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There probably are no maritime academies in the world that can match the professional education provided by Kings Point (inset) and the six state maritime academies. The major goal of these institutions is to educate their graduates for professional careers at sea. But just as there is a wet and a dry Navy, so, too, do these adjectives apply to the merchant marine. And almost no effort is made to equip young officers to man the vital shore side activities.
A recent Proceedings article dealt with the preparation of potential naval shore establishment commanders.1 The thrust was that shore management differs from command at sea and that, in order to be a successful manager ashore, a person needs specialized education and/or training. Although it is not mandatory that managers of ocean carriers have seagoing experience, tradition has certainly dictated that such a route is desirable. As a result, a strong parallel can be drawn between the Proceedings article and similar situations in our merchant marine.
People enter the managerial ranks in a number of ways. Partially as an outgrowth of the individual entrepreneurship role of ship masters in history, a natural progression from ship to shore was established. Even today, numerous managerial positions at all levels are filled with men who have left the sea. A parallel source of managers is retired military officers, often of senior rank, with relevant transportation experience. These paths to the managerial ranks rely on the belief that there is a natural progression from operating the vehicles and that either there is a
'For footnotes, please turn to page 75.
direct relevance between the two or that the managerial skills required can be readily acquired.
In the days of the Yankee traders, when the ship master was himself a businessman, this traditional progression was both logical and useful. Today, however, there are other ways to the management ranks. One is to hire individuals with master of business administration (MBA) degrees but little or no relevant transportation experience. New MBAs in transportation firms usually begin their “apprenticeships” in such functional areas as marketing, finance, traffic, or general management. Ocean carriers have been quite conservative with respect to marketing and engaging in financial analysis to promote firm and industry development. Some contend that this is at least in part a result of the lack of a sound maritime program on the part of the U. S. Government as well as reliance of some liner firms on operating differential subsidies. Some studies have pointed to these subsidies as promoting managerial efficiency ' Changes in the subsidy program via the Merchant Marine Act of 1970 were made to promote increased managerial responsibility and efficiency.3 In spite of this, as an article in Business Week pointed out:
“Edward J. Heine Jr., president of U. S. Lines, contends that ‘the huge subsidy payments camouflage inefficiencies.’ He explains: ‘Companies become so preoccupied with putting together figures for the Maritime Administration to keep subsidy levels as high as possible that they reach a point where they really don't have a good handle on their actual expenses.’ ”4
This brings to the fore another “modern” path to management of ocean carriers—through takeover by a non-transportation firm. Not only are “experts” if various aspects of management able to move into the managerial ranks of the ocean carriers, the carrier if turn has access to the pool of expertise in the parent company. Of Sea-Land Service Inc., an unsubsidized carrier owned by R. J. Reynolds Industries Inc., an
executive at another shipping line has said: “I would rather have R. J. Reynolds behind me than any government subsidy.”'"1
Training and education, therefore, vary with regard to what a particular firm requires. One fact is clear, however: the practice of relying on shipboard experience as the only path to management is gone. The wave of the future is to rely on managerial “expertise” gained via an MBA; relevant managerial experience, probably in some functional area; a managerial training program whereby seagoing personnel are given the opportunity to rotate into shoreside positions on a scheduled basis; or some combination of the above.
One additional path for the development of potential shoreside personnel is new and presents a unique twist to the management of shipping as a whole. Seatrade reported on a project to improve efficiency of Jebsens United Kingdom (a United Kingdom subsidiary of a Norwegian firm):
“The basis of the philosophy behind the project was and remains that the ship should become the ‘production unit’ and that it should be allowed increasing amounts of autonomy and responsibility. The establishment of a self-regulating community at sea involved obviously the devolution of considerable powers that have traditionally been held ashore. These powers fall under three main headings: economic, covering the preparation of, and subsequently the control of, the budget for the vessel; technical, giving the crew power to take all technical decisions that they practically can; and personnel, requiring the crew to arrange their own relief plan and other matters relating to the distribution of responsibility.
