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Ships Without Sailors

Merchant marine's demise endangers war readiness

The rapid dwindling of the nation's cargo fleet has left the Pentagon short of sailors to crew the ships that would supply the military if war broke out. That poses a threat to national security.

By Robert Little Sun Staff

August 5, 2001

First of two parts

The Cape Avinof is waiting for a war.

It is tied to a pier in Baltimore 365 days a year, full of fuel, the boilers cleaned and warmed, and the cargo holds lined with wood for loading ammunition. Its orders are to sail on five days' notice.

Part of the nation's Ready Reserve Force, the Cape Avinof is one of nearly 100 empty American cargo ships scattered around the world, waiting for a war. Without them, tank divisions can't deploy and airborne troops can't be re-supplied. The United States spends more than $350 million every year to ensure that its fleet of ships such as the Cape Avinof is ready for a crisis.

But the fleet isn't ready.

Many of the nation's military cargo ships - so critical to the national defense - could not sail in five days, or even five months, because the United States doesn't have enough seamen to operate them, an investigation by The Sun found.

The government masks the manning shortage by shuffling sailors from ship to ship, giving each vessel a full crew just long enough to pass a drill verifying its readiness.

But the American military needed more than 200 cargo ships to create the "steel bridge" that outfitted troops during Operation Desert Storm in 1991, and a recent test deployment of 29 vessels used nearly every available sailor in the nation.

Federal officials acknowledge that a manpower crisis is looming, but they deny that it has arrived. They say a combination of patriotism and financial incentives will lure civilian seafarers out of retirement in an emergency.

"Can we do it today? Yes," said Gen. Charles T. "Tony" Robertson Jr., commander in chief of the U.S. Transportation Command and the Pentagon's top transportation official. "Can we do it tomorrow? To be determined."

But in its investigation, which included interviews with more than 150 current and former military planners, federal regulators, maritime union officials and merchant seamen, the newspaper found that the shortage is already a threat to national security. And early next year it will get worse.

"Are there enough people to sail all of those ships today? The answer to that is truly no," said Jerry A. Aspland, a past president of the California Maritime Academy, one of six state colleges around the country that train merchant mariners. "We could never send all those ships to sea, and everyone in the country should be worried about that."

Among The Sun's findings:

The government's own preparedness drills show that the United States lacks the manpower to activate even one-third of its sealift fleet - and then only by sending some ships to sea one at a time with the same crew members.

The Pentagon expects to supply crews for its cargo ships in a crisis by hiring more than 3,000 civilians away from the commercial fleet, even though ships in the commercial fleet often can't find enough qualified employees to sail.

A complete activation would force the government to lure merchant seamen out of retirement. But government officials have no idea how many retirees are available, who they are, where they live or what qualifications they have. And new regulations will soon disqualify most retirees from going to sea anyway.

Pentagon officials have known of the shortages since the Persian Gulf war, perhaps earlier. But though the estimated size of the nation's seafaring labor pool has shrunk from about 23,000 sailors in 1990 to fewer than 15,000 today, the military's reliance on those sailors for wartime sealift has remained constant.

'A real problem'

"A lot of people in the Department of Defense and the Maritime Administration are wetting their lips to whistle past the graveyard over this," said John Graykowski, a former head of the U.S. Maritime Administration, which regulates merchant shipping. "They won't say it, but they know there's a real problem."

The United States cannot fight a war - even a small one - without cargo ships. Aircraft can't handle the volume of tanks, trucks, fuel and other supplies needed to deploy U.S. ground forces overseas. The largest airplane in the U.S. Air Force, a C-5 Galaxy, can transport no more than four small tanks at a time; a ship could carry more than 1,000.

So vital are cargo ships to national defense that the Pentagon keeps more than 30 of them loaded with military supplies, fully crewed and waiting in ports around the globe. These "pre-positioned" ships can equip a full Marine expeditionary brigade or Army heavy division - each with about 16,000 troops - virtually anywhere in the world on a few days' notice.

But the pre-positioned ships can supply only an initial invasion or occupation force. To sustain a mobilization of any significant size or duration, such as in the gulf war, the Pentagon must activate the nation's reserve sealift ships.

That fleet consists of nearly 100 vessels, three of them in Japan and the rest tied up in U.S. ports. Eight, including the Cape Avinof, are based in Baltimore.

Most have small crews onboard year-round for maintenance but are otherwise empty and rarely leave port. Each must hire at least 15 additional crew members before it can sail, and some must hire 36 or more.

