U.S. Merchant Marine / U.S. Merchant Fleet

The ability of the United States to respond unilaterally to military emergencies requires adequate U.S.-controlled maritime shipping capacity. Since the end of the Cold War, increased globalization and consolidation of maritime shipping companies have reduced the number of US-flagged commercial carriers. Nevertheless, nearly 80 percent of the military cargo transported during the Persian Gulf conflict of 1990-91 was carried on US-flag ships. More than 30 percent of the cargo carried on US-flag ships was transported aboard commercial vessels as a part of normal operations or under time-charter to the Department of Defense (DOD) without disruption to regular commercial service.

The fact that the Merchant Marine Act of 1936 remained in place long after its usefulness had ended was responsible in part for the decline of the Merchant Marine, Through World War II, the Act accomplished its mission of building a U.S. merchant fleet. At that time, the United States had 61 percent of the world's tonnage. But continuing to subsidize a large healthy merchant marine during a time of limited competition resulted in a dependent and noncompetitive industry. At the end of World War II, America had 16 million deadweight tons of shipping in the United States, and there were 2,480 vessels in the U.S. Merchant Fleet. But 20 years later, America was ranked not first any longer but eighth in the world. The world merchant fleet in 1975 consisted of 22,872 ships of 556,572,000 deadweight tons. The United States ranked eighth in terms of deadweight tonnage. Liberia was ranked number one in vessel registries (by number of ships) and was considered a country flag of convenience.

By 2003 the United States ranked 17th in number of oceangoing vessels, having fallen from a top-ten ranking just a few years earlier. The US merchant fleet ranked 11th on a deadweight tonnage basis. The US fleet's share of oceanborne commercial foreign trade, by weight, continued to be less than five percent.

As of year-end 2005 the U.S.-flag oceangoing fleet included 195 vessels (9.1 million DWT). Of this, 100 vessels (4.8 million DWT) were Jones Act vessels (US-built) eligible for domestic trades. From 2001 to 2005, the U.S.-flag privately-owned oceangoing merchant fleet declined by 26 vessels (1.0 million DWT). The Jones Act fleet declined by 31 vessels (1.6 million DWT), while the non-Jones Act fleet (foreign trade vessels) increased by 5 vessels (0.6 million DWT). As of year-end 2005, 47 percent of the U.S.-flag fleet (DWT) was older than 20 years. For the Jones Act segment, 67 percent of the fleet was older than 20 years.

The U.S. Merchant Marine is a fleet of nongovernmental ships that handles waterborne commerce during peacetime and becomes a naval auxiliary during wartime to deliver troops and equipment. Prior to World War II, international water commerce relied on a huge fleet of relatively small ships; however, since then, the U.S.-flag merchant fleet has been steadily declining. In 2002, the United States ranked eighteenth in the world in the number of ocean-going merchant vessels and fourth in the deadweight tonnage capacity of those vessels. This represents approximately five percent of the world's tonnage capacity.

One reason for the decrease in the number of vessels in the U.S. fleet is that many nations have built an international maritime presence. These registries do not have the same requirements regarding protection of seafarer health, welfare and safety as U.S.-flag vessels. Consequently, companies have a financial incentive to register under non-U.S. flags. In addition, foreign-flag vessel owners do not pay any corporate income taxes on the revenue earned in U.S. foreign commerce. By comparison, vessels operating under the U.S. flag are subject to all the taxes and regulations applicable in the United States, resulting in higher costs for ownership and operation.

Changes in maritime technology and reduction in crew sizes have also contributed to a decrease in the U.S.-flag industry's supply of vessels and manpower. Vessels are larger but require a smaller operating crew. The average capacity of cargo vessels in the U.S.-flag fleet is nearly 28,000 deadweight tons (DWT), compared to 12,000 DWT in 1970. The size of the U.S.-flag fleet has declined in recent years, but the productivity has improved substantially. The U.S.-flag foreign trade liner fleet handles 42 percent more cargo than in 1970, but in fewer, larger vessels.

While the U.S. Merchant Marine operates primarily within the MTS to move cargo, the U.S. military can also use the vessels to move personnel and equipment. DOT's Maritime Administration (MARAD) and the U.S. Department of Defense (DoD) operate several programs that use commercial vessels for military purposes, discussed below. Non-military crews operate both government and private vessels under these programs. Some of the vessels operate continuously for DoD, and some operate only when needed.

The Maritime Security Act of 1996 established the Maritime Security Program to support a fleet of U.S.-flag commercial vessels and American-citizen crews necessary for military purposes. Funding for the program has permitted 47 ocean-going vessels (through 12 total operators) to participate in the program. Eligible vessels are subject to one-year renewable contracts, and funding for the program is subject to annual appropriations from Congress. During peacetime, participating vessels are typically involved with deep-sea international trades; however, participating vessel operators are required to make their ships and other commercial transportation resources available to DoD. As of 2000, 50 vessels participated in this program.

Designed to augment the Maritime Security Program, the Voluntary Intermodal Sealift Agreement is a standby agreement to make commercial, intermodal, dry cargo capacity, and supporting global infrastructure available to meet DoD's "contingency deployment" requirements. The Sealift Agreement calls for comprehensive and integrated peacetime planning and exercises among commercial entities and the U.S. military. The intent is to bring commercial best practices into military logistics, and to coordinate military and nonmilitary activities for improved asset utilization.

As the size and prominence of the US merchant fleet decreased, the US transitioned from being a "flag state" becoming a "port state," as well. A "port state" is a nation whose interactions with merchant shipping come about primarily through port calls and coastal accidents involving ships whose safety is overseen by other governments. By the end of the 1990s fully 95 percent of US foreign trade was carried in ships flying the flags of other nations. The United States is no longer able to carry out the same kind of risk reduction measures as was possible when the majority of ships in US ports flew the American flag. Further, not all nations are as conscientious in their flag state duties as the United States had been. Accordingly, the USCG has pursued a two-tiered approach to protecting public and environmental safety from the threats posed by inadequately supervised foreign shipping.

The first tier is has been to promote increasingly rigorous international standards at the International Maritime Organization (IMO). The IMO is a specialized branch of the United Nations, responsible for a wide range of safety and environmental protection standards issued under several international conventions. In recent years, IMO standards have been made far more stringent, for both the protection of life and the marine environment. These improvements have been largely at the instigation of the United States, and the USCG is recognized at IMO and elsewhere as the world leader in maritime safety and environmental protection issues. Rigorous standards are meaningless, however, if they are not adequately enforced.

The United States, acting in concert with other nations, has embarked on an aggressive Port State Control program to ensure foreign flag vessels calling in US ports meet applicable IMO standards and any additional measures required for entry into U.S. ports. The United States, again in cooperation with other nations, is working to improve flag state enforcement capabilities through technical assistance and international training programs and by developing the Model Maritime Code to guide developing nations' efforts in building effective enforcement capabilities.