[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]





 
             STATE OF THE U.S. MARITIME INDUSTRY: IMPACTS OF THE 
                             COVID-19 PANDEMIC

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

                                (117-2)

                             REMOTE HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                COAST GUARD AND MARITIME TRANSPORTATION

                                 OF THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             FIRST SESSION

                               __________

                            FEBRUARY 9, 2021

                               __________

                       Printed for the use of the
             Committee on Transportation and Infrastructure
             
             
             
             
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     Available online at: https://www.govinfo.gov/committee/house-
     transportation?path=/browsecommittee/chamber/house/committee/
                             transportation
                             
                             
                             
                             
                             ______                       


              U.S. GOVERNMENT PUBLISHING OFFICE 
44-493 PDF              WASHINGTON : 2021                              





             COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

  PETER A. DeFAZIO, Oregon, Chair
SAM GRAVES, Missouri                 ELEANOR HOLMES NORTON,
DON YOUNG, Alaska                      District of Columbia
ERIC A. ``RICK'' CRAWFORD, Arkansas  EDDIE BERNICE JOHNSON, Texas
BOB GIBBS, Ohio                      RICK LARSEN, Washington
DANIEL WEBSTER, Florida              GRACE F. NAPOLITANO, California
THOMAS MASSIE, Kentucky              STEVE COHEN, Tennessee
SCOTT PERRY, Pennsylvania            ALBIO SIRES, New Jersey
RODNEY DAVIS, Illinois               JOHN GARAMENDI, California
JOHN KATKO, New York                 HENRY C. ``HANK'' JOHNSON, Jr., 
BRIAN BABIN, Texas                   Georgia
GARRET GRAVES, Louisiana             ANDRE CARSON, Indiana
DAVID ROUZER, North Carolina         DINA TITUS, Nevada
MIKE BOST, Illinois                  SEAN PATRICK MALONEY, New York
RANDY K. WEBER, Sr., Texas           JARED HUFFMAN, California
DOUG LaMALFA, California             JULIA BROWNLEY, California
BRUCE WESTERMAN, Arkansas            FREDERICA S. WILSON, Florida
BRIAN J. MAST, Florida               DONALD M. PAYNE, Jr., New Jersey
MIKE GALLAGHER, Wisconsin            ALAN S. LOWENTHAL, California
BRIAN K. FITZPATRICK, Pennsylvania   MARK DeSAULNIER, California
JENNIFFER GONZALEZ-COLON,            STEPHEN F. LYNCH, Massachusetts
  Puerto Rico                        SALUD O. CARBAJAL, California
TROY BALDERSON, Ohio                 ANTHONY G. BROWN, Maryland
PETE STAUBER, Minnesota              TOM MALINOWSKI, New Jersey
TIM BURCHETT, Tennessee              GREG STANTON, Arizona
DUSTY JOHNSON, South Dakota          COLIN Z. ALLRED, Texas
JEFFERSON VAN DREW, New Jersey       SHARICE DAVIDS, Kansas, Vice Chair
MICHAEL GUEST, Mississippi           JESUS G. ``CHUY'' GARCIA, Illinois
TROY E. NEHLS, Texas                 ANTONIO DELGADO, New York
NANCY MACE, South Carolina           CHRIS PAPPAS, New Hampshire
NICOLE MALLIOTAKIS, New York         CONOR LAMB, Pennsylvania
BETH VAN DUYNE, Texas                SETH MOULTON, Massachusetts
CARLOS A. GIMENEZ, Florida           JAKE AUCHINCLOSS, Massachusetts
MICHELLE STEEL, California           CAROLYN BOURDEAUX, Georgia
                                     KAIALI`I KAHELE, Hawaii
                                     MARILYN STRICKLAND, Washington
                                     NIKEMA WILLIAMS, Georgia
                                     MARIE NEWMAN, Illinois
                                     Vacancy
                                ------                                

        Subcommittee on Coast Guard and Maritime Transportation

                  SALUD O. CARBAJAL, California, Chair
RICK LARSEN, Washington              BOB GIBBS, Ohio
JAKE AUCHINCLOSS, Massachusetts      DON YOUNG, Alaska
SEAN PATRICK MALONEY, New York       RANDY K. WEBER, Sr., Texas
ALAN S. LOWENTHAL, California        MIKE GALLAGHER, Wisconsin
ANTHONY G. BROWN, Maryland           JEFFERSON VAN DREW, New Jersey
CHRIS PAPPAS, New Hampshire          NICOLE MALLIOTAKIS, New York
PETER A. DeFAZIO, Oregon (Ex         SAM GRAVES, Missouri (Ex Officio)
    Officio)



                                CONTENTS

                                                                   Page

Summary of Subject Matter........................................     v

                 STATEMENTS OF MEMBERS OF THE COMMITTEE

Hon. Salud O. Carbajal, a Representative in Congress from the 
  State of California, and Chair, Subcommittee on Coast Guard and 
  Maritime Transportation:

    Opening statement............................................     1
    Prepared statement...........................................     4
Hon. Bob Gibbs, a Representative in Congress from the State of 
  Ohio, and Ranking Member, Subcommittee on Coast Guard and 
  Maritime Transportation:

    Opening statement............................................     5
    Prepared statement...........................................     6
Hon. Peter A. DeFazio, a Representative in Congress from the 
  State of Oregon, and Chair, Committee on Transportation and 
  Infrastructure:

    Opening statement............................................     7
    Prepared statement...........................................     7
Hon. Sam Graves, a Representative in Congress from the State of 
  Missouri, and Ranking Member, Committee on Transportation and 
  Infrastructure, prepared statement.............................    69

                               WITNESSES

Lauren K. Brand, President, National Association of Waterfront 
  Employers:

    Oral statement...............................................    10
    Prepared statement...........................................    12
Ben Bordelon, Chairman, Shipbuilders Council of America:

    Oral statement...............................................    15
    Prepared statement...........................................    16
Mario Cordero, Executive Director, Port of Long Beach, on behalf 
  of the American Association of Port Authorities:

    Oral statement...............................................    21
    Prepared statement...........................................    23
C. James Patti, President, Maritime Institute for Research and 
  Industrial Development, on behalf of USA Maritime:

    Oral statement...............................................    27
    Prepared statement...........................................    29
Michael G. Roberts, Senior Vice President, Crowley Maritime, on 
  behalf of the American Maritime Partnership:

    Oral statement...............................................    33
    Prepared statement...........................................    35
Del Wilkins, President, Illinois Marine Towing, on behalf of 
  American Waterways Operators:

    Oral statement...............................................    40
    Prepared statement...........................................    42

                       SUBMISSIONS FOR THE RECORD

Letter of February 2, 2021, from the American Association of Port 
  Authorities et al., Submitted for the Record by Hon. Alan S. 
  Lowenthal......................................................    51
Submissions for the Record by Lauren K. Brand, President, 
  National Association of Waterfront Employers:

    Letter of February 2, 2021, from the American Association of 
      Port Authorities et al.....................................    69
    Letter of February 2, 2021, from David F. Adam, Chairman and 
      CEO, United States Maritime Alliance, Ltd. et al...........    69

                                APPENDIX

Questions from Hon. Rick Larsen to Lauren K. Brand, President, 
  National Association of Waterfront Employers...................    71
Questions to Ben Bordelon, Chairman, Shipbuilders Council of 
  America, from:

    Hon. Rick Larsen.............................................    72
    Hon. Garret Graves of Louisiana..............................    73
Questions to Mario Cordero, Executive Director, Port of Long 
  Beach, on behalf of the American Association of Port 
  Authorities, from:

    Hon. Bob Gibbs...............................................    74
    Hon. Rick Larsen.............................................    75
Questions from Hon. Rick Larsen to C. James Patti, President, 
  Maritime Institute for Research and Industrial Development, on 
  behalf of USA Maritime.........................................    77
Questions to Michael G. Roberts, Senior Vice President, Crowley 
  Maritime, on behalf of the American Maritime Partnership, from:

    Hon. Mike Gallagher..........................................    77
    Hon. Rick Larsen.............................................    80
    Hon. Garret Graves of Louisiana..............................    80
Questions to Del Wilkins, President, Illinois Marine Towing, on 
  behalf of American Waterways Operators, from:

    Hon. Rick Larsen.............................................    91
    Hon. Garret Graves of Louisiana..............................    92

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                            February 4, 2021

    SUMMARY OF SUBJECT MATTER

    TO:      LMembers, Subcommittee on Coast Guard and Maritime 
Transportation
    FROM:  LStaff, Subcommittee on Coast Guard and Maritime 
Transportation
    RE:      LHearing on ``State of the U.S. Maritime Industry: 
Impacts of the COVID-19 Pandemic''
_______________________________________________________________________


                                PURPOSE

    The Subcommittee on Coast Guard and Maritime Transportation 
will hold a hearing on Tuesday, February 9, 2021, at 11:00 a.m. 
EST to examine the current state of the U.S. maritime industry 
amid the ongoing COVID-19 pandemic. The hearing will take place 
in 2167 Rayburn House Office Building and virtually via Cisco 
WebEx. The Subcommittee will hear testimony from the American 
Association of Port Authorities, American Maritime Partnership, 
American Waterways Operators, the National Association of 
Waterfront Employers, Shipbuilders Council of America, and USA 
Maritime.

                               BACKGROUND

U.S. MARITIME INDUSTRY

U.S. MERCHANT MARINE AND FLEET

    The U.S. Merchant Marine, the Nation's port system, and 
supporting industries (collectively referred to as the U.S. 
maritime industry), integrate our economy with a vast global 
maritime supply chain system that moves more than 90 percent of 
the world's trade by tonnage, including energy, consumer goods, 
agricultural products, and raw materials.\1\ These industries, 
vessels, infrastructure, and personnel also play critical roles 
in national security, supporting our Nation's ability to 
provide sealift for the Department of Defense (DoD) during 
times of war and national emergency.
---------------------------------------------------------------------------
    \1\ Maritime Administrator Mark H. Buzby Testimony before the House 
Committee on Transportation and Infrastructure Subcommittee on Coast 
Guard and Maritime Transportation (March 6, 2019).
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    The U.S. Merchant Marine is the fleet of U.S. documented 
(flagged) commercial vessels and civilian mariners that carry 
goods to and from, as well as within, the United States. These 
vessels are operated by U.S. licensed deck and engineering 
officers and unlicensed seafarers. During times of peace and 
war, the U.S. Merchant Marine acts as a naval auxiliary to 
deliver troops and war material to military operations abroad. 
Throughout our Nation's history, the Navy has relied on U.S. 
flagged commercial vessels to carry weapons and supplies and 
ferry troops to the battlefield. During Operations Enduring 
Freedom and Iraqi Freedom, U.S. flagged commercial vessels 
transported 90 percent of sustainment cargoes moved to 
Afghanistan and Iraq.\2\
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    \2\ Id.
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    The merchant marine was formally recognized in statute with 
the passage of the Merchant Marine Act of 1920, portions of 
which are now codified in Subtitle V of title 46, United States 
Code. Section 50101(a) of title 46, United States Code, states 
that ``[i]t is necessary for the national defense and the 
development of the domestic and foreign commerce of the United 
States that the United States have a merchant marine . . .'' 
Sections 50101(b) and 51101 of title 46, United States Code, 
establish that ``[i]t is the policy of the United States to 
encourage and aid the development and maintenance of the 
merchant marine . . .'' and that ``merchant marine vessels of 
the United States should be operated by highly trained and 
efficient citizens of the United States . . .''
    Currently, there are approximately 41,000 non-fishing 
related commercial vessels flagged and operating in the United 
States.\3\ The vast majority of these vessels are engaged in 
domestic waterborne commerce, generally referred to as the 
``Jones Act trade,'' \4\ moving over 115 million passengers and 
nearly $300 billion worth of goods between ports in the United 
States on an annual basis.\5\ Each year the domestic coastwise 
fleet carries nearly 900 million tons of cargo through the 
inland waterways, across the Great Lakes, and along the 
Atlantic, Pacific, and Gulf of Mexico coasts.\6\
---------------------------------------------------------------------------
    \3\ The Waterways Journal How big is the Jones Act Fleet? (January 
18, 2019) available at https://www.waterwaysjournal.net/2019/01/18/how-
big-jones-act-fleet/.
    \4\ Merchant Marine Act of 1920, portions of which are now codified 
in Subtitle V of title 46, United States Code.
    \5\ National Strategy for the Marine Transportation System: 
Channeling the Maritime Advantage 2017-2022 (Oct. 2017), available at 
https://www.cmts.gov/downloads/
National_Strategy_for_the_MTS_October_2017.pdf; Economic Contribution 
of the US Tugboat, Towboat, and Barge Industry (June 22, 2017), 
available at https://www.maritime.dot.gov/ports/economic-contribution-
us-tugboat-towboat-and-barge-industry-study.
    \6\ The U.S. Waterway System Transportation Facts & Information, 
available at https://usace.contentdm.oclc.org/digital/collection/
p16021coll2/id/1429/.
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    The U.S. Government-owned National Defense Reserve Fleet 
(NDRF) consists of 100 government-owned vessels waiting in 
reserve to provide additional domestic or international 
logistic support with 46 vessels in the Maritime 
Administration's (MARAD) Ready Reserve Force (RRF), a subset of 
NDRF.\7\ The RRF vessels provide the initial surge of military 
capability while the commercial fleet is responsible for the 
ongoing sustainment.
---------------------------------------------------------------------------
    \7\ U.S. Department of Transportation, Maritime Administration. 
(accessed Feb. 2, 2021) available at https://www.maritime.dot.gov/
national-security/strategic-sealift/strategic-sealift.
---------------------------------------------------------------------------
    Of the 41,000 U.S. flagged vessels, approximately 85 are 
operating in international commerce moving goods between U.S. 
and foreign ports.\8\ These vessels serve as a training and 
employment base for the civilian mariners who serve aboard the 
Government-owned fleet when they are called to deploy. The 
percentage of international commercial cargoes carried on U.S. 
flagged vessels has fallen from 25 percent in 1955 to 
approximately 1.5 percent today.\9\ Over the last 36 years, the 
number of U.S. flagged vessels sailing in the international 
trade dropped from 850 to 85 vessels.\10\ This decline 
corresponds with a decrease in U.S. mariners resulting in an 
estimated shortfall of approximately 1,929 qualified mariners 
needed to crew the Government-owned fleet.\11\ Since the DoD 
relies on civilian mariners to crew the Government-owned fleet, 
maintaining a pool of highly trained mariners through the 
Maritime Security Program (MSP) is imperative.
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    \8\ U.S. Department of Transportation, Maritime Administration. 
(January 2021).
    \9\ Id.
    \10\ Id.
    \11\ Maritime Admin. Mark H. Buzby Testimony before the House 
Committee on Armed Services (March 8, 2018).
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    Within the international U.S. flag fleet, up to 60 vessels 
are enrolled in the MSP.\12\ Under this program, militarily 
useful oceangoing commercial vessels each receive an annual 
operating stipend of $5 million, which will increase to $5.3 
million in fiscal year (FY) 2022, to provide military sealift 
for the United States Transportation Command within the 
DoD.\13\
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    \12\ U.S. Department of Transportation, Maritime Administration, 
available at https://maritime.dot.gov/national-security/strategic-
sealift/maritime-security-program-msp.
    \13\ National Defense Authorization Act for FY 2020 (P.L. 116-92).
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U.S. PORTS AND MARINE TERMINALS

    Public ports in the United States play an indispensable 
role in local and regional economies throughout the nation.\14\ 
Ports generate business development and provide employment to 
more than 13 million Americans, which includes those that work 
at the ports themselves and those employed in global trade and 
import/export support services.\15\ According to the American 
Society of Civil Engineers (ASCE), there are 926 ports in the 
United States, each essential to the Nation's competitiveness 
by serving as gateways through which 99 percent of U.S. 
overseas trade by volume passes.\16\ Ports are responsible for 
$4.6 trillion in economic activity--roughly 26 percent of the 
U.S. economy.\17\ The American Association of Port Authorities 
(AAPA) reports that, seaport activities alone accounted for 
$378.1 billion in federal, state, and local tax revenues in 
2018.\18\
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    \14\ Global Trade Magazine, 2020 U.S. Ports Summary (last accessed 
May 26, 2020) available at https://www.globaltrademag.com/us-ports/.
    \15\ Id.
    \16\ ASCE, 2019 Infrastructure Report Card, Ports (Jan. 2017) 
available at https://www.infrastructurereportcard.org/wp-content/
uploads/2017/01/Ports-Final.pdf.
    \17\ Id.
    \18\ AAPA, The Economic Impact of U.S. Seaports (2019) available at 
http://aapa.files.cms-plus.com/2019_PortsFundingMap.pdf.
---------------------------------------------------------------------------
    America's port authorities play a key role in the business 
of waterborne commerce. Their authority may also incorporate 
other global trade hubs such as airports, industrial parks, 
inland ports, and Foreign Trade Zones. Many of these 
accommodate ocean-going cargo, as well as barges, ferries, and 
recreational watercraft. More than 150 deep draft seaports are 
located along the Atlantic and Pacific Oceans as well as the 
Great Lakes, the Gulf of Mexico, Alaska, Hawaii, Puerto Rico, 
Guam, and the U.S. Virgin Islands.\19\ Many of the country's 
most prominent ports work closely with private industry in the 
development and financing of maritime-related facilities. 
Within the Nation's ports are more than 3,500 publicly or 
privately held marine terminal operators (MTOs).\20\ MTOs 
provide wharfage, dock, warehouse, or other marine terminal 
facilities to ocean common carriers moving cargo in the ocean-
borne, foreign commerce of the United States.\21\
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    \19\ Global Trade Magazine, https://www.globaltrademag.com/us-
ports/
    \20\ MARAD, Maritime Transportation System Summary (2021) available 
at https://www.maritime.dot.gov/outreach/maritime-transportation-
system-mts/maritime-transportation-system-mts.
    \21\ Fed. Maritime Com. Marine Terminal Operators (2021) available 
at https://www.fmc.gov/resources-services/marine-terminal-operators/.
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PORT INFRASTRUCTURE DEVELOPMENT PROGRAM

    The ability of U.S. ports to increase capacity and move 
freight efficiently--both domestically and globally--is 
critical to U.S. competitiveness. Freight volumes are projected 
to increase by 31 percent and U.S. foreign trade is projected 
to double between 2015 and 2045.\22\ Without major improvements 
to multimodal transportation infrastructure and technologies, 
congestion resulting from greater volumes of freight could lead 
to growing delays and failures in the supply chain.
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    \22\ DOT Bureau of Transp. Statistics, Freight Facts and Figures 
2017, Table 2-1.
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    As required by Section 50302 of 46 United States Code, 
MARAD established a Port Infrastructure Development Program to 
better support the development of port facilities. The FY 2021 
Consolidated Appropriations Act, P.L. 116-260, provided $230 
million for the Port Infrastructure Development Program, with 
$205 million reserved for grants to coastal seaports and Great 
Lakes ports; a $5 million increase from FY 2020. Grants are 
provided for infrastructure improvement projects that are 
directly related to port operations, or intermodal connections 
to ports that improve the safety, efficiency, or reliability of 
the movement of goods into, out of, or around coastal seaports.

U.S. SHIPBUILDING INDUSTRY

    The U.S. shipbuilding and ship repair industry is a major 
component of the Nation's maritime supply chain; essential for 
sustaining one of the world's largest navies, a Coast Guard 
that protects thousands of miles of U.S. coastline, and the 
domestic commercial fleet. Construction and repair shipyards 
also provide a critical backstop to American seapower, ensuring 
that the United States retains the capability to expand or 
recapitalize its Navy or Coast Guard without relying on other 
nations.
    Today, the U.S. shipbuilding industry includes 
approximately 125 active shipyards across the country.\23\ In 
addition, there are more than 200 shipyards engaged in ship 
repairs or capable of building ships, but not actively engaged 
in shipbuilding.\24\ According to the U.S. Maritime 
Administration, the U.S. shipyard industry supports more than 
100,000 direct shipyard jobs across the United States, produces 
$7.9 billion in direct labor income and contributes $9.8 
billion in direct GDP to the national economy.\25\
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    \23\ Center for Strategic and Budgetary Assessments, Strengthening 
the U.S. Defense Maritime Industrial Base, A Plan to Improve Maritime 
Industry's Contribution to National Security (2020).
    \24\ Id.
    \25\ MARAD, available at https://www.maritime.dot.gov/sites/
marad.dot.gov/files/docs/resources/3641/
maradeconstudyfinalreport2015.pdf.
---------------------------------------------------------------------------
    Other than ships required to be U.S.-built for the domestic 
cabotage trade, popularly known as Jones Act \26\ trade, U.S. 
commercial shipbuilding faces steep challenges from 
shipbuilders in China, South Korea, and Japan. These heavily 
subsidized foreign competitors accounted for over 90 percent of 
the global shipping tonnage delivered in 2018.\27\
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    \26\ Merchant Marine Act of 1920, portions of which are now 
codified in Subtitle V of title 46, United States Code.
    \27\ United Nations Conference on Trade and Development, available 
at https://unctadstat.unctad.org/wds/TableViewer/
tableView.aspx?ReportId=89493; Wall Street Journal, Costas Paris, Asia 
State Players Wield Subsidies to Dominate Shipping (Dec.2, 2018).
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COVID-19 BACKGROUND AND IMPACTS

    The COVID-19 pandemic has upended the world economies and 
substantially impacted societies across the globe. According to 
the Centers for Disease Control and Prevention (CDC), the 
coronavirus (COVID-19) is a virus strain that can cause mild to 
fatal respiratory illness to those persons it infects.\28\ 
First identified at the end of 2019 in Wuhan, China, the virus 
is spread from person to person, usually via respiratory 
droplets or through physical contact with surfaces with the 
virus on it. As of late January 2021, COVID-19 had spread 
worldwide with almost 99 million confirmed cases and more than 
2 million deaths.\29\ In the United States, data released by 
the Johns Hopkins Coronavirus Research Center on February 4, 
2021, totaled 26,561,428reported cases and 450,887 deaths 
attributed to COVID-19.\30\
---------------------------------------------------------------------------
    \28\ Centers for Disease Control and Prevention. (last accessed 
February 3, 2021) available at https://www.cdc.gov/coronavirus/2019-
ncov/symptoms-testing/symptoms.html?.
    \29\ World Health Org., Coronavirus Disease Dashboard (last 
accessed January 25, 2021) available at https://covid19.who.int/.
    \30\ Johns Hopkins Univ., COVID-19 Dashboard (last accessed 
February 4, 2021) available at https://coronavirus.jhu.edu/map.html.
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    According to CDC data and statistics, COVID-19 is the worst 
pandemic in over 100 years since the 1918 influenza (H1N1) 
pandemic broke out and took over 50 million lives across the 
globe.\31\ In the initial months of the pandemic, many cities, 
states, and entire countries remained on lockdown or operated 
under stay-at-home orders. In the more recent months, countries 
started to gradually re-open commerce and modify operations and 
activities, although many countries have had to enforce 
additional lockdown orders or travel restrictions as COVID-19 
cases surged.\32\
---------------------------------------------------------------------------
    \31\ Fauci, A. IDWeek's 24 hours of COVID-19 ``Chasing the Sun'' 
2020 virtual meeting. (Oct. 21, 2020) available at https://
www.eventscribe.net/2020/IDWeek/
SearchByBucket.asp?pfp=ChasingTheSun&f=CustomPresField66&bm=Chasing%20th
e%20Sun.
    \32\ U.S. Chamber of Commerce, Global Dashboard on COVID-19 
Government Policies, (last accessed February 3, 2021) available at 
https://www.uschamber.com/international-affairs-division/covid-
dashboard.
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GLOBAL SUPPLY CHAIN CHALLENGES

    According to the Organization for Economic Cooperation and 
Development (OECD), the global maritime industry has been 
severely impacted by COVID-19, leaving virtually no market 
segment spared.\33\ As countries entered lockdown, ocean 
carriers across key trades, especially the trans-Pacific 
trades, enacted capacity cuts, either by increasing the number 
of blank sailings or by laying up vessels.\34\ U.S. ports 
experienced a 7.3 percent drop in container volumes in the 
first five months of 2020 caused by general shutdowns across 
many key markets in nations affected by the COVID-19 
pandemic.\35\ But as consumer trends shifted from in-person 
consumption and entertainment to at home and online retail 
purchases, the global supply chain failed to keep up; upending 
long-standing trade patterns and causing bottlenecks at 
ports.\36\ Containers are in high demand and short supply and 
U.S. ports are struggling to keep up with volume which is 
further complicated by a shortage of dock workers due to COVID-
19 outbreaks across the United States. The cost of shipping a 
container of goods has risen by 80 percent since early November 
and has nearly tripled over the past year due to a ripple 
effect as cargo volume soars, containers pile up at U.S. ports, 
and ships sit anchored offshore, waiting to unload their 
cargo.\37\ More than one-third of the containers transiting the 
world's 20 largest ports last month failed to ship when 
scheduled.\38\ All the while American producers in the Midwest 
are having difficulties finding available containers to export 
their goods as carriers push to return containers to China as 
quickly as possible.\39\ Industry fears the troubles effecting 
the global supply chain are just starting as they see record 
high pricing, and are bracing for increased delays and 
disruptions despite capacity increases of more than 30 percent 
in some routes such as the trans-Pacific.\40\
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    \33\ OECD, COVID-19 and International Trade: Issues and Actions 
(2020).
    \34\ DHL, Global Freight Forwarding, Ocean Freight Market Update 
(May 2020) available at www.dhl.com/content/dam/dhl/global/dhl-global-
forwarding/documents/pdf/glo-dgf-ocean-market-update.pdf.
    \35\ Shipping Water, Container volumes almost fully recovered 
despite large drop in the spring of 2020 (January 8, 2021).
    \36\ The Washington Post, Pandemic aftershocks overwhelm global 
supply lines (January 24, 2021) available at https://
www.washingtonpost.com/business/2021/01/24/pandemic-shipping-economy/.
    \37\ Freightos Baltic Index (January 25, 2021) available at https:/
/fbx.freightos.com/.
    \38\ The Washington Post, Pandemic aftershocks overwhelm global 
supply lines (January 24, 2021) available at https://
www.washingtonpost.com/business/2021/01/24/pandemic-shipping-economy/.
    \39\ Id.
    \40\ Id.
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    In March 2020, the Federal Maritime Commission initiated 
Fact Finding No. 29, International Ocean Transportation Supply 
Chain Engagement, in order to identify operational solutions to 
cargo delivery system challenges related to COVID-19. This fact 
finding was expanded in November 2020 to investigate potential 
violations of Section 41102(c) of Title 46 United States Code, 
Practices in Handling Property, by improper regulations and 
practices.\41\
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    \41\ Federal Maritime Commission, (November 1, 2020) available at 
https://www2.fmc.gov/readingroom/docs/FFno29/
FF29_41102(c)_%20Supplemental_Order.pdf/.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

  Figure 1_Shippingwatch, Change in container volumes on major trades 
   (January 8, 2021) available at https://shippingwatch.com/carriers/
                     Container/article12674801.ece

WORKFORCE CHALLENGES

    Global shipping depends on nearly two million seafarers 
worldwide, who make it possible for the world to receive the 
goods and products needed for everyday life.\42\ This is not 
including the seafarers or longshoreman involved in other 
trades, such as transportation of passengers, fishing, or 
response, who are also vitally important to the maritime 
industry. To much of the industry, maintaining operations 
during the pandemic requires their frontline employees to 
potentially be exposed to COVID-19 as they continue working 
while other segments of the industry stopped operations and 
furloughed employees as business faltered. Mariners working 
onboard vessels engaged in the international trade face 
lockdowns, mandatory quarantines, and travel and port 
restrictions imposed by governments around the world. These 
circumstances have created significant issues restricting crew 
changes and repatriation of seafarers, raising humanitarian 
concerns regarding the mental and physical safety of mariners 
stuck onboard vessels. The abandonment of seafarers 
internationally is among the many concerns that have arisen 
during the pandemic.\43\
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    \42\ Doumbia-Henry, C. Shipping and COVID-19: protecting seafarers 
as frontline workers. (September 24, 2020). https://link.springer.com/
article/10.1007/s13437-020-00217-9.
    \43\ Id.
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    Operators are also faced with social distancing 
requirements and increased cost of acquiring Personal 
Protective Equipment (PPE) for crew as public health measures 
became stricter in an attempt to prevent and manage outbreaks 
of COVID-19 on board vessels. Stricter public health measures 
also affect ports and shipyards as employers and employees work 
to prevent potential COVID-19 outbreaks.

U.S. INDUSTRY REQUESTS FOR ASSISTANCE

    The ability to obtain PPE is dependent upon a well-
functioning global supply chain of critical medical supplies. 
Ports, MTOs, and stevedores are continuing to find creative 
ways to keep workers safe in order to keep the supply chain 
functioning well. Those U.S. ports, MTOs, and stevedores, like 
many other hard hit parts of the U.S. economy, are also seeking 
federal help to shoulder additional costs tied to COVID-19 and 
to weather losses in maritime transportation, including from 
the cruise industry which is completely shut down in the U.S. 
through March of 2021.
    To date, little federal assistance has gone to the U.S. 
maritime industry. Under the Coronavirus Economic Relief for 
Transportation Services Act, included in the FY 2021 
Consolidated Appropriations Act, P.L. 116-260, passenger 
vessels carrying less than 2,400 passengers, ferries, and other 
passenger transportation groups such as buses companies, were 
provided access to $2 billion in funding. The passenger vessel 
industry has been severely impacted by the COVID-19 pandemic. 
The Passenger Vessel Association, which represents much of the 
U.S. flagged passenger vessel industry, estimates lost revenue 
for the U.S. industry in 2020 at $5 to $10 billion with about 
80 percent of the workforce either furloughed or laid off, and 
business for many has dropped 80 to 90 percent.\44\
---------------------------------------------------------------------------
    \44\ Workboat, Covid-19 has bludgeoned the U.S. passenger vessel 
industry (December 1, 2020) https://www.workboat.com/passenger-vessels/
covid-19-has-bludgeoned-the-u-s-passenger-vessel-industry.
---------------------------------------------------------------------------
    In the 116th Congress, the Maritime Transportation System 
Emergency Relief Program was included in the William A. 
Thornberry National Defense Authorization Act of 2020, P.L. 
116-283. This legislation provides comprehensive maritime 
emergency relief authority to enable the Maritime 
Administration to provide financial assistance to stabilize and 
ensure the reliable functioning of the U.S. Maritime 
Transportation System in the event of a national emergency or 
disaster, including, the current COVID-19 public health 
emergency. This relief authority has not yet been funded and no 
other sector of maritime industry has received designated 
COVID-19 federal assistance other than the passenger vessel 
industry stated above. AAPA as well as 36 other industry groups 
such as the National Association of Waterfront Employers have 
asked Congress to consider funding the Maritime Transportation 
System Emergency Relief Program, which would help allow them to 
keep workers and customers safe and ensure supply chains 
continue moving.

                              WITNESS LIST

     LMs. Lauren Brand, President, National Association 
of Waterfront Employers
     LMr. Ben Bordelon, Chairman, Shipbuilders Council 
of America
     LMr. Mario Cordero, Chairman, The American 
Association of Port Authorities
     LMr. Jim Patti, Chairman, USA Maritime
     LMr. Michael Roberts, President, American Maritime 
Partnership
     LMr. Del Wilkins, President, Illinois Marine 
Towing, Inc., on behalf of American Waterways Operators


 STATE OF THE U.S. MARITIME INDUSTRY: IMPACTS OF THE COVID-19 PANDEMIC

                              ----------                              


                       TUESDAY, FEBRUARY 9, 2021

                  House of Representatives,
          Subcommittee on Coast Guard and Maritime 
                                    Transportation,
            Committee on Transportation and Infrastructure,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 11:03 a.m., in 
room 2167 Rayburn House Office Building and via Cisco Webex, 
Hon. Salud O. Carbajal (Chair of the subcommittee) presiding.
    Present in person: Mr. Carbajal, Mr. DeFazio, Mr. Larsen, 
and Ms. Malliotakis.
    Present remotely: Mr. Auchincloss, Mr. Lowenthal, Mr. 
Brown, Mr. Pappas, Mr. Gibbs, Mr. Weber, Mr. Gallagher, Mr. Van 
Drew, Mr. Rodney Davis, Mr. Graves of Louisiana, and Mr. Mast.
    Mr. Carbajal. The subcommittee will come to order. I ask 
unanimous consent that the chair be authorized to declare a 
recess at any time during today's hearing. Without objection, 
so ordered.
    I also ask unanimous consent that Members not on the 
subcommittee be permitted to sit with the subcommittee at 
today's hearing and ask questions. Without objection, so 
ordered.
    For Members participating remotely, I want to remind you of 
key regulations from the House Committee on Rules. Members must 
be visible on video to be considered in attendance and to 
participate, unless experiencing connectivity issues. Members 
must also continue to use the video function for the remainder 
of the time they are attending this meeting, and hearing, 
unless experiencing connectivity issues or other technical 
problems.
    If a Member is experiencing any connectivity issues or 
other technical problems, please inform committee staff as soon 
as possible so you can receive assistance. A chat function is 
available for Members on the Cisco Webex platform for this 
purpose. Members can also call the committee's main phone line 
at (202) 225-4472 for technical assistance by phone.
    Members may not participate in more than one committee 
proceeding simultaneously. However, for security reasons, 
Members may maintain a connection to the software platform 
while not in attendance. It is the responsibility of each 
Member seeking recognition to unmute their microphone prior to 
speaking, and to keep their microphone muted when not speaking, 
to avoid inadvertent background noise.
    As the chair of today's meeting and hearing, I will make a 
good-faith effort to provide every Member experiencing 
connectivity issues an opportunity to participate fully in the 
proceedings.
    And finally, to insert a document into the record, please 
have your staff email it to [email protected].
    With that, I will proceed to my opening statement.
    Good morning and welcome to the first Coast Guard and 
Maritime Transportation Subcommittee hearing in the 117th 
Congress. Today, we will examine the state of the United States 
maritime industry amid the ongoing COVID-19 pandemic. It is an 
honor to chair this vital subcommittee, and I look forward to 
working alongside my colleagues on both sides of the aisle to 
support our maritime community and the United States Coast 
Guard.
    The maritime transportation system is vast and complex. It 
touches virtually every aspect of American life, from movement 
of passengers, the clothes we wear, to the cars we drive and 
the fuel in those vehicles. When it is working well, it is easy 
to forget the importance of our maritime system, as well as the 
Coast Guard. And, as chair, I will strive to uplift this 
important sector.
    The Subcommittee on Coast Guard and Maritime Transportation 
has a long history of bipartisan cooperation, and I look 
forward to working with Ranking Member Gibbs to conduct 
oversight and pass important legislation to support our 
maritime industry and the Coast Guard.
    I am sorry we cannot physically meet in person today for 
this important first subcommittee hearing. I am sure, though, 
that we will rise to the challenge to conduct the important 
business, nonetheless.
    I also want to thank the former subcommittee chair, Sean 
Patrick Maloney, for the great work he did last Congress. He 
worked tirelessly to improve our Coast Guard and to strengthen 
the U.S. maritime industry, and we will work to build upon 
those efforts. He leaves big shoes to fill.
    The United States maritime industry includes four major 
components: the internationally trading U.S.-flag fleet, the 
domestic--or Jones Act--trades, also shipbuilders, and U.S. 
ports. Commercial shipping carries more than 95 percent by 
volume of U.S. overseas trade, and yet, the presence of U.S.-
flag fleet operating in international trade is diminishing.
    In the past 35 years, we have seen the U.S.-flag fleet drop 
from over 850 vessels to merely 85. Let me say that again: from 
over 850 vessels to merely 85.
    The United States merchant marine, which provides a living 
wage to its American mariners, pays taxes in America, and 
complies with American regulations, simply cannot compete with 
foreign fleets that pay little to no taxes, comply with the 
bare minimum regulations, and pay substandard wages.
    The Merchant Marine Act of 1920, or Jones Act, safeguards 
our country and economy and provides guaranteed work to 
American merchant mariners, ensuring Government and civilian 
goods, people and equipment are carried by U.S.-flagged ships 
and U.S. citizens.
    The domestic Jones Act trade includes more than 41,000 
vessels, not including fishing vessels. In my district, which 
encompasses Santa Barbara and San Luis Obispo Counties, and a 
portion of Ventura County, maritime and seafaring is an 
essential way of life, with the Ports of Los Angeles and Long 
Beach just to the south, and the Pacific Ocean to the west. Our 
community is rich in maritime history, or heritage.
    My district is home to a vibrant passenger vessel industry, 
but in the wake of this pandemic, much of the industry has had 
to shut down its business and furlough employees. Many 
passenger vessels operating in the Jones Act trade have lost 
the entirety of their 2020 operating season.
    Of the companies operating, most have experienced 
reductions in revenue by as much as 90 percent and have laid 
off or furloughed as much as 80 percent of their employees. And 
while passenger vessels and ferries are one of the few sectors 
of the maritime industry to receive Federal assistance, they 
were left to compete for this assistance with other modes of 
passenger transportation.
    The remainder of the maritime industry has been left to 
fend for itself. Operators have had to shoulder the burden of 
increased costs of new safety measures, acquiring protective 
gear, and complying with public health measures, while other 
industries have received Federal assistance. Requests for 
assistance have gone unanswered, while demand on our ports and 
cargo-carrying U.S. fleet only increases as American commerce 
increases.
    I applaud President Biden for affirming support for the 
Jones Act. The industry needs strong Federal support in order 
to weather this storm.
    One way to provide immediate assistance is by funding the 
Maritime Transportation System Emergency Relief Program that 
was passed into law last Congress, under the leadership of 
Chairman DeFazio. For the first time, it created a program 
within the Maritime Administration to provide financial 
assistance to the maritime industry in times of national 
emergency. We need to utilize this program and provide funding 
to protect American maritime jobs and assist operators 
struggling to stay afloat.
    As we gather here today to hear from our witnesses on the 
current state of the U.S. maritime industry, I want to take a 
moment to stop and say thank you to our maritime workforce. 
These crucial frontline workers show up, day in and day out, to 
ensure our shelves are stocked and that Americans get their 
essentials, while also facing their share of danger and loss 
from COVID-19. Without your dedication, we would not be able to 
weather this storm, so thank you.
    My hope is that this hearing will help inform the committee 
of the ongoing difficulties facing the maritime industry and 
identify areas of support that will allow the industry to 
emerge stronger than when the pandemic began. We must ensure 
the Marine Transportation System continues to operate 
seamlessly, and we must protect these essential frontline 
workers. I look forward to hearing from our witnesses.
    [Mr. Carbajal's prepared statement follows:]

