[Senate Hearing 114-629]
[From the U.S. Government Publishing Office]




                                                        S. Hrg. 114-629
 
       THE STATE OF THE U.S. MARITIME INDUSTRY: THE FEDERAL ROLE

=======================================================================

                                HEARING

                               before the

                 SUBCOMMITTEE ON SURFACE TRANSPORTATION
                  AND MERCHANT MARINE INFRASTRUCTURE,
                          SAFETY AND SECURITY

                                 of the

                         COMMITTEE ON COMMERCE,
                      SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                    ONE HUNDRED FOURTEENTH CONGRESS

                             SECOND SESSION

                               __________

                             MARCH 8, 2016

                               __________

    Printed for the use of the Committee on Commerce, Science, and Transportation
    

                             

       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
       
       
       
       
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                    ONE HUNDRED FOURTEENTH CONGRESS

                             SECOND SESSION

                   JOHN THUNE, South Dakota, Chairman
ROGER F. WICKER, Mississippi         BILL NELSON, Florida, Ranking
ROY BLUNT, Missouri                  MARIA CANTWELL, Washington
MARCO RUBIO, Florida                 CLAIRE McCASKILL, Missouri
KELLY AYOTTE, New Hampshire          AMY KLOBUCHAR, Minnesota
TED CRUZ, Texas                      RICHARD BLUMENTHAL, Connecticut
DEB FISCHER, Nebraska                BRIAN SCHATZ, Hawaii
JERRY MORAN, Kansas                  EDWARD MARKEY, Massachusetts
DAN SULLIVAN, Alaska                 CORY BOOKER, New Jersey
RON JOHNSON, Wisconsin               TOM UDALL, New Mexico
DEAN HELLER, Nevada                  JOE MANCHIN III, West Virginia
CORY GARDNER, Colorado               GARY PETERS, Michigan
STEVE DAINES, Montana
                       Nick Rossi, Staff Director
                 Adrian Arnakis, Deputy Staff Director
                    Rebecca Seidel, General Counsel
                 Jason Van Beek, Deputy General Counsel
                 Kim Lipsky, Democratic Staff Director
              Chris Day, Democratic Deputy Staff Director
       Clint Odom, Democratic General Counsel and Policy Director
                                 ------                                

      SUBCOMMITTEE ON SURFACE TRANSPORTATION AND MERCHANT MARINE 
                  INFRASTRUCTURE, SAFETY AND SECURITY

DEB FISCHER, Nebraska, Chairman      CORY BOOKER, New Jersey, Ranking
ROGER F. WICKER, Mississippi         MARIA CANTWELL, Washington
ROY BLUNT, Missouri                  CLAIRE McCASKILL, Missouri
KELLY AYOTTE, New Hampshire          AMY KLOBUCHAR, Minnesota
JERRY MORAN, Kansas                  RICHARD BLUMENTHAL, Connecticut
DAN SULLIVAN, Alaska                 BRIAN SCHATZ, Hawaii
RON JOHNSON, Wisconsin               EDWARD MARKEY, Massachusetts
DEAN HELLER, Nevada                  TOM UDALL, New Mexico
STEVE DAINES, Montana
                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on March 8, 2016....................................     1
Statement of Senator Fischer.....................................     1
Statement of Senator Booker......................................     3
Statement of Senator Nelson......................................     4
Statement of Senator Cantwell....................................    31
Statement of Senator Klobuchar...................................    32
Statement of Senator Ayotte......................................    34

                               Witnesses

Hon. Paul N. Jaenichen, Administrator, Maritime Administration, 
  U.S.. Department of Transportation.............................     4
    Prepared statement...........................................     6
Hon. Mario Cordero, Chairman, Federal Maritime Commission........    11
    Prepared statement...........................................    13
Rear Admiral James Helis, U.S. Maritime Service Superintendent, 
  United States Merchant Marine Academy..........................    16
    Prepared statement...........................................    17
Mitchell Behm, Assistant Inspector General, Surface 
  Transportation Audits, U.S. Department of Transportation.......    20
    Prepared statement...........................................    22

                                Appendix

Response to written questions submitted to Hon. Paul N. Jaenichen 
  by:
    Hon. Richard Blumenthal......................................    51
    Hon. Brian Schatz............................................    51
    Hon. Cory Booker.............................................    53
Response to written question submitted to Hon. Mario Cordero by:
    Hon. John Thune..............................................    54
    Hon. Ron Johnson.............................................    55
    Hon. Richard Blumenthal......................................    57
    Hon. Brian Schatz............................................    58
Response to written question submitted to Rear Admiral James 
  Helis by:
    Hon. Richard Blumenthal......................................    59
    Hon. Brian Schatz............................................    60
Response to written questions submitted to Mitchell Behm by:
    Hon. Richard Blumenthal......................................    61
    Hon. Brian Schatz............................................    62


       THE STATE OF THE U.S. MARITIME INDUSTRY: THE FEDERAL ROLE

                              ----------                              


                         TUESDAY, MARCH 8, 2016

                               U.S. Senate,
         Subcommittee on Surface Transportation and
           Merchant Marine Infrastructure, Safety, and Security,   
        Committee on Commerce, Science, and Transportation,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 2:20 p.m. in 
room SR-253, Russell Senate Office Building, Hon. Deb Fischer, 
Chair of the Subcommittee, presiding.
    Present: Senators Fischer [presiding], Ayotte, Nelson, 
Booker, Cantwell, and Klobuchar.

            OPENING STATEMENT OF HON. DEB FISCHER, 
                   U.S. SENATOR FROM NEBRASKA

    Senator Fischer. The hearing is called to order.
    Good afternoon. I am pleased to convene the Senate 
Subcommittee on Surface Transportation and Merchant Marine 
Infrastructure, Safety, and Security for today's hearing 
entitled ``The State of the U.S. Maritime Industry: The Federal 
Role.'' This is the first in a series of hearings examining the 
maritime industry in preparation for legislation to reauthorize 
the Maritime Administration at the U.S. Department of 
Transportation.
    The United States has a rich maritime heritage. In fact, 
shipbuilding was one of our oldest industries in this country, 
dating back to our Nation's early colonial times. From the 
beginning, U.S. waterways were used for exploration, commerce, 
transportation, defense, and recreation.
    Today, shipping is even more crucial to the global supply 
chain. As a global leader, the United States needs an efficient 
and reliable intermodal freight transportation network to grow 
our economy and create new jobs. Ports and the U.S. maritime 
shipping fleet are critical to keeping America competitive in 
the global market, especially as freight flows continue to 
increase. According to the Bureau of Transportation Statistics, 
freight tonnage on our nation's transportation network will 
grow by 40 percent over the next 30 years.
    Meanwhile, deep-water sea ports represent a key element of 
the U.S. transportation network, and they are vital to our 
economic growth. In fact, America's sea ports often serve as 
the key connection point for all modes of transportation. 
Today, we will hear from witnesses representing the Federal 
Government stakeholders with jurisdiction over maritime 
shipping and ports infrastructure. This includes the Maritime 
Administration, the Federal Maritime Commission, the Merchant 
Marine Academy, and the Inspector General's Office of the 
Department of Transportation.
    Around this time last year, I convened a hearing on the 
situation at the West Coast ports. These ports alone move 12.5 
percent of U.S. GDP per year and channel goods throughout the 
entire country. Congress must continue to prioritize our 
Nation's ports to avoid massive congestion and gridlock like we 
saw last year.
    One step toward ensuring that our ports remain a top 
priority at both the Department of Transportation and here in 
Congress is to strengthen the data received at the national 
level. Chairman Thune and I worked to include critical port 
performance legislation to aid us in retrieving critical data 
on port metrics in the highway bill that passed last year. 
Nationally, consistent data on our nation's ports will inform 
policymakers to help ensure that our nation's ports do not fall 
behind.
    I am pleased to see Admiral Helis here, who graciously 
welcomed me to the U.S. Merchant Marine Academy last fall. I 
was very pleased to visit and tour the Academy. During the 
tour, I had the opportunity to visit with Nebraska midshipmen 
that I nominated to the Academy.
    Admiral Helis, it's clear that you are shaping excellent 
future leaders for the maritime industry at King's Point, and I 
do thank you for your service. Moving forward, I hope to work 
with you and the Academy to ensure we strengthen efforts to 
address on-campus sexual assault through the upcoming Maritime 
Reauthorization bill.
    The Academy's recent 2015 anonymous survey of midshipmen 
found that as many as 28 women and 24 men had been sexually 
assaulted on campus. However, the Academy noted there was only 
one officially reported case of sexual assault. As you know, we 
need to strengthen the support network available for midshipmen 
so they are confident in the reporting system.
    We also need to encourage more on-campus and industry 
preventive training and the completion of the Academy's sexual 
assault action plan. After meeting with the on-campus 
coordinator during my visit to King's Point, I am confident 
that we can move in the right direction, and I do look forward 
to working with you to address this critical issue.
    With regard to the Maritime Administration, I appreciate 
the important role that this agency plays in national security. 
MARAD manages the Department of Defense Ready Reserve Force, 
which serves to transport combat support, resupply, and unit 
equipment to the Army and the Marine Corps.
    In addition, MARAD maintains a national defense reserve 
fleet of cargo ships to support military shipping operations 
during times of war and in national emergency. This was evident 
in the Korean War, where nearly 540 reserve fleet vessels were 
activated to support military forces.
    I have serious concerns, however, regarding mismanagement 
at the agency as identified by the most recent IG report on the 
Maritime Administration. The IG report noted that weaknesses 
remain in MARAD's hiring practices and program implementation. 
This report shows that adequate risk management for MARAD 
programs are needed, along with updated policies, hiring 
practices, and stronger oversight.
    Administrator, I hope that we can work together to address 
these management challenges.
    Now, I would now like to invite my Ranking Member, Senator 
Booker, to offer opening remarks.

                STATEMENT OF HON. CORY BOOKER, 
                  U.S. SENATOR FROM NEW JERSEY

    Senator Booker. Thank you, Chairwoman Fischer. I appreciate 
you having my back. We were in a caucus, having a very lively 
discussion about GMOs, which is not the subject of this 
hearing, so I will move on.
    I just want to thank, again, Senator Fischer. She has been 
a tremendous partner, and I'm glad that she and I have been 
able to work together on a lot of very important issues. I know 
this hearing will be one opportunity to discuss those important 
issues.
    The country's port vessels and merchant marine forces, we 
know, as has been said, are critical to this nation's economy, 
critical to our military preparedness and, as I know, 
personally, toward disaster relief efforts. Our nation's ports 
and marine terminals, as well as our rail and road networks 
that support them, are essential for Americans getting products 
to overseas markets and generating a significant part of our 
economy that helps to create jobs.
    Residents of my home state of New Jersey, this is something 
they know very, very well. New Jersey is home to the Port of 
New York and New Jersey--which I think should be renamed the 
Port of New Jersey and New York--which has moved more than 120 
million tons of cargo. You heard that. I have bipartisan 
support for that. The bill will be coming shortly.
    [Laughter.]
    Senator Booker. But they're moving about 120 million tons 
of cargo in recent years and is the busiest port on the East 
Coast and I think the third busiest in the United States as a 
whole. Together, the port and terminals employ more than 
163,000 people in New Jersey in 2014 and supported $60 billion 
in family incomes. It is an amazing force on the East Coast.
    In the past 5 years, the public and private sectors have 
helped fund more than $2 billion in infrastructure improvements 
and has helped to expand our region's economy pretty 
significantly. For example, the Port of New York and New Jersey 
has committed $1.3 billion to raise the Bayonne Bridge to allow 
very much larger vessels that serve our region.
    While investments like these are essential and offer long-
term benefits to our regional economy, they cannot, by 
themselves, reduce the congestion caused by our nation's 
outdated and, frankly, crumbling infrastructure. That's why I'm 
proud of the work of this committee and the bipartisan work on 
the FAST Act that has established the Nation's first multimodal 
freight grant program.
    While this is a substantial advancement--we've made steps--
we know there's more work to do. For many decades, the U.S. has 
relied on the U.S. Merchant Marine with its fleet of commercial 
vessels and crew of U.S. mariners to assist the military during 
times of war and national emergency. For example, during the 
height of the U.S. military operations in Iraq and Afghanistan, 
from 2002 to 2008, privately-owned U.S. flag vessels and U.S. 
crews carried the majority of military cargos to those 
theaters.
    The U.S. international fleet has diminished. U.S. mariners 
lose employment and the opportunity to remain certified to crew 
large ocean-going vessels. This concerns me. As we lose U.S. 
mariners, we lose sealift capacity to support U.S. military 
during times of War and these national disasters.
    However, there are ways to combat this decline, such as 
continuing to support the increased funding for MARAD's 
Maritime Security Program, which ensures that 60 military-
useful U.S. vessels are readily available to carry military 
cargos. We also need a long-term strategy that bolsters and 
supports all sectors of the maritime industry.
    I am very, very happy about this hearing. I'm grateful to 
my Chairperson and look forward to each of our witnesses to 
hear about these issues and more.
    Thank you.
    Senator Fischer. Thank you, Senator Booker.
    We've been joined by our Ranking Member, Senator Nelson.
    Senator Nelson, if you would like to make any welcoming 
comments at this time, it would be appropriate.

                STATEMENT OF HON. BILL NELSON, 
                   U.S. SENATOR FROM FLORIDA

    Senator Nelson. Only to say I am thankful that you and the 
Ranking Member are having this, because the maritime industry 
provides very, very important services to the country.
    Thank you.
    Senator Fischer. Thank you, Senator Nelson.
    At this time, I would like to welcome our panel. We will 
begin with your opening statements. I would like to introduce 
first, the Honorable Paul Jaenichen, the Administrator of the 
U.S. Maritime Administration.
    Welcome, sir.

              STATEMENT OF HON. PAUL N. JAENICHEN,

            ADMINISTRATOR, MARITIME ADMINISTRATION,

               U.S.. DEPARTMENT OF TRANSPORTATION

    Mr. Jaenichen. Thank you. Good afternoon, Chairwoman 
Fischer, Ranking Member Booker, and members of the Committee. 
Thank you for the invitation to testify on the state of the 
U.S. maritime industry.
    I'd like to begin today by talking about the status of the 
United States fleet. The U.S. flag fleet is made up of vessels 
operating in both domestic coastwise trade and also in 
international trade. The U.S. coastwise trade law, also known 
as the Merchant Marine Act of 1920, more commonly referred to 
as the Jones Act, requires the use of U.S.-owned, U.S.-built, 
and U.S.-crewed vessels to carry our nation's goods and 
domestic commerce, including trade to Puerto Rico, Hawaii, and 
Alaska.
    We see encouraging signals for industry growth with the 
recent construction and deliveries of new container ships and 
tankers and articulated tugs and barges qualified to operate in 
a coastwise trade. The recent delivery of two container ships, 
in particular, are the first of their type in the world that 
are powered by U.S.-produced, liquefied natural gas or LNG, 
making them one of the most environmentally friendly forms of 
freight transportation in the world. They were built in the 
United States at the General Dynamics NASSCO shipyard in San 
Diego, and they are supporting our domestic shipbuilding 
industrial base.
    However, in the U.S.-flag international trade, we face 
significant challenges. The U.S.-flag fleet of privately-owned, 
commercially-operated vessels in international trade, along 
with the government-owned vessels, provide critical sealift 
capacity, as both of you noted in your opening remarks, to move 
equipment and materials for the global projection and 
sustainment of our armed forces and also in the support of 
other Federal agencies, when needed and where needed, during 
times of conflict, humanitarian crisis, and natural disaster.
    Despite the winding down of military operations in the 
Middle East, the continued American involvement in that region 
as well as the developments in Eastern Europe and the Western 
Pacific point to a continuing need for a robust U.S. armed 
forces deployment capability and capacity. The total number of 
vessels in the international U.S.-flag fleet has varied 
considerably over the years, rising from 92 in 2001 to 106 at 
the end of 2011, and after reaching a historic low last fall of 
75 has climbed slightly back to 78 as of the end of February 
2016, continuing a long-term downward trend, with over a 25 
percent reduction in the number of U.S.-flag international 
trading fleet vessels over the last three years. The 
corresponding reduction, as Senator Booker noted in his 
remarks, with regards to the loss of jobs and the resulting 
loss of capacity is of concern.
    Currently, there are approximately 11,230 qualified 
mariners available to sail either commercial or government-
owned sealift ships. The initial activation of 63 Maritime 
Administration and Military Sealift Command surge vessels would 
require an additional 3,200 mariners for sustained operation. 
This is in addition to the continued operation of the privately 
owned commercial U.S.-flag fleet.
    And while it appears possible to meet the sealift surge for 
the initial four to six months with available mariners, 
maintaining sustained operations that require crew rotations on 
both government and commercial vessels, including those vessels 
that are not involved in carrying military cargo, would be 
severely challenging and perhaps not even possible without 
voluntary extensions beyond normal crewing periods. Given this 
assessment, I'm currently working closely with the U.S. 
Transportation Command, the Navy, and the commercial maritime 
industry to develop proposals to maintain an adequate number of 
licensed, trained, and experienced mariners.
    Another area of focus for the Maritime Administration is 
addressing freight congestion in and around our nation's ports. 
Freight congestion at our ports will be exacerbated by the ever 
larger mega container ships that are coming into the global 
fleet. These large ships calling at our container ports create 
surges in freight volumes moving in and out of those ports, and 
in many cases our ports and their surrounding infrastructure 
are in need of repair and modernization to accommodate the 
needs of the increasingly larger vessels of commercial merchant 
fleets that are currently handling our trade.
    In recognition of these challenges, both the Congress and 
the administration have been taking steps to further integrate 
the marine transportation system into the surface 
transportation planning and the programs to support movement of 
freight. The Maritime Administration is taking action to aid 
the department's efforts in safe and efficient freight 
transportation and to address the issues that challenge the 
U.S. maritime industry through the development of a National 
Maritime Strategy. We expect to publish the draft strategy for 
public comment in the coming months before we are able to 
finalize it. I look forward to providing a draft of that 
strategy to the Committee soon.
    Again, thank you for inviting me to testify today. I 
appreciate your interest and the continued support for the 
maritime industry and the U.S. Merchant Marine, in particular, 
and will be happy to answer any questions that you may have.
    [The prepared statement of Mr. Jaenichen follows:]

