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S. HRG. 114–629 

THE STATE OF THE U.S. MARITIME INDUSTRY: 

THE FEDERAL ROLE 

HEARING 

BEFORE THE

SUBCOMMITTEE ON SURFACE TRANSPORTATION 

AND MERCHANT MARINE INFRASTRUCTURE, 

SAFETY AND SECURITY 

OF THE

COMMITTEE ON COMMERCE, 

SCIENCE, AND TRANSPORTATION 

UNITED STATES SENATE 

ONE HUNDRED FOURTEENTH CONGRESS 

SECOND SESSION 

MARCH 8, 2016 

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

( 

(II) 

SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION 

ONE HUNDRED FOURTEENTH CONGRESS 

SECOND SESSION 

JOHN THUNE, South Dakota, Chairman 

ROGER F. WICKER, Mississippi 

ROY BLUNT, Missouri 

MARCO RUBIO, Florida 

KELLY AYOTTE, New Hampshire 

TED CRUZ, Texas 

DEB FISCHER, Nebraska 

JERRY MORAN, Kansas 

DAN SULLIVAN, Alaska 

RON JOHNSON, Wisconsin 

DEAN HELLER, Nevada 

CORY GARDNER, Colorado 

STEVE DAINES, Montana 

BILL NELSON, Florida, Ranking 

MARIA CANTWELL, Washington 

CLAIRE MCCASKILL, Missouri 

AMY KLOBUCHAR, Minnesota 

RICHARD BLUMENTHAL, Connecticut 

BRIAN SCHATZ, Hawaii 

EDWARD MARKEY, Massachusetts 

CORY BOOKER, New Jersey 

TOM UDALL, New Mexico 

JOE MANCHIN III, West Virginia 

GARY PETERS, Michigan 

NICK ROSSI, Staff Director 

ADRIAN ARNAKIS, Deputy Staff Director 

REBECCA SEIDEL, General Counsel 

JASON VAN BEEK, Deputy General Counsel 

KIM LIPSKY, Democratic Staff Director 

CHRIS DAY, Democratic Deputy Staff Director 

CLINT ODOM, Democratic General Counsel and Policy Director 

SUBCOMMITTEE ON SURFACE TRANSPORTATION AND MERCHANT 

MARINE INFRASTRUCTURE, SAFETY AND SECURITY 

DEB FISCHER, Nebraska, Chairman 

ROGER F. WICKER, Mississippi 

ROY BLUNT, Missouri 

KELLY AYOTTE, New Hampshire 

JERRY MORAN, Kansas 

DAN SULLIVAN, Alaska 

RON JOHNSON, Wisconsin 

DEAN HELLER, Nevada 

STEVE DAINES, Montana 

CORY BOOKER, New Jersey, Ranking 

MARIA CANTWELL, Washington 

CLAIRE MCCASKILL, Missouri 

AMY KLOBUCHAR, Minnesota 

RICHARD BLUMENTHAL, Connecticut 

BRIAN SCHATZ, Hawaii 

EDWARD MARKEY, Massachusetts 

TOM UDALL, New Mexico 

(III) 

C O N T E N T S 

Page 

Hearing held on March 8, 2016 .............................................................................. 1 

Statement of Senator Fischer ................................................................................. 1 

Statement of Senator Booker .................................................................................. 3 

Statement of Senator Nelson .................................................................................. 4 

Statement of Senator Cantwell .............................................................................. 31 

Statement of Senator Klobuchar ............................................................................ 32 

Statement of Senator Ayotte ................................................................................... 34 

WITNESSES

Hon. Paul N. Jaenichen, Administrator, Maritime Administration, U.S.. Department of Transportation ................................................................................. 4 

Prepared statement .......................................................................................... 6 

Hon. Mario Cordero, Chairman, Federal Maritime Commission ......................... 11 

Prepared statement .......................................................................................... 13 

Rear Admiral James Helis, U.S. Maritime Service Superintendent, United 

States Merchant Marine Academy ..................................................................... 16 

Prepared statement .......................................................................................... 17 

Mitchell Behm, Assistant Inspector General, Surface Transportation Audits, 

U.S. Department of Transportation .................................................................... 20 

Prepared statement .......................................................................................... 22 

APPENDIX

Response to written questions submitted to Hon. Paul N. Jaenichen by: 

Hon. Richard Blumenthal ................................................................................ 51 

Hon. Brian Schatz ............................................................................................ 51 

Hon. Cory Booker ............................................................................................. 53 

Response to written question submitted to Hon. Mario Cordero by: 

Hon. John Thune .............................................................................................. 54 

Hon. Ron Johnson ............................................................................................. 55 

Hon. Richard Blumenthal ................................................................................ 57 

Hon. Brian Schatz ............................................................................................ 58 

Response to written question submitted to Rear Admiral James Helis by: 

Hon. Richard Blumenthal ................................................................................ 59 

Hon. Brian Schatz ............................................................................................ 60 

Response to written questions submitted to Mitchell Behm by: 

Hon. Richard Blumenthal ................................................................................ 61 

Hon. Brian Schatz ............................................................................................ 62 

(1) 

THE STATE OF THE U.S. MARITIME 

INDUSTRY: THE FEDERAL ROLE 

TUESDAY, MARCH 8, 2016 

U.S. SENATE, SUBCOMMITTEE ON SURFACE TRANSPORTATION AND

MERCHANT MARINE INFRASTRUCTURE, SAFETY, AND SECURITY,

COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION, Washington, DC. 

The Subcommittee met, pursuant to notice, at 2:20 p.m. in room 

SR–253, Russell Senate Office Building, Hon. Deb Fischer, Chair of 

the Subcommittee, presiding. 

Present: Senators Fischer [presiding], Ayotte, Nelson, Booker, 

Cantwell, and Klobuchar. 

OPENING STATEMENT OF HON. DEB FISCHER, 

U.S. SENATOR FROM NEBRASKA 

Senator FISCHER. The hearing is called to order. 

Good afternoon. I am pleased to convene the Senate Subcommittee on Surface Transportation and Merchant Marine Infrastructure, Safety, and Security for today’s hearing entitled ‘‘The 

State of the U.S. Maritime Industry: The Federal Role.’’ This is the 

first in a series of hearings examining the maritime industry in 

preparation for legislation to reauthorize the Maritime Administration at the U.S. Department of Transportation. 

The United States has a rich maritime heritage. In fact, shipbuilding was one of our oldest industries in this country, dating 

back to our Nation’s early colonial times. From the beginning, U.S. 

waterways were used for exploration, commerce, transportation, defense, and recreation. 

Today, shipping is even more crucial to the global supply chain. 

As a global leader, the United States needs an efficient and reliable 

intermodal freight transportation network to grow our economy 

and create new jobs. Ports and the U.S. maritime shipping fleet are 

critical to keeping America competitive in the global market, especially as freight flows continue to increase. According to the Bureau 

of Transportation Statistics, freight tonnage on our nation’s transportation network will grow by 40 percent over the next 30 years. 

Meanwhile, deep-water sea ports represent a key element of the 

U.S. transportation network, and they are vital to our economic 

growth. In fact, America’s sea ports often serve as the key connection point for all modes of transportation. Today, we will hear from 

witnesses representing the Federal Government stakeholders with 

jurisdiction over maritime shipping and ports infrastructure. This 

includes the Maritime Administration, the Federal Maritime ComVerDate Nov 24 2008 08:10 May 15, 2017 Jkt 075679 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 S:\GPO\DOCS\25360.TXT JACKIE
2 

mission, the Merchant Marine Academy, and the Inspector General’s Office of the Department of Transportation. 

Around this time last year, I convened a hearing on the situation 

at the West Coast ports. These ports alone move 12.5 percent of 

U.S. GDP per year and channel goods throughout the entire country. Congress must continue to prioritize our Nation’s ports to 

avoid massive congestion and gridlock like we saw last year. 

One step toward ensuring that our ports remain a top priority 

at both the Department of Transportation and here in Congress is 

to strengthen the data received at the national level. Chairman 

Thune and I worked to include critical port performance legislation 

to aid us in retrieving critical data on port metrics in the highway 

bill that passed last year. Nationally, consistent data on our nation’s ports will inform policymakers to help ensure that our nation’s ports do not fall behind. 

I am pleased to see Admiral Helis here, who graciously welcomed 

me to the U.S. Merchant Marine Academy last fall. I was very 

pleased to visit and tour the Academy. During the tour, I had the 

opportunity to visit with Nebraska midshipmen that I nominated 

to the Academy. 

Admiral Helis, it’s clear that you are shaping excellent future 

leaders for the maritime industry at King’s Point, and I do thank 

you for your service. Moving forward, I hope to work with you and 

the Academy to ensure we strengthen efforts to address on-campus 

sexual assault through the upcoming Maritime Reauthorization 

bill. 

The Academy’s recent 2015 anonymous survey of midshipmen 

found that as many as 28 women and 24 men had been sexually 

assaulted on campus. However, the Academy noted there was only 

one officially reported case of sexual assault. As you know, we need 

to strengthen the support network available for midshipmen so 

they are confident in the reporting system. 

We also need to encourage more on-campus and industry preventive training and the completion of the Academy’s sexual assault 

action plan. After meeting with the on-campus coordinator during 

my visit to King’s Point, I am confident that we can move in the 

right direction, and I do look forward to working with you to address this critical issue. 

With regard to the Maritime Administration, I appreciate the important role that this agency plays in national security. MARAD 

manages the Department of Defense Ready Reserve Force, which 

serves to transport combat support, resupply, and unit equipment 

to the Army and the Marine Corps. 

In addition, MARAD maintains a national defense reserve fleet 

of cargo ships to support military shipping operations during times 

of war and in national emergency. This was evident in the Korean 

War, where nearly 540 reserve fleet vessels were activated to support military forces. 

I have serious concerns, however, regarding mismanagement at 

the agency as identified by the most recent IG report on the Maritime Administration. The IG report noted that weaknesses remain 

in MARAD’s hiring practices and program implementation. This report shows that adequate risk management for MARAD programs 

3 

are needed, along with updated policies, hiring practices, and 

stronger oversight. 

Administrator, I hope that we can work together to address these 

management challenges. 

Now, I would now like to invite my Ranking Member, Senator 

Booker, to offer opening remarks. 

STATEMENT OF HON. CORY BOOKER, 

U.S. SENATOR FROM NEW JERSEY 

Senator BOOKER. Thank you, Chairwoman Fischer. I appreciate 

you having my back. We were in a caucus, having a very lively discussion about GMOs, which is not the subject of this hearing, so 

I will move on. 

I just want to thank, again, Senator Fischer. She has been a tremendous partner, and I’m glad that she and I have been able to 

work together on a lot of very important issues. I know this hearing will be one opportunity to discuss those important issues. 

The country’s port vessels and merchant marine forces, we know, 

as has been said, are critical to this nation’s economy, critical to 

our military preparedness and, as I know, personally, toward disaster relief efforts. Our nation’s ports and marine terminals, as 

well as our rail and road networks that support them, are essential 

for Americans getting products to overseas markets and generating 

a significant part of our economy that helps to create jobs. 

Residents of my home state of New Jersey, this is something 

they know very, very well. New Jersey is home to the Port of New 

York and New Jersey—which I think should be renamed the Port 

of New Jersey and New York—which has moved more than 120 

million tons of cargo. You heard that. I have bipartisan support for 

that. The bill will be coming shortly. 

[Laughter.] 

Senator BOOKER. But they’re moving about 120 million tons of 

cargo in recent years and is the busiest port on the East Coast and 

I think the third busiest in the United States as a whole. Together, 

the port and terminals employ more than 163,000 people in New 

Jersey in 2014 and supported $60 billion in family incomes. It is 

an amazing force on the East Coast. 

In the past 5 years, the public and private sectors have helped 

fund more than $2 billion in infrastructure improvements and has 

helped to expand our region’s economy pretty significantly. For example, the Port of New York and New Jersey has committed $1.3 

billion to raise the Bayonne Bridge to allow very much larger vessels that serve our region. 

While investments like these are essential and offer long-term 

benefits to our regional economy, they cannot, by themselves, reduce the congestion caused by our nation’s outdated and, frankly, 

crumbling infrastructure. That’s why I’m proud of the work of this 

committee and the bipartisan work on the FAST Act that has established the Nation’s first multimodal freight grant program. 

While this is a substantial advancement—we’ve made steps—we 

know there’s more work to do. For many decades, the U.S. has relied on the U.S. Merchant Marine with its fleet of commercial vessels and crew of U.S. mariners to assist the military during times 

of war and national emergency. For example, during the height of 

4 

the U.S. military operations in Iraq and Afghanistan, from 2002 to 

2008, privately-owned U.S. flag vessels and U.S. crews carried the 

majority of military cargos to those theaters. 

The U.S. international fleet has diminished. U.S. mariners lose 

employment and the opportunity to remain certified to crew large 

ocean-going vessels. This concerns me. As we lose U.S. mariners, 

we lose sealift capacity to support U.S. military during times of 

War and these national disasters. 

However, there are ways to combat this decline, such as continuing to support the increased funding for MARAD’s Maritime 

Security Program, which ensures that 60 military-useful U.S. vessels are readily available to carry military cargos. We also need a 

long-term strategy that bolsters and supports all sectors of the 

maritime industry. 

I am very, very happy about this hearing. I’m grateful to my 

Chairperson and look forward to each of our witnesses to hear 

about these issues and more. 

Thank you. 

Senator FISCHER. Thank you, Senator Booker. 

We’ve been joined by our Ranking Member, Senator Nelson. 

Senator Nelson, if you would like to make any welcoming comments at this time, it would be appropriate. 

STATEMENT OF HON. BILL NELSON, 

U.S. SENATOR FROM FLORIDA 

Senator NELSON. Only to say I am thankful that you and the 

Ranking Member are having this, because the maritime industry 

provides very, very important services to the country. 

Thank you. 

Senator FISCHER. Thank you, Senator Nelson. 

At this time, I would like to welcome our panel. We will begin 

with your opening statements. I would like to introduce first, the 

Honorable Paul Jaenichen, the Administrator of the U.S. Maritime 

Administration. 

Welcome, sir. 

STATEMENT OF HON. PAUL N. JAENICHEN, 

ADMINISTRATOR, MARITIME ADMINISTRATION, 

U.S.. DEPARTMENT OF TRANSPORTATION 

Mr. JAENICHEN. Thank you. Good afternoon, Chairwoman Fischer, Ranking Member Booker, and members of the Committee. 

Thank you for the invitation to testify on the state of the U.S. maritime industry. 

I’d like to begin today by talking about the status of the United 

States fleet. The U.S. flag fleet is made up of vessels operating in 

both domestic coastwise trade and also in international trade. The 

U.S. coastwise trade law, also known as the Merchant Marine Act 

of 1920, more commonly referred to as the Jones Act, requires the 

use of U.S.-owned, U.S.-built, and U.S.-crewed vessels to carry our 

nation’s goods and domestic commerce, including trade to Puerto 

Rico, Hawaii, and Alaska. 

We see encouraging signals for industry growth with the recent 

construction and deliveries of new container ships and tankers and 

articulated tugs and barges qualified to operate in a coastwise 

5 

trade. The recent delivery of two container ships, in particular, are 

the first of their type in the world that are powered by U.S.-produced, liquefied natural gas or LNG, making them one of the most 

environmentally friendly forms of freight transportation in the 

world. They were built in the United States at the General Dynamics NASSCO shipyard in San Diego, and they are supporting our 

domestic shipbuilding industrial base. 

However, in the U.S.-flag international trade, we face significant 

challenges. The U.S.-flag fleet of privately-owned, commercially-operated vessels in international trade, along with the governmentowned vessels, provide critical sealift capacity, as both of you noted 

in your opening remarks, to move equipment and materials for the 

global projection and sustainment of our armed forces and also in 

the support of other Federal agencies, when needed and where 

needed, during times of conflict, humanitarian crisis, and natural 

disaster. 

Despite the winding down of military operations in the Middle 

East, the continued American involvement in that region as well as 

the developments in Eastern Europe and the Western Pacific point 

to a continuing need for a robust U.S. armed forces deployment capability and capacity. The total number of vessels in the international U.S.-flag fleet has varied considerably over the years, rising from 92 in 2001 to 106 at the end of 2011, and after reaching 

a historic low last fall of 75 has climbed slightly back to 78 as of 

the end of February 2016, continuing a long-term downward trend, 

with over a 25 percent reduction in the number of U.S.-flag international trading fleet vessels over the last three years. The corresponding reduction, as Senator Booker noted in his remarks, 

with regards to the loss of jobs and the resulting loss of capacity 

is of concern. 

Currently, there are approximately 11,230 qualified mariners 

available to sail either commercial or government-owned sealift 

ships. The initial activation of 63 Maritime Administration and 

Military Sealift Command surge vessels would require an additional 3,200 mariners for sustained operation. This is in addition 

to the continued operation of the privately owned commercial U.S.- 

flag fleet. 

And while it appears possible to meet the sealift surge for the 

initial four to six months with available mariners, maintaining sustained operations that require crew rotations on both government 

and commercial vessels, including those vessels that are not involved in carrying military cargo, would be severely challenging 

and perhaps not even possible without voluntary extensions beyond 

normal crewing periods. Given this assessment, I’m currently working closely with the U.S. Transportation Command, the Navy, and 

the commercial maritime industry to develop proposals to maintain 

an adequate number of licensed, trained, and experienced mariners. 

Another area of focus for the Maritime Administration is addressing freight congestion in and around our nation’s ports. 

Freight congestion at our ports will be exacerbated by the ever 

larger mega container ships that are coming into the global fleet. 

These large ships calling at our container ports create surges in 

freight volumes moving in and out of those ports, and in many 

6 

1 46 § U.S.C. 50101 

2 46 U.S.C. 55102 

3 Currently, 91 large U.S.-flag self-propelled ocean-going vessels operate in U.S. domestic commerce. Although this segment of the fleet does not depend on government-impelled cargos, the 

crews of these vessels are qualified to operate sealift ships in the Government reserve fleet. 

cases our ports and their surrounding infrastructure are in need of 

repair and modernization to accommodate the needs of the increasingly larger vessels of commercial merchant fleets that are currently handling our trade. 

In recognition of these challenges, both the Congress and the administration have been taking steps to further integrate the marine 

transportation system into the surface transportation planning and 

the programs to support movement of freight. The Maritime Administration is taking action to aid the department’s efforts in safe 

and efficient freight transportation and to address the issues that 

challenge the U.S. maritime industry through the development of 

a National Maritime Strategy. We expect to publish the draft strategy for public comment in the coming months before we are able 

to finalize it. I look forward to providing a draft of that strategy 

to the Committee soon. 

Again, thank you for inviting me to testify today. I appreciate 

your interest and the continued support for the maritime industry 

and the U.S. Merchant Marine, in particular, and will be happy to 

answer any questions that you may have. 

[The prepared statement of Mr. Jaenichen follows:] 

PREPARED STATEMENT OF PAUL N. JAENICHEN, ADMINISTRATOR, MARITIME

ADMINISTRATION, U.S. DEPARTMENT OF TRANSPORTATION

Good afternoon, Chairwoman Fischer, Ranking Member Booker and Members of 

the Committee. Thank you for the invitation to testify on the state of the U.S. maritime industry. The United States is a maritime Nation: Our ports, inland rivers and 

waterways, Great Lakes and coastal ocean routes are essential to our global economic competitiveness, and the U.S. Merchant Marine plays a critical role in meeting national defense sealift and other security requirements and maintains a U.S. 

presence in international commercial shipping. To ensure a strong domestic maritime industry and U.S. Merchant Marine into the future, the Maritime Administration (MARAD) is focused on increasing the competitiveness of the U.S.-flag fleet, 

educating and training the next generation of merchant mariners, supporting innovation to address maritime energy and environmental issues, and addressing infrastructure challenges at our ports and on our inland rivers and waterways to increase mobility throughout the domestic transportation network. I will highlight 

each of these areas in my testimony today. 

The U.S.-Flag Fleet 

The U.S.-flag fleet is made up of vessels operating in both the domestic, coastwise 

trades and international trade. Our national policy for coastwise commerce is governed by the Merchant Marine Act of 1920, commonly referred to as the Jones Act, 

which reserves this trade for ships built in the United States, owned by U.S. citizens, and crewed by U.S. mariners. The national policy objectives for maintaining 

a U.S. Merchant Marine engaged in international maritime commerce is set forth 

in the Merchant Marine Act of 1936 as amended in 1970 which includes the objective that a substantial portion of our foreign trade should be carried on U.S. ships. 

Another policy goal of the 1936 Act is that our Nation’s Merchant Marine, both 

ships and mariners, will serve as a naval auxiliary in times of war or national emergency.1 These goals were reinforced in the 1989 National Security Directive 28, 

known as the National Security Sealift Policy. 

U.S.-Flag Fleet in Coastwise Trade 

U.S. coastwise trade law 2 requires the use of qualified U.S.-flag vessels to carry 

our Nation’s goods in domestic commerce, including trade with Puerto Rico, Hawaii 

and Alaska.3 This same law also helps us to meet our national defense needs by 

7 

4 U.S. Army Corps of Engineers, Waterborne Transportation Lines of the United States, Calendar Year 2013, Volume 1-National Summaries, Table 1: SUMMARY OF THE UNITED 

STATES FLAG PASSENGER AND CARGO VESSELS OPERATING OR AVAILABLE FOR OPERATION ON DECEMBER 31, 2013 BY REGION. 5 46 U.S.C. 55102 

6 Economic Importance of the U.S. Shipbuilding and Repairing Industry, Maritime Administration (November 2015) http://www.marad.dot.gov/wp-content/uploads/pdf/MARADlEcon lStudylFinallReportl2015.pdf 7Source: IHS Maritime Sea-Web, accessed February 2, 2016. 

8The Use of Commercial Vessels and Intermodal Systems for Military Sealift 2002–2011, A 

Report of the NDTA Military Sealift Committee Working Group on Maritime Policy, Operation 

Enduring Freedom (OE F) and Operation Iraqi Freedom (OIF), National Defense Transportation 

Association, Arlington Va. (Feb. 28, 2003). 

supporting American built ships, the crews to operate them, and ensures that intermodal equipment, terminals and other infrastructure are available to the U.S. military in times of war or national emergency. Coastwise trade law promotes a strong 

and vibrant U.S. maritime industry, which helps the United States maintain its expertise in shipbuilding and maritime transportation. It also ensures that the vessels 

navigating our coastal and inland rivers and waterways abide by U.S. laws and operate under the oversight of the U.S. Government. 

More than 40,000 vessels operate in coastwise and inland trades. This includes 

91 large self-propelled oceangoing vessels (1,000 gross tons or more) in domestic 

U.S. trade.4 While the number of vessels is down from 125 in 2006, the decline is 

primarily due to the retirement of older tankers which are being replaced by large, 

oceangoing tank barges, most in the form of articulated tug-barges (ATBs). ATBs 

function in much the same way as self-propelled oceangoing vessels, but with smaller crews and slower speeds. 

We do see encouraging signals for domestic industry growth with recent deliveries 

of new containerships and tankers qualified to operate in the coastwise trade. These 

containerships are among the first in the world that are able to be powered by U.S.- 

produced liquefied natural gas (LNG), making them one of the most environmentally friendly forms of freight transportation in the world. 

The construction of these vessels demonstrates the benefit of the U.S.-build requirement of the coastwise law 5 to domestic shipbuilding. In 2013, American ship- builders directly employed 110,000 Americans and produced $37.3 billion in gross 

domestic product.6 As of February 2016, there are seven tankers, two containerships, two containership roll-on/roll-off vessels (ConRos), 16 ATBs and several 

barges on U.S. shipyard order books.7 These civilian shipyards and related industries are part of the Federal shipbuilding and repair industrial base that ensures 

adequate American expertise and capacity to meet national shipbuilding needs. 

U.S.-Flag Fleet in International Trade 

To defend American interests and carry out national policy overseas, the United 

States must be capable of deploying military forces anywhere in the world on short 

notice to meet contingency requirements. The U.S.-flag fleet of privately owned, 

commercially operated vessels, along with government-owned vessels, provide critical sealift surge and sustainment capacity to move equipment and materials for the 

Armed Forces and Federal agencies when needed, and where needed, during times 

of conflict, humanitarian crises, and natural disasters. 

For example, during U.S. overseas contingency operations in Iraq and Afghanistan from 2002 to 2010, over 95 percent of all military ocean-borne cargoes were 

moved on U.S.-flag vessels and government-owned sealift vessels activated from reserve status and crewed by U.S. merchant mariners.8 U.S.-flag vessels, strategic 

ports and intermodal systems ensure delivery of vital supplies and equipment to our 

military service members and their families stationed overseas. 

