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Missing cargo ship highlights vulnerability of aging U.S. fleet

The 40-year-old cargo ship El Faro, which disappeared in the Caribbean this month with 33 people on board, was about four times older than the global average.

Yet the vessel, built in 1975, was not at the end of its service life. After the ship completed its runs to Puerto Rico this year, its owner planned to send El Faro to Alaska for service between Anchorage and Tacoma, Washington.

El Faro’s sinking highlights a vulnerability in the U.S. merchant fleet: its age. Commercial ships around the world are an average of 11 years old, but ships registered in the United States average 31 years, according to the consulting group IHS Maritime.

The fleet’s relative age is in large part a consequence of a law nearly a century old that regulates domestic maritime commerce, critics of the law say. That law, the 1920 Merchant Marine Act or Jones Act, requires that ships serving routes between domestic ports be built and registered in the United States, and owned and crewed by U.S. citizens.

Proponents argue that the provisions are critical to the nation’s security because they maintain a domestic fleet for national emergencies and, through the Military Sealift Command, provide for an auxiliary navy to deploy troops and equipment. By guaranteeing that ships be made in the United States, the Jones Act also keeps a domestic shipbuilding industry and capabilities.

There are, however, only a handful of shipyards left in the United States capable of building commercial-class ships; two of the largest are in Philadelphia and San Diego. Because of high labor costs, it is about three times as expensive to build a ship in the United States as in China, said Krispen Atkinson, a principal analyst at IHS Maritime in London.

"That’s why this fleet is not being renewed," he said.

As a result, the global shipbuilding business has shifted in the last three decades to China, South Korea and Japan, while specialty vessels, like cruise ships or offshore petroleum platforms, are manufactured in Germany, Finland or Norway. Few large commercial ships are built in the United States.

"One of the surprises in the case of the El Faro is that a 40-year-old ship is still navigating," said Okan Duru, an assistant professor of maritime finances and logistics at the Department of Maritime Administration of Texas A&M University, Galveston. "But if a ship is built in the United States, the expectation is that it is put in service for a very long time."

The domestic oceangoing merchant marine fleet declined 82 percent from 1951 to 2011. At its peak, the ocean fleet comprised nearly 1,300 vessels. Today, it has shrunk to about 166 ships and accounts for about 1 percent of the global fleet.

Of those, only about half are eligible under the Jones Act to serve domestic ports, while the rest sail overseas. More than 60 vessels are more than 20 years old, which is the normal life span of a ship.

El Faro was sailing between Jacksonville, Florida, and Puerto Rico with the 33 people and cargo that included cars and retail goods when it came into the path of Hurricane Joaquin. On the way, El Faro crossed paths with its sister ship, El Yunque, according to the National Transportation Safety Board, which is investigating the disappearance.

El Faro’s crew reported that the ship had lost power and was taking on water before all communications were lost. The Coast Guard determined that the ship had sunk in 15,000 feet of water.

To gain insight into the operating conditions and layout of El Faro, safety board inspectors have visited El Yunque, which was built a year after El Faro. Both are owned by Sea Star Line, a subsidiary of Tote Inc., which is based in New Jersey.

Asked at a news conference last week whether El Faro was too old to be sailing, company executives emphasized that the vessel had been inspected for safety by the Coast Guard, and that its hull and machinery were credentialed by the American Bureau of Shipping.

"The engineering standards we have on board our vessels is very high," said Philip H. Greene Jr., the president of Tote Services Inc., the company that provided the ship’s crew and management.

Coast Guard records show the ship had a handful of mechanical problems dating back several years, including a failed boiler and a fuel leak. Several former seamen who sailed on El Faro in the past said they had seen recurring problems, including engine failure, water seeping into rooms during heavy rain and problems lowering the lifeboats.

The episode has renewed questions about whether to amend the Jones Act. The oil industry, for example, has long complained about the restrictions, which it says limit the availability of tanker transportation for its refineries and drive up its costs.

Jones Act restrictions also apply to cargo ships traveling between the mainland United States and Alaska, Hawaii and Puerto Rico. Islanders complain about the restrictions, which they say increase living costs.

In February 2014, officials in New Jersey sought a waiver to the Jones Act to get badly needed road salt that was stranded in Maine. Such waivers to use noncompliant ships have been granted in cases of national emergencies, as in the aftermath of Hurricane Katrina and Hurricane Sandy, to move fuel shipments faster.

The Heritage Foundation, a conservative research institution, said in a report last year that the Jones Act should be scrapped because it kept shipping costs artificially high, increased energy costs and harmed innovation in the domestic shipping industry without meeting the needs of the military.

This year, Sen. John McCain, R-Ariz., made the latest effort to repeal the law, which he called antiquated. But his push was defeated, a demonstration that the policy has strong support among a broad coalition of marine professionals, unions, shipyards and military officials, who favor it for ensuring that the nation maintains a domestic commercial industry.

Still, even some defenders of the policy said the age of the fleet was a matter of concern.

"It is time we make it a safer environment, because every day, these ships are getting older," said Capt. William H. Doherty, a retired master and director of maritime relations at the Nexus Consulting Group in Alexandria, Virginia. "This one sunk, and the rest of them aren’t getting any younger."!~neIP~!

U.S.-flagged ships are not just older; they are also more expensive. The total average cost of operating one is nearly three times the cost for an equivalent foreign ship, according to the federal Maritime Administration.

For instance, the operating cost of a container ship based in the United States with an American crew is $21,194 a day, compared with $9,583 a day for a foreign vessel.

Over recent decades, because of advances in ship design, communications and safety equipment, modern shipping has become a lot safer. Older ships are not necessarily more dangerous when they are properly maintained.

But academic studies have found a direct link between ship age and accident rates.

A 2012 report by researchers at Southampton Solent University in Britain concluded, "The evidence confirms that the majority of accidents can be linked with older vessels, a predominance of general cargo carrier accidents and a suite of worst-performing flags."

The researchers also found that vessel safety standards had improved and that shipping accidents had declined relative to the growth in the world fleet.

Making comparisons by age between international and domestic fleets is a tricky exercise, said Michael S. Bruno, the dean of the Schaefer School of Engineering and Science and a professor of ocean engineering at Stevens Institute of Technology in Hoboken, New Jersey.

"There has been a large turnover of commercial vessels, in particular container ships, over the last decade, because of the movement toward very large ships," he said. "So while the average age among certain types of vessels might be going down in some circles, that does not necessarily mean that a particular vessel, or that U.S. flagships, are in some sense too old to operate safely."

Bruno pointed out that ships registered in the United States operated under strict regulations that were enforced by the Coast Guard and third-party companies, known as classification societies, that verified that each vessel complied with the rules.

While there are no age limits for sailing, these classification societies require more rigorous inspections as ships become older. The American Bureau of Shipping, which inspected El Faro, declined to comment because it is a party to the safety board’s investigation.

Doherty said, however: "What they have done over the past 20 years is lowering the bar. Their definition of seaworthy gets lower and lower because the ships are getting older and older."

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