OPINION GUEST ESSAY By Michael Roberts Oct. 3, 2022 https://www.nytimes.com/2022/10/03/opinion/china-us-shipping-security.html A China Ocean Shipping Company container carrier at a port in Greece.Credit...Yannis Kolesidis/European Pressphoto Agency Mr. Roberts is a former shipping industry executive and past president of the American Maritime Partnership. Soon after President Xi Jinping of China took power, heinstructedtop Communist Party leaders in a 2013 speech to turn the country into a “maritime superpower.” China already has theworld’s largest navy, though its ability to contend with U.S. naval forces remains in doubt. But leaders in Beijing have realized that maritime strength is not measured solely in firepower. Success in commercial shipping would have “great and far-reaching significance” for Chinese national strength and security, Mr. Xi told the Politburo then, reminding the party that throughout history the most powerful nations were those that controlled the seas. Nearly a decade later, Mr. Xi’s vision is a reality. China has become a global maritime powerhouse, with thousands of commercial vessels plying sea lanes, a vast shipbuilding industry capable of churning out more vessels and such dominance of global supply chains that it could bring the United States to its knees in a conflict. The U.S. economy is heavily dependent on products and resources from China and East Asia, transported through shipping networks that are increasingly under the control of Chinese interests. China, including Hong Kong, owns morecommercial vesselsthan any other country — almost twice as many as second-place Greece. It buildsabout halfof the world’s large commercial ships, up from just3 percent in 1993, andproduces96 percent of the world’s dry shipping containers. Chinese entities havegained ownership sharesin marine terminals and infrastructure around the world — including some U.S. terminals — through theBelt and Road Initiative, Mr. Xi’s global plan to extend his country’s economic reach. And a congressional advisory body haswarnedthat Beijing could use shipping data to track cargo movements for commercial or strategic advantage. This includes movements of U.S.military equipment, much of which is transported via commercial shipping. A vast majority of U.S. trade with China is done by sea, and the United Statesrelies on Chineseimports of computers, smartphones, technical components and essential machinery. But China also dominates global production of specialized commodities likerefined lithiumandrare-earth products, crucial components in arange of high-tech products, including those with military applications. The risk of overreliance on potential adversaries has been made clear by Russia’sthrottling of natural gasto Western Europe, which has sent prices soaring and reduced supplies as winter approaches. America got a taste of its own vulnerability when skyrocketing demand for Chinese-made face masks and personal protective equipment early in the pandemic caused China tostallshipments, and subsequentsupply-chain gridlockcaused chaos for U.S. importers and exporters. If China and the United States went to war over Taiwan, Beijing could direct Chinese shipping companies to interfere with U.S.-bound products or resources. Beijing has shown its willingness to play hardball on other occasions, includingblockinga range of imports from Australia after it called for an investigation into the source of the coronavirus. Trade disruptions would hurt China, too. But it’s easier for authoritarian regimes to suppress dissent over asking their citizens to endure economic pain, and Beijing is moving to insulate itself from such shocks througheconomic decouplingfrom the United States. America was the world’s leading shipbuilder after World War II. But in 1981 the government canceled an important subsidy program, leaving American shipyards to compete directly with heavily subsidized foreign rivals. The impact has been severe: U.S. shipbuilders delivered an average of about16 ships per yearover the decade ending in 2018, mostly for Navy or Coast Guard use; Chinese shipyards had orders for1,529 large commercial shipsat the end of last year.Fewer than 200 such vesselsflew the U.S. flag at the end of 2021 versusmore than 5,000 Chinese ships. Hobbled by unfavorable tax policies and other competitive disadvantages, the last of the large U.S. shipping companiessold outto foreign buyers in the 1990s. TheCHIPS and Science Act— passed by Congress in July to diversify America’s global sources of semiconductors and support U.S. manufacturers — showed what can be done when there is bipartisan recognition of the risks the country faces. America needs a “U.S. Ships Act” that sets a clear national maritime strategy, channels investment into developing