Friday, June 8, 2012

US Export Import Bank Reauthorized to Support Native Flagged Freight Carriers

LaHood Praises an Institution as Overseas Ocean Carriers Go Native
Shipping News Feature

US – One of the criticisms regularly levelled at the country’s authorities is that of perceived double standards with regard to protectionist measures. The US is seen as the first to complain when another country steps in to control trade, yet is the first in line to assist its own cargo carriers and export industry. We have often written of the outside world’s view of the so called Jones Act, introduced to guarantee a viable defensive fleet capable of resupplying the country with vital freight in times of conflict which many now consider simply a tool to protect American jobs and flag status whilst paying a premium not subject to free market forces as a consequence.

This week, in his regular blog, US Secretary of Transportation, Ray LaHood has written in praise of the Export – Import Bank, the seventy eight year old institution that supports companies overseas – provided they purchase American produced goods. The Ex-Im Bank is highly praised by the Secretary for ‘creating a substantial number of US-Flag cargo opportunities’, shipping via the Great Lakes Seaway System for example can be undertaken by a variety of vessels but those requiring the bank’s support can only move their cargo on US flagged ships.

As an illustration Secretary LaHood cites the fact that last week, at the same time Congress reauthorized the bank, for the first time since the 1980’s a ship flying the American flag left Milwaukee with cargo bound for international export and he points out that the Ex-Im Bank has been in part responsible for creating a substantial number of US-Flag cargo opportunities, allowing for at least six new heavy-lift vessels to be registered.

The irony to overseas onlookers will be the names on the ships in question, last weeks example for instance was the Maersk Illinois, to any uninformed onlooker one of the Danish company’s vessels and part of the largest cargo fleet on the planet. On this occasion however the owner, Maersk Line Limited, is registered in Norfolk, Virginia and the company’s two vessels are flagged as US, without this strategy they simply wouldn’t be able to trade.

So, whilst the US system of support for home trade will doubtless be welcomed in the States one may wonder if they will now offer such wholehearted support when and if other countries institute similar policies.

Photo: The Maersk Illinois waits at the Port of Milwaukee to load US made equipment destined for a Siberian coal mine. Courtesy of Maersk.