Ready Reserve Force (RRF) 

MARAD manages and maintains a fleet of government-owned merchant ships in 

the National Defense Reserve Fleet (NDRF). This includes 45 RRF vessels that are 

maintained ready for operation within five days for transport of cargo to the area 

of operation and one RRF off-shore petroleum discharge vessel maintained ready for 

operation within 10 days to meet critical war fighting requirements. Vessels maintained in the RRF and NDRF, including training ships on loan to the six State Maritime Academies (SMAs), are also called upon for disaster response in an emergency, 

as was the case when one RRF ship and two training ships were activated in November 2012 to provide support for relief efforts following Hurricane Sandy, and 

more recently RRF ships supported the medical mission to Liberia for the United 

States contribution to the international Ebola Virus response in late 2014. Additionally, RRF and NDRF vessels can be configured to support other emergent situations 

8 

as was the case in mobilizing the Motor Vessel (M/V) CAPE RAY for use in the 

international effort to destroy the Syrian Government’s declared chemical weapon 

stockpile. That mission was completed in August of 2014. 

Maritime Security Program 

The Maritime Security Act of 1996 established the Maritime Security Program 

(MSP), which provides direct annual stipends for up to 60 active, commercially viable, militarily useful, privately-owned U.S.-flag vessels and crews operating in U.S. 

international trades. The MSP fleet ensures access to U.S.-flag ships in ocean-borne 

foreign commerce with the necessary intermodal logistics capability to move military 

equipment and supplies during armed conflict or national emergency, and also provides critical employment for up to 2,400 highly qualified U.S. merchant mariners. 

Under this program, participating operators are required to commit their ships, 

crews and commercial transportation resources upon request by the Secretary of Defense during times of war or national emergency. Of the 78 U.S.-flag vessels that 

trade internationally, 57 currently participate in the MSP program. MARAD recently approved one vessel to enter the program and is in the process of filling the 

remaining two vacancies in the program. 

Cargo Preference Laws 

To encourage an active, privately owned and operated, U.S.-flag fleet, Congress 

enacted several measures known as ‘‘cargo preference’’ laws between 1904 and 1954. 

These laws require shippers to use U.S.-flag vessels to transport certain government-impelled ocean-borne cargoes. Specifically, under the Military Cargo Preference Act of 1904 and the Cargo Preference Act of 1954, 100 percent of military 

cargo, and at least 50 percent of government non-military cargo, including agricultural cargoes, must be carried on U.S. flag vessels. The cargoes provided under 

these programs help maintain the fleet of privately-owned U.S.-flag ships in global 

trade that provide ready access to ships and crews to transport equipment and supplies to support our Armed Forces when deployed globally. 

Trends Concerning the U.S.-Flag Vessel Fleet Size 

The total number of vessels in the internationally trading U.S.-flag fleet has varied considerably over the years, rising from 92 in 2001 to 106 in 2011 and declining 

to 78 vessels in February 2016, continuing a long-term downward trend. Vessel owners take into account a variety of factors before making a decision to leave the fleet 

including the availability of government-impelled cargo and foreign-flag trading options for their vessels. In individual circumstances, particularly for operators that 

do not have the benefit of participating in the MSP, loss of government-impelled 

cargo could influence a vessel owner’s decision to retire vessels from the fleet or 

reflag. 

Privately owned and operated ships remain under U.S.-flag only if there is cargo 

to move. Reductions in available preference cargo have contributed to a decline in 

the number of U.S.-flag vessels trading internationally, and in turn, a reduction in 

U.S. mariner jobs in international trade. While this does not preclude these mariners from seeking jobs in coastwise or Jones Act trades, they may not necessarily 

maintain the appropriate U.S. Coast Guard (USCG) Merchant Mariner Credential 

(MMC) for international trade given that the number of large self-propelled oceangoing domestic trading vessels has not increased, but stayed roughly the same. 

Sealift Manpower Assessment 

MARAD is responsible for determining whether adequate U.S. manpower is available to support the operation of sealift ships during a major crisis and is currently 

working with the Department of Defense (DOD) to address mariner requirements 

and to assess the availability and capacity of sealift assets to support national security. This assessment of the status of the U.S. civilian merchant mariner pool includes close coordination with maritime labor and consultation with other maritime 

industry stakeholders. Given that mariner service is completely voluntary, it is difficult to assess actual mariner availability to meet contingencies. At the same time, 

the domestic and international training requirements for mariners in domestic 

coastwise and international trade are increasing due to updated Standards of Training, Certification and Watchkeeping (STCW) requirements adopted at the International Maritime Organization that take effect in January 2017. 

Currently, there are approximately 11,300 qualified mariners readily available to 

sail on either commercial or government reserve sealift ships. The initial activation 

of the 63 MARAD and Military Sealift Command surge vessels would require roughly 3,200 mariners for sustained operation. This is in addition to continued operation 

of the privately-owned commercial fleet. While it appears possible to meet the initial 

four to six months of sealift surge with available mariners, maintaining sustained 

9 

9 Bureau of Labor Statistics, Occupational Outlook Handbook, http://www.bls.gov/ooh/transportation-and-material-moving/water-transportation-occupations.htm accessed March 3, 2016. 10The six SMAs are: California Maritime Academy in Vallejo, CA; Great Lakes Maritime 

Academy in Traverse City, MI; Texas A&M Maritime Academy in Galveston, TX; Maine Maritime Academy in Castine, ME; Massachusetts Maritime Academy in Buzzards Bay, MA; and 

State University of New York (SUNY) Maritime College in the Bronx, NY. 11 46 U.S.C. 51504 

operations that require crew rotation on both government and commercial vessels, 

including vessels that are not carrying military cargo, could be severely challenged. 

Given this assessment, I am working closely with the U.S. Transportation Command, the U.S. Navy (Military Sealift Command), and the commercial maritime industry to develop proposals to maintain an adequate number of trained mariners. 

Mariner Training 

It takes many years of training to develop the necessary mariner competencies for 

officer and engineering positions on vessels; therefore, maintaining an adequate pool 

of American merchant mariners is vital to the commercial success of both the U.S.- 

flag fleet and the capacity to project American sea power. The average age of USCG 

credentialed merchant mariners is 46, and the workforce is retiring faster than it 

is being replaced.9 Since the maritime segment of transportation workers is relatively small, the effect of a large percentage of older workers is likely to be significant on the entire transportation workforce. Given the high average age of the 

credentialed mariner workforce, the expected separation rate of workers from the 

industry (i.e., those leaving the industry, retirements, and expected job growth), and 

time needed to gain shipboard experience, there could be a critical need for senior 

mariners to meet employment demand between now and 2022. 

Both the U.S. Merchant Marine Academy (Academy) and the SMAs provide training for USCG credentialed Merchant Marine officers. The Academy graduates each 

year one quarter of the Nation’s new highly skilled, entry-level Merchant Marine 

officers who hold an unlimited tonnage or horsepower endorsement available to support the U.S. Merchant Marine and national maritime industry infrastructure. To 

meet USCG licensing requirements, Midshipmen are required to have 360 days of 

sea service during their four-year education program. This at-sea experience qualifies midshipmen for both their domestic USCG MMC and their international STCW 

endorsements. The Academy’s shipboard training program exposes Midshipmen to 

life at sea on board commercial and military vessels and enables commercial U.S. 

shipping companies and the U.S. Navy (Military Sealift Command) an opportunity 

to provide seamanship and engineering training. In 2016, 230 Midshipmen are expected to graduate from the Academy. Presently, with rare exceptions, all of these 

graduates are commissioned on active duty or into a reserve unit of the Armed Services or other uniformed services of the United States and provide a guaranteed 

source of mariners to crew government owned surge sealift vessels when activated. 

The six State Maritime Academies (SMAs) collectively graduate more than twothirds of the entry-level Merchant Marine officers annually.10 More than 660 Cadets 

are expected to graduate from the SMAs in 2016. As part of its support to the 

SMAs, MARAD provides ships 11 on loan to the SMAs to support at-sea training. 

Unlike the Academy, SMA Cadets receive most of their sea time to qualify for their 

MMC and STCW endorsements on these MARAD-provided training ships rather 

than on commercial or military vessels. The available SMA training ships are aging 

with an average age of 37 years. MARAD is addressing priority maintenance across 

all the aging training vessels to ensure that they all meet safety and functional requirements and can stay in service as long as possible. In addition, MARAD is looking into appropriate next steps to ensure adequate shipboard training capacity remains available in order to produce sufficient quantity and quality of mariners to 

support sealift needs into the future. 

Environment 

Air emissions control and the prevention of invasive species spread through ballast water and other means remain the most significant environmental challenges 

for the maritime industry. MARAD works in partnership with other Federal agencies, academia and the maritime industry, and with continued support from Congress for the Maritime Environmental and Technical Assistance (META) Program, 

progress is being made on both of these fronts. Recent projects have demonstrated 

the feasibility of using biofuels and LNG for maritime propulsion, and the use of 

hydrogen and other fuel cells for shipboard and shoreside applications; however, 

challenges still exist. No ballast water management system has yet been Coast 

Guard certified as capable of meeting U.S. standards, but with MARAD assistance, 

10 

12Department of Transportation, Bureau of Transportation Statistics—Occupational Employment Statistics (May 2014). Include those employed in water transport (NAICS 483000), ship 

and boatbuilding, (NAICS 336600), support activities for water transportation (NAICS 488300). 13Department of Commerce, Bureau of Economic Analysis, Gross-Domestic-Product-(GDP)-byIndustry 2014. 

progress is being made to help assess the effectiveness of control systems and to advance invasive species control science. 

The Maritime Transportation System 

The U.S. maritime transportation system employs more than 200,000 workers in 

water transportation and ship and boat building, and another 95,000 in support of 

the maritime industry.12 In 2014, the maritime industry, including those that serve 

foreign transportation needs, added $18.5 billion to our Gross Domestic Product.13

The maritime transportation system is a critical component of our national transportation system of ports, railways, roads, pipelines and waterways, and the maritime component is our primary access to global trade. As our country grows, so does 

demand for freight transportation. 

Freight congestion in and around our Nation’s ports continues to grow and will 

be exacerbated by ever larger mega containerships and growing multi-partner shipping alliances, whereby multiple shippers agree to share the capacity of a single vessel to improve capacity utilization and lower per unit shipping costs. Large ships 

calling at our container ports create surges in freight moving into and out of ports. 

These surges create logistical challenges with the availability and storage for equipment such as chassis and empty containers, long lines and wait times for trucks entering ports, adequate space for safe truck parking, and traffic on the intermodal 

road and rail infrastructure connecting to the ports. 

In many cases, our ports and their surrounding infrastructure are in need of repair and modernization to accommodate the needs of increasingly larger vessels in 

the commercial merchant fleets that handle our trade. In recognition of these challenges, both Congress and the Administration have been taking steps to further integrate the marine transportation system into surface transportation planning and 

programs. 

One of those efforts was rolled out in February of last year, when Secretary Foxx 

released the draft report Beyond Traffic 2045: Trends and Choices, which created 

a baseline for the discussion of marine transportation’s role in our Nation’s transportation system as it evolves over the next 30 years. Following that, Congress 

passed the Fixing America’s Surface Transportation (FAST) Act, which further integrates ports into the surface transportation system by making them eligible for 

funding under the new National Highway Freight Program (NHFP) and the Nationally Significant Freight and Highway Projects Program. 

MARAD is also working to develop a robust Marine Highway system aimed at 

providing a viable and efficient transportation option for shippers to move freight 

more efficiently, avoiding congested cities and towns. The America’s Marine Highway Program is focused on facilitating partnerships between service operators and 

potential shippers, as well as State DOTs, Metropolitan Planning Organizations, 

and Economic Development Agencies at the Federal, State and local level in order 

to create opportunities for new services. In FY 2016, MARAD will be assisting sponsors of designated Marine Highway projects to conduct planning and develop equipment and infrastructure necessary to bring these new services to life. 

The Department of Transportation’s National Maritime Strategy 

MARAD is taking action to aid the Department’s efforts in safe and efficient 

freight transportation, and to address the issues that challenge the U.S. maritime 

industry through the development of a draft National Maritime Strategy. We expect 

to publish the draft strategy in the coming months, which will be available for public comment before MARAD finalizes it. As required in section 603 of the Howard 

Coble Coast Guard and Maritime Transportation Act of 2014, the strategy will identify Federal regulations and policies that reduce the competitiveness of U.S.-flag 

vessels operating in foreign trade; and the impact of reduced cargo flow due to reductions in military deployment overseas. It will also include recommendations to 

make U.S.-flag vessels more competitive and increase the use of U.S.-flag vessels 

in foreign trade, ensure compliance by Federal agencies with cargo preference laws, 

increase the use of third-party inspection and certification authorities to inspect and 

certify vessels; increase the use of short sea transportation routes; and enhance 

United States shipbuilding capability. Following publication of the draft strategy for 

public comment, I look forward to providing the strategy to the Committee. 

11 

Again, thank you for inviting me to testify today. I appreciate your interest and 

continued support for the maritime industry and the U.S. Merchant Marine and will 

be happy to answer any questions you may have. 

Senator FISCHER. Thank you, Administrator. 

Next we have the Honorable Mario Cordero, Chairman of the 

Federal Maritime Commission. 

Welcome. 

STATEMENT OF HON. MARIO CORDERO, CHAIRMAN, 

FEDERAL MARITIME COMMISSION 

Mr. CORDERO. Thank you. Chairperson Fischer, Senator Booker, 

members of the Committee, thank you for inviting me to join you 

today to provide a perspective on the Federal Maritime Commission, on the state of the U.S. maritime industry, and related infrastructure. With your permission, I will summarize my prepared remarks and ask that my full statement be entered into the record. 

In 2015, total container volumes transiting the United States 

were 31.5 million TEUs. The imbalance in the container trades 

grew for a second year in a row with 20 million TEUs imported 

into the United States, and container-based exports dropped 11.5 

million TEUs, a 5 percent decrease from export volumes in the 

prior year. The vessel capacity among the global fleet that is available to meet demands for increased container volumes is more than 

sufficient, and it is likely that shippers will continue to benefit 

from low transportation rates for their international ocean cargo. 

In regard to competition, we may see considerable consolidation 

among container carriers this year. CMA-CGM is acquiring NOL. 

China Ocean Shipping Company, COSCO, is absorbing China Shipping as part of a merger. Pending approval by regulators in the 

United States and other nations, both CMA and COSCO will grow 

in size, capabilities, market share, and possibly market power. The 

CMA and COSCO transactions are complex, far reaching, and will 

require careful ongoing analysis for some time in the future. 

In Fiscal Year 2015, the Commission saw the largest number of 

operating agreements filed during a 12-month period since 2006. 

Many of these agreements now filed with the FMC reflect a trend 

in which carriers and maritime terminal operators increasingly 

work in cooperation with each other, sharing resources and assets. 

These agreements are much more complex and time consuming to 

analyze than previously was the case. Additionally, the complexity 

and potentially anti-competitive effect of these agreements require 

consistent oversight and critical analysis. 

International trade at our Nation’s ports account for 32 percent 

of the Gross Domestic Product. It is vital that we have the efficient 

flow of cargo through our maritime terminals, and it is a key priority for the Federal Maritime Commission that our maritime gateways are able to handle current and projected cargo volumes. 

In February of this year, the Commission initiated its latest effort to address congestion issues by voting unanimously to approve 

the facilitation of a supply chain innovative team project that will 

work to develop commercial solutions to supply chain challenges 

and related port congestion challenges and concerns. This effort 

will be led by Commissioner Rebecca Dye. 

12 

At issue presently, the Commission is currently hearing much 

about the Safety of Life at Sea Treaty amendments coming into 

force this July regarding the verified gross weight of containers, or 

verified gross mass of containers. On February 18, 2016, the FMC 

hosted a meeting at its headquarters and brought together all interested parties, including the Coast Guard, which is the U.S. Government agency with the responsibility and jurisdiction for this 

matter. 

At this particular juncture, it seems more work needs to be done 

to achieve consensus. I reiterate that the Coast Guard is the lead 

agency in this matter. That noted, the FMC will carefully monitor 

developments to see if the situation ever reaches a point where it 

would warrant intervention by the Commission under the relevant 

applicable portions of the Shipping Act. The Commission is also 

prepared to continue the informal role of promoting dialog among 

all relevant parties, including through meetings such as the one we 

hosted last month. 

The ultimate goal of the FMC is to give the U.S. shipper confidence that when they contract for ocean freight services, they are 

doing so with an honest actor who is charging a fair rate and is 

capable of actually having the shipment move from origin to destination. We safeguard the public against anti-competitive practices. We maintain and review confidentially filed service contracts. 

We provide forums for exporters, importers, and other members of 

the shipping public, and we guard against unfair and unfavorable 

conditions caused by foreign government business practices in U.S. 

foreign shipping lanes. 

The FMC is a small agency with a broad mandate and the essential mission of making international cargo actually flow. As trade 

volume continues to grow exponentially, there will be an increased 

demand for the services of the FMC, and very simply put, we need 

to be better resourced to meet our responsibilities. 

In summary, the state of the maritime industry is mixed. On one 

hand, increasing trade volumes are an encouraging indicator of the 

strength of the economy. Additionally, we are fortunate there is 

sufficient vessel and container capacity to move this cargo. 

On the other hand, if unaddressed, congestion at U.S. ports presents a serious potential impediment to continued economic growth 

as well as the competitiveness of the nation. Continued attention 

by Congress to ports and the intermodal connectors that link the 

quayside to the countryside is absolutely essential. Financing ports, 

port infrastructure, and good movement networks are necessary investments that benefit the economy as well as the U.S. consumer. 

Chairperson Fischer, Senator Booker, once again, I appreciate 

this opportunity to appear before you. I’m happy to answer any 

questions that anyone may have on the Committee or Subcommittee regarding the Federal Maritime Commission or developments on the waterfront where our insight would be helpful. 

Thank you again. 

[The prepared statement of Mr. Cordero follows:] 

13 

PREPARED STATEMENT OF HON. MARIO CORDERO, CHAIRMAN, 

FEDERAL MARITIME COMMISSION

Chairman Fischer; Senator Booker; members of the Committee—thank you for inviting me to join you today to provide the perspective of the Federal Maritime Commission on the state of U.S. maritime industry and related infrastructure. 

As you know, the Federal Maritime Commission is the independent agency 

charged with promoting the fair, efficient, and reliable transportation of cargo into 

and out of the United States via international, ocean-borne shipping. We do this primarily through enforcing the Shipping Act of 1984. We regulate all ocean shipping 

entering and leaving the United States and we engage entities involved in every aspect of moving cargo internationally via the water. Our mission, and exposure to 

the people who make ocean shipping work, gives the Commission a unique perspective to review and summarize trends in the shipping business. 

Looking only at overall container volumes imported and exported into the United 

States, 2015 was an impressive year for shipping. Total container volumes were 31.5 

million Twenty Foot Equivalent Units (TEUs), which represents a two-percent increase in container volumes year-on-year. The imbalance in the container trades 

grew for the second-year in a row with 20 million TEUs entering the United States 

and container-based exports dropped to 11.5 million TEUs—a five percent decrease 

from export volumes of the previous year. The U.S. share of the world’s container 

trade was nearly 17 percent and according to our analysis, this is the second consecutive year that imported container volumes have surpassed the previous record 

of 18.6 million containers that was established in Fiscal Year 2007. 

In terms of container cargo volumes, Asia remains our largest trading region and 

China our largest trading partner. In Fiscal Year 2015, Asia was responsible for 62 

percent of U.S. container trade volumes, 53 percent of that volume being tied to 

north Asia. Our annual report, which will be published in the next few weeks, has 

a very useful summary of ocean shipping trends as they relate to the United States 

on a region-by-region basis. We will be certain to get copies of our report to you and 

your staff as soon as it has been printed. 

The vessel capacity among the global fleet that is available to meet demands for 

increased container volumes seems more than sufficient. The world’s containership 

fleet continued to expand with nominal capacity growing by approximately 9 percent. At the end of the fiscal year, there are 5,143 containerships with a capacity 

of 19.7 million TEUs in the global fleet. Additionally, there were orders worldwide 

for 511 new containerships with an aggregate capacity of 4.1 million TEUs—an increase of 21 percent over the existing fleet capacity. This generous supply of container capacity suggests that shippers will likely benefit from continued low transportation rates for their international ocean cargo. 

Regarding competition in the shipping industry, we may see considerable consolidation among container carriers this year. France-based carrier CMA–CGM (CMA) 

is acquiring Singapore-based carrier NOL; and, China Ocean Shipping Company 

(COSCO) is absorbing China Shipping as part of a merger. Pending approval by regulators in the United States and other nations, both CMA–CGM and COSCO will 

grow in size; capabilities; market share; and possibly market power. The FMC has 

the vital responsibility to monitor possible changes in the marketplace and analyze 

potential impact on shippers. The CMA and COSCO transactions are complex, farreaching, and will require careful on-going analysis for some time into the future. 

One of the most significant areas of responsibility for the Federal Maritime Commission is its review of operating agreements filed with the agency, particularly as 

the industry rapidly reacts to changing global economic conditions. 

Under the law, Vessel Operating Common Carriers (VOCCs) and Marine Terminal Operators (MTOs) who file agreements with the FMC enjoy a limited exemption from the Nation’s antitrust laws. These exemptions are designed to help facilitate efficiencies and provide reliable and fair international ocean-borne transportation services to domestic shippers. Such agreements are thoroughly monitored and 

analyzed by Commission staff on a continuing basis to confirm that the law is followed and the American shipping public is not harmed. 

In Fiscal Year 2015, the Commission received 258 agreement filings—both new 

agreements and amendments to existing agreements—which is the largest number 

of agreements filed during a 12-month period since 2006. The nature of international trade has changed tremendously over the nine-years between 2006 and 

2015: trade volumes have grown; vessels have become larger in size; and supply 

chains have become more sophisticated. Corresponding trends in the shipping business are consequentially changing the nature of many of the agreements we consider. 

14 

Many of these agreements now filed at the FMC reflect the trend in which carriers and MTOs increasingly work in cooperation with each other, sharing resources 

and assets. These agreements are much more complex and time-consuming to analyze than previously was the case. Additionally, the complexity and potentially anticompetitive effect of these agreements, require consistent oversight and critical 

analysis. 

As a result of merger and acquisition developments in the container shipping 

business, we are likely to see much more activity on the agreements front. Carriers 

that are purchasing other carriers, or are merging, are likely to modify their existing agreements or enter into new agreements and competing lines may change their 

agreements in reaction to the new reality of the shipping business. These developments warrant careful review and will demand more time, attention, and resources 

of the FMC. 

It is very easy to report a statistic via testimony, but there is a real world impact 

to all the record breaking volumes of containers landing in the United States and 

that is the continuing stress on maritime gateways—ports and intermodal connectors that are already congested with trade traffic. Marine Terminal Operators 

(MTOs) are working to find ways to more efficiently move cargo from ship-to-shore 

and out the gate. 

While the FMC is an enforcement and regulatory agency, it is also an organization that seeks actively to facilitate trade. It has been our experience that sometimes the best solution to a problem in an area under our purview is not simply 

regulation, but encouraging private sector parties to find their way to a private sector solution. That is the path we have mostly taken when it comes to port congestion. 

International trade begins at our Nation’s ports and it is through marine terminals that cargo enters and exits the country. International trade moving through 

America’s coastal gateways accounts for 32 percent of America’s Gross Domestic 

Product and some predict that by 2030 this figure may rise to 60 percent. Ensuring 

that U.S. ports handling international ocean-borne commerce are able to efficiently 

handle current and projected volumes is a key priority for the Commission. 

Over the past two years, the Federal Maritime Commission has actively engaged 

in surveying the status of the nations’ ports and identifying not only what the 

causes of congestion are, but how private sector, mutually agreeable, and results 

driven solutions might be found. 

In latter FY 2014, and throughout FY 2015, the Commission hosted four separate 

listening events at major gateway cities throughout the United States—Los Angeles; 

Baltimore; New Orleans; and Charleston—to gather input from stakeholders about 

what problems they were experiencing and how congestion was impacting their ability to move goods. These listening sessions, which were always headed by at least 

one Commissioner, led to the issuance of two separate publications: 

• Rules, Rates, and Practices Relating to Detention, Demurrage, and Free Time for 

Containerized Imports and Exports Moving Through Selected United States 

Ports (April 2015—http://www.fmc.gov/NR15-03/?pg=9) 

• U.S. Container Port Congestion & Related International Supply Chain Issues: 

Causes, Consequences & Challenges (July 2015—http://www.fmc.gov/NR15-11/ 

?pg=6) 

The Commission voted unanimously in February to approve the facilitation of 

‘‘Supply Chain Innovation Teams’’—working groups comprised of industry stakeholders doing business in, at, or with the combined port facilities in the San Pedro 

Bay, which is our Nation’s largest and busiest port complex. Supply Chain Innovation Team members will work to develop commercial solutions to supply chain challenges and related port congestion concerns. This effort will be led by Commissioner 

Dye and will culminate in a report that will be issued to the FMC. The real value 

of this undertaking is that we believe it will lead to collaborative, practical solutions 

that will increase efficiencies and terminal throughput at port facilities. 

