U.S. Shipping CEO Calls for Foreign Seafarers Amidst US Merchant Marine Pay and Crewing Crisis

by Captain John Konrad (gCaptain) In the current American labor landscape, the stark contrast between the assertive strides of transportation unions and the maritime sector’s unique labor challenges is striking. Under the most pro-labor presidential administration in generations, maritime officer unions are – with minor exception – not gaining much ground as they are unwilling to strike or pressure US flagged shipping companies to increase pay, benefits or shoreside opportunities. This has contributed to a significant shortage of qualified U.S. Merchant Mariners, a crisis that Sam Norton, CEO of Overseas Shipping Group, the largest U.S.-flagged tanker company, recently underscored in an interview with Tradewinds. However, instead of pushing for enhanced pay, benefits, and opportunities to attract and retain skilled talent, Norton urges unions to endorse the immigration of foreign mariners prepared to accept current reduced wages and limited shoreside opportunities when they reach retirement age.

“Everybody understands that there’s a labour shortage, but nobody’s really talking about a solution,” Norton told Tradewinds news. “This is an effort that needs work. I think the State Department is listening. I think the Department of Defense understands there is a problem. And I think a strategy can be developed in conjunction with the unions that would sponsor qualified mariners on a path to citizenship.”

Higher Pay After The Threat Of Strike

The salary disparity in the maritime sector is particularly alarming. A brief survey of ship officers holding Master Unlimited Oceans licenses – the highest issued by the US Coast Guard – revealed that some Chief Mates, at the lower end of union contracts, are earning less than the $170,000 in pay and benefits of an average UPS driver under a new Teamsters union contract, negotiated after more than 300,000 teamsters threatened to strike. Starting salaries for ship masters (in at least one union) is only a few thousand dollars higher. This is despite the fact it takes approximately ten years of experience, four years of college and years of STCW and training classes to get a master unlimited license but only a few months to obtain a truck driver certificate license.

The training requirements for ship captains today even exceed that of wide-body airline pilots who are also rewriting union contracts. In March Delta Airlines negotiated a new union $7.2 billion contract that increases pay 34% pushing the pay of some senior widebody pilots above a half million dollars per year. Meanwhile ship officer pay is falling far behind inflation rates. While interviewing senior officers gCaptain learned that many union Chief Mates – the position where the crewing crisis is the most acute – are making less today than I made as Chief Mate aboard a foreign flagged ship 20 years ago.

The workload and responsibilities borne by ship captains and chief engineers, compared to their aviation counterparts, further justify the call for increased pay. Unlike airline pilots who are home frequently and are rerouted around heavy weather, merchant marine captains spend months away from home. They are responsible for navigating aging ships through some of the most treacherous waters, such as the winter North Atlantic, carrying highly dangerous and critical military cargo. These factors coupled with the prolonged periods away from family and the inherent risks of the job, demands recognition through adequate compensation.

Old Ships And Stagnant Pay

The stagnation of wages for U.S. flagged union captains is particularly alarming when viewed through the lens of inflation. Since the 1990s, their pay has seen minimal increases, failing to keep pace with the rising cost of living. This is starkly evident when considering that $1 in 1990 held the same purchasing power as about $2.30 in 2022, and with 2023 witnessing some of the highest inflation rates in decades, the gap only widens. In real terms, U.S. maritime captains are earning less today than they were thirty years ago.

During a recent conference, gCaptain had the opportunity to meet with several union leaders who expressed their frustration with companies reluctant to increase wages. However, they confidently dismissed the idea of exerting pressure on employers with strong union actions like going on strike. It is unclear why they won’t consider the same tactics that truck and aviation unions used to press for more pay.

While the union officials we spoke to off the record did not explain why strikes were not being considered, some suggested that it might be due to the presence of three maritime officer unions (AMO, MEBA and MM&P) competing for the limited number of ships remaining in the US Merchant Marine. Shipping companies have the option to switch unions if one demands significant pay increases. On the unlicensed side, jobs are primarily dominated by a single union – SIU – but it is difficult for them to justify higher pay than officers.

