MARITIME ADMINISTRATION

The mission of the Maritime Administration (MARAD) is diverse and far-reaching. MARAD improves and strengthens the U.S. maritime transportation system — including infrastructure, industry and labor — to meet the nation’s economic and security needs. MARAD also seeks to ensure the United States maintains adequate shipbuilding and repair services, efficient ports, effective intermodal water and land connections, less congested transportation routes and reserve shipping capacity for use in time of national emergency.

MARAD is the principal advocate for waterborne transportation systems and federal programs supporting the marine mode within the Department of Transportation. Changing demographics, trading patterns, economic growth and consumer demand are straining the U.S. transportation infrastructure, intensifying congestion and increasing transportation related pollutants. Expansion of water-borne services could relieve congestion and improve air quality along highways. Greater use of short-sea shipping to integrate waterborne shipping into the overall U.S. transportation system is a MARAD priority.

Historical Perspective

The United States began as a maritime nation, and its earliest industry was shipbuilding. In the 19th century, the U.S.-flag merchant vessels transported more than 90 percent of America’s foreign trade. Today, while 95 percent (by weight) of the nation’s overseas trade still moves by water, only about 3 percent is carried by the U.S.-flag fleet. Without a U.S.-flag fleet, the nation’s foreign commerce would depend exclusively on foreign-flag ships.

Shipping provides a vital link for mobilizing U.S. armed forces for military contingencies and supporting civilian emergency response. For the first quarter of 2006, MARAD-owned vessels continued emergency services to the Gulf Coast. Auxiliary sealift provided by the U.S.-flag Merchant Marine has played a vital role in American success in all wars and many of the international crises in which U.S. forces have been involved. MARAD vessels have supported the deployment of U.S. armed forces during Operation Enduring Freedom as well as maintaining continuous logistical support for Operation Iraqi Freedom.

MARAD provides the programs for the integration of civilian support for military requirements. Many of these programs provide not only a planning aspect, but a platform for discussion with the military on its priorities.

Maritime Security Program/Voluntary Intermodal Sealift Agreement

The Maritime Security Program (MSP) and Voluntary Intermodal Sealift Agreement (VISA) programs make commercial ships and intermodal sealift capacity available to the U.S. armed services. The programs are designed primarily for sustainment sealift, that is, maintaining sealift capacity when the initial surge period has passed.

VISA is sponsored jointly by MARAD and the Department of Defense (DoD), and includes nearly all of the U.S.-flag cargo oceangoing fleet. VISA participants commit specific vessel capacity, intermodal equipment and management services to DoD. The VISA program is the means used by DoD to preplan the availability of militarily useful commercial vessels in times of emergency. In return for their capacity commitments, VISA participants receive priority consideration for the award of DoD peacetime cargo.

A key element of the VISA Program is the Joint Planning Advisory Group. During fiscal year 2006, MARAD and U.S. Transportation Command conducted four advisory group meetings, including one Tabletop Exercise to match industry capabilities to military requirements. As a result of the meetings, it was reaffirmed that the industry could play a major part in responding to DoD requirements.

MSP-generated capacity is a significant component of VISA. MSP participants are required to enroll 100 percent of their MSP ships and a corresponding level of intermodal resources and services in the VISA program. These two interlocking programs serve to maintain a U.S.-flag fleet in ocean-going commerce, both in peace and war.

During 2006, MARAD maintained the enrollment of 60 ships in the MSP and an overall enrollment of 118 ships in the VISA program. Since January 2003, a total of 79 VISA ships have been used to support Operation Iraqi Freedom/Operation Enduring Freedom, including 57 MSP ships. One additional VISA ship supported the rebuilding of Iraq.

