AWO's Allegretti Touts Merits of Domestic Maritime Industry

During an address today in New York City at the TradeWinds 2013 Jones Act Shipping Forum, American Maritime Partnership Chairman and American Waterways Operators President & CEO Tom Allegretti hailed the nation’s domestic maritime industry as a crucial element of America’s economic, national and homeland security, calling the Jones Act, which serves as the industry’s foundation, both a commercial and a public policy success.
 

In his remarks, Mr. Allegretti highlighted the thriving industry’s role in the nation’s economy.  

“The American maritime industry is a thriving economic engine and a jobs creator.  Companies have made, and are making today, multi-billion dollar investments in vessels, in shoreside facilities, and in technology to meet the needs of their customers in every sector of the U.S. economy. Ours is one of the largest, most vibrant domestic maritime industries in the world, and will continue to adapt and grow to meet America’s transportation needs.”  

Mr. Allegretti’s address also focused on the critical role American maritime plays in the helping to protect U.S. national and homeland security.

“The domestic maritime industry supports U.S. national and homeland security at zero cost to the federal government.  The Department of Defense and the U.S. Navy strongly support the domestic maritime industry – and the Jones Act as its statutory foundation – because strong vessel operating companies, a skilled, available supply of mariners, and a robust shipyard industrial base are critical force multipliers that the U.S. government must have, but could not sustain, without the commercial domestic maritime industry.”  

Mr. Allegretti’s full address to the 2013 TradeWinds Conference:

The Jones Act – A Commercial and Public Policy Success

Tom Allegretti, President
The American Waterways Operators
September 18, 2013

Thank you, Aaron. It’s great to be with you today. I am particularly pleased to share the podium with Acting Administrator Jaenichen – soon to be Administrator Jaenichen, I hope. I suspect I speak for everyone in this room in saying how pleased we were to hear of your nomination as Maritime Administrator, and how supportive we are of your confirmation.  Thanks for all you are doing to support a strong American maritime industry.

I want to thank TradeWinds for the opportunity to be here.  I speak to you today as president of the American Waterways Operators and as chairman of the American Maritime Partnership. Let me tell you just a little bit about AWO and AMP.

AWO represents the American tugboat, towboat and barge industry, which operates 5,000 towing vessels and more than 27,000 barges on our nation’s inland waterways, Atlantic, Pacific, and Gulf coasts, the Great Lakes, and ports and harbors around the country. Our industry moves more than 800 million tons of cargo each year in the domestic commerce of the United States, and does so safely, securely, and with a deep commitment to environmental stewardship.

AWO is also a long-standing member of the American Maritime Partnership. AMP is a broad-based coalition that represents, essentially, the entire American domestic maritime industry – vessel operators, shipyards, maritime labor, and pro-defense organizations. Just as AWO advocates for the tugboat, towboat and barge industry, AMP serves as the voice of U.S. domestic maritime – one of the largest, most vibrant domestic maritime industries in the world.

The statutory foundation of this vital and essential industry is the Jones Act – technically, section 27 of the Merchant Marine Act of 1920, which requires that vessels moving cargo in the domestic commerce of the United States be owned by American companies, built in American shipyards, and crewed by American mariners.  This law, now nearly century-old, is a remarkable example of a statute that is both a commercial success for the American economy and a public policy success for our country.   And, that’s what I want to focus on with you today.

Underpinned by the Jones Act, the American domestic maritime industry is an economic engine and a jobs creator.  More than 40,000 American vessels built in American shipyards and crewed by American mariners ply our domestic waterways, from the North Slope of Alaska to the island of Puerto Rico; from Portland, Oregon to Portland, Maine; from St. Paul, Minnesota to New Orleans. The economic value of that activity is an astonishing 500,000 jobs and $100 billion in economic output, including $29 billion in labor compensation, with those wages spent in every corner of the country. Additionally, the domestic maritime industry generates more than $11 billion in tax revenue for federal, state and local treasuries.

And, let’s look at the human impact that exists behind those numbers. In the tugboat, towboat, and barge industry, a young man or woman can come to us out of high school and not just get a job, but embark on a ladder of career opportunity.  He or she can start out as a deckhand making $45,000 a year and rise through the ranks, earning more than $100,000 as a captain or pilot in just a few short years.  The domestic maritime industry offers a career to be proud of and the compensation and benefits that enable a mariner to support his or her family.  Jobs like that are good for American families, for American communities, and for the American economy.

