Sealift and National Security -

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By Richard T. Ackley

Sealift worked well in the Persian Gulf, but the United States should not be blinded by the glow of success. Desert Storm’s unique circumstances—including the avail­ability of modern, deep-water port facilities at A1 Jubayl, Saudi Arabia—are not likely to recur.

When the United States goes to war, it goes over­seas—and 95% of all its military cargo goes by sea. It follows that U.S.-controlled cargo ships in adequate number and mix are vital to our national security interests. Additionally, it makes good sense to haul and control a fair share of U.S. commerce in U.S.- Aag, civilian-owned and -operated merchant ships. Today’s U-S.-flag fleet does not meet the criteria for hauling our ⁿ°rmal imports and exports, and both government- and civilian-owned ships fall short of meeting our emer­gency military needs.

U.S. National Security Strategy in a Changing World

Today, a major war with the Soviet Union is unlikely. One apparent reaction is to reduce military force levels across the board. Yet, as President George Bush has stated, the world remains a dangerous place—and our ability to project power will underpin U.S. strategy in the post-Cold War era more than ever before. For the United States, President Bush has also stated, there can be no retreat from the world’s problems. We must be able to deploy and sus­tain substantial forces in parts of the world where prepo­sitioning of equipment is not feasible. U.S. strategy tasks the nation’s armed services to move personnel and ma­teriel to distant areas, at a pace and in numbers sufficient to field an overwhelming force.¹ These demands cry out for a strong U.S. sealift capability, supported by a solid shipyard industrial base. Additionally, a ready pool of

qualified and licensed merchant seamen to man these ships in a minimal-warning or surge deployment is necessary. Not one of these capabilities exists today.

Sources of Strategic Sealift

There are four sources of domestic sealift assets:

>• Military Sealift Command (MSC)—U.S. Navy-owned and civilian-manned dry cargo ships and tankers >■ National Defense Reserve Fleet (NDRF)—tankers and dry cargo ships laid up (preserved) for breakout in one to six months

• Ready Reserve Force (RRF)—part of the NDRF main­tained for breakout in less than 30 days
• U.S.-flag merchant marine—private-sector vessels that can augment combat deployment support

Before the Middle East crisis, MSC’s strategic sealift force was:

• 11 chartered U.S.-flag dry cargo ships
• 26 chartered U.S.-flag tankers engaged in the transport of DoD cargo
• 25 U.S.-flag chartered ships dedicated to contingency operations and prepositioned near potential trouble spots around the world
• Various chartered U.S.-flag liners that move bulk DoD cargo to support U.S. forces abroad²

The NDRF has two groups of ships:

• 96 RRF ships regularly maintained, emphasizing break- bulk freighters and tankers³
• 116 older ships not regularly maintained

The U.S.-flag privately owned merchant marine con­sisted of 367 ships.

Sealift assets are meaningless without qualified mariners

to man the ships. There is 1 federal merchant marine academy at Kings Point, New York, 6 state merchant ma­rine schools, and 17 merchant marine training facilities. Despite this, there is a growing shortage of merchant mariners available in time of crisis. As the number of U.S.- flag merchant ships declines, fewer jobs become available each year, forcing graduates of the maritime schools to leave the profession. Once their career patterns have changed, their licenses expire, and their desire to return to the sea is low. The U.S. Merchant Marine’s seagoing work force is about 11,000 personnel today, down 60% since 1970. For the future, a civilian merchant marine reserve may be necessary to meet DoD surge shipping re­quirements.

In a crisis environment, the strategic sealift mission di­vides into two categories: surge shipping during initial mobilization, and resupply (sustainment) shipping to main­tain our forces. The recently completed Operations Desert Shield and Desert Storm (hereafter referred to as Desert Storm) provide a case history for analysis of U.S. sealift in action.

