Maritime
Administration
Mission.
The Maritime Administration (MARAD), an agency of the Department of
Transportation, administers federal laws that foster and maintain a U.S.
merchant marine capable of meeting the nation's shipping needs for
domestic and international waterborne commerce and national security.
MARAD also seeks to ensure that the United States enjoys adequate
shipbuilding and repair services and possesses efficient and adequate port
capacity complemented by effective intermodal water and landside
transportation. The agency promotes the use of U.S.-flag vessels, manages
an active reserve of ships in the Ready Reserve Force (RRF), maintains an
inactive inventory of ships in the National Defense Reserve Fleet (NDRF),
and ensures the availability of a pool of highly skilled merchant marine
officers and seafarers through its operation of the U.S. Merchant Marine
Academy at Kings Point, N.Y., and its support of six state maritime
academies (in California, Maine, Massachusetts, Michigan, New York, and
Texas).
More
recently, with expanding economic globalization, a massive increase in
international trade and cargo--and the corresponding growth both in
environmental degradation and in the congestion of landside
transportation--MARAD has sharpened its focus on logistics, ports,
intermodalism, environmental activities, and international trade
practices. Ensuring that there is adequate and environmentally sound
transportation to meet future U.S. national-security and commercial needs
requires a well-planned and truly integrated multimodal transportation
system. Moreover, international standards have become increasingly
important in maintaining the integrity of U.S. commerce and the
competitiveness and strength of the U.S. maritime industrial base.
Historical
Perspective
America
is a maritime nation and, from the early days of its existence, has relied
heavily on its merchant marine and maritime industries to establish and
maintain its preeminence as a major economic power as well as to provide
for its defense. From the first seagoing vessel launched by the
Massachusetts Bay colony in 1631 and the first shipyard established in
Maine in 1638, a fledgling America took its first steps as a maritime
entity, producing its own vessels and sailing forth into the world of
international commerce, using its merchant marine as an auxiliary to its
Navy as protection for its expanding and highly lucrative trade.
International
Trade. By the late 1780s, the upstart Yankee nation had added the West
Indies and India--as well as Baltic, Mediterranean, and African ports--to
its already flourishing trade with England, France, and China and could
claim 124,000 deadweight tons (dwt) of shipping in its fleet. It took only
a generation of Yankee ingenuity and persistence before the American-flag
fleet was carrying nearly one million tons of cargo to ports around the
globe. By 1826, moreover, U.S.-flag merchant vessels transported 92
percent of America's foreign trade.
Today,
with the largest portion of the nation's ever-increasing global trade
moving by water, only three percent is carried by the U.S.-flag fleet.
This downward spiral has disturbing implications for America's national
security and economic vigor. America must depend on its U.S.-flag fleet to
carry its cargoes overseas in wartime or during military contingencies.
Moreover,
oceangoing jobs employ 22,000 U.S. citizen-mariners, while
maritime-related shoreside activities engage thousands more. U.S.-flag
liner companies generate $8.5 billion annually in revenues, contributing
hundreds of millions of tax dollars to their respective federal, state,
and local governments. Without a U.S.-flag fleet, the nation's foreign
commerce and its auxiliary sealift capability would depend exclusively on
foreign-flag ships.
United
States Shipbuilding. Well-endowed with factors of production, America
stood alone as the undisputed world leader in shipbuilding until the
1850s. World Wars I and II further increased output during the 20th
century. However, the nation's surplus of vessels amassed after World War
II dampened world demand for new construction and forced the shutdown of
most U.S. shipbuilding capacity.
Later,
the Cold War spurred new naval construction. Large and sustained
investments in core technologies, coupled with continuing major efforts in
research and development programs, pushed the industry to new heights, and
American shipbuilders again assumed a preeminent position, producing the
world's most sophisticated, capable, and complex warships.
The
sheer strength of domestic (primarily U.S. Navy) demand in this industry
provided sufficient activity so that American shipbuilders did not have to
compete in the international market. The end of the Cold War, however,
brought a dramatic decline in new naval construction and ship-repair
requirements, causing the industry as well as its supporting
infrastructure to downsize rapidly.
Thus,
the industry's 30-year concentration on naval construction diminished its
commercial shipbuilding ability and posed a major challenge to its reentry
into the international shipbuilding arena. The decline poses a major
problem not only from the standpoint of national security, but also
economically. Since the naval buildup of the 1980s, 75,500 production jobs
have been lost in the shipbuilding and repair industry, more than a 50
percent decline. According to the U.S. Department of Labor, the U.S.
shipbuilding and repair industry employed only 72,800 production workers
in mid-1998.
American
Shipbuilding Policy
Realizing
the magnitude of the several complex challenges confronting the industry,
the Clinton administration developed a strategy in 1993 to energize U.S.
shipyards and ease their transition from defense to the commercial sector.
The goal: to make America's high-quality shipyards and suppliers
commercially competitive worldwide. The administration's plan, entitled
"Strengthening America's Shipyards: A Plan for Competing in the
International Market," consists of five parts:
-
Ensuring
fair international competition;
-
Eliminating
unnecessary government regulation;
-
Assisting
international marketing;
-
Financing
ship sales through Title XI loan guarantees; and
Improving
commercial competitiveness through the MARITECH program, which was devised
to supplement efforts already underway within the industry to compete
internationally.
To
implement the plan, Congress enacted the National Shipbuilding and
Shipyard Conversion Act of 1993, included in the National Defense
Authorization Act of 1993 (Public Law 102-484). That legislation expanded
the existing Title XI Federal Ship Financing Program by authorizing the
Secretary of Transportation to guarantee obligations issued to finance the
construction, reconstruction, or reconditioning of eligible export
vessels. It also authorized guarantees for shipyard modernization and
improvement.
The
Shipyard Act also established a National Shipbuilding Initiative (NSI)
program to help the industrial base meet several national-security
objectives. The goal of the NSI program is to help reestablish the
American shipbuilding industry as an internationally competitive industry.
