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i 

89–518 2015

[H.A.S.C. No. 113–125] 

LOGISTICS AND SEALIFT FORCE 

REQUIREMENTS AND FORCE 

STRUCTURE ASSESSMENT 

HEARING 

BEFORE THE

SUBCOMMITTEE ON SEAPOWER AND 

PROJECTION FORCES 

OF THE

COMMITTEE ON ARMED SERVICES 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

SECOND SESSION 

HEARING HELD 

JULY 30, 2014 
(II) 

SUBCOMMITTEE ON SEAPOWER AND PROJECTION FORCES 

J. RANDY FORBES, Virginia, Chairman 

K. MICHAEL CONAWAY, Texas 

DUNCAN HUNTER, California 

E. SCOTT RIGELL, Virginia 

STEVEN M. PALAZZO, Mississippi 

ROBERT J. WITTMAN, Virginia 

MIKE COFFMAN, Colorado 

JON RUNYAN, New Jersey 

KRISTI L. NOEM, South Dakota 

PAUL COOK, California 

BRADLEY BYRNE, Alabama 

MIKE MCINTYRE, North Carolina 

JOE COURTNEY, Connecticut 

JAMES R. LANGEVIN, Rhode Island 

RICK LARSEN, Washington 

HENRY C. ‘‘HANK’’ JOHNSON, JR., Georgia 

COLLEEN W. HANABUSA, Hawaii 

DEREK KILMER, Washington 

SCOTT H. PETERS, California 

DAVID SIENICKI, Professional Staff Member 

PHIL MACNAUGHTON, Professional Staff Member 

KATHERINE REMBER, Clerk 
(III) 

C O N T E N T S 

CHRONOLOGICAL LIST OF HEARINGS 

2014 

Page 

HEARING: 

Wednesday, July 30, 2014, Logistics and Sealift Force Requirements and 

Force Structure Assessment ................................................................................ 1 

APPENDIX: 

Wednesday, July 30, 2014 ....................................................................................... 25 

WEDNESDAY, JULY 30, 2014 

LOGISTICS AND SEALIFT FORCE REQUIREMENTS AND FORCE 

STRUCTURE ASSESSMENT 

STATEMENTS PRESENTED BY MEMBERS OF CONGRESS 

Forbes, Hon. J. Randy, a Representative from Virginia, Chairman, Subcommittee on Seapower and Projection Forces .................................................. 1 

McIntyre, Hon. Mike, a Representative from North Carolina, Ranking Member, Subcommittee on Seapower and Projection Forces .................................... 2 

WITNESSES 

Brown, VADM William A., USN, Deputy Commander, United States Transportation Command ............................................................................................. 2 

DiLisio, F. Scott, Director, Strategic Mobility/Combat Logistics Division, Office of the Chief of Naval Operations ................................................................. 5 

Jaenichen, Paul N., Maritime Administrator, U.S. Department of Transportation ..................................................................................................................... 3 

APPENDIX 

PREPARED STATEMENTS: 

Brown, VADM William A. ................................................................................ 33 

DiLisio, F. Scott ................................................................................................ 49 

Forbes, Hon. J. Randy ...................................................................................... 29 

Jaenichen, Paul N. ........................................................................................... 41 

McIntyre, Hon. Mike ........................................................................................ 31 

DOCUMENTS SUBMITTED FOR THE RECORD: 

[There were no Documents submitted.] 

WITNESS RESPONSES TO QUESTIONS ASKED DURING THE HEARING: 

Mr. Hunter ........................................................................................................ 65 

QUESTIONS SUBMITTED BY MEMBERS POST HEARING: 

Mr. Forbes ......................................................................................................... 69 

(1) 

LOGISTICS AND SEALIFT FORCE REQUIREMENTS AND 

FORCE STRUCTURE ASSESSMENT 

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON ARMED SERVICES, 

SUBCOMMITTEE ON SEAPOWER AND PROJECTION FORCES, 

Washington, DC, Wednesday, July 30, 2014. 

The subcommittee met, pursuant to call, at 2:02 p.m., in room 

2212, Rayburn House Office Building, Hon. J. Randy Forbes (chairman of the subcommittee) presiding. 

OPENING STATEMENT OF HON. J. RANDY FORBES, A REPRESENTATIVE FROM VIRGINIA, CHAIRMAN, SUBCOMMITTEE 

ON SEAPOWER AND PROJECTION FORCES 

Mr. FORBES. We want to welcome all of you today to this hearing, 

and today the subcommittee convenes to receive testimony on logistics and sealift requirements. 

We are going to forego our opening statements just in the interest of time, because we are going to have a vote series called, I 

think, about 3:00, 3:15, or 3:30, and we want to make sure we get 

as much of this hearing in as we can before that. 

We have three very distinguished witnesses here today. And I 

want to thank all three of you for, one, your service to our country, 

but also your willingness to come help us today. I know, also, you 

couldn’t do what you do without the valuable work of your staffs 

that are behind you, and on behalf of Mr. McIntyre and I, if you 

could just stand up if you are one of the staff people here today 

supporting them, we just want to tell you how much we appreciate 

you. So stand up and let us just thank you for that effort. Well, 

we appreciate so much all of your hard work and what you do. 

Our witnesses today are the Honorable Paul N. Jaenichen, Sr., 

Maritime Administrator, U.S. Department of Transportation, Maritime Administration; also, Vice Admiral William A. Brown, Deputy 

Commander, U.S. Transportation Command; and Mr. F. Scott 

DiLisio, Director, Strategic Mobility/Combat Logistics, Office of 

Chief of Naval Operations. So we thank you three gentlemen for 

being here. 

As I mentioned, we are going to put our opening statement in the 

record, but I would like to now recognize my partner in all of this, 

the ranking member, my good friend from North Carolina, Mr. 

McIntyre, for any comments he may have. 

[The prepared statement of Mr. Forbes can be found in the Appendix on page 29.] 
2 

STATEMENT OF HON. MIKE MCINTYRE, A REPRESENTATIVE 

FROM NORTH CAROLINA, RANKING MEMBER, SUBCOMMITTEE ON SEAPOWER AND PROJECTION FORCES 

Mr. MCINTYRE. Thank you, Mr. Chairman. Thanks to all of you 

all for coming, and I will echo the chairman’s appreciation for your 

work and for the staff’s work. We also will respect the fact of the 

more compressed time schedule we are on and forego opening remarks, but we will submit them for the record. God bless you all 

for your commitment and work. 

And thank you, Mr. Chairman. 

[The prepared statement of Mr. McIntyre can be found in the Appendix on page 31.] 

Mr. FORBES. Thank you, Congressman McIntyre. 

And I don’t know which order you would like to go. Admiral, are 

you going to start us off, or are we going to go in a different—— 

Admiral BROWN. I can do that, sir. 

Mr. FORBES. Okay. Well, we would love to hear your comments 

now. 

STATEMENT OF VADM WILLIAM A. BROWN, USN, DEPUTY 

COMMANDER, UNITED STATES TRANSPORTATION COMMAND 

Admiral BROWN. Thank you, sir. 

Chairman Forbes, Ranking Member McIntyre, and distinguished 

members of this committee, it is truly an honor for me to be here 

today representing the United States Transportation Command 

[TRANSCOM]. Our force of men and women, military and civilian, 

is dedicated to providing reliable, seamless logistical support to our 

warfighters and their families around the globe. The dedicated professionals at TRANSCOM simply cannot accomplish this global 

mission without the capabilities provided by the United States 

Strategic Sealift fleet and our steadfast merchant mariners. 

I would also like to recognize and thank my good friends on my 

left here, Mr. Jaenichen and Mr. DiLisio. They work with us every 

day to try to achieve our goal of supporting our Nation. Their vision and leadership have enabled TRANSCOM to provide transportation and distribution support that are second to none anywhere 

in the world, and together, we deliver. 

TRANSCOM relies on both government-owned vessels and those 

accessed via commercial industry. Our government-owned fleet of 

60 total assets from the Military Sealift Command and the surge 

fleet and the Maritime Administration’s Ready Reserve Force are 

strategically positioned around the country and important to our 

capability. All of these government-owned and commercial vessels 

are critical to the Department of Defense’s ability to surge to meet 

future global requirements. 

As the Department of Defense [DOD] postures its forces in the 

future, sealift will continue to be a key component in ensuring strategic agility and dynamic presence for our Nation’s military forces. 

And although organic assets are essential to meeting our requirement, we rely on commercial partners to augment the organic fleet 

during the initial surge of combat power and for the vast majority 

of sealift in peacetime and in the sustainment phases of the contingency operations. 
3 

Access to these commercial assets is formalized by MARAD’s 

[United States Maritime Administration] Voluntary Intermodal 

Sealift Agreement, the VISA program; and the Maritime Security 

Program, MSP program; as well as the Voluntary Tanker Agreement, the VTA. Through these programs, DOD gains critical access 

to U.S. commercial capabilities while ensuring the availability of a 

viable U.S.-flag maritime industry and crewed by U.S. citizens who 

are merchant mariners in our times of national emergency. 