US Government Recognizes The Need For Higher Pay

One government employer – the US Navy’s Sealift Command – has acknowledged the shortage of US mariners and is offering generous sign-on bonuses of up to $55,334. First Assistant Engineer jobs are advertised with an annual salary of $223,537 plus a $43,300 bonus. Although this amount is still considerably less than what union airline pilots make and significantly lower than the $600,000 in bonuses offered by the US Air Force to retain active duty pilots, it is still a substantial sum. However, these jobs push against the US Government’s salary cap and require minimal time off in order to qualify for the top pay. The result is that brand new officers straight out of college (e.g. third engineers are offered $225,4005 their first year) are making close to what the most experienced top officers are being paid.

Historically, U.S. maritime captains enjoyed a pay advantage over their counterparts on foreign-flagged ships, especially given their extensive training and specialization. However, this disparity has significantly diminished over the past decades. Today, International wages paid by the best companies are approaching or, especially in specialized sectors like offshore energy, exceeding what US Merchant Marine captains make without the added benefit of operating more modern ships and without the obligation to fight in future wars or carry dangerous US military supplies to Israel and Ukraine. This shift not only reflects a global leveling of the playing field but also underscores the need to reevaluate the compensation of U.S. maritime captains.

Unless US Merchant Mariners start pressuring their own unions to merge or collectively strike, they are unlikely to get the types of deals UPS drivers and Delta pilots have received.

Historically, US Merchant Marine captains earned considerably more than US Navy captains. However, that is no longer the case. Today, a married Navy captain with 30 years of service stationed on a ship in San Diego can earn over $200,000 per year. These Navy captains, after retiring with advanced degrees and top security clearances, are actively recruited by defense contractors for high-paying shoreside jobs. On the other hand, very few shipping companies hire US Merchant Marine ship captains for shoreside positions, and those that do often offer lower salaries compared to what captains made at sea. When considering retirement benefits and VA benefits over decades after retirement, the pay of USMM captains is significantly lower than that of their US Navy counterparts.

Merchant Mariner Pay & National Security

Urgent needIn conclusion, there is a compelling and urgent case for increasing the pay of U.S. maritime officers. This is not only a matter of fairness, but also recognition of their expertise and dedication. It’s a necessary step to ensure the sustainability and effectiveness of the U.S. maritime industry. As essential contributors to national security and the global economy, U.S. maritime captains deserve wages that reflect their invaluable service and the significant challenges they face.

Wages for unlicensed merchant mariners must also rise, but this will be a difficult task until the bottleneck at the Chief Mate and Master levels is addressed.

Amid a crewing crisis, there's a notable lack of decisive action from unions & shipping companies. The quick fix? Bringing in foreign seafarers for ?? ships. But at a time of growing maritime chaos & heightened DoD reliance on the US Merchant Marine, will hitting the easy button… https://t.co/Mq8oKVxBrg

— John ? Konrad V (@johnkonrad) December 11, 2023

According to Norton, “Most of our employees are 50, 60, 70 years old.” This demonstrates the difficulty that many mariners face when transitioning to shoreside jobs. Instead, they are forced to continue working in harsh conditions aboard aging ships, such as the winter North Atlantic, long after others in other dangerous and physically demanding professions have moved on to office jobs. As a result, younger generations are leaving the industry long before reaching retirement age and becoming stuck offshore. They see the lack of opportunities and inflation adjustments as a dark omen and are voting with their feet to leave the industry before they settle down with families and get “locked into” a long and hard life at sea. Additionally, the allure of job opportunities in related shoreside industries, which have offered raises exceeding inflation targets, is increasingly enticing young officers away.

