REMARKS AS PREPARED BY

MARITIME ADMINISTRATOR REAR ADM. (RET) ANN PHILLIPS

AT Marine Trades Department of the AFL/CIO 

Buena Vista, FL

 

INTRODUCTION 

Thank you for the warm reception this morning.   

I am delighted to be here.  I’m also delighted to meet Mike Sacco for the first time—and on such a historic occasion! 

Let me take this moment to thank you for your incredible 35 years of service to the maritime industry and to our nation!   

You fought for the dignity of every mariner—whether they were an SIU member or not. 

I also know you and SIU were always moving heaven and earth to ensure that we had the mariners we needed for a Ready Reserve activation.  

THANK YOU for everything!  

I wish you fair winds and following seas and every blessing in retirement!   

I also wish David Heindel the very best in his new role—and I look forward to working closely with him. 

And of course, a big thank you to Augie Tellez.  I deeply appreciate his leadership, counsel, and support. 

On behalf of the Maritime Administration and Transportation Secretary Pete Buttigieg, I am honored to join you to talk about my priorities as the Maritime Administrator.   

As a retired U.S. Navy Rear Admiral, I can tell you that our enduring commitment to the historic naval elements of deterrence, sea control, power projection, and maritime security remains essential to America’s national security strategy today.   

And the only way we can achieve these results is through the work that you and your members contribute to our sealift enterprise.   

They are part of our essential team whether sailing on ships, building them, or fixing them.  And I can tell you—I, WE—need your continued stewardship in this regard.   

I will do all that I can while I am serving as Administrator to support the men and women you represent because they are the backbone of our Nation’s strength—Sealift In Peace and War since 1775. 

A lot has changed in the past three years since COVID racked the world.  Outside of the medical community, I can think of no group of workers more affected than our transportation industry workforce.   

Mariners and transportation workers didn’t get to telework from home as we vital supplies to move, and as our supply chains were strained by unprecedented demand.   

Instead, they had to come in person to answer the call to work the ships, ports, and shipyards to keep us fed, healthy, and secure. 

And I know that today, your workforce is dealing with new challenges.  Everywhere I go, everyone I talk with wants to discuss their challenges in recruiting and retaining talent.   

This is a top concern to MARAD, and we are working with industry, with management, across government, and, of course, with labor, to better understand these challenges and to determine where we can lean in to help change the course with the tools that we have. 

I look forward to continuing to work with all stakeholders to tackle these challenges and make sure our sealift enterprise is ALWAYS ready to answer the call! 

Today, I want to talk briefly about both our U.S.-flagged coastwise Jones Act fleet as well as our U.S.-flagged foreign trading fleet.   

JONES ACT 

Let me start with the Jones Act fleet. 

As you know, this Administration is unwavering in its support of the Jones Act.  The Jones Act is essential to maintaining national security by ensuring sealift capability—and it supports well-paying union jobs. 

As you also know, the Fiscal Year 2023 National Defense Authority Act—the NDAA—made numerous changes to the Jones Act waiver process. 

Specifically, it requires the President—rather than the Department of Homeland Security—to make determinations regarding whether a waiver is in the interest of national defense. 

It requires DHS to publish waiver requests when they are received and prohibits the issuance of waivers until 48 hours have elapsed after the publication of a waiver request. 

It also prohibits MARAD from conducting any retroactive surveys and it prohibits the issuance of waivers for cargoes that are already laden. 

Taken as a whole, the NDAA changes make clear that waiver requests are to be considered on a case-by-case basis—as we have done throughout this Administration. 

This Administration will comply with these requirements whenever a waiver request is received—and I can assure you we will continue to enforce the Jones Act in accordance with Federal law. 

U.S.-FLAGGED FOREIGN TRADING FLEET 

Let me now turn to talk about issues affecting our U.S.-flagged, commercial operated, foreign trading fleet. 

As the Maritime Administrator, I work closely with my colleagues—particularly General Jackie Van Ovost, the Commander of the U.S. Transportation Command, and in the Navy, VADM Williamson, the N4, and Admiral Wettlaufer at Military Sealift Command—to understand and ensure MARAD meets our nation’s evolving sealift needs. 

