Organized 1885 Official Organ of the Sailors’ Union of the Pacific Volume LXXVIII No. 12 SAN FRANCISCO, CALIFORNIA Friday, December 25, 2015 Victories for U.S. Merchant Marine! MSP funding increased, Ex-Im Bank reauthorized he year ended on a high program to $4,999,990 per ship ty Program. A ninth vessel, the note when on Decem- in Fiscal Year 2017; $5 million APL Guam which replaced the Tber 18, President Obama per ship in Fiscal Years 2018, APL Cyprine in the program is signed omnibus spending legis- 2019, and 2020; and $5,230,000 the subject of a dispute between lation (Consolidated Appropria- per ship in Fiscal Year 2021. the Union and APL. See the tions Act, 2016) approved by the This increase, which reflects the President’s Report on Page 10. House of Representatives and the amount the Maritime Adminis- In other good news this month Senate that includes much need- tration has indicated is necessary for the maritime industry, the ed and significant new funding to retain the 60 vessels and their charter of the U.S. Export-Im- levels for the Maritime Security maritime jobs for the U.S.-flag, port Bank was renewed De- Program (MSP). will help to guarantee that the cember 4, as President Obama In the short term, the legisla- Department of Defense will signed into law five-year surface tion increases MSP funding for continue to have the commercial transportation authorization leg- Fiscal Year 2016 (October 1, 2015 sealift capacity it needs to pro- islation, known as the “highway through September 30, 2016) by tect American interests around bill,” which includes a provision $24 million, making each vessel the world. to reauthorize the Export-Import participating in the program SUP President Gunnar Lunde- Bank through fiscal year 2019. eligible for $3.5 million rather berg said the action by Congress The highway bill was pro- than the previously authorized and President Obama is “a crit- duced by a House-Senate confer- $3.1 million. ically important first step in the ence committee. The conference In addition and most impor- ongoing battle to strengthen and report containing the Export-Im- tantly, the legislation recognizes grow the U.S.-flag merchant ma- port (Ex-Im) Bank provisions the necessity of providing a long- rine in the international trades.” was overwhelmingly approved term MSP funding schedule that SUP-contracted American by both chambers of Congress more realistically addresses the President Lines and its oper- on December 3. impact that reductions in defense ating subsidiary APL Marine A portion of exports financed and other government cargoes Services currently operates eight with the assistance of the Ex-Im Good tidings and fair seas have had on the MSP fleet. It vessels (APL Agate, APL Bel- Bank must be shipped on U.S.- does so by authorizing in the per gium, APL China, APL Coral, flagged commercial vessels, pro- from the vessel stipend for each of the 60 APL Korea, APL Philippines, viding a strong source of cargo militarily-useful U.S.-flag com- APL Singapore, APL Thailand) Sailors’ Union of the Pacific mercial vessels enrolled in the enrolled in the Maritime Securi- continued on page 2 French outfit buys APL/Neptune Orient Lines CMA CGM (Compagnie Mar- acquire Neptune Orient Lines ing position on the Asia-Europe, Container Line and United Arab some time next year, up to $1 itime d’Affretement - Compag- (NOL), the parent company of Asia-Mediterranean, Africa and Shipping Company on the major billion in assets will be sold and nie Generale Maritime) will American President Lines, in Latin America trade routes, East-West trade routes. that these could include termi- an all cash deal worth approx- while Singapore-based APL is Once approvals from anti-trust nals, ships or containers that imately $2.4 billion, according in the TransPacific, intra-Asia authorities are received, CMA could come from either NOL or to a joint statement issued by the and Indian subcontinent trades. CGM said it will launch an offer CMA CGM. companies on December 7. In Ng Yat Chung, the CEO of at a price of $1.3 (Singapore) CMA CGM has approximate- addition, CMA CGM assumed NOL, said CMA CGM intends or 92.56 U.S. cents per share. ly 22,000 employees and NOL NOL’s $2.6 billion debt. to maintain the APL brand as Temasek, the Singapore Govern- 7,400. Saade said that there will The companies said the deal, well as APL’s U.S.