Let’s talk more about the contributions of the domestic maritime industry to the American economy, which is a remarkable story of a sector that is thriving.  

Underpinned by the Jones Act, companies in the domestic maritime industry have made, and are making today, multi-billion dollar investments in vessels, in shoreside facilities, and in technology to meet the needs of their customers in every sector of the U.S. economy.  You don’t have to look far to find examples.  Over the last two decades, the U.S. tank barge industry has transformed and renewed its fleet, building state-of-the-art double-hull barges and larger, more powerful tugboats and towboats to propel them.  

In the past five years alone, Kirby Corporation, one of the sponsors of today’s conference, has invested over $2.1 billion in fleet replacement, acquisitions and capital improvements to its existing vessels. TOTE is building new state-of-the-art vessels powered by liquefied natural gas for the Puerto Rico trades which are expected to be the largest LNG-powered vessels in the world.

Another great example from the industry is Crowley Maritime, which has just completed a new build program, investing more than $1 billion in 17 articulated tug-barge units ranging in size from 155 to 330,000 barrels. Crowley has also announced plans to build up to eight 330,000-barrel product tankers to be delivered between 2015 and the end of 2017.

Companies are not only investing in their fleets, but in the industry’s future. Bouchard Transportation, based not too far from here in Melville, has also had a substantial fleet modernization and expansion plan underway, having made it its own investments in excess of $1 billion. Bouchard also recently announced a $750,000 donation to SUNY Maritime to establish a tug and barge simulation center for cadets to learn the skills to operate today’s modern tugs and barges.

Underpinned by the Jones Act, which provides the level playing field and the certainty that enables companies to make these multi-billion dollar investments, the domestic maritime industry continues to demonstrate that it can, and will, adapt and grow to meet America’s transportation needs.  This is a dynamic marketplace, and this is a dynamic industry.

We’ve talked about the domestic maritime industry’s role as an economic engine and a jobs creator.  As we meet here in New York City, just one week since the twelfth anniversary of 9/11, I also want to focus on our industry’s role as a partner with government in protecting our country’s national and homeland security.

We saw the industry’s contributions dramatically on that fateful day, when the maritime community came together and spontaneously carried out the largest sea evacuation in history, bringing more than 500,000 Americans to safety from the terror that struck lower Manhattan. On one of the nation’s darkest days came some of its most heroic moments, and the 9/11 Boatlift is a reminder of the domestic maritime industry’s role in keeping our country safe.

And, there’s more to that story.  

Underpinned by the Jones Act, the domestic maritime industry supports U.S. national and homeland security at zero cost – let me repeat, zero cost – to the federal government.  The Department of Defense and the U.S. Navy strongly support the domestic maritime industry – and the Jones Act as its statutory foundation – because strong vessel operating companies, a skilled, available supply of mariners, and a robust shipyard industrial base are critical force multipliers that the U.S. government must have, but could not sustain, without the commercial domestic maritime industry.  

The United States has adopted a multi-layered approach to homeland security, and many new layers have been added over the past 12 years.  The American-owned, American-crewed, and American-built domestic maritime industry is a foundational element of that homeland security strategy.  Here’s what one expert, Dr. Daniel Goure of The Lexington Institute, has written:

“Although the Jones Act was not written with today’s threats to homeland security in mind, its provisions provide an important base on which to build the systems, processes and procedures needed to secure America.  The provisions in the Jones Act regarding vessel ownership and manning simplify efforts to ensure that rogue regimes and international terrorists cannot strike at this country via its ports and waterways.  One could readily assert that were there not a Jones Act, Congress would have to invent one.”

I know from my conversations with AWO members that the men and women who crew their vessels see themselves as the eyes and ears of our nation’s homeland security as they work on the water every day. It is a responsibility they feel innately as Americans and it is an integral part of who they are and what they do.  

There really is no doubt. The Jones Act made sense when it was enacted nearly a century ago, and its value to our country has deepened, not diminished, over the last century. It underpins an industry that serves the broad needs of the modern U.S. economy.

It provides certainty to an industry that is an engine of economic growth and a creator of high quality, family wage jobs. And it serves important national public policy priorities at no cost to the federal government. That is a win, win, win, and why I’m so proud to represent the domestic maritime industry in both AWO and AMP.

Thank you very much for the opportunity to be with you today.