Maritime Administration 

Annual Report to Congress 

U.S. Department of Transportation 

Maritime Administration 

Maritime Administration 

 

Annual Report 

to Congress 

 

Fiscal Year 2005 

 

 

 

U. S. Department of Transportation 

Norman Y. Mineta 

Secretary 

 

Maritime Administration 

John Jamian 

Acting Maritime Administrator 

 

Headquarters 

400 7th Street, SW 

Washington, DC 20590 

1 
2 
TABLE OF CONTENTS 

INTRODUCTION page 5 

EXECUTIVE SUMMARY page 7 

NATIONAL SECURITY page 9 

Hurricane Recovery Response page 10 

Ready Reserve Force page 11 

Maritime Security Program & page 12 

 Voluntary Intermodal Sealift Agreement 

Inventory of Intermodal Equipment page 13 

Strategic Ports page 13 

National Defense Reserve Fleet page 13 

Merchant Mariner Availability page 14 

Maritime Training and Education page 15 

Maritime Recruitment/Careers Outreach page 18 

War Risk Insurance page 19 

NATO Planning Board for Ocean Shipping page 20 

Port Security Grants page 20 

COMMERCIAL MOBILITY page 21

Short Sea Shipping Initiative page 22 

Marine Transportation System page 23 

Delaware River Maritime Enterprise Council page 24 

Port of Anchorage page 24 

Maritime Guaranteed Loan Program (Title XI) page 24 

Research and Development page 26 

Deepwater Port Licensing page 28 

Port Facility Conveyance Program page 28 

GLOBAL CONNECTIVITY page 29

 Bilateral and Multilateral Maritime Negotiations page 29 

International Port Security Initiatives page 30 

Cargo Preference page 31 

Fair and Reasonable Guideline Rates page 33 

Financial Approvals page 33 

Operating Costs page 33 

Agile Port page 34 

Operating-Differential Subsidy page 34 

3 
ENVIRONMENTAL STEWARDSHIP page 35 

Ship Disposal Program page 35 

Environment and Marine Technology page 36 

Dredging page 37 

Pilot Emergency Management System Project page 38 

ORGANIZATIONAL EXCELLENCE page 39 

Improved Financial Management page 39 

Budget and Performance Integration Initiative page 40 

Competitive Sourcing page 41 

Expanded Electronic Government page 41 

Strategic Management of Human Capital page 43 

Civil Rights page 43 

Legal Services and Agency Decisions page 44 

Cooperative Work page 47 

Region Offices page 50 

Publications, Reports, and Web sites page 57

 MARAD Financial Statements pages 58-61 

Maritime Day Proclamation, 2005 page 62

MARAD Organizational Chart page 63

 

 

 

 

 

 

4 
 

 

The Maritime Administration and Response to Hurricanes Katrina and Rita 

John Jamian 

Acting Maritime Administrator 

When the time came to respond to a crisis, the Maritime Administration (MARAD) was 

ready. 

Even as Hurricanes Katrina and Rita were beginning to wreak their devastation on the U.S. 

Gulf Coast, all modal agencies at the U.S. Department of Transportation were actively 

involved in exchanging information and addressing immediate needs. 

Secretary Norman Y. Mineta made it clear during his emergency briefings when he stated, “I 

don’t want to hear reports. I want to see action.” 

The Maritime Administration produced the desired action. 

MARAD did not wait to be asked to help in the recovery of vital shipping and port facilities, 

but moved quickly to actively support relief and recovery efforts in the affected regions. 

As soon as the recovery needs for Hurricanes Katrina and Rita were identified, Secretary 

Mineta had MARAD deploy seven ships from its Ready Reserve Force (RRF) to participate 

in the next phase of disaster recovery and reconstruction of infrastructure. The Secretary’s 

unprecedented and historic deployment marks the first time that the RRF has been activated 

to assist in recovery from a domestic disaster. 

Two of the ships, the Cape Kennedy and the Cape Knox, were of immediate assistance. They 

stood firm throughout the storm at the Port of New Orleans, and were at once deployed to 

serve as emergency headquarters for the staff of the port, and to support oil spill recovery 

efforts on the

5
Mississippi coast. The remaining RRF ships were used for cargo transport and discharge, 

helicopter repair, generation of electrical power, and provision of meals and shelter for 

recovery workers. 

Secretary Mineta also ordered the release of three State maritime academy training ships to 

house a total of over 1,000 relief workers, police, port employees, stevedores, petroleum 

industry workers, and others on the front lines of the response. Their skills and abilities 

were critical to vital recovery efforts to rebuild Gulf Coast port infrastructure. 

It is my firm belief that Secretary Mineta’s timely efforts saved many lives in the affected 

regions and provided important leadership in keeping America’s commerce moving. 

MARAD was ready to serve because MARAD’s efficient programs are dedicated to keeping 

America moving. MARAD programs flow from the departmental goals of Homeland and 

National Security, Commercial Mobility, Global Connectivity, Environmental Stewardship, 

and Organizational Excellence. MARAD was ready to meet the challenge of hurricane 

recovery, and as you read the pages of this Annual Report you will understand why—

MARAD’s people believe in excellence and readiness, and they make it happen. 

MARAD is responsible for many important activities that do not make headlines. For 

example, MARAD assists shippers in locating vessels qualified for domestic trade under 

Section 27 of the Merchant Marine Act of 1920. This law, commonly called the Jones Act, 

requires that cargo carried between U.S. ports be moved on vessels that are U.S. built, 

owned, registered, and crewed. MARAD also provides Jones Act vessel availability 

determinations to U.S. Customs and Border Protection. Throughout both hurricanes and 

their aftermaths, MARAD provided vessel availability information for commercial maritime 

needs, as well as providing daily updates on needs and status in the affected ports. 

We do not know what challenges the future may bring. We know that in Fiscal Year 2005, 

MARAD not only met its greatest challenge, but also continued to meet many other 

challenges. We hope that is communicated in this Annual Report. 

 John Jamian 

 Acting Maritime Administrator

6
EXECUTIVE SUMMARY 

This Annual Report of the Maritime Administration (MARAD) fulfills the reporting 

requirements under Section 208 of the Merchant Marine Act of 1936, as amended. It also 

fulfills requirements for reporting to Congress on Cargo Preference activities, plus the 

requirement for reporting on Title XI activities, as mandated in 2003. 

During Fiscal Year 2005, MARAD continued to provide strong support to the 

Administration’s efforts to ensure America’s future as a maritime nation. 

The agency activated the Ready Reserve Force (RRF) ships to support the U.S. Armed 

Forces in overseas movements, and the RRF continued to play a key role in transporting 

support supplies for Operation Iraqi Freedom. 

Domestically, the RRF, other ships from the National Defense Reserve Fleet (NDRF), 

including training ships from the fleet’s school ship program, as well as an additional ship 

from the NDRF, were activated for the first time to respond to a domestic emergency. They 

assisted in the recovery and rebuilding efforts due to the unprecedented destruction caused 

by Hurricanes Katrina and Rita. 

Additionally, the RRF displayed its security capabilities and importance to national security 

by conducting a SafePort demonstration in San Francisco Harbor. The demonstration safely 

accessed a “suspect container” by removing it from a post-Panamax containership at a safe 

anchorage location for homeland security. 

The Maritime Security Program (MSP) was scheduled for expansion at the end of Fiscal 

Year (FY) 2005, and MARAD completed preparations for the transition. As of October 1, 

2005, the program was authorized for 60 ships instead of the 47 of previous years. These 60 

ships serve to maintain a U.S.-flag fleet in oceangoing commerce, both in peace and war. 

MARAD also completed the final phase of the development of a Mariner Tracking System 

capable of importing data from the U.S. Coast Guard merchant mariner database to identify 

qualified mariners. 

MARAD is actively investigating ways our Nation’s maritime transportation system can be 

used to alleviate congested landside transportation systems, thereby promoting greater use of 

the waterways. MARAD acts as the official sponsor of the Short Sea Shipping Cooperative 

Program, supports the I-95 Corridor Coalition’s efforts to study freight alternatives from 

Maine to Florida, and established the Inland Waterways Intermodal Cooperative Program to 

assist the Nation's inland waterway intermodal transport system operators in promoting 

innovations in cargo handling and new technologies. 

In other significant activities during the fiscal year, MARAD continued its efforts to 

strengthen the Marine Transportation System with participation in the Marine 

Transportation System National Advisory Council (MTSNAC). The MTSNAC provided 

important input to the U.S. Commission on Ocean Policy Report, resulting in the creation of 

7
a new cabinet-level Committee on the Marine Transportation System, and held its inaugural 

meeting in July 2005, chaired by U.S. Secretary of Transportation Norman Y. Mineta. 

MARAD promoted the growth and modernization of the U.S. merchant marine and U.S. 

shipyards through the Title XI Program. For the third straight year, the Title XI loan 

guarantee program did not experience any defaults during FY 2005. 

In FY 2005, major changes in coordination of Department of Transportation (DOT) 

research were made with the creation of the Research and Innovative Technology 

Administration under the Norman Y. Mineta Research and Special Programs Improvement 

Act. MARAD has worked with other agencies within DOT to develop arrangements to 

significantly improve coordination of research by the different DOT agencies. A first report 

to Congress, Research Activities of the Department of Transportation: A Report to Congress, was 

developed by the coordinated effort and was published in March 2005. 

During FY 2005, MARAD conducted bilateral negotiations or consultations on maritime 

issues with the following countries: Brazil, China, India, Thailand, and Vietnam. These 

bilateral agreements are intended to achieve full-market access for U.S. carriers in specific 

markets where full access is not assured by major global trade agreements. 

MARAD continues to protect the environment by ensuring that its facilities, ships, and 

programs are in compliance with environmental laws, regulations, executive orders, and 

treaties. 

The agency created a Ship Disposal Comprehensive Management Plan that implements 

disposition of all existing obsolete ships and future transfers in an environmentally friendly 

and timely manner. 

In keeping with project goals for FY 2005, MARAD signed a Memorandum of Agreement 

with the National Oceanic and Atmospheric Administration for the purpose of obtaining 

funds to convert a MARAD-owned barge into a ballast water technology testing platform. 

MARAD became a member of the Aquatic Nuisance Species Task Force in FY 2005. 

The annual report discusses the accomplishments of the Maritime Administration in greater 

detail and highlights many MARAD efforts to support the Nation’s maritime policy and the 

goals of the Administration. 

8
NATIONAL SECURITY 

The Department of Transportation’s Security Strategic Objective is to ensure the security of 

the transportation system for the movement of people and goods, and to support the 

National Security Strategy. The Maritime Administration (MARAD) receives more in 

appropriations for this function than all of the other modes of the Department of 

Transportation combined, as illustrated in Figure 1. 