Following are updates on MARAD's major activities under the auspices of
the National Shipbuilding Initiative.
OECD
Agreement
Legislative
efforts continued in search of a compromise that would enable the United
States to ratify the agreement to end foreign shipbuilding subsidies that
was negotiated in 1994 by the U.S. Trade Representative through the
multinational Organization for Economic Cooperation and Development (OECD).
That
agreement, developed by the world's key shipbuilding nations, eliminates
virtually all direct and indirect subsidies, establishes common rules for
government-assisted financing, creates an innovative pricing mechanism to
prevent ship dumping, and provides a means to settle disputes through
binding agreements. Under the OECD agreement, the U.S Title XI program
will be modified to meet its terms, which provide for a maximum repayment
period of 12 years and a maximum financing coverage of 80 percent.
Although
negotiation of the OECD agreement began as a U.S. initiative, there has
been a protracted disagreement within the U.S. shipbuilding industry over
the utility of the agreement. The large military-oriented yards have
opposed the agreement, while small and medium-sized yards have supported
it. Congress still must act on the proposal.
The
key provisions of a proposed legislative compromise would strengthen
protection of national security and the Jones Act and extend the current
terms for Title XI loan guarantees to 1 January 2001. In July 1998, the
Senate Finance Committee approved an omnibus trade bill that included
implementation of the OECD agreement, but Congress recessed before the
legislation could be further advanced.
Financing
Ship Sales Through Title XI Loan Guarantees. The Title XI program,
authorized under the Merchant Marine Act of 1936 and administered by MARAD,
assists the U.S. shipbuilding and repair industry in developing and
obtaining the private financing often critical to attracting domestic and
foreign buyers.
Title
XI, as modified by the National Shipbuilding and Shipyard Conversion Act
of 1993, authorizes MARAD to guarantee up to 87.5 percent of loans,
amortized over 25 years, to foreign purchasers of ships built in U.S.
yards, or loans for modernization of U.S. yards. The current terms of the
Title XI program would be modified as needed if the United States ratifies
the OECD Shipbuilding Agreement.
The
Title XI loan-guarantee program has been an important factor in improving
the ability of U.S. yards to compete for international contracts. During
fiscal year 1998, MARAD approved 12 Title XI financing guarantees
amounting to approximately $734 million. The Title XI program continues to
attract a substantial level of interest with approximately $528 million in
currently pending projects and a portfolio of approximately $2.86 billion.
MARITECH.
Through MARITECH, a five-year program of matching funds, the federal
government is encouraging the shipbuilding industry to direct and lead the
development and application of modern processes, procedures, and
technology to improve the industry's competitiveness and to preserve the
U.S. industrial base. The industry-led, industry-driven
initiative--jointly sponsored by MARAD, the Defense Advanced Research
Projects Agency, and the Office of Naval Research--provides up to $220
million over five years to private-sector industry consortia for the
development of innovative ship designs and construction as well as
improved processes and business procedures.
By
September 1997, 66 MARITECH projects had been awarded for development of a
wide range of improvements in shipbuilding technologies. In addition, 36
new commercial ship designs have been generated. MARI-TECH participants
span 200 private-sector organizations in nine foreign countries and over
40 states.
National
Maritime Resource and Education Center. MARAD has established a
National Maritime Resource and Education Center to assist the U.S.
shipbuilding and allied industries in improving their competitiveness in
international commercial markets by offering a central source of
information, expertise, and reference materials on commercial
shipbuilding. The center also provides oversight and technical expertise
in the administration of MARITECH projects.
Status
of U.S. Shipbuilding
Commercial.
In October 1998, a total of 56 vessels were on order in U.S. shipyards: 46
Navy ships and 10 commercial ships--including five new 46,000-dwt-class
product tankers for the domestic trade (Newport News Shipbuilding), three
125,000-dwt crude carriers for the Alaskan North Slope transport market
(Avondale), one chemical carrier (Alabama Shipyard), and one nonoceangoing
ferry (Todd Pacific). During the first nine months of 1998, two oceangoing
commercial ships were delivered--one chemical carrier (Alabama Shipyard)
and one oceangoing ferry (Halter Marine). In addition, one smaller
nonoceangoing ferry also was delivered (Todd Pacific).
Newport
News has been constructing a series of "Double Eagle" product
carriers. The first, owned by Mobil Oil, already has been delivered. It
was followed by delivery of two vessels to Lightship Tankers III & IV,
LLC, and one to Danneborg Rederi AS. National Steel and Shipbuilding
Company also has been awarded a contract to design British Petroleum's
(BP) next generation of crude carriers for the Alaskan trade. The Suez
max-size double-hull BP tankers will have diesel electric power provided
by two independent engine rooms, shafts, and propellers.
American
Classic Voyages Company of Chicago and Ingalls Shipbuilding, a division of
Litton Industries, signed a letter of intent in October 1998 to construct
two passenger ships for the Hawaii interisland service, with options to
build up to four additional vessels. These cruise ships would be the
largest passenger vessels ever built in a U.S. shipyard and the first
passenger vessels built in the United States since the early 1950s.
A
MARAD survey of the U.S. shipbuilding industry showed that, as of June
1998, there were 160 additional vessels over 100 gross tons on order,
consisting mostly of offshore supply vessels, various types of tugs,
catamarans and other types of ferries, patrol boats, lift boats, and
survey vessels. In addition, a number of U.S. shipyards had received
orders to build approximately 1,000 barges of various types.
The
U.S. shipbuilding and repair industry invested more than $244 million in
1997 in its continuing effort to upgrade and improve yard facilities and
production processes aimed at enhancing their competitiveness. Over the
past 10 years the industry has made capital investments in excess of $2
billion. Preliminary numbers available at MARAD indicate that the industry
will exceed the capital investment projections for 1998 of $256 million.
The
Title XI loan-guarantee program has been an important factor in improving
the ability of U.S. shipyards to compete for international contracts. The
Astro Offshore Corporation construction contract to Atlantic Marine Inc.
was made possible by a Title XI guarantee.
Military.