   Prepared Statement of Paul N. Jaenichen, Administrator, Maritime 
           Administration, U.S. Department of Transportation
    Good afternoon, Chairwoman Fischer, Ranking Member Booker and 
Members of the Committee. Thank you for the invitation to testify on 
the state of the U.S. maritime industry. The United States is a 
maritime Nation: Our ports, inland rivers and waterways, Great Lakes 
and coastal ocean routes are essential to our global economic 
competitiveness, and the U.S. Merchant Marine plays a critical role in 
meeting national defense sealift and other security requirements and 
maintains a U.S. presence in international commercial shipping. To 
ensure a strong domestic maritime industry and U.S. Merchant Marine 
into the future, the Maritime Administration (MARAD) is focused on 
increasing the competitiveness of the U.S.-flag fleet, educating and 
training the next generation of merchant mariners, supporting 
innovation to address maritime energy and environmental issues, and 
addressing infrastructure challenges at our ports and on our inland 
rivers and waterways to increase mobility throughout the domestic 
transportation network. I will highlight each of these areas in my 
testimony today.
The U.S.-Flag Fleet
    The U.S.-flag fleet is made up of vessels operating in both the 
domestic, coastwise trades and international trade. Our national policy 
for coastwise commerce is governed by the Merchant Marine Act of 1920, 
commonly referred to as the Jones Act, which reserves this trade for 
ships built in the United States, owned by U.S. citizens, and crewed by 
U.S. mariners. The national policy objectives for maintaining a U.S. 
Merchant Marine engaged in international maritime commerce is set forth 
in the Merchant Marine Act of 1936 as amended in 1970 which includes 
the objective that a substantial portion of our foreign trade should be 
carried on U.S. ships. Another policy goal of the 1936 Act is that our 
Nation's Merchant Marine, both ships and mariners, will serve as a 
naval auxiliary in times of war or national emergency.\1\ These goals 
were reinforced in the 1989 National Security Directive 28, known as 
the National Security Sealift Policy.
---------------------------------------------------------------------------
    \1\ 46 Sec. U.S.C. 50101
---------------------------------------------------------------------------
U.S.-Flag Fleet in Coastwise Trade
    U.S. coastwise trade law \2\ requires the use of qualified U.S.-
flag vessels to carry our Nation's goods in domestic commerce, 
including trade with Puerto Rico, Hawaii and Alaska.\3\ This same law 
also helps us to meet our national defense needs by supporting American 
built ships, the crews to operate them, and ensures that intermodal 
equipment, terminals and other infrastructure are available to the U.S. 
military in times of war or national emergency. Coastwise trade law 
promotes a strong and vibrant U.S. maritime industry, which helps the 
United States maintain its expertise in shipbuilding and maritime 
transportation. It also ensures that the vessels navigating our coastal 
and inland rivers and waterways abide by U.S. laws and operate under 
the oversight of the U.S. Government.
---------------------------------------------------------------------------
    \2\ 46 U.S.C. 55102
    \3\ Currently, 91 large U.S.-flag self-propelled ocean-going 
vessels operate in U.S. domestic commerce. Although this segment of the 
fleet does not depend on government-impelled cargos, the crews of these 
vessels are qualified to operate sealift ships in the Government 
reserve fleet.
---------------------------------------------------------------------------
    More than 40,000 vessels operate in coastwise and inland trades. 
This includes 91 large self-propelled oceangoing vessels (1,000 gross 
tons or more) in domestic U.S. trade.\4\ While the number of vessels is 
down from 125 in 2006, the decline is primarily due to the retirement 
of older tankers which are being replaced by large, oceangoing tank 
barges, most in the form of articulated tug-barges (ATBs). ATBs 
function in much the same way as self-propelled oceangoing vessels, but 
with smaller crews and slower speeds.
---------------------------------------------------------------------------
    \4\ U.S. Army Corps of Engineers, Waterborne Transportation Lines 
of the United States, Calendar Year 2013, Volume 1-National Summaries, 
Table 1: SUMMARY OF THE UNITED STATES FLAG PASSENGER AND CARGO VESSELS 
OPERATING OR AVAILABLE FOR OPERATION ON DECEMBER 31, 2013 BY REGION.
---------------------------------------------------------------------------
    We do see encouraging signals for domestic industry growth with 
recent deliveries of new containerships and tankers qualified to 
operate in the coastwise trade. These containerships are among the 
first in the world that are able to be powered by U.S.-produced 
liquefied natural gas (LNG), making them one of the most 
environmentally friendly forms of freight transportation in the world.
    The construction of these vessels demonstrates the benefit of the 
U.S.-build requirement of the coastwise law \5\ to domestic 
shipbuilding. In 2013, American shipbuilders directly employed 110,000 
Americans and produced $37.3 billion in gross domestic product.\6\ As 
of February 2016, there are seven tankers, two containerships, two 
containership roll-on/roll-off vessels (ConRos), 16 ATBs and several 
barges on U.S. shipyard order books.\7\ These civilian shipyards and 
related industries are part of the Federal shipbuilding and repair 
industrial base that ensures adequate American expertise and capacity 
to meet national shipbuilding needs.
---------------------------------------------------------------------------
    \5\ 46 U.S.C. 55102
    \6\ Economic Importance of the U.S. Shipbuilding and Repairing 
Industry, Maritime Administration (November 2015) http://
www.marad.dot.gov/wp-content/uploads/pdf/MARAD_Econ
_Study_Final_Report_2015.pdf
    \7\ Source: IHS Maritime Sea-Web, accessed February 2, 2016.
---------------------------------------------------------------------------
U.S.-Flag Fleet in International Trade
    To defend American interests and carry out national policy 
overseas, the United States must be capable of deploying military 
forces anywhere in the world on short notice to meet contingency 
requirements. The U.S.-flag fleet of privately owned, commercially 
operated vessels, along with government-owned vessels, provide critical 
sealift surge and sustainment capacity to move equipment and materials 
for the Armed Forces and Federal agencies when needed, and where 
needed, during times of conflict, humanitarian crises, and natural 
disasters.
    For example, during U.S. overseas contingency operations in Iraq 
and Afghanistan from 2002 to 2010, over 95 percent of all military 
ocean-borne cargoes were moved on U.S.-flag vessels and government-
owned sealift vessels activated from reserve status and crewed by U.S. 
merchant mariners.\8\ U.S.-flag vessels, strategic ports and intermodal 
systems ensure delivery of vital supplies and equipment to our military 
service members and their families stationed overseas.
---------------------------------------------------------------------------
    \8\ The Use of Commercial Vessels and Intermodal Systems for 
Military Sealift 2002-2011, A Report of the NDTA Military Sealift 
Committee Working Group on Maritime Policy, Operation Enduring Freedom 
(OE F) and Operation Iraqi Freedom (OIF), National Defense 
Transportation Association, Arlington Va. (Feb. 28, 2003).
---------------------------------------------------------------------------
Ready Reserve Force (RRF)
    MARAD manages and maintains a fleet of government-owned merchant 
ships in the National Defense Reserve Fleet (NDRF). This includes 45 
RRF vessels that are maintained ready for operation within five days 
for transport of cargo to the area of operation and one RRF off-shore 
petroleum discharge vessel maintained ready for operation within 10 
days to meet critical war fighting requirements. Vessels maintained in 
the RRF and NDRF, including training ships on loan to the six State 
Maritime Academies (SMAs), are also called upon for disaster response 
in an emergency, as was the case when one RRF ship and two training 
ships were activated in November 2012 to provide support for relief 
efforts following Hurricane Sandy, and more recently RRF ships 
supported the medical mission to Liberia for the United States 
contribution to the international Ebola Virus response in late 2014. 
Additionally, RRF and NDRF vessels can be configured to support other 
emergent situations as was the case in mobilizing the Motor Vessel (M/
V) CAPE RAY for use in the international effort to destroy the Syrian 
Government's declared chemical weapon stockpile. That mission was 
completed in August of 2014.
Maritime Security Program
    The Maritime Security Act of 1996 established the Maritime Security 
Program (MSP), which provides direct annual stipends for up to 60 
active, commercially viable, militarily useful, privately-owned U.S.-
flag vessels and crews operating in U.S. international trades. The MSP 
fleet ensures access to U.S.-flag ships in ocean-borne foreign commerce 
with the necessary intermodal logistics capability to move military 
equipment and supplies during armed conflict or national emergency, and 
also provides critical employment for up to 2,400 highly qualified U.S. 
merchant mariners. Under this program, participating operators are 
required to commit their ships, crews and commercial transportation 
resources upon request by the Secretary of Defense during times of war 
or national emergency. Of the 78 U.S.-flag vessels that trade 
internationally, 57 currently participate in the MSP program. MARAD 
recently approved one vessel to enter the program and is in the process 
of filling the remaining two vacancies in the program.
Cargo Preference Laws
    To encourage an active, privately owned and operated, U.S.-flag 
fleet, Congress enacted several measures known as ``cargo preference'' 
laws between 1904 and 1954. These laws require shippers to use U.S.-
flag vessels to transport certain government-impelled ocean-borne 
cargoes. Specifically, under the Military Cargo Preference Act of 1904 
and the Cargo Preference Act of 1954, 100 percent of military cargo, 
and at least 50 percent of government non-military cargo, including 
agricultural cargoes, must be carried on U.S. flag vessels. The cargoes 
provided under these programs help maintain the fleet of privately-
owned U.S.-flag ships in global trade that provide ready access to 
ships and crews to transport equipment and supplies to support our 
Armed Forces when deployed globally.
Trends Concerning the U.S.-Flag Vessel Fleet Size
    The total number of vessels in the internationally trading U.S.-
flag fleet has varied considerably over the years, rising from 92 in 
2001 to 106 in 2011 and declining to 78 vessels in February 2016, 
continuing a long-term downward trend. Vessel owners take into account 
a variety of factors before making a decision to leave the fleet 
including the availability of government-impelled cargo and foreign-
flag trading options for their vessels. In individual circumstances, 
particularly for operators that do not have the benefit of 
participating in the MSP, loss of government-impelled cargo could 
influence a vessel owner's decision to retire vessels from the fleet or 
reflag.
    Privately owned and operated ships remain under U.S.-flag only if 
there is cargo to move. Reductions in available preference cargo have 
contributed to a decline in the number of U.S.-flag vessels trading 
internationally, and in turn, a reduction in U.S. mariner jobs in 
international trade. While this does not preclude these mariners from 
seeking jobs in coastwise or Jones Act trades, they may not necessarily 
maintain the appropriate U.S. Coast Guard (USCG) Merchant Mariner 
Credential (MMC) for international trade given that the number of large 
self-propelled ocean-going domestic trading vessels has not increased, 
but stayed roughly the same.
Sealift Manpower Assessment
    MARAD is responsible for determining whether adequate U.S. manpower 
is available to support the operation of sealift ships during a major 
crisis and is currently working with the Department of Defense (DOD) to 
address mariner requirements and to assess the availability and 
capacity of sealift assets to support national security. This 
assessment of the status of the U.S. civilian merchant mariner pool 
includes close coordination with maritime labor and consultation with 
other maritime industry stakeholders. Given that mariner service is 
completely voluntary, it is difficult to assess actual mariner 
availability to meet contingencies. At the same time, the domestic and 
international training requirements for mariners in domestic coastwise 
and international trade are increasing due to updated Standards of 
Training, Certification and Watchkeeping (STCW) requirements adopted at 
the International Maritime Organization that take effect in January 
2017.
    Currently, there are approximately 11,300 qualified mariners 
readily available to sail on either commercial or government reserve 
sealift ships. The initial activation of the 63 MARAD and Military 
Sealift Command surge vessels would require roughly 3,200 mariners for 
sustained operation. This is in addition to continued operation of the 
privately-owned commercial fleet. While it appears possible to meet the 
initial four to six months of sealift surge with available mariners, 
maintaining sustained operations that require crew rotation on both 
government and commercial vessels, including vessels that are not 
carrying military cargo, could be severely challenged. Given this 
assessment, I am working closely with the U.S. Transportation Command, 
the U.S. Navy (Military Sealift Command), and the commercial maritime 
industry to develop proposals to maintain an adequate number of trained 
mariners.
Mariner Training
    It takes many years of training to develop the necessary mariner 
competencies for officer and engineering positions on vessels; 
therefore, maintaining an adequate pool of American merchant mariners 
is vital to the commercial success of both the U.S.-flag fleet and the 
capacity to project American sea power. The average age of USCG 
credentialed merchant mariners is 46, and the workforce is retiring 
faster than it is being replaced.\9\ Since the maritime segment of 
transportation workers is relatively small, the effect of a large 
percentage of older workers is likely to be significant on the entire 
transportation workforce. Given the high average age of the 
credentialed mariner workforce, the expected separation rate of workers 
from the industry (i.e., those leaving the industry, retirements, and 
expected job growth), and time needed to gain shipboard experience, 
there could be a critical need for senior mariners to meet employment 
demand between now and 2022.
---------------------------------------------------------------------------
    \9\ Bureau of Labor Statistics, Occupational Outlook Handbook, 
http://www.bls.gov/ooh/transportation-and-material-moving/water-
transportation-occupations.htm accessed March 3, 2016.
---------------------------------------------------------------------------
    Both the U.S. Merchant Marine Academy (Academy) and the SMAs 
provide training for USCG credentialed Merchant Marine officers. The 
Academy graduates each year one quarter of the Nation's new highly 
skilled, entry-level Merchant Marine officers who hold an unlimited 
tonnage or horsepower endorsement available to support the U.S. 
Merchant Marine and national maritime industry infrastructure. To meet 
USCG licensing requirements, Midshipmen are required to have 360 days 
of sea service during their four-year education program. This at-sea 
experience qualifies midshipmen for both their domestic USCG MMC and 
their international STCW endorsements. The Academy's shipboard training 
program exposes Midshipmen to life at sea on board commercial and 
military vessels and enables commercial U.S. shipping companies and the 
U.S. Navy (Military Sealift Command) an opportunity to provide 
seamanship and engineering training. In 2016, 230 Midshipmen are 
expected to graduate from the Academy. Presently, with rare exceptions, 
all of these graduates are commissioned on active duty or into a 
reserve unit of the Armed Services or other uniformed services of the 
United States and provide a guaranteed source of mariners to crew 
government owned surge sealift vessels when activated.
    The six State Maritime Academies (SMAs) collectively graduate more 
than two-thirds of the entry-level Merchant Marine officers 
annually.\10\ More than 660 Cadets are expected to graduate from the 
SMAs in 2016. As part of its support to the SMAs, MARAD provides ships 
\11\ on loan to the SMAs to support at-sea training. Unlike the 
Academy, SMA Cadets receive most of their sea time to qualify for their 
MMC and STCW endorsements on these MARAD-provided training ships rather 
than on commercial or military vessels. The available SMA training 
ships are aging with an average age of 37 years. MARAD is addressing 
priority maintenance across all the aging training vessels to ensure 
that they all meet safety and functional requirements and can stay in 
service as long as possible. In addition, MARAD is looking into 
appropriate next steps to ensure adequate shipboard training capacity 
remains available in order to produce sufficient quantity and quality 
of mariners to support sealift needs into the future.
---------------------------------------------------------------------------
    \10\ The six SMAs are: California Maritime Academy in Vallejo, CA; 
Great Lakes Maritime Academy in Traverse City, MI; Texas A&M Maritime 
Academy in Galveston, TX; Maine Maritime Academy in Castine, ME; 
Massachusetts Maritime Academy in Buzzards Bay, MA; and State 
University of New York (SUNY) Maritime College in the Bronx, NY.
    \11\ 46 U.S.C. 51504
---------------------------------------------------------------------------
Environment
    Air emissions control and the prevention of invasive species spread 
through ballast water and other means remain the most significant 
environmental challenges for the maritime industry. MARAD works in 
partnership with other Federal agencies, academia and the maritime 
industry, and with continued support from Congress for the Maritime 
Environmental and Technical Assistance (META) Program, progress is 
being made on both of these fronts. Recent projects have demonstrated 
the feasibility of using biofuels and LNG for maritime propulsion, and 
the use of hydrogen and other fuel cells for shipboard and shoreside 
applications; however, challenges still exist. No ballast water 
management system has yet been Coast Guard certified as capable of 
meeting U.S. standards, but with MARAD assistance, progress is being 
made to help assess the effectiveness of control systems and to advance 
invasive species control science.
The Maritime Transportation System
    The U.S. maritime transportation system employs more than 200,000 
workers in water transportation and ship and boat building, and another 
95,000 in support of the maritime industry.\12\ In 2014, the maritime 
industry, including those that serve foreign transportation needs, 
added $18.5 billion to our Gross Domestic Product.\13\ The maritime 
transportation system is a critical component of our national 
transportation system of ports, railways, roads, pipelines and 
waterways, and the maritime component is our primary access to global 
trade. As our country grows, so does demand for freight transportation.
---------------------------------------------------------------------------
    \12\ Department of Transportation, Bureau of Transportation 
Statistics--Occupational Employment Statistics (May 2014). Include 
those employed in water transport (NAICS 483000), ship and 
boatbuilding, (NAICS 336600), support activities for water 
transportation (NAICS 488300).
    \13\ Department of Commerce, Bureau of Economic Analysis, Gross-
Domestic-Product-(GDP)-by-Industry 2014.
---------------------------------------------------------------------------
    Freight congestion in and around our Nation's ports continues to 
grow and will be exacerbated by ever larger mega containerships and 
growing multi-partner shipping alliances, whereby multiple shippers 
agree to share the capacity of a single vessel to improve capacity 
utilization and lower per unit shipping costs. Large ships calling at 
our container ports create surges in freight moving into and out of 
ports. These surges create logistical challenges with the availability 
and storage for equipment such as chassis and empty containers, long 
lines and wait times for trucks entering ports, adequate space for safe 
truck parking, and traffic on the intermodal road and rail 
infrastructure connecting to the ports.
    In many cases, our ports and their surrounding infrastructure are 
in need of repair and modernization to accommodate the needs of 
increasingly larger vessels in the commercial merchant fleets that 
handle our trade. In recognition of these challenges, both Congress and 
the Administration have been taking steps to further integrate the 
marine transportation system into surface transportation planning and 
programs.
    One of those efforts was rolled out in February of last year, when 
Secretary Foxx released the draft report Beyond Traffic 2045: Trends 
and Choices, which created a baseline for the discussion of marine 
transportation's role in our Nation's transportation system as it 
evolves over the next 30 years. Following that, Congress passed the 
Fixing America's Surface Transportation (FAST) Act, which further 
integrates ports into the surface transportation system by making them 
eligible for funding under the new National Highway Freight Program 
(NHFP) and the Nationally Significant Freight and Highway Projects 
Program.
    MARAD is also working to develop a robust Marine Highway system 
aimed at providing a viable and efficient transportation option for 
shippers to move freight more efficiently, avoiding congested cities 
and towns. The America's Marine Highway Program is focused on 
facilitating partnerships between service operators and potential 
shippers, as well as State DOTs, Metropolitan Planning Organizations, 
and Economic Development Agencies at the Federal, State and local level 
in order to create opportunities for new services. In FY 2016, MARAD 
will be assisting sponsors of designated Marine Highway projects to 
conduct planning and develop equipment and infrastructure necessary to 
bring these new services to life.
The Department of Transportation's National Maritime Strategy
    MARAD is taking action to aid the Department's efforts in safe and 
efficient freight transportation, and to address the issues that 
challenge the U.S. maritime industry through the development of a draft 
National Maritime Strategy. We expect to publish the draft strategy in 
the coming months, which will be available for public comment before 
MARAD finalizes it. As required in section 603 of the Howard Coble 
Coast Guard and Maritime Transportation Act of 2014, the strategy will 
identify Federal regulations and policies that reduce the 
competitiveness of U.S.-flag vessels operating in foreign trade; and 
the impact of reduced cargo flow due to reductions in military 
deployment overseas. It will also include recommendations to make U.S.-
flag vessels more competitive and increase the use of U.S.-flag vessels 
in foreign trade, ensure compliance by Federal agencies with cargo 
preference laws, increase the use of third-party inspection and 
certification authorities to inspect and certify vessels; increase the 
use of short sea transportation routes; and enhance United States 
shipbuilding capability. Following publication of the draft strategy 
for public comment, I look forward to providing the strategy to the 
Committee.
    Again, thank you for inviting me to testify today. I appreciate 
your interest and continued support for the maritime industry and the 
U.S. Merchant Marine and will be happy to answer any questions you may 
have.

    Senator Fischer. Thank you, Administrator.
    Next we have the Honorable Mario Cordero, Chairman of the 
Federal Maritime Commission.
    Welcome.

          STATEMENT OF HON. MARIO CORDERO, CHAIRMAN, 
                  FEDERAL MARITIME COMMISSION

    Mr. Cordero. Thank you. Chairperson Fischer, Senator 
Booker, members of the Committee, thank you for inviting me to 
join you today to provide a perspective on the Federal Maritime 
Commission, on the state of the U.S. maritime industry, and 
related infrastructure. With your permission, I will summarize 
my prepared remarks and ask that my full statement be entered 
into the record.
    In 2015, total container volumes transiting the United 
States were 31.5 million TEUs. The imbalance in the container 
trades grew for a second year in a row with 20 million TEUs 
imported into the United States, and container-based exports 
dropped 11.5 million TEUs, a 5 percent decrease from export 
volumes in the prior year. The vessel capacity among the global 
fleet that is available to meet demands for increased container 
volumes is more than sufficient, and it is likely that shippers 
will continue to benefit from low transportation rates for 
their international ocean cargo.
    In regard to competition, we may see considerable 
consolidation among container carriers this year. CMA-CGM is 
acquiring NOL. China Ocean Shipping Company, COSCO, is 
absorbing China Shipping as part of a merger. Pending approval 
by regulators in the United States and other nations, both CMA 
and COSCO will grow in size, capabilities, market share, and 
possibly market power. The CMA and COSCO transactions are 
complex, far reaching, and will require careful ongoing 
analysis for some time in the future.
    In Fiscal Year 2015, the Commission saw the largest number 
of operating agreements filed during a 12-month period since 
2006. Many of these agreements now filed with the FMC reflect a 
trend in which carriers and maritime terminal operators 
increasingly work in cooperation with each other, sharing 
resources and assets. These agreements are much more complex 
and time consuming to analyze than previously was the case. 
Additionally, the complexity and potentially anti-competitive 
effect of these agreements require consistent oversight and 
critical analysis.
    International trade at our Nation's ports account for 32 
percent of the Gross Domestic Product. It is vital that we have 
the efficient flow of cargo through our maritime terminals, and 
it is a key priority for the Federal Maritime Commission that 
our maritime gateways are able to handle current and projected 
cargo volumes.
    In February of this year, the Commission initiated its 
latest effort to address congestion issues by voting 
unanimously to approve the facilitation of a supply chain 
innovative team project that will work to develop commercial 
solutions to supply chain challenges and related port 
congestion challenges and concerns. This effort will be led by 
Commissioner Rebecca Dye.
    At issue presently, the Commission is currently hearing 
much about the Safety of Life at Sea Treaty amendments coming 
into force this July regarding the verified gross weight of 
containers, or verified gross mass of containers. On February 
18, 2016, the FMC hosted a meeting at its headquarters and 
brought together all interested parties, including the Coast 
Guard, which is the U.S. Government agency with the 
responsibility and jurisdiction for this matter.
    At this particular juncture, it seems more work needs to be 
done to achieve consensus. I reiterate that the Coast Guard is 
the lead agency in this matter. That noted, the FMC will 
carefully monitor developments to see if the situation ever 
reaches a point where it would warrant intervention by the 
Commission under the relevant applicable portions of the 
Shipping Act. The Commission is also prepared to continue the 
informal role of promoting dialog among all relevant parties, 
including through meetings such as the one we hosted last 
month.
    The ultimate goal of the FMC is to give the U.S. shipper 
confidence that when they contract for ocean freight services, 
they are doing so with an honest actor who is charging a fair 
rate and is capable of actually having the shipment move from 
origin to destination. We safeguard the public against anti-
competitive practices. We maintain and review confidentially 
filed service contracts. We provide forums for exporters, 
importers, and other members of the shipping public, and we 
guard against unfair and unfavorable conditions caused by 
foreign government business practices in U.S. foreign shipping 
lanes.
    The FMC is a small agency with a broad mandate and the 
essential mission of making international cargo actually flow. 
As trade volume continues to grow exponentially, there will be 
an increased demand for the services of the FMC, and very 
simply put, we need to be better resourced to meet our 
responsibilities.
    In summary, the state of the maritime industry is mixed. On 
one hand, increasing trade volumes are an encouraging indicator 
of the strength of the economy. Additionally, we are fortunate 
there is sufficient vessel and container capacity to move this 
cargo.
    On the other hand, if unaddressed, congestion at U.S. ports 
presents a serious potential impediment to continued economic 
growth as well as the competitiveness of the nation. Continued 
attention by Congress to ports and the intermodal connectors 
that link the quayside to the countryside is absolutely 
essential. Financing ports, port infrastructure, and good 
movement networks are necessary investments that benefit the 
economy as well as the U.S. consumer.
    Chairperson Fischer, Senator Booker, once again, I 
appreciate this opportunity to appear before you. I'm happy to 
answer any questions that anyone may have on the Committee or 
Subcommittee regarding the Federal Maritime Commission or 
developments on the waterfront where our insight would be 
helpful.
    Thank you again.
    [The prepared statement of Mr. Cordero follows:]

          Prepared Statement of Hon. Mario Cordero, Chairman, 
                      Federal Maritime Commission
    Chairman Fischer; Senator Booker; members of the Committee--thank 
you for inviting me to join you today to provide the perspective of the 
Federal Maritime Commission on the state of U.S. maritime industry and 
related infrastructure.
    As you know, the Federal Maritime Commission is the independent 
agency charged with promoting the fair, efficient, and reliable 
transportation of cargo into and out of the United States via 
international, ocean-borne shipping. We do this primarily through 
enforcing the Shipping Act of 1984. We regulate all ocean shipping 
entering and leaving the United States and we engage entities involved 
in every aspect of moving cargo internationally via the water. Our 
mission, and exposure to the people who make ocean shipping work, gives 
the Commission a unique perspective to review and summarize trends in 
the shipping business.
    Looking only at overall container volumes imported and exported 
into the United States, 2015 was an impressive year for shipping. Total 
container volumes were 31.5 million Twenty Foot Equivalent Units 
(TEUs), which represents a two-percent increase in container volumes 
year-on-year. The imbalance in the container trades grew for the 
second-year in a row with 20 million TEUs entering the United States 
and container-based exports dropped to 11.5 million TEUs--a five 
percent decrease from export volumes of the previous year. The U.S. 
share of the world's container trade was nearly 17 percent and 
according to our analysis, this is the second consecutive year that 
imported container volumes have surpassed the previous record of 18.6 
million containers that was established in Fiscal Year 2007.
    In terms of container cargo volumes, Asia remains our largest 
trading region and China our largest trading partner. In Fiscal Year 
2015, Asia was responsible for 62 percent of U.S. container trade 
volumes, 53 percent of that volume being tied to north Asia. Our annual 
report, which will be published in the next few weeks, has a very 
useful summary of ocean shipping trends as they relate to the United 
States on a region-by-region basis. We will be certain to get copies of 
our report to you and your staff as soon as it has been printed.
    The vessel capacity among the global fleet that is available to 
meet demands for increased container volumes seems more than 
sufficient. The world's containership fleet continued to expand with 
nominal capacity growing by approximately 9 percent. At the end of the 
fiscal year, there are 5,143 containerships with a capacity of 19.7 
million TEUs in the global fleet. Additionally, there were orders 
worldwide for 511 new containerships with an aggregate capacity of 4.1 
million TEUs--an increase of 21 percent over the existing fleet 
capacity. This generous supply of container capacity suggests that 
shippers will likely benefit from continued low transportation rates 
for their international ocean cargo.
    Regarding competition in the shipping industry, we may see 
considerable consolidation among container carriers this year. France-
based carrier CMA-CGM (CMA) is acquiring Singapore-based carrier NOL; 
and, China Ocean Shipping Company (COSCO) is absorbing China Shipping 
as part of a merger. Pending approval by regulators in the United 
States and other nations, both CMA-CGM and COSCO will grow in size; 
capabilities; market share; and possibly market power. The FMC has the 
vital responsibility to monitor possible changes in the marketplace and 
analyze potential impact on shippers. The CMA and COSCO transactions 
are complex, far-reaching, and will require careful on-going analysis 
for some time into the future.
    One of the most significant areas of responsibility for the Federal 
Maritime Commission is its review of operating agreements filed with 
the agency, particularly as the industry rapidly reacts to changing 
global economic conditions.
    Under the law, Vessel Operating Common Carriers (VOCCs) and Marine 
Terminal Operators (MTOs) who file agreements with the FMC enjoy a 
limited exemption from the Nation's antitrust laws. These exemptions 
are designed to help facilitate efficiencies and provide reliable and 
fair international ocean-borne transportation services to domestic 
shippers. Such agreements are thoroughly monitored and analyzed by 
Commission staff on a continuing basis to confirm that the law is 
followed and the American shipping public is not harmed.
    In Fiscal Year 2015, the Commission received 258 agreement 
filings--both new agreements and amendments to existing agreements--
which is the largest number of agreements filed during a 12-month 
period since 2006. The nature of international trade has changed 
tremendously over the nine-years between 2006 and 2015: trade volumes 
have grown; vessels have become larger in size; and supply chains have 
become more sophisticated. Corresponding trends in the shipping 
business are consequentially changing the nature of many of the 
agreements we consider.
    Many of these agreements now filed at the FMC reflect the trend in 
which carriers and MTOs increasingly work in cooperation with each 
other, sharing resources and assets. These agreements are much more 
complex and time-consuming to analyze than previously was the case. 
Additionally, the complexity and potentially anti-competitive effect of 
these agreements, require consistent oversight and critical analysis.
    As a result of merger and acquisition developments in the container 
shipping business, we are likely to see much more activity on the 
agreements front. Carriers that are purchasing other carriers, or are 
merging, are likely to modify their existing agreements or enter into 
new agreements and competing lines may change their agreements in 
reaction to the new reality of the shipping business. These 
developments warrant careful review and will demand more time, 
attention, and resources of the FMC.
    It is very easy to report a statistic via testimony, but there is a 
real world impact to all the record breaking volumes of containers 
landing in the United States and that is the continuing stress on 
maritime gateways--ports and intermodal connectors that are already 
congested with trade traffic. Marine Terminal Operators (MTOs) are 
working to find ways to more efficiently move cargo from ship-to-shore 
and out the gate.
    While the FMC is an enforcement and regulatory agency, it is also 
an organization that seeks actively to facilitate trade. It has been 
our experience that sometimes the best solution to a problem in an area 
under our purview is not simply regulation, but encouraging private 
sector parties to find their way to a private sector solution. That is 
the path we have mostly taken when it comes to port congestion.
    International trade begins at our Nation's ports and it is through 
marine terminals that cargo enters and exits the country. International 
trade moving through America's coastal gateways accounts for 32 percent 
of America's Gross Domestic Product and some predict that by 2030 this 
figure may rise to 60 percent. Ensuring that U.S. ports handling 
international ocean-borne commerce are able to efficiently handle 
current and projected volumes is a key priority for the Commission.
    Over the past two years, the Federal Maritime Commission has 
actively engaged in surveying the status of the nations' ports and 
identifying not only what the causes of congestion are, but how private 
sector, mutually agreeable, and results driven solutions might be 
found.
    In latter FY 2014, and throughout FY 2015, the Commission hosted 
four separate listening events at major gateway cities throughout the 
United States--Los Angeles; Baltimore; New Orleans; and Charleston--to 
gather input from stakeholders about what problems they were 
experiencing and how congestion was impacting their ability to move 
goods. These listening sessions, which were always headed by at least 
one Commissioner, led to the issuance of two separate publications:

   Rules, Rates, and Practices Relating to Detention, 
        Demurrage, and Free Time for Containerized Imports and Exports 
        Moving Through Selected United States Ports (April 2015--http:/
        /www.fmc.gov/NR15-03/?pg=9)

   U.S. Container Port Congestion & Related International 
        Supply Chain Issues: Causes, Consequences & Challenges (July 
        2015--http://www.fmc.gov/NR15-11/?pg=6)

