RE-FLAG U.S.-OWNED SHIPS?

A NUMBER OF PROPELLER CLUB CHAPTERS around the country are considering what role, if any, foreign-flag U.S.-owned shipping should play in their organization.

For decades, the Propeller Club has been the voice of the U.S.-flag merchant fleet. Its promotion of U.S.-flag shipping has been unwavering. The Propeller Club has been a force on Capitol Hill, in hundreds of meetings in dozens of seaports, in adopt-a-ship classroom projects and even in the streets, as expressed in the sentiments of a bumper sticker declaring American Bottoms Are Better.Some believe things should remain that way, with the Propeller Club identifying strictly with the interests of U.S.-flag ships manned by U.S. crewmen. Others, seeing the rapid shrinkage of the U.S.-flag fleet, believe that the Propeller Club must represent the interestsof the U.S. maritime industry as a whole, and cannot afford to wither away by continuing to ignore a large portion of the U.S. maritime community.

It would be presumptuous for us to try to prescribe to the Propeller Club what policy it should follow. That debate must be left up to its members. Nonetheless, we believe the Propeller Club has focused on an issue of crucial importance.

It is correct to say that the U.S.-flag merchant fleet has declined enormously since the end of World War II, to a point where as little as 4 percent of U.S. cargoes move on U.S.-flag ships. By that standard, the United States has slipped from having the largest national-flag fleet on the world's oceans to a fifth- or sixth-rate power.

But it is equally correct to say that the U.S.-owned shipping fleet is quite possibly the largest and most powerful merchant marine this planet has ever known.

TRUE ENOUGH, MANY OF THOSE SHIPS do not fly the red, white and blue and are not manned by well-trained (and well-paid) U.S. crews found aboard U.S.-flag ships. It is also true that some of those ships will never exhibit the technological prowess and premier quality of service that U.S.-flag liners have come to exemplify. Yet hundreds of ships without the U.S. flag, 300 to 500 depending on who you believe, are U.S.-owned or affiliated. And most of them are owned by the largest corporations in the United States.

It is debatable whether these ships can be legally and/or practically called upon to serve the interests of the United States in time of national emergency. However, the very concept of the use of foreign flags on ships carrying U.S. cargo was developed in the dark days preceding World War II, as a means to transport vitally needed lend-lease materials to an embattled Britain.

There must always be a U.S.-flag fleet, with a corps of highly trained officers and skilled crewmen, both to provide leadership in the development of efficient shipping and as a first line of logistical support in the event of international conflict.

The underlying issue of whether the United States has already gone too far, and become too dependent on lower cost ships with foreign crewmen, will continue to be debated, as it should be. History teaches that within a very few years after a war, nations forget the overwhelming importance of ocean transportation and often are caught unprepared the next time. In a nuclear age, the ability to carry out national policy successfully by conventional means may be the key to avoiding nuclear war. A number of Defense Department scenarios and exercises have demonstrated that the greater the number and effectiveness of non-nuclear alternatives, the less the probability that a conflict will escalate to nuclear proportions.

THUS, THE WAY THAT U.S.-FLAG SHIPPING is balanced against U.S.-owned flag-of-convenience shipping will remain a point of great concern.

Like the U.S.-flag shipping industry, we believe that special recognition and financial assistance for U.S.-flag shipping should be made available through legislation such as that pending before Congress. At the same time, however, it seems prudent that the nation find a way to tap into and be able to use those vessels that are owned by Americans and fly another nation's flag. The sheer numbers of ships without U.S. flags but under U.S. control makes it unwise to ignore them. Foreign construction of U.S.-flag ships has further blurred previous distinctions between U.S.-flag ships and U.S.-controlled ships with other registries.

In the best of all possible scenarios, some mechanism could possibly be developed in which these ships are offered tax breaks (assuming they make money) that would help offset high U.S. crew costs, permitting and encouraging them to re-flag under the red, white and blue. Offering this kind of tax break would accomplish two things: It would supplement the coun try's merchant marine, and it would create more jobs for U.S. merchant seamen. Both are needed in case of national emergencies. Perhaps there are other economic advantages that could be offered to these ships, such as some access to U.S. government cargo.

We'd appreciate industry comment on whether this should be done and how it might be done.

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