The Navy shipbuilding program for the years 19992003 is expected to fund
a total of 41 ships, an average of 8.2 ships per year, which is a sharp
decline from the 1980s when annual construction averaged 19 ships per
year. The five-year plan proposed includes seven conversions, one nuclear
carrier refueling, and four SLEPs (service-life extension programs), as
well as the construction of at least one military sealift ship.
The
Navy's sealift construction program is providing additional work for U.S.
shipbuilders. In October 1998, 12 new LMSR (large, medium-speed,
roll-on/roll-off) sealift ships (T-AKRs 300305 and T-AKRs 310315) were
on order, six with Avondale and six
with National Steel and Shipbuilding Company (NASSCO), with deliveries
scheduled between 1998 and 2002.
World
Shipbuilding
In
December 1997, the world order book for commercial vessels consisted of
2,604 vessels over 1,000 gross tons, a decline of 7.1 percent from
December 1996. Japanese shipyards accounted for 35 percent of the gross
tonnage on order; South Korea ranked second with 33.1 percent, followed by
the People's Republic of China with 5.6 percent. The United States ranked
14th with 1.0 percent, a substantial increase since December 1995.
Orders
for new-construction commercial vessels can be expected to increase beyond
the year 2000. Drewry Shipping Consultants Ltd. projects total worldwide
demand between 1997 and 2010 in the range of 370 million dwt, including
more than 109 million dwt of new construction--new tankers and dry bulk
carriers, primarily--in the 19982000 period.
The
Oil Pollution Act of 1990, which requires that all tankers operating in
U.S. territorial waters after 2015 be double-hulled, has spurred a
dramatic increase in double-hull construction. Approximately 1,500 tankers
enter U.S. waters each year. Construction of very large crude carriers
also will increase so that aging ships (those built before 1980) can be
replaced. Some 40 percent of the world fleet will be more than 25 years
old by 2000.
United
States Shipping
As
of July 1998, the U.S.-flag merchant fleet included 287 oceangoing vessels
(1,000 gross tons and over) as well as 68 Great Lakes vessels and over
40,000 other cargo ships, tugs, barges, passenger ships, and other vessels
in domestic waterborne trade. There was a net decline of two oceangoing
vessels during the year. The United States continued to rank 11th in the
world in the deadweight tonnage of its operational oceangoing commercial
ships. The U.S.-flag share of America's seaborne foreign trade carried
declined in 1997 to 2.8 percent (from 2.9 percent in 1996). The U.S.-flag
percentage of liner trade, carried in newer containerships, increased from
8.1 percent to 9.0 percent.
Even
though the number of U.S.-flag oceangoing ships has declined in recent
years, the productivity of the fleet has improved substantially. The
average capacity of liner vessels in the U.S.-flag fleet today is over
38,000 dwt. Fleet productivity also has been enhanced since 1997 by the
development of state-of-the-art intermodal systems that provide seamless,
door-to-door, just-in-time transportation worldwide. These advances also
have been applied to the movement of military shipments and have resulted
in significantly improved coordination and speed in delivery of Department
of Defense (DOD) cargoes.
Commercial
shipping continues to be critical to the well-being of the U.S. economy
for both economic and defense reasons, as recent events have repeatedly
emphasized. The recent intervention by the Federal Maritime Commission in
U.S. international trade with Japan and the Shanghai Shipping Exchange to
remove discriminatory practices against the American consumer and the
ongoing negotiations by MARAD in these cases--and now with Brazil and
China as well--were possible only because the United States has a merchant
fleet of its own. Having a U.S.-flag merchant fleet engaged in
international trade gives the United States the legal standing to
intervene to protect its economy.
However,
like other profit-oriented corporations, vessel owners will register their
ships under the U.S. flag only if there is a measurable economic benefit
to their shareholders. Because of higher U.S. construction, maintenance,
environmental, and safety standards, it almost always costs more to
operate U.S.-flag vessels than it does to operate foreign-flag ships.
There is limited direct U.S. government assistance to help support a
minimal liner fleet. Since 1904, to provide the economic incentive to
shareholders to maintain their U.S. registry, the Congress has enacted a
series of so-called "cargo-preference laws." When the government
provides a benefit to help American industry export U.S.-made products, it
establishes a "quid pro quo" requiring the exports to be carried
on U.S.-flag vessels, when such vessels are available at fair and
reasonable rates. Two or more industries therefore are assisted at the
same time. These cargo-preference laws generate about $900 million dollars
per year of base-cargo revenue for U.S.-flag vessels, allowing them to
then seek additional commercial cargoes totaling more than $8.5 billion in
total revenues. The actual cost of the cargo-preference laws is negligible
because the difference between the cost of using foreign-flag versus
U.S.-flag is relatively low. The government recaptures most and perhaps
all of the added cost, moreover, through taxes on the total gross revenue
and on the taxes generated as that total gross revenue flows through the
American economy. Without the combination of the limited direct subsidy
and the cargo-preference laws, the already diminished U.S.-flag fleet
would disappear entirely.
Global
Shipping
For
many years, the international liner industry has been in tumult for a
number of reasons: vessel capacity growth exceeded cargo volume increases,
driving rates down; low-cost carriers upgraded services but continued to
offer lower rates; and shippers, anxious to remain globally competitive,
continually demanded more service. As a result, carriers have been
emphasizing vigorous cost-reduction efforts. One of the most significant
results has been the emergence of intermodal operating alliances and
mergers. In 1997, as carriers continued to seek even greater global
coverage and operating efficiencies to increase their competitiveness,
several corporate mergers occurred among major global liner operators,
including two U.S.-flag carriers that merged with foreign-flag lines. This
trend continued in 1999 with the announced merger between Sea-Land
Services and Maersk. In addition, U.S. international ocean-shipping
regulatory reform, enacted in October 1998 and put into effect on 1 May
1999, is expected to increase competition among carriers involved in U.S.
international waterborne commerce.
