Navy League of the United States: Recommendations for a maritime nation

The following is excerpted from a report published this month by the Navy League of the United States. The complete report is available online.

The United States is a tapestry of rivers, waterways and coastlines. It is not lost on America's allies - and adversaries - that its wealth of natural resources have afforded the nation unparalleled growth, as well as physical and economic autonomy. The demonstrable conclusion is that government policy continues to vigorously protect our coastlines and inland ports, harbors and waterways, and one way by which the U.S. manages to do this is through the Jones Act.

Opponents of the Jones Act suggest the U.S. shipping industry would save millions of dollars a year by turning over domestic cargo to foreign fleets. Likewise, they state that the cost of doing business in the U.S., particularly in the shipbuilding arena, is expensive, and, likewise, that opting for less-regulated "flags of convenience" over U.S.-flagging is cheaper and easier.

Where shipbuilding is concerned, the challenge is complicated. Opponents of the Jones Act have long complained about the costs of building vessels in the U.S. and would just as soon see the industry become fragmented. In the context of China's state-sponsored investments in shipbuilding, the CSIS brief raises the question: "Compared to what?"

In other words, state-supported shipbuilding by China and the other top shipbuilding nations make cost comparisons to the U.S. shipbuilding industry incongruous at best. But U.S. strategy has been to rely on these shipyards to be converted to military use whenever necessary.

Military leaders understand the critical security ramifications of maintaining U.S. shipyards. One need only look to Canada, Australia and the United Kingdom as examples of what happens if a nation does not protect its domestic shipbuilding industry. These NATO-allied countries saw their shipbuilding industries shrink so much that they were confronted with having to reconstruct and, at massive expense, recapitalize their naval and coast guard fleets.

It is clear that the Jones Act plays an important role in keeping American shipyards operational when competing against heavily subsidized foreign yards. The Jones Act also ensures a healthy domestic inland waters fleet, thousands of mariner jobs and a strong defense maritime industrial base.

By prioritizing the defense maritime industrial base, maritime stakeholders are conceiving possible approaches for counteracting America's apparent vulnerabilities. In context, any weakening of the Jones Act would diminish the nation's seafaring and shipbuilding industrial base and make America less secure.

To stem the decline of U.S. shipping in foreign trade, boost mariner employment and provide additional work for U.S. shipyards, military and shipping industry experts must focus on reinvigorating the blue-water vessel industry. Stakeholders should look closely at recent projections, for example, that indicate a need for at least 60 new military-useful oil tankers that would be required in a future contingency with China to support dispersed forces and advanced bases - a major undertaking that would begin to revitalize U.S. shipbuilding.

Moreover, current cargo preference laws should not only be continued, but expanded. By exporting a percentage of liquefied natural gas (LNG) and crude oil on U.S.-built and U.S.-registered ships, this approach can stem the decline of U.S.-flag ships. Such is the case with pending bipartisan legislation in Congress, known as the Energizing American Shipbuilding Act. The bill, sponsored by Rep. John Garamendi (D-Calif.) and Sen. Roger Wicker (R-Miss.), seeks to recapitalize the U.S. domestic shipbuilding industry through a requirement that a percentage of LNG and crude oil volumes be transported on U.S.-built, flagged and crewed vessels. The legislation aims to spur the construction of new ships, which, by extension, could generate thousands of new shipyard jobs, while positively impacting the domestic production side of the U.S. manufacturing and maritime industries.

Another alternative previously explored by the Navy is the option of supporting the development of coastwise services of dual-use vessels, or commercial ships with military utility, including roll-on/roll-off (RoRo) vessels, trailerships or the hybrid ConRos, which are vessels that combine features of RoRos and container ships. Such ships would alleviate ground transportation congestion while also being quickly available to support a major deployment of military equipment through participation in the Voluntary Intermodal Sealift Agreement program - a program in which 73% of the non-tanker Jones Act fleet participates.

In the context of China's goal of dominating the global maritime supply chain, the United States and its allies must develop and implement a strategy to deny China success. It must be a whole-of-government and whole-of-industry approach. We must take inventory of today's American maritime industry, preserve what we have, identify what we need and chart a path forward. It is not a question of matching dollar-for-dollar Chinese government financial support. It is more a question of how we and our allies scale up our defense maritime industrial base to prevent China from achieving the hegemony it seeks through its maritime investments.