Seventy-six of the ships are part of the Ready Reserve Force, maintained in peacetime by the U.S. Department of Transportation. About 20 others - the newest and fastest, mostly - are under direct control of the Pentagon.

None of the ships is part of the Navy's surface fleet, and the ships are not operated by Navy personnel. Each crew consists entirely of civilians, hired from the union halls and dispatch centers of the U.S. merchant marine.

The United States has fought every major war by using civilian crews on cargo ships, and military officials say the nation is prepared to do it again. The Pentagon frequently tests its reserve sealift fleet by ordering the ships to activate, hire crews and put out to sea. Only twice in the past decade has a ship missed its deadline, each time by a few hours.

What those tests do not show is that the Pentagon recycles crew members from one ship to another. It rarely activates more than eight ships at a time, allowing some sailors to serve on as many as five drills a year.

The Cape Avinof hired 27 crew members during a test activation last year. Mariners came from California, Florida, Massachusetts, Texas - anywhere the unions could find them.

For Bobby Adams, an able-seaman from Houston, the Cape Avinof drill was his fourth in a little more than a year. Between regular jobs on commercial ships, he worked three two-week stints on Ready Reserve Force ships in New Orleans and Texas before joining the Cape Avinof. Each ship sailed just long enough to declare itself ready for war.

His schedule was not unusual. Sterling Adams, an engine room worker from Louisiana, helped activate three ships in the Gulf of Mexico in the year before he joined the Cape Avinof. Eric Williams, a deck worker from California, activated two ships in San Francisco, then flew straight to Baltimore.

"It's good money," said Williams. "As long as they pay me to fly out there, why not?"

The shuffling between ships is routine.

The Cape Race and the Cape Ray, two Ready Reserve Force ships in Virginia, sailed with the same captain during successive activation drills over the winter.

Ships share crews

George Mazzola, a shipping buff from District Heights who sails for the Seafarers International Union, estimates that he has worked on two dozen activation drills in the past decade. An experienced able seaman such as Mazzola might earn $1,400 or more for a seven-day drill, including overtime. A licensed engineer or mate can make more than $2,000.

"They're great little jobs," Mazzola said. "I call them candy."

Government officials acknowledge that the vessels share crew members but deny that the practice is widespread and say the drills are designed primarily to test the condition of the ships.

For evidence that the nation could provide crews for the ships in a crisis, they point to a drill in September 1998 during which 29 vessels went to sea simultaneously. More than 700 temporary crew members were hired, and the exercise was declared a success.

That drill "exemplified ... the readiness response of U.S. merchant mariners to crew the surge fleet," said then-maritime administrator Clyde J. Hart, in testimony before Congress.

But if anything, the test exposed the sealift fleet's limitations.

At least three ships - the Alatna, the Chattahoochee and the Nodoway - never found full crews. The ships, all tankers based in Tsuneishi, Japan, had to share crew members and go out to sea one at a time, according to men who worked on them.

"Three crews were supposed to go, but they couldn't get enough people," said Paul Garber, a deck officer from Texas who served on one of the ships. "They just used the guys they had and sent the ships out one at a time."

Other ships in the exercise borrowed sailors from the full-time crews on ships that had not been activated.

As the exercise ended, and all 29 ships were reporting a successful activation, Hurricane George churned past Florida and forced vessels in the Gulf of Mexico to scurry out to sea to avoid damage.

According to Coast Guard inspection reports, two reserve sealift ships that did not participate in the exercise, the USNS Algol and the USNS Regulus, had to leave the port of New Orleans "minimally manned" - without enough crew members to conduct an adequate lifeboat drill.

A month later, the Coast Guard found the U.S.-flagged tanker Valiant sailing near Japan with a crew that included four sailors licensed in the Philippines, one from Poland and three Americans lacking the proper qualifications. The ship was on a full-time charter to the federal government, hauling cargo for the Military Sealift Command.

The size of the United States' reserve sealift fleet changes often as vessels visit shipyards or serve on temporary deployments, but on a typical day 90 or more ships might be sitting idle, waiting to be called up. Yet the activation of 29 ships three years ago used nearly every available sailor in the country.

"It was very painful, no question," said retired Vice Adm. James Perkins, head of the Navy's Military Sealift Command at the time.

"They just had to go out to the sea buoy and back, and that was only, what, one-third of the fleet?"

