Overview:
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The Maritime Administration (MARAD) is an agency within the Department of Transportation responsible for all waterborne transportation. MARAD’s programs include facilitating use of waterborne transportation and overseeing its integration with other segments of the transportation industry. The agency is responsible for the US merchant marine and works to make sure American ships, ports, environment, safety and national security are protected. The Maritime Administration maintains a fleet of cargo ships to provide surge sealift during war and national emergencies (the National Defense Reserve Fleet, or NDRF), and it helps to dispose of non-combatant government ships as they become obsolete.
History:
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The US Maritime Commission was an independent agency of the federal government that was created by the Merchant Marine Act of 1936. This replaced the US Shipping Board, which had existed before World War I and was intended to create a merchant shipbuilding program to design and build 500 modern merchant cargo ships to replace those used in WWI. Additionally, the agency was charged with administering a subsidy program to offset the costs of building ships in the United States. The act also formed the US Maritime Service for the training of seagoing officers to manage the new fleet.
The SS America was the first vessel commissioned under the new act, and it was owned and operated as a passenger cruiser between 1940 and 1941. When the US entered WWII, the SS America was requisitioned by the US Navy and became the USS West Point. During the war, an emergency shipbuilding program was launched, and the Maritime Commission’s shipbuilding program became known as Ships for Victory. Thousands of ships were built during the period between 1939 and 1945. In 1942, the training and licensing aspects of the shipping industry were transferred to the US Coast Guard. Later that same year, the Maritime Service was transferred to the newly created War Shipping Administration.
When WWII ended, the emergency and long range shipbuilding programs were shut down. In 1946, the Merchant Ship Sales Act was passed so that the surfeit of ships could be sold off to commercial buyers. Many decimated fleets, such as those of Great Britain, Greece and Norway, were rebuilt this way. Ships not disposed of through the Ship Sales Act were placed into one of eight National Defense Reserve Fleet (NDRF) sites maintained on the Atlantic, Pacific and Gulf Coasts for use in national emergencies and humanitarian aid missions.
The last major mobilization of the NDRF came during the Vietnam War, and the last major shipbuilding project oversaw the design and construction of the super passenger liner SS United States, which could quickly be converted into the world’s fastest naval troop transport.
On May 24, 1950, the US Maritime Commission was abolished. Its functions were then split between the Maritime Board, which regulates shipping and awards subsidies for construction and operation of merchant vessels, and the Maritime Administration, which is responsible for administering subsidy programs, maintaining the National Defense Reserve Fleet and operating the US Merchant Marine Academy.
In 1961, the Federal Maritime Board regulatory functions were assumed by the Federal Maritime Commission, which was created to help shape maritime policy. The subsidy functions were then assigned to the Maritime Subsidy Board of the Maritime Administration.
In August of 1981, the Maritime Administration came under the control of the US Department of Transportation. This brought all transportation-related agencies under a single cabinet-level department.
What it Does:
Students who receive training & education through maritime academies can graduate with a Coast Guard license (either mate or engineer) and may become commissioned reserve officers in any branch of the service when they graduate from the Merchant Marine Academy or receive a Reserve Officer Training Corps (ROTC) scholarship from one of the other maritime schools.
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The Maritime Administration (MARAD) is responsible for administering financial programs to develop, promote and operate the US Maritime Service and the US Merchant Marine. The agency determines the services and routes necessary to develop and maintain American foreign commerce and conducts research and development activities in the maritime field. The agency regulates the transfer of US documented vessels to foreign registries, maintains equipment, shipyard facilities and reserve fleets for government-owned ships deemed essential for national defense.
MARAD Programs:
National Security assures that merchant shipping is available in time of war or national emergency. The National Security programs oversees the Maritime Security Program; Voluntary Intermodal Sealift Agreement; National Defense Reserve Fleet; Ready Reserve Force; Foreign Transfer; and NATO and the Planning Board for Ocean Shipping.
Financial Approvals and Cargo Preference monitors the administration of and compliance with US cargo preference laws and regulations by federal agencies. Programs include the Ship Operations Cooperative Program; Cargo Preference; and Financial and Rate Approvals.
Shipbuilding supports a shipbuilding industrial base for national security objectives and promotes a self-sufficient internationally competitive industry. MARAD operates programs covering Title XI Financing; the National Maritime Resource and Education Center; Capital Construction Fund; and Construction Reserve Fund.