The Maritime Security Program provides access to a fleet of 60 

military useful commercial vessels operating in international commerce and exercising intermodal networks throughout the world, 

and these provide jobs for United States citizens who are mariners. 

A significant percentage of our required sealift capacity needed in 

response to a national emergency will come from the 60 vessels operating within the MSP program. 

The maritime defense industrial base provides an irreplaceable 

shipbuilding as well as ship operating capability for the U.S., including the ability to support our forces around the globe. But this 

national defense capability is undergoing stress from several recent 

enduring factors, primarily the reduced amount of defense cargo resulting from our drawdown in Afghanistan and current economic 

conditions which make it challenging for U.S.-flag companies to 

compete with companies operating at much lower cost under foreign flags. 

Some think that as we transition from Afghanistan our requirement is reduced; this is, indeed, not the case. Maintaining a responsive sealift capacity and experienced mariners to crew our 

ships in time of need is essential to meeting the Nation’s defense 

requirements. We are working with the Maritime Administration 

in its development of a national maritime strategy which could 

grow the U.S.-flag fleet and ensure that availability and the ability 

of U.S. Merchant Marine to meet our national security needs. Despite an uncertain future and dynamic strategic environment, 

TRANSCOM will continue in close collaboration with our partners 

to ensure we meet the Nation’s needs in peace and in time of conflict. 

Chairman Forbes, Ranking Member McIntyre, and all the distinguished members of this committee, thank you for your continued 

support to TRANSCOM and our total force. I am grateful for the 

opportunity to be here before the committee, and I ask that my 

written statement be submitted for the record and I look forward 

to your questions. 

Thank you, sir. 

[The prepared statement of Admiral Brown can be found in the 

Appendix on page 33.] 

Mr. FORBES. Admiral, thank you for your comments. And without 

objection, all the written statements will be submitted as part of 

the record. 

Mr. Jaenichen. 

STATEMENT OF PAUL N. JAENICHEN, MARITIME 

ADMINISTRATOR, U.S. DEPARTMENT OF TRANSPORTATION 

Mr. JAENICHEN. Good afternoon, Chairman Forbes, Ranking 

Member McIntyre, members of the subcommittee. 
4 

I want to thank you for the opportunity to discuss the United 

States Merchant Marine that supports our Nation’s governmentowned and U.S.-flag commercial fleet sealift requirements. 

While our Nation is continuing to recover from economic downturn of the past several years, more cargo today is being moved by 

merchant ships globally. However, there are challenges for maintaining the number of commercial U.S.-flag vessels actively involved in international trade, which affects the availability of sealift capacity that the Department of Defense relies upon to move 

equipment and supplies to support global projection and sustainment of our Armed Forces. 

The U.S.-flag commercial fleet operating international trade provides a substantial portion of the infrastructure for the sealift capacity with our commercial maritime companies, their vessels, and 

the mariners available in wartime or crisis, whenever and wherever they are needed. 

The number of vessels currently in the U.S.-flag fleet today has 

declined by nearly 20 percent as compared to the running 5-year 

average between 2008 and 2013. This causes me great concern 

about the overall health of our international trading fleet. 

Government-owned sealift force requirements have a direct and 

significant nexus to the commercial U.S.-flag maritime industry 

that provides the ready pool of proficient and qualified mariners. 

Given that the two are linked, DOD and the Maritime Administration must now assess the impact of a loss of these vessels on our 

sealift capacity and the availability to support national security. 

The overall volume of non-bulk dry and dry bulk preference 

cargo transported on U.S.-flag vessels has substantially decreased 

since 2005. Ships require cargo to be economically viable. So without ready access to commercial or government-impelled cargo, the 

survival of some vessels in the U.S.-flag fleet operating international trade is in question. 

The cause of the falling volume of non-bulk dry and dry bulk 

preference cargo do not appear to be transient. Continued reductions in the number of U.S. Armed Forces and overseas bases, coupled with the decline in the number of troops involved in global operations suggest that military cargos will continue to decrease 

through 2016 and level off at less than 1 million metric tons per 

year, or less than half of the volume that was transported as recently as 2011. 

The size of the U.S.-flag international trading fleet has decreased 

from the 5-year average of 101 to 83 as of this afternoon, and it 

is expected to decrease further in the future. Adverse impacts on 

the 58 liner-type vessels in the Maritime Security Program are already occurring, with one vessel having left the program and reflagging foreign, and up to two more expected to leave before the 

end of this year. Their primary reason for leaving the program is 

lack of cargo, and it appears unlikely that commercial or preference 

cargo opportunities will recover significantly anytime in the future. 

MARAD is responsible for determining whether adequate mariners are available to support the operation of sealift ships required 

to support our global deployment of our Nation’s Armed Forces. We 

have determined that the pool of civilian U.S. merchant mariners 

available to crew government sealift ships when activated has de-
5 

clined over the last decade. The current number of qualified and 

experienced mariners available may not be adequate in the very 

near future without requiring the U.S. Coast Guard to waive domestic and international requirements for the mariners to crew 

government sealift ships when activated for longer than 6 to 8 

months. 

This assessment of the status of the civilian merchant mariner 

pool included close coordination with the U.S. maritime labor 

unions in consultation with other maritime industry stakeholders. 

I have shared this assessment with DOD and intend to work closely with the U.S. Transportation Command, the U.S. Navy, and 

commercial maritime industry to address this issue. The Maritime 

Administration is currently working on developing a national maritime strategy with stakeholders aimed at preserving and growing 

all aspects of the U.S. Merchant Marine, including the U.S.-flag 

fleet trading internationally. 

The Maritime Administration is also focused on the future of the 

government sealift capacity. The average age of the 46 vessels and 

the Ready Reserve Force or RRF is 40 years with the oldest being 

47. While commercial ships are typically retired after 25 to 30 

years of operation, the Maritime Administration intends to maintain the RRF vessels in the fleet for 50 years. 

Given the 40-year average age of the Ready Reserve Force, 

MARAD is coordinating with the Department of Defense to examine the need for recapitalization and to assess the full range of options that will balance DOD’s requirements with funding realities. 

With regard to the Maritime Security Program which supports the 

60 commercial U.S.-owned, U.S.-flag, U.S.-crewed vessels that support DOD sustainment sealift requirements and which transported 

over 90 percent of the equipment and supplies used by our troops 

in Afghanistan and Iraq, I would request that the committee support full funding at the authorized level of $186 million, as requested in the President’s budget. 

Thank you for the opportunity to discuss the issues affecting the 

ability of the U.S. Merchant Marine to continue to meet DOD sealift requirements. 

I thank the committee for their support, and I look forward to 

any questions that you might have. 

[The prepared statement of Mr. Jaenichen can be found in the 

Appendix on page 41.] 

Mr. FORBES. Mr. Jaenichen, thank you so much for your testimony. 

Mr. DiLisio, you are now recognized for any opening remarks you 

would like to make. 

STATEMENT OF F. SCOTT DILISIO, DIRECTOR, STRATEGIC MOBILITY/COMBAT LOGISTICS DIVISION, OFFICE OF THE CHIEF 

OF NAVAL OPERATIONS 

Mr. DILISIO. Thank you, Chairman Forbes, Ranking Member 

McIntyre, distinguished—— 

Mr. FORBES. You might want to pull that microphone a little bit 

closer. I don’t know if it is turned on or not, but sometimes you 

have to get—— 

Mr. DILISIO. I think I have got it now. 
6 

Mr. FORBES. That is good. 

Mr. DILISIO. Thanks. 

We continue to meet operational requirements while driving successful, innovative, and nontraditional solutions to global maritime 

logistics. You have met my colleagues. I won’t reintroduce them, 

but I am honored to be here with them both. I consider them to 

be my close partners in this regard. 

I will be brief in my remarks so we can spare some time together. The Combat Logistics Force and Strategic Sealift missions 

are accomplished by an organic fleet comprised of about 122 ships. 

These ships support numerous missions, including the following: 

At-sea resupply of our naval combatants; prepositioning of critical 

unit equipment, ammunition, and sustainment for Marine Corps, 

Army, and Air Force; humanitarian assistance and disaster relief; 

towing, diving, and salvage operations worldwide; rapid intra-theater movement of cargo and personnel; and afloat staging capabilities. 

This unique segment of the fleet is augmented by the commercial 

U.S.-flag fleet, as Mr. Jaenichen spoke to you about. It provides a 

scalability capability required by the combatant commander to execute critical missions around the globe. The ability to rearm, refuel, 

and reprovision our forces at sea, independent of restrictions placed 

on it by any foreign country, is critical in the Navy’s ability provide 

presence and projected warfighting power from the sea where it 

matters when it matters. 