“The first stage in the process of shipboard management was the setting up of a management team, consisting of the master, the chief officer, the chief engineer, the second engineer and the purser. The team was encouraged to take over as many of the powers mentioned above as they felt able to do, including repair and overhaul under a planned maintenance system and the control of stores and storing. The extent to which the ships in the fleet have actually gone ahead and taken these responsibilities varies, according to the indi-
Engineering students at the maritime academies undergo extensive training in design and construction. What they don't get is exposure to the real world political and legal realities of the industry in which they will work.
viduals concerned. As the company itself says, ‘From some there has been' a positive and eager response, from others virtually none. We have learned that this has to be accepted; to push too hard, or to try to impose change from a central point only creates resistance to and non-acceptance of change.’ ... A much higher awareness of cost is reported and running expenses are under control. ‘We know that our costs are competitive and substantially below the average running costs shown in General Council of British Shipping surveys for similar types of vessel.’”(>
Few people would disagree with the contention that it is beneficial for a shoreside manager of ocean carriers to be familiar with the operating characteristics and problems of the transport units under his jurisdiction. Regrettably, most of an officer’s seagoing experience does little to prepare him for a managerial position ashore. Seagoing personnel have little contact with financial statements, marketing, labor negotiations, or long-range planning. Moreover, there is little contact between ships and other modes of transportation. Hence, the perspective of a ship’5 officer is potentially very narrow with respect to the role his firm, or mode, plays in the overall transportation network, much less as a part of a complex logistical system. Programs have been established if some companies to rotate seagoing officers through shoreside positions. A popular model is six months sea and six months ashore. Such programs are proving to be attractive incentives for maritime academy graduates to join particular firms. They should mate-
nally increase the quality and quantity of managers ln the maritime field.
Another way of clearing up the educational gap of these potential managers is via quality graduate programs in management, normally leading to a master °f business administration degree. Such programs are an excellent means to secure an understanding of the managerial environment and the tools for operating within it. MBA programs are, by their very nature, general in scope. Most offer an opportunity to spe- Clalize, but breadth takes precedence over depth. In t‘le case of the maritime industry, this should offer n° problems, for such breadth is exactly what officers coming ashore need. However, one problem does Present itself, and that is the lack of attention graduate programs give to the field of transportation, specially water transportation. This author recently administered a survey of all schools accredited by the American Assembly of Collegiate Schools of Business- There was a 78% (154 of 197) return rate. Of these schools, only 58 offer any courses in logistics ar>d/or transportation at the graduate level. Of the graduate courses offered, only four have course offer- ln8s that deal with water (one) or international (four) transportation. There are 24 that offer a course in transportation policy, and 17 offer a seminar in transportation. Both of these courses could focus on Water transportation. The understanding of the conCept of logistics—and the relationship of water car- ners fo other modes of transportation—is imperative t0 the proper management of an ocean carrier.
The picture in accredited undergraduate business Programs is not much better. Of the 154 responding schools, 87 offer undergraduate courses in rransportation/logistics. Of these, 58 offer an intro- uctory course in transportation, and 53 offer an introductory course in logistics. This is encouraging, except that only 26 of the introductory transporta- Cl°ri courses cover international water transportation and virtually all schools use texts that make little, if any, mention of ocean carriage. Moreover, only four °h these schools offer a course in international transportation. Given this picture, one can see that the sohools and colleg es of business pay little attention to
e concerns of our ocean carriers. There is little W°nder why the public, including people in the Us*ness world, have such little appreciation of the Problems of the U. S. merchant marine.
As for the federal and state maritime academies,
ere are two obvious degree vehicles these schools Can Use to provide maritime officers with the educa- t,0nal framework to meet the demands of shoreside executive decision-making. One is via their undergraduate programs; the other is through programs at the master’s degree level. There are pros and cons to each. Let it suffice to say that offerings at both levels are preferable so that individual needs may be met. The leaning of this author is to provide some background in transportation and management courses at the undergraduate level. Then, after duty at sea, individuals can build on both the undergraduate background and seagoing experience to maximize the benefits from a graduate program in management.
