REMARKS AS PREPARED BY

MARITIME ADMINISTRATOR REAR ADM. (RET) ANN PHILLIPS

AT NEW YORK COUNCIL NAVY LEAGUE

 

(Thank Yous) 

I’d first like to thank John Jay College for hosting this event. And the Navy League New York and Transportation Institute for inviting me, I’d also like to thank the panelists and my fellow speakers here today who are providing powerful insights about the current state of maritime security, and I welcome Deputy Secretary of Transportation Polly Trottenberg – Polly, thank you for joining us today.  I’d also like to thank all the Navy League’s New York Council members for inviting me to join you. 

 (Intro) 

In today’s world, threat multipliers revolve around a number of shared challenges and national security interests.  Political tensions, supply chain disruptions, unregulated technologies, cybersecurity threats, climate change and extreme weather, and  our energy dependencies,  even in this time of alternative energy solutions,  have created exposure within the maritime environment. 

Securing the maritime domain is not only a whole of government undertaking— it is also requires insight and expertise from maritime industry professionals, academics and other stakeholder experts.   

 (MARAD’s Interest in the topic) 

As the Maritime Administrator I spend a great deal of my time ensuring that my agency does its part to protect the maritime interest of the United States, our allies, and our partners.   

Importantly, we—those of us in this room—are not the only ones interested in protecting our interests in the maritime domain. This interest is global. 

I have been on travel a lot over the past few months and each place I go, whether it be:  

At the Naval War college’s International Seapower Symposium last week,  I moderated an international panel discussion among senior naval leaders on the topic of how best to protect maritime commerce around the globe, and  

 At the London International Shipping week two weeks ago, where I met with the Secretary General of the International Maritime Organization, leaders from the UK Department for Transportation, and leaders in the global shipping industry; or  

 Earlier this summer where I met with the Vice Minister of Oceans and Fisheries in Busan, Korea, and back in the US at MARAD, with maritime leaders from Vietnam … 

What I found at the heart of all of my conversations is that in one form or another, the shared common focus is on trying to answer the question posed by this conference’s facilitators: how should nation states approach, both individually and collectively, the complex operational, and commercial challenges and opportunities presented by today’s maritime domain both at home and abroad??  

As the Maritime Administrator my job is to foster, promote, and develop the maritime industry of the United States to ensure our nation’s economic and security needs are met.  We are both an operational and a promotional agency and in this role I am in regular communications with colleagues across industry, labor, and in the federal government to ensure that MARAD does its part in engaging this unique problem set.   

My approach to this fact pattern is two-fold.  The first, commercially.  The second, militarily. 

 (Grants programs/loan programs) 

First commercially. 

Maritime commerce, includes commercial and military transport ships at sea, coastal vessels, and the infrastructure that supports all maritime operations, including port facilities, cargo handling systems, ship repair/construction yards, and intermodal transportation systems.  

Covid revealed, in no uncertain terms, how disruption in our maritime commerce supply chains can have dire, life-threatening effects to communities around the world.  To protect against such disruption, we at MARAD facilitate maritime commerce through various programs, including: grants to build resilience into our nation’s port infrastructure and small shipyards, and loans, made possible by our Title XI Program. 

To that end: 

Several days ago, the Secretary announced the award of 8 United States Marine Highway grants totaling $11.9M. That funding will improve the movement of goods along our navigable waterways and expand existing waterborne freight services across the United States.   

MARAD also administers the Port Infrastructure Development Program (PIDP). This year, thanks the President Biden’s Bipartisan Infrastructure Law there is more than $662 million in Federal funding available for PIDP awards, and these grants will improve port and related freight infrastructure to meet the nation’s freight transportation needs and ensure our port infrastructure can meet anticipated growth in freight volumes. I anticipate an award announcement before the end of this calendar year. Additionally, 

 MARAD’s Title XI loan guarantees are critical to the U.S. maritime industry and offer a great opportunity for American shipbuilders to modernize their facilities, and expand their businesses by accessing longer-term, lower-interest-rate loans with higher loan-to-value amounts.  And with the Department of Transportation’s determination that offshore wind vessels can be considered for prioritized processing for financial assistance—I can assure you that MARAD is  doing its part to  facilitate new energy solutions in support of the President’s goal of deploying 30 gigawatts of offshore wind by 2030.Next , our  Small Shipyard Grant program has also been active. In FY 23 MARAD awarded $20.8 million to 27 shipyards in 20 states   The funds will help awardees modernize, increase productivity, and expand local employment opportunities while competing in the global marketplace. 