    The Commission voted unanimously in February to approve the 
facilitation of ``Supply Chain Innovation Teams''--working groups 
comprised of industry stakeholders doing business in, at, or with the 
combined port facilities in the San Pedro Bay, which is our Nation's 
largest and busiest port complex. Supply Chain Innovation Team members 
will work to develop commercial solutions to supply chain challenges 
and related port congestion concerns. This effort will be led by 
Commissioner Dye and will culminate in a report that will be issued to 
the FMC. The real value of this undertaking is that we believe it will 
lead to collaborative, practical solutions that will increase 
efficiencies and terminal throughput at port facilities.
    An issue that the Commission is currently hearing much about is 
that of Safety of Life at Sea Treaty (SOLAS) amendments coming into 
force this July that will require shippers to declare a ``Verified 
Gross Mass'' (VGM) of containers to ocean carriers before a shipment 
will be allowed to be loaded on a vessel. Carriers and shippers have 
not yet resolved the issue, and on February 18, 2016, the FMC hosted a 
meeting at its headquarters that brought together all interested 
parties, including the Coast Guard, which is the U.S. Government agency 
with responsibility and jurisdiction for this matter. The meeting was 
convened to pursue guided discussion and seek consensus on how to 
proceed on the VGM matter. At this particular juncture, it seems more 
work needs to be done to achieve consensus. I reiterate that the Coast 
Guard is the lead agency on this matter--it represents the United 
States at the International Maritime Organization; it is responsible 
for implementing SOLAS; and it is responsible for enforcement matters 
in terms of vessel and facility safety. That noted, the FMC will 
maintain a vigilant watch on this issue and carefully monitor 
developments to see if the situation ever reaches a point where it 
would warrant intervention by the Commission under the relevant and 
applicable portions of the Shipping Act. The Commission is prepared to 
continue its informal role of promoting dialog among all relevant 
parties and is willing to continue to facilitate meetings.
    Earlier in my testimony, I noted that though the Federal Maritime 
Commission has regulatory and enforcement powers, trade facilitation is 
very much also at the core of its mission and activities. The ultimate 
goal of our work is to give the U.S. shipper confidence that when they 
contract for ocean freight services they are doing so with an honest 
actor, who is charging a fair rate, and is capable of actually having 
the shipment moved from origin to destination. We review, analyze, and 
monitor carrier and marine terminal operator agreements to assure these 
entities do not engage in anticompetitive behavior; we maintain and 
review confidentially filed service contracts; we provide forums for 
exporters, importers, and other members of the shipping public to 
obtain relief from ocean shipping practices or disputes that impede the 
flow of commerce; and we guard against unfair and unfavorable 
conditions caused by foreign government business practices in U.S. 
foreign shipping trades. The sum total of our efforts is that 
international trade flows efficiently and at a reasonable cost. When 
ocean transportation services begin to take longer or cost more, we 
want to know why this happening and how we can potentially fix any 
problems.
    We do all of this with less than 125 employees and with a budget in 
Fiscal Years 2015 and 2016 of only $25.6 million. I am very proud of 
the hard work our employees do, and the commitment they bring to the 
office each and every.
    While acknowledging and commending the hard work of Commission 
staff, I am not certain how much longer the Commission can sustain 
current operations if we do not receive modest relief in terms of some 
additional personnel in key positions and a corresponding realistic 
increase in funds to carry out our functions.
    The demands on the Commission are significant in terms of 
accepting, processing, analyzing, and acting upon just the routine 
filings that provide the foundation for a transparent and competitive 
international ocean shipping network. In just the first quarter of 
Fiscal Year 2016 (calendar months October, November, and December 2015) 
8,491 new service contracts were filed and 177,382 service contract 
Amendments were filed. Last year, the FMC received 51,109 new service 
contracts and 653,315 service contract amendments. As I mentioned 
above, merger and acquisition activity in the container industry will 
generate substantial new monitoring and analysis requirements.
    Simply put, the demands on the agency's resources are continually 
increasing, but the resources available to the FMC to execute its 
mission never seem to keep pace with the work that must be done. At 
some point, we may not be able to provide service at the rate our 
constituents require to be able to do their business; and if that day 
comes, we will not be facilitating trade, we will instead risk becoming 
an impediment to the free flow of cargo.
    In summary, the state of the maritime industry is mixed. On the one 
hand, increasing trade volumes are an encouraging indicator about the 
strength of the economy and it is fortunate that there is sufficient 
capacity in terms of vessels and container capacity that the costs of 
moving cargo internationally via the ocean will likely remain 
reasonable. On the other hand, if unaddressed congestion at U.S. ports 
presents a serious potential impediment to continued economic growth as 
well as the competitiveness of the Nation. Continued attention by 
Congress to ports and the intermodal connectors that link the quayside 
to the countryside is absolutely requisite. Financing ports, port 
infrastructure, and goods movement networks are investments that 
benefit the whole economy.
    Chairman Fischer, Senator Booker, once again, I appreciate this 
opportunity to appear before you and I am happy to answer any questions 
that anyone may have regarding the Federal Maritime Commission or 
developments on the waterfront where our insight would be helpful.

    Senator Fischer. Thank you, Mr. Chairman.
    Next we have Rear Admiral James Helis, United States 
Maritime Service Superintendent, United States Merchant Marine 
Academy.
    Welcome, sir.

             STATEMENT OF REAR ADMIRAL JAMES HELIS,

             U.S. MARITIME SERVICE SUPERINTENDENT,

             UNITED STATES MERCHANT MARINE ACADEMY

    Admiral Helis. Good afternoon, Chairwoman Fischer, Ranking 
Member Booker, and members of the Committee. Thank you for the 
invitation to testify on the state of the U.S. maritime 
industry and the role of the U.S. Merchant Marine Academy.
    Chairwoman Fischer, it's good to see you again, and I'd 
like to thank you again for visiting the Academy this past fall 
and for your kind words in your opening remarks. I value your 
interest in the Academy as well as that of Senator Wicker, who 
has also visited, and I appreciate the leadership of both of 
you as well as Senator Schatz and the Academy's Board of 
Visitors, of which he is also a member.
    The mission of the United States Merchant Marine Academy is 
to educate and graduate licensed merchant mariners and leaders 
of exemplary character who will serve America's marine 
transportation and defense needs in peace and war. Each year, 
the Academy graduates over 200 highly qualified young women and 
men committed to serving the nation as officers in the armed 
forces and the merchant marine. All graduating midshipmen will 
receive a Bachelor of Science degree, a U.S. Coast Guard issued 
merchant marine officer's license, and a commission in an 
active or reserve component of one of the armed forces.
    Over the past 5 years, the quality and diversity of the 
incoming classes at the Academy has improved considerably. The 
mean SAT scores have improved from 1215 to 1283. The percentage 
of women admitted rose from 12.9 percent to 19.3 percent, and 
minorities similarly rose from 15.2 percent to 21.1 percent. 
We're pleased with the progress we're making and expect to see 
continued improvements in the quality and the diversity of 
future classes.
    My top strategic priorities for the Academy are, one, 
improving infrastructure and facilities; two, degree 
reaccreditation; three, the leadership development program; 
and, four, prevention of sexual assault and sexual harassment. 
I will address each of these in some detail.
    First, capital improvements. We have pursued an aggressive 
capital improvements program for the Academy in recent years, 
renovating the midshipmen barracks and food service facilities; 
replacing Mallory Pier, the Academy's primary waterfront 
training asset; improving water, sewer, and electrical systems; 
and enhancing safety and physical security systems on campus. 
Our next major phase of capital improvements will focus on 
modernizing and renovating the academic buildings to include 
science laboratories and training simulators.
    Second, accreditation. The Middle States Commission on 
Higher Education accredits the Academy's academic degrees. We 
are presently in the decennial degree reaccreditation process. 
We anticipate the Middle States Commission issuing its final 
report and reaccrediting our degree programs in the summer of 
2016. The report will include Middle States' recommendations 
for actions to improve the quality of our programs, which will 
drive our strategic planning for 2017 and beyond.
    Third, leadership development. Leadership development is at 
the forefront of the Academy experience. Everything we do 
should contribute to the personal and professional growth of 
the midshipmen so they graduate prepared to be lifelong leaders 
for our Nation in the Merchant Marine, the armed forces, and in 
government.
    Starting with the class of 2020, two formal academic 
courses in leadership will be added to the core curriculum. In 
addition, the Commandant of Midshipmen is revising the 
regimental training program to dedicate more time to leadership 
development.
    Finally, sexual assault and harassment. Sexual assault and 
sexual harassment are unacceptable behaviors that have no place 
at any institution of higher education, especially one 
committed to developing our Nation's future leaders. The 
Academy has taken a number of steps to address sexual assault 
and sexual harassment, including implementing a wide variety of 
training, education, reporting, and security enhancements, 
which are detailed in my written testimony.
    While we have made progress, incidents of sexual assault 
and harassment are still occurring. There is still work to be 
done to eliminate this problem, and I am personally committed 
to doing so.
    Again, thank you for inviting me to testify today. I 
appreciate your interest and continued support for the U.S. 
Merchant Marine Academy, and I'll be happy to answer any 
questions you may have.
    Thank you.
    [The prepared statement of Admiral Helis follows:]

 Prepared Statement of Rear Admiral James Helis, U.S. Maritime Service 
         Superintendent, United States Merchant Marine Academy
    Good afternoon, Chairwoman Fischer, Ranking Member Booker and 
Members of the Committee. Thank you for the invitation to testify on 
the state of the U.S. maritime industry and the role of the U.S. 
Merchant Marine Academy.
    The mission of the United States Merchant Marine Academy is to 
educate and graduate licensed merchant mariners and leaders of 
exemplary character who will serve America's marine transportation and 
defense needs in peace and war. Each year the Academy graduates over 
200 highly-qualified young women and men committed to serving the 
Nation as officers in the Armed Forces and the Merchant Marine.
    The Academy provides a comprehensive four-year leadership 
development experience. All graduating midshipmen will receive a 
Bachelor of Science degree a U.S. Coast Guard-issued Merchant Marine 
officer's license,\1\ and a commission in an Active or Reserve 
Component of one of the Armed Forces. They can meet their service 
obligation in one of two ways. Twenty to 25 percent will choose to 
serve five years on Active Duty as an officer in any branch of the U.S. 
Armed Forces. The majority of the graduates will sail for five years as 
a Merchant Marine officer on U.S.-flagged commercial ships or with a 
Federal agency, normally Military Sealift Command or the National 
Oceanographic and Atmospheric Administration.
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    \1\ To graduate, Midshipmen must pass the U.S. Coast Guard 
examination for a Merchant Marine officer's license.
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    The Academy's mission begins with the men and women who pass 
through its gates in late June to begin their four-year journey. The 
Merchant Marine Academy has a highly competitive and selective 
admissions process. Candidates must have a strong academic record and 
demonstrate superior leadership potential through their participation 
in co-curricular activities, athletics, and community service. They 
must meet rigorous medical and physical fitness qualifications for 
military service. They must also receive a nomination from a Member of 
Congress or qualify for one of 40 direct appointments by the Secretary 
of Transportation by demonstrating qualities deemed to be of special 
value to the Academy.
    Over the past five years the quality and diversity of the incoming 
classes has improved considerably. Comparing the classes that entered 
the Academy in 2010 and 2015, we saw the mean score on the Scholastic 
Aptitude Test (SAT) improve from 1215 to 1283. The percentage of women 
admitted rose from 12.9 percent to 19.3 percent. Minorities similarly 
rose from 15.2 percent to 21.1 percent. Other indicators of the quality 
of our incoming candidates are class rank, grade point average, and key 
leadership positions in student government, athletics, and co-
curricular and community activities. We are pleased with the progress 
we are making and expect to see continued improvements in the quality 
and diversity of future classes.
    My top strategic priorities for the Academy are (1) improving 
infrastructure and facilities, (2) degree reaccreditation, (3) the 
leadership development program, and (4) prevention of sexual assault 
and sexual harassment. I will address each in some detail.
    The Obama Administration has pursued an aggressive capital 
improvements program for the Academy. We completed the renovation of 
all six barracks in December 2014. Since 2012, we have also replaced 
Mallory Pier, which had become unsafe and was deteriorating, with a 
modern, safe platform for instructional, competitive, and recreational 
waterfront activities. We upgraded and modernized the food service 
facilities in the Delano Hall dining facility. We have also undertaken 
major improvements in the water distribution and sewage systems, and 
are preparing to upgrade the electrical grid on campus. We will next 
execute a multi-year modernization and renovation of the academic 
buildings, to include science laboratories and training simulators. We 
will then proceed to the Academy's athletic and administrative 
buildings.
    We are fully committed to the safety and security of our campus, 
our midshipmen who live there, and our dedicated staff and faculty. To 
that end, we have undertaken major enhancements to our physical 
security program. Since 2012, we have installed surveillance cameras 
and blue light emergency call boxes in key locations on campus. We 
added electronic card access to all entrances to the barracks where our 
Midshipmen live. In 2013, we increased the size of the Academy's 
contract guard force. Our contract security personnel are now armed and 
trained to respond to a broad range of contingencies, including an 
active shooter and reports of sexual assault. Our new, manned command 
center integrates the security systems and provides immediate 
connections to local emergency services and law enforcement. Our 
emergency operations planning committee is reviewing and updating our 
response plans. We conducted active shooter training for faculty and 
staff in January, and will hold similar training for all midshipmen, 
staff, and faculty this spring. We are also planning exercises with 
local law enforcement. Funding for additional enhancements, including 
more surveillance systems and improved vehicle access control, is 
requested in the President's proposed budget for Fiscal Year 2017.
    The Middle States Commission on Higher Education (MSCHE) accredits 
the Academy's academic degrees. We are presently in the decennial 
degree reaccreditation process. Accreditation is based in part on a 
comprehensive evaluation including a very detailed institutional self-
study report. We initiated the self-study in 2013, with over one 
hundred staff, faculty, and Midshipmen serving on various committees. 
We completed the self-study on time and submitted it to MSCHE for 
review earlier this year. The accreditation team, appointed by MSCHE, 
is comprised of educators and experts who ensure the Academy is meeting 
the standards of excellence established by MSCHE. The team, led by West 
Point's Dean of Academics, Brigadier General Tim Trainor, will visit 
the Academy in April 2016 to conduct their on-site assessment and 
provide us their initial findings. We anticipate MSCHE issuing its 
final report and reaccrediting our degree programs in the summer of 
2016. The report will include MSCHE's recommendations for actions to 
improve the quality of our programs, which will drive our strategic 
planning for 2017 and beyond.
    Leadership development is at the forefront of the Academy 
experience. Everything we do should contribute to the personal and 
professional growth of the Midshipmen so they graduate prepared to be 
lifelong leaders for our Nation in the Merchant Marine, the Armed 
Forces, and government. Starting with the class of 2020, two formal 
academic courses in leadership will be added to the core curriculum. 
The Dean of Academics and the faculty are making adjustments to the 
curriculum to ensure these courses are not additive to an already 
demanding academic load. We presently offer an elective in leadership 
which is well-subscribed. The Commandant of Midshipmen is revising the 
Regimental training program to dedicate more time to leadership 
development. His intent is to develop a more progressive program of 
seminars targeted at the experience and needs of each class. He is also 
building additional leadership training through exercises into the 
summer training program for the incoming class, which should be 
beneficial to both the new Midshipmen and the senior midshipmen 
conducting the training. I am proud of how the Commandant's staff, 
faculty, and athletics department have embraced the challenge of more 
explicitly addressing the development of the leadership skills of our 
Midshipmen. We believe this will enhance the quality of the Academy's 
graduates and better inspire them to lives of selfless service as 
leaders for our Nation.
    Sexual assault and sexual harassment are unacceptable behaviors and 
have no place at any institution of higher education, especially one 
committed to developing our Nation's future leaders. Sexual assault and 
sexual harassment continue to be a concern at the Academy. We are 
committed to eliminating this behavior on our campus and, until we 
reach that goal, improving the reporting rate and taking appropriate 
action in each reported case. The Commandant in his vision for the 
Regiment has clearly defined assaults on personal dignity, integrity, 
and leadership as harmful not only to individuals, but also to the 
Academy and detrimental to mission accomplishment. The steps we have 
taken since 2012 to address sexual assault and harassment are included 
in our annual reports to Congress. We welcomed evaluations of our 
programs by the Department of Transportation (DOT) Inspector General in 
2013 and 2014, which provided a review of our programs and provided 
useful recommendations, all of which we have implemented.
    To oversee and guide the Sexual Assault Prevention and Response 
(SAPR) program, DOT established a Senior SAPR Steering Committee with 
members of senior staff from the Secretary of Transportation's office, 
the Maritime Administration (MARAD), and the Academy. At the Academy, 
we established a multi-disciplinary Sexual Assault Review Board (SARB), 
meeting monthly, to provide executive oversight and procedural guidance 
for the SAPR program by reviewing ways to improve processes, system 
accountability and victim access to quality services. The SARB has 
recently drafted Standard Operating Procedures for investigating 
reports of sexual assault and appropriately maintaining these reports 
and records.
    Our full-time Sexual Assault Response Coordinator (SARC) resides on 
the Academy, and is available to Midshipmen 24/7 through a victim 
hotline. Victims are provided with information and referrals, and 
assistance in obtaining any necessary medical or mental health 
treatment at the academy or appropriate local community resource and/or 
victim advocacy agency. Victims may make a confidential (restricted) 
report \2\ through the SARC, Health Clinic counseling staff, Chaplain, 
or trained and designated staff and faculty victim advocates. The 
Academy works closely with a local victim advocacy agency to provide an 
additional confidential reporting option. A victim may also make an 
unrestricted report which results in the initiation of both criminal 
and administrative investigations. Depending on the outcome of the 
investigations, the Academy may take administrative disciplinary action 
regardless of whether criminal charges are ultimately filed.
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    \2\ A confidential report, also known as a restricted report, 
allows Midshipmen who are sexual assault victims to disclose, on a 
confidential basis, the details of their assault to specifically 
identified individuals at the Academy and receive medical treatment and 
counseling at a location of the victim's choice (on or off-campus), 
without triggering the official investigative process. Midshipmen who 
initially elect to make a restricted report can, at any time after 
their initial restricted report, decide to pursue unrestricted 
reporting, which will result in the initiation of criminal and 
administrative investigatory proceedings.
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    The SARC, working with the Superintendent, Commandant and Dean of 
Academics, has significantly improved training across the Academy aimed 
at the prevention of sexual assault and sexual harassment. Faculty and 
staff receive mandatory training annually. Incoming Midshipmen receive 
training in the first three weeks in small group settings (20-25 
midshipmen per training) covering the topics of sexual assault, sexual 
harassment, dating violence, stalking and bystander intervention. For 
the Class of 2019, we increased training to three hours from one hour 
in the year prior. The SARC and Commandant continue to provide 
quarterly training throughout each Midshipman's academic career in both 
small and large group settings. The SARC and the Department of 
Professional Development and Career Services provide special training 
sessions prior to departure for Sea Year (sophomores spend four months 
at sea and juniors spend eight months at sea). Training focuses on 
where to seek help or assistance (Ship's Master, Designated Person 
Ashore), situational awareness, risk reduction, and bystander 
intervention. This year, the Academy adopted the Green Dot bystander 
intervention program, which teaches students to identify volatile 
situations in which there could be the possibility of sexual violence 
and to defuse those situations through diversion or distraction. The 
SARB recently decided to increase our training on sexual assault and 
proper conduct for Midshipmen prior to their departure for sea training 
this summer, in response to reports that this is a higher risk period 
for Midshipmen. While we have implemented this wide variety of 
important training, education, reporting, and security mechanisms, much 
work remains to be done to achieve a climate of where sexual assault 
and sexual harassment are not tolerated and this behavior is 
eliminated. The USMMA recognizes this important on-going responsibility 
and will work towards continuous improvement.
    To give our Midshipmen alternatives to behaviors that could put 
them at risk, we have improved our campus climate. We hired a new 
Student Activities Director to organize activities after school and 
during the weekend to keep students occupied and energized. Activities 
have included trips to New York City cultural attractions, movie 
marathons, Sea Story Sunday, open mic nights, and a Winter Carnival 
featuring an iceless skating rink.
    Since 2012, our surveys tell us Midshipmen have a much better 
awareness and understanding of sexual assault and sexual harassment and 
appreciate the commitment of everyone from the Secretary of 
Transportation through MARAD, the Academy's senior leadership, and 
Midshipmen Regimental officers to eliminating sexual assault and sexual 
harassment from the Academy. We are extremely disappointed that we are 
not seeing a decrease in incidents in the survey results. I want to 
assure the Committee that I am personally committed to solving this 
problem. My experience in assisting victims of sexual assault dates 
back to the 1990s when I served in the Army as a battalion commander. I 
know from working firsthand with victims the immeasurable, sometimes 
lifelong harm these crimes inflict and how they undermine unit 
readiness and cohesion.
    Sexual assault and sexual harassment are fundamentally at odds with 
our values as a Nation and our obligation as leaders to live by, model, 
and expand those values. They undermine our ability to accomplish our 
mission. The U.S. Merchant Marine Academy, a Federal service academy, 
should be setting the example for the Nation in eliminating sexual 
assault and sexual harassment on campus.
    Again, thank you for inviting me to testify today. I appreciate 
your interest and continued support for the U.S. Merchant Marine 
Academy and will be happy to answer any questions you may have.

    Senator Fischer. Thank you, Admiral.
    And, finally, we have Mr. Mitch Behm, Assistant Inspector 
General, U.S. Department of Transportation.
    Welcome.

        STATEMENT OF MITCHELL BEHM, ASSISTANT INSPECTOR

            GENERAL, SURFACE TRANSPORTATION AUDITS,

               U.S. DEPARTMENT OF TRANSPORTATION

    Mr. Behm. Thank you. Chairman Fischer, Ranking Member 
Booker, and members of the Subcommittee, thank you for inviting 
me to discuss our work on DOT's Maritime Administration.
    As you know, MARAD has faced a number of changes over the 
past few years, including taking on an organizational 
restructuring and an expanded grant oversight mission, as well 
as addressing sexual assault and sexual harassment concerns at 
the U.S. Merchant Marine Academy. Since 2010, we've issued 12 
reports that point to the need for enhanced controls and 
oversight at MARAD. Today, I will highlight our findings from 
our most recent report issued last December and provide an 
update of USMMA's actions to address sexual assault and sexual 
harassment.
    As we reported in December 2015, weaknesses in MARAD's 
management controls for risk mitigation, workforce development, 
and program implementation hindered the Agency's ability to 
meet its mission. MARAD has since implemented 5 of our 16 
recommendations that improved its risk management process, 
refined program implementation in two areas, and enhanced 
oversight mechanisms. However, weaknesses remain in workforce 
development and program implementation.
    First, MARAD has not fully implemented workforce plans from 
its 2012 workforce analysis, including competency models for 
mission critical positions. These models are important for 
making informed hiring and training decisions to close 
competency gaps. MARAD has identified competency models that it 
plans to use, such as OPM's leadership framework, but has not 
developed important components for each competency, such as a 
definition, behaviors, and proficiency levels.
    MARAD'S workforce development policies also lacked 
important elements. For example, policies and procedures for 
onboarding new hires, training, and addressing misconduct, 
specifically suspected drug use, were incomplete, out of date, 
or not fully implemented.
    To address our concerns about MARAD's workforce plans and 
policies, we made five recommendations, including that MARAD 
fully implement comprehensive competency models for mission 
critical positions, develop supplemental policies and 
procedures, and train fleet supervisors on how to handle 
suspected drug use. MARAD plans to complete its actions on all 
these recommendations by the end of 2017.
    Second, we reported in December that MARAD's policies and 
procedures for program implementation were outdated agency-wide 
and incomplete or outdated in four of the five program areas we 
reviewed. Since December, MARAD has improved management 
controls in two of these areas, TIGER grant oversight and the 
Historic Preservation Program. However, gaps remain in MARAD's 
controls agency-wide and for ship disposal and vessel transfer, 
gaps that increase the risks of poor program implementation; 
noncompliance with Federal requirements; lapses in continuity 
of operations; and fraud, waste, and abuse.
    A particular concern with regard to ship disposal was 
MARAD's lack of policies and procedures to ensure it disposes 
of the vessels under its purview. In one case, the Coast Guard 
disposed of a vessel that may have been under MARAD's purview 
through GSA without consulting MARAD, potentially diverting 
funds from MARAD that it is statutorily entitled to.
    Finally, monitoring weaknesses remain in two program areas: 
the Vessel Transfer Office and National Defense Reserve Fleet 
Operations. For example, key performance indicators for Reserve 
Fleet Operations are not consistently calculated, due in part 
to systems limitations, and as a result do not produce reliable 
assessments of fleet performance. We made nine recommendations 
to address our concerns about program implementation, three of 
which MARAD has already implemented. MARAD plans to complete 
its actions on the other six recommendations by the end of 
2018.
    Another area that we continue to closely monitor is MARAD's 
progress in implementing the Merchant Marine Academy's Sexual 
Assault Prevention and Response Program. In October 2014, we 
reported a lack of progress in implementing needed actions, 
including assigning oversight responsibility and establishing 
standard operating procedures for investigating and reporting 
allegations of sexual harassment and assault. Weaknesses in the 
Academy's biennial surveys of midshipmen, staff, and faculty 
further limited USMMA's efforts to target and make progress in 
critical areas.
    MARAD has implemented all nine of our recommendations. We 
continue to monitor the Academy's actions to address sexual 
assault and harassment in light of ongoing congressional 
interest.
    This concludes my prepared statement. I'll be happy to 
answer any questions you or other Subcommittee members may 
have.
    [The prepared statement of Mr. Behm follows:]