In June of last year, we were honored to have General Van Ovost speak at the graduation of the U.S. Merchant Marine Academy.   

Addressing our graduates—our nation’s newest merchant mariners—she said that, quote, “as a maritime nation, our national security depends on the Merchant Marine.” 

However, General Van Ovost also warned the graduates that they, quote, “are about to face challenges our country has not encountered since WWII.”   

She also warned that, and again I quote, “Contested waters will stress our logistics lines all the way from home port.”  

We must be able to meet this potential challenge.  And to do that, it is critical to recognize that there is an essential interdependence between the commercial and military elements of the maritime industry.   

A healthy commercial maritime industry is critical to support DoD force mobilizations.   

Further, the size of our commercial fleet determines the number of billets available to sealift qualified mariners, both officers and ratings, who can also meet our sealift sustainment needs.   

MARAD works at these overlapping intersections to strengthen our sealift enterprise by administering commercial sealift programs, managing the operations of our government-owned Ready Reserve Force, and helping to train the next generation of mariners. 

STATUS OF THE MERCHANT MARINE 

Without mariners, there will be no ships.  That’s the bottom line. 

However, MARAD’s most recent study assessing mariner availability—which was completed in 2017 at the request of Congress—estimated that there was a shortfall of approximately 1,800 mariners.   

And recent anecdotal evidence, including information you have told us, suggests the mariner shortage is worse. 

The merchant marine, like every industry, has been profoundly affected by the COVID-19 pandemic.  

MARAD is deeply concerned by studies warning that the stress of being a mariner is taking a stark toll on those who sail.  MARAD supported and facilitated a 2021 University of Washington study that found that approximately one-fifth of U.S. mariners were at risk for major depressive disorder.  

These findings are startling—and MARAD has been working to raise the alarm and to provide access to information about support systems on which mariners can draw when they need assistance.   

Thank you for all that you are doing to support mariner well-being. 

In September of last year, I convened a forum attended by more than 75 industry stakeholders including some in this room, to discuss the mariner shortage.   

Among many issues, we discussed the fact that providing better work/life balance to today’s merchant mariners—comparable to the quality of work life that workers in other sectors of the economy—is fundamental to making any headway in mariner availability.   

Mariners deserve a commitment from their employers to a high-quality work/life balance, including safety at sea, along with digital connectivity and modern quality of life on board their ships.   

In fact, it is time for us to look at internet connectivity as an essential investment in operational efficiency and the health and welfare of crew.   

And we also need to look at basic issues such as career planning for our maritime workforce and support for professional development aspirations.  

EMBARC 

Further, we must ensure that mariners’ working environments are safe—and that the maritime industry is a place where every mariner can succeed on the basis of their professionalism and skill. 

As you all know, in late 2021, we paused the at-sea training of Midshipmen at the U.S. Merchant Marine Academy so that we could implement new measures to strengthen protections for our cadets and spur culture change across the industry. 

The program we introduced was called Every Mariner Builds a Respectful Culture or EMBARC—and I am pleased to announce that there are now 16 carriers enrolled in the program. 

It has been MARAD’s requirement since December 2021 that commercial operators must adopt EMBARC standards before cadets can embark on their vessels.   

But now, the National Defense Authorization Act (NDAA) for Fiscal Year 2023 mandates BY LAW that commercial carriers comply with EMBARC before they can train cadets. 

The NDAA also mandates BY LAW that carriers’ sexual assault and harassment prevention and response policies be implemented in their vessels’ Safety Management Systems.   

This was a central tenet of the EMBARC program and one we implemented to make sure this is a safety priority for every mariner aboard a vessel. 

While we are still working to fully assess the many provisions included in the NDAA related to EMBARC, I’ll emphasize that developing a final rule on EMBARC is a very high priority for MARAD. 

I know that culture change is happening—and I want to thank EVERYONE in this room for your support of this change and of the EMBARC measures from the moment we announced the Sea Year pause until today. 

Thank you for all that you are doing to support culture change across the industry. 

Let me now also discuss our commercial sealift programs. 

