Before members of Congress left Washington late last year to head home for the holidays, the House and Senate both passed major spending bills, which were signed by President Trump, that contain significant wins for the U.S.-flag maritime industry.
Within the National Defense Authorization Act (NDAA) for fiscal year 2020 was an SIU-backed component extending the Maritime Security Program (MSP) by 10 years, through fiscal year 2035. Additionally, the MSP stipend was boosted to $5.3 million per vessel beginning in 2022, followed by gradual increases to $6.8 million in 2032.
Enacted in 1996, the MSP ensures that the Defense Department has access to a fleet of U.S.-crewed, U.S.-flagged, militarily useful vessels in times of war or national emergency. In exchange, U.S.-flag companies whose ships are enrolled in the program receive an annual stipend. The MSP and its related Voluntary Intermodal Sealift Agreement have saved the federal government billions of dollars that would be needed to replicate its efforts.
Sixty ships currently are included in the MSP, and Congress still must approve the stipends annually. Moreover, the NDAA authorized an MSP-like cable ship program beginning in fiscal year 2021. It provides a $5 million per-vessel stipend for two privately owned cable installation vessels.
A program involving U.S.-flag tankers also may be on the horizon thanks to the recently enacted legislation. The Defense bill mandates a report on American-flag tanker vessel capacity from the Secretary of Defense. The report will be created in conjunction with the Secretary of Transportation.
Also within the NDAA is language aimed at making the transition from the U.S. Coast Guard to the U.S. Merchant Marine easier. It includes a study on the availability of Jones Act vessels for offshore wind farm work.
A second and much larger appropriations bill (which covers the federal government through September 2020) reauthorized the U.S. Export-Import Bank for seven years. Cargo generated by Ex-Im Bank funds must be moved overseas on U.S.-crewed, U.S.-flagged vessels. It permitted the bank’s board to authorize loans in the event it lacks a quorum.
The package also included $1.7 billion for the Food for Peace Program (PL 480). Fifty percent of the cargo must be moved aboard U.S.-crewed, U.S.-flagged vessels.
The fiscal year 2020 bill contained more than $75 million for the construction of a new larger lock within the Soo Locks system between Lake Superior and the rest of the Great Lakes.
Presently, only one of the three operational locks – the Poe Lock – can handle the longest thousand-footers that ply the Lakes. Maritime and business experts have conjectured for years that if the Poe Lock (built in 1968) ever became disabled for an extended time during the sailing season, it could lead to an economic disaster for that U.S.-Canadian area.
The Lake Carriers’ Association, which represents the U.S.-flag Great Lakes fleet, reported the Soo Locks is responsible for 87,000 American jobs, paying $6.4 billion in salaries and generating $17.4 billion in economic activity in the U.S.
Complementing the new resources will be $52 million provided by the state of Michigan in 2018 as well as $32 million from the U.S. Army Corps of Engineers 2019 discretionary work funds.
Jim Weakley, president of the association, stated, “These funds will lay the groundwork for the next big step – the construction of the lock chamber. With continued efficient funding, the construction of the new lock could be complete in as little as seven years.”
Congress authorized construction of a new lock in 1986, but funding was never granted. In 2015, the Department of Homeland Security pointed out a 2007 Army Corps of Engineers study stating there was no need for a second Poe-sized lock contained flawed data.
In addition, the appropriations legislation had good news for many unions. It repealed the so-called “Cadillac” tax on quality health care coverage that could have adversely affected millions of union members and their families. It also provided funding for the American Miners Act that secures the pensions and health care for thousands of Mine Workers and their families.
“What we and the rest of maritime labor were able to accomplish in 2019 is nothing short of incredible,” said Brian Schoeneman, the SIU’s Political and Legislative Director. “In a year where everyone has been complaining about gridlock, and with Democrats and Republicans fighting on almost every issue, we were able to get significant victories that provide job security and stability for our membership and keep America safe. These wins demonstrate that the SIU’s bipartisan approach, made possible through the membership’s support for SPAD, can get things done even in the toughest political environments.”