If the United States went to war today and the Pentagon activated all of its reserve sealift ships, it would need to hire 3,594 sailors, mostly from merchant marine unions around the country. About 900 sailors already work on the ships year-round. Federal officials say finding the rest is not a problem, though they question how long they could keep the positions filled in a crisis.

"I do worry that in a long-term conflict we won't have sufficient mariners," said Vice Adm. Gordon S. Holder, commander of the Military Sealift Command. "But I can man the ships today."

The U.S. Maritime Administration estimated in February that 14,417 mariners worked on oceangoing ships in the United States and that the commercial fleet kept 6,351 of them at sea at one time. That left 8,066 crew members for use in a military emergency.

The men and women who sail American cargo ships for a living laugh at that kind of logic because it ignores some of the basic realities of life at sea.

Merchant seamen are all volunteers, for one. Many would be unwilling to spend what little time they get ashore working for the Pentagon, particularly if the work is dangerous.

Also, many sailors have regular jobs ashore. They work on cargo ships only sporadically to augment their income and can't commit to the months-long deployments that the reserve fleet would require in wartime.

Specialized jobs

Mariners also perform specific tasks, requiring specific training, so supplying a ship with a crew demands more than simply an adequate number of bodies.

Much of the work on a ship's bridge, for instance, must be performed by a licensed mate, with training equivalent to a four-year degree. Most deckhands must be "able seamen" with at least three years of sea time. Engineers need engineering licenses, and their training must match the power plant on the ship - diesel or steam.

A job in the merchant marine bears little resemblance to a job on land. Sailors live on the ships, working seven days a week, and rotate on and off every few months. A typical merchant seaman works four months at sea, then gets two months on shore, so a ship might need 1 1/2 to 2 people for each job.

And the employers rarely decide whom to hire - the unions do. Shipping companies "order" sailors from a union, and the union decides which qualified employee gets the job, usually based on seniority and the amount of time since a mariner last worked at sea.

The Pentagon plans to provide crews for its reserve sealift ships the same way private companies do - by ordering sailors from the unions. It can't raid the commercial fleet outright because merchant vessels need to continue operating. So the military expects to fill its ships largely with sailors taking their two-month break on shore, asking them to spend a year or more at sea without relief.

None of this was a problem during World War II and the Vietnam War, because the U.S. merchant marine was a major force in global shipping for most of the 20th century, with plenty of available workers. At its peak in 1950, the United States had 3,492 oceangoing cargo vessels and 166,000 laborers for crews.

Fleet still shrinking

The U.S. merchant marine is less than one-tenth that size today. And it gets smaller every year.

The government's surveys determined four years ago that 6,889 sailors were available to work on sealift ships, fewer than it says are available today.

The Maritime Administration conducted a mock activation drill for 63 Ready Reserve Force ships in May, asking the unions for names and phone numbers of potential crew members. Officials then contacted enough people on the lists to gain "a high level of confidence" that the ships can be manned, according to a report on the drill.

But the drill included only Ready Reserve Force ships, not the newer, Pentagon-controlled ships that are always the first to be activated.

And union officials say privately that the lists of crew members were inflated with office personnel, elderly retired seafarers and scores of others with no intention of going to sea.

Only 75 percent of those contacted were qualified and willing to work, according to the report. The Maritime Administration destroyed the lists for privacy reasons once the test was finished.

"I think, unfortunately, a lot of our national policies are like this - they're based on assumptions that are never tested," said Graykowski, who resigned as maritime administrator in November.

Shortages since gulf war

Pentagon officials have known of staffing shortages at least since the Persian Gulf war, when the activation of 79 ships so strained the civilian labor pool that mariners as old as 81 were called back to service.

Several reserve ships never left port during the war; others were delayed waiting for adequate crews. Licensing requirements were waived, and crew members were allowed to sail with fewer qualifications. Still, many ships sailed short-staffed.

By the start of Operation Desert Storm in January 1991, the union halls were empty and the labor pool was exhausted. The Pentagon activated its last few ships by hiring sailors out of the Great Lakes, where the fleet was temporarily idle because of ice.

Military planners often boast of the "steel bridge" during the gulf war - a string of cargo ships, one every 50 miles across the Atlantic Ocean. But conditions for sealift at the time were ideal. The military had modern ports and friendly harbors, and the ocean was safe. And still it took allied forces nearly six months to amass the equipment and supplies needed to invade Iraq.