   Prepared Statement of Mitchell Behm, Assistant Inspector General, 
    Surface Transportation Audits, U.S. Department of Transportation
    Chairman Fischer, Ranking Member Booker, and Members of the 
Subcommittee:

    Thank you for inviting me to testify on our recent work related to 
the Department of Transportation's (DOT) Maritime Administration 
(MARAD). MARAD received over $399 million for Fiscal Year 2016 to 
support operations and administer its programs, including operation of 
the U.S. Merchant Marine Academy (USMMA).\1\ During the past few years, 
MARAD's mission has expanded to include oversight of a number of grants 
for port development projects. This increase in responsibilities--along 
with a restructuring of MARAD's organization--point to the need for 
enhanced attention to MARAD's management controls.\2\
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    \1\ MARAD also receives funds on a reimbursable basis from the U.S. 
Department of Defense (DOD) for its National Defense Reserve Fleet 
(NDRF) program to provide sealift, or ocean transportation, for DOD and 
other Federal agencies during peacetime and war.
    \2\ Management controls, also referred to as internal controls, are 
intended to help managers achieve desired results through effective 
stewardship of public resources.
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    Since 2010, we have issued 5 MARAD-specific reports with 46 
recommendations and 7 departmentwide reports with 15 MARAD-related 
recommendations (see exhibit for reports and status of 
recommendations). Most recently, in December 2015, we issued a 
comprehensive report \3\ on a self-initiated audit of the Agency's 
management controls for a number of areas.\4\ In October 2014, in 
response to congressional requests, we reported on USMMA's progress in 
establishing a program to address sexual assault and harassment at the 
Academy.\5\ My testimony today will focus primarily on the findings in 
our 2015 report, as well as update you on our ongoing assessment of 
USMMA's actions to address sexual assault and sexual harassment.
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    \3\ Weaknesses in MARAD's Management Controls for Risk Mitigation, 
Workforce Development, and Program Implementation Hinder the Agency's 
Ability To Meet Its Mission, OIG Report Number ST-2016-011, December 
10, 2015.
    \4\ We assessed MARAD's management controls organization-wide and 
for five specific program areas: (1) NDRF Reserve Fleet Operations, (2) 
Historic Preservation Program, (3) Ship Disposal Program, (4) Vessel 
Transfer Office (VTO), and (5) Transportation Investment Generating 
Economic Recovery (TIGER) Grant Oversight. We selected these program 
areas for review based on MARAD's risk assessments, congressional 
interest, and input from Office of Inspector General (OIG) 
investigators and previous audits.
    \5\ Better Program Management and Oversight Are Required for 
USMMA's Efforts To Address Sexual Assault and Harassment, OIG Report 
Number ST-2015-004, October 23, 2014.
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Summary
    In 2015, we reported that weaknesses in MARAD's management controls 
for risk mitigation, workforce development, and program implementation 
hindered the Agency's ability to meet its mission. MARAD has since 
taken action to address some of these areas, but weaknesses remain in 
workforce development and program implementation.
    Specifically, we found that MARAD's strategic plan and performance 
measures aligned with Federal management control standards.\6\ However, 
MARAD fell short of complying with Federal standards for risk 
management in that it thoroughly documented risks to achieving its 
goals for most of its divisions, but it did not thoroughly document 
strategies for mitigating those risks. MARAD has since taken action to 
improve its risk management process. In line with Federal management 
control standards, MARAD also conducted a workforce analysis to assess 
its organizational structure in 2012 and developed several workforce 
plans, including a Strategic Human Capital Plan. However, as of 
December 2015--more than 3 years after its 2012 analysis--MARAD had not 
fully implemented its workforce plans, as it had not fully implemented 
competency models for certain mission-critical occupations. 
Furthermore, MARAD's workforce development policies and procedures 
related to onboarding new hires, training, and addressing misconduct 
were incomplete, out-of-date, or not fully implemented. Finally, 
MARAD's controls for program implementation, monitoring, and oversight 
were deficient. We found that over half of the Agency's directives that 
document MARAD's policies and procedures for program implementation 
were over 10 years old--potentially making these controls obsolete--and 
policies and procedures were incomplete or outdated in four of the five 
program areas we reviewed. Since we issued our report, MARAD has taken 
action to improve its controls for implementation of two program areas 
and its program oversight, but gaps remain.
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    \6\ GAO, Standards for Internal Control in the Federal Government, 
GAO/AIMD-00-21.3.1, November 1999. This publication was in effect for 
the duration of this review; GAO, Internal Control Management and 
Evaluation Tool, GAO-01-1008G, August 2001.
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    MARAD has also made progress in implementing USMMA's Sexual Assault 
Prevention and Response (SAPR) program. In October 2014, we reported 
that USMMA had not completed actions identified for effectively 
managing SAPR, including assigning responsibility for program oversight 
and for ensuring compliance with legislative requirements. We also 
reported delays in establishing standard operating procedures (SOP) for 
effective SAPR program management. MARAD has since taken action to 
address our concerns and the weaknesses we identified, but we continue 
to monitor USMMA's actions in carrying out the SAPR Program.
Weak Management Controls Hinder MARAD's Ability to Meet Its Mission
    In December 2015, we reported that MARAD's strategic plan and 
performance measures aligned with Federal standards, but the Agency did 
not thoroughly document its risk mitigation strategies. We also 
reported that MARAD had assessed its organizational structure but had 
not fully implemented workforce plans and development policies. 
Finally, we reported that MARAD's controls for program implementation, 
monitoring, and oversight were deficient. MARAD has begun to take 
action in some of these areas.
MARAD's Strategic Plan and Performance Measures Aligned With Federal 
        Standards, but the Agency Did Not Thoroughly Document Its Risk 
        Mitigation Strategies
    MARAD's 2012-2015 Strategic Plan and documented performance 
measures met Federal management control standards. MARAD intends to 
update its strategic plan based on the outcomes of three ongoing 
planning efforts--DOT's National Freight Strategy,\7\ the Secretary's 
30-year transportation plan, and the National Maritime Strategy. MARAD 
also established performance measures that align with Federal 
management control standards for the organization, for each major 
activity, and for its Senior Executive Service employees. MARAD works 
with managers, the Department, and OMB to annually re-evaluate its 
performance measures, and reports certain operational and 
administrative measures to DOT leadership through quarterly performance 
management reviews.
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    \7\ Mandated by the Moving Ahead for Progress in the 21st Century 
Act, Public Law 112-141, July 6, 2012.
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    However, MARAD fell short of meeting Federal standards for risk 
management, which require identification of risks to achieving goals 
and strategies for mitigating those risks. Specifically, MARAD 
thoroughly documented risks for most of its assessable units 
(programmatic or functional divisions) but did not thoroughly document 
mitigation strategies. For example, the Federal Ship Financing Program 
identified risks, including poor documentation and inter-office 
coordination on loan monitoring, which could impact program 
effectiveness, the Agency's reputation, and public trust. However, the 
program did not document any strategies for mitigating these risks.
    To better ensure that MARAD's risk management aligned with Federal 
control standards, we recommended that the Agency (1) update its 
policies and procedures to require risk profile reviews to thoroughly 
document risks and mitigation strategies, and (2) provide additional 
training to program managers and Internal Control Officers on 
thoroughly documenting risks and mitigation strategies in risk 
profiles. MARAD has taken action to implement both recommendations.
MARAD Assessed Its Organizational Structure but Had Not Fully 
        Implemented Workforce Plans and Development Policies
    In accordance with Federal standards, MARAD conducted a workforce 
analysis in 2012 to assess its organizational structure, and in 
response, developed several workforce plans, including a Strategic 
Human Capital Plan. The Agency also initiated position enrichment and 
realignment efforts in 2013 to transform its top-heavy organizational 
structure by replacing high graded positions with lower grades as 
attrition occurs.
    However, as of December 2015--3 years after its 2012 analysis--
MARAD had not fully implemented its workforce plans. For example, MARAD 
had not fully implemented competency models for mission-critical 
positions. These models are important for making fully informed hiring 
and training decisions to close identified competency gaps. MARAD 
identified competency models that it plans to use, such as the Office 
of Personnel Management's Leadership Framework, but has not developed 
important components for each competency--such as a definition, 
behaviors, and proficiency levels.
    MARAD's workforce development policies also lack important 
elements. For example, while the policies and procedures for recruiting 
and hiring aligned with Federal best practices, policies and procedures 
for onboarding new hires, training, and addressing misconduct were 
incomplete, out-of-date, or not fully implemented.
    A particular concern was the lack of effective policies, 
procedures, and training to address suspected drug use. DOT's policy on 
drug and alcohol use \8\ calls for random drug testing of employees in 
positions that the Department of Health and Human Services (HHS) has 
approved as ``testing designated,'' and testing of employees in non-
designated positions when there is ``reasonable suspicion'' \9\ of 
illegal drug use. However, only a few of MARAD's fleet site employees 
are testing designated--even though fleet sites are open water 
industrial areas with inherent safety risks that could be exacerbated 
by employee intoxication. MARAD is working with DOT and HHS to add 
positions to its list of testing designated positions, but MARAD 
officials stated that it could be over a year before HHS approves the 
expanded list and MARAD can implement expanded testing. Testing 
employees in non-testing designated positions has also been 
problematic. MARAD has not provided written policies or procedures for 
determining when to apply the reasonable suspicion provision of DOT's 
policy for testing these employees, and some fleet site managers 
indicated a need for assistance. Further, while DOT requires all 
Operating Administrations to provide drug and alcohol awareness 
training for new supervisors--which covers testing procedures in cases 
of reasonable suspicion--MARAD had not provided this training because 
its human resources officials were unaware of the training 
requirements.
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    \8\ DOT Order 3910.1D, Drug and Alcohol-Free Departmental Workplace 
Program, October 1, 2010.
    \9\ According to DOT's policy, reasonable suspicion must be based 
on specific and timely observations concerning the appearance, 
behavior, speech, and/or body odors of the employee, or information 
provided by either a reliable and credible source (independently 
corroborated) or by the employee's own admission.
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    We made five recommendations to improve MARAD's management controls 
for its organizational structure and workforce development. For 
example, to better inform MARAD's hiring, training, and promotion 
decisions, we recommended that MARAD fully implement comprehensive 
competency models for mission-critical positions. To prepare 
supervisors to address important safety issues, we recommended MARAD 
develop supplemental policies and procedures and train fleet 
supervisors on how to handle suspected drug use. MARAD plans to 
complete its actions on all five of our recommendations by the end of 
December 2017.
MARAD Has Begun to Take Action to Strengthen Controls for Program 
        Implementation, Monitoring, and Oversight
    MARAD policies and procedures--which provide management controls 
for program implementation--are largely outdated agencywide, and 
incomplete or outdated in four of the five program areas we reviewed: 
the Ship Disposal Program, the Historic Preservation Program, the VTO, 
and TIGER grant oversight. We found 132 of the Agency's 226 maritime 
administrative orders (MAO)--directives that document MARAD's policies 
and procedures for program implementation--were over 10 years old, 
potentially making these controls obsolete. For example, MARAD had not 
updated its Freedom of Information Act (FOIA) MAO from 1986 to reflect 
its current FOIA processes, which incorporate changes in FOIA and DOT 
policies as well as technological advances. In October 2014, MARAD 
developed a 3-year plan for updating its MAOs, and identified 96 MAOs 
to review by July 2015. However, less than a third had been reviewed 
and updated by that date.
    Since we reported our findings in December 2015, MARAD has taken 
action to improve controls for TIGER grant oversight by changing roles 
and responsibilities. MARAD has also taken action to improve its 
Historic Preservation Program by enhancing its policies and procedures 
for managing and preserving heritage assets, such as artwork, ship 
models, and ship wheels. These enhancements should help minimize the 
risk of lost heritage assets--a condition we found during our audit. 
MARAD also committed to disposing of its excess assets that are no 
longer considered heritage.
    Gaps remain in MARAD's policies and procedures for the Ship 
Disposal Program and VTO. These gaps increase the risk of poor program 
implementation; non-compliance with Federal requirements; lapses in 
continuity of operations; and fraud, waste, and abuse.

   The Ship Disposal Program lacked policies and procedures for 
        (1) notifying other Federal agencies of its role as disposal 
        agent for obsolete NDRF vessels and some vessels owned by other 
        Federal agencies,\10\ and (2) identifying the universe of 
        federally owned vessels it is responsible for disposing. 
        Because MARAD does not have statutory authority to enforce 
        compliance by other Federal agencies, MARAD executed ship 
        disposal agreements with some agencies that own vessels under 
        its disposal purview--the Navy, U.S. Coast Guard, and General 
        Services Administration (GSA)--but not with others, including 
        the National Oceanic and Atmospheric Administration. 
        Furthermore, these agreements do not cover all applicable 
        vessels. For example, the agreement with the Coast Guard did 
        not cover a vessel that may have been under MARAD's purview for 
        disposal that the Coast Guard ultimately disposed of through 
        GSA without consulting MARAD. When MARAD does not dispose of 
        vessels it is statutorily responsible for, it does not receive 
        funds for its Vessel Operating Revolving Fund for MARAD and 
        National Parks Service programs.\11\ MARAD also had incomplete 
        procedures to allocate and expend ship disposal proceeds in 
        accordance with the provisions of the National Maritime 
        Heritage Act of 1994.
---------------------------------------------------------------------------
    \10\ Per 40 U.S.C. Sec. 548, MARAD is the disposal agent for 
Government-owned vessels over 1,500 gross tons that are merchant 
vessels or capable of being converted to merchant use.
    \11\ The National Maritime Heritage Act of 1994 (54 U.S.C. 
Sec. 308704) requires MARAD to allocate its ship disposal proceeds to 
the Vessel Operations Revolving Fund and to expend 50 percent of those 
funds for acquisition, maintenance, repair, reconditioning, or 
improvement of vessels in the National Defense Reserve Fleet; 25 
percent for expenses incurred by or on behalf of State maritime 
academies or the U.S. Merchant Marine Academy for facility and training 
ship maintenance, repair, and modernization, and for the purchase of 
simulators and fuel; and the remaining 25 percent for the Maritime 
Heritage Grants or, if otherwise determined by the Maritime 
Administrator, for use in the preservation and presentation to the 
public of MARAD's maritime heritage property.

   VTO's policies and procedures for authorizing ownership, 
        registry, and flag transfers for U.S. vessels weighing 1,000 
        tons or more were developed in 1993 and have not been updated. 
        According to VTO's staff person, the policies are not used 
        because she has the knowledge and experience needed to process 
        transfer applications. As we noted in our report, well-
        documented policies and procedures would enhance MARAD's 
        ability to ensure consistent program implementation and smooth 
        continuity of VTO operations if the office's only employee 
---------------------------------------------------------------------------
        leaves the Agency.

    MARAD had mechanisms for monitoring performance in the five areas 
we reviewed. However, we found weaknesses in two areas--NDRF Reserve 
Fleet Operations and VTO--that inhibit the effectiveness of monitoring. 
For example, the NDRF Reserve Fleet Operations' key performance 
indicators (KPI) are not consistently calculated due to differences in 
fleet practices and system limitations. As a result, the KPIs do not 
produce reliable assessments of fleet performance.
    Finally, MARAD has taken action to enhance mechanisms for 
overseeing implementation of corrective actions, in response to our 
recommendation. While the Agency tracked recommendations from OIG and 
GAO audit reports and the Department's A-123 reviews, the tracking 
system did not include complete information on management control 
deficiencies from other sources, such as internal MARAD reviews and 
other external audits. Moreover, MARAD's Internal Control Program 
directive did not require information on all management control 
deficiencies to be communicated to the Program and Performance Office 
staff who maintain the tracking system. As a result, the Agency may 
have missed opportunities for program improvement and exposed its 
programs to ongoing risk. MARAD has implemented our recommendation 
related to this weakness, and can now better track management control 
deficiencies and corrective actions.
    MARAD has taken action addressing three of our nine recommendations 
in this area, and plans to complete action on the remaining six by the 
end of December 2018.
USMMA'S Actions to Address Sexual Assault and Sexual Harassment Are 
        Ongoing
    In 2008, Congress legislated action aimed at creating a campus 
environment free of sexual assault and harassment at USMMA.\12\ 
However, USMMA's survey for the 2011-2012 academic year indicated an 
estimated 25 midshipmen were sexually assaulted and 136 midshipmen were 
sexually harassed--despite no incidents being reported in that academic 
year.
---------------------------------------------------------------------------
    \12\ Duncan Hunter National Defense Authorization Act for Fiscal 
Year 2009, Public Law No. 110-417 Sec. 3507, October, 14, 2008.
---------------------------------------------------------------------------
    In October 2014--6 years after the 2008 legislation--we reported 
that USMMA had not completed over a third of the actions identified for 
effectively managing the SAPR program, including assigning 
responsibility for program oversight and for ensuring compliance with 
statutory requirements. In response to our report, OST clarified the 
SAPR program oversight responsibilities in a MAO.
    We also reported delays in establishing SOPs for effective SAPR 
program management. These SOPs included ones for investigating sexual 
harassment and sexual assault, collecting evidence related to sexual 
assault and processing restricted sexual assault reports, and meeting 
requirements to report allegations of sexual harassment and assault.
    Finally, we reported that USMMA's annual reports to Congress were 
issued, on average, nearly 2 years after the academic year ended.\13\ 
For example, the final 2011-2012 report was issued in March 2014--21 
months after the end of the academic year. Weaknesses in USMMA's 
biennial surveys further limited timely and useful data by delaying the 
establishment of a reliable baseline for measuring midshipmen, staff, 
and faculty perceptions of the campus climate. Most recently, MARAD 
issued a preliminary 2013-2014 report in January 2015, and the final 
report for that academic year in January 2016. MARAD also issued a 
preliminary report for academic year 2014-2015 in January 2016.
---------------------------------------------------------------------------
    \13\ USMMA's academic year runs from July 1 through June 30.
---------------------------------------------------------------------------
    MARAD concurred with our nine recommendations for addressing the 
concerns and weaknesses we identified and implemented all of them as of 
May 2015. We continue to monitor USMMA's actions in carrying out SAPR 
in response to a congressional directive \14\ and plan to brief the 
requesting committee on our work this Spring.
---------------------------------------------------------------------------
    \14\ See U.S. Senate Report 113-182 accompanying the 
Transportation, Housing and Urban Development, and Related Agencies 
Appropriation Bill, 2015.
---------------------------------------------------------------------------
    This concludes my prepared statement. I will be happy to answer any 
questions you or other subcommittee members may have.
                                 ______
                                 
Exhibit. Summary of OIG Reports From 2010 to Present With MARAD-Related 
                            Recommendations
    From 2010 through the present, we issued 5 reports on audits 
specific to MARAD. These audits contained 46 recommendations, of which 
12 remain open.

     Table 1.--Status of Recommendations from MARAD-specific Audits
------------------------------------------------------------------------
          Report Title              Date Issued    Total   Closed   Open
------------------------------------------------------------------------
Weaknesses in MARAD's Management      12/10/2015      16        5     11
 Controls for Risk Mitigation,
 Workforce Development, and
 Program Implementation Hinder
 the Agency's Ability To Meet
 Its Mission
------------------------------------------------------------------------
Better Program Management and         10/23/2014       9        9      0
 Oversight are Required for
 USMMA's Efforts to Address
 Sexual Assault and Harassment
------------------------------------------------------------------------
MARAD Has Taken Steps To Develop      08/02/2013       9        8      1
 a Port Infrastructure
 Development Program but Is
 Challenged in Managing Its
 Current Port Projects
------------------------------------------------------------------------
USMMA Security Controls Were Not      05/30/2012       9        9      0
 Sufficient to Protect Sensitive
 Data from Unauthorized Access
------------------------------------------------------------------------
Title XI Loan Guarantee Program:      12/07/2010       3        3      0
 Actions Are Needed To Fully
 Address OIG Recommendations
------------------------------------------------------------------------
Totals                                                46       34     12
------------------------------------------------------------------------

    In addition, from 2010 to the present, we have reported on 7 
departmentwide audits with 15 recommendations related to MARAD. Of 
these, 4 recommendations remain open.

 Table 2.--Status of MARAD-Related Recommendations from Department-wide
                                 Audits
------------------------------------------------------------------------
          Report Title              Date Issued    Total   Closed   Open
------------------------------------------------------------------------
FISMA 2015: DOT Has Major             11/05/2015       1        0      1
 Success in PIV Implementation,
 but Problems Persist In Other
 Cybersecurity Areas
------------------------------------------------------------------------
Some Deficiencies Exist in DOT's      04/09/2015       2        0      2
 Enforcement and Oversight of
 Certification and Warrant
 Authority for its Contracting
 Officers
------------------------------------------------------------------------
FISMA 2013: DOT Has Made              11/22/2013       1        0      1
 Progress, but Its Systems
 Remain Vulnerable to
 Significant Security Threats
------------------------------------------------------------------------
DOT Does Not Fully Comply With        08/05/2013       1        1      0
 Revised Federal Acquisition
 Regulations on the Use and
 Management of Cost-
 Reimbursement Awards
------------------------------------------------------------------------
Quality Control Review of the         11/15/2011       4        4      0
 Department of Transportation's
 Audited Consolidated Financial
 Statements for Fiscal Years
 2011 and 2010
------------------------------------------------------------------------
Quality Control Review of             11/15/2010       3        3      0
 Audited Consolidated Financial
 Statements for Fiscal Years
 2010 and 2009, Department of
 Transportation
------------------------------------------------------------------------
Timely Actions Needed To Improve      11/15/2010       3        3      0
 DOT's Cybersecurity
------------------------------------------------------------------------
Totals                                                15       11      4
------------------------------------------------------------------------


         Table 3.--Open MARAD-Related Recommendations by Report
------------------------------------------------------------------------
                        Open Recommendations by Report    Target Action
------------------------------------------------------------------------
8Weaknesses in MARAD's Management Controls for Risk Mitigation,
 Workforce Development, and Program Implementation Hinder the Agency's
 Ability To Meet Its Mission, Dec. 10, 20150
------------------------------------------------------------------------
3.                    Create and implement a plan--           09/30/2016
                       including tasks, actions,
                       timelines, and responsible
                       personnel--to fully implement
                       comprehensive competency models
                       for mission-critical
                       occupations.
------------------------------------------------------------------------
4.                    Align Headquarters' and field           06/30/2016
                       offices' onboarding policies and
                       procedures to ensure consistent
                       implementation and provision of
                       critical information across the
                       Agency.
------------------------------------------------------------------------
5.                    Update the training policies to         06/30/2016
                       reflect the current operating
                       environment and to include a
                       control mechanism to ensure all
                       completed training is tracked in
                       a comprehensive training
                       repository.
------------------------------------------------------------------------
6.                    Contingent upon HHS' response,          12/29/2017
                       finalize the expansion of the
                       number of testing-designated
                       positions at fleet sites.
------------------------------------------------------------------------
7.                    Develop supplemental policies and       03/31/2016
                       procedures and train fleet
                       supervisors on MARAD's
                       procedures to handle suspected
                       drug use.
------------------------------------------------------------------------
8.                    Update existing MAOs in                 12/28/2018
                       accordance with established
                       timelines.
------------------------------------------------------------------------
9.                    Update the MAO governing the            07/29/2016
                       internal directive system to
                       assign responsibility for
                       monitoring implementation.
------------------------------------------------------------------------
10.                   Develop or update policies and          12/30/2016
                       procedures to carry out MARAD's
                       ship disposal responsibilities
                       under Title 40 U.S.C. Section
                       548, including policies and
                       procedures for (a) identifying
                       the universe of Government-owned
                       vessels that meet the statutory
                       criteria for MARAD to serve as
                       the disposal agent; (b)
                       notifying agencies that own
                       these vessels of MARAD's
                       disposal agent role; (c)
                       specifying into what accounts
                       MARAD should deposit ship
                       disposal proceeds; and (d)
                       specifying when and how the
                       Maritime Administrator
                       determines what portion of funds
                       MARAD retains for its heritage
                       property.
------------------------------------------------------------------------
12.                   Dispose of excess non-heritage          03/31/2016
                       assets identified in the
                       heritage asset inventory.
------------------------------------------------------------------------
13.                   Update VTO policies and                 03/31/2016
                       procedures to reflect the
                       current range of program
                       responsibilities and processes.
------------------------------------------------------------------------
15.                   Provide additional guidance to          06/30/2016
                       fleet sites to standardize NDRF
                       Reserve Fleet Operations' KPI
                       data inputs, and provide more
                       uniform measures of fleet
                       performance.
------------------------------------------------------------------------
8FISMA 2015: DOT Has Major Success in PIV Implementation, but Problems
 Persist In Other Cybersecurity Areas, Nov. 5, 20150
------------------------------------------------------------------------
3.                    The Deputy Secretary, or his            09/30/2016
                       designees, take the following
                       action to ensure that FAA, FHWA,
                       FMCSA, FRA, FTA, NHTSA, MARAD/
                       USMMA, OST, and SLSDC perform
                       actions to immediately disable
                       user accounts that have been
                       inactive for over 90 days, as
                       required by the DOT compendium.
                       Report completion of this effort
                       to OCIO. Create a POA&M to track
                       progress and verify completion
                       of the action.
------------------------------------------------------------------------
8Some Deficiencies Exist in DOT's Enforcement and Oversight of
 Certification and Warrant Authority for Its Contracting Officers, Apr.
 9, 20150
------------------------------------------------------------------------
1.                    The Office of the Senior                06/30/2016
                       Procurement Executive address
                       the cases of noncompliance with
                       CO certification and warrant
                       requirements at FMCSA, FRA,
                       MARAD, and NHTSA, as noted in
                       this report. Specifically, the
                       Operating Administrations should
                       ensure that (a) CO warrants are
                       issued in compliance with
                       Federal and departmental
                       requirements and (b) COs obtain
                       and maintain their FAC-C
                       certifications.
------------------------------------------------------------------------
6.                    The Office of the Senior                06/30/2016
                       Procurement Executive correct
                       the FAITAS data inaccuracies
                       noted in this report at FTA and
                       MARAD.
------------------------------------------------------------------------
8FISMA 2013: DOT Has Made Progress, but Its Systems Remain Vulnerable to
 Significant Security Threats, Nov. 22, 20130
------------------------------------------------------------------------
4.                    Obtain and review plans from            09/30/2016
                       FMCSA, MARAD, OST, and RITA to
                       authorize systems with expired
                       accreditations. Perform security
                       reviews of unauthorized systems
                       to determine if the enterprise
                       is exposed to unacceptable risk.
------------------------------------------------------------------------
8MARAD Has Taken Steps To Develop a Port Infrastructure Development
 Program but Is Challenged in Managing Its Current Port Projects, Aug.
 2, 20130
------------------------------------------------------------------------
5.                    Implement procedures to help            07/30/2016
                       ensure that MARAD's contract
                       planning efforts comply with
                       Federal acquisition regulations
                       and requirements. These
                       procedures should include
                       establishing acquisition plans
                       and contract administration
                       plans in a timely manner, and
                       maintaining supporting
                       documentation for their
                       rationale; and developing
                       independent Government cost
                       estimates, and validating cost
                       estimates provided by entities
                       other than MARAD.
------------------------------------------------------------------------


