REMARKS AS PREPARED BY

MARITIME ADMINISTRATOR REAR ADM. (RET) ANN PHILLIPS

AT NDTA Transportation Advisory Board Meeting

Ponte Vedra, FL 

On behalf of the Maritime Administration and the Department of Transportation, I am honored to be here with you all today for my first TAB meeting! 

A special thanks to NDTA chairman John Dietrich, Vice chairman William Woodhour, and President and CEO VADM Andy Brown, as well as the full board of directors.  

I’m also pleased to be here with the Nation’s leadership overseeing defense transportation – from the Department of Defense, Department of Homeland Security, and Department of Transportation sister agencies.  And thank you to the CEO’s and senior leaders from America’s transportation industry that maintains our supply lines for economic and national security.  

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. I’d like to discuss some of my main priorities we are working on.  

PEOPLE AND SAFETY 

I will begin by discussing our work of supporting mariners. 

Our merchant marine is as vital to our national security and economic success as it has ever been.  However, in 2017, MARAD estimated that we are approximately 1,800 mariners short of the number needed in the event of a full mobilization exceeding 4-6 months. In an uncontested environment.   

We are working a whole-of-government-and-stakeholder approach to Recruit, Train, Retain, and Reduce Barriers to entering a maritime career. 

We are making critical investments to address the urgent and long-standing infrastructure and cultural challenges at the Merchant Marine Academy, which is the primary source of mariners with service obligations. 

We are building ships again!   

With speed and near on-time accuracy, a process playbook we intend to repeat in the near future.  We are currently building five new National Security Multi-mission Vessels in Philadelphia’s shipyard, and along with the 1400 plus jobs created, these ships will provide state-of-the-art training platforms for the state maritime academies we support. I note that the first ship—the EMPIRE STATE—will be delivered in June! 

Further, we also 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. 

We are working in close partnership with the Coast Guard to combat sexual assault and sexual harassment on board commercial vessels.  

MARAD established the EMBARC (Every Mariner Builds A Respectful Culture) program in December 2021 to help prevent sexual assault and sexual harassment, to support survivors, strengthen a culture of accountability, and improve safety for Merchant Marine Academy cadets and for all mariners.   

Now, thanks to Congress’ support, the Fiscal Year 2023 National Defense Authority Act—NDAA requires commercially operated vessels, by law, to comply with these standards before they can train cadets—and this will also help improve safety throughout the industry. 

STRENGTHENING SEALIFT FOR ECONOMIC & NATIONAL SECURITY 

Another key mission at MARAD is serving as the provider of all surge sealift capacity—but we are challenged to meet US TRANSCOM’s requirements. 

The 45 vessels in our Ready Reserve Force have an average age of more than 45 years and it is increasingly difficult to maintain them, but we must.  Today we have 7 RRF ships active, sailing in support of USTRANSCOM missions and global exercise support. 

So we are working to implement recapitalization of the RRF as quickly as we can. 

In March 2022, we purchased two former MSP ships, adding more than 316,000 square feet of military cargo capacity.  Three more commercial ships will be purchased and placed under MARAD ownership the first just earlier this week, and continuing into early summer..   

MARAD will continue to acquire more used ships as the market, funding, and legislative authority allows.  The letter from the Secretary of Defense certifying auxiliary ship new construction has been transmitted, lifting the previous the four-ship acquisition limit, although the overall nine-ship limit remains in place.  

These are critical steps—but I must tell you that at this pace, we will continue to have the challenge of managing an old fleet for many years. 

Of course, our government-owned sealift fleet is supported and leveraged by a fleet of privately owned, commercially operated U.S.-flag vessels. 

Let me start with the Jones Act fleet. 

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. 

The Fiscal Year 2023 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 fleet of ships ensures our Nation’s domestic security on the waterways, employing US-mariners while providing the critical supply chains that support our domestic needs.  The domestic fleet has been the first to build LNG powered containerships and has made significant investment in domestic shipbuilding capabilities that also supports MARAD, the Navy, Coast Guard, NOAA, and the Army Corps with US-built ships. 

We also administer the programs that support the 60-ship Maritime Security Program as well as the 2 Ship Cable Ship Security Program.   

We are working to grow our U.S.-flagged fleet by implementing the new Tanker Security Program, in coordination with USTRANSCOM, to meet DOD mission requirements.  We expect to announce the first 10 vessel enrollments shortly (upon their acceptance of our offers). 

All TSP operators are required to participate in the Voluntary Tanker Agreement (VTA) program, which parallels the Voluntary Intermodal Sealift Agreement (VISA) for non-tanker vessels. MARAD published VTA in the Federal Register in November 2022 and we are currently accepting applications to enroll in the Agreement.  

The MSP remains funded for and fully enrolled at 60 vessels.  As a result of the two MSP tankers moving over to TSP, we expect to solicit for two MSP vacancies very soon.  We intend to award those two MSP Operating Agreements by late summer. 

As I testified before Congress in late March, put simply, without cargoes, ships will leave the U.S. flag and our modest fleet will continue to dwindle to the point that the number of American vessels is simply too small to meet all of the government shipper agency requirements, whether military or civilian, and we will risk our ability to move military cargoes on American 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.   

MARAD is working diligently on revisions to the cargo preference regulations as required by the Fiscal Year 2023 NDAA, by this Fall.   

MARAD’S STRONG ECONOMIC AND CLIMATE SUSTAINABILITY INVESTMENTS  

Finally, let me talk about the historic investments in port infrastructure—and supply chain resiliency—made possible by the Bipartisan Infrastructure Law (BIL).   

Under the BIL, the Port Infrastructure Development Program that MARAD will administer an infusion of $2.25 billion. 

Last year, thanks to the BIL funding and additional appropriations, we were able to award more than $700 million in PIDP grants to 41 projects in 22 states and one territory.   

And get this: more than 60 percent of the PIDP awards made in 2022 benefit ports in historically disadvantaged communities.  More than $150 million of the funding awarded last year focuses on port electrification to improve air quality, and nearly $100 million went to help ports that are supporting offshore wind developments. 

Also, on average, 25% of PIDP funds awarded each year go to DOD Designated Strategic Sealift Ports ensuring improvements to support the movement of goods through those facilities.  I visited JAXPORT yesterday and got to see the work ongoing from earlier infrastructure investments by MARAD that helps commerce – and DoD. 

Of the 17 Commercial Strategic Seaports with Port Readiness Plans, five are reporting readiness concerns: the Ports of Long Beach and Philadelphia, due to cargo congestion, and the Ports of Alaska, Oakland and Savannah, due to construction. 

This year, we have more than $662 million in Federal funding available through the PIDP program—and our Notice of Funding Opportunity is out now.  Applications are due April 28, 2023! 

In addition, the United States Marine Highway Program will have $10 million available to make grant awards this year, supporting greater use of coastwise shipping to lessen landside congestion. 

CONCLUSION 

In closing, thank you again for the opportunity to join you here today, I am looking forward to our discussion! \

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