[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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_________
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____________________________________________________________________
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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
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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
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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
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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.
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\1\ 46 Sec. U.S.C. 50101
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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.
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\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.
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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.
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\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.
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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.
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\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.
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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.
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\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).
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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.
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\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.
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\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
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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.
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\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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