Vice Adm. Paul Butcher, then deputy commander of the U.S Transportation Command, said shortly after the war ended, "If you take away any of those equations, you've got a hell of a mess, and the shortfalls in airlift and sealift would have been exposed."

'Serious manpower problem'

Robert W. Kesteloot, a retired Navy captain and former director of strategic sealift for the chief of naval operations, said, "It was real clear, even back in the 1980s, that we had a serious manpower problem.

"I think people are worried, but nobody wants to talk about it. The government doesn't want to admit that it has a readiness problem, and the unions don't want to admit that they don't have enough people."

Four years after the gulf war, a study commissioned by the Navy revealed that the labor shortage was growing, particularly among the able seamen who make up the bulk of a crew's skilled work force. The study stopped short of predicting a manning calamity, but its author says the situation was probably direr than reported.

"It appeared to us at times that we had come up with the wrong answer for our customer, and we were told to recompute the figures," said Thomas F. McCaffery, the consultant who conducted the study.

Retirees no solution

And the problem is getting worse. One pool of potential manpower - retirees - is drying up because of new international training requirements that will force retired sailors to attend classes to maintain their qualifications, often at a cost of several hundred dollars.

The Pentagon relied heavily on retired merchant seamen during the gulf war, but today many retirees are letting their licenses and other qualifications expire rather than comply with the new training standards, which will become mandatory in February. Federal officials don't know how widespread the problem is because the government has no idea how many retirees there are and which of them are qualified, capable or willing to go to sea.

"The commercial fleet is shrinking, more people are retiring, and now people who retire are losing their qualifications," said Perkins. "It's a serious problem that needs to be addressed immediately with some very creative thinking."

Despite the warnings, the military has maintained its reliance on civilian seafarers for sealift and even tried to increase it.

The federal government continues to build $314 million cargo vessels and expects to have 19 of them - each requiring at least 26 civilian crew members - by 2004. The new ships are larger and more efficient than older cargo ships in the federal fleet. The government recently retired 14 ships in the Ready Reserve Force, saying a 76-vessel fleet is adequate because the new vessels can make up the difference.

But the government is keeping the retired ships in mothballs for emergencies. And according to a 1994 Department of Defense review, the Ready Reserve Force needs 142 ships to meet the demands of a large-scale conflict.

"I think there is a fair amount of, if not denial, at least a lot of people looking at this problem through glasses with a very heavy rose tint to them," McCaffery said.

"The bottom line is that fixing the problem is going to cost money, and nobody wants to step up and say they'll take money out of their budget to do it - the Navy won't, and the Department of Transportation won't."

Fixing the problem is not easy for the Pentagon because the labor shortage stems primarily from the economic troubles of the nation's commercial shipping industry.

American cargo ships have all but vanished from the oceans, replaced by lower-cost competitors with Third World labor.

Once the world's largest fleet of commercial vessels, the U.S. merchant marine has dwindled to 220 vessels in active trade. The new maritime power is Panama, with 4,621 ships in its registry last year.

As the American fleet has shrunk, and as job prospects for mariners have disappeared, fewer people are committing themselves to the years-long process of getting the Coast Guard qualifications necessary to work at sea.

As a result, every major union in the U.S. merchant marine is desperate for workers.

"It's an industry-wide problem," said Glen Nekvasil, vice president of the Lake Carriers Association, which represents American shipping companies on the Great Lakes. "We're having very, very serious difficulty finding qualified, good people."

One vessel, the 665-foot U.S.-flagged tanker Asphalt Commander, wants to leave the U.S.-flagged fleet because it can't find crew members. After scouring union halls around the country for third assistant engineers, the ship was boarded by Coast Guard inspectors in Wilmington, N.C., and caught sailing understaffed - without a third assistant engineer.

The ship's owners have petitioned the Maritime Administration and Congress for permission to re-flag with another country, allowing it to hire foreign sailors.

"They made it clear to us that they had checked all the union halls and there weren't any engineers available," said Lt. Cmdr. Rick Raksnis, head of the Coast Guard's inspections unit in Wilmington.

"We told them that wasn't acceptable and they had to find someone. They eventually did."

Citations from the Coast Guard are rare, but the labor shortage is common in cities, on ships and in unions around the country.

The recruitment problem is so dire that the Military Sealift Command gives $1,500 signing bonuses for new workers on ships it operates full time. Still, some mariners are kept at sea for nearly a year at a time because no qualified workers are available to relieve them.