Security 

FY 2005 Total $449

(Millions)

FTA, $39

FMCSA, $8

FAA, $114

FHWA , 

$23

MARAD, 

$256

FRA, $1

OST, $8

Figure 1: Appropriations for Security in the U.S. Department of Transportation, broken 

down by mode. Source: Performance and Accountability Report, U.S. Department of Transportation. 

MARAD administers three programs providing sealift: the Ready Reserve Force (RRF) of 

government-owned and commercially operated ships, the government-commercial 

partnerships of the Maritime Security Program, and the Voluntary Intermodal Sealift 

Agreement. MARAD is also responsible for the National Defense Reserve Fleet, the State 

maritime academy schoolship programs, the Strategic Commercial Port Readiness Program, 

and education and training for merchant mariners, both at the degree-program level and for 

continuing education. Additionally, MARAD administers war risk insurance for shipping 

and plays a continuing role in the Port Security Grant program. 

9
HURRICANE RECOVERY RESPONSE 

 

Left to Right: MARAD ships Wright, 

Sirius, and Diamond State in the Port of 

New Orleans. 

The unparalleled destruction 

caused by Hurricanes Katrina and 

Rita in the U.S. Gulf Coast called 

for an unprecedented response 

from MARAD and the National 

Defense Reserve Fleet. Training 

ships from the fleet’s school ship 

program, ships from the RRF, and an additional ship from the National Defense Reserve 

Fleet were activated for missions designated by the Federal Emergency Management Agency 

(FEMA). The RRF ships Cape Knox and Cape Kennedy, which are based in New Orleans, 

weathered Hurricane Katrina successfully, and immediately offered a base of operations for 

the Port of New Orleans in the days that followed. 

The RRF ship Diamond State was activated and sent to New Orleans to generate necessary 

electrical power and to unload the first ship to arrive after the hurricane. The following 

training ships provided meals and shelter for rescue and recovery workers, and also for port 

workers in the days after the storm: the State of Maine, from the Maine Maritime Academy in 

Castine, Maine; the Sirius, the newly-arrived school ship for the Texas Maritime Academy, 

Texas A & M at Galveston, Texas; and the Empire State, from the Maritime College of the 

State University of New York. The RRF ship Wright was activated to provide critically 

needed meals and shelter. The RRF ship Equality State was activated for the use of its cranes, 

and the RRF ship Cape Vincent, after bringing cargo into the area, was retained to provide 

meals and shelter for workers at the Port of St. Bernard, in Chalmette, Louisiana. These 

operations were vital in assisting the Ports of New Orleans and St. Bernard to resume 

operations, helping to accelerate the economic recovery. 

The Cape Vincent entered Louisiana after participating in an unusual emergency management 

operation in the recovery of its home port, Beaumont, Texas, from the devastation of 

Hurricane Rita. Along with the Cape Victory, also home ported in Beaumont, the Cape 

Vincent loaded on board more than 225 emergency response vehicles for the Port of 

Beaumont, City of Beaumont, Jefferson County, and the neighboring cities of Nederland, 

Groves, and Port Neches. Weathering the hurricane, the emergency personnel and vehicles 

were ready to roll off the ships and begin rescue and recovery operations. Some emergency 

personnel who could not live in their own homes in the days after the storm stayed on the 

ships, where the captains provided meals and a place to sleep, and had washers and dryers 

installed. These measures made it possible for emergency services in the area to continue to 

operate at full efficiency, despite the enormous devastation. 

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READY RESERVE FORCE 

The RRF is MARAD’s most responsive sealift program using government-owned ships. 

Although the response to the hurricanes in the Gulf Coast marked the first time the RRF 

was activated for a domestic emergency, the RRF remained heavily involved in its 

established mission of supporting the U.S. Armed Forces in overseas movements, and in 

Operation Iraqi Freedom, during FY 2005. Six ships continued operations from FY 

2004, and 18 additional ships were successfully activated to support the mission. Once 

activated, the vessels maintained 99 percent operational reliability, surpassing expected 

performance. 

RRF ships and their crews have provided an unprecedented level of support to the Armed 

Forces since November 2002 for Operations Enduring Freedom and Iraqi Freedom with 

more than 90 ship activations, logging over 12,300 days of service. RRF ships continued to 

support the more routine exercises and prepositioning required by the Department of 

Defense during the same time period, with almost 5,000 days of service. 

RRF ships under operational control of the Military Sealift Command (MSC) logged 5,106 

operating days in FY 2005 supporting military missions and exercises. The overall 

performance, or fully mission-capable rate for RRF ships while under MSC Operational 

Control, was 99.4 percent, surpassing its overall goal of 99 percent. 

Safe Port - The RRF demonstrated additional security capabilities with the SafePort 

demonstration, on June 8, 2005, in San Francisco Harbor. The operational concept of

SafePort is to safely access a “suspect container” and remove it from a post-Panamax 

containership at a safe anchorage location for homeland security. This exercise was 

conducted in-stream at anchor with the RRF ship Keystone State and the containership Horizon 

Consumer, after initial testing with the Matson Lines container vessel Lihue dockside. The 

Keystone State’s cranes were operated by the ship’s crew, and the exercise was deemed highly 

successful in implementing a unified Incident Command System with MARAD, U.S. Coast 

Guard, U.S. Department of Energy, and other Federal and State agencies participating. 

Ship Management Contracts - On July 27, 2005, the three-year procurement effort to 

obtain ship management services for the RRF program was completed. Twenty-one 

contracts were awarded to nine successful offerers for the management, maintenance and 

repair, activation, operation and deactivation of 54 RRF vessels. The total contract award 

value exceeded $2.3 billion over a 10 year performance period; the $2.3 billion figure 

includes options for extension for good performance. Innovation was the keynote of this 

procurement; it was the first performance-based services solicitation issued by MARAD and 

was the first major all-electronic solicitation in MARAD’s history. 

A list of successful offerers and the ships they manage is available at 

http://www.marad.dot.gov/programs/RRF.html

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MARITIME SECURITY PROGRAM AND VOLUNTARY INTERMODAL 

SEALIFT AGREEMENT 

The Maritime Security Program (MSP) and Voluntary Intermodal Sealift Agreement (VISA) 

make commercial ships and intermodal capability available to the U.S. Armed Services, and 

are designed primarily for sustainment sealift, that is, maintaining sealift capacity when the 

initial surge period has passed. VISA is sponsored jointly by MARAD and DOD, and 

includes nearly all the U.S.-flag oceangoing fleet. VISA companies commit specific vessel 

capacity, intermodal equipment, and management services to DOD. The VISA program is 

the means used by DOD to pre-plan the availability of militarily useful commercial vessels 

for DOD in times of emergency. In return for their participation, VISA companies receive 

priority consideration for the award of DOD peacetime cargoes under MARAD’s Cargo 

Preference program. 

MSP is a significant component of VISA; MSP participants are required to enroll 100 

percent of their MSP ships and a comparable mix of intermodal resources and services in the 

VISA program, in return for which they receive payments. These two interlocking programs 

serve to maintain a U.S.-flag fleet in oceangoing commerce, both in peace and war. During 

FY 2005, MARAD maintained the enrollment of 47 ships in the MSP and 121 ships in the 

VISA program. A total of 62 VISA ships were used during FY 2005 to support Operation 

Iraqi Freedom (OIF). Forty-two MSP ships supported OIF operations. An additional six 

VISA ships, including four MSP ships, supported the rebuilding of Iraq. 

MSP was scheduled for expansion at the end of FY 2005. As of October 1, 2005, the 

program was reauthorized and expanded to 60 ships instead of the previous 47. 

Preparations for expansion were made in FY 2005. On October 15, 2004, MARAD 

received MSP applications from 25 companies for 142 ships for the reauthorized MSP. On 

January 12, 2005, MSP Operating Agreements were approved for 12 companies and 60 

ships. Of the 60 ships approved for the MSP, 47 were Participating Fleet vessels covered by 

MSP Operating Agreements on December 31, 2004. These 60 ships will operate in the 

international trade and, subject to the availability of appropriated funds, will receive $2.6 

million per ship per year for FY’s 2006 through 2008, $2.9 million per ship per year for FYs 

2009 through 2011, and $3.1 million per ship per year for FYs 2012 through 2015. A chart 

showing the 60 ships, their types, and their operating companies, is available at 

www.marad.dot.gov/Offices/MSP_Fleet.xls. 

Of the additional 13 ships, 10 were re-flagged to the U.S. flag as a result of selection into the 

program. The MSP fleet will include 35 containerships, five geared containerships, 14 rollon/roll-off vessels, two heavy lift ships, one lighter aboard ship, and three product tankers. 

MARAD published the Final MSP regulations in the Federal Register on September 22, 2005. 

Performance Summary on Sealift Programs: Target was 94 percent of DOD required 

shipping capacity, complete with crews, available within mobilization timelines. 

Actual performance was 95 percent. Target was exceeded. 

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INVENTORY OF INTERMODAL EQUIPMENT 

 

In FY 2005, MARAD began collaborating with MSP participants to determine the types and 

quantities of intermodal equipment available to the government in times of contingency 

needs. Generally, such types of equipment are containers, chassis and cranes. As part of the 

requirements to participate in the MSP, companies must make available their entire 

intermodal network. Annual intermodal equipment updates allow MARAD to determine 

trends in the types and quantity of owned and leased equipment. Military planners, for 

operational preparations, use this information in determining shortfalls of intermodal 

equipment needed for operational purposes. Prior to 2005, MARAD went directly to U.S.-

flag carriers to get intermodal equipment inventories, but recent mergers and conference 

alliance changes have caused intermodal equipment inventory data to become less reliable. 

Through access to MSP participants, MARAD is now able to get accurate inventory data. 

STRATEGIC PORTS 

MARAD administers the Strategic Ports Program, under which 15 U.S. ports designated 

by DOD are available to the military during emergencies. The ports must handle military 

cargo securely, efficiently, and in a way that minimizes disruption of commercial cargo. 

DOD, in conjunction with MARAD, negotiates a Port Planning Order with each strategic 

port, specifying which facilities will be needed to conduct a military deployment. Each port 

is expected to be able to make these facilities available to the military within 48 hours of 

notification. 

Performance Summary: The target for availability of strategic port facilities within 48 

hours was 93 percent; performance was 87 percent. Target not met. 

While the target was not reached, the overall strategic objective was accomplished: military 

cargoes were not delayed. The problem was caused by commercial cargo growth, an external 

factor not controlled by MARAD. MARAD is working with DOD’s Surface Deployment 

and Distribution Command on restructuring plans to accommodate anticipated growth. 

NATIONAL DEFENSE RESERVE FLEET 

MARAD is authorized to maintain the National Defense Reserve Fleet (NDRF), which 

contains vessels that can be activated to support cargo movement requirements during 

national emergencies. The RRF is one component; other NDRF ships may be operated 

infrequently and many are prepared for long-term storage in a preserved condition. The 

NDRF program was started after World War II when the Merchant Ship Sales Act of 1946 

was enacted. As ships used for the war were retired, the program grew to a high point of 

2,277 ships in 1950. Ship sales, donations, and disposal efforts have reduced the inventory 

while other initiatives have added newer ships to the program. 