An issue that the Commission is currently hearing much about is that of Safety 

of Life at Sea Treaty (SOLAS) amendments coming into force this July that will require shippers to declare a ‘‘Verified Gross Mass’’ (VGM) of containers to ocean carriers before a shipment will be allowed to be loaded on a vessel. Carriers and shippers have not yet resolved the issue, and on February 18, 2016, the FMC hosted 

a meeting at its headquarters that brought together all interested parties, including 

the Coast Guard, which is the U.S. Government agency with responsibility and jurisdiction for this matter. The meeting was convened to pursue guided discussion 

and seek consensus on how to proceed on the VGM matter. At this particular juncture, it seems more work needs to be done to achieve consensus. I reiterate that 

the Coast Guard is the lead agency on this matter—it represents the United States 

15 

at the International Maritime Organization; it is responsible for implementing 

SOLAS; and it is responsible for enforcement matters in terms of vessel and facility 

safety. That noted, the FMC will maintain a vigilant watch on this issue and carefully monitor developments to see if the situation ever reaches a point where it 

would warrant intervention by the Commission under the relevant and applicable 

portions of the Shipping Act. The Commission is prepared to continue its informal 

role of promoting dialog among all relevant parties and is willing to continue to facilitate meetings. 

Earlier in my testimony, I noted that though the Federal Maritime Commission 

has regulatory and enforcement powers, trade facilitation is very much also at the 

core of its mission and activities. The ultimate goal of our work is to give the U.S. 

shipper confidence that when they contract for ocean freight services they are doing 

so with an honest actor, who is charging a fair rate, and is capable of actually having the shipment moved from origin to destination. We review, analyze, and monitor 

carrier and marine terminal operator agreements to assure these entities do not engage in anticompetitive behavior; we maintain and review confidentially filed service contracts; we provide forums for exporters, importers, and other members of the 

shipping public to obtain relief from ocean shipping practices or disputes that impede the flow of commerce; and we guard against unfair and unfavorable conditions 

caused by foreign government business practices in U.S. foreign shipping trades. 

The sum total of our efforts is that international trade flows efficiently and at a reasonable cost. When ocean transportation services begin to take longer or cost more, 

we want to know why this happening and how we can potentially fix any problems. 

We do all of this with less than 125 employees and with a budget in Fiscal Years 

2015 and 2016 of only $25.6 million. I am very proud of the hard work our employees do, and the commitment they bring to the office each and every. 

While acknowledging and commending the hard work of Commission staff, I am 

not certain how much longer the Commission can sustain current operations if we 

do not receive modest relief in terms of some additional personnel in key positions 

and a corresponding realistic increase in funds to carry out our functions. 

The demands on the Commission are significant in terms of accepting, processing, 

analyzing, and acting upon just the routine filings that provide the foundation for 

a transparent and competitive international ocean shipping network. In just the 

first quarter of Fiscal Year 2016 (calendar months October, November, and December 2015) 8,491 new service contracts were filed and 177,382 service contract 

Amendments were filed. Last year, the FMC received 51,109 new service contracts 

and 653,315 service contract amendments. As I mentioned above, merger and acquisition activity in the container industry will generate substantial new monitoring 

and analysis requirements. 

Simply put, the demands on the agency’s resources are continually increasing, but 

the resources available to the FMC to execute its mission never seem to keep pace 

with the work that must be done. At some point, we may not be able to provide 

service at the rate our constituents require to be able to do their business; and if 

that day comes, we will not be facilitating trade, we will instead risk becoming an 

impediment to the free flow of cargo. 

In summary, the state of the maritime industry is mixed. On the one hand, increasing trade volumes are an encouraging indicator about the strength of the economy and it is fortunate that there is sufficient capacity in terms of vessels and container capacity that the costs of moving cargo internationally via the ocean will likely remain reasonable. On the other hand, if unaddressed congestion at U.S. ports 

presents a serious potential impediment to continued economic growth as well as 

the competitiveness of the Nation. Continued attention by Congress to ports and the 

intermodal connectors that link the quayside to the countryside is absolutely requisite. Financing ports, port infrastructure, and goods movement networks are investments that benefit the whole economy. 

Chairman Fischer, Senator Booker, once again, I appreciate this opportunity to 

appear before you and I am happy to answer any questions that anyone may have 

regarding the Federal Maritime Commission or developments on the waterfront 

where our insight would be helpful. 

Senator FISCHER. Thank you, Mr. Chairman. 

Next we have Rear Admiral James Helis, United States Maritime Service Superintendent, United States Merchant Marine 

Academy. 

Welcome, sir. 

16 

STATEMENT OF REAR ADMIRAL JAMES HELIS, 

U.S. MARITIME SERVICE SUPERINTENDENT, 

UNITED STATES MERCHANT MARINE ACADEMY 

Admiral HELIS. Good afternoon, Chairwoman Fischer, Ranking 

Member Booker, and members of the Committee. Thank you for 

the invitation to testify on the state of the U.S. maritime industry 

and the role of the U.S. Merchant Marine Academy. 

Chairwoman Fischer, it’s good to see you again, and I’d like to 

thank you again for visiting the Academy this past fall and for 

your kind words in your opening remarks. I value your interest in 

the Academy as well as that of Senator Wicker, who has also visited, and I appreciate the leadership of both of you as well as Senator Schatz and the Academy’s Board of Visitors, of which he is 

also a member. 

The mission of the United States Merchant Marine Academy is 

to educate and graduate licensed merchant mariners and leaders 

of exemplary character who will serve America’s marine transportation and defense needs in peace and war. Each year, the Academy graduates over 200 highly qualified young women and men 

committed to serving the nation as officers in the armed forces and 

the merchant marine. All graduating midshipmen will receive a 

Bachelor of Science degree, a U.S. Coast Guard issued merchant 

marine officer’s license, and a commission in an active or reserve 

component of one of the armed forces. 

Over the past 5 years, the quality and diversity of the incoming 

classes at the Academy has improved considerably. The mean SAT 

scores have improved from 1215 to 1283. The percentage of women 

admitted rose from 12.9 percent to 19.3 percent, and minorities 

similarly rose from 15.2 percent to 21.1 percent. We’re pleased with 

the progress we’re making and expect to see continued improvements in the quality and the diversity of future classes. 

My top strategic priorities for the Academy are, one, improving 

infrastructure and facilities; two, degree reaccreditation; three, the 

leadership development program; and, four, prevention of sexual 

assault and sexual harassment. I will address each of these in 

some detail. 

First, capital improvements. We have pursued an aggressive capital improvements program for the Academy in recent years, renovating the midshipmen barracks and food service facilities; replacing Mallory Pier, the Academy’s primary waterfront training asset; 

improving water, sewer, and electrical systems; and enhancing 

safety and physical security systems on campus. Our next major 

phase of capital improvements will focus on modernizing and renovating the academic buildings to include science laboratories and 

training simulators. 

Second, accreditation. The Middle States Commission on Higher 

Education accredits the Academy’s academic degrees. We are presently in the decennial degree reaccreditation process. We anticipate 

the Middle States Commission issuing its final report and reaccrediting our degree programs in the summer of 2016. The report will 

include Middle States’ recommendations for actions to improve the 

quality of our programs, which will drive our strategic planning for 

2017 and beyond. 

17 

1To graduate, Midshipmen must pass the U.S. Coast Guard examination for a Merchant Marine officer’s license. 

Third, leadership development. Leadership development is at the 

forefront of the Academy experience. Everything we do should contribute to the personal and professional growth of the midshipmen 

so they graduate prepared to be lifelong leaders for our Nation in 

the Merchant Marine, the armed forces, and in government. 

Starting with the class of 2020, two formal academic courses in 

leadership will be added to the core curriculum. In addition, the 

Commandant of Midshipmen is revising the regimental training 

program to dedicate more time to leadership development. 

Finally, sexual assault and harassment. Sexual assault and sexual harassment are unacceptable behaviors that have no place at 

any institution of higher education, especially one committed to developing our Nation’s future leaders. The Academy has taken a 

number of steps to address sexual assault and sexual harassment, 

including implementing a wide variety of training, education, reporting, and security enhancements, which are detailed in my written testimony. 

While we have made progress, incidents of sexual assault and 

harassment are still occurring. There is still work to be done to 

eliminate this problem, and I am personally committed to doing so. 

Again, thank you for inviting me to testify today. I appreciate 

your interest and continued support for the U.S. Merchant Marine 

Academy, and I’ll be happy to answer any questions you may have. 

Thank you. 

[The prepared statement of Admiral Helis follows:] 

PREPARED STATEMENT OF REAR ADMIRAL JAMES HELIS, U.S. MARITIME SERVICE

SUPERINTENDENT, UNITED STATES MERCHANT MARINE ACADEMY

Good afternoon, Chairwoman Fischer, Ranking Member Booker and Members of 

the Committee. Thank you for the invitation to testify on the state of the U.S. maritime industry and the role of the U.S. Merchant Marine Academy. 

The mission of the United States Merchant Marine Academy is to educate and 

graduate licensed merchant mariners and leaders of exemplary character who will 

serve America’s marine transportation and defense needs in peace and war. Each 

year the Academy graduates over 200 highly-qualified young women and men committed to serving the Nation as officers in the Armed Forces and the Merchant Marine. 

The Academy provides a comprehensive four-year leadership development experience. All graduating midshipmen will receive a Bachelor of Science degree a U.S. 

Coast Guard-issued Merchant Marine officer’s license,1 and a commission in an Active or Reserve Component of one of the Armed Forces. They can meet their service 

obligation in one of two ways. Twenty to 25 percent will choose to serve five years 

on Active Duty as an officer in any branch of the U.S. Armed Forces. The majority 

of the graduates will sail for five years as a Merchant Marine officer on U.S.-flagged 

commercial ships or with a Federal agency, normally Military Sealift Command or 

the National Oceanographic and Atmospheric Administration. 

The Academy’s mission begins with the men and women who pass through its 

gates in late June to begin their four-year journey. The Merchant Marine Academy 

has a highly competitive and selective admissions process. Candidates must have a 

strong academic record and demonstrate superior leadership potential through their 

participation in co-curricular activities, athletics, and community service. They must 

meet rigorous medical and physical fitness qualifications for military service. They 

must also receive a nomination from a Member of Congress or qualify for one of 40 

direct appointments by the Secretary of Transportation by demonstrating qualities 

deemed to be of special value to the Academy. 

Over the past five years the quality and diversity of the incoming classes has improved considerably. Comparing the classes that entered the Academy in 2010 and 

18 

2015, we saw the mean score on the Scholastic Aptitude Test (SAT) improve from 

1215 to 1283. The percentage of women admitted rose from 12.9 percent to 19.3 percent. Minorities similarly rose from 15.2 percent to 21.1 percent. Other indicators 

of the quality of our incoming candidates are class rank, grade point average, and 

key leadership positions in student government, athletics, and co-curricular and 

community activities. We are pleased with the progress we are making and expect 

to see continued improvements in the quality and diversity of future classes. 

My top strategic priorities for the Academy are (1) improving infrastructure and 

facilities, (2) degree reaccreditation, (3) the leadership development program, and (4) 

prevention of sexual assault and sexual harassment. I will address each in some detail. 

The Obama Administration has pursued an aggressive capital improvements program for the Academy. We completed the renovation of all six barracks in December 

2014. Since 2012, we have also replaced Mallory Pier, which had become unsafe and 

was deteriorating, with a modern, safe platform for instructional, competitive, and 

recreational waterfront activities. We upgraded and modernized the food service facilities in the Delano Hall dining facility. We have also undertaken major improvements in the water distribution and sewage systems, and are preparing to upgrade 

the electrical grid on campus. We will next execute a multi-year modernization and 

renovation of the academic buildings, to include science laboratories and training 

simulators. We will then proceed to the Academy’s athletic and administrative 

buildings. 

We are fully committed to the safety and security of our campus, our midshipmen 

who live there, and our dedicated staff and faculty. To that end, we have undertaken major enhancements to our physical security program. Since 2012, we have 

installed surveillance cameras and blue light emergency call boxes in key locations 

on campus. We added electronic card access to all entrances to the barracks where 

our Midshipmen live. In 2013, we increased the size of the Academy’s contract 

guard force. Our contract security personnel are now armed and trained to respond 

to a broad range of contingencies, including an active shooter and reports of sexual 

assault. Our new, manned command center integrates the security systems and provides immediate connections to local emergency services and law enforcement. Our 

emergency operations planning committee is reviewing and updating our response 

plans. We conducted active shooter training for faculty and staff in January, and 

will hold similar training for all midshipmen, staff, and faculty this spring. We are 

also planning exercises with local law enforcement. Funding for additional enhancements, including more surveillance systems and improved vehicle access control, is 

requested in the President’s proposed budget for Fiscal Year 2017. 

The Middle States Commission on Higher Education (MSCHE) accredits the Academy’s academic degrees. We are presently in the decennial degree reaccreditation 

process. Accreditation is based in part on a comprehensive evaluation including a 

very detailed institutional self-study report. We initiated the self-study in 2013, 

with over one hundred staff, faculty, and Midshipmen serving on various committees. We completed the self-study on time and submitted it to MSCHE for review 

earlier this year. The accreditation team, appointed by MSCHE, is comprised of educators and experts who ensure the Academy is meeting the standards of excellence 

established by MSCHE. The team, led by West Point’s Dean of Academics, Brigadier 

General Tim Trainor, will visit the Academy in April 2016 to conduct their on-site 

assessment and provide us their initial findings. We anticipate MSCHE issuing its 

final report and reaccrediting our degree programs in the summer of 2016. The report will include MSCHE’s recommendations for actions to improve the quality of 

our programs, which will drive our strategic planning for 2017 and beyond. 

Leadership development is at the forefront of the Academy experience. Everything 

we do should contribute to the personal and professional growth of the Midshipmen 

so they graduate prepared to be lifelong leaders for our Nation in the Merchant Marine, the Armed Forces, and government. Starting with the class of 2020, two formal 

academic courses in leadership will be added to the core curriculum. The Dean of 

Academics and the faculty are making adjustments to the curriculum to ensure 

these courses are not additive to an already demanding academic load. We presently 

offer an elective in leadership which is well-subscribed. The Commandant of Midshipmen is revising the Regimental training program to dedicate more time to leadership development. His intent is to develop a more progressive program of seminars targeted at the experience and needs of each class. He is also building additional leadership training through exercises into the summer training program for 

the incoming class, which should be beneficial to both the new Midshipmen and the 

senior midshipmen conducting the training. I am proud of how the Commandant’s 

staff, faculty, and athletics department have embraced the challenge of more explicitly addressing the development of the leadership skills of our Midshipmen. We beVerDate Nov 24 2008 08:10 May 15, 2017 Jkt 075679 PO 00000 Frm 00022 Fmt 6633 Sfmt 6621 S:\GPO\DOCS\25360.TXT JACKIE
19 

2 A confidential report, also known as a restricted report, allows Midshipmen who are sexual 

assault victims to disclose, on a confidential basis, the details of their assault to specifically 

identified individuals at the Academy and receive medical treatment and counseling at a location of the victim’s choice (on or off-campus), without triggering the official investigative process. 

Midshipmen who initially elect to make a restricted report can, at any time after their initial 

restricted report, decide to pursue unrestricted reporting, which will result in the initiation of 

criminal and administrative investigatory proceedings. 

lieve this will enhance the quality of the Academy’s graduates and better inspire 

them to lives of selfless service as leaders for our Nation. 

Sexual assault and sexual harassment are unacceptable behaviors and have no 

place at any institution of higher education, especially one committed to developing 

our Nation’s future leaders. Sexual assault and sexual harassment continue to be 

a concern at the Academy. We are committed to eliminating this behavior on our 

campus and, until we reach that goal, improving the reporting rate and taking appropriate action in each reported case. The Commandant in his vision for the Regiment has clearly defined assaults on personal dignity, integrity, and leadership as 

harmful not only to individuals, but also to the Academy and detrimental to mission 

accomplishment. The steps we have taken since 2012 to address sexual assault and 

harassment are included in our annual reports to Congress. We welcomed evaluations of our programs by the Department of Transportation (DOT) Inspector General 

in 2013 and 2014, which provided a review of our programs and provided useful recommendations, all of which we have implemented. 

To oversee and guide the Sexual Assault Prevention and Response (SAPR) program, DOT established a Senior SAPR Steering Committee with members of senior 

staff from the Secretary of Transportation’s office, the Maritime Administration 

(MARAD), and the Academy. At the Academy, we established a multi-disciplinary 

Sexual Assault Review Board (SARB), meeting monthly, to provide executive oversight and procedural guidance for the SAPR program by reviewing ways to improve 

processes, system accountability and victim access to quality services. The SARB 

has recently drafted Standard Operating Procedures for investigating reports of sexual assault and appropriately maintaining these reports and records. 

Our full-time Sexual Assault Response Coordinator (SARC) resides on the Academy, and is available to Midshipmen 24/7 through a victim hotline. Victims are provided with information and referrals, and assistance in obtaining any necessary 

medical or mental health treatment at the academy or appropriate local community 

resource and/or victim advocacy agency. Victims may make a confidential (restricted) report 2 through the SARC, Health Clinic counseling staff, Chaplain, or 

trained and designated staff and faculty victim advocates. The Academy works 

closely with a local victim advocacy agency to provide an additional confidential reporting option. A victim may also make an unrestricted report which results in the 

initiation of both criminal and administrative investigations. Depending on the outcome of the investigations, the Academy may take administrative disciplinary action 

regardless of whether criminal charges are ultimately filed. 

The SARC, working with the Superintendent, Commandant and Dean of Academics, has significantly improved training across the Academy aimed at the prevention of sexual assault and sexual harassment. Faculty and staff receive mandatory training annually. Incoming Midshipmen receive training in the first three 

weeks in small group settings (20–25 midshipmen per training) covering the topics 

of sexual assault, sexual harassment, dating violence, stalking and bystander intervention. For the Class of 2019, we increased training to three hours from one hour 

in the year prior. The SARC and Commandant continue to provide quarterly training throughout each Midshipman’s academic career in both small and large group 

settings. The SARC and the Department of Professional Development and Career 

Services provide special training sessions prior to departure for Sea Year (sophomores spend four months at sea and juniors spend eight months at sea). Training 

focuses on where to seek help or assistance (Ship’s Master, Designated Person 

Ashore), situational awareness, risk reduction, and bystander intervention. This 

year, the Academy adopted the Green Dot bystander intervention program, which 

teaches students to identify volatile situations in which there could be the possibility of sexual violence and to defuse those situations through diversion or distraction. The SARB recently decided to increase our training on sexual assault and 

proper conduct for Midshipmen prior to their departure for sea training this summer, in response to reports that this is a higher risk period for Midshipmen. While 

we have implemented this wide variety of important training, education, reporting, 

and security mechanisms, much work remains to be done to achieve a climate of 

where sexual assault and sexual harassment are not tolerated and this behavior is 

20 

eliminated. The USMMA recognizes this important on-going responsibility and will 

work towards continuous improvement. 

To give our Midshipmen alternatives to behaviors that could put them at risk, we 

have improved our campus climate. We hired a new Student Activities Director to 

organize activities after school and during the weekend to keep students occupied 

and energized. Activities have included trips to New York City cultural attractions, 

movie marathons, Sea Story Sunday, open mic nights, and a Winter Carnival featuring an iceless skating rink. 

Since 2012, our surveys tell us Midshipmen have a much better awareness and 

understanding of sexual assault and sexual harassment and appreciate the commitment of everyone from the Secretary of Transportation through MARAD, the Academy’s senior leadership, and Midshipmen Regimental officers to eliminating sexual 

assault and sexual harassment from the Academy. We are extremely disappointed 

that we are not seeing a decrease in incidents in the survey results. I want to assure 

the Committee that I am personally committed to solving this problem. My experience in assisting victims of sexual assault dates back to the 1990s when I served 

in the Army as a battalion commander. I know from working firsthand with victims 

the immeasurable, sometimes lifelong harm these crimes inflict and how they undermine unit readiness and cohesion. 

Sexual assault and sexual harassment are fundamentally at odds with our values 

as a Nation and our obligation as leaders to live by, model, and expand those values. They undermine our ability to accomplish our mission. The U.S. Merchant Marine Academy, a Federal service academy, should be setting the example for the Nation in eliminating sexual assault and sexual harassment on campus. 

Again, thank you for inviting me to testify today. I appreciate your interest and 

continued support for the U.S. Merchant Marine Academy and will be happy to answer any questions you may have. 

Senator FISCHER. Thank you, Admiral. 

And, finally, we have Mr. Mitch Behm, Assistant Inspector General, U.S. Department of Transportation. 

Welcome. 

STATEMENT OF MITCHELL BEHM, ASSISTANT INSPECTOR 

GENERAL, SURFACE TRANSPORTATION AUDITS, 

U.S. DEPARTMENT OF TRANSPORTATION 

Mr. BEHM. Thank you. Chairman Fischer, Ranking Member 

Booker, and members of the Subcommittee, thank you for inviting 

me to discuss our work on DOT’s Maritime Administration. 

As you know, MARAD has faced a number of changes over the 

past few years, including taking on an organizational restructuring 

and an expanded grant oversight mission, as well as addressing 

sexual assault and sexual harassment concerns at the U.S. Merchant Marine Academy. Since 2010, we’ve issued 12 reports that 

point to the need for enhanced controls and oversight at MARAD. 

Today, I will highlight our findings from our most recent report 

issued last December and provide an update of USMMA’s actions 

to address sexual assault and sexual harassment. 

As we reported in December 2015, weaknesses in MARAD’s management controls for risk mitigation, workforce development, and 

program implementation hindered the Agency’s ability to meet its 

mission. MARAD has since implemented 5 of our 16 recommendations that improved its risk management process, refined program 

implementation in two areas, and enhanced oversight mechanisms. 

However, weaknesses remain in workforce development and program implementation. 

First, MARAD has not fully implemented workforce plans from 

its 2012 workforce analysis, including competency models for mission critical positions. These models are important for making informed hiring and training decisions to close competency gaps. 

21 

MARAD has identified competency models that it plans to use, 

such as OPM’s leadership framework, but has not developed important components for each competency, such as a definition, behaviors, and proficiency levels. 

MARAD’S workforce development policies also lacked important 

elements. For example, policies and procedures for onboarding new 

hires, training, and addressing misconduct, specifically suspected 

drug use, were incomplete, out of date, or not fully implemented. 

To address our concerns about MARAD’s workforce plans and 

policies, we made five recommendations, including that MARAD 

fully implement comprehensive competency models for mission critical positions, develop supplemental policies and procedures, and 

train fleet supervisors on how to handle suspected drug use. 

MARAD plans to complete its actions on all these recommendations 

by the end of 2017. 

Second, we reported in December that MARAD’s policies and procedures for program implementation were outdated agency-wide 

and incomplete or outdated in four of the five program areas we 

reviewed. Since December, MARAD has improved management 

controls in two of these areas, TIGER grant oversight and the Historic Preservation Program. However, gaps remain in MARAD’s 

controls agency-wide and for ship disposal and vessel transfer, gaps 

that increase the risks of poor program implementation; noncompliance with Federal requirements; lapses in continuity of operations; 

and fraud, waste, and abuse. 

A particular concern with regard to ship disposal was MARAD’s 

lack of policies and procedures to ensure it disposes of the vessels 

under its purview. In one case, the Coast Guard disposed of a vessel that may have been under MARAD’s purview through GSA 

without consulting MARAD, potentially diverting funds from 

MARAD that it is statutorily entitled to. 

Finally, monitoring weaknesses remain in two program areas: 

the Vessel Transfer Office and National Defense Reserve Fleet Operations. For example, key performance indicators for Reserve Fleet 

Operations are not consistently calculated, due in part to systems 

limitations, and as a result do not produce reliable assessments of 

fleet performance. We made nine recommendations to address our 

concerns about program implementation, three of which MARAD 

has already implemented. MARAD plans to complete its actions on 

the other six recommendations by the end of 2018. 

Another area that we continue to closely monitor is MARAD’s 

progress in implementing the Merchant Marine Academy’s Sexual 

Assault Prevention and Response Program. In October 2014, we reported a lack of progress in implementing needed actions, including 

assigning oversight responsibility and establishing standard operating procedures for investigating and reporting allegations of sexual harassment and assault. Weaknesses in the Academy’s biennial 

surveys of midshipmen, staff, and faculty further limited USMMA’s 

efforts to target and make progress in critical areas. 

MARAD has implemented all nine of our recommendations. We 

continue to monitor the Academy’s actions to address sexual assault and harassment in light of ongoing congressional interest. 

This concludes my prepared statement. I’ll be happy to answer 

any questions you or other Subcommittee members may have. 

