Shipping Out
Shipping Out
The American merchant marine is dying. Will we miss it when it’s gone?
In the early hours of March 26, the MV Dali, a 985-foot cargo ship weighing in whole over 91,000 tons, smashed into a supporting pier of the Francis Scott Key Bridge in Baltimore, Maryland.
The ship was built in South Korea, and its owners and managers were Singaporean. The crew and officers were from India and Sri Lanka. The six men who were working on the bridge and died in its collapse were from Central America. Indeed, the only Americans involved in the disaster were the harbor pilot, frustrated commuters, the soon-to-be-bilked taxpayers, and the uneasy shade of the father of the national anthem.
This is not atypical. The world’s largest shipping registries by tonnage are Panama, Liberia, and the Marshall Islands—“flags of convenience” for international concerns. Yet some nations still maintain top-10 registries. China flags over 8,000 vessels; Hong Kong over 5,000. The top three ship-owning nations, again by tonnage, are Greece, China, and Japan. By the number of sailors, the top countries are the Philippines, Indonesia, China, India, and Russia. By the tonnage of ships produced, China, Japan, and South Korea.
It has been claimed that America is “the indispensable nation”; be that as it may, it is quite simply no longer a maritime power. In 1970, there were over 800 U.S.-flagged ships, which accounted for 15 percent of global shipping. Today, despite more tonnage being moved across the oceans than ever before, there are about 180, accounting for about a half a percent of global shipping. The American registry is 21st; the fleet of American-owned ships comes in at 11th.
At the Founding, shipping was one of the dominant interests in the United States; John Hancock was the face and the funds for the revolutionary government. The republic’s early debates on economic policy centered on how to protect and develop shipbuilding and shipping; her earliest armed conflicts were over predations on American ships by the British, French, and Arabs. How did the United States come to be a maritime midget? And can anything be done to reverse the decay, or is it too late?
The first question is whether American maritime collapse is even a problem. If other nations’ interests can build and man ships better or more cheaply than Americans, why not let them? Is the U.S. Merchant Marine—“all the commercial ships of a country together with the personnel who man them,” as briefly defined in the American Merchant Seaman’s Manual—actually important?
Salvatore Mercogliano, a former mariner and current professor of history at Campbell University who focuses on maritime history, laid out the argument for The American Conservative. “The ultimate case is, well, we don’t care about the U.S. Merchant Marine. We just let the Panamanian-, Liberian-, Marshall Island–flag registries handle it. And a lot of countries do that. I mean, they just completely depend on it,” he said. “The plus side is cheap ships, because you’re buying ships from overseas, from China, Korea, Japan. The mariners are cheap because minimum wage for foreign mariners is $666 a month. So that’s pretty cheap, 20-something bucks a day. I get my stuff in Walmart and Target. And so it’s like, ‘I don’t need it.’”
The maritime industry, however, is unlike textiles or consumer electronics in a few ways; foremost, it is directly integrated with American military affairs. Civilian mariners make up the majority of the staff in the Military Sealift Command, the organ that supplies and operates military transports for the U.S. Navy. A 2017 survey by the Maritime Administration (MARAD)—the Department of Transportation body in part responsible for overseeing the U.S. Merchant Marine—found that the concurrent operation of a wartime sealift and the U.S.-flagged merchant fleet would require roughly 13,600 qualified American mariners. At the time of the survey, there were roughly 11,800—a 13.2 percent staffing deficit. Further, in wartime, nations expect to integrate their flagged civilian vessels into military logistics operations in time of war. It is for this reason that, for example, China regularly includes civilian ships in its naval exercises. A mere 60 U.S.-flagged vessels are registered with the Maritime Security Program, which is the instrument by which the Department of Defense can call upon merchant ships in time of war or national emergency.
Merchant ships and mariners absent from urgent military operations is but one problem arising from a mothballed maritime sector. “The negative side of that is, well, hang on a second, you’re completely dependent then on foreign shipyards, foreign shipping. If there’s any issue that they get angry at us—because we’re the U.S., we tend to make people angry all the time—it does cause a disruption,” Mercogliano said. “And, you know, you’re also a superpower, you’ve got an overseas military, you consume 20, or produce 23 percent of the world’s GDP, should you not also have at least a sufficient reservoir of shipping so that you’re not manipulated by foreign shipping?”