13
As of September 30, 2005, there were 255 vessels in the NDRF of which 58 were in the 

RRF, 54 were in long-term storage (retention), and 143 were ready for disposal or being 

prepared for disposal (non-retention). An additional 18 vessels, owned by other Federal 

agencies, were also maintained at NDRF facilities on a cost-reimbursable basis. The total 

number of vessels in custody associated with the NDRF program at the end of FY 2005 was 

273. 

There were three NDRF anchorages as of September 30, 2005: 67 ships were in the James 

River Reserve Fleet (JRRF) at Ft. Eustis, Virginia; 46 remain in the Beaumont Reserve Fleet 

(BRF) at Beaumont, Texas; and 83 ships were in the Suisun Bay Reserve Fleet (SBRF) at 

Benicia, California. There were 77 vessels assigned to port facility locations. A current 

inventory of the NDRF may be found at 

http://www.marad.dot.gov/Offices/Ship/Current_Inventory.pdf. 

MARITIME HERITAGE 

MARAD is authorized to provide obsolete parts and equipment from NDRF ships to U.S. 

museums, memorial ship organizations, and other entities to preserve our maritime heritage. 

Transfers made during FY 2005 are shown in the following table. 

Organization Supported of items 

U.S. Navy Museum, Washington Navy Yard, Washington, DC 250

Submarine U re Maritime Museum, Baltimore, MD 5

Battleship U 1050 

Destroyer E 1

Destroyer U 1

Texas Tech University, Vietnam War Archives, TX 2

All items tra tems included bunk as, 

ess equipment and supplies, vintage typewriters, fittings and consumables, vintage radio 

Y 

ft is making sure that enough qualified mariners 

are available to sail the required number of ships. During FY 2005, MARAD continued to 

Number 

 

SS Torsk – Baltimo 0 

SS Massachusetts, Battleship Cove, MA 

scort USS Orleck , Albany, NY 50 

SS Orleck, Orange, TX 50 

50 

nsferred came off obsolete NDRF ships. Types of i canv

m

and electronic equipment, bridge/navigational equipment and manuals, stateroom 

accessories, vintage personal safety equipment, tools, meters and gauges, machinery parts, 

and other miscellaneous equipment/parts. 

MERCHANT MARINER AVAILABILIT

An essential component of assuring sufficient seali

participate in contingency crewing meetings to maximize mariner availability and to facilitate the 

swift and efficient crewing of Government vessels during Operation Iraqi Freedom and future 

conflicts. In FY 2005, no ships were delayed or failed to sail as a result of crewing issues. 

14
Merchant mariner availability is continually monitored. During FY 2005, the estimated number 

of willing and available mariners in the merchant mariner labor pool was approximately 105 

percent of the number required to fully crew the commercial and government fleets. Despite the 

training of additional mariners during the past year, retirements and other losses have resulted in 

no net change to the total number of available mariners. 

The final phase of the development of a Mariner Tracking System was completed during FY 

2005. The result is a system that is capable of importing data from the U.S. Coast Guard 

(USCG) merchant mariner database and performing basic searches to identify qualified mariners. 

The system transitioned to MARAD’s Information Technology system and is also compatible 

with the Mariner Service Compliance System. Development of an Internet interface that will 

allow mariners to update contact information is underway. 

MARITIME TRAINING AND EDUCATION 

MARAD vigorously supports maritime training and education through the U.S. Merchant 

Marine Academy, support of six State maritime academies, and several outreach and 

continuing education programs. 

U.S. Merchant Marine Academy 

Aerial view of the United States Merchant Marine 

Academy, Kings Point, New York. 

MARAD operates the U.S. Merchant Marine 

Academy at Kings Point, New York, to 

educate young men and women for service 

in the U.S. merchant marine, in the U.S. 

Armed Forces, and in the Nation’s 

intermodal transportation system. 

Additional information on the Academy may 

be found at http://www.usmma.edu/

Graduates receive Bachelor of Science degrees and USCG licenses as deck or engineering 

officers, and commissions in the U.S. Naval Reserve or another uniformed service. 

MARAD owns and operates the USMMA’s primary training vessel. 

As a key component of the national security effort, Academy graduates incur an eight-year 

U.S. Naval Reserve commitment, unless they are accepted in another uniformed service. 

The critical maritime skills developed with their military training significantly increase our 

Nation’s defense readiness. 

Academy graduates are required to obtain a merchant marine officer’s license in order to 

graduate from the Academy, and to maintain the license for at least six years. The license 

may be maintained through active sailing, as documented by the U.S. Coast Guard, or by reexamination. The graduates are also committed to a five-year maritime employment service 

obligation. This maritime service obligation may be satisfied in the merchant marine as an 

officer aboard U.S. merchant ships, or in shoreside maritime or intermodal transportation 

15
industry positions if afloat employment is not available and with the permission of the 

Maritime Administrator. Active military duty in the U.S. Armed Forces or service with the 

National Oceanic and Atmospheric Administration also satisfies the obligation. 

The Class of 2005, which graduated on June 20, 2005, comprised 112 third mates and 110 

third assistant engineers. The 29 women graduates in 2005 brought to 524 the total number 

of female graduates since the first coeducational graduating class in 1978. Within six months 

after graduation, nearly 100 percent of the 222 graduates had obtained employment in the 

maritime and transportation industry, afloat and ashore, or were serving on active military 

duty. Additional information on the U.S. Merchant Marine Academy may be found at 

http://www.usmma.edu. 

State Maritime Schools/Schoolship Program 

MARAD provides assistance to six State maritime academies to train merchant marine 

officers pursuant to the Maritime Education and Training Act of 1980. They are: 

• California Maritime Academy, Vallejo, CA; 

• Great Lakes Maritime Academy, Traverse City, MI; 

• Maine Maritime Academy, Castine, ME; 

• Massachusetts Maritime Academy, Buzzards Bay, MA; 

• State University of New York Maritime College, Fort Schuyler, NY; and 

• Texas Maritime Academy, Galveston, TX. 

State maritime academy cadets who participate in the Student Incentive Payment Program 

receive $4,000 annually, for a maximum of four years, with satisfactory performance, to 

offset school costs. 

Participating cadets have these obligations: 

• To complete the academy’s course of instruction; 

• To graduate from a State academy, cadets must pass the U.S. Coast Guard examination 

for a license as an officer in the U.S. merchant marine, and to maintain that license for at 

least six years from the date of graduation; 

• To apply for and accept, if offered, an appointment as a commissioned officer in an 

armed force reserve component, and serve for at least six years from the date of 

graduation; and 

• To maintain employment in the maritime industry for at least three years from the date 

of graduation. 

MARAD provides training vessels to all six State maritime academies for use in at-sea 

training and as seagoing laboratories. The vessels provide cadets with practical knowledge of 

vessel operations, and are part of MARAD’s assistance to the academies to train highly 

qualified licensed officers. Three of these training vessels were activated in FY 2005 to assist 

in the recovery from Hurricanes Katrina and Rita: the State of Maine assigned to Maine 

Maritime Academy, the Empire State assigned to State University of New York Maritime 

College, and the Sirius assigned to the Texas Maritime Academy. 

16
Maritime Transportation Security Training 

The Maritime Transportation Security Act of 2002 required the development of maritime 

security course standards and curricula to allow for the training and certification of maritime 

security professionals. MARAD is the lead agency in this work, collaborating with industry 

and other government agencies. These courses have been adopted as the global benchmark 

by the International Maritime Organization, forming the basis for uniform worldwide 

standards, which will, in turn, make security work more effective. During FY 2005, the 

United States Merchant Marine Academy developed six model courses based upon course 

standards and curricula developed in FY 2004. A seventh course, designed especially for 

military and law enforcement personnel, is being finalized. The model courses are used to 

assess and certify U.S. training providers under a voluntary certification/course approval 

program that MARAD implemented in February, 2005. During FY 2005, approximately 75 

percent of the courses submitted for certification were approved. 

In order to broaden security training participation nationwide, MARAD negotiated a 

Cooperative Agreement with the six State Maritime Academies to include jointly-developed 

maritime security training as part of their port and maritime industry curricula. This will 

also serve to standardize security training and make it more efficient, both nationwide and 

worldwide. 

Three trainees putting out a fire at the Great Lakes Fire 

Training Center.

In FY 2005, the Center trained 418 students from a wide array of organizations: 

• 224 trainees completed the 40-hour combined basic/advanced marine firefighting 

training. This included crews of eight U.S. Coast Guard cutters as well as merchant 

mariners from many companies; 

• 21 trainees completed the 16-hour basic firefighting training to comply with Standards of 

Training, Certification & Watchkeeping (STCW); 

• 33 members of the U.S. Coast Guard completed a 16-hour basic class; and 

• 140 trainees participated in live firefighting training sessions tailored to the needs of the 

attending groups: 

 Ohio Army National Guard Engineers; 

 Two State of Ohio Firefighter II Certification Classes; 

 City of Toledo, Ohio, Firefighters 

Great Lakes Fire Training Center 

MARAD provides training in fighting ship, barge, and 

dockside fires to mariners and other personnel, 

offering basic and advanced firefighting classes 

through its Great Lakes Fire Training Center located in 

Swanton, Ohio. 

17
 U.S. Naval Reserve Fleet Hospital-Great Lakes DET 28 (pre-deployment basic fire 

training); 

 Sunoco, Inc.’s fire brigade; and 

 United States Steel Corporation’s fire brigade. 

MARITIME RECRUITMENT/CAREERS OUTREACH 

MARAD’s Mariner Recruitment and Retention Working Group increases the awareness of 

the maritime industry for the general public about career opportunities in the maritime 

industry and the important role these careers play in ensuring our Nation has adequately 

trained and reliable crews for our sealift support in times of national emergency. In FY 

2005, MARAD expanded its promotional efforts by awarding five maritime educational 

grants. The grants provide student scholarships for school-to-work programs, maritime and 

port curriculum development, and experiential learning in maritime academy campus 

environments. 

MARAD’s support enabled 30 students to participate in the California Maritime Academy’s 

Summer Bridge Program. The program’s mission is to enhance academic skills and to 

encourage the college enrollment of racial minorities and economically disadvantaged high 

school students. 

Philadelphia City Sail (PCS) is another grant awardee that sponsors an annual School Ship 

and Summer Sail Program. Through PCS’s program, students participate in adventures, 

explorations, and studies that center on maritime knowledge and skill development, which 

are applied to training exercises aboard the schooner North Wind. Twenty-five to 30 students 

will be able to enroll in this year’s program as a direct result of the grant. 

