiiipaiiy iu 11-
£r',°PeratioIaSe 3nd conversion of the
fa /,Ce have ai lps in scheduled liner Ce of the ore m°St disappeared from the
CCVer» comi"!; s,ix u- s;-flagvessels-
h,
lr»w v, o.-iuiiz VC5>SCI5,
ea ? *° Delt-i >lnUe tbe tradition: four be- K<:b' •. Ine> carry 100 passengers
Pa ’ and c.,;i e’ carry 100 passengers ar^'Pa Canai r.°m Seattle 'hrough the ;vback to v..;. ,round South America,
'-H'l
, back trs o ’ droun(l v
?n'day CruTaUle; tW0 ............ - upciaic in
lan Islan"! lervice around the Ha-
more operate in
s‘ands c7 'T around the Ha‘ us- otrictly speaking, the
Museum and Hall of Fame
Long overdue as a means of recognizing the importance in the life of the United States of the merchant marine and the people who serve it afloat and ashore, the American Merchant Marine Museum and the National Maritime Hall of Fame were dedicated and opened to the public on 22 May 1982. Physically located on the McNulty Campus of the U. S. Merchant Marine Academy at Kings Point, New York, the museum contains the nucleus of what is expected to be a major treasure house of merchant marine items. The first four persons inducted into the Hall of Fame were Nathaniel Bowditch
As 1983 dawned, it was apparent that the future of the U. S. merchant marine industry was clouded. In large measure, this condition results from the lack of a genuine and consistent policy toward the merchant marine. Existing statutes reiterate that “it is the policy of the United States to foster the development and encourage the maintenance” of the merchant fleet, but little attention is given to this mandate by either the White House or Congress. Those who are familiar with the industry and its problems are convinced that until a realistic policy is adopted and upheld by appropriate financial and legislative support, the uncertainty which prevailed during 1982 will continue to plague the industry. It is the duty of the historian to point out both what has been done and what has not been accomplished. It is the responsibility of the statesmen to learn from this history and to lead the nation to the adoption of a program assuring that the role of the merchant marine is recognized as an indispensable instrument in international commerce and in maintaining the national security.
nounced in June that it was ing” the permanent work
cargoes has kept ten — -
Lykes fleet in idle status this }'e ^
► In the August issue of Morga ^rVey, anty Trust Company’s month y ^ j the proposition was advance ^ 5. major reason for the decline 0 .
merchant fleet was the very j scale for United States mariner excessive number of seamen as type with foreign-flag ships of iden . g seC-
worn
iens3'
compe'; .
collier to carry coal from Hamp^ ^
water (well within the the
55-foot
vess(
ied
feet
Hampton Roads),
would be 170_____
long. Her capacity would e
esti'
vvas
!
woman in the U. S. mei hold the ranking position m department.
pm
in the 1930s. He 1
Marine Academy at Kings ^°‘nt’S^nsDod»t‘oni. tbe
staff member of the Military Sea Tra v .j was .,
press.
i January by Cornell Maritime
Maritime Miscellany
► Matson Line celebrated its centennial year in the Hawaiian trade.
► Sun Shipbuilding and Drydock Company was sold to Levingston Industries, of Orange, Texas, and the name changed to Pennsylvania Shipbuilding Company. The terms were not disclosed.
► Sun Company, of Radnor, Pennsylvania, sold its controlling interest in Totem Ocean Trailer Express, which operates two trailerships from Tacoma to Anchorage. The 790-foot Great Land and the Westward Venture sail twice weekly, providing three-day transit time on the route. The purchasers were Pacific Northwest investors headed by Robert B. McMillen, president of the steamship company since 1977.
► The 91,800-ton (deadweight) tanker Golden Dolphin, built by National Steel and Shipbuilding Company, San Diego, in 1974 with construction subsidy, caught fire and sank about 900 miles east of Bermuda on 7 March 1982. The Maritime Administration had guaranteed the building loans; at the time of the vessel’s loss the amount outstanding was $10.4 million. Proceeds of the ship’s insurance were used to meet the guarantee.
► A shipment of baled hay was sent from Portland, Oregon, to Hawaii in a “house” barge of 12,500 tons deadweight. This may presage a steady movement of the commodity between these states. The new cargo is the result of research at the University of Hawaii which concluded that milk production would be improved if each cow in Hawaii were fed daily five pounds of hay grown on the U. S. mainland.
► A class action suit was settled by a stipulation that women be employed as longshore workers in the port of Los Angeles. By 1995, from 25% to 35% of the registered members of the longshoremen’s union must be female. As of 31 December 1982, 19 women had been registered as second-class marine clerks.
