Creating the Conditions for a Revival in Shipbuilding

Given the right conditions, utilization, employment, productivity and output of the U.S. shipbuilding industry would all rise dramatically. Among the conditions that must be set “right”:

  • Effective enforcement of the Jones Act to cover construction of all manner of domestically used vessels—including traditional cargo ships, oilrigs and construction barges. Enforcement should cover de-facto “re-construction” of Jones Act vessels now taking place under the guise of “repair” work undertaken in China and elsewhere. Much of this repair work consists of complete construction from the ribs out. Five court challenges against de-facto foreign repair/reconstruction and “kit ship” construction have been frustrated by the tangle of administrative regulations and limited legal redress because of what we perceive to be lax interpretations by the Coast Guard (See footnote and cases).
  • Ending DOD’s long-term vessel leasing of foreign-built vessels by the Military Sealift Command—at least 11 ships in the current strategic reserve fleet are foreign built vessels. This practice is neither fiscally sound nor consistent with U.S. Buy American requirements. DOD keeps the costs of its leases a secret—arguing that it is “proprietary” information (even though it’s paid for with tax dollars). Long-term leasing is, in fact, illegal. As practiced by the Pentagon, long-term leasing is a budget expedient helping balance DOD’s budget in the short run, and killing shipyard jobs in the long run. Congress must no longer turn a blind eye toward the practice. See DOD Leases of Foreign-Built Ships, a document provided by the Research Department of the International Brotherhood of Electrical Workers (IBEW) and DOD Leases of Foreign Built Ships: Background for Congress, June 10, by the Congressional Research Service.
  • Fund maritime construction guarantees (Title XI) to re-establish and support ship orders for both cargo and passenger vessels in Jones Act commerce.
  • Support legislation requiring U.S. construction of renewable energy equipment and technology—wind & wave technology components as well as oil & construction barges used in the U.S.
  • Expedite implementation and increase financial support for the Department of Transportation Maritime Highway concept to encourage more cargo movement on U.S. waterways on the east and west coasts as well as the Mississippi River and throughout the Great Lakes. The plan would beef up maritime activity and ship building while relieving highway congestion on the nation’s interstates.

 

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