Even the U.S. Merchant Marine Academy can't always persuade its graduates to go to sea. The federal academy, which requires a congressional appointment to attend and offers free tuition, exists to create licensed engineers and deck officers for the commercial fleet. But fewer than 45 percent of its 218 graduates last year took seagoing jobs - and that at a time when unfilled positions are plentiful.

Some graduates joined the military. Others got waivers from the Maritime Administration allowing them to work on shore for shipping companies, port operators or in other maritime-related positions. The agency has pledged to grant fewer such waivers.

"We find an enormous demand for our students right now, but a lot of them want to work ashore," said Rear Adm. Joseph D. Stewart, superintendent of the academy.

"I don't think an awful lot of people who apply here do so because they want to go into the merchant marine."

Kevin Egleston, an able seaman from Miami, said, "Companies call me up at home now asking me to ship out. They can't even fill the regular jobs.

"If they had to crew up those [Ready Reserve Force] ships, I don't know where the guys would come from."

The Pentagon has two alternatives to activating its reserve sealift ships in wartime: It can commandeer the U.S.-flagged commercial fleet or charter foreign-flagged ships.

But federal officials don't like those options.

The Pentagon often charters commercial ships, but it has resisted compelling them into service because many vessels that tried to return to the private sector after the Vietnam War found they had been replaced by foreign competitors. If that happened again, the country's commercial shipping industry might disappear.

And though the Pentagon can use foreign ships - during the gulf war, the United States chartered 182 foreign vessels for sealift - they can be a perilous alternative in wartime.

Reluctant foreign crews

Several foreign crews refused to sail into the Persian Gulf in 1991, once forcing the Military Sealift Command to transfer cargo from one ship to another. Crew members on a Bangladeshi vessel abandoned their ship in San Francisco rather than sail into a war zone. A Japanese freighter refused anything but "benign cargo," ultimately agreeing to haul prefabricated buildings.

Last summer, commandos from the Canadian Navy had to seize the cargo ship GTS Katie off the Grand Banks when the ship's Russian captain refused to enter port because of a payment dispute. The vessel was returning from Kosovo loaded with 590 military vehicles and 390 containers of weapons and ammunition, nearly one-tenth of the Canadian Army's supply of such equipment.

"We need a fairly robust, certainly healthy, U.S.-flag fleet to do the [Department of Defense's] business," said Robertson, the Pentagon's top official in charge of sealift. "When a crisis occurs - I mean a real knockdown, drag-out crisis - for the country to rely on foreign-flag carriers is something we wouldn't want to do."

And so the federal government spends $350 million a year on a fleet of empty ships.

Ships such as the Cape Avinof.

Pat Wright captained the Cape Avinof when it went to sea last year. He has spent most of his career sailing petroleum tankers and loves going to sea. The adventure, the solitude.

But Wright, 47, has a wife and four children in Newport News, Va., and his industry is dying. So instead of going to sea, he works the steadiest job left in the U.S. merchant marine - he sits in port, waiting for a war.

Wright is a permanent chief mate on the Cape Race, a Ready Reserve Force ship in Portsmouth, Va.

'No way'

On deck last fall, he was asked whether he thinks there are enough sailors in the United States to crew all of the nation's sealift ships during a war. He laughed and gave the answer that most merchant mariners give: "No way."

"The whole concept behind keeping these ships here is based on the assumption that you have a viable merchant marine, which creates enough jobs so that there are people available to crew the ships when they're needed," he said. "And we don't have much of a viable merchant marine anymore.

"Nobody seems to realize it, but if there's no merchant marine, our military doesn't go anywhere."

Tomorrow: Once the world's dominant cargo fleet, the U.S. merchant marine has nearly vanished.

-- Martin Thompson (, August 05, 2001


U.S. merchant fleet sails toward oblivion Crews: Once dominant worldwide, the U.S. cargo fleet has been ravaged by cheaper foreign competition, leaving the nation short of seamen to operate the ships in wartime. ---------------------------------------------------------------------- ---------- By Robert Little Sun Staff Originally published August 6, 2001

Last of two parts

The LNG Aquarius was built in the United States because it is one of the most technically sophisticated cargo ships afloat. And American shipyards are the best in the world.

The 936-foot tanker was registered, or "flagged," in the United States because it hauls liquefied natural gas chilled to 260 degrees below zero and requires meticulous care. And American sailors are the best-trained in the world.

But the LNG Aquarius doesn't fly the American flag anymore, and its crew of American mariners is gone.

