THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Monday, April 10, 1995 TAG: 9504080160
SECTION: BUSINESS WEEKLY PAGE: 10 EDITION: FINAL
SOURCE: BY TIM SHORROCK, JOURNAL OF COMMERCE
LENGTH: Short : 41 lines
Shipowners warned the U.S. merchant fleet's decline could pose transportation problems for the Pentagon.
``The Congress and the military had better wake up, because the backbone of the American merchant marine is gone,'' said Ragnar Knutsen, vice president of Sealift Inc. of Oyster Bay, N.Y.
The shipowners recently switched two modern cargo ships to a foreign flag and scrapped or reflagged more than a dozen bulk vessels and freighters to shave expenses.
Shipping and government officials expect most of the country's breakbulk freighter fleet and more than one-third of its bulk tonnage to be gone by summer.
All the bulk and breakbulk ships being scrapped are active in U.S. cargo preference programs that reserve up to 75 percent of military and aid cargoes for U.S. flag ships. Those programs have been slashed drastically and are facing even deeper cuts in Congress.
The U.S. Sealift Command, which carries munitions, has 19 large roll-on, roll-off ships scheduled for delivery in 2001. Sealift Command said it ``is aware of the growing loss of militarily useful breakbulks in the U.S. merchant fleet. However, this trend will not degrade the U.S. military's sealift readiness based on the expansion program now under way through the year 2001.''
America's merchant fleet is in decline because of cost. U.S. flag ships must hire U.S. citizens and meet stricter safety standards than foreign vessels. The costs diminish U.S. vessels' ability to compete in foreign markets unless they are subsidized for the cost of their crews or guaranteed markets for U.S. government cargo. by CNB