REMARKS AS PREPARED BY

MARITIME ADMINISTRATOR REAR ADM. (RET) ANN PHILLIPS

AT National Academies of Sciences, Engineering, and Medicine 

Transportation Research Board (TRB) 

2023 Marine Board Spring Meeting  

NORFOLK, VA

 

INTRODUCTION   

Good morning, everyone! On behalf of the Maritime Administration and the Department of Transportation, I am honored to be here with you all today for the Transportation Research Board’s Marine Board Spring Meeting! 

I offer a special thanks to Marine Board Chair Craig Philip, to Scott Brotemarkle, and to the full board for inviting me to join today’s discussion.  And let me also thank Dr. Grabowski for her service here and of course on the Merchant Marine Academy’s advisory board! 

I would also like to commend the Marine Board for keeping maritime workforce development at the forefront of your considerations.   

MARAD’s mission is to foster, promote, and develop the maritime industry of the United States to meet the nation’s economic and security needs.   

At MARAD, our team is meeting what are truly historic moments in our nation’s maritime history.   

We are administering the historic investments in our nation’s ports and waterways made possible by the President’s Bipartisan Infrastructure Law.  Last year, we were able to award more than $700 million in Port Infrastructure Development Grants to 41 projects in 22 states and one territory.   

Get this: more than 60 percent of the PIDP awards made in 2022 benefit ports in historically disadvantaged communities.  More than $150 million in the funding awarded last year focuses on port electrification to improve air quality.   

We are recapitalizing our Ready Reserve Force even as we maintain the aging fleet we currently own.  In 2021, we brought two used vessels into our fleet, and this month, we will begin bringing three more vessels into the fleet. 

As I will discuss, we are also working to support offshore wind developments through our Title XI program—and, as I already mentioned, through the Port Infrastructure Development Program. 

We are also making historic investments in mariner education even as we work to grow our U.S.-flagged foreign trading fleet.   

And all this is done by 730 staff –  

split 1/3 at DOT HQ, 1/3 at USMMA, and 1/3 at our Fleet Support sites and Ports and Waterways Gateway Directors. . ..  

STATUS OF THE MERCHANT MARINE 

Let me drill in first to discuss our merchant marine, including our mariner education programs. 

Last year, in the U.S. Capitol in Washington, MARAD helped unveil the Congressional Gold Medal for the Merchant Mariners of World War II.   

The medal honors the more than 240,000 merchant mariners who sailed the American convoys that President Roosevelt called, quote, “the arsenal of democracy.”  

American merchant mariners and American ships delivered the supplies we needed to defeat tyranny during World War II.   

Merchant mariners were absolutely critical to our success in World War II. 

And even though nearly eight decades have passed since that war, merchant mariners remain just as critical to ensuring we can maintain supply lines. 

That said, a study prepared in 2017 by the Maritime Workforce Working Group at the request of Congress estimated that we were then about 1,800 mariners short of the number with unlimited tonnage credentials needed to sustain a full activation of our Ready Reserve fleet and commercially operated vessels to meet sealift needs. In an uncontested environment. 

During the six years since that study was released, the U.S. merchant marine has been affected by globally standardized credentialing requirements.  And of course, the maritime industry—like all industries—has also been profoundly affected by the COVID-19 pandemic.   

MARAD has been working for several years to try to validate the current mariner shortfall.  We are challenged because of limitations in the Coast Guard’s IT system.  Fortunately, the Coast Guard is working to build new systems that can provide more granular details—but of course better information on raw numbers will not reveal which mariners would be willing to serve, particularly in a contested environment. 

In September 2022, I convened a forum attended by more than 75 industry stakeholders to discuss the challenges facing our mariner workforce.  We discussed quality-of-life issues, career opportunities, and the unique challenges of recruiting from the current generation.  And we settled on a rough strategy focused on Recruit, Train, Retain, Reduce Barriers. . .  

However, fundamentally, addressing a mariner shortfall will require a whole-of-government effort paired with industry initiatives.  As part of what must be a collaborative effort, MARAD is implementing numerous initiatives to strengthen our mariner workforce—and I will talk more about these in a moment. 

