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| By MICHAEL R. McKAY | |
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Notes on why 2005 is an especially important year for everyone in American Maritime Officers:
On Oct. 1, the Maritime Security Program authorized for 10 years in 1996 will be renewed through 2015 under legislation enacted in November 2003, and there will be some significant revisions. The MSP fleet will expand from 47 ships to 60, the amount of operating assistance payable annually to each ship will increase, and U.S.-built tankers that can carry defense fuels will be eligible to participate for the first time. The Maritime Administration this month will announce its MSP contracts for the renewed and expanded program. Indications are that our union will have some additional cargo ships in the program (AMO now mans four containerships and three pure car carriers operating under Maritime Security Program contracts), and that companies that have collective bargaining agreements with AMO are well placed to land at least some of the five MSP slots held for tankers under the 2003 authorizing statute. But indications are just that. All we knew with certainty at the New Year was that, because vessels already enrolled in the Maritime Security Program are guaranteed participation in the next 10-year round, AMO is assured of long-term jobs on at least seven MSP ships. How does MARAD select ships for Maritime Security Program contracts? The ships must operate in commercial foreign trade, and they must be suited for strategic sealift service and other military support missions. A specific vessel's military utility is determined exclusively by the Department of Defense. There is no economic competition between or among U.S.-flagged merchant ship operators for MSP agreements. Each participating ship draws the same fixed amount--currently $2.1 million--in limited operating assistance each year. The money must be used to keep the ships active and available to DOD. The Maritime Security Program was intended in 1996 to prevent or at least delay the flag-out of scores of liner ships to foreign registries as the ships' operating differential subsidy contracts (ODS) expired. Funding of ODS--a program authorized in the Merchant Marine Act of 1936--had been cut off by the Reagan administration. Although AMO had no labor agreements with the ODS fleets that were to be the principal beneficiaries of the Maritime Security Program in 1996, we supported the MSP strongly as a matter of principle--AMO did not want to see any merchant ship abandon U.S. registry, regardless of which union or unions represented the engine, deck and radio-electronics officers, and we did not want to see any American merchant mariner lose his or her job. We also had a practical reason to support the authorizing legislation. A provision allowed MSP participation by Maersk Line Limited, an AMO employer with U.S.-flagged ships under government charter but no U.S.-flagged vessels in commercial trade at the time. The result was four new vessels in our union's ocean-going fleet. While we anticipate greater participation by AMO employers in the renewed Maritime Security Program, we also expect threats to the program. One thing that did not change with the renewal legislation was the requirement that MSP be funded each year through direct appropriations. MSP has strong bipartisan support in the House and the Senate, and the administration has requested full funding of MSP in every budget cycle. But the program is not without its critics, and there could be an annual funding fight as budgets tighten. This month, AMO engine, deck and radio-electronics officers will fill new jobs on the USNS Gilliland, one of two large, medium-speed roll-on/roll-off ships to be operated for the Navy's Military Sealift Command by 3PSC LLC under a small business set-aside charter awarded by MSC late in August 2004. 3PSC is expected to assume operating control of the second ship, the USNS Gordon, in March or April. The USNS Gilliland and USNS Gordon are currently operated by Patriot Contract Services, which has labor agreements with the Marine Engineers Beneficial Association and the International Organization of Masters, Mates and Pilots. AMO also awaits the Spring 2005 turnover of nine additional LMSRs from Patriot to American Overseas Marine Corp. under a separate MSC charter awarded in September 2004. MSC's timetable had called for completion of the management transfer by the end of 2004. Both the 3PSC and AMSEA LMSR charter awards were snagged by protests filed with the Government Accountability Office and, in the 3PSC case, failed challenges to the company's status as a small business. The latest complication was Patriot's year-end lawsuit against MSC. Patriot wants a federal court to set AMSEA's LMSR charter award aside. The 3PSC and AMSEA LMSR charter awards followed MSC's selection of Horizon Lines--which employs members of MEBA and the MM&P--to operate seven T-AGS oceanographic survey vessels. Dyn Marine Services, which employs AMO engine, deck and radio-electronics officers, had operated the vessels under MSC charter for years. The LMSR and T-AGS awards are examples of life in the world of government charters, the largest source of business for U.S.-flagged merchant vessel operators and jobs for American merchant mariners. A government agency--MSC or MARAD--issues a Request for Proposals for a specific shipping service and companies compete for the resulting charter award. The seagoing unions employed by the competing companies are secondary beneficiaries of winning bids, and the unions have no legal standing to challenge charter awards. The points are plain--no government shipping charter is won easily, and no government shipping charter is permanent. Having manned ships under government charter for more than 20 years, AMO knows what rides on an RFP, and there are several pending at various stages for resolution this year:
The Jones Act holds all domestic waterborne commerce for merchant vessels owned, built, flagged and manned in the U.S. The law sustains jobs for AMO in deep-sea, Great Lakes and inland waters markets. Targeted repeatedly by powerful corporate and political interests in the U.S. and abroad, the Jones Act is threatened this year by at least one lawmaker--Ed Case, a Hawaii Democrat now serving a second term in the U.S. House of Representatives. In the 108th Congress, Rep Case was the sponsor of three separate bills to weaken this vital domestic shipping law--one would have lifted the law's jurisdiction over cargoes moving directly between the continental United States and the non-contiguous states and territories of Alaska, Hawaii, Guam and Puerto Rico, another would have waived the Jones Act in trade between the U.S. mainland and Hawaii, and the third would have allowed the foreign-flagged transport of farm and livestock cargoes between Hawaii and the mainland. Late last year, rep. Case said he would take up the cause once more in the 109th Congress, which convened Jan. 4. The Jones Act also remains at risk on the trade front. Panama is pressing the U.S. for a concession on another cabotage law in negotiations possibly leading to a U.S.-Panama free trade agreement. Such U.S. concession would encourage wider diplomatic assaults on the law. Panama, the European Union, Japan, the Nordic countries and other foreign governments remain determined to force negotiated repeal of the Jones Act through multilateral service trade negotiations sponsored by the World Trade Organization. |
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