22 

1MARAD also receives funds on a reimbursable basis from the U.S. Department of Defense 

(DOD) for its National Defense Reserve Fleet (NDRF) program to provide sealift, or ocean transportation, for DOD and other Federal agencies during peacetime and war. 2Management controls, also referred to as internal controls, are intended to help managers 

achieve desired results through effective stewardship of public resources. 3Weaknesses in MARAD’s Management Controls for Risk Mitigation, Workforce Development, 

and Program Implementation Hinder the Agency’s Ability To Meet Its Mission, OIG Report Number ST–2016–011, December 10, 2015. 4We assessed MARAD’s management controls organization-wide and for five specific program 

areas: (1) NDRF Reserve Fleet Operations, (2) Historic Preservation Program, (3) Ship Disposal 

Program, (4) Vessel Transfer Office (VTO), and (5) Transportation Investment Generating Economic Recovery (TIGER) Grant Oversight. We selected these program areas for review based 

on MARAD’s risk assessments, congressional interest, and input from Office of Inspector General (OIG) investigators and previous audits. 5 Better Program Management and Oversight Are Required for USMMA’s Efforts To Address 

Sexual Assault and Harassment, OIG Report Number ST–2015–004, October 23, 2014. 6GAO, Standards for Internal Control in the Federal Government, GAO/AIMD–00–21.3.1, November 1999. This publication was in effect for the duration of this review; GAO, Internal Control Management and Evaluation Tool, GAO–01–1008G, August 2001. 

[The prepared statement of Mr. Behm follows:] 

PREPARED STATEMENT OF MITCHELL BEHM, ASSISTANT INSPECTOR GENERAL, SURFACE TRANSPORTATION AUDITS, U.S. DEPARTMENT OF TRANSPORTATION

Chairman Fischer, Ranking Member Booker, and Members of the Subcommittee: 

Thank you for inviting me to testify on our recent work related to the Department 

of Transportation’s (DOT) Maritime Administration (MARAD). MARAD received 

over $399 million for Fiscal Year 2016 to support operations and administer its programs, including operation of the U.S. Merchant Marine Academy (USMMA).1 During the past few years, MARAD’s mission has expanded to include oversight of a 

number of grants for port development projects. This increase in responsibilities— 

along with a restructuring of MARAD’s organization—point to the need for enhanced attention to MARAD’s management controls.2

Since 2010, we have issued 5 MARAD-specific reports with 46 recommendations 

and 7 departmentwide reports with 15 MARAD-related recommendations (see exhibit for reports and status of recommendations). Most recently, in December 2015, 

we issued a comprehensive report 3 on a self-initiated audit of the Agency’s management controls for a number of areas.4 In October 2014, in response to congressional 

requests, we reported on USMMA’s progress in establishing a program to address 

sexual assault and harassment at the Academy.5 My testimony today will focus primarily on the findings in our 2015 report, as well as update you on our ongoing assessment of USMMA’s actions to address sexual assault and sexual harassment. 

Summary 

In 2015, we reported that weaknesses in MARAD’s management controls for risk 

mitigation, workforce development, and program implementation hindered the 

Agency’s ability to meet its mission. MARAD has since taken action to address some 

of these areas, but weaknesses remain in workforce development and program implementation. 

Specifically, we found that MARAD’s strategic plan and performance measures 

aligned with Federal management control standards.6 However, MARAD fell short 

of complying with Federal standards for risk management in that it thoroughly documented risks to achieving its goals for most of its divisions, but it did not thoroughly document strategies for mitigating those risks. MARAD has since taken action to improve its risk management process. In line with Federal management control standards, MARAD also conducted a workforce analysis to assess its organizational structure in 2012 and developed several workforce plans, including a Strategic Human Capital Plan. However, as of December 2015—more than 3 years after 

its 2012 analysis—MARAD had not fully implemented its workforce plans, as it had 

not fully implemented competency models for certain mission-critical occupations. 

Furthermore, MARAD’s workforce development policies and procedures related to 

onboarding new hires, training, and addressing misconduct were incomplete, out-ofdate, or not fully implemented. Finally, MARAD’s controls for program implementation, monitoring, and oversight were deficient. We found that over half of the Agency’s directives that document MARAD’s policies and procedures for program implementation were over 10 years old—potentially making these controls obsolete—and 

policies and procedures were incomplete or outdated in four of the five program 

areas we reviewed. Since we issued our report, MARAD has taken action to improve 

23 

7Mandated by the Moving Ahead for Progress in the 21st Century Act, Public Law 112–141, 

July 6, 2012. 

its controls for implementation of two program areas and its program oversight, but 

gaps remain. 

MARAD has also made progress in implementing USMMA’s Sexual Assault Prevention and Response (SAPR) program. In October 2014, we reported that USMMA 

had not completed actions identified for effectively managing SAPR, including assigning responsibility for program oversight and for ensuring compliance with legislative requirements. We also reported delays in establishing standard operating procedures (SOP) for effective SAPR program management. MARAD has since taken 

action to address our concerns and the weaknesses we identified, but we continue 

to monitor USMMA’s actions in carrying out the SAPR Program. 

Weak Management Controls Hinder MARAD’s Ability to Meet Its Mission 

In December 2015, we reported that MARAD’s strategic plan and performance 

measures aligned with Federal standards, but the Agency did not thoroughly document its risk mitigation strategies. We also reported that MARAD had assessed its 

organizational structure but had not fully implemented workforce plans and development policies. Finally, we reported that MARAD’s controls for program implementation, monitoring, and oversight were deficient. MARAD has begun to take action 

in some of these areas. 

MARAD’s Strategic Plan and Performance Measures Aligned With Federal 

Standards, but the Agency Did Not Thoroughly Document Its Risk Mitigation 

Strategies 

MARAD’s 2012–2015 Strategic Plan and documented performance measures met 

Federal management control standards. MARAD intends to update its strategic plan 

based on the outcomes of three ongoing planning efforts—DOT’s National Freight 

Strategy,7 the Secretary’s 30-year transportation plan, and the National Maritime 

Strategy. MARAD also established performance measures that align with Federal 

management control standards for the organization, for each major activity, and for 

its Senior Executive Service employees. MARAD works with managers, the Department, and OMB to annually re-evaluate its performance measures, and reports certain operational and administrative measures to DOT leadership through quarterly 

performance management reviews. 

However, MARAD fell short of meeting Federal standards for risk management, 

which require identification of risks to achieving goals and strategies for mitigating 

those risks. Specifically, MARAD thoroughly documented risks for most of its assessable units (programmatic or functional divisions) but did not thoroughly document mitigation strategies. For example, the Federal Ship Financing Program identified risks, including poor documentation and inter-office coordination on loan monitoring, which could impact program effectiveness, the Agency’s reputation, and public trust. However, the program did not document any strategies for mitigating these 

risks. 

To better ensure that MARAD’s risk management aligned with Federal control 

standards, we recommended that the Agency (1) update its policies and procedures 

to require risk profile reviews to thoroughly document risks and mitigation strategies, and (2) provide additional training to program managers and Internal Control 

Officers on thoroughly documenting risks and mitigation strategies in risk profiles. 

MARAD has taken action to implement both recommendations. 

MARAD Assessed Its Organizational Structure but Had Not Fully Implemented 

Workforce Plans and Development Policies 

In accordance with Federal standards, MARAD conducted a workforce analysis in 

2012 to assess its organizational structure, and in response, developed several workforce plans, including a Strategic Human Capital Plan. The Agency also initiated 

position enrichment and realignment efforts in 2013 to transform its top-heavy organizational structure by replacing high graded positions with lower grades as attrition occurs. 

However, as of December 2015—3 years after its 2012 analysis—MARAD had not 

fully implemented its workforce plans. For example, MARAD had not fully implemented competency models for mission-critical positions. These models are important for making fully informed hiring and training decisions to close identified competency gaps. MARAD identified competency models that it plans to use, such as 

the Office of Personnel Management’s Leadership Framework, but has not developed important components for each competency—such as a definition, behaviors, 

and proficiency levels. 

24 

8DOT Order 3910.1D, Drug and Alcohol-Free Departmental Workplace Program, October 1, 

2010. 9 According to DOT’s policy, reasonable suspicion must be based on specific and timely observations concerning the appearance, behavior, speech, and/or body odors of the employee, or information provided by either a reliable and credible source (independently corroborated) or by the 

employee’s own admission. 

MARAD’s workforce development policies also lack important elements. For example, while the policies and procedures for recruiting and hiring aligned with Federal 

best practices, policies and procedures for onboarding new hires, training, and addressing misconduct were incomplete, out-of-date, or not fully implemented. 

A particular concern was the lack of effective policies, procedures, and training 

to address suspected drug use. DOT’s policy on drug and alcohol use 8 calls for random drug testing of employees in positions that the Department of Health and 

Human Services (HHS) has approved as ‘‘testing designated,’’ and testing of employees in non-designated positions when there is ‘‘reasonable suspicion’’ 9 of illegal drug 

use. However, only a few of MARAD’s fleet site employees are testing designated— 

even though fleet sites are open water industrial areas with inherent safety risks 

that could be exacerbated by employee intoxication. MARAD is working with DOT 

and HHS to add positions to its list of testing designated positions, but MARAD officials stated that it could be over a year before HHS approves the expanded list and 

MARAD can implement expanded testing. Testing employees in non-testing designated positions has also been problematic. MARAD has not provided written policies or procedures for determining when to apply the reasonable suspicion provision 

of DOT’s policy for testing these employees, and some fleet site managers indicated 

a need for assistance. Further, while DOT requires all Operating Administrations 

to provide drug and alcohol awareness training for new supervisors—which covers 

testing procedures in cases of reasonable suspicion—MARAD had not provided this 

training because its human resources officials were unaware of the training requirements. 

We made five recommendations to improve MARAD’s management controls for its 

organizational structure and workforce development. For example, to better inform 

MARAD’s hiring, training, and promotion decisions, we recommended that MARAD 

fully implement comprehensive competency models for mission-critical positions. To 

prepare supervisors to address important safety issues, we recommended MARAD 

develop supplemental policies and procedures and train fleet supervisors on how to 

handle suspected drug use. MARAD plans to complete its actions on all five of our 

recommendations by the end of December 2017. 

MARAD Has Begun to Take Action to Strengthen Controls for Program 

Implementation, Monitoring, and Oversight 

MARAD policies and procedures—which provide management controls for program implementation—are largely outdated agencywide, and incomplete or outdated 

in four of the five program areas we reviewed: the Ship Disposal Program, the Historic Preservation Program, the VTO, and TIGER grant oversight. We found 132 of 

the Agency’s 226 maritime administrative orders (MAO)—directives that document 

MARAD’s policies and procedures for program implementation—were over 10 years 

old, potentially making these controls obsolete. For example, MARAD had not updated its Freedom of Information Act (FOIA) MAO from 1986 to reflect its current 

FOIA processes, which incorporate changes in FOIA and DOT policies as well as 

technological advances. In October 2014, MARAD developed a 3-year plan for updating its MAOs, and identified 96 MAOs to review by July 2015. However, less than 

a third had been reviewed and updated by that date. 

Since we reported our findings in December 2015, MARAD has taken action to 

improve controls for TIGER grant oversight by changing roles and responsibilities. 

MARAD has also taken action to improve its Historic Preservation Program by enhancing its policies and procedures for managing and preserving heritage assets, 

such as artwork, ship models, and ship wheels. These enhancements should help 

minimize the risk of lost heritage assets—a condition we found during our audit. 

MARAD also committed to disposing of its excess assets that are no longer considered heritage. 

Gaps remain in MARAD’s policies and procedures for the Ship Disposal Program 

and VTO. These gaps increase the risk of poor program implementation; non-compliance with Federal requirements; lapses in continuity of operations; and fraud, 

waste, and abuse. 

• The Ship Disposal Program lacked policies and procedures for (1) notifying 

other Federal agencies of its role as disposal agent for obsolete NDRF vessels 

25 

10Per 40 U.S.C. § 548, MARAD is the disposal agent for Government-owned vessels over 1,500 

gross tons that are merchant vessels or capable of being converted to merchant use. 11The National Maritime Heritage Act of 1994 (54 U.S.C. § 308704) requires MARAD to allocate its ship disposal proceeds to the Vessel Operations Revolving Fund and to expend 50 percent of those funds for acquisition, maintenance, repair, reconditioning, or improvement of vessels in the National Defense Reserve Fleet; 25 percent for expenses incurred by or on behalf 

of State maritime academies or the U.S. Merchant Marine Academy for facility and training 

ship maintenance, repair, and modernization, and for the purchase of simulators and fuel; and 

the remaining 25 percent for the Maritime Heritage Grants or, if otherwise determined by the 

Maritime Administrator, for use in the preservation and presentation to the public of MARAD’s 

maritime heritage property. 12Duncan Hunter National Defense Authorization Act for Fiscal Year 2009, Public Law No. 

110–417 § 3507, October, 14, 2008. 

and some vessels owned by other Federal agencies,10 and (2) identifying the 

universe of federally owned vessels it is responsible for disposing. Because 

MARAD does not have statutory authority to enforce compliance by other Federal agencies, MARAD executed ship disposal agreements with some agencies 

that own vessels under its disposal purview—the Navy, U.S. Coast Guard, and 

General Services Administration (GSA)—but not with others, including the National Oceanic and Atmospheric Administration. Furthermore, these agreements 

do not cover all applicable vessels. For example, the agreement with the Coast 

Guard did not cover a vessel that may have been under MARAD’s purview for 

disposal that the Coast Guard ultimately disposed of through GSA without consulting MARAD. When MARAD does not dispose of vessels it is statutorily responsible for, it does not receive funds for its Vessel Operating Revolving Fund 

for MARAD and National Parks Service programs.11 MARAD also had incomplete procedures to allocate and expend ship disposal proceeds in accordance 

with the provisions of the National Maritime Heritage Act of 1994. 

• VTO’s policies and procedures for authorizing ownership, registry, and flag 

transfers for U.S. vessels weighing 1,000 tons or more were developed in 1993 

and have not been updated. According to VTO’s staff person, the policies are 

not used because she has the knowledge and experience needed to process 

transfer applications. As we noted in our report, well-documented policies and 

procedures would enhance MARAD’s ability to ensure consistent program implementation and smooth continuity of VTO operations if the office’s only employee 

leaves the Agency. 

MARAD had mechanisms for monitoring performance in the five areas we reviewed. However, we found weaknesses in two areas—NDRF Reserve Fleet Operations and VTO—that inhibit the effectiveness of monitoring. For example, the 

NDRF Reserve Fleet Operations’ key performance indicators (KPI) are not consistently calculated due to differences in fleet practices and system limitations. As a result, the KPIs do not produce reliable assessments of fleet performance. 

Finally, MARAD has taken action to enhance mechanisms for overseeing implementation of corrective actions, in response to our recommendation. While the Agency tracked recommendations from OIG and GAO audit reports and the Department’s 

A–123 reviews, the tracking system did not include complete information on management control deficiencies from other sources, such as internal MARAD reviews 

and other external audits. Moreover, MARAD’s Internal Control Program directive 

did not require information on all management control deficiencies to be communicated to the Program and Performance Office staff who maintain the tracking system. As a result, the Agency may have missed opportunities for program improvement and exposed its programs to ongoing risk. MARAD has implemented our recommendation related to this weakness, and can now better track management control deficiencies and corrective actions. 

MARAD has taken action addressing three of our nine recommendations in this 

area, and plans to complete action on the remaining six by the end of December 

2018. 

USMMA’S Actions to Address Sexual Assault and Sexual Harassment Are 

Ongoing 

In 2008, Congress legislated action aimed at creating a campus environment free 

of sexual assault and harassment at USMMA.12 However, USMMA’s survey for the 

2011–2012 academic year indicated an estimated 25 midshipmen were sexually assaulted and 136 midshipmen were sexually harassed—despite no incidents being reported in that academic year. 

In October 2014—6 years after the 2008 legislation—we reported that USMMA 

had not completed over a third of the actions identified for effectively managing the 

SAPR program, including assigning responsibility for program oversight and for enVerDate Nov 24 2008 08:10 May 15, 2017 Jkt 075679 PO 00000 Frm 00029 Fmt 6633 Sfmt 6621 S:\GPO\DOCS\25360.TXT JACKIE
26 

13 USMMA’s academic year runs from July 1 through June 30. 14See U.S. Senate Report 113–182 accompanying the Transportation, Housing and Urban Development, and Related Agencies Appropriation Bill, 2015. 

suring compliance with statutory requirements. In response to our report, OST 

clarified the SAPR program oversight responsibilities in a MAO. 

We also reported delays in establishing SOPs for effective SAPR program management. These SOPs included ones for investigating sexual harassment and sexual assault, collecting evidence related to sexual assault and processing restricted sexual 

assault reports, and meeting requirements to report allegations of sexual harassment and assault. 

Finally, we reported that USMMA’s annual reports to Congress were issued, on 

average, nearly 2 years after the academic year ended.13 For example, the final 

2011–2012 report was issued in March 2014—21 months after the end of the academic year. Weaknesses in USMMA’s biennial surveys further limited timely and 

useful data by delaying the establishment of a reliable baseline for measuring midshipmen, staff, and faculty perceptions of the campus climate. Most recently, 

MARAD issued a preliminary 2013–2014 report in January 2015, and the final report for that academic year in January 2016. MARAD also issued a preliminary report for academic year 2014–2015 in January 2016. 

MARAD concurred with our nine recommendations for addressing the concerns 

and weaknesses we identified and implemented all of them as of May 2015. We continue to monitor USMMA’s actions in carrying out SAPR in response to a congressional directive 14 and plan to brief the requesting committee on our work this 

Spring. 

This concludes my prepared statement. I will be happy to answer any questions 

you or other subcommittee members may have. 

EXHIBIT. SUMMARY OF OIG REPORTS FROM 2010 TO PRESENT WITH MARADRELATED RECOMMENDATIONS

From 2010 through the present, we issued 5 reports on audits specific to MARAD. 

These audits contained 46 recommendations, of which 12 remain open. 

Table 1.—Status of Recommendations from MARAD-specific Audits 

Report Title Date Issued Total Closed Open 

Weaknesses in MARAD’s Management Controls for Risk Mitigation, 

Workforce Development, and Program Implementation Hinder the 

Agency’s Ability To Meet Its Mission 12/10/2015 16 5 11 

Better Program Management and Oversight are Required for USMMA’s 

Efforts to Address Sexual Assault and Harassment 10/23/2014 9 9 0 

MARAD Has Taken Steps To Develop a Port Infrastructure 

Development Program but Is Challenged in Managing Its Current Port 

Projects 08/02/2013 9 8 1 

USMMA Security Controls Were Not Sufficient to Protect Sensitive 

Data from Unauthorized Access 05/30/2012 9 9 0 

Title XI Loan Guarantee Program: Actions Are Needed To Fully 

Address OIG Recommendations 12/07/2010 3 3 0 

Totals 46 34 12 

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

Table 2.—Status of MARAD-Related Recommendations from Department-wide Audits 

Report Title Date Issued Total Closed Open 

FISMA 2015: DOT Has Major Success in PIV Implementation, but 

Problems Persist In Other Cybersecurity Areas 11/05/2015 1 0 1 

Some Deficiencies Exist in DOT’s Enforcement and Oversight of 

Certification and Warrant Authority for its Contracting Officers 04/09/2015 2 0 2 

27 

Table 2.—Status of MARAD-Related Recommendations from Department-wide Audits—Continued 

Report Title Date Issued Total Closed Open 

FISMA 2013: DOT Has Made Progress, but Its Systems Remain 

Vulnerable to Significant Security Threats 11/22/2013 1 0 1 

DOT Does Not Fully Comply With Revised Federal Acquisition 

Regulations on the Use and Management of Cost-Reimbursement 

Awards 08/05/2013 1 1 0 

Quality Control Review of the Department of Transportation’s Audited 

Consolidated Financial Statements for Fiscal Years 2011 and 2010 11/15/2011 4 4 0 

Quality Control Review of Audited Consolidated Financial Statements 

for Fiscal Years 2010 and 2009, Department of Transportation 11/15/2010 3 3 0 

Timely Actions Needed To Improve DOT’s Cybersecurity 11/15/2010 3 3 0 

Totals 15 11 4 

Table 3.—Open MARAD-Related Recommendations by Report 

Open Recommendations by Report Target Action 

Weaknesses in MARAD’s Management Controls for Risk Mitigation, Workforce Development, and Program Weaknesses in MARAD’s Management Controls for Risk Mitigation, Workforce Development, and Program 

Implementation Hinder the Agency’s Ability To Meet Its Mission, Dec. 10, 2015 Implementation Hinder the Agency’s Ability To Meet Its Mission, Dec. 10, 2015 

3. Create and implement a plan—including tasks, actions, timelines, and responsible personnel—to fully implement comprehensive competency models for mission-critical occupations. 

09/30/2016 

4. Align Headquarters’ and field offices’ onboarding policies and procedures to ensure consistent implementation and provision of critical information across the Agency. 06/30/2016 

5. Update the training policies to reflect the current operating environment and to include 

a control mechanism to ensure all completed training is tracked in a comprehensive 

training repository. 

06/30/2016 

6. Contingent upon HHS’ response, finalize the expansion of the number of testing-designated positions at fleet sites. 12/29/2017 

7. Develop supplemental policies and procedures and train fleet supervisors on MARAD’s 

procedures to handle suspected drug use. 

03/31/2016 

8. Update existing MAOs in accordance with established timelines. 12/28/2018 

9. Update the MAO governing the internal directive system to assign responsibility for 

monitoring implementation. 

07/29/2016 

10. Develop or update policies and procedures to carry out MARAD’s ship disposal responsibilities under Title 40 U.S.C. Section 548, including policies and procedures for (a) 

identifying the universe of Government-owned vessels that meet the statutory criteria 

for MARAD to serve as the disposal agent; (b) notifying agencies that own these vessels 

of MARAD’s disposal agent role; (c) specifying into what accounts MARAD should deposit ship disposal proceeds; and (d) specifying when and how the Maritime Administrator determines what portion of funds MARAD retains for its heritage property. 

12/30/2016 

12. Dispose of excess non-heritage assets identified in the heritage asset inventory. 03/31/2016 

13. Update VTO policies and procedures to reflect the current range of program responsibilities and processes. 03/31/2016 

15. Provide additional guidance to fleet sites to standardize NDRF Reserve Fleet Operations’ KPI data inputs, and provide more uniform measures of fleet performance. 06/30/2016 

FISMA 2015: DOT Has Major Success in PIV Implementation, but Problems Persist In Other Cybersecurity FISMA 2015: DOT Has Major Success in PIV Implementation, but Problems Persist In Other Cybersecurity 

Areas, Nov. 5, 2015 Areas, Nov. 5, 2015 

3. The Deputy Secretary, or his designees, take the following action to ensure that FAA, 

FHWA, FMCSA, FRA, FTA, NHTSA, MARAD/USMMA, OST, and SLSDC perform actions to immediately disable user accounts that have been inactive for over 90 days, as 

required by the DOT compendium. Report completion of this effort to OCIO. Create a 

POA&M to track progress and verify completion of the action. 

09/30/2016 

28 

Table 3.—Open MARAD-Related Recommendations by Report—Continued 

Open Recommendations by Report Target Action 

Some Deficiencies Exist in DOT’s Enforcement and Oversight of Certification and Warrant Authority for Its Some Deficiencies Exist in DOT’s Enforcement and Oversight of Certification and Warrant Authority for Its 

Contracting Officers, Apr. 9, 2015 Contracting Officers, Apr. 9, 2015 

1. The Office of the Senior Procurement Executive address the cases of noncompliance with 

CO certification and warrant requirements at FMCSA, FRA, MARAD, and NHTSA, as 

noted in this report. Specifically, the Operating Administrations should ensure that (a) 

CO warrants are issued in compliance with Federal and departmental requirements and 

(b) COs obtain and maintain their FAC–C certifications. 

06/30/2016 

6. The Office of the Senior Procurement Executive correct the FAITAS data inaccuracies 

noted in this report at FTA and MARAD. 

06/30/2016 

FISMA 2013: DOT Has Made Progress, but Its Systems Remain Vulnerable to Significant Security Threats, FISMA 2013: DOT Has Made Progress, but Its Systems Remain Vulnerable to Significant Security Threats, 

Nov. 22, 2013 Nov. 22, 2013 

4. Obtain and review plans from FMCSA, MARAD, OST, and RITA to authorize systems 

with expired accreditations. Perform security reviews of unauthorized systems to determine if the enterprise is exposed to unacceptable risk. 

09/30/2016 

MARAD Has Taken Steps To Develop a Port Infrastructure Development Program but Is Challenged in MARAD Has Taken Steps To Develop a Port Infrastructure Development Program but Is Challenged in 

Managing Its Current Port Projects, Aug. 2, 2013 Managing Its Current Port Projects, Aug. 2, 2013 

5. Implement procedures to help ensure that MARAD’s contract planning efforts comply 

with Federal acquisition regulations and requirements. These procedures should include 

establishing acquisition plans and contract administration plans in a timely manner, 

and maintaining supporting documentation for their rationale; and developing independent Government cost estimates, and validating cost estimates provided by entities 

other than MARAD. 

07/30/2016 

Senator FISCHER. Thank you, Mr. Behm. 

We will begin with our first round of questions. Again, I’d like 

to thank you all for being here. 

Mr. Behm, after I read your testimony and looked at the recent 

IG report, I am concerned that the Maritime Administration has 

neglected to assess and develop some risk mitigation strategies associated with the Federal Ship Financing Program which could potentially lead to some wasted taxpayer dollars. As we look ahead, 

and as you were mentioning in your testimony, there has been 

some improvements that have taken place. You also talked about 

gaps that remain. 