The Maritime Careers/Outreach Program enabled 20 teachers to participate in the St. Cloud 

State University Transportation Education Academy. The Academy’s goal is to provide 

information to teachers concerning all facets of the transportation system and they, in turn, 

share the information with their students upon their return to the classroom. 

The Hands-On Training Scholarship is a newly created scholarship enabled by a MARAD 

grant. The Coordinated Maritime Services’ grant will be the scholarship source for the 

Maritime Industry Career Hands-On Training Scholarship. The goal is to have four students 

between the ages of 18 and 24 participate in classroom instruction and lectures, hands-on 

and lab-work training, and field trip tours of local shipyards and port facilities, among other 

interactive experiences. 

FY 2005 marked the first opportunity for MARAD to promote maritime careers through a 

newspaper supplement in observance of Excellence in Science, Technology, Engineering, 

and Mathematics Education (ESTEME) Week. The observance encourages young people to 

pursue their curiosity and understanding of math, science, technology, and engineering, all of 

which are required for select maritime disciplines. Through the Washington Times newspaper, 

more than 120,000 copies of the “Newspaper in Education” supplement were published and 

distributed to thousands of students across the United States. 

In FY 2005, MARAD also agreed to co-sponsor the American Sail Training Association 

Conference, which strives to encourage character building through sail training. The work 

18
of this association serves to promote the awareness of our Nation’s maritime heritage and an 

appreciation of the skills used in seafaring. 

WAR RISK INSURANCE 

MARAD administers the emergency War Risk Insurance Program. This standby program 

protects commercial vessel operators and seafarers against losses resulting from war or 

warlike actions, and is designed to continue the flow of U.S. foreign commerce during 

periods when commercial insurance cannot be obtained on reasonable terms and conditions. 

As a result of the terrorist activities of September 11, 2001, MARAD activated the Title XII 

War Risk Insurance Program at the request of DOD. MARAD wrote war risk insurance on 

six vessels in conjunction with Operation Enduring Freedom (OEF), and 117 in conjunction 

with Operation Iraqi Freedom (OIF). MARAD has issued more than 330 policies covering 

more than $10.4 billion in values and limits since the post-September 11 activation. As of 

September 30, 2005, there had been no losses. 

MARAD’s FY 2005 war risk insurance objective was to continue management of the War 

Risk Insurance Program and carry over as many vessels under war risk insurance policies as 

DOD required to sustain Iraq and Afghanistan rebuilding efforts. MARAD worked closely 

with Military Sealift Command during the year and accomplished this objective. 

In addition to the active War Risk Insurance Program, MARAD also administers a standby 

binder program. As of September 30, 2005, there were 324 binders on vessels and barges 

providing eligibility for hull and machinery protection and indemnity and second seamen’s 

war risk insurance. No binders related to MARAD’s standby war risk cargo insurance and 

builder risk insurance programs have been issued. All binders are effective for 30 days 

following an automatic termination of commercial insurance. 

TYPE OF INSURANCE TOTAL 

AMOUNT 

PERCENTAGE 

AMERICAN 

PERCENTAGE 

 FOREIGN

Marine Hull and Machinery 

Protection and Indemnity *

$5,178,230,440 39% 61% 

War Risk Hull and Machinery $4,797,768,175 29% 71%

War Risk Protection and 

Indemnity 

$4,797,768,175 29% 71% 

*Protection and indemnity insurance coverage is obtained principally from assessable mutual associations 

managed in the British market and is unlimited, thereby making it impossible to arrive at the total amount 

or percentage figures for American and foreign participation. 

19
NATO PLANNING BOARD FOR OCEAN SHIPPING 

MARAD is the focal point for U.S. participation in the work of the North Atlantic 

Treaty Organization (NATO) Planning Board for Ocean Shipping (PBOS). MARAD 

chaired the 57th annual plenary meetings of PBOS on September 27 to 28, 2005, to 

facilitate the military's access to the commercial shipping market for sealift resources to 

support NATO military operations. Several procedures for providing civil sealift 

support to NATO military forces were revamped. PBOS also participated in NATO 

civil/military exercises and coordinated regularly with FEMA on NATO civil emergency 

planning activities. 

PORT SECURITY GRANTS 

MARAD has played a key role in the Port Security Grants Program since the program’s 

inception in FY 2002. In October 2004, Congress appropriated $150 million for the fifth 

round of grants in FY 2005. On September 13, 2005, port security grants were awarded to 

79 entities. The largest grants were awarded to the ports of Houston, Long Beach, and Los 

Angeles for $35 million, $12 million, and $11 million, respectively. 

Although primary responsibility for the program now resides with the Department of 

Homeland Security, MARAD’s regional offices continue to work with the U.S. Coast Guard 

to conduct the field-level evaluations of grant applications, and MARAD participates at the 

national review level. 

20
COMMERCIAL MOBILITY

Tug Elena Hick pushing the Barbara Vaught barge. 

The Maritime Administration’s (MARAD) strategic objective of commercial mobility seeks 

to promote and facilitate a United States maritime transportation system that improves the 

safe and efficient movement of goods and people. This also supports Department of 

Transportation’s (DOT’s) strategic objective of mobility to advance accessible, efficient, 

intermodal transportation for the movement of people and goods. 

MARAD’s commercial mobility activities primarily address maintaining and enhancing the 

U.S. merchant fleet and U.S. shipbuilding, and congestion reduction through the use of 

waterborne transportation to ameliorate the impact of freight growth that is anticipated in 

the Nation’s intermodal transportation system. Currently, key components of the Nation’s 

inland waterway, seaport, and landside infrastructure are operating at or near capacity due to 

global economic changes and trade growth. These factors are generating additional demand 

for more port and marine terminal capacity, more efficient landside access, and better 

intermodal connections to the surface transportation system. In 2004, total U.S. 

international waterborne traffic (inbound/outbound) accounted for 1.505 billion short tons. 

According to statistics compiled by the U.S. Army Corps of Engineers, total domestic 

21
waterborne commerce totaled 1.045 billion tons. DOT now projects that total freight 

volumes will increase by more than 50 percent in the next 20 years. 

SHORT SEA SHIPPING INITIATIVE 

Two tugs moving a Trailer Bridge barge. 

MARAD is actively investigating and 

promoting the potential commercial viability 

of short sea shipping. Short sea shipping is 

defined as waterborne transportation that 

does not cross an ocean. Short sea 

transportation along our Nation’s coasts and 

inland waterways, is recognized as a reliable, 

economical, and environmentally friendly 

transportation mode that may help alleviate growing road and rail congestion. 

FY 2005 initiative activities included sponsoring a comprehensive maritime industry 

stakeholders conference, the Short Sea Shipping Cooperative Program (SCOOP), and 

participation in a study with the I-95 Corridor Coalition regarding the potential benefits of 

short sea shipping. MARAD’s work with SCOOP and the I-95 Corridor Coalition is in the 

Cooperative Organizations chapter of this annual report. 

Short Sea Shipping Conference 

The Third Annual Marine Transportation System (MTS) Short Sea Shipping Conference was 

held in New York City on October 13-15, 2004. This highly successful and well attended 

conference brought together more than 250 marine stakeholders, including transportation 

planners and executives to focus on future strategies for the development and expansion of 

North American short sea shipping services. Conference attendees clearly discovered that 

there is an “information gap” among transportation providers and shippers regarding the 

benefits of short sea shipping, and this conference began the process of closing this gap. 

Support for the Gulf of Mexico States Accord (GOMSA) for Advancing Short Sea 

Shipping 

The Gulf of Mexico Trade Corridor Transportation Study (Study) represents the first time 

that the Gulf of Mexico will be examined as an integrated economic region across 

international boundaries with consideration of the balance among economic development, 

trade, transportation, energy, and other infrastructure issues. The Study is funded by a grant 

administered by MARAD. The final report, to be issued in phases over the next three years, 

will offer a “master plan” for infrastructure and economic development, port and critical 

infrastructure security, and environmental stewardship on all sides of the Gulf of Mexico. 

The initial findings of the Study clearly indicate what has been dramatically underscored by 

Hurricane Katrina’s destruction, the breadth of the Gulf of Mexico’s vital marine 

infrastructure, and how that infrastructure supports the Nation’s economy. The Study will 

22
focus on how to best apply the lessons of Hurricane Katrina to recovery efforts and how 

those efforts will impact future development of the Gulf of Mexico’s transportation 

infrastructure--especially regarding the marine transportation system. 

MARINE TRANSPORTATION SYSTEM 

The Marine Transportation System (MTS) includes all of America's coastal and inland 

waterways, more than 300 public and private ports, a network of navigable channels, 

pipelines, vessels, marine terminals, intermodal connections, and associated management and 

safety information systems. The MTS includes 25,000 miles of commercially navigable 

waterways, which are a critically important mode of transportation and which provide the 

linkage between ocean-borne transportation, highway, rail, and pipeline transportation. The 

waterborne cargo moving on the MTS generates more than 13 million jobs and this 

contributes more than $750 billion to the Nation’s Gross Domestic Product. 

Marine Transportation System National Advisory Council (MTSNAC) 

MARAD continued its efforts to strengthen the MTS with participation in the Marine 

Transportation System National Advisory Council (MTSNAC). The MTSNAC advises the 

U.S. Secretary of Transportation on MTS issues. Its membership is comprised of leaders 

from 30 commercial transportation firms, trade associations, State and local public entities, 

marine terminal operators, labor groups, academics, and environmental groups. During FY 

2005, MTSNAC completed and submitted to the Secretary its recommendations for 

investment in our Nation’s MTS as part of a coherent, coordinated, and comprehensive 

intermodal transportation policy. 

Through the work of its Education Subcommittee, MTSNAC developed a comprehensive 

report outlining the origins of the supply chain system and its contribution to the Nation’s 

overall transportation system. This report is to be transformed into a multi-media tool to 

educate public policy makers in both the executive and legislative branches of the U.S. 

Government on the complex MTS. 

MTSNAC also provided important input to the U.S. Commission on Ocean Policy Report 

(Ocean Policy Report) to the President of the United States. Recognizing the fragmented 

approach to the MTS, MTSNAC recommended that DOT be designated as the lead agency 

for planning and oversight of the MTS, and that the former Interagency Committee for the 

Marine Transportation System (ICMTS) be elevated to the cabinet level and be chaired by 

the Department. The U.S. Secretary of Transportation convened the first meeting of the 

successor organization, the Committee on the Marine Transportation System (CMTS), on 

July 11, 2005. In September 2005, the CMTS directed its coordinating board to create a 

strategic plan. 

At the beginning of FY 2005, a key study for MARAD and MTS efforts, The Marine 

Transportation System and the Federal Role: Measuring Performance, Targeting Improvement, was 

published. This study, published by the Transportation Research Board of the National 

Academies of Science, recommends that DOT produce a conditions and performance report 

on the MTS. MARAD has begun preliminary work for this study. 