Because American cargo ships are also the most expensive in the world.

Like thousands of vessels before it, the LNG Aquarius fled the U.S. merchant marine in favor of a fleet with fewer regulations and lower costs. It replaced its crew with foreign sailors, casting the Americans off into new careers, early retirement or unemployment.

The exodus of ships has decimated the U.S. merchant marine, once the world's dominant fleet of cargo vessels. Now the decline is threatening national security, not because of the withering fleet of ships but because of the dwindling number of sailors employed by it.

The pool of qualified American merchant seamen has been so ravaged by cheaper international competition that the nation lacks the manpower to operate the Pentagon's cargo fleet in wartime. Waging even a modest conflict no larger than the Persian Gulf war of 1991 is beyond the fleet's means.

Ship owners say the federal government is largely to blame. For decades, Congress has slashed or eliminated the industry's subsidies and protections while imposing the costliest regulations, taxes and safety standards in the world.

Unofficial 're-flagging' ban

Only now, with military readiness in peril, has the U.S. Maritime Administration turned its focus toward preserving the merchant marine's labor pool by quietly imposing an unofficial ban on the "re- flagging" of vessels to hire foreign crews.

But the fleet continues to decline, with many ships choosing the scrap yard as an acceptable alternative to the high costs of flying the American flag.

"It's tragic, really, that it's gotten to this point," said John A. Gaughan, a former head of the Maritime Administration, which regulates merchant shipping in the United States. "I think if you took all of us who have been maritime administrators and lined us up, and if we were honest, we would all have to say that we failed."

The United States' commercial fleet was the largest in the world in 1950, with 3,492 ships. Today, the trade lanes are ruled by countries such as Panama, Liberia, Malta and Cyprus. The United States, with 220 vessels in active trade, doesn't rank among the top dozen maritime powers.

Money is to blame. Virtually every cost associated with operating a ship - except fuel - is more expensive when that ship is part of the U.S. merchant marine.

The payroll costs more. Taxes are higher. Insurance is more expensive. Ships must be built to the Coast Guard's exacting standards. Repairs must be made in expensive American shipyards.

An American cargo ship costs as much as $4 million more to operate for a year than an identical ship flying a foreign flag, expenses that few ship owners are willing to pay.

'It just gets worse'

"You start off with an income tax that puts a company 35 percent behind the curve," said Joseph J. Cox, president of the Chamber of Shipping of America, a group of American ship operators. "Who's going to get in? No one. And it just gets worse from there."

Owners of ships registered in the United States often take extraordinary measures to reduce the costs that the flag demands.

Lykes Lines once stripped the engines out of two ships, plugged up the propeller shafts and towed the vessels with tugs, ruining two perfectly good ships but reducing their required crew from 33 to nine.

American Heavy Lift Shipping chopped four 1950s-vintage tankers in half and welded on new 510-foot bodies, an unfathomable expense anywhere else in the world but one-quarter the price of building new ships in an American shipyard.

Matson Navigation signed a contract this spring to repair five ships in Shanghai, China, even though it will be fined 36 percent of its costs as a penalty for using a foreign shipyard. "It's still considerably cheaper," said Matson spokesman Jeff Hull.

The few ships still in the U.S.-flag fleet remain mostly so that they can haul products reserved for American ships by law, such as Alaskan oil, government grain, military cargo and domestic shipments to Hawaii and Puerto Rico.

For most others, the U.S. flag is not worth the costs, so they do what the LNG Aquarius did - they leave the fleet.

A change of flags

While the LNG Aquarius was at anchor last year in the United Arab Emirates port of Fujairah, its nation of registry was changed to the Republic of the Marshall Islands. The American flag came down, the new flag went up, and a crew of Croatians and Filipinos replaced the 27 Americans.

The ship is still sailing today, with annual expenses reduced by about $3 million.

"We couldn't keep operating with those expenses. No one could," said Sidney G. Vass, president of BGT Ltd., which charters the LNG Aquarius. "Americans are just too expensive."

The largest expense onboard an American ship is the crew. Any vessel flagged in the United States must employ Americans, who demand American wages. An able seaman on a U.S.-flagged vessel typically makes at least $40,000 a year, and officers can make $120,000 or more. A sailor from the Philippines can make as little as $435 a month.

Mariners in the U.S. merchant marine make no apology for being more expensive than their Third World counterparts. American mariners are generally regarded as the best-trained sailors in the world and their wages are no better than those of other skilled workers in the United States.

