THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Thursday, October 6, 1994 TAG: 9410060451
SECTION: BUSINESS PAGE: D2 EDITION: FINAL
SOURCE: ASSOCIATED PRESS
DATELINE: RICHMOND LENGTH: Short : 40 lines
CSX Corp. plans to register 10 container ships in the Marshall Islands because they're too expensive to sail under the U.S. flag, a top executive said.
Sea Land Service Inc., a subsidiary of Richmond-based CSX, has long threatened to reflag its ships because of the nation's maritime policies.
The company estimates that current policies cost shipowners $3 million more a year to operate a ship under U.S. registry.
Reflagging the vessels could diminish what few jobs remain for mariners in the United States. Ships registered in the United States are required to employ U.S. merchant seamen.
Sea-Land, the nation's largest container shipping company, applied in June 1993 to reflag 13 of its 41 U.S.-flagged container ships. The company delayed reflagging while waiting for possible reforms.
Reforms appeared likely when the House in November approved a bill granting subsidies to U.S. flagged ships. Backers hoped subsidies would help preserve the U.S. oceangoing fleet, which numbers 151 ships, compared to more than 1,000 in the early 1960s.
A similar reform measure has stalled in the Senate, and James Ermer, chief financial officer for CSX, said the company sees little hope of a bill passing soon.
``It's been pretty frustrating,'' Ermer said. ``I think for our shareholders' sake we don't have much choice'' but to move ahead with reflagging.
Ermer said reflagging would occur soon after discussions with labor groups. by CNB