The National Defense Reserve Fleet is divided into two components.

• One component—the Ready Reserve Fleet (RRF)—includes 96 ships that are routinely maintained so that they could be activated in 5,10, or 20 days. The Maritime Administration budgets about $225 million for RRF ships.

• The other component (the non- RRF) consists of 116 ships: 71 Victory- class ships built during World War II and 45 others of varying age and time in reserve status. The non- RRF ships receive far less maintenance than RRF ships and would require much longer activation times—between 30 and 120 days.

The Maritime Administration spends about $2 million a year to retain these ships.

Because of their physical appearance, the non-RRF ships are often referred to as "rust buckets." The Maritime Administration has developed a plan to gradually scrap them over the next decade. The Department of Defense (DOD) is continuing to study total sealift requirements.

Current U.S. sealift capabilities were strained during the recent Persian Gulf war, but the non-RRF ships were not used during the crisis. The General Accounting Office (GAO) believes these older, less-ready ships are no longer needed.

The General Accounting Office estimates that scrapping the obsolete Reserve Fleet ships could (1) save about $10 million in direct maintenance costs over the next 10 years and (2) generate an estimated $38 million to $42 million to improve the current Ready Reserve Fleet if the ships were sold to the highest foreign or domestic bidders.

Legislation pending before Congress that would limit the sale of Reserve Fleet ships (built before 1946) to domestic scrapping companies would lower these revenue estimates.

The Merchant Ship Sales Act of 1946 created a government-owned and administered National Defense Reserve Fleet of inactive but potentially useful merchant ships. In 1976, the Reserve Fleet was separated into two parts: (1) a Ready Reserve Force (RRF) consisting of ships maintained in a more-ready condition to meet more immediate shipping requirements and (2) a less-ready component of ships preserved and retained at very little government expense (non-RRF).

The Maritime Administration (MarAd) maintains custody of the Reserve Fleet ships. Over the years, reserve ships have been activated during emergencies, including the conflicts in Korea and Vietnam. For example, 40 percent of the materiel moving to Vietnam in 1967 was transported by ships of the Reserve Fleet. Most recently, 78 of the 96 ships in the RRF were activated to assist in sending and resupplying U.S. troops in Saudi Arabia after Iraq invaded Kuwait. With the exception of two ships that were testactivated in 1985, none of the non- RRF ships has been activated since the Vietnam War.

At one time over 2,000 Reserve Fleet ships were stored at eight different anchorages along the Atlantic, Gulf, and Pacific coasts. Since 1946, a large number of these ships have been sold for scrap, traded for other vessels, or used for purposes not related to transportation. Table 1 shows that as of May 31,1991, the total number of Reserve Fleet ships was down to 212—96 RRF and 116 non-RRF ships.

The RRF was created in 1976 to improve the overall readiness of the Reserve Fleet. RRF ships are maintained so that they can be activated in 5,10, or 20 days without the need for dry-docking or more expensive repairs (which would be necessary for the other Reserve Fleet ships).

These ships are located at Reserve Fleet sites in James River, Virginia; Beaumont, Texas; Suisun Bay, California; and at various other locations (mainly in the United States).

Improvements in Sealift Capabilities During the 1980s DOD spent over $7 billion to improve military sealift capabilities. Key increases in were: • A 25-ship prepositioned force (costing almost $4.2 billion) was deployed. This force includes 13 Prepositioning Ships, grouped into three squadrons. Each squadron is capable of equipping and supplying a Brigade of about 16,500 combat Marines. Another 12 ships constitute the Afloat Prepositioning Ships, which carry Army and Air Force equipment and supplies and a Navy field hospital. Supplies from some of these ships were the first to arrive in Saudi Arabia during the Persian Gulf crisis.

• Eight Fast Sealift Ships (about $827 million) were added. These ships are large, fast, converted container ships modified to a roll-on/ roll-off and especially suited to transport equipment such as tanks, large vehicles, and helicopters. They are maintained in a reduced operating status with a allowing activation in 4 days or less.

• Twoaviationlogistics support ships and two hospital ships were added, and 10 crane ships (about $ 717 million) were converted ships can be activated in 5 days. The two hospital ships that were converted from commercial tankers.

Each ship is capable of being activated in 5 days. The crane ships, part of the RRF with activation expectations of 5 days, can provide mobile loading and off-loading capabilities for non-self-sustaining container ships.

• The RRF was expanded to 96 ships (about $ 1 billion). The increase was accomplished by the direct purchase of ships, the exchange of scrap Reserve Fleet ships for obsolete commercial ships, and the acquisition of ships formerly operated by the Navy.

As a result of the Iraqi invasion of Kuwait, our sealift capabilities were given a dramatic practical test. According to the Military Sealift Command, as of April 15, 1991, 10 million tons of cargo had been shipped to the Persian Gulf. The ships utilized for this massive operation, as shown in table 2, were chartered from U.S. and foreign-flag commercial operators or activated from our own organic sealift assets.

Although the U.S. deployment to the Persian Gulf was the largest concentrated sealift activity since World War II, the non-RRF portion of the Reserve Fleet was excluded primarily because of (1) the lack of indication that there would be enough time to activate and use them; (2) their relatively small size, slow transit speeds, and long off-loading times compared with RRF and other ships used; and (3) the ready availability of U.S. and foreign-flag commercial ships. Suchfactorsraisequestions about when non-RRF ships would ever be needed.

MarAd's most recent sale of two non-RRF ships to a foreign firm, was for $76 per ton. MarAd estimates that future near-term sales might $85 per ton.

Therefore, scrapping the non- RRF ships now would (1) save about $10 million in direct preservation expenses during the next 10 years and (2) generate revenue of about $38 million to $42 million, depending on scrap prices.

Given the fact that the non-RRF ships were not used in the Persian Gulf war, the likelihood of the future need for the non-RRF ships is extremely remote.

Congress should consider directing the Maritime Administrator to scrap non-RRF ships not being held for RRF upgrade and use the sale proceeds to enhance the Ready Reserve Fleet.

Other stories from November 1991 issue


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