He added a hypothetical. “I always joke, if China ever got mad at the United States, they don’t have to attack the United States, all they have to do—they control 15 percent of the world shipping fleet—is slow them down by two days. And you know, all of a sudden ships that were scheduled to arrive in LA come in two days later, right? And it creates massive disruptions inside the United States. It causes consternation. We’re hustling to fix that. That’s the issue.”
Covid illustrated the havoc that unplanned supply-chain disruptions can wreak on major economies, especially in an import-reliant nation like the U.S. With something close to half of all international trade traveling by sea, a coordinated disruption by a hostile power could bring down economic catastrophe.
“It’s not that we should have 100 percent U.S.-flag vessels hauling 100 percent of our cargo. That’s impossible,” Mercogliano told TAC. “But you should have a good little mix if you want to consider yourself a major economic world power. If you’re Costa Rica, you probably don’t need it, because you can get by with just hauling in what you need.”
This is not a new lesson. Adam Smith himself, that totem of the free-trade dogmatists, was an unapologetic protectionist when it came to shipping and shipbuilding, singling out the Navigation Act of 1650 for particular praise.
[BLOCK[There seem, however, to be two cases in which it will generally be advantageous to lay some burden upon foreign for the encouragement of domestic industry. The first is, when some particular sort of industry is necessary for the defence of the country. The defence of Great Britain, for example, depends very much upon the number of its sailors and shipping. The act of navigation, therefore, very properly endeavours to give the sailors and shipping of Great Britain the monopoly of the trade of their own country in some cases by absolute prohibitions and in others by heavy burdens upon the shipping of foreign countries.[/BLOCK]
Nor is it a lesson that ceased to hold after the era of mercantilism passed. “Literally the reason we have a merchant marine is because this happened to us in World War One,” Mercogliano commented. “It’s the reason you have things like the Jones Act, and all those little laws that came into effect is because we found out ourselves what happens when we are overly reliant on foreign shipping”
In the lead-up to the First World War, the United States was disproportionately reliant on foreign-flagged ships for its overseas commerce—roughly one-tenth of American shipping was handled by American vessels. The Merchant Marine Act of 1916 established the U.S. Shipping Board, the predecessor of the modern Department of Transportation’s Maritime Administration, which was to oversee the Americanization of merchant shipping, including by the establishment of temporary corporations for the purchase and maintenance of ships. The Merchant Marine Act of 1920—better known as the Jones Act—consolidated the position of the new American merchant fleet by forbidding foreign vessels from conducting coastal traffic in the U.S. Subsequent maritime laws in 1928 and particularly in 1936 supported the merchant marine with operating and construction subsidies and provisions for mariner training.
This period of state interest in the maritime industry coincided with the era of mass labor organization. Mariners were a ripe target for unionization. Historically, a ship is a floating city with the captain as an absolute monarch. Not only was he the lawgiver; he was also the chief doctor and spiritual authority on board. (Hence his traditional power to preside over passengers’ marriages, and the section of the Book of Common Prayer devoted to services at sea.) Unsurprisingly, this led to abuses. In the 1840 sailing memoir Two Years Before the Mast, Richard Henry Dana Jr. recounts the flogging of a sailor who asked an ill-timed question of the captain.
What is there for sailors to do? If they resist; it is mutiny; if they succeed, and take the vessel, it is piracy. If they ever yield again, their punishment must come; and if they do not yield, they are pirates for life. If a sailor resist his commander, he resists the law, and piracy or submission, are his only alternatives. Bad as it was, it must be borne. It is what a sailor ships for. Swinging the rope over his head, and bending his body so as to give it full force, the captain brought it down upon the poor fellow’s back. Once, twice,—six times.
The unions—particularly the International Seamen’s Union, predecessor of the modern Seafarers International Union (SIU)—put an end to scenes like this, and negotiated many other improvements for sailors’ living and working conditions. The mid-century settlement found American shipping interests working directly with the unions to fill the crews of ships.
The result of this confluence of state, capital, and labor efforts was one of the New Deal era’s greatest successes. By the end of the Second World War, two-thirds of world shipping was carried by American vessels. Over the course of the conflict, the nation produced over a quarter million merchant seamen, 8,000 of whom died in action. In 1946, the yards were building a merchant ship almost every third day; roughly 5,500 were built in total during the war.