Desert Storm Revisited ^{[1] [2]}

The sea lines of communication and Saudi ports were not interdicted, and almost six months were available for a logistic buildup before hostilities commenced. The United Nations sanctioned the campaign, and most of the world supported it. Additionally, the war was short and the Coali­tion forces victorious. The United States was able to draw on military forces and equipment stationed in Europe that were being readied for return stateside. Additionally, potable water and petroleum, oil, and lubricants (POL) generally were available in-theater.⁸

Perhaps the greatest single logistic advantage in the Gulf War was the availability of the new and modern deep­water port facilities in Saudi Arabia. The concrete wharves and Saudi land transport made ship offloading time min­imal and cargo accumulation on the dock negligible. Mod­em port facilities permitted direct, rapid, and simultane­ous discharge of high-tech containerships and mll-on/roll-off (RO/RO) ships. These ships discharged their cargoes directly to the pier for rapid drive away.⁹ Without modern port facilities, the usefulness of con­tainerships and RO/RO ships diminishes rapidly.

As a rule, most Third World nations do not have mod­ern deep-water ports comparable to those of NATO or Saudi Arabia. The United States cannot expect universal Political and military support or POL and potable water f°r ground forces to be as readily available. And, with the steady drawdown of U.S. forward-based forces, we are losing the ability to reinforce rapidly with both men and materiel in distant locations.

If the White House is correct in predicting a continua­tion of conflicts in the Third World, the United States must °e able to deploy and sustain forces in underdeveloped countries when necessary. Aside from the Persian Gulf, ^U combat operations since World War II have taken Place in countries like Lebanon, Korea, Vietnam, and ^anama—not in industrialized states. Rarely has the in­ternational community supported U.S. combat operations he way they did against Saddam Hussein. In other words, tt is reasonable to suggest that certain conditions conducive fo the successful logistic support of the Persian Gulf War are not likely to recur.

Ships

Before the Middle East crisis developed, MSC’s strate- §tc sealift force consisted of 62 owned and chartered hips.¹" An overwhelming success was the first use of , ^e 13 maritime prepositioning ships. These ships were °aded between 1984 and 1986 with equipment for Ma- ⁿhe expeditionary brigades and had been offloaded peri- ically for maintenance and deployment exercises." Other SC ships that were U.S.-owned or chartered at the ■'me the crisis began were placed at the Navy’s disposal •mmediately.

Mips_______________________________

Of the 96 RRF ships, 45 were reactivated for Desert °rm and 42 were turned over to MSC for operational °htrol. Many of these ships were not ready for sea in

the allotted time, and only 14 of the 45 reached their loading ports on time. Poor propulsion and auxiliary ma­chinery condition seemed to be the main cause of delay. One recent assessment says the 51 RRF ships not reacti­vated either were not militarily useful or could not be readied on time.¹²

The 116 older non-RRF ships were neither maintained regularly nor stored inexpensively. To keep these ships dehumidified while in an inactive status costs about $12,000 per ship per year. Initial time estimates to make these older ships ready for sea was 30-120 days.¹³ Most of the ships were 20-45-year-old breakbulk freighters. They had out-of-date steam propulsion plants that required mariners trained in a past era to operate them—one ma­rine engineer voluntarily recalled to active duty was 83 years old. As Vice Admiral Francis R. Donovan, Com­mander Military Sealift Command, revealed during Desert Storm, many U.S. merchant seamen and longshoremen also lack the skills required to load and operate breakbulk freighters.¹⁴

A 1985 reactivation test of two of these older ships re­sulted in an estimated cost of $2 million to prepare each one for sea. Maritime Administrator Warren G. Leback reported that the average cost during Desert Storm was $2.5 million per ship, exclusive of fuel. It cost $191.5 mil­lion to activate 73 of these ships.'⁵ Ultimately, the lack of trained crews and deteriorating steam-turbine propulsion plants made older RRF ships neither ready nor cost ef­fective for sealift duty on short notice.

Retiring Vice Admiral Paul D. Butcher, Deputy Com­mander, U.S. Transportation Command, during the Persian Gulf War, stated in part:

The Ready Reserve Force was predicated on the prin­ciple that we would break out (the ships) all at one time. . . . Because we had 161 days to do it, we broke out the ships incrementally to accommodate the lack of machinists, boiler technicians, engineers, and so forth. If we had to break out all of the ships simulta­neously, we would not have been successful.”¹⁶

The Department of the Navy’s Fiscal Years 1992-1993 Report to the Congress, addressing sealift during Desert Storm, stated, “The performance of our Ready Reserve Force was the greatest deficiency.”¹⁷ It is not surprising the Maritime Administration decided to sell all 116 ships for scrap by the year 2000. (The price of scrap metal is too low to sell them now.)

