Posted:
October 4, 2013
As the partial government shutdown entered its fourth day, the Maritime Administration and the U.S. Transportation Command continued to assess the potential impact of a funding shortfall on the Maritime Security Program fleet in fiscal year 2014 and which MSP ships may be idled in the near future.
Ahead of the first day of the fiscal year, MARAD had notified U.S.-flag operators with vessels enrolled in the MSP that certain ships would be laid-up beginning 60 days from October 1 - a notification period required by the law that governs the program. MARAD and USTRANSCOM are continuing to negotiate regarding the exact number of projected lay-ups and the specific vessels that could be affected. While the precise breakdown may still be in flux to some extent, one thing seems fairly certain at this point: MSP ships will be idled in the near future. One ship in the MSP fleet that was operated under contract with American Maritime Officers has already been flagged-out to foreign registry.
The initial breakdown issued by MARAD was considered a starting point for discussion in these preparations and the agency continues to work with USTRANSCOM to refine and update the list. When a final roster is completed and becomes available to us, it will be distributed on AMO Currents. Any rosters that have been published at this point are only estimates and are not official.
MARAD and USTRANSCOM are preparing to absorb the consequences of an appropriation insufficient to fully fund the MSP, although no appropriation has yet been made, as well as the projected impact of another round of arbitrary federal spending cuts under sequestration.
Also affected will be an as-of-yet-unknown number of Ready Reserve Force ships. As I noted last month, MARAD is working proactively to find new ways to reduce costs wherever it can in order to keep as many RRF ships as possible in the fleet and prepared for activation. But without a federal spending blueprint or predictable appropriations, it remains probable that some ships in the fleet will shift to deep lay-up status.
Still subject to change is the federal funding situation for this fiscal year. The hopes of AMO, along with the rest of the U.S. maritime industry, remain pinned to the prospect that any short-term funding solution to end the government shutdown will lead to the drafting of comprehensive spending legislation - an omnibus appropriations bill. In the absence of a budget, such legislation would provide the possibility of full funding being allocated to these fleets that are so critical to U.S. defense sealift capabilities and the job base of the U.S. merchant marine.
Any amount of funding that may be approved in whatever form would almost certainly be subject to reduction when the axe falls in the next round of sequestration.
Absent sequestration, full funding for the MSP in this fiscal year would require an appropriation of $186 million. Although the fleet of 60 U.S.-flagged ships and the global network of commercial intermodal infrastructure the program makes available to the Defense Department are uniformly recognized as absolutely essential and exceptionally cost efficient, a budgetary anomaly from the previous fiscal year may present a challenge in achieving full funding.
The program is authorized at a level of $186 million for this fiscal year. However, when the MSP appropriation for fiscal year 2013 was made under a continuing resolution, MARAD had a surplus of about $12 million in the program's account. Thus, an appropriation of $174 million was enacted to provide what was then thought to be full funding for the program. Although there is no longer any carry-over funding in the MSP account, $174 million may be used as a baseline for the appropriation in fiscal year 2014. Each ship in the program is due an allotment of $3.1 million per year, so with a $12 million shortfall up front, and another potential funding loss under sequestration in January, the number of ships idled would become academic.
I urge all AMO members to support the Voluntary Political Action Fund to the greatest extent possible as AMO continues to work with all of maritime labor, with our contracted operating companies, and with representatives and senators on both sides of the aisle on closing this gap and restoring full funding to these crucial sealift fleets.
We remain steadfast in our determination to overcome the dire circumstances now confronting our union and our industry. As this situation continues to unfold and reliable information becomes available, we will keep you informed.
Tom Bethel
National President
MARAD prepares for vessel lay-ups as the gears of Congress grind
As the partial government shutdown entered its fourth day, the Maritime Administration and the U.S. Transportation Command continued to assess the potential impact of a funding shortfall on the Maritime Security Program fleet in fiscal year 2014 and which MSP ships may be idled in the near future.
Ahead of the first day of the fiscal year, MARAD had notified U.S.-flag operators with vessels enrolled in the MSP that certain ships would be laid-up beginning 60 days from October 1 - a notification period required by the law that governs the program. MARAD and USTRANSCOM are continuing to negotiate regarding the exact number of projected lay-ups and the specific vessels that could be affected. While the precise breakdown may still be in flux to some extent, one thing seems fairly certain at this point: MSP ships will be idled in the near future. One ship in the MSP fleet that was operated under contract with American Maritime Officers has already been flagged-out to foreign registry.
The initial breakdown issued by MARAD was considered a starting point for discussion in these preparations and the agency continues to work with USTRANSCOM to refine and update the list. When a final roster is completed and becomes available to us, it will be distributed on AMO Currents. Any rosters that have been published at this point are only estimates and are not official.
MARAD and USTRANSCOM are preparing to absorb the consequences of an appropriation insufficient to fully fund the MSP, although no appropriation has yet been made, as well as the projected impact of another round of arbitrary federal spending cuts under sequestration.
Also affected will be an as-of-yet-unknown number of Ready Reserve Force ships. As I noted last month, MARAD is working proactively to find new ways to reduce costs wherever it can in order to keep as many RRF ships as possible in the fleet and prepared for activation. But without a federal spending blueprint or predictable appropriations, it remains probable that some ships in the fleet will shift to deep lay-up status.
Still subject to change is the federal funding situation for this fiscal year. The hopes of AMO, along with the rest of the U.S. maritime industry, remain pinned to the prospect that any short-term funding solution to end the government shutdown will lead to the drafting of comprehensive spending legislation - an omnibus appropriations bill. In the absence of a budget, such legislation would provide the possibility of full funding being allocated to these fleets that are so critical to U.S. defense sealift capabilities and the job base of the U.S. merchant marine.
Any amount of funding that may be approved in whatever form would almost certainly be subject to reduction when the axe falls in the next round of sequestration.
Absent sequestration, full funding for the MSP in this fiscal year would require an appropriation of $186 million. Although the fleet of 60 U.S.-flagged ships and the global network of commercial intermodal infrastructure the program makes available to the Defense Department are uniformly recognized as absolutely essential and exceptionally cost efficient, a budgetary anomaly from the previous fiscal year may present a challenge in achieving full funding.
The program is authorized at a level of $186 million for this fiscal year. However, when the MSP appropriation for fiscal year 2013 was made under a continuing resolution, MARAD had a surplus of about $12 million in the program's account. Thus, an appropriation of $174 million was enacted to provide what was then thought to be full funding for the program. Although there is no longer any carry-over funding in the MSP account, $174 million may be used as a baseline for the appropriation in fiscal year 2014. Each ship in the program is due an allotment of $3.1 million per year, so with a $12 million shortfall up front, and another potential funding loss under sequestration in January, the number of ships idled would become academic.
I urge all AMO members to support the Voluntary Political Action Fund to the greatest extent possible as AMO continues to work with all of maritime labor, with our contracted operating companies, and with representatives and senators on both sides of the aisle on closing this gap and restoring full funding to these crucial sealift fleets.
We remain steadfast in our determination to overcome the dire circumstances now confronting our union and our industry. As this situation continues to unfold and reliable information becomes available, we will keep you informed.
Tom Bethel
National President