At the end of the war, many of those vessels were considered surplus and given away to replenish the war-ravaged merchant fleets of other nations. This was the beginning of a familiar postwar tale: other nations rebuilding their own industries at the expense, and often with the direct aid, of the United States. By the late ’60s, the American maritime industry was in serious decline, particularly the shipyards, due to foreign competition, sclerotic business practices, and that era’s ugly conflicts between labor and management. President Richard Nixon found this unacceptable and laid out a comprehensive plan to overhaul the fleet in a 1969 speech to Congress.
Our shipping industry has come a long way over the last three centuries. Yet, as one of the great historians of American seafaring, Samuel Eliot Morison, has written: “all her modern docks and terminals and dredged channels will avail nothing, if the spirit perish that led her founders to ‘trye all ports.’” It is that spirit to which our program of challenge and opportunity appeals.
It is my hope and expectation that this program will introduce a new era in the maritime history of America, an era in which our shipbuilding and ship operating industries take their place once again among the vigorous, competitive industries of this nation.
Nixon’s intentions were in part realized in the rejuvenated subsidy program of the Merchant Marine Act of 1970, but the untimely termination of his administration and a new era of fiscal austerity stymied further work.
“It was a big push for business. You know, shipping costs were high, let’s reduce costs. Let’s outsource this to other nations for its convenience,” commented John Konrad V, a former sea captain and the CEO of gCaptain, a shipping news service. “Nixon was the last president who had a strong maritime policy, and unfortunately that got killed by Watergate.”
In 1981, the Reagan administration ended subsidies to the shipyards. Japan, South Korea, and various European nations, however, continued to subsidize their own shipbuilding industries; private interests fled to foreign suppliers to these inexpensive rivals, leaving the U.S. Navy as the largest customer by far for American shipbuilders—with the economic distortions attendant on near monopsony.
There are four interlocking interests in the maritime industry—the state, ship owners and operators, shipbuilders, and mariners. The comprehensive Merchant Marine Acts of the last century placed the state firmly in charge of this system under the explicit theory that, while it is in large part composed of non-state corporate actors, the merchant marine is a service, comparable to the armed services—something that pertains directly to the national interest, and thereby the proper realm of state oversight. Deregulation-era attentions fastened on the inefficiencies and abuses of the system, particularly the waste of public funds in an era characterized by fiscal austerity. In short, the maritime sector underwent the same dialectic every other major American economic sector underwent between 1920 and 1985. Accordingly, the arguments about what are to be done about the American maritime industry are familiar.
A particular whipping boy is the Jones Act, which still limits American internal and coastal shipping to American ships. Following the destruction of 2017’s Hurricane Maria, the century-old law received a public beating for allegedly “strangling” (in the words of one New York Times op-ed) Puerto Rico by slowing disaster relief. On the other hand, entrenched interests—perhaps most visibly, the SIU—are regular boosters for the Act’s protections.
As TAC’s own James Pinkerton wrote during Maria’s aftermath, the Act’s role in the relief effort’s mismanagement was heavily overstated—and, if we believe a merchant fleet is worth having, nixing one of its few remaining protections may be counterproductive. That is not to say there isn’t room for improvement.
Mercogliano observes that the logistics industry is a far different technical beast than it was a century ago. “[Dealing with] the Jones Act is the panacea, that it’ll be rainbows and unicorns and everything is fixed. And it fixes some things, but not everything. I think the Jones Act needs reform by any means—any law that was written in 1920 probably needs reform all the time—we need to be looking at it and changing it,” he said. “The problem you have in the maritime industry is you have two entrenched sides, those who are for the Jones Act, and those who are against the Jones Act, and they’re on their mountain tops, and none of them are going to take a step off, none of them want to show any potential for change for fear that the other side will pounce on them. And so what you wind up with is the status quo.”
To Mercogliano, the national-security and worker-protection aspects of the Act hold up. “I think the Jones Act does a lot of positive things. For us, I think it’s good that Staten Island Ferry is U.S.-built, U.S.-flagged, U.S.-owned. I think that’s a good thing. I think it’s a good thing that we don’t have cruise ships that anchor and park inside the United States for days at a time and challenge American hotels and businesses,” he said. “I don’t think we really want to compete against foreign workers who are making, again, 20 bucks a day in the industry.”