                                 
   Prepared Statement of Hon. Salud O. Carbajal, a Representative in 
Congress from the State of California, and Chair, Subcommittee on Coast 
                   Guard and Maritime Transportation
    Good morning, and welcome to the first Coast Guard and Maritime 
Transportation Subcommittee hearing in the 117th Congress. Today we 
will examine the state of the United States maritime industry amid the 
ongoing COVID-19 pandemic.
    It is an honor to chair this vital subcommittee, and I look forward 
to working alongside my colleagues on both sides of the aisle to 
support our maritime community and United States Coast Guard. The 
maritime transportation system is vast and complex. It touches 
virtually every aspect of American life--from the movement of 
passengers, the clothes we wear, to the cars we drive and the fuel in 
those cars. When it is working well, it is easy to forget the 
importance of our maritime system, as well as the Coast Guard, and as 
Chair I will strive to uplift this important sector.
    The Subcommittee on Coast Guard and Maritime Transportation has a 
long history of bipartisan cooperation and I look forward to working 
with Ranking Member Gibbs to conduct oversight and pass important 
legislation to support our maritime industry and the Coast Guard.
    I am sorry we cannot physically meet in person today for this 
important first subcommittee hearing. I am sure though that we will 
rise to the challenge to conduct the important business, nonetheless.
    I also want to thank the former Subcommittee Chair Sean Patrick 
Maloney for the great work he did last Congress. He worked tirelessly 
to improve our Coast Guard and strengthen the U.S. maritime industry 
and we will work to build upon those efforts. He leaves big shoes to 
fill.
    The U.S. maritime industry includes four major components: the 
internationally trading U.S. flagged fleet, the domestic (or Jones Act) 
trades, shipbuilders, and U.S. ports. Commercial shipping carries more 
than 95 percent by volume of U.S. overseas trade. And yet, the presence 
of the U.S. flag fleet operating in international trade is diminishing. 
In the past 35 years we've seen the U.S. flag fleet drop from over 850 
vessels to merely 85. The U.S. merchant marine, which provides a living 
wage to its American mariners, pays taxes in America, and complies with 
American regulations simply cannot compete with foreign fleets that pay 
little to no taxes, comply with the bare minimum regulations, and pay 
substandard wages.
    The Merchant Marine Act of 1920 or Jones Act safeguards our country 
and economy and provides guaranteed work to American merchant mariners; 
ensuring government and civilian goods, people and equipment are 
carried by U.S. flagged ships and U.S. citizens. The domestic Jones Act 
trade includes more than 41,000 vessels, not including fishing vessels.
    In my district, which encompasses Santa Barbara and San Luis Obispo 
Counties, and portions of Ventura County, maritime and seafaring is an 
essential way of life. With the Ports of Los Angeles and Long Beach 
just to the south and the Pacific Ocean to the west, our community is 
rich in maritime heritage. My district is home to a vibrant passenger 
vessel industry but in the wake of this pandemic, much of this industry 
has had to shut down its business and furlough employees.
    Many passenger vessels operating in the Jones Act trade have lost 
the entirety of their 2020 operating season. Of the companies 
operating, most have experienced reductions in revenue by as much as 90 
percent and have laid off or furloughed as much as 80 percent of their 
employees. And while passenger vessels and ferries are one of the few 
sectors of the maritime industry to receive Federal assistance, they 
were left to compete for this assistance with other modes of passenger 
transportation.
    The remainder of the maritime industry has been left to fend for 
itself. Operators have had to shoulder the burden of the increased 
costs of new safety measures, acquiring protective gear and complying 
with public health measures while other industries have received 
federal assistance. Requests for assistance have gone unanswered while 
demand on our ports and cargo carrying U.S. fleet only increases as 
American commerce increases.
    I applaud President Biden for affirming support for the Jones Act; 
the industry needs strong Federal support in order to weather this 
storm.
    One way to provide immediate assistance is by funding the Maritime 
Transportation System Emergency Relief program that was passed into law 
last Congress under the leadership of Chairman DeFazio. For the first 
time, it created a program within the Maritime Administration to 
provide financial assistance to the maritime industry in times of 
national emergency. We need to utilize this program and provide funding 
to protect American maritime jobs and assist operators struggling to 
stay afloat.
    As we gather here today to hear from our witnesses on the current 
state of the U.S. maritime industry, I want to take a moment to stop 
and say thank you to our maritime workforce. These crucial frontline 
workers show up day in and day out to ensure our shelves are stocked, 
and that Americans get their essentials, while also facing their share 
of danger and loss from COVID-19. Without your dedication, we would not 
be able to weather this storm. So, thank you.
    My hope is that this hearing will help inform the Committee of the 
ongoing difficulties facing the maritime industry and identify areas of 
support that will allow the industry to emerge stronger than when the 
pandemic began. We must ensure the marine transportation system 
continues to operate seamlessly and we must protect these essential, 
frontline workers. I look forward to hearing from our witnesses.

    Mr. Carbajal. I now call on the ranking member of the 
subcommittee, Mr. Gibbs, for an opening statement.
    Mr. Gibbs. Thank you, Chair Carbajal, and congratulations 
on your first hearing as the chair of the Subcommittee on Coast 
Guard and Maritime Transportation. I look forward to working 
with you in this 117th Congress.
    I would also like to welcome to the subcommittee two new 
subcommittee members on our side of the aisle: Jeff Van Drew, 
who represents the U.S. Coast Guard Training Center Cape May, 
through which all enlisted members of the Coast Guard enter the 
Service, and the district formerly held by the long-serving 
chairman of this subcommittee, Frank LoBiondo; and Nicole 
Malliotakis, who represents the U.S. Coast Guard Sector New 
York and Station New York, which are both located on Staten 
Island. I also thank the witnesses for attending from wherever 
they are located today.
    I would like to know more about the reports that the U.S. 
agriculture exporters are having trouble finding sufficient 
containers to meet the needs of U.S. exporters. I am interested 
in hearing from witnesses whether the pressure to swiftly 
return empty boxes to China has impacted that availability of 
containers for U.S. ag exports. I am particularly interested to 
learn if the ag exports have been delayed, or have if there has 
been a switch back to the use of bulk shipping of ag 
commodities.
    At the very end of the last Congress, the Maritime 
Transportation System Emergency Relief Program was authorized 
as part of the National Defense Authorization Act for fiscal 
year 2021. I supported the adoption of that program as part of 
the T&I Committee amendment, which also included assistance for 
port development and mariner education and training. No funds 
have been provided for this program.
    Thirty-eight maritime organizations, including two 
represented here today, have sent a letter to Congress seeking 
emergency relief under the new program. The letter emphasizes 
an overall annual decrease in maritime commerce in 2020. 
However, the letter does not address the unprecedented surge in 
traffic at U.S. ports which has occurred since August and is 
expected to last through this spring.
    I am interested in hearing from the witnesses what the 
industry's emergency relief needs are in light of the ongoing 
historic increase in container traffic at U.S. ports. And we 
are especially seeing bottlenecks at our L.A. and Long Beach 
Ports, and I know that today, the Wall Street Journal even had 
an article about that.
    Finally, I understand that the myriad of new, conflicting, 
and ad hoc travel restrictions around the world has led to 
delays in planned crew changes. This has left many mariners 
trapped on their ships, unable to disembark or travel through 
the countries from which they were scheduled to depart for 
home. I have read that as many as 300,000 mariners have been 
caught on ships well past the point of which they were due to 
rotate off. I am interested in whether any U.S. mariners have 
faced these difficulties, and, if so, what actions have been 
taken to allow reasonable crew changes to proceed.
    Again, I look forward to learning of the impacts of the 
COVID-19 pandemic on the U.S. maritime transportation system, 
ranging from U.S. shipbuilders and operators to our ports and 
marine terminal operators.
    [Mr. Gibbs' prepared statement follows:]

                                 
Prepared Statement of Hon. Bob Gibbs, a Representative in Congress from 
the State of Ohio, and Ranking Member, Subcommittee on Coast Guard and 
                        Maritime Transportation
    Thank you, Chair Carbajal, and congratulations on your first 
hearing as the Chair of the Subcommittee on Coast Guard and Maritime 
Transportation. I look forward to working with you in the 117th 
Congress.
    I'd also like to welcome two new Subcommittee Members on this side 
of the aisle: Jeff Van Drew, who represents U.S. Coast Guard Training 
Center Cape May through which all enlisted members of the Coast Guard 
enter the Service, and the District formerly held by the long-serving 
Chairman of this Subcommittee, Frank LoBiondo; and Nicole Malliotakis, 
who represents U.S. Coast Guard Sector New York and Station New York, 
which are both located on Staten Island. I also thank the witnesses for 
attending from wherever they are located today.
    I would like to know more about reports that U.S. ag exporters are 
having trouble finding sufficient containers to meet the needs of U.S. 
exporters. I am interested in hearing from witnesses whether the 
pressure to swiftly return empty boxes to China has impacted that 
availability of containers for U.S. ag exports. I'm particularly 
interested to learn if ag exports have been delayed, or if there has 
been a switch back to the use of bulk shipping for ag commodities.
    At the very end of the last Congress, the Maritime Transportation 
Emergency Relief program was authorized as part of the National Defense 
Authorization Act for FY '21. I supported adoption of that program as 
part of a T&I Committee amendment which also included assistance for 
port development and mariner education and training. No funds have been 
provided for this program.
    Thirty-eight maritime organizations, including two represented here 
today, have sent a letter to Congress seeking emergency relief under 
the new program. The letter emphasizes an overall annual decrease in 
maritime commerce in 2020. However, it does not address the 
unprecedented surge in traffic at U.S. ports which has occurred since 
August and is expected to last through the spring. I am interested in 
hearing from the witnesses what the industry's emergency relief needs 
are in light of the ongoing historic increase in container traffic at 
U.S. ports.
    Finally, I understand that the myriad of new, conflicting, and ad 
hoc travel restrictions around the world has led to delays in planned 
crew changes. This has left many mariners trapped on their ships, 
unable to disembark or to travel through the countries from which they 
were scheduled to depart for home. I have read that as many 300,000 
mariners have been caught on ships well past the point at which they 
were due to rotate off. I am interested in whether any U.S. mariners 
have faced these difficulties, and if so, what actions have been taken 
to allow reasonable crew changes to proceed.
    Again, I look forward to learning of the impacts of the COVID-19 
pandemic on the U.S. Maritime Transportation System, ranging from U.S. 
shipbuilders and operators to our ports and marine terminal operators.

    Mr. Gibbs. Thank you, Chairman, and I yield back. And thank 
you to all the workers out there that are doing their best, as 
you said, fighting, trying to do all this under these 
challenging times of COVID-19. I yield back.
    Mr. Carbajal. Thank you, Mr. Gibbs.
    I now would like to recognize our chairman of the T&I 
Committee, Mr. DeFazio.
    Mr. DeFazio. Thanks, Chairman Carbajal, and congratulations 
on your new position. I know you represent a good section of 
coast there in California and I know you have a deep interest 
in maritime issues.
    We are about to do another COVID relief package. We have 
done several. Unfortunately, the maritime industry has not been 
included in any of these. As the chairman said, I did write, 
and we did pass the Maritime Transportation System Emergency 
Relief Act last Congress. It was in the National Defense 
Authorization Act, and became law January 1st.
    We are giving the Maritime Administration specific 
emergency authority to distribute financial relief and 
assistance to any dramatically impacted links in the supply 
chain during times of emergency, whether it is a pandemic or 
something else. And we are here today, hopefully, to begin to 
make the case to our fellow colleagues on the Appropriations 
Committee that this is something that should be funded this 
next year.
    Beyond that, the chairman touched on the issue of the Jones 
Act, and the fact that the U.S. fleet has shrunk to a minuscule 
size in international trade. We cannot, and should not, have to 
compete with foreign-flag vessels that are flagged in countries 
that really don't exist, like Liberia. It used to be the Coast 
Guard, a couple of retired Coasties were running Liberia out of 
an office in Virginia. I don't know if they still are. And as I 
have said to those particularly in the cruise industry, if you 
need help, call the Liberian Navy. Oh, they don't have one.
    We simply have to rebuild our domestic fleet, and the Jones 
Act is absolutely key to that. This President has already 
mentioned his strong support for the Jones Act, unlike the last 
one, who didn't even know what it was, and his feckless so-
called economic adviser, Larry Kudlow, who wanted to grant 
waivers or do away with the Jones Act.
    So, I think we are beginning a building phase for America 
here, or rebuilding phase. We used to be a great maritime 
nation. We can be one again. But we can't compete with virtual 
slave labor, poorly maintained ships, et cetera. So it is time 
to strike out, level the playing field, and rebuild. As our 
President says, build back better, and we are going to build 
back better.
    [Mr. DeFazio's prepared statement follows:]

                                 
   Prepared Statement of Hon. Peter A. DeFazio, a Representative in 
      Congress from the State of Oregon, and Chair, Committee on 
                   Transportation and Infrastructure
    Thank you, Chairman Carbajal and Ranking Member Gibbs for convening 
this hearing. After hearing excellent testimony from witnesses who 
represent workers across all modes of transportation last week, this 
hearing allows the committee to more closely examine the impacts of the 
COVID-19 pandemic on the U.S. maritime supply chain and the maritime 
workforce as well as strategies to improve our vital maritime 
transportation industry.
    In the year since the virus was first detected in the United 
States, the maritime industry has endured significant hardships and has 
experienced substantial impacts to business.
    It is vitally important that this committee understand how the 
pandemic has affected the reliability and efficiency of our maritime 
industry and its workers, the gaps that still exist in protecting the 
workforce from the virus, the lessons that have been learned from the 
Federal Government's response to the pandemic so far, and potential 
next steps to better protect the maritime industry and workforce from 
COVID-19 and any future public health crisis we may confront.
    With so much of U.S. trade and our national economy dependent on a 
seamlessly efficient global maritime supply chain, it is critical that 
we understand the impacts and implications moving forward as we shape 
recovery actions and future responses to national emergencies.
    The situation is complicated by the fact that certain portions of 
the industry were not faring well before the pandemic. The 
internationally trading fleet for instance, has shrunk to a paltry 85 
vessels and carries less than 1.5 percent of the goods entering and 
exiting our ports. Without a robust U.S. flag maritime industry, we 
would not have the mariners needed go to war or supply our 
internationally deployed members of the military.
    Make no mistake about it; our Nation will recover from this 
pandemic. The question is, what will be left of our maritime industry?
    Unless we begin now to take constructive actions to shore up and 
support all sectors in our maritime supply chain--from Coos Bay to 
PortMiami--we will only frustrate our efforts to revitalize our 
economy. The economy cannot recover without a working maritime supply 
chain.
    The critical workers employed throughout our maritime 
transportation system have kept vital goods moving to medical 
professionals and first responders, have ensured that our Nation's 
shelves remain stocked, and have enabled commerce to continue flowing 
during these dangerous and uncertain times.
    I realize that the Congress has already committed trillions in 
Federal aid to address the fall-out from the pandemic; however, no 
dedicated funding has been provided to assist the maritime 
transportation system.
    That is why I developed the Maritime Transportation System 
Emergency Relief Act (MTSERA) last Congress which was included in the 
FY21 NDAA and subsequently became law on January 1, 2021. MTSERA 
finally provides the Maritime Administration with specific emergency 
authority to distribute financial relief and assistance to each link in 
the maritime supply chain.
    That is why this morning's hearing is important. We need to 
understand the needs in order to best tailor assistance. But in doing 
so, we must first think holistically.
    It will do little good to address the financial issues affecting 
our marine terminal operators, and do nothing to ensure that our 
longshore workers and Coast Guard service members have the protective 
gear they need to stay safe and healthy on the job.
    Moreover, we can help our U.S. flagged fleet in the short term with 
financial assistance, but if we do not address the system of unfair 
international competition created by the flag-of-convenience system, 
the fleet will not grow. This is our opportunity to ``Build Back 
Better.''
    Too much of our economic recovery and future prosperity rides on 
what we do over the next couple of months to ensure that we have a 
maritime industry, workforce, and supply chain able to move the 
Nation's commerce reliably and efficiently. I urge members to join me 
in that effort.
    And with that, I want to extend my thanks to our witnesses for 
making themselves available. I look forward to your participation in 
this important hearing.

    Mr. DeFazio. With that, I yield back the balance of my 
time.
    Mr. Carbajal. Thank you, Mr. Chairman.
    With that, let me move on to our T&I Committee ranking 
member, Mr. Graves. But before you go, Mr. Graves, I wanted to 
take a minute to also recognize the other Graves on the 
committee, Garret Graves, for sending us all those wonderful 
king cakes. Thank you very much.
    I was going to thank Sam Graves, and I realized it was 
Garret Graves who sent us those cakes, so thank you very much.
    With that, Mr. Graves. Actually, I am just informed that 
Mr. Graves is not here, so we will move on.
    I now would like to welcome the witnesses on our panel. 
First, we have Ms. Lauren Brand, president of the National 
Association of Waterfront Employers; Mr. Ben Bordelon, chairman 
of the Shipbuilders Council of America; Mr. Mario Cordero, 
executive director, Port of Long Beach, on behalf of the 
American Association of Port Authorities; Mr. Jim Patti, 
president, Maritime Institute for Research and Industrial 
Development, on behalf of USA Maritime; Mr. Michael Roberts, 
senior vice president, Crowley Maritime, on behalf of the 
American Maritime Partnership; and Mr. Del Wilkins, president, 
Illinois Marine Towing, on behalf of the American Waterways 
Operators. Thank you for being here today, and I look forward 
to your testimony.
    Before we begin, I would like to recognize Representative 
Garret Graves to say a few words about Mr. Bordelon.
    Mr. Graves of Louisiana. Thank you, Mr. Chairman, and I am 
glad you enjoyed the Mardi Gras king cake.
    I want to introduce Mr. Ben Bordelon, who is chairman of 
the Shipbuilders Council of America. Of course, that is the 
national trade association that represents all of the domestic 
shipbuilders, the shipyards that often repair our Navy and 
Coast Guard vessels and build that fleet, as well as commercial 
vessels in every class, in accordance with the Jones Act. And 
that is really what represents our industrial base in the 
shipbuilding industry.
    Ben grew up in south Louisiana. We represent a large number 
of the employees of Bollinger Shipyards. He was a graduate of 
LSU, where he was an All-SEC football player. And I see my 
friend Mr. Lowenthal. Alan, he went on to play professional 
ball for the Chargers over in California. But Benis one of 
those guys that worked his way up from project manager to vice 
president for repair, and, ultimately, to CEO of Bollinger 
Shipyards.
    Most importantly, Mr. Chairman, I look forward to hearing 
about how this important economic engine in south Louisiana, 
Bollinger Shipyards, and, of course, wearing the hat as the 
chairman of the Shipbuilders Council of America, how these 
shipyards all across the country are faring during COVID, and 
to hear how we could best provide support to the shipbuilding 
industry around the United States, in terms of trying to help 
them sustain through this COVID pandemic, including possibly 
through the markup we are going to be doing tomorrow.
    So I welcome Mr. Bordelon and all the witnesses, and look 
forward to your testimony.
    Thank you, Mr. Chairman.
    Mr. Carbajal. Thank you, Mr. Graves.
    I now would like to recognize Representative Davis to say a 
few words about Mr. Wilkins.
    Mr. Davis. Thank you, Mr. Chairman, and congratulations to 
you on your new assignment as chair of this subcommittee. As a 
guest of the subcommittee, I doubt I am able to come and sit at 
many of your hearings, but I wish you and also Ranking Member 
Gibbs the best.
    And I will say, too, you know, especially succeeding my 
good friend Mr. Maloney, the bar was pretty low for success for 
you after Sean Patrick. So you are going to be able to do 
extremely well, and we got a lot of high hopes for you, Mr. 
Carbajal.
    I do want to also say thanks to Garret Graves, too, for the 
king cakes. And I certainly hope that none of you got the same 
note I did that actually told me he wished I would choke on the 
plastic baby found inside. But I took that as a joke, not an 
insult from my fellow colleague on our side of the aisle and my 
good friend from Louisiana.
    But I am here to actually introduce a very good friend of 
mine, and that is Del Wilkins. Del is a champion for waterways 
and workers in the industries that use the waterways, not just 
in my home State of Illinois, in his home State of Illinois, 
but throughout our Nation.
    He currently serves as the president of Illinois Marine 
Towing and the vice president of northern operations and 
business development at Canal Barge. And additionally, he 
serves as the waterways chairman on the Illinois Chamber of 
Commerce Infrastructure Council, and as a board member of the 
American Waterways Operators.
    As someone who has spent most of his career in the 
waterways industry, there is no doubt Mr. Wilkins will provide 
a wealth of knowledge at today's hearing on the state of the 
U.S. maritime industry.
    I looked at the rest of the witnesses, too. I am honored to 
be able to sit here in this subcommittee with you all today. 
And I do want to thank my friend, Del, for testifying.
    I yield back the balance of my time.
    Mr. Carbajal. Thank you, Mr. Davis.
    Without objection, our witnesses' full statements will be 
included in the record. Since your written testimony has been 
made a part of the record, the subcommittee requests that you 
limit your oral testimony to 5 minutes.
    Ms. Brand, you may proceed.

 TESTIMONY OF LAUREN K. BRAND, PRESIDENT, NATIONAL ASSOCIATION 
 OF WATERFRONT EMPLOYERS; BEN BORDELON, CHAIRMAN, SHIPBUILDERS 
COUNCIL OF AMERICA; MARIO CORDERO, EXECUTIVE DIRECTOR, PORT OF 
   LONG BEACH, ON BEHALF OF THE AMERICAN ASSOCIATION OF PORT 
AUTHORITIES; C. JAMES PATTI, PRESIDENT, MARITIME INSTITUTE FOR 
RESEARCH AND INDUSTRIAL DEVELOPMENT, ON BEHALF OF USA MARITIME; 
MICHAEL G. ROBERTS, SENIOR VICE PRESIDENT, CROWLEY MARITIME, ON 
 BEHALF OF THE AMERICAN MARITIME PARTNERSHIP; AND DEL WILKINS, 
   PRESIDENT, ILLINOIS MARINE TOWING, ON BEHALF OF AMERICAN 
                      WATERWAYS OPERATORS

    Ms. Brand. Thank you very much. Good morning, Chairman 
Carbajal, Ranking Member Gibbs, and members of the 
subcommittee. My name is Lauren Brand, and I am the president 
of the National Association of Waterfront Employers.
    The members of NAWE and I thank you for this opportunity to 
relay what we are experiencing during these unprecedented 
times. NAWE is the voice for U.S. marine terminal operators, 
stevedores, and operating port authorities.
    Our members are U.S. entities who are responsible for 
safely and securely transporting freight and passengers between 
vessels, trucks, and rail at ports in 34 States and Puerto 
Rico.
    Our terminals are located on the Atlantic, Pacific and gulf 
coasts, the Great Lakes, and the inland waterway system. 
Members also include the associations responsible for labor 
relations and contract negotiations with the ILA and ILWU in 
all coastal States. NAWE's members hire labor, fund the 
purchase of cargo-moving equipment, construct intermodal 
infrastructure and design systems that track each shipment.
    I will present three issues today: prioritize vaccinations 
in authorized ports at CDC-approved inoculation sites; address 
funding of the Maritime Transportation System Emergency Relief 
Program [MTSERA]; and promote innovative port and intermodal 
infrastructure assistance programs for a network of 
transportation corridors versus modal silos.
    The health and safety of frontline portworkers remains our 
number one priority. We have redesignated operating areas and 
implemented protocols that meet or exceed CDC's guidelines. Now 
we need vaccines for women and men who work on the waterfront. 
To quote the leaders of the ILA, ILWU, PMA and USMX, ``in 
recent weeks, COVID infections among frontline portworkers have 
reached crisis levels in many locations. . . . [A]t the Ports 
of Los Angeles and Long Beach, . . . almost as many longshore 
workers tested positive in the first 3 weeks of 2021 as in the 
first 10 months of the pandemic . . . . Other port regions 
report similar, troubling increases.''
    At times, we are facing a shortage of workers. We 
respectfully request that the CDC work with States to designate 
gateway port authorities and terminals as sites where all 
essential waterfront and transportation workers can be 
inoculated.
    NAWE's members thank Chairman DeFazio and members of this 
committee for their leadership and steadfast support for 
America's maritime industry. Our members handle containers 
filled with consumer goods and manufacturing parts, bulk 
products needed to build roads, U.S. grown agriculture and U.S. 
manufactured cars and heavy equipment exported to other 
nations, petroleum products needed to propel trucks, trains, 
planes and automobiles, and, yes, they handle millions of units 
of PPE and equipment needed to fight COVID. They are also 
responsible for the safe, secure transfer of passengers, 
luggage, and provisions onto and off of large and small 
vessels, a sector of the industry that has been devastated.
    MTSERA is the only program that has been made available to 
this sector to defray costs incurred since March 2020, fighting 
to safely work. Yesterday, the reconciliation amendment was 
issued with no funding for the industries covered in MTSERA. We 
respectfully encourage this committee to consider funding 
MTSERA.
    Additionally, yesterday, amendments to the Longshore Act 
which are highly detrimental to maritime employers, have been 
proposed without consideration or action by this committee. I 
welcome the opportunity to discuss this important issue further 
during this hearing's Q&A session.
    The U.S. transportation system was designed in response to 
the market. The market controls all cargo orders, builds 
distribution centers to accommodate shipments, and orders the 
trucks, chassis and railcars needed to move it all.
    A consumer shift from buying services to buying goods has 
led to the saturation of the maritime lane in the Pacific 
Southwest and pushed this part of the import supply chain to 
its limits. The volumes flowing through this trade lane change 
faster than the system can reinvent itself.
    The good news is that union dockworkers have been reliable 
partners and eastbound rail transits have sustained scheduled 
services. And while these challenges are most pronounced in one 
region of our Nation, they demonstrate the risk to the system 
posed by the current pandemic.
    We encourage the development of port and intermodal 
infrastructure assistance programs and policies that address 
our system as a network of transportation corridors versus 
modal silos.
    For the record, I must let you know that the U.S. Coast 
Guard has applied common sense and been very thorough while 
conducting their mission and interactions with marine terminal 
operators and stevedores during this pandemic, and for that, we 
thank them.
    In summary, NAWE's members remain committed to ensuring the 
intermodal transportation needs of the U.S. are met, and we 
look forward to your leadership in the 117th Congress, and your 
continued support for the maritime industry.
    [Ms. Brand's prepared statement follows:]

                                 
Prepared Statement of Lauren K. Brand, President, National Association 
                        of Waterfront Employers
    Good morning, Chairman Carbajal, Ranking Member Gibbs, and members 
of the Subcommittee. Please accept our congratulations; we in the 
maritime industry look forward to your leadership in the 117th 
Congress. My name is Lauren Brand, and I am the President of the 
National Association of Waterfront Employers (NAWE). The members of 
NAWE and I thank you for this opportunity to relay what we are 
experiencing during these unprecedented times.
    NAWE is the voice for U.S. marine terminal operators, stevedores, 
and operating port authorities. Our members are the U.S. entities who 
are responsible for safely and securely transporting freight and 
passengers between vessels, trucks and rail at U.S. ports in 34 States 
and Puerto Rico. Our terminals are located on the Atlantic, Pacific and 
Gulf Coasts, the Great Lakes and a portion of the inland waterway 
system. Members also include the associations responsible for labor 
relations and contract negotiations with the ILA and the ILWU in all 
coastal states. I would like to request my formal written remarks be 
entered into the record at this time.
    We would like to share three items with you today:
    1.  Prioritization of vaccinations for the women and men who work 
on the waterfront so that we can keep freight moving. NAWE has written 
to the Governors of thirty-four States and Puerto Rico seeking 
vaccination priorities. We respectfully request you instruct the Center 
for Disease Control (CDC) to recognize ports as viable inoculation 
sites for transportation workers.
    2.  Funding the Marine Transportation System Emergency Relief 
Program (MTSERA). We thank Chairman DeFazio for his leadership in 
drafting this and applaud you for your support in passing this 
important piece of legislation last Congress. $3.5B will help the 
maritime industry begin to recover.
    3.  Promotion of innovative port and intermodal infrastructure 
assistance programs and policies that address our system as a network 
of transportation corridors vs. modal silos.
                                 ______
                                 
     Prioritize vaccinations for the women and men who work on the 
             waterfront so that we can keep freight moving.
    NAWE's members hire labor, fund the purchase of cargo moving 
equipment, construct intermodal infrastructure and design systems that 
track each shipment. At the hearing held on May 29, 2020, I reported on 
significant COVID-19 related challenges. Today, the health and safety 
of waterfront workers remains our number one priority. We have 
redesigned operating areas and implemented protocols that meet or 
exceed CDC guidelines. Now we need vaccines for the women and men who 
work on the waterfront.
    To quote from a letter issued by the leaders of the ILA, ILWU, PMA 
and USMX \1\: ``Since the start of the pandemic last year, America's 
maritime workforce has answered the call of duty to keep our ports open 
for business and warehouses and store shelves fully stocked . . . In 
recent weeks, however, COVID infections among frontline port workers 
have reached crisis levels in many locations . . . For example, at the 
Ports of Los Angeles and Long Beach, America's largest port complex, 
almost as many longshore workers tested positive in the first three 
weeks of 2021 as in the first 10 months of the pandemic, from March 
through December of 2020. Other port regions report similar, troubling 
increases.''
---------------------------------------------------------------------------
    \1\ International Longshoremen's Association (ILA) is the largest 
union of maritime workers in North America, representing upwards of 
65,000 longshoremen on the Atlantic and Gulf Coasts, Great Lakes, major 
U.S. rivers, Puerto Rico and Eastern Canada. The International 
Longshore and Warehousemen's Union (ILWU) represents approximately 
40,000 longshoremen in the States of Alaska, Washington, Oregon, Hawaii 
and California. The Pacific Maritime Association (PMA) negotiates and 
administers the maritime labor agreements with the ILWU for the 29 U.S. 
West Coast ports. The United States Maritime Alliance, Ltd. (USMX) is 
an alliance of container carriers, direct employers, and port 
associations serving the East and Gulf Coasts of the U.S.
---------------------------------------------------------------------------
    At times we are facing a shortage of workers. Imagine the number of 
employees needed to be ready for a 24-hour security detail . . . and 
then they are quarantined due to exposure to COVID-19. How quickly can 
a critical team be replaced? We respectfully request that CDC work with 
States to designate gateway port authorities and terminals as sites 
where all essential waterfront and transportation workers can be 
inoculated. Vaccination sites designated at ports for essential workers 
represent a practical way to protect the waterfront and ensure the 
integrity of the supply chain. This will be an expedient way to serve 
thousands who work in or around a single location. Ports have the space 
to make this happen. We are willing to work with the CDC and States on 
this initiative.
                                 ______
                                 
   Funding the Marine Transportation System Emergency Relief Program 
                               (MTSERA).
    The MTSERA program is vital to this industry. It is historic in 
that rather than passing a one-and-done stimulus program, MTSERA is a 
true disaster relief program that includes this pandemic situation. 
Declared March 13, 2020, the pandemic has been raging for eleven months 
now, and is projected to continue its impact well into 2022. Funding 
MTSERA at $3.5B or more, will begin to enable this industry to recover. 
Each of our members is a key leader in the movement of freight. They 
handle containers filled with consumer goods and manufacturing parts, 
bulk products needed to build roads, agriculture shipped overseas to 
feed other nations, export cars and heavy equipment that is made in the 
U.S., petroleum products needed to propel trucks, trains, planes and 
automobiles, and, yes, they handle thousands and thousands of boxes of 
PPE and equipment needed to fight COVID. The expenses incurred meeting 
CDC guidelines for sanitation, separation and protection of workers is 
steadily increasing. Some have been able to continue infrastructure 
projects, while others have had to put them on hold. A full twenty-four 
percent are also responsible for the safe, secure transfer of 
passengers, luggage and provisions onto and off of large and small 
vessels. These are U.S. taxpayers who will have not been able to work 
for over 18 months or more before this pandemic is over. We are losing 
uniquely skilled workers during this down time. The resulting financial 
hit is a hard, stressful blow to employers and workers alike. MTSERA is 
the only program that has been made available to this sector.
                                 ______
                                 
 Promotion of innovative port and intermodal infrastructure assistance 
     programs and policies that address our system as a network of 
               transportation corridors vs. modal silos.
    Which leads me to the question: how quickly can freight move in a 
system that is stretched beyond its capacity? You may be aware that the 
maritime trade lane into the Pacific Southwest is saturated. This is 
primarily due to a consumer shift from buying services to buying goods.
    Our intermodal transportation system was designed in response to 
the market. The market demanded where roads and rail would be built and 
selected their ports of entry. The market defined expected cargo flows, 
built distribution centers to accommodate their projected shipments, 
and ordered the number of trucks and chassis needed to move it all. 
COVID-19 has changed the volumes flowing through this trade lane faster 
than the system can reinvent itself.
    Today's demand for retail products, agricultural exports, PPE and 
equipment to fight COVID-19, finished components to support domestic 
manufacturing, raw material to support heavy industry, and continual 
personal protective equipment has pushed the system to its limits. 
Ninety-eight percent of the international fleet of container ships are 
currently being utilized and are at sea. Using our nation's number one 
gateway of Los Angeles and Long Beach as an example, this import supply 
chain has been challenged with record-breaking volumes of cargo orders. 
As a result, a series of related challenges have clogged the import 
supply chain:
      the inland distribution centers are operating at, or 
above, designed capacity,
      because inland warehouses are full, import cargo is being 
stored ``on wheels'',
      and containers are being parked in auxiliary yards 
between the port and the warehouse which has essentially exhausted the 
supply of chassis.

    What is the impact to terminals? Loaded containers are dwelling on 
marine terminals for eight days; marine terminals have been designed to 
securely store containers for half that amount of time. Today cargo 
volumes at terminals are ``dense''; containers that are normally 
stacked 3-high are now being stored 5-high.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

             Chart source: U.S. Bureau of Economic Analysis

    Here is one example of what is happening: a trucker is dispatched 
to pick up your container, which is now probably at the bottom of that 
stack, requiring the stevedore to move four other containers to 
retrieve your load. These added container moves degrade terminal 
efficiency while vastly increasing operating costs . . . and the truck 
driver has been kept waiting. The good news is that union dockworkers 
have been reliable partners and are working five-plus days a week and 
Eastbound rail transits have sustained scheduled services.
    As of last week, there were 37 container ships at anchor outside 
the two ports of Los Angeles and Long Beach, awaiting a berth in port. 
We estimate that equates 185,000 loaded containers at anchor awaiting 
off-load. This is the scope and scale of our challenge. Every shipper 
is anxiously awaiting their cargo. Every load is critical. Everyone 
wants their goods yesterday. We recognize this pressure, as these goods 
are necessary to bolster our Nation's economic engine.
    While these challenges are most pronounced in one region of our 
nation, they demonstrate the risk to the system posed by the current 
pandemic and the immediate need to prioritize maritime workers for 
vaccines and invest in the industry's ability to withstand the 
financial pressures and recover. To date, operations in other regions 
have been able to handle issues as they arise, but even where terminals 
are not experiencing significant operational delays, they still 
requiring additional sanitizing--especially between shifts--to allow 
safe work in the pandemic.
    We encourage the development of port and intermodal infrastructure 
assistance programs and policies that address our system as a network 
of transportation corridors vs. modal silos. And we stand ready to work 
collaboratively with others in the maritime industry, State and Federal 
entities to innovate and implement such programs.
    In summary, Marine terminal operators, stevedoring firms and 
operating port authorities remain committed to ensuring the intermodal 
transportation needs of the United States are met. For the record, I 
must let you know that the U.S. Coast Guard has been thorough and 
applied common sense while approaching their mission and in 
interactions with marine terminal operators and stevedores during the 
pandemic. For that we thank them.
    We appreciate the dedication of this Subcommittee and your 
continued support for the maritime industry.