Port, Intermodal and Environmental Activities - Domestic Operations oversees programs affecting Inland Waterways; Environmental Activities; Domestic Shipping; and
International Activities is charged primarily with enforcing bilateral relations and agreements. These include:
Also, MARAD operates the U.S. Merchant Marine Academy in Kings Point, NY, and administers a Grant-In-Aid programs for state-operated maritime academies: California Maritime Academy; Maine Maritime Academy; Massachusetts Maritime Academy; Great Lakes Maritime Academy; SUNY Maritime Academy; and Texas Maritime Academy.
Students who receive training & education through maritime academies can graduate with a Coast Guard license (either mate or engineer) and may become commissioned reserve officers in any branch of the service when they graduate from the Merchant Marine Academy or receive a Reserve Officer Training Corps (ROTC) scholarship from one of the other maritime schools.
The Maritime Administration also oversees shipbuilding subsidies through the Maritime Subsidy Board. The board negotiates contracts for ship construction and grants operating-differential subsidies to shipping companies.
Under the
Maritime Security Program (MSP)
, the Maritime Administrator is vested with the residual powers of the Director of the National Shipping Authority, which organizes and directs emergency merchant marine operations. This program authorizes MARAD to enter into contracts with US-flag commercial ship owners to provide service during times of war or national emergencies.
Where Does the Money Go:
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The Maritime Administration spent nearly $3.06 billion on 2,807 contractors this decade. According to USASpending.gov, MARAD paid for a variety of services, from salvaging services to lease and rental of facilities.
The top 10 recipients of MARAD contracts were:
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Crowley Maritime Corporation
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$888,334,346
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Saltchuk Resources, Inc.
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$499,143,560
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Chas Kurz & Co., Inc.
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$357,539,369
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Pacific-Gulf Marine, Inc.
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$240,780,279
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General Dynamics Corporation
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$230,268,130
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Patriot Contract Services, LLC
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$164,218,752
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Ocean Duchess, Inc.
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$51,671,052
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Alexander & Baldwin, Inc.
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$41,018,411
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Stanley, Inc.
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$37,165,357
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Veridyne, Inc.
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$36,333,401
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Crowley Maritime Corporation, MARAD’s largest contractor, is a company providing diversified transportation services in domestic and international markets using liner services, logistics, energy support, ocean towing and transportation, petroleum and chemical transportation, fuel sales and distribution, ship assist and escort, salvage and emergency response, vessel construction and naval architecture, and ship management.
, MARAD’s second largest contractor, operates on the Pacific Rim in North America and offers a variety of transportation services through air cargo, maritime transportation, Marine resources, real estate and petroleum distribution.
Controversies:
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Dubai Ports Controversy
In February 2006, it came to light that port management businesses in six major American seaports had been sold to a company based in the United Arab Emirates (UAE). This caused an immediate and intense debate about whether this would compromise national security as a result. The purchasing company was DP World, a company controlled by the royal family of Dubai. Personal ties between the Bush Administration and DP World included the appointment of David C. Sanborn to the Maritime Administration. Previous to his appointment, Sanborn had worked for Dubai Ports World (DP World). The sale of port management businesses in these six ports was approved by the executive branch of the US government in March of 2006.
The Dubai Ports World Controversy: Jingoism or Legitimate Concerns? (by Stephen Zunes, Foreign Policy in Focus)
DP World and U.S. Port Security (by Randall Beisecker, NTI)
Agency nominee taking Senate heat: Lawmakers want to know if he had role in port deal (by Michael Kranish, Boston Globe)
The DP World Controversy and the Ongoing Vulnerability of U.S. Seaports (by Stephen E. Flynn, Council on Foreign Relations)
6 Ships Abandoned by Maritime Administration Contractor
In 2007, several news sources reported that six ships from the James River Reserve Fleet were in limbo after a Maryland salvage yard that was supposed to scrap them abruptly closed. This left behind two of Virginia’s “ghost fleet” ships and opened potential environmental risks of oil spills since both ships were built during WWII. The contracts were terminated, although the owners of the company could not be found. In July 2008, the Maritime Administration managed to finally sell the two ships for a total of $2.6 million.
Floating scrap worth millions (by Patrick Lynch, Newport News Daily Press)
Shipyard Closes, Leaves “Ghost Fleet” Ships in Limbo
(MarineLink)
- Table of Contents
- Overview
- History
- What it Does
- Where Does the Money Go
- Controversies
- Suggested Reforms
- Comments
- Leave a Comment
Founded: 1950
Annual Budget: $433.4 million (2009)
Employees: 760
Official Website: http://www.marad.dot.gov/
Maritime Administration
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