Maritime
Security Program
The
continued existence of a privately owned U.S.-flag merchant marine is
vital to the nation's military and economic security. During national
emergencies, there is no completely reliable alternative to the U.S.-flag
fleet of commercial ships and/or to the availability of trained U.S.
citizen crews. Nearly 80 percent of the military dry cargo transported
during the Persian Gulf conflict was carried on U.S.-flag ships, and more
than 30 percent was carried on commercial U.S.-flag ships as part of
normal liner operations or under time-charter to the Department of
Defense, with no disruption to commercial service. All of the U.S.-flag
ships used by DOD during these sealift operations were totally crewed by
U.S. citizens.
U.S.
economic security also benefits from the participation of the U.S.-flag
fleet in the movement of U.S. international trade. Without a U.S.-flag
fleet, the United States, the largest consumer market in the world, as
well as thousands of U.S. importers and exporters, would become entirely
dependent on foreign entities for transportation. The presence of a
privately owned U.S.-flag fleet provides an alternative to foreign-flag
carriers, some of which are government-owned or -controlled or have close
affiliations with firms in their own countries that compete with U.S.
businesses.
In
recognition of the need to foster a strong and competitive U.S. merchant
marine, the Clinton administration proposed and Congress enacted
legislation to revitalize the U.S. merchant marine. The 104th Congress
approved the maritime revitalization legislation by a voice vote in the
House of Representatives and by a substantial majority (8810) in the
Senate. The Maritime Security Act (Public Law 104-239) established the
Maritime Security Program (MSP) under Title VI, Subtitle B, of the
Merchant Marine Act of 1936.
This
maritime program is intended to ensure that an active U.S. merchant fleet,
and the trained personnel needed to operate both active and reserve
vessels, will be available to meet national security requirements for
sealift capacity. MSP participants also will provide intermodal shipping
services and systems--including ships, cargo-carrying capacity, intermodal
equipment, and related management services--to DOD to support the
emergency deployment and sustainment of U.S. military forces. In addition,
the MSP will ensure America's continued presence in international commerce
and provide a competitive bulwark against predatory pricing by foreign
carriers in the movement of U.S. import and export commerce.
The
Maritime Security Act establishes a 10-year, 47-ship program providing
fixed federal-support payments of $2.1 million per vessel per year,
subject to annual appropriations, to participant companies to partially
offset the higher costs of operating U.S.-flag liner ships in
international trade.
The
MSP costs only half as much as the previous maritime support program and
provides the Department of Defense with "assured access" to more
than 120,000 20-foot-equivalent units (TEUs) of MSP participants' ship
capacity and other intermodal assets. It substantially deregulates
previous operating restrictions placed on U.S. liner operators receiving
direct federal support. It extends reemployment rights to U.S. merchant
mariners, similar to those provided to military reservists who voluntarily
leave their peacetime employment to crew government strategic sealift
ships in a contingency.
The
MSP will help fulfill the shared administration and congressional goals
to:
-
Foster
and maintain a U.S. merchant marine capable of meeting economic and
national security requirements;
-
Improve
the vitality and competitiveness of the U.S. foreign-trade liner fleet
and the U.S. citizen seafarers who serve on board those ships;
-
Reverse
the precipitous decrease in the number of ships in the U.S.-flag
fleet;
-
Stabilize
the number of mariners available to crew U.S. merchant vessels;
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Achieve
adequate manning of merchant vessels for national security needs
during a mobilization;
-
Ensure
that sufficient civilian maritime resources will be available to meet
defense deployment and essential economic requirements in support of
the U.S. national security strategy; and
-
Ensure
that the United States maintains the capability to respond
unilaterally to security threats in geographic areas not covered by
alliance commitments and otherwise meets sealift requirements in the
event of crisis or war.
Voluntary
Intermodal Sealift Agreement
The
companion sealift emergency-preparedness program to the MSP is the new
Voluntary Intermodal Sealift Agree-ment (VISA), organized under MARAD's
authorities contained in the Merchant Marine Act of 1936 and the Defense
Production Act of 1950, which was approved by the secretary of Defense in
January 1997 for incorporation in DOD planning as a sealift readiness
program.
VISA's
objectives are to provide intermodal sealift support to DOD in time of war
or other national emergency, or whenever the secretary of Defense
determines it is necessary for national security. This will enable DOD to
secure space to transport military supplies and equipment. Under the terms
of VISA, participating carriers are required to commit a portion of their
intermodal sealift capacity to DOD; MSP participants are required to
commit 100 percent of the capacity of enrolled vessels along with the
proportionate amount of their total transportation resources. VISA thus
provides DOD with access to the shipping companies' worldwide intermodal
networks, including vessels, trains, trucks, and cargo-handling equipment,
cargo-tracking and -control systems, and traffic- and logistics-management
services.
In
return, the carriers are able to rationalize capacity and pool resources,
giving them a more predictable and stable business environment. Moreover,
DOD will extend preferential treatment to participating ship owners when
military cargoes are assigned in peacetime.
The
MSP and VISA programs are the result of several years of bipartisan and
interagency collaboration. The two programs will slow the decline of the
U.S.-flag merchant fleet, but by themselves will not reverse the
continuing trend of a reduced U.S.-flag presence in the international
ocean transportation arena.
Ready
Reserve Force
Sealift
is essential to execute the nation's forward-defense strategy and maintain
a wartime economy. The U.S. national-sealift objective is to ensure that
sufficient military and civil maritime resources will be available to meet
defense deployment and essential civilian economic requirements in support
of the U.S. national security strategy. During national emergencies, there
must be adequate sealift available on a timely basis to support both the
deployment and the sustainment of U.S. military forces overseas.
The
Ready Reserve Force (RRF) ensures that the nation can maintain the surge
capability needed to respond unilaterally to security threats in
geographic areas not covered by NATO or other alliance commitments and to
meet other national sealift requirements in the event of crisis or war.
The RRF fleet (currently 91 vessels) guarantees that quick-response
shipping and sealift are available to support the early stages of
deployment before a sufficient number of commercial ships can be
marshaled.
