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In 1996, the Congress enacted the Maritime Security Act establishing a 10-year promotional program for the U.S.-flag fleet, the Maritime Security Program (MSP). The 108th Congress, through the enactment of the Maritime Security Act of 2003, expanded the fleet from 47 to a total of 60 vessels. The legislation also called for additional funding for the program subject to annual appropriations.
MSP funding provides for the 60 U.S.-flag vessels to participate in the program. Companies presently awarded MSP operating agreements as of December 4, 2009 are: APL Marine Services Ltd.; American International Shipping, LLC; Argent Marine Operations, Inc.; Central Gulf Lines, Inc.; Farrell Lines Inc.; Fidelio Limited Partnership; Hapag-Lloyd USA, LLC; Liberty Global Logistics, LLC; Luxmar Tanker LLC; Maersk Line, Limited; Maremar Tanker LLC; Patriot Shipping LLC; and Waterman Steamship Corporation. Of the 96 U.S.-flag vessels engaged in the foreign trades, 60 vessels are in the MSP program, as follows: 38 containerships, 17 Roll-On/Roll-Off vessels, 3 tankers, and 2 general (heavy lift) vessels.
| 2009 Self-Propelled U.S.-Flag Deep-Sea Foreign Trades Vessel Fleet | |
|---|---|
VESSEL TYPE |
NUMBER |
Containership |
53 |
Dry Bulk Vessel |
9 |
Liquid Bulk Vessel |
4 |
Roll On/Roll Off |
26 |
General (Heavy Lift) |
4 |
| TOTAL | 96 |
| Source: Maritime Administration | |
Liner Trades
Liner or berth service is defined as a scheduled operation by a common carrier whose ships operate on a predetermined and fixed itinerary over a given route, at relatively regular intervals, and are advertised considerably before sailing in order to solicit cargo from the public. These common carriers provide transportation on fixed schedules and at rates (tariffs) made electronically available to the public. The liner fleet includes full containerships, partial containerships, lighter aboard ships (LASH), roll on/roll off (Ro/Ros), and barge-carrying vessels. Vessels in the liner trades carry high-value cargo as to its worth and multi-faceted cargo as to its physical description, including packaged goods and refrigerated fruit and vegetables. The U.S.-flag commercial fleet is a worldwide leader in innovative technologies in ocean shipping. Innovations include double-stack trains, seamless cargo tracking and identification technologies.
As of 2009, there were 83 private vessels (containerships, roll-on/roll-off, general cargo, multi-purpose and deck barges) in the active oceangoing U.S.-flag fleet serving the foreign liner trades. In addition, this trade was served by 136 non-self-propelled vessels in excess of 1,000 gross registered tons and 109 non-self-propelled vessels of less than 1,000 gross registered tons.
Bulk Trades
The bulk shipping industry's economic environment is much different from the liner industry. Bulk shipping is much less structured and not organized along schedules but it is, in its own way, very disciplined. The bulk trades, mainly oil, chemicals, and dry raw materials, are structured to follow the cargoes. This means that an operator does not have a fixed schedule of sailings for his vessel and will employ it where and when he can get a cargo. Bulk service is generally not provided on a regularly scheduled basis, but rather as needed, on specialized ships transporting a specific commodity. Cargoes are shipped unpackaged either dry, such as grain and ore, or liquid, such as petroleum products.
The rate structure is not set in deliberations by a group of operators as they are in a liner conference framework. Rather, the rates are set by dictates of market forces of supply/demand for the commodity and for tonnage. Brokers are the key to making contracts and many contracts are executed over the telephone and by telegraph strictly on the verbal agreement of businessmen. In the bulk trades, bulk operators are contract carriers, either time or voyage chartered by the shipper.
Bulk carriers can be divided primarily into two principal types of ownership. The first is the proprietary owner, whose costs may be calculated as part of the corporation's operating expenses. To minimize those costs the proprietary owner may try to offer his ship for charter on the ballast leg of a voyage. The other type is the privately owned company, which sells its transportation service as the market dictates. Both types are not common carriers but contract carriers which charter ships on a long-term or short-term voyage or other basis. Bulk operations in foreign trade include both dry cargo vessels (grain and coal carriers) and tankers (chemical or petroleum products).
Dry Bulk Fleet
In 2009, there were 9 dry cargo vessels in the privately owned oceangoing active U.S.-flag fleet serving the foreign trades. These ships are specifically designed to transport vast amounts of cargoes such as sugar, grain, ore, coal, etc. Examples of dry bulk vessels include colliers and OBOs. In addition, there were 101 non-self-propelled vessels of 1,000 grt or greater and 106 non-self-propelled vessels of less than 1,000 gross registered tons serving the international trades.
Liquid Bulk Fleet
In 2009, there were 4 liquid bulk vessels (tankers) in the privately owned oceangoing active U.S.-flag fleet serving the Great Lakes and foreign trades, operated by the vessel-operating subsidiaries of major oil or other companies, or by independently operated companies. These ships are specifically designed to transport oil and other liquid cargoes. At times, tankers also carry grain. Examples of liquid bulk vessels include tankers, liquid natural gas (LNG), and liquid petroleum gas (LPG) carriers.
