Sam Spade's San Francisco

All U.S.-flag ships in international commerce would have to be built in the United States if language approved July 9 by the Senate Commerce, Science and Transportation Committee becomes law.

Shippers of government-impelled cargo such as food aid, project or military cargo that require U.S. flag vessels for transport would likely incur higher rates. Experts said it would be impossible to calculate how much, but owners would have to recover the higher relative cost of building a ship in the U.S.

The change — spelled out in five words — also would affect carriers in the Maritime Security Program, which requires U.S. flag vessels, but allows the re-flagging of foreign-built ships.

The Maritime Administration Authorization Act of 2010 calls for an amendment to the language in Title 46, Sec. 50101 of the U.S. Code, which covers policies and objectives for the U.S. merchant marine.

The law states that for the national defense and development of import and export foreign commerce, the merchant marine should "provide shipping service essential for maintaining the flow of the waterborne domestic and foreign commerce at all times."

To do that, the law says ships should be capable of being part of navy auxiliary fleet, and be U.S. owned and operated. It continues, the fleet should be "composed of the best-equipped, safest, and most suitable types of vessels and manned with a trained and efficient citizen personnel."

The Senate bill would add "constructed in the United States" after "vessels" in the last clause.

The Jones Act already requires U.S.-built ships in trades to Hawaii, Alaska, Puerto Rico and Guam, the Marad bill goes farther. U.S. flag operators in foreign trades now have the option of re-flagging foreign-built ships.

Joe Cox, president of the Chamber of Shipping of America, estimated that 200 of some 800 vessels owned by chamber members are U.S. built. The chamber is made up of U.S. shipping companies, overseas and Jones Act, which operate under mix of U.S. and foreign flags.

Cox said a company would have to make the business case to replace a foreign-built ship with a U.S.-built one.

"A company would have to run the numbers. 'How much income are we getting from this trade? How much would it cost us to replace our ship with a U.S.-built ship? Does it make economic sense?'" Cox said. "This bill could have unintended consequences."

Officials at the Commerce Committee did not return an inquiry for comment. The bill still requires full Senate approval. Marad's authorization has not been taken up by the House.

Contact R.G. Edmonson at .

Thanks to www.themaritimeblog.com for first sharing this find with the rest of us on Twitter (@).

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