MARAD
keeps RRF ships in designated states-of-readiness (as determined by DOD)
to enable them to be activated in 4, 5, 10, 20, or 30 days to meet
military surge sealift requirements. To respond quickly to military
emergencies in any area of the world, RRF vessels in higher states of
readiness--called Reduced Operating Status (ROS)--are outported with small
but highly trained crews on board. Vessels in 10-, 20-, or 30-day
readiness status are berthed in one of the National Defense Reserve Fleet
sites located in James River, Va., Beaumont, Texas, and Suisun Bay, Calif.
Once RRF vessels are activated in support of a DOD exercise or operation,
they come under the operational control of the Military Sealift Command.
The
RRF meets or exceeds every measure of reliability and performance. During
fiscal year 1998, the operational reliability of ships activated from the
RRF was 99 percent over more than 1,600 operational days. All 36 of the
RRF vessels activated under "no notice" criteria during this
period were available to DOD within the assigned time requirements.
In
recent years, RRF vessels have provided DOD with needed surge and
sustainment sealift during several operations involving U.S., NATO, U.N.,
and other allied forces, including:
-
Operations
Desert Shield/Desert Storm/Desert Sortie in 19901991. MARAD
activated 79 RRF vessels to transport urgently needed supplies and
materials to the Persian Gulf.
-
Operation
Restore Hope in 19931994. Several RRF vessels transported military
cargo to Somalia in support of the U.N. relief effort, and an RRF
troop ship was activated to repatriate and return troops from Somalia.
-
Operation
Uphold Democracy in 1994. Fourteen RRF vessels transported military
cargo from various U.S. ports to Haiti.
-
Operation
Quick Lift in 1995. Two RRF ships were activated to support NATO
peacekeeping activities in Bosnia.
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Operations
Vigilant Warrior and Vigilant Sentinel in 1995. Eight RRF vessels
supported military operations in the Persian Gulf.
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Exercise
Joint Endeavor in 1996. Two RRF vessels were activated to provide
logistical support to the British Expeditionary Forces in Croatia.
-
Exercise
Tandem Thrust in 1997. Two RRF ships were activated for a
U.S.-Australian amphibious exercise in northeast Australia.
-
Exercise
Foal Eagle/Freedom Banner in 1998. Two RRF vessels supported the U.S./ROK
(Republic of Korea) naval/military exercises in South Korea.
War
Risk Insurance
MARAD
administers the standby emergency War Risk Insurance Program in accordance
with the statutory authority of Title XI of the Merchant Marine Act, 1936,
as amended. The program encourages the continued flow of U.S.-foreign
commerce during periods when commercial insurance cannot be obtained on
reasonable terms and conditions. It protects vessel operators and
seafarers against losses resulting from war or warlike actions. The
program was activated in 1990 for operations Desert Shield and Desert
Storm, during which war-risk insurance policies were written on 388
military contracted vessels; the Navy estimated that the program saved the
government over $436 million in premium costs. The program was also
successfully activated during operations in Somalia and Haiti.
The
U.S. Port System
U.S.
Ports. Since colonial times, U.S. ports have played a major role in
U.S. economic development and national security. Ports continue to play an
important role in meeting the demands for commercial and military
waterborne service. These demands are the first link in a chain of
economic activity that contributes in several measurable ways to the
national economy. U.S. ports are a vital link in that economic chain. The
national benefits associated with the movement of foreign and domestic
waterborne commerce are significant. Throughout the economy, this activity
creates 13.1 million jobs, contributes $743 billion to the gross domestic
product, and provides almost $200 billion in federal, state, and local
taxes. U.S. ports handle more than two billion tons of foreign and
domestic trade, and serve as critical interchange points within the
nation's intermodal transportation system. With the recent changes in the
U.S. national defense strategy and the downsizing of the U.S. military,
greater reliance will be placed on the U.S. port system for the deployment
of forces in times of national emergency.
MARAD
works with industry and other federal agencies to assist in addressing the
critical challenges that lie ahead. Dredging is one of the critical issues
confronting America's ports. MARAD, in cooperation with other agencies,
has been examining ways to improve the dredging process and to encourage
the beneficial use of dredged material. The nation's waterborne trade is
expected to at least double in the next 20 years. To meet this projected
growth, ports must expand their terminal facilities. MARAD administers a
program that conveys surplus federal property to state and local public
entities for the development and operation of port facilities. The purpose
of this program is to create jobs, revitalize local economies, and
increase port capacity. MARAD also encourages ports to become involved in
the administration's Brownfields Initiative, which is designed to return
contaminated urban industrial sites (brownfields) to productive use. The
use of brownfields can help provide ports with land for expansion and
economic growth for local communities.
National
Port Readiness. MARAD is the permanent chair of the National Port
Readiness Network (NPRN), a coalition of 10 federal agencies and
organizations directly responsible for supporting the deployment of
military forces through U.S. ports during contingencies and defense
emergencies. MARAD and DOD cooperatively determine the status of strategic
ports with port planning orders and engage in port terminal facility site
planning as well as annual port-readiness exercises. MARAD serves as the
strategic liaison for commercial port operations during actual national
defense emergencies.
Domestic
Shipping
The
effective water transport of U.S. national cargoes within the United
States is the backbone of the U.S. national maritime security system.
Domestic waterborne shipping provides more than 124,000 direct jobs to the
U.S. economy, including 80,170 vessel billets and 17,247 shipyard jobs.
The workers in those jobs constitute a critical national resource and
could be easily used in alternative transportation or war-production jobs
in the event of a national security emergency.
MARAD
continues to emphasize the importance of the Jones Act to America's
national security by, among other things, guaranteeing U.S. control of
essential transportation assets in both peace and war. The Jones Act
ensures that U.S.-owned, -crewed, and -built ships will be available to
transport domestic cargo during a national emergency. MARAD is proactive
in the advancement of Jones Act trade by providing a compliance assistance
program to shippers looking for coastal-qualified U.S.-flag vessels.