23
Committee on the Marine Transportation System (CMTS) 

At the beginning of FY 2005, a key study for MARAD and MTS efforts, The Marine 

Transportation System and the Federal Role: Measuring Performance, Targeting Improvement, was 

published. This study, published by the Transportation Research Board of the National 

Academies of Science, recommends that DOT produce a conditions and performance report 

on the MTS. MARAD has begun preliminary work for this study. Based upon direction 

from that meeting the CMTS in July 2005, the CMTS Executive Secretariat recommended 

the creation of three Integrated Action Teams. These teams will formulate a national 

strategy for the MTS, perform an assessment of the MTS, and develop a plan for data 

collection and information management. 

DELAWARE RIVER MARITIME ENTERPRISE COUNCIL 

In partnership with the Delaware River Maritime Enterprise Council, MARAD was involved 

with a project tracking military deployment movement from an inland port, to the Port of 

Philadelphia, to an overseas location in support of Operation Iraqi Freedom. Information 

about the movement was provided to local security and police organizations through the 

Regional Agile Port Information Distribution System, which included military, government, 

and commercial organizations. The project allowed participants to view the real-time 

location of the equipment as it proceeded to the port. 

PORT OF ANCHORAGE 

MARAD is the lead federal agency in a public-private partnership with the Port of 

Anchorage for redevelopment of the port complex. As the major gateway for the State of 

Alaska, the Port of Anchorage has seen steady growth in the past decade, and it is expected 

to continue growth into the future. MARAD is assisting the port with implementing major 

infrastructure improvements to accommodate larger ships with deeper drafts, newer, 

advanced container cranes, and an on-site railroad trailer and container yard to improve 

efficiency and reduce truck traffic, pollution, and energy use in the area. The road and rail 

connections in the project were completed in FY 2005. Other developments include new 

barge berths and transshipment areas to improve the flow of goods to rural Alaska, 

improved cruise ship facilities, and enhanced deployment areas for the Stryker Brigade, the 

501st Airborne Division, and other strategic port needs. 

This year, MARAD completed an environmental assessment for the Marine Terminal 

Redevelopment Project. Initial design engineering phases have been completed. Final design is 

expected to be completed by the spring of 2006, with the first phase of pier terminal construction

beginning in the 2006 construction season. The total project is scheduled for completion by 

2011. 

MARITIME GUARANTEED LOAN (TITLE XI) PROGRAM 

The purpose of the Title XI Program is to promote the growth and modernization of the 

U.S. merchant marine and U.S. shipyards. Title XI authorizes the U.S. Government to 

24
guarantee the repayment of debt obligations, including unpaid interest, obtained in the 

private sector by 

(1) U.S. or foreign shipowners for the purpose of constructing or reconstructing 

U.S.-flag vessels or eligible export vessels in U.S. shipyards, and 

(2) U.S. shipyards for the purpose of financing advanced or modern shipbuilding 

technology. 

The Title XI Program permits loan guarantees in an amount not to exceed 87.5 percent of 

the actual cost of projects eligible for financing. Some eligible projects are limited to 75 

percent of actual cost. The maximum guarantee period is 25 years. 

Title XI Activities, FY 2005 

During FY 2005, MARAD issued one commitment for a Title XI loan guarantee. The 

commitment was issued to Hawaii Superferry, Inc., in the amount of $139,731,000 for two 

105-meter high-speed Roll-On/Roll-Off (RO/RO) ferry vessels to be built at Austal USA, 

LLC, in Mobile, Alabama. The two vessels will provide passenger, cargo, and vehicle ferry 

service among the four major Hawaiian Islands. The first vessel will be delivered in late 

2006, with the second delivered in early 2009. Upon delivery of the second vessel, Hawaii 

Superferry will provide at least daily service to each of the four Hawaiian Islands, which are 

currently served only by airlines and barge. 

Port Imperial Ferry Corp. (PIF) owned and operated 35 ferries in the New York City 

waterways transporting commuters daily between New Jersey and Manhattan. PIF financed 

19 of these ferries through Title XI guarantees approved during fiscal years 1996 through 

2002. Because its financial position had weakened, PIF arranged in March 2005 to sell 16 of 

the ferries to Billybey Ferry Company, LLC (Billybey). Billybey assumed the Title XI 

obligations related to the 16 vessels and is operating the ferries on their previous routes. 

MARAD’s approval of the sale prevented a potential near-term default on the Title XI debt, 

maintained MARAD’s collateral position, and provided for the continuation of a vital 

transportation mode in the New York City area. 

MARAD closed on two commitments to guarantee debt obligations for three vessels: two 

double-hull heavy-oil tank barges and one ultra-deepwater semi-submersible multi-service 

vessel. In addition, MARAD closed on two conversions of financings from floating rate to 

fixed-rate obligations. 

MARAD had ongoing Title XI litigation during the fiscal year. MARAD litigated issues in 

three bankruptcies related to five Title XI companies. MARAD also litigated seven cases to 

defend MARAD’s sales of property, resolve conflicting lien priorities, and recover debts 

owed MARAD by defaulting Title XI obligors and related parties. MARAD foreclosed 

upon one vessel mortgage. 

At the end of FY 2005, the Title XI loan guarantee portfolio was $3.26 billion. Of this 

amount, $3.12 billion was for loan guarantees outstanding and $140 million was for the 

Hawaii Superferry commitment, which was not funded as of that date. The portfolio 

25
consists of 84 projects, which include drill rigs, tankers, barges, containerships, RO/RO 

vessels, fast ferries, passenger vessels, supply vessels, tugs, and shipyard modernization 

projects. At the end of FY 2005, there were 

10 pending applications for over $600 million in Title XI loan guarantees. Additional 

information on MARAD’s Title XI Program can be found at 

http://www.marad.dot.gov/TitleXI. 

All companies in MARAD’s Title XI portfolio undergo periodic financial reviews, and 

financial reports are prepared for companies with a potential for default. These reports are 

presented to the DOT Credit Council, which is comprised of senior MARAD management 

staff and other DOT officials. A total of $132 million in guaranteed projects, or four 

percent of the Title XI portfolio, has been identified as experiencing financial difficulties 

and, as such, these projects are receiving the highest level of monitoring. For the third 

straight year, the Title XI loan guarantee program did not experience any defaults during FY 

2005. 

During FY 2005, MARAD continued to implement the recommendations contained in 

program audits conducted by DOT’s Inspector General and the Government Accountability 

Office. Included among these activities was funding for the development of a computerbased credit program portfolio management system, which will also be used by other DOT 

credit programs. 

Title XI Insurance Compliance 

MARAD monitors the contractual requirements for marine insurance coverage placed in the 

commercial market on all existing Title XI vessels on which MARAD holds the mortgage, 

together with Government-owned vessels on charter to private operators. 

In addition to ensuring that all insurance meets the requirements of the Title XI contracts 

with respect to amounts and conditions, MARAD monitors market compliance. One aspect 

of this compliance is to assure that the American marine insurance market has the 

opportunity to compete for placement of marine insurance on these vessels. MARAD 

approved marine hull and machinery insurance during FY 2005, with 39 percent being 

placed in the American market and 61 percent being placed in the foreign insurance markets. 

This compares with 36 percent American market placement in FY 2004. 

DOT Management Challenge - Title XI 

This program was the subject of the Government Accountability Office report, Management 

Attention Needed to Strengthen Oversight of the Title XI Loan Guarantees. The Inspector General’s 

(IG) follow-up audit report dated September 28, 2004, states “MARAD has developed 

policies and procedures that address each of the five recommendations from our March 

2003 audit report in a satisfactory manner.” The IG subsequently indicated that the three 

additional recommendations contained in its September 28, 2004, follow-up audit have also 

been resolved. 

RESEARCH AND DEVELOPMENT 

26
Research, Technology, Demonstration, and Deployment (RTDD) Initiative 

 

Recognizing the need for more attention to maritime research and innovation, MARAD’s 

Research, Technology, Demonstration, and Deployment (RTDD) Initiative encourages 

maritime research and innovation, identifying and encouraging collaboration and partnership 

opportunities to address the maritime industry’s extremely low level of research investment. 

This deficiency was highlighted in a report to Congress. The report is available at 

http://marad.dot.gov/R&D/images/R&D%20Report%206-02.pdf 

 

In FY 2005, major changes in coordination of DOT research were made with the creation of 

the Research and Innovative Technology Administration under the Norman Y. Mineta 

Research and Special Programs Improvement Act. MARAD and other agencies within 

DOT have worked together to develop arrangements to significantly improve coordination 

of research by the different DOT agencies. 

A first report to Congress, Research Activities of the Department of Transportation: A Report to 

Congress, was developed by the coordinated effort and was published in March 2005. It is 

available at http://www.rita.dot.gov/publications/research_activities_of_the_department of 

_transportation_a_report_to_congress/ Efforts were made to engage stakeholders in 

connection with the creation of the new coordinated DOT activity through a broad request 

to all available sources. A number of maritime-related and intermodal research ideas and 

priorities were collected and documented at that time. 

The RTDD effort continues to work with DOT’s Technology Innovation Committees to 

describe and provide points of contact for each of the individual MARAD programs. 

DOT’s Guide to Transportation Technology and Innovation brochure and companion web site, 

http://t2.dot.gov contain brief descriptions and points of contact for MARAD’s RTDDrelated program efforts along with other DOT research programs. 

The National Maritime Enhancement Institute (NMEI) Program advanced in FY 2005, with 

the designation of an eighth NMEI. A University of Wisconsin-Superior and University of 

Minnesota-Duluth Consortium (GLMRI) applied and was found qualified and was 

designated an NMEI on June 1, 2005. The GLMRI Consortium began moving forward 

with a DOT-funded research effort on short sea shipping route evaluation focused on 

development in the Great Lakes. 

MARAD, in conjunction with the Asian Pacific Economic Cooperation (APEC), is involved 

in a new consortium that will update an earlier maritime transportation constraints study and 

result in a web-based Atlas of Global Commerce: Transportation Corridors, Infrastructure, and 

Constraints. A proposal is under development and is being pursued by APEC transportation 

subgroup committees. 

MARAD also continues to support the Society of Naval Architects and Marine Engineers 

(SNAME) Panel H-10 (Ship Controllability) efforts to improve ship operational safety. With 

MARAD chairing the panel, a coordinated paper was published in the widely distributed 

SNAME journal Marine Technology entitled, “Critical Needs for Ship Maneuverability: Lessons 

from the Houston Ship Channel Full-Scale Maneuvering Trials.” This paper won the Vice 

27
Admiral E. L. Cochrane Award given for the best paper published in Marine Technology. A 

related paper was also presented at the September Oceans 2005 Marine Technology 

Conference to encourage efforts in the area that improves safety and efficiency of 

commerce. 

