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Shipping, Ocean

SHIPPING, OCEAN

SHIPPING, OCEAN. From early colonial times to about 1870, there was little change in American cargo ships. The conventional major carrier in those early years was the three-masted, square-rigged ship, or bark. The earlier ones, like the Mayflower, had abnormally high poops and forecastles, which gradually gave way during the eighteenth century to relatively flush decks. But basically they were much the same, about one hundred feet long and thirty feet wide, measuring about three hundred tons, with hulls of oak and masts of pine or fir; they carried crews of about thirty men. Off the transatlantic main line, smaller vessels were used: two-masted, square-rigged brigs for runs to the Mediterranean or the West Indies and still smaller fore-and aft-rigged schooners or sloops for coastal and other short runs. Ownership of such ships was divided into sixty-four shares; sometimes a single person owned all shares, sometimes the shares were divided among dozens of people. In 1818 the American Black Ball Line innovated shipping by sailing on fixed schedules between New York City and Liverpool, England, with passengers, mail, and fine freight, but still using conventional ships. This new line pattern, highly profitable, expanded, but chiefly from New York.

The coming of steam gradually led to a new pattern. Robert Fulton's Clermont first plied the Hudson River in 1807, and in 1838 regular transatlantic service by steam-driven ships began. The early engines used so much fuel that governments were forced to subsidize steamers; consequently, ordinary cargoes continued to go by square-riggers.

A quiet revolution occurred about 1870 with the compound engine, which, by using the steam twice (and later three or four times), cut costs, so that a freighter could profitably carry such heavy cargoes as grain, coal, and sugar. These new freighters gradually drove the square-riggers from their older runs. Measuring only a few thousand tons, with iron (and later steel) hulls, some served on regular line runs, but most of them were operated as tramp steamers, picking up cargoes wherever they could find them. The American shipbuilders, who had done well with the wooden square-riggers, now could not compete with the cheaper British building costs of the new freighters.

The smaller freighters were particularly hard hit by German submarines in World War I, but their design became the basis for the type of ship that restored America to top the merchant marine position after the war. The thousands of Liberty and Victory ships built in U.S. shipyards during World War II were essentially the same type, although by that time they were fueled by oil rather than coal.

By the 1920s, the oil tanker was a prominent part of ocean shipping, and older freighters became known as dry cargo ships. The rapid development of the automobile stimulated a worldwide demand for oil, and during World War II the U.S. produced numerous 16,000-ton T-2 tank-ers. Because of high American crew wages, many oil companies registered their tankers in the merchant marines of Panama and Liberia.

In the 1960s labor costs became the crucial factor in most merchant marines, and shippers began to seek cheaper methods of loading and unloading ships. The previous cargo ships had open holds into which longshoremen loaded the individual bags, boxes, and bales that made up a cargo, a time-consuming process. The shippers cut the loading time by assembling the cargo beforehand and sending it aboard in a single container, a process called containerization. Another innovation was the so-called "sea train," where loaded freight cars could be run aboard on tracks and run off at the other end. Later came other "roll on–roll off" devices for the same purpose. Even with these changes, the ship had to be put into port to load or unload, and a ship's stay in port could cost several thousand dollars a day. To save more time shippers inaugurated the LASH (lighter-aboard-ship) system, whereby scores of self-operating little lighters could be hoisted over the side to run into port while the mother ship kept on without loss of time.