This country relies on one federal and six state maritime academies to provide the primary education for merchant marine officers:
^ The U. S. Merchant Marine Academy at Kings Point, New York, was established in 1938, is accredited, and offers the bachelor of science degree in both nautical science and marine engineering. It also has a dual program whereby midshipmen can elect to prepare for both the third assistant engineer and third mate licenses. Instead of using a school-ship for professional training as do the state academies, Kings Point places its midshipmen aboard regular merchant vessels. Each midshipman receives training on board a number of vessels, usually on more than one trade route. While at sea, a midshipman serves as a member of the vessel’s contingent and also completes, as part of the academy’s curriculum, a number of written assignments in various professional and academic areas.
^ The Great Lakes Maritime Academy is located in Traverse, Michigan, and is the only maritime academy operating on fresh water. It is also the only academy operating as part of a community college, and, hence, offering an associate rather than a bachelor’s degree. The graduates are prepared for serving on board vessels operating on the Great Lakes and are qualified to sit for either a first class pilot license (Great Lakes) or third assistant engineer’s license.
y The Massachusetts Maritime Academy, located in Buzzards Bay, was founded in 1891. The academy is accredited and grants the bachelor of science degree in marine engineering and in marine transportation. It has been part of the state college system since 1964.
^ The State University of New York Maritime College is located at Fort Schuyler. It is an accredited specialized college of the SUNY system offering coursework leading to the bachelor of science or bachelor of engineering degree. The program is designed to prepare students for positions at sea and ashore in the maritime field. This academy is also the only one that offers coursework leading to a graduate degree with a specialization in transportation management.
► The Maine Maritime Academy was founded in 1941 and is located in Castine. The accredited academy preparation leads to a bachelor of science degree in nautical science and marine engineering. As is true of all the state maritime academies, the Maine Maritime Academy operates a school-ship. As part of the degree requirements, all cadets are required to spend time on board the ship to gain practical experience in various facets of ship operations.
► The California Maritime Academy was established in 1929 and is located at Vallejo. The academy is currently a candidate for accreditation and offers the bachelor of science degree in both marine engineer
ing technology and nautical industrial technology- As with the other academies offering bachelor degrees, the program is four years in duration and students normally attend 11 months a year to accommodate the classroom and seagoing portions of the programs.
► Moody College of Marine Sciences and Maritime Resources is part of Texas A & M University and 15 located at Galveston. The Texas Maritime Academy is an academic division of Moody College and was created in 1962. The programs of the other maritime academies have a primary focus on the preparation of students to become merchant marine officers. The Texas Maritime Academy, on the other hand, offerS such preparation as an option to its degree programs in marine biology, marine engineering, and marine sciences. The degree in marine transportation is a basic degree and licensing program, and the degree in marine systems engineering has no license option- All degrees are the bachelor of science.
Kings Point and the state academies provide an excellent source of ships’ officers. There are small variances in the curricula; however, all have a strong professional orientation guided to a considerable extent by the preparation for the U. S. Coast Guard license examinations. There are probably no maritime academies in the world that can match the professional education provided by these institutions- All receive substantial federal funding and, of course, Kings Point is entirely financed by the federal gov' ernment. Also, when one considers that the graduates are able to assume full responsibility for a watch upon graduation, one can certainly praise the job these academies are doing in educating theif graduates for professional careers at sea.
One must ask, however, whether these acadenmeS are doing the full job that should be expected of them. To date, the government has been concerned only with the education of seagoing officers. There has been virtually no concern with the preparation 0‘
usiness: accounting, management, finance, labor re-
academy graduates to help man the vital shoreside activities. This view of the role of academies on the part of the government is reflected in the curricula. Omitting the Great Lakes academy, which does not °ffer a bachelor’s degree, five of the six academies require that potential deck officers take a course familiarizing them with the environment of marine rransportation. Only two permit potential engineers t0 take such a course even on an elective basis. It is difficult to understand how one can justify graduates a person from a maritime academy without requiring at least one course that would provide an understanding of the economies of the industry and the Political/legal environment within which it must operate. For example, Kings Point offers a sound course ln marine transportation which provides an excellent background to understanding the industry. Yet, only deck and dual program midshipmen are required to cake this course. Engineering students may complete cheir program without once being exposed to the tealicies of the environment in which they will be expected to operate.
