MARAD REVERSES DECISION ON TECO SHIP
The U.S. Maritime Administration has announced that it has reversed its confirmation of TECO Ocean Shipping’s U.S.-flag dry-bulk vessel, Shiela McDevitt, from the international cargo preference trade.
MarAd had confirmed the 22-year-old Japanese-built 40,000-deadweight-ton vessel for the cargo preference trade on Feb. 22, shortly after TECO (formerly Gulfcoast Transit Co.) purchased the ship from a U.S. Marshals Service auction in Miami.
The agency also based is initial confirmation on the Cargo Preference Act’s Section 901(b). MarAd also said that since 1792, Congress has allowed vessels forfeited to the federal government for breaking the law to register and operate in the U.S.-flag domestic trades. The three-year wait period that normally accompanies foreign-built-and-flagged vessels brought under U.S. flag was unnecessary, according to MarAd’s original confirmation.
TECO had planned to use the Shiela McDevitt to increase its international food-aid transport business. One of the biggest pieces of the cargo preference trade is food-aid under the Public Law 480 programs, Title II and Title III.
MarAd received letters of opposition from a number of U.S.-flag carriers and industry groups, including Sealift, Farrell Lines Inc., Liberty Maritime Corp., First American Bulk Carrier Corp., Maersk Sealand, the Transportation Institute, the International Organization of Masters Mates & Pilots, the Maritime Institute for Research and Industrial Development, International Longshoremen’s Association, Marine Engineers’ Beneficial Association, and American Maritime Congress. No views of support for MarAd’s confirmation were received from the industry.
“After careful review, it is determined that the policy of the 1936 (Merchant Marine) Act and the Cargo Preference Act and its amendments, as incorporated into the 1936 Act, is furthered by applying the three-year waiting period to ‘forfeited vessels,'” said Joel C. Richard, MarAd secretary, in an order from the agency. “The advisory opinion of the Acting Chief Counsel (J. Patrick Weise) is reversed.”
The industry opposition to the initial cargo preference confirmation for the Shiela McDevitt favored MarAd’s decision.
“I was pleased with the administrator’s decision,” said John A. Gaughan, president of First American Bulk Carrier Corp., and former maritime administrator. “Having been an administrator, I know how difficult it is to find ways to expand the U.S.-flag fleet, but the initial decision to place a 22-year-old vessel into the cargo preference trade isn’t the way to do it.”
MarAd will continue, however, to promote U.S.-flag vessel interests. “MarAd may have to choose, from time to time, from alternatives where some portion of the purposes and policy are not furthered, while others are furthered,” Richard said.
“The national interest in promoting a modern U.S. fleet is furthered by providing an inducement for new vessels to enter the fleet,” Richard said. “It would not further the purposes and policy of the Act to allow entry of a 22-year old vessel that could underbid new vessels for available cargoes.”
TECO was unavailable for comment for this report.