    Senator Fischer. Thank you, Mr. Behm.
    We will begin with our first round of questions. Again, I'd 
like to thank you all for being here.
    Mr. Behm, after I read your testimony and looked at the 
recent IG report, I am concerned that the Maritime 
Administration has neglected to assess and develop some risk 
mitigation strategies associated with the Federal Ship 
Financing Program which could potentially lead to some wasted 
taxpayer dollars. As we look ahead, and as you were mentioning 
in your testimony, there has been some improvements that have 
taken place. You also talked about gaps that remain.
    Are you confident that MARAD is going to move forward to 
address all the concerns there? You know, we're going to be 
looking at the reauthorization bill, and I guess I'm asking you 
if you can suggest any policy changes or objectives that you 
think we ought to be considering incorporating into that bill.
    Mr. Behm. Well, as the OIG, we don't really comment on 
policy or make policy suggestions or decisions.
    Senator Fischer. Even when asked?
    Mr. Behm. Even when asked, maybe in a different form or 
something like that. But----
    Senator Fischer. Noted.
    Mr. Behm. But on the record, I would say that--first of 
all, I would say that MARAD has been very receptive. Like I 
said, we've issued several reports over the last several years. 
They've been very receptive to our reports, very receptive to 
our recommendations. As I stated, the Merchant Marine Academy--
in our report, which I think was pretty hard-hitting on the 
concerns surrounding sexual assault and sexual harassment at 
the Merchant Marine Academy, the Academy took them very 
seriously, and all of those are closed. In that regard, I 
think, as Admiral Helis really showed in his statement, the 
concern there is just continued focus, which it's apparent that 
they continue to have.
    With regard to some of the concerns we identified in our 
December report, again, I would suggest that you could be very 
confident that MARAD--you know, they have a very tight time-
frame to address most of these recommendations.
    With regard to risk assessment and risk mitigation 
strategies, specifically, I would suggest that, actually, 
compared to some of the other programs we've looked at, MARAD 
has a very robust risk assessment program. I think where we 
found some weaknesses were in the strategies developed and 
documented to address those risks. And, actually, as a matter 
of fact, we had a couple of recommendations in that area, both 
of which have already been closed.
    Senator Fischer. Thank you, sir.
    Administrator Jaenichen, what immediate actions is MARAD 
taking to strengthen the agency's workforce and resource 
management?
    Mr. Jaenichen. Thank you for the question. We're actually 
coordinating with our associate administrator for 
Aministration, who is also responsible for our human resources. 
We're very focused on, as specifically noted by the IG, the 
actual position descriptions and the competencies that are 
required, and we are revising those position descriptions as 
we're going out with new hires. That is one of the focuses that 
we have.
    Additionally, as it relates to all of the comments that we 
get, either through the General Accounting Office or from the 
IG, we actually track each of those specific comments, and we 
have a periodic update, so we're moving forward on each of the 
actions to ensure that we meet the timelines that we have 
specified for completing the recommendations and completing the 
actions.
    Senator Fischer. Thank you, sir.
    Admiral Helis, as you and I discussed when I was up for the 
visit and the tour of the facility, there are concerns with 
adequately addressing the sexual assault on the campus. I know 
the pledge you have made, and I know your commitment to 
addressing that issue. But to what extent would you say that 
we're looking at these unreported cases of assault on campus or 
when the midshipmen are at sea during the year that they're at 
sea? Where do you see potential fears, I guess, of retribution? 
How do we get around that?
    Admiral Helis. Senator, getting the reporting to start 
coming in is the key next step. The surveys tell us we've 
increased awareness, we've increased understanding. There's an 
understanding by the midshipmen, staff, faculty at all levels 
that we're fully committed to eliminating this. So that is the 
first step in what is going to be a process that involves some 
changes in the Academy's culture.
    Again, the second thing that we have to address now is how 
do we increase reporting, and how do we reduce the barriers or 
the fears midshipmen have of reporting incidents of sexual 
assault and sexual harassment. Part of this is simply going to 
have to be continuing to address to victims that there will be 
no retribution, to being explicit about that, to continuing to 
educate midshipmen that retribution is unacceptable.
    We are pushing much harder on our training, bystander 
intervention, taking it to each one of us, that from the 
youngest freshman up to me has an obligation to be engaged with 
this problem and this challenge and to step up and intervene or 
say something when you see something happening or see something 
about to happen. That's what we have to do, is to get everybody 
to feel a personal sense of ownership, that this is our problem 
as a team, that we have to address it as a team, and that 
people who commit these kinds of behaviors have no place in our 
organization and no place on our team.
    We're also emphasizing that this is not just a conduct 
issue, but this is a leadership issue. We're in the business of 
developing leaders and telling midshipmen candidly, ``You are 
going to have to deal with this challenge as leaders. When you 
go out, you're going to, at some point, whether you like it or 
not, in your career--it may be early or it may be late--someone 
on a ship, someone in your business, someone in your military 
unit is going to come to you and report, `I have been sexually 
assaulted or sexually harassed,' and you as a leader are going 
to have to step up and deal with it.''
    So it's just going to have to be continued pounding away 
that this is not acceptable and to try to lower the barriers. 
Some of the barriers that women feel at the Academy--and it 
could be men or women, but in our case it appears--we think 
it's mostly women who are the victims. Some of these are the 
same barriers that women have faced in society. The 
investigative process is very challenging, because they're 
going to have to make statements, and they're going to have to 
relive a very difficult and traumatic experience. But if we're 
going to administer disciplinary action, there's no way that we 
can get around that. They're going to have to be able to 
communicate these with us.
    We are in a very small community with the Academy. There 
are only 900-some midshipmen and only about 700 on campus at a 
time. It is very--when somebody is accused of sexual assault, 
the alleged assailant--if you move him to another barracks 
because of that, or you issue a no-contact order, again, as 
small as the community is and as infrequently as those kind of 
moves happen, people immediately make a connection of--okay, 
something happened here in the area of sexual assault or sexual 
harassment.
    That is something that we just have to continue to work on, 
that, hey, this should not prejudice you against either the 
victim or against the accused. These are just prudent steps 
that we're taking to provide for the safety of midshipmen.
    Senator, it is a long answer, but it is the challenge. And 
as I see it, the next biggest challenge is how do we get over--
now that we've educated, how do we start reducing the barriers 
to reporting.
    Senator Fischer. Thank you. I appreciate your answer, 
Admiral.
    Senator Booker, it's my understanding that Senator Cantwell 
has to leave, and so I would recognize her next.
    Senator Booker. I appreciate that, and just for the record, 
she expressed her gratitude and affection for me for allowing 
this to happen.
    [Laughter.]
    Senator Fischer. We all do.
    Senator Cantwell?

               STATEMENT OF HON. MARIA CANTWELL, 
                  U.S. SENATOR FROM WASHINGTON

    Senator Cantwell. Thank you, Madam Chair, and I do want to 
thank the Ranking Member for allowing me to go ahead. He and I 
share a very big priority, which is making sure that our port 
infrastructure continues to see improvement.
    So I wanted to ask you, Mr. Jaenichen, about the National 
Strategic Freight and Highway Grant Program. Obviously, I've 
been very involved in this program along with many of my 
colleagues, both in getting it originally focused on from a 
national priority perspective and then working to get the $4.6 
billion in dedicated funding over the next 5 years.
    So I wanted to know whether you had a maritime strategy for 
accessing those resources? And what are you doing to make sure 
that both West Coast ports, which already have deep harbors and 
connected railways, see some of that revenue; and, also, what 
are you thinking about as far as small ports? Because there's 
so much economic activity in the Asian markets. There are so 
many partnerships.
    And, again, we might be the state and the ports on the 
coast, but I guarantee you what's moving through there is a lot 
of Midwest product, and it's all about making it cost 
competitive and effective with our system juxtaposed to, say, 
Canadian or other avenues. So what are your thoughts on 
prioritizing maritime projects?
    Mr. Jaenichen. Senator, thank you for the question, and 
I'll try to keep my answer as concise as I can. As you know, 
the Department of Transportation has gone out with a notice of 
available funding opportunity specifically for this year's $800 
million, which is the first tranche of the FAST Act money to be 
able to support the freight program. The good part is that 
we've been very engaged with the department to ensure that 
ports are included in that notice of available funding.
    The department also established the Build America 
Transportation Investment Center. We refer to it as BATIC. It 
is a one-stop shop for all ports of all sizes, and I think 
that's a critical component in that. In fact, my staff, who 
works in the intermodal development, actually reaches out to 
small ports. I have gateway offices located around the country. 
We're engaged. They actually physically meet with the ports, 
and I also go out and do these port talks as well. In fact, I 
have one scheduled in two weeks in Cincinnati to be able to 
support the inland river and waterway system.
    As we look at the requirements, one of the things that 
we've noticed--and it's actually included in our plan as part 
of funding for the strong force in our President's Budget for 
Fiscal Year 2017--is we want to make sure that we recognize, 
especially for small ports--they typically do not have finance 
planners. They do not have what I would call all the 
necessities to be able to meet investment grade projects, to be 
able to build out their infrastructure, to be able to improve 
their efficiencies, their productivity, or their safety.
    So we are proposing that in our budget to be able to allow 
us to extend about 15 grants at about $200,000 apiece to make 
sure that we can get that investment grade. So that's how we do 
that. But the combination of all these things, the fact that 
the ports are included for the first time--and we appreciate 
the support of Congress to be able to make that happen. We also 
have a formula funding program that supports freight as well, 
and ports are also involved there.
    With regard to the West Coast versus East Coast, we haven't 
really prioritized one coast versus the other. We recognize 
there's a need across the entire port community for 
infrastructure improvements, and we know that a lot of our 
ports aren't prepared for the vessels and the sizes of those 
vessels that are calling on our ports today. So we have a lot 
of work to do.
    In fact, yesterday, at the Port of Baltimore at the 
Tradepoint Atlantic, we convened a roundtable with labor, with 
shippers, with railroads, and it included three cabinet 
secretaries, Secretary Foxx of Transportation, Secretary 
Pritzker of Commerce, and also Secretary Perez of Labor. We had 
Senator Cardin there and several folks from the Maryland 
delegation so we could have this dialog, specifically, at the 
request of the Administration, to have this meeting to make 
sure we're focused on ports and port infrastructure.
    Senator Cantwell. Well, I appreciate that. I can guarantee 
you when we were looking at this legislation, ports were a 
cornerstone, not that other projects can't qualify, and we 
definitely think they do. But I like to say our economic 
strategy in Washington State is ports-are-us. That's how many 
ports we have and that's how critical they are.
    But often, like in telecom, it's this last mile, from the 
highway to the port entrance, that is heavily congested and not 
invested in. And, literally, you can get incredible speed 
across the country, but then sit right at that barrier outside 
of some of our ports. So I hope that we'll look at those kinds 
of projects as a way to speed up that activity.
    For us, Prince Rupert in Canada is always a competitive 
port, and we know that people can go other places. The good 
news is that we want to continue to promote U.S. product by 
saying that we can get it to its foreign destination in a 
timely fashion. So I appreciate your work on that.
    And, again, to the Ranking Member, thank you.
    Senator Booker [presiding]. Just for the record, I am no 
longer the Ranking Member. I am now the Chairperson of this 
Committee.
    Senator Cantwell. Oh, my, and I'm so lucky.
    [Laughter.]
    Senator Booker. I am not Thor, the Norse god, and this is 
not Mjolnir, his hammer, but I do have the power now.
    Senator Klobuchar, I'm a nerd geek. You may go.

               STATEMENT OF HON. AMY KLOBUCHAR, 
                  U.S. SENATOR FROM MINNESOTA

    Senator Klobuchar. Very good. Well, I don't know what it 
will be like with a new chair in town. But I'll try my best.
    I want to thank Senator Fischer and also Senator Booker for 
having this hearing. As you know, when I got to the Senate, I 
got placed on the Ocean Subcommittee, and I will never forget 
the moment when I looked around and I said to Frank Lautenberg, 
one of the former Senators from New Jersey--I wrote him a note 
and I said, ``Every Senator on this committee, including Trent 
Lott and Olympia Snowe, has an ocean except me.'' And he wrote 
back, ``Well, next year, come back and ask for one.''
    But then, as you know--and thank you for your visit to our 
state, Administrator. You know that Minnesota has Lake 
Superior, and we're very proud of the Great Lakes, and we 
actually have a lot of issues that are similar to oceans, from 
restoration issues with the Great Lakes to shipping issues and 
port issues.
    And the Port of Duluth, in fact, has been the cornerstone 
of Northeastern Minnesota's economy for more than a century. My 
grandpa worked in the iron ore mines. My dad worked there for a 
while, and my uncle, and that iron ore goes right out of the 
Duluth port. Every year, 38 million tons of cargo and nearly 
1,000 vessels pass through the port. It's the largest port on 
the Great Lakes, and we need to ensure that the Port of Duluth 
remains efficient.
    I, of course, supported the TIGER application for the 
grant, and we were so pleased, Administrator Jaenichen, when 
you came to that event. And I want to thank you for joining us 
in May, when it's still cold in Duluth, and for being there. It 
is, as you know, an intermodal project, connecting a lot of 
different types of transportation.
    Can you talk about these upgrades and how these investments 
can work to improve intermodal capabilities beyond just the 
port?
    Mr. Jaenichen. Thank you, Senator, for that comment. I 
would refer to the Great Lakes as our fourth coast, and you can 
call them an ocean if you would like.
    Senator Klobuchar. Thank you. I will repeat that, that you 
gave me permission to do that.
    Mr. Jaenichen. With regard to the Port of Duluth, I'd like 
to say that that particular TIGER project--actually, it was $10 
million that was funded by the Department of Transportation. 
The total project is about $16 million, $2 million was provided 
by the state of Minnesota, and then the other $4 million was 
actually provided by the port.
    This is a 28-acre facility. It's primary going to be break 
bulk. I'm happy to say we're about 50 percent completion. My 
folks track that progress on a routine basis, and we're 
expecting that project to be completed, at least substantially 
completed, by October of this year.
    It includes access to road, as you pointed out, but it also 
includes on-dock rail, and that will provide significant 
capability, potentially, for large project cargo. In talking to 
the Port Director, Vanta Coda, he has indicated that they're 
making great progress. And a lot of the shippers and some of 
the other beneficial cargo operators are looking very favorably 
at using that facility to be able to support their needs. So I 
think it's going to actually be an economic boost to the 
country.
    But I will point out that TIGER, in general, through the 
seven rounds of TIGER that we've done so far since 2009, we've 
been able to direct $524 million to ports and maritime--Marine 
Highway projects, 43 of those in 24 different states. So it's 
not just Duluth that has benefited. It's actually all across 
the country, and we appreciate the support from Congress to be 
able to allow us to do that.
    Senator Klobuchar. Very good. You know, I'm one of the vice 
chairs of the Great Lakes Task Force and have been involved, of 
course, in the invasive species issue. And, actually, for a 
lock that wasn't being used very much except by some kayakers 
and two scrap metal firms, we were able to close that lock down 
because of the fear of the invasive carp traveling up the 
Mississippi River. When we're done here, you should Google the 
picture of the carp that was found very close by in another 
river in Minnesota, literally gigantic, in the middle of the 
winter just recently.
    So we're really concerned about what's going on there now. 
Could you talk about the University of Minnesota research and 
things that are being done? They've actually come out with an 
idea for some of the other locks. Obviously, it's a Great Lakes 
issue as well from a maritime standpoint.
    Mr. Jaenichen. Thank you for the question. We do have a 
representative that participates with the Army Corps on that 
particular invasive species issue. I don't really have 
cognizance over that program, but I will tell you that we are 
very involved with the Great Ships Initiative, which you know 
is actually adjacent to Minnesota in Superior. That is the only 
fresh water ballast water testing facility in the entire world.
    It's actually an underwriting laboratory for the U.S. Coast 
Guard. Fortunately, the Maritime Administration actually 
administers that with funds that are provided by the EPA, and 
we're very favorable in terms of how that is working. 
Unfortunately, we do not have a Coast Guard certified ballast 
water management system yet, but we're certainly on the path to 
be able to do that.
    But resident in MARAD, I have a person by the name of Dr. 
Carolyn Junemann. She is a representative for the United States 
at the International Maritime Organization. She is an expert on 
invasive species, and she is the one who actually manages the 
program. So we're pretty satisfied with our level of 
involvement and also that of the other interagency activities 
and departments that are involved in it, essentially minimizing 
the advance of the invasive species into the Great Lakes and 
fresh water.
    Senator Klobuchar. Very good. And I see my colleagues are 
here to ask questions. Senator Ayotte is here. But I will put 
the next one just on the record. But given the Prime Minister's 
visit this week and our Canadian friends, suddenly making my 
work as Chair of the Interparliamentarian Canadian Group have 
some glamour after a decade of doing this--but I'll ask you a 
question just about the need to continue coordinating with 
Canada. So thank you very much.
    Senator Booker. Thank you very much, Senator Klobuchar.
    I would like to now invite Senator Ayotte to ask her 
questions.

