Maersk’s journey with U.S. flagged ships got a boost with the acquisition of SeaLand in 1999, a company established by the pioneer of containerization, Malcom McLean. This acquisition merged SeaLand with Maersk Lines Limited, a U.S.-based subsidiary managing both the fleet and military contracts. Maersk’s commitment to supporting its U.S.-flagged fleet has until recently, been unwavering, offering thousands of union jobs to U.S. Merchant Mariners over the years including the crew aboard Captain Philip’s ill-fated ship Maersk Alabama.
However, with rising geopolitical tensions and the US government’s renewed focus on maritime policy, the US Maritime Administration (MARAD) is emerging from decades of neglect with few additional resources to manage relationships. This is evident in the stark contrast between MARAD, which has only 800 staff members, and its sister agency, the Federal Aviation Administration, which employs 45,000 people. As a result, the US Government — including MARAD, the Biden administration and Congress — is now facing a complex set of challenges that are hindering companies like Maersk from strengthening America’s maritime industry. An industry is increasingly important for a military facing severe logistical challenges in the Black and South China Seas.
When asked about investments in China vs the United states Ed Hanley, Vice President Maersk Line Limited, said the company has been expanding strategically to better serve the North American market. In 2020, Maersk acquired Performance Team to strengthen its presence. In 2021, it acquired Visible Supply Chain Management to enhance its supply chain capabilities. In 2022, Maersk incorporated Pilot Freight Services into its portfolio.
According to Hanley, Maersk executive interviewed by gCaptain today, the company plans to maintain its support and investment in container services and the US Maritime Security Program. However, it has already divested its critical tanker fleet and contracts to manage military grey hull ships. Maersk also was clear the recent divestiture of sale of assets received the approval of key military stakeholders including the US Maritime Administration (MARAD), Military Sealift Command (MSC) and the US Transportation Command (TRANSCOM).
How critical are those assets to the US Military? Very.