    Mr. Carbajal. Thank you, Ms. Brand.
    Mr. Bordelon, you can proceed.
    Mr. Bordelon. Thank you. And on behalf of the Shipbuilders 
Council of America, I would like to thank Chairman Carbajal, 
Ranking Member Gibbs, and members of the committee for the 
opportunity to provide testimony on the impact of the COVID-19 
pandemic to the U.S. shipyard industry. I ask that my entire 
testimony be submitted for the record.
    I am here today as chairman of SCA, which represents both 
shipyards and suppliers that comprise the critical domestic 
shipyard industrial base. I am a proud third-generation 
shipbuilder, and I serve as president and CEO of Bollinger 
Shipyards in south Louisiana. Founded as a machine shop by my 
grandfather, Donald Bollinger, in 1946, here we are, 75 years 
later, and still today remain the largest privately owned and 
operated shipbuilder in the United States.
    The U.S. shipyard industrial base is a diverse and critical 
manufacturing sector of our Nation's economy. Shipyards are 
engaged in designing, building, maintaining and repairing 
vessels of all sizes for Government customers, local and State 
governments, and the 40,000 commercial vessels that operate in 
domestic commerce.
    While our industry has faced enormous challenges throughout 
the pandemic, I am proud to report that, as a designated 
essential industry, your American shipyards never shut down. 
Our workers continue cutting steel and coming to work despite 
some very challenging circumstances.
    In response to the pandemic, the SCA established an 
emergency COVID-19 task force that met weekly, starting March 
2020. The task force gathered information and shared industry 
best practices amongst our membership, our Federal partners, 
and with Congress.
    Shipyards responded immediately and took action by 
establishing their own crisis response teams and implementing 
new policies, like limiting company travel and modifying work 
and shift schedules. In addition, managing supply chain 
disruptions became essential to mitigate production delays.
    Because of the pandemic, the biggest drivers of schedule 
and cost impacts have been increased rates of absenteeism, 
sometimes as high as 30 percent at some of our member yards, 
unexpected loss of supervision, and delayed equipment 
deliveries due to supply chain challenges.
    While these and other COVID-related costs have impacted 
every area of our business from our workforce and finance teams 
to our IT and technical infrastructure, they have been and 
remain necessary to keep our people safe and our programs on 
schedule. SCA and its members are appreciative of Congress 
passing the CARES Act in 2020, but the scale of the pandemic's 
impact have grown since then.
    The lack of appropriate funds for pandemic-related expenses 
has placed a significant burden on the shipyard industrial base 
due to the uncertainty of if, when, and how reimbursements may 
come. As the Congress considers recovery efforts, SCA would 
support incentivizing investment in vocational training and 
development of critical skill workers.
    The Congress' continued support of and the administration's 
enforcement of existing laws will also be key to our industry's 
recovery in the wake of the pandemic. SCA was pleased that in 
the first week in office, President Biden issued an Executive 
order reaffirming his support for the Jones Act, and identified 
it as a critical tool to support the development of American 
jobs.
    In addition to supporting the Jones Act, SCA encourages the 
Congress to provide stable and predictable budgets for the U.S. 
Navy and Coast Guard that are necessary to grow and sustain 
those fleets for national security purposes. We are very proud 
that our shipyards and suppliers have met the challenge of the 
pandemic, and we look forward to working with you all to 
continue those efforts.
    Thank you, again, Chairman Carbajal and Ranking Member 
Gibbs, for allowing me today the opportunity to testify along 
such distinguished witnesses. I look forward to your questions. 
Happy Mardi Gras.
    [Mr. Bordelon's prepared statement follows:]

                                 
 Prepared Statement of Ben Bordelon, Chairman, Shipbuilders Council of 
                                America
    On behalf of the Shipbuilders Council of America (SCA) I would like 
to thank Chairman Carbajal, Ranking Member Gibbs and members of the 
Committee for the opportunity to provide testimony on the state of the 
U.S. shipyard industry, specifically the impact that COVID-19 has had 
on our industrial base and the opportunities we see on the horizon. I 
ask that my entire testimony be submitted for the record.
    I am testifying today as Chairman of the Shipbuilders Council of 
America, the national trade association for the U.S. shipyard industry. 
SCA is comprised of 83 member shipyard facilities and 104 industry 
partner member companies, many that are small and represent the vital 
supply and logistics chain that comprise the U.S. shipyard industrial 
base.
    I am a proud third-generation shipbuilder and serve as president 
and CEO of Bollinger Shipyards. Founded as a machine shop by my 
grandfather, Donald Bollinger, in 1946, today we are the largest 
privately owned and operated shipbuilder in the United States and a 
leading designer and builder of high performance military patrol boats, 
ocean-going double hull barges, offshore oil field support vessels, tug 
boats, rigs, liftboats, inland waterways push boats, barges, and other 
steel and aluminum products. While we have both commercial and 
government customers, we are especially proud of our work for the 
United States government where we have designed, built, and delivered 
more than [182] and counting U.S. Navy and Coast Guard vessels since 
1984--over 165 of those high-speed Coast Guard cutters.
    The U.S. shipyard industrial base is a diverse and critical 
manufacturing sector of our nation's economy. Shipyards are engaged in 
building, maintaining and repairing vessels of all sizes for the U.S. 
Navy, U.S. Coast Guard, U.S. Army, NOAA, Maritime Administration, local 
and state government customers and the 40,000 commercial vessels that 
operate in domestic commerce.
    The ships built for these customers are some of the most 
technologically advanced in the world and are only possible because of 
the significant contributions of U.S. shipyard workers and the 
associated supply chain that support jobs in all 50 states.
                     COVID Impacts to the Industry
    Though the COVID-19 pandemic greatly impacted the shipyard 
industry, I am proud to report that with the workforce designated 
essential workers, your American shipyards never shut down and have 
been cutting steel and coming to work throughout the past year. The 
COVID-19 pandemic impacted the U.S. shipyard industry by introducing 
additional costs and delays related to production, workforce and our 
critical supply chains and there is uncertainty as to how those delays 
and costs will ultimately be addressed by the government and commercial 
customers.
    In response to the pandemic, the SCA established an emergency 
COVID-19 task force that met weekly beginning mid-March 2020. The task 
force conducted industry surveys, shared industry best practices and 
resources and provided this information to our government partners, 
including the Navy Industrial Base Task Force, the Maritime 
Administration and the DHS Maritime Security Committee. Additionally, 
we know the dedication our members have to their teams and while they 
were sharing essential information with us, we were also providing them 
with real-time information from Washington so they could plan and make 
the best decisions for their companies and workforces. Regular 
communication with those groups helped facilitate questions related to 
testing, personal protective equipment (PPE) and additional assistance 
from the Federal Emergency Management Agency (FEMA).
    The shipyard industry has a long culture of safety and we are 
dedicated to the health and safety of our employees. When the pandemic 
crisis began, our industry was prepared to meet unique demands and 
adjusted to protect our workers by shifting our operations, providing 
additional PPE and issuing safety guidance as we learned more about the 
virus.
    Shipyards took immediate action to keep employees safe with many 
facilities establishing their own crisis response teams, limiting 
company travel and spreading out the work force as much as possible in 
our facilities. Additionally, managing supply chain disruptions became 
a critical component to mitigate production delays as well as 
reassigning our workforce to complete other tasks while those delays 
were absorbed. There have been associated costs to these changes in 
every area of our business from our workforce and finance teams to IT 
and our technical infrastructure to absorb the changes necessary to 
continue working while keeping people safe.
    The biggest drivers of schedule and cost impacts have been 
increased rates of absenteeism, sometimes as high as 30% at some of our 
member yards, unexpected loss of supervision, late equipment deliveries 
due to other production delays in the supply chain and inability of our 
suppliers to travel to oversee complex discussions with our engineers.
    Almost a year into the pandemic, facilities are continuing to 
adjust to this new normal and implementing innovative policies to limit 
workplace spread of COVID-19. Like any industry on the frontlines, we 
continue to focus on the health and wellness of our employees and 
adjust our work environments to make sure our teams come to work and 
leave safely. However, challenges persist and many of our members' 
shipyard facilities are expected to face production delays and cost 
impacts.
    Congress and the Administration need to be aware of the impact our 
yards are having in their communities and the essential work they are 
completing for the good of our nation. Shipyards were essential 
economic drivers in their communities pre-pandemic and will be 
essential to the long-term economic recovery of those communities. 
During this time when so many in our country are out of work, the jobs 
associated with shipbuilding and ship repair have been incredibly 
resilient, allowing working people to continue bringing home paychecks 
to their families.
      CARES Act and Additional Congressional Response to Pandemic
    SCA and its members are appreciative of Congress passing the CARES 
Act in 2020. Section 3610 of the CARES Act authorized government 
contractors to be reimbursed for employees who could not work as a 
result of COVID-related closures. The U.S. shipyard industry was deemed 
essential from the beginning of the pandemic and shipyards have since 
remained in operation. For these companies, Section 3610 has largely 
not been applicable.
    The scale of the pandemic's impact was not known when the Congress 
passed the CARES Act legislation. Then-Under Secretary of Defense 
(Acquisition and Sustainment) Ellen Lord testified before the House 
Armed Services Committee that without additional funds, the Department 
of Defense would have to use modernization and readiness funds to plug 
gaps caused by the pandemic. The lack of appropriated funds for those 
expenses has placed a significant burden on the shipyard industrial 
base due to the uncertainty of if, when, and how reimbursements will be 
distributed.
    Absorbing these COVID-related costs without the necessary 
appropriated reimbursements could seriously jeopardize the shipyard 
industrial base which would have a degrading effect on our national 
security.
         Planning for a Post-Pandemic Shipyard Industrial Base
    Our experience with the ongoing pandemic has also reinforced the 
industry's need to shore up our domestic manufacturing capabilities, 
supply chains, facilities and workforce. In a 2015 report, the Maritime 
Administration determined the Economic Benefits of the U.S. shipyard 
industry supports nearly 110,000 skilled craftsmen in the Nation's 
private shipyards building and repairing America's military and 
commercial fleets.\1\ The report found the U.S. shipbuilding industry 
supports nearly 400,000 jobs across the country and generates $25.1 
billion in income and $37.3 billion worth of goods and services each 
year. In fact, the MARAD report found that the shipyard industry 
creates direct and induced employment in every State and Congressional 
District and each job in the private shipbuilding and repairing 
industry supports another 2.6 jobs nationally. This data confirms the 
significant economic impact of this manufacturing sector, but also that 
the highly-skilled workforce and industrial base needs stability and 
predictability to train the next generation of the U.S. shipyard 
workforce. We expect MARAD to update this report in the first quarter 
of 2021 which will provide us an updated snapshot of where the industry 
stands through this pandemic and the concurrent economic downturn.
---------------------------------------------------------------------------
    \1\ ``Economic Importance of the U.S. Shipbuilding and Repairing 
Industry''. Maritime Administration (MARAD), November 2015
---------------------------------------------------------------------------
    U.S. shipyards and shipyard suppliers pride themselves on 
implementing state of the art training and apprenticeship programs to 
develop skilled craftspeople that can cut, weld, bend and build truly 
first of kind vessels and technologically advanced ships. However, the 
shipbuilding industry, like so many other manufacturing sectors, faces 
an aging workforce.
    Our industry has continued to look at best practices for attracting 
the next generation workforce by highlighting the opportunities to 
learn high-skilled labor and the corresponding wages that can be earned 
without a four-year degree. Our shipyards work with regional partners 
to establish the curriculum needed for apprenticeship and vocational 
education at community colleges and local technical schools.
    We encourage the Congress to look at opportunities to incentivize 
investment in vocational training and development of these critical 
skilled workers. This not only supports the requirements needed for our 
military customers but supports additional needs and opportunities in 
new commercial markets such as offshore renewable energy.
                       Providing Market Stability
    To grow and develop the next generation of shipyard workers, U.S. 
shipyards require market stability across sectors so that companies can 
make the required investment in their people and facilities to meet 
demand.
    The domestic commercial market is sustained by the Jones Act, which 
provides market certainty and stability. This law helps to ensure the 
existence of a domestic shipbuilding and ship repair industrial base. 
We were pleased that in his first week in office, President Joe Biden 
issued an Executive Order reaffirming his support for the Jones Act and 
identifying it as a critical tool to support the development of U.S. 
jobs. The Jones Act sustains a domestic market for which carriers, 
operators and shipyards vigorously compete. When the Jones Act is not 
enforced or undermined by shortsighted policy, there can be detrimental 
influences on the larger domestic maritime industry and U.S. job 
creation.
    A 2017 decision by the Customs and Border Protection (CBP) has 
allowed [certain] foreign-built, foreign-crewed and foreign-owned 
offshore supply vessels to operate in violation of the Jones Act. This 
has resulted in the cancellation of numerous construction contracts to 
build new ``Made in the U.S.A.'' vessels because of the uncertainty 
introduced by executive-fiat and in contravention of Congressional 
intent. Not only does the cancellation of contracts have an immediate 
dampening impact to the domestic industry, but it initiates a vicious 
cycle wherein future opportunities could also be reconsidered or 
rescinded. The cancellation of contracts also dampens the domestic 
industry's ability to invest in their workforce and modernize their 
facilities to make them more safe and efficient.
    I raise this issue as an example of how a decision by an agency to 
not enforce the Jones Act can have an adverse impact on commercial 
shipbuilding that reverberates throughout the entire shipyard 
industrial base, further raising costs and destabilizing its ability to 
support national defense requirements. We encourage the Congress to 
consider identifying and closing loopholes to the Jones Act that 
currently exist by providing clarity on matters related to visa issues 
and heavy lift operations that are integral to success and viability 
this critical commercial market.
    Instead of seeking to undermine the Jones Act and undermine the 
critical shipbuilding manufacturing sector, the United States 
government, both the Administration and the Congress, should be 
promoting policies that actively encourage the expansion of the 
shipyard industrial base.
    Efforts by this Committee in its support of the most recent U.S. 
Coast Guard Authorization Act provided clarity about the Congressional 
intent of the application of the Outer Continental Shelf Lands Act 
(OCSLA) to all aspects of development of offshore energy, not just 
production. That language, which was adopted into the full FY21 
National Defense Authorization Act (NDAA), resulted in several 
shipyards confirming orders to construct new vessels to serve the 
burgeoning offshore wind market. Again, these policies result in jobs 
for American workers--so critical at this time of economic upheaval in 
our country.
    Other efforts by members of this Committee have also seen the 
potential benefits of ensuring access to our own domestic energy 
production. As the United States has become the world's leader in 
energy production, we should encourage that our domestically produced 
natural resources, including LNG, be transported on U.S. vessels under 
such policies as proposed by Congressman Garamendi's Energizing 
American Shipbuilding Act. Not only would that help us regain a 
foothold on the international shipping market where we've ceded ground 
to heavily subsidized and government-backed shipyards, but there is a 
direct relationship from the construction of LNG tanker vessels to the 
recapitalization of our strategic sealift fleets because of the 
stabilization it would bring to the shipyard supplier base and 
shipyards generally.
    In addition to preserving opportunities for commercial shipyard 
interests, SCA encourages the Congress to support stable and 
predictable budgets for the U.S. Navy and Coast Guard. The recently 
released Battle Force 2045 concept would see the fleet grow far beyond 
today's 296 ships. Simultaneously, the United States Coast Guard is 
undertaking efforts to recapitalize essential assets and programs. To 
be clear, SCA advocates for policies and budgets that support our 
members' combined interests and refrains from promoting specific 
platforms or mixes of ships.
    To meet the demands that these plans would require, the U.S. 
shipyard industry would need a substantial and sustained investment of 
both money and time, in both shipbuilding and readiness.
    The increase in shipbuilding and ship repair to meet the Navy's 
plan would require U.S. shipyards to expand their work forces and 
improve their infrastructure to meet the increased demand for vessels--
a requirement our Nation's shipyards are eager to provide. But to build 
these ships in a timely and affordable manner, stable and robust 
funding is necessary to sustain those industrial capabilities which 
support Navy and Coast Guard shipbuilding. It is important to note that 
today many of our shipyards and suppliers that compete to build these 
national security assets are sustained by commercial shipbuilding and 
repair so they are viable when the time comes to build and repair the 
national security fleets.
    Congress has the tools to provide for the use of acquisition 
strategies that enhance cost reduction rather than requiring the entire 
procurement cost of a ship to be funded in one fiscal year. Alternative 
funding approaches such as advanced procurement, incremental funding 
and block buy contracting could increase stability in U.S. government 
shipbuilding plans and increase the number of ships that could be built 
for the same amount of procurement funding.
    Through the use of advanced procurement, Congress can define the 
full cost of a ship in an initial appropriations act but incrementally 
defer some appropriated funds to future years. For the shipbuilding 
industry and the supplier base, this creates an early financial 
commitment which enhances job security and encourages capital 
investment. Additionally, advance procurement can reduce the total 
construction cost of a ship through improved sequencing or year-to-year 
balancing of shipyard construction work and the purchase of batch items 
that can be manufactured in an efficient and economic manner.
    Incremental funding, where cost is divided into two or more annual 
measures, allow for expensive items, such as large Navy ships, to be 
procured in a given year while avoiding or mitigating budget ``spikes'' 
and major fluctuations in year-to-year budget totals. Incremental 
funding would also allow construction to start on a larger number of 
ships in a given year so as to achieve better production economies. An 
added benefit often not considered is a reduction in the amount of 
unobligated balances associated with DOD procurement programs.
    Beyond that, Congress can consider block buys of ships. Block buy 
contracting permits a department to use a single contract for more than 
one year's worth of procurement of a given kind of ship without having 
to exercise contract options for each year after the first year. 
Purchasing ships through block buy contracting would enable shipyards 
to leverage ``hot'' production lines--those assembling current ships--
and streamline the acquisition process for these vessels. Additionally, 
taking advantage of ``hot'' production lines as opposed to starting new 
classes of ships and reducing build ``centers'' can save the government 
significant money and get to the target fleet size more rapidly.
    In addition to funding the construction of Navy and Coast Guard 
vessels, there must be similar commitments to fund the ``tail''--the 
maintenance of the current and new ships entering the fleet. It is not 
possible to get to the target fleet size if the services do not 
maintain the ships that they currently have, for their expected service 
lives, while building new ships. Congressional initiatives such as the 
recently extended OPN Pilot and relaxing upward obligation requirements 
are moving in the right direction. Reversing the Navy's momentum of 
cancelling planned modernizations and decommissioning Aegis Cruisers 
would help the industrial base as well as keep more ships in the fleet 
to meet our ever-increasing commitments around the world.
    Another area of significant concern for government fleets is the 
recapitalization of the nation's strategic sealift fleet, which ensures 
that unitized military cargo can be delivered to the war front. 
Currently the average age of the ships in this fleet is nearly 40 years 
old, and the number of ships that will reach the end of their 
programmed service lives over the next decade will reduce sealift 
capacity by more than 25 percent. The Navy, in partnership with 
TRANSCOM and MARAD, is working through a plan to recapitalize that 
fleet through a combination of service life extensions, acquiring used 
commercial ships, and investing in new-build construction at U.S. 
shipyards.
    In order to build and maintain these ships in as timely and 
affordable manner, stable and robust funding as well as stable 
construction rates and long-term procurement vehicles are necessary to 
sustain those industrial capabilities which support Navy, Coast Guard 
and other government shipbuilding and ship maintenance and 
modernization programs. These programmatic attributes provide the 
horizon and incentives required by industry to make risk-balanced 
investments in support of our national defense needs. To meet the 
demand for increased vessel construction while maintaining the vessels 
we currently have will require U.S. shipyards to expand their work 
forces and invest in their physical infrastructure in varying degrees 
depending on ship type and ship mix. Therefore, undermining the Jones 
Act through lack of proper enforcement directly impacts the ability of 
the nation to meet our own national security objectives.
             Impact of Foreign Competition in Shipbuilding
    Over the last twenty years, with significant government policy and 
financial assistance, the global shipbuilding capacity grew 
dramatically, primarily in Asia. At its peak Asian shipbuilders had 
captured 92% of the world commercial shipbuilding market. Despite the 
recent severe and sustained downturn in the world commercial 
shipbuilding markets, Asian governments have doubled down on the 
support of their shipbuilding industries. Policies like direct 
government subsidies and government-supported shipbuilding credit pools 
being used in Asian countries will continue to distort the global 
shipbuilding market.
    A recent UN report notes that ``in several Asian countries, 
Governments have taken various initiatives to support the shipbuilding 
industry. The use of public funds to finance shipbuilding prompted a 
complaint at WTO against the Republic of Korea in November 2018, on 
grounds that it may grant subsidies that may have a substantial impact 
on the price of ships, ship engines and maritime equipment, affecting 
trade flows in these products. At the same time, the shipbuilding 
industry in several European countries has called for increased 
Government support to help achieve the target of zero-emission shipping 
by 2050 (JOC.com, 2018a, 2018b)'' \2\
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    \2\ https://unctad.org/system/files/official-document/
rmt2019_en.pdf
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    These countries are investing and financing their shipyard 
industries because they consider it to be an issue of national 
sovereignty. The Congress and Administration need to recognize this 
distortion of the shipbuilding markets as they consider the actions 
needed to protect and support the U.S. shipyard industrial base. This 
begins with ensuring that the Jones Act is fully enforced.
                               Conclusion
    The nation's shipyard industrial base has met the challenge of 
COVID-19 and continued to show its value to the nation. The shipyard 
worker stayed on the front lines and worked through the pandemic in 
difficult conditions. Looking towards the future, continued investment 
from Congress is essential to support the U.S. Navy and U.S. Coast 
Guard in their recapitalization of critical shipbuilding programs for 
their fleets. Simultaneously, the commercial market will continue to 
respond to industry demands for domestic shipbuilding, so long as there 
is stability and predictability in the market.
    On behalf of our members at the Shipbuilders Council of America and 
personally as a President and CEO of Bollinger Shipyards, I want to 
reiterate my sincerest gratitude for all this Committee has done for 
the U.S. maritime industry and ask for continued Congressional and 
Administrative support on these initiatives and enforcement of the 
Jones Act because it is essential to maintaining the critical U.S. 
shipyard industrial base that supports our national security fleets.
    Thank you again Chairman Carbajal and Ranking Member Gibbs for 
allowing me to testify alongside such distinguished witnesses today. I 
look forward to your questions.

    Mr. Carbajal. Thank you, Mr. Bordelon.
    Mr. Mario Cordero, you may proceed.
    Mr. Cordero. Good morning, Chairman Carbajal, Ranking 
Member Gibbs, and members of the subcommittee. My name is Mario 
Cordero. I am the executive director of the Port of Long Beach. 
Today, I am testifying to you as chairman of the board of the 
American Association of Port Authorities, the unified voice of 
the seaport industry in the Americas.
    First, I would like to congratulate a fellow Californian on 
being named chairman of this distinguished subcommittee in the 
117th Congress. Chairman Carbajal, thank you for your service 
to the State's ports and harbors. I would also like to thank 
the subcommittee and the full committee chairman, Chairman 
DeFazio, and former Chairman Maloney, for your recognition of 
the important role played by the ports and your work to 
establish the Maritime Transportation System Emergency Relief 
Program, and unlock the Harbor Maintenance Trust Fund.
    Finally, I would like to recognize and honor the frontline 
workers who have died from COVID-19. We have lost many good 
people. Our Nation's seaports deliver vital goods for 
consumers, facilitate the export of American-made goods, create 
jobs, and support local and national economic growth. Ports 
also play a crucial role in our national defense, a point 
acknowledged through the designation of 17 of our Nation's 
ports, including the Port of Long Beach, as strategic seaports 
by the Department of Defense.
    According to Martin Associates, an internationally 
recognized economic and transportation consulting firm, prior 
to the outbreak of the COVID-19 pandemic, the total economic 
value generated in terms of revenue to businesses, personal 
income, and economic output at U.S. coastal ports accounts for 
$5.4 trillion, roughly 26 percent of GDP. This research also 
showed over 31 million Americans are employed in jobs generated 
as a result of port activity.
    Since the beginning of the COVID-19 pandemic, AAPA has 
remained in regular contact with members to monitor the impact 
of the pandemic and to communicate regarding the need for 
Federal relief and recovery. I would like to highlight how 
impressive the collaboration within the industry has been.
    As the former Chair of the Federal Maritime Commission, I 
am truly pleased on how the ports across the country, and, in 
fact, the world, have worked together to ensure safety of 
workers and minimize supply chain disruptions.
    However, portworkers are greatly impacted. In California, 
cases of COVID-19 among International Longshore and Warehouse 
Union members are captured by a dockworker self-service portal, 
established by the Pacific Maritime Association, where members 
of the ILWU can report they have been tested positive and 
qualify for emergency paid sick relief. Since March of last 
year, across California, cases reported in the portal total 
1,497.
    To protect our workforce, minimize disruptions to our 
maritime transportation system, and power our economic 
recovery, I raise the following issues to this subcommittee:
    Number one, we need assistance to prioritize vaccinations 
and provide more testing for portworkers and other 
transportation system personnel.
    Two, we need Congress to fund the Maritime Transportation 
System Emergency Relief Program to help ports mitigate COVID-19 
impacts and protect workers. The COVID-19 pandemic caused 2020 
to be one of the most erratic and volatile years, in terms of 
container volumes. By the end of the year, total waterborne 
trade volume was down 4.8 percent compared to the prior year, 
and the value of trade dropped 11.3 percent, totaling nearly 
$200 billion. The cruise industry was closed for nearly the 
entire year of 2020, without a date at this point to resume. By 
funding this new maritime relief program, Congress can sustain 
critical supply chains and ensure that maritime operations 
continue at a high level that Americans have come to depend on.
    Number three, investments in our Nation's trade 
infrastructure will help power economic recovery.
    President Biden recently spoke of the need to take a two-
step approach to respond to this pandemic, rescue and recovery. 
The first two issues I mentioned, we focus on rescue, but it is 
important to also address recovery. Ports build during crisis 
and we invest. We serve as an engine for economic prosperity in 
our communities and provide access to markets across the globe 
for communities nationwide.
    AAPA has identified $20 billion in multimodal and rail 
access needs at these ports. As populations shift and cargo 
volumes grow, we continue to embrace e-commerce. These 
investments will be critical to ensuring that the United States 
has a 21st-century multimodal freight network to compete 
globally and deliver locally.
    I noted earlier in my recent remarks at the Port of Long 
Beach that in crisis, we build. As we recover from the impacts 
of this pandemic, we have an opportunity to transform our 
infrastructure.
    And finally, we ask that harmful trade practices that have 
hurt American consumers and businesses be reevaluated. I 
believe we have an opportunity to reassess the country's trade 
and tariff policies, and to assist our businesses in conducting 
international business. This is vital to our economy.
    Chairman Carbajal, Ranking Member Gibbs, and members of the 
subcommittee, our Nation's ports are committed to sustaining 
critical responsibility in supply chains nationwide. Congress 
can help accomplish these goals. Again, I appreciate the 
opportunity to testify today and look forward to your 
questions. Thank you.
    [Mr. Cordero's prepared statement follows:]

                                 
 Prepared Statement of Mario Cordero, Executive Director, Port of Long 
    Beach, on behalf of the American Association of Port Authorities
    Good morning Chairman Carbajal, Ranking Member Gibbs, and members 
of the Subcommittee.
    My name is Mario Cordero, and I am the Executive Director of the 
Port of Long Beach. However, today I am testifying before you as the 
Chairman of the Board of the American Association of Port Authorities 
(AAPA). I would like to thank the Coast Guard and Maritime 
Transportation Subcommittee and the Transportation and Infrastructure 
Committee for working to ensure that our nation's maritime 
transportation system remains functional during the ongoing pandemic. 
Your recognition of the important role played by our ports and by our 
partners throughout the maritime supply chain has been critical, as has 
your work to establish the new Maritime Transportation System Emergency 
Relief Program. I appreciate the opportunity to be here today to 
discuss the impact of the ongoing COVID-19 pandemic on our nation's 
port authorities.
    Before I continue, I would also like to congratulate a fellow 
Californian on being named Chairman of this distinguished subcommittee 
in the 117th Congress. Chairman Carbajal, thank you for your service to 
the state's network of ports and harbors. I would also like to commend 
and congratulate the Committee on passage of the Water Resources 
Development Act of 2020, which included a provision to unlock the 
Harbor Maintenance fund. This historic, landmark legislation has been 
at the forefront of AAPA's advocacy efforts to improve America's 
economy, infrastructure and competitiveness, and we are thankful for 
the Committee's tireless work to see this legislation enacted.
    AAPA is the unified voice of the seaport industry in the Americas, 
and my testimony is given on behalf of state and local public agencies 
located along the Atlantic, Pacific, and Gulf coasts, the Great Lakes, 
and in Alaska, Hawaii, Puerto Rico, Guam, and the U.S. Virgin Islands. 
For more than a century, AAPA membership has empowered port authorities 
to serve global customers and create economic and social value for 
their communities. Today, AAPA represents ports in our nation's Capital 
on urgent and pressing issues facing our industry, promotes the common 
interests of the port community, and provides critical industry 
leadership on security, trade, transportation, infrastructure, 
environmental and other issues related to port development and 
operations.
    AAPA's members remain committed to the continued flow of freight 
and goods to markets across the nation and across the globe. I am here 
today to discuss the economic and operational impacts the COVID-19 
pandemic has had on our ports, and to discuss what opportunities the 
future holds for our industry. It is critical that we take steps to 
continue to combat this virus to ensure that disruptions to our 
maritime transportation system are minimized.
    But more importantly, as we continue to weather the impacts of the 
pandemic we risk losing valuable members of our community. I would like 
to recognize and honor the frontline workers, both in the maritime 
industry and otherwise, who have died from COVID-19. We've lost many 
good people.
            Seaports are Vital to the United States Economy
    Port authorities are governmental entities that own facilities at 
one or more ports. While the role of port authorities in port 
operations vary, most ports can be categorized as Operating Ports or 
Landlord Ports. Operating Ports own and construct port facilities, own 
cargo handling equipment, and hire labor to move cargo through port 
premises. At these operating ports, stevedores hire dockworkers to move 
cargo between ships and the dock. Landlord Ports, on the other hand, 
own the land and wharves of a port and lease these premises to our 
partners in the Marine Terminal Operator industry.
    Our nation's seaports deliver vital goods to consumers, facilitate 
the export of American made goods, create jobs, and support local and 
national economic growth. Ports also play a crucial role in our 
national defense--a point acknowledged through the designation of 17 of 
our nation's ports as ``strategic seaports'' by the Department of 
Defense.
    According to Martin Associates \1\, an internationally recognized 
economic and transportation consulting firm, prior to the outbreak of 
the COVID-19 pandemic the total economic value generated in terms of 
revenue to businesses, personal income and economic output at U.S. 
coastal ports accounts for $5.4 trillion, roughly 26 percent of GDP. 
This research also showed over 30.8 million Americans are employed in 
jobs generated as a result of port activity. Ports also generate 
significant tax revenue, with $47.1 billion of direct, induced and 
indirect federal, state and local tax revenue created through the 
economic activity taking place at ports across the nation.
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    \1\ 2018 National Economic Impact of the U.S. Coastal Port System. 
(2019, March). http://aapa.files.cms-plus.com/
Martin%20study_executive%20summary%202018%20US%20coastal
%20port%20impacts%20final.docx
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             How Has the COVID-19 Pandemic Impacted Ports?
    Since the beginning of the COVID-19 pandemic, AAPA has remained in 
regular contact with members to monitor the impact of the pandemic, to 
communicate regarding the need for federal relief and recovery, and to 
give our members the opportunity to share best practices with one 
another as they manage this ever changing and ongoing crisis. On this 
latter point I would like to highlight how impressive the collaboration 
within the industry has been; typically the fiercest of competitors--
ports have set aside market share aims in favor of keeping port workers 
safe and healthy, and getting goods to the frontline of the COVID-19 
pandemic, as well as to consumers like you and me. As the former chair 
of the Federal Maritime Commission, I have been truly impressed with 
how ports across the country and the world have worked together to 
ensure safety of workers and minimize supply chain disruptions.
    However, like nearly all aspects of life, our ports have endured 
significant impacts over the past year.
    The COVID-19 pandemic caused 2020 to be one of the most erratic and 
volatile years in terms of container volumes. Early in the year, 
China's efforts to stem the pandemic led to the shuttering of factories 
which led to cancelled sailings. Coupled with a drop in consumer 
spending here in the United States as shutdowns were implemented to 
stop the spread of the COVID-19 virus, we experienced significant drops 
in volumes across the industry throughout the first half of 2020. By 
November commercial cargo volumes had declined across the industry--
with total waterborne trade volume down 5.5% compared to the prior 
year, while the value of trade dropped by 12.7% totaling $200 
billion.\2\
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    \2\ U.S. Census Bureau, FT920--U.S. Merchandise Trade: Selected 
Highlights (2020, January).
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    In the spring, the U.S. economy seemed headed for an historic 
collapse. Millions of people lost their jobs. At the Port of Long 
Beach, following a slowdown in spring 2020 our container volumes began 
to rebound in May with record volumes by July. The year concluded with 
a December that turned out to be our busiest month ever. The year 2020 
was like a crescendo in nature. We started soft, in a sea of 
uncertainty and we finished strong, topping 8.1 million TEUs.\3\ It was 
our best year ever.
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    \3\ Polb.com. Retrieved January, 2021, from https://polb.com/
business/port-statistics/#latest-statistics
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    These surges in cargo have led to challenges--from container 
shortages for the United States export market, to issues of chassis 
availability. But despite these challenges and others, goods and cargo 
have continued to move through our ports.
    For the Port of Long Beach--in crisis, we build. We were determined 
to build toward recovery and continue our stated mission--to be an 
international gateway for the reliable, efficient and sustainable 
movement of goods for the benefit of our local and global economies.
    To be clear, each port has been impacted differently. For every 
port like the Port of Long Beach that experienced surges in cargo over 
the course of the year there is a port that saw cargo declines with 
little recovery. One thing is clear--no port been spared the impact of 
the COVID-19 pandemic. While there were encouraging signs at the end of 
the year for some of those ailing, the outlook for the coming year 
remains uncertain.
    Cargo and goods have continued to flow during this unprecedented 
moment in history in large part thanks to the work of frontline port 
employees and dockworkers. This has been a testament to the dedication 
of our maritime workforce. Like frontline workers nationwide though, 
port workers have not been spared from impacts of the pandemic.
    Ports, working with marine terminal operators and others operating 
within port footprints, have put in place protocols to maintain the 
health, safety, and well-being of our employees and all involved in the 
movement of goods and cargo throughout our facilities. AAPA has worked 
with our members to establish recommended COVID-19 protocols and best 
practices for the port industry.
    These recommendations include protocols for when a port employee or 
third-party worker at a port receives a positive COVID-19 test, 
including following all CDC and local health department guidance 
regarding contact tracing, notifying local health agencies, isolating 
and disinfecting equipment, vehicles, or workspaces typically used by 
the COVID-19 positive employee, notifying workers who may have been in 
contact with the positive employee, and isolating and disinfecting 
workspaces, equipment, and vehicles where an employee may have passed. 
Critically, confidentiality also must be respected.
    AAPA has also recommended options and best practices for cleaning 
and sanitizing port property. These recommendations begin by advising 
adherence to CDC guidelines on ``Cleaning and Disinfection for 
Community Facilities.'' We also recommend that workstations be 
disinfected following shifts, that high touch surfaces be disinfected, 
that bathrooms be disinfected with aerosol spray following each use, 
that ample hand sanitizer be provided to port workers, and that nightly 
deep cleaning of staff buildings and facilities be undertaken.
    Finally, AAPA has shared recommendations to limit port employee 
exposure to COVID-19. These recommendations stress the importance of 
social distancing, the supply and use of personal protective equipment, 
modifying schedules and shifts to limit contact, and the use of virtual 
meeting platforms where possible.
    Despite these precautions, port workers are still being impacted. 
In California, cases of COVID-19 among International Longshore and 
Warehouse Union (ILWU) members are captured by a dockworker self-
service portal established by the Pacific Maritime Association (PMA) 
where members of ILWU can report that they have tested positive and 
qualify for emergency paid sick leave. While we do not have direct 
access to this portal or the information provided to the portal, since 
March of last year across California, cases self-reported into the 
portal is 1,497 cases. Of that, according to the portal data, 939 cases 
tested positive for COVID-19. It is important to note that, to the 
extent members may choose not to get tested or choose not to report a 
positive test, the positivity rate does not reflect the positivity rate 
of the total population of longshore workers.\4\
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    \4\ Information shared by the Pacific Maritime Association and 
International Longshore and Warehouse Union
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    Even with current protocols in place for cleaning and social 
distancing, infection rates appear to be increasing at a time when 
Ports are experiencing high-levels of cargo volumes, including imports 
of essential goods and personal protective equipment. With positivity 
rates exceeding that in the general population and with an escalating 
number of workers testing positive, if additional action is not taken 
to ensure more testing and vaccination of port workers, we risk 
jeopardizing the fluidity of the movement of cargo.
    While acting as hubs of commerce, ports are also a beacon of 
tourism in many communities. According to the Cruise Lines 
International Association, the cruise industry generates more than $53 
billion USD in economic activity in the United States and supports 
421,000 American jobs.\5\ However, since the onset of the pandemic 
passenger movements have virtually ceased and remain nearly 
nonexistent. Operations are not expected to resume for months. Ports 
across the country have continually worked alongside cruise line 
partners to safely and responsibly accommodate vessels that were 
impacted by the virus while navigating severe economic impacts to their 
communities.
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    \5\ Contribution of the International Cruise Industry to the U.S. 
Economy in 2018. (2019, November). https://cruising.org/-/media/
research-updates/research/contribution-of-the-international-
cruise-industry-to-the-us-economy-2018.pdf
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    AAPA appreciates the Center for Disease Control's (CDC) leadership 
as it has worked to protect the American public from the spread of 
COVID-19, and we were grateful for the opportunity to provide comments 
to Docket No. CDC-2020-0087 regarding cruise ship planning, 
infrastructure, and resumption of passenger operations. This issue is 
of vital importance to our cruise port members as the CDC considers 
future public health guidance and preventative measures relating to 
travel on cruise ships.
    AAPA has endorsed recent legislation introduced by Senators Rick 
Scott (R-FL) and Marco Rubio (R-FL), the Set Sail Safely Act, to 
establish a federal Maritime Task Force and private sector advisory 
committee aimed at facilitating the safe resumption of cruise. AAPA's 
member seaports stand ready to work in partnership and collaboration 
with vessel operators to safely resume cruising in the United States, 
and look forward to continuing dialogue with the CDC, this 
Subcommittee, and others in Congress on how best to accomplish this 
goal.
                          Key Recommendations
Fund the Maritime Transportation System Emergency Relief Program to 
        Help Ports Mitigate COVID-19 Impacts and Protect Workers
    As the Committee considers additional actions to respond to the 
ongoing pandemic, AAPA believes it is critical that the Maritime 
Transportation System Emergency Relief Program be funded. Originally 
introduced and supported by Chairman Peter DeFazio and former Coast 
Guard and Maritime Transportation Subcommittee Chairman Sean Patrick 
Maloney, this new program was created in the National Defense 
Authorization Act of 2020 (P.L. 116-283). It authorizes the Maritime 
Administration to solicit applications for aid from those across the 
maritime industry, both inland and coastal, entities both public and 
private, and provide grants to those most in need due to emergencies or 
disasters. This includes aid to help mitigate the impacts of the 
ongoing COVID-19 pandemic, ensure the health and safety of port 
workers, and provide the relief necessary to those in the maritime 
industry ailing as a result of the pandemic.
    It is essential that the U.S. maritime industry maintain a state of 
readiness and sustain our critical responsibility in the supply chains 
that provide food, medical equipment, and other essential goods for the 
citizens of this country. By funding this new program and giving the 
Maritime Administration the resources necessary to provide grants to 
manage expenses incurred due to the ongoing pandemic, Congress will 
help ensure that maritime operations continue at the high level that 
Americans have come to depend on.
Prioritize Vaccination and Provide More Testing for Port Workers and 
        other Transportation System Workers
    It is also critical that COVID-19 vaccines flow predictably, be 
made available to port workers, and that these workers be categorized 
for Phase 1 allocations. In late December 2020, the CDC's Advisory 
Committee on Immunization Practices (ACIP) made its recommendation on 
allocation of vaccinations to essential workers, categorizing them in 
Phase 1. However, some confusion has resulted from a distinction made 
in the CDC's vaccine allocation guidance between what are termed 
``frontline essential workers,'' categorized under ``Phase 1b,'' and 
``other essential workers,'' categorized under ``Phase 1c.'' This 
distinction is not made by the Department of Homeland Security's (DHS) 
Cybersecurity and Infrastructure Security Agency (CISA) in its Guidance 
on the Essential Critical Infrastructure Workforce, and clarification 
is necessary.
    The surges we have seen in recent months in COVID-19 cases have 
escalated the exposure to the virus of essential workers--including 
those at ports. The safe, efficient movement of cargo underpins a 
strong and resilient economy, and the administration of vaccines to 
port workers and other essential transportation infrastructure workers 
adds an effective measure towards mitigating the spread of the virus 
throughout port facilities, and provides an effective measure in 
ensuring that we have the capability and capacity to continue to move 
cargo through our facilities. While education, facial coverings, other 
protective equipment, social distancing where practicable, and 
extensive cleaning and hygiene regimes are effective, vaccines provide 
a critical tool in continuing to ensure our workforce remains capable.
    Many ports have sought to apply to have their unused space to 
provide their individual states a point of distribution to be used by 
the state for a vaccine site. As the Congress considers additional 
funding for vaccine distribution, ensuring that ports and other hubs of 
transportation activity are prioritized as vaccination sites would be a 
helpful tactic to get port workers and other transportation workers 
vaccinated more quickly and can help supply each state with a 
facilities with the capacity to adequately administer the vaccine at 
scale. To date, no port has been successful in becoming a point of 
distribution, though as vaccination efforts continue and as federal aid 
for these facilities expand our members will continue to look at ways 
to ensure the health and safety of port workers.
    While vaccination is critical to ensuring the safety of our 
workforce, COVID-19 testing is a critical tool in this effort. Rapid, 
frequent testing is the best way to know who among port workers have 
active COVID-19 infections. Additional federal resources to allow for 
frequent testing of port workers will give ports and our partners in 
labor the insights necessary to protect our critical frontline workers.
Invest in our Nation's Trade Infrastructure to Power the Economic 
        Recovery
    President Biden recently spoke of the need to take a two-step 
approach to respond to the pandemic--an approach of rescue and 
recovery. The first two recommendations here focused on rescue--
ensuring our ports have the resources necessary to address this crisis 
and remain able to fulfill their critical role in our national supply 
chains and ensuring that our critical workforce is vaccinated and able 
to keep our economy moving--but it is important to address the next 
phase of recovery.
    Ports exist to facilitate an integrated, end-to-end supply chain. 
We optimize goods movement. We build and invest. We serve as an engine 
for economic prosperity in our communities and provide access to 
markets across the globe for communities nationwide.
    Ports serve as the beginning point for our nation's multimodal 
freight system. For the decade spanning 2018-2028, AAPA identified $20 
billion in multimodal and rail access needs at ports.\6\ Federal 
investment in these multimodal projects can leverage billions of 
dollars in additional port investment. As populations shift, as cargo 
volumes grow, and as we continue to embrace e-commerce and direct to 
consumer shopping, these investments will be critical to ensuring the 
United States has a 21st century multimodal freight network to compete 
globally and deliver locally.
---------------------------------------------------------------------------
    \6\ The State of Freight III--Rail Access + Port Multimodal Funding 
Needs Report. (2018, May 16). https://aapa.files.cms-plus.com/PDFs/
State%20of%20Freight%20III.pdf
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    I noted earlier in my remarks at the Port of Long Beach--in crisis, 
we build. I hope this Subcommittee and the full Transportation and 
Infrastructure Committee will take steps necessary to invest in our 
ports and in our nation's trade infrastructure. As we recover from the 
impacts of this pandemic, we have an opportunity to transform our 
infrastructure.
    President Biden put it best: we can create ``millions of good-
paying jobs that put Americans to work rebuilding our roads, our 
bridges, our ports to make them more climate resilient, to make them 
faster, cheaper, cleaner, to transport American-made goods across our 
country and around the world. That's how we compete.''
Reevaluate Harmful Trade Practices
    I will also note, that prior to the outbreak of the COVID-19 
pandemic, trade and tariff policies put in place under the previous 
Administration were in the process of being implemented. These tariffs 
were beginning to negatively affect trans-Pacific trade. Fortunately, 
as the first impacts of the COVID-19 pandemic were beginning to be 
felt, the Trump Administration provided a measure of relief to American 
consumers from these tariffs.
    I hope that the Biden Administration will take the opportunity to 
reassess this country's trade and tariff policies. By doing so, we can 
assist our businesses in conducting the international business that is 
so vital to our economy.
                               Conclusion
    Over the past year, since the beginning of the COVID-19 pandemic, 
ports and port workers have tirelessly worked to continue to move 
cargo, to ensure that food, medical equipment, and other essential 
goods are available for the citizens of this country. While we have 
faced challenges, we are proud of the fact that ports have remained 
open.
    Once again, I appreciate the opportunity to share with the 
Subcommittee the impacts of the ongoing pandemic on the port industry, 
and I hope you will consider the steps outlined here that Congress 
could take to help ports and the maritime industry maintain a state of 
readiness and sustain our critical responsibility in the supply chains 
nationwide.

