Article by William J. Coffey
As an introduction, I want to make a few observations about our occasionally maligned and frequently misunderstood business. First, I assure you that the U.S.-flag containership industry is alive and well. Certainly during the era of multimodalism, there have been great changes in our ranks, and a number of well-established companies—American Export Lines, States Steamship Company, and Delta Steamship Company, prominent among them, were absorbed into other companies or entered other lines of business.
According to periodic shipper and customer surveys that have been published by the American Shipper Magazine, the National Maritime Council, and other authorities in recent years, the remaining players today occupy substantial niches in the various markets they serve and continue to be in the front ranks of the ocean carrier industry.
Over the past two centuries, our American industry has led the way with the conversion from sail power to steam. We opened up the intercoastal and Pacific trades with the development of the graceful clipper ships in the 1850s, advanced the development of metal hull vessels, and certainly not incidentally, in 1956 developed the containership, which truly opened the era of multimodalism. In a relatively few years, we totally revolutionized the way in which most packaged goods were shipped.
The multimodal era is now nearing its thirty-fifth year. In that time, our industry, initially through conversions and more recently through new buildings, has developed at least three generations of containerships as well as other specialized multimodal vessels, most notably barge-carrying and roll-on, roll-off ships.
The American shipping industry has also fostered the construction of new container-port facilities both in the United States and throughout the world; developed the trailer-container carrying trains, now operating in a double-stack car configuration throughout the United States; and invented and financed the containers themselves in their numerous configurations, specialized uses, and sizes. Finally, the U.S.-flag containership group generally supported many of the key statutory and regulatory changes that collectively have made multimodalism a commercial and legal reality.
Today, Sea-Land Service, American President Lines, Central Gulf Lines, Lykes Brothers Steamship Company, the several Crowley Maritime Corporation companies, Waterman Steamship Company, the Topgallant Group, and Farrell Lines, among others, comprise the U.S.-flag industry and operate more than 100 vessels engaged in foreign oceanborne commerce. Several other companies, most notably Matson, Navieras de Puerto Rico, Sea-Barge, Totem Ocean Express, and Sea-Land, serve domestic offshore commerce.
Being an American company engaged in international commerce is not easy. There are growing capital needs and competition in a business environment that can hardly be characterized as free market. Many foreign competitors have substantial backing from their governments, both financially and through highly preferential access to cargoes. However, with slot and operating costs improvements during the past decade, the U.S. container shipping industry is in a position that augurs well for the future.
Oceanborne trade has grown and will continue to grow at a steady pace, and the U.S.-flag containership operators will be competitive for a substantial share of each market they serve. Profits and adequate returns on investment are still not what they should be—this is an industry-wide fact— but we are well prepared to enter the 1990s and the third millenium and to continue on the cutting edge of multimodalism as it continues to evolve.
The role played by our industry in supporting the national defense and commercial shipping needs of the United States is more vital today than ever before as has been recently highlighted in the four Reports of the Commission on Merchant Marine and Defense presently before the White House and Congress.
If this introduction sounds a little more like a sales pitch than a legal brief, I plead guilty. I am proud to have been associated with our industry for the past twenty years and am truly optimistic about our prospects for the future.
About the Author
William J. Coffey. Associate General Counsel, Sea-Land Service, Inc.
Citation
64 Tul. L. Rev. 569 (1989)