- Strategic Commercial Fleet Program Targets 250 U.S.-Flagged Vessels.
- Legislation Strengthens Cargo Preference and Import Requirements.
- Shipbuilding Incentives and Tax Benefits Included in New Bill.
The SHIPS for America Act was re-introduced this week aimed at reviving the U.S. domestic maritime sector. Sponsored by Sens. Mark Kelly (Arizona), Todd Young (Indiana), and Reps. Trent Kelly (Indiana) and John Garamendi (California), the bill aims to enhance American sealift capacity, restore shipbuilding, and cultivate a proficient maritime workforce, reports Freight Waves.
Key Provisions of the SHIPS for America Act
The bill targets two key components: the Building SHIPS in America Act and the SHIPS for America Act, the latter of which is intended to provide solutions to major issues in the maritime industry.
Strategic Commercial Fleet Program
One of the primary aspects of the new act is the creation of the Strategic Commercial Fleet Program, which has the goal of developing a fleet of 250 American-flagged ships in international trade. The program focuses on tanker ships and provides assistance for capital and operating expenses, seeking to bring new U.S.-constructed, -flagged, and -manned ships into service. There are currently just 80 American-flagged merchant ships in the U.S. fleet.
Improved Cargo Preference and Import Needs
The act greatly expands cargo preference requirements and requires 100% of United States government cargo to be transported on U.S.-flag ships. Also, within 15 years, 10% of all U.S. cargo imported from China must be carried on U.S.-flag ships. The bill also provides subsidies for U.S. agricultural exports and requires U.S. ports to give preference to U.S.-flag over foreign-flag ships.
Shipbuilding Financial Incentives and Tax Benefits
The bill establishes a shipbuilding financial incentive program, funded at $250 million per year through 2035 and $100 million for small shipyards. Although this funding is important, it is pointed out that the cost to construct a Neopanamax container vessel can be between $150 million and $160 million. The legislation also offers tax incentives, such as a 33% investment tax credit for U.S. vessel construction and a 25% credit for shipyard facilities.
Workforce Development and Assistance for Maritime Workers
In order to combat the dearth of skilled maritime workers, the bill provides public service loan forgiveness to merchant mariners and greater assistance to maritime academies. It also provides a Maritime Career Retention Program to secure the retention of skilled workers in the industry.
Maritime Security Adviser Position
The bill keeps the provision for a White House adviser on maritime security, which was present in the bill introduced earlier. This adviser will help increase strategic guidance and assistance to the American maritime sector.
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Source: Freight Waves