U.S.-Flag Merchant Marine

Many years ago, Admiral Alfred Thayer Mahan wrote, “A nation’s maritime commerce strength in peacetime is the most telling indication of its overall endurance during war.” Mahan might have been shocked to witness the re­duction of the U.S.-flag merchant fleet from about 3,000 vessels after World War II to 367 today. Besides the low numbers, many of these vessels are commercially efficient containerships that require special high-tech cargo piers or off-board equipment to handle loading and unloading. Additionally, they are of limited use in hauling outsized military cargo—such as tanks, artillery, and aircraft—that cannot be fitted into standard shipping containers.

The 367 active, militarily useful, U.S.-flag merchant

ships will not be around forever. Some maritime ex­perts estimate that, without a turnaround, the U.S.-flag cargo fleet will decrease about 85% through the year 2005, and militarily useful tankers will decrease about 70%. The combined loss may represent more than 200 ships.¹⁸

To survive, U.S.-flag commercial shipping must earn revenue. Earning revenue means moving cargo, and mov­ing cargo means not waiting for a DoD call-up. Thus, short of a declaration of national emergency, U.S-flag ships do not get called into government service. Such a call-up would risk a significant, and perhaps permanent, trade loss for marginal private U.S. shipping companies. During Desert Storm, “no active U.S.-flag ships were taken by the government under the provisions of the Sealift Readi­ness Program.”¹⁹ Of course, U.S.-flag ships on long-term charter to the Navy fall outside this category.

Using Foreign-Flag Ships

The U.S. Transportation Command turned to foreign- flag ships to meet the logistic needs of Desert Storm. Because of the favorable political climate created by this U.N.-sponsored action, acquiring foreign-flag shipping was not a problem. Nevertheless, it is difficult to project continued successful use of foreign-flag vessels in the fu­ture. For instance, some of our allies made ships available but prohibited them from entering the combat zone. The crew of the Japanese freighter Sea Venus, which was loaded with military vehicles, refused to carry its cargo to Saudi Arabia.²⁰ Similar manageable incidents occurred during the U.S. logistic support of Israel in the 1973 war and during the Vietnam War. In the former case, U.S.- chartered Liberian tankers would not deliver petroleum products to Israel; and, in the latter case, some Asian crews in foreign-flag ships would not sail with war supplies from Oakland to South Vietnam.

Captain J. F. Kelly, Jr., U.S. Navy (Retired), reported,

For the Persian Gulf war, we had to hire more than 100 ships. They came, by the way, from countries like Japan—and even the Soviet Union—and many of them came with strings attached.”²¹

Some have argued that, because many U.S. companies own merchant ships registered under a foreign flag (U.S.- controlled shipping), the ships could be recalled.²² This sounds appealing except, in December 1988, a federal court on appeal ruled that the U.S. government does not have authority to press U.S.-owned foreign-flag ships into service.

Vice Admiral Paul D. Butcher, until recently the Deputy Commander-in-Chief, U.S. Transportation Com­mand, described 25 February 1991 as a typical day dur­ing Desert Storm:

On that date, 168 dry cargo ships were in use: 74 were foreign-flag ships, and 25 were privately-owned U.S-- : flag ships, a mere 15% of the total. The other 69 ships were owned by the U.S. government.”²³

construction and conversion contracts indefinitely.

ship

>ng legislation to establish the Sealift Fund may delay

It was faster to hire available U.S. or foreign ships that were in port on the Gulf Coast than to get ships out of the James River RRF fleet and sail them to Gulf Coast ports. During Desert Shield, about one-third of the ships used were of foreign registry; for Desert Shield and Desert Storm, it was about 45%.²⁴

It seems apparent that Desert Storm enjoyed condi­tions conducive to a successful sealift. In support of this contention, Admiral Butcher said on 29 April 1991, ■ • • the buildup for Operation Desert Storm could still be going on today if optimum conditions and virtually unlimited support from the world community had not been forthcoming.”²⁵

Sealift for the Future

How can strategic sealift be improved? Major options are to purchase and maintain more MSC ships for con- hngency operations and to revitalize the U.S.-flag mer­chant marine. The former is an unpopular choice with the Navy Department because of congressionally ordered bud­get cuts and shipbuilding setbacks. With a 25% cut in naval combatants mandated, there is little enthusiasm for Purchasing and maintaining sealift ships.

