Page 8: of Marine News Magazine (March 2021)

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Maritime Guaranteed Loan

Program (“Title XI” Loans)

The Maritime Guaranteed Loan Program provides fed- operators from ordering vessels from U.S. shipyards, except eral loan guarantees to vessel operators to construct vessels when they are required to use U.S.-built vessels to engage in U.S. shipyards, and to modernize those shipyards. It was in domestic trade. U.S. shipyards enjoy few economies of created by the Merchant Marine Act of 1936, and is more scale in building containerships and tankers due to the low commonly referred to by the speci? c section of the law cre- volume of construction. Also, oceangoing vessels built in ating it—Title XI. However, the program as currently con- U.S. shipyards tend to be signi? cantly smaller than similar ? gured dates to 1993, when it was reformed to comply with vessels built abroad, as only a modest amount of domestic requirements of the Federal Credit Reform Act of 1990. cargo is shipped by sea. Together, China, South Korea, and

The comparatively high cost of building ships in the Unit- Japan account for over 90% of all ship production in terms ed States relative to other countries discourages commercial of cargo carrying capacity. In general, shipbuilding is highly © chirnoagarazvan / Adobe Stock 8 | MN March 2021