The Navy’s Combat Logistics Force ships are the lifeline of resupply to the Navy operating forces underway, enabling carrier 

strike groups, amphibious ready groups, to operate forward and remain on station during peacetime and war. The Combat Logistics 

Force includes replenishment oilers, T–AOs; fast combat support 

ships, T–AOEs; and dry cargo and ammunition ships, T–AKEs. The 

T–AOs primarily provide fuel but with the ability to provide limited quantities of dry cargo. The T–AOEs and T–AKEs are multimission ships capable of multiproduct, a term of ‘‘one-stop shopping,’’ if you will, to customer ships by simultaneously replenishing 

ammunition, provisions, and fuel. 

A different portion of that force is the Strategic Sealift Program, 

provides the necessary transportation for Marine Corps and Army 

combat equipment, fuel, and sustainment. This capability is provided to the combatant commander through three methods: afloat 

prepositioning, surge sealift, and sustainment shipping. These 

methods encompass 85 organic ships with each providing a critical 

set of capabilities when called for tasking or activated for service. 

The Prepositioned Fleet is strategically located in key areas on 

the globe prior to actual need ensuring ready access for contingencies. Doing so provides flexible, rapid response of military 

equipment, combat gear, and supplies essential to sustaining initial 

phases of contingencies, including major combat operations. When 

Mobile Landing Platform [MLP] ships join the Large MediumSpeed Roll-on/Roll-off ships as part of the Maritime Prepositioning 

Force next year, they will enable a greater sea-basing capability 

and increased flexibility across the operational area. 

An MLP is a tremendously versatile ship; it is new and will act 

as a floating base for expeditionary operations. Equipped with 
7 

ramp systems, the MLP is an intermediary transfer point for 

troops, equipment, and sustainment moved ashore by Landing 

Craft Air Cushion craft and the Joint High Speed Vessel. The Joint 

High Speed Vessel is designed for high-speed intra-theater transport. Experimentation is revealing more potential missions to include various types of mission support, humanitarian assistance, 

theater security cooperation, and security force assistance. 

Surge ships are the second subset of sealift and is comprised of 

60 ships. These ships move unit equipment to the theater of operation and facilitate the rapid on-load and off-load of rolling stock 

and service-unique special mission equipment. The sustainment 

shipping provided by the commercial U.S.-flag fleet Mr. Jaenichen 

referred to, is the third component of Strategic Sealift. These vessels assist in the sustainment phases of operations as well as the 

global movement of government cargo. 

These commercial owners participate as a program member of 

the overall sealift capability. We are currently working with fleet 

commanders to complement Combat Logistics Force and Strategic 

Sealift capabilities by examining innovative ways to improve capability and capacity to perform theater security cooperation missions 

that also enhance overall Navy combat force availability. Deploying 

adaptive force packaging can create cost-effective opportunities for 

our fleet to expand support missions and sustain global presence. 

We will continue to support forward presence and relieve stress 

on the rest of the force through traditional and innovative approaches. We will continue to rely on the Combat Logistics Force 

and Strategic Sealift as they contribute to the Navy’s tenets, you 

have heard from the CNO [Chief of Naval Operations]: Warfighting 

first, operate forward, and be ready. 

I want to thank you for your continued support of our force, and 

thank you again for the opportunity to speak to the committee. 

[The prepared statement of Mr. DiLisio can be found in the Appendix on page 49.] 

Mr. FORBES. Mr. DiLisio, thank you so much for being here and 

your service to our country. 

I am going to defer my questions until the end to make sure all 

our Members can get their questions in. 

So at this time, I would like to recognize Mr. McIntyre for any 

questions he may have. 

Mr. MCINTYRE. And again, I will follow the chairman’s example, 

given our compressed time today and proceed with the Members 

asking their questions. 

Thank you. 

Mr. FORBES. Thank you, Mr. McIntyre. 

Then, our first Member for questions will be recognized will be 

Mr. Runyan recognized for 5 minutes. 

Mr. RUNYAN. Thank you, Mr. Chairman. 

Just a little bit, I know I have dealt with this on other subcommittees a little bit with TRANSCOM, with airlift and CRAF 

[Civil Reserve Air Fleet], which Merchant Marine, I would think, 

would be the mirror thing on the seas. I know we have probably 

been through these situations before where you have a downturn 

and you have to walk away from it. 
8 

What have we learned from the past and what are we able to do 

to keep that readiness there? Because obviously, we don’t have a 

need for it. But I dealt with this on the CRAF aspect of it; as the 

companies can’t keep the civilian fleets around, it becomes a huge 

problem and the ramp-up on the back end when there is another 

conflict is huge. 

And where would that—well, can the Air Force absorb that, and 

do you have any idea of what cost that would be to get that, to 

get—you know, because it may take you at some point if you do 

have to, a year or two to get the civilian sealift aspect back on? 

Mr. Jaenichen, do you have any—I know it is kind of a vague 

question, but—— 

Mr. JAENICHEN. Well, first of all, what I will tell you is the 83 

vessels that are currently operating international trade, 60 of those 

are in the Maritime Security Program. If those ships are lost or 

they decide to not continue in the program, the cost to the U.S. 

Government to replace them in terms of the assets that these civilian companies have essentially invested, probably over $2 billion in 

those 60 ships alone. But the piece that is probably more important 

to us is the international logistics capability that those companies 

have access to that we don’t necessarily have access to as the Department of Defense or as the U.S. Government. 

For example, when Pakistan closed their borders to be able to get 

our supplies to Afghanistan, it was the MSP program that actually 

developed the Northern Distribution Network to be able to get 

those supplies to our troops to be able to support the continued operations in Afghanistan. So that particular aspect of the infrastructure, that is a $40 bil- lion, in excess of $40 billion to replace. So to be able to say that 

we can ramp up, the ships themselves are important, but the mariners who man them are probably just as important because I can’t 

necessarily make a mariner. 

It takes 10 years to get a mariner trained and experienced and 

licensed to be a master on one of these vessels or a chief engineer. 

I can’t turn the faucet on and just say, okay, I ramp up and suddenly they are there. I talked about the fact that we need cargo to 

have ships. I need ships to have mariners. The mariners are probably one of the most important complements of that, and it is not 

easy to ramp those up. 

Mr. RUNYAN. I know but also in the same way, to really train 

mariners, you are going to have to be moving them around and you 

are going to have to have cargo on those ships. So it is, you know, 

what is first? The chicken or the egg? I mean, it is a little bit frustrating. I mean, I really, I think we understand the need for it, but 

how do we sustain it? Any suggestions there? 

Mr. JAENICHEN. I think the important aspect of sustainment is 

to continue the funding of the programs that are currently in place. 

The Maritime Security Program which is currently funded at $186 

million a year and is in the request for fiscal year 2015 at the same 

funding level, that to replace that capacity would cost the Department of Defense significantly more than what we are currently expending. So I think that is the first piece that we have to do. 

The second piece is to take a look at what other cargo opportunities and to take a look, that is what we are doing with this national 
9 

maritime strategy, to evaluate ways to be able to get cargo on these 

ships to make sure that they are economically viable. One of the 

challenges that we have is for a number of reasons the cost to operate under U.S. flag, as Admiral Brown pointed out in his opening 

remarks, is somewhere between $5- and $7 million on an annual 

basis. 

The amount that we pay them under the MSP program stipend 

barely covers 50 percent of that amount. So in order to make up 

that amount, we have to either have government-impelled cargo 

through cargo preference or civilian cargo. Absent that, and now 

that we have these decreasing cargos, both on the DOD side and 

other preference cargos that we have here in the U.S., the program, 

when it was developed in 1996, relied on three things: it relied on 

the stipend amount; it relied on the cargo commercially available; 

and it relied on government-impelled cargo. 

If you change sort of the tenets of the program where you lower 

one, you are going to have to figure out how to increase the other 

two, and it doesn’t look like that the preference cargo is going to 

increase any time soon, so we have to look at those other levers to 

be able to maintain those ships in the program that are vitally important. 

The mariners, as I talked about, those mariners that are sailing 

commercially today are the same mariner pool that mans our government sealift ships. If I don’t have the commercial ships operating, I don’t have access to the mariners, and so I have now lost 

that surge capacity that we are currently maintaining. 

Mr. RUNYAN. Thank you. 

Chairman, I yield back. 

Mr. FORBES. Gentleman yields back. 

Before I recognize Mr. Larsen for his questions, I would like to 

ask unanimous consent that non-subcommittee members, if any, be 

allowed to participate in today’s hearing after all subcommittee 

members have had an opportunity to ask questions. Is there any 

objection? 