Finally, our ports, harbors, and marine highways are the vital connectors between sealift and surface distribution in a national mobilization, and MARAD will continue to support the development of port infrastructure, not just in our 18 commercial Strategic Seaports but in ports in every coastal, inland, and Great Lakes hub.  

(Military Support: Sealift/Cargo Preference) 

In addition to the commercial aspects I just described, MARAD also supports the Department of Defense in their efforts to protect and defend our national interests globally.  

America’s strategic sealift provides the Nation with the capability to project power by deploying forces and moving cargoes worldwide during peace, war, and/or in any contested environment. Sealift requires a combination of commercial and Federal resources to succeed. The Government-owned strategic sealift fleet includes the MARAD-maintained Ready Reserve Force (RRF) as the single surge sealift provider, which supports our  now  92 privately owned, commercially operated, internationally trading U.S.-flag ships. Most of these commercial vessels participate in the Maritime Security Program (MSP), the Tanker Security Program (TSP) and the Cable Fleet Security (CSF) program, which MARAD manages to provide capacity to DoD in response to national security or defense needs.   

(RRF) 

The RRF is a fleet of 48 Government-owned vessels available to transport DOD cargo and meet other mission requirements – this is our operational role -  8 of these vessels are underway today supporting US TRANSCOM Missions.  RRF vessels average more than 46 years in age—some well past their expected use—which makes recapitalization critical.  Consistent with the three pronged approach in the  U.S. Navy’s 2018 “Sealift That the Nation Needs” strategy, and the FY18 NDAA, MARAD is recapitalizing and modernizing our aging RRF first through service life extensions, and second by purchasing newer, second-hand ships from the open market, using our Vessel Acquisition Manager process.   

We have completed the purchase and delivery of four vessels to date with a fifth vessel joining later this month - and MARAD will continue to work closely with Navy, DOD, and USTRANSCOM to continue this procurement action up to the 9 vessels currently authorized. 

In the FY 2023 NDAA, MARAD received authorization to consider the third prong, building 10 strategic sealift vessels.  If funded, MARAD will use the Vessel Construction Manager process currently in use for building our NSMV’s to build these new strategic sealift vessels.   

(MSP) 

MSP, the heart of sustainment sealift, is made up of a fleet of 60 commercially viable, militarily useful vessels, active in international trade and available on-call to meet DOD contingency requirements. MSP operators provide DOD with assured access to ships as well as the multibillion-dollar global intermodal networks maintained by participating carriers. MSP operators provide employment on their vessels for 2,400 highly trained, skilled U.S. merchant mariners our country depends on to crew the RRF and MSC surge vessels if activated during a crisis. Additionally, MSP supports more than 5,000 shore side maritime industry jobs each year. Right now we have 58 vessels enrolled in MSP, and we anticipate enrolling the final two soon. 

(TSP) 

In addition, the Tanker Security Fleet Program addresses the need for more U.S.-flag refined product tankers capable of loading, transporting, and storing on-station bulk petroleum products to meet both national economic needs and DOD contingency requirements.  

The Tanker security program, initiated in the FY 21 NDAA, with funding appropriated in the FY 2022 is new, with nine of ten Tank vessels selected for the program.    We anticipate the 10th to be announced soon.  Congress has authorized MARAD to increase the Tanker program to 20 vessels, but the full appropriation has not yet been made available. 

(CSF) 

Our Cable Security Program Fleet consists of 2 vessels tasked with helping to protect and maintain support for the U.S. seabed infrastructure.   

