Maritime’s Link to the Global Economy

Paul ‘Chip’ Jaenichen, Executive President at US Flag of Liberty Global Logistics, LLC, presented “Maritime’s Link to the Global Economy” during the US Flag Ocean Carrier Perspectives class at the NDTA-USTRANSCOM Fall Meeting on October 7, 2019, in St. Louis, Missouri.

Maritime is inextricably linked to the US and global economy. In fact, maritime ships carry 99 percent of overseas trade by volume and 90 percent of all international trade. When one considers moving cargo this way is generally cleaner, safer, less expensive, and more energy-efficient than other modes, it is easy to understand why the world relies so heavily on marine transportation.

Roll-on/roll-off (RORO) ships are of particular importance to moving the US military’s rolling stock. The inside of these ships looks much like large parking garages with all cargo transported entirely under deck. “From a military useful capacity, the US-flag fleet ranges from about 140,000 to 180,000 square feet, but the total capacity on the vessel is about 200,000 [sf],” said Jaenichen. The difference between the two numbers, he explained, is due to the ability to adjust the deck heights to accommodate a variety of equipment.

RORO can move all types of wheeled or tracked cargo, cars and other motor vehicles, heavy equipment, rail cars, project cargo, helicopters, break-bulk commodities, trailers, containerized cargoes, and much more. But while the ships can move all types of freight, the necessity for them depends heavily on the automobile market. Currently, automobile production is up, but movement by ocean is down as manufacturers move toward more local production. This has meant that while operating costs continue to increase, freight rates remain relatively flat. Factors such as The International Maritime Organisation’s sulfur caps (IMO 2020) and geopolitical changes in places such as the Middle East have contributed to higher operating costs.

Industry’s ability to expand the fleet to meet increase DOD demand requires a strong military-commercial partnership. The US-flag fleet brings with it a wealth of benefits for DOD, including readily accessible and reliable vessels, capacity to support operational requirements, and access to carriers’ global networks. As the fourth arm of defense, it is critical that the right plan, and the mariners needed to accomplish that plan, are in place to support DOD’s global requirements.