Intermodal
Transportation Access
The
U.S. economy, international competitiveness, and national security all are
increasingly dependent on the effectiveness of the intermodal
transportation system. Intermodal connections between U.S. transportation
modes are typically the weakest links in the national transportation
system. As the land/water transportation interface, U.S. ports and
terminals are the pivotal links for the movement of U.S. international
trade. Approximately 95 percent of America's overseas international trade,
measured by volume, passes through U.S. ports. It has been predicted that
the nation's international waterborne freight will triple by 2020. This
unprecedented growth in international freight poses an enormous challenge
in terms of ensuring the continued unimpeded access to U.S. ports by both
land and sea.
U.S.
Marine Transportation System
MARAD
and the U.S. Coast Guard jointly undertook an initiative by Secretary of
Transportation Rodney E. Slater to redefine the current and future needs
of the U.S. Marine Transportation System. This initiative is intended to
support a safe and environmentally sound world-class waterways system that
improves U.S. global competitiveness and national security. Marine
transportation is now characterized by many diverse organizations engaged
in a complex environment, often working independently and for the
accomplishment of different goals.
During
a series of seven federally sponsored regional listening sessions, MARAD
and the Coast Guard brought together the principal stakeholders--other
federal entities, state governments, industry, and local and state port
authorities--to discuss mutual problems. In November 1998, Secretary
Slater convened a national conference to address the key issues identified
in the regional listening
sessions and other outreach efforts to develop potential solutions to
these problems.
TEA-21
MARAD
recently has worked with the Department of Transportation to address
intermodal freight infrastructure requirements included in the
Transportation Equity Act for the 21st Century (TEA-21). The overall
funding level of approximately $175 billion for fiscal years 1998-2003 is
a major provision important to marine freight transportation
infrastructure requirements, and provides an increase of 11 percent over
the Intermodal Surface Transportation Efficiency Act's funding. This
includes a 30 percent increase in funding for core highway programs, such
as the National Highway System, which includes the designation of major
connectors to marine ports and terminals. TEA-21 also increases--by 30
percent, to $8 billion--the funding for the Congestion Mitigation and Air
Quality Improvement (CMAQ) Program. The CMAQ program will continue to
provide U.S. ports and terminals opportunities to flex investments in
intermodal freight facilities that will result in improvements to air
quality and in the relief of congestion.
One
of the bill's priorities is to improve the transportation corridors and
border crossings needed to connect with foreign markets and to capitalize
on the growing trade generated by the North American Free Trade Agreement.
The National Corridor Planning and Development Program and Coordinated
Border Infrastructure Program are funded with $700 million in TEA-21.
TEA-21
preserves a strong voice in transportation planning for freight and
shipping interests, and initiated an intermodal freight connector study
(due at the end of 1999).
Cargo
Handling Cooperative Program
The
primary purpose of the Cargo Handling Cooperative Program (CHCP) is to
increase the productivity of U.S. marine freight transportation companies
through cargo handling research and development. A public-private
partnership, the CHCP is designed to pursue innovative cargo-handling
developments that increase the productivity and cost effectiveness of
cargo operations.
The
program's principal focus is on the movement of international and domestic
freight through the use of advanced technologies in infrastructure design,
seamless international-transportation networks, and more efficient
communication and information flows. Initiatives to enhance such a
transportation system are based on a system-level approach to freight
transportation from origin to destination. This allows for the development
of a framework wherein segments of technologically advanced transportation
networks are developed in relation to total system requirements.
Intelligent
Transportation Technologies
In
June 1998, MARAD participated in an Intermodal Freight Identification
Technology Workshop to develop a process that would harmonize freight
technology and help advance and improve U.S. competitiveness by creating a
seamless, intermodal freight movement system. The 1998 workshop brought
together more than 150 leaders from the public and private sectors to
forge a collaborative agenda to address interoperability issues in
intermodal freight location and identification. Industry and government
attendees discussed their current systems and future requirements for
freight identification and location (containers, trailers, etc.) across
the modes and international borders.
CCDoTT
MARAD,
in partnership with the U.S. Transportation Command and California State
University Long Beach, manages the Center for the Commercial Deployment of
Transportation Technologies (CCDoTT), which serves as the focal point of
an innovative program to demonstrate existing, emerging, and developing
technologies in cargo handling, tagging, tracking, information management
systems, and high-speed sealift. The technologies involved, if fully
exploited, will help the military deploy quickly, expand the ability of
commercial transportation to accommodate military surge cargo, and
minimize disruptions to commercial transportation.
Maritime
Labor and Training
An
adequate work force of merchant mariners trained to operate today's
modern, technologically advanced vessels is critical to U.S. economic and
national security needs. The ability of the United States to sustain its
domestic and international waterborne commerce and successfully implement
U.S. national and international policies could be disrupted or impaired
without a skilled, knowledgeable, and competent manpower base.
An
estimated 98 percent or more of the equipment and supplies required for a
mobilization effort must move by sea. The United States therefore needs
assured access to sealift and cannot rely totally on foreign sources for
the success of military initiatives. The success of DOD sealift operations
during a crisis clearly depends upon the nation's ability to move cargoes
swiftly and reliably to the area of operations on active and reserve
U.S.-flag merchant ships crewed by U.S. citizen-seafarers.
The
importance of labor to U.S. economic growth and national security is
reflected in MARAD's commitment to foster a sufficient, well-qualified,
and safety-conscious maritime work force. Through support of programs to
improve the education, training, health, welfare, and safety of U.S.
citizen-seafarers, MARAD is working to ensure the availability of an
adequate number of mariners to crew active U.S.-flag commercial vessels
during peacetime and in emergencies, as well as RRF ships activated for
sealift or humanitarian-assistance missions.
Employment
of oceangoing seafarers, including licensed and unlicensed mariners aboard
privately owned subsidized and nonsubsidized shipping, totaled 6,542 jobs
in August 1998, a decline from 6,871 a year earlier. The ratio of
seafarers to jobs remained the same, about 2-to-3. Overall, the number of
mariners and officers decreased to 15,000. Total employment of
longshoremen in Atlantic, Pacific, Gulf Coast, and Great Lakes ports rose
slightly, to 23,588.