Acquisition of MSC (U.S. Navy-Owned) Ships

Congress ordered an update of the congressionally man­dated mobility study to redefine airlift and sealift re­quirements for a series of scenarios other than a U.S.- Soviet confrontation. In April 1991, the Joint Staff and HoD completed their interim response to the mobility re­quirements study. Because of war plan discussions, the ^rePort is classified secret. Yet, the Shipbuilders Council of America believes that the Navy’s previous goal of ^5 additional ships (costing up to 7.3 billion FY-91 dollars) is inadequate for the cases examined in the in­terim report.²⁶

On 24 January 1992, DoD provided the mobility re­quirements study to Congress. Its unclassified executive ^Summary revealed a call for the construction or major Conversion of 20 large, medium-speed RO/RO ships, teven of these would be retained for fast sealift, simi- ^ar to the mission of the SL-7s in Desert Storm. The re­gaining nine would be assigned prepositioning roles, be ships, in all probability, will be the large 950-foot, 'knot RO/ROs under development at the Naval Sea ystems Command. The study also calls for two con- ^ainerships for prepositioning missions. The ship deliv­^ery rate is specified at six per year by FY-94, -96, -97, ^at)d -98. Additionally, the mobility requirements study teaftirms growth of the RRF from 96 ships to 142. The ter ships may be acquired used or through the build- •td-charter program.²⁷

^be DoD FY-93 budget includes $1.2 billion for the program. When added to the $1,875 billion ap­. ^r°priated in fiscal years ‘90, ‘91, and ‘92, the total fund- abf ^WiH ^exceec* $3 billion. The requirement to enact en-

The industry has waited for more than two years since the first sealift funds were appropriated. The contracts, when awarded, will be the difference between survival and closure of some U.S. yards.²⁸

The mobility requirements study is an encouraging in­dication, even though it cannot address total sealift con­tingency needs. The Shipbuilders Council of America was more outspoken when it announced, “It is regrettable that it took a war to bring around the administration to sup­port a sealift program, but it is now obvious to all that our national sealift capability must be improved.”²⁹ Unfortu­nately, the government has a poor track record for fol­lowing through with plans to bolster civilian- and gov­ernment-owned sealift.

Revitalize the U.S.-Flag Merchant Marine

Revitalization of the U.S.-flag merchant marine is ap­pealing because of the favorable by-products it would cre­ate. Building and sailing more civilian-owned merchant ships strengthens the U.S. shipyard industrial base and creates jobs for shipbuilders, subcontractors, and merchant mariners. Additionally, a strong merchant marine permits the United States to assume control of more of its imports and exports in peace time and to move DoD cargoes rapidly in time of emergency.

Why is the U.S.-flag merchant marine declining? Cap­tain Kelly may have said it best when he suggested that, “The American merchant marine is a commercial enter­prise. American businessmen find it cheaper to buy for­eign-built ships, hire foreign crews, and operate them under foreign flags.”³⁰ There are many reasons these conditions exist: the high U.S. union wage scale, U.S. Coast Guard safety and maintenance requirements, the cost of ship con­struction and equipment, and the lack of subsidies.

U.S. union wage scales are high for both shipyard work­ers and mariners. Although their ships are more costly, U.S. shipbuilders would argue that they build the best, and highest-tech ships in the world. Additionally, man­ning levels for U.S. ships are higher than required by most other nations. On the other hand, U.S. officers and crews are well qualified and trained to do their jobs efficiently and safely. This is attested to by the rigid inspections the U.S. Coast Guard requires of foreign-flag merchant ships carrying dangerous cargo into U.S. ports.