Research and Development Studies Funded 

The Office of Intermodal Development awarded a contract to the Texas Transportation 

Institute in August 2005, to identify the environmental impacts of modal transportation. 

This is a follow-up to a 1994 MARAD study, Environmental Advantages of Inland Barge 

Transportation. The contractor will perform a study that will assess, analyze, and compare 

certain environmental impacts associated with each transportation mode, i.e., rail, truck, and 

barge, while quantifying the costs of these impacts associated with each mode. 

MARAD awarded two grants to Inland Rivers Ports and Terminals (IRPT) to assist in 

building relationships and increasing awareness of the inland river system as part of the 

Nation’s intermodal transportation system. 

MARAD also works closely with industry in several research cooperatives. The activities 

and accomplishments of these cooperatives are outlined in the section on Cooperative 

Work. 

DEEPWATER PORT LICENSING 

The Deepwater Port Act of 1974 provides for the authorization and regulation of the 

location, ownership, construction, and operations of deepwater ports that connect to the 

United States from waters beyond territorial limits of the US. In 2002, the Act was amended 

to include the importation, transportation, and production of liquefied natural gas (LNG). 

The authority to issue, transfer, amend, or reinstate a license for the construction of a 

deepwater port has been delegated by the Secretary of Transportation to MARAD. 

During FY 2005, one license was issued to Gulf Landing, LLC. Gulf Landing is located in 

the Gulf of Mexico, offshore of Louisiana. Additionally, three applications for licenses were 

filed during the year: Beacon Port (located offshore of Galveston, Texas), Neptune LNG, 

LLC, and Northeast Gateway (both located off the coast of Boston, Massachusetts). These 

projects are expected to add significant volumes of natural gas to the Nation’s gas 

distribution market, improving the efficiency and flexibility of the existing pipeline 

infrastructure and providing supply diversification. 

PORT FACILITY CONVEYANCE PROGRAM 

Under the National Defense Authorization of 1994, the Secretary of Transportation is 

authorized to convey surplus property to non-public entities for the development and 

operation of a port facility. This authority was delegated by the Secretary of Transportation 

to MARAD, which developed the Port Facility Conveyance Program. The program is 

designed to assist port communities by creating jobs and stimulating the economy in areas 

identified by the Department of Commerce as economically depressed. In FY 2005, 

MARAD received three port conveyance applications, which are currently under review. 

28
GLOBAL CONNECTIVITY

U.S.-flag ships at the Port of Los Angeles, California 

The Maritime Administration (MARAD), global connectivity objective mirrors the global 

connectivity strategic objective of Department of Transportation (DOT): to facilitate a more 

efficient global and domestic transportation system that enables economic growth and 

development. 

BILATERAL AND MULTILATERAL MARITIME NEGOTIATIONS

The U.S. maritime industry contends with trade barriers imposed by foreign governments 

that restrict market access. These restrictions impinge on U.S. maritime companies’ access 

to foreign transportation markets, add to costs, limit revenues, and impede efficient 

operation of the U.S. maritime industry in international trade. Removal of barriers improves 

the operating efficiency of U.S. shipping companies and improves U.S. carriers’ participation 

in the movement of U.S. international trade. MARAD acts as the U.S. Government 

facilitator to resolve problems that the U.S. maritime industry encounters in foreign markets. 

During FY 2005, MARAD conducted bilateral negotiations or consultations on maritime 

issues with the following countries: Brazil, China, India, Thailand, and Vietnam. These 

bilateral agreements are intended to achieve full-market access for U.S. carriers in specific 

markets where full access is not assured by major global trade agreements. MARAD works 

either directly, or in conjunction with the State Department and other government agencies, 

to negotiate these agreements, understandings, and arrangements. 

29
As a result of MARAD’s efforts, on September 30, 2005, U.S. Secretary of Transportation 

Norman Y. Mineta and Brazilian Ambassador Roberto Abdenur signed a new maritime 

agreement between the United States and Brazil, which provides for equal access to both 

markets, including government cargoes. The agreement must be ratified by the Brazilian 

Congress. 

MARAD was fully involved in the Doha round of trade negotiations launched under the 

umbrella of the World Trade Organization with the intent of reaching a general agreement 

on trade-in services. 

INTERNATIONAL PORT SECURITY INITIATIVES 

Signing of the U.S./Brazilian Bilateral Agreement. 

MARAD heads the U.S. delegation to the 

Organization of American States (OAS) InterAmerican Committee on Ports and serves as chair of 

the Committee’s Technical Advisory Group, which 

coordinates multilateral approaches to improving 

port security in the Western Hemisphere. This 

group has organized and conducted annual courses 

managed by MARAD, which provide port security training for commercial port authority 

police and security personnel. More than 800 people have been trained in these courses 

since 1998. 

Inter-American Port Security Training Program 

In FY 2005, MARAD collaborated with the OAS Committee Against Terrorism to design, 

develop, organize, and execute five-day seminars in port security operations, policy, and 

strategy. Seminars on South America were hosted by Argentina, Ecuador, and Brazil; the 

seminar on Central America was hosted by El Salvador. More than 200 people from 19 

OAS member countries completed this training. 

Diplomatic Engagement with OAS 

MARAD chairs the OAS Technical Advisory Group on Port Security, and provides subject 

matter expertise to the U.S. delegation to the Inter-American Drug Abuse Control 

Commission Experts Working Group on Maritime Narcotrafficking. MARAD also works 

on the process of implementation of relevant OAS policy instruments, such as the Strategic 

Framework for Inter-American Port Security Cooperation. This is a U.S. agenda item for 

the 2005 Summit of the Americas resulting from a joint effort by the Office of the Secretary 

of Transportation and MARAD. 

30
U.S. Southern Command Joint Interagency Coordination Group 

This group meets monthly to develop and maintain port security cognizance regarding the 

foreign governments and international commercial maritime industry in the Latin 

America/Caribbean Region. 

CARGO PREFERENCE 

In addition to assuring access to global markets for American manufacturers, farmers, and 

consumers, the U.S. commercial merchant marine plays an important role as the military’s 

auxiliary navy, thus achieving the dual national policy set forth in the Merchant Marine Act 

of 1936 and reiterated in DOT’s strategic goals of Global Connectivity and National 

Security. The U.S.-flag vessels must meet more stringent labor, construction, maintenance, 

environmental, and safety standards than many of their foreign-flag competitors and thus 

incur higher operating costs. 

Economic incentives encourage retention of the vessels under U.S. registry. Although the 

U.S. Government provides limited direct assistance through the Maritime Security Program, 

the primary form of assistance to 118 U.S.-flag vessels is provided through the cargo 

preference laws. In FY 2005, these vessels created more than 5,500 merchant mariner jobs 

and a larger number of maritime and transportation-related jobs shore-side. The cargo 

preference laws generated over 10 million metric tons of cargo and $1.3 billion of ocean 

freight revenue in FY 2005. Varying by corporate size, these cargoes represent from 7 

percent to more than 50 percent of a carrier’s annual revenues and are vital to retaining their 

vessels under the U.S.-flag. 

The cargo preference laws are (1) The Military Cargo Preference Act of 1904 requiring 100 

percent of military cargoes be carried on U.S.-flag vessels; (2) Public Resolution 17 of 1934 

requiring 100 percent of Export-Import Bank-financed cargoes be transported on U.S.-flag 

vessels; (3) The Cargo Preference Act of 1954 requiring 50 percent of U.S. Governmentfinanced cargoes be carried on U.S.-flag vessels; and (4) the Food Security Act of 1985 

requiring 75 percent of humanitarian food aid be transported on U.S.-flag vessels. 

Information on the cargo preference laws and regulations may be viewed at 

http://www.marad.dot.gov/offices/cargo. Detailed statistics on the shipping activities of 

federal agencies, independent entities, and government corporations may be viewed at 

http://www.marad.dot.gov/marad_statistics/index.html. 

MARAD is tasked with ensuring that government agencies and their contractors comply 

with the cargo preference laws. With the exception of humanitarian food aid shipment by 

U.S. Agency for International Development (USAID) all government agencies and their 

contractors achieved compliance in FY 2005. MARAD is also charged with promoting the 

use of U.S.-flag vessels, monitoring international shipping agreements, and identifying 

discriminatory trade practices. Major programs include humanitarian food aid shipments by 

the U.S. Department of Agriculture (USDA); congressionally funded Iraqi reconstruction; 

Department of State embassy construction; Federal Transit Administration rail and bus 

equipment; Export-Import Bank-financed exports; foreign military sales; and DOD military 

31
cargoes. There is also a multitude of smaller programs. The web site 

http://www.marad.dot.gov/usflag makes it easier for shippers and government agencies to 

find U.S.-flag commercial ships to transport their cargo to or from foreign nations. 

MARAD reimburses USDA and USAID for the ocean freight cost differential (OFD) 

between using U.S.-flag vessels and foreign-flag vessels. In FY 2005, MARAD reimbursed 

USDA/USAID $78,090,709.35 for “incremental” OFD invoices they submitted covering 

FY’s 2003, 2004, and 2005. MARAD also reimbursed USDA/USAID $163,825,007.79 for 

“excess 20 percent” invoices they submitted covering FY’s 2002 and 2003. 

Section 17 of the Maritime Security Act of 1996 (MSA 17) requires USDA's Commodity 

Credit Corporation to allocate up to 25 percent of bagged, processed, or fortified 

commodities under the Title II food aid program to Great Lakes ports on the basis of lowest 

landed cost without reference to the flag of the vessel. In FY 2005, approximately 337,340 

metric tons of food aid cargo transited via the Great Lakes ports, more than ten-fold the 

amount prior to the law. Transportation organizations invested additional assets in the 

Great Lakes ports to meet the requirements of MSA 17. This increased tonnage 

strengthened the U.S. maritime transportation system including the infrastructure, industry, 

and labor in the Great Lakes. 

Public Law 105-383 established that substandard vessels and vessels operated by owners or 

charterers of substandard vessels are prohibited from the carriage of Government-impelled 

cargo for up to one year after such determination has been published electronically. The 

Secretary of Transportation has delegated enforcement authority to MARAD. A discussion 

of this issue is included on MARAD’s cargo preference web site, including links to the U.S. 

Coast Guard’s listing of vessels, owners, and operators prohibited from carrying 

Government-impelled cargo. The easy availability of this information has resulted in 

increased industry awareness and therefore avoidance of substandard vessels. 

The cargo preference team’s proactive approach on the Iraq Reconstruction program has 

enabled a close working relationship with the Iraq Project and Contracting Office and with 

the contracting officers working under the Baghdad-based U.S. Government Joint 

Contracting Command – Iraq. This working relationship ensures that the contractors are 

aware of their U.S. –flag transportation requirements are: (1) that the contractors that are 

awarded contracts are aware of their U.S.-flag transportation requirements; and (2) and 

assists MARAD in enforcing penalties for non-compliance. U.S.-flag carriers are getting 

maximum opportunity for cargo liftings. MARAD also worked with U.S.-flag carriers to 

establish U.S.-vessel shuttle service between Dubai and Iraqi ports. 