THE U.S.-FLAGGED FLEET 

Critically, however, I want to pan back for one moment as it is not possible to talk about mariner needs or shortfalls without discussing the size of the U.S.-flagged fleet.   

After World War II, America owned most of the world’s shipping tonnage.  But today, while approximately 70 percent by weight of our import and export cargoes enter and leave the country directly by the sea, commercial vessels sailing under the U.S. flag carry less than two percent of these cargoes. 

In 2012, there were 106 ships in the foreign trade flying the U.S. flag.  Four years later, there were just 77 vessels in international trade sailing under our flag.  

Today, from that low point, we have grown back to 85 foreign trading ships under the U.S. flag.   

By law, we are to maintain a merchant marine that can carry our domestic waterborne commerce.  This is our Jones Act fleet and it is thriving.   

As I said, We are also supposed to be carrying a substantial part of our import/export waterborne foreign commerce on U.S.-flagged vessels.  However, today we carry less than two percent of such commerce on U.S.-flagged vessels. 

By comparison, about 75% of our waterborne trade by weight is carried on ships sailing under these 5 flags:  Panama, Liberia, Marshall Islands, Singapore, and Bahamas.    

The number of unlimited tonnage vessels determines the number of mariner billets we have—and thus the number of career opportunities under the U.S. flag. 

The Biden-Harris Administration is implementing programs that will grow our U.S.-flagged foreign trading fleet.  For example, in 2021 we stood up the Cable Security Fleet Program, which brought two cable laying vessels into the U.S. flag.  

And now, we have created the Tanker Security Program, which will provide support for 10 tank vessels—and likely several of those ships will be new to the U.S. flag.  I note that the application period for ships wishing to enroll in the program has closed and we will announce selected vessels shortly. 

The Biden-Harris Administration also proposed a measure that would have cost nothing and would have helped expand the types of vessels in our fleet mix.  Specifically, the Administration proposed eliminating the three-year period that vessels entering the U.S. flag must wait before they are eligible to carry civilian agencies’ preference cargoes.  Again, this action would not add costs—but Congress did not adopt this proposal. 

SUPPORTING MARINER EDUCATION  

Having framed the issue, let me now tell you more about what MARAD is doing on a variety of fronts to support mariner education and training to prepare the next generation for service at sea. 

The federal maritime academy, the U.S. Merchant Marine Academy, is of course an immense part of our work and, as you well know, we’ve undertaken massive efforts to ensure its continued success.   

We are making significant investments in the Academy’s infrastructure to ensure its facilities meet tomorrow’s industry needs and can attract applicants from across the nation.  

We also continue our work to ensure a safe, respectful culture at the Academy and on the vessels on which our cadets train, and I will speak more about this work in a moment. 

I can also point to the extensive support we provide for the State Maritime Academies—California, Texas A&M, Great Lakes, Maine, Massachusetts, and SUNY Maritime College—which collectively supply about 70 percent of the nation’s mariner workforce.   

To help them with their mission, we are providing modern training vessels—the National Security Multi-mission Vessels—which will replace the obsolete ships on which they currently train. (National assets, may be used to support other national needs / FEMA/DOD). We also continue to support the academies with fuel payments. 

We are also very excited about our Centers of Excellence for Domestic Maritime Workforce Training and Education, or CoE, program. This program recognizes maritime training and education institutions that offer pathways to afloat and ashore maritime careers, including careers in the port and intermodal sector as well as shipyards.  

The Centers are leaders in workforce and economic development. Through their education and training programs, these institutions are not only developing the next generation of our maritime workforce, they are also developing tailored solutions to advance existing services and industries.  

MARAD recognizes that engaging the K-12 age group is critical recruiting our next generation of maritime workforce—and is fundamental to building a resilient maritime workforce.  

EMBARC 

Now let me talk for a moment about mariner workplaces.  At MARAD, we strongly believe that the maritime industry should become 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 the “Every Mariner Builds a Respectful Culture” or EMBARC.  And I note that today, there are 16 commercial operators enrolled in EMBARC; together, they operate more than 140 vessels. 

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. 

And let me emphasize here that developing a final rule on EMBARC is a very high priority for MARAD. 

I know that culture change is happening—and I emphasize to you that EVERYONE in this room has a critical role to play in supporting continued change. 