► A federal district court ruled that 80% of the fault in the collision of the Hellenic Carrier and the LASH Atlantico off the North Carolina Coast in 1981 was attributable to Prudential Lines, charterers of the latter ship. The court ruled that 60% of the blame was attributable to Prudential because at the outset of the voyage both radars were in disrepair. The Hellenic Carrier was held 20% responsible because she failed to reduce speed in conditions of intermittent fog limiting visibility to 500 to 1,000 feet.
► The National Transportation Safety Board decided that the master of Delta Lines’ Del Norte and the chief mate of the Liberian-flag African Pioneer “failed to establish a meeting arrangement by radio-telephone,” and neither vessel had reduced speed “to allow more time to assess the situation” which led to a collision in which two persons were injured and heavy material damage was sustained.
► Lane Kirkland, president of the AFL- CIO, agreed to assist the presidents of the National Maritime Union and the Seafarers’ International Union to put together a “workable” formula for merging the two unions of unlicensed seamen.
► At the end of November 1982, 1,489 ships of 81.5 million tons deadweight— 12% of the world’s merchant fleet—were laid up for lack of employment. Tankers comprised the largest segment, with 393 ships of 58,400,000 tons deadweight out of work. On 31 October, Norway had 30% of its fleet idle; Greece had 26% out of service; the United Kingdom had 12% of its fleet in lay-up; and West Germany counted 10% of its fleet inactive.
► The Maritime Administration has advanced cash secured by mortgages on existing ships to Farrell Lines, Prudential Line, American Atlantic Line, and Waterman Steamship Corporation. All companies experienced difficulties with cash flow and required assistance in meeting interest payments and handling other capital charges.
► Gulf Oil Corporation and Atlantic Richfield Corporation swapped a total of five ships in January. Gulf took three 150,000-ton (deadweight) Liberian-flag tankers plus $14 million, and ARCO received two 265,000-ton (deadweight) U. S.-flag tankers which will be used in the Alaska-lower 48 trade. ARCO requested permission in June to repay the construction subsidy, in order to participate freely in the domestic trades.
► The Seafarers’ International Union, Marine Engineers Beneficial Association (District II), and the Associated Marine Officers concluded a cooperative agreement in April. The intent is to upgrade efficiency of personnel, provide for multiple beneficial funds, coordinate legislative and political efforts, and confer with the Navy regarding vessel manning.
► Secretary of Transportation Drew Lewis on 23 June ended litigation begun in 1965 when he ordered five subsidized U. S. liner operators to refund to the government $10 million in operating- differential subsidy payments. The companies—Lykes, United States, Moore- mack, American Export, and Bloomfield—were found in 1967 to have competed unfairly and to have driven Sapphire Lines out of business. Final action was prolonged from 1967 through many processes of litigation. In the ensu
ing years, American Export waj^e|(l sorbed by Farrell Lines, and Bloo went out of business. , j in
► The U. S. Court of Claims ru> ^ June that the Carter Administrate ^ within its legal rights when it he ^ ^ increases for civil service seamen same level as that approved servants. Personnel affected wi njc ships of MSC and the National u and Atmospheric Administration^^.
► In response to “continuing ati- ing” of world trade, Lykes. gtr0ct>jr'
company and reduC^k of force by j„tl>c
i of the 46 ships
........... o —o * o»*f»
and size. (Japanese seamen ,, wor^t ond highest paid maritime
U. S. costs require a v'""'”heat ®ei freight rate of $122 a ton for * ^ proto Egypt, whereas a Greek ship ^ vide the transportation for 5- ^ tk'
► The Maritime Administrate jfjift
signed a broad-beamed,^ s goa^s to Northern Europe. Drawing^-j.^t
„„ .... plane
feet wide and w*
tons. The cost to build the price5, mated to be $120 million at , Qtfi
► The President of the Nat>0" t o
Association stated that enf°r the
cargo preference laws would r Si-
freight rates on coal be raise a ^0# per ton. An increase of th>^f# would result, he said, in the 0
of U. S. coal exports. . . n< opL’r.
