Hearing

The State of the U.S. Flag Maritime Industry

2167 Rayburn House Office Building

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0 Wednesday, January 17, 2018 @ 10:00 | Contact: Justin Harclerode (202) 225-9446


This is a hearing of the Subcommittee on Coast Guard and Maritime Transportation.

Summary of Subject Matter

Wittnesses:

Panel I:

  • Rear Admiral John Nadeau, Assistant Commandant for Prevention Policy, United States Coast Guard | Written Testimony
  • Rear Admiral Mark H. Buzby, USN Ret., Administrator, Maritime Administration | Written Testimony  

Panel II:

  • Mr. Matt Woodruff, President, American Maritime Partnership | Written Testimony 
  • Mr. Eric Ebeling, President and Chief Executive Officer, American Roll-On Roll-Off Carrier On behalf of USA Maritime | Written Testimony
  • Mr. Aaron Smith, President and Chief Executive Officer, Offshore Marine Service Association | Written Testimony
  • Mr. Matthew Paxton, President, Shipbuilders Council of America | Written Testimony 
  • Mr. Bill Van Loo, Secretary Treasurer, Marine Engineers’ Beneficial Association | Written Testimony

Chairman Duncan Hunter (R-CA)
Subcommittee on Coast Guard and Maritime Transportation
Hearing on “State of the U.S. Flag Maritime Industry

January 17, 2018
Opening Statement
(Remarks as Prepared)

 

The Subcommittee is convening today to review the state of the U.S. flag maritime industry, including the U.S. merchant marine. 

The Jones Act was enacted in 1920 as part of the Merchant Marine Act.  It encouraged a strong merchant marine to support both national defense and economic security.  For a vessel to move merchandise or passengers between two points in the United States, also called the coastwise trade, a vessel is required to be - owned by a U.S. citizen, U.S. flagged, built in the United States, and crewed with U.S. mariners.  

There are over 41,000 U.S. flagged vessels in the U.S. coastwise trade moving 115 million passengers and nearly $300 billion worth of goods between U.S. ports on an annual basis.  The use of a U.S. flagged, built, and crewed vessel in the domestic coastwise trade can be waived by the Secretary of Homeland Security in two ways under section 501 of title 46, United States Code. 

The first waiver authority, outlined in subsection 501(a), is at the request of the Secretary of Defense for the purposes of national defense. The second, outlined in subsection 501(b), is also for the purpose of national defense; however, MARAD is required to make a determination that no U.S. vessel is available. The subsection 501(a) waiver authority was used by the Secretary of Homeland Security for responses to Hurricanes Harvey, Irma, and Maria. U.S industry raised concerns regarding the use of the waiver authority.

Out of the over 41,000 U.S. flagged vessels, there are only 82 vessels active in international commerce, down from 850 vessels 35 years ago. The United States has cargo preference requirements where a percentage of U.S. government cargo, including international food aid, be transported on U.S. flagged vessels. One intention behind the requirement is to ensure a merchant marine – both vessels and mariners – remain available and capable to provide sealift capacity in times of conflict or national emergencies.  Out of those 82 vessels, sixty vessels participate in the Maritime Security Program which provides an annual stipend to military useful oceangoing vessels to support military sealift operations.

In order to maintain the capabilities necessary to assist military operations and continue to conduct coastwise trade operations, the U.S. flagged fleet needs a strong, proficient pool of U.S. merchant mariners. 

Officials in the Administration have reported to the Committee that the active pool of U.S. merchant mariners is decreasing due to retirements and low recruitment rates.  To work to address any potential gaps, Members of this Subcommittee support increasing the opportunities for military mariners to transition into civilian mariners.  Mariners in the Armed Forces have skills that can successfully translate into the civilian workforce.  Military mariners just need to know about what civilian opportunities are available and how they can attain the proper certificates during their military career to successfully transition into a civilian career.

The Subcommittee held two listening sessions in 2016 that included military and civilian participants to discuss what needs to be done to create a more seamless process for military mariners to transition into a civilian mariner career.  In addition, the Department of Defense reported that in 2016 and 2017, the Navy, Army and Coast Guard participated in MERPAC meetings, conferences, and working groups to make further progress on this issue.

I look forward to discussing where we are now and the importance of ensuring the United States has a strong merchant marine.  The civilian mariner workforce is facing a potential shortage and military mariners can be a way to bridge any gaps as well as provide an ongoing source of retired, experienced military mariners.

I thank our witnesses for being here today and I look forward to hearing their thoughts on issues relating to the state of the U.S. flag maritime industry.

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