Without objection, non-subcommittee members will be recognized 

at the appropriate time for 5 minutes. 

And now, the chair recognizes Mr. Larsen for 5 minutes. 

Mr. LARSEN. Thank you, Mr. Chairman. 

Mr. Jaenichen, thanks for being here. Can you cover in a little 

more detail the impact on the employment base on the mariner 

availability and mariner training; and are you looking at that as 

part of the maritime strategy, not just from a broad strategic perspective, but are you going to try to describe that in a little more 

detail year to year or every 5 years what it might mean for mariners? 

Mr. JAENICHEN. Thank you for the question, Mr. Larsen. 

There are two things. One, today the licensed mariners that are 

sailing internationally, or blue ocean or deep ocean, as we refer to 

them, is about 4,100 officers and about 7,600 what we call unlicensed that operate the ships. Typical crews themselves, we will 

continue to take a look at that. The key piece of this as we take 

a look at the age demographic, we coordinate very closely with the 

maritime unions to make sure that we are able to man not only 

our commercial ships but also our government sealift ships. 
10 

We have mariners on our reserve sealift ships today that are in 

surge, the Ready Reserve Force. About 460 mariners are employed 

to do that. So we have some of the experience and capacity, but I 

require in excess of, you know, 1,200 additional mariners if I activate all of those ships. That has to come from somewhere. So the 

actual national maritime strategy will focus on the floor for the 

number of ships in the program has to be able to support the Department of Defense requirements, specifically for the sealift requirements for TRANSCOM. That is the floor. Our intention is to 

make sure that we are well above the floor so that we are not at 

risk. 

I am concerned today about the number of mariners and the ability to be able to man our vessels, if they were activated, for much 

longer than the time that they potentially needed. As I pointed out 

in my opening remarks, 6 to 8 months is all we estimate with release to be able to sustain that. Without that, those crews would 

have to go indefinitely on the ships, and that is just not the way 

we operate them. 

Mr. LARSEN. Yeah. So can you explain that 6 to 8 months timeframe again? 

Mr. JAENICHEN. That 6 to 8 months is, normally the crews, when 

they go on the ship, at some point in time and it really determines, 

you know, it is based on the ship manager, it is based on the ship, 

it is based on the company, at some point in the future, they have 

to have a rotation. We estimate that there is, you know, about 2.2 

times the number of mariners that is required to be able to man 

the number of billets on that vessel, so you have to have a relief 

crew that is available. 

Mr. LARSEN. Okay. Great. 

And then, Admiral, I think it was you—well, you probably all 

discussed recapitalization, but, perhaps it was in your testimony on 

recap, can you talk a little bit about what that cost is and how you 

are thinking about how we should be thinking about doing that? 

Admiral BROWN. Yes, sir. Right now we see there is kind of a 

near-term issue in the 2017 to 2026 timeframe that we are losing 

about nine vessels, we could lose nine vessels if we don’t extend the 

life of some of them and then we have a longer-term problem where 

more ships would age out. So right now we are focused on the 

short-term problem between now and 2026, and we are working 

with the Navy as well as MARAD to come up with a hybrid solution that would look at potentially building new U.S.-built ships for 

the Navy that we would get the ships that they replace and put 

them in the surge force. 

The other option would be to extend the service life of some of 

the ships that we already have. So we are looking at those combinations, and we owe basically in the 2017 budget a plan and I 

think there will be other requirements to come back here and discuss our plan in more detail. 

Mr. LARSEN. On the life extension, is it going from 40 to 45 or 

just going out to the 50 years? 

Admiral BROWN. It would go from 50 to 60 years. So what we 

have to do is we have to start making those decisions early because 

if we are going to take them out of the fleet, we would stop doing 

normal investments that would keep them active. So we would 
11 

have to, you know, continue to invest in them and then they would 

also have to have perhaps some, you know, additional shipyard 

work and whatnot to extend them. 

Mr. LARSEN. Okay. Thanks. 

And then just because it is a—not just because, I mean it is important, as well, but MLP John Glenn was at Naval Station Everett for about 6 months and left not too long ago. But what is our 

MLP plan? 

Mr. DILISIO. Right now we have got an MLP assigned to both 

MPSRONs [maritime prepositioning ship squadrons], and so what 

they basically represent is a feature ship. So they don’t carry cargo, 

per se, but they allow the opportunity for teaming with an LMSR 

[Large, Medium-Speed Roll-on/Roll-off] so that you could break 

down that LMSR or its cargo or its vehicles very quickly. I don’t 

know if you got a chance to see its modified version when it left, 

but basically there were three ways for the LCACs [Landing Craft 

Air Cushion] to board, plus a landing spot and a ramp situation so 

it could interface with the ships we have just been talking about. 

Mr. LARSEN. And I am sorry, just quickly, the numbers we are 

building? 

Mr. DILISIO. Two. 

Mr. LARSEN. Just the two. 

Mr. DILISIO. Two of that variety. 

Mr. LARSEN. Two of that variety. Thank you. 

Thank you, Mr. Chairman. 

Mr. FORBES. The gentleman yields back the balance of his time. 

The gentleman from California, Mr. Hunter, is recognized for 5 

minutes. 

Mr. HUNTER. Thank you, Mr. Chairman. 

I am going to get parochial stuff out of the way first. You just 

talked about MLP/AFSB [Afloat Forward Staging Base]. I think 

there is a 3- or a 2-year gap at NASSCO [National Steel and Ship 

Building Company] where they are in a trough over the next 2 

years, and they are talking about getting lead-time funding for the 

second MLP. 

Are you familiar with that, Mr. DiLisio? Any thoughts on that? 

Mr. DILISIO. I am familiar with the discussion. I would probably 

take that one for the record, in that it was—— 

Mr. HUNTER. Please. 

Mr. DILISIO. [continuing]. More appropriate for the Secretary to 

answer that one than me. 

[The information referred to can be found in the Appendix on 

page 65.] 

Mr. HUNTER. No, I think it is appropriate for you, because it is 

a Navy ship. It is not a transportation ship. But anyway—— 

Mr. DILISIO. No, I mean the Secretary. 

Mr. HUNTER. Oh, the Secretary of the Navy. Yeah. Okay. We will 

get him in here. 

Number two, I want to thank the chairman for doing this. I 

think this is one of the most important things we have that we do 

here, and we are facing a time in Congress right now where people 

don’t understand why you have cargo preference. We are fighting 

food aid cargo preference. Ex-Im [Export-Import] Bank goes away; 
12 

that is cargo preference. These numbers are going to drop and this 

is how America goes to war. 

When America has to go to war, it uses these ships every single 

time. This is how I went to war. In 2004, I actually loaded a RO/ 

RO [Roll-on/Roll-off] in San Diego. I was the embarkation officer, 

some horrible title that the newest guy gets. That was me. Anyway, drove everything down, got on the RO/RO, we unloaded it in 

Kuwait and went up into Iraq in 2004. So this is important, and 

I think Mr. Runyan alluded to this, it doesn’t seem like it is sustainable. 

You said, Admiral, you don’t have a timeframe on the 60-ship 

study. Is that right or no? 

Admiral BROWN. On the 60-ship study, I don’t think I—— 

Mr. HUNTER. Am I talking about the right study? The report on 

60-ship requirement U.S. TRANSCOM is doing. I thought Mr. 

Larsen just asked and you say you don’t have it? 

Admiral BROWN. Well, the study that I think you are referring 

to is one that OMB [Office of Management and Budget] has asked 

for that is going to look at the—— 

Mr. HUNTER. Okay. Do we have that one? 

Admiral BROWN. We are working on that, sir, and we should 

have the results of—and that won’t just focus on the 60-ship requirement. It will look at the entire industry and see what—— 

Mr. HUNTER. Is that going to play into the strategy that administrator—— 

Admiral BROWN. That will be going into that, too, sir. 

Mr. HUNTER. Okay. Let me see. Talking about military useful 

RRF [Ready Reserve Force] ships. The Navy had said that they 

have some requirement policy changes that would have to go into 

effect to stop simply building or maintaining the RRF fleet but 

building new RRF ships that are basically dual use. 

So to both Admiral and Mr. Jaenichen, what is happening with 

that? Are you familiar with that, dual-use RRF ships? 

Mr. JAENICHEN. I am. In fact, I had a discussion with the Department of Navy yesterday on that specific issue, and we are looking at how we might be able to do that. One of the challenges that 

we saw in the dual-use component of that is how you use them in 

civilian trade and then be able to pull them back because the civilian sector from a Marine highway or however we would employ 

them don’t necessarily have the ships to backfill. 

Commercially, if you were a company, typically you will have 

four or five ships in a liner-type service. If you pull one out you 

might still be able to—— 

Mr. HUNTER. But the RRF is only used in time of actual war, 

right? 

Mr. JAENICHEN. That is correct. 