-flag service, ments Sovereign Wealth Fund be some “rationalization” of staff which would combine the world’s which CMA CGM would like and largest single shareholder as the two companies merge, but third largest (CMA CGM) and to grow. (67%) of NOL and its affiliates, said it was too early to say how 12th largest (NOL/APL) contain- Ng added that over the last few are supporting the transaction many workers will lose their jobs. er carriers is subject to anti-trust years, NOL has been approached and irrevocably undertaken to CMA CGM is a family-owned approvals in the United States, by numerous companies inter- tender all their shares. business founded in 1978 by China and the European Union. ested in acquiring the firm and CMA CGM said it will es- Jean Saade. The company said it A tie-up between CMA CGM chose CMA CGM both on the tablish a regional head office might consider an initial public and APL would create a com- basis of value and “transaction in Singapore. Saade said, “We share offering at some time in the bined company with 563 ships certainty.” understand the importance of the future, but will consider it after Periodicals’ postage paid at San Francisco, CA (USPS 675-180) postage paid at San Francisco, CA Periodicals’ with a capacity of 2.4 million Rodolphe Saade, Vice Chair- maritime industry to Singapore integrating APL. TEUs and annual revenues of man of CMA CGM, said the and we intend to build on it.” The transaction between CMA $22 billion. company intends to make APL Michael Sirat, Chief Financial CGM and NOL/APL is being CMA CGM, based in Mar- part of the Ocean 3 Alliance it Officer at CMA CGM, said after financed by J.P. Morgan Chase, seilles, France, said it has a lead- operates with China Shipping the two companies are combined HSBC and BN Paribas. ESU News: Page 7 Page 2 WEST COAST SAILORS Friday, December 25, 2015 New study: America too dependent on Chinese ships In future conflicts, America’s merchant In 1965, shipments of military supplies fleet could find itself outnumbered and for Vietnam were held up for months due outmaneuvered on the high seas, say the to neutrality issues. That year, Mexican authors of a new paper on U.S. maritime government authorities ordered the Mex- security. The paper, released Novem- ican-flagged merchant vesselEl Mejicano ber 19, and entitled “Sea Strangulation: to offload its Vietnam-bound American How the United States Has Become Vul- cargo. Mexico claimed neutrality, and it nerable to Chinese Maritime Coercion,” refused to let a vessel under its flag carry highlights the defense risks of a reduced military supplies. But “loading the cargo American merchant fleet and the need to on a Greek-flag ship did not solve the In the Mahimahi, this month, in Oakland from the left: Norhaslan Idris, Remoni Tufono improve its capability. problem because the Greek crewmen also (Bosun), Joe McDonald, Phillip Romei, Raul Guillen, Izzy Idris, and Mike Soper. The authors –Captain Carl Schuster, refused to sail the cargo to Vietnam,” the former Director of Operations at the U.S. authors say. In all, a total of seven ships in Joint Intelligence Center Pacific, and three months refused American cargoes Export-Import Bank reauthorized Dr. Patrick Bratton, Associate Professor bound for Vietnam. continued from page 1 of Political Science at Hawai’i Pacific Uni- As an example of the type of sealift ca- for the U.S. merchant fleet operating in the international trades. versity– claim that “the United States has pacity America might need in the future, adopted an ‘abandon ship’ policy towards the authors estimate that in a conflict in In late July, the Senate had approved its own six-year highway bill with an amend- the crucial merchant maritime industry,” the South China Sea, the deployment of ment included to reauthorize the Ex-Im Bank – that amendment was approved 64-29 and has let it shrink to its smallest size two carrier strike groups would require in the Senate. The Senate’s long-term highway bill was not voted upon in the House. since the Spanish-American War. the shipment of 100,000 tons of ordinance Separate legislation to reauthorize the Ex-Im Bank had been bottled up for months Bratton and Schuster point to the gap and 300,000 tons of fuel in the first 30 in the House due to opposition from some influential members. However, in October, a in fleet size between the U.S. and China. days. The plan would require large sus- bold effort spearheaded by Congressman Stephen Fincher (R-Tennessee) forced a vote “Only about 80 of the ships engaged in tained deliveries every day thereafter, on stand-alone legislation to reauthorize the bank. Representative Fincher introduced international trade across the world’s transported over a distance of more than legislation nearly identical to the Senate’s reauthorization and reform measure that oceans are U.S.-flag carriers,” compared 6,000 nautical miles. They added that out- had been approved with that chamber’s long-term highway bill.