                STATEMENT OF HON. KELLY AYOTTE, 
                U.S. SENATOR FROM NEW HAMPSHIRE

    Senator Ayotte. Thank you, Chairman.
    I think that it does sound very glamorous--absolutely 
important, especially as a state that borders Canada. I can 
respect that.
    So, Administrator Jaenichen, in your written testimony, you 
spoke about the need to update our ports and surrounding 
infrastructure. In New Hampshire, our Portsmouth harbor is a 
beautiful harbor, if you haven't been there. It needs to be 
dredged to accommodate the larger ships that we know are being 
built. And our cargo terminal is aging and in need of 
improvements. These updates are obviously important to the 
future of our port and our seacoast economy in Portsmouth and 
the area, the surrounding towns.
    What more can be done at the Federal level to help support 
our smaller local ports, which we know are of critical 
importance to our economy? And are there tools that MARAD needs 
to help support our Nation's smaller ports?
    Mr. Jaenichen. Senator, thank you for the question. First 
of all, I'm going to address the dredging portion of that. 
Obviously, the deepening and also the maintenance dredging for 
our ports actually falls under the purview and the 
responsibility of the Army Corps of Engineers.
    Senator Ayotte. Right.
    Mr. Jaenichen. So I would defer that question to them.
    Senator Ayotte. Right. But you know how critical this 
larger ship issue is for our economy and the ability of our 
ports to thrive.
    Mr. Jaenichen. We certainly understand that those ports 
need the deepening to be able to allow access to that, but 
there are some other vessels that can get access to the ports. 
But we need to think about it more from a regional perspective. 
One of the things we're doing in our National Maritime Strategy 
is to identify and address those needs.
    With regard to the investment that you referred to, we have 
a program at the Maritime Administration run by my Associate 
Administrator for intermodal development. It's referred to as 
``Strong Ports,'' and one of the things that we do is, we reach 
out to the small ports, and we've identified--some of the 
weaknesses that the small ports have is, unlike large ports, 
they don't have large business offices or large planning 
departments. So in order for them to be able to put together 
investment grade types of projects that you can go out and get 
both public and private investment, you really need to have 
some funding to be able to do that.
    In our President's Budget Request for 2017 for our Strong 
Ports Program, we're actually requesting $3 million. And our 
goal there is to be able to get to 15 ports with about 
$200,000, because we recognize that's the threshold where you 
need to be able to do that planning and investment. So we would 
reach out and make sure--similar to a competitive program, to 
make sure that we can help those ports to be able to do that, 
because we recognize that's where the real need is.
    With regard to the entire department, we have put together 
what we refer to as a Build America Transportation Investment 
Center. That is a one-stop shop. I have dedicated a Senior 
Executive to be the Executive Director of that to make sure 
that ports have a place to go.
    I think one of the big things--and for Senator Booker, the 
Port of New York and New Jersey has actually, sort of, now 
become the poster child of this project. They're putting 
together a $500 million program. They're the first port in the 
country to be eligible for TIFIA funding, and we're very 
encouraged in terms of the direction that they're going. But 
this has all happened as a result of having this BATIC 
organization within the department, to be able to help ports be 
able to identify what financial strategies they can use, what 
grants and other loan programs that are available through the 
Federal Government, as well as through the private sector, and 
we're helping them to do that.
    Senator Ayotte. Well, I appreciate it, and I'm glad to hear 
that you also have thought of a strategy for the smaller ports 
so that we can get some of that support, because you're 
absolutely right. We don't have the office support that a 
larger port has, although we have really good people that work 
there. But we could certainly use the help. Appreciate it. 
Thank you.
    Senator Booker. Thank you, Senator. I appreciate you 
acknowledging me as Chairman, because I have--I don't know if 
you know--I got a field promotion.
    Senator Ayotte. It was well deserved.
    Senator Booker. Thank you very much.
    [Laughter.]
    Senator Booker. Gentlemen, how are you? And thank you very 
much. I want to just say, if it hasn't been said enough, we 
appreciate the hard work you do. You all are dedicated public 
servants, and we're grateful for the work that you do.
    Just for a matter--because you made me hurt my neck when I 
looked up at you when you said of the new qualifications, the 
average SAT score is now 1285, you said?
    Admiral Helis. Senator, for the last couple of classes, 
it's hovering around 1285, 1283 for the last class.
    Senator Booker. And the average GPA?
    Admiral Helis. I don't know the GPA off the top of my head, 
but the majority of our students rank in the top 10 percent of 
their high school classes.
    Senator Booker. So, basically, you're saying that most of 
Congress--we couldn't get into your Academy. Is that what 
you're saying?
    [Laughter.]
    Admiral Helis. Sir, I haven't reviewed your file yet, so I 
couldn't make a guess.
    Senator Booker. Well, let the record show I got into my 
college because I had a 4.0 and 1,600, 4.0 yards for carry, 
1,600 receiving yards. I went on a football scholarship, so 
maybe that could have helped me get in.
    Admiral Helis. Senator, we do look at the whole person. We 
look at their leadership, their co-curriculars.
    [Laughter.]
    Senator Booker. All right. I appreciate your willingness to 
be sympathetic to my fragile ego about my high school scores.
    I just want to jump in, if you don't mind, really quick, to 
some of New Jersey's specific issues that have me concerned. 
The Panamanian government recently announced that they're going 
to be finishing the Panama Canal expansion project in May 2016, 
and ports in a number of U.S. states already have made a lot of 
improvements so these big Panamax ships can access their ports.
    In New Jersey, the Port Authority of--and remember we're 
switching it now--the Port Authority of New Jersey and New York 
is in the process of raising the Bayonne Bridge to increase 
access of these ships to New Jersey, something I worked on and 
pushed for when I was Mayor of Newark.
    I'm just curious. What changes--maybe this is to Chairman 
Cordero and Mr. Jaenichen. What changes do you anticipate in 
global shipping activity in the near and long term as a result 
of the Panama Canal expansion? And what are the impacts if 
ports are not ready for these larger ships?
    Mr. Jaenichen. Senator Booker, thank you, first of all, for 
the question. In November 2013, the Maritime Administration 
issued our first phase of a report on the expansion and the 
impact of what the Panama Canal potentially would do. I 
recently had a team down visiting Panama to get an assessment, 
talking to the Panama Canal Authority. It looks like now--
although it may be substantially completed, it looks like it 
will not actually open until late this year. They may have a 
ceremonial opening, but it won't be open necessarily for 
commercial traffic for a while.
    I think one of the most significant things that we have 
noted in the Panama Canal expansion is probably in energy 
transport. Currently, today, with the existing locks as they 
are currently configured, only about 6 percent of the world's 
LNG tanker fleet can actually fit through the canal and 
actually go from the Atlantic to the Pacific, or vice versa.
    Once the new expanded locks are completed, 86 percent of 
the fleet--so that will actually change the trade flows with 
regard to energy, specifically with regard to large tanker 
ships or LNG. So we see that as a change coming.
    With regard to the ships themselves--for example, 
currently, today, the container vessel size that can actually 
go through the lock is on the order of about 4,500 20-foot 
equivalent units. Once the expansion is complete, that will go 
to nearly 12,000. That's about a two and a half time increase. 
What that changes is what size ships can actually use that.
    We're talking with a number of shipping companies. We're 
talking with shippers. And we don't know whether there's going 
to be a large immediate change. But we do anticipate that there 
will be a change eventually with regard to the larger ships 
that are actually calling.
    Ports on the West Coast are already receiving ships of that 
size. Ports on the East Coast are receiving ships in the 
vicinity of 9,000 to 11,000 TEUs. So we know that they 
predominately can accommodate them. But as you pointed out, 
there's only one terminal in the Port of New York and New 
Jersey, or New Jersey and New York, depending on whether you 
get that legislation approved or not. Without the Bayonne 
Bridge being raised, you only have access to one port. So, 
clearly, that's a challenge.
    Most of the cargo that comes into New York and New Jersey 
is actually destined within about a 150-mile radius. We know 
that. So there are other ports up and down the East Coast, 
obviously, that will be impacted differently.
    What we have found is with regard to the trade itself, we 
think that there's actually an area probably east of the 
Mississippi and then along the coastal states where we think 
most of the change in cargo--otherwise, we think it's going to 
continue to reside and come from the West Coast, which is the 
currently existing freight flow that we are currently seeing. 
As the Chairman pointed out, about 32 percent of the GDP and 
12.5 percent of the total product actually moves through the 
West Coast, and I'll defer to the Chairman.
    Mr. Cordero. Thank you, Chairman Booker, for your question. 
Senator, let's put this in perspective a little bit, just for 
those of you who want to have a better understanding of these 
large vessels. Today, we have approximately 5,153 container 
vessels in the global trade.
    Senator Booker. What's that number again?
    Mr. Cordero. Five thousand, one hundred and fifty-three. 
I'm sorry. So there are 5,153 container trade vessels. Now, of 
that amount, 23 percent of that fleet is considered ultra large 
container vessels, which means they're a nexus of 10,000 TEUs. 
So that gives you an understanding and perspective of what it 
is today.
    Now, let's look at the orders that are right now, 
presently, on order. We have a figure of about 487, again of 
last year, 2015, that are on order. Of those 487 container 
vessels, 77 percent are in excess of 10,000 TEUs. So that 
really gives you a perspective of what the future is bringing, 
which means the impact on our primary gateways, New York-New 
Jersey--excuse me, New Jersey-New York, Long Beach, Los 
Angeles, and others.
    [Laughter.]
    Mr. Cordero. And let me add a little bit more to this 
dynamic. Recently, I was present at the ceremony of the arrival 
of the CMA-CGM vessel, the Ben Franklin. That vessel is 18,000 
TEUs. Now, I was there in December in Los Angeles, and then 
again in February in Long Beach. Speaking to the executives of 
that carrier, the word was that they were exploring the 
possibility of how can these West Coast ports or deep-water 
ports, for that matter, handle the 18,000 vessel. Well, 
recently, last week, I guess we had the answer. CMA-CGM has 
announced now that that vessel will be now anchoring or 
arriving at these ports.
    So that gives you an indication of the direction that we're 
going now, which means--and I'll conclude--that the time to now 
really dedicate ourselves to port infrastructure, as has been 
said, be it the big ports or the small ports--because the small 
ports will play with regard to the movement of these containers 
in the regions--is ever critical right now, is very critical. 
And I appreciate the Subcommittee having a hearing on this 
topic, because no longer are we talking about the future of the 
vessel. The future is already here.
    And, last, let me give you one other statistic. The three 
top ports in our Nation account for 50 percent of international 
trade.
    Senator Booker. Say that one more time?
    Mr. Cordero. Fifty percent. The three top ports account for 
50 percent of the movement of international cargo. If you take 
the top----
    Senator Booker. And that's Los Angeles----
    Mr. Cordero. That's Long Beach, Los Angeles, New Jersey-New 
York.
    Senator Booker. And then down in Louisiana, correct?
    Mr. Cordero. No. Those would be the three.
    Senator Booker. Those would be the three.
    Mr. Cordero. Because Long Beach, Los Angeles, is--there are 
two different port authorities. So they're one and two, and New 
Jersey and New York are number three. Now, the top 11 ports in 
our Nation account for 85 percent of the movement of 
international cargo.
    So I just wanted to add to the comments of the 
Administrator with regard to the perspective of these large 
vessels, and that the future is now. So it's ever important to 
have the--what's already been said about funding for maritime 
and port infrastructure.
    Senator Booker. So, you know, the real Ranking Member and 
power on this committee, Senator Nelson--we talked about this 
question. Something I had on my mind is, well, I'm very proud 
of the FAST Act that requires the Department of Transportation 
to establish a working group on port performance.
    And, by the way, I was with Secretary Foxx, who told 
stories about private businesses on the East Coast deciding to 
use Canadian ports instead of American ports because of how far 
they're ahead of us in efficiency. I have not gone to visit 
European ports, but the stories I hear about some of the 
Europeans having invested in port infrastructure is beyond some 
of the things we're seeing on the East Coast. So it's a concern 
for me, as it is for Ranking Member Nelson.
    So there's a hotly contested provision, though, in the 
bill, because it would have had a negative impact on labor and 
the competitiveness of our ports. I know you guys know what I'm 
referring to. And it took an immense amount of compromise from 
both sides to try to reach an agreement on this.
    So here's the balance--and I really want to hear your 
professional input, as a part now of this working group--the 
balance between the competitiveness of our ports and protecting 
the hardworking men and women who work at the ports. And I 
don't know if there's tension there, but my concern is really 
that you all are working and really committed to ensuring that 
we're advancing both of these and not sacrificing perhaps a lot 
of those folks who really work hard out there on the ports 
every single day, their quality of life, their ability to raise 
their families, and the like.
    Could you talk to that tension a little bit?
    Mr. Cordero. Absolutely, and I'm sure the Administrator 
will also chime in on this question. But, again, Senator, thank 
you for your question. Let me also say for those of you who may 
not be familiar with my background, prior to coming to the FMC 
in 2011, I spent eight years as a Commissioner at the Port of 
Long Beach. So I had 8 years of valuable experience actually 
seeing how this works.
    Now, as the Administrator----
    Senator Booker. You couldn't get a job at the New Jersey 
and New York port? Is that why you were out west?
    [Laughter.]
    Mr. Cordero. As the Administrator was referencing, there 
was a meeting, a roundtable, discussing these issues, and I 
think the discussion, in my opinion, was excellent, because it 
takes a balanced approach. I think what's lost in the 
discussion--I know that everybody talks about what happened in 
the West Coast and some of the preliminary views and opinions 
about the causes and factors.
    But let me just say this. I mentioned these large vessels 
that are arriving. I think that the FMC--as you may know, we 
undertook an endeavor beginning in 2014 to study this issue of 
congestion. And our study basically points to the fact--there 
were a number of factors. The fact is that what people may not 
understand sometimes is part of it has been the shortage of 
labor, the non-availability of labor.
    Now, again, I mentioned this 18,000 vessel. But as the 
Administrator mentioned, right now, the common place for deep 
ports is 10,000 to 12,000. But the bigger ones are coming. So 
what happens when this vessel arrives, when, in fact, a little 
less than 6 or 7 years ago, the average size vessel was 5,000, 
which leads to my point.
    The biggest factor with regard to the metrics that needs to 
be addressed is port operations, and let me be more specific--
marine terminal operations. As you know, New York-New Jersey, 
LA, Long Beach are landlord-tenant ports, and the terminals, 
basically, have not been challenged with regard to their 
ability to unload and load these vessels and then take them out 
the gate.
    So the metrics, among other things that should be 
considered, is, for example, in my opinion, the most visible 
metrics--and you can ask any stakeholder at our major ports--
that we now see when it leads to congestion is truck lines, 
whether it's New York-New Jersey, or Long Beach, Los Angeles, 
and others--the truck lines. So when you think about that 
perspective, how are we going to move forward to make sure that 
our terminals have operations to now limit that problem?
    That is related also to a labor issue, because we're losing 
truckers in this nation, because truckers cannot have an income 
to support a family when they have to stand in line 2 or 3 
hours, or wait in line 2 or 3 hours to get into a port. There 
are all kinds of studies. In fact, New York-New Jersey did a 
study recently--I met with Ms. Campbell there at New York-New 
Jersey--and their study revealed that if you give a trucker an 
additional turn time, that is, assuming we have fluid in the 
gates, that means to that trucker $15,000 in extra annual 
income.
    And in my opinion, Senator, there is no reason why we 
should have these truck lines in today's world, a world where 
we have the technology and the political wherewithal to deal 
with this issue. As the Administrator has mentioned, both our 
agencies have put a ``full court press'' on addressing this 
issue.
    Thank you, Senator.
    Senator Booker. But I would--I'm sorry. Did you want to add 
to that specific point?
    Mr. Jaenichen. Yes, Senator. But I'll just talk about the 
actual Port Performance Freight Statistics Program, which you 
mentioned, that was actually included in the legislation. There 
was a notice out to be able to put nominees for the working 
group that goes with that committee. It's actually going to be 
run by the Director of the Bureau of Transportation Statistics.
    Both the Maritime Administration--all of the modes we're 
going to be covering. In terms of the Federal Motor Carrier--so 
we're covering trucking and the various other activities that 
support congestion, plus we have other activities that will be 
there as well. Labor will have a seat on the working group.
    It's important that it came out in the roundtable yesterday 
that in order to move forward, we have to do it together. It 
has to be management, it has to be labor, it has to be the 
terminal operators or the port authority to be able to make 
sure that they make the right investments to be able to improve 
those efficiencies.
    One of the comments that came up yesterday was the fact 
that it's not just about the trucks. It's about the 
availability of chassis, and where the chassis are located. 
Many times they're out of place, which means it makes it 
difficult to get a chassis, to be able to get a container, to 
be able to get it in or out of the port.
    We've also heard about the gate times, in terms of--most of 
them don't run 24 hours a day. They're limited, primarily, 
because many of these ports are in communities, and they're 
trying to be good neighbors. So they actually limit their 
actual gate operation times, which ends up in long queues 
during the day, which lowers the actual turn time, or the 
number of times a trucker can go in and get a container.
    The challenge, really, for the truckers is if you're 
waiting in line, you're not getting paid for that. You're only 
getting paid when you're moving the container or the freight 
from one point to another to the end customer or to an 
intermodal facility. So that's one of the challenges.
    But the conversation yesterday was good. I think that this 
working group that we're putting together will help. The first 
report to Congress is due in January 2017, but we're encouraged 
that at least we'll be having that dialog to be able to improve 
the safety, the efficiency, and the productivity of ports.
    Senator Booker. And it just seems to me you're really 
drilling down on some logistics issues. I guess what Senator 
Cantwell was talking about, that last mile, that it's not some 
of the issues--even though I do agree we need to do major 
things, important infrastructure improvement. But that's 
interesting that you really pointed that out.
    Mr. Cordero. Well, in terms of the FMC, Senator, one of the 
other aspects, as we're moving forward with our congestion 
study--you know, what we call Phase 3--is putting together a 
supply chain innovative team. As I mentioned in my opening 
comments, Commissioner Rebecca Dye will be taking the lead in 
bringing stakeholders in to talk about commercial solutions to 
some of these issues.
    So, for example, I think that, again, as I mentioned, the 
main challenge is terminal operations. It's a new day. I think 
most people would agree that most terminals operate in the 
mindset of what it used to be in the arrival of a 4,000 or a 
5,000 TEU. That is no longer the case.
    So I think the good news is there's plenty of energy for 
collaboration, and we believe--we're optimistic about the 
potential of moving forward to create or being part of a 
discussion about creating efficiencies with port operations and 
talk about port productivity.
    Senator Booker. So it seems, Administrator Jaenichen, MARAD 
has been in the process of working with the DOD and the 
maritime industry stakeholders to develop a National Maritime 
Strategy because of some of the issues I said in my opening 
remarks about what is sort of a crisis, it seems to me, in 
terms of the numbers and preparedness. And, really, you all are 
looking at a comprehensive range of actions to preserve and 
grow all aspects of the U.S. Merchant Marine, which is 
something that's very encouraging to me.
    Part of that strategy--I'm especially interested in the 
role of the Marine Highway, which you mentioned before. I think 
it was to Senator Klobuchar's comments. As you know, last 
summer, the Department of Transportation designated a new route 
from the Port Newark Container Terminal to Red Hook Container 
Terminal in Brooklyn.
    So I just want to know--can you update me on the strategy 
and the timeline for that? Are we going to see the release of 
it very soon in terms of a strategy? And then can I just hear a 
little bit more about your vision about how the growth and 
integration of our Marine Highways is going to affect our 
nation, making it, hopefully, more reliable, more competitive, 
and a sustainable option for shippers?
    Mr. Jaenichen. Senator, thank you for the question. First, 
the National Maritime Strategy has been drafted. It is now in 
interagency review, and so we've had our first several 
meetings. During the course of the drafting of that--and, 
unfortunately, it took us a fairly long time to do it, in fact, 
2 years. We started the process back in January 2014. We met 
with about 600 maritime stakeholders over the course of 3 days, 
and then we did it again in May 2014 with about the same number 
of stakeholders.
    So we coalesced around a number of strategies, and then we 
put the underpinning, in terms of the actions that are needed 
to be able to implement those strategies. I hope to have that 
out in the coming months. Again, we'll be putting it out in a 
Federal Register notice, and we'll be going out for public 
comment to make sure we have it right. Then once we've done 
that, we'll adjudicate those comments, and we'll put together a 
formal strategy.
    But so far, we have shared it with the Committee on Marine 
Transportation, which is the Federal agency--about 27 agencies 
that have a touch or responsibility or oversight in the 
maritime sector. So we've shared it with them, and we're in the 
right place.
    We've done the same thing with our Marine Transportation 
System National Advisory Committee, which is part of FACA, 
about 29 members, who has reviewed it as well. So we know we're 
on the right track, and so we're pretty confident that once we 
get it out, folks will recognize the importance, the strategies 
involved, and also the implementing actions.
    With regard to Marine Highways, Congress funded in 2016 $5 
million--I'm sorry--yes, $5 million for Marine Highways. And, 
essentially, that will be dedicated to Marine Highway projects 
that are already designated by the Secretary. So, clearly, the 
Marine Highway that you identified would be one of the ones 
that would be eligible for that funding.
    We're going to be focusing on the intermodal movement of 
freight as part of that. So that really means sort of container 
on barge or some kind of ability to move freight between a 
couple of different points. So all over the country, we have 
right now 11 different designations that have been done by the 
Secretary since 2010, and those will be the ports that are 
actually eligible. So we're pretty encouraged. We plan to have 
that notice of available funding opportunity out the first part 
of April, and then we'll attempt to award those by the end of 
the summer.
    Senator Booker. So just give me some basics. How many U.S.-
flag international vessels does MARAD have--or, excuse me, the 
estimate needed to ensure that a sufficient number of certified 
U.S. mariners would be available to support activation of 
government reserve fleets?
    Mr. Jaenichen. Thank you for the question. Currently, 
today, we've got about 11,230, and I estimate that I have about 
a four-ship margin in terms of having enough to be able to 
activate for a prolonged period of time. I need about 13,000, 
which means to be where I would be comfortable, I need about 45 
more ships under U.S. flag. Again, that would be 45 more than 
the 78 that I currently have today.
    Since about 2000 or so, we've hovered right around 100, and 
that was enough to sort of keep us in what I could call the 
yellow zone, where there were sufficient numbers. We're sort of 
at the confluence of what I would call sort of the perfect 
storm. We had the combination where we lost 26 percent of the 
fleet since 2012, and then we have the implementation of the 
International Maritime Organization standards for training 
certification and watchkeeping. Those requirements come into 
effect in January 2017.
    So the combination of the loss of jobs--and they're not 
currently sailing--means they're probably not going to upgrade 
their Coast Guard license to get those STCW endorsements, which 
means if they're not available, they may not be available for 
the government reserve sealift, which is supporting the 
Department of Defense global projection and sustainment of the 
armed forces. So I'm concerned about that.
    We're working, again, with the U.S. Transportation Command, 
the Navy, specifically the Military Sealift Command, and some 
of our commercial partners, including the American Maritime 
Partnership, on a military to mariner program, which would 
allow veterans, through their normal training and the job that 
they do, whether they're in the Army, in the watercraft 
program, whether they're in the Coast Guard or the Navy, to be 
able to make a transition to the Merchant Marine once they 
leave the service. But they have to have the underpinning of 
the courses and the certification and the endorsements. 
Otherwise, they almost have to start from scratch. So we're 
working very diligently on that program.
    In August 2015, there was a report that was put out by the 
Secretaries of Transportation, Education, and Labor, and what 
we identified--by 2022, we're going to need about 70,000 new 
seafarers or mariners, and about half of those are licensed 
officers. And right now, the training programs we have--the 
combination of the Merchant Marine Academy, which produces 
about 200, and the other state maritime academies produce about 
660. So I'm producing less than 1,000.
    And then in company with the maritime unions, who are 
putting some of their seafarers through a licensing program 
they refer to as Hawsepipe, I'm just not creating enough to 
take over the demand that I know is coming because of the aging 
demographic of the seafarer. So we're at the confluence of what 
I think is a very difficult period, and we're going to have to 
come to some actions to be able to ensure that we have the 
seafarers, to make sure that we have the capability, to make 
sure that our global--our commercial and our government sealift 
fleets have sufficient mariners to be able to do what they need 
to do to support the Department of Defense.
    Senator Booker. And that 2012 reduction in preference--
that's putting a lot of pressure. It has obviously had a very 
severe impact, right?
    Mr. Jaenichen. It's certainly had a downward pressure, 
essentially, what we've lost, and the combination of that, plus 
about 54 other what I call ocean-going vessels, and some of the 
change in the status of some military sealift--we've lost about 
2,400 mariners actively sailing jobs, and that has put a 
significant pressure on the availability of the mariners that 
we have for the pool. We rely on the commercial mariners to 
voluntarily come to our ships when we activate them, and up 
until now, we have not had a challenge with that. But we're 
going to get to the point where we are, and that's what our 
concern is, and that's the reason why we're aggressively going 
after this issue.
    Senator Booker. Rear Admiral, you've been so gracious with 
the questioning around sexual assault, and I think the 
reflection from the Chairwoman, as well as some others, shows 
you the urgency which many of us feel. This is an issue to me--
obviously, it's very personal, very emotional for many of us, 
knowing the culture that's out there, the brutality that has 
been involved, the silencing that's been involved in the past. 
I know and appreciate your commitment to doing and addressing 
these issues.
    I just feel a sense of urgency about it, and you, 
obviously, do as well from your comments. But if I may ask, 
what opportunities are there for the U.S. Merchant Marine 
Academy to increase its coordination and collaboration with 
Naval, Army, Air Force, and Coast Guard academies to better 
address this national problem of sexual assault on college 
campuses? And I'm wondering--is there coordination going on? Is 
there more that could be done? These are our leadership 
academies. They should be setting the example, and I just 
really believe we have a national problem here, a national 
crisis, and would love to hear if you are working on this in a 
coordinated fashion.
    Admiral Helis. Senator, thank you for the question. Yes, 
this is a national problem, and many of our partners and 
counterparts face the same challenges. There is a lot of 
networking and collaboration that goes on. I'll give you just a 
couple of examples.
    The five Federal service academies--we interact, we share 
best practices. At least once a year, the senior leadership 
meets together. I can tell you every year I've been doing this, 
both from the Commandants of Midshipmen and the 
Superintendents, sexual assault and sexual harassment 
prevention has been on our agendas.
    The personnel responsible for sexual assault prevention and 
response at the service academies--at their level, they 
network--my coordinator, Ms. Tamara Jell, who is sitting behind 
me in the audience today--recently, we spent some time at the 
Coast Guard Academy, again, with the sharing of best practices.
    When we look at the state academies, every year, there's an 
annual conference called ``Wild Women on the Water.'' It 
rotates amongst the maritime academies. We hosted it last year. 
California Maritime hosts it this year. It will be next week 
out at Mission Viejo. Again, that is a conference that 
addresses specifically the wide range of women's issues in the 
maritime industry, and it is a gathering of all the academies 
and leadership from industry, from the unions, from government. 
Again, sexual assault and sexual harassment is one of the 
issues that they address at this annual conference.
    We have had meetings sponsored by the Maritime 
Administration with industry leadership and union leadership to 
discuss and address the issue. Specifically, at the Academy, we 
have requested and received from all of the shipping companies 
to whom we send midshipmen for training their policies on 
sexual assault and sexual harassment. We make sure that our 
midshipmen are aware that, ``Hey, your company has a policy, 
and while you're out on a ship during training, you know what 
the reporting policies are within the company.''
    Senator Booker. For that sea year, are we doing enough? Is 
just informing people of what the policies are--do we do things 
to collect information afterwards? Do we have any sense of what 
the problems might be during that year?
    Admiral Helis. Senator, first, in the preparation for the 
midshipmen going to sea, we run a range of programs to prepare 
them for the wide range of challenges. They're dealing with 
international culture. They're away from home for extended 
periods. And we address the issues of sexual assault and sexual 
harassment and prevention and bystander intervention at sea. 
When we put midshipmen on ships, they're together--you know, 
take care of each other as buddies and partners.
    For the women, amongst whom we see the greatest risk of 
problems, we run specific focused training. We bring in women 
who are normally graduates of the Academy, who have sailed in 
the maritime industry, women who can address, again, the broad 
range of issues that our midshipmen will face, not only in 
their Sea Year, but after graduation, as women, as officers, 
and leaders, in a male dominated profession. So we do that.
    We're going to continue to expand that training in the 
coming term for the next group that will go out this summer at 
sea, again, to continue to address in small groups that these 
are the kinds of issues and challenges they're going to face 
around sexual assault and sexual harassment.
    In terms of cooperation, you mentioned Military Sealift 
Command. I'll describe one incident. We had an incident where a 
midshipman was sexually assaulted, not on a ship, but at a crew 
party ashore while on a Military Sealift Command ship. She 
reported it, and there was immediate parallel work between the 
Academy and Military Sealift Command.
    We were coordinating--Admiral Shannon and I were 
communicating about it, and he was also in communication with 
Administrator Jaenichen. Our JAGs and our legal staffs were in 
coordination. Our sexual assault prevention and response 
personnel were in coordination. So we had a coordinated effort 
between MSC and the Academy to investigate--which was primarily 
on MSC to do the investigation--and also for care of the 
victim, which we shared between MSC and the Academy.
    And I felt that the coordination was better--it could not 
have--as bad as the incident was, the response to the incident 
from MSC and the Academy and the coordination--I couldn't 
think, when we looked at this afterwards, that it could have 
been done any better. My sense is that there is a shared 
urgency of this problem across the Federal academies, across 
the State academies, across the industry that we all work to 
share best practices and work together on this.
    It is a tough problem, though. You're right, Senator. It is 
a tough problem. Having personally been involved with victims, 
both in my Army career and here, I understand firsthand just 
how devastating this is. At the end, I'll tell you that you 
have my personal commitment and all of my senior staff.
    I know I have the absolute support of the Administrator. 
We've had great support from the IG in terms of things we can 
do to improve the program. I think everybody is pulling 
together really well on this. But we are committed to continue 
to work and come up with new ideas and do better.
    Senator Booker. I'm grateful for that, sir. What's the 
racial makeup of the Academy?
    Admiral Helis. Senator, as I mentioned in my opening 
statement, we're up to about--the incoming classes are coming 
in between 20 percent and 24 percent with minorities. So with 
this cycle of four classes, if we stay on track this year, 
we'll be close to 20 percent women, between 18 percent and 20 
percent women at the start of the next academic year, and we 
will be about 25 percent of minorities, some being women.
    I would say broadly in our recruiting, we're doing--you 
know, OK is about the best, Senator. With Hispanics, we're 
doing OK, and with Asian Americans. We are lagging right now, 
in my opinion, in African Americans, particularly African 
American males. We're starting to see slight upticks in the 
Native American and Pacific Islander populations. That's ones 
and twos and threes. It's very small.
    Senator Booker. I'm sorry to interrupt you, sir. Can you 
just give me some of the strategies you're using to make the 
Academy more reflective of America's population?
    Admiral Helis. Yes, Senator. One is we have one of our 
recruiting officers now dedicated as a diversity recruiter. Ms. 
Dumorne, Lieutenant Dumorne, was hired last year, so she is 
getting up to speed and on track. And it becomes where are the 
networks where you can identify densities of minority students 
that you can address by population center, and also are there 
gatherings of educational institutions that are recruiting for 
the HIS, the Hispanic oriented institutions, the HPCs, and try 
to tap into those same pools of recruits and applicants.
    She also works in coordination with all of the other 
regional recruiting officers to try to say, ``Hey, here are 
ways that you can address and specifically reach out to women 
and minorities to make this more diverse.'' And, again, I think 
the numbers over the last 3 years indicate that the efforts are 
beginning to pay off, that we are beginning to--we've seen a 
definite statistically significant increase over time in women 
and minorities. And, again, we're committed to making the 
Academy more diverse and more reflective of the society that we 
serve.
    Senator Booker. Well, your minority representation is 
better than the U.S. Senate. But I will say I appreciate those 
efforts and would love to learn more about them. And, 
hopefully, I'll get a chance to visit and talk to you more 
firsthand about that.
    Admiral Helis. Senator, we'd welcome your visit or your 
staff, and to talk you through the admissions process in detail 
and meet with the admission recruiters, and any suggestions you 
have in that area, we would be appreciative of.
    Senator Booker. And when you're looking at the whole 
picture of an individual that you're evaluating for admissions, 
you know, the kid that comes from Appalachia, who comes from a 
poor family, who has worked their way through high school, they 
may not have the 1285 SAT score. Do you take that into 
consideration?
    Admiral Helis. Yes, Senator, we do. Getting a little bit 
into detail, we actually do appointments by state. There are 
allocations by state in the CFR akin to the other academics 
that are keyed to their size and their representation in 
Congress.
    The Secretary also has 40 discretionary appointments that 
he can use. And for those, we have a policy where we have 
established 20 areas that we call of value or special interest 
to the Academy. And for those applicants who either are unable 
to secure a Congressional nomination or who don't get--my term 
is over the bubble, off the line, in their state--you know, 
you've got 10 allocations, and you're number 11 or 12 on the 
list--we have a process where we identify those midshipmen with 
those special qualities.
    We're looking at some first-generation Americans, first in 
family to go to college--have they had difficult family 
circumstances to overcome? Are they historically represented 
groups at the Academy? Do they possess special talents that we 
would value, which would include music, foreign language 
skills, athletic abilities, and so on?
    We have a panel that I chair with the senior leadership 
that reviews the files of those nominated by admissions. 
There's a process by which they go from me to the Administrator 
to the Secretary. And that's how we try to address those 
issues.
    One case we just looked at--a young man, OK academically, 
kind of short on his leadership, but great essay, great 
interviews, and we looked at his background--Hispanic male, 
three high schools in 4 years because his father works in the 
ranching business--and you can see the story--where he's 
moving. And, in addition, he averages 20 hours a week working 
on the ranch to help support the family. So he is on the list, 
the current package that's on the way to the Administrator. So 
I've given away a piece of it to you.
    But that's one we looked at and said that this is a young 
man who, based on his scores and academics, looks really 
bright, really smart, and you look at the family circumstances 
and you can understand why he was not able to get involved more 
in community service and athletics and co-curriculars and 
leadership. But he has a terrific work ethic. He has tremendous 
recommendations. So, again, we're going to be recommending him 
to the Secretary for an appointment, and that's how we try to 
get it done--those factors.
    Senator Booker. I appreciate you going into the details.
    Really quick, Administrator Jaenichen, you guys have a 
ladder of opportunity initiative. I'd love to hear a little bit 
more about that. I know it's striving to create opportunities 
for economic empowerment for a range of folks. As you know, 
sometimes, the communities most in need are often the ones 
located right near our ports.
    Again, I was Mayor of Newark, New Jersey, where our port 
sits, and it was an ongoing battle for me to try to get 
underrepresented populations, populations that have high levels 
of poverty and unemployment, opportunities. So I just want to 
hear about that departmental initiative, and I wonder if there 
are any opportunities to provide workforce training programs 
and employment opportunities in the maritime sector in 
communities most in need. There might be something that cities 
like Newark aren't doing that we could be taking advantage of.
    Mr. Jaenichen. Thank you, Senator, for the question. I'll 
just sort of highlight a couple of them. First, one of the 
things that we're doing is we recognize that part of this is--
Congressman Cummings made a great statement. He said, ``If you 
don't know it, you can't dream it.'' So part of this is an 
outreach program to make sure that they're aware that the 
maritime industry is out there.
    So we have reached out to historically black colleges and 
universities, Hispanic-serving and minority-serving 
institutions. And over the course of about the last year or so, 
we've been able to reach out to two dozen different schools. We 
have engaged nearly about 1,400 students at this point. We're 
going to job fairs. We're doing briefings and awareness 
programs. We're also doing personal interviews, and we're 
helping them prepare. We're doing mock interviews.
    Senator Booker. When you say you're doing that, what 
communities are you----
    Mr. Jaenichen. We're actually doing it at the various 
minority-serving institutions. For example, we'll go to Howard 
University, and that's just an example nearby. But we've been 
down in North Carolina. We've been down to Georgia. And, again, 
we're trying to do this on a fairly minimal budget. But we 
recognize the importance of making sure that they're aware of 
it, especially in areas where you don't necessarily have a 
connection to water or the sea, to make sure that they're aware 
of it.
    We also recognize that from a standpoint of the 
transportation sector, we need to make sure that they're aware 
of that. We also have an intern program that we do. And I will 
tell you that last year, I believe we had nine or 10 that were 
actually with us at the Maritime Administration, and I will 
tell you that probably 80 percent of them were minority 
students, and they were going back to their schools. So we had 
them in everything from law to environmental science and a 
whole bunch of other things.
    So we've actually been doing that outreach in order to make 
that awareness, especially from the workforce. And we're pretty 
happy with the actual product that we're able to put out. The 
question now is can we get a return on the investment, and 
that's the one thing that's very difficult to measure. You 
know, we've contacted about 1,400. The question is how many of 
that 1,400 have actually gone on to get into the maritime 
sector, and that's something that's hard to quantify at this 
point, but we're going to try to do that going forward.
    Senator Booker. I really greatly appreciate that.
    Mr. Behm, I just want to say I apologize. I had no 
questions for you today, sir. I could make up a question now, 
if you think so, or we could just end the hearing.
    Mr. Behm. I think we should end the hearing.
    [Laughter.]
    Senator Booker. OK. So in closing, first of all, thank you 
to all of the witnesses here. I really cannot express to you 
how much I appreciate the professionalism and dedication you 
bring to this job. You're rendering a great service to our 
country. If you need me to write letters to your families, I 
will, to let them know that you are good men.
    So just a closing note regarding the record. The hearing 
record will remain open for up to 2 weeks. During this time, 
Senators are asked to submit any questions for the record. Upon 
receipt, the witnesses are requested to submit the written 
answers to the Committee as soon as you all can, and that would 
be greatly appreciated. If you all don't know, you should not 
take the lack of attendance here personally. There are multiple 
competing hearings going on at this time, and a number of folks 
who had to come and go expressed to me their regret because 
they realize that for our economy as well as for our safety how 
important this is.
    I just want to conclude this hearing by one more time 
thanking you all for your leadership. I truly do respect you 
and feel a sense of gratitude for what you all do to keep us 
safe and to grow our economy.
    I now say, with this hammer, which I've never had a chance 
to use as a Freshman Senator--this is my first time with the 
power. That's why I'm dragging this hearing out. I don't want 
to let it go.
    [Laughter.]
    Senator Booker. But I now say that this hearing is 
adjourned.
    [Whereupon, at 3:57 p.m., the hearing was adjourned.]