Mr. HUNTER. So you would say, hey, stop this route, you are 

going to go to war? 

Mr. JAENICHEN. Correct. And so the question is, does that make 

it economically viable going forward? Because once the shippers 

don’t have cargo—— 

Mr. HUNTER. But they get paid by the government during the 

time they were used as RRF, right? 
13 

Mr. JAENICHEN. Maybe, but then the question is, is do the shippers come back when the ships are done doing what they are doing 

in terms of their activation? That is one of the challenges that we 

are looking at from that standpoint. 

Admiral BROWN. Sir, can I add that you also have to look at the 

size of those vessels, would they truly be military useful. And so 

if they are too small, we are talking about, you know, moving BCTs 

[brigade combat teams] not, you know, platoons here. 

Mr. HUNTER. Right. Okay. 

Mr. JAENICHEN. Mr. Hunter, to the admiral’s point, what we 

have found in all of our studies is the type of ships that were available to be able to use in some kind of a Marine Highway Program 

are either self-propelled barges or articulated tug and barges kind 

of things to be able to move that equipment. Those are not necessarily the most militarily useful, but they would be the best in 

the commercial program if we were looking at it. 

Mr. HUNTER. The Navy also had, and this ties along in with this, 

the Navy did have proposals—I haven’t seen those specific proposals—on how to at least start using dual use. But have you started using those? Have you started implementing them? I mean, are 

you looking at them, or we are not sure yet? 

Mr. JAENICHEN. No. In fact, what we have talked about is what 

kind of legislative proposals, what kind of policy—— 

Mr. HUNTER. There have to be policy changes, right? 

Mr. JAENICHEN. There would be some policy changes that are required. 

Mr. HUNTER. Like what? 

Mr. JAENICHEN. Well, as we take a look at it, how do you make 

the funding stream be able to work that? How do you make a stipend payment work? For example, some of the investment that 

would be required to be able to build those ships has to come from 

somewhere, and the question is, is where did it come from without 

sacrificing a port of the surge sealift capacity that is currently 

there? 

Mr. HUNTER. You would stop maintaining the RRF fleet and simply build new ones. You would use the maintenance fund, right? 

Mr. JAENICHEN. And then we would start taking risk on the 

ships if they were activated during the period of time as we ramp 

up, in terms of how—so we have to evaluate how we would do that. 

Then, obviously, there is some legislative changes. As you know, in 

order to recapitalize the Ready Reserve Force there is a U.S.-build 

requirement to be able to support that recapitalization. 

Mr. HUNTER. Thank you, all. Appreciate it. 

Thank you, Mr. Chairman. 

Mr. FORBES. I think the gentleman from California raises some 

good points that all of you gentlemen, I think, agree with. And the 

main thing is that this myth that this is a faucet that we can turn 

on and turn off is just not accurate, because as the ships get reduced, also our industrial base to repair the ships get reduced. 

And, Mr. Jaenichen, as you pointed out, then our workforce suffers and it takes you about 10 years just to train one captain to 

be able to handle one of these ships. 

Mr. Courtney, you are recognized for 5 minutes. 
14 

Mr. COURTNEY. Thank you, Mr. Chairman. Actually, your comment sort of, I think, segue into my question for Mr. Jaenichen. 

Again, your written testimony refers to the fact that MARAD is 

working on developing a national maritime strategy with stakeholders. Again, when we look at the U.S.-build requirements which 

you just talked about and the impending, you know, aging-out of 

the existing fleet, along with, again, a lot of the other issues that 

have come up in the question. 

Maybe you can just sort of step back and talk a little bit about 

this national maritime strategy, you know, what is happening with 

it, how you visualize it unfolding, because I think at some point I 

think a lot of us need to get our heads around that to work with 

you. 

Mr. JAENICHEN. Thank you, Mr. Courtney, for the question. 

First, in the development of the national maritime strategy, we 

have actually had two strategy symposiums. The first one was done 

in January. It was specifically focused on the international trading 

fleet, which is where I have my most concerns, because that affects 

the mariner pool that is used by both the strategics on the commercial side and also on the surge sealift side. 

The second one we did in May and that was focused on the inland industry. It was also focused on shipyards, and then we had 

some cross-cutting themes of labor and environmental and those 

kinds of things. We also focused on that particular one on port and 

port infrastructure. 

What we have done so far is we have drafted a strategy. We have 

created a document that provides a number of options. On the 14th 

of August I am going to share that with the Marine Transportation 

[System] National Advisory Council [MTSNAC] to get their recommendations and once we have had an opportunity to work with 

them to try to sort of dig into the actual details of the options that 

are available, our intent would be that we would then open it up 

for public comment later this year after we have had a chance to 

do that. 

But our first meeting with this national advisory council that we 

have, MTSNAC as we refer to them, is going to happen on the 14th 

of August. 

Mr. COURTNEY. So, again, to take it to the next step, public comment occurs. I am sure there is going to be a lot of comment. I 

mean, is there going to be a window of time for that, and then 

there will be sort of a final-final as far as some kind of document 

that will get generated? 

Mr. JAENICHEN. Yes. And our proposal would be that we would 

have some kind of a strategy that has been vetted and we resolve 

the public comments by the end of this year. I think we need to 

be able to provide the new Congress an opportunity to work on 

these particular issues, and there is a number of them from policy 

to legislation. 

I mean, there is a whole host of possible options. Some of them 

are much harder than others to be able to accomplish, but it is 

going to have to be done in some way, shape, or form, because I 

think we are at that point where we have to do something about 

the maritime industry in this country. 
15 

Mr. COURTNEY. And I would assume that, you know, the topic we 

are talking about today is going to at least be part of that overall 

strategy. Is that a pretty safe assumption? 

Mr. JAENICHEN. In fact, as I talked about before, the floor of our 

strategy in terms of the ships that are required to be under U.S. 

flag is really a DOD requirement to be able to make sure that they 

have the capacity to be able to support national security. We would 

obviously like to be well above that, because as you get sort of the 

to the line, you start assuming more risk and I don’t think we want 

to be in a situation where we risk not being able to globally project 

power through our Armed Forces, and that is one of the reasons 

why this strategy. 

So the sealift strategy that is a component of the national maritime strategy is something we are closely coordinating with 

TRANSCOM and Navy in terms of how you would essentially 

structure that to be able to support. You know, obviously, we have 

to take a look at what future requirements will be because that 

will dictate the size of that U.S.-flag fleet. 

Mr. COURTNEY. So, again, looking forward to the 114th Congress, 

we are talking January, February, March, something in that timeframe in terms of the Seapower Committee having the opportunity 

to sink, you know, their teeth into it? 

Mr. JAENICHEN. That would be my intent. 

Mr. COURTNEY. All right. Thank you. 

I yield back. 

Mr. FORBES. Gentleman yields back. 

Mr. Johnson is recognized for 5 minutes. 

Mr. JOHNSON. Thank you, Mr. Chairman. 

Mr. DiLisio, how did the Department determine the cost of the 

procurement of the T–AO(X)? 

Mr. DILISIO. Basically, we did a complete study of the current 

oiler base, the Kaiser class, to determine what pieces of the Kaiser 

class gave us our acceptable requirement set. We took the Kaiser 

class, increased some of the freeze chill [cargo-carrying] portions, 

increased the lift so we could handle heavier lift, readdressed speed 

requirements so we have an array of different speed requirements 

that we went and looked at which would bring you different propulsion sets. 

So basically, we are looking at what does a carrier need to take 

oil and provisions? What does the rest of the [carrier] strike group 

need? So you get a strike group answer, you get an ARG [Amphibious Ready Group] answer, and then you get basically a rest-of-thestrike-group answer. So we were looking kind of at middle of the 

road. We have a very good class of ships right now in the Kaiser 

class, so we didn’t have to go too far from the Kaiser class to get 

to something that we liked. 

Then we want to use the competition in the industry to take us 

the rest of the way with some interesting ideas on how to manage 

energy, get the O&S [operations and support] cost down and see if 

we can get the number of mariners down, as well. So basically, we 

are pretty happy with our current oiler. What we are looking for 

is something new, something as fast as we could get it that could 

do multiproduct and continue the workhorse development that we 

currently enjoy. 
16 

Mr. JOHNSON. Does the cost reflect the balance of cost and capabilities of the T–AO(X)? 

Mr. DILISIO. Right now, we have it right around $680 to $690 

million for the one that we have got a draft CDD [Capability Development Document] for as we sit here right now. I think we will 

hold right there with that amount, so I don’t think we need to go 

any higher than that to meet our current requirements. So I think 

I am pretty comfortable in telling you that we are ready to start 

as soon as we get through joint staffing with our CDD, and we are 

not far from a 2016 start with the current requirements we have, 

very comfortable with them. 