(Cargo Preference) 

In addition to sealift support provided by the MSP, TSP, and CSF, cargo preference requirements ensure we have capacity to carry 100% of our DOD Cargo and 50% non-DOD cargo and  keeps vessels operating under the U.S.-flag to ensure availability in times of crisis.  In addition to ensuring demand for US Flag vessels, Cargo preference  requirements ensure demand for the  U.S. mariners who crew these ships, which ultimately improves the Nation’s overall sealift readiness.  We are in the midst of preparing for a cargo preference rulemaking, as directed by the 2023 NDAA. 

 (Shipbuilding/NSMV/education) 

In addition to these programs MARAD is also building vessels—doing our part to revitalize America’s shipbuilding industry!   

Just last week Deputy Secretary Trottenberg celebrated DOT’s custody transfer of the first National Security Multi-Mission Vessel, or NSMV to SUNY Maritime.  This is the first vessel built by MARAD in more than 60 years, and we have four more ships being built in the Philadelphia shipyard, using an innovative Vessel Construction Manager Program.  These vessels will be provided for training purposes to 4 other state maritime academies in Massachusetts, Maine, Texas and California!  With the final vessel scheduled to be delivered in 2026.  

Each NSMV includes state-of-the-art multi-purpose classrooms, equipment simulators, and a separate engineering control room and training bridge.  

Further, in constructing this vessel the VCM model saved hundreds of millions of American taxpayer dollars and years in development and construction time!  Which means that the NSMV will serve as a real-life example of what our nation can do when we use a maritime commercial business model that reduces risk to the U.S. Government.  

Importantly, the “M” in this vessel stands for “multi missioned” and in addition to being a training vessel, each NSMV will also be part of MARAD’s National Defense Reserve Fleet available to support major federal relief and response efforts—providing medical capabilities and berthing for up to 1,000 first responders, recovery workers, and crew!  

These purpose-built vessels will—  

revolutionize the Nation's training capabilities, 

better equip the United States to increase our ranks of a well-trained, highly efficient maritime workforce,  

improve our security interests at home and around the world, and  

bolster critical sectors of our economy—thereby securing our spot as a global leader in the maritime industry! 

IN addition, I want to address where we are with the EMBARC Program – We 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.   

EMBARC is now codified in LAW - including the codification of the basic tenets of EMBARC in 46 U.S.C. § 51322 (Protection of cadets from sexual assault onboard vessels) and includes provisions requiring MSP/TSP/CSP vessel owners/operators to meet EMBARC requirements as a condition of receiving payments under the programs.  

EMBARC standards which were released in December of 2021, have now been operational on some of your vessels for over a year. As of today, every carrier receiving a federal subsidy has enrolled in EMBARC. We now have 19 enrolled operators participating in the EMBARC program and continue to reach out to others for enrollment.  

(Strategy) PAUSE 

So, that is much of what MARAD has been working in our approach to the complex issues presented by the Maritime domain.  But that is not all.   

AT MARAD we are also thinking strategically about the future. Specifically: 

The FY 2023 NDAA directed MARAD to enter into an agreement with a Federally Funded Research and Development Corporation (FFRDC) to inform development a National Maritime Strategy.  MARAD has entered into this agreement with the Center for Naval Analysis and just held our kick-off meeting.  We expect this to be a far-reaching endeavor and look forward to wide ranging engagements with various stakeholders. 

Also, at the direction of Congress in the FY 2021 NDAA, working with stakeholders, MARAD has developed a five-year strategic Mariner Workforce Development Plan to recruit, train, and retain merchant mariners. We are close to a release date. Overall, the Plan addresses the four elements: 

Merchant mariner recruitment,  

Merchant mariner training, 

Merchant mariner retention, and 

Demonstration and research priorities related to the above three elements.  

All of the above will complement the work our USMMA,  and SMA’s do every day to train our mariners 

(U.S. Maritime Advisory 2023-009) 

  (Conclusion) 

As I close, I would like reiterate that the approach to the complex operational, and commercial challenges and opportunities presented by the maritime domain both at home and abroad require a comprehensive and coordinated effort that involves a whole host of stakeholders from industry, labor, the federal government, academics, and international allies and partners.  By addressing the challenges and embracing new strategies collectively, we can ensure that our maritime domain remains secure and that the United States continues to thrive!   

Thank you for your time, I look forward to taking your questions. 

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