Are you confident that MARAD is going to move forward to address all the concerns there? You know, we’re going to be looking 

at the reauthorization bill, and I guess I’m asking you if you can 

suggest any policy changes or objectives that you think we ought 

to be considering incorporating into that bill. 

Mr. BEHM. Well, as the OIG, we don’t really comment on policy 

or make policy suggestions or decisions. 

Senator FISCHER. Even when asked? 

Mr. BEHM. Even when asked, maybe in a different form or something like that. But—— 

Senator FISCHER. Noted. 

Mr. BEHM. But on the record, I would say that—first of all, I 

would say that MARAD has been very receptive. Like I said, we’ve 

issued several reports over the last several years. They’ve been 

very receptive to our reports, very receptive to our recommendations. As I stated, the Merchant Marine Academy—in our report, 

which I think was pretty hard-hitting on the concerns surrounding 

sexual assault and sexual harassment at the Merchant Marine 

Academy, the Academy took them very seriously, and all of those 

29 

are closed. In that regard, I think, as Admiral Helis really showed 

in his statement, the concern there is just continued focus, which 

it’s apparent that they continue to have. 

With regard to some of the concerns we identified in our December report, again, I would suggest that you could be very confident 

that MARAD—you know, they have a very tight time-frame to address most of these recommendations. 

With regard to risk assessment and risk mitigation strategies, 

specifically, I would suggest that, actually, compared to some of the 

other programs we’ve looked at, MARAD has a very robust risk assessment program. I think where we found some weaknesses were 

in the strategies developed and documented to address those risks. 

And, actually, as a matter of fact, we had a couple of recommendations in that area, both of which have already been closed. 

Senator FISCHER. Thank you, sir. 

Administrator Jaenichen, what immediate actions is MARAD 

taking to strengthen the agency’s workforce and resource management? 

Mr. JAENICHEN. Thank you for the question. We’re actually coordinating with our associate administrator for Aministration, who 

is also responsible for our human resources. We’re very focused on, 

as specifically noted by the IG, the actual position descriptions and 

the competencies that are required, and we are revising those position descriptions as we’re going out with new hires. That is one of 

the focuses that we have. 

Additionally, as it relates to all of the comments that we get, either through the General Accounting Office or from the IG, we actually track each of those specific comments, and we have a periodic update, so we’re moving forward on each of the actions to ensure that we meet the timelines that we have specified for completing the recommendations and completing the actions. 

Senator FISCHER. Thank you, sir. 

Admiral Helis, as you and I discussed when I was up for the visit 

and the tour of the facility, there are concerns with adequately addressing the sexual assault on the campus. I know the pledge you 

have made, and I know your commitment to addressing that issue. 

But to what extent would you say that we’re looking at these unreported cases of assault on campus or when the midshipmen are at 

sea during the year that they’re at sea? Where do you see potential 

fears, I guess, of retribution? How do we get around that? 

Admiral HELIS. Senator, getting the reporting to start coming in 

is the key next step. The surveys tell us we’ve increased awareness, 

we’ve increased understanding. There’s an understanding by the 

midshipmen, staff, faculty at all levels that we’re fully committed 

to eliminating this. So that is the first step in what is going to be 

a process that involves some changes in the Academy’s culture. 

Again, the second thing that we have to address now is how do 

we increase reporting, and how do we reduce the barriers or the 

fears midshipmen have of reporting incidents of sexual assault and 

sexual harassment. Part of this is simply going to have to be continuing to address to victims that there will be no retribution, to 

being explicit about that, to continuing to educate midshipmen that 

retribution is unacceptable. 

30 

We are pushing much harder on our training, bystander intervention, taking it to each one of us, that from the youngest freshman up to me has an obligation to be engaged with this problem 

and this challenge and to step up and intervene or say something 

when you see something happening or see something about to happen. That’s what we have to do, is to get everybody to feel a personal sense of ownership, that this is our problem as a team, that 

we have to address it as a team, and that people who commit these 

kinds of behaviors have no place in our organization and no place 

on our team. 

We’re also emphasizing that this is not just a conduct issue, but 

this is a leadership issue. We’re in the business of developing leaders and telling midshipmen candidly, ‘‘You are going to have to 

deal with this challenge as leaders. When you go out, you’re going 

to, at some point, whether you like it or not, in your career—it may 

be early or it may be late—someone on a ship, someone in your 

business, someone in your military unit is going to come to you and 

report, ‘I have been sexually assaulted or sexually harassed,’ and 

you as a leader are going to have to step up and deal with it.’’ 

So it’s just going to have to be continued pounding away that this 

is not acceptable and to try to lower the barriers. Some of the barriers that women feel at the Academy—and it could be men or 

women, but in our case it appears—we think it’s mostly women 

who are the victims. Some of these are the same barriers that 

women have faced in society. The investigative process is very challenging, because they’re going to have to make statements, and 

they’re going to have to relive a very difficult and traumatic experience. But if we’re going to administer disciplinary action, there’s no 

way that we can get around that. They’re going to have to be able 

to communicate these with us. 

We are in a very small community with the Academy. There are 

only 900-some midshipmen and only about 700 on campus at a 

time. It is very—when somebody is accused of sexual assault, the 

alleged assailant—if you move him to another barracks because of 

that, or you issue a no-contact order, again, as small as the community is and as infrequently as those kind of moves happen, people 

immediately make a connection of—okay, something happened here 

in the area of sexual assault or sexual harassment. 

That is something that we just have to continue to work on, that, 

hey, this should not prejudice you against either the victim or 

against the accused. These are just prudent steps that we’re taking 

to provide for the safety of midshipmen. 

Senator, it is a long answer, but it is the challenge. And as I see 

it, the next biggest challenge is how do we get over—now that 

we’ve educated, how do we start reducing the barriers to reporting. 

Senator FISCHER. Thank you. I appreciate your answer, Admiral. 

Senator Booker, it’s my understanding that Senator Cantwell has 

to leave, and so I would recognize her next. 

Senator BOOKER. I appreciate that, and just for the record, she 

expressed her gratitude and affection for me for allowing this to 

happen. 

[Laughter.] 

Senator FISCHER. We all do. 

Senator Cantwell? 

31 

STATEMENT OF HON. MARIA CANTWELL, 

U.S. SENATOR FROM WASHINGTON 

Senator CANTWELL. Thank you, Madam Chair, and I do want to 

thank the Ranking Member for allowing me to go ahead. He and 

I share a very big priority, which is making sure that our port infrastructure continues to see improvement. 

So I wanted to ask you, Mr. Jaenichen, about the National Strategic Freight and Highway Grant Program. Obviously, I’ve been 

very involved in this program along with many of my colleagues, 

both in getting it originally focused on from a national priority perspective and then working to get the $4.6 billion in dedicated funding over the next 5 years. 

So I wanted to know whether you had a maritime strategy for 

accessing those resources? And what are you doing to make sure 

that both West Coast ports, which already have deep harbors and 

connected railways, see some of that revenue; and, also, what are 

you thinking about as far as small ports? Because there’s so much 

economic activity in the Asian markets. There are so many partnerships. 

And, again, we might be the state and the ports on the coast, but 

I guarantee you what’s moving through there is a lot of Midwest 

product, and it’s all about making it cost competitive and effective 

with our system juxtaposed to, say, Canadian or other avenues. So 

what are your thoughts on prioritizing maritime projects? 

Mr. JAENICHEN. Senator, thank you for the question, and I’ll try 

to keep my answer as concise as I can. As you know, the Department of Transportation has gone out with a notice of available 

funding opportunity specifically for this year’s $800 million, which 

is the first tranche of the FAST Act money to be able to support 

the freight program. The good part is that we’ve been very engaged 

with the department to ensure that ports are included in that notice of available funding. 

The department also established the Build America Transportation Investment Center. We refer to it as BATIC. It is a one-stop 

shop for all ports of all sizes, and I think that’s a critical component in that. In fact, my staff, who works in the intermodal development, actually reaches out to small ports. I have gateway offices 

located around the country. We’re engaged. They actually physically meet with the ports, and I also go out and do these port talks 

as well. In fact, I have one scheduled in two weeks in Cincinnati 

to be able to support the inland river and waterway system. 

As we look at the requirements, one of the things that we’ve noticed—and it’s actually included in our plan as part of funding for 

the strong force in our President’s Budget for Fiscal Year 2017— 

is we want to make sure that we recognize, especially for small 

ports—they typically do not have finance planners. They do not 

have what I would call all the necessities to be able to meet investment grade projects, to be able to build out their infrastructure, to 

be able to improve their efficiencies, their productivity, or their 

safety. 

So we are proposing that in our budget to be able to allow us to 

extend about 15 grants at about $200,000 apiece to make sure that 

we can get that investment grade. So that’s how we do that. But 

the combination of all these things, the fact that the ports are inVerDate Nov 24 2008 08:10 May 15, 2017 Jkt 075679 PO 00000 Frm 00035 Fmt 6633 Sfmt 6601 S:\GPO\DOCS\25360.TXT JACKIE
32 

cluded for the first time—and we appreciate the support of Congress to be able to make that happen. We also have a formula 

funding program that supports freight as well, and ports are also 

involved there. 

With regard to the West Coast versus East Coast, we haven’t 

really prioritized one coast versus the other. We recognize there’s 

a need across the entire port community for infrastructure improvements, and we know that a lot of our ports aren’t prepared 

for the vessels and the sizes of those vessels that are calling on our 

ports today. So we have a lot of work to do. 

In fact, yesterday, at the Port of Baltimore at the Tradepoint Atlantic, we convened a roundtable with labor, with shippers, with 

railroads, and it included three cabinet secretaries, Secretary Foxx 

of Transportation, Secretary Pritzker of Commerce, and also Secretary Perez of Labor. We had Senator Cardin there and several 

folks from the Maryland delegation so we could have this dialog, 

specifically, at the request of the Administration, to have this meeting to make sure we’re focused on ports and port infrastructure. 

Senator CANTWELL. Well, I appreciate that. I can guarantee you 

when we were looking at this legislation, ports were a cornerstone, 

not that other projects can’t qualify, and we definitely think they 

do. But I like to say our economic strategy in Washington State is 

ports-are-us. That’s how many ports we have and that’s how critical they are. 

But often, like in telecom, it’s this last mile, from the highway 

to the port entrance, that is heavily congested and not invested in. 

And, literally, you can get incredible speed across the country, but 

then sit right at that barrier outside of some of our ports. So I hope 

that we’ll look at those kinds of projects as a way to speed up that 

activity. 

For us, Prince Rupert in Canada is always a competitive port, 

and we know that people can go other places. The good news is 

that we want to continue to promote U.S. product by saying that 

we can get it to its foreign destination in a timely fashion. So I appreciate your work on that. 

And, again, to the Ranking Member, thank you. 

Senator BOOKER [presiding]. Just for the record, I am no longer 

the Ranking Member. I am now the Chairperson of this Committee. 

Senator CANTWELL. Oh, my, and I’m so lucky. 

[Laughter.] 

Senator BOOKER. I am not Thor, the Norse god, and this is not 

Mjo ̈lnir, his hammer, but I do have the power now. 

Senator Klobuchar, I’m a nerd geek. You may go. 

STATEMENT OF HON. AMY KLOBUCHAR, 

U.S. SENATOR FROM MINNESOTA 

Senator KLOBUCHAR. Very good. Well, I don’t know what it will 

be like with a new chair in town. But I’ll try my best. 

I want to thank Senator Fischer and also Senator Booker for 

having this hearing. As you know, when I got to the Senate, I got 

placed on the Ocean Subcommittee, and I will never forget the moment when I looked around and I said to Frank Lautenberg, one 

of the former Senators from New Jersey—I wrote him a note and 

33 

I said, ‘‘Every Senator on this committee, including Trent Lott and 

Olympia Snowe, has an ocean except me.’’ And he wrote back, 

‘‘Well, next year, come back and ask for one.’’ 

But then, as you know—and thank you for your visit to our state, 

Administrator. You know that Minnesota has Lake Superior, and 

we’re very proud of the Great Lakes, and we actually have a lot 

of issues that are similar to oceans, from restoration issues with 

the Great Lakes to shipping issues and port issues. 

And the Port of Duluth, in fact, has been the cornerstone of 

Northeastern Minnesota’s economy for more than a century. My 

grandpa worked in the iron ore mines. My dad worked there for a 

while, and my uncle, and that iron ore goes right out of the Duluth 

port. Every year, 38 million tons of cargo and nearly 1,000 vessels 

pass through the port. It’s the largest port on the Great Lakes, and 

we need to ensure that the Port of Duluth remains efficient. 

I, of course, supported the TIGER application for the grant, and 

we were so pleased, Administrator Jaenichen, when you came to 

that event. And I want to thank you for joining us in May, when 

it’s still cold in Duluth, and for being there. It is, as you know, an 

intermodal project, connecting a lot of different types of transportation. 

Can you talk about these upgrades and how these investments 

can work to improve intermodal capabilities beyond just the port? 

Mr. JAENICHEN. Thank you, Senator, for that comment. I would 

refer to the Great Lakes as our fourth coast, and you can call them 

an ocean if you would like. 

Senator KLOBUCHAR. Thank you. I will repeat that, that you gave 

me permission to do that. 

Mr. JAENICHEN. With regard to the Port of Duluth, I’d like to say that that particular TIGER project—actually, it was $10 million 

that was funded by the Department of Transportation. The total 

project is about $16 million, $2 million was provided by the state 

of Minnesota, and then the other $4 million was actually provided 

by the port. 

This is a 28-acre facility. It’s primary going to be break bulk. I’m 

happy to say we’re about 50 percent completion. My folks track 

that progress on a routine basis, and we’re expecting that project 

to be completed, at least substantially completed, by October of this 

year. 

It includes access to road, as you pointed out, but it also includes 

on-dock rail, and that will provide significant capability, potentially, for large project cargo. In talking to the Port Director, Vanta 

Coda, he has indicated that they’re making great progress. And a 

lot of the shippers and some of the other beneficial cargo operators 

are looking very favorably at using that facility to be able to support their needs. So I think it’s going to actually be an economic 

boost to the country. 

But I will point out that TIGER, in general, through the seven 

rounds of TIGER that we’ve done so far since 2009, we’ve been able 

to direct $524 million to ports and maritime—Marine Highway 

projects, 43 of those in 24 different states. So it’s not just Duluth 

that has benefited. It’s actually all across the country, and we appreciate the support from Congress to be able to allow us to do 

that. 

34 

Senator KLOBUCHAR. Very good. You know, I’m one of the vice 

chairs of the Great Lakes Task Force and have been involved, of 

course, in the invasive species issue. And, actually, for a lock that 

wasn’t being used very much except by some kayakers and two 

scrap metal firms, we were able to close that lock down because of 

the fear of the invasive carp traveling up the Mississippi River. 

When we’re done here, you should Google the picture of the carp 

that was found very close by in another river in Minnesota, literally gigantic, in the middle of the winter just recently. 

So we’re really concerned about what’s going on there now. Could 

you talk about the University of Minnesota research and things 

that are being done? They’ve actually come out with an idea for 

some of the other locks. Obviously, it’s a Great Lakes issue as well 

from a maritime standpoint. 

Mr. JAENICHEN. Thank you for the question. We do have a representative that participates with the Army Corps on that particular invasive species issue. I don’t really have cognizance over 

that program, but I will tell you that we are very involved with the 

Great Ships Initiative, which you know is actually adjacent to Minnesota in Superior. That is the only fresh water ballast water testing facility in the entire world. 

It’s actually an underwriting laboratory for the U.S. Coast 

Guard. Fortunately, the Maritime Administration actually administers that with funds that are provided by the EPA, and we’re very 

favorable in terms of how that is working. Unfortunately, we do not 

have a Coast Guard certified ballast water management system 

yet, but we’re certainly on the path to be able to do that. 

But resident in MARAD, I have a person by the name of Dr. 

Carolyn Junemann. She is a representative for the United States 

at the International Maritime Organization. She is an expert on 

invasive species, and she is the one who actually manages the program. So we’re pretty satisfied with our level of involvement and 

also that of the other interagency activities and departments that 

are involved in it, essentially minimizing the advance of the 

invasive species into the Great Lakes and fresh water. 

Senator KLOBUCHAR. Very good. And I see my colleagues are 

here to ask questions. Senator Ayotte is here. But I will put the 

next one just on the record. But given the Prime Minister’s visit 

this week and our Canadian friends, suddenly making my work as 

Chair of the Interparliamentarian Canadian Group have some 

glamour after a decade of doing this—but I’ll ask you a question 

just about the need to continue coordinating with Canada. So 

thank you very much. 

Senator BOOKER. Thank you very much, Senator Klobuchar. 

I would like to now invite Senator Ayotte to ask her questions. 

STATEMENT OF HON. KELLY AYOTTE, 

U.S. SENATOR FROM NEW HAMPSHIRE 

Senator AYOTTE. Thank you, Chairman. 

I think that it does sound very glamorous—absolutely important, 

especially as a state that borders Canada. I can respect that. 

So, Administrator Jaenichen, in your written testimony, you 

spoke about the need to update our ports and surrounding infrastructure. In New Hampshire, our Portsmouth harbor is a beautiful 

35 

harbor, if you haven’t been there. It needs to be dredged to accommodate the larger ships that we know are being built. And our 

cargo terminal is aging and in need of improvements. These updates are obviously important to the future of our port and our seacoast economy in Portsmouth and the area, the surrounding towns. 

What more can be done at the Federal level to help support our 

smaller local ports, which we know are of critical importance to our 

economy? And are there tools that MARAD needs to help support 

our Nation’s smaller ports? 

Mr. JAENICHEN. Senator, thank you for the question. First of all, 

I’m going to address the dredging portion of that. Obviously, the 

deepening and also the maintenance dredging for our ports actually 

falls under the purview and the responsibility of the Army Corps 

of Engineers. 

Senator AYOTTE. Right. 

Mr. JAENICHEN. So I would defer that question to them. 

Senator AYOTTE. Right. But you know how critical this larger 

ship issue is for our economy and the ability of our ports to thrive. 

Mr. JAENICHEN. We certainly understand that those ports need 

the deepening to be able to allow access to that, but there are some 

other vessels that can get access to the ports. But we need to think 

about it more from a regional perspective. One of the things we’re 

doing in our National Maritime Strategy is to identify and address 

those needs. 

With regard to the investment that you referred to, we have a 

program at the Maritime Administration run by my Associate Administrator for intermodal development. It’s referred to as ‘‘Strong 

Ports,’’ and one of the things that we do is, we reach out to the 

small ports, and we’ve identified—some of the weaknesses that the 

small ports have is, unlike large ports, they don’t have large business offices or large planning departments. So in order for them to 

be able to put together investment grade types of projects that you 

can go out and get both public and private investment, you really 

need to have some funding to be able to do that. 

In our President’s Budget Request for 2017 for our Strong Ports 

Program, we’re actually requesting $3 million. And our goal there 

is to be able to get to 15 ports with about $200,000, because we 

recognize that’s the threshold where you need to be able to do that 

planning and investment. So we would reach out and make sure— 

similar to a competitive program, to make sure that we can help 

those ports to be able to do that, because we recognize that’s where 

the real need is. 

With regard to the entire department, we have put together what 

we refer to as a Build America Transportation Investment Center. 

That is a one-stop shop. I have dedicated a Senior Executive to be 

the Executive Director of that to make sure that ports have a place 

to go. 

I think one of the big things—and for Senator Booker, the Port 

of New York and New Jersey has actually, sort of, now become the 

poster child of this project. They’re putting together a $500 million 

program. They’re the first port in the country to be eligible for 

TIFIA funding, and we’re very encouraged in terms of the direction 

that they’re going. But this has all happened as a result of having 

this BATIC organization within the department, to be able to help 

36 

ports be able to identify what financial strategies they can use, 

what grants and other loan programs that are available through 

the Federal Government, as well as through the private sector, and 

we’re helping them to do that. 

Senator AYOTTE. Well, I appreciate it, and I’m glad to hear that 

you also have thought of a strategy for the smaller ports so that 

we can get some of that support, because you’re absolutely right. 

We don’t have the office support that a larger port has, although 

we have really good people that work there. But we could certainly 

use the help. Appreciate it. Thank you. 

Senator BOOKER. Thank you, Senator. I appreciate you acknowledging me as Chairman, because I have—I don’t know if you 

know—I got a field promotion. 

Senator AYOTTE. It was well deserved. 

Senator BOOKER. Thank you very much. 

[Laughter.] 

Senator BOOKER. Gentlemen, how are you? And thank you very 

much. I want to just say, if it hasn’t been said enough, we appreciate the hard work you do. You all are dedicated public servants, 

and we’re grateful for the work that you do. 

Just for a matter—because you made me hurt my neck when I 

looked up at you when you said of the new qualifications, the average SAT score is now 1285, you said? 

Admiral HELIS. Senator, for the last couple of classes, it’s hovering around 1285, 1283 for the last class. 

Senator BOOKER. And the average GPA? 

Admiral HELIS. I don’t know the GPA off the top of my head, but 

the majority of our students rank in the top 10 percent of their 

high school classes. 

Senator BOOKER. So, basically, you’re saying that most of Congress—we couldn’t get into your Academy. Is that what you’re saying? 

[Laughter.] 

Admiral HELIS. Sir, I haven’t reviewed your file yet, so I couldn’t 

make a guess. 

Senator BOOKER. Well, let the record show I got into my college 

because I had a 4.0 and 1,600, 4.0 yards for carry, 1,600 receiving 

yards. I went on a football scholarship, so maybe that could have 

helped me get in. 

Admiral HELIS. Senator, we do look at the whole person. We look 

at their leadership, their co-curriculars. 

[Laughter.] 

Senator BOOKER. All right. I appreciate your willingness to be 

sympathetic to my fragile ego about my high school scores. 

I just want to jump in, if you don’t mind, really quick, to some 

of New Jersey’s specific issues that have me concerned. The Panamanian government recently announced that they’re going to be 

finishing the Panama Canal expansion project in May 2016, and 

ports in a number of U.S. states already have made a lot of improvements so these big Panamax ships can access their ports. 

In New Jersey, the Port Authority of—and remember we’re 

switching it now—the Port Authority of New Jersey and New York 

is in the process of raising the Bayonne Bridge to increase access 

37 

of these ships to New Jersey, something I worked on and pushed 

for when I was Mayor of Newark. 

I’m just curious. What changes—maybe this is to Chairman 

Cordero and Mr. Jaenichen. What changes do you anticipate in 

global shipping activity in the near and long term as a result of the 

Panama Canal expansion? And what are the impacts if ports are 

not ready for these larger ships? 

Mr. JAENICHEN. Senator Booker, thank you, first of all, for the 

question. In November 2013, the Maritime Administration issued 

our first phase of a report on the expansion and the impact of what 

the Panama Canal potentially would do. I recently had a team 

down visiting Panama to get an assessment, talking to the Panama 

Canal Authority. It looks like now—although it may be substantially completed, it looks like it will not actually open until late this 

year. They may have a ceremonial opening, but it won’t be open 

necessarily for commercial traffic for a while. 

I think one of the most significant things that we have noted in 

the Panama Canal expansion is probably in energy transport. Currently, today, with the existing locks as they are currently configured, only about 6 percent of the world’s LNG tanker fleet can actually fit through the canal and actually go from the Atlantic to the 

Pacific, or vice versa. 

Once the new expanded locks are completed, 86 percent of the 

fleet—so that will actually change the trade flows with regard to 

energy, specifically with regard to large tanker ships or LNG. So 

we see that as a change coming. 

With regard to the ships themselves—for example, currently, 

today, the container vessel size that can actually go through the 

lock is on the order of about 4,500 20-foot equivalent units. Once 

the expansion is complete, that will go to nearly 12,000. That’s 

about a two and a half time increase. What that changes is what 

size ships can actually use that. 

We’re talking with a number of shipping companies. We’re talking with shippers. And we don’t know whether there’s going to be 

a large immediate change. But we do anticipate that there will be 

a change eventually with regard to the larger ships that are actually calling. 

Ports on the West Coast are already receiving ships of that size. 

Ports on the East Coast are receiving ships in the vicinity of 9,000 

to 11,000 TEUs. So we know that they predominately can accommodate them. But as you pointed out, there’s only one terminal in 

the Port of New York and New Jersey, or New Jersey and New 

York, depending on whether you get that legislation approved or 

not. Without the Bayonne Bridge being raised, you only have access to one port. So, clearly, that’s a challenge. 

Most of the cargo that comes into New York and New Jersey is 

actually destined within about a 150-mile radius. We know that. So 

there are other ports up and down the East Coast, obviously, that 

will be impacted differently. 

What we have found is with regard to the trade itself, we think 

that there’s actually an area probably east of the Mississippi and 

then along the coastal states where we think most of the change 

in cargo—otherwise, we think it’s going to continue to reside and 

come from the West Coast, which is the currently existing freight 

38 

flow that we are currently seeing. As the Chairman pointed out, 

about 32 percent of the GDP and 12.5 percent of the total product 

actually moves through the West Coast, and I’ll defer to the Chairman. 

