Putting U.S. mariners to work

By Patrick Burnson, Executive Editor
March 23, 2012 - LM Editorial

Flags of Convenience should be reigned in to provide more opportunity for U.S. mariners.

Alan Favicchio, Projects Director for Houston-based UTC Overseas, Inc.’s Project Division, is proposing a change in MARAD (U.S. Maritime Administration) rules to encourage the training and hiring of a badly needed new generation of U.S. personnel for the international freight-forwarding and project cargo industry.

Favicchio suggests a modification of MARAD’s existing Compensatory Waiver (CW) Process as a way to promote new career opportunities for graduates of the U.S. Merchant Marine Academy and the nation’s six State maritime academies, while also speeding and simplifying the waiver review and approval process.

Under present law (46 U.S.C. 55304), Favicchio notes, project cargoes being financed by the U.S. Export-Import Bank must be transported aboard U.S.-flag vessels.  The purpose of the statue is to help maintain both a U.S.-flag merchant fleet and the cadre of licensed and skilled mariners available to crew such vessels when needed for the economic and defense security of the nation.

When a borrower, prior to a decision to seek EX-IM Bank financing, or in honest error, moves a cargo on a non-U.S. flag vessel for which a waiver is necessary to meet subsequent EX-IM financing, the borrower may obtain a Compensatory Waiver from MARAD by agreeing to make equivalent-revenue future shipments of non-Ex-Im cargoes on U.S. vessels, documented with monthly records

Under Favicchio’s plan, Compensatory Waivers could also be granted if:
• EPC (Engineer/Procure/Construct) companies, shippers, or freight forwarders who are under contract to the borrower for that specfic project, had hired or would hire one or more qualified U.S. citizen licensed maritime graduates within an agreed period of time prior to approval of a CW; and/or
• The foreign-flag carrier/fleet owner/steamship line could prove they had hired or would hire one or more U.S. citizen licensed graduates within an agreed period of time; and/or
• Such hirings could be combined with the shipment of an agreed amount of commercial cargoes on U.S.-flag vessels within an agreed period of time.

Under the proposed changes, documentation of qualified hiring would require copies of employment agreements, resumes, college transcripts and proof of graduation from an approved U.S. Maritime academy or university.

Favicchio argues that the new waiver procedure would encourage the hiring of licensed U.S. citizen mariners, and speed review and processing procedures for Compensatory Waivers.  Further, monthly follow-up reports, called for under existing waiver procedures, could be ameliorated.

“Encouraging the hiring of maritime academy graduates in our industry is a win-win solution,” he argues.  “Their maritime and engineering training concentrates on just the skill sets we need, both at sea and ashore. These skills are especially critical in the years ahead, given the continuing growth in global trade, and the globalization of manufacturing, distribution and processing.”



About the Author

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Patrick Burnson
Executive Editor

Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at .(JavaScript must be enabled to view this email address).


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About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review. Patrick covers international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. Contact Patrick Burnson

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