A second area of concern is the lack of courses dealing with the total environment of transportation aud an appreciation of some of the basic concepts of at'ons, marketing, etc. There may be optional c°urses or programs provided, although in three of che six academies, the course offerings in these areas are quite weak. One might ask, however, if all the academies should not require at least some of these c°urses; they are required in minors programs at . ew York and Texas. Also, even where such offer- jn8s exist, engineers appear to be prohibited, or at ast discouraged, from taking such courses. Given e potential role of these engineering graduates in °teside positions, a legitimate question can be raised as to whether such an educational policy is ^°und. There is one final point regarding curricula.
°n-degree programs designed to meet immediate Professional updating are also valid courses for ‘Tadernies to offer and some, such as New York and . lngs Point, do. All academies in the general prox- Jrdty of carrier offices should provide such services.
ese programs are excellent means of providing Vltal services to current managers and, at the same tlrne. can materially assist in reinforcing degree programs.
'n summary, there is clearly a need for increasing Managerial efficiency of ocean carriers, and many car- ’ers are responding to this need. The recent thrust of Qj.e Soviet Union into the liner trade, the interaction ^ domestic and international shipping with the aska pipeline, subsidized versus non-subsidized services, proposals for extended cargo preference, and certainly the relationship between ocean and land transportation call for competent innovative management. With the U. S. merchant marine carrying but 4.5% of U. S. foreign waterborne commerce, and with recent bankruptcies of carriers such as Pacific Far East Lines and States Lines, concerns with managerial development and efficiency are in material focus. While the market had its role, certainly the lack of transportation experience and overall questionable management decisions played a major role in PFEL’s demise.7 Carriers must be managed as modern concerns which are part of international business as a whole.
Our academies are important, but their role should be expanded. They should concentrate on education for the entire maritime industry, not just seagoing positions. Such an expanded mission should be reflected in federal funding. Renewed attention must be given to these institutions. If not, the government, the maritime industry, anti the academies themselves will surely miss the boat. The U. S. economy, national defense, and, hence, society as a whole, will suffer the consequences.
After graduation from the U. S. Merchant Marine Academy in 1961, Dr. Bess worked for the Hawaiian Tug and Barge Co. In 1963 he returned to school, earning an MBA and a Fh.l). with a major in transportation from UCLA in 1964 and 1967 respectively. Since 1967 he has been employed by the University of Hawaii, where he is an associate dean and professor of transportation in the College of Business Administration. During the academic year 1973-1974, Dr. Bess was on sabbatical leave during which he served as a visiting professor at Kings Point and as a visiting scholar at UCLA. He is the author of Marine Transportation, 1976, and of numerous articles and professional papers in the maritime and airport management fields.
'Howard Norman Kay, "Managing the Shore Establishment," United States Naval Institute Proceedings, December 1977, pp. 18-25.
2See Allen R. Ferguson, et. al., The Economic Value of the United States Merchant Marine (Evanston, Illinois: Northwestern University, 1961); Samuel A. Lawrence, United States Merchant Shipping Policies and Politics (Washington, D.C.: Brookings Institution, 1966); and John G. Kilgour, The U. S. Merchant Marine: National Maritime Policy and Industrial Relations (New York: Praeger Publishers Inc., 1975).
3See David Bess, "An Act of Faith and Hope," Proceedings, March 1975,
pp. 43-49.
4"The search for a workable maritime policy,” Business Week, 17 July 1978, p. 99.
*Ibid.
‘'"Taking the Management Responsibility to Sea," Seatrade, April 1978, pp. 3-4.
7See "Why Pacific Far East is close to drowning,” Business Week. 19 June 1978, pp. 28-29; and "PFEL—Success Story That Faltered Under the Lash "Seatrade. December 1978, p. 23.