The Impacts Of The War On Terrorism On Maritime Shipping

Abstract

The terrorist acts that destroyed the World Trade Center and part of the Pentagon have, of course, changed much of the world in many ways since September 2001. Among those effects has been a pronounced and noticeable shift in airport and aircraft security.  Much less noticeable to most Americans has been the impact of added security and changed priorities on maritime transportation systems.  But maritime security actually has a far greater impact on commerce than does air security because most cargo moves worldwide via commercial ocean-going vessels.  Security requirements and wartime priorities are compelling the world’s governments to more closely monitor and inspect all vessels and cargo entering their nation’s ports.  The US Coast Guard’s inspections are forcing tremendous delays upon entering vessels.  The consequences of losing millions of dollars daily both for shipping companies and cargo interests create severe economic and logistical problems that impact all transportation modes.  The new US embargo on 24 small countries may force them into bankruptcy unless they comply with US requests to end terrorism.  These countries depend on exports and imports for a large portion of their GDP, which will be dramatically reduced unless they join the war against terrorism. This paper examines five impacts on the US and world shipping industry caused by the war on terrorism--those on:  1) vessel and port security; 2) transportation- and trade-related communications; 3) trade levels; 4) marine insurance; and 5) maritime and related freight rates.  Then the authors draw some conclusions regarding possibilities of reflagging of ships and effects on the status of the US merchant marine industry.