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Maritime Administration (MARAD)

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.

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 commercial ships.

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.