Mr. CORDERO. Thank you, Chairman Booker, for your question. 

Senator, let’s put this in perspective a little bit, just for those of 

you who want to have a better understanding of these large vessels. Today, we have approximately 5,153 container vessels in the 

global trade. 

Senator BOOKER. What’s that number again? 

Mr. CORDERO. Five thousand, one hundred and fifty-three. I’m 

sorry. So there are 5,153 container trade vessels. Now, of that 

amount, 23 percent of that fleet is considered ultra large container 

vessels, which means they’re a nexus of 10,000 TEUs. So that gives 

you an understanding and perspective of what it is today. 

Now, let’s look at the orders that are right now, presently, on 

order. We have a figure of about 487, again of last year, 2015, that 

are on order. Of those 487 container vessels, 77 percent are in excess of 10,000 TEUs. So that really gives you a perspective of what 

the future is bringing, which means the impact on our primary 

gateways, New York-New Jersey—excuse me, New Jersey-New 

York, Long Beach, Los Angeles, and others. 

[Laughter.] 

Mr. CORDERO. And let me add a little bit more to this dynamic. 

Recently, I was present at the ceremony of the arrival of the CMACGM vessel, the Ben Franklin. That vessel is 18,000 TEUs. Now, 

I was there in December in Los Angeles, and then again in February in Long Beach. Speaking to the executives of that carrier, the 

word was that they were exploring the possibility of how can these 

West Coast ports or deep-water ports, for that matter, handle the 

18,000 vessel. Well, recently, last week, I guess we had the answer. 

CMA-CGM has announced now that that vessel will be now anchoring or arriving at these ports. 

So that gives you an indication of the direction that we’re going 

now, which means—and I’ll conclude—that the time to now really 

dedicate ourselves to port infrastructure, as has been said, be it the 

big ports or the small ports—because the small ports will play with 

regard to the movement of these containers in the regions—is ever 

critical right now, is very critical. And I appreciate the Subcommittee having a hearing on this topic, because no longer are we 

talking about the future of the vessel. The future is already here. 

And, last, let me give you one other statistic. The three top ports 

in our Nation account for 50 percent of international trade. 

Senator BOOKER. Say that one more time? 

Mr. CORDERO. Fifty percent. The three top ports account for 50 

percent of the movement of international cargo. If you take the 

top—— 

Senator BOOKER. And that’s Los Angeles—— 

Mr. CORDERO. That’s Long Beach, Los Angeles, New Jersey-New 

York. 

Senator BOOKER. And then down in Louisiana, correct? 

Mr. CORDERO. No. Those would be the three. 

Senator BOOKER. Those would be the three. 

39 

Mr. CORDERO. Because Long Beach, Los Angeles, is—there are 

two different port authorities. So they’re one and two, and New 

Jersey and New York are number three. Now, the top 11 ports in 

our Nation account for 85 percent of the movement of international 

cargo. 

So I just wanted to add to the comments of the Administrator 

with regard to the perspective of these large vessels, and that the 

future is now. So it’s ever important to have the—what’s already 

been said about funding for maritime and port infrastructure. 

Senator BOOKER. So, you know, the real Ranking Member and 

power on this committee, Senator Nelson—we talked about this 

question. Something I had on my mind is, well, I’m very proud of 

the FAST Act that requires the Department of Transportation to 

establish a working group on port performance. 

And, by the way, I was with Secretary Foxx, who told stories 

about private businesses on the East Coast deciding to use Canadian ports instead of American ports because of how far they’re 

ahead of us in efficiency. I have not gone to visit European ports, 

but the stories I hear about some of the Europeans having invested 

in port infrastructure is beyond some of the things we’re seeing on 

the East Coast. So it’s a concern for me, as it is for Ranking Member Nelson. 

So there’s a hotly contested provision, though, in the bill, because 

it would have had a negative impact on labor and the competitiveness of our ports. I know you guys know what I’m referring to. And 

it took an immense amount of compromise from both sides to try 

to reach an agreement on this. 

So here’s the balance—and I really want to hear your professional input, as a part now of this working group—the balance between the competitiveness of our ports and protecting the hardworking men and women who work at the ports. And I don’t know 

if there’s tension there, but my concern is really that you all are 

working and really committed to ensuring that we’re advancing 

both of these and not sacrificing perhaps a lot of those folks who 

really work hard out there on the ports every single day, their 

quality of life, their ability to raise their families, and the like. 

Could you talk to that tension a little bit? 

Mr. CORDERO. Absolutely, and I’m sure the Administrator will 

also chime in on this question. But, again, Senator, thank you for 

your question. Let me also say for those of you who may not be familiar with my background, prior to coming to the FMC in 2011, 

I spent eight years as a Commissioner at the Port of Long Beach. 

So I had 8 years of valuable experience actually seeing how this 

works. 

Now, as the Administrator—— 

Senator BOOKER. You couldn’t get a job at the New Jersey and 

New York port? Is that why you were out west? 

[Laughter.] 

Mr. CORDERO. As the Administrator was referencing, there was 

a meeting, a roundtable, discussing these issues, and I think the 

discussion, in my opinion, was excellent, because it takes a balanced approach. I think what’s lost in the discussion—I know that 

everybody talks about what happened in the West Coast and some 

of the preliminary views and opinions about the causes and factors. 

40 

But let me just say this. I mentioned these large vessels that are 

arriving. I think that the FMC—as you may know, we undertook 

an endeavor beginning in 2014 to study this issue of congestion. 

And our study basically points to the fact—there were a number 

of factors. The fact is that what people may not understand sometimes is part of it has been the shortage of labor, the non-availability of labor. 

Now, again, I mentioned this 18,000 vessel. But as the Administrator mentioned, right now, the common place for deep ports is 

10,000 to 12,000. But the bigger ones are coming. So what happens 

when this vessel arrives, when, in fact, a little less than 6 or 7 

years ago, the average size vessel was 5,000, which leads to my 

point. 

The biggest factor with regard to the metrics that needs to be addressed is port operations, and let me be more specific—marine terminal operations. As you know, New York-New Jersey, LA, Long 

Beach are landlord-tenant ports, and the terminals, basically, have 

not been challenged with regard to their ability to unload and load 

these vessels and then take them out the gate. 

So the metrics, among other things that should be considered, is, 

for example, in my opinion, the most visible metrics—and you can 

ask any stakeholder at our major ports—that we now see when it 

leads to congestion is truck lines, whether it’s New York-New Jersey, or Long Beach, Los Angeles, and others—the truck lines. So 

when you think about that perspective, how are we going to move 

forward to make sure that our terminals have operations to now 

limit that problem? 

That is related also to a labor issue, because we’re losing truckers in this nation, because truckers cannot have an income to support a family when they have to stand in line 2 or 3 hours, or wait 

in line 2 or 3 hours to get into a port. There are all kinds of studies. In fact, New York-New Jersey did a study recently—I met with 

Ms. Campbell there at New York-New Jersey—and their study revealed that if you give a trucker an additional turn time, that is, 

assuming we have fluid in the gates, that means to that trucker 

$15,000 in extra annual income. 

And in my opinion, Senator, there is no reason why we should 

have these truck lines in today’s world, a world where we have the 

technology and the political wherewithal to deal with this issue. As 

the Administrator has mentioned, both our agencies have put a 

‘‘full court press’’ on addressing this issue. 

Thank you, Senator. 

Senator BOOKER. But I would—I’m sorry. Did you want to add 

to that specific point? 

Mr. JAENICHEN. Yes, Senator. But I’ll just talk about the actual 

Port Performance Freight Statistics Program, which you mentioned, that was actually included in the legislation. There was a 

notice out to be able to put nominees for the working group that 

goes with that committee. It’s actually going to be run by the Director of the Bureau of Transportation Statistics. 

Both the Maritime Administration—all of the modes we’re going 

to be covering. In terms of the Federal Motor Carrier—so we’re covering trucking and the various other activities that support congesVerDate Nov 24 2008 08:10 May 15, 2017 Jkt 075679 PO 00000 Frm 00044 Fmt 6633 Sfmt 6601 S:\GPO\DOCS\25360.TXT JACKIE
41 

tion, plus we have other activities that will be there as well. Labor 

will have a seat on the working group. 

It’s important that it came out in the roundtable yesterday that 

in order to move forward, we have to do it together. It has to be 

management, it has to be labor, it has to be the terminal operators 

or the port authority to be able to make sure that they make the 

right investments to be able to improve those efficiencies. 

One of the comments that came up yesterday was the fact that 

it’s not just about the trucks. It’s about the availability of chassis, 

and where the chassis are located. Many times they’re out of place, 

which means it makes it difficult to get a chassis, to be able to get 

a container, to be able to get it in or out of the port. 

We’ve also heard about the gate times, in terms of—most of them 

don’t run 24 hours a day. They’re limited, primarily, because many 

of these ports are in communities, and they’re trying to be good 

neighbors. So they actually limit their actual gate operation times, 

which ends up in long queues during the day, which lowers the actual turn time, or the number of times a trucker can go in and get 

a container. 

The challenge, really, for the truckers is if you’re waiting in line, 

you’re not getting paid for that. You’re only getting paid when 

you’re moving the container or the freight from one point to another to the end customer or to an intermodal facility. So that’s one 

of the challenges. 

But the conversation yesterday was good. I think that this working group that we’re putting together will help. The first report to 

Congress is due in January 2017, but we’re encouraged that at 

least we’ll be having that dialog to be able to improve the safety, 

the efficiency, and the productivity of ports. 

Senator BOOKER. And it just seems to me you’re really drilling 

down on some logistics issues. I guess what Senator Cantwell was 

talking about, that last mile, that it’s not some of the issues—even 

though I do agree we need to do major things, important infrastructure improvement. But that’s interesting that you really pointed that out. 

Mr. CORDERO. Well, in terms of the FMC, Senator, one of the 

other aspects, as we’re moving forward with our congestion study— 

you know, what we call Phase 3—is putting together a supply 

chain innovative team. As I mentioned in my opening comments, 

Commissioner Rebecca Dye will be taking the lead in bringing 

stakeholders in to talk about commercial solutions to some of these 

issues. 

So, for example, I think that, again, as I mentioned, the main 

challenge is terminal operations. It’s a new day. I think most people would agree that most terminals operate in the mindset of what 

it used to be in the arrival of a 4,000 or a 5,000 TEU. That is no 

longer the case. 

So I think the good news is there’s plenty of energy for collaboration, and we believe—we’re optimistic about the potential of moving 

forward to create or being part of a discussion about creating efficiencies with port operations and talk about port productivity. 

Senator BOOKER. So it seems, Administrator Jaenichen, MARAD 

has been in the process of working with the DOD and the maritime 

industry stakeholders to develop a National Maritime Strategy beVerDate Nov 24 2008 08:10 May 15, 2017 Jkt 075679 PO 00000 Frm 00045 Fmt 6633 Sfmt 6601 S:\GPO\DOCS\25360.TXT JACKIE
42 

cause of some of the issues I said in my opening remarks about 

what is sort of a crisis, it seems to me, in terms of the numbers 

and preparedness. And, really, you all are looking at a comprehensive range of actions to preserve and grow all aspects of the U.S. 

Merchant Marine, which is something that’s very encouraging to 

me. 

Part of that strategy—I’m especially interested in the role of the 

Marine Highway, which you mentioned before. I think it was to 

Senator Klobuchar’s comments. As you know, last summer, the Department of Transportation designated a new route from the Port 

Newark Container Terminal to Red Hook Container Terminal in 

Brooklyn. 

So I just want to know—can you update me on the strategy and 

the timeline for that? Are we going to see the release of it very 

soon in terms of a strategy? And then can I just hear a little bit 

more about your vision about how the growth and integration of 

our Marine Highways is going to affect our nation, making it, hopefully, more reliable, more competitive, and a sustainable option for 

shippers? 

Mr. JAENICHEN. Senator, thank you for the question. First, the 

National Maritime Strategy has been drafted. It is now in interagency review, and so we’ve had our first several meetings. During 

the course of the drafting of that—and, unfortunately, it took us a 

fairly long time to do it, in fact, 2 years. We started the process 

back in January 2014. We met with about 600 maritime stakeholders over the course of 3 days, and then we did it again in May 

2014 with about the same number of stakeholders. 

So we coalesced around a number of strategies, and then we put 

the underpinning, in terms of the actions that are needed to be 

able to implement those strategies. I hope to have that out in the 

coming months. Again, we’ll be putting it out in a Federal Register 

notice, and we’ll be going out for public comment to make sure we 

have it right. Then once we’ve done that, we’ll adjudicate those 

comments, and we’ll put together a formal strategy. 

But so far, we have shared it with the Committee on Marine 

Transportation, which is the Federal agency—about 27 agencies 

that have a touch or responsibility or oversight in the maritime 

sector. So we’ve shared it with them, and we’re in the right place. 

We’ve done the same thing with our Marine Transportation System National Advisory Committee, which is part of FACA, about 29 

members, who has reviewed it as well. So we know we’re on the 

right track, and so we’re pretty confident that once we get it out, 

folks will recognize the importance, the strategies involved, and 

also the implementing actions. 

With regard to Marine Highways, Congress funded in 2016 $5 

million—I’m sorry—yes, $5 million for Marine Highways. And, essentially, that will be dedicated to Marine Highway projects that 

are already designated by the Secretary. So, clearly, the Marine 

Highway that you identified would be one of the ones that would 

be eligible for that funding. 

We’re going to be focusing on the intermodal movement of freight 

as part of that. So that really means sort of container on barge or 

some kind of ability to move freight between a couple of different 

points. So all over the country, we have right now 11 different desVerDate Nov 24 2008 08:10 May 15, 2017 Jkt 075679 PO 00000 Frm 00046 Fmt 6633 Sfmt 6601 S:\GPO\DOCS\25360.TXT JACKIE
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ignations that have been done by the Secretary since 2010, and 

those will be the ports that are actually eligible. So we’re pretty encouraged. We plan to have that notice of available funding opportunity out the first part of April, and then we’ll attempt to award 

those by the end of the summer. 

Senator BOOKER. So just give me some basics. How many U.S.- 

flag international vessels does MARAD have—or, excuse me, the 

estimate needed to ensure that a sufficient number of certified U.S. 

mariners would be available to support activation of government 

reserve fleets? 

Mr. JAENICHEN. Thank you for the question. Currently, today, 

we’ve got about 11,230, and I estimate that I have about a fourship margin in terms of having enough to be able to activate for 

a prolonged period of time. I need about 13,000, which means to 

be where I would be comfortable, I need about 45 more ships under 

U.S. flag. Again, that would be 45 more than the 78 that I currently have today. 

Since about 2000 or so, we’ve hovered right around 100, and that 

was enough to sort of keep us in what I could call the yellow zone, 

where there were sufficient numbers. We’re sort of at the confluence of what I would call sort of the perfect storm. We had the 

combination where we lost 26 percent of the fleet since 2012, and 

then we have the implementation of the International Maritime 

Organization standards for training certification and watchkeeping. 

Those requirements come into effect in January 2017. 

So the combination of the loss of jobs—and they’re not currently 

sailing—means they’re probably not going to upgrade their Coast 

Guard license to get those STCW endorsements, which means if 

they’re not available, they may not be available for the government 

reserve sealift, which is supporting the Department of Defense 

global projection and sustainment of the armed forces. So I’m concerned about that. 

We’re working, again, with the U.S. Transportation Command, 

the Navy, specifically the Military Sealift Command, and some of 

our commercial partners, including the American Maritime Partnership, on a military to mariner program, which would allow veterans, through their normal training and the job that they do, 

whether they’re in the Army, in the watercraft program, whether 

they’re in the Coast Guard or the Navy, to be able to make a transition to the Merchant Marine once they leave the service. But they 

have to have the underpinning of the courses and the certification 

and the endorsements. Otherwise, they almost have to start from 

scratch. So we’re working very diligently on that program. 

In August 2015, there was a report that was put out by the Secretaries of Transportation, Education, and Labor, and what we 

identified—by 2022, we’re going to need about 70,000 new seafarers or mariners, and about half of those are licensed officers. 

And right now, the training programs we have—the combination of 

the Merchant Marine Academy, which produces about 200, and the 

other state maritime academies produce about 660. So I’m producing less than 1,000. 

And then in company with the maritime unions, who are putting 

some of their seafarers through a licensing program they refer to 

as Hawsepipe, I’m just not creating enough to take over the deVerDate Nov 24 2008 08:10 May 15, 2017 Jkt 075679 PO 00000 Frm 00047 Fmt 6633 Sfmt 6601 S:\GPO\DOCS\25360.TXT JACKIE
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mand that I know is coming because of the aging demographic of 

the seafarer. So we’re at the confluence of what I think is a very 

difficult period, and we’re going to have to come to some actions to 

be able to ensure that we have the seafarers, to make sure that we 

have the capability, to make sure that our global—our commercial 

and our government sealift fleets have sufficient mariners to be 

able to do what they need to do to support the Department of Defense. 

Senator BOOKER. And that 2012 reduction in preference—that’s 

putting a lot of pressure. It has obviously had a very severe impact, 

right? 

Mr. JAENICHEN. It’s certainly had a downward pressure, essentially, what we’ve lost, and the combination of that, plus about 54 

other what I call ocean-going vessels, and some of the change in 

the status of some military sealift—we’ve lost about 2,400 mariners 

actively sailing jobs, and that has put a significant pressure on the 

availability of the mariners that we have for the pool. We rely on 

the commercial mariners to voluntarily come to our ships when we 

activate them, and up until now, we have not had a challenge with 

that. But we’re going to get to the point where we are, and that’s 

what our concern is, and that’s the reason why we’re aggressively 

going after this issue. 

Senator BOOKER. Rear Admiral, you’ve been so gracious with the 

questioning around sexual assault, and I think the reflection from 

the Chairwoman, as well as some others, shows you the urgency 

which many of us feel. This is an issue to me—obviously, it’s very 

personal, very emotional for many of us, knowing the culture that’s 

out there, the brutality that has been involved, the silencing that’s 

been involved in the past. I know and appreciate your commitment 

to doing and addressing these issues. 

I just feel a sense of urgency about it, and you, obviously, do as 

well from your comments. But if I may ask, what opportunities are 

there for the U.S. Merchant Marine Academy to increase its coordination and collaboration with Naval, Army, Air Force, and Coast 

Guard academies to better address this national problem of sexual 

assault on college campuses? And I’m wondering—is there coordination going on? Is there more that could be done? These are our 

leadership academies. They should be setting the example, and I 

just really believe we have a national problem here, a national crisis, and would love to hear if you are working on this in a coordinated fashion. 

Admiral HELIS. Senator, thank you for the question. Yes, this is 

a national problem, and many of our partners and counterparts 

face the same challenges. There is a lot of networking and collaboration that goes on. I’ll give you just a couple of examples. 

The five Federal service academies—we interact, we share best 

practices. At least once a year, the senior leadership meets together. I can tell you every year I’ve been doing this, both from the 

Commandants of Midshipmen and the Superintendents, sexual assault and sexual harassment prevention has been on our agendas. 

The personnel responsible for sexual assault prevention and response at the service academies—at their level, they network—my 

coordinator, Ms. Tamara Jell, who is sitting behind me in the audiVerDate Nov 24 2008 08:10 May 15, 2017 Jkt 075679 PO 00000 Frm 00048 Fmt 6633 Sfmt 6601 S:\GPO\DOCS\25360.TXT JACKIE
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ence today—recently, we spent some time at the Coast Guard 

Academy, again, with the sharing of best practices. 

When we look at the state academies, every year, there’s an annual conference called ‘‘Wild Women on the Water.’’ It rotates 

amongst the maritime academies. We hosted it last year. California 

Maritime hosts it this year. It will be next week out at Mission 

Viejo. Again, that is a conference that addresses specifically the 

wide range of women’s issues in the maritime industry, and it is 

a gathering of all the academies and leadership from industry, 

from the unions, from government. Again, sexual assault and sexual harassment is one of the issues that they address at this annual conference. 

We have had meetings sponsored by the Maritime Administration with industry leadership and union leadership to discuss and 

address the issue. Specifically, at the Academy, we have requested 

and received from all of the shipping companies to whom we send 

midshipmen for training their policies on sexual assault and sexual 

harassment. We make sure that our midshipmen are aware that, 

‘‘Hey, your company has a policy, and while you’re out on a ship 

during training, you know what the reporting policies are within 

the company.’’ 

Senator BOOKER. For that sea year, are we doing enough? Is just 

informing people of what the policies are—do we do things to collect information afterwards? Do we have any sense of what the 

problems might be during that year? 

Admiral HELIS. Senator, first, in the preparation for the midshipmen going to sea, we run a range of programs to prepare them 

for the wide range of challenges. They’re dealing with international 

culture. They’re away from home for extended periods. And we address the issues of sexual assault and sexual harassment and prevention and bystander intervention at sea. When we put midshipmen on ships, they’re together—you know, take care of each 

other as buddies and partners. 

For the women, amongst whom we see the greatest risk of problems, we run specific focused training. We bring in women who are 

normally graduates of the Academy, who have sailed in the maritime industry, women who can address, again, the broad range of 

issues that our midshipmen will face, not only in their Sea Year, 

but after graduation, as women, as officers, and leaders, in a male 

dominated profession. So we do that. 

We’re going to continue to expand that training in the coming 

term for the next group that will go out this summer at sea, again, 

to continue to address in small groups that these are the kinds of 

issues and challenges they’re going to face around sexual assault 

and sexual harassment. 

In terms of cooperation, you mentioned Military Sealift Command. I’ll describe one incident. We had an incident where a midshipman was sexually assaulted, not on a ship, but at a crew party 

ashore while on a Military Sealift Command ship. She reported it, 

and there was immediate parallel work between the Academy and 

Military Sealift Command. 

We were coordinating—Admiral Shannon and I were communicating about it, and he was also in communication with Administrator Jaenichen. Our JAGs and our legal staffs were in coordinaVerDate Nov 24 2008 08:10 May 15, 2017 Jkt 075679 PO 00000 Frm 00049 Fmt 6633 Sfmt 6601 S:\GPO\DOCS\25360.TXT JACKIE
46 

tion. Our sexual assault prevention and response personnel were in 

coordination. So we had a coordinated effort between MSC and the 

Academy to investigate—which was primarily on MSC to do the investigation—and also for care of the victim, which we shared between MSC and the Academy. 

And I felt that the coordination was better—it could not have— 

as bad as the incident was, the response to the incident from MSC 

and the Academy and the coordination—I couldn’t think, when we 

looked at this afterwards, that it could have been done any better. 

My sense is that there is a shared urgency of this problem across 

the Federal academies, across the State academies, across the industry that we all work to share best practices and work together 

on this. 

It is a tough problem, though. You’re right, Senator. It is a tough 

problem. Having personally been involved with victims, both in my 

Army career and here, I understand firsthand just how devastating 

this is. At the end, I’ll tell you that you have my personal commitment and all of my senior staff. 

I know I have the absolute support of the Administrator. We’ve 

had great support from the IG in terms of things we can do to improve the program. I think everybody is pulling together really well 

on this. But we are committed to continue to work and come up 

with new ideas and do better. 

Senator BOOKER. I’m grateful for that, sir. What’s the racial 

makeup of the Academy? 

Admiral HELIS. Senator, as I mentioned in my opening statement, we’re up to about—the incoming classes are coming in between 20 percent and 24 percent with minorities. So with this cycle 

of four classes, if we stay on track this year, we’ll be close to 20 

percent women, between 18 percent and 20 percent women at the 

start of the next academic year, and we will be about 25 percent 

of minorities, some being women. 

I would say broadly in our recruiting, we’re doing—you know, 

OK is about the best, Senator. With Hispanics, we’re doing OK, 

and with Asian Americans. We are lagging right now, in my opinion, in African Americans, particularly African American males. 

We’re starting to see slight upticks in the Native American and Pacific Islander populations. That’s ones and twos and threes. It’s 

very small. 

Senator BOOKER. I’m sorry to interrupt you, sir. Can you just 

give me some of the strategies you’re using to make the Academy 

more reflective of America’s population? 

Admiral HELIS. Yes, Senator. One is we have one of our recruiting officers now dedicated as a diversity recruiter. Ms. Dumorne, 

Lieutenant Dumorne, was hired last year, so she is getting up to 

speed and on track. And it becomes where are the networks where 

you can identify densities of minority students that you can address by population center, and also are there gatherings of educational institutions that are recruiting for the HIS, the Hispanic 

oriented institutions, the HPCs, and try to tap into those same 

pools of recruits and applicants. 

She also works in coordination with all of the other regional recruiting officers to try to say, ‘‘Hey, here are ways that you can address and specifically reach out to women and minorities to make 

47 

this more diverse.’’ And, again, I think the numbers over the last 

3 years indicate that the efforts are beginning to pay off, that we 

are beginning to—we’ve seen a definite statistically significant increase over time in women and minorities. And, again, we’re committed to making the Academy more diverse and more reflective of 

the society that we serve. 

Senator BOOKER. Well, your minority representation is better 

than the U.S. Senate. But I will say I appreciate those efforts and 

would love to learn more about them. And, hopefully, I’ll get a 

chance to visit and talk to you more firsthand about that. 