Mr. JOHNSON. If ship capabilities exceed program costs, will the 

Department cut back on operational requirements? 

Mr. DILISIO. As I am sitting here now, they don’t, and I don’t expect that they will because the things that would have stressed the 

current oiler were things like a heavier lift capability so that we 

could send greater loads of cargo between ships. I believe we have 

that covered. We have the ability to land aircraft that we need to 

be able to land and refuel on that deck, which is another new requirement above and beyond Kaiser class. I think we have that covered. So I am pretty comfortable right now that is a tradeoff we 

don’t have to make. 

Mr. JOHNSON. Thank you. 

Can you explain how the Department, Mr. DiLisio, intends to 

conduct competition to build the T–AO(X)? 

Mr. DILISIO. Yes, sir. We will put out an RFP [request for proposal] with the requirements for the oiler in it. There will be areas 

where the bidder will be able to associate bill of material selections 

and/or arrangements. It is a commercial-base ship, so there is a 

couple of very good offerors out there that know a lot about building these commercial ships. So they will be able to handle the bill 

of material as they put their competitive pricing together, and we 

will take the best value between capability and price once we get 

a chance to see those bids. 

Mr. JOHNSON. Now, do you anticipate that multiple teams will be 

used to build the ship? And also, if you could give me some idea 

of your potential bidders? 

Mr. DILISIO. I believe we have qualified builders out there that 

will—I mean, I would not want to presuppose how they would go 

about bidding this, because primarily that is their own business 

strategy, so I wouldn’t want to get in and try to predict how they 

may come at this piece of the business. But the industrial base is 

fully capable of building them, so I expect multiple bidders. 

Mr. JOHNSON. Thank you. 

Vice Admiral Brown, does the U.S. have enough commercial and 

organic capacity to meet your requirement? 

Admiral BROWN. Sir, thank you for the question. 

We do right now. However, we, in our organic surge fleet as well 

as our commercial capacity, but as we discussed a little bit earlier, 

we are concerned that we may be coming closer to a tipping point 

where our ability to man some of the surge fleet would be at risk 

if we lose additional international trade, so that that is our main 

concern right now. The other piece is, as I discussed, is our recapitalization plan that we have to put in place here in the near term. 
17 

Mr. JOHNSON. Thank you. 

Mr. Chairman, I yield back. 

Mr. FORBES. Gentleman yields back his time. 

And Mr. Garamendi is recognized for 5 minutes. 

Mr. GARAMENDI. Mr. Forbes, thank you so much for the courtesy 

of allowing me to join your hearing. Mr. Hunter and I share responsibility on the Coast Guard maritime and therefore this discussion is very relevant to that as well as to the Armed Services Committee, so thank you. 

A whole series of questions have been asked, many of which I 

would have taken up, but the Ready Reserve Fleet and the recapitalization of it, I think, Admiral Brown, you and Mr. Jaenichen 

have talked about a timing and a proposal that you are going to 

be putting together to deal with that piece of it. Could you explain 

that in a little more detail? 

Admiral BROWN. Sir, right now our commitment from the Navy 

is to put together a plan that would first be introduced in the fiscal 

year 2017 budget. 

Right now, there is not a requirement in the 2015 or 2016 budget, but we have to work out the details of the eaches of each ship 

that would be retiring and have a replacement square footage for 

those vessels. 

Mr. GARAMENDI. Okay. So that would include not only the design 

of the ship, the cost of the ships, when that money would be necessary, when the construction would take place. Does it also include the issue of refurbishing or refitting the existing ships? 

Admiral BROWN. Yes, sir. If we decide to execute and extend its 

service life of some of the vessels that could be aging out, we would 

require investment to extend the life. 

Mr. GARAMENDI. So we are going to be faced with a significant 

budget and appropriation issue here as this comes online; it’s not 

now in the process, it is not in the plans going forward. Is that correct? 

Admiral BROWN. Right. It is not currently in the plan, but we 

have commitment from all the parties that we need to develop that 

plan. 

Mr. GARAMENDI. Okay. Does that include the Army? 

Admiral BROWN. The Army is a part of that discussion, yes, sir. 

Mr. GARAMENDI. I would think so, unless they decide to—— 

Admiral BROWN. They are a major customer of sealift, yes, sir. 

Mr. GARAMENDI. Mr. Jaenichen, could you also address that 

same question? 

Mr. JAENICHEN. Well, one of the things I think that we have to 

take a look at is in addition to the recapitalization, we are going 

to have to collectively take a look at what the requirement is. 

And your point about the Army, I think, is a critical one in terms 

of what we have to lift and how we would have to lift it to be able 

to support the Department of Defense’s operational planning and 

so as we take a look at the ships, the admiral talked about the 

eaches. You know, for example, several of the ships we had, the 

majority of them that are in the Ready Reserve Force are Roll-on/ 

Roll-off type vessels. And so some of the replacement vessels that 

we may take a look at might be larger and have more capacity. 
18 

In the admiral’s written statement, he talks about the fact that 

the RRF has about 1.6 million square feet of capacity that will potentially go out of service and age out at the 50-year point within 

the next decade, and we have to think about, you know, how we 

do that. So for example, we may have, you know, two or three ships 

that age out, but you could replace it with one and have similar 

capacity. So we have to think about all of those things together. 

Mr. GARAMENDI. Since this particular issue bridges two committees, two very different committees, it would be very helpful to me, 

and I suspect to our committee, Mr. Hunter’s committee, to work 

with you between now and 2017 budget proposal, so that we can 

be aware and provide whatever insight we might have. 

This next question goes to Mr. Jaenichen and it has to do with 

the incentives that do exist in current law Title XI, the CCF [Capital Construction Fund] program, the small shipyard grant program. How does that integrate into what we are discussing here on 

this Ready Reserve and the MSP program? 

Mr. JAENICHEN. The Title XI program is really a commercial ship 

loan guarantee program. Currently, we have—as part of carryover—we have not approved an application since 2011. We are in 

the process of approving several. We have about $73 million in 

carryover, which supports about $750 million or so of loan applications. So we are actually in good shape in terms of what we have 

currently in the queue. 

However, right now there are 30 vessels that are currently on 

order, under construction, that includes tankers, articulated tug 

and barges, large ocean-going supply vessels and container vessels, 

and some of these are LNG [liquefied natural gas] powered, as you 

know, that are being built down in NASSCO [National Steel and 

Shipbuilding Company]. 

We know that there are more applications that will be coming, 

and so we will have to evaluate how Title XI would be funded going 

forward to be able to assure that we can support that. 

Mr. GARAMENDI. Do you personally have constraints—do the constraints, are they going to limit your opportunities or the opportunities of shipbuilders? 

Mr. JAENICHEN. You are talking about constraints in the funding 

that we have available? 

Mr. GARAMENDI. The amount of money. 

Mr. JAENICHEN. We may be at that point here within the next 

15 to 18 months depending on the applications and again, the applications that come in, we have to, you know, validate through a 

very rigorous process their financial viability, financial soundness 

to be able to get to the point where we can actually guarantee that 

loan. 

Mr. GARAMENDI. Yeah. As a guest to this committee, I am 4 seconds over. 

Mr. Forbes, thank you for the courtesy. 

Mr. FORBES. I thank the gentleman for his questions. 

I think all of our Members have asked their questions. As I mentioned at the beginning, I deferred my questions just to have a few 

for you for the record if we could ask them. 

The T–AOEs are the Navy’s largest and fastest logistics ships. 

The Navy has proposed to reduce two of the four ships that each 
19 

have over 10 years of service life remaining. Former strike group 

commander Rear Admiral Tom Shannon suggested that the T–AOs 

and the T–AKEs inability to keep up with carrier strike groups 

would be a significant problem. 

From a warfighting perspective, from how we operate and exercise, from one-stop shopping from one ship as opposed to bringing 

along two slower ships, I just think keeping the T–AOEs is a very 

practical way to go. 

Mr. DiLisio, from a warfighting perspective, how does a T–AOE 

fit into our ability to project power? Will the reduction in T–AOEs 

impair ability to project power? And how will our ship logistics be 

changed as a result of the introduction of a less-capable platform? 

Mr. DILISIO. Thank you, Mr. Chairman. It is no surprise to me 

that a strike group commander would want an AOE as the fastest 

ship because it does make things a little easier. The time alongside 

for an AOE replenishment of a carrier is about a 6-hour evolution. 

That evolution can—I am sorry, a 4-hour evolution, pardon me. The 

AO and AKE pair will do the same evolution in about 6. So the capability is there; it may not be the preferred capability, but the existing force is actually matched up pretty well to do those types of 

replenishments at sea. The 2-hour loss—— 

Mr. FORBES. Isn’t that once they arrive? 