On Oct. 1, 2005, MSP operators commenced operations in U.S. international trade under the reauthorized MSP. Subject to the availability of funds, MSP companies will receive $2.6 million per ship per year for fiscal years 2006-2008, $2.9 million per ship per year for 2009-2011, and $3.1 million per ship per year for 2012-2015. The current MSP fleet includes 35 container ships, five geared container ships, 14 roll-on/roll-off (RO/RO) vessels, two heavy-lift ships, one lighter-aboard ship and three product tankers. A chart illustrating the 60 ships, their types and their operating companies, is available at: www.marad.dot.gov/Offices/MSP_Fleet.xls

Ready Reserve Force (RRF)

Established in 1976, the RRF adds significantly to the DoD’s overall sealift capability. An agreement between the DoD and RRF ensures U.S. armed forces the availability of a combination of sealift platforms — including RO/RO ships, break bulk/ammo replenishment ships, auxiliary crane ships, offshore petroleum discharge ships, heavy-lift barge carriers and aviation logistic support ships. Maintained by MARAD, the RRF ships routinely participate in exercises and operations to ensure readiness. RRF appropriations come through the National Defense Sealift Fund.

Ships in the RRF are retained in Reduced Operating Status 5 (ROS-5), RRF-10 or RRF-20. The ships in five-day readiness are in ROS-5 and have 10 mariners onboard conducting maintenance. They alternate between sea and dock trials annually. They are required to be ready for sea within 120 hours. ROS ships are generally outported along the West, East and Gulf Coasts of the United States.

RRF-10 and RRF-20 ships are generally maintained at one of MARAD’s three reserve fleet anchorages, or near a strategic port. When ordered to activate, the ship is towed to an industrial facility to activate all systems. Ten-day ships undergo systematic full-power sea trials every 30 months and 20-day ships go through full-power sea trials every 60 months.

During Iraqi Freedom sustainment operations in 2006, five RRF RO/RO ships were activated to carry equipment and supplies for various U.S. military forces to Kuwait. During Operation Desert Storm, 83 percent of the RRF, or 49 vessels, were activated to transport cargo to the theater of operations. More than 99 percent of these vessels were available within their assigned readiness time frame.

At the end of fiscal year 2006, U.S. Transportation Command ordered a reduction in the number of RRF vessels comprising the force. MARAD had 44 ships on the active RRF roll, with three T-1 tankers being advertised for sale.

Maritime Heritage

Obsolete parts and equipment from National Defense Reserve Fleet ships that are to be disposed of are made available to memorial ship organizations to help preserve the operational or historical character of vessels. During fiscal year 2005, more than 1,900 items were transferred. Recipients of these items included the battleship USS Massachusetts, in Battleship Cove, Mass., and the U.S. Navy Museum in Washington, D.C.

Training Availability

National Defense Reserve Fleet vessels are made available to various groups for training purposes. Ships in the reserve fleet anchorages are used for military, law-enforcement and ship-interdiction training by groups in the Navy and FBI. RRF vessels standing by at port facilities are often used for cargo-handling training.

A total of 82 training events were held during the year, including Navy, Army and Marine Corps cargo-handling units, as well as stevedores sponsored by the Pacific Maritime Association. These RRF vessels also supported security exercises conducted by antiterrorism units from the U.S. Coast Guard and Marine Corps.

Strategic Ports

Strategic ports are commercial ports that have been specifically evaluated and selected for their militarily useful location, facilities, equipment and services. The National Port Readiness Network was established to facilitate coordination within the federal agencies that support deploying forces through these ports, in the event of a mobilization or national defense contingency. This coordination is vital to minimizing congestion and disruption of commercial activities while supporting the military’s surge and sustainment cargo operations.

The commercial ports are increasingly important to the nation’s defense as DoD downsizes and the military relies more heavily on U.S.-based forces. Fifteen commercial ports have been identified as strategic ports by the military and the National Shipping Authority, which is the defense arm of MARAD. These 15 commercial ports are: New York/New Jersey Port Complex; Philadelphia; Hampton Roads Port Complex, Va.; Morehead City, N.C.; Wilmington, N.C.; Charleston, S.C.; Savannah, Ga.; Jacksonville, Fla.; Beaumont, Texas; Corpus Christi, Texas; San Diego; Long Beach, Calif.; Oakland, Calif.; Tacoma, Wash.; and Anchorage, Alaska.