Without a doubt, the U.S. shipping industry needs an infusion of capital and business. In the past 13 years, ten U.S.-flag steamship companies have gone banknipt, with a corresponding loss in the U.S. shipbuilding base. At the same time, foreign yards and operators are flourishing. (See Figure 1.) The last merchant ship order placed in a U.S. yard in the 1980s was in 1984; the last delivery was in November 1987. In 1988 and 1989, there were no commercial ships on order in the United States. In 1990, there were three orders placed for vessels to be used in domestic (Jones Act) trade that requires U.S.-built, -reg­istered, and -manned ships.³¹

Because of the cuts in naval shipbuilding and the flight to foreign-flag ships by U.S. operators, the U.S. ship­building and repair industry faces near extinction. To

improve U.S. sealift capability, Air Force General Hans­ford T. Johnson, Commander-in-Chief of the U.S. Trans­portation Command, recommended in early 1991 that the United States purchase 20 foreign-built, 15-year-old RO/RO ships. In response to this recommendation, Ship­builders Council President John J. Stocker said,

“You will note that General Johnson, who knows some­thing about airplanes, is not recommending that used foreign aircraft support the nation’s airlift capability. When it comes to RO/ROs, he’s getting bad advice.”^[3]

Stocker went on to say that these foreign-built ships are single-compartment ships with stability problems.

The declining number of U.S. Navy shipbuilding starts means that penetration of the commercial market will be needed to maintain a sound shipbuilding base. This is not an easy task because shipbuilding and operating subsidies escalated worldwide in the 1980s, while, in the United States, subsidies were cut off in 1981.

Subsidies and other types of assistance nations grant their maritime industries come in overt and covert forms. Typical items include operating and construction subsi­dies, low-interest loans, tax benefits, accelerated depre­ciation, cargo preference, and cabotage restrictions. The

46

intent is to protect their maritime industries, but the result is unfair competition with nations that do not do the same.

Since 1987, Germany, South Korea, and Japan have proposed or budgeted more than $12 billion in commer­cial shipbuilding-related aid. During this period, the United States negotiated with the Organization for Eco­nomic Cooperation and Development (OECD) to elimi­nate shipbuilding subsidies. Throughout the negotiations, our trading partners continued to subsidize. After more than 20 months of OECD trade talks, it was clear that U.S. trading competitors were unwilling to end shipbuilding subsidies through multilateral negotiations.³³

The U.S. administration considers subsidies protec­tionism, an unfair practice not compatible with a market economy. Yet most nations competing with the United States for a share of the market subsidize. It is this un­even playing field that, in large part, is causing the atro­phy of the U.S. maritime industry. Recent legislation placed an assessment on foreign-flag ships, built or re­paired with the help of foreign government subsidies, entering U.S. ports. This is useful legislation but, in itself, it lacks the clout to reinvigorate the U.S. industry.

Another form of relief particularly damaging to the U.S. maritime industry is cargo preference. This is an historic practice designed to protect national fleets by requiring a specific percentage of a nation’s seaborne trade to be car­ried in ships flying its own flag. Despite the fact that cargo preference gives a competitive advantage to nations that . practice it, the United States rejects this circumvention for the same reasons it rejects subsidies.

The U.N. Conference on Trade and Development “Code of Conduct for Liner Conferences” went into ef­fect in October 1983 with 56 signatory countries. Gener­ally, the code allows each signatory nation to carry 40% of its imported and exported products in its own vessels and 40% in the vessels of another signatory nation. The remaining 20% is open to outsider cross-trade. The United States did not sign because it is contrary to free trade principles.

A U.S. Naval War College study in January 1990 sug­gested that the U.S. government allow Title 11 mortgage guarantees for product tankers with high military utility built in the United States. These tankers would be de­signed for commercial demand, but exempt from U.S. im­port tariffs on cargoes they carried—another promising concept for government consideration.

Some shipping specialists suggest that in 1992 more than 40% of the world’s merchant ships will be more than 20 years old and an additional 25% will be 15-19 years old. Worldwide, about 13,000 commercial vessels are to be scrapped by the year 2000. These projections suggest a need for 1,500-1,900 new merchant ships per year until then. From present indications, the United States will not be a player. None of this bodes well for the U.S. shipping industry or the national defense sealift problem.

Where We Are and What To Do