"It can be a comfortable living, no doubt about it," said Charlie Snyder, chief engineer on the LNG Aquarius before it was re- flagged. "But I've always felt you had to pay us about 50 percent more to get us to go to sea.

'Not an easy life'

"Do you know how many games I've missed? How many of my daughters' dance recitals? Imagine being with your 4-month-old daughter, walking out the door and not coming back until she was 8 months old. It's not an easy life."

The federal government doesn't allow ships to hire foreign sailors, because American sailors are the U.S. merchant marine's most important commodity.

The Pentagon needs 3,594 of them to operate its fleet of cargo ships in wartime, and it can't cannibalize the merchant fleet to get them. The nation needs enough sailors to operate the military and commercial fleets simultaneously.

So the federal government requires its cargo ships to hire Americans, then tries to compensate the ships' owners for the added cost.

The government pays out $100 million in ship subsidies every year and underwrites more than $1 billion in loans. It spends half a billion dollars a year on the added cost of shipping its cargo on American vessels and employs an entire government agency to preserve the U.S. merchant marine.

But American ships are still the most expensive in the world. And despite its efforts, the government is still mostly to blame.

Salaries aren't the only thing driving up the cost of an American ship. A host of other expenses contribute to the fleet's inability to compete in the international market, all of them required by the federal government.

Bigger crews required

American ships must hire more crew members than foreign ships, often 23 or more, compared with as few as 11 on other vessels.

They must make repairs in the United States or pay a penalty. Even repairs made at sea by the crew result in a penalty if foreign equipment is used.

Any ship that carries goods from one American port to another must be flagged in the United States and built in the United States under the Jones Act of 1920. The requirement is designed to preserve American shipyards, which are also considered vital to national defense. But American shipyards might charge $150 million or more for a standard cargo ship, compared with $70 million or less for a similar ship built in a foreign yard.

American ships pay the same taxes any other business does, while most of their competitors pay nothing. They are required to comply with safety regulations that far exceed international standards.

American ships also cost more to insure, partly because they cost more to replace but also because American sailors file more injury claims than any others.

Back injuries in particular "appear to be endemic amongst U.S. seamen," says a report from the U.K. Protection & Indemnity Club, the world's largest marine insurer. "It seems possible that these figures say as much about the U.S. legal system as they do about the U.S. backbone."

Even ship owners willing to pay American salaries say they were forced from the fleet because of all the other expenses that the U.S. flag requires.

"Foreign crews eat less, they travel economy class, they seem to use less [provisions], there's less overtime, no workers complaints," said Vass, who re-flagged the LNG Aquarius. "I can't think of anything that didn't cost more. Like the beef. They would only eat prime American beef - not choice, like your wife feeds you, but prime, U.S. beef. We had to fly it out to Japan.

"I'm not saying the Americans aren't good. They are. But the foreign crew doesn't mind eating Australian beef."

The U.S. Maritime Administration had the power to stop the LNG Aquarius from leaving the fleet. It can refuse requests to re-flag if the ship's departure would be harmful to the nation.

But for years the administration granted vessels' re-flagging requests routinely, saying it was powerless to stop them because the Pentagon didn't need the ships.

Only now, after allowing more than 1,600 vessels to leave the fleet in the past quarter of a century, has the Maritime Administration decided to stop re-flaggings, because the Pentagon needs the sailors.

In an unprecedented move, the Maritime Administration granted the LNG Aquarius' request to re-flag only when its owners pledged to employ Americans on six other vessels they wanted to re-flag.

"Absent applicant's proposal to retain U.S. seafarers, it is hard to perceive of a sound basis for approval in view of the adverse impact on the commercial and militarily useful U.S.-flag fleet that a lack of trained mariners would cause," Clyde J. Hart, then maritime administrator, wrote in the order allowing the ships to re-flag.

In a later interview, Hart said the agency would deny all new re- flagging requests that could lead to a decline in the seafaring labor pool. Hart was appointed by President Bill Clinton. The Bush administration has not named a replacement.

"Any re-flagging request, at least now, will require a look into the manning issue," he said. "At this point, every job counts - even a hundred or so. These days a hundred people is enough to crew five ships. And we need every ship."

The Maritime Administration's mission is to "promote the development and maintenance of an adequate, well-balanced U.S. merchant marine." Its latest report calls the U.S.-flag cargo fleet "large" and "diverse" and says it consists of 29,446 vessels.