Another innovation during the 1960s was the vastly increased tonnage of tankers and bulk carriers. The T-2 tanker of World War II measured 16,000 tons. Tonnage increased gradually after that; about 1970 the designation "very large crude carrier" (VLCC) was applied to ships of 150,000 tons or more. By the autumn of 1972, six ships measuring more than 250,000 tons were under construction, and one of nearly 500,000 tons was planned. Two factors brought on this expansion. The first was the closing of the Suez Canal in the Arab-Israeli war of 1967. Some tankers from the Persian Gulf had already been getting rather large for the canal, and, because of the war, there was no choice except to go around the Cape of Good Hope. The longer Good Hope route meant higher tanker earnings, stimulating new construction of larger tankers. The second factor was American concern about its overseas supplies of raw materials. U.S. oil reserves were dropping, and the old self-sufficiency in iron ore was dwindling, with substitute ore supplies necessary from Venezuela and northeastern Canada. Large numbers of bulk carriers began operating. Tankers also began carrying oil one way and ore or bulk grain the other. Few ports could provide the necessary draft for the larger tankers. Offshore loading into pipe facilities seemed one answer. Coastal communities, moreover, were concerned with the danger of oil spills. With the help of a subsidy act passed in 1970, the United States began to build some new types of oceangoing ships. Special ships were developed for natural gas, and bulk carriers were developed to bring iron and other ore from overseas. President Richard Nixon cut the subsidy program in 1973, which temporarily forced a decline in shipping's expansion.

Nonetheless, shipping remains an important source of revenue and employment in the nation's ports. The leading U.S. ports on the East Coast are New York–New Jersey, with 38 percent of the North Atlantic trade, mostly containerized cargo; Norfolk, Virginia; Philadelphia; and Baltimore. In the Gulf of Mexico, the principal port is Houston. New Orleans leads on the Mississippi. On the West Coast the leading ports are Seattle-Tacoma, San Francisco (including Oakland), Long Beach, and Los Angeles.

BIBLIOGRAPHY

Albion, R. G. Seaports South of Sahara: The Achievements of an American Steamship Service. New York: Appleton-Century-Crofts, 1959.

Gibson, Andrew, and Arthur Donovan. The Abandoned Ocean: A History of United States' Maritime Policy. Columbia: University of South Carolina Press, 2000.

Kendall, Lane C. The Business of Shipping. Centreville, Md.: Cornell Maritime Press, 1992.

Lawrence, Samuel A. United States Merchant Shipping, Policies and Politics. Washington, D.C.: Brookings Institution, 1966.

Robert G.Albion/f. b.

See alsoCape Horn ; Embargo Act ; Emergency Fleet Corporation ; Maritime Commission, Federal ; River and Harbor Improvements ;River Navigation ; Trade, Foreign .

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Federal Maritime Commission

FEDERAL MARITIME COMMISSION

The Federal Maritime Commission (FMC) regulates the waterborne foreign and domestic offshore commerce of the United States; ensures that U.S. international trade is open to all nations on fair and equitable terms; and protects against unauthorized activity in the waterborne commerce of the United States. The FMC reviews agreements made by groups of common carriers (those who operate ships for commercial purposes), ensures that carriers charge rates on file with the FMC, and guarantees equal treatment to carriers and those who ship their goods. The FMC also ensures that adequate levels of financial responsibility are maintained for the indemnification of passengers who sail on commercial passenger ships. The commission comprises a chairman and four commissioners, who are appointed by the president.

The FMC was established by reorganization plan No. 7 of 1961 (5 U.S.C.A. app.), effective August 12, 1961. It is an independent agency that regulates shipping under the following statutes: the Shipping Act of 1984 (46U.S.C.A. app. at 1701–1720); the Shipping Act, 1916; the Merchant Marine Act, 1920; the Foreign Shipping Practices Act of 1988 (46 U.S.C.A. app. at 1710a); the Intercoastal Shipping Act, 1933 (46 U.S.C.A. app. at 843 et seq.); and certain provisions of the Act of November 6, 1966 (46 U.S.C.A. app. at 817(d), 871(e)).

The commission reviews agreements made by common carriers, terminal operators (i.e., those who operate the docking facilities in harbors), and other persons subject to the shipping statutes. The FMC also monitors activities under all effective or approved agreements, for compliance with the provisions of the law and its rules, orders, and regulations.

The FMC accepts or rejects tariff filings, including filings dealing with service contracts, of common carriers engaged in foreign and domestic offshore commerce of the United States, or conferences of such carriers. The FMC regulates the rate of return of carriers in domestic offshore trades. It has the authority to grant exemptions from tariff requirements.