    Mr. Carbajal. Thank you, Mr. Cordero. Next, we have Mr. Jim 
Patti. You may proceed.
    Mr. Patti. Thank you, Mr. Chairman, Ranking Member Gibbs, 
members of the subcommittee. My name is James Patti. I am 
chairman of USA Maritime, a coalition that includes shipping 
companies operating U.S.-flag vessels in our Nation's foreign 
trades, maritime labor unions representing the men and women 
who crew these vessels, and their related maritime 
associations.
    Our companies own and operate the 60 militarily useful 
U.S.-flag commercial vessels enrolled in the Maritime Security 
Program, and carry defense and nondefense Government cargoes, 
pursuant to the U.S.-flag cargo preference shipping laws.
    At the outset, we thank you for your support for the 
Maritime Security Program, and for your leadership in enacting 
legislation to determine whether our Nation's cargo preference 
laws are being fully enforced.
    We also appreciate your efforts that led to the enactment 
of the Maritime Transportation System Emergency Relief Act, 
which will, once funded, allow those in need in the maritime 
industry to apply for assistance and respond to COVID-19 or 
other emergency.
    Since the onset of the pandemic, the companies and unions 
in USA Maritime have worked tirelessly to protect the lives of 
American mariners, address the professional and personal 
hardships they endure because of COVID-19, and to ensure that 
the essential economic and defense services provided by our 
industry remain available. Nevertheless, and despite the 
essential protocols and practices put in place, more needs to 
be done.
    Most importantly, we are asking that American mariners and 
cadets working aboard our U.S.-flag vessels, be considered for 
expedited access to the COVID-19 vaccine. Such access will help 
to ensure that mariners remain available to crew the vessels 
necessary to support American troops deployed overseas, and 
protect America's economic and military security.
    As General Stephen Lyons, commander, United States 
Transportation Command, has said, quote: ``When our Nation goes 
to war, so does the maritime industry. Today, as in the past, 
the Defense Department relies on U.S.-flag vessels, global 
trade routes, and expert mariners . . . in times of crisis,'' 
end quote.
    Expedited access is also important, because many of these 
mariners, already designated as critical transportation 
infrastructure workers, help deliver the medicine, personal 
protective equipment, food and other supplies desperately 
needed by those suffering from COVID in our country and around 
the world.
    Due to the time spent at sea, the fact that mariners live 
and work closely together in multigenerational settings for 
months at a time, and the exposure to individuals aboard their 
vessels in foreign ports who do not follow necessary safety 
procedures and protocols, mariners face a significant and 
elevated risk from COVID-19. These risks are exacerbated by the 
lack of medical care aboard ship when a crewmember becomes 
infected while underway, because they are all too often denied 
access to medical care in foreign ports.
    In addition, crew rotation, pre- and post-employment 
quarantine, the repatriation of sick or injured seafarers, 
travel restrictions, and the need for uniform testing 
protocols, remain major concerns for the U.S.-flag shipping 
companies and maritime unions engaged in the U.S. international 
trades.
    Finally, Mr. Chairman, the COVID-19 pandemic has made it 
all too clear how vulnerable our commercial sealift readiness 
capability is, due to the current maritime manpower shortage, 
estimated by the Department of Defense to be as much as 1,800 
mariners in the event of a protracted conflict.
    The reality is that less than 2 percent of America's 
foreign trade is carried on U.S.-flag vessels. Until this is 
changed, the current manpower shortage will not be erased. 
While it may sound overly simplistic, without cargoes, vessels 
don't sail, and mariners don't have jobs.
    This not only means funding and support for the programs 
and policies currently in place, including the cargo preference 
laws, the Maritime Security Program, and the newly authorized 
tanker security fleet, but also requires strong and innovative 
action on the part of our industry, Congress, and the 
administration.
    We are convinced that by working together, we can develop 
and implement programs and policies that will increase the 
amount of America's foreign trade carried aboard U.S.-flag 
ships, increase the number of vessels operating under the U.S. 
flag, and increase the number of jobs for American mariners.
    We are encouraged by the maritime policy objectives put 
forward by President Biden, including his recent Buy America 
Executive order, which includes maritime services within its 
scope, as well as by the confirmation of Mayor Pete Buttigieg 
as Secretary of Transportation and the appointment of Ms. 
Lucinda Lessley as Deputy Maritime Administrator.
    In conclusion, on behalf of the USA Maritime coalition, I 
would like to again thank you and the members of this 
subcommittee and committee for your support. I look forward to 
answering your questions.
    [Mr. Patti's prepared statement follows:]

                                 
Prepared Statement of C. James Patti, President, Maritime Institute for 
     Research and Industrial Development, on behalf of USA Maritime
    Good morning Chairman Carbajal, Ranking Member Gibbs and Members of 
the Subcommittee:
    My name is C. James Patti. I am President of the Maritime Institute 
for Research and Industrial Development and Chairman of USA Maritime. 
USA Maritime is a Coalition whose membership includes shipping 
companies operating U.S.-flag vessels in our nation's foreign trades, 
including all the U.S.-flag shipping companies having vessels enrolled 
in the 60-ship Maritime Security Program; the maritime labor unions 
representing the licensed and unlicensed men and women who crew these 
vessels; and their related maritime associations. I appreciate the 
opportunity to appear on behalf of USA Maritime to discuss the current 
state of the U.S.-flag international merchant fleet.
    The development and implementation of programs and policies that 
support this fleet, enhance its economic viability and enable it to 
compete for a larger share of America's foreign trade are extremely 
important to our ability to support the economic and military security 
of our country. Consequently, we are extremely pleased that this 
hearing is being held and that we have been given the opportunity to 
present our views.
    As this Committee knows, throughout our history the United States 
has depended on a strong, active, and militarily-useful privately-owned 
U.S.-flag merchant marine to protect, strengthen and enhance our 
nation's economic, homeland and military security. U.S.-flag shipping 
companies and the loyal, reliable American mariners who crew their 
vessels are extremely proud of the role they play as our nation's 
Fourth Arm of Defense, and they are always ready to respond to our 
nation's call in times of war or other international emergency, 
providing the commercial sealift readiness capability, intermodal and 
logistical networks and civilian maritime manpower necessary to support 
America's interests and to supply American forces deployed overseas.
    It is important to understand that the number one priority of the 
Department of Defense United States Transportation Command (USTRANSCOM) 
is ``warfighting readiness'' and its mission is ``to project and 
sustain combat credible forces needed to deter war, protect the 
security of our nation, and win decisively should deterrence fail.'' 
The U.S.-flag maritime industry is a key resource relied upon by 
USTRANSCOM to fulfill this mission.
    As stated by General Stephen Lyons, Commander, USTRANSCOM in 
December 2020, ``When our nation goes to war, so does the maritime 
industry. Today, as in the past, the Defense Department relies on U.S.-
flag vessels, global trade routes and expert mariners to comprise a 
naval auxiliary in times of crisis.''
    Of course, the current state of affairs of the U.S.-flag 
international fleet and its ability to provide the capability our 
country needs are impacted by COVID-19. As with other segments of the 
maritime industry, the U.S.-flag shipping companies and maritime labor 
organizations belonging to USA Maritime have been affected by COVID-19 
and in some extremely important areas continue to be.
    We are seeing demand for container shipping remaining at a high 
level while companies operating Roll-on Roll-off ships and Multi-
purpose heavy lift ships are experiencing an improving market. For 
those operating tankers, however, the market is still somewhat 
depressed. Of course, with the full impact of the new variants of 
COVID-19 yet to be determined, it is impossible to predict with any 
accuracy what the market and demand for shipping services will be in 
the months ahead.
    We appreciate the work done by Committee Chairman Peter DeFazio, 
former Subcommittee Chairman Sean Patrick Maloney and other members of 
this Committee and Subcommittee to enact the Maritime Transportation 
System Emergency Relief Act (MTSERA). This program, once funded, will 
allow those maritime industry companies and entities and maritime 
training facilities who need the assistance now or in the future to 
seek grants from the Maritime Administration in response to COVID-19 or 
other emergency.
    Since the onset of the pandemic, maritime labor and their U.S.-flag 
shipping companies have been working with each other as well as with a 
number of Federal agencies and departments, including the Maritime 
Administration, the United States Coast Guard, the United States 
Transportation Command, the Department of State, the Federal Maritime 
Commission and others to put in place the measures that help protect 
the lives of American mariners and ensure that the essential economic 
and defense services provided by our industry remain available. The 
support given to our industry by these and other Federal agencies is 
greatly appreciated.
    While over the past eleven months safety practices and protocols 
have been developed and put in place within our industry there are 
still COVID-19 related issues that need to be resolved. Most 
importantly, while we clearly understand and appreciate that there are 
many segments of the American workforce who need expedited access to 
the COVID-19 vaccine, it is extremely important that American mariners 
and cadets working aboard Maritime Security Program vessels and other 
U.S.-flag vessels in the foreign trades receive such access. Otherwise, 
with the differences in vaccine administration procedures among the 
states, it may be months at the earliest before mariners receive a 
vaccine.
    Due to the time spent at sea and the number of countries visited by 
merchant mariners in the course of their employment, there is a 
significant and elevated risk of COVID-19. American mariners are 
continually exposed to individuals in foreign ports who board their 
vessels who do not follow necessary safety procedures and protocols. If 
a crewmember tests positive for COVID-19 the vessel, depending on the 
jurisdiction, may be taken out of service and it, along with the entire 
crew, may be placed into quarantine for an undetermined period of time. 
The quarantine and cleaning of the vessel is not only time consuming 
and extremely expensive for the shipping company, but the delay means 
that the vessel's cargo will not arrive at its destination when 
expected and when needed. In the case of commercial cargo, including 
the delivery of essential medical and other supplies, this may have a 
detrimental impact on consumers and businesses and, most importantly, 
on the first responders and other essential workers relying on the 
delivery of medical supplies and equipment. In the case of military 
cargo, such disruptions raise the distinct possibility that the lives 
of American troops overseas may be affected and the ability of the 
Department of Defense to protect the interests of the United States 
threatened.
    Seafarers live and work closely together in multi-generational 
settings aboard ship for months at a time. The close contact and risk 
of exposure is exacerbated by the lack of medical care aboard ship when 
mariners become infected while underway or when denied shoreside access 
to medical care in foreign ports, a situation which occurs all too 
often. One infected crew member may quickly infect the entire ship's 
crew, most often with no medivac available and frequently with no port 
of refuge that will allow mariners to disembark and seek medical care. 
Although mariners are trained to stabilize a sick or injured 
crewmember, they have always been able to obtain medical care in 
foreign countries and ports. Since COVID-19 however, mariners are as a 
general rule not allowed ashore to receive medical attention unless it 
entails a ``life threatening'' situation.
    As stated by Vice Admiral Dee Mewbourne, Deputy Commander, United 
States Transportation Command, ``The merchant mariners who support the 
. . . U.S.-flag international shipping industry are vital to our 
national security and provide the necessary capacity to move forces, 
supplies, and equipment when needed.'' Admiral Mewbourne went on to say 
that ``we are well aware of the challenges in mission accomplishment 
when a merchant mariner has to undergo restrictions on movement, 
quarantine, or medical treatment due to the COVID pandemic.''
    Admiral Mewbourne's comments once again highlight the fact that 
American mariners are a key component of the commercial sealift 
readiness capability relied upon by the Department of Defense and we 
appreciate USTRANSCOM's efforts to address the vaccine distribution 
effort as it pertains to American mariners. We urge Congress and the 
Administration to similarly consider American mariners in the 
development and implementation of a strategy and overall plan for the 
distribution of the COVID-19 vaccine.
    In addition, crew rotation, pre- and post-employment quarantine, 
the repatriation of sick or injured seafarers and travel restrictions 
are major concerns for the U.S.-flag shipping companies and maritime 
unions engaged in the U.S. international trades. As stated previously, 
there is a serious problem obtaining adequate medical care in foreign 
ports where the local authorities will not allow the mariner to leave 
his vessel. This is compounded by the difficulty relieving sick or 
injured mariners and sending them home from locations where there is no 
established process in place and the government or local authority in 
question is unwilling or unable to act.
    Severe restrictions persist regarding entering or departing from 
foreign airports and territories for crew changes aboard military and 
commercial shuttle ships overseas, impeding the ability of mariners to 
get to their vessels or to return home, compounding the personal and 
professional hardships they endure. In addition, mariners like all 
other travelers are now required, upon entry into the United States, to 
present a negative COVID-19 test, taken within three calendar days of 
departure. Overall, while crew rotation delays have been generally 
reduced, many isolated but nonetheless serious cases still occur.
    We appreciate the assistance we have received from Members of 
Congress, the Maritime Administration, Department of Defense and the 
State Department to address crew rotation and related issues, 
especially those involving sick or injured mariners. It is important, 
not only to the overall efficient operation of our fleet but to the 
health and morale of American mariners that the crew have access to 
reliable and professional health care in ports across the globe whether 
it involves COVID-19 or for other injuries and illnesses that arise 
during a long voyage. We need to take care of the people keeping the 
supply chain flowing.
    Looking forward, we believe that one of the most important lessons 
learned to date from the ongoing COVID-19 pandemic and its continuing 
impact on the U.S.-flag international fleet and the men and women who 
crew these vessels is that we must continue to address the shortfall in 
the number of qualified and available U.S. citizen mariners to crew the 
government and privately-owned vessels used by the Department of 
Defense in time of war or international emergency. As stated by 
USTRANSCOM Commander General Lyons in November 2020, ``With 85 percent 
of our forces based in the continental United States, nearly 90 percent 
of our military equipment is expected to deploy via sealift in a major 
conflict. In order to deploy those forces, we require safe, reliable 
and ready U.S.-flagged vessels [and], mariners to crew those ships. . . 
.''
    Without the capability provided by the U.S.-flag international 
fleet and its civilian American mariner workforce, the Department of 
Defense would be forced to either dedicate its resources to replicate, 
at significant cost to the American taxpayer, the commercial sealift 
readiness capability provided by our industry or to entrust the 
security of our Nation and the safety and supply of American troops to 
foreign flag of convenience vessels crewed by foreign nationals who may 
not support U.S. defense operations. To do so would be to jeopardize 
the lives of American servicewomen and men who will no longer be 
guaranteed the supplies and equipment they need to do their job in 
support of our country.
    We can address this shortfall in the American maritime manpower 
pool by ensuring that greater amounts of government-generated and 
commercial cargoes move on U.S.-flag ships, thereby increasing the size 
of the U.S.-flag fleet and the number of American merchant mariners to 
crew the vessels needed to meet Department of Defense requirements. As 
history shows, American mariners have never failed to sail into harm's 
way when needed by the United States. There is no guarantee--no reason 
to believe--foreign flag of convenience vessels and their foreign crews 
will do the same. As we go forward, even as we continue to confront the 
COVID-19 pandemic, it is essential we focus on ways to not only 
maintain but to increase the number of vessels operating under the 
U.S.-flag so that we can increase the number of American maritime jobs.
    For example:
    Cargo Preference: Without cargo, vessels do not operate and 
mariners do not have employment. Working in conjunction with the 
Maritime Security Program, our nation's cargo preference laws ensure 
that the U.S.-flag international fleet has the base of cargo needed to 
support U.S.-flag vessel operations. U.S.-flag cargo preference 
shipping requirements mandate that a percentage of U.S. taxpayer 
financed exports and imports be transported on privately-owned U.S.-
flag commercial vessels, to the degree such vessels are available at 
fair and reasonable rates. It is important to understand that every 
U.S.-flag vessel--whether it has been selected to participate in the 
Maritime Security Program or not--has important military utility by 
providing the employment base necessary to maintain the cadre of 
American merchant mariners needed by the Department of Defense. The 
full implementation of the cargo preference requirements to transport 
U.S. government cargoes helps guarantee that American maritime jobs 
will not be outsourced to the benefit of foreign maritime workers and 
that the dangerous decline in the number of available American merchant 
mariners will not worsen.
    To this end, we are encouraged by the recent ``Buy America'' 
Executive Order issued by President Biden which includes maritime 
services within its scope. This affirmation of support from the highest 
office in the land sends a clear message that U.S.-flag vessels and the 
jobs they provide and support are key elements of the Administration's 
economic policy. In addition, legislation initiated by this Committee 
to require an audit of cargo preference implementation and enforcement 
was incorporated into the final FY'21 defense authorizations 
legislation (PL 116-283) and demonstrates continued Congressional 
support for existing U.S.-flag cargo preference shipping requirements.
    We appreciate this support for U.S.-flag cargo preference shipping 
requirements and ask your help to ensure that all Federal agencies 
which ship ocean cargoes fully comply with the spirit and the letter of 
the Congressionally mandated audit. We also look forward to working 
with this Subcommittee to consider changes to the cargo preference laws 
that will further enhance and expand U.S.-flag vessel operations and 
American maritime jobs.
    Maritime Security Program: The Maritime Security Program (MSP) and 
its fleet of 60 privately-owned militarily-useful U.S.-flag commercial 
vessels and their U.S. citizen crews form the backbone of America's 
commercial sealift readiness capability. Since the inception of 
military operations in Iraq and Afghanistan in 2002, 98 percent of the 
cargoes have been transported to the region on either U.S.-flag 
commercial vessels or U.S. Government owned and/or controlled vessels--
all of which are crewed by U.S. citizen civilian merchant mariners. In 
fact, since 2009, privately-owned U.S.-flag commercial vessels and 
their civilian U.S. citizen crews transported more than 90 percent of 
the sustainment cargo needed to support U.S. military operations and 
rebuilding programs in Iraq and Afghanistan. Vessels enrolled in MSP--
all of which are also enrolled in the Voluntary Intermodal Shipping 
Agreement program, a related sealift readiness program, and all of 
which are crewed by United States citizen civilian mariners--carried 99 
percent of these cargoes.
    Today, the Maritime Security Program provides an employment base 
for approximately 2,400 U.S. merchant mariners, all of whom are 
qualified to sail on oceangoing vessels and can be relied upon to crew 
the privately-owned and government vessels needed by the Department of 
Defense. In addition, the Maritime Security Program provides the 
Department of Defense with access to the essential multibillion-dollar 
global network of intermodal facilities and transport systems 
maintained by companies participating in the Maritime Security Program.
    A 2006 report prepared for the National Defense Transportation 
Association and Military Sealift Command concluded that at that time 
``the likely cost to the government to replicate just the vessel 
capacity provided by MSP dry cargo vessels would be $13 billion.'' In 
addition, the United States Transportation Command estimated that it 
would cost the Government an additional $52 billion to replicate the 
global intermodal systems made available to DOD by MSP contractors who 
are continuously developing, maintaining, and upgrading their logistics 
systems. Instead of the minimum estimated $65 billion it would cost the 
taxpayer if there were no MSP, a fully funded MSP will continue to 
provide DOD with the militarily-useful U.S.-flag vessels, U.S. civilian 
maritime manpower, and the global intermodal systems it needs at a cost 
to the taxpayer of $318 million in FY'22.
    For these reasons, we ask Congress to fund the Maritime Security 
Program at its Congressionally authorized level of $318 million in 
Fiscal Year 2022 so that these vessels will continue to operate under 
the United States-flag with American mariners and provide the 
commercial sealift readiness capability needed by the Department of 
Defense.
    Tanker Security Fleet: In a letter to Congress in 2019, General 
John Broadmeadow, then-Deputy Commander, U.S. Transportation Command, 
warned that today's fleet of U.S.-flag tankers ``is insufficient to 
meet certain war plan requirements.'' He further went on to say that 
``As our mobility analysis continues to refine requirements, a 10-
tanker program will be a welcome start to begin to address the gap in 
U.S.-flagged bulk fuel delivery.''
    Similarly, a report released in February 2020 by the Center for 
Strategic and Budgetary Assessment noted that the Department of Defense 
``faces a gap of approximately 76 fuel tankers to meet surge sealift 
requirements. A Tanker Security Program would be a rapid and cost-
effective means to help address this gap . . . .'' The report further 
noted that under a tanker security fleet program, ``militarily useful 
tankers would participate in the Voluntary Tanker Agreement, be 
equipped with capabilities for delivering fuel at sea via consolidated 
logistics tanking and would carry crews trained to support military 
operations during contingencies.''
    In response, and with the support of Members of this Committee, the 
FY'21 defense authorizations legislation (PL 116-283) authorizes the 
establishment of such a tanker security fleet. This fleet will be 
comprised of 10 U.S.-flag U.S.-crewed product tankers to help reduce 
our military's reliance on foreign flag vessels by increasing the 
amount of fuel supplied and transported by American mariners on U.S. 
flag commercial vessels, consistent with the priorities of our national 
defense.
    We ask all Members of Congress to support funding for this program 
as authorized by Congress ($60 million in FY'22). We also look forward 
to working with Congress to ensure that this program not only enhances 
commercial sealift readiness and supports the Department of Defense 
supply chain but that it attracts additional vessels to the United 
States-flag and increases the number of jobs available to American 
mariners.
    In conclusion, we cannot discuss the state of affairs of the U.S.-
flag international fleet without addressing the reality that less than 
2 percent of America's foreign trade is carried on U.S.-flag vessels. 
This has resulted in a precipitous and dangerous decline in the number 
of U.S.-flag ships engaged in the international trades with a 
corresponding decline in the U.S. citizen civilian mariner manpower 
pool.
    We believe it is imperative that the downward trend in the number 
of vessels operating under the U.S.-flag not only be stopped but 
reversed, and that the outsourcing of American maritime jobs to the 
benefit of foreign workers be ended. This not only means funding and 
support for the programs and policies currently in place, including the 
cargo preference laws, the Maritime Security Program and the Tanker 
Security Fleet, but requires strong, positive and innovative action on 
the part of our industry, the Congress and the Administration working 
together to develop and implement meaningful and effective programs and 
policies that will increase the number of commercially viable U.S.-flag 
vessels, increase the number of American maritime jobs, and increase 
the amount of America's foreign trade carried aboard U.S.-flag ships.
    We look forward to working with you and your colleagues not only on 
the issues addressed above but on other initiatives, including those 
for example that result in Federal tax policy and laws that incentivize 
shippers to utilize U.S.-flag vessels and encourage, rather than 
discourage, investment in the U.S.-flag shipping industry; that promote 
bilateral shipping and cargo sharing agreements with our trading 
partners; and that include a greater reliance on U.S.-flag vessels as a 
means to achieve energy efficiency and a cleaner environment. In this 
way, our ability to serve as a military auxiliary in time of war will 
be enhanced, further guaranteeing that the United States will have the 
U.S.-flag ships with American crews it needs to provide the assured 
logistics the Department of Defense requires.
    On behalf of the organizations belonging to the USA Maritime 
Coalition I want to again thank you Mr. Chairman, Ranking Member Gibbs 
and the Members of this Subcommittee for your support and stand ready 
to provide whatever additional information you may require.

    Mr. Carbajal. Thank you, Mr. Patti.
    Next, we will proceed with Mr. Michael Roberts. You may 
proceed.
    Mr. Roberts. Thank you, Mr. Chairman. Chairman Carbajal, 
Ranking Member Gibbs, members of the subcommittee, I am honored 
to appear before you on behalf of the American Maritime 
Partnership, or AMP. AMP is the largest coalition of American 
maritime interests ever assembled, representing almost all 
segments of the domestic maritime industry, producing 650,000 
jobs nationwide.
    As in my written testimony, I would like to speak briefly 
today about three issues, COVID, offshore wind, and China, but 
I have two preliminary comments before I get to those.
    First, for those who may be new to American maritime, you 
should know that labor and management stand together on 
virtually every policy issue. I believe this is because of the 
unique role we play in promoting our national security, and it 
is important to recognize, especially in a highly polarized 
environment.
    Secondly, let me touch on the Jones Act, which is the 
legislative foundation for the American domestic maritime 
industry. The central requirement of the Jones Act is that 
those who carry cargo between two American points must use 
American ships with American workers, and must obey American 
laws, a pretty simple proposition.
    Ships flying the flag of China or Liberia or some other 
flag of convenience can carry cargo in our import-export trades 
between America and a foreign country, but not within our 
domestic markets. Almost all countries that have a coastline 
have similar laws.
    The Jones Act has overwhelming bipartisan support in 
Congress and has been supported by every American President in 
modern times, including President Biden, who explicitly 
endorsed the Jones Act in his Executive order on Buy America, 
and we appreciate that very much.
    The American maritime industry, which the Jones Act 
supports, has performed remarkably well through this pandemic. 
The character and culture of American maritime continues to 
drive leaders at every level to find solutions, to keep people 
safe, and keep supply chains moving.
    Government agencies have also helped, providing regulatory 
flexibility and in other ways. We also appreciate the very 
important maritime legislation passed in the last Congress, 
including MTSERA, which has been discussed and which enables 
the Maritime Administration to do more.
    Not enough has been done yet, however--and this builds on 
Jim Patti's comments--for those essential frontline workers to 
keep them healthy. We are telling them to continue working, and 
the companies are doing what we can and they can to keep them 
safe. But for mariners, working means living onboard the ship. 
It is a congregate living setting, in CDC's terms, like a 
nursing home or a fire station, except that mariners live in 
that bubble for weeks at a time. They should have priority 
access to testing before entering that bubble, and they should 
have priority access to vaccines in phase 1b, right after 
senior citizens and frontline healthcare workers.
    The next issue, the development of offshore wind power, 
represents what may be a generational opportunity for American 
maritime, producing dozens of vessels and tens of thousands of 
jobs. We are very grateful for the work of many current and 
former members of this committee in having legislation enacted 
by the last Congress that confirms this work is, in fact, in 
our domestic economy, and subject to the Jones Act. Investment 
is already moving forward and jobs are being created, based, in 
part, on that legislation.
    This is one example of American maritime's commitment to 
improving sustainability, which includes cutting-edge 
investments to fuel cargo ships with liquefied natural gas, 
prototype development of electric-powered vessels, and research 
in many other areas of maritime sustainability.
    Finally, many believe that after COVID, the most 
significant national security challenge we face is geopolitical 
competition with China. The maritime industry has clearly been 
targeted. According to CSIS, the Chinese Government has spent 
almost $15 billion annually for more than a decade to support 
its shipping and shipbuilding industry.
    The result is that China built 1,291 large commercial ships 
in 2019, compared to 8 built in the United States. More than 
6,000 Chinese-flag commercial ships sail the ocean versus less 
than 200 flying the U.S. flag.
    We believe this demands a strong policy response. 
Thankfully, because of the Jones Act, we still have commercial 
shipbuilding in the United States, and we have a modern fleet 
of U.S.-flag vessels, crewed by American mariners, to meet the 
needs of American domestic commerce, but a great deal more is 
obviously needed if we are going to respond effectively to 
China's maritime ambitions.
    With that, I want to thank you again, Chairman Carbajal and 
Ranking Member Gibbs, and will welcome your questions.
    [Mr. Robert's prepared statement follows:]