                            A P P E N D I X

 Response to Written Question Submitted by Hon. Richard Blumenthal to 
                         Hon. Paul N. Jaenichen
    Question. Enhancing security at our Nation's ports: In February 
2016, the President released his proposed budget for Fiscal Year 2017. 
The proposed budget raises a number of concerns for me--and I'm sure it 
does for others who have critical assets in their state that need to be 
protected from terrorist threats. The proposed budget cuts the 
Department of Homeland Security's Port Security Grant funding program 
from $100 million to $93 million.
    The port security program is crucial in states like Connecticut. It 
helps protect critical port infrastructure from terrorism, improve 
port-wide maritime security risk management, and maintain maritime 
security protocols that support port recovery and resiliency. The 
funding strengthens first responder training.
    In 2015, more than 10 communities in Connecticut benefited from 
this program--radio communications systems, surveillance cameras, 
patrol boats--resources that can thwart terrorism and stifle security 
threats. But the proposed budget cuts this funding by about $7 
million--and it cuts funding even more dramatically for other major 
security programs, such as slashing the State Homeland Security Program 
from $402 million to about $200 million.
    Are you concerned by the message this sends? Shouldn't we be 
strengthening these programs--not slashing them?
    Answer. The Maritime Administration is committed to working with 
our Federal partners with authorities and responsibilities for port 
security and defers to the Department of Homeland Security, which has 
oversight for the Port Security Grant Program, regarding appropriate 
funding levels for the program.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Brian Schatz to 
                         Hon. Paul N. Jaenichen
    Question 1. Harbor maintenance--including dredging and deepening 
navigation channels, anchorages and berthing areas--is essential to 
maritime safety. But we also have to make sure that harbor pilots and 
ship operators have access to near-real time nautical charts that 
reduce the risks of collisions and groundings in our harbors.
    NOAA's PORTS program is one promising area that aims to improve 
maritime safety by integrating real-time environmental observations, 
forecasts, and other geospatial information that mariners need to 
navigate safely. Researchers, at the University of Hawaii's Center for 
Island, Maritime, and Extreme Environment Security, are exploring other 
promising areas, including the use of unmanned systems to improve 
maritime awareness.
    But creating this information and making sure people can access it 
are two separate concerns, and we need to make sure there is no gap 
there.
    What are we doing to improve information sharing so that operators 
are getting more access to real-time nautical charts?
    Answer. MARAD supports sharing of real-time information to mariners 
for safety of navigation and managing maritime traffic. MARAD has no 
statutory authority in this area, but does support and contribute to 
the work of the U.S. Committee on the Marine Transportation System 
(CMTS), a Congressionally-mandated, Federal Cabinet-level, inter-
departmental committee chaired by the Secretary of Transportation, 
under which navigation services and safety are being addressed to 
support enhanced marine safety information to the mariner. The purpose 
of the CMTS is to create a partnership of Federal departments and 
agencies with responsibility for the marine transportation system.

    Question 2. The Merchant Marine Academy and the six Maritime 
Academies are responsible for graduating Merchant Marine officers with 
the skills to ensure that the U.S. maritime industry remains globally 
competitive.
    How are we adapting our training curricula to support the 
requirements of a modern maritime industry--so that our Merchant Marine 
Officers can do everything from operate new ships and communications 
technology to finance facilities?
    Answer. The United States Merchant Marine Academy and the State 
Maritime Academies are accredited institutions of higher education. 
They monitor their academic programs continuously to stay current with 
developments in the industry as well as their U.S. Coast Guard (USCG) 
approved Merchant Mariner Credentialing program.
    Each institution has professional faculty who are subject matter 
experts in several maritime-related fields including maritime training, 
business and finance. Each institution closely monitors the development 
of national and international standards required by the USCG and the 
International Maritime Organization. The academies also participate in 
the USCG's advisory committees related to training and other 
requirements.

    Question 3. Annually, the six State Maritime Academies graduate 
more than 70 percent of the licensed Merchant Marine officers in the 
United States. These graduates come from all 50 states.
    We are quite proud of the relationship that Hawaii has with Cal 
Maritime, where many graduates from Hawaii become licensed Merchant 
Marine officers.
    How are we doing with recruiting graduates to the State Maritime 
Academies so that, in addition to the Merchant Marine Academy, we are 
ensuring that these institutions are helping to develop a pool of well-
trained Merchant Mariners?
    Answer. The United States Merchant Marine Academy (USMMA) and all 
six of the State Maritime Academies (SMAs) engage in recruiting high 
school students nationwide. MARAD has no statutory or formal oversight 
role for the SMA institutions and does not directly recruit potential 
cadets. The USMMA and the SMAs have excellent reputations for career 
preparation and job prospects. The success of their recruiting efforts 
is well demonstrated by the high number of applicants for enrollment in 
their marine transportation/logistics academic and merchant mariner 
credentialing programs.

    Question 4. In order for licensed officers to graduate from our 
maritime academies they must acquire sea time, so each academy has a 
training ship.
    Last year, the President's budget included a request for funding 
for the common design of a new National Security Multi-Mission Vessel. 
This year's budget includes a request for $6 million under the National 
Security Multi-Mission Vessel/School Ship Replacement Program to fund 
an independent requirements and alternatives analysis for cadet 
training needs.
    Can you clarify these requests? Is MARAD reevaluating the 
requirement for a new multi-mission vessel?
    If so, what is the requirement for replacing cadet training ships?
    Answer. The FY 2017 President's Budget request is to fund an 
independent verification and validation of the requirements and 
alternatives analysis for Cadet training vessel needs. The analysis 
will also include the assessment and validation of future mariner 
requirements and demand, the impact to the current training programs 
and measures to keep pace with anticipated demands for mariners.

    Question 5. Many of our ports remain congested in part due to a 
lack of shore infrastructure connecting ships to the rest of our 
transportation network. We have seen this congestion especially on the 
West Coast. And as the Panama Canal Expansion Project is completed, we 
may see similar challenges manifest on the East Coast as larger vessels 
call on ports in the northeast.
    The problem is not that ships have outgrown our ports, it is that 
we have failed to grow the shore infrastructure--including intermodal 
links such as bridges, rails, tunnels, and terminals--that supports our 
ports to keep pace with the vessels that the international maritime 
industry is using.
    What is our investment strategy for ensuring that we are making 
commensurate improvements to our ports and the shore infrastructure 
that are crucial to the delivery of goods in the United States?
    Answer. MARAD and the Department of Transportation (DOT) recognize 
that ports and the U.S. marine transportation system are critical to 
our economy and that our maritime and freight systems need to be 
prepared for the challenges which exist now and in the future. Ports 
are our Nation's ultimate intermodal freight hubs--a key part of our 
transportation and economic systems. We are working with public and 
private sponsors to improve intermodal port-based facilitates on all 
coasts, the Great Lakes, and on our inland river and waterway system.
    Given the need to meet current and anticipated freight network 
requirements and the growing demands placed on ports and related 
infrastructure, MARAD and DOT are working to help meet the 
infrastructure needs of our Nation's freight and port infrastructure 
through a number of programs, including:
    StrongPorts--MARAD has developed a port infrastructure development 
program to better support our ports. StrongPorts is designed to deliver 
tools and technical assistance to ports with a goal of integrating 
ports and maritime transportation into the larger U.S. surface 
transportation system. The program provides a planning and investment 
framework that brings together all stakeholders, including private 
companies and local, State and Federal agencies.
    TIGER--The Transportation Investment Generating Economic Recovery 
(TIGER) Discretionary Grant program provides a unique opportunity for 
DOT to invest in projects that promise to achieve national objectives. 
Since 2009, Congress has dedicated nearly $4.6 billion over seven 
rounds of TIGER to fund highway, rail, transit and port projects that 
have a significant impact on the Nation, a region or a metropolitan 
area. Of the total funds awarded, $524 million has been awarded for 43 
port and/or marine highway projects in 24 states. These Federal funds 
have leveraged approximately $700 million of State, local, and private 
matching dollars for these port projects. TIGER funded projects at 
ports have included terminal expansions, berth expansions, intermodal 
transfer facilities, truck gates, rail connector improvements, as well 
as equipment and other improvements that directly contribute to 
improved freight throughput. Another $500 million has been appropriated 
for TIGER in FY 2016 and the application review period is now underway.
    Fixing America's Surface Transportation (FAST) Act--Congress 
recently passed the FAST Act which includes significant provisions for 
freight system planning--including the collection of performance 
measures for the Nation's top 25 ports, development and funding which 
are applicable to ports. On September 7, 2016, the Secretary of 
Transportation announced the first ever FASTLANE grant recipients. Of 
the 18 grants awarded, five are to ports. The port funds will be used 
to improve facilities, remove at-grade rail crossings, and increase the 
efficiency of the maritime system. More than $759 million was awarded 
for the 18 of which ports will receive $115.3 million.
    Transportation Infrastructure Finance and Innovation Act (TIFIA) 
and Railroad Rehabilitation and Improvement Financing (RRIF)--DOT has 
worked with ports to identify opportunities to utilize TIFIA and RRIF 
loans for eligible ``inside the gate'' projects. The FAST Act 
establishes DOT's National Surface Transportation and Innovative 
Finance Bureau to, among other things, provide assistance and 
communicate best practices and financing and funding opportunities to 
eligible entities for DOT's credit assistance programs. Prior to the 
FAST Act, the DOT's Build America Transportation Investment Center 
(BATIC) had already started working with ports to identify various 
Federal funding and financing programs at DOT and to harness these 
potential funding and financing opportunities. The BATIC has now been 
formally established within DOT as the Build America Bureau.
    Additionally, Congress appropriated $5 million in grant funds in FY 
2016 for America's Marine Highway Program to further expand the use of 
Marine Highway services. A Notice of Funding Opportunity was published 
in the Federal Register on April 25, 2016 and applications have been 
received and are under review. MARAD will use those funds to encourage 
shippers around the country to routinely choose the use of waterborne 
transportation for freight.
    The President's FY 2017 budget also contains proposals that would 
facilitate increased infrastructure investment in our ports and shore 
infrastructure. These include Qualified Public Infrastructure Bonds 
(QPIBs) that would level the playing field for public-private 
partnerships and attract billions of dollars of new private capital for 
our nations' ports and surface transportation projects, as well as for 
other important infrastructure sectors. Port projects would also be 
eligible for assistance under the proposed Financing America's 
Infrastructure Renewal Program (FAIR) that would provide direct loans 
to U.S. infrastructure projects developed through public-private 
partnerships that meet applicable environmental and labor standards.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Cory Booker to 
                         Hon. Paul N. Jaenichen
    Question 1. The Department of Transportation Office of Inspector 
General (OIG) released a report in December 2015 highlighting 
deficiencies in the Maritime Administration's controls for program 
implementation, monitoring, and oversight. In the report, the OIG found 
that MARAD ``lacks policies and procedures for notifying other Federal 
agencies of its role as the disposal agent and identifying the universe 
of Government-owned vessels it is responsible for disposing.'' What is 
MARAD's plan to develop these policies and procedures?
    Answer. Under 40 U.S.C. Sec. 548, MARAD is required to dispose of 
Government-owned, merchant-type vessels of 1,500 gross tons or more. 
The DOT Office of Inspector General (OIG) Audit Report, issued on 
December 10, 2015, recommended MARAD develop or update policies and 
procedures for (1) identifying the universe of Government-owned vessels 
that meet the statutory criteria for MARAD to serve as the disposal 
agent, and (2) notifying agencies that own these vessels of MARAD's 
disposal agent role.
    In response, MARAD has implemented the following process to 
establish itself as the exclusive agency for the disposal of government 
owned and operated merchant type vessels which meet the gross tonnage 
criteria established by the statute. First, MARAD has determined there 
are eight Federal agencies, including MARAD, which own and operate 
vessels subject to MARAD's ship disposal authority. The other agencies 
include the Naval Sea Systems Command (NAVSEA), Military Sealift 
Command (MSC), National Oceanic and Atmospheric Administration (NOAA), 
Office of Naval Research (ONR), Department of the Army, Army Corps of 
Engineers (ACE), United States Coast Guard (USCG), and the National 
Science Foundation (NSF). Second, MARAD has identified a universe of 
approximately 250 vessels at these agencies for which MARAD will be the 
exclusive disposal agency. Each vessel has been recorded in a ship 
disposal program database which contains the specific vessel 
characteristics including the vessel planned disposal date. Population 
of the database with vessel records was completed in May 2016. Third, 
MARAD reached out to each of the agencies and identified the specific 
point of contact to initiate the notification process for MARAD's 
vessel disposal authority.

    Question 2. When will these documents be finalized?
    Answer. MARAD issued two notification letters to the agencies which 
own and operate vessels subject to MARAD's ship disposal authority. The 
first letter was issued by the Ship Disposal Program Office on June 23, 
2016 to the corresponding program managers at the other agencies. A 
follow-on letter from the Maritime Administrator was issued on July 8, 
2016 to the corresponding agency executives. It should be noted that 
MARAD does not have statutory authority to enforce compliance by other 
Federal agencies.

    Question 3. The DOT OIG also expressed concern with the General 
Service Administration (GSA)'s role in ship disposal. The National 
Maritime Heritage Act of 1994 requires MARAD to allocate ship disposal 
proceeds to its Vessel Operations Revolving Fund, where they are 
expended on MARAD and National Parks Service programs. When GSA 
disposes of vessels, the proceeds go into the General Treasury, not to 
the Vessel Operations Revolving Fund.
    What is your opinion on the practice whereby some agencies have 
disposed vessels through GSA rather than through MARAD? Are you 
concerned by the potential losses in revenue this could create for the 
maritime community if it becomes common practice?
    Answer. Under 40 U.S.C. Sec. 541, the GSA has authority to act as 
the sales agent for other Federal agencies and sell excess Federal 
vessels less than 1,500 gross tons. Under 40 U.S.C. Sec. 548, MARAD is 
responsible for disposing of surplus Government-owned, merchant-type 
vessels that are 1,500 gross tons or greater. It is in MARAD's interest 
to ensure vessels of this size are disposed of through MARAD's ship 
disposal program because such sales revenue is deposited into the 
Vessel Operating Revolving Fund (VORF) account, rather than into the 
General Treasury. Sales proceeds deposited into the VORF account are 
used to support the National Defense Reserve Fleet, the U.S. Merchant 
Marine Academy and State Maritime Academies, and for maritime heritage 
preservation and education.
    As recommended by the OIG in the Audit Report, MARAD has developed 
policies and procedures to notify other Federal agencies that MARAD is 
the exclusive disposal agency for surplus merchant-type vessels of 
1,500 gross tons or greater.
                                 ______
                                 
     Response to Written Question Submitted by Hon. John Thune to 
                           Hon. Mario Cordero
    Question. Chairman Cordero, just last month you announced that the 
Federal Maritime Commission would assemble Supply Chain Innovation 
Teams to ``develop commercial solutions to supply chain challenges and 
related port congestion concerns.'' The IMO container weight issue goes 
into force on July 1, 2016, and there remains concern that it could 
challenge the U.S. supply chain. Do you think that the container weight 
issue is one that can be considered by your Innovation Teams in the 
immediate future, and if so, how do you think its effort could 
contribute to identifying and implementing a resolution?
    Answer. The Federal Maritime Commission Supply Chain Innovation 
Teams Initiative was constituted pursuant to our plan of action to 
address supply change congestion issues. They were charged with 
identifying systemic changes to supply chains as opposed to serving as 
an arbitrating forum. Accordingly, and appropriately, it was 
Commissioners and Commission staff who were engaged in what essentially 
amounted to supply chain diplomacy on the container weight matter.
    The Commission launched its Supply Chain Innovation Teams 
initiative on May 3 here in Washington, D.C. with participation by 
experienced, successful industry leaders from 35 major companies 
representing nine key supply chain industries.
    Divided into three teams, and led by Commissioner Rebecca Dye, our 
private sector participants were challenged to identify and implement 
process innovations and improvements that would lead to greater 
national supply chain reliability and effectiveness. The focus is on 
cooperative commercial solutions.
    The teams quickly identified supply chain ``visibility'' as the 
most effective ways to improve reliability since many supply chain 
obstacles result from poor information transmission, inaccurate 
information, or information unavailable at the right time.
    To increase supply chain visibility and stimulate more effective 
cooperation, all three teams chose to pursue the development of a 
national supply chain information portal that could be adapted for use 
by any port in the country.
    They are now in the process of refining the precise information 
that must be available to each supply chain actor for overall maximum 
supply chain alignment and coordination. Ensuring the availability of 
that essential information is the most critical component of a national 
port information system.
    Although the Supply Chain Teams Initiative is unlikely to provide a 
``quick fix'' for the challenges we face, I am pleased to report that 
the project is on track and making great progress.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Ron Johnson to 
                           Hon. Mario Cordero
    Question 1. Chairman Cordero: I am concerned that this SOLAS 
amendment will disrupt the flow of freight through U.S. ports. If that 
happens, U.S. exporters will be put at a competitive disadvantage. 
Therefore, I have serious concerns with this IMO amendment.
    This feels like a situation where the past actions of a few bad 
foreign actors have led to a regulatory situation where all U.S. 
shippers are now being mandated, burdened really, to change how they 
move their products from the truck, or the rail, onto the ship. How do 
you see it playing out?

    Question 2. We are only weeks away from these new weight 
verification regulations being put into effect, but there is still no 
fully-operational system that American shippers can utilize to transmit 
their container weight information to the carrier or terminal 
operators:
    Am I right in thinking that after this goes into effect on July 1, 
shippers can have their containers literally left off a ship, if they 
can't meet the VGM requirements?

    Question 3. You've mentioned that the FMC has supply chain 
innovation teams:
    Are you ready to take this task on?
    What is FMC's role in all of this?
    Are you ready to investigate when problems undoubtedly arise?

    Question 4. I admit I'm not all that familiar with the inner-
workings of the IMO:
    What American interests are part of the IMO?
    Does the FMC, as the agency that administers U.S. maritime law, 
have the authority to investigate concerns that come from Congress?

