The United States continues to depend primarily on oceanborne shipments for its international trade. As the world’s largest trading nation, the United States exports and imports about one-fourth of global merchandise trade in value annually. The largest part of this merchandise trade – over 1.3 billion metric tons of cargo – is moved by water. Another billion tons of cargo is carried in domestic waterborne movements, which serve over 90 percent of the U.S. population. Based on current projections, by the year 2020 U.S. foreign trade in goods may grow to four times today’s value and almost double its current tonnage, and inland waterways traffic will increase by one-third.
The United States once relied on a huge fleet of relatively small ships to provide the commercial and sealift shipping capacity appropriate for its trade. Since the end of World War II, the U.S.-flag vessel fleet has been in a continual state of decline. As of January 2016, the United States ranked 27th in number of oceangoing vessels and 25th in gross tonnage compared to other merchant fleets by country of owner. Today, the U.S. fleet’s share of oceanborne commercial foreign trade, by weight, continues to be less than five percent. Other traditional maritime powers have experienced similar declines.
While the number of vessels in the U.S. fleet has shrunk, at the same time many nations have built an international maritime presence as a means of projecting visibility and earning hard currency. These registries may not require the same level of protection for seafarer health, welfare and safety as on U.S.-flag vessels. Often, foreign-flag vessel owners do not pay any corporate income taxes on revenues earned in U.S. foreign commerce, and the crews frequently do not pay income taxes to any country. By comparison, vessels operating under the U.S. flag are subject to all the taxes and regulatory laws applicable in the United States.
Changes in maritime technology and reductions in crew sizes have contributed to a contraction of the industry’s supply of vessels and manpower.