Cargo Preference

U.S.-flag ships are registered in the United States and subject to additional U.S. laws and regulations. Unlike their foreign-flag competitors, U.S.-flag commercial ships must meet strict guidelines for the construction, maintenance, environmental and safety standards, resulting in increased operation costs. To help these ships compete, and provide an incentive to remain under U.S. registry, Congress established a series of cargo preference laws that assist ship owners in defraying costs associated with maintaining their vessels under the U.S. registry. These laws, the first of which was established in 1904, require that some government-sponsored cargo shipped internationally be carried on U.S.-flag vessels.

When the government provides a benefit to help an American industry export U.S.-made products, it often establishes a quid pro quo that requires a certain portion of the exports to be carried on U.S.-flag vessels — when such vessels are available at fair and reasonable rates. Two or more industries therefore are assisted at the same time. The government recaptures the added cost: (a) through taxes on the total gross revenue of the U.S. carrier and (b) on the taxes generated as that total gross revenue flows through the American economy. Without the combination of the limited direct subsidy and the cargo-preference laws, the already much-diminished U.S.-flag foreign trade fleet might well disappear completely.

MARAD’s website (www.marad.dot.gov/usflag) makes it easier for exporters, importers and government agencies to find available U.S.-flag ships to transport cargo around the world.

Ship Operations Cooperative Program

The Ship Operations Cooperative Program brings together U.S.-based maritime organizations to address common problems and develop products that satisfy its members’ common needs, while sharing the costs of that work. Members work in unison to achieve improved safety, efficiency and environmental protection of ship operations.

Program contributions include: active participation in the development and submittal of organizational comments on Notice of Proposed Rule Makings for Transportation Worker Identification Credentials, providing similar support to the development of Merchant Mariner Credentials, and the tracking and logging of right whale strikes.

Maritime Administrator

Sean T. Connaughton was sworn is as administrator of MARAD in September. The maritime administrator is MARAD’s senior official and advises the secretary of transportation on commercial maritime matters, the U.S. maritime industry and strategic sealift. The administrator develops MARAD policies and manages MARAD activities, and serves as commandant of the U.S. Maritime Service and director of the National Shipping Authority.

A lawyer who had been serving as chairman of the Prince William, Va., Board of County Supervisors, Connaughton is a commander in the Naval Reserve. He served in the Coast Guard from 1983-1986, after receiving a bachelor’s degree from the Merchant Marine Academy. He later worked in the Office of Marine Safety, Security and Environmental Protection at Coast Guard Headquarters in Washington, D.C.

Maritime Labor and Training

The importance of labor to U.S. economic growth and national security is reflected in MARAD’s commitment to foster a sufficient, well-qualified and safety-conscious maritime work force. Through support of programs to improve the education, training, health, welfare and safety of U.S. citizen seafarers, MARAD is working to ensure the availability of an adequate number of mariners to crew active U.S.-flag commercial vessels during peacetime and in emergencies, as well as RRF ships activated for sealift and/or humanitarian-assistance missions.

Maritime Issues and Challenges

The marine transportation industry supports and contributes to this robust economy. Waterborne cargo and associated activities contributed more than $742 billion annually to the U.S. Gross Domestic Product. America’s network of waterways moves 2.2 billion tons of domestic and foreign commerce each year, and the top 50 ports in the U.S. account for about 84 percent of all waterborne domestic and international cargo tonnage.

America’s maritime infrastructure will only grow in importance. Conservative estimates project that U.S. trade and freight volumes at American ports will double by 2020. The marine transportation industries that carry this trade are going to be essential to the nation’s economic future. Continued investment in the nation’s maritime infrastructure and assets, including personnel, is essential to keep the transportation network from becoming a chokepoint for the economy.

America faces a vast transportation challenge — congestion — that threatens to overwhelm its ports and its distribution network and erase any efficiencies gained from improved vessel and cargo handling designs.

Transportation facilitation is linked to the challenges posed by congestion, but also about developing better approaches to moving cargo and people by and through seaports. The maritime industry is complicated, involving ports, carriers and shippers, different modes of transportation, and numerous levels and subdivisions of government. It also involves passengers and different commodities that can either be carried in containers or considered break bulk, liquid bulk, dry bulk and RO/RO cargoes. It involves individuals and companies with operations that span from the Alaska North Slope to the Great Lakes and inland waterways to the offshore energy industry and coastwise and international deep-sea carriers. It is international in scope in practically every way.