The cargo preference laws have been a definite part of U.S. national defense and economic 

security policy for more than a hundred years. These laws and programs directly improve 

and strengthen the U.S. maritime transportation system, including infrastructure, industry 

and labor, to meet the economic and security needs of the nation. For example, of the $1.3 

billion in revenue earned by U.S.-flag vessel owners that was generated by the cargo 

preference laws, a large part was utilized for domestic rail, truckers, stevedores, 

longshoremen, freight forwarders, shipping agents, tug boat operators, pilots, port 

authorities, and various other maritime-related organizations. Furthermore, revenue for 

U.S.-flag vessel owners generated by cargo preference laws creates local revitalization in 

32
many ports throughout the United States. This revenue helps sustain the conditions that 

meet the economic and security needs of the Nation. 

FAIR AND REASONABLE GUIDELINE RATES 

MARAD’S regulations require that any agriculture cargoes carried on U.S.-flag commercial 

vessels for U.S. government shipping agencies be fixed at fair and reasonable rates. 

MARAD calculates the fair and reasonable or “guideline rate,” and offerings made by vessel 

operators above the calculated rate are adjusted downward to the guideline rate. 

In FY 2005, 2.3 million metric tons were fixed on U.S.-flag vessels subject to guideline rate 

calculation. During this time the offered freight rate exceeded the fair and reasonable rate 29 

times. This resulted in the lowering of freight rate offerings by $4.3 million. Eighty-nine 

percent of all rates calculated were completed within one business day. 

FINANCIAL APPROVALS 

To promote and facilitate a U.S. maritime transportation system that improves the efficient 

movement of goods, the financial approvals staff provides financial and cost analyses and 

advice, internally and externally, to organizations on matters in which MARAD has an 

interest. This broad function includes financial reviews of applicants for MARAD programs. 

In FY 2005 reviews were conducted in the following cases: 

• Deepwater Ports: MARAD is the delegated authority for the issuance of licenses to 

own, construct, and operate deepwater ports in the United States, as outlined in the 

Commercial Mobility section of this report. The Financial Approvals group 

determines whether applicants meet all financial commitments associated with the 

project. In FY 2005, the group conducted the required completeness reviews for 

three applications. 

• Maritime Security Program and Marine Hull Insurance Program: Analysis conducted 

in FY 2005 found that the financial positions of all participating companies were 

stable and acceptable for continued participation in both programs. 

• Ship Donation Program: Detailed financial analysis of two independent non-profit 

agencies applying for participation in this program found both to be financially 

sound and acceptable. A successful Ship Donation Program contributes to the 

future release of National Defense Reserve Fleet vessels from MARAD, and to the 

preservation of the Nation’s maritime heritage while allowing significant cost savings 

to the Federal Government. 

OPERATING COSTS 

The Operating Costs Group is responsible for conducting extensive analysis of both U.S. - 

flag and foreign-flag vessel crewing practices and the associated costs. MARAD produces 

detailed information regarding the crew nationalities and their associated vessel operating 

costs according to the size of the various cargo-carrying vessel types serving the U.S. markets 

and determines cost comparisons between U.S.-flag and foreign-flag vessels. This 

33
information is published for internal and external entities, and is also made available to 

Members of Congress and other government entities upon request. 

During FY 2005, members of the Operating Cost team entered more than 8,700 records into 

the office’s Crew Manifest Database. A revision of the publication Foreign-Flag Crewing 

Practices: A Review of Crewing Practices in U.S .-Foreign Ocean Cargo Shipping, based on 

data covering the period July 2003 through June 2004, is currently being prepared and is 

expected to be published during FY 2006. 

AGILE PORT

MARAD is working with the Center for the Commercial Deployment of Transportation 

Technologies, commercial companies, and military organizations to demonstrate the 

simultaneous discharging and loading of a large container ship in the Pacific Northwest. The 

demonstration will be used to verify the projected efficiency of this method of operation 

that promises productivity increases of up to 100 percent over existing methods. MARAD 

is the catalyst for this project by bringing together those parties needed to complete this 

effort. 

MARAD also signed a Memorandum of Understanding with the City of Dallas and the Port 

of Houston to cooperate in the development of an agile port system for the State of Texas. 

Emphasis will be on developing an agile port corridor and facility in Dallas to expedite the 

efficient flow of cargo through the State. This initiative is part of a larger initiative called the 

Dallas NAFTA Trade Corridor. 

OPERATING-DIFFERENTIAL SUBSIDY 

MARAD is required by Congress to report on disbursements under the OperatingDifferential Subsidy Program (ODS), which has been phased out except for small residual 

payments. All voyages under this program ceased with the termination of the final ODS 

contract on September 18, 2001. Final payments to operators were concluded during FY 

2003. 

The only outstanding ODS liabilities are related to subsidy claims under the ODS contracts 

for payments made for asbestos- related diseases incurred by seafarers when serving on 

subsidized vessels. The obligation of the government regarding such claims is not time 

restricted and, when presented for payment, claims will be reviewed and satisfied as 

appropriate. During FY 2005, one payment of $517, 242 was made. 

34
ENVIRONMENTAL 

STEWARDSHIP 

The Maritime Administration (MARAD) strategic objective on the environment is to 

promote maritime and intermodal transportation solutions that enhance environmental 

stewardship, support the U.S. Department of Transportation strategic objective of 

environmental stewardship, and to promote transportation solutions that enhance 

communities and protect the natural and built environment. 

MARAD continues to protect the environment by ensuring that its facilities, ships, and 

programs are in compliance with environmental laws, regulations, executive orders, and 

treaties. This is accomplished by conducting internal environmental compliance audits of 

facilities and ships. 

SHIP DISPOSAL 

FY 2005 was the third year MARAD received direct appropriations for the Ship Disposal 

Program, receiving $19.5 million to dispose of obsolete vessels. MARAD used four 

performance measures and goals in FY 2005 for the Ship Disposal Program. 

(1) The number of contract awards of obsolete vessels from the National Defense 

Reserve Fleet (NDRF) site for subsequent disposal. The target was 15; the actual 

number of contracts awarded for obsolete, non-retention ships was 20, exceeding the 

FY 2005 goal by five. 

35
(2) The number of obsolete vessels removed from the NDRF site for subsequent 

disposal. The goal was 15 vessels; the actual number of vessels removed in FY 2005 

was 18, exceeding the FY 2005 goal by three. 

(3) The number of obsolete vessels disposed of from the NDRF sites. The goal was 15 

ships; the actual number of vessels disposed in FY 2005 was 13. Adjustments have 

been made in the consistency of the funding stream, and those should improve 

performance. 

(4) The cost-per-ton for obsolete vessel disposal actions from the (NDRF). The target 

cost was $170 per ton; the actual cost-per-ton figure for FY 2005 was $109, 

exceeding the goal. 

Taken together, the FY 2005 results from these measures indicate a reduced likelihood of 

environmental damage from the obsolete ship inventory now and into the near future. 

In April 2005, the Government Accountability Office (GAO) issued a report, Maritime 

Administration: Improved Program Management Needed to Address Timely Disposal of Obsolete Ships. 

The report stated that MARAD needed a more integrated ship disposal program. MARAD 

has adopted the GAO’s recommendations, and is moving forward in continuing to dispose 

of obsolete ships. The report had three recommendations for improving MARAD’s ship 

disposal program and MARAD has acted on all three. 

First, MARAD created a Ship Disposal Comprehensive Management Plan that implements 

disposition of all existing obsolete ships and future transfers in a timely manner, maximizing 

the use of all available disposal methods. Second, MARAD continues to communicate its 

disposal plan and impediments to Congress. And third, since January 2005, MARAD has 

been using the Federal Acquisition Regulation Test Program for Certain Commercial Items. 

MARAD implemented the use of Standing Quotations in FY 2005 as the primary 

procurement method for soliciting ship disposal services. The use of Standing Quotations is 

a simplified acquisition procedure for the competitive procurement of commercial services. 

 

ENVIRONMENT AND MARINE TECHNOLOGY 

As maritime trade expands and increases the strain on the land transportation system, so will 

the potential effects that maritime transportation has on the environment. There are two 

particularly critical environmental impacts associated with the Marine Transportation 

System: one is the combination of air emissions and energy consumption, and the other is 

the introduction of aquatic nuisance species, particularly in ballast water. 

Aquatic Nuisance Species /Ballast Water Initiative 

Aquatic Nuisance Species are plants, animals, bacteria, and pathogens, which have been 

introduced into new ecosystems, and have a harmful impact on those ecosystems. Such 

species have been introduced into the United States by a number of means, including the 

discharging of shipboard ballast water. The best-known example is that of the zebra mussel, 

36
which has disturbed native species, clogged intake pipes for water supplies, and may pose 

serious human health risks. 

In keeping with project goals for FY 2005, MARAD signed a Memorandum of Agreement 

with the National Oceanic and Atmospheric Administration for the purpose of obtaining 

funds to convert a MARAD-owned barge into a ballast water technology testing platform. 

The platform is to be used for testing of ballast water technologies in the Great Lakes 

region. Conversion of the barge is scheduled for early FY 2006. 

Ballast water testing platform 

being converted for testing 

technologies. 

With the goal of increasing 

outreach in the area of 

developing ballast water 

standards and testing 

requirements, MARAD became a member of the Aquatic Nuisance Species Task Force in 

FY 2005. The Task Force is an intergovernmental organization dedicated to preventing and 

controlling aquatic nuisance species, and implementing the Non-indigenous Aquatic 

Nuisance Prevention and Control Act of 1990 and the National Invasive Species Act of 

1996. MARAD launched a web site to provide information on recent developments and 

activities regarding ballast water, http://www.marad.dot.gov/ballast/. 

Air Emissions and Clean Energy 

To address air pollutant emissions from marine vessels, MARAD has continued partnerships 

with governmental agencies, academia, and industry that have focused on fostering research 

and designing environmental policy mechanisms to encourage voluntary application of 

emissions reduction technology. 

MARAD initiated a cooperative agreement with the University of Delaware. The first 

project funded under the agreement focuses on an emissions incentive study for marine 

vessels and port activities. In addition, MARAD is the technical representative on several 

projects funded by the DOT Center for Climate Change and Environmental Forecasting. 

Those projects include a “well-to-hull” marine vessel emissions model, a short sea shipping 

emissions analysis “Emissions Analysis of Freight Transport Comparing Land-Side and 

Water-Side Short Sea Routes: Development and Demonstration of a Decision Making 

Tool,” a large diesel engine retrofit study, and a vessel emissions inventory analysis. 

