Maritime transportation networks, which include both port and maritime services, are the most cost-effective way to move large-volume, long-distance shipments between sources and end users. A vast range of goods and commodities travel globally through maritime services, including:
- bulk and containerized raw materials
- energy supplies
- agricultural goods
- consumer products
In 2022, imports by water from the United States’ top three trading partners - Canada, Mexico, and China - totaled more than $400 billion, and accounted for roughly a third of total imports across modes of transportation from those three countries. In general, approximately 99% of all trade by weight that year traveled by water.
Port services are the shoreside functions necessary for the receipt, storage, and movement of cargo to and from waterborne vessels such as ships and barges. These operations are controlled by a port authority which, in the United States, is usually a government agency at the state or local level that either operates the port facility or leases the terminals of the port to individual operators.
Terminals operate within ports and are designed to receive different types of cargoes from ships that are purpose-designed to carry these cargoes. Terminals can be designed to handle liquid bulk, dry bulk, breakbulk/project cargo, roll-on/roll-off (ro/ro) vehicle carriers, or container ships. Terminal operators need a combination of specialized handling equipment and longshore labor to complete the work of loading and unloading ships and transferring cargo in and out of the port.
There are many options in the U.S. domestic port market. Publicly owned or operated terminals frequently handle container and ro/ro traffic, while there are many privately owned and operated terminals that handle bulk cargoes such as wood pellets, coal, and liquid natural gas.
Maritime services, which are reliant on port services, are the waterborne services provided by ocean carriers to move cargo for their customers. Ocean carriers can operate on a liner service or on a contract basis. Commodity shipments such as liquid bulk petroleum products and bulk agricultural products often move on bulk carriers on a contract basis. Container ships operate in liner services, where they run regular routes and sell space on each ship similar to passenger air travel. Maritime services largely consist of foreign enterprises that own or operate ships to deliver imports to the United States and to export U.S. commodities.
Port Labor Relations
The International Longshoremen’s Association (ILA) and the International Longshore and Warehousing Union (ILWU) are the labor organizations which represent port workers on the East and Gulf coasts and West coasts of the United States, respectively. They each negotiate six-year contracts with the relevant negotiating body, the Pacific Maritime Association on the West Coast and the U.S. Maritime Alliance (USMX) on the East and Gulf Coasts. The ILWU in 2023 and the ILA in 2024/25 have negotiated master contracts which define pay, benefits, working hours, and methods of work. Labor actions were a possibility during both negotiations, with a three-day strike in October 2024 by the ILA. In both negotiations, port automation was a key area of concern. As other countries increase the amount of automation in their ports, future negotiations with U.S. labor unions will increasingly have to include ways to automate ports to remain competitive. The maritime employers, namely the ocean carriers and ports, will need to create pathways for labor to still have a large role in their operations.
Suez Canal/Red Sea Disruptions
Since the war between Israel and Hamas began in October 2023, at least 110 commercial vessels have come under attack by Iran-backed Houthi rebels from Yemen in the area around the Bab-el-Mandeb Strait, which connects the Red Sea to the Gulf of Aden. After increasing in frequency and intensity in June 2024, the attacks on commercial vessels returned in July to levels similar to those earlier in the spring of 2024. Attacks continued through 2024 and into 2025, including attacks on commercial shipping and naval vessels alike. In January 2025, the Houthis announced that they planned to stop their attacks against commercial ships in the Red Sea in light of the ceasefire agreement, allowing for the possibility of returning to normal operations. Most shipping companies, however, are still choosing to avoid the region in a wait-and-see approach rather than risk being diverted or coming under attack. The route around the Cape of Good Hope adds approximately 7,000 miles and an additional two weeks’ sailing time to the journey. In some cases, this diversion can add up to $1 million in additional costs for each round trip. According to FreightWaves, up to 90% of container vessels have been rerouted away from the Suez Canal.
Panama Canal Drought
Beginning in 2023, drought due to the El Niño effect reduced the water levels of Gatun Lake, the reservoir that fuels the Panama Canal, to the lowest level since 1950. As a result of the reduced water levels, fewer ships were able to transit the Canal. After reducing daily transits to 22 in February 2024, the Panama Canal Authority (ACP) gradually increased the number of daily transits allowed through the Panama Canal until the start of the rainy season from May to October 2024. Disruptions to movement through the Canal result in longer transit times and more expensive shipping globally. While the 2023-2024 dry season is over, and shipping is back to normal, more seasons of drought can be expected in the future, to include more extreme El Niño events.
Jones Act
The Jones Act primarily refers to Section 27 of the Merchant Marine Act of 1920 (P.L. 66-261, largely codified at 46 U.S.C. §55102 et. seq.), which governs domestic transportation of merchandise by sea. The Jones Act generally restricts commercial shipments between U.S. ports to U.S.-owned and -flagged ships. Consequently, foreign-flag vessels are generally prohibited from engaging in U.S. coastwise trade and cannot transport merchandise between U.S. ports. In addition, the same prohibitions typically apply to U.S.-flag vessels that are not coastwise qualified.
The Jones Act enjoys strong domestic political support from the U.S. maritime transport and shipbuilding sector, the U.S. shipping industries that are dependent on domestic maritime transport, the U.S. merchant marine union (the Seafarers International Union of North America, AFL-CIO), and the U.S. dockworkers’ unions (the East Coast’s International Longshoremen’s Association (ILA) and the West Coast’s International Longshore and Warehouse Union (ILWU).
Detractors of this legislation argue that it is a barrier to trade that raises the price of transportation to parts of the United States only accessible by water, such as Hawaii and Puerto Rico. The topic has also frequently been raised as an alleged market access barrier in bilateral and multilateral trade discussions and negotiations.
The Committee on the Marine Transportation System is a federal interagency committee where government agencies with equities in marine transportation gather to coordinate their activities.
