American Merchants are Facing a Crew Crisis

U.S.-flagged ships are more expensive to operate than foreign-flagged ships, and it is getting more challenging to find crews for them. A 2011 report by the U.S. Department of Transportation

The Maritime Administration (MARAD) found that the costs for U.S.-flagged ships are 2.7 times those for foreign-flagged vessels, with the difference in crew costs being the largest multiple relative to foreign counterparts at 5.3 times. 

U.S.-flagged ships are required to hire U.S. citizens. In contrast, foreign-flagged ships frequently hire the cheapest crews available, which drives a significant wedge between U.S. and foreign crew costs. Crew costs are also not a trivial part of shipping’s operating costs. That same MARAD report found that crew costs accounted for 68% of total U.S.-flagged operating costs but just 35% of total operating costs for foreign-flagged ships. The crew-cost problem must be addressed if America wants to make shipping more affordable and competitive.

Despite the requirement that qualifying vessels be crewed by American merchant marines and the high pay they command, they are becoming harder to find: the U.S. has a severe shortage of merchant marines. The Navy has had to sideline 17 support ships because of the shortage. The decline in merchant mariners has been dramatic: in 1960, there were 50,000, but now there are only 13,000. America needs more sailors and cheaper sailors.

Many proposed solutions to the shortage would increase funding, promotion, and recruitment for merchant marine schools. While increased promotion and funding may modestly increase recruitment, they are unlikely to solve the shortage. 

Higher salaries are not likely to help either. Merchant marines are already offered high salaries: the median annual pay is $93,000 a year, and for those with less than one year’s experience, it is $75,000. Both these salaries are well above the U.S. median personal income. One of the biggest hurdles in recruiting is the lifestyle. Sailors can be at sea for weeks or even months at a time, which makes relationships with people on land difficult. 

Deregulating the maritime labor market could go a long way toward solving the worker shortage. The process for approving Navy and Coast Guard veterans to join the merchant marine is unnecessarily difficult. Streamlining it could get more people who are used to life at sea on American merchant ships.

Another simple solution would be to lower or abolish the Jones Act’s American crew requirement. Foreign workers could augment the dwindling supply of sailors. This would help lower shipping costs and ensure a supply of sailors to meet the needs of the American merchant fleet.

Additionally, if increasing the number of American citizen-sailors is important, a pathway could be set up to naturalize foreign sailors. Such an immigration pathway would encourage high-quality foreigners to work on U.S. ships while lowering costs. 

The current regulatory framework for commercial shipping drives up operating costs and deprives American merchant ships of manpower. America needs serious cuts to maritime labor regulations to supply the merchant fleet with the next generation of mariners.