Dwindling US fleet carries 5% of cargo

The privately owned and operated US merchant fleet -which as recently as the late 1940s dominated world shipping -is facing dreary seas these days. Although the US is the world's largest trading power, its merchant fleet is tenth in absolute numbers, far behind that of the Soviet Union.

While the US fleet had over 4,000 oceangoing vessels 30 years ago, the fleet is down to about 600 ships. In fact, without all-out support from the US public and Congress, argues Samuel R. Sacco, an officail of the National Maritime Council (NMC), main trade group for the maritime industry, the US fleet is "slowly sinking into the sea."

Today, despite the fact that well over 90 percent of US foreign trade is conducted by shipping, less than 5 percent of that amount is carried on US ships.

Moreover, there is a genuine national "security danger" for the US, according to C. William Neuhauser, executive secretary of the NMC.

Currently, he argues, the US merchant fleet does not have the ships or manpower to fill its military "deterrence role."

That means, he says, being able to transport men and materials to a potential war zone," a traditional role for the US fleet.

At the same time, importation of most vital strategic materials are now carried on non-US vessels. US ships for example, carry less than 2 percent of imported iron ore, bauxite, and tungsten. Only 3 percent of oil imports are on US flag carriers.

What does the maritime industry seek in the way of public policy to restore the primacy of its fleet?

According to Mr. Sacco, reginal director for the NMC, the industry is seeking three main objectives:

1. "True cost parity" for US flag carriers. Parity refers to putting US firms on "cost of business" basis. As the maritime industry sees it, that means that US shipyards should be able to deliver ships to US carriers at prices equivalent to overseas shipyards. Currently, most overseas shipping nations heavily subsidize their merchant fleets. Also as the NMC sees it, operating subsidies for the carriers must be equal to advantages enjoyed by overseas competitors.

Currently, the federal subsidy for the US fleet (for ship construction and operations runs around $700 million annually.

To gain truer parity, arrgues Mr. Sacco, the added-on subsidy would run an additional $4 million annually. That, he points out, is comparable to what Congress expends for the Pentagon annually for only several navy ships, or limited numbers of military equipment.

2. "Increased operating flexibility" for US shippers.

At present, notes mr. Sacco, US shipping lines operate under a broad range of restrictive laws that do not apply to overseas nations.

This gives other nations an advantage in shipping costs.

3. "Evenhandedness" for the industry vis-a-vis other nations' merchant fleets.

Exactly how serious is the decline in the US fleet?

To an increasing number of lawmakers it now seems clear that some additional assistance to the fleet is necessary. Earlier this year the Senate enacted legislation reforming maritime regulations. But the House is now bogged down in consideration of various promotional programs to aid the US fleet. As a result, no final legislation is expected to clear Capitol Hill this year.

For his part, MR. Neuhauser of the NMC is gloomily predicting a reduction of 50,000 US shipyard worker by 1983 without additional federal assistance. Many of these jobs, he notes, are held by non-whites working in major metropolitan areas.

In addition to rising concern about the shipyards, there is also apprehension within the industry about the possibity of additional shipping companies going out of business in the next few years.