Mr. DILISIO. In most cases, they are already in theater waiting, 

because they are forward-hubbed. These are not necessarily having 

to keep up with the race across the oceans. All of the oilers and 

AKEs are forward-hubbed, so they can be preplaced, so it is a matter of understanding and being able to manage the battle space. 

That is one piece. 

The second piece is, we still need to come through an analysis 

we are actually in right now with fleet commanders to make sure 

that we have got that right. As I am sitting here today, we have 

not made that decision. We are still discussing it. They get a vote 

in that position. There are only four AOEs as we sit here right 

now. They don’t enjoy any more protection of themselves than an 

oiler or an AKE does in a theater of battle, and when you get into 

a more stressful situation, you need 14 oilers to take care of that 

situation. 

So this is really not just about AOEs, it is about the total force 

and whether or not you can bring the amount of oilers to bear on 

a most-stressing scenario which is 14; and in peacetime, it is actually the inverse of what you might think. In peacetime, the oiler 

demand is actually higher because we disperse the force in a greater regard across the globe. So when you have a wartime scenario 

you are very focused, which allows you to keep a smaller number 

of tankers in the mix. Peacetime, they are everywhere. 

And so right now, even if we were to get rid of the two AOEs, 

we would have enough tankers to go perform the missions we need 

to with little to no surge we would be right on the number. 

And again, I am not surprise that Admiral Shannon would want 

an AOE. It is a very capable vessel, but it also carries a very capable and impressive O&S cost. 

Mr. FORBES. Admiral, you have just heard what Mr. DiLisio has 

said, that he wasn’t surprised that a strike group commander 

would want a particular asset. We often hear that with our 
20 

COCOMs [combatant commanders], when we look at their requirements in this gap that is being developed between what they are 

asking and what we are actually giving them. And oftentimes when 

we ask that question, we hear a similar response, so I am not surprised that the COCOMs would want all this. 

What is your feeling in dealing with COCOMs on a regular basis, 

and our strike group commanders? Are they asking unreasonable 

things, or are they pretty much on the mark? And then the other 

part of that is, if sea control will be increasingly contested in the 

coming decade, should we reconsider the need to build a T–AOE(X), 

or at least replicate this capability as was planned earlier in the 

last decade? 

Admiral BROWN. Sir, thank you for your question. 

Working with the COCOMs is something that we do every day 

in our planning. As you know, the demand around the world for, 

I would call them smaller contingencies, has actually gone up. So 

the COCOMs in my experience that have been stationed at 

EUCOM [European Command] do not ask for over what they think 

is necessary, so it is a natural tension. We are in the process of 

looking at different ways of providing forces forward. 

So there will be an ongoing discussion with the COCOMs about 

forward-deployed assets and what they ask for. But in general, I 

think, they are not asking for things that they personally feel are 

not required for executing their plan. And one of the advantages 

that TRANSCOM has is we are able to pool our assets and swing 

from one COCOM to the other rather quickly. So by assigning the 

forces in the pool, that is somewhat of an advantage to be able to 

swing quickly. 

With regard to access, anti-access in future fights and whatnot, 

we would in the scenarios that we look at, we would definitely 

need, if we were going to take a major combat operation and go forward to a location with our reserve surge fleet, we would have to 

have at least a semi-permissible environment so we would have to 

set the conditions to do that ahead of time. And we have done that 

in the past, in history, and we would have to continue to do that 

in the future. So in terms of protecting ships as they go across, we, 

just so you know, we don’t have a lot of attrition built into our 

modeling. So that is not something that we really build in there. 

So we would have to—— 

Mr. FORBES. We have heard some testimony before this subcommittee that perhaps as we look at what the Russians are doing 

now, the Chinese are doing, maybe that assumption we have had 

over the last decade or two that we were going to have those permissive environments may at least need to be relooked. Do you disagree with that testimony, or would you—— 

Admiral BROWN. I concur, I would say they are being relooked 

and they are being exercised. And we stay plugged in with the 

COCOMs during all those exercises. 

Mr. FORBES. Okay. Last year, the Navy placed one of three maritime prepositioning squadrons, which specifically supported the European commander, in layup. This reduces the flexibility of the 

combatant commander from having Marine Corps equipment available in Europe in case of a major Marine Corps deployment. Can 

you quantify the loss of the European Command maritime preposi-
21 

tioning squadron on the ability of EUCOM to project forces in Europe? 

Admiral BROWN. Sir, those, the ships that were involved there, 

they remain in our surge capability. So from a square footage 

standpoint, we maintain the same amount of square footage. So by 

bringing those forces back to the United States, it adds somewhere 

around two weeks or so to our ability to surge to that requirement 

should we need to in the future. 

Mr. FORBES. Admiral and Mr. DiLisio, during the Cold War, 

Combat Logistics Force ships were manned by U.S. Navy sailors 

and armed with defensive systems to protect against air and surface threats. Are there significant cost savings to the current MSC 

[Military Sealift Command] model if the blue waters become contested and the U.S. Navy is going to once again have to fight for 

command of the seas, should we be considering recommissioning a 

select group of Combat Logistics Force ships back to the United 

States Navy? 

Mr. DILISIO. Thank you, Mr. Chairman. 

You have acknowledged the cost differential. Their cost would be 

very large. The current AOE does not enjoy any self-defense weapons either. What we would need to do is, one, continue to recapitalize our Kaiser class oilers because they are about end of service 

life anyway, and we are going to have to start capturing data on 

their performance. There is always a tradeoff between whether or 

not the escort can provide that coverage or whether the ship has 

to provide own ship coverage, and I think we have to go look at 

those trades. 

Right now, survivability is being studied, and I believe we have 

done some briefing on carrier survivability and the CLF [Combat 

Logistics Force] survivability right alongside. Right now, we enjoy 

escort-type protection, and so we would have to come through that 

conversation that said either that wasn’t good enough or we wanted to do something in addition or something layered. We don’t have 

any plans currently to do that. 

Mr. FORBES. Okay. I indicated to all three of you before that at 

the end we were going to give you any time you needed to add to 

the record whatever you think we have not asked or to clarify anything that you feel was perhaps misrepresented. 

So if at this time we could do that, and Mr. DiLisio, why don’t 

we start with you and we will work back, if that is okay. 

Mr. DILISIO. Thank you, sir. 

Two things and I will be brief. My comment on the strike group 

commander is but one strike group, and there is a worldwide balance of Combat Logistics Force necessary. So the balance, and you 

will find Rear Admiral Shannon as the head of Military Sealift 

Command today, is now challenged with his global force management and supply across the entire world, not just one strike group. 

So I wasn’t trying to insinuate that he has asked for something 

that he should not get, but that asset may be somewhere else in 

the world inventory, and there is usually more than one thing 

going on at a time. That was one. 

Secondly, the entire conversation that we have had about sealift 

has been primarily in the surge and sustainment shipping area. 

What I would propose, and what my partners and I have talked 
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through, is getting the services to the table to talk about how we 

address prepositioning, how we intend on the sharp end of the stick 

to perform and deploy forces, has a lot to do with how we then 

surge behind it and how we replenish and how we do sustainment 

operations. 

So I introduced in my oral statement three different disciplines 

that we need to think about in this regard, and not just buying a 

one-for-one replacement for square footage on the surge side of 

this. 

So if investment is tight, we need to make sure across this entire 

three-tiered formula that we have got the investment right and we 

put it in the right place. 

Thank you, sir. 

Mr. FORBES. And I didn’t mean to indicate that you were belittling the strike group commander’s comments. But I did want to 

make it clear, because we hear this oftentimes as we are doing all 

this dismantling of the military, when they come and they say, no, 

this is acceptable risk, et cetera, and when we say, well, the 

COCOMs are telling us this or the strike commanders are telling 

us this, it is kind of like they get poo-poo’d like, you know, they 

just reach for the sky. 

That really isn’t true because if all the stuff breaks down, they 

are the guys we are looking to to make sure that we are winning 

these conflicts, and I think we need to pay attention to what they 

have to say. 

Mr. Jaenichen. 

Mr. JAENICHEN. Thank you, Mr. Chairman. 

First of all, I would like to just point out that the U.S. Merchant 

Marine, both the vessels and the mariners, are a national asset. As 

we take a look at the ability to project forces globally, it requires 

a capable U.S. Merchant Marine both from a standpoint of having 

vessels that can do it and the mariners that are able to be there, 

and so we need to have that capacity. 

We can invest billions in infrastructure, but one of the critical 

components is the number of the mariners to man that infrastructure, that equipment to be able to do that. And we want them sailing commercial, if it is possible to be able to do that. We don’t want 

to be able to maintain them in a reserved capacity and then man 

them up and spool them, as you talked about, opening the faucet. 

It is better to have them trained and operating all the time than 

it is to be able to keep them in reserve status and hope they are 

ready when the time comes. 

