Written by Robert Shuford

As discussed in last week’s article, The Merchant Marine Act of the 1930s, America’s maritime industry was fully revitalized under President Roosevelt’s leadership during the period leading up to and throughout World War II.

Unfortunately, the post-World War II era brought changes to the Maritime Administration’s organization. Although America emerged as a world superpower, the government quickly implemented two programs that played a major role in the decline of American shipping.

Merchant Ship Sales Act of 1946
After World War II, the U.S. government had a large surplus of ships built during the war. The Merchant Ship Sales Act of 1946 directed the Administration to sell the surplus to private individuals and companies, including foreign shipping firms, in an effort to revive a struggling global trade industry. The goal of the Act was to strengthen the American merchant marine for commercial trade and national defense. Additionally, the Act encouraged acquisitions, promoting the continued use of American shipyards and supporting commercial shipping activities.
The unintended consequence was that flooding the international market with cheap surplus vessels significantly depressed demand for new ships in U.S. shipyards, leading to a complete market contraction. In America, widespread mergers began and shipyards closed, while the sale of American ships laid the groundwork for explosive growth in competitor nations, enabling them to rebuild and become highly competitive, it had the opposite impact domestically. The Act’s policies encouraged shipowners to register their vessels in countries like Panama and Liberia under “flags of convenience,” allowing them to bypass U.S. labor and tax laws. All of these factors contributed to a loss of market share for U.S. operators, even on U.S. trade routes.
To make matters worse, as the number of U.S.-flagged vessels decreased, the number of jobs for American maritime workers also declined, leading to stagnation in the maritime sector.

The Marshall Plan (European Recovery Program)
The Marshall Plan was a large-scale economic aid program that the United States offered to Western European countries after World War II. Its goal was to help rebuild their economies and prevent communism from spreading. Between 1948 and 1951, the aid enabled European nations to buy American goods such as food, fuel, and machinery, which were transported across the Atlantic. This initiative restored infrastructure, revived industrial and agricultural production, and created new markets for American exports.
While America’s goodwill aided in rebuilding foreign shipping fleets, it greatly harmed the U.S. maritime and manufacturing sectors.

The Manufacturing Impact of World War II
While the command economy established during World War II is the reason U.S. manufacturing surged, by January 1946, America’s manufacturing output had significantly fallen after the war ended. This post-war slump led to a consumer society, and U.S. manufacturing experienced a long-term decline in size and dominance due to globalization, lower labor costs abroad, and technological progress.

Additionally, the U.S. invested in rebuilding other countries, unintentionally creating new competitors that eventually surpassed the U.S. in some sectors.

While exact numbers are difficult to pinpoint, there were approximately 70 shipbuilders in the U.S. during the 1920s and 30s. Today, there are roughly 20. [I think it is also important to note the production capacity, not just number of shipyards. Something like we went from being able to produce XXX number of ships over XXX tons per year to now only Y number of that same size – I think it will highlight / exacerbate how big the drop off is] And while the U.S. maritime industry has played a vital role in several international crises (the Suez Crisis in 1956, the OPEC oil embargo in 1973, and the end of the Cold War in 1989), American shipyards have always been at the mercy of decisions made by the U.S. government.