the country’s shipbuilding industrial base and includes financial and other supports to help American shipbuilders and shipping companies reclaim lost ground in international markets. The United States also needs to replace its fleet ofmostly obsolete shipsthat are kept on standby to carry military supplies in an overseas conflict, as was done successfully during thePersian Gulf warand which may be necessary in a conflict over Taiwan. All of this must be accompanied by a push to recruit, train and retain the tens of thousands of skilled American workers who will be needed for this industry revival. The United States has a strong basic infrastructure for maritime education in place, with the federal merchant marine academy, six state academies and various other programs. But shipbuilding is hard work, and working on commercial vessels can mean weeks away from home. Aggressive recruiting programs are needed starting at the high school level, with the sincere message that building and operating ships can be a safe, rewarding career choice that helps make America stronger. The broader regulatory outlook needs to change too, starting with the currentsystem for international shippingthat allows ships registered in“flag of convenience”countries like Liberia to carry American cargo, competing directly with U.S.-flagged vessels. Those countries often have minimal safety, labor and environmental standards, allowing ships to operate with lower costs, putting more heavily regulated U.S. ships at a disadvantage. Countering China’s maritime dominance will take time, money and commitment. But if we fail to diversify American import sources and re-establish some control over the global maritime supply chain, the United States may find itself in a confrontation with China, and with one arm tied behind its back. Michael Roberts(@mrob359)is an adjunct fellow at the Hudson Institute and a non-resident senior fellow at the Navy League’s Center for Maritime Strategy. He is former president of the American Maritime Partnership, was a senior executive with Crowley Maritime Corp and continues to provide consulting services to the maritime industry.
This is an area I have a special expertise so let me offer my thoughts: 1. The cost of building a container ship in a U.S. shipyard is 5-10 times what it costs to build in Korea or Europe. Reagan cut the Constructional Differential Subsidy program in 1981 because it costs hundreds of millions of dollars with little to no benefit. More importantly it subsidized a bloated expensive U.S. industry that made no efforts to compete with overseas shipbuilders. We had minimal ships for national security and still do. 2. No other country requires international trade be conducted on their own flag vessels. 3. The U.S. could never build enough ships or develop enough maritime labor to match Maersk, Hapag-llyod, CMA, NOL, Cosco, Evergreen, etc. etc.. so it is a fairy tale. 4. Operating a U.S. flag vessel is easily 5 - 10 times more expensive than foreign flag vessels. That means the cost of shipping containers on U.S. flag vessels would raise the cost of imported goods considerably unless the U.S. government spends billions on operating and construction subsidies. Just compare freight rates between Asia and California and U.S. and Puerto Rico (which must ship on U.S. flag vessels). This is an article waving a magic fairy wand saying we need a strong U.S. maritime industry to protrect our trade from China while buying all our shit from China---fucktarded. The U.S. maritime industry has been on a steady decline since the 1970s and for a very good reason. U.S. labor and U.S. shipbuilding is so expensive it cannot compete unless heavily subsidized by U.S. taxpayer money which is useless spending when the private sector already performs the service much cheaper and there are numerous options in the free market.
Top 5 largest cargo ships are built by Korean shipbuilders. Top 3 container shipping companies are European, which has over 40% of the market. Is it China bashing day again? This Robert guy is another useful idiot.
His bad point was about trans-pacific trade. U.S. is not heavily importing goods from Europe. COSCO is the largest trans-pacific carrier handling U.S. imports and is about 17% of the trans-pacific trade so his point was if COSCO decides to cut off routes to the U.S. that would deliver a huge blow to trade because the other carriers do not have the capacity to suddenly pick up that large a hole. Cosco also carries 15% of exports from U.S. to Asia. he has a valid point but his solution is to suddenly create a non-existent U.S. maritime industry. the solution is to stop buying eveyrthing from China but U.S. is a consumer economy so no way that is changing and China likes earning $$$ also.