MARAD and the Navy's Inactive Fleet are two separate entities. MARAD is not
a Navy facility, but is under the Department of Transportation (DOT).
MARAD maintains the National Defense Reserve Fleet (NDRF)
as a ready source of ships for use during national emergencies and assists
in fulfilling its traditional role as the nation's fourth arm of defense in
logistically supporting the military when needed.History
The US Maritime Commission was created as an independent agency by the
Merchant Marine Act of 29 June 1936, to further develop and maintain a
merchant marine for the promotion of US commerce and defense. It was
authorized to regulate US ocean commerce, supervise freight and terminal
facilities, and administer Government funds to construct and operate
The Commission was the successor agency of the US Shipping Board and the
US Shipping Board Bureau of the Department of Commerce. It also took over
the property and records of the US Shipping Board Emergency Fleet
Corporation, known as the US Shipping Board Merchant Fleet Corporation,
after 1927. When the War Shipping Administration was established in 1942,
it took over many functions of the Commission, including the operation of
the merchant marine and the shipbuilding activity remained under the
Commission. These functions were returned to the Commission after
1 September 1946.
The Commission was abolished on 24 May 1950, and its functions were
transferred to the Department of Commerce where they were assigned to the
Federal Maritime Board and the Maritime Administration (MARAD).
The Maritime Administration was established by Reorganization Plan No. 21,
effective 24 May 1950, as one of the successor agencies to the US Maritime
Commission. It administers financial programs to develop, promote, and
operate the US Merchant Marine; determines services and routes necessary
to develop and maintain American foreign commerce and requirements of ships
necessary to provide adequate service on such routes; conducts research and
development activities in the maritime field; regulates the transfer of
US documented vessels to foreign registries; maintains equipment, shipyard
facilities, and reserve fleets of Government-owned ships essential for
national defense; operates the US Merchant Marine Academy at Kings Point,
NY; and administers a Grant-In-Aid Program for State operated maritime
academies in California, Maine, Massachusetts, New York, and Texas.
When the Federal Maritime Board was abolished in 1961, its functions
relating to the subsidization of the merchant marine were transferred to the
Secretary of Commerce who established the Maritime Subsidy Board within
the Administration to perform these functions. This latter Board negotiates
contracts for ship construction and grants operating-differential subsidies
to shipping companies.
The Maritime Administrator is vested with the residual powers of the
Director of the National Shipping Authority, which was established in 1951
to organize and direct emergency merchant marine operations.