Report called misleading

But according to Gaughan, the former Maritime Administrator, the report is misleading.

Only 610 of those vessels have engines. And discounting ships owned by the government, chartered to the military, laid up in mothballs, working on the Great Lakes or too small to be considered oceangoing, the active deep-sea fleet consists of about 220 ships.

"That report seems to be a conscious decision on the part of [the U.S. Maritime Administration] to mask the size of the fleet and hide the fact that it's gotten so small," said Gaughan.

And the fleet continues to shrink.

Sabine Transportation scrapped the tanker Sea Princess earlier this year because it couldn't use a foreign shipyard to convert it into a bulk carrier.

Sargent Marine plans to lay up the Asphalt Commander this year and re- flag or scrap it because labor shortages, high repair costs and government-imposed trade restrictions make it unprofitable flying the U.S. flag.

An additional 40 ships could flee by 2006 because of a law passed after the Exxon Valdez oil spill in 1989 that requires tankers to have double-layered hulls. A large double-hulled ship costs more than $200 million to build in an American shipyard - three times the price in South Korea - and only one new ship is being built for every three that leave the fleet.

'Not encouraged'

"Shipping companies who own and operate these vessels base their replacement decisions largely on whether they believe that new or converted vessels are worth the investment," said a report last year from the U.S. General Accounting Office. "And most companies apparently are not encouraged."

Crowley Maritime Corp. of Oakland, Calif., operated seven U.S.- flagged ships in foreign trade four years ago. Today it operates none.

Two were re-flagged when the government cut shipments to Central America, two were sold and re-flagged when their government charters expired, and three were sold after a trade dispute between the United States and Brazil dried up the company's profits.

All seven of the vessels are still sailing, four of them under foreign flags and three chartered by the U.S. Navy. None was commercially profitable for Crowley under the American flag.

"This is a company that wants to fly the U.S. flag - they held on to the flag a lot longer than most," said Mike Roberts, a former Crowley vice president and now its director of government relations. "But they couldn't do it any more. It just wasn't profitable."

Few Americans might notice the merchant marine's demise - unless war breaks out. The shelves in American stores are stocked by a continuous stream of goods, less than 3 percent of which ever see the inside of a U.S.-flagged ship.

But businesses that rely on the U.S.-flagged fleet notice.

Midwestern farmers say they could sell 20 percent more grain through the government's international assistance programs if the United States didn't have to spend an extra $400 million every year paying to ship its products on American vessels.

Airborne cattle

Hawaiian cattle ranchers have found it cheaper and more efficient to ship their livestock on airplanes than on U.S.-flagged ships.

They can't use cattle ships because all cattle ships are foreign. And shipping cattle in "cowtainers" stowed next to the pineapples, coffee and other exports on a U.S.-flagged ship is expensive, slow and insufficient to handle the volume the ranchers need.

So some Hawaiian cattle fly - in 747s, herded into livestock containers, 30 cents a pound.

"Can you believe that? Cattle on an airplane," said Corky Bryan, vice president of Parker Ranch, Hawaii's largest cattle ranch. "It's nuts."

It's the law. Shipping companies have complained for decades that federal regulations were driving their costs to unthinkable levels and decimating the U.S. merchant marine as a result. The presidents of two large U.S. carriers warned Congress in 1992 that the fleet was "in a state of orderly liquidation."

But in the past half century, little has changed.

Cuts in subsidies

The most sweeping change in federal maritime policy in the past decade was made in 1995, when the government reduced vessel operating subsidies by about half.

Before that, a 1986 law eliminated tax breaks for foreign-flagged vessels owned by American companies.

Proposals to allow foreign-built ships in domestic trade are rejected in Washington every year - by the same Congress that eliminated federal subsidies for construction of American-built ships.

The Bush administration proposes eliminating loan guarantees for vessel construction. It also wants to transfer much of the Maritime Administration's responsibility to the Department of Defense.

"If you look back through history, you'll see that the industry was never really taken seriously. The only time people cared about the merchant marine was when there was a war on," Andrew Gibson said in an interview before his death July 8. Gibson was maritime administrator under President Richard M. Nixon and was co-author of a recent book on U.S. maritime policy.

"You eventually become convinced," he said, "that this country really doesn't want a viable merchant marine, at least not in international trade. It's the only conclusion you can reach." coll=bal%2Dnationworld%2Dutility

-- Martin Thompson (, August 11, 2001.

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