‘Challenging Times’
U.S.-flag shippers adapt to changing market, economic factors
By JOHN C. MARCARIO, Associate Editor
Murky Waters
Corp. “We have to do a lot of dif-
ferent things in the maritime space
… but we are going to survive and
thrive in challenging times.”
There are 58 U.S.-flag carriers
operating a total of 195 vessels.
These vessels are given preference
over non-flag carriers with regard
to shipping within the United
States and for military cargo ship-
ping through the Jones Act, Cargo
Preference Act of 1904 and Cargo
Preference Act of 1954.
Crowley maintains a fleet of 200
vessels — of which two are U.S. flag
— and has $1.6 billion in annual revenue while employing 5,300 people.
Roberts said he is quite bullish on the future of the
domestic market because there are growth opportunities
given the resources and development being invested by
the government through grants and financing loans. His
optimism does not stretch to the international market.
“I think the issues are more challenging [internation-ally]. [The future] depends, largely, on the maritime security programs and on the government cargo sales to provide opportunity in the international segment,” he said.
The Maritime Administration (MARAD) is the federal agency that provides assistance in locating U.S.-flag vessels for the carriage of domestic and international cargo for the shipping public.
“Developing and maintaining a solid domestic fleet
of U.S.-flag vessels is a priority for MARAD. This
industry is a partnership that daily supports our U.S.
shipyards, provides employment for mariners, shipbuilders and other industries that contribute to our
maritime transportation system. All across the country,
we’ve been making major investments in our ports and
waterways that will benefit us for years to come,”
David T. Matsuda, MARAD administrator, said in an e-mail response to Seapower questions.
The U.S.-flag shipping industry has been forced to adjust its business model over the past decade as many factors have affected
business opportunities and revenue.
■ As the war in Afghanistan winds down and international shipping opportunities decline, carriers are brainstorming new ways to
attract business.
■ A record number of export finance loans have been authorized
by the U.S. Export-Import Bank over the last three years to help
the U.S.-flag shipping business.
■ There are 58 U.S.-flag carriers operating a total of 195 vessels.
In the face of continued economic volatility, shrink- ing opportunities and a tougher regulatory climate, U.S.-flag carriers must look at building a more
diverse portfolio and think of ways to bring in new
business, industry and shipping officials said.
Some carriers have depended on international shipping
to supply and support U.S. military operations Iraq and
Afghanistan, but as they wind down those opportunities
are dwindling. Other carriers will be affected by recent legislation that will reduce overseas food aid transportation
by U.S. ships by 25 percent over the next two years.
Some of the larger carriers continue to stay away from
international shipping opportunities due to increased
fees for security from pirate attacks off the coast of
Somalia. At home, some of the smaller carriers continue
to deal with rising costs and scheduling delays due to
recent historic flooding and droughts in the Midwest.
“The reality is the amount of government cargo
being shipped is dropping with the drawdown in
Afghanistan and Iraq, and I think that’s a concern that
there will be less cargo to provide to U.S.-flag vessels,”
said Michael Roberts, senior vice president and general
counsel for Jacksonville, Fla.-based Crowley Maritime