Admiral HELIS. Senator, we’d welcome your visit or your staff, 

and to talk you through the admissions process in detail and meet 

with the admission recruiters, and any suggestions you have in 

that area, we would be appreciative of. 

Senator BOOKER. And when you’re looking at the whole picture 

of an individual that you’re evaluating for admissions, you know, 

the kid that comes from Appalachia, who comes from a poor family, 

who has worked their way through high school, they may not have 

the 1285 SAT score. Do you take that into consideration? 

Admiral HELIS. Yes, Senator, we do. Getting a little bit into detail, we actually do appointments by state. There are allocations by 

state in the CFR akin to the other academics that are keyed to 

their size and their representation in Congress. 

The Secretary also has 40 discretionary appointments that he 

can use. And for those, we have a policy where we have established 

20 areas that we call of value or special interest to the Academy. 

And for those applicants who either are unable to secure a Congressional nomination or who don’t get—my term is over the bubble, off the line, in their state—you know, you’ve got 10 allocations, 

and you’re number 11 or 12 on the list—we have a process where 

we identify those midshipmen with those special qualities. 

We’re looking at some first-generation Americans, first in family 

to go to college—have they had difficult family circumstances to 

overcome? Are they historically represented groups at the Academy? Do they possess special talents that we would value, which 

would include music, foreign language skills, athletic abilities, and 

so on? 

We have a panel that I chair with the senior leadership that reviews the files of those nominated by admissions. There’s a process 

by which they go from me to the Administrator to the Secretary. 

And that’s how we try to address those issues. 

One case we just looked at—a young man, OK academically, kind 

of short on his leadership, but great essay, great interviews, and 

we looked at his background—Hispanic male, three high schools in 

4 years because his father works in the ranching business—and 

you can see the story—where he’s moving. And, in addition, he 

averages 20 hours a week working on the ranch to help support the 

family. So he is on the list, the current package that’s on the way 

to the Administrator. So I’ve given away a piece of it to you. 

But that’s one we looked at and said that this is a young man 

who, based on his scores and academics, looks really bright, really 

smart, and you look at the family circumstances and you can understand why he was not able to get involved more in community 

service and athletics and co-curriculars and leadership. But he has 

48 

a terrific work ethic. He has tremendous recommendations. So, 

again, we’re going to be recommending him to the Secretary for an 

appointment, and that’s how we try to get it done—those factors. 

Senator BOOKER. I appreciate you going into the details. 

Really quick, Administrator Jaenichen, you guys have a ladder 

of opportunity initiative. I’d love to hear a little bit more about 

that. I know it’s striving to create opportunities for economic empowerment for a range of folks. As you know, sometimes, the communities most in need are often the ones located right near our 

ports. 

Again, I was Mayor of Newark, New Jersey, where our port sits, 

and it was an ongoing battle for me to try to get underrepresented 

populations, populations that have high levels of poverty and unemployment, opportunities. So I just want to hear about that departmental initiative, and I wonder if there are any opportunities 

to provide workforce training programs and employment opportunities in the maritime sector in communities most in need. There 

might be something that cities like Newark aren’t doing that we 

could be taking advantage of. 

Mr. JAENICHEN. Thank you, Senator, for the question. I’ll just 

sort of highlight a couple of them. First, one of the things that 

we’re doing is we recognize that part of this is—Congressman 

Cummings made a great statement. He said, ‘‘If you don’t know it, 

you can’t dream it.’’ So part of this is an outreach program to make 

sure that they’re aware that the maritime industry is out there. 

So we have reached out to historically black colleges and universities, Hispanic-serving and minority-serving institutions. And over 

the course of about the last year or so, we’ve been able to reach 

out to two dozen different schools. We have engaged nearly about 

1,400 students at this point. We’re going to job fairs. We’re doing 

briefings and awareness programs. We’re also doing personal interviews, and we’re helping them prepare. We’re doing mock interviews. 

Senator BOOKER. When you say you’re doing that, what communities are you—— 

Mr. JAENICHEN. We’re actually doing it at the various minorityserving institutions. For example, we’ll go to Howard University, 

and that’s just an example nearby. But we’ve been down in North 

Carolina. We’ve been down to Georgia. And, again, we’re trying to 

do this on a fairly minimal budget. But we recognize the importance of making sure that they’re aware of it, especially in areas 

where you don’t necessarily have a connection to water or the sea, 

to make sure that they’re aware of it. 

We also recognize that from a standpoint of the transportation 

sector, we need to make sure that they’re aware of that. We also 

have an intern program that we do. And I will tell you that last 

year, I believe we had nine or 10 that were actually with us at the 

Maritime Administration, and I will tell you that probably 80 percent of them were minority students, and they were going back to 

their schools. So we had them in everything from law to environmental science and a whole bunch of other things. 

So we’ve actually been doing that outreach in order to make that 

awareness, especially from the workforce. And we’re pretty happy 

with the actual product that we’re able to put out. The question 

49 

now is can we get a return on the investment, and that’s the one 

thing that’s very difficult to measure. You know, we’ve contacted 

about 1,400. The question is how many of that 1,400 have actually 

gone on to get into the maritime sector, and that’s something that’s 

hard to quantify at this point, but we’re going to try to do that 

going forward. 

Senator BOOKER. I really greatly appreciate that. 

Mr. Behm, I just want to say I apologize. I had no questions for 

you today, sir. I could make up a question now, if you think so, or 

we could just end the hearing. 

Mr. BEHM. I think we should end the hearing. 

[Laughter.] 

Senator BOOKER. OK. So in closing, first of all, thank you to all 

of the witnesses here. I really cannot express to you how much I 

appreciate the professionalism and dedication you bring to this job. 

You’re rendering a great service to our country. If you need me to 

write letters to your families, I will, to let them know that you are 

good men. 

So just a closing note regarding the record. The hearing record 

will remain open for up to 2 weeks. During this time, Senators are 

asked to submit any questions for the record. Upon receipt, the witnesses are requested to submit the written answers to the Committee as soon as you all can, and that would be greatly appreciated. If you all don’t know, you should not take the lack of attendance here personally. There are multiple competing hearings 

going on at this time, and a number of folks who had to come and 

go expressed to me their regret because they realize that for our 

economy as well as for our safety how important this is. 

I just want to conclude this hearing by one more time thanking 

you all for your leadership. I truly do respect you and feel a sense 

of gratitude for what you all do to keep us safe and to grow our 

economy. 

I now say, with this hammer, which I’ve never had a chance to 

use as a Freshman Senator—this is my first time with the power. 

That’s why I’m dragging this hearing out. I don’t want to let it go. 

[Laughter.] 

Senator BOOKER. But I now say that this hearing is adjourned. 

[Whereupon, at 3:57 p.m., the hearing was adjourned.] 

(51) 

A P P E N D I X 

RESPONSE TO WRITTEN QUESTION SUBMITTED BY HON. RICHARD BLUMENTHAL TO

HON. PAUL N. JAENICHEN

Question. Enhancing security at our Nation’s ports: In February 2016, the President released his proposed budget for Fiscal Year 2017. The proposed budget raises 

a number of concerns for me—and I’m sure it does for others who have critical assets in their state that need to be protected from terrorist threats. The proposed 

budget cuts the Department of Homeland Security’s Port Security Grant funding 

program from $100 million to $93 million. 

The port security program is crucial in states like Connecticut. It helps protect 

critical port infrastructure from terrorism, improve port-wide maritime security risk 

management, and maintain maritime security protocols that support port recovery 

and resiliency. The funding strengthens first responder training. 

In 2015, more than 10 communities in Connecticut benefited from this program— 

radio communications systems, surveillance cameras, patrol boats—resources that 

can thwart terrorism and stifle security threats. But the proposed budget cuts this 

funding by about $7 million—and it cuts funding even more dramatically for other 

major security programs, such as slashing the State Homeland Security Program 

from $402 million to about $200 million. 

Are you concerned by the message this sends? Shouldn’t we be strengthening 

these programs—not slashing them? 

Answer. The Maritime Administration is committed to working with our Federal 

partners with authorities and responsibilities for port security and defers to the Department of Homeland Security, which has oversight for the Port Security Grant 

Program, regarding appropriate funding levels for the program. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. BRIAN SCHATZ TO

HON. PAUL N. JAENICHEN

Question 1. Harbor maintenance—including dredging and deepening navigation 

channels, anchorages and berthing areas—is essential to maritime safety. But we 

also have to make sure that harbor pilots and ship operators have access to nearreal time nautical charts that reduce the risks of collisions and groundings in our 

harbors. 

NOAA’s PORTS program is one promising area that aims to improve maritime 

safety by integrating real-time environmental observations, forecasts, and other 

geospatial information that mariners need to navigate safely. Researchers, at the 

University of Hawaii’s Center for Island, Maritime, and Extreme Environment Security, are exploring other promising areas, including the use of unmanned systems 

to improve maritime awareness. 

But creating this information and making sure people can access it are two separate concerns, and we need to make sure there is no gap there. 

What are we doing to improve information sharing so that operators are getting 

more access to real-time nautical charts? 

Answer. MARAD supports sharing of real-time information to mariners for safety 

of navigation and managing maritime traffic. MARAD has no statutory authority in 

this area, but does support and contribute to the work of the U.S. Committee on 

the Marine Transportation System (CMTS), a Congressionally-mandated, Federal 

Cabinet-level, inter-departmental committee chaired by the Secretary of Transportation, under which navigation services and safety are being addressed to support 

enhanced marine safety information to the mariner. The purpose of the CMTS is 

to create a partnership of Federal departments and agencies with responsibility for 

the marine transportation system. 

Question 2. The Merchant Marine Academy and the six Maritime Academies are 

responsible for graduating Merchant Marine officers with the skills to ensure that 

the U.S. maritime industry remains globally competitive. 

52 

How are we adapting our training curricula to support the requirements of a modern maritime industry—so that our Merchant Marine Officers can do everything 

from operate new ships and communications technology to finance facilities? 

Answer. The United States Merchant Marine Academy and the State Maritime 

Academies are accredited institutions of higher education. They monitor their academic programs continuously to stay current with developments in the industry as 

well as their U.S. Coast Guard (USCG) approved Merchant Mariner Credentialing 

program. 

Each institution has professional faculty who are subject matter experts in several 

maritime-related fields including maritime training, business and finance. Each institution closely monitors the development of national and international standards 

required by the USCG and the International Maritime Organization. The academies 

also participate in the USCG’s advisory committees related to training and other requirements. 

Question 3. Annually, the six State Maritime Academies graduate more than 70 

percent of the licensed Merchant Marine officers in the United States. These graduates come from all 50 states. 

We are quite proud of the relationship that Hawaii has with Cal Maritime, where 

many graduates from Hawaii become licensed Merchant Marine officers. 

How are we doing with recruiting graduates to the State Maritime Academies so 

that, in addition to the Merchant Marine Academy, we are ensuring that these institutions are helping to develop a pool of well-trained Merchant Mariners? 

Answer. The United States Merchant Marine Academy (USMMA) and all six of 

the State Maritime Academies (SMAs) engage in recruiting high school students nationwide. MARAD has no statutory or formal oversight role for the SMA institutions 

and does not directly recruit potential cadets. The USMMA and the SMAs have excellent reputations for career preparation and job prospects. The success of their recruiting efforts is well demonstrated by the high number of applicants for enrollment in their marine transportation/logistics academic and merchant mariner 

credentialing programs. 

Question 4. In order for licensed officers to graduate from our maritime academies 

they must acquire sea time, so each academy has a training ship. 

Last year, the President’s budget included a request for funding for the common 

design of a new National Security Multi-Mission Vessel. This year’s budget includes 

a request for $6 million under the National Security Multi-Mission Vessel/School 

Ship Replacement Program to fund an independent requirements and alternatives 

analysis for cadet training needs. 

Can you clarify these requests? Is MARAD reevaluating the requirement for a 

new multi-mission vessel? 

If so, what is the requirement for replacing cadet training ships? 

Answer. The FY 2017 President’s Budget request is to fund an independent 

verification and validation of the requirements and alternatives analysis for Cadet 

training vessel needs. The analysis will also include the assessment and validation 

of future mariner requirements and demand, the impact to the current training programs and measures to keep pace with anticipated demands for mariners. 

Question 5. Many of our ports remain congested in part due to a lack of shore 

infrastructure connecting ships to the rest of our transportation network. We have 

seen this congestion especially on the West Coast. And as the Panama Canal Expansion Project is completed, we may see similar challenges manifest on the East Coast 

as larger vessels call on ports in the northeast. 

The problem is not that ships have outgrown our ports, it is that we have failed 

to grow the shore infrastructure—including intermodal links such as bridges, rails, 

tunnels, and terminals—that supports our ports to keep pace with the vessels that 

the international maritime industry is using. 

What is our investment strategy for ensuring that we are making commensurate 

improvements to our ports and the shore infrastructure that are crucial to the delivery of goods in the United States? 

Answer. MARAD and the Department of Transportation (DOT) recognize that 

ports and the U.S. marine transportation system are critical to our economy and 

that our maritime and freight systems need to be prepared for the challenges which 

exist now and in the future. Ports are our Nation’s ultimate intermodal freight 

hubs—a key part of our transportation and economic systems. We are working with 

public and private sponsors to improve intermodal port-based facilitates on all 

coasts, the Great Lakes, and on our inland river and waterway system. 

Given the need to meet current and anticipated freight network requirements and 

the growing demands placed on ports and related infrastructure, MARAD and DOT 

53 

are working to help meet the infrastructure needs of our Nation’s freight and port 

infrastructure through a number of programs, including: 

StrongPorts—MARAD has developed a port infrastructure development program 

to better support our ports. StrongPorts is designed to deliver tools and technical 

assistance to ports with a goal of integrating ports and maritime transportation into 

the larger U.S. surface transportation system. The program provides a planning and 

investment framework that brings together all stakeholders, including private companies and local, State and Federal agencies. 

TIGER—The Transportation Investment Generating Economic Recovery (TIGER) 

Discretionary Grant program provides a unique opportunity for DOT to invest in 

projects that promise to achieve national objectives. Since 2009, Congress has dedicated nearly $4.6 billion over seven rounds of TIGER to fund highway, rail, transit 

and port projects that have a significant impact on the Nation, a region or a metropolitan area. Of the total funds awarded, $524 million has been awarded for 43 port 

and/or marine highway projects in 24 states. These Federal funds have leveraged 

approximately $700 million of State, local, and private matching dollars for these 

port projects. TIGER funded projects at ports have included terminal expansions, 

berth expansions, intermodal transfer facilities, truck gates, rail connector improvements, as well as equipment and other improvements that directly contribute to improved freight throughput. Another $500 million has been appropriated for TIGER 

in FY 2016 and the application review period is now underway. 

Fixing America’s Surface Transportation (FAST) Act—Congress recently passed 

the FAST Act which includes significant provisions for freight system planning—including the collection of performance measures for the Nation’s top 25 ports, development and funding which are applicable to ports. On September 7, 2016, the Secretary of Transportation announced the first ever FASTLANE grant recipients. Of 

the 18 grants awarded, five are to ports. The port funds will be used to improve 

facilities, remove at-grade rail crossings, and increase the efficiency of the maritime 

system. More than $759 million was awarded for the 18 of which ports will receive 

$115.3 million. 

Transportation Infrastructure Finance and Innovation Act (TIFIA) and Railroad 

Rehabilitation and Improvement Financing (RRIF)—DOT has worked with ports to 

identify opportunities to utilize TIFIA and RRIF loans for eligible ‘‘inside the gate’’ 

projects. The FAST Act establishes DOT’s National Surface Transportation and Innovative Finance Bureau to, among other things, provide assistance and communicate best practices and financing and funding opportunities to eligible entities for 

DOT’s credit assistance programs. Prior to the FAST Act, the DOT’s Build America 

Transportation Investment Center (BATIC) had already started working with ports 

to identify various Federal funding and financing programs at DOT and to harness 

these potential funding and financing opportunities. The BATIC has now been formally established within DOT as the Build America Bureau. 

Additionally, Congress appropriated $5 million in grant funds in FY 2016 for 

America’s Marine Highway Program to further expand the use of Marine Highway 

services. A Notice of Funding Opportunity was published in the Federal Register on 

April 25, 2016 and applications have been received and are under review. MARAD 

will use those funds to encourage shippers around the country to routinely choose 

the use of waterborne transportation for freight. 

The President’s FY 2017 budget also contains proposals that would facilitate increased infrastructure investment in our ports and shore infrastructure. These include Qualified Public Infrastructure Bonds (QPIBs) that would level the playing 

field for public-private partnerships and attract billions of dollars of new private 

capital for our nations’ ports and surface transportation projects, as well as for other 

important infrastructure sectors. Port projects would also be eligible for assistance 

under the proposed Financing America’s Infrastructure Renewal Program (FAIR) 

that would provide direct loans to U.S. infrastructure projects developed through 

public-private partnerships that meet applicable environmental and labor standards. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. CORY BOOKER TO

HON. PAUL N. JAENICHEN

Question 1. The Department of Transportation Office of Inspector General (OIG) 

released a report in December 2015 highlighting deficiencies in the Maritime Administration’s controls for program implementation, monitoring, and oversight. In 

the report, the OIG found that MARAD ‘‘lacks policies and procedures for notifying 

other Federal agencies of its role as the disposal agent and identifying the universe 

54 

of Government-owned vessels it is responsible for disposing.’’ What is MARAD’s plan 

to develop these policies and procedures? 

Answer. Under 40 U.S.C. § 548, MARAD is required to dispose of Governmentowned, merchant-type vessels of 1,500 gross tons or more. The DOT Office of Inspector General (OIG) Audit Report, issued on December 10, 2015, recommended 

MARAD develop or update policies and procedures for (1) identifying the universe 

of Government-owned vessels that meet the statutory criteria for MARAD to serve 

as the disposal agent, and (2) notifying agencies that own these vessels of MARAD’s 

disposal agent role. 

In response, MARAD has implemented the following process to establish itself as 

the exclusive agency for the disposal of government owned and operated merchant 

type vessels which meet the gross tonnage criteria established by the statute. First, 

MARAD has determined there are eight Federal agencies, including MARAD, which 

own and operate vessels subject to MARAD’s ship disposal authority. The other 

agencies include the Naval Sea Systems Command (NAVSEA), Military Sealift Command (MSC), National Oceanic and Atmospheric Administration (NOAA), Office of 

Naval Research (ONR), Department of the Army, Army Corps of Engineers (ACE), 

United States Coast Guard (USCG), and the National Science Foundation (NSF). 

Second, MARAD has identified a universe of approximately 250 vessels at these 

agencies for which MARAD will be the exclusive disposal agency. Each vessel has 

been recorded in a ship disposal program database which contains the specific vessel 

characteristics including the vessel planned disposal date. Population of the database with vessel records was completed in May 2016. Third, MARAD reached out 

to each of the agencies and identified the specific point of contact to initiate the notification process for MARAD’s vessel disposal authority. 

Question 2. When will these documents be finalized? 

Answer. MARAD issued two notification letters to the agencies which own and operate vessels subject to MARAD’s ship disposal authority. The first letter was issued 

by the Ship Disposal Program Office on June 23, 2016 to the corresponding program 

managers at the other agencies. A follow-on letter from the Maritime Administrator 

was issued on July 8, 2016 to the corresponding agency executives. It should be 

noted that MARAD does not have statutory authority to enforce compliance by other 

Federal agencies. 

Question 3. The DOT OIG also expressed concern with the General Service Administration (GSA)’s role in ship disposal. The National Maritime Heritage Act of 

1994 requires MARAD to allocate ship disposal proceeds to its Vessel Operations 

Revolving Fund, where they are expended on MARAD and National Parks Service 

programs. When GSA disposes of vessels, the proceeds go into the General Treasury, 

not to the Vessel Operations Revolving Fund. 

What is your opinion on the practice whereby some agencies have disposed vessels 

through GSA rather than through MARAD? Are you concerned by the potential 

losses in revenue this could create for the maritime community if it becomes common practice? 

Answer. Under 40 U.S.C. § 541, the GSA has authority to act as the sales agent 

for other Federal agencies and sell excess Federal vessels less than 1,500 gross tons. 

Under 40 U.S.C. § 548, MARAD is responsible for disposing of surplus Governmentowned, merchant-type vessels that are 1,500 gross tons or greater. It is in MARAD’s 

interest to ensure vessels of this size are disposed of through MARAD’s ship disposal program because such sales revenue is deposited into the Vessel Operating 

Revolving Fund (VORF) account, rather than into the General Treasury. Sales proceeds deposited into the VORF account are used to support the National Defense 

Reserve Fleet, the U.S. Merchant Marine Academy and State Maritime Academies, 

and for maritime heritage preservation and education. 

As recommended by the OIG in the Audit Report, MARAD has developed policies 

and procedures to notify other Federal agencies that MARAD is the exclusive disposal agency for surplus merchant-type vessels of 1,500 gross tons or greater. 

RESPONSE TO WRITTEN QUESTION SUBMITTED BY HON. JOHN THUNE TO

HON. MARIO CORDERO

Question. Chairman Cordero, just last month you announced that the Federal 

Maritime Commission would assemble Supply Chain Innovation Teams to ‘‘develop 

commercial solutions to supply chain challenges and related port congestion concerns.’’ The IMO container weight issue goes into force on July 1, 2016, and there 

remains concern that it could challenge the U.S. supply chain. Do you think that 

the container weight issue is one that can be considered by your Innovation Teams 

55 

in the immediate future, and if so, how do you think its effort could contribute to 

identifying and implementing a resolution? 

Answer. The Federal Maritime Commission Supply Chain Innovation Teams Initiative was constituted pursuant to our plan of action to address supply change congestion issues. They were charged with identifying systemic changes to supply 

chains as opposed to serving as an arbitrating forum. Accordingly, and appropriately, it was Commissioners and Commission staff who were engaged in what essentially amounted to supply chain diplomacy on the container weight matter. 

The Commission launched its Supply Chain Innovation Teams initiative on 

May 3 here in Washington, D.C. with participation by experienced, successful industry leaders from 35 major companies representing nine key supply chain industries. 

Divided into three teams, and led by Commissioner Rebecca Dye, our private sector participants were challenged to identify and implement process innovations and 

improvements that would lead to greater national supply chain reliability and effectiveness. The focus is on cooperative commercial solutions. 

The teams quickly identified supply chain ‘‘visibility’’ as the most effective ways 

to improve reliability since many supply chain obstacles result from poor information transmission, inaccurate information, or information unavailable at the right 

time. 

To increase supply chain visibility and stimulate more effective cooperation, all 

three teams chose to pursue the development of a national supply chain information 

portal that could be adapted for use by any port in the country. 

They are now in the process of refining the precise information that must be 

available to each supply chain actor for overall maximum supply chain alignment 

and coordination. Ensuring the availability of that essential information is the most 

critical component of a national port information system. 

Although the Supply Chain Teams Initiative is unlikely to provide a ‘‘quick fix’’ 

for the challenges we face, I am pleased to report that the project is on track and 

making great progress. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. RON JOHNSON TO

HON. MARIO CORDERO

Question 1. Chairman Cordero: I am concerned that this SOLAS amendment will 

disrupt the flow of freight through U.S. ports. If that happens, U.S. exporters will 

be put at a competitive disadvantage. Therefore, I have serious concerns with this 

IMO amendment. 

This feels like a situation where the past actions of a few bad foreign actors have 

led to a regulatory situation where all U.S. shippers are now being mandated, burdened really, to change how they move their products from the truck, or the rail, 

onto the ship. How do you see it playing out? 

Question 2. We are only weeks away from these new weight verification regulations being put into effect, but there is still no fully-operational system that American shippers can utilize to transmit their container weight information to the carrier or terminal operators: 

Am I right in thinking that after this goes into effect on July 1, shippers can have 

their containers literally left off a ship, if they can’t meet the VGM requirements? 

Question 3. You’ve mentioned that the FMC has supply chain innovation teams: 

Are you ready to take this task on? 

What is FMC’s role in all of this? 

Are you ready to investigate when problems undoubtedly arise? 

Question 4. I admit I’m not all that familiar with the inner-workings of the IMO: 

What American interests are part of the IMO? 

Does the FMC, as the agency that administers U.S. maritime law, have the authority to investigate concerns that come from Congress? 

Question 5. We have to do everything we can to make sure the IMO amendment 

doesn’t hurt shippers, or disrupt the food chain. 

What are you doing for shippers to ensure there aren’t unnecessary costs? 

Answer. Many of your inquiries addressed amendments to the International Convention for the Safety of Life at Sea (SOLAS) Treaty that established a requirement 

for shippers to provide the Verified Gross Mass (VGM) of a container before it can 

be loaded aboard a vessel. I am pleased to report that the July 1, 2016 SOLAS VGM 

implementation date passed with no resulting complications and no substantive or 

notable disruptions to the export supply chain of the United States. 

56 

The container weight declaration requirement was established in November 2014 

at the International Maritime Organization (IMO), which is a United Nations ‘‘specialized agency’’ headquartered in London. The IMO is responsible for a number of 

conventions, including the International Convention for the Safety of Life at Sea. 