                                 
   Prepared Statement of Michael G. Roberts, Senior Vice President, 
    Crowley Maritime, on behalf of the American Maritime Partnership
                            I. Introduction
    Mr. Chairman, Mr. Ranking Member, Members of the Subcommittee. 
Thank you for the opportunity to be with you today. I am Michael 
Roberts, senior vice president of Crowley Maritime, a major American 
domestic shipping company. We are a diversified marine transportation 
and logistics company based in Jacksonville, Florida. We employ about 
3,000 American mariners, and have invested nearly $3 billion in vessels 
built by American workers in U.S. shipyards. Vessels in our fleet serve 
customers in Alaska, the U.S. West, East and Gulf coasts, the Caribbean 
and Central America. Thank you for the opportunity to talk to you today 
about ``the state of the American maritime industry during the COVID-19 
pandemic.''
    I am here today in my capacity as president of the American 
Maritime Partnership (AMP). AMP is the largest maritime legislative 
coalition ever assembled. Our organization includes all elements of the 
American domestic maritime industry--shipping companies, ship 
construction and repair yards, mariners, and pro-defense organizations. 
Our focus is America's domestic shipping law, the Jones Act, which 
requires that cargo moved by water between two points in the United 
States be transported on American vessels by American mariners.
    As I will discuss in more detail below, it is in times like these--
when our domestic transportation industry and our nation faces a 
historic pandemic--that we are well served by American mariners on 
American vessels in American waters.
                       II. What is the Jones Act?
    The Jones Act is the fundamental law of the domestic maritime 
industry. As mentioned, the Jones Act requires that cargo moved between 
two points in the United States by water is transported on vessels that 
are U.S.-flagged, U.S.-owned, U.S.-crewed and U.S.-built. The Jones Act 
and related coastwise laws are the underpinning for the American 
domestic maritime industry, which is comprised of more than 40,000 
vessels and supports 650,000 jobs with an economic impact of more than 
$150 billion annually, according to a study for the Transportation 
Institute by PricewaterhouseCoopers.
    The reason we have a Jones Act can be encompassed in one word--
security. The coastwise laws of the U.S. are essential to the continued 
economic security of the U.S. transportation system and to the 
maintenance of a U.S.-flag fleet to support that system. The Jones Act 
ensures that American mariners are constantly on the watch on our 
inland waterways, promoting homeland security. And finally, the Jones 
Act is critical to ensuring that our country has both the mariners and 
the sealift capacity to go to war, which is essential to our national 
security.
    The value of the Jones Act is even clearer during this pandemic. As 
can be seen by the breakdown of the supply chain for basic medical 
goods at the beginning of the COVID-19 pandemic, America cannot be 
wholly dependent on foreign countries for our basic needs. The Jones 
Act ensures that America will have the ability to transport our own 
goods by water and a defense industrial base that is not hamstrung by 
unfair foreign competition. Today's domestic U.S.-flag fleet has proven 
its capabilities to meet the demands of the pandemic, and our mariners 
have risen to the call of their essential worker status.
                       III. Summary of Key Points
    Today I would like to leave you with three main points:
    First, despite the massive challenges associated with COVID-19, 
this subcommittee can be assured that the American domestic maritime 
industry will continue to deliver the goods that are essential to our 
nation despite one of the most difficult work environments in a 
generation. We take our responsibility as frontline workers very 
seriously and understand our obligation to ensure that America's 
critical supply chains are not interrupted. In these difficult times, 
our nation's economic, homeland, and national security can only benefit 
from an all-American industry like ours. I'm proud to tell you today 
that our industry has risen to the occasion to keep America moving 
during this historic pandemic. But there is more the government can do 
to support America's maritime frontline workers to help keep them safe 
and able to keep domestic supply chains intact.
    Second, one very positive development for the American maritime 
industry during this difficult period is the emergence of the offshore 
wind industry. This is one of the most important emerging markets for 
our industry, and we are proud to be full partners in the development 
of offshore wind as a renewable energy source. This partnership is 
expected to produce tens of thousands of jobs, tens of billions of 
dollars in economic output, and play a significant role in 
decarbonizing electricity production in the United States. American 
Maritime is excited to be playing a key role in realizing those 
expectations, as we are a dynamic and competitive industry that strives 
for best-in-class safety, efficiency and environmental stewardship.
    Third, China's shipping and shipbuilding industries have 
experienced dramatic growth in recent years, fueled by its export 
economy and extraordinary support from the Chinese government. The 
result is a Chinese commercial maritime industry that puts U.S. 
national security interests at risk both in peacetime and in the event 
of conflict. Americans have learned during the pandemic that depending 
on China for face masks and other critical supplies is not in our 
country's best interest. America must develop a thoughtful and 
effective policy response to China's maritime ambitions. A growing 
number of experts and scholars have begun to do this, and have found, 
among other things, that the starting place for such a policy is to 
reinforce and expand support for the American domestic maritime 
industry and the Jones Act. We share that view, as we will discuss in 
more detail below.
    I will now take these three main points--our industry's response to 
COVID-19, the growing offshore wind industry, and concerns about 
China--in turn:
         IV. COVID-19 Impacts on the Domestic Maritime Industry
    I last testified before this subcommittee in May 2020, only two 
months into the pandemic. Then, as now, the maritime industry was 
recognized as essential by the Department of Homeland Security, meaning 
that we continue operating throughout the pandemic. Our ability to keep 
operating and deliver the goods for America is due to the men and women 
of our maritime workforce--those who work on the docks; those on board 
the containerships, tankers, bulkers, dredges and other vessels; those 
who pilot these vessels safely into port; and thousands of others who 
contribute to the safe and efficient operation of our domestic maritime 
supply chain. We are grateful for the dedication of these men and 
women. Because of their commitment and adherence to appropriate 
protocols we have been largely successful at ensuring the safety of 
these essential workers while continuing service to our customers. We 
also appreciate the continued efforts of U.S. government maritime 
authorities--the U.S. Coast Guard, Maritime Administration, U.S. 
Transportation Command and others--for their leadership on these 
issues. The foundation of collaboration between government and industry 
that has been built on national security, safety, and other issues has 
enabled real progress to be made in these extraordinary times.
    But there is still work to be done. Most importantly, we need to 
better ensure that the maritime workforce remains as free of COVID-19 
as possible both for safety reasons and so that the domestic supply 
chain remains intact. Companies have had to improvise during the 
pandemic, developing special operating protocols to protect employees 
based on the best information available and developing testing and 
other safety protocols to ensure, to the best of our ability, that 
mariners entering the ``bubble'' of a ship are not infected with COVID-
19. While testing, quarantine and other measures have been mostly 
successful, we are operating on borrowed time as the possibility of a 
COVID-19 outbreak severely impacting our domestic supply chain is an 
everyday reality.
    We have seen glimpses of the potential impacts that such an 
outbreak could produce. Ports are backed up due to a surge of imports, 
but also a lack of workers due to COVID-19 infections. An overreaching 
government response to a suspected COVID-19 case onboard a cargo ship--
where the ship is ordered to anchor instead of to a secure, controlled-
access dock--could have enormous supply chain impacts. This is 
especially true for a non-contiguous area like Hawaii, Alaska or Puerto 
Rico, where the potential quarantine of an entire vessel, instead of 
the vessel's crew, is of great concern. A single vessel may account for 
a large portion of the weekly commerce of the communities in the 
noncontiguous U.S. trades, such that any delay, no matter how slight, 
may have a serious impact on those states and territories being served.
    The most important solution to these threats is to prioritize 
mariners for the COVID-19 vaccination and, in the interim, ensure that 
mariners have access to rapid testing. We were grateful that the 
Cybersecurity and Infrastructure Security Agency recognized the 
importance of the maritime industry and ensured that maritime workers 
were broadly covered as part of the critical infrastructure guidance 
released in March. That recognition allowed the industry to continue 
operating but did nothing to help reduce the risk of coronavirus 
exposure while continuing the work. We also appreciate very much that 
Federal Maritime Commissioners Maffei and Bentzel recently urged the 
Biden Administration to prioritize mariners for vaccination and rapid 
testing, emphasizing the mariner's critical role in moving medical 
supplies, personal protective equipment, and handling an unprecedented 
amount of consumer goods flowing into our nation's ports. But that is 
not enough. It is past time that the federal and state government 
agencies having direct input and actual authority over mariner safety 
do likewise.
    As vaccines start to be rolled out across the country, it is 
crucial that our domestic mariners receive priority access as they work 
to move essential cargoes, ensuring that our grocery stores are 
stocked, our fuel is delivered, and the vital commerce that sustains 
this nation remains flowing.
             V. American Maritime Environmental Leadership
    At the same time that the pandemic has challenged our industry, we 
are also looking towards the future. Offshore wind is a critical new 
market for American Maritime and we are excited about the opportunity 
to support the production of renewable energy while ensuring that these 
jobs are filled by American workers. We also appreciate President 
Biden's strong support for the Jones Act in his recent Buy American 
Executive order, which confirmed that the Jones Act is ``an opportunity 
to invest in America's workers as we build offshore renewable energy, 
in line with the President's goals to build our clean energy future 
here in America.''
    The potential scope of this market is enormous, with 19 offshore 
wind projects off the East Coast already planned. These offshore wind 
farms will consist of more than 2,100 wind turbines that will produce 
some thirty gigawatts of electrical power when fully installed and 
operational by 2030. The American Wind Energy Association (now part of 
American Clean Power) has projected that the development and operation 
of these wind farms will produce $57 billion in investment and 45,000 
to 83,000 jobs by 2030. Further offshore wind farm projects are likely 
to be proposed on the Atlantic, Gulf and Pacific coasts of the United 
States as these projects are successfully developed.
    Other countries that are ahead of the United States in installing 
offshore wind power have benefited greatly from various government 
support programs. The EU has at this time some 3,072 offshore wind 
turbines installed vs. 7 in the U.S., producing 23 gigawatts of 
electricity. Further, the cost of offshore wind power generation in the 
EU has declined steadily with technological advances in the newer 
turbines. Like the Europeans, America will need prudent government 
policies to jumpstart offshore wind development in this country. 
Regulatory measures needing attention include a more predictable 
permitting process; a possible regional approach to local content 
requirements; prompt Coast Guard regulatory actions related to the 
vessels required to install and service offshore wind turbines; and 
support and planning for the necessary port infrastructure. However, 
offshore wind energy in the United States will benefit from the lessons 
learned in the EU, including, for example, the ability to install 
turbines with power generation capacities that are 3 to 4 times more 
powerful than first generation installations in the EU.
    American Maritime is eager to invest in offshore wind 
opportunities. At the same time, we exist in a highly capital-intensive 
business and our investments in vessels and other infrastructure are 
long-term. We make those investments in reliance on U.S. law as it 
stands today and as it has generally stood for over 100 years. The 
recent confirmation in the FY2021 National Defense Authorization Act 
that all American laws, including the Jones Act, apply to offshore wind 
development on the Outer Continental Shelf provides us the certainty 
needed to invest in long-term offshore wind assets.
    With this confirmation and the promise of a large new market for 
American assets, operators are already beginning their investments in 
ships to meet emerging needs. AMP member Great Lakes Dredge and Dock is 
moving forward with the design of the first Jones Act compliant 
inclined fallpipe vessel for subsea rock installation, a critical 
vessel for the building of offshore wind assets. Dominion Energy 
recently announced the beginning of construction for the first Jones 
Act compliant offshore wind turbine installation vessel, which is 
expected to be available to support wind turbine installations by the 
end of 2023. Other American companies are building service operation 
vessels to support the development of offshore wind off the East Coast. 
Our members stand ready to support the development of America's 
offshore wind network and we look forward to supporting this important 
renewable energy source.
    Beyond offshore wind, American carriers are investing in new, 
environmentally friendly assets to support a more sustainable maritime 
industry. Shipping is the most energy-efficient mode of mass cargo 
transportation, and domestic carriers are taking important steps to 
improve their environmental footprint. For example, in the non-
contiguous container trades, American carriers have recently upgraded 
their vessels to be some of the cleanest in the world. AMP members TOTE 
and Crowley recently built new state-of-the-art ships powered by 
liquefied natural gas (LNG) for the Puerto Rico trades. AMP member 
Matson also took delivery of their newest vessel last December, one of 
two combination container/roll-on, roll-off ships that were built to 
run on a dual use LNG system. At the same time, AMP member Pasha Hawaii 
is building two LNG-fueled containerships in Brownsville, Texas that 
will eventually serve the Mainland-Hawaii trade lane.
    Fueling these ships with LNG reduces emissions significantly, 
including a 100-percent reduction in sulfur oxide (SOx) and particulate 
matter (PM); a 92-percent reduction in nitrogen oxide (NOx); and a 
reduction of carbon dioxide (CO2) of more than 35 percent per 
container, compared with fossil fuels generally used in the 
international maritime industry. American Maritime expects that the 
development of alternatives such as hydrogen fuel cells and/or 
renewable energy and storage technology may eventually lead to zero 
carbon propulsion solutions for marine vessels. Such technology is in 
its infancy, however, and any commercially scalable alternative is 
likely decades away. Given the very substantial benefits LNG provides 
in reducing overall emissions as compared to conventional marine fuels, 
U.S. policies should support the use of LNG as we transition toward a 
carbon-free future.
    Investments in environmental innovation are occurring across the 
domestic U.S.-flag industry. American naval architects and engineers 
design these innovations and thousands of workers in American shipyards 
and related businesses build these vessels, helping to sustain our 
marine research and development capabilities and our shipbuilding 
industrial base and providing jobs for a new generation of American 
seafarers needed to meet military sealift requirements.
 VI. National Security and the Challenge of China's Maritime Ambitions
    As noted at the beginning of my testimony, support for the Jones 
Act and the American maritime industry is rooted in part on the 
recognition that military conflicts have historically depended on 
sealift to supply American troops in overseas engagements. American-
crewed ships are much more likely than foreign flag ships to answer the 
call when American troops need resupply in different parts of the 
world. This is particularly true when the maritime domain is contested 
by our enemies. America also needs shipbuilding expertise and capacity 
so that it can build different types of militarily useful vessels if 
needed during a conflict. Our maritime policies, including the Jones 
Act, are therefore designed to assure that we retain a critical mass of 
Americans who know how to build and operate large ships and a core set 
of vessels and facilities, all so that we have something to scale up in 
the event of a military contingency. We could not create these 
capabilities and assets on a timely basis out of nothing. Without that 
critical base provided by American Maritime, we would be extremely 
vulnerable in a military conflict.
    In addition to helping assure American control over our maritime 
supply chains in connection with an overseas conflict, the Jones Act 
also helps assure that Americans control our domestic supply chains, 
including those serving Hawaii, Alaska, and Puerto Rico and within the 
continental United States. The performance of these supply chains 
during the pandemic has certainly demonstrated the value of American 
Maritime control over them. Allowing foreign control over those supply 
chains would create serious vulnerabilities. For example, allowing 
state-owned Chinese shipping companies to control the route between 
Hawaii and the mainland would be obviously unacceptable, as the Chinese 
carriers could use their economic leverage over Hawaii's maritime 
logistics supply chain for purposes that would be contrary to our 
interests. In this scenario, economic pressure could be used against us 
even in the absence of a military conflict.
    This Subcommittee has taken a serious look into the subject of 
China's maritime ambitions. In its October 2019 Hearing, ``China's 
Maritime Silk Road Initiative: Implications for the Global Maritime 
Supply Chain'' this Subcommittee heard from experts at the Department 
of Defense and other organizations concerning the maritime component of 
China's Belt and Road Initiative (BRI). It is well worth reviewing that 
testimony, which focused primarily on Chinese strategic investments in 
ports around the world. The geopolitical significance of those 
investments was made clear, with the Department of Defense witnesses 
noting, ``Beijing has now explicitly linked China's global development 
framework with its overseas military ambitions.'' Further, ``[g]iven 
China's demonstrated history of using economic leverage to exact 
political retribution against other countries, we are concerned these 
projects will increase partner nations' concessions from or exposure to 
Chinese influence or pressure.''
    Other testimony made clear that the Chinese government's strategic 
commitment to its maritime industry extends well beyond investments in 
ports:

        ``The Chinese economy is not a free market. It is a state-
        managed economy with an industrial policy. The Chinese 
        government is transparent in its plans and goals. When it 
        identifies strategic sectors, it uses a whole-of-government 
        approach to build them up. . . . The Chinese shipping and 
        shipbuilding industries are the beneficiaries of this policy, 
        to the detriment of the U.S. industries.''

    This is according to Carolyn Bartholomew, who is the Chairman of 
the U.S.-China Economic and Security Review Commission. Her testimony 
briefly summarizes the growth of the Chinese state-owned shipping and 
shipbuilding sectors, and notes that, ``[s]ubsidies for Chinese 
shipbuilding SOEs have harmed the U.S. shipbuilding industry's ability 
to compete in the global market, and have led to shipyard closings and 
a reduced U.S. vendor base over the past several decades.''
    A substantial body of information has been developed since that 
hearing. In the past year at least three studies and reports on this 
subject have been issued:
      ``Strengthening the U.S. Defense Maritime Industrial 
Base,'' Center for Strategic and Budgetary Assessments (CSBA), Bryan 
Clark, Tim Walton and Adam Lemon (March 2020). Among other things, this 
study found that a robust maritime industry, including a strong 
shipbuilding base and a ready pool of mariners, are important in this 
era of great power competition. However, the domestic maritime industry 
is facing pressure from subsidized foreign competition, especially in 
China, that undermines their ability to operate. The report explains 
that the threat of China in the maritime domain is significant, saying 
``the Chinese government has also slowly but systematically gained port 
access around the world for commerce, logistics and naval operations'' 
as part of its goal of ``boost[ing] trade and global influence by 
economic, political and military means.'' The report highlights that 
the Jones Act is important to preventing further erosion of the 
domestic fleet due to pressures from China, noting the ``[Jones Act] 
guards against the ability of China--the world's largest merchant 
marine and global port management system--to take over shipping to U.S. 
territories and gain local influence during peacetime, only to threaten 
or deny shipping to CONUS during a crisis or conflict.''
      ``Hidden Harbors--China's State-Backed Shipping 
Industry,'' Center for Strategic and International Studies (CSIS), Jude 
Blanchette, Jonathon E. Hillman, Maesea McCalpin and Mingda Qui (July 
2020). This report sought to quantify the extent of Chinese government 
support for its state-owned shipping and shipbuilding sectors. After 
reviewing the different methods of Chinese whole-of-government support, 
it offered a conservative estimate that such support totaled ``roughly 
$132 billion between 2010 and 2018 . . .'' Most of the quantifiable 
support came in the form of loans from state-owned banks, along with 
direct subsidies and equity infusions. More opaque forms of support 
include indirect subsidies, certain regulatory policies and forced tech 
transfer and IP theft.
      ``China's Use of Maritime for Global Power Demands a 
Strong Commitment to American Maritime'', Navy League of the United 
States (November 2020). This report highlighted the importance of 
maintaining a strong domestic maritime industry in the face of 
heightened threats from China. Specifically, the Navy League noted that 
``China understands it is critical as a national security issue to 
maintain a heavy industry in shipbuilding, in particular because it 
drives a range of other industries that are necessary to maintain a 
high level as a producing nation. Furthermore, the capabilities to 
build commercial ships are the ones that the Chinese are using to be 
able to mass produce their Navy ships.'' In response to this targeted 
investment in shipbuilding, the Navy League recommended a number of 
policies to strengthen the domestic maritime industry, while noting 
that ``it is clear that the Jones Act plays an important role in 
keeping American shipyards operational when competing against heavily 
subsidized foreign yards.''

    These studies show vividly that if China has targeted the shipping 
and shipbuilding industries as strategic to their larger objective of 
competing with the United States as a global superpower, they have 
assumed a commanding lead. The Navy League study mentioned above shows 
that of the 2,873 large commercial vessels under construction in 2019, 
1,291 were built in China as compared to 8 in the United States. 
Similarly, large commercial vessels under the Chinese flag totaled 
about 6,000 as compared to less than 200 large commercial vessels 
flying the U.S. flag.
    The vulnerability that this massive disparity creates for American 
security interests should be clear. In the event of a conflict, China 
is developing an overwhelming maritime logistics advantage to keep its 
supply chains functioning, while America would be increasingly 
challenged to do so. And even in the absence of a military conflict, 
China is gaining market power over international commercial supply 
chains that it can leverage to its advantage and to America's 
disadvantage in ways not yet foreseen.
    America should have a policy response to this problem. As a 
starting point, it should reaffirm the essential nature of the Jones 
Act and the American maritime industry it helps foster. It should also 
provide a roadmap to effectively deny China success in its geopolitical 
maritime ambitions.
                    VII. America's maritime workers
    Please allow me to conclude with some remarks about American 
mariners and other workers. These are the men and women who are 
responsible for ensuring that our nation's supply lines have not been 
interrupted by the pandemic. It is not an exaggeration to say they are 
true American heroes. In these situations, it is overwhelmingly to our 
benefit that these mariners and maritime workers are Americans who are 
committed to the safety and security of our nation. The Jones Act 
ensures that these essential workers remain on the job, and we are 
grateful for this Subcommittee's longstanding support for this crucial 
law.
    Again, thank you for allowing us to be with you today for one of 
the first Coast Guard and Maritime Transportation Subcommittee hearings 
of this Congress. We are grateful for the chance to tell our story and 
to emphasize to you the exciting growth of our industry. I will be 
pleased to answer any questions you might have.

    Mr. Carbajal. Thank you very much, Mr. Roberts. Next, we 
will proceed with Mr. Del Wilkins.
    Mr. Wilkins. Thank you. Good morning, and, again, thank you 
for the opportunity to testify with you and before you today. I 
thank you, my good friend, Congressman Davis, for the 
introduction.
    Chairman Carbajal, congratulations on being selected to 
chair this subcommittee. We look forward to working with you to 
achieve our mutual goal of ensuring the safe, efficient, and 
environmentally responsible movement of freight on our maritime 
transportation systems.
    I also extend our thanks to the bipartisan leadership of 
the full committee and subcommittee for your great work in the 
116th Congress, in particular, the Coast Guard authorization 
bill, MTSERA, and the Water Resources Development Act are all 
greatly appreciated. And, as always, we are grateful for the 
committee's stalwart support of the Jones Act, the statutory 
foundation that undergirds every dollar that companies like 
mine invest in American-built vessels, and every job we provide 
to American women and men. And continuation of these good 
efforts will position our industry to continue to meet the 
country's transportation needs and support a national economic 
recovery.
    And that leads me to my main message for you today, which 
is, that the domestic maritime industry remains resilient, but 
needs your support to navigate the challenges of keeping 
mariners healthy and vessels in service.
    From the beginning of the pandemic, our industry's 
overriding priority has been protecting mariners from COVID 
while keeping vessels in service to protect the continuity of 
the national supply chain. Industry best practices, based on 
CDC and U.S. Coast Guard guidelines, were quickly put in place 
and have served as a foundation of our resilience.
    We are working hard to avoid disruption to regular vessel 
operations. However, given the higher prevalence of COVID in 
the general population, towing companies are seeing increased 
incidence of exposure to infection off the job, which keeps 
mariners and other frontline workers from reporting to work.
    We have no question that the task is more challenging than 
it has ever been during and throughout this whole pandemic. At 
the same time, many companies are struggling with the 
unforeseen cost associated with this pandemic, and in the 
backdrop, is the ever-present need to maintain our Nation's 
waterways infrastructure, so that vessels can move safely and 
reliably. Taken together, these conditions pose real challenges 
to the critical infrastructure sector at a time when a robust 
supply chain is most needed.
    The bottom line is that a healthy, fully, operational 
domestic maritime industry is indispensable to our Nation's 
ability to weather and recover from the twin public health and 
economic crises.
    With that in mind, I would like to highlight three 
priorities that will help the hard-working men and women keep 
tugboats, towboats, and barges operating on our waterways:
    First, implement a national strategy for mariner 
vaccination, at a minimum, and clear Federal guidance to States 
to effectively immunize these essential workers against COVID, 
and ensure safety and continuity. To be clear, we are not 
asking to cut the line. We are asking to work with you and the 
administration to ensure the timely immunization of a 
relatively small segment of the country's frontline essential 
workforce that has an outsize impact on our economy and 
security.
    Second, we ask that you please support full funding of the 
MTSERA program. COVID-19 was an unforeseen crisis that required 
sufficient resources and significant resources to adapt to a 
radically altered operating condition. At the same time, many 
companies saw steep declines in cargo volumes directly as a 
result of the economic contraction. MTSERA will provide 
companies with additional options to bolster financial 
resources in preparation for a full economic recovery.
    Finally, we are encouraged by President Biden's early 
support for the large-scale infrastructure package, but we urge 
that any such initiative contain three critical elements: One, 
increased funding for locks, dams, ports and waterways; two, 
accelerated construction of the Coast Guard buoy tenders, and 
in the interim, support for the efficient use of existing buoy 
tenders and other resources to promote safe and reliable 
navigation; and third, improvements to the Army Corps of 
Engineers contracting processes for dredges that keep our 
rivers operating at congressionally authorized levels.
    Such a package will both increase shipper confidence in 
waterborne commerce, and as we recover from the pandemic, in 
the long term, help secure a transformed waterway system that 
supports robust domestic and international trade.
    Furthermore, waterway transport is the most economical and 
environmentally friendly mode of transport in the country, 
which makes investing in maritime infrastructure a critical 
component of environmental sustainability.
    Chairman Carbajal and Ranking Member Gibbs, working 
together, we can go forward to better our Nation. This 
committee has a proven record of enacting policies beneficial 
to the domestic maritime industry.
    And let me assure you that we are suited up and ready to be 
a full partner in the critical year ahead. We are ready to work 
together, and eager to help as we know you are ready to get to 
work. I thank you, and I am prepared to answer any questions 
that you may have.
    [Mr. Wilkins' prepared statement follows:]

                                 
 Prepared Statement of Del Wilkins, President, Illinois Marine Towing, 
               on behalf of American Waterways Operators
    Good morning, Chairman Carbajal, Ranking Member Gibbs, and Members 
of the Subcommittee. My name is Del Wilkins, and I am president of 
Illinois Marine Towing, Inc., based in Joliet, Illinois, which is a 
subsidiary of Canal Barge Company in New Orleans, Louisiana. IMT 
provides towing, fleeting and shipyard services along the Illinois 
Waterway. For over 20 years, our highly experienced transportation 
professionals have provided safe and reliable marine services to the 
major barge transportation companies of our country. We are part of a 
unique industry where a captain or pilot can earn a six-figure salary 
with just a high school diploma, something that's just not possible in 
most sectors of our economy today. Our robust employee base of over 900 
employees is spread throughout the country, with the largest 
concentrations in Louisiana (293), Illinois (169), Alabama (125), 
Missouri (91), Arkansas (61), and Texas (54). In addition, we have 
employees as far north as Minnesota, east to New Jersey, west to 
Nevada, and south to Florida.
    I currently serve as Vice Chairman of the Board of the American 
Waterways Operators, the national trade association for the inland and 
coastal tugboat, towboat and barge industry. On behalf of AWO's over 
300 member companies, thank you for the opportunity to testify at this 
important hearing on the impact of the COVID-19 pandemic on the U.S. 
maritime industry. Chairman Carbajal, please accept AWO's 
congratulations on being selected by your colleagues to lead the Coast 
Guard and Maritime Transportation Subcommittee. Just as we worked in 
the 116th Congress with the Subcommittee to advance policies that 
increase safety and efficiency in our industry, we look forward to 
rolling up our sleeves to help you achieve our mutual goal of ensuring 
the safe, efficient and environmentally responsible movement of freight 
via our marine transportation system.
    My message for you today is that the domestic maritime industry 
remains resilient, but needs your support to continue to navigate the 
challenges of keeping mariners healthy and vessels in service. The 
Transportation and Infrastructure Committee's bipartisan efforts to 
assist the industry in the 116th Congress--in particular, the Coast 
Guard authorization bill, the Maritime Transportation System Emergency 
Relief Act (MTSERA) and the Water Resources Development Act--are 
greatly appreciated, and we would extend our thanks to Chairman 
DeFazio, Ranking Member Graves, former Chairman Maloney, and Ranking 
Member Gibbs. And, as always, we are grateful for the Committee's 
stalwart support for the Jones Act, the statutory foundation that 
undergirds every dollar that companies like IMT invest in American-
built vessels and every job we provide to American men and women. A 
continuation of these good efforts in the 117th Congress will better 
position our industry to continue to meet the country's critical 
transportation needs and support a national economic recovery.
                    Resilience and Challenges Ahead
    From the beginning of the pandemic, the overriding priority of our 
industry was taking the necessary steps to protect mariners from COVID-
19 while keeping vessels in service to protect the continuity of the 
national supply chain that these mariners support. Industry best 
practices, based on guidelines issued by the Centers for Disease 
Control and Prevention (CDC) and the U.S. Coast Guard, were quickly put 
in place and served as the foundation of our resilience. However, as a 
result of the heightened prevalence of COVID in the general population, 
towing companies are seeing increased incidences of exposure and 
infection off the job, which keeps mariners and other front-line 
maritime transportation workers from reporting to work. We are working 
hard to avoid disruption to regular vessel operations that affect the 
marine transportation system and the Americans that rely on it, but 
there's no question that the task is more challenging than it has been 
at any point since the pandemic began.
    At the same time, many companies are still struggling with the 
fallout from the unforeseen costs associated with the pandemic. And in 
the backdrop is the ever-present need to maintain our nation's 
waterways infrastructure so that vessel traffic can move safely and 
reliably. Taken together, these conditions pose real challenges to a 
critical infrastructure sector at a time when supply chain resilience 
will be most needed.
          Maritime Industry Resilience: Three Policy Proposals
    The bottom line is that a healthy, fully operational domestic 
maritime industry is indispensable to our nation's ability to weather 
and recover from the current dual public health and economic crisis. 
With that in mind, I would like to highlight three priorities for the 
industry that are well within the Subcommittee's jurisdiction. 
Addressing these issues will help the hard-working men and women who 
keep tugboats, towboats and barges operating on America's waterways. 
Working together with the Members of the Subcommittee and the full 
Committee--which has an exemplary record of bipartisan achievement--we 
can prepare to go forward to better.
Prioritized Vaccination for Mariners
    America's commercial mariners are an essential workforce with a key 
role in national security and the national supply chain, and they are 
in a unique position: many of them live aboard the vessels on which 
they work, in very close quarters where COVID-19 can spread quickly. 
Many mariners do not live in the states where they report to work, and 
are away from home for weeks or months at a time, complicating their 
ability to secure COVID-19 vaccinations in their states of residence.
    Although the Department of Homeland Security's Cybersecurity and 
Infrastructure Security Agency and the Coast Guard have recognized the 
criticality of the maritime transportation workforce in their guidance 
on the identification of essential workers, mariners are not 
categorized as ``frontline'' essential workers in the Centers for 
Disease Control and Prevention's guidance on allocating COVID-19 
vaccines and in many states' vaccine distribution plans. This is 
despite the fact that the men and women who work onboard vessels and 
onshore at ports and terminals play vital roles in the transportation 
of critical commodities that enable other frontline essential workers 
to do their jobs, including the food products and consumer goods that 
stock store shelves, the pharmaceuticals and medical supplies that 
hospitals and clinics rely on, the energy cargoes that power our 
country, and the manufacturing inputs that keep our factories up and 
running.
    This suggests that a national strategy for mariner vaccination, or 
at a minimum, clear federal guidance for states, is urgently needed to 
efficiently immunize these essential workers against COVID-19 and 
ensure the safety and continuity of waterborne transportation. On this 
issue, AWO has partnered and is aligned with stakeholders from every 
segment of the maritime industry, from labor to ports and terminals to 
vessel owners and operators. We are also supported in this effort by 
Federal Maritime Commissioners Carl Bentzel and Daniel Maffei, who have 
sent letters to the Administration regarding ``the urgent issue of 
vaccinating the Nation's maritime workforce as soon as possible'' and 
urging the Administration ``to emphasize the need to keep the supply 
chain transportation workforce in mind as each state deploys rapid 
COVID-19 testing and implements the vaccination process.''
    To be clear, we're not asking to cut the line; we're asking to work 
with you and the Administration to ensure the timely and efficient 
immunization of a relatively small segment of the country's frontline 
essential workforce that has an outsize impact on our economy and 
security. Our industry is eager to be part of the solution and work 
with the federal and state governments to resolve any logistical 
challenges to the vaccination process for America's mariners.
Full Funding for MTSERA
    Thanks to Chairman DeFazio's leadership, and the pivotal roles 
played by Ranking Member Graves, then-Chairman Maloney, and Ranking 
Member Gibbs, the Maritime Transportation System Emergency Relief Act 
was enacted as part of the National Defense Authorization Act (NDAA) 
earlier this year. This much-needed assistance program, which will be 
administered by the Maritime Administration, will help vessel owners 
and other maritime stakeholders offset unforeseen costs arising from 
the COVID-19 crisis, including the costs of purchasing of personal 
protective equipment, sanitizing vessels, and testing mariners to 
prevent the onboard transmission of the virus.
    While our industry has long experience with contingency planning 
and emergency preparedness, COVID-19 was an unforeseen crisis for us, 
as it was for most American businesses. It required a significant 
commitment of resources in order to successfully adapt to radically 
altered operating conditions. At the same time, many companies across 
our industry saw a decline in both dry and liquid cargo volumes as a 
result of economic contraction. The resulting revenue decreases posed 
real challenges for many companies at the same time as they faced 
increased operating expenses. MTSERA provides companies with an 
additional option to bolster financial resources in preparation for a 
full economic recovery.
    With MTSERA now authorized, our request to Congress is simple: 
please follow through with a bipartisan effort to fully fund MTSERA in 
the FY 22 appropriations process.
Maritime Infrastructure is Essential
    WRDA 2020 makes enormous strides to accelerate the pace of 
waterways infrastructure projects, thanks to the leadership of this 
Committee. We applaud Chairman DeFazio for his consistent support of 
comprehensive infrastructure legislation. In addition, we are 
encouraged by President Biden's early support for moving forward with a 
large-scale infrastructure package. We urge that any such effort 
contain three critical elements: (1) increased funding for lock and dam 
projects and port facilities; (2) accelerated construction of Coast 
Guard waterways commerce cutters (buoy tenders) and, in the interim, 
support for the efficient use of existing buoy tenders and other 
resources to promote safe and reliable navigation; and (3) improvements 
to the Army Corps of Engineers' contracting process for commercial 
dredges to keep our inland rivers operating at Congressionally-
authorized levels.
    Congress has a unique opportunity to build on its recent efforts by 
thinking and acting big. An infrastructure package with a robust 
maritime component will both increase shipper confidence in waterborne 
commerce over the period of recovery from the pandemic, and, over the 
long term, help secure a transformed waterway system that supports 
robust domestic and international trade. Furthermore, waterborne 
transport is the most environmentally friendly mode of freight 
transportation, which makes investing in the improvement of maritime 
infrastructure a critical component of environmental sustainability. 
Failure to make these investments will ultimately force cargo to move 
by less efficient and less environmentally sustainable modes.
    A comprehensive infrastructure package also provides an opportunity 
to explore other ways in which Congress can bolster critical maritime 
industry infrastructure, including facilitating short sea shipping and 
other innovative efforts to enhance the efficiency and sustainability 
of maritime transportation, as well as providing support for maritime 
industry initiatives to increase cybersecurity readiness and 
resiliency. In addition, as you begin your work to develop the 
framework for the next Coast Guard authorization bill, we look forward 
to sharing our ideas about ways in which you can ease unnecessary 
burdens on towing companies, such as suspending the collection of 
inspection user fees that charge vessel owners twice for services 
performed by Coast Guard-approved third parties.
                               Conclusion
    Chairman Carbajal and Ranking Member Gibbs, let me conclude by 
saying: Together, we can do this. Both the Subcommittee and the full 
Committee have a proven record in enacting policies beneficial to the 
domestic maritime industry. And let me assure you that we're suited up 
and ready to be a full partner in the crucial year ahead. America's 
maritime industry is the critical link to supply chain continuity and 
economic recovery, and we're as eager to help as you are to get to 
work.