We have also taken numerous steps to improve safety on the Merchant Marine Academy campus and to remove barriers to reporting.   

We have strengthened our Sexual Assault Prevention and Response Office.   

We have expanded our amnesty policy to ensure that Midshipmen can report sexual assault and harassment without the fear of facing discipline for collateral violations of Academy policy.   

And we have established concurrent jurisdiction to ensure that local law enforcement can respond to sexual assault—and any other crime—on the campus. 

We recognize that these are just first steps and we are committed to continuous review and improvement of our policies and procedures. 

OFFSHORE WIND 

Changing focus a bit, let me discuss the investments made possible by the President’s Bipartisan Infrastructure Law that are helping us expand our renewable energy capabilities, including offshore wind.  

The Biden-Harris Administration is committed to reaching 30 gigawatts of offshore wind energy by the year 2030.  

The Maritime Administration is supporting this effort in several ways. 

First, port projects that support offshore wind developments are eligible for funding under the Port Infrastructure Development Program. 

In fact, last year, nearly $100 million of the PIDP awards we made last year will support projects that will advance offshore wind farm development.  

TITLE XI 

The Maritime Administration also provides loan guarantees to support ship construction in U.S. shipyards.  Through Title XI, we are able to provide full faith and credit guarantees to promote the growth and modernization of the U.S. merchant marine and U.S. shipyards.   

The Title XI program has the ability to provide guaranteed loans for longer terms, higher loan-to-value amounts, and lower interest rates than are typically available through private lenders—and this program is available to help finance new construction or refinance vessels that are already constructed. 

Since 1993, Title XI has provided $9.3 billion in loan guarantees.  

The Title XI statute was amended in 2019 to make several important changes to the program.   

One change gave MARAD the authority to designate “Vessels of National Interest.”  This designation enables us to prioritize and expedite specific applications. 

I recently designated the vessels that service offshore wind farm facilities as Vessels of National Interest—and these are the first vessels to be designated under this authority.   

This designation reflects the Administration’s commitment to supporting construction of vessels to service offshore wind terminals. 

Several American shipyards have already secured contracts to build vessels to service offshore wind development—and we have had a surge in expressions of interest in the Title XI program since we announced the national interest designation for offshore wind vessels. 

SMALL SHIPYARD GRANT PROGRAM 

MARAD also runs a Small Shipyard Grant Program to support infrastructure improvements at qualified small U.S. shipyards—which are defined as yards with fewer than 1200 employees and that meet certain other criteria. 

Grants provided to shipyards help improve their efficiency and ability to compete for domestic and international commercial ship construction and maintenance opportunities.  

And these grants can also be used to support the acquisition of equipment that reduces climate impacts and adapts technologies that reduce shipyard power consumption.   

 The Maritime Administration awarded $19.6 million to 24 shipyards in 19 states through the Small Shipyard Grant Program in Fiscal Year 2022.  

Our awards included a $900,000 award to Fairlead Boatworks, Inc in Newport News to assist the yard in procuring new equipment. 

This year, we again have $20 million available to make awards.  The application period closed in February, and we anticipate award announcements later this spring.   

MARITIME ENVIRONMENTAL AND TECHNICAL ASSISTANCE (META) PROGRAM 

Finally, as I close, let me briefly discuss our META program.  For well over a decade, MARAD has managed the Maritime Environmental and Technical Assistance program, which assists  maritime transportation system stakeholders in addressing maritime environmental challenges. 

META is unique among Federal programs and enables MARAD to collaborate with other government agencies, the maritime industry, and academia to engage in the study, research, development, assessment, and deployment of emerging marine technologies and practices.   

Results of META projects inform the American maritime transportation sector and U.S. and international policy regarding “what works” in the real world.   

Among other topics, META’s portfolio includes air emissions reduction, decarbonization, reduction of vessel generated underwater noise, and control of aquatic nuisance species. 

Under the Biden-Harris Administration, the budget for this program has grown and it is playing an important role in urgent research initiatives. 

CONCLUSION   

Thank you again for the opportunity to join you here and thank you for the critical discussions you are leading.  I touched on some of the many areas of work in which MARAD is engaged!  And I’m pleased to answer any questions you may have! 

 

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