Updated shipping bill calls for 250-vessel US cargo fleet

A cornerstone of the revised act is the new Strategic Commercial Fleet Program, which sets an ambitious goal of establishing a fleet of 250 U.S.-flagged vessels in international commerce, and prioritizes tanker vessels. The program provides support payments for capital and operational costs to encourage the introduction of new U.S.-built, -flagged and -crewed vessels. There are currently 80 U.S.-flag merchant ships. 

The legislation significantly enhances cargo preference requirements, increasing the percentage of U.S. government cargo that must sail on U.S.-flagged vessels from 50% to 100%. It also requires that within 15 years, 10% of all cargo imported from China must be transported on U.S.-flagged vessels. There are subsidies for U.S. agricultural exports, and a requirement that U.S. ports give U.S.-flagged vessels priority over non-U.S. ships.

The bill envisions a dedicated shipbuilding financial incentive program with  $250 million in annual funding through 2035, and $100 million in yearly allocations for small shipyards. However, that’s an exceedingly modest outlay since a neopanamax container ship, which carries 15,000 twenty-foot equivalent units, typically costs $150 million to $160 million to construct. 

The bill also provides significant tax benefits, including a 33% investment tax credit for U.S. vessel construction and a 25% investment tax credit for shipyard facilities.

The legislation addresses the critical need for qualified maritime workers through public service loan forgiveness for merchant mariners, enhanced support for maritime academies and establishment of a Maritime Career Retention Program.

A maritime security adviser position within the White House was included in the original version of the bill.

Find more articles by Stuart Chirls here.

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