    Mr. Carbajal. Thank you, Mr. Wilkins.
    We will now move on to Member questions. Each Member will 
be recognized for 5 minutes.
    Usually I would start and then go on to Ranking Member 
Gibbs, but we will acquiesce today to Chair DeFazio, as he has 
another commitment he has to get to. Mr. DeFazio.
    Mr. DeFazio. I thank the gentleman for yielding the time.
    I think it was Mr. Patti who said that you still can't 
access testing. Is that correct? That ships are being 
dispatched, and you can't get people tested before they go?
    Mr. Patti. No, it is not that we can't access testing. It 
is just that it is still a very disorganized and not quite as 
coordinated as it should be processed in order to provide the 
uniform testing for each vessel and for all the mariners.
    But testing is available. It has taken a while to get to 
this point. In the very early stages of the pandemic, it was 
incredibly, incredibly difficult to secure the testing that we 
needed. But testing is available. It is just not being handled 
in as uniform and as organized a fashion as we would like.
    Mr. DeFazio. OK. And then are we still seeing, Ms. Brand or 
anyone else, a lack of PPE in our ports, for workers in the 
ports loading/unloading cargo and that? Personal protective 
equipment?
    Ms. Brand. Chairman DeFazio, thank you so much for the 
question. No, I am not hearing of a shortage of PPE. I hear 
that it is flowing. I understand there are some counterfeit PPE 
that we are watching for and making sure our members don't get 
that.
    Mr. DeFazio. OK, that is good.
    Mr. Bordelon, when I was visiting your shipyard, you told 
me something about the acquisition of the counter you are 
working on. You started out with an order for so many, so, 
therefore, you couldn't do forward purchasing for, I think it 
was the engines, in particular, were an issue.
    Do you have any comments on the Coast Guard's contracting 
process, without being too upsetting to them?
    Mr. Bordelon. Sure. Yeah, that is just exercising of the 
claims in the contracts. So we had some things on the Bollinger 
side. We had some things come up on the Bollinger side that we 
worked through Coast Guard with as far as getting the boats 
appropriated and funded so we could continue the program.
    And really, Chairman, that is a great point of some of the 
things that the shipbuilding industry needs right now is 
predictability, and some vision going forward on budgets and 
awarding contracts that have longer lives, and short-term 
opportunities for us to evaluate definitely help in a time, 
like a COVID crisis, to have some stability and sustainability 
in our workforce.
    And that is really what our workers are looking for from a 
central business standpoint, that we need some predictability 
in front of us. And budgets and appropriations definitely help 
fix that for shipbuilders and all of our suppliers.
    Mr. DeFazio. OK. Thank you.
    Just one other question. I think someone said we built 
eight ships last year, eight large vessels, commercial vessels. 
Did someone say that?
    Mr. Roberts. I did say that. Mike Roberts here. Yes. 
According to our Navy league----
    Mr. DeFazio. How many did the Chinese build?
    Mr. Roberts. 1,291, on the basis of $15 billion in support 
from the Chinese Government.
    Mr. DeFazio. Well, wait a minute. You know, wouldn't that 
be unfair competition? The Chinese Government subsidizes the 
building of the ships. They have cheap labor.
    Mr. Roberts. There are a lot of advantages in Chinese 
shipyards in addition to the financial support that they 
receive from the Chinese Government, and the results are 
telling.
    Mr. DeFazio. OK. Yeah, I just remember Mr. Kudlow, a former 
economic adviser to the former President, saying he really 
believed in free markets, because he wanted to do away with the 
Jones Act. And I said, well, how is it free when we have to 
compete with the Communist government of China? That is not a 
free market. Anyway, that is an extraordinary number, 8 versus 
1,000. That is very worrisome. Thank you.
    Mr. Carbajal. Thank you, Chairman DeFazio. We will now move 
on with the alternating approach, so I will recognize Ranking 
Member Gibbs.
    Mr. Gibbs. Thank you, Chairman.
    To Mr. Cordero and Mr. Wilkins, as we have seen in 
testimony and see the backup, especially in the California 
ports, and we see back-hauling of empty containers back to 
China to fill quicker turnaround. Mr. Cordero, have you seen 
containers not be available to ag exports? And then for Mr. 
Wilkins, are you seeing an increased trade on the river system, 
on the inland waterway system, a switch from container to bulk 
shipping? I want to get an idea of what is going on with ag 
exports.
    Mr. Cordero. Ranking Member Gibbs, excellent question. I 
think that, number one, your commentary regarding the 
importance of American exports is key for us going forward. So, 
with regard to what is happening here in southern California, 
and if I may say, many of our container gateways in the United 
States regarding the volume of imports that we are seeing, 
number one, that has caused a shortage of empties. Now, I will 
say that issue has been mitigated since the end of last year 
with regard to extra loaders, that is vessels that are being 
sent specifically with regard to the empty issue.
    But how does that affect the American exporter? I think 
what we need to get to is, as we referenced, the common ground 
here that you see many of us testifying this morning, 
Congressman, is the need to upgrade our infrastructure here in 
the port community in the United States, and, more importantly, 
to upgrade the connectivity. For example, inland ports, so that 
the American exporter, particularly the American farmer, has a 
competitive opportunity to the largest market in the world, 
which is Asia.
    So, I think in that regard, here in southern California 
the--along with the Ports of Los Angeles and Long Beach, is the 
largest container gateway in the United States. So to put this 
into context, in 2020, together with the Ports of L.A. and Long 
Beach, we moved in excess of 17 million TEUs. That is a 
tremendous amount of volume.
    Nevertheless, I think that, again, we are moving forward as 
ports throughout the Nation. And as AAPA chairman of the board, 
I can represent to you that is the single most important issue 
that we are trying to address here in the port community.
    Mr. Gibbs. Mr. Wilkins, what are you seeing on the 
maritime, on the waterways? Mr. Wilkins is there?
    Mr. Wilkins. Yes, I am here. I had it on mute. Sorry, Mr. 
Gibbs.
    Mr. Gibbs. Oh, OK.
    Mr. Wilkins. Yes. On the inland waterway system, we see 
containers that really move in the gulf region of the country. 
There is not a lot of container traffic that moves on the 
inland waterways as we know it per se. The Snake River is 
probably the best example of great movements. And the 
underscoring, we looked forward to moving containers in a more 
robust way on the inland waterways, and there has been a 
downturn in overall tonnage, per se. But the reliability of the 
system is what is really key.
    We saw the Coast Guard and the Corps of Engineers work 
together with maintenance programs to be able to not have a 5-
year maintenance program, but of 90 to 120 days. We watched 
them work together to take it to 2 years over 5 years, which 
really enhances reliability by those two agencies working 
together in partnership with industry to ensure that we have 
the ability to move commerce, and say to shippers, bring 
containers to the waterways and any other cargo, because the 
system is reliable.
    Mr. Gibbs. Let me interrupt you. Are you seeing an 
increases in bulk trade?
    Mr. Wilkins. Bulk trades? Bulk trades, I mean, it depends 
on the commodity. We see grain that moves up and down, versus 
cyclical.
    Mr. Gibbs. Yeah, I know. I have just seen an increase 
because I can't move my container out of L.A. and Long Beach. 
Have you seen any increase or not?
    Mr. Wilkins. Not for the inland waterways, no, sir.
    Mr. Gibbs. OK. I just--so I have one more question quick, 
because I could run out of time, to Mr. Wilkins. It is an issue 
that is outside today's topic, but many towing vessels have 
signed up as response vessels for Oil Pollution Act-required 
response plans. Now that such vessels are subject to inspection 
under subchapter M, the geographic restrictions included in the 
towing vessel's certificate of inspection will not allow these 
vessels to continue signing up as response vessels. Congress 
recently enacted a short-term waiver to allow towing vessels to 
continue this work for a short period. Do you expect any towing 
vessels to make the needed upgrades to be able to expand the 
geographic restrictions on their certificate of inspections to 
continue to work as response vessels, Mr. Wilkins?
    Mr. Wilkins. Well, unfortunately, you broke up, Mr. Gibbs. 
I think you are asking about the inspections and the inspection 
fees. I believe that is what you are asking?
    Mr. Gibbs. Yeah. Subchapter M, geographic restrictions with 
certificates of inspections, yeah, the vessels that were 
granted a short-term waiver, I guess. But do you see them 
continuing to work as response vessels?
    Mr. Wilkins. Yes. On the moratorium, we thank the committee 
for its leadership in drafting legislation that was able to 
have a moratorium on these fees, because bottom line is, for 
time, we see the fees that we are paying to the Coast Guard 
plus TPOs, third-party operators, as being duplicative and 
redundant. We pay between [inaudible] upwards of $33,000 a year 
just for TPO, third-party inspections, and then the Coast 
Guard.
    So the bottom line for us is that we don't see--where the 
Coast Guard is doing 20 percent of the work versus the TPOs 
doing 100 percent of the work, the fees are relatively the 
same, so we think that is duplicative and redundant. So there 
is an opportunity to improve there.
    Mr. Gibbs. Thank you. I am out of time. I yield back, Mr. 
Chairman.
    Mr. Wilkins. Thank you, Mr. Gibbs.
    Mr. Carbajal. Thank you, Mr. Gibbs.
    I will proceed to recognize myself. Mr. Patti, like other 
agencies within the Department of Transportation, the Maritime 
Administration is not tasked with regulating the commercial 
maritime industry. Instead, and by statute, their job is to 
promote the industry. In a couple months, the Maritime 
Administration will testify before the committee on their 
proposed budget. If you had a message for MARAD, what would it 
be?
    Mr. Patti. Thank you, Mr. Chairman. Let me preface my 
answer by just thanking the incredibly hard-working, dedicated 
people at the Maritime Administration, especially over these 
past 4 years. They have worked tirelessly, in light of the 
pandemic and before that, in support of our industry.
    If I had a message for the Maritime Administration, really 
it would be twofold: First, I would encourage the Maritime 
Administration to be aggressive in its role as the promotional 
agency for our industry. We now have a President who has lent 
his name to a number of maritime policy objectives and has 
reasonably issued an Executive order, including not only the 
Jones Act, but maritime services within its scope.
    I would encourage the Maritime Administration to use that 
to make sure all Federal shipper agencies understand not only 
what the law of the land is, but what the policy of the 
administration is so that ``ship American'' is as strongly 
enforced as ``buy American.''
    And, secondly, I would encourage the Maritime 
Administration in its role as the promotional agency, be 
innovative, to work with the Congress with their colleagues in 
the Department of Transportation and the administration and 
with the industry. Look at new ways or rehash the old ways to 
increase the amount of cargo on U.S.-flag ships.
    They should start now looking at the tanker, the newly 
enacted tanker security program. Figure out ways to ensure that 
the vessels that we hope will come in under the United States 
flag pursuant to this program will, in fact, have the cargo 
they need to operate.
    Look at the tax laws. Consider whether it is time to extend 
the foreign-source income exclusion to American mariners the 
way most other maritime nations do; to consider, as we approach 
another tax bill, should there be incentives? Can there be 
incentives that would encourage shippers to use U.S.-flag 
vessels to a much greater extent than they are right now?
    Look at trade policy, encourage the promotion and the 
negotiation of bilateral cargo sharing agreements with our 
trading partners, again, with an eye toward increasing the 
amount of cargo carried on U.S.-flag vessels to increase the 
number of ships under our flag and to increase maritime jobs.
    In short, I would encourage MARAD to be aggressive and to 
be innovative, and hopefully by working together, we can build 
up our maritime industry.
    Mr. Carbajal. Thank you, Mr. Patti.
    Given the pandemic, have you had problems with recruitment 
and retention, and what are the implications in the very near 
future, 5 to 10 years?
    Mr. Patti. Again, as we have said, there is absolutely no 
question the pandemic has adversely affected American mariners 
as it has affected all Americans, regardless of the industry in 
which they work.
    For the American mariner, the hardships that they have 
endured, being stuck overseas months upon months after they 
were supposed to return home to take care of their families, 
being quarantined on vessels, not being able to have the 
immediate access to vaccines they need for all of the reasons I 
had mentioned previously, despite all of that, morale in the 
maritime industry among the American mariners is still good.
    We have not experienced a situation where people are 
leaving the industry. We have not had a problem recruiting 
members to the maritime industry through the maritime 
academies, through Kings Point, through the unlicensed schools. 
Individuals are still willing and ready and able to work 
onboard U.S.-flag vessels.
    Needless to say, we have to continue to address the 
pandemic. We have to resolve these issues. And, most 
importantly, if we are talking really recruitment and retention 
for the maritime industry, we have to make sure we have the 
ships under the U.S. flag that will provide these individuals 
with jobs.
    Mr. Carbajal. OK. Mr. Patti, finally, when a crewmember 
aboard a ship is infected, and the vessel is in a foreign port, 
what are the remedies or protocols currently in place to 
provide medical care for the crewmembers and avoid community 
spread on the vessel?
    Mr. Patti. Mr. Chairman, that varies. It varies quite a bit 
from where the vessel is located. In some jurisdictions, the 
entire vessel and the entire crew will be placed into 
quarantine. The vessel will have to be cleaned. There will be a 
specified amount of time based on what the local authorities 
say before the vessel can sail, before the crewmembers are 
removed from the vessel, and either taken to a hospital or 
brought home. Again, it is not a very, very consistent system. 
Really, it begins and ends really where the vessel is located.
    Mr. Carbajal. Thank you very much. My time is up, so we 
will proceed to Representative Van Drew. You have to unmute 
yours, Mr. Van Drew.
    Mr. Van Drew. Hello. How are you? It is good to be with all 
of you today, and I think this is an important hearing, and I 
would like to congratulate everybody on their posts, obviously.
    I would first like to say how important--and I think 
everybody knows--that the Coast Guard is, in my community. We 
are actually a Coast Guard community in Cape May itself, and we 
also have the training center for the United States of America. 
So this is all extremely important, and I am glad that we are 
focusing on it.
    You know, South Jersey, where I live, people think of New 
Jersey, but South Jersey is a highly coastal district. And it 
depends on maritime industries, including fishing, 
shipbuilding, and maritime shipping. We need to keep the United 
States extremely economically competitive, and maritime 
commerce is essential to that mission.
    And we must always, always support the Jones Act, which 
ensures that all vessels transiting cargo between domestic 
ports, as we all know here, are made in the United States. This 
policy is important for economic and military security and has 
broad bipartisan support, which is a good thing, and I hope we 
have a lot of bipartisan support in this committee as we move 
forward.
    I have a question for President Del Wilkins. I would ask 
him, as the president of a towboat and barge company in a major 
market, you are in a unique position to help educate us as to 
why investments in maritime infrastructure are urgently needed. 
What actions should Congress take on maritime infrastructure to 
improve the United States commercial maritime competitiveness? 
Thank you, Mr. Del Wilkins.
    Mr. Wilkins. Thank you, Representative Van Drew, for the 
question. I appreciate it. And I think I have a very unique 
life experience on my resume. I was blessed to serve 15 years 
in South America--Venezuela, Brazil, and Argentina. I have done 
exploratories in China on the Yangtze, and Africa on various 
rivers, also in Europe.
    And I would say to you that infrastructure is key. There is 
no country on the planet that can move commerce like we do here 
in the United States, especially with this network of barge, 
rail, and truck, especially maritime. So therefore, it is 
incumbent upon us, in my opinion to--I think it was Lee Iacocca 
or General Patton who once said, ``Lead, follow, or get out of 
the way.''
    So we are leading, and I can assure you that those other 
countries are trying to replicate what we have. So I think that 
is how critical it is to maintain the infrastructure that we 
have in place and enhance it, that others are trying to do what 
we already have.
    Mr. Van Drew. OK. Well, thank you for the answer. I look 
forward to working with you, and I yield back my time.
    Mr. Carbajal. Thank you, Mr. Van Drew. I will now recognize 
Mr. Larsen.
    Mr. Larsen. Thank you, Mr. Chair. I am going to do this 
very slowly, because a lot of my questions have been asked, and 
so, I wanted to yield to Mr. Lowenthal my 5 minutes, if he is 
prepared. So I would yield to Representative Alan Lowenthal.
    Mr. Carbajal. Mr. Lowenthal?
    Mr. Lowenthal. I am prepared. Thank you. And, first, I want 
to thank you, Mr. Chair, and congratulate you on your becoming 
the chair. I think we are going to enjoy working with you, and 
I think you are going to bring a certain amount of humor to 
this subcommittee.
    And I also want to thank the panel for their testimony, and 
it has illustrated how important the maritime industry has 
become through this pandemic crisis. Workers on the front line, 
they are putting themselves at risk so that we can move vital 
goods across our country. You have done your part, and now 
Congress must do its part.
    I also want to ask unanimous consent to introduce a letter 
from the American Association of Port Authorities highlighting 
the impact of the COVID pandemic on maritime operations. I ask 
unanimous consent, Mr. Chair.
    Mr. Carbajal. Without objection.
    [The information follows:]

                                 
   Letter of February 2, 2021, from the American Association of Port 
 Authorities et al., Submitted for the Record by Hon. Alan S. Lowenthal
                                                  February 2, 2021.
Hon. Charles E. Schumer,
Senate Majority Leader,
322 Hart Senate Office Building, Washington, DC.
Hon. Nancy Pelosi,
Speaker of the House,
H-232, The Capitol, Washington DC.
Hon. Mitch McConnell,
Senate Republican Leader,
317 Russell Senate Office Building, Washington, DC.
Hon. Kevin McCarthy,
House Republican Leader,
H-204, The Capitol, Washington, DC.
    Dear Speaker Pelosi, Majority Leader Schumer, Senate Republican 
Leader McConnell, and House Republican Leader McCarthy,
    As Congress continues the process of developing the next COVID-19 
relief package, it is critical that this package include emergency 
relief for our Nation's maritime transportation system. In the year 
since the virus was first detected in the United States the maritime 
industry has endured significant hardships and has experienced 
substantial impacts to business. Congress must take immediate steps to 
ensure that the whole of the maritime transportation system has the 
resources necessary to address the unique and unexpected challenges 
posed by the COVID-19 pandemic.
    Our maritime transportation system and the critical workers 
employed throughout this system have kept vital goods moving to medical 
professionals and first responders, have ensured that our Nation's 
shelves remain stocked, and have enabled commerce to continue flowing 
during these uncertain times. Ports that are located in rural areas 
have propped up local economies, dispensing critical public services 
while providing assistance to small businesses, oftentimes at the 
ports' own expense. Prior to the COVID-19 outbreak, over 650,000 
Americans were directly employed in jobs generated through the movement 
of marine cargo and through vessel activity while 30.8 million total 
jobs were supported by cargo moving through America's deep-draft ports.
    Unfortunately, the COVID-19 crisis has had a significantly negative 
impact on the maritime industry. Despite container surges at several 
large ports, commercial cargo volumes have plummeted across the 
industry--total waterborne trade volume is down 5.5% compared to last 
year, while the value of this trade has crashed by 12.7% totaling $200 
billion. Passenger movements remain virtually nonexistent with 
operations not expected to resume for months. Expenses have greatly 
increased due to COVID-19 protocols and precautions that have been put 
in place to ensure the health and safety of staff, and these extra 
costs borne by the industry to keep supply lines open are above and 
beyond the normal costs of operations.
    With an uncertain outlook, these trends are likely to continue and 
intensify as the COVID-19 pandemic peaks over the coming months. To 
date, no dedicated funding has been provided in any of the COVID-19 
legislative packages to assist the maritime transportation system 
despite emergency relief being provided to other modes of 
transportation.
    We urge you to include emergency relief for the maritime industry 
in the next COVID-19 package through the Maritime Transportation System 
Emergency Relief Program, which was created by the National Defense 
Authorization Act of 2020 (P.L. 116-283). This new program, the only 
one of its kind, authorizes the Maritime Administration to solicit 
applications for aid from those across the maritime industry, both 
inland and coastal, and provide grants to those most in need due to 
emergencies or disasters. This includes aid to help mitigate the 
impacts of the ongoing COVID-19 pandemic.
    It is essential that the U.S. maritime industry maintain a state of 
readiness and sustain our critical responsibility in the supply chains 
that provide food, medical equipment, and other essential goods for the 
citizens of this country. By providing this emergency relief Congress 
will help ensure that maritime operations continue at the high level 
that Americans have come to depend on. We hope that you can provide 
this critical emergency relief to the maritime industry as additional 
COVID-19 response measures are considered.
        Sincerely,

American Association of Port Authorities.
American Great Lakes Ports Association.
Association of Ship Brokers and Agents.
Atlantic Intracoastal Waterway Association.
Big River Coalition.
California Association of Port Authorities.
Columbia River Steamship Operators Association.
Connecticut Maritime Association.
Dredging Contractors of America.
Florida Ports Council.
Gulf Ports Association.
Inland Rivers, Ports and Terminals, Inc.
International Freight Forwarders & Customs Brokers Association of New 
Orleans.
International Longshoremen's Association, AFL-CIO, CLC.
International Longshore and Warehouse Union.
International Propeller Club of the United States.
Jacksonville Marine Transportation Exchange.
Marine Exchange of the Puget Sound.
Maritime Association of the Port of New York/New Jersey.
Maritime Exchange for the Delaware River and Bay.
National Association of Maritime Organizations.
National Association of Waterfront Employers.
National Maritime Safety Association.
National Waterways Conference.
North Atlantic Ports Association.
Louisiana Maritime Association.
Oregon Public Ports Association.
Pacific Northwest Waterways Association.
Passenger Vessel Association.
Ports Association of Louisiana.
The Propeller Club of New Orleans.
Transportation Trades Department, AFL-CIO.
Virginia Maritime Association.
Washington Public Ports Association.
Waterways Council, Inc.
West Gulf Maritime Association.
World Trade Center of New
Orleans.

