TAX CONFERENCE

The recently enacted "American Jobs Creation Act" gives significant tax breaks to a number of U.S. industries--including shipping.

MARINE LOG and BLANK ROME will present a senior level seminar CHANGES IN U.S. TAXATION OF SHIPPING INCOME in Stamford, Conn. on April 5 & 6, 2004

Make sure you know how the new tax rules work!


March 11, 2005

Coast Guard faces "readiness gap"

"Despite spending increasing amounts to maintain operational assets, the Coast Guard is experiencing a continuing decline in fleet readiness," U.S. Coast Guard Commandant Admiral Tom Collins said yesterday in his prepared statement when testifying on the Coast Guard FY 2006 Budget Request before the House Appropriations Subcommittee on Homeland Security.

You can access the whole of his prepared statement here: https://www.piersystem.com/external/index.cfm?cid=786&fuseaction=EXTERNAL.docview&documentID=65807

Meantime, here's a small excerpt that underscores just how urgently recapitalization of the Coast Guard is needed:

The majority of the Coast Guard's operational assets will reach the end of their anticipated service lives by 2010, resulting in rising operating and maintenance costs, reduced mission effectiveness, unnecessary risks, and excessive wear and tear on our people. Listed below are some specific examples highlighting alarming system failure rates, increased maintenance requirements, and the subsequent impact on mission effectiveness:

  • HH-65 helicopter in-flight engine power losses occurred at a rate of 329 mishaps per 100,000 flight hours in FY 2004. This is up from a FY 2003 rate of 63 mishaps per 100,000 flight hours. The comparable Federal Aviation Administration acceptable standard for a mishap of this severity is approximately 1 per 100,000 flight hours. The engine loss rate has resulted in flight and operational restrictions and high levels of risk to our aircrews. Re-engining the HH-65 will remain the Coast Guard's highest legacy asset priority until complete.
  • The 110-foot Patrol Boat fleet has experienced 23 hull breaches requiring emergency dry docks. The resultant loss in operational days is unsustainable, and risks to our personnel are unacceptable. By the end of 2005, the Coast Guard will have taken delivery of eight reconfigured 123-foot patrol boats, which are upgraded 110-foot patrol boats designed to sustain this cutter class until replacement with the Integrated Deepwater System's Fast Response Cutter.
  • Our high and medium endurance cutters are experiencing sub-system failures due to old and unserviceable systems. The 378-foot WHEC fleet averages one engine room casualty, with potential to escalate to a fire, on every patrol. One-quarter of our fleet have recently missed operations due to unscheduled maintenance required to repair failing sub-systems. The total number of unscheduled maintenance days for the major cutter (medium and high endurance cutters) fleet has skyrocketed from 85 days in FY 1999 to 358 days in FY 2004 (over a 400 percent increase). This loss of operational cutter days in 2004 equates to losing two major cutters, or 5 percent of our major fleet for an entire year. The 2006 budget includes funding for six mission effectiveness projects to help sustain the medium endurance cutter fleet, and funds construction of the third National Security Cutter, the replacement for the Coast Guard's high endurance cutter class.
  • Despite spending increasing amounts to maintain operational assets, the Coast Guard is experiencing a continuing decline in fleet readiness. Legacy cutters are now operating free of major equipment casualties (equipment failures that significantly impact mission performance) less than 50 percent of the time, despite the investment per operational day increasing by over 50 percent over the last six years. The resulting "readiness gap" negatively impacts both the quantity and quality of Coast Guard "presence"--critical to our ability to accomplish all missions. The FY 2006 budget continues the urgently-needed Coast Guard fleet recapitalization to address this readiness gap.

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