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. Companies presently awarded MSP operating agreements as of 2016 are:
- American International Shipping, LLC;
- APL Marine Services Ltd.;
- Argent Marine Operations, Inc.;
- Central Gulf Lines, Inc.; Farrell Lines Inc.;
- Fidelio Limited Partnership;
- Hapag-Lloyd USA, LLC; Liberty Global Logistics,
- LLC; Maersk Line, Limited; Mykonas Tanker LLC;
- Patriot Shipping LLC;
- Santorini Tanker LLC and Waterman Steamship Corporation.
- Dry Bulk Vessel
- Liquid Bulk Vessel
- Roll On / Roll Off
- Heavy Lift
Of the 77 U.S.-flag vessels engaged in the oceangoing trades, 58 vessels are in the MSP program, as follows: 35 containerships, 15 Roll-On/Roll-Off vessels, 2 tankers, and 6 heavy lift vessels.
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 year-end 2013, there were 76 private vessels (containerships, roll-on/roll-off, and general cargo) in the active oceangoing U.S.-flag fleet serving the foreign liner 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
Liquid Bulk Fleet
National Registry which can be classified as the traditional flag states, i.e. United States, United Kingdom, Germany, China, Russia, and Japan to name a few. Traditional flag states typically have national restrictions in terms of ownership, shipbuilding, crewing and trading, for example, national cabotage laws.
Open Registries which are known and referred to as Flags of Convenience, i.e., vessels registered under the flags of Honduras, Vanuatu, Marshall Islands, Panama, Liberia, Bahamas, Cyprus, and Malta. Flags of Convenience have few restrictions concerning nationality of crews, where vessels may be financed or constructed, or ownership limitations. Shipping concerns adopted the practice of shopping around for nations under open registry giving them the best deal on taxes, wages and legal restrictions, “conveniently” registering their vessels with these countries.
Second Registries commonly referred to as hybrids, adopting many of the operating characteristics of Open Registries/Flags of Convenience while acting under the appearance of national authority, i.e. Hong Kong or Singapore.