We talked a little about the Maritime Security Program. That 

program is under pressure. The House has proposed a $20 million 

cut to that program of $186 million. That $20 million cut equates 

to essentially the loss of about seven ships in that program and the 

reason I state seven is because it is a delta between 18.6 and 21.7, 

which is the $3.1 million a year, which is the annual stipend 

amount. 

That force of 60 ships supports 2,700 mariners. As we have 

talked about throughout this testimony, the mariners are the critical component of this. Those 7 ships, if you lose them, you lose, 

you know, 280 sailing mariner jobs. We need them. 
23 

The other thing that we talk about in terms of the MSP is the 

infrastructure land side logistics that is provided by that fleet of 

commercial ships. So we want to make sure that we are able to 

maintain them viable in the commercial trade as well as being able 

to have preference cargo and support sealift requirements for 

sustainment for the Department of Defense. 

With the cargos reducing, specifically on the DOD side, which 

historically, at least over the last decade or so, has provided about 

87 percent of the revenue for the U.S.-flag fleet and about 70 percent of what I would call the total capacity in terms of dry bulk 

cargo that has been moved on these ships. With that reducing, we 

have to evaluate how you keep those ships viable in the program. 

As I talked about in my testimony, the levers that are available 

to us are to identify ways to get additional commercial cargo. They 

are competing against foreign-flag, which their cost on a daily average could be as low as $5,000 a day; for a U.S.-flag it is $18,000 

to $20,000 a day. That is a very difficult delta to make up. 

And so the other lever we have is the stipend amount, and that 

has to be considered to be able to ensure that we have and are able 

to maintain this fleet viable and capable to be able to serve us from 

a national security standpoint. 

Mr. FORBES. Mr. Jaenichen, as I think you have also pointed out 

very clearly, there is a domino, a ripple effect with all of this. As 

you have fewer ships, you lose actually some of the repair capabilities in the industrial base to fix other ships, and then you create 

a culture that is difficult to get the workforce that you need to have 

in to do the job that you need to have done. 

So Congressman Hunter and I were talking before he left about 

trying to do something jointly, working with you to make sure we 

help fill those gaps. 

So thank you for the good work you are doing. 

Mr. JAENICHEN. Thank you, Mr. Chairman. Appreciate it. 

Mr. FORBES. Admiral, we will give you the last word. 

Admiral BROWN. Sir, first, thank you for your committee taking 

the interest in talking to us. 

I think one of the concerns that we continue to have is, that we 

didn’t discuss, is the Budget Control Act potential there that would 

have impacts across many, many programs, but it definitely would 

impact our surge fleet, as well, and I don’t think Mr. DiLisio could 

work miracles in that situation. He has up to this point. 

Sir, TRANSCOM has to be ready 24/7 to be able to react to a 

small contingency or a large contingency. We are adequately positioned to do that today, and we appreciate the support that we get 

from you in that regard. Our requirement has not significantly 

changed because we are coming out of Afghanistan. We have to 

maintain the capacity that we have currently. 

Mr. Jaenichen mentioned the need to ensure we fully fund the 

MSP program and we talked about the recapitalization plan that 

we have to come back to the committee with in the near future. 

And lastly, I would like to conclude by thanking the maritime industry, the mariners that sail every day commercially and, you 

know, on our organic fleet in the Navy. They truly are our heroes, 

and they allow TRANSCOM to do our job every day. 

So thank you very much, sir. 
24 

Mr. FORBES. Admiral, and both of you, gentlemen, thank you so 

much for your service to our country. Thanks for sharing this time 

with us, and we look forward to working with you in the future. 

And if there is no additional comments or questions, we are adjourned. 

[Whereupon, at 3:09 p.m., the subcommittee was adjourned.] 
A P P E N D I X 

JULY 30, 2014 

PREPARED STATEMENTS SUBMITTED FOR THE RECORD 

JULY 30, 2014 

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WITNESS RESPONSES TO QUESTIONS ASKED DURING 

THE HEARING 

JULY 30, 2014 

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RESPONSE TO QUESTION SUBMITTED BY MR. HUNTER 

Mr. DILISIO. Mobile Landing Platform (MLP 3) is being built as an Afloat Forward Staging Base (AFSB) variant. MLP 3 AFSB is currently under construction 

at NASSCO and is expected to deliver in Fiscal Year (FY) 2015. The second MLP 

AFSB, MLP 4 AFSB, is planned to be awarded to NASSCO in 2014. The President’s 

Budget submittal for FY 2015 includes a third MLP AFSB, MLP 5 AFSB in FY 2017 

but did not include advanced procurement funds for the ship. [See page 11.] 

QUESTIONS SUBMITTED BY MEMBERS POST HEARING 

JULY 30, 2014 

(69) 

QUESTIONS SUBMITTED BY MR. FORBES 

Mr. FORBES. If sea control will be increasingly contested in the coming decade, 

should we re-consider the need to build a T–AOE(X), as was planned earlier the last 

decade? 

Admiral BROWN. If built, the T–AOE(X) Fleet Oiler would be managed by the 

Military Sealift Command, through U.S. Navy operations. USTRANSCOM would 

have no operational control of T–AOE(X) assets. The Navy is in the best position 

to provide information concerning building a T–AOE(X). 

Mr. FORBES. Today, the U.S. military has a selected set of supply depots and refineries overseas. Does the Navy’s logistic ship requirement reflect the likelihood 

that the fleet may need to depend on a larger number of geographically dispersed 

refineries and depots ashore in a conflict? 

Admiral BROWN. USTRANSCOM does not have operational control or influence on 

how the U.S. Navy logistically supports the fleets. The Navy is in the best position 

to provide information about the U.S. Navy’s logistic ship requirement. 

Mr. FORBES. The advent of longer range threats to carrier strike groups (like the 

DF–21D, advanced conventional submarines and long-range aircraft armed with advanced anti-ship missiles, etc.) suggests that in the future carrier aircraft may need 

to conduct high-intensity operations much farther from their targets than they have 

in the past. Has the Navy analyzed the impact of such operations on the demand 

for logistic ship support to carrier strike groups, and if so what did it find? 

Admiral BROWN. The demand for fleet logistics ships in support of U.S. Naval 

Forces underway is an internal U.S. Navy issue. USTRANSCOM does not conduct 

analysis on the demand for logistic ship support to carrier strike groups. U.S. Navy 

would be in the best position to answer this question. 

Mr. FORBES. Today, the U.S. military has a selected set of supply depots and refineries overseas. Does the Navy’s logistic ship requirement reflect the likelihood 

that the fleet may need to depend on a larger number of geographically dispersed 

refineries and depots ashore in a conflict? 

Mr. DILISIO. The Navy’s logistic ship requirement reflects the number required 

to support the Global Force Management Allocation Plan (GFMAP). GFMAP presence values are based on the SecDef approved assessment of combatant ship presence required in theaters for national defense and other priorities. Based on these 

combatant presence requirements, Navy Fleet commanders determine the CLF ship 

presence needed in each theater to support this force. Fuel refinery and depot locations are important variables among others that, in the aggregate, determine the 

requirement. Working with other DoD entities (e.g., Defense Logistics Agency), the 

Navy constantly reviews options to ensure appropriate support is in place to meet 

requirements. As policy and plans evolve, the numbers (and locations) may change. 

Mr. FORBES. On June 23, 2014 the Navy responded to a HASC inquiry pertaining 

to the current status of the LMSR Crane Control Upgrade Program. The Navy response indicated that additional Pier-side and Afloat testing of the CC3000 crane 

control system were expected as part of the next phase of the program. The response 

stated that the Navy was currently developing a work package and contract award 

to support an FY 15 shipboard installation and testing of the CC3000 control system 

on a full ship set of four cranes (two twin pedestal cranes). Will this installation 

and testing be implemented with FY 14 funding and executed within CY 2015? 

Mr. DILISIO. Efforts to test the CC3000 crane control system have been put on 

hold pending identification of funding. Navy will monitor commercial progress of the 

technology for future potential application. 

Mr. FORBES. We understand that the targeted ship for this installation and testing is the USNS Sisler. What is the current status for executing this installation 

and testing on the USNS Sisler? 

Mr. DILISIO. Efforts to test the CC3000 crane control system have been put on 

hold pending identification of funding. Ship to be used for installation and testing 

has yet to be identified. Navy will monitor commercial progress of the technology 

for future potential application. 

Mr. FORBES. If the installation and testing are successful, what is the Navy’s plan 

for installing the CC3000 upgrade across the LMSR fleet? 
70 

Mr. DILISIO. Efforts to test the CC3000 crane control system have been put on 

hold pending identification of funding. Navy will monitor commercial progress of the 

technology for future potential application. All current and future efforts will continue to balance the need to keep existing cranes in service and capable of performing their mission against components that become obsolete for missions that require greater control for more complex lifts. 

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