Wednesday, December 17, 2003

Turning Around The Merchant Marine

WASHINGTON - If a nation's preeminence is measured by the size of its maritime shipping industry, then the United States is in decline. Consider: Since 1991, America's merchant fleet has dropped to 260 ships from 536, according to the American Maritime Congress, the industry group representing ocean carriers. Just 4% of U.S. trade is carried on U.S.-flagged vessels.

For Charles G. Raymond, chief executive of Charlotte, N.C.-based ocean shipper Horizon Lines, that's evidence that the government needs to do more for the industry. "Clearly, there's a need for a government focus on this," he says, adding that "there should be a high-level, blue ribbon committee that looks into what can be done and the key drivers to make it happen in a socially and fiscally responsible way."

And in a way, of course, that helps Raymond's company. Horizon Lines, which CSX sold in February to Washington buyout firm The Carlyle Group for $300 million, is one of America's biggest ocean haulers, moving freight on 17 ships between the continental U.S. and Alaska, Guam, Hawaii and Puerto Rico.

But Raymond and others in maritime transportation insist the matter goes well beyond their own self interest. On its Web site, the American Maritime Congress points out that 95% of military cargo must travel by sea during wartime. Raymond, who started his career as a deck officer for Sea-Land in 1965, recalls scrambling to retrofit two Sea-Land ships to haul ammunition when Japanese and Danish sailors suddenly refused to carry America's military supplies during the first Gulf War.

"When you have to sustain the surge of material going into a war zone," he says, "you find guys have gotten hurt, or they've been out at sea for 75 days and they've got family issues and need to be replaced. That's where we run into trouble as a nation, coming up with enough mariners to keep those vessels manned on a sustained basis."

Full story at Forbes.com