Troubled Maritime Industry

Report Outline
Merchant Fleet's Decline
Evolving Maritime Policy
U.S. Defense Considerations
Special Focus

Merchant Fleet's Decline

Shrinking U.S. Share of Maritime Traffic

The number of oceangoing, American-owned and operated ships—the U.S.-flag fleet—has been declining steadily for decades, falling from 1,170 ships in 1950 to 520 today. While the United States remains the largest trading nation in the world, it now carries only about 5 percent of its imports and exports on its own ships; 30 years ago more than half the nation's international commerce moved on U.S.-flag ships.

Only 15 of the world's 4,700 dry-bulk ships—those that carry commodities such as iron ore, coal and grain—fly the American flag. This means that 98 percent of U.S. exports of bulk goods travel on foreign vessels. Surprisingly, the steady decline in the nation's $8 billion maritime industry has received relatively little public attention. Said Charles I. Hiltzheimer, chairman and chief executive of Sea-Land Industries: “To my knowledge, no other major American industry has lost so great a share of its market to foreign competition with virtually no public awareness or government concern.”

It is argued that dependence on foreign shipping not only hurts the U.S. maritime industry, it also threatens national security. This is because the nation's merchant ships are counted on in time of war for logistical support for the armed forces. “A strong merchant marine is, of course, important to our economy,” Secretary of the Navy John F. Lehman Jr. said recently. “But …to those of us in the national security area, it is an imperative for our continued existence as a secure and free nation.…We cannot honor our commitments to allies and protect our vital interests without this crucial sealift….” The extent to which a nation's merchant ships are counted on in time of war was demonstrated by the British victory over Argentina in the Falkland Islands.