U.S.
Merchant Marine Academy
The
U.S. Merchant Marine Academy, dedicated in 1943, is recognized worldwide
as an outstanding maritime educational institution, graduating
approximately 180 licensed officers yearly. The Academy is a tuition-free
four-year accredited college operated by the Maritime Administration of
the U.S. Department of Transportation. Candidates for admission must be
nominated by a congressman or senator and must compete for vacancies
allocated by state in proportion to its representation in Congress.
Current enrollment is approximately 950. In 1974 the Academy became the
first of the federal academies to admit women.
All
Academy graduates incur an eight-year U.S. Naval Reserve commitment,
obligating them to serve in time of war or national emergency, if
activated. Academy graduates also are committed to a five-year maritime
service obligation, requiring them to obtain a merchant marine officer's
license on or before graduation and to maintain the license for at least
six years. This service obligation may be satisfied as an officer aboard
U.S. merchant ships, or in shoreside maritime or intermodal transportation
industry positions if afloat employment is not obtainable. Active military
duty in any branch of the armed forces also satisfies the obligation.
The
Academy has kept its educational program responsive to the needs of
America's maritime industry and to U.S. national security requirements,
both in its four-year undergraduate curriculum and in its continuing
education program. Students receive B.S. degrees in the following areas of
study: marine transportation; marine engineering; marine engineering
systems; the ship's officer program, which provides the marine
transportation major with some fundamental engineering skills; the
dual-license program, which fully integrates the marine transportation and
engineering curriculum; logistics and intermodal transportation; or the
shipyard and marine engineering management program. Over the years, new
emphasis has been placed on important emerging areas in the industry. The
breadth of coursework and hands-on training prepares graduates to become
not only merchant mariners, but leaders in the maritime industry.
Superintendent:
Rear Adm. Joseph D. Stewart, USMS
Nomination
Information: Candidates should contact their congressman or senator
and request nominations at the end of their junior year of high school.
Completed applications must be received by the 1 March deadline, and
candidates must qualify scholastically and physically. Eligibility
considerations include high school academic records, class rank, SAT or
ACT scores, and leadership potential.
Costs:
Upon entrance, each midshipman pays a fee of $4,852 to cover student
activities, personal services, and the cost of a personal computer.
Financial
Aid: Pay received by a midshipman is $558 a month during two training
periods aboard ship. While the Academy does not offer financial aid, its
Financial Aid Office can assist students with identifying and applying for
assistance from external student loan sources.
For
more information contact:
Office
of Admissions
U.S. Merchant Marine Academy
Steamboat Road
Kings Point, NY 110241699
Phone:
(516) 7735391 or
(800) 7326267
Fax: (516) 7735390
Website: www.usmma.edu
State
Maritime Academies
The
six state maritime academies (in California, Maine, Massachusetts,
Michigan, New York, and Texas) conduct training and offer academic
programs that yield highly skilled deck and engineering officers for
employment in the U.S. merchant marine. In addition to training
engineering and deck officers, individual schools specialize in maritime
port management, marine sciences, international business, logistics, and
other maritime-related areas of study.
By
authority of the Maritime Education and Training Act of 1980, MARAD
provides annual funding for student assistance, school-ship maintenance
and repair, and training-ship fuel oil (when available) to the six state
academies. Qualified students are eligible, at a total federal program
cost of $1.2 million per year, to receive student incentive payments (SIPs)
of $3,000 annually, for no more than four academic years, to offset the
cost of uniforms, books, and subsistence.
In
return, SIP recipients must sail or work in maritime-related employment
ashore for three years, accept a commission in the Naval Reserve or other
reserve component of the U.S. armed forces (making these qualified
seafarers available for sealift support), and obtain a U.S. Coast Guard
merchant marine officer's license--they must maintain that license for six
years after graduation.
MARAD
also provides training vessels to the five coastal academies for use in
at-sea training and as shoreside laboratories. These training ships are
critical to the ability of the state maritime academy programs to
familiarize students with ship systems and to train them in ship safety,
fire fighting, and damage control. The training ships ensure that students
are able to gain the practical experience of living and working aboard
ship and are able to put to sea more safely.
California
Maritime Academy
Located
on San Francisco Bay, the California Maritime Academy is a campus of the
California State University system, offering an accredited B.S. in marine
transportation, facilities engineering technology, marine engineering
technology, or mechanical engineering, with a license as a third mate or
third assistant engineer issued by the U.S. Coast Guard, or a certified
plant engineer-in-training license.
An
accredited B.S. in business administration without the Coast Guard license
is available. The degree offers options in Transportation, Maritime
Management, Logistics & International Business, and Management.
Active-
and inactive-duty commissioning programs are available for the U.S. Navy,
the U.S. Coast Guard, and the U.S. Navy/Merchant Marine Reserve.
For
more information, contact:
Director
of Outreach
California Maritime Academy
P.O. Box 1392
Vallejo, CA 945900644
Phone:
(707) 6484224
Fax: (707) 6494773
E-Mail: enroll@csum.edu
Website: www.csum.edu
Great
Lakes Maritime Academy
An
affiliate of Northwestern Michigan College (NMC), the Great Lakes Maritime
Academy has been jointly designated by the U.S. Maritime Administrator and
the governors of the states touching on the Great Lakes as a regional
academy in support of the Great Lakes shipping industry. Deck officer
graduates are legally and professionally qualified to serve as pilots of
the largest bulk carriers in the Great Lakes trade immediately upon
graduation. Engine officer graduates are specifically trained to operate
and maintain shipboard equipment unique to the industry as well as all
other machinery and systems commonly found aboard ships worldwide.
A
four-year degree option is available for Maritime Academy students through
Ferris State University, leading to a B.S. degree in maritime management,
and is conducted concurrently with the maritime program entirely at the
Academy/NMC/University campuses in Traverse City, Mich.
