Risk and reward

Last week’s Economist came up with the unlikely fact that the way to get a good salary in the USA is to attend a maritime college. In an article examining the value for money of a US college education they showed that graduates of SUNY Maritime in New York, which admits two thirds of applicants, earn higher salaries than those of Caltech, which selects only nine per cent of applicants. The merchant marine graduates even outstrip alumni of MIT and Harvard, while Yale graduates languish way down the earnings list.

There are a lot of reasons why young people want to go to sea, but one of them was never to get rich. But it seems US seafarers do rather well for salaries. The problem is that the high pay comes along with high risk. The same US policy that featherbeds US seafarers also kills them.

Twenty-eight US seafarers and five Polish contractors in the crew of the US-flag ro-ro ship El Faro died on October 1 when the ship sank in a hurricane off the US coast. The US Navy has found the wreck and there will be endless investigations and lawsuits to ascertain the causes of the sinking, some of which might come close to finding out the proximate cause of the sinking. But everyone already knows the real underlying causes. El Faro was forty years old, it was a roll-on/roll-off ship and it had been extended and converted at least once in its over-long lifetime.

Forty years old is too old for a hard-worked cargo ship to be out in a major Atlantic storm. Especially as ro-ro cargo ships are inherently unsafe. A little bit of water on the cargo decks and they lose stability. When the structure and machinery of a ship are forty years old it is difficult to keep that little bit of water outside when the going gets tough.

Why was such an old ship flying the flag of the world’s most advanced economy and how come such an old lady was plying its trade off the US coast? For the same reason that US seafarers are very well paid. The US has a complicated set of protectionist legislation, known as the Jones Act, which says only ships built in the US and manned by US citizens can carry cargo between US ports. The motive for this legislation is to ensure that the US retains the ability to build ships and the ability to man them, and has a merchant marine which can support the military in times of war.

The motive is good and I’m all for well-paid seafarers. But the unintended consequence is that the US fleet is very small and made up of ancient ships which would not even be accepted to fly the Liberian or other open registry flag. Building a ship in the US takes much longer and costs up to three times more than it would for the same or a better ship built in Asia, for much the same well-rehearsed reasons why US giant Apple makes iPhones in Asia and not in the US. Faced with that cost US shipping lines can’t replace their ships, so they keep running them long past the date they would have been scrapped in the rest of the world and a lot of cargo moves by road when it could have been better moved by sea.

Defenders of the Jones Act wrap themselves in the Star – Spangled Banner and say that the US fleet is inspected by the US Coastguard and maintained to the highest standards. I’m sure that the classification society and US Coastguard surveyors do their best, but I can tell you from bitter experience that when you are surveying and maintaining a very old ship you are always on patch and mend, running to keep just ahead of the next failure.

 

It’s certainly not for me to suggest how the US should run their shipping and defence policy. And we are often reminded that the US of A did not become the greatest nation on earth by behaving like Europeans. But my message to parents of US kids thinking of going to the merchant marine colleges is to send your kids to Yale. They might not get rich but no-one ever drowned talking about law or art and literature. And they can go into politics and campaign for a more rational and safer shipping regulation.

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