MARITIME SECURITY PROGRAM 

As you know, the Maritime Security Program maintains a fleet of 60 modern, privately owned U.S.-flag ships, active in international commercial trade and available on-call to meet DOD contingency requirements.  

The current MSP fleet provides cargo capacity that now exceeds 3.4 million square feet—the highest level in the program’s history—and it employs some 2,400 U.S. mariners. 

However, these ships must also have cargoes—and here is another point at which the elements of MARAD’s policies intersect to support our sealift enterprise. 

CARGO PREFERENCE PROGRAMS 

Last year, I testified before the House Subcommittee on Coast Guard and Maritime Transportation regarding our cargo preference programs.   

As I said then, put simply, without cargoes, ships will leave the U.S. flag, our modest fleet will continue to dwindle, and we would risk our ability to move military cargoes on American vessels. 

One of MARAD’s responsibilities is to ensure that federal agencies meet their obligations to move cargoes on U.S.-flagged vessels consistent with federal law, including civilian agencies, which must move at least 50% of their cargoes on U.S.-flagged vessels. 

We are working with the Biden-Harris Administration’s Made In America Office to help agencies understand cargo preference requirements.  

In addition, I have written to all federal departments and agencies explaining how MARAD can help them ensure they meet their obligations under cargo preference laws and regulations.   

The 2023 NDAA has directed MARAD to implement a final rulemaking within 270 days of its passage and we will work to implement this responsibility. 

TANKER SECURITY PROGRAM 

Let me also briefly touch on the new Tanker Security Program.   

A study required by the 2020 National Defense Authorization Act found a substantial risk to the nation associated with heavy reliance on foreign-flagged tankers, particularly in a contested environment.   

In response to this study, a new Tanker Security Program, or TSP, was created—and I am pleased to report that at the end of last year, MARAD issued the updated Voluntary Tanker Agreement and an Interim Final Rule.   

The application period for operators that want to apply to enroll vessels in the TSP closes on February 17th—tomorrow. 

We anxiously await the review process to award the new TSP agreements, which will increase the number of tankers under our flag and create new crewing positions. 

NSMV's 

Finally, let me talk about our key shipbuilding effort, which is constructing the National Security Multi-mission Vessels (NSMV). 

Just a couple of weeks ago, I was honored to attend the “first steel cutting” in the Philly Shipyard for the fourth NSMV, the LONE STAR STATE.    

We now have four NSMVs under construction, with the EMPIRE STATE already launched.   

In the Navy, I was the commissioning Commanding Officer of USS MUSTIN, and I know just how complex a ship construction effort is.   

These vessels—the first that MARAD has built in six decades—are so unique because we are using commercial best practices to design, build, and manage them with a private company, TOTE, as our contracted Vessel Construction Manager.   

The use of the commercial shipbuilding business model is saving American taxpayers hundreds of millions of dollars and several years in development and construction time.   

And the ships are being built to American Bureau of Ships (ABS), Coast Guard, and SOLAS requirements, and fully comply to be eligible for a coastwise endorsement under the Jones Act.   

Perhaps the biggest impact, however, is that Philly Ship went from a yard employing just around 80 employees to well over 1,400 shipyard workers—union workers—today.  These workers are earning great wages, improving their career pathways, and creating new opportunities for their families! 

I can also tell you that leaders in Washington are taking note of the lessons that the example of the NSMV can teach our nation about shipbuilding—particularly when it comes to meeting our sealift needs.   

CONCLUSION 

As I close, let me reiterate the key frame within which to see the critical importance of the U.S. merchant marine. 

By providing strategic sealift, our merchant marine constitutes our nation’s “fourth arm of defense” and has been historically organized, trained, and equipped to perform three essential functions: sea control, power projection, and maritime security.  

The Maritime Administration is working to ensure that our mariners have the ships, training, and resources they need to meet our evolving sealift needs—and to meet the logistics needs in contested waters of which General Van Ovost warned. 

Through these efforts, we are working to ensure that our sealift enterprise is ready to deliver for our nation!  

Thank you for the opportunity to join you today—and thank you for all that you and your members do in service to our nation!###