    Mr. Lowenthal. I will take that as giving me unanimous 
consent to introduce the letter. Thank you, Mr. Chair.
    Mr. Cordero, you know, I have known you for over two 
decades, probably a lot longer, and I really want to say that 
you have really become a leader, maybe the leader in the U.S. 
maritime industry. I watched you first as a member of the Long 
Beach Board of Harbor Commissioners where you championed the 
fact that the Port of Long Beach could be both an economic 
engine, could continue to grow, as you mention now in your talk 
today, but also could grow greener.
    Then you became a member appointed by President Obama to 
the Federal Maritime Commission, where you demonstrated your 
leadership, and actually were selected by the President to 
become the Chair of the Federal Maritime Commission. And then 
you came back to become the executive director of the Long 
Beach Port and also now as the chair of the executive committee 
of the American Association of Port Authorities. Quite a 
career.
    But I want to say, you have talked about how Federal funds 
for the Maritime Transportation System Emergency Relief Program 
could be used to help portworkers. Can you give us some idea 
how could those Federal funds help such things right now? What 
would you use those funds for?
    And maybe, also, talk about, what are we going to do about 
the backlog of goods? I look out my window sometimes here in 
Long Beach, and I see all those ships waiting to unload their 
cargo, and yet, they are sitting out in the port. What are we 
going to do about the backlog, and how can the Federal Maritime 
Transportation System Emergency Relief Program help on 
something like that?
    Mr. Cordero. Well, thank you, Congressman, for your 
question. And let me answer the twofold question as follows: 
With regard to the funds, I think, first of all, many of you 
who I see here I met in my role as Chairman of the FMC. You 
know, Congressman Weber, Congressman Graves, yourself, 
Congressman Lowenthal, and a couple other familiar faces. So 
the historic quest of the maritime industry is to be seen as an 
important, vital sector of transportation as we see other modes 
that are being funded.
    And, you know, Chairman DeFazio said this morning, and I 
will say, that the port industry here has yet to receive any 
relief in funding with regard to this COVID crisis. So if I 
could leave one thing here with this committee and the 
subcommittee, again, we just want to have a percentile of 
relief here that is so important for the vital reasons that, 
again, you have heard the testimony this morning.
    Now, with regard to the funding, I think I would direct 
myself to the National Defense Authorization Act here that was 
recently passed, and, more specifically, section 3505, which 
established the Maritime Transportation System Emergency Relief 
Program. And with that, if you look to section J, I think that 
answers the question, everything with regard to operations in 
how we have been impacted, PPEs, workforce retention, 
infrastructure repair, and so forth and so forth. The list is 
long.
    So, I think, all I would reference to the answer is, if we 
apply section 3505(j) by definition of what is an emergency 
here, a health pandemic here, COVID-19, and how this has 
impacted the port authorities. And I think, finally, again, 
what we are asking for is a vital part of the transportation 
sector here has yet to receive any funding with regard to this 
emergency crisis that we have experienced.
    So as to the part two, and the congestion, as I indicated, 
I think it is fair to say that we are seeing that in many 
gateways, but more particularly in southern California. I think 
for the Port of Long Beach you have seen that investment of 
over $4 billion over 10 years, and going forward, an additional 
$1.7 billion. Our colleague, our neighbor Port of L.A., has 
similar investments. So southern California is the gateway to 
the most important trade route in the United States, the trans-
Pacific trade route.
    And I will say, let's not just see this as an import 
dynamic; we have to see this as an export dynamic going 
forward. And that is the reason why, again, we are applying all 
aspects to move efficiency here with containers. And in a way--
that's my last comment--in terms of funding, a large part of 
what we need to do is to move to digital transformation, and I 
think that is going to create the kind of efficiencies that we 
need to have here at our port and gateways throughout the 
country.
    Mr. Lowenthal. Thank you, Chairman Cordero. I yield back, 
and I thank Representative Larsen for giving me his time.
    Mr. Larsen. I yield back.
    Mr. Carbajal. Thank you, Mr. Lowenthal and Mr. Larsen.
    I will now proceed to Representative Malliotakis. Did I say 
that correctly?
    Ms. Malliotakis. Good. For some reason, everyone is having 
trouble with my first name. I have been called Nickel and 
Nicolas, but everybody is getting Malliotakis right, which is 
very nice. And I appreciate, Chairman and Ranking Member Gibbs, 
this is my first time participating in a hearing as a Member, 
and I am very excited to be here.
    I really found the testimony to be very enlightening. And, 
in particular, Mike Roberts touched on an issue that I also 
have concerns with, the influence of China. And in addition to 
investment China is making in maritime vessels and supplies, it 
is also making significant investment in infrastructure, such 
as in ports with our neighboring countries, in Latin America 
and South America.
    And I was wondering if Mike Roberts, or anyone else who 
testified, would like to expand and maybe talk about the impact 
that this is having on trade with those particular nations in 
Latin and South America and the maritime industry as a whole.
    Mr. Roberts. Thank you, Representative Malliotakis. I 
appreciate the question. I would say a couple of things. First, 
this subcommittee, 1\1/2\ years ago, held a hearing on this 
subject, and it was certainly one of the first times that the 
impact of China's ambitions was brought to light with respect 
to the maritime industry.
    And we have done a lot of work since then to explore that 
further. We think it is serious. I think that the question is, 
what do we do about it? We don't really have a response. We 
have a seriously risky situation and a great vulnerability, and 
we don't have a strong policy response. I think we need to 
recognize that because of our trade and economic policies we 
are a Nation of consumers, and that it may be fine in a world 
where there is no threats, but that is not the world we live in 
today, so we have to recognize that.
    We have to also understand that there is an economic 
component to this, that overwhelming military superiority, if 
we can sustain it, doesn't prevent China from using economic 
leverage against our interests.
    So, I think to respond effectively, we need to really deny 
China's success in terms of its maritime ambitions, we need an 
industrial policy that balances the benefits of trade alongside 
the need to preserve a strong and diversified American economy. 
And key sectors like shipbuilding and strategic service sectors 
like shipping need to be recognized and supported much more 
than they are today.
    Ms. Malliotakis. I appreciate that. And I think in addition 
to the Jones Act, and our supply chain in terms of the maritime 
and shipping industries, I think we could also look at the 
supply chain of PPE. And I was wondering if anyone, perhaps, 
could comment on some of the challenges that we as a Nation 
have had obtaining PPE from overseas, from Asia during the 
pandemic, and how it highlights the need to bring that supply 
chain home as well.
    Mr. Roberts. I will offer my 2 cents on it. My sense of it 
is that early in the pandemic, the Chinese made a rational 
decision to make sure they had enough PPE for their own 
population. And as that became less of a threat, they were 
willing at that point to go ahead with contracts that enabled 
shipments to this country.
    It is, I think, widely recognized the importance of near-
sourcing, in-sourcing critical supplies like PPE and many, many 
other things that we are now dependent on China for 
manufacturing, and then for the logistics to bring it here.
    Ms. Malliotakis. Thank you.
    Mr. Cordero. Congresswoman, if I may add to that question--
--
    Ms. Malliotakis. Yes.
    Mr. Cordero [continuing]. And that is a great question, 
Congresswoman. Let me add this: You know, part of the question 
in terms of this issue of congestion at our ports, let's keep 
in mind there is a confluence of factors as to what has led to 
the volume. One commodity, aspect that has been very, very key 
here and important is the number of PPEs and medical supplies 
that are coming in as imports. That is one of the reasons we 
have had this surge in volume.
    So, I think the question for us as a Nation that these 
important medical supplies and PPEs have to be here, come back 
to be manufactured in the United States.
    Ms. Malliotakis. Absolutely.
    Mr. Cordero. We have seen that in this crisis, if it 
teaches us anything, that we need to have a quick pivot to make 
sure we protect frontline workers. And, again, if we go back a 
year, and for the first several months thereafter, that was 
really problematic. And going forward, I don't see any 
reduction in the use of PPEs in terms of what this pandemic has 
now changed in terms of what Americans have to be accustomed to 
for a few years.
    Ms. Malliotakis. Thank you, Mr. Cordero. I absolutely agree 
with you. And I would actually like to speak with you offline 
on another issue related to high tolls at my port, because 
while everyone else is crowded, we are not as crowded because 
of this type of impact on my local terminal. So let's connect 
offline. Thank you.
    Mr. Cordero. Absolutely. Would love to do that.
    Mr. Wilkins. Would there be time to weigh in on her first 
question, Mr. Chairman?
    Mr. Carbajal. Time is up. We are going to have a second 
round in a few, so----
    Mr. Wilkins. OK.
    Mr. Carbajal [continuing]. Hold that answer.
    Next, we will proceed to Representative Lowenthal, a second 
bite at the apple.
    Mr. Lowenthal. Thank you, and it tastes very good, Mr. 
Chair, that apple.
    I want to follow up on some things that Mr. Patti has said. 
You know, Mr. Patti, you have really demonstrated that this 
pandemic has exacerbated the current state of the U.S.-flag 
international merchant fleet, which is already at risk, and 
now, you have indicated how much more at risk it has become.
    So I want to talk about what we can do. Can you--you know, 
this past Congress, we passed and put into the National Defense 
Authorization Act the 10-tanker security fleet that you 
mentioned, to begin to fund that, but it hasn't been 
appropriated. How important is it for us to fight to 
appropriate that, the tanker security program?
    Mr. Patti. Thank you, Mr. Congressman. I think it is 
incredibly important that you fight to appropriate funds. The 
$60 million is authorized for the new tanker security fleet 
program. Not only will this help alleviate some of the manpower 
shortage; if you are talking about 10 vessels coming into the 
United States flag for the first time, you are talking about an 
employment base for approximately 500 mariners, which is a nice 
step in the right direction.
    It doesn't obviously solve the entire shortage that is 
estimated, as I said, for approximately 1,800 mariners, but it 
is a step in the right direction.
    But I would also suggest that not only do we have to fight 
to secure the appropriation for that program but we also need 
to begin now to look very, very carefully at the program, make 
sure that when those vessels do come into the United States 
flag that there is cargo for them to carry, that they are able 
to operate as opposed to just bringing in more vessels to the 
U.S. flag that are going to be laid up.
    It is an incredibly important program. It was initiated 
based on its statements that it made by the Department of 
Defense warning of our almost total reliance on foreign vessels 
that supply the military. And, again, the simple answer to your 
question is, yes, absolutely, we should fight to get that 
appropriation.
    Mr. Lowenthal. Thank you.
    I want to ask the following question to return to Mr. 
Cordero, Chairman Cordero. I believe that this committee, and 
certainly Chairman DeFazio, has indicated we will be supportive 
of the need for vaccinations and testing for the maritime 
industry. You are essential workers. You are not receiving 
those. And it is critically important for the health of your 
workers, who are essential workers and defending our Nation.
    But I want to ask you about something. We have seen 
throughout this country, we have seen the CDC, we have seen Dr. 
Fauci, we have talked about public health recommendations, and 
yet, we still see superspreader events, people not following 
them. I guess the question that I am asking is, the AAPA has 
made wonderful recommendations about public health, how we 
should have best practices, social distancing, PPE.
    The question to you is, as the chair of the AAPA, have you 
found that these are really being followed in the ports? When 
we just recommend, is that enough? And what practices in the 
future, if we have other pandemics, are we going to need to 
make sure that we do not have superspreader events anymore, and 
apparently that we are beginning to see those in the ports?
    Mr. Cordero. Thank you for your question, Congressman 
Lowenthal. Let me just say this, as chairman of the board of 
AAPA, I could represent to this committee that our major 
container gateways are doing everything possible to put in 
place these protocols, whether it is the Port of Virginia, and 
my colleague at the Port of Houston, and, of course, here at 
Long Beach in Los Angeles.
    And I say here, locally in southern California, I have to 
commend the ILWU and the Pacific Maritime Association, who came 
together to address this issue. So the bottom line is, I think 
both management and labor are implementing these protocols 
because it is very key for the frontline workers.
    And going forward, let me just say this: 9/11 changed the 
whole dynamic in terms of how this country viewed our security. 
I would suggest that COVID-19 now is changing the whole dynamic 
in terms of how this country is now moving forward with how we 
address health pandemics. Because, again, going forward, I 
think that nothing is going to change in the future in terms of 
how we need to be extremely cognizant of health and safety of 
the frontline workers.
    And last, I will say this: I think, clearly, as you look 
forward in terms of what our practices are going forward, I 
think it is going to be paramount for us to have, as the 
congressman mentioned, adequate PPEs and medical supplies 
related to health pandemics, because, again, one thing I will 
say for port authorities, aside from the fact that we have not 
been the beneficiaries of port relief, is this operation has 
never closed down, not 1 day. There is no one port across the 
United States that its essential operation closed down.
    Mr. Carbajal. Could you sum up, please.
    Mr. Cordero. So with that, again, I appreciate the time and 
the question, Congressman. And I appreciate the subcommittee, 
again, listening to what you have seen here from our testimony 
here regarding the vital need of the maritime industry.
    Mr. Carbajal. Thank you.
    Mr. Lowenthal. Thank you, and I yield back.
    Mr. Carbajal. Thank you, Mr. Lowenthal.
    Next, we will proceed to Representative Gallagher, who I 
see is sporting a jersey in his background of a team that 
almost made it into the Super Bowl.
    Mr. Gallagher. That was a low blow, Salud. That was a very 
low blow. And this jersey is officially cursed. Well, thank 
you.
    This is a question for Mr. Wilkins probably, at the risk of 
repeating an area of questioning that Mr. Gibbs had raised 
earlier, I believe. Mr. Wilkins, you mentioned inspection user 
fees towards the end of your testimony. Last year, the House 
passed a Coast Guard bill that included language placing a 
moratorium on those fees for vessels that utilize safety 
management systems which was removed when the bill was attached 
to NDAA. Can you confirm that congressional action on a 
moratorium is still needed? How are these fees affecting your 
bottom line, and that of other companies in the industry?
    Mr. Wilkins. Well, thank you, Mr. Gallagher, for the 
question. Yes, I would like to thank the committee and the 
leadership for drafting that legislation, and certainly it was 
a big help to us. Respectfully, when we look at these fees, I 
think I mentioned that the structure of the fees could be 
duplicative and inequitable in the sense that companies like 
myself, we use TPOs, third-party operators, to come in and do 
the inspections.
    The Coast Guard also has a fee structure for these 
inspections for the vessels to be in compliance, and I have 
mentioned the fact that when we pay the TPOs, our companies 
will have annual costs of around $30,000-odd a year, just in 
the TPO over and above paying the Coast Guard fees as well.
    So certainly it helps to--I think the effort is to be able 
to ensure that the annual fee structure is fair and to ensure 
that if we are going to have the inspection protocols, which we 
should under subchapter M, we have to ensure that the Coast 
Guard does not have a fee, we are not doing the work, and 
whereas we have the TPOs doing the work makes it, if you will, 
best for us in the sense of fees.
    You have to finish the job to ensure that the moratorium on 
the fees for the Towing Safety Management System, TSMS, for the 
vessels until the Coast Guard establishes a new user fee 
structure that differentiates the two inspection options that 
we have.
    Mr. Gallagher. I appreciate that, Mr. Wilkins. Maybe as a 
followup, in last week's hearing we heard that mariners living 
in one State are not given reciprocity in another State for 
their position in line for the vaccine. I have heard from 
mariners in my district who are making port calls elsewhere in 
the Great Lakes that this is a problem.
    So I don't know who this would go to, but is the fix as 
simple as Congress mandating that States honor the position in 
line granted by another State, or would this cause impossible 
logistical problems in States that honor such a reciprocity? Do 
you think this is an important issue? I just throw that out to 
the panel with the time I have remaining.
    Mr. Wilkins. Well, if I could field that, I would say that 
there are very few mariners right now who are getting and 
qualify for vaccinations unless they meet the age requirements. 
And we have some fourth-quarter players who are meeting those 
age requirements. And currently, we are classified by DHS under 
group 1c.
    So if we were to move to 1b as a central workforce as 
established, again, by DHS, we will handle the logistics 
because in our organization, we have mariners who are living in 
more than 25 States across the country traveling all the time, 
so it might not be really advisable for them to be able to go 
and get the vaccines they need in the States given their time 
on board and time away from home, so there are logistics 
challenges.
    But I think we can manage that if, in fact, we can move the 
statutes up and give guidance to have us moving, again, to 1b, 
because we are critical, essential workers, and would certainly 
prioritize our being able to keep vessels running, keep 
operations moving, and meet the needs of having our mariners 
vaccinated, because they live--I think it was mentioned by one 
of the panelists, we live in tight quarters. And we bear a lot 
of cost trying to ensure the viability of operations and 
maintaining production by keeping our mariners safe, and added 
expense of cleaning, disinfecting, I mean, go on and on, but it 
certainly would be advantageous to have guidance.
    Mr. Gallagher. All right. Well, thank you, Mr. Wilkins, and 
I like the term ``fourth-quarter players.'' As the 
Representative from Green Bay, that metaphor takes on added 
significance, so I appreciate that. And I yield back my 
remainder of my time.
    Mr. Carbajal. Thank you, Mr. Gallagher.
    We will proceed with Representative Pappas.
    Mr. Pappas. Well, thank you, Mr. Chairman. I know everyone 
on this committee is a first-quarter player right now, so I am 
glad we are fresh and ready for the new term.
    But I really appreciate the panel here today. I think you 
gave a good overview of the challenges that we face in the 
maritime industry, how Congress can play a role moving forward. 
And I think what is critically important for us to all 
understand is the central nature that the maritime industry 
plays in the health and well-being of this country, in its 
economic future, and, certainly, as it pertains to our national 
security as well.
    I am glad a number of you have asked questions and our 
panelists have commented on the vaccination issue. I think this 
is clearly a place where the Federal Government needs to play 
an increasing role, as Mr. Wilkins just said, with increased 
guidance. I would recommend as well on support of Federal 
testing sites to make sure that we are dealing with our 
frontline essential workers who are putting themselves on the 
line each and every day.
    I think Ms. Brand in her comments said pretty clearly that 
infections are at crisis levels at some of our ports. And what 
we can't afford to have happen is any disruption in our supply 
chains, and in the supplies that we are all relying on to get 
through this pandemic.
    A lot of it has been said as well about the Jones Act, and 
I think, most of this committee understands the essential 
nature of the Jones Act and protecting our national security 
and ensuring that the industry is strong moving forward. I am 
wondering if anyone here can speak directly to how having 
American workers trained to serve on American ships as the 
Jones Act requires has helped us, especially as it pertains to 
this pandemic to keep goods moving.
    Mr. Roberts. Well, I will take a crack at that, 
Congressman. Mike Roberts with the American Maritime 
Partnership. There was a recent study, I guess, maybe a year 
ago, that showed that out of the maritime workforce needed to 
crew ships in response to an incident, a military contingency. 
The minimum number needed--we would be 30-plus percent short of 
meeting that minimum needed if we didn't have the mariners from 
the domestic maritime industry. The Jones Act would supply 
those mariners, and they do supply those mariners in 
activations and war-game-type scenarios, turbo activations.
    So it is critical that we have American mariners available 
from the domestic maritime industry for our national security 
purposes generally. And certainly, I think how they performed 
in the context of this pandemic and bringing supplies in places 
where they are not--as Jim Patti said, whether or not their 
conditions of employment have gone downhill dramatically over 
the past year as a result of the pandemic, but they persevere, 
they've come through, they show up as merchant mariners do 
throughout history.
    So it is--I am proud to be associated with this community, 
and I think they really are a critical asset to our national 
security.
    Mr. Patti. If I can, Congressman, just to pick up a little 
bit on what Mr. Roberts said, I would echo essentially 
everything he said as it pertains to the mariners working 
aboard our U.S.-flag vessels in the foreign trades. From the 
very early stages of the pandemic, when nobody really knew the 
degree to which it was going to affect maritime transportation, 
whether it was going to get worse much quicker and much more 
severe than it did, but the mariners did show up. The mariners 
continued to perform. They continued to go to work. They 
complied with the guidelines that were put in place ranging 
from having to wear masks and social distancing when they are 
in the union hall trying to get their next job to ship out, to 
the shipping companies themselves, putting out the expense, 
absorbing the expense of flying mariners home when their 
rotation was done because there was no other way to do it.
    But as I said earlier, despite all of this and throughout 
all of that, the mariners have taken their responsibilities 
very, very seriously. When our mariners go to sea, they do so 
knowing that their first and most important objective is to 
support our country, to support the military, to support 
American troops, and it is to do whatever they can to make sure 
the sea lanes remain open for our trade.
    So, again, as Mike said, it is very, very humbling to be 
associated with this industry and especially to have the 
privilege, as I do, to represent maritime labor.
    Mr. Pappas. Well, terrific. I appreciate those comments.
    I would like to get one more quick question in if I can. 
And switching gears a little bit, as some of you have alluded 
to workforce challenges, and I think the COVID epidemic has 
highlighted a lot of the problems that have always been present 
in this country around diversity and inclusion.
    And so, my question, for anyone on the panel that would 
like to take it up is, is the maritime industry doing a good 
job of promoting diversity and inclusion? Are there any 
impediments or challenges in the way of making the industry 
more inclusive? Because I am trying to figure out what we can 
do potentially in Congress to help support a growing, diverse 
workforce, make sure the incentives are in the right place, and 
help build the right culture for the industry as we move 
forward.
    Mr. Carbajal. Mr. Pappas, I am going to ask that those 
answers be provided for the record to be consistent with our 
previous colleague, who didn't get one of their questions 
answered when they ran out of time.
    Mr. Pappas. Terrific. Thanks, Mr. Chair.
    Mr. Carbajal. Thank you. So with that, we will now go to 
Representative Weber.
    Mr. Weber. OK. There I am. Thank you, Mr. Chairman. 
Congratulations on your new post. Can you hear me?
    Mr. Carbajal. Yes. Thank you.
    Mr. Weber. OK. Good. Lots of questions. Let me start with--
Ranking Member Gibbs said that he understood there were 300,000 
mariners stranded. And I didn't really ever hear, was there an 
answer to that, stranded around the country, around the globe? 
How do we get that answer?
    Mr. Patti. Congressman, if I can, Jim Patti, most of those 
mariners, almost all of those mariners now are foreign 
nationals working aboard foreign vessels, many of which we 
would define as flag of convenience ships where there is 
virtually no legal relationship to the flag of the vessel and 
the vessel's owner.
    And most of these mariners have literally been abandoned by 
their shipowner, by the charterer, by their flag nation and are 
desperately trying to just, in some way, shape, or form, get 
home. They are on these ships with virtually no food. They are 
on these ships, they have not been paid. Some of them have been 
on these ships for well over a year. So it is a very, very 
serious humanitarian issue. You know, good news is, it is not 
affecting the American mariner, but as, you know, mariners and 
brotherhood of the sea it is an incredibly terrible 
humanitarian issue.
    Mr. Weber. Right. Thank you for that.
    And I want to jump on over to Mr. Bordelon now, if I may. 
Glad to hear that his grandfather started a business building 
ships, but so much of our manufacturing has gone overseas, 
especially heavy manufacturing, whether it is Japan, South 
Korea, wherever. And we have talked about China building, what 
was it, 1,800 vessels, whatever it was.
    Mr. Bordelon, how do we compete? From the business 
standpoint, how do we get manufacturing of those vessels back 
here?
    Mr. Bordelon. Thank you, sir, for the question and 
opportunity. A lot was said over the last 1\1/2\ hours that we 
have been talking about it, and China's name comes up and 
foreign competitors come up, but we continue as a Nation to 
further develop ourselves and be competitive. I think we have 
responded really well in leading technology on different fronts 
and different facilities and different manufacturing, not just 
in shipbuilding, but, specifically, in shipbuilding, and we 
need to continue to do that.
    Some of the shipbuilding grants that have been done through 
MARAD have helped the shipbuilders do that. That is one 
opportunity. But really, the biggest thing for us to remain 
competitive and be a leader, because that is, I think, often 
overlooked is that, you know, you talk about free trade or fair 
trade, and we care about fair trade. We care about national 
defense and security. All of those things are important for us. 
We pay taxes. We keep our people safe. We follow OSHA. We don't 
pollute the world like other places do.
    So giving us the opportunity to continue to be a leading 
edge, some of the biggest things we need, I am going to say it 
again, we need some visibility and consistency in budgets that 
can keep our manufacturing in a position where we would have a 
great, competitive workforce that you are offering careers to 
people that you can effectively train.
    And then the obvious reinvestment comes with that. My 
grandfather was a machinist by trade, uneducated, and he bought 
an old lathe and a drill press, and that is how he got started. 
And his philosophy was he was going to keep improving and keep 
investing in his business.
    And with some kind of sustainability and vision with U.S. 
shipbuilding as far as the U.S. Navy goes, the Army has 
projects, obviously the Coast Guard, and the commerciality, all 
of those things help keep us competitive and reinvesting.
    So I think those are the key things, Congressman, that 
could help us continue to push forward and be more competitive 
in the world that we are living in today in shipbuilding.
    Mr. Weber. All right. Thank you, for that.
    I am going to move on to Mr. Cordero now. Mr. Cordero, you 
cited, I think it was 1,497 COVID cases, and you may or may not 
have this percentage. What percentage of the workforce, of the 
mariner workforce would you say that is?
    Mr. Cordero. Well, it varies, Congressman, from port to 
port, region to region. But let me just--let me answer the 
question generally. It is a high percentage, and let me just 
give you some data. We talked about testing, which is a very 
important component to this. So, for the Port of Long Beach, we 
put in place the only COVID testing site in the port complex.
    Our commission supported us in authorizing $1 million to 
set up that test site back in August of 2020. And in December, 
November, our commission authorized another $3 million so that 
we can have that test site open through July of 2021. So that 
right there is a $4 million investment by the Port of Long 
Beach.
    What has that resulted in? From August to the present date, 
I can represent to this subcommittee we have tested over 20,000 
people at that site. So obviously, we have to be proactive with 
testing, but the other aspect in terms of, going back to the 
funding question, is rapid testing. That is what we need.
    And, last, I will say this: What I have here is a KN95 mask 
[holding up a mask]. To the question of PPEs, let me just say 
that in this industry, when this pandemic hit, many of our 
frontline workers were wearing basically cloth masks. I mean, 
it was really unfortunate that we were in that situation. But 
what we need in this country is for every frontline worker to 
have an N95 mask made in the United States. That is what is 
needed. It is not a question of just ordinary PPE; it is the 
quality of PPE.
    Mr. Carbajal. If you could summarize, please.
    Mr. Cordero. I hope that answers your question, 
Congressman, and thank you so much for your question.
    Mr. Weber. Well, thank you for that. Mr. Chairman, I yield 
back.
    Mr. Carbajal. Thank you very much, Mr. Weber.
    Next, we will go to Representative Auchincloss.
    Mr. Auchincloss. Thank you, Mr. Chair, and to the panel. I 
wanted to pivot to something that was mentioned in your written 
testimony, Mr. Roberts, about offshore wind as an important 
emerging market for the maritime industry. Offshore wind has 
the potential to produce tens of thousands of jobs nationwide, 
including many in southeastern Massachusetts, in my district, 
and could play a significant role in decarbonizing electricity 
production in the United States.
    In your written testimony, Mr. Roberts, you specifically 
called out, as ways to encourage offshore wind, ``regulatory 
measures needing attention include a more predictable 
permitting process, a possible regional approach to local 
content requirements, prompt Coast Guard regulatory actions 
related to the vessels required to install and service offshore 
wind turbines, and support and planning for the necessary port 
infrastructure.'' I want to invite you to take 2 minutes and 
talk about which of those might be the highest impact and how 
the Federal Government might assist?
    Mr. Roberts. Great. Thank you for your question. As you may 
have gathered, we are very excited about the prospect of 
offshore wind development and being part of that, and the 
economic benefits and job benefits that it will provide.
    We are, frankly, very early in this industry's development. 
When I talk about the permitting process, I think the change in 
administrations will see--I am fairly confident we will see a 
more predictable and responsive permitting system put in place 
that will help a lot with respect to Coast Guard and other 
regulatory areas. And I think that really is the starting 
place, having the licenses in place and having all of that kind 
of going is great, but having the authority to go ahead with 
the development is really critical.
    Obviously, it needs to be done safely with full 
accommodation for all of the stakeholders, fishing and other 
stakeholders that could be affected by it. But I think that 
getting that done quickly and getting it right is very 
important.
    Coast Guard regulation of vessels--some of them are very 
new vessels that are not in the fleet today, and so making sure 
that we have clarity and a good collaborative ability to work 
through regulatory issues is critically important also. So 
those are two I would just mention.
    Mr. Auchincloss. One way that has been--and, Mr. Roberts, 
this is still, I think, in your wheelhouse--one way that has 
been promoted by some advocates in my district has been 
offshore wind opportunity zones that could receive accelerated 
permitting and priority consideration for Federal 
infrastructure investments. Would you support that designation, 
and if so, are there components of it that you would advocate 
for?
    Mr. Roberts. Well, I am not familiar with that specific 
program. I would say that certainly another area of attention 
is with respect to the ports themselves and the need to develop 
logistics capabilities at the ports, and that sounds like it 
probably is something that would fit well within the 
opportunity zones that you are talking about there.
    Mr. Auchincloss. Thank you.
    And a final question, and this is for anybody on the panel, 
although, Mr. Roberts, perhaps you can have first pass: Bristol 
Community College serves my constituents, building a state-of-
the-art national offshore wind institute to ensure a workforce 
that is ready for this new industry. Can you describe the 
nature of the jobs and the sort of--directionally the volume of 
the jobs that can be created for this industry?
    Mr. Roberts. I will mention that from a maritime 
perspective, there are so many different elements to doing 
offshore development, and some of this is certainly learning 
from the offshore oil and gas development industry. But you 
need to be able to install the facility, put foundations in, 
and you need vessels and you need mariners who know how to 
operate those ships and do that very heavy engineering work.
    You will need to be able to link those installations back 
to shore using cables instead of pipelines. We will need 
service vessels to maintain them over many, many years, and 
mariners and technicians to be able to operate those vessels. 
Just sort of from a maritime perspective, that is a snapshot.
    Ms. Brand. Sir, this is Lauren Brand. May I also respond to 
this quickly?
    Mr. Auchincloss. Please.
    Ms. Brand. So this will also create terminal opportunities 
and opportunities for logisticians. The offshore wind is high, 
wide, and heavy cargo. I know of one case where we should have 
seen some products go from the gulf area to the Northeast area 
by marine highway, by vessel, and instead, it went by truck and 
it took over 6 months to move that way. And they actually went 
through intersections where they had to take down the signal 
lights, because the equipment was too high to fit under the 
over-road obstacles. So it is a great logistics thing, great 
terminal thing. If there is any way I can help, let me know.
    Mr. Auchincloss. I appreciate that. And I will yield back 
my time, Mr. Chair.
    Mr. Carbajal. Thank you.
    Next, we will proceed to Representative Brown.
    Mr. Brown. Thank you, Mr. Chairman. Let me start by saying 
it is a pleasure to be able to serve with you under your 
leadership on this subcommittee. You and I served together on 
both the House Armed Services Committee and Transportation and 
Infrastructure Committee. The only frustrating part about that 
is that I am sitting behind you in seniority on both of those 
committees.
    But in all seriousness, it is a pleasure, it is an honor to 
be able to serve with you, and I think really appropriate 
because I think the work that we do on the Transportation and 
Infrastructure Committee, the policy, the authorities, the 
investments in infrastructure perhaps are just as important to 
national security as the work that we do together on the House 
Armed Services Committee.
    As we have been hearing throughout the testimony today, 
obviously public ports in the United States play an 
indispensable role in local and regional economies throughout 
the Nation, and the COVID-19 pandemic has had a tremendous 
impact on the industry in 2020.
    I have a particular interest in the Port of Baltimore, 
which is arguably the most diverse port on the east coast. It 
has a portfolio of containers, automobiles, farm equipment, 
roll-on/roll-off cargo, and forest products, and it is ranked 
first among all U.S. ports in the volume of vehicle cargo for 9 
consecutive years.
    Key cargo commodities at the Port of Baltimore's public 
terminals were down for the year compared to 2019, but the 
port's strong recovery in the second half of the year helped 
dramatically narrow those declines. The port's strong finish in 
2020, I think, reflects highly on Maryland's economy and the 
dedication of our port workforce.
    However, if we are going to continue to ensure that our 
Nation's ports are functioning, meaning that we are supporting 
frontline portworkers who are really key to what we are doing, 
we have to prioritize testing and vaccination. And at the end 
of last year, or during last year, Congress passed the CARES 
Act, the NDAA. Both of them included important provisions to 
help mitigate the virus and the effects it has had on this 
industry.
    Both Mr. Cordero and Mr. Patti, and perhaps some of the 
other panelists, I apologize, but I know that you specifically 
addressed in your testimony the Maritime Transportation System 
Emergency Relief Program. And while it was passed in the NDAA, 
it was the brainchild of this committee.
    So if Mr. Cordero and Mr. Patti, I mean, look--we 
authorized it; now we have got to fund it. And could you talk 
about the need to fund it in 2022, and what happens if we 
underfund it? What happens if we don't step up and do what we 
need to do as a Congress to support the Maritime Transportation 
System Emergency Relief Program? Mr. Cordero? Mr. Patti?
    Mr. Cordero. Well, thank you, Congressman. And I think a 
very good question, because you have already heard this morning 
the impact that COVID-19 has had already to our ports 
throughout the Nation.
    And I will say that my good friend, Bill Doyle, over there 
at the Port of Baltimore is doing a great job, and, again, 
former Commissioner of the FMC. But I think as AAPA 
chairperson, I will say this: That we have a great opportunity, 
Congressman and subcommittee, to not only fund this program, 
but earlier there was a question posed as to whether we see the 
merits going forward in terms of what an important aspect that 
needs to be addressed.
    MARAD has a great opportunity right now to advocate on this 
issue, because they have been identified as the lead Federal 
agency to move forward and identify emergency relief and issue 
grants to the port authorities across the Nation. So that is 
going to be very key, for MARAD to move forward with 3505(j) of 
the program or of the act, which, again, is going to be very 
important with all the issues that we have addressed this 
morning. And failure to do that is going to create a real 
problematic question in the supply chain, a vital 
transportation sector.
    And, again, we talk about imports, exports. Ninety-five 
percent of international trade moves by water. Trade begins at 
the ports.
    Mr. Brown. Mr. Patti.
    Mr. Patti. Yes, sir. Thank you, Congressman. I would just 
pick up a little bit on what was said and, again, strongly 
encourage Congress to fund this program.
    There are a number of entities in the maritime industry, 
ranging from training institutions that the unions and the 
shipping companies run and operate in order to continue to 
provide the best trained mariners that we possibly can that 
have effectively been shut down for most of this past year, 
because ships were not sailing. They were not able to travel to 
and from the schools. And they desperately need help in order 
to remain open.
    There are small passenger vessel operations, there are 
other shipping companies, all of whom have taken significant 
hits throughout this pandemic. And I think just to emphasize, 
this legislation does not dictate that money go to anybody. 
They still have to apply. They still have to apply for the 
grant. They have to prove that it is worthwhile and necessary, 
but none of that happens until the money is made available.
    So on behalf of all of those types of entities, most of 
whom don't belong to our organization, but, nevertheless, I 
would encourage Congress to provide funding for that program.
    Mr. Brown. Thank you, Mr. Patti. Thank you, panelists.
    Mr. Chairman, thank you very much. I yield back.
    Mr. Carbajal. Thank you, Mr. Brown.
    That concludes the first round of questions. I am going to 
proceed with the second round for anybody interested in asking 
a second question. And with that, I will recognize myself for 5 
minutes and then proceed to other Members who may have 
additional questions.
    Ms. Brand, in your statement, you said that there are 
currently 37 containerships sitting outside of the Port of Los 
Angeles and Long Beach. What would happen if congestion were to 
continue to rise? What does that mean for ports and the U.S. 
economy?
    Ms. Brand. So thank you very much for that question.
    Because of the vessels that are offshore--right now there 
are containers that are holding parts for manufacturing and 
assembly sites in the United States, and we are going to start 
to see some of those start to falter in their schedules, the 
longer this goes on.
    I believe yesterday, I checked the number and the number 
now is down to 32 ships that were offshore. We estimate that 
that is about 380,000 TEU, or 190,000 truckloads of goods. I 
actually went shopping at one of my favorite local retail 
stores. It is called Chico's. And I asked them if they had 
certain spring colors. And they said, no, those are stuck in 
the port.
    So we are seeing a decline in the fashion market. We will 
see some commodities not come in. Maybe some Valentine's Day 
things are stuck. We will see Easter things being stuck. And we 
will see things that are actually arriving too late to go to 
market. So there will be an economic impact for a number of 
different things, from consumer goods all the way to 
manufacturing.
    Mr. Carbajal. Thank you, Ms. Brand.
    Mr. Wilkins, in your written testimony, you stated that 
waterborne transportation is the most environmentally friendly 
mode of transportation. What can Congress do to encourage more 
shipping by water? What policies would spur development of 
coastwide shipping?
    Mr. Wilkins. Thank you, Mr. Chairman, for the question. I 
don't know if I am prepared to answer the question directly, 
especially on the coastal side.
    What I would say is that I think I answered in the sense 
that having the programs of ensuring reliable locks, dams, and 
ports that is maintained and allowing the Corps to do what it 
does in operating and maintenance of those systems promotes 
reliability, and reliability promotes confidence, and 
confidence promotes investment from the shipping world and 
cargo holders to realize they have a viable means of transport, 
and reliable means of transport. I would answer that question 
that way, sir.
    Mr. Carbajal. Thank you.
    Mr. Patti.
    Mr. Patti. Thank you, Mr. Chairman.
    One of the things I would suggest that Congress look at--
and it is something that this committee had been advocating for 
quite a while in the past--is to look at the application of the 
harbor maintenance tax on coastwide shipping.
    The way things work now under the harbor maintenance tax, 
there is a very unfair, we consider discriminatory, double 
taxation on ships operating in the coastal trade. If you have a 
large containership coming in from overseas and your container 
is the value of that cargo, it is subject to the HMT. When it 
is reloaded onto these smaller vessels that travel up and down 
the coast, when it reaches its second destination, it is taxed 
again.
    At a minimum, this serves as a tremendous disincentive to 
use U.S.-flag vessel operations. So it is just another thing to 
look at as we go forward in this Congress. And I think part of 
the objective would be to try to eliminate as many of these 
disincentives as possible that impede the operation of American 
ships.
    Mr. Carbajal. Thank you.
    Ranking Member Gibbs, do you have any additional questions?
    Mr. Gibbs. Yes, just a couple. Thank you, Chair.
    First of all, Mr. Wilkins, in 2020, the Corps of Engineers 
moved forward with a large-scale rehabilitation project on the 
Illinois River, which necessitated periods of closure on the 
river.
    In your opinion, did the Coast Guard and the Army Corps of 
Engineers manage the process? Were there any lessons learned 
that we should know about, Mr. Wilkins?
    Mr. Wilkins. Thank you, Mr. Gibbs.
    No, I would say that I think that the Coast Guard and the 
U.S. Army Corps of Engineers worked in harmony and worked 
perfectly together as a partner. I applaud that they listened 
to industry to reduce having disruptions over a 5-year plan, to 
mitigate that and bring it down to a 2-year plan.
    So I think the lesson learned is a shining example that 
industry and the Coast Guard and the Corps of Engineers can 
work together to accomplish maintaining our infrastructure. So 
we were very pleased in the way that they came together at a 
solution.
    Mr. Gibbs. Good. I am glad to hear that.
    Ms. Brand, in your testimony you talked a lot about the 
vaccines. And since you represent the National Association of 
Waterfront Employers, are you seeing differences between States 
where you operate, the vaccine accessibility, or is it just 
they are not getting it because they haven't been declared 
essential workers, or what are you seeing within the different 
areas geographically around the country?
    Ms. Brand. Thank you very much. We wrote to 35 different 
States, including Puerto Rico, and we received responses from 
less than half of those. Basically, sir, what is happening is 
that the waterfront workers are not getting any priority 
whatsoever. It is age priority right now.
    Each State has its own regulations and rules. For example, 
in Florida, if you are 65 and over, you can be eligible for a 
vaccine. In Virginia, if you are 75 and older, you can be 
eligible for a vaccine. So even the age priority has a 
difference between States. It is very difficult to track.
    Mr. Gibbs. Thank you.
    Mr. Chairman, I believe Representative Malliotakis asked a 
question and didn't have a chance for the panelist to answer, 
and I don't know which panelist that was. I will yield my time 
if that person wants to answer Representative Malliotakis' 
question.
    Mr. Wilkins. Thank you, sir. That was myself. And I was 
only going to point out to the Representative that--her 
question was around the competitive advantage of lack of moving 
commerce, given other nations around the world.
    And I was going to point out in our last project that Canal 
Barge did in Colombia, to move a container from Bogota to 
Cartagena, 660 miles, costs four times the amount of money to 
take that same container 9,000 miles from Cartagena all the way 
to China.
    So, as they were developing their Magdalena River and other 
countries look to develop river systems, we measure 
productivity on a cost per ton-mile basis. So that is our 
competitive advantage. And underscoring infrastructure was the 
final point I wanted to make to her.
    Mr. Gibbs. Thank you.
    Mr. Chairman, I yield back.
    Mr. Carbajal. Thank you, Representative Gibbs. Are there 
any other questions?
    Seeing none, I would like to thank each of the witnesses 
for your testimony today. Your comments have been very 
informative and helpful. I ask unanimous consent that the 
record of today's hearing remain open until such time as our 
witnesses have provided answers to any questions that may be 
submitted to them in writing.
    I also ask unanimous consent that the record remain open 
for 15 days for any additional comments and information 
submitted by Members or witnesses to be included in the record 
of today's hearing. Without objection, so ordered.
    The subcommittee stands adjourned. Thank you very much.
    [Whereupon, at 1:12 p.m., the subcommittee was adjourned.]



                       Submissions for the Record

                              ----------                              

  Prepared Statement of Hon. Sam Graves, a Representative in Congress 
     from the State of Missouri, and Ranking Member, Committee on 
                   Transportation and Infrastructure
    Thank you, Chair Carbajal, and congratulations on your first 
hearing as Chair of the Subcommittee on Coast Guard and Maritime 
Transportation. Also, thank you to our witnesses for being here today.
    As you know, the Full Committee conducted a broad-ranging hearing 
last Thursday on the COVID-19 pandemic's impacts on transportation 
workers and businesses. I commend the Chair for holding this hearing on 
the pandemic's specific impacts on the Maritime Transportation System.
    I represent an agricultural district, and I'm also a farmer. So I 
am concerned about persistent press reports about the shortage of 
containers to carry U.S. agriculture exports to our customers around 
the world.
    I look forward to hearing the witnesses' experiences with any 
recent changes in the carriage of U.S. ag exports, and whether such 
changes are having an impact on the competitiveness of those exports.
    I also look forward to hearing about the COVID-19 related impacts 
on the U.S. Maritime Transportation System. I understand the import 
driven part of the System is currently operating at record levels. 
However, I would like to know the impacts of the pandemic on U.S. 
shipbuilders, vessel owners and operators, mariners, and other maritime 
workers, and whether Federal action is needed to relieve any of these 
impacts.
    Thank you, Chair Carbajal. I yield back.

                                 
   Letter of February 2, 2021, from the American Association of Port 
   Authorities et al., Submitted for the Record by Lauren K. Brand, 
        President, National Association of Waterfront Employers
    [This letter was also submitted for the record by Hon. Alan S. 
Lowenthal on page 51. To avoid redundancy, this letter is not reprinted 
here.]

                                 
   Letter of February 2, 2021, from David F. Adam, Chairman and CEO, 
United States Maritime Alliance, Ltd. et al., Submitted for the Record 
   by Lauren K. Brand, President, National Association of Waterfront 
                               Employers
                                                  February 2, 2021.
Hon. Peter A. DeFazio,
Chairman,
House Committee on Transportation and Infrastructure, U.S. House of 
        Representatives, Washington, DC 20510.
    Dear Mr. Chairman:
    We write as the leading representatives of America's frontline 
longshore workers and maritime employers to seek your assistance on a 
matter of urgent national importance: protecting our nation's economy 
and supply chain by prioritizing COVID-19 vaccinations for port 
workers. While our organizations represent a diversity of maritime 
interests in varying regions of the nation, we have come together to 
speak with one voice on this pressing and immediate priority.
    America's ports are the primary gateways for the goods and supplies 
Americans depend on, including food, medical supplies, personal 
protective equipment (PPE), sanitizer, and other items sustaining the 
country during this historic pandemic. Millions of jobs and a 
significant portion of America's GDP are directly tied to the health of 
our ports, which are vital to national industries including retail, 
manufacturing, agriculture, and more. But the reliable operation of 
port terminals could soon be in jeopardy due to the alarming increase 
in COVID-19 among frontline longshore workers nationwide. Prioritizing 
frontline port workers' eligibility for vaccination and ensuring 
adequate vaccine supply is the only sure way to safeguard the supply 
chain that drives our economy and connects America to the rest of the 
world.
    Since the start of the pandemic last year, America's maritime 
workforce has answered the call of duty to keep our ports open for 
business, and our warehouses and store shelves fully stocked. From 
Maine to California, their dedication and resilience has been nothing 
short of heroic. In recent weeks, however, COVID infections among 
frontline port workers have reached crisis levels in many locations.
    From March 2020 through January 25, 2021, the International 
Longshore and Warehouse Union (ILWU) and Pacific Maritime Association 
(PMA) reported 1,034 coronavirus infections among frontline port 
workers along the West Coast. Over the same period, the International 
Longshoremen's Association (ILA) reported 784 positive tests along the 
East Coast and Gulf Coast. And infection rates are rising rapidly. For 
example, at the Ports of Los Angeles and Long Beach, America's largest 
port complex, almost as many longshore workers tested positive in the 
first three weeks of 2021 as in the first 10 months of the pandemic, 
from March through December of 2020. Other port regions report similar, 
troubling increases.
    This wave of virus infections comes as ports nationwide contend 
with record-breaking tide of imports from Asia that shows no sign of 
relenting. Our ports require as many workers as possible to accommodate 
this unprecedented surge. Exacerbating the challenge, the virus poses 
the greatest threat to older workers, who often possess the specialized 
skills and experience that are most needed to keep port terminals 
operating smoothly.
    We recognize that state and local governments play a key role in 
administering the COVID-19 vaccination process. However, given the 
clear national interest in keeping our ports functioning smoothly--
protecting our economy, healthcare infrastructure, and national 
security--we respectfully ask your assistance in taking all possible 
steps to help speed the vaccination process for the men and women of 
our maritime workforce.
        Sincerely,
                                             David F. Adam,
            Chairman and CEO, United States Maritime Alliance, Ltd.
                                          William E. Adams,
    International President, International Longshore and Warehouse 
                                                             Union.
                                         Harold J. Daggett,
               President, International Longshoremen's Association.
                                          James C. McKenna,
                   President and CEO, Pacific Maritime Association.



                                Appendix

                              ----------                              


Questions from Hon. Rick Larsen to Lauren K. Brand, President, National 
                  Association of Waterfront Employers

    Question 1. The COVID-19 pandemic has devastated Washington state's 
maritime economy, particularly the cruise industry. Last week, Canada 
extended suspension of cruise sailings in its waters through February 
2022. According to Port of Seattle data, the cancellation of the 2020 
cruise season cost an estimated 5,000 local jobs and more than $900M in 
economic activity.
    a.  With the ongoing cruise sailing suspensions, how can the 
federal government help impacted ports, waterfront operators and 
employees?
    Answer. We agree that the COVID-19 pandemic has devastated 
Washington state's maritime economy, particularly the cruise industry. 
When Canada extended suspension of cruise sailings in its waters 
through February 2022 a huge blow was struck to cruises as the Jones 
Act prohibits those firms who did provide cruise vacations from the 
U.S. Pacific Northwest from sailing to Alaska. The impact from the way 
the cruise industry is not being allowed to return to work has become a 
national issue. The decline in Alaska's economy has been even greater 
than that of Seattle \1\. Moreover, the Miami Herald published an 
article that mentions the impact of the cruise operations at Port Miami 
on the ILA. The drop in cruise related work is now endangering their 
members' health care coverage. Health coverage will drop early next 
year if they cannot reach 700 hours--the minimum number of hours 
required to be worked to have coverage. From the maritime terminal 
operator and stevedore perspective, we respectfully suggest 
establishing a working dialogue between the industry and the CDC. To 
date, there has been little to no interaction between the groups to 
solidify working procedures for the industry to get back up on its feet 
in a manner that is safe and agreeable.
---------------------------------------------------------------------------
    \1\ Fact Finding report by the Federal Maritime Commission on the 
impact of COVID-19 to the States of Alaska, Oregon and Washington. 
https://www2.fmc.gov/readingroom/docs/FFno30/20-
20_AK_WA_OR_FF30_Final_Interim_Report.pdf/
---------------------------------------------------------------------------
    The federal government's clearest form of help would come from 
lifting the conditional sailing order given advancements in science and 
public health since it was issued six months ago in a pre-vaccine 
environment. There is plenty of data from the Cruise Line International 
Association (CLIA) as to the success of the cruise industry operating 
in markets outside of the U.S., even without vaccines \2\. Waterfront 
operators, organized labor, and all who depend on the cruise industry 
have felt the hardship of the pandemic; indeed, the opportunity to 
return to work in the same manner as all other travel and hospitality 
sectors have been allowed to do is a minimal ``ask''. The vast majority 
of companies supporting cruise lines in the PNW and Alaska will have 
generated zero revenue since the pandemic occurred.
---------------------------------------------------------------------------
    \2\ (see https://cruising.org/en/news-and-research/press-room/2021/
march/cruise-lines-ready-to-sail-again-in-the-united-states)
---------------------------------------------------------------------------
    The Maritime Transportation System Emergency Relief Program 
(MTSERP) has been signed into law and is waiting for appropriations. 
This law allows relief for maritime firms who support the cruise 
industry and have been struck by the inability to work due to the 
suspension of cruising to/from U.S. ports. We urge appropriations for 
MTSERP be passed as soon as possible.

    b.  What should the cruise industry do to ensure the safety of 
homeport workforce and its passengers?
    Answer. The marine terminal and stevedoring industries are ready to 
go back to work and have implemented many protocols to address 
concerns. Almost immediately upon COVID-19's declaration as a pandemic, 
the industry had already committed to advanced health and safety 
measures including but not limited to testing of all crew and 
passengers as a condition to board a vessel and during sailing. This 
remains so today, with terminal operators going above and beyond in 
this past year. For example, measures have been implemented to stagger 
arrival times and reduce occupancy in all areas to minimize crowding; 
hospital-grade HVAC systems and/or filters are being installed; and 
pre-arranged sites shoreside are being designated with transportation 
to these sites for workers.
    We believe the cruise industry is taking the most thorough approach 
in the interest of public safety than any other travel or vacation 
segment, and we want to work with them. Many homeports have been at the 
front of the line in terms of asking for vaccine prioritization of 
their workforce as essential workers, with some taking a step further 
and using the terminal site as a vaccination clinic for the community. 
Royal Caribbean Group has already planned resumption of sailings that 
will not include ports in the U.S., followed by NCL announcing their 
non-U.S. sailings this week. It is frustrating to see the lines ready 
to set sail and we not have the option to provide services to them in 
the United States. It is also frustrating to see significant sized 
crowds gather at sporting events to watch people play while we are 
waiting for the Federal government to permit us to get back to work.

    Question 2. As you know firsthand, the loss of port revenue during 
the pandemic has consequences on local economies and communities. For 
instance, last year the Port of Everett in my district experienced a 
total revenue loss of $6.65M, stemming from aerospace shipping 
declines, lost tourism/hospitality and delayed construction. How would 
full funding for the Maritime Transportation System Emergency Relief 
Program help local ports and employees during these difficult times?
    Answer. Note that the Maritime Transportation System Emergency 
Relief Program (MTSERP) is the first and, to date, only, relief program 
available to the maritime industry. MTSERP is significant for at least 
three reasons:
    1.  It permits emergency relief to both public and private eligible 
entities.
    2.  It covers all declared disasters that may occur, including 
tornados, earthquakes, fire, tsunamis, hurricanes, volcanic eruptions 
and the global pandemic COVID-19; and
    3.  It thoughtfully names over 40 different types of eligible 
public and privately owned entities. These categories include over 
10,000 individual eligible applicants in the NAICS codes that are 
listed in the law.

    The maritime industry has come together to present a conservative 
request for $3.5B--which we expect to be oversubscribed. Applicants for 
funding will include more than the expected public port authorities and 
privately owned marine terminal operators and stevedores. Based upon 
numerous conversations held in the past six months, harbor pilots; US 
flag vessel owner/operators, including tugboat, towboat and barge 
operators, small passenger vessels, and others; firms providing reefer 
equipment; utility companies serving port needs such as cold ironing; 
and more will be submitting applications for emergency relief. Attached 
to this document is a letter jointly signed by 31 maritime entities, 
representing thousands of public and private firms who are eligible for 
MTSERP grants.

Questions from Hon. Rick Larsen to Ben Bordelon, Chairman, Shipbuilders 
                           Council of America

    Question 1. Shipyards, like Dakota Creek Industries and Nichols 
Brothers Boat Builders in my district, are the backbone of the Pacific 
Northwest's maritime economy. Of the 117 shipyards in the U.S., 26 are 
in Washington State. The Jones Act, which celebrated its centennial 
last year, helps sustains a strong domestic shipbuilding industry. Can 
you please discuss the importance of Jones Act protections to the U.S. 
shipbuilding industry during the pandemic?
    Answer. The Jones Act, which is provided at no cost to the U.S. 
government, helps to maintain a merchant marine that is sufficient to 
carry our domestic water-borne commerce and also ensures that there is 
sufficient U.S. capacity to serve as a naval and military auxiliary in 
time of war or national emergency. The Jones Act also ensures that the 
U.S. maintains critical shipyard infrastructure and an associated 
skilled workforce that can build, repair, modernize and maintain the 
more than 40,000 vessels of the domestic Jones Act fleet. This 
industrial base also ensures there is a sufficient workforce to support 
the construction and repair of our critical national security fleets.
    The 40,000 Jones Act vessels operating in the domestic trades 
support nearly 650,000 American jobs and $150 billion in annual 
economic impact. In addition, an impressive five indirect jobs are 
created for every one direct maritime job, which results in more than 
$41 billion in labor compensation. Supporting the Jones Act is critical 
to ensuring that those 650,000 U.S. citizens keep their jobs during the 
pandemic.

    Question 2. Your written testimony discusses some of the 
``loopholes'' in the Jones Act and concerning federal agency action in 
recent years that undermine the U.S. maritime industry. Can you please 
elaborate on the impact of those issues during the ongoing pandemic? 
How can Congress address them to support U.S.-flagged vessels?
    Answer. The Jones Act combined with the OCSLA makes the subsoil and 
seabed of the OCS, as well as installations permanently or temporarily 
attached to the seabed, coastwise points under the Jones Act. As such, 
foreign vessels are legally prohibited from picking up cargo at U.S. 
ports and transporting that cargo to topside or underwater points on 
the OCS.
    U.S. Customs and Border Protection (CBP) confused and degraded that 
clear standard via their issuing of letter rulings that are directly 
contrary to the Jones Act's text, structure, and purpose. Specifically, 
between 1976 and 2009, CBP issued 160 letter rulings which allowed 
foreign flag vessels to transport offshore energy cargos (called 
``merchandise'' under the Jones Act) from U.S. ports to locations on 
the OCS. These letter rulings have green lit proposals by foreign 
vessel operators to transport merchandise to and from U.S. points on 
the OCS, using foreign labor on foreign ships in clear contradiction of 
the Jones Act. Congress can preserve and strengthen the Jones Act by 
encouraging the revocation of these letter rulings.