He is also skeptical of the claims about market distortions arising from the Act. “Everyone wants to sit there and say, the reason things are so expensive is because of the Jones Act. Well, it’s under $2 a mile to haul something by truck in the United States, you’re never going to find cost efficiency. If you’re in Baltimore, and you want to haul something to New York, I don’t care if you use a foreign ship, it’s not going to be cheaper than hiring a truck to drive it up to New York,” he said. “And the other problem is most Americans don’t live right by a port, they live within 100 miles of the port so that you’re still going to put [cargo] on a truck at some point. So whether or not you put it on a truck for short haul or long haul, you know, it just tends to be better. It’s the knee-jerk reaction, you know, get rid of this law, and everything will be better.”
Mercogliano thinks there must be a more thoughtful and comprehensive approach to maritime policy: “The Jones Act in 1920 wasn’t just coastal shipping. It was international trade, it was rates, it was everything—shipbuilding. We really need to look at that.” Yet in those spheres—shipbuilding and ship-operating writ large—libertarian-leaning critics point out, with justice, that American shipyards are enormously inefficient relative to foreign rivals, and unfocused subsidy programs do nothing (at best) to resolve inefficiencies.
If the capital side of the merchant fleet were worked out—the building of American ships and establishment or expansion of American shipping companies—the task of finding crews and officers for these ships would remain. Per the 2017 MARAD survey, even in the fleet’s advanced state of atrophy, there aren’t enough seamen to staff it fully—and, even if the parameters of that survey are correct, it may not tell the whole story.
“I think that study grossly underestimates how short we are because if we ever got into a true conflict, I think you would see a lot of mariners beat feet, not take the chance and, you know, potentially get sunk by a Chinese submarine or missile or something like that,” said Mercogliano. “You’re kind of seeing that with the Houthis and what they’re doing.”
Sailing has always been a line of work with inherent difficulties and hardships, particularly for a family man. “I came down with a condition that precluded me from continuing sailing—I got married,” Mercogliano said. “It’s a long time at sea, so you’re not at home a lot.”
These hardships were aggravated during the COVID crisis. “COVID created a big problem, in that mariners were either stuck on their ships or couldn’t get to their ships. And that created a big displacement,” Mercogliano said. “You were basically stuck at work 24/7, it’s the nightmare of everybody’s stuck at work. They couldn’t get out, or they were stuck at home and couldn’t get to work and couldn’t make any money. It caused a lot of people who got off the ships not to want to go back.”
Konrad blames the stagnation of prospects for officers for making the field less attractive, noting that salaries have not kept pace with inflation and the shrunken U.S. fleet produces few opportunities to rise for young officers. “It takes 10 years to get a captain’s license. So it’s a lot of work to get it. So once you get the captain’s license and a job—people keep that job for a long time,” he said. “So [maritime] is one of the oldest industries because they have all these boomers who are in it and don’t want to leave.”
Per Konrad, overregulation of mariners may be an even more significant discouragement. “When I went to a conference recently, they say, John, come back on the ship. I get to capitalize on some experience, right? I would like to go out just for a month. Maybe not all year, but I’d go out for a month and do an exercise. I can’t, because I got to take all these international certificates. The most recent is ‘leadership principles.’ It’s unreal.”
The effects trickle down to the crews. “The SIU unlisted, they can’t make more than the junior officers, so they’re stuck I think. Personally, I think they have to do a lot more to cut regulation, cut bullshit training, and at the top, so you can start pulling people up into the ladder.”
Regulatory concerns weigh heavily on unlicensed mariners. There are two broad classes of merchant mariner, licensed and unlicensed—the equivalent of commissioned officers and enlisted men in the armed forces. The merchant marine previously afforded a mobility that was almost unparalleled in other industries; experienced unlicensed seamen of enterprise and talent could simply sit for licensing exams and become eligible for officer positions. Roughly three decades ago, the U.S. Coast Guard—the organ responsible for mariner licensing—changed its standards to align with those of the UN-affiliated International Maritime Organization.
“Since the late ’90s, the IMO looked at all the training of all mariners worldwide and said there’s huge discrepancies—the American training is better than everyone’s at that point,” said Konrad. “Americans were a lot better sailors. So they said, we’ve got to mandate all these courses. You need a simulator, you need to firefight—so they require all these classes, and you’re not [getting] a full college degree, but about six months of college when you join as an officer.”