Flags of Convenience
(FOC) All ships must be registered to one of the nations of the world in order that responsibility for violations of international law and convention may be assigned. These ships then fall under the jurisdiction of their nation of registry. Shipping concerns adopted the practice of shopping around for nations that would give them the best deal on taxes, wages, and legal restrictions. They "conveniently" register their ships with these countries, which include Liberia -- which has the world's largest shipping fleet -- Panama, Honduras, the Bahamas, Vanuatu, and the Marshall Islands.
International Maritime Organization
The International Maritime Organization (IMO), a specialized agency of the United Nations whose primary focus is maritime affairs, is responsible for measures to improve the safety of international shipping and prevent marine pollution from ships. It is also involved in legal matters, including liability and compensation issues and the facilitation of international maritime traffic. Established under a 1948 United Nations Convention that entered into force on March 17, 1958, IMO is open to membership by all states that are members of the United Nations and to other states in accordance with the admission procedures of the IMO Convention.
IMO consists of an Assembly, a Council, and five Committees: Maritime Safety Committee (MSC) - the senior technical body responsible for all matters affecting maritime safety; the Marine Environment Protection Committee (MEPC) - responsible for the prevention and control of pollution from ships; the Legal Committee; the Facilitation Committee; and, the Technical Cooperation Committee. The organization, which is based in London, England, currently has 167 member states and two associate members. The Secretary-General, Efthimios Mitropoulos of Greece, who is appointed by the Council and approved by the Assembly, heads the IMO Secretariat.
United States' Role
The U.S. Coast Guard, by appointment of the Department of State, leads U.S. delegations to IMO meetings while the Department of State leads the U.S. delegations to the Council and the Technical Cooperation Committee. In addition to the Coast Guard, U.S. delegations often include representatives from other U.S. agencies, such as the Maritime Administration, the Department of Defense, the National Oceanic and Atmospheric Administration, and the Environmental Protection Agency. Private sector representatives also serve on the U.S. delegation.
Since the late 1970s, the United States has taken the initiative to improve international standards for maritime safety and protection of the marine environment so as to provide a significant degree of protection for its waters, waterways, environmental resources, population, and property. Largely as a result of U.S. efforts, the international maritime community has become more uniformly regulated by increasingly comprehensive and stringent international standards. Over the past three decades, most of the vessel design, equipment, and operational standards adopted in IMO instruments have evolved to the point of substantial parity with U.S. requirements. And in 2002, the United States was instrumental in persuading the IMO to adopt a comprehensive regime to strengthen maritime security and prevent and suppress acts of terrorism against shipping.
IMO conventions are not automatically binding upon governments, since IMO only recommends the decisions to member governments for adoption. An IMO convention is not binding to the United States and industry until certain criteria are met. These include: official recommendation of the convention to the President by the State Department; ratification of the convention by the President upon the advice and consent of the Senate; domestic implementing legislation, if required; and promulgation of regulations by the Coast Guard, if required.
IMO Conventions and Protocols
Currently, IMO has adopted 50 conventions and protocols that are mandatory instruments for those countries that have become party to them. The majority of conventions adopted under the auspices of IMO or for which the organization is otherwise responsible falls into three main categories - maritime safety; the prevention of marine pollution; and, liability and compensation, especially in relation to damage caused by pollution. Outside of these major groupings are a number of other conventions dealing with facilitation, tonnage measurement, unlawful acts against shipping and salvage, etc. Some of the more important conventions of interest and importance to vessel operators and to which the United States is a signatory include:
- International Convention for Safety of Life at Sea (SOLAS) - regarded as the most important of all international treaties concerning the safety of merchant ships and which specifies minimum standards for the construction, equipment and operation of vessels.
- International Convention for the Prevention of Marine Pollution from Ships (MARPOL) - which places restraints on the contamination of the sea, land and air by ships.
- International Convention on Standards of Training, Certification and Watchkeeping for Seafarers (STCW), 1978, as amended in 1995 - establishes internationally acceptable minimum standards and requirements on training, certification and watchkeeping for seafarers.
The IMO has also developed 25 separate codes of safe practice, some of which are mandated through a specific convention and others of which are only recommendations, for example:
- International Management Code for the Safe Operation of Ships and for Pollution Prevention (ISM Code) - establishes safety management objectives and emphasizes the role of sound management in safety and pollution prevention. Compliance with the ISM Code is mandated by the SOLAS Convention, Chapter IX.
- International Ship and Port Facility Security Code (ISPS Code) -- details security-related requirements for governments, port authorities and shipping companies in a mandatory section (Part A), together with a series of guidelines about how to meet these requirements in a second non-mandatory section (Part B). The ISPS Code will come into force in July 2004.
International Ship and Port Facility Security Code (ISPS Code) -- details security-related requirements for governments, port authorities and shipping companies in a mandatory section (Part A), together with a series of guidelines about how to meet these requirements in a second non-mandatory section (Part B). The ISPS Code will come into force in July 2004.