MARITIME UNIONS AND THE U.S. MERCHANT MARINE

INTRODUCTION In 1994, America's two largest ocean carriers, Sea-Land and American President Line (APL) applied to the Maritime Administration (MARAD) for permission to change the country of registry of several of their largest and newest container ships from the United States to foreign, so-called flag of convenience countries. The CEOs of these two companies joined forces to argue that unless the federal government took immediate action to create significant new operating subsidies, their companies would be unable to continue to compete with foreign-flag carriers whose crew costs per month are about one-third that of U.S. flag carriers. Organized maritime labor vigorously opposed the reflagging proposal because it would have eliminated several hundred union jobs. Since passage of the Merchant Marine Act of 1936, ship owners registering their ships in the United States have been required to crew their ships with U.S. citizens who are union members. U.S. maritime labor is organized and controlled by 12 major AFL-CIO chartered unions and 18 company-sponsored unions. Over the past 60 years, maritime unions have in large part controlled crew size and crew costs on vessels of U.S. registry. The gauntlet laid down by APL and Sea-Land posed a serious threat to U.S. maritime labor unions, whose membership has shrunk significantly from post-WWII levels. Fortunately for organized labor, the situation was resolved in their favor when the Clinton Administration persuaded Sea-Land and APL to maintain U.S. registry for the ships at issue by offering a new operating subsidy bill. In 1996, after years of intensive lobbying by several different maritime interest groups, Congress passed the Maritime Security Act of 1996. Under this plan, Sea-Land and APL as well as smaller operators of U.S.-registered deep-sea vessels (U.S. flagships) will receive significant subsidy payments for designated ships. In exchange, the carriers must pledge to provide the subsidized ships to the Department of Defense upon request to support emergency military sealift needs. The primary beneficiaries of this law, Sea-Land and APL, subsequently dropped their request to change the country of registry for their ships to foreign countries where ' ship operating costs are much lower (called reflagging or nagging out). Sea-land and APLs' response to the passage of this new maritime subsidy program preserves what remains of the U.S. flag deep-sea fleet. The real underlying issue that motivated their request for reflagging was not addressed. The real issue is the continuing high cost of unionized U.S. maritime labor relative to the rest of the global shipping industry. The purpose of this paper is to analyze the impact maritime unions have had on the growth and development of the U.S. Merchant Marine through their strikes, lobbying efforts and more recent cooperation with carrier management. The development and influence of maritime unions is traced from the Maritime Security Act of 1915 to the present. The paper briefly reviews the history of maritime unions then examines the impact maritime unions have had on the formation of national policy regarding the U.S. Merchant Marine. The paper concludes by considering the implications of the Ocean Shipping Reform Act of 1998 (OSRA) and recent ocean carrier mergers. HISTORY OF U.S. MARITIME UNIONS To understand the impact that maritime unions have had on the U.S. flag shipping industry, it is necessary to understand the pervasive nature of U.S. maritime unions in the industry. U.S. maritime unions include both licensed and unlicensed seamen on U.S. flag oceangoing vessels, Great Lakes ships and inland waterway tugs and barges. There are two longshoremen's unions, five unions for shipyard workers, twelve primary seagoing unions and nineteen independent labor unions who do business with individual oil companies (Heine, 1976). Over the years these unions became very powerful because they have had the legal right to determine crew size and composition for different classes of ships. …