Benefits Beside Pay

“I want to be very clear that I’m not talking about just replacing US seafarers with foreign seafarers,” Norton told Tradewinds. “There would be visas that provide a green card from the day you land, with a process to earn US citizenship. Everybody understands that there’s a labour shortage, but nobody’s really talking about a solution”

Welcoming foreign labor into the US Merchant Marine and offering paths to citizenship for seafarers could be a real solution, but other measures should be explored first. Can shipping companies offer senior captains more shoreside opportunities with higher pay to show younger mariners that they won’t be stuck on a ship into their 70s? Can unions merge to prevent undercutting each other or agree on collective actions like strikes? Are shipping companies doing enough to market and advertise for inactive mariners to return to shipping? Can US Coast Guard policy be eased to reopen the hawsepipe? Can the US Maritime Administration (MARAD) fund the training needed for advancement into the officer ranks? If the merchant marine is essential to national security, can MARAD reinstate veteran benefits to close the post-retirement wage gap between Merchant Mariners and active duty navy (e.g., the US government historically provided free veteran medical benefits via Marine Hospitals and free retirement housing to US Merchant Mariners at Snug Harbor)? Can the US Navy welcome US Merchant Mariners into advance study programs at places like the Navy War College so they have more opportunities after retirement?

While inviting foreign seafarers to immigrate may help alleviate the crewing crisis faced by Mr. Norton’s company, there are still many other avenues to explore. Unfortunately, unless mariners start pressuring their own unions to merge or collectively strike, they are unlikely to get the types of deals UPS drivers and Delta pilots have received and shipowners like Norton will continue to ask lawmakers to support simple and fast solutions like immigration. If unions don’t start pushing back on wages and benefits, policy makers are likely to mandate more changes like this. Changes their members will not like. With the oceans becoming more dangerous and the military’s maritime transportation needs becoming more acute, lawmakers will likely face pressure from the defense community to find quick solutions to the crisis.

Conclusion Of Crisis

In conclusion, the current state of the U.S. maritime industry, particularly the stagnant wages and challenging working conditions faced by American maritime officers, presents a critical juncture, and very few incentives for young mariners to remain in the industry over the long term. The stark contrast between the strong actions of transportation unions in other sectors and the US maritime union’s reluctance to assert similar pressure (e.g. merge to increase leverage or strike for better pay and benefits) underscores a pressing need for change. The alarming fact that salaries have been stagnant for decades and are now falling far behind inflation, coupled with the demanding and often hazardous nature of their work and few opportunities to retire at a reasonable age, justifies a significant increase in compensation for these dedicated professionals.

The fact that U.S. maritime captains now earn less in real terms than they did three decades ago – and far less over time relative to foreign mariners working for top companies, US Navy officers, and other unionized transportation labor – highlights a systemic undervaluation of their skills and contributions. This not only affects the individuals and their families but also has broader implications for national security and the global economy, given the critical role played by the U.S. Merchant Marine in a time when geopolitical risk is sharply rising (especially at sea).

The proposed introduction of foreign labor as a solution, while pragmatic, should not be the primary focus. Instead, more pay and a multi-faceted approach is needed. This should include exploring options such as merging unions to strengthen bargaining power, union members pressuring leadership to employ more aggressive tactics, voting for younger and more future looking union leaders, companies offering more attractive shoreside opportunities for senior officers, revising Coast Guard policies to encourage re-entry of inactive mariners, reopening the hawsepipe, and enhancing benefits through initiatives like MARAD’s funding for training and veteran benefits. Additionally, creating pathways for continued education, advancement post-retirement and career opportunities in government and defense circles that offer long-term career sustainability.

The challenge lies in the fact that none of these solutions are as straightforward and expedient as enacting a single law that would grant foreign workers US Coast Guard licenses.

It is imperative for maritime unions, shipping companies, and policymakers to collaborate in addressing these challenges. If the U.S. maritime industry is to remain competitive and capable of meeting the demands of a rapidly evolving global landscape, it must prioritize the welfare and advancement of its mariners. Ensuring fair and competitive compensation is not just a matter of equity; it is a strategic necessity that will determine the future resilience and efficacy of the U.S. Merchant Marine.

As we stand at this crossroads, unions and US Maritime Administration officials officials have a choice to press the easy button and open immigration or take actions that will shape the future of the US Merchant Marine, influencing not just the lives of those at sea but the very fabric of American trade and security in the maritime domain.

UPDATE

Read part two of this editorial: Union Fights Back On Proposal To Import Foreign Labor Into US Merchant Marine