Wayne Johnson, director of admissions at the Harry Lundeberg School of Seamanship, a training center for unlicensed seamen run by the SIU at Piney Point, Maryland, says the union is flooded with prospects despite the challenges facing the industry but agrees that government red tape is the biggest obstacle to putting men on ships.
“We have had the ability to put a recruiter in each one of our ports. So we actually have—I’m never gonna say too many—but we have an abundance of applicants. I mean, we’re being super selective on who we’re selecting to come into our program,” said Johnson, who noted that 1,000 prospective mariners—almost two years’ worth of trainees—are currently queued up for training at the Lundeberg School. “Our issue is the regulations, the regulations that are in place make it difficult for us to create ABs [able seamen].”
There are three departments on the ship, engine, steward, and deck. Johnson explains that Coast Guard rules make it so mariners going into the deck department—the largest on a ship—have to spend twice as much time in training as candidates in the other two departments. “Having that regulation in place greatly limits the amount of people or the time that it takes us to train an AB to get them fit to sail with that rating to get them out there,” he said. “We’re doing it. But we could be doing it much faster.”
The Francis Scott Key Bridge still lies in ruins. Maryland’s Governor Wes Moore alleges that it will be rebuilt by 2026. We’ll see about that.
The American maritime industry also lies in ruins. A growing set of interests—political, business, and labor—have expressed the will to rebuild it. We’ll see about that, too. To some degree the weaknesses in the maritime industry defy analysis because the data do not exist or are years out of date. “MARAD hasn’t done a shipyard survey since 2000. It’s been 25 years, and we’re supposed to do it every year. Well, why is that a problem?” commented Konrad. “Well, we don’t know. We don’t know our capacity. We don’t know our ships, because MARAD hasn’t done it.”
Yet there is growing political will to take the American maritime industry in hand. Senator Marco Rubio (R-FL), Representative Mike Waltz (R-FL), and Representative John Garamendi (D-CA), and Senator Mark Kelly (D-AZ), a graduate of the U.S. Merchant Marine Academy, in May released an advisory report on a national maritime strategy. In January, two dozen lawmakers, including those four, called on the Biden administration to appoint a maritime policy czar.
“Everyone’s realizing that things need to change. So there are more advocates for change than ever before. There’s new leadership in some of the unions. There’s new leadership in the shipyards. So the problem you have is there’s no one advocate for the U.S. Merchant Marine,” said Mercogliano. “There are Navy advocacy groups, there are labor advocacy groups. But in the merchant marine, what you tend to have is shipping companies, interest groups, shipbuilders… There’s no merchant marine War College that sits there and says, ‘This is what we need for a federal maritime policy,’ because there’s no one to bankroll that.”
A disproportionate amount of maritime policy falls to the executive, and so the near future of the American merchant fleet will in large part be determined by the outcome of November’s election. Konrad sees the basic attitude of the administration toward the merchant marine as a basic test of whether it is serious about renewal.
“The merchant guys are at just as much risk and Pete [Buttigieg, Transportation Secretary] refuses to acknowledge them,” Konrad said. “Go to the Merchant Marine Academy at Kings Point. It’s completely falling apart. The lawn care budget of West Point is bigger than the Kings Point budget. It’s a disaster zone, falling apart. It looks like a Third World nation. It starts with the respect.”
It will be hard. The bare fact is that Americans have far higher industrial standards than other nations across the board—for mechanical maintenance, for personnel training, for safety. This is expensive. Much of the maritime industry needs to be rebuilt at the base, infrastructural level. This, too, is expensive. The reward: a more secure nation, a forward-looking technical field, and a growing pool of high-paying jobs. Johnson puts it succinctly: “We are the U.S. supply chain. Without ships, the stuff doesn’t move. Not only do we support the United States as a whole, but the United States military. When they call, we respond, we get them what they need.”
It is unlikely, even were it desirable, that the U.S. will return to the postwar economic settlement that ushered in the golden age of American shipping. Yet there are signs of an industrial revival in what might be called the “monumental” sectors—most notably space travel, under the attentions of Jeff Bezos and especially Elon Musk. Perhaps an industrial policy like David Goldman’s proposed “moonshot” framework could be applied to shipping.
Editor’s note: This article has been updated to reflect the presence of a Maryland pilot on the MV Dali.
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