For
more information contact:
Recruiter
Great Lakes Maritime Academy
1701 E. Front Street
Traverse City, MI 496863061
Phone:
(616) 9221200
Fax: (616) 9221318
E-Mail: jurokos@nmc.edu
Website: www.nmc.edu/~maritime
Maine
Maritime Academy
Maine's
seafaring heritage continues at Maine Maritime Academy, a college offering
students the opportunity for an associate's, bachelor's, or master's
degree. Maine Maritime awards the B.S. degree with majors in marine
engineering operations, marine engineering technology, marine systems
engineering, nautical science, marine transportation, power engineering,
ocean studies, small-vessel operations, marine management, and a new major
in international business and logistics.
For
more information, contact:
Office
of Admissions
Maine Maritime Academy
Castine, ME 04420
Phone:
(207) 3262206
Fax: (207) 3262515
E-Mail: admissns@bell.mma.edu
Website: www.mainemaritime.edu
Massachusetts
Maritime Academy
Founded
in 1891, the Massachusetts Maritime Academy has evolved into a four-year
accredited coeducational college, preparing graduates for careers both at
sea and ashore. The college offers students four academic majors: marine
engineering, marine transportation, facilities and environmental
engineering, and marine safety and environmental protection. A five-year
program offering a dual major in marine engineering and marine
transportation also is available. The Academy also offers six academic
concentrations: business management, electrical power, facilities and
environmental engineering, marine fisheries, marine transportation, and
mechanical engineering.
For
more information, contact:
Director
of Admissions
Massachusetts Maritime Academy
Academy Drive, Buzzards Bay
Cape Cod, MA 02532
Phone:
1 (800) 5443411
Fax: (508) 8305077
E-Mail: MMADMIT@mma.mass.edu
Website: www.mma.mass.edu
State
University of New York Maritime College
Founded
in 1874 as the New York Nautical School, SUNY Maritime College, located at
Fort Schuyler, the Bronx, N.Y., is the oldest of the state maritime
colleges. The primary mission of the college is to prepare young men and
women to become licensed U.S. merchant marine officers (third mate or
third assistant engineers) and to assume industry leadership positions
afloat and ashore.
Course
work in preparation for B.S. or B.E. degrees is offered in marine
engineering, marine electrical and electronic systems engineering, marine
operations, facilities engineering, naval architecture, the humanities,
marine transportation, and marine environmental sciences. An AAS degree is
offered in marine technology/small vessel operations. An M.S. degree also
is offered in transportation management.
For
more information, contact:
Director
of Admissions
State University of New York
Maritime College
6 Pennyfield Avenue, Fort Schuyler,
Throggs Neck, NY 10465
Phone:
(718) 4097220
Website: www.sunymaritime.edu
Texas
Maritime Academy (Texas A&M University)
At
Texas A&M University at Galveston, the ocean is the classroom. Ocean
voyages, sailing in Galveston Bay, beachfront experiments, and independent
study complement the rigorous classroom experience at Texas A&M
University at Galveston.
Texas
A&M University at Galveston is a totally ocean-oriented campus
offering academic degrees, research, continuing education programs, and
public service in marine science, engineering, business, and
transportation. TAMUG provides undergraduate academic instruction in seven
marine and maritime-related degree programs in marine biology, marine
sciences (oceanography), marine engineering technology, marine
transportation, marine fisheries, maritime systems engineering
(ocean/civil), maritime administration (policy/business), and maritime
studies.
For
more information, contact:
Office
of Student Relations
Texas A&M University at Galveston
P. O. Box 1675
Galveston, TX 775531675
Phone:
187SEAAGGIE (toll-free)
Fax: (409) 7404731
E-Mail: seaaggie@tamug.tamu.edu
Website: www.tamug.tamu.edu
Maritime
Issues and Challenges
Many
complex maritime issues and challenges face the nation. Changes in world
political trends and economies, domestic and international public-sector
budget priorities, and state-of-the-art technologies occur constantly. The
United States once relied on a huge fleet of relatively small ships to
provide the commercial and sealift shipping capacity appropriate for its
trade. Over time, much larger vessels and a sophisticated network of
interrelated, intermodal equipment have supplanted that fleet.
Today's
fleet includes not only ships and barges, but also containers, chassis,
computer-based data systems, rail and truck interchanges, piers, cranes,
terminals, and, most importantly, highly skilled people ashore and at sea.
Technological advances have greatly improved the flow of cargo, resulting
in the virtually seamless movement of goods from origin to destination
anywhere in the world. These advances also have been applied to the
movement of military shipments and have resulted in significantly improved
coordination and speed in the delivery of Department of Defense cargoes.
The
United States must have a strong and vigorous maritime industry to ensure
the national and economic security of the nation. The strategic goals of
the Maritime Administration envision a competitive U.S.-flag fleet to
transport domestic and international waterborne commerce, a domestic
shipbuilding industry that prospers in the domestic and international
marketplace, and a technologically advanced maritime transportation
infrastructure.
In
recent years, the two most important maritime policy accomplishments were
passage of the National Shipbuilding and Shipyard Conversion Act of 1993
and the Maritime Security Act of 1996. The overwhelming bipartisan support
in Congress for these maritime revitalization initiatives during a time
marked by other vital national priorities stands as an affirmation of
America's commitment to the nation's maritime industry. That commitment
must continue unabated.
During
the years ahead, the Department of Transportation will advocate a variety
of maritime policies to arrest the further decline in America's maritime
infrastructure. But these policies alone will not meet the challenges that
the U.S. maritime industry faces in the 21st century. Working together,
the federal government and the maritime community must move forward to
meet these challenges and ensure that the United States maintains a
commercial maritime industry adequate to meet the economic and national
security needs of the nation.
Additional
Information on the Maritime Administration may be obtained from:
The
Office of Congressional and Public
Affairs
Maritime Administration
400 Seventh Street, S.W.
Washington, D.C. 20590
Phone:
(202) 3665807
Fax: (202)3665063
Website: http://www.marad.dot.gov.
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