From about 1900 until World War I, Germany held second place in the world in both navy and merchant marine, and its challenge to Great Britain's domination of the sea was an important cause of the war. In the period between the two world wars the principal maritime nations were Great Britain and its dominions, the United States, Japan, Norway, Germany, Italy, the Netherlands, and France. The United States merchant marine steadily declined, and in order to stimulate shipbuilding the Merchant Marine Act of 1936 created the U.S. Maritime Commission. At the beginning of World War II in Europe, U.S. shipping, handicapped by the Neutrality Act, again declined. American vessels were diverted to trade outside the war zones and many were transferred to other flags, mainly the Panamanian.
After the entry of the United States into the war (Dec., 1941), a huge shipbuilding program rapidly got under way, and standardized vessels were turned out by assembly-line methods. A brief period of United States dominance in world shipping followed the war. Subsequently, however, the U.S. merchant marine again declined steadily; as the expense of American labor and ship construction increased, the cost of operation went beyond competitive levels, despite the fact that the American shipping industry was receiving a large subsidy from the federal government.
Since the 1960s, U.S. ports have modernized their facilities by automating operations, installing computerized tracking systems, and handling containers ("intermodal shipping") that can be transferred directly to truck trailers or rail cars. Older facilities that do not have the room to handle containerized shipping have declined. These changes have greatly reduced the number of jobs in the shipping industry.
Much of the cargo formerly carried in American vessels and in those of other major nations is now carried by so-called flag of convenience fleets. Such lines arose with the tendency of large shippers, especially those of Greece and the United States, to avoid the high taxes of their home countries by registering their ships in low-tax nations such as Panama and Liberia. In 1998 about 1.08 trillion tons of goods were imported to or exported from the United States by ship, but vessels flying the U.S. flag handled only 3% of that shipping.
The Columbia Electronic Encyclopedia, 6th ed. Copyright © 2012, Columbia University Press. All rights reserved.