Title XI Loan Guarantees: The Destruction of an Excellent Financial Aid Program for the United States Maritime Industry

97 Com. L.J. 510 (1992)

30 Pages Posted: 15 Jul 2016

See all articles by Barry Dubner

Barry Dubner

Barry University - Dwayne O. Andreas School of Law

Date Written: 1992

Abstract

In 1979, eighteen major U.S. flag liner companies operated in the foreign trades. Today, there are only six, and these companies operate only 120 vessels. The two largest U.S. flag liner operators, American President Lines, and Sea-Land, have threatened to withdraw their vessels from the U.S. flag starting in 1995 unless reforms are implemented to help U.S. flag operators compete in world markets. Total revenues earned by the U.S. water transportation industry are nearly $21 billion. Nearly $10 billion in revenues are earned from the movement of freight by water. Over $8 billion in revenues are earned from services incidental to water transportation. More than $2 billion in revenues are earned from the water transportation of passengers. In 1990, the U.S. maritime industry generated over $12.1 billion in balance of payments receipts. This includes over $4.2 billion in export freight and charter hire payments to U.S. carriers by foreign entities. Because there have been no significant numbers of commercial ships for foreign trades recently being built in American ship yards, America has had to rely on foreign flag ships and foreign crews to carry the vast majority of its import and export cargoes. In fact, since 1985, foreign flag ships have carried more than 80 percent of the U.S. ocean borne liner trade, and more than 95 percent of our bulk commodities. And, as the number of ships in the U.S. flag fleet decline, so do the number of civilian merchant sea-farers in the active work force.

In 1960 the U.S. flag fleet supported slightly over 100,000 active sea-farers. By 1990, these numbers had dropped to about 27,000. The bottom line is that our American foreign trade merchant fleet will probably be extinct by the year 2000. For purposes of this paper (research cut-off date September 2, 1992), The authors review the actual requirements that are ostensibly needed to obtain Title XI ship financing, and discuss the current Bills which are tangentially related to this problem. The synthesis of this paper is that even though Congress intended the Merchant Marine Act to "foster the development and encourage the maintenance" of a merchant marine in the United States for domestic and foreign trade and military support, Title XI, one of the cornerstones of the plan to place "American ship owners on a parity with their foreign competitors, by equalizing the higher cost of building ships in the United States and operating them under American registry" has become a casualty of changing economic policies.

Keywords: Title XI Loan Guarantee, Merchant Marine Act, Title XI, ship financing, Foreign Flag Ship, American Foreign Trade, Commercial Ships, Maritime Industry, water transportation, flag liner, merchant fleet, foreign entities, Sea-Land, American President Lines, shipyard, export, import, freight, charter

Suggested Citation

Dubner, Barry, Title XI Loan Guarantees: The Destruction of an Excellent Financial Aid Program for the United States Maritime Industry (1992). 97 Com. L.J. 510 (1992), Available at SSRN: https://ssrn.com/abstract=2809418

Barry Dubner (Contact Author)

Barry University - Dwayne O. Andreas School of Law ( email )

6441 East Colonial Drive
Orlando, FL 32807
United States

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
30
Abstract Views
391
PlumX Metrics