► The passenger ship Constim haS a ated by American Hawaii cru>
chief purser Barbara Bian '• arjn°1 rchant tn^s
Colonel Kendall is a recognized exp^ sUbP , merchant marine; he has been wn 1ond ti®0? j,jjr for the Proceedings since he was a efci* nt in the 1930s. He has worked in the ^ ior ping industry, been on the Jacu as asCrp
mcmrcrui - ,, an<t sp
— (now Military Sealift Comm ’ of 1975 winner of the Naval Institu c joUrth0 , for his contributions as an author- ^,as pub of his book The Business of 1 ^
1982
Force Summary, U. S. Navy and Marine Corps
1968 1972 1976 1980
FISCAL YEARS
FORCES (NUMBER)
TOTAL BATTLE FORCES
STRATEGIC FORCES FBM Submarines (SSBN)
Support (AS, TAK)
BATTLE FORCES Carriers (CV, CVN)
ASW Carriers (CVS)
Battleships (BB)
Cruisers (CG, CAG, CGN, CA, CC) Destroyers (DD, DDR)
Destroyers (DDG)
Frigates (FF, FFG)
Submarines (SS, SSN, SSG, SSGN) Patrol Combatants Amphibious Warfare Ships Mine Warfare Mobile Logistics
SUPPORT FORCES Mobile Logistics Ships Support Ships
MOBILIZATION FORCES CAT A Surface Combatants (NRF) Amphibious Warfare Ships (NRF) Submarines Patrol Combatants Mobile Logistics Ships
9,326
7,836
6,839
6,300
6,130
ACTIVE INVENTORY | 8,491 | 6,752 | 5,752 | 5,360 | 5,349 |
PIPELINE | 1,388 | 1,094 | 821 | 924 | 821 |
TOTAL OPERATING | 7,103 | 5,658 | 4,931 | 4,436 | 4,528 |
Fighter/Attack | — | — | — | — | 24 |
Fighter | 886 | 750 | 623 | 602 | 605 |
Attack | 1,539 | 1,238 | 1,135 | 984 | 974 |
Antisubmarine | 302 | 149 | 112 | 136 | 128 |
Patrol | 493 | 390 | 369 | 352 | 388 |
Warning | 142 | 136 | 106 | 90 | 104 |
Transport | 362 | 249 | 213 | 165 | 126 |
In-Flight Refueler | 40 | 31 | 35 | 45 | 43 |
Observation | 36 | 63 | 63 | 74 | 79 |
Training | 1,876 | 1,369 | 1,067 | 884 | 908 |
Utility and Airship | 199 | 196 | 110 | 54 | 73 |
Rotary Wing | 1,191 | 1,073 | 1,087 | 1,046 | 1,076 |
Drone Control | 37 | 14 | 11 | 4 | — |
SELECTED NAVY ACRFT SQDRNS |
|
|
|
|
|
Fighter/Attack (VF/VA) | 81 | 68 | 65 | 60 | 60 |
Reconnaissance | 11 | 20 | 9 | 4 | 2 |
Helicopter (HC) | 7 | 5 | 4 | 5 | 5 |
Patrol (VP) | 30 | 24 | 24 | 24 | 26 |
ASW (VS/HS) | 24 | 20 | 21 | 22 | 22 |
Other | 28 | 33 | 39 | 42 | 39 |
MARCORPS ACRFT SQDRNS |
|
|
|
|
|
Attack/Fighter | 27 | 26 | 25 | 25 | 24 |
Helicopter (Assault) | 25 | 21 | 23 | 24 | 23 |
Other | 15 | 9 | 9 | 13 | 16 |
MARINE CORPS DIVISIONS | 4 | 3 | 3 | 3 | 3 |
TOTAL AIRCRAFT INVENTORY
ACTUAL
957 | 645 | 484 | 479 | 513 |
51 | 50 | 50 | 48 | 39 |
41 | 41 | 41 | 40 | 33 |
10 | 9 | 9 | 8 | 6 |
756 | 520 | 367 | 384 | 420 |
15 8 | 14 3 | 13 | 13 | 13 |
1 34 | 28 | 26 | 26 | 27 |
184 | 93 | 31 | 43 | 43 |
37 | 38 | 38 | 37 | 41 |
50 | 66 | 64 | 71 | 82 |
105 | 94 | .74 | 79 | 96 |
6 | 16 | 8 | 3 | 4 |
157 | 77 | 62 | 63 | 59 |
84 | 31 | 3 | 3 | 3 |
75 | 60 | 48 | 46 | 52 |
100 | 69 | 63 | 11 | 43 |