The United States has been a Member State of the IMO since 1950 and is represented there by the United States Coast Guard. The Federal Maritime Commission does not attend meetings at the International Maritime Organization and we 

were not made aware of this proposal as it was being considered in London. 

Key to avoiding potential disruption as the result of the new SOLAS VGM requirement were extensive and frank discussions between all interested parties subject to the new regime. These exchanges, which the FMC was often responsible for 

arranging if not leading, ultimately created a multitude of options for SOLAS VGM 

compliance that provided shippers with the flexibility they sought. I have written 

to Chairman Thune on this specific issue and am attaching a copy of my correspondence for your review and information. 

While the Federal Maritime Commission was significantly involved in the work 

required to achieve consensus on SOLAS VGM matters, our Supply Chain Innovation Teams Initiative was not part of that effort. The teams were constituted to 

identify systemic changes to supply chains as opposed to serving as an arbitrating 

forum. Accordingly, and appropriately, it was Commissioners and Commission staff 

who were engaged in what essentially amounted to supply chain diplomacy on this 

matter. 

The Commission launched its Supply Chain Innovation Teams initiative on 

May 3 here in Washington, D.C. with participation by experienced, successful industry leaders from 35 major companies representing 9 key supply chain industries. 

Divided into three teams, and led by Commissioner Rebecca Dye, our private sector participants were challenged to identify and implement process innovations and 

improvements that would lead to greater national supply chain reliability and effectiveness. The focus is on cooperative commercial solutions. 

The teams quickly identified supply chain ‘‘visibility’’ as the most effective ways 

to improve reliability since many supply chain obstacles result from poor information transmission, inaccurate information, or information unavailable at the right 

time. 

To increase supply chain visibility and stimulate more effective cooperation, all 

three teams chose to pursue the development of a national supply chain information 

portal that could be adapted for use by any port in the country. 

They are now in the process of refining the precise information that must be 

available to each supply chain actor for overall maximum supply chain alignment 

and coordination. Ensuring the availability of that essential information is the most 

critical component of a national port information system. 

Although the Supply Chain Teams Initiative is unlikely to provide a ‘‘quick fix’’ 

for the challenges we face, I am pleased to report that the project is on track and 

making great progress. 

Your questions very commendably focus on how to best represent the priorities 

and interests of the American shipping public. That is a priority I share, especially 

as the core of the Commission’s mission is to guarantee a competitive marketplace 

for international ocean carriage services. I am keenly interested in knowing what 

issues and trends concern American shippers and am always eager to engage ocean 

transportation consumers to benefit from their insights on the functioning of the 

international, intermodal supply chain. As such, I would welcome the opportunity 

for my staff to work with your staff to identify who key export shippers and shipper 

organizations are in Wisconsin and to explore ways in which the Commission can 

engage them on a regular basis. I am confident that such a dialog would be mutually beneficial. 

While the Federal Maritime Commission places a high priority on engaging its 

constituencies and maintaining communications across all parties involved in the 

international transportation of cargoes, the agency has a fairly limited writ in terms 

of administering United States maritime laws. The Commission is narrowly charged 

with enforcing the Shipping Act, while other agencies enforce different statues applicable to the maritime industry. In all candor, the Federal Maritime Commission 

is a small agency with limited resources. It is our goal and our responsibility to be 

responsive to the parties we regulate and to the United States Congress, but we 

simply do not have the capacity to take on any new tasking to examine and analyze 

an issue without pausing on-going work. Our daily work involves analyzing and 

monitoring the shipping markets and industries to guard against unfair business 

practices. We have a critical need to hire a small number of additional, specialized 

experts. By increasing our team of economists and analysts, by probably no more 

than eight people in total, we would be much more capable of responding to new 

57 

issues or inquiries while simultaneously continuing to guarantee competition in 

shipping, which is our core mission. 

RESPONSE TO WRITTEN QUESTION SUBMITTED BY HON. RICHARD BLUMENTHAL TO

HON. MARIO CORDERO

Question. Enhancing security at our Nation’s ports: In February 2016, the President released his proposed budget for Fiscal Year 2017. The proposed budget raises 

a number of concerns for me—and I’m sure it does for others who have critical assets in their state that need to be protected from terrorist threats. The proposed 

budget cuts the Department of Homeland Security’s Port Security Grant funding 

program from $100 million to $93 million. 

The port security program is crucial in states like Connecticut. It helps protect 

critical port infrastructure from terrorism, improve port-wide maritime security risk 

management, and maintain maritime security protocols that support port recovery 

and resiliency. The funding strengthens first responder training. 

In 2015, more than 10 communities in Connecticut benefited from this program— 

radio communications systems, surveillance cameras, patrol boats—resources that 

can thwart terrorism and stifle security threats. But the proposed budget cuts this 

funding by about $7 million—and it cuts funding even more dramatically for other 

major security programs, such as slashing the State Homeland Security Program 

from $402 million to about $200 million. 

Are you concerned by the message this sends? Shouldn’t we be strengthening 

these programs—not slashing them? 

Answer. I appreciated receiving your Question for the Record soliciting the views 

of the Federal Maritime Commission on the issue of enhancing seaport security. 

As someone with a background in ports, I understand your desire to ensure Connecticut law enforcement agencies are adequately equipped and trained to protect 

marine-related facilities and the waterways of your state. Given my experience, I 

also have an insight into just how beneficial grant funding can be to port authorities 

and terminal operators in meeting security requirements set forth by the Federal 

Government. Indeed, I have previously written to the Department of Homeland Security to advocate that Marine Terminal Operators be compensated for expenses incurred to satisfy mandates intended to address real or perceived facility 

vulnerabilities. 

The Federal Maritime Commission has a limited role in terms of the contribution 

it makes to domestic security operations, and to the extent we are able to engage 

in these undertakings, our efforts largely consist of sharing information. Given the 

body of parties involved in international, oceanborne commerce that the Commission 

regulates, our agency has access to data that can be helpful to other Federal agencies in executing their respective missions. We are always pleased to be able to provide information we possess that can be of assistance to law enforcement agencies 

in identifying individuals involved in illegal activities. 

To facilitate the sharing of information, the Commission has formal Memorandums of Understanding with Customs and Border Protection and the Census Bureau. We are seeking to expand our Memorandum with Customs and Border Protection to give us access to its targeting system, which would be very helpful to our 

agency in better meeting our own enforcement obligations and actions. Our discussions with that agency are ongoing and we hope at some point we are able to reach 

an agreement that will allow us to use the rich pool of desirable targeting data Customs and Border Protection has at its disposal. 

In addition to our cooperation with Customs and Border Protection, the Federal 

Maritime Commission also works with a variety of Federal, state, and local agencies 

to provide assistance in investigations. Examples of agencies that the Commission 

has cooperated with on a somewhat regular basis include: individual U.S. Attorney’s 

Offices; the Federal Bureau of Investigation; Immigration and Customs Enforcement; the Bureau of Alcohol, Tobacco, and Firearms; the United States Coast 

Guard; Department of Homeland Security Investigations; the Intellectual Property 

Coordination Center; the New York State Police; the New Jersey State Police; and, 

the New York Police Department. 

Our efforts in New York and New Jersey have not been entirely limited to information sharing. Commission personnel within the last year participated in an operation designed to interdict contraband being sent overseas. Our Northeastern Area 

Representative joined Customs and Coast Guard officials in targeting and physically 

inspecting export containers at the Port Authority of New York and New Jersey 

with the goal of interrupting smuggling operations. On a related note, the same 

Area Representative is involved in a regional, joint-agency automobile theft 

58 

taskforce that seeks to disrupt the export of stolen vehicles. There is a vibrant trade 

in the northeast of stolen vehicles being sent overseas and our regional representative assists law enforcement agencies in identifying the freight forwarders and nonvessel-operating common carriers who are accessories to these smuggling operations. 

To the extent cars stolen in Connecticut find their way to the docks of New York 

and New Jersey, the Federal Maritime Commission is contributing to police efforts 

to aid your constituents in recovering stolen automobiles. 

As I mentioned above, the Commission is happy to cooperate with law enforcement. If sharing data with the Connecticut State Police, or another Connecticutbased law enforcement organization, would be beneficial to their investigative efforts, I am happy to volunteer our Bureau of Enforcement and Area Representatives 

as resources. I would welcome your assistance in forwarding my offer to the appropriate officials. 

Ports are dynamic environments and the challenges to safeguarding them are 

multifold. While I empathize with the challenges Connecticut port authorities will 

face in paying for assets that will help add to physical security, I regret the Federal 

Maritime Commission does not have programs or resources that can provide new 

or additional funding streams to meet that goal. That noted, we can make a meaningful contribution in terms of safeguarding the supply chain by working with the 

Connecticut State Police and local Connecticut law enforcement agencies to identify 

those who seek to benefit by exploiting international transportation networks for nefarious ends. 

Again, I appreciate having this opportunity to provide you with the benefit of the 

Commission’s views on this matter. As always, I am happy to be of whatever assistance I can to you, or your staff, in any matter of jurisdiction to the Federal Maritime Commission and of concern to your constituents. 

RESPONSE TO WRITTEN QUESTION SUBMITTED BY HON. BRIAN SCHATZ TO

HON. MARIO CORDERO

Question. Many of our ports remain congested in part due to a lack of shore infrastructure connecting ships to the rest of our transportation network. We have seen 

this congestion especially on the West Coast. And as the Panama Canal Expansion 

Project is completed, we may see similar challenges manifest on the East Coast as 

larger vessels call on ports in the northeast. 

The problem is not that ships have outgrown our ports, it is that we have failed 

to grow the shore infrastructure—including intermodal links such as bridges, rails, 

tunnels, and terminals—that supports our ports to keep pace with the vessels that 

the international maritime industry is using. 

I understand that FMC has overseen projects and programs that have addressed 

transportation infrastructure needs and reduced pollution caused by port-related activities, like in Los Angeles and Long Beach. 

How is the Commission helping improve our shore infrastructure so that the 

United States can engage in international trade at the pace that our international 

partners do? 

Answer. I appreciated receiving your Question for the Record regarding the Federal Maritime Commission (FMC) and its efforts to address port congestion. I am 

happy to provide the following response to your inquiry. 

You are correct that in recent years, congestion at West Coast ports has been a 

recurring problem. Congestion has been caused by a variety of factors, but the lack 

of sufficient landside intermodal connections, particularly outside the gates of marine terminals, has exacerbated the problem if not contributed to the cause of it. 

For the sake of clarity, congestion has manifested itself on the West Coast several 

times over the past decade. In each of these separate instances, there were many 

differing precipitating causes, but the domestic physical network becoming overwhelmed was a common outcome no matter the underlying reason for the congestion. 

As you are no doubt aware, the Federal Maritime Commission does not have a 

lead role on port development matters. That mission is the responsibility of the Department of Transportation and its subordinate modal administrations. That noted, 

the Federal Maritime Commission has a unique contribution to make in terms of 

identifying instances of port congestion; determining possible causes for the congestion; facilitating discussion among parties impacted by congestion; and ultimately 

trying to promote possible ways to address port congestion. 

Our most recent endeavor in this field is the unanimous vote the Commission 

made on February 1, 2016 directing Commissioner Rebecca Dye to establish Supply 

Chain Innovation Teams. These teams are comprised of leading individuals from the 

59 

shipping, port, logistics, international trade, and retail sectors who will work directly with each other with the goal of identifying steps that can be taken to address 

the potential for congestion. The Supply Chain Innovation Teams initiative will be 

formally launched on May 3, 2016 at the Federal Maritime Commission headquarters building in Washington, D.C. The first meeting of the teams will span two 

days. Teams will subsequently be able to meet as frequently as needed or practical. 

Commissioner Dye envisions these teams being essentially entrepreneurial in nature and her desire, which I share, is that the collaborative work that is launched 

in these sessions will lead to industry-driven and industry-implemented steps that 

will lead to mitigating port congestion and helping to forestall situations where the 

system becomes overwhelmed. 

The final product of Commissioner Dye’s teams is all the more potentially significant in that it will not be easy to build our way out of port congestion. It is a difficult, time consuming, and expensive endeavor to move infrastructure projects 

through the planning and approval process; and those are all steps that take place 

prior to when construction ever begins. Notwithstanding the clear need to build new 

capacity to serve international trade, the more immediate and more economical option to relieve congestion is via making existing infrastructure work more efficiently. 

One example of how to make existing networks and infrastructure carry more volumes and work against the return of congestion is to move marine terminals to true 

24-hour operations when it comes to truck gates. When a container ship calls a port, 

cargo is offloaded continually and around the clock until all the ‘‘box moves’’ for that 

vessel are completed. What does not now match the non-stop ‘‘ship-to-shore’’ operation is the ‘‘shore-to-gate’’ operation. Finding a way to create gates at marine terminals that remain open with predictable, dependable and late hours is a necessary 

and inevitable evolution that must take place, particularly in the Nation’s highest 

volume ports. Admittedly, there are related operational issues that would have to 

be resolved, but it is simply wasteful and inefficient to not have as many containers 

as possible heading for the exit of a terminal once they are offloaded from a vessel. 

In summary, I have always said that I view the mission of the Federal Maritime 

Commission as two-fold: (1) furthering efficient ocean cargo movement; and (2) highlighting the paramount role of our Nation’s ports. Ports that function efficiently and 

are able to scale with increases in container volumes are key to meeting the mission 

objectives of the Commission. I am not only continually learning what the issues 

of concern are to our marine terminal operator constituents, but am open to any 

proposals that might help us improve port productivity. 

Again, I appreciated receiving your Question for the Record and would be happy 

to discuss this topic with you in person if doing so would be helpful. As always, 

please let us know how we can be of assistance as you work to represent the interests of Hawaii and its residents. 

RESPONSE TO WRITTEN QUESTION SUBMITTED BY HON. RICHARD BLUMENTHAL TO

REAR ADMIRAL JAMES HELIS

Question. Enhancing security at our Nation’s ports: In February 2016, the President released his proposed budget for Fiscal Year 2017. The proposed budget raises 

a number of concerns for me—and I’m sure it does for others who have critical assets in their state that need to be protected from terrorist threats. The proposed 

budget cuts the Department of Homeland Security’s Port Security Grant funding 

program from $100 million to $93 million. 

The port security program is crucial in states like Connecticut. It helps protect 

critical port infrastructure from terrorism, improve port-wide maritime security risk 

management, and maintain maritime security protocols that support port recovery 

and resiliency. The funding strengthens first responder training. 

In 2015, more than 10 communities in Connecticut benefited from this program— 

radio communications systems, surveillance cameras, patrol boats—resources that 

can thwart terrorism and stifle security threats. But the proposed budget cuts this 

funding by about $7 million—and it cuts funding even more dramatically for other 

major security programs, such as slashing the State Homeland Security Program 

from $402 million to about $200 million. 

Are you concerned by the message this sends? Shouldn’t we be strengthening 

these programs—not slashing them? 

Answer. The USMMA defers to the Department of Homeland Security, which has 

oversight for the Port Security Grant Program, regarding appropriate funding levels 

for the program. 

60 

RESPONSE TO WRITTEN QUESTION SUBMITTED BY HON. BRIAN SCHATZ TO

REAR ADMIRAL JAMES HELIS

Question. The Merchant Marine Academy and the six Maritime Academies are responsible for graduating Merchant Marine officers with the skills to ensure that the 

U.S. maritime industry remains globally competitive. 

How are we adapting our training curricula to support the requirements of a modern maritime industry—so that our Merchant Marine Officers can do everything 

from operate new ships and communications technology to finance facilities? 

Answer. The United State Merchant Marine Academy (USMMA) and the State 

Maritime Academies (SMAs) are accredited institutions of higher education. They 

monitor their academic programs continuously to stay current with developments in 

the industry as well as their U.S. Coast Guard (USCG) approved Merchant Marine 

Credentialing program. Because the Maritime Administration does not determine 

the curricula for the SMAs, it cannot speak to how the state academies are adapting 

their curricula. Thus, the response to this question will focus exclusively on 

USMMA. 

One of the USMMA’s strategic goals is to provide cutting-edge programs that will 

prepare Midshipmen to work at both ends of the technological spectrum, from pencils and paper charts to electronic navigation, and from conventionally-fueled propulsion plants to those using cleaner and greener alternative fuels. To achieve this 

goal, the USMMA takes a three-pronged approach, consistent with its available 

funding resources, to ensure its training curriculum supports the requirements of 

a modern maritime industry. First, the USMMA keeps its faculty members up-todate on the newest technology and latest developments in industry by sending them 

to classes and conferences. Second, the USMMA acquires, as budgets allow, the latest equipment for demonstration purposes in its laboratories and operates and 

maintains realistic simulators to provide Midshipmen with virtual maritime experience. Finally, the USMMA revises and updates its curriculum, to include the addition of courses, when it becomes clear that new policies and technologies will constitute the way of the future in industry. 

The USMMA augments classroom learning with hands-on laboratory experience 

and simulator training. The FY 2017 President’s Budget proposes funding to upgrade the USMMA’s analog engine simulator to a virtual engine simulator that is 

capable of emulating multiple propulsion plant types. On a virtual engine simulator, 

USMMA Midshipmen will be able to troubleshoot engineering plant casualties down 

to the nuts and bolts level. Similarly, USMMA’s Full Mission Bridge is also in need 

of an upgrade of its console analog systems to digital ones in order to permit a more 

accurate translation of electronic chart and radar data. Even though our technicians 

are trying to provide realistic simulation of new and old ships in a variety of sea 

states, weather conditions, and traffic scenarios, the simulator projectors are out of 

date, causing pixilation of the picture, and require replacement along with the projection screens, which have suffered from water intrusion damage due to weather 

related events. Recent simulator updates in the USMMA Marine Transportation Department have enabled Midshipmen to experience, among other things, the newest 

onboard Electronic Chart Display and Information System (ECDIS) and radars 

available and in use in industry. Informal polls of students returning from sea year 

since 2013 have reflected that changes in the course of instruction, coupled with 

simulator use, have translated well to better understanding of bridge navigational 

systems aboard their assigned vessels. 

To further complement our kinesthetic learning environment, the USMMA has leveraged the Training Vessel (T/V) KINGS POINTER’s Dynamic Positioning System 

to teach dynamic positioning, which is being widely used by ships and semi-submersible mobile offshore drilling units, oceanographic research vessels, and cruise 

ships. The USMMA also accepted the donation of a tugboat and acquired a former 

Navy multi-purpose barge in order to complete efforts to initiate an inland/coastal 

training program. This elective course is embedded in a new academic concentration 

entitled ‘‘Coastal and Inland Vessel Management,’’ which is designed to provide an 

afloat and classroom entry level view into the coastal and inland marine industry. 

Classwork includes exposure to subjects such as inland waterway operations, infrastructure and equipment, business practices, the regulatory environment, and short 

sea shipping. 

The USMMA curriculum was revised in 2013 to incorporate the new internationally mandated Standards of Training, Certification and Watchkeeping (STCW) competencies required by the STCW 2010 Manila Amendments. The regulatory changes 

included renewed emphasis on Engine Resource Management and Bridge Resource 

Management, with a change of focus from technical ability to leadership and management, with the goal of building watch teams capable of handling both routine 

61 

and emergency situations at sea. Those Class of 2017 Midshipmen enrolled as Deck 

majors were the first group offered the new Maritime Logistics and Security Program, which modifies the existing Logistics and Intermodal Transportation major. 

The principal objective is to provide Midshipmen with the knowledge and skills required to manage complex maritime and intermodal supply chains and to assist in 

addressing the security challenges facing the marine transportation system. This 

goal is achieved through an integrated program of study and experiential learning, 

building on the USMMA’s traditional maritime core competencies. 

We believe that this technologically sophisticated curriculum is enhanced by the 

Sea Year experience, which puts Midshipmen on commercial vessels for nearly 300 

days during their sophomore and junior years Leadership development is at the 

forefront of the Academy experience, and in the 2020 Academic Year, the USMMA 

plans to add two formal academic leadership courses. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. RICHARD BLUMENTHAL TO

MITCHELL BEHM

Question 1. Enhancing security at our Nation’s ports: In February 2016, the President released his proposed budget for Fiscal Year 2017. The proposed budget raises 

a number of concerns for me—and I’m sure it does for others who have critical assets in their state that need to be protected from terrorist threats. The proposed 

budget cuts the Department of Homeland Security’s Port Security Grant funding 

program from $100 million to $93 million. 

The port security program is crucial in states like Connecticut. It helps protect 

critical port infrastructure from terrorism, improve port-wide maritime security risk 

management, and maintain maritime security protocols that support port recovery 

and resiliency. The funding strengthens first responder training. 

In 2015, more than 10 communities in Connecticut benefited from this program— 

radio communications systems, surveillance cameras, patrol boats—resources that 

can thwart terrorism and stifle security threats. But the proposed budget cuts this 

funding by about $7 million—and it cuts funding even more dramatically for other 

major security programs, such as slashing the State Homeland Security Program 

from $402 million to about $200 million. 

Are you concerned by the message this sends? Shouldn’t we be strengthening 

these programs—not slashing them? 

Answer. The Office of Inspector General (OIG) serves as the Department of Transportation’s (DOT) sole in-house source for objectively examining the Agency’s programs and their integrity. To preserve our independence, OIG refrains from a policy-making role, including decisions related to the President’s budget request, as 

well as collaboration related to policy development between DOT and its operating 

administrations. To that end, DOT and MARAD are better suited to responding to 

your questions given the policy issues outlined therein. 

Question 2. Fighting sexual assault at the U.S. Merchant Marine Academy: Mr. 

Behm, your testimony notes the efforts of the Merchant Marine Academy to address 

campus sexual assault. You note that during the 2011–2012 academic year, an estimated 25 midshipmen were sexually assaulted and 136 midshipmen were sexually 

harassed—but no incidents were officially reported. 

This complete lack of reporting demonstrates the importance of a victim-centered 

sexual assault reporting procedure—an approach that I urge the Academy to adopt. 

Your office urged MARAD and the academy to take action, and your testimony 

notes that the nine recommendations you issued to MARAD and the academy have 

been closed. 

Your testimony says you plan to brief the Committee on this issue later this 

spring, but what can you say now about your confidence in the academy in doing 

what is necessary to effectively end sexual assault on campus? What else can and 

should be done? 

Answer. Leaders in the Department, Maritime Administration, and U.S. Merchant Marine Academy (USMMA), appear to be focused seriously on addressing the 

myriad issues related to sexual assault and sexual harassment at USMMA. Our current work is focused on whether the Academy carried out its promised actions in 

the 2014–2015 action plan for preventing sexual assault and sexual harassment. 

Going forward, sustained and institutionalized attention to implementing each action in the Academy’s plan as well as creating an atmosphere in which midshipmen 

are comfortable reporting instances of sexual assault and sexual harassment should 

be the highest priorities. With continued leadership pointing the Academy’s strong 

corps of midshipmen in the right direction, and focused efforts in carrying out each 

62 

action plan to prevent and respond to sexual harassment and sexual assault, the 

Academy can make further progress in implementing an effective program. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. BRIAN SCHATZ TO

MITCHELL BEHM

Question 1. Harbor maintenance—including dredging and deepening navigation 

channels, anchorages and berthing areas—is essential to maritime safety. But we 

also have to make sure that harbor pilots and ship operators have access to nearreal time nautical charts that reduce the risks of collisions and groundings in our 

harbors. 

NOAA’s PORTS program is one promising area that aims to improve maritime 

safety by integrating real-time environmental observations, forecasts, and other 

geospatial information that mariners need to navigate safely. Researchers, at the 

University of Hawaii’s Center for Island, Maritime, and Extreme Environment Security, are exploring other promising areas, including the use of unmanned systems 

to improve maritime awareness. But creating this information and making sure people can access it are two separate concerns, and we need to make sure there is no 

gap there. 

What are we doing to improve information sharing so that operators are getting 

more access to real-time nautical charts? 

Answer. We have not conducted any work related to operators’ access to nautical 

charts. Therefore, MARAD is better suited to responding to this question. 

Question 2. Many of our ports remain congested in part due to a lack of shore 

infrastructure connecting ships to the rest of our transportation network. We have 

seen this congestion especially on the West Coast. And as the Panama Canal Expansion Project is completed, we may see similar challenges manifest on the East Coast 

as larger vessels call on ports in the northeast. 

The problem is not that ships have outgrown our ports, it is that we have failed 

to grow the shore infrastructure—including intermodal links such as bridges, rails, 

tunnels, and terminals—that supports our ports to keep pace with the vessels that 

the international maritime industry is using. 

What is our investment strategy for ensuring that we are making commensurate 

improvements to our ports and the shore infrastructure that are crucial to the delivery of goods in the United States? 

Answer. The OIG serves as DOT’s sole in-house source for objectively examining 

the Agency’s programs and their integrity. To preserve our independence, OIG refrains from a policy-making role, including decisions related to investment strategies, as well as collaboration related to policy development between DOT and its operating administrations. Given the policy issues outlined in your question, DOT and 

MARAD are better suited to responding to it. 

Æ 

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