Cargo is King : Maritime Strategy, Policy, Jones Act Update

Nov 3, 2021 | DTJ Online, Fall Meeting, Fall Meeting 2021 Videos, Logistics and Transportation Legislation and Policy, Ocean Freight

Instructor: Tony Fisher, MARAD

As great powers have often relied on the strength of their merchant fleets to extend their military, economic, and diplomatic reach, so too have their merchant fleets relied on policy makers to create an economic environment suitable for sustained investment. The U.S. Merchant Marine, which reached its low point of 169 vessels in 2016, serves as a prime case study of this interdependent relationship. This course will identify key market dynamics and federal policies that shape global merchant fleets, including the one universal constant upon which investment is hinged—a quest for cargo.

A strong Merchant Marine is undoubtedly a key enabler in support of America’s strategic economic and national defense goals. Thus, since the origin of the nation, the U.S. has employed critical policies to promote, build, and maintain a strong maritime transportation system. This includes a merchant fleet capable of meeting domestic and international transportation needs—while also serving as the primary transportation vehicle for the U.S. military. However, as in the case of many American industries, competition from cheap foreign labor and the heavily subsidized shipyards and fleets of our peer and near peer competitors have placed the American merchant marine in peril. The root of this contest is a global competition to capture the world’s cargo. Without cargo, vessel owners are unable to derive the revenue necessary to operate ships. And without the ships, the U.S. cannot sustain a force oversees. Thus unlike naval vessels, the size and strength of this fleet is dependent upon financial factors such as profit, loss, and risk. This course will examine two key U.S. policies supporting our merchant fleet, the Jones Act and Cargo Preference, along with policies implemented by our global competitors.

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