    Questions from Hon. Garret Graves of Louisiana to Ben Bordelon, 
               Chairman, Shipbuilders Council of America

    Question 1. The domestic shipyard industry was declared essential 
from the start of the COVID-19 pandemic. How has the industry adapted 
to the new climate under a pandemic to ensure workers stay safe and 
healthy, and shipyards stay open and operational?
    Answer. The domestic shipyard industry has a long culture of 
promoting employee safety and health in the workplace. When the 
pandemic crisis began, our industry was prepared to meet unique demands 
and adjusted to protect our workers by shifting our operations, 
providing additional PPE, and issuing safety guidance as we learned 
more about the virus. Almost a year into the pandemic, facilities are 
continuing to adjust to this new normal and implementing innovative 
policies to limit workplace spread of COVID-19. Like any industry on 
the frontlines, we continue to focus on the health and wellness of our 
employees and adjust our work environments to make sure our teams come 
to work and leave safely.

    Question 2. President Biden has made a commitment to renewable and 
clean energy. Do you see the pandemic having any impact on the domestic 
shipbuilding industry's ability to support the budding offshore wind 
market? What other threats exist outside the pandemic?
    Answer. The domestic shipyard industry has adapted well to 
conditions under the pandemic and is ready and able to build for, and 
support the emerging offshore wind market. Currently, the biggest 
threat to the shipyard industry's ability to support the offshore wind 
market is lack of Jones Act enforcement on the Outer Continental Shelf 
(OCS).
    In the FY21 National Defense Authorization Act (NDAA), Congress 
took the important step of inserting language to clarify that the Jones 
Act applies to all offshore energy development on the OCS. Prior to 
this clarification, there was a high degree of market uncertainty for 
the industry due to the potential for foreign vessels to exploit Jones 
Act loopholes and perform the work. As a result of the language in the 
NDAA several U.S. shipyards have already confirmed orders to construct 
new vessels to serve the burgeoning offshore wind market. SCA asks that 
Congress continue to strictly enforce the Jones Act on the OCS.

    Question 3. Do you anticipate any long-term negative impacts from 
the pandemic on the domestic shipyard industrial base?
    Answer. Workforce development and retention is an important part of 
maintaining a robust domestic shipyard industry. Throughout the 
pandemic, absenteeism has been a common occurrence. This has led 
workforce shortages throughout the industry which has the potential to 
slow down the production process. As we eventually move past the 
pandemic and get back to normal, there is concern that a skills gap 
could form and that returning shipyard employees will need to be re-
certified and re-trained for their jobs.

    Question 4. What can Congress do in terms of support for the 
domestic shipyard industrial base?
    Answer. SCA is appreciative of Congress extending Section 3610 of 
the CARES Act through March 31, 2021, which authorized government 
contractors to be reimbursed for employees who could not work because 
of COVID-related closures. However, as the industry continues to work 
in the ``new normal'' of the pandemic, we see more clearly that 
additional relief is needed to support the domestic shipyard industry. 
There are a number of things Congress can do to support the industry 
during this time such as, extend the application of Section 3610 
through September 30, 2021, authorize federal agencies to reimburse 
contractors for COVID-related costs, provide supplemental FY21 
appropriations to reimburse COVID-related costs, and provide additional 
support for small businesses in the shipyard industrial base.
    Additionally, government shutdowns and Continuing Resolutions (CR) 
are detrimental to the shipyard industrial base's ability to support 
the nation's Navy, Coast Guard, and other agencies. Without stable and 
predictable funding, we fear the Nation is putting at risk the 
industrial base that services the critical national security vessels on 
which our sailors depend. We hope that Congress will continue to 
support the industry by consistently passing appropriations bill and 
keeping the government open.

  Questions from Hon. Bob Gibbs to Mario Cordero, Executive Director, 
   Port of Long Beach, on behalf of the American Association of Port 
                              Authorities

    Question 1. What measures are in place to match workforce capacity 
with port workload? Is there an integrated, comprehensive, resource 
management system?
    Answer. The Port of Long Beach (the Port) and other ports and 
Marine Terminal Operators (MTOs) across the country are constantly 
rebalancing workforce capacity to appropriately meet port workload 
demands. We seek to support our operations with labor that is trained 
and qualified while working to ensure that this workforce does not go 
underutilized. This effort takes a strategic, integrated, and 
comprehensive resource management approach. Of course, the ongoing 
COVID-19 pandemic has presented challenges, particularly at ports like 
ours that have seen surges in cargo recently after significant slowing 
of supply chains in quarters one and two of 2020. This has required a 
tactical response to registration and training.

    Question 2. Have you conducted any level of what-if analysis to 
understand how COVID may impact port capacity and the resultant impact 
on addressing the port workload?
    Answer. The Port has not officially estimated the impact on our 
volume. Volumes will not change unless ships get diverted. As 
throughput capacity is impacted, i.e., 2 gangs per ship per shift 
instead of 5, the result is that it takes longer to work the ship, but 
we still see the same volume--unless it goes on long enough for 
carriers to begin diverting ships. In a regular year, container 
turnaround times are 3 to 5 days. During this unprecedented time, 
average turnarounds are 7 to 10 days. We haven't seen much of 
diversion; however, if we continue to experience delays, diversions of 
as little as 1% is the equivalent of about $1.7 billion worth of cargo.
    The workforce has been challenged with a theoretical reduction, but 
there are no alternatives, so our throughput hasn't changed. Delays are 
causing problems for exports. Due to lack of storage space, some 
containers are being used as temporary storage, holding up the return 
of empty containers for exporters. With warehouse and distribution 
center capacity fully subscribed, containers sit on chassis, impacting 
fluidity of the system-wide chassis supply. It is more economical for 
shippers to ship back empty containers than wait to send empties 
inland, further away, to be filled with less expensive commodities.

    Question 3. How does your organization track and manage 
certifications and competencies so if/when there is a COVID impact, you 
can effectively react to and formulate updated workforce plans?
    Answer. For the Port's business continuity plan includes 
contingencies for the loss of key personnel. Each position in the Port 
has a position description that includes core competencies which can be 
cross-referenced with those of key function personnel so that 
replacements can be made and essential functions continued after a 
disruption event such as COVID-19. As a landlord port, we do not have a 
direct impact on terminal manpower options.
    Operating ports put in place similar plans to manage their 
workforce. At the Port of Virginia, for example, a COVID Planning and 
Response Task Force was established to address all issues related to 
COVID and how it impacted the organization. This Task Force focused on 
the entire workforce, not just tracking and managing certifications and 
competencies, and a colleague tracking system was developed for all of 
the Port of Virginia and International Longshoreman's Association 
members to determine colleague exposure and positive cases, to 
determine quarantine time frames per Centers for Disease Control 
Guidelines (CDC), and to determine if case spikes or outbreak clusters 
appeared in one area. If an outbreak impacted the effectiveness of a 
particular team, Port of Virginia made adjustments to ensure adequate 
staffing and reported all clusters per CDC and local department of 
health guidelines.

 Questions from Hon. Rick Larsen to Mario Cordero, Executive Director, 
   Port of Long Beach, on behalf of the American Association of Port 
                              Authorities

    Question 1. The COVID-19 pandemic has devastated Washington state's 
maritime economy, particularly the cruise industry. Last week, Canada 
extended suspension of cruise sailings in its waters through February 
2022. According to Port of Seattle data, the cancellation of the 2020 
cruise season cost an estimated 5,000 local jobs and more than $900M in 
economic activity. With the ongoing cruise sailing suspensions, how can 
the federal government help impacted ports, waterfront operators and 
employees? What should the cruise industry do to ensure the safety of 
homeport workforce and its passengers?
    Answer. Cruising makes significant economic contributions to 
communities that include both home ports and ports of call. The federal 
government can help communities that have been economically impacted by 
the halt in cruising by creating a safe, clear path for resumption. 
Right now, cruise ports and the cruise industry are awaiting promised 
technical guidance from the Centers for Disease Control (CDC) regarding 
health and safety protocols. Other industries and other sectors within 
transportation have clear criteria to abide by, but this guidance for 
cruising has yet to be released. The American Association of Port 
Authorities and its members look forward to working with the CDC on 
implementing health and safety protocols to ensure that cruises can 
resume in a safe manner.

    Question 2. In Northwest Washington, ports like the Port of Everett 
in my district, specialize in oversized and breakbulk cargo which are 
crucial to regional manufacturers. Due to the pandemic, the Port of 
Everett's seaport operations are down 20% this year and they expect the 
same through 2021. Can you comment on the impact of the pandemic on the 
global cargo supply chain? How do you anticipate this will impact the 
United States' future economy recovery?
    Answer. Revenue decreases associated with drops in business, like 
those seen at the Port of Everett, put a strain on every manner of port 
operations. From the difficult decision made by some ports to furlough 
or lay off employees, to making decisions on delaying maintenance of 
infrastructure, to even delaying investing in new infrastructure 
improvements, significant and sustained reductions in revenue may 
impact the ability of ports to build and maintain capacity for a 
continued economic recovery. Particularly at smaller or medium sized 
ports, even a slight decline in revenue can impact financing for 
planned port improvements.
    While the impacts of these decisions may not be felt immediately, 
these infrastructure investments pay dividends for years and without 
investment now that return can be jeopardized. And staff capacity, once 
lost, is difficult to replace.
    The Federal Government can play a role here. By investing in our 
nation's port infrastructure, through maintenance of existing 
infrastructure and construction of new infrastructure through the 
Maritime Transportation System Emergency Relief Program and the Port 
Infrastructure Development Program, respectively, some of the impacts 
that ports and our supply chains may face as a result of sustained 
declines in business can be ameliorated.

    Question 3. A recent Mercator report found that the Port of 
Vancouver and Port of Prince Rupert in Canada have route cost 
advantages of up to $500 per container over U.S. West Coast ports on 
Asian imports. It also found that once infrastructure projects are 
completed by 2022, these Canadian ports could divert nearly 15% of 
intermodal import volumes now moving through the West Coast. Can you 
comment on the impact of cargo diversion on U.S. ports' ability to 
recover from the COVID-19 pandemic?
    Answer. I conferred with other AAPA member ports, and the Northwest 
Seaport Alliance (NWSA), a partnership between the ports of Seattle and 
Tacoma that jointly manages the two ports' marine cargo facilities, is 
one of the ports that is most susceptible to cargo diversion to Canada 
because of its proximity to major ports in British Columbia (BC). The 
NWSA has lost 19% of its market share to the BC ports since Prince 
Rupert opened its container terminal in 2007. The Canadian government 
continues to invest in infrastructure and capacity improvements at 
Canadian West Coast ports.
    In 2020, BC ports experienced flat container volumes while the NWSA 
experienced a 12%decline in volumes compared to the prior year. 
Importantly, a significant portion of cargo handled at West Coast ports 
is discretionary, meaning it could be shipped through any number of 
ports.
    When our ports lose cargo to other nations, we lose jobs associated 
with movement of this cargo. As ports lose cargo to other nations and 
the revenue generated by these flows it makes it more difficult to make 
the investments necessary to remain competitive. If the growth in cargo 
volumes at Canadian ports comes at the expense of cargo traveling 
through American ports, it will likely be more difficult for those who 
saw cargo declines throughout 2020 to recover.

    Question 4. As you know firsthand, the loss of port revenue during 
the pandemic has consequences on local economies and communities. For 
instance, last year the Port of Everett in my district experienced a 
total revenue loss of $6.65M, stemming from aerospace shipping 
declines, lost tourism/hospitality and delayed construction. How would 
full funding for the Maritime Transportation System Emergency Relief 
Program help local ports and employees during these difficult times?
    Answer. This new program, the Maritime Transportation System 
Emergency Relief Program (MTSERP), is designed to provide ports relief 
to be able to withstand emergencies and disasters that may arise. While 
the MTSERP is not designed to replace lost revenue, these grants, which 
are to be made available for emergency response; cleaning; 
sanitization; janitorial services; staffing; workforce retention; paid 
leave; procurement and use of protective health equipment, testing, and 
training for employees and contractors; debt service payments; 
infrastructure repair projects; fuel; and other maritime transportation 
system operations as determined by the Secretary of Transportation, 
give the Maritime Administration and the Department of Transportation 
the flexibility to provide grants to ailing ports and other impacted 
maritime entities to ensure that the impacts of the COVID-19 pandemic 
did not hamper their ability to continue essential business operations 
once the pandemic, or whatever future disaster may result in this 
Program being used, were to subside.
    While many ports have been able to apply for and receive 
reimbursement for eligible emergency protective measures from the 
Federal Emergency Management Agency, no other relief has been provided 
by Congress to help weather the effects of the ongoing pandemic. This 
program would help fill existing aid gaps and put ports on a level 
playing field with other industries and modes of transportation. This 
program could be used to reimburse ports for sick time taken due to the 
pandemic, to retain staff and critical institutional knowledge that may 
otherwise be furloughed or laid off, to perform infrastructure repair 
projects otherwise financially unfeasible to undertake, and even make 
debt service payments for impacted ports. By providing these grants, 
the MTSERP would give ports the ability to ensure that they are able to 
implement health and safety protocols to keep port workers safe, while 
giving ports the flexibility and relief necessary to weather the 
financial effects of the pandemic and emerge strong and capable of 
helping facilitate continued economic recovery.

    Question 5. As the administration and state/local governments work 
to improve COVID-19 vaccine distribution, I am curious about the role 
U.S. ports can play. Particularly whether port cold storage facilities 
can be used as potential vaccine refrigeration and/or storage spaces. 
Would this be feasible? If not, why?
    Answer. Ports play a key role, and, as I noted in my written 
testimony, many ports have sought to have unused port space provided to 
state governments as a point of distribution vaccination site. To date 
though, no port has been successful in partnering with state or local 
governments in this effort.
    A useful example of how ports may be effective in vaccine 
distribution can be found at the Port of Long Beach. In partnership 
with our local Health Department and the Pacific Maritime Association, 
we opened a COVID-19 testing site with walk up availability for port 
workers and appointments available for the general public. To date, 
this site has conducted 22,413 tests, serving both port workers and our 
community. A vaccination site could operate in a similar fashion.
    Many ports also offer access to cold storage facilities, whether 
cold storage buildings or refrigerated containers, known as 
``reefers.'' The capacity for vaccine storage at ports are likely to 
vary, depending on what capabilities are available, what partnerships 
are able to be forged with cold storage facility owners, and what 
storage requirements exist for the vaccine set to be distributed at a 
port location.
    As vaccination efforts continue and as federal aid for these 
facilities expand AAPA members will continue to look at ways to ensure 
the health and safety of port workers, including exploration of using 
port facilities as vaccine distribution points.

Questions from Hon. Rick Larsen to C. James Patti, President, Maritime 
  Institute for Research and Industrial Development, on behalf of USA 
                                Maritime

    Question 1. In Northwest Washington, ports like the Port of Everett 
in my district, specialize in oversized and breakbulk cargo which are 
crucial to regional manufacturers. Due to the pandemic, the Port of 
Everett's seaport operations are down 20% this year and they expect the 
same through 2021. Can you comment on the impact of the pandemic on the 
global cargo supply chain? How do you anticipate this will impact the 
United States' future economy recovery?
    Answer. During the early stages of the worldwide coronavirus 
pandemic, ocean shipping was significantly affected as manufacturing 
and other businesses throughout the world ceased production and ports 
in numerous countries were shut to traffic, causing ocean carriers to 
take vessels out of service and to otherwise curtail their operations. 
This adverse impact on the global supply chain was due to the broader 
economic issues affected by the pandemic and not caused by problems 
with or shortages in maritime capacity. Today, one year later, the 
situation in the maritime trades has improved although not to the same 
degree in all sectors and in all ports. As for our economic recovery 
looking forward, we would anticipate that as imports and exports 
continue to increase; as entities such as the Export-Import Bank 
further resume their activities to finance the export of oversized 
equipment and products, and as more mariners and longshoremen receive 
the vaccine, activities in all ports should continue move upwards to 
their pre-pandemic levels.

 Questions from Hon. Mike Gallagher to Michael G. Roberts, Senior Vice 
    President, Crowley Maritime, on behalf of the American Maritime 
                              Partnership

    Question 1. How has the lack of sufficient icebreaking on the Great 
Lakes impacted the use of U.S.-flag vessels in Great Lakes commerce?
    Answer. Two of American Maritime Partnership's members, American 
Waterways Operators and Lake Carriers' Association (LCA) operate Jones 
Act-qualified vessels on the Great Lakes. Commodities moved include 
iron ore, limestone, grain, road salt, petroleum products, cement, and 
other bulk cargoes. For years they have suffered from inadequate Great 
Lakes icebreaking services and the 2020-2021 pandemic has further 
complicated the situation. COVID-19 impacts on the Great Lakes were 
somewhat delayed because stockpiles of critical raw manufacturing 
materials were resupplied at the beginning of the 2020 post-Soo Lock 
closure sailing season from March to April. As manufacturing slowed, so 
did Great Lakes shipping. The reopening of the economy toward the end 
of 2020 sparked increased Great Lakes commerce and shipping rebounded 
significantly as demand rose, just as ice was beginning to appear.
    The pandemic made it very clear that Great Lakes icebreaking has no 
resiliency. U.S. and Canadian Coast Guard icebreakers were sidelined by 
COVID-19 outbreaks and engineering casualties which, in addition to an 
existing lack of icebreaker capacity, strained the navigation system. 
Fortunately, COVID-19 outbreaks have not occurred aboard LCA-enrolled 
vessels. If any commercial cargo vessels cannot sail this year because 
of COVID-19, the need for greater icebreaking capability and resiliency 
would become even more critical.
    Billions of dollars and over 10,000 jobs have been lost during the 
past eight years as a result of insufficient Great Lakes icebreaking. 
During three of those years, the U.S. Coast Guard (USCG) has been 
unable to keep Great Lakes waterways consistently open to commercial 
navigation when ice challenges commercial vessel traffic. The ice 
season typically runs from December through April when 15 percent of 
domestic Great Lakes waterborne tonnage is moved, including 
replenishing stockpiles of important materials for the U.S. economy. 
From January 15th to March 25th each year, the Soo Locks, which connect 
Lake Superior to the other Great Lakes, and most U.S. vessels enter a 
winter maintenance period. LCA needs to ensure that its customers' raw 
material stockpiles can last through the Soo Lock closure period and 
replenish them when the Soo Locks reopens. The above figures are based 
on economic analyses developed by Martin Associates, which calculated 
that during the winters of 2013-2014 and 2014-2015 the U.S. economy 
suffered losses of over $1 billion and 5,800 jobs because of this lack 
of effective Great Lakes icebreaking. According to the same source, 
during the winter of 2018-2019, an additional $1 billion and 5,000 jobs 
were lost due to inadequate icebreaking on the Great Lakes.
    Lives have been unnecessarily risked due to inadequate Great Lakes 
icebreaking. Commercial vessels have been forced aground when 
icebreaking was lacking. Other vessels, due to inadequate icebreaking, 
have been sliced open when squeezed between ice fields. One example 
occurred in the winter of 2013-2014: In the Straits of Mackinac, a 
USCG-designated ``tier 1 waterway,'' there was no icebreaker assistance 
available. The commercial vessel CASON J. CALLAWAY attempted to pass 
close to the vessel AMERICAN REPUBLIC, which was beset in the ice. Due 
to a lack of icebreaker assistance, it is not unusual for one laker to 
try and free another in this manner, even if it is operated by another 
company. As the experienced master aboard the CALLAWAY attempted to 
alter course, an ice shear forced the two vessels to collide. In the 
attachment, on slide 2, is a picture of the CALLAWAY being repaired in 
the drydock. The attachment also notes that Jones Act vessels on the 
Great Lakes experienced $6 million damages as a result of inadequate 
icebreaking that winter. Slide 3 of the attachment shows an established 
ice track in the Straits of Mackinac and its location.
    Flood control is another purpose of USCG icebreaking on the Great 
Lakes. Most recently, an ice jam on the St. Clair River north of 
Detroit caused significant damage to area residences. Several USCG 
icebreakers, including the sole heavy Great Lakes icebreaker (USCGC 
MACKINAW), were not available to assist. The smaller USCG icebreakers 
did the best they could, but the conditions exceeded their capability 
and the flooding continued for weeks. This ice-induced flooding not 
only occurs along the Great Lakes connecting rivers, but also where 
other rivers meet the Great Lakes. The impacts of inadequate 
icebreaking were clearly felt by the home and business owners whose 
lives were disrupted and property was damaged. In the attachment, slide 
4 shows a geographical reference for the Detroit and St. Clair Rivers 
and vessels operating there in the ice.
    The USCG simply does not have enough icebreaking resources on the 
Great Lakes to be able to maintain the 1,600 miles of open lake 
commercial vessel routes, connecting waterways, and rivers, in addition 
to the sixty federally-maintained commercial ports. In 1979, the USCG 
operated fourteen icebreakers on the Great Lakes, including two heavy 
icebreakers. Now, that fleet has dwindled to nine total, including only 
one heavy icebreaker. Both the quantity and capability of the USCG's 
Great Lakes icebreaking fleet has diminished over that period, as 
several larger, more capable ships were replaced with smaller, less 
capable.

    Question 2. Would an additional icebreaker capacity on the Great 
Lakes benefit Great Lakes commerce? How so? What is needed?
    Answer. At a minimum, the Great Lakes region needs one more 
icebreaker that is at least as capable as USCGC MACKINAW. It is crucial 
to the region's economy that the USCG is sufficiently resourced to 
perform the icebreaking mission on the Great Lakes. The USCG needs 
additional icebreaking assets, including a heavy Great Lakes 
icebreaker, to ensure Great Lakes waterways remain open to meet the 
reasonable demands of commerce. This is a system resiliency issue. 
USCGC MACKINAW can't be in two places at once and it needs both 
scheduled maintenance and casualty repair time during the winter 
icebreaking months.
    The reliability of the other USCG Great Lakes icebreakers also 
needs to be improved. The USCG recently completed a service life 
extension program (SLEP) on its fleet of 140-foot icebreaking tugs. 
However, a last-minute budget cut inexplicably eliminated the 
repowering of the vessels from the SLEP. These icebreakers continue to 
operate with 30-40-year-old power plants. Since the vessels are diesel-
electric, the main engines, propulsion generators and main motor, which 
constitute the power plant, should have been replaced to extend the 
life of the vessels. Although the post-SLEP vessels are more habitable, 
they are often immobilized at the dock by power plant problems. It is 
not too late to repower that fleet. It would complete the life 
extension program and is a better use of taxpayer funds than vessel 
replacements. The two Great Lakes 225-foot buoy tenders, which were not 
designed to break heavy ice, have been less than reliable as 
icebreakers and less capable at that mission than their predecessors. 
In the winter of 2017-2018, the USCG lost 246 cutter days from the 
Great Lakes ice-capable fleet due to engineering casualties. This is 
the equivalent of all nine ice-capable cutters each losing almost one 
month of operations during the ice season.
    Additional Great Lakes icebreaking capability is even more 
important now as our nation's economy starts to recover from the 
pandemic. There is currently significant ice cover from Buffalo, New 
York to Duluth, Minnesota and multiple areas of the Great Lakes region 
will require a heavy icebreaker to assist commerce. In March of 2020, 
the first vessel into Lake Superior became beset in the ice overnight 
because USCGC MACKINAW, the only icebreaker assigned to Whitefish Bay, 
couldn't escort the vessel to the ice edge. It was needed elsewhere. 
With only one heavy icebreaker in the USCG's Great Lakes inventory, it 
would be devastating if critical raw materials could not be delivered 
this spring or become delayed because a single heavy icebreaker is 
unable to cover the vast expanse of the Great Lakes trade routes. The 
Great Lakes domestic commercial fleet and its customers desperately 
call out for adequate icebreaking.

    Question 3. Does Congress need to update the Coast Guard's mission 
on the Great Lakes in regards to icebreaking in order to promote more 
efficient use of U.S.-flag vessel on the Great Lakes? What type of 
performance standard should the Coast Guard be using?
    Answer. Yes, Congress needs to update the USCG's icebreaking 
mission on the Great Lakes. The authority for the USCG's domestic 
icebreaking mission comes from a 1936 executive order issued by 
President Franklin D. Roosevelt, but the USCG interprets it as giving 
themselves too much flexibility to inadequately perform that mission. 
Congressional direction and clarification are badly needed. Currently, 
the USCG measures its Great Lakes icebreaking mission performance based 
on less than what its limited resources can do and not on the 
``reasonable demands of commerce'' as is called for in the executive 
order. With 25 USCG icebreakers and ice capable cutters between North 
Carolina and Maine (a distance equal to about half of the Lake Michigan 
shoreline), the USCG takes a different approach on the East Coast, 
where they consider maintaining winter access to almost all commercial 
ports as vital. On the Great Lakes, the USCG has manipulated its 
icebreaking performance metrics to show success regardless of whether 
commercial traffic moves in the winter months or not. The USCG Great 
Lakes icebreaking performance standard is considered not met only after 
two commercial vessels are simultaneously stuck in the ice, the second 
as a direct result of the first, in one of four small connecting ``tier 
1 waterways'' for greater than 24-hours. That is what the USCG requires 
for a tier 1 waterway to be considered as restricted or closed. That 
means a commercial vessel loaded with vital winter road salt for one of 
America's metropolitan areas (around Chicago), can be stuck in southern 
Lake Michigan (as recently occurred) without affecting the USCG's 
icebreaking performance. The USCG has not designated any tier 1 
waterways on Lake Michigan. The Straits of Mackinac, connecting Lake 
Michigan to Lake Huron, is the only tier 1 waterway adjacent to either 
of those two lakes. In the attachment, slide 5 shows the track of a 
laker trying to deliver salt to Gary, IN and where it spent the night 
beset in ice on February 18 and 19, 2021.
    A headline from The Maritime Executive dated Wednesday, April 8, 
2015 notes ``18 Ships Stuck in Lake Superior Ice.'' The article points 
out that they had been beset since Monday and likely would remain so 
until Thursday. Since there are no tier 1 waterways on Lake Superior, 
the above incident had no impact on the USCG's performance metrics. In 
the attachment, slides 6 and 7 show different versions of automatic 
identification system screen shots with the commercial fleet beset in 
Whitefish Bay. Slide 8 shows its location, pictures of vessels 
operating in the ice and a satellite photo of ice in Whitefish Bay.
    When the laker ARTHUR M. ANDERSON was beset in the ice off 
Conneaut, OH for five days in February of 2015, it did not affect the 
USCG's icebreaking mission performance. The only tier 1 water way in 
Lake Erie is in Canadian waters in the west near where the Detroit 
River enters Lake Erie. In this instance the USCG 140-foot icebreaker 
BRISTOL BAY also became beset in the ice. It eventually ran out of food 
and the USCG had to airdrop supplies to the icebreaker. It took two 
other icebreakers to free both vessels from the icy grip of Lake Erie. 
The ARTHUR M. ANDERSON abandoned its attempt to deliver a cargo from 
Conneaut, OH to the Chicago area. Instead, it went to an early winter 
maintenance berth. If a second icebreaker as capable as USCG MACKINAW 
had been available in the lower lakes, it would have resulted in a 
better outcome. In the attachment, on slide 9 shows a laker being 
loaded in the winter and a satellite picture of icy Lake Erie.
    In the absence of Congressional direction, the USCG established 
performance metrics for Great Lakes icebreaking that set the bar so low 
that success is guaranteed, despite costing the economy billions of 
dollars, tens of thousands of jobs and unnecessarily risking the lives 
of mariners. It is time to tie mission performance to the economy's 
needs. This requires the Congress to define the ``reasonable demands of 
commerce'' and the USCG to resource its Great Lakes icebreaking mission 
to meet those demands. The Great Lakes Winter Commerce Act defines the 
``reasonable demands of commerce'' as ``the safe movement of commercial 
vessels transiting ice covered waterways in the Great Lakes at a speed 
consistent with the design capability of Coast Guard icebreakers 
operating in the Great Lakes.''
    The Great Lakes Winter Commerce Act is a critical step in the right 
direction to ensure the USCG assists commercial mariners, who have 
braved the ongoing pandemic, don't have to also battle ice and the 
damage that it inflicts on their vessels without USCG assistance. Great 
Lakes raw material transportation protects our national and economic 
security. We need adequate Great Lakes icebreaking metrics and 
icebreaking assets to provide for navigation system resiliency. The 
Great Lakes Winter Commerce Act would for the first time authorize the 
Coast Guard's domestic icebreaking mission by statute. It also would 
increase the amount of appropriations currently authorized for 
acquiring a new Great Lakes icebreaker at least as capable as USCGC 
MACKINAW. Both are critical to ensuring that the pilot light of North 
American manufacturing, the Great Lakes Navigation System, continues to 
burn brightly.

   Question from Hon. Rick Larsen to Michael G. Roberts, Senior Vice 
    President, Crowley Maritime, on behalf of the American Maritime 
                              Partnership

    Question 1. Shipyards, like Dakota Creek Industries and Nichols 
Brothers Boat Builders in my district, are the backbone of the Pacific 
Northwest's maritime economy. Of the 117 shipyards in the U.S., 26 are 
in Washington State. The Jones Act, which celebrated its centennial 
last year, helps sustains a strong domestic shipbuilding industry. Can 
you please discuss the importance of Jones Act protections to the U.S. 
shipbuilding industry during the pandemic?
    Answer. The United States simply would not have a commercial 
shipbuilding industry without the Jones Act and related laws. The top 
shipbuilding countries are China, South Korea and Japan, which combined 
account for about 90% of total global shipbuilding according to various 
sources. Shipbuilders in those countries have enormous advantages over 
U.S. shipbuilders due primarily to policy choices made by those 
governments to support their shipping and shipbuilding industries. For 
example, the Center for Strategic and International Studies has 
estimated that the government of People's Republic of China has 
provided an average of almost $15 billion annually to support the 
Chinese commercial shipping and shipbuilding industries. Hidden 
Harbors: China's State-Backed Shipping Industry (June 2020).
    In comparison, U.S. Government financial support for the American 
commercial shipping and shipbuilding industries is virtually non-
existent. Direct shipbuilding subsidies were ended forty years ago, and 
small grants and financial guarantees for U.S. shipyards that are 
sometimes available amount to a tiny fraction of the support provided 
by China to its shipyards. Instead of competing on subsidies, the U.S. 
policy approach has been to reserve the very sizable American domestic 
maritime market for American ships. This approach has succeeded in 
achieving the objective of preserving a critical mass of facilities and 
skilled workers capable of building a variety of ship types, including 
many with very advanced designs. This includes the 117 U.S. shipyards 
(including 26 in Washington) noted in your question. By meeting the 
needs of U.S. domestic maritime commerce, America has the resources 
that may be needed to scale up its shipbuilding capabilities if 
required in a military contingency.
    The pandemic dramatically illustrates the importance of the Jones 
Act to American shipbuilding specifically and the U.S. defense maritime 
industrial base more generally. America's dependence on the Chinese to 
produce nearly 100% of the shipping containers, personal protective 
equipment and other materials Americans have needed in abundance was 
not as well-known before the pandemic. Alarming allegations have been 
made that certain global shipping companies (including Chinese shipping 
companies) have refused to allow U.S. exporters to fill empty 
containers for the backhaul to China--so that the containers can be 
turned around as fast as possible and reloaded with Chinese exports to 
the U.S. Whether or not these allegations are accurate, ceding control 
over both the production of essential goods and the maritime logistics 
services needed to deliver them suggest a type and degree of American 
economic vulnerability that was not previously understood and is very 
much of concern.

 Question from Hon. Garret Graves of Louisiana to Michael G. Roberts, 
  Senior Vice President, Crowley Maritime, on behalf of the American 
                          Maritime Partnership

    Question 1. Congress passed a clarification of the Outer 
Continental Shelf Lands Act to clarify the application of U.S. laws to 
the offshore wind and other non-oil and gas energy sources. Recently, 
CBP issued its first letter ruling following enactment of that law. We 
were pleased to see CBP determined that the Jones Act applies to these 
offshore activities. What is AMP's view of the recent CBP ruling?
    Answer. AMP is very supportive of the recent CBP letter ruling. As 
you noted, that ruling expressly confirms that the plain language of 
the Outer Continental Shelf Lands Act extends all U.S. law, including 
the Jones Act, to offshore wind activities on the Outer Continental 
Shelf. Offshore wind is an extremely important emerging market for the 
American maritime industry. Our industry is a highly capital-intensive 
business and our investments in vessels and other infrastructure are 
long-term. This ruling provides us the certainty needed to invest in 
long-term offshore wind assets. This investment has already begun and 
we expect it to only grow in the future.


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


  Questions from Hon. Rick Larsen to Del Wilkins, President, Illinois 
        Marine Towing, on behalf of American Waterways Operators

    Question 1. The COVID-19 pandemic has devastated Washington state's 
maritime economy, particularly the cruise industry. Last week, Canada 
extended suspension of cruise sailings in its waters through February 
2022. According to Port of Seattle data, the cancellation of the 2020 
cruise season cost an estimated 5,000 local jobs and more than $900M in 
economic activity. With the ongoing cruise sailing suspensions, how can 
the federal government help impacted ports, waterfront operators and 
employees? What should the cruise industry do to ensure the safety of 
homeport workforce and its passengers?
    Answer. It is difficult to overstate the economic impacts to the 
Pacific Northwest and Alaskan maritime economy from the cancellation of 
the cruise season in 2020. To the extent that the cruise industry can 
resume sailings, AWO did not oppose the grant of limited and 
conditional waiver of the Passenger Vessel Services Act to ensure that 
Washington ports can resume serving the cruise industry as soon as it 
is safe to do so. The federal government can further help impacted 
ports in Washington by helping to ensure a diverse business portfolio 
for marine businesses. Washington supports marine freight 
transportation, commercial fishing, non-cruise passenger service, 
shipbuilding and vessel maintenance, recreational boating, and a vast 
array of maritime support industries. This economic ecosystem must be 
sustained with strong policy and deliberate investment. Offshore energy 
generation, innovative vessel construction, short-sea shipping, and 
aquaculture opportunities all offer promising new maritime revenue 
streams that could help to offset the economic downturn imposed by the 
pandemic.

    Question 2. As you know firsthand, the loss of port revenue during 
the pandemic has consequences on local economies and communities. For 
instance, last year the Port of Everett in my district experienced a 
total revenue loss of $6.65M, stemming from aerospace shipping 
declines, lost tourism/hospitality and delayed construction. How would 
full funding for the Maritime Transportation System Emergency Relief 
Program help local ports and employees during these difficult times?
    Answer. While it's unlikely that any federal relief program could 
have fully mitigated the impacts experienced by the Port of Everett 
over the last year, the Maritime Transportation System Emergency Relief 
Program is a sound investment in American resilience. Congressional 
investment in this program is like any investment in necessary 
infrastructure, it proves invaluable when the need arises and deferred 
maintenance can be catastrophic. In the PNW, which is both heavily 
reliant on domestic and international maritime trade and where the 
threat from natural disasters is very real, this investment could be 
the difference between recovery and failure. This program would build 
additional resilience and redundancy for the state marine 
transportation system. Small ports like Everett serve critical needs in 
Washington State and could in the future gain market share from larger 
ports like Tacoma and Seattle. Going forward, this program is likely to 
become more important for Everett and will help mitigate against 
disasters, downturns, and unforeseeable events.

    Questions from Hon. Garret Graves of Louisiana to Del Wilkins, 
  President, Illinois Marine Towing, on behalf of American Waterways 
                               Operators

    Question 1. Would you consider the Coast Guard's Waterways Commerce 
Cutter program a high priority for the industry? Are you satisfied with 
the agency's Q2 2025 target for placing the first new cutters into 
service?
    Answer. The current fleet of Coast Guard waterways commerce cutters 
is comprised of superannuated vessels that are frequently out of 
service because they require a disproportionate amount of maintenance. 
Furthermore, there are only two WCCs that can accommodate co-ed 
personnel. We are aware--and fully appreciative--of the funding 
Congress has thus far provided to help the Coast Guard meet the 
projected goal of placing the first WCCs in service in Q2 of 2025. 
However, in the context of upcoming infrastructure legislation and 
other possible vehicles, we would encourage Committee Members to look 
for opportunities to accelerate the program so that the new fleet is 
ready to serve the Western Rivers.
    Secondly, we believe several Coast Guard policies and procedures 
severely decrease WCC mission-capable hours of service. To address 
this, we would encourage the Committee to consider the following policy 
changes:
      Improve drydocking procedures to commercial vessel 
standards;
      Do not tie crew positions to one vessel. Captains and 
engineers should be able to function on several vessels, and should 
also be certified for all cutters;
      Captains should be licensed mariners for safety purposes;
      Retain two pilots and engineers on board to allow vessels 
to run at night; and
      Initiate repair standards that reflect the needs of 
Western Rivers, rather than ocean-going vessels.