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Need Replacement Program For Cargo Shipping By Homer L. Ferguson* LL will probably agree that A for any Shipyard the really desirable condition is a steady flow of work, with sufficient of it repetitive to make it possible to take advantage of some of the economies of mass production so far as appli- cable to ships. It is interesting to examine the history of shipbuilding in this coun- try as exemplified, for instance, by our shipyard at Newport News. We have had 355 hull numbers since the contract for hull number one in July 1890. These vessels are divided as follows: Seagoing passenger ships ............ 51 Seagoine freight ship iccsc.0dne. 50 OMS ee iba ECs eee Ga i ae ape ane en 31 MPOSTLOVETS fie oe iiesticckeiueceiesse 29 MESA ELS SINS s aria cctenc scat scesviccasiccdcheces cesses 13 CNA OVa be CARTICT jocwiiaticnsssieccsesteasstec ess al (SNWISCES a oie) eee hla otis 7 (GURIMO OBIS eee ea os setandtioeius 3 VNTR UDO oe eres ee Oe ce 1 WOoast ellard -CULLErS, 6.58. ccs a MEPOLO NAMIC TE esc oaks Sor eSe geet ees acuiuenewesies 1 PRAAND ANE cess Ne eS Pee ech OLN aG Cucee eile 10 River and bay steamers ............. 7 MARTIN SORES en ene ee en ice ase 5 POTOOLES oy eh ese ee eke sade enn: 5 EEE STRSS pan tes Pa a 13 The remainder being made up of miscellaneous contracts for scows, barges, car floats, ete. The only instances of building at the same time any considerable num- ber of ships exactly alike, or nearly so, have been one set of eleven de- stroyers and another fourteen dur- ing the war, and a set of eight oil tankers built about the same time. Since the war, the largest number of sister ships built in any one yard is four—the Grace ships and the Ex- port ships. As illustrating the wide variation in types of vessels, in 1926 we built five passenger steamers, one dredge, six yachts, three barges, one carfloat, and two tugs. Some American yards may have been able to obtain a uni- form flow of similar vessels, but we have not. There have been startling varia- ations in deliveries during various years, running from 10,000 tons in 1924 to 156,000 tons in 1917. Hardly Any Cargo Ships Since 1919, eliminating oil tank- ers and the two ‘‘Seatrain’”’ vessels, no seagoing freight ships have been built with the single exception of the *Address by Homer lL. Ferguson, president and general manager of the Newport News Shipbuilding & Dry Dock Co., delivered before the Sixth Annual Conference on the Merchant Marine at Washington, Jan. 4, 1933. 10 Southern Pacific Steamship Ex Ocr- ANO delivered in 1925 by the Feder- al Shipbuilding Co. It seems re- markable that the wealthiest nation in the world can find it possible to refrain for a period of ten or twelve years from building seagoing vessels for general cargo service. A ten year naval holiday is perhaps con- ceivable, but a ten year holiday in merchant cargo vessels seems hardly possible. Of course the explanation is that we have been operating on the excess cargo ships built during the war at enormous cost. The Jones-White act has given us a program of passenger ship con- struction which has kept us fairly busy and which has now given us about all the ships of that type we can well digest, particularly in the face of the depression; but after ail the principal function, of passenger ships is to make the contacts, accom- plish the commercial transactions, carry the mail and passengers, do the advertising, and start the freight movement which must ultimately be the back bone of the enterprise if it is to endure. A replacement program of cargo ships is needed now, and such a pro- gram would result in lessening the cost of the ships. Our investigations indicate that the saving in duplicate ships will run up to above twelve per cent when the order calls for six or more. In the case of two ships built at the same time, or at nearly the same time, there is a saving of at least five per cent. Value of Replacement Program So far as we are concerned, the value of the replacement program now is that unless something is done quickly many of our shipyards will have to close and dismiss, to: join the unemployed, thousands of skilled workmen and hundreds of trained technical men. The matter of later re-opening the vards and starting the wheels turning from a dead stop will be so expensive as to bring out in strong relief what a judicious re- placement program would have done in lessening the cost. If anyone thinks not, let him consider for a moment our experience during the war, The need of a definite replacement program is quite as great on the part of the owner in the long run as it is for the builder. Not only do ships wear Out in a comparatively short time, but they become obsolescent MARINE REVIEW—February, 1933 even before they wear out and the constantly changing trades demand larger and faster types. This has been the history of the business. It has recently been stated in the press that the United States has spent billions in subsidy, having ref- erence to the war-built fleet sold at prices far below the cost of produc- tion. Our friends abroad were very anxious to have us build a great fleet in time of war when it looked as if the German submarines were about to win the war. We should not allow the _ basic facts regarding a merchant marine to be ignored by those in charge of the government of our Own country. The war-built fleet was authorized as an emergency measure and the great- er part of the expenditure was made necessary by sixty years of neglect before the war, during which time we should have provided ourselves with means of carrying a fair share of our own commerce. A Vast Unnecessary Loss It is likely that about $2,000,000,- 000 was the price we paid in this particular connection, so that the principal of the United States bonds and their interest provide a proper measure of the cost of our neglect and make the sums to be expended in mail contracts appear insignificant by comparison. Not only that, but our merchants and farmers whose memories go back further than fif- teen years know of the vast sums lost by them through inability to market our products when Europe with her merchant marine was busy with the war. Not only that, but the great majority of the tonnage constructed under the Emergency Fleet Corp. was not ready for service until long after the armistice. It is argued now in some quarters that there should be no _ further scrapping of the war-built dead- weight tonnage fleet. We sannot agree that the same principles do not apply to the shipping business as to any other business, nor that prof- its nowadays can be earned with any kind of vessels except up-to-date ves- sels of suitable design. If our merchant marine is worth while we must keep it up and it would seem that now would be a good time to build the ships needed. Our foreign trade has assumed a new significance in these times and the development of that trade is one of the roads leading to recovery. The building of ships now would provide work for thousands of men in ship- yards throughout the country. Nineteen Canadian Pacific liners during 1932 rolled up a total of near- ly 1,500,000 miles. Saving even 1 cent a mile, in fuel for instance, will amount to $15,000, and at 10 cents a mile would amount to the substantial sum of $150,000.