Maritime Administration

Summary of Maritime Administration

An agency of the U.S. Department of Transportation assigned the task of promoting the American Merchant Marine.MARAD was established in 1950 and pursues its objective through various programs, including ports and intermodal systems development, research and development in vessel and equipment design, and extensive market promotion efforts to encourage the use of American vessels.

The agency also administers operating differential subsidies and construction differential subsidies to over-come higher costs of building ships under the American flag, and the Cargo Preference Act, which requires that at least 50 percent of government-generated cargoes travel on U.S. flag ships. It operates the U.S. Merchant Marine Academy and provides financial assistance to the state maritime academies to produce qualified officers to staff U.S. vessels.

In addition, during national emergencies, MARAD directs the National Shipping Authority, which coordinates the mobilization of the merchant marine in furtherance of national objectives. Similarly, MARAD administers a war-risk insurance program to provide cover for U.S. flag vessels when war or other conflict makes such insurance commercially unavailable.

MARAD should not be confused with the l l.u ERAL Maritime Commission (read this and related legal terms for further details), an unrelated regulatory agency.

(Main Author: William J. Miller)

Introduction to Maritime Administration

Maritime Administration, United States government agency charged with encouraging the development and maintenance of a merchant marine sufficient to meet peacetime commercial needs of the country and capable of serving as a naval and military auxiliary in time of war or national emergency. An agency of the U.S. Department of Transportation, it was established in 1950. Prior to 1981, the agency was part of the Department of Commerce.

The agency administers operating- and construction-differential subsidies, to make up the difference between U.S. costs of building and operating ships and the estimated costs of foreign competitors, and determines the service of U.S. operators in return for government aid. It pays the cost of national defense equipment, exceeding commercial requirements, that is incorporated in U.S. ships. Decisions on subsidy grants are made by the Maritime Subsidy Board.

As part of planning for possible national emergencies, the administration maintains a National Defense Reserve Fleet. In emergencies it can also charter ships to U.S. operators and requisition ships owned by U.S. citizens for defense needs.

The administration also promotes the use of American ships to carry U.S. trade, grants approval of transfers of U.S. ships to foreign flags, authorizes government guarantees for privately granted ship-construction loans, designs vessels, engages in research to improve ship transportation systems, participates in international programs and meetings on maritime problems, provides a War Risk Insurance program to insure both seamen and operators against losses from hostile action; operates the U.S. Merchant Marine Academy at Kings Point, New York, and supervises government grants and student aid to the six state maritime academies in California, Maine, Massachusetts, Michigan, New York, and Texas.” (1)

Resources

Notes and References

• Information about Maritime Administration in the Encarta Online Encyclopedia

Guide to Maritime Administration

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