    Question 5. We have to do everything we can to make sure the IMO 
amendment doesn't hurt shippers, or disrupt the food chain.
    What are you doing for shippers to ensure there aren't unnecessary 
costs?
    Answer. Many of your inquiries addressed amendments to the 
International Convention for the Safety of Life at Sea (SOLAS) Treaty 
that established a requirement for shippers to provide the Verified 
Gross Mass (VGM) of a container before it can be loaded aboard a 
vessel. I am pleased to report that the July 1, 2016 SOLAS VGM 
implementation date passed with no resulting complications and no 
substantive or notable disruptions to the export supply chain of the 
United States.
    The container weight declaration requirement was established in 
November 2014 at the International Maritime Organization (IMO), which 
is a United Nations ``specialized agency'' headquartered in London. The 
IMO is responsible for a number of conventions, including the 
International Convention for the Safety of Life at Sea. The United 
States has been a Member State of the IMO since 1950 and is represented 
there by the United States Coast Guard. The Federal Maritime Commission 
does not attend meetings at the International Maritime Organization and 
we were not made aware of this proposal as it was being considered in 
London.
    Key to avoiding potential disruption as the result of the new SOLAS 
VGM requirement were extensive and frank discussions between all 
interested parties subject to the new regime. These exchanges, which 
the FMC was often responsible for arranging if not leading, ultimately 
created a multitude of options for SOLAS VGM compliance that provided 
shippers with the flexibility they sought. I have written to Chairman 
Thune on this specific issue and am attaching a copy of my 
correspondence for your review and information.
    While the Federal Maritime Commission was significantly involved in 
the work required to achieve consensus on SOLAS VGM matters, our Supply 
Chain Innovation Teams Initiative was not part of that effort. The 
teams were constituted to identify systemic changes to supply chains as 
opposed to serving as an arbitrating forum. Accordingly, and 
appropriately, it was Commissioners and Commission staff who were 
engaged in what essentially amounted to supply chain diplomacy on this 
matter.
    The Commission launched its Supply Chain Innovation Teams 
initiative on May 3 here in Washington, D.C. with participation by 
experienced, successful industry leaders from 35 major companies 
representing 9 key supply chain industries.
    Divided into three teams, and led by Commissioner Rebecca Dye, our 
private sector participants were challenged to identify and implement 
process innovations and improvements that would lead to greater 
national supply chain reliability and effectiveness. The focus is on 
cooperative commercial solutions.
    The teams quickly identified supply chain ``visibility'' as the 
most effective ways to improve reliability since many supply chain 
obstacles result from poor information transmission, inaccurate 
information, or information unavailable at the right time.
    To increase supply chain visibility and stimulate more effective 
cooperation, all three teams chose to pursue the development of a 
national supply chain information portal that could be adapted for use 
by any port in the country.
    They are now in the process of refining the precise information 
that must be available to each supply chain actor for overall maximum 
supply chain alignment and coordination. Ensuring the availability of 
that essential information is the most critical component of a national 
port information system.
    Although the Supply Chain Teams Initiative is unlikely to provide a 
``quick fix'' for the challenges we face, I am pleased to report that 
the project is on track and making great progress.
    Your questions very commendably focus on how to best represent the 
priorities and interests of the American shipping public. That is a 
priority I share, especially as the core of the Commission's mission is 
to guarantee a competitive marketplace for international ocean carriage 
services. I am keenly interested in knowing what issues and trends 
concern American shippers and am always eager to engage ocean 
transportation consumers to benefit from their insights on the 
functioning of the international, intermodal supply chain. As such, I 
would welcome the opportunity for my staff to work with your staff to 
identify who key export shippers and shipper organizations are in 
Wisconsin and to explore ways in which the Commission can engage them 
on a regular basis. I am confident that such a dialog would be mutually 
beneficial.
    While the Federal Maritime Commission places a high priority on 
engaging its constituencies and maintaining communications across all 
parties involved in the international transportation of cargoes, the 
agency has a fairly limited writ in terms of administering United 
States maritime laws. The Commission is narrowly charged with enforcing 
the Shipping Act, while other agencies enforce different statues 
applicable to the maritime industry. In all candor, the Federal 
Maritime Commission is a small agency with limited resources. It is our 
goal and our responsibility to be responsive to the parties we regulate 
and to the United States Congress, but we simply do not have the 
capacity to take on any new tasking to examine and analyze an issue 
without pausing on-going work. Our daily work involves analyzing and 
monitoring the shipping markets and industries to guard against unfair 
business practices. We have a critical need to hire a small number of 
additional, specialized experts. By increasing our team of economists 
and analysts, by probably no more than eight people in total, we would 
be much more capable of responding to new issues or inquiries while 
simultaneously continuing to guarantee competition in shipping, which 
is our core mission.
                                 ______
                                 
 Response to Written Question Submitted by Hon. Richard Blumenthal to 
                           Hon. Mario Cordero
    Question. Enhancing security at our Nation's ports: In February 
2016, the President released his proposed budget for Fiscal Year 2017. 
The proposed budget raises a number of concerns for me--and I'm sure it 
does for others who have critical assets in their state that need to be 
protected from terrorist threats. The proposed budget cuts the 
Department of Homeland Security's Port Security Grant funding program 
from $100 million to $93 million.
    The port security program is crucial in states like Connecticut. It 
helps protect critical port infrastructure from terrorism, improve 
port-wide maritime security risk management, and maintain maritime 
security protocols that support port recovery and resiliency. The 
funding strengthens first responder training.
    In 2015, more than 10 communities in Connecticut benefited from 
this program--radio communications systems, surveillance cameras, 
patrol boats--resources that can thwart terrorism and stifle security 
threats. But the proposed budget cuts this funding by about $7 
million--and it cuts funding even more dramatically for other major 
security programs, such as slashing the State Homeland Security Program 
from $402 million to about $200 million.
    Are you concerned by the message this sends? Shouldn't we be 
strengthening these programs--not slashing them?
    Answer. I appreciated receiving your Question for the Record 
soliciting the views of the Federal Maritime Commission on the issue of 
enhancing seaport security.
    As someone with a background in ports, I understand your desire to 
ensure Connecticut law enforcement agencies are adequately equipped and 
trained to protect marine-related facilities and the waterways of your 
state. Given my experience, I also have an insight into just how 
beneficial grant funding can be to port authorities and terminal 
operators in meeting security requirements set forth by the Federal 
Government. Indeed, I have previously written to the Department of 
Homeland Security to advocate that Marine Terminal Operators be 
compensated for expenses incurred to satisfy mandates intended to 
address real or perceived facility vulnerabilities.
    The Federal Maritime Commission has a limited role in terms of the 
contribution it makes to domestic security operations, and to the 
extent we are able to engage in these undertakings, our efforts largely 
consist of sharing information. Given the body of parties involved in 
international, oceanborne commerce that the Commission regulates, our 
agency has access to data that can be helpful to other Federal agencies 
in executing their respective missions. We are always pleased to be 
able to provide information we possess that can be of assistance to law 
enforcement agencies in identifying individuals involved in illegal 
activities.
    To facilitate the sharing of information, the Commission has formal 
Memorandums of Understanding with Customs and Border Protection and the 
Census Bureau. We are seeking to expand our Memorandum with Customs and 
Border Protection to give us access to its targeting system, which 
would be very helpful to our agency in better meeting our own 
enforcement obligations and actions. Our discussions with that agency 
are ongoing and we hope at some point we are able to reach an agreement 
that will allow us to use the rich pool of desirable targeting data 
Customs and Border Protection has at its disposal.
    In addition to our cooperation with Customs and Border Protection, 
the Federal Maritime Commission also works with a variety of Federal, 
state, and local agencies to provide assistance in investigations. 
Examples of agencies that the Commission has cooperated with on a 
somewhat regular basis include: individual U.S. Attorney's Offices; the 
Federal Bureau of Investigation; Immigration and Customs Enforcement; 
the Bureau of Alcohol, Tobacco, and Firearms; the United States Coast 
Guard; Department of Homeland Security Investigations; the Intellectual 
Property Coordination Center; the New York State Police; the New Jersey 
State Police; and, the New York Police Department.
    Our efforts in New York and New Jersey have not been entirely 
limited to information sharing. Commission personnel within the last 
year participated in an operation designed to interdict contraband 
being sent overseas. Our Northeastern Area Representative joined 
Customs and Coast Guard officials in targeting and physically 
inspecting export containers at the Port Authority of New York and New 
Jersey with the goal of interrupting smuggling operations. On a related 
note, the same Area Representative is involved in a regional, joint-
agency automobile theft taskforce that seeks to disrupt the export of 
stolen vehicles. There is a vibrant trade in the northeast of stolen 
vehicles being sent overseas and our regional representative assists 
law enforcement agencies in identifying the freight forwarders and non-
vessel-operating common carriers who are accessories to these smuggling 
operations. To the extent cars stolen in Connecticut find their way to 
the docks of New York and New Jersey, the Federal Maritime Commission 
is contributing to police efforts to aid your constituents in 
recovering stolen automobiles.
    As I mentioned above, the Commission is happy to cooperate with law 
enforcement. If sharing data with the Connecticut State Police, or 
another Connecticut-based law enforcement organization, would be 
beneficial to their investigative efforts, I am happy to volunteer our 
Bureau of Enforcement and Area Representatives as resources. I would 
welcome your assistance in forwarding my offer to the appropriate 
officials.
    Ports are dynamic environments and the challenges to safeguarding 
them are multifold. While I empathize with the challenges Connecticut 
port authorities will face in paying for assets that will help add to 
physical security, I regret the Federal Maritime Commission does not 
have programs or resources that can provide new or additional funding 
streams to meet that goal. That noted, we can make a meaningful 
contribution in terms of safeguarding the supply chain by working with 
the Connecticut State Police and local Connecticut law enforcement 
agencies to identify those who seek to benefit by exploiting 
international transportation networks for nefarious ends.
    Again, I appreciate having this opportunity to provide you with the 
benefit of the Commission's views on this matter. As always, I am happy 
to be of whatever assistance I can to you, or your staff, in any matter 
of jurisdiction to the Federal Maritime Commission and of concern to 
your constituents.
                                 ______
                                 
    Response to Written Question Submitted by Hon. Brian Schatz to 
                           Hon. Mario Cordero
    Question. Many of our ports remain congested in part due to a lack 
of shore infrastructure connecting ships to the rest of our 
transportation network. We have seen this congestion especially on the 
West Coast. And as the Panama Canal Expansion Project is completed, we 
may see similar challenges manifest on the East Coast as larger vessels 
call on ports in the northeast.
    The problem is not that ships have outgrown our ports, it is that 
we have failed to grow the shore infrastructure--including intermodal 
links such as bridges, rails, tunnels, and terminals--that supports our 
ports to keep pace with the vessels that the international maritime 
industry is using.
    I understand that FMC has overseen projects and programs that have 
addressed transportation infrastructure needs and reduced pollution 
caused by port-related activities, like in Los Angeles and Long Beach.
    How is the Commission helping improve our shore infrastructure so 
that the United States can engage in international trade at the pace 
that our international partners do?
    Answer. I appreciated receiving your Question for the Record 
regarding the Federal Maritime Commission (FMC) and its efforts to 
address port congestion. I am happy to provide the following response 
to your inquiry.
    You are correct that in recent years, congestion at West Coast 
ports has been a recurring problem. Congestion has been caused by a 
variety of factors, but the lack of sufficient landside intermodal 
connections, particularly outside the gates of marine terminals, has 
exacerbated the problem if not contributed to the cause of it.
    For the sake of clarity, congestion has manifested itself on the 
West Coast several times over the past decade. In each of these 
separate instances, there were many differing precipitating causes, but 
the domestic physical network becoming overwhelmed was a common outcome 
no matter the underlying reason for the congestion.
    As you are no doubt aware, the Federal Maritime Commission does not 
have a lead role on port development matters. That mission is the 
responsibility of the Department of Transportation and its subordinate 
modal administrations. That noted, the Federal Maritime Commission has 
a unique contribution to make in terms of identifying instances of port 
congestion; determining possible causes for the congestion; 
facilitating discussion among parties impacted by congestion; and 
ultimately trying to promote possible ways to address port congestion.
    Our most recent endeavor in this field is the unanimous vote the 
Commission made on February 1, 2016 directing Commissioner Rebecca Dye 
to establish Supply Chain Innovation Teams. These teams are comprised 
of leading individuals from the shipping, port, logistics, 
international trade, and retail sectors who will work directly with 
each other with the goal of identifying steps that can be taken to 
address the potential for congestion. The Supply Chain Innovation Teams 
initiative will be formally launched on May 3, 2016 at the Federal 
Maritime Commission headquarters building in Washington, D.C. The first 
meeting of the teams will span two days. Teams will subsequently be 
able to meet as frequently as needed or practical. Commissioner Dye 
envisions these teams being essentially entrepreneurial in nature and 
her desire, which I share, is that the collaborative work that is 
launched in these sessions will lead to industry-driven and industry-
implemented steps that will lead to mitigating port congestion and 
helping to forestall situations where the system becomes overwhelmed.
    The final product of Commissioner Dye's teams is all the more 
potentially significant in that it will not be easy to build our way 
out of port congestion. It is a difficult, time consuming, and 
expensive endeavor to move infrastructure projects through the planning 
and approval process; and those are all steps that take place prior to 
when construction ever begins. Notwithstanding the clear need to build 
new capacity to serve international trade, the more immediate and more 
economical option to relieve congestion is via making existing 
infrastructure work more efficiently. One example of how to make 
existing networks and infrastructure carry more volumes and work 
against the return of congestion is to move marine terminals to true 
24-hour operations when it comes to truck gates. When a container ship 
calls a port, cargo is offloaded continually and around the clock until 
all the ``box moves'' for that vessel are completed. What does not now 
match the non-stop ``ship-to-shore'' operation is the ``shore-to-gate'' 
operation. Finding a way to create gates at marine terminals that 
remain open with predictable, dependable and late hours is a necessary 
and inevitable evolution that must take place, particularly in the 
Nation's highest volume ports. Admittedly, there are related 
operational issues that would have to be resolved, but it is simply 
wasteful and inefficient to not have as many containers as possible 
heading for the exit of a terminal once they are offloaded from a 
vessel.
    In summary, I have always said that I view the mission of the 
Federal Maritime Commission as two-fold: (1) furthering efficient ocean 
cargo movement; and (2) highlighting the paramount role of our Nation's 
ports. Ports that function efficiently and are able to scale with 
increases in container volumes are key to meeting the mission 
objectives of the Commission. I am not only continually learning what 
the issues of concern are to our marine terminal operator constituents, 
but am open to any proposals that might help us improve port 
productivity.
    Again, I appreciated receiving your Question for the Record and 
would be happy to discuss this topic with you in person if doing so 
would be helpful. As always, please let us know how we can be of 
assistance as you work to represent the interests of Hawaii and its 
residents.
                                 ______
                                 
 Response to Written Question Submitted by Hon. Richard Blumenthal to 
                        Rear Admiral James Helis
    Question. Enhancing security at our Nation's ports: In February 
2016, the President released his proposed budget for Fiscal Year 2017. 
The proposed budget raises a number of concerns for me--and I'm sure it 
does for others who have critical assets in their state that need to be 
protected from terrorist threats. The proposed budget cuts the 
Department of Homeland Security's Port Security Grant funding program 
from $100 million to $93 million.
    The port security program is crucial in states like Connecticut. It 
helps protect critical port infrastructure from terrorism, improve 
port-wide maritime security risk management, and maintain maritime 
security protocols that support port recovery and resiliency. The 
funding strengthens first responder training.
    In 2015, more than 10 communities in Connecticut benefited from 
this program--radio communications systems, surveillance cameras, 
patrol boats--resources that can thwart terrorism and stifle security 
threats. But the proposed budget cuts this funding by about $7 
million--and it cuts funding even more dramatically for other major 
security programs, such as slashing the State Homeland Security Program 
from $402 million to about $200 million.
    Are you concerned by the message this sends? Shouldn't we be 
strengthening these programs--not slashing them?
    Answer. The USMMA defers to the Department of Homeland Security, 
which has oversight for the Port Security Grant Program, regarding 
appropriate funding levels for the program.
                                 ______
                                 
    Response to Written Question Submitted by Hon. Brian Schatz to 
                        Rear Admiral James Helis
    Question. The Merchant Marine Academy and the six Maritime 
Academies are responsible for graduating Merchant Marine officers with 
the skills to ensure that the U.S. maritime industry remains globally 
competitive.
    How are we adapting our training curricula to support the 
requirements of a modern maritime industry--so that our Merchant Marine 
Officers can do everything from operate new ships and communications 
technology to finance facilities?
    Answer. The United State Merchant Marine Academy (USMMA) and the 
State Maritime Academies (SMAs) are accredited institutions of higher 
education. They monitor their academic programs continuously to stay 
current with developments in the industry as well as their U.S. Coast 
Guard (USCG) approved Merchant Marine Credentialing program. Because 
the Maritime Administration does not determine the curricula for the 
SMAs, it cannot speak to how the state academies are adapting their 
curricula. Thus, the response to this question will focus exclusively 
on USMMA.
    One of the USMMA's strategic goals is to provide cutting-edge 
programs that will prepare Midshipmen to work at both ends of the 
technological spectrum, from pencils and paper charts to electronic 
navigation, and from conventionally-fueled propulsion plants to those 
using cleaner and greener alternative fuels. To achieve this goal, the 
USMMA takes a three-pronged approach, consistent with its available 
funding resources, to ensure its training curriculum supports the 
requirements of a modern maritime industry. First, the USMMA keeps its 
faculty members up-to-date on the newest technology and latest 
developments in industry by sending them to classes and conferences. 
Second, the USMMA acquires, as budgets allow, the latest equipment for 
demonstration purposes in its laboratories and operates and maintains 
realistic simulators to provide Midshipmen with virtual maritime 
experience. Finally, the USMMA revises and updates its curriculum, to 
include the addition of courses, when it becomes clear that new 
policies and technologies will constitute the way of the future in 
industry.
    The USMMA augments classroom learning with hands-on laboratory 
experience and simulator training. The FY 2017 President's Budget 
proposes funding to upgrade the USMMA's analog engine simulator to a 
virtual engine simulator that is capable of emulating multiple 
propulsion plant types. On a virtual engine simulator, USMMA Midshipmen 
will be able to troubleshoot engineering plant casualties down to the 
nuts and bolts level. Similarly, USMMA's Full Mission Bridge is also in 
need of an upgrade of its console analog systems to digital ones in 
order to permit a more accurate translation of electronic chart and 
radar data. Even though our technicians are trying to provide realistic 
simulation of new and old ships in a variety of sea states, weather 
conditions, and traffic scenarios, the simulator projectors are out of 
date, causing pixilation of the picture, and require replacement along 
with the projection screens, which have suffered from water intrusion 
damage due to weather related events. Recent simulator updates in the 
USMMA Marine Transportation Department have enabled Midshipmen to 
experience, among other things, the newest onboard Electronic Chart 
Display and Information System (ECDIS) and radars available and in use 
in industry. Informal polls of students returning from sea year since 
2013 have reflected that changes in the course of instruction, coupled 
with simulator use, have translated well to better understanding of 
bridge navigational systems aboard their assigned vessels.
    To further complement our kinesthetic learning environment, the 
USMMA has leveraged the Training Vessel (T/V) KINGS POINTER's Dynamic 
Positioning System to teach dynamic positioning, which is being widely 
used by ships and semi-submersible mobile offshore drilling units, 
oceanographic research vessels, and cruise ships. The USMMA also 
accepted the donation of a tugboat and acquired a former Navy multi-
purpose barge in order to complete efforts to initiate an inland/
coastal training program. This elective course is embedded in a new 
academic concentration entitled ``Coastal and Inland Vessel 
Management,'' which is designed to provide an afloat and classroom 
entry level view into the coastal and inland marine industry. Classwork 
includes exposure to subjects such as inland waterway operations, 
infrastructure and equipment, business practices, the regulatory 
environment, and short sea shipping.
    The USMMA curriculum was revised in 2013 to incorporate the new 
internationally mandated Standards of Training, Certification and 
Watchkeeping (STCW) competencies required by the STCW 2010 Manila 
Amendments. The regulatory changes included renewed emphasis on Engine 
Resource Management and Bridge Resource Management, with a change of 
focus from technical ability to leadership and management, with the 
goal of building watch teams capable of handling both routine and 
emergency situations at sea. Those Class of 2017 Midshipmen enrolled as 
Deck majors were the first group offered the new Maritime Logistics and 
Security Program, which modifies the existing Logistics and Intermodal 
Transportation major. The principal objective is to provide Midshipmen 
with the knowledge and skills required to manage complex maritime and 
intermodal supply chains and to assist in addressing the security 
challenges facing the marine transportation system. This goal is 
achieved through an integrated program of study and experiential 
learning, building on the USMMA's traditional maritime core 
competencies.
    We believe that this technologically sophisticated curriculum is 
enhanced by the Sea Year experience, which puts Midshipmen on 
commercial vessels for nearly 300 days during their sophomore and 
junior years Leadership development is at the forefront of the Academy 
experience, and in the 2020 Academic Year, the USMMA plans to add two 
formal academic leadership courses.
                                 ______
                                 
 Response to Written Questions Submitted by Hon. Richard Blumenthal to 
                             Mitchell Behm
    Question 1. Enhancing security at our Nation's ports: In February 
2016, the President released his proposed budget for Fiscal Year 2017. 
The proposed budget raises a number of concerns for me--and I'm sure it 
does for others who have critical assets in their state that need to be 
protected from terrorist threats. The proposed budget cuts the 
Department of Homeland Security's Port Security Grant funding program 
from $100 million to $93 million.
    The port security program is crucial in states like Connecticut. It 
helps protect critical port infrastructure from terrorism, improve 
port-wide maritime security risk management, and maintain maritime 
security protocols that support port recovery and resiliency. The 
funding strengthens first responder training.
    In 2015, more than 10 communities in Connecticut benefited from 
this program--radio communications systems, surveillance cameras, 
patrol boats--resources that can thwart terrorism and stifle security 
threats. But the proposed budget cuts this funding by about $7 
million--and it cuts funding even more dramatically for other major 
security programs, such as slashing the State Homeland Security Program 
from $402 million to about $200 million.
    Are you concerned by the message this sends? Shouldn't we be 
strengthening these programs--not slashing them?
    Answer. The Office of Inspector General (OIG) serves as the 
Department of Transportation's (DOT) sole in-house source for 
objectively examining the Agency's programs and their integrity. To 
preserve our independence, OIG refrains from a policy-making role, 
including decisions related to the President's budget request, as well 
as collaboration related to policy development between DOT and its 
operating administrations. To that end, DOT and MARAD are better suited 
to responding to your questions given the policy issues outlined 
therein.

    Question 2. Fighting sexual assault at the U.S. Merchant Marine 
Academy: Mr. Behm, your testimony notes the efforts of the Merchant 
Marine Academy to address campus sexual assault. You note that during 
the 2011-2012 academic year, an estimated 25 midshipmen were sexually 
assaulted and 136 midshipmen were sexually harassed--but no incidents 
were officially reported.
    This complete lack of reporting demonstrates the importance of a 
victim-centered sexual assault reporting procedure--an approach that I 
urge the Academy to adopt.
    Your office urged MARAD and the academy to take action, and your 
testimony notes that the nine recommendations you issued to MARAD and 
the academy have been closed.
    Your testimony says you plan to brief the Committee on this issue 
later this spring, but what can you say now about your confidence in 
the academy in doing what is necessary to effectively end sexual 
assault on campus? What else can and should be done?
    Answer. Leaders in the Department, Maritime Administration, and 
U.S. Merchant Marine Academy (USMMA), appear to be focused seriously on 
addressing the myriad issues related to sexual assault and sexual 
harassment at USMMA. Our current work is focused on whether the Academy 
carried out its promised actions in the 2014-2015 action plan for 
preventing sexual assault and sexual harassment. Going forward, 
sustained and institutionalized attention to implementing each action 
in the Academy's plan as well as creating an atmosphere in which 
midshipmen are comfortable reporting instances of sexual assault and 
sexual harassment should be the highest priorities. With continued 
leadership pointing the Academy's strong corps of midshipmen in the 
right direction, and focused efforts in carrying out each action plan 
to prevent and respond to sexual harassment and sexual assault, the 
Academy can make further progress in implementing an effective program.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Brian Schatz to 
                             Mitchell Behm
    Question 1. Harbor maintenance--including dredging and deepening 
navigation channels, anchorages and berthing areas--is essential to 
maritime safety. But we also have to make sure that harbor pilots and 
ship operators have access to near-real time nautical charts that 
reduce the risks of collisions and groundings in our harbors.
    NOAA's PORTS program is one promising area that aims to improve 
maritime safety by integrating real-time environmental observations, 
forecasts, and other geospatial information that mariners need to 
navigate safely. Researchers, at the University of Hawaii's Center for 
Island, Maritime, and Extreme Environment Security, are exploring other 
promising areas, including the use of unmanned systems to improve 
maritime awareness. But creating this information and making sure 
people can access it are two separate concerns, and we need to make 
sure there is no gap there.
    What are we doing to improve information sharing so that operators 
are getting more access to real-time nautical charts?
    Answer. We have not conducted any work related to operators' access 
to nautical charts. Therefore, MARAD is better suited to responding to 
this question.

    Question 2. Many of our ports remain congested in part due to a 
lack of shore infrastructure connecting ships to the rest of our 
transportation network. We have seen this congestion especially on the 
West Coast. And as the Panama Canal Expansion Project is completed, we 
may see similar challenges manifest on the East Coast as larger vessels 
call on ports in the northeast.
    The problem is not that ships have outgrown our ports, it is that 
we have failed to grow the shore infrastructure--including intermodal 
links such as bridges, rails, tunnels, and terminals--that supports our 
ports to keep pace with the vessels that the international maritime 
industry is using.
    What is our investment strategy for ensuring that we are making 
commensurate improvements to our ports and the shore infrastructure 
that are crucial to the delivery of goods in the United States?
    Answer. The OIG serves as DOT's sole in-house source for 
objectively examining the Agency's programs and their integrity. To 
preserve our independence, OIG refrains from a policy-making role, 
including decisions related to investment strategies, as well as 
collaboration related to policy development between DOT and its 
operating administrations. Given the policy issues outlined in your 
question, DOT and MARAD are better suited to responding to it.

                                  

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