The commission issues licenses to persons, partnerships, corporations, and associations desiring to engage in ocean freight forwarding activities. Shipowners and the operators of passenger ships that carry more than fifty passengers are required to obtain certificates from the FMC that demonstrate that they have the financial resources and responsibility to pay judgments for personal injury or death, or to refund fares in the event that voyages are canceled.

When a violation of the shipping laws is alleged or suspected, the FMC is authorized to investigate and may take administrative action to start formal proceedings, to refer matters to other government agencies, or to bring about voluntary agreement between the parties. It also may conduct formal investigations and hearings on its own motion and may adjudicate formal complaints.

The FMC promulgates rules and regulations to interpret, enforce, and ensure compliance with shipping and related statutes by common carriers and other persons subject to those statutes.

The staff of the FMC administers programs to ensure compliance with the provisions of the shipping statutes. These programs include the submission of information, and field investigations and audits of activities and practices of common carriers, terminal operators, and others subject to the shipping statutes. The FMC also conducts rate analyses, studies, and economic reviews of current and future trade conditions, including the extent and nature of competition in various trade areas.

The FMC conducts investigations of practices by foreign governments and foreign carriers that adversely affect the U.S. shipping trade. The commission works with the department of state to eliminate discriminatory practices on the part of foreign governments against U.S.-flag shipping and to promote fairness between the United States and its trading partners.

The FMC has sought to become more efficient by implementing an electronic filing system. By 2002, it was able to issue service on companies electronically, which proved crucial during the fall of 2001, when the anthrax crisis prevented the delivery of mail by the u.s. postal service in some areas. In addition, it now posts filings of important public proceedings on its web site.

further readings

Federal Maritime Commission. 2003. Annual Program Performance Report. Available online at <www.fmc.gov> (accessed November 12, 2003).

U.S. Government Manual Website. Available online at <www.gpoaccess.gov/gmanual> (accessed November 10, 1993).

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Maritime Commission, Federal

MARITIME COMMISSION, FEDERAL

MARITIME COMMISSION, FEDERAL, a regulatory agency charged with protecting the interests of shippers, carriers, and passengers sailing under the U.S. flag. The Commission investigates anticompetitive practices in the maritime transport business and reviews the records of service contracts and rates. It issues licenses to ocean transportation intermediaries to guard against unqualified, insolvent, or dishonest companies; requires companies to maintain bonds against financial loss; and ensures that passenger cruise operations take financial responsibility when found liable for personal injury, death, or nonperformance of a voyage.

Today's Federal Maritime Commission is a fragment of a once huge network of government agencies created by legislation including the Shipping Act of 1916 and the Merchant Marine Acts of 1920 and 1936. On the eve of World War I, with American ships carrying only 2 percent of the nation's foreign trade, policymakers moved to reverse the nation's vulnerability to shortages in vital supplies. With the help of massive government subsidies, by the end of world War II the United States had one of the largest maritime fleets in the world and U.S. merchant ships carried 60 percent of the world's tonnage.

In the decades after the war, U.S.-flagged shipping began a continuing decline as air traffic took over passenger service previously provided by ocean liners, containerization technology made managing cargo more efficient, and U.S.-owned ships transferred registration to foreign countries such as Liberia to avoid higher costs associated with U.S. regulation.

In 1950 the U.S. Maritime Commission, which had presided over the fleet's buildup, was dismantled and its responsibilities shifted to the Maritime Administration and the Federal Maritime Board. In 1961 the Board was renamed the Federal Maritime Commission and its non-regulatory responsibilities were given to the Maritime Administration. Regulatory provisions of the Shipping Act of 1984 and the Ocean Shipping Reform Act of 1998 reflect the recent era of diminished government involvement in the ocean transportation industry.

BIBLIOGRAPHY

Federal Maritime Commission. 39th Annual Report for Fiscal Year2000. Washington, D.C.: Federal Maritime Commission, 2001.

Labaree, Benjamin W., et al. America and the Sea: A MaritimeHistory. Mystic, Conn.: Mystic Seaport Museum, 1998.

JenniferMaier

See alsoMerchant Marine ; Shipping, Ocean ; Shipping Board, U.S.

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