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United States Department of Transportation United States Department of Transportation

CENTER FOR STRATEGIC AND BUDGETARY ASSESSMENTS

Friday, February 28, 2020

Good afternoon. Thank you, Dr. [Thomas] Mahnken for that kind introduction. And thank you to CSBA for inviting me to be here today to talk ships and shipyards.

The last time I was here, it was to discuss CSBA’s previous report “Sustaining the Fight – Resilient Maritime Logistics for a New Era.” I’ve shared in several forums my belief that the authors – Tim Walton, Ryan Boone, and Harrison Schramm – produced a great report.

They addressed issues surrounding sustaining the Navy fleet (both fuel and dry cargo) with the combat logistics force. They addressed the other piece: the sealift requirement to deploy joint forces around the globe and sustain them – again, fuel and equipment. And they did it by challenging the old assumptions which drove operational and budgetary decisions that got us to where we are today: which is an efficient force for supporting uncontested movements around the world, but not a very resilient force.

Their sobering assessment is contained in the opening sentence of their report: quote:

“The current and programmed defense maritime logistics force of the United States is inadequate to support the current U.S. national defense strategy and major military operations against China or Russia.”

Those are hard words to hear. Some may challenge that conclusion. I hope we don’t have to have it proven to us.

So, CBSA has shined a spotlight on this issue. There are more and more people paying attention to this important element of our national defense. The question now is ‘what are we going to do about it?’ How are we going to strengthen our government-owned fleet, reconstitute our merchant marine, and what resources are available to do this? Can we even do it?

For those of you who have already read the report being released today I think that you’d agree that it begins with a National Maritime Strategy. Directed by Congress in the 2014 Coble Coast Guard Authorization Act, my predecessor Chip Jaenichen started trying to produce one back in the last administration, and his draft was waiting for me when I showed up in August 2017.  The final version is with the Secretary and will be forthcoming very, very soon.

What one will quickly realize in the process of coordinating a national maritime strategy—as I have been doing—is that the scope of the challenge is enormous, that the authorities required for action are greatly dispersed throughout our government and not resident in a small agency such as MARAD.

One probably needs to harken back to the pre-war days of 1940 to find a time when maritime policy could be neatly packaged and controlled by a few key individuals. Every morning when I walk into my office I pass the U.S. Maritime Commission flag and it reminds me of the amazing power and authority my predecessor at that time Admiral Jerry Land had. He could pick up the phone and call FDR.

Now I’m not advocating to have direct authority to call President Trump – please don’t quote me as saying that!

My point is that constructing a National maritime strategy is going to be a matter of mustering national will.

Our document will be out shortly, and I think it will help move us along in the needed direction.

From our point of view, it states again what I have repeatedly stated publicly and before Congress:

I have real concerns about the ability of our aging Ready Reserve Force and relatively small remaining commercial U.S Merchant Marine and mariner pool to meet the country’s needs in a protracted “all hands on deck” sealift effort.

The results of our most recent turbo activation offer a snapshot of where we are today: of 61 vessels in the government owned sealift fleet, 39 were available at the start for tasking – 64%. Given the challenges associated with maintaining and operating older vessels, the results were about what we expected. Recapitalizing that force is very much in my focus these days.

But that’s not even addressing the need for tankers to bucket-brigade the fuel needed to keep everything running. More than 80 tankers – significantly more – need to come from somewhere. Our domestic tanker fleet may provide some capacity – but the rest?  

Effective control of U.S. shipping is a very shaky strategy in my view, given today’s complicated web of ownership, leasing, financing, and crewing schemes in place. While effective U.S. control shipping may have been a realistic factor in the past, today it is in truth an illusion.

And of course, there is the need to have sufficient mariners available to crew the ships, and we know we are short there. We can take some pride in the fact that our volunteer civilian mariners consistently answer the call, and we did see that borne out in Turbo Activation 19.  My concern continues to be in a protracted sealift where we still are likely short about 1,800 people.

So, the findings of the previous CSBA assessment? I’m sorry to say they offer a fairly accurate portrait. But there are fixes – and plans – but we need to get on with it, and there is going to be a bill involved.

In my mind, we as a Nation have to make the decision that this part of our Nation’s armed forces – the movement and sustainment part – needs some work.  It requires the will to do so.

The consequences if we fail to act could very well be a repeat of the mistakes of the past.

Heading into World War I, it was clear that the United States lacked the number and types of vessels required to move large numbers of troops and equipment to Europe, and to sustain them. So, we entered upon a crash program to get ships built; the results were far from perfect. Despite great expense, only a fraction were built, many too late to assist in the war, and the remains of some of that effort can still be seen down in Mallows Bay, and in the James River Reserve Fleet site which was created to store all of those excess ships.

Two decades later we would enter upon another steep shipbuilding ramp up to construct a merchant marine to stem the staggering losses from German U-boat attacks and to sustain the Allied war effort overseas: Liberty ships, Victory ships, T2 tankers. In both the world war scenarios, we had the shipbuilding capacity to respond, or could stand it up quickly.

Did we learn a lesson from that experience? The state of America’s merchant marine, it’s government-owned sealift fleets, of our shipbuilding and repair industry, and of our support for mariners would tend to indicate that our memories have faded.

So, again, the report that we’re here to discuss today has done a great job to illuminate

the state of the U.S. maritime industrial base.

Even if we all agreed upon the composition, size and nature of our sealift fleet, or which agency will have responsibility for it—and there are many opinions in those regards—the question remains: how will it get built? Do we have the industrial base necessary to conduct a crash shipbuilding program – or even a modest build program - if the clouds of conflict appear on the horizon? What is the state of our resiliency?

Just look at a place like Avondale Shipyard. Only a few years back it was actively producing ships and employing about 26,000 Louisianans. I was just there a few months ago…. Now it’s being converted to a shipping terminal.

There were seven major shipyards involved in the last major effort to convert or construct large, commercial-type ships to support the U.S. Maritime Prepositioning Force (MPF) and strategic sealift surge ships from 1984 to 2002. Of these yards, three (General Dynamics – Quincy, Sun Shipbuilding, and Avondale) are now closed, one (Newport News) no longer does large commercial work, and two (Detyens and Atlantic Drydock) do conversion work only. General Dynamics NASSCO remains able to build large commercial type ships.

Their disappearance takes a huge slice of shipbuilding workforce and their expertise with it. And, even if we got back into the business of building ships, where do we put those shipyards? Much of our waterfront is being commercially developed and much is now home to condos and riverwalks.

I would tell you that as someone currently engaged in the process of trying to get a new class of training ships built, I can attest to the challenges of engaging a shipyard with capacity and capability to construct a large oceangoing commercial vessel.

Our vessel construction manager, Tote Services has been working it for months.

When you start thinking hard about the challenges posed by the shrinking industrial base, as Bryan, Tim, and Adam have done in this new report, I think it brings us back to my earlier point: implementing a national maritime strategy demands a national level effort, and a national will to support our shipbuilding and repair sector.

It begins with this kind of report from CSBA, so I thank you again for your contribution to the debate and to the security of our great Nation. Together, we will continue to educate our Nation on the importance of maritime policy. It’s critical to our economic and national security in the face of an increasingly contentious world. Thank you.

 

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