Maritime unions are up in arms and calling for the resignation of U.S. Maritime Administrator David Matsuda, following the release of a MarAd report that compares the costs of U.S.-flag and foreign-flag vessel operations.
The report, a Comparison of U.S. and Foreign-Flag Operating Costs, reaches the conclusion that it costs more to operate ships under the U.S.-flag than under an open-register flag and that the key reason for this is that U.S. citizen crews are more expensive than third-world crews.
Possibly this is news to the Maritime Administrator, who worked as an attorney with the safety law division of the USDOT's Federal Railroad Administration before becoming a staffer for Senator Frank Lautenberg. Matsuda has often been criticized in maritime circles for his lack of knowledge and engagement with the maritime industry. One well-known maritime attorney who works for a major flag state went so far as to say that the Administrator was "underwhelming." Another prominent member of the salvage community said he was going to make it his mission to get rid of Matsuda. One long-time maritime commentator called him "the invisible man."
What appears to have infuriated union officials is that they were not even consulted regarding the report. The American Maritime Officers, International Organization of Masters, Mates and Pilots, Marine Engineers Beneficial Association and the Seafarers International Union issues a joint statement criticizing the report.
In part the joint statement said: "The U.S. Maritime Administration recently released a highly contentious study of American-flag shipping without any input whatsoever from maritime labor. This
inexplicable decision guaranteed that the report would not contain the information that Congress and the Administration would need to develop and implement meaningful maritime policy that strengthens, not weakens, the U.S.-flag merchant marine, provides jobs for American, not foreign, maritime workers, and bolsters, not diminishes, the economic, military and homeland security of the United States. The administrator who approved the report, David Matsuda, should be held accountable."
The MarAd report also recites various suggestions for enhancing the competitiveness of the U.S.-flag fleet. Among these are to amend the Jones Act to reduce the U.S. citizen crew, introduce a second "open" U.S. register, amend labor laws and U.S. Coast Guard manning requirements, as well as changes to labor pensions and health care costs and training costs. None of these are news either and none of them are going to happen.
"The Maritime Administration," said the unions in a joint statement, "more than a year ago, was tasked by Congress with identifying ways to boost American-flag shipping. Instead, the agency accepted a report based on incomplete information whose main conclusion – that in the deep-sea commercial sector, it often costs more to use U.S.-flag ships – isn’t news to anyone. The fact that MarAd chose to exclude a significant segment of the maritime industry from this process, and accepted a report that includes possible cost-cutting suggestions that are completely contrary to the overall best interests of the United States, represents a gigantic failure in Matsuda’s leadership and a missed opportunity on the part of the Maritime Administration.
"How could the Maritime Administration sign off on a report that suggests consideration of weakening or eliminating the Jones Act, one of the bedrocks of our national and economic security? How could the agency not refuse the mere notion of turning America into a second register? (It should be noted that the carriers interviewed for the study soundly rejected lowering U.S.-citizen crewing requirements as well as the second-register idea.)"
November 11, 2011