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firmer understanding of what they can actually spend.
The hardest internal sell is often not ownership. It is the 
CPA or financial officer who looks at the compliance struc-
ture, the restriction on funds, and the long commitment 
horizon and defaults to skepticism. The honest answer is an 
NPV comparison: weigh the value of deferring tax on a dol-
lar today, compounding that dollar for five to ten years, and 
using it to reduce the debt needed for a new vessel. Add vessel 
cost escalation to the equation and the case strengthens. The 
program can materially improve the operator’s capital stack.
The most common mistake is entering the process too 
vaguely. MARAD’s Schedule B asks what vessel the op-
erator intends to build, at what approximate cost, and on 
what timeline. Absolute certainty is not required, and 
agreements can be modified as projects become more de-
fined. However, operators who enter without a working 
replacement or expansion thesis tend to treat CCF like a 
passive savings account, which wastes most of what makes 
it useful. The tool earns its keep when it is tied to a specific 
vessel strategy.
CCF reduces how much 
debt an operator needs, 
lowers the effective cost of 
the capital stack, and  
creates a funding runway 
that can be matched to a 
construction timeline. 
All American Marine has built three vessels for fellow PVA member Island Packers. The operator has established a Capital 
Construction Fund for new construction in the future. 

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