30 | 22 | 20 | 20 | 20 |
70 | 47 | 43 | 21 | 23 |
50 | 6 | 4 | 6 | J_[ |
35 | 4 | — | 1 | 5 |
— | — | 3 | 3 | 6 |
12 3 | 2 | 1 |
| — |
59 | 19 | 14 | ‘ ]5 | 27 |
39 | 49 | 57 | 44 | 33 |
60
2
6
26
22
40
1
28
31
37
89
96
6
58
3
52
43
21
22
9
7
2
AUXILIARIES AND SEALIFT MOBILIZATION FORCES CAT B
Personnel and Weapons Summary, U. S. Navy and Marine Corps
FISCAL YEARS | 1968 | 1972 | 1976 | 1980 | 1982 |
MANPOWER (In Thousands) MILITARY PERSONNEL |
|
| ACTUAL |
|
|
PERS ON ACTIVE DUTY
NAVY MILITARY PERSONNEL | 765.4 | 588.1 | |||||
Officers | 85.4 | 73.2 | |||||
Enlisted and midshipmen | 680.0 | 514.9 | |||||
Career Reenlistments | 26.5 | 28.4 | |||||
First Term Reenlistments | 14.2 | 17.1 | |||||
Recruits From Civil Life | 123.4 | 89.6 | |||||
MARINE CORPS MILITARY PERS | 307.3 | 198.2 | |||||
Officers | 24.6 | 19.8 | |||||
Enlisted | 282.7 | 178.4 | |||||
Career Reenlistments | 4.9 | 5.3 | |||||
First Term Reenlistments | 3.7 | 4.5 | |||||
Recruits From Civil Life | 93.8 | 56.8 | |||||
524.7 | 527.2 | 553.0 | 560.3 | 572J 70-2 |
| ||
63.7 | 63.1 | 67.3 | 68.3 | 502-0 |
| ||
461.0 | 464.1 | 485.7 | 492.0 | 38-4 22 |
| ||
22.8 | 21.8 | 30.3 | 36.4 |
| |||
18.6 | 19.7 | 21.9 | 20.8 | 66-1 |
| ||
83.7 | 88.8 | 62.0 | 67.4 | 1§7>3 |
| ||
192.4 | 188.5 | 192.4 | J9L6 | 19.8 |
| ||
18.9 | 18.2 | 19.0 | 19.5 | 1775 |
| ||
173.5 | 170.3 | 173.4 | 175.1 | 7-3 |
| ||
5.6 | 7.6 | 8.9 | 7.3 | 9-2 4l-6 |
| ||
4.6 | 4.3 | 7.3 | 9.2 |
| |||
51.2 | 41.8 | 38.1 | 40.5 |
|
| ||
RESERVE PERSONNEL NAVY RESERVE Extended Active Duty Ready Reserve (Pay Status)
Others (Standby, Ret., etc)
MARINE CORPS RESERVE Extended Active Duty Ready Reserve (Pay Status)
Others (Standby, Ret., etc)
CIV PERS (DIRECT HIRE)
Headquarters Field U. S.
Field Outside U. S.
PROCUREMENT (QUANTITY)
SHIPS & CONVRS: Budgeted
Warships only
FIXED WING AC: Budgeted HELICOPTERS: Budgeted MISSILES: Budgeted
566.3
108.1
328.1 (123.9)
130.1
180.9 13.0
131.7
(46.7)
36.2
419.5
7.5“
369.1
42.9
568.6 | 431.4 |
64.9 | 53.2 |
339.6 | 208.5 |
(127.4) | (98.2) |
164.1 | 169.7 |
254.2 | 126.1 |
7.6 | 7.1 |
179.4 | 86.4 |
(41.4) | (32.4) |
67.2 | 32.6 |
341.5 | 310.9 |
5.8* | 14.8‘ |
306.8 | 272.4 |
28.9 | 23.7 |
400.4
65.2
183.3 (86.8) 151.9
106.1
5.1
92.3 (35.4)
8.7
298.0
8.9“
269.8
19.3
393.4
74.2
171.1 (93.7)
148.1
104.2
5.6 88.9
(40.5)
9.7
308.4
9.6
279.4
19.4
26
12
370
286
5869
23 | 15 |
21 | 9 |
229 | 232 |
42 | 31 |
2433 | 1892 |
II
10
110
15
4421
24
11
207
80
2917
432j
413i g9.4'
86.6* 186-3
170.8 (lOOT
(93.4) i56-6
155-8 o
“Headquarters of Bureaus & Offices; * Departmental Headquarters; “All Headquarters; “Some Headquarters have been functionally stratified. •ESTIMATED
Put your money where |
|
your Heart is. | ^ ^American |
■ ■Heart Association WE'RE FIGHTING FOR YOUR LIFE ____________________________ |