If the United States is truly going to commit itself to maintaining its historical status as a global shipping power, then the nation must undertake a dedicated effort to build new commercial vessels domestically.
Many deep sea and Jones Act ships either have reached their life expectancy or are nearing it. Even though union-contracted shipyards – like those in Philadelphia, Pascagoula and San Diego – are turning out new vessels, more needs to be done to ensure that the international and domestic fleets do not stagnate.
America does have a valuable, though underused, asset at its disposal to grow and strengthen the U.S.-fleet, one that would provide decent jobs for Americans as well. The Title XI Shipbuilding Loan Guarantee Program remains a valuable resource for those planning to build vessels in U.S. shipyards or for U.S. shipyards planning boatyard improvement projects.
Title XI is administered by the U.S. Maritime Administration (MarAd). It insures loans made by private sector lenders to shipowners, enabling those shipowners to obtain funding for building projects in domestic yards. This program unlocks low-cost financing for U.S. shipowners seeking to build new vessels in this country. Earlier studies have shown that for every dollar invested in Title XI, about $20 worth of economic activity is generated. This is a good return on the investment of taxpayer dollars.
Title XI, when used properly, promotes the growth and modernization of the U.S.-flag fleet, domestic shipyards and the U.S. Merchant Marine. This has been on full display since 2015 when the U.S.-flag vessels Isla Bella and Perla Del Caribe began sailing between Jacksonville, Florida, and San Juan, Puerto Rico, after being built at General Dynamics NASSCO in San Diego. TOTE Maritime utilized Title XI to pay for the construction of these modern LNG-powered vessels, the first of their kind in the world.
Of course, new U.S.-flag ships increase the pool of skilled mariners available to the country in times of national defense or emergencies. Newer ships are less costly, more fuel efficient and better for the economy.
When Title XI is utilized, it has been proven to work. We are pleased that MarAd recently simplified its review process for new construction, which has enabled greater utilization of Title XI.
While it is good to see Title XI being used again, still more action is needed. Congress appropriates funding for Title XI. In many of the recent fiscal years, the dollars for the program have only covered its basic administration. It is critical that Congress increase funding for Title XI to allow it to be used for future shipbuilding in the United States.
NOW, THEREFORE BE IT RESOLVED that the MTD, its affiliates and its Port Maritime Councils once again recognize the importance of a strong, vibrant domestic shipbuilding industry and the need to revitalize the U.S.-flag fleet; and
BE IT FURTHER RESOLVED that the MTD, its affiliates and its Port Maritime Councils call upon the Congress and the White House to increase funding for the Title XI Shipbuilding Loan Guarantee Program to a proper and sustainable level.
Passed 2017 MTD Convention