DREDGING 

MARAD continues to be a member of the National Dredging Team (NDT) and Regional 

Dredging Team which address issues such as beneficial uses of dredged material, sediment 

management, emerging dredging issues, and strengthening regional teams. Federal agencies 

participating on the NDT are the U.S. Army Corps of Engineers, U. S. Environmental 

37
Protection Agency, National Oceanic and Atmospheric Administration, U.S. Fish and 

Wildlife Service, U.S. Coast Guard, U.S. Navy, and MARAD. 

PILOT EMERGENCY MANAGEMENT SYSTEM PROJECT 

In 2005, MARAD accomplished its goal of starting the implementation of an Emergency 

Management System (EMS) program by developing a pilot EMS program at the James River 

Reserve Fleet (JRRF). In using the JRRF as a pilot, MARAD is planning to expand the full 

EMS program to the four other facilities, i.e., the Beaumont Reserve Fleet, the Suisun Bay 

Reserve Fleet, the Fire Training Center, and the U.S. Merchant Marine Academy, in 2006 

and 2007. The final EMS will provide MARAD with a new system that documents 

environmental risks as they relate to environmental compliance, significant environmental 

aspects, and legal obligations. 

38
ORGANIZATIONAL 

EXCELLENCE 

The President’s Management Agenda focuses on five areas of management across the 

government where improvement is needed and the most progress can be made. The 

Maritime Administration (MARAD) has also focused on those areas: budget and 

performance integration, improved financial management, competitive sourcing, strategic 

management of human capital, and expanded electronic government, or e-government. 

IMPROVED FINANCIAL MANAGEMENT 

Clean Audit Opinion 

In FY 2005, MARAD’s audited financial statement received an unqualified (clean) opinion 

from DOT’s Office of the Inspector General. This reflects that MARAD has been running 

successful accounting operations, systems, and reporting. 

Monitoring Improper Payment 

MARAD’s payment practices and history were audited by a third party, hired by the Office 

of the Secretary. This audit showed MARAD had zero improper payments during the FY 

2005 review. This is one of the factors for successful financial management. 

39
Managing Travel Expenses 

DOT has selected GovTrip to provide a web-based, end-to-end travel management service. 

MARAD completed testing, setup and modification of GovTrip to meet MARAD’s financial 

management requirements. GovTrip is fully integrated with DOT’s financial system, and its 

use allows the electronic flow of travel data supporting obligation and disbursal of travelrelated funds, including electronic transfer of reimbursements to the traveler’s bank account. 

Payroll Migration 

In FY 2005, MARAD’s payroll system was successfully migrated to the Department of 

Interior’s Federal Personnel and Payroll System, an effort which contributes toward 

streamlining and consolidating payroll services across the Federal Government. 

Managerial Cost Accounting 

MARAD identified efficiency financial measures and coding schemes for all strategic goals 

and elements scored by MARAD’s Performance and Accountability Report. This also 

supports the objective of integrating budget and performance. 

Consolidation of Accounting Operations 

MARAD supported DOT’s initiative for migrating accounting data processing function to 

the Enterprise Service Center in Oklahoma City. This resulted in a 50 percent reduction in 

personnel numbers, as measured by Full-Time Equivalents (FTE’s) during FY 2005, and the 

remaining MARAD personnel focuses on Financial Reconciliation, Reporting and Analysis 

rather than processing. 

BUDGET AND PERFORMANCE INTEGRATION INITIATIVE 

MARAD produced an integrated performance budget request during FY 2005 for the FY 

2007 budget year. This budget request was organized in a manner that continued to improve 

the readability and usefulness of the document. The FY 2007 budget request provided 

increased program level detail, both numeric and written text, to improve the reader’s 

understanding of the funding request. As part of its budget development process, MARAD 

conducted two new Program Assessment Rating Tool (PART) reviews. The United States 

Merchant Marine Academy received a PART assessment rating of 83 percent and the State 

Maritime Schools program received a rating of 89 percent. 

The FY 2006 budget request totaled 68 pages of resource exhibits and narrative justification. 

This represented a reduction of 72 pages, or 51.4 percent, from the number of pages in the 

MARAD FY 2005 President's budget request. In addition to being far more concise, the FY 

2006 budget also displays improved organization with a more finite resource breakout for 

easier comparison between the resource requests and the text justifying those requests. 

As part of its budget development process, MARAD also continued to conduct annual and 

quarterly performance reviews of MARAD's programs, and conducted its first program 

40
assessment using the PART. The Maritime Security Program received a PART assessment 

rating of 91 percent. This is one of the higher PART ratings received by a Federal program 

as a result of a PART review. 

COMPETITIVE SOURCING 

In June 2005, MARAD completed a commercial activity competition using streamlined 

competitive procedures in OMB Circular A-76. This study on approximately 30 

administrative positions at Headquarters covering administrative and clerical; human 

resources; supply; and public affairs support services resulted in MARAD employees 

retaining their jobs. The staff in these support functions established a most efficient 

organization (MEO) that reorganized and redefined positions to develop its Government 

cost estimate. An independent team separately developed an industry cost estimate based on 

research of the commercial market. The MEO prevailed in the competition when its 

estimate beat the private-sector estimate. 

Implementation began in December 2005, with the issuance of the Letter of Obligation and 

start of the 60-day phase-in period. The MEO anticipates full operational performance of 

required services and was scheduled for February 2006. 

This competition followed a larger competition completed in FY 2003, when MARAD 

employees retained the task of maintaining vessels moored at the three National Defense 

Reserve Fleet Anchorage Facilities. 

EXPANDED ELECTRONIC GOVERNMENT 

In FY 2005, the concentration for the Office of the Chief Information Officer (OCIO) has been 

threefold: 1) governance, 2) operating environment, and 3) content environment. This structured

focus allows the OCIO and information technology (IT) to play a key role in transforming the 

mission and business of the Maritime Administration. 

Governance 

• Capital Planning and Investment Control 

(CPIC): MARAD created the position of IT 

Business Manager whose focus is on IT 

strategic planning and portfolio management. 

MARAD published its first comprehensive 

policy on CPIC, as well as an administrative 

manual containing procedures and processes for 

implementing the CPIC process. MARAD 

gathered data on agency-wide IT investments 

and conducted its first Investment Review 

Board (IRB) meeting to ensure IT investments 

are aligned with the MARAD mission, are 

managed throughout their life cycle, and deliver 

the expected results. MARAD will mature its 

41
portfolio over time to realize the greatest return on investment for IT expenditures. 

• Project Management: MARAD published its first comprehensive IT policy on System 

Development Life Cycle (SDLC) management, as well as an administrative manual 

containing procedures and processes for implementing the SDLC process. 

Systematically, the OCIO will assess each IT investment against this policy and bring 

each investment into compliance. 

• Enterprise Architecture (EA): The OCIO produced MARAD’s first modernization 

blueprint and selected a tool set for capturing and analyzing its EA. MARAD is building 

from several previous efforts to ensure the EA is actionable and strongly tied to the 

agency’s mission. 

• Strategic Planning: MARAD published its first Electronic Government 

(E-Government) Plan outlining objectives for the OCIO during the next five years. 

Each year during this period, MARAD will publish an annual performance plan detailing 

the strategies and goals the OCIO will pursue to meet the objectives. 

• Workforce Planning: MARAD chaired the DOT effort to develop and implement 

guidelines for validating major IT project managers. Internally, MARAD is raising the 

bar by establishing standards for its IT workers and ensuring all are trained in core areas 

of governance. 

• Information Assurance: MARAD began integrating information assurance processes 

and mechanisms into the SDLC and will continue this work into FY 2006. 

Operating Environment 

Common Operating Environment (COE): MARAD began migration to the DOT COE 

that will provide common infrastructure services to Headquarters personnel. This year 

MARAD migrated electronic mail services and active directory services to DOT. 

MARAD also relocated many servers and other hardware to the DOT computer fa

These efforts will help MARAD transition to the new DOT Headquarters building with 

less effort and disruption of services. 

MARAD Residual Operating Environ

•

cility. 

• ment (MOE): MARAD continued to provide 

l 

vily 

rce 

ontent Environment 

OMB E-Government Initiatives/DOT Enterprise Initiatives: MARAD supported OMB 

• mon Content Environment (CCE): MARAD continued its deployment 

of foundation tools, such as Documentum, to establish a robust content management 

infrastructure services to the region offices and continued its connectivity to the U.S. 

Merchant Marine Academy. In the Western Region, MARAD cooperated with Federa

Highway Administration (FHWA) to relocate offices and build an integrated 

infrastructure for co-located organizations. The MARAD OCIO became hea

involved in deploying networks and business applications to the Ready Reserve Fo

(RRF) ships and will continue to support these deployments through operations and 

support. 

C

•

initiatives, as they are being implemented in DOT, including consolidation of personnel 

and payroll systems, on-line training management systems, electronic rulemaking, 

international trade data, business gateway, integrated acquisition, and financial 

management. 

MARAD Com

42
service capability, allowing users to maintain content in a structured manner. This 

eliminates the need for daily IT support in areas such as web publication. The CCE als

provides standard toolsets for developing business applications, helping to ensure th

our applications fit our enterprise architecture and integrate well together. 

MARAD Specific Business Applications: MARAD continued to automate 

administrative workflows and business systems using tools in the CCE as w

o 

at 

•

ell as other erastructure 

STR APITAL

o years ago so that senior 

anagement could analyze and evaluate human capital needs and accomplishments as 

th 

s 

itiatives of the Department, which continues to earn a Green Status from the Office of 

ired a total of 66 employees; 24 percent of the hires were female, 36 percent were minority 

m MARAD served on the ONEDOT Committee tasked with reviewing 

d evaluating DOT’s Civil Rights function to determine if the existing structure, 

apital 

pportunity programs, the concept of diversity, harassment, sexual harassment and the 

e 

f of 

isionary, creative, 

government initiatives. The MARAD OCIO has changed its focus from inf

support to customer service in the area of specific mission needs, including such areas as 

national security, cargo preferences, and Title XI management. This type of strategic 

focus allows the MARAD OCIO to bring increased business value to the organization 

by ensuring that IT is aligned with the mission. 

ATEGIC MANAGEMENT OF HUMAN C

MARAD’s Human Capital Council (HCC) was implemented tw

m

prescribed by the President’s Management Agenda. Specifically, the Council is charged wi

reaching a consensus on workforce allocation and development, making recommendation

to the Administrator to ensure the ability to execute critical missions and goals. Through the 

HCC, MARAD is able to focus on organizational employment opportunities to help it 

become a high-performing diverse organization prepared to meet today’s workplace 

challenges and opportunities. 

In addition, MARAD consistently supports the DOT in accomplishing the Human Capital 

in

Personnel Management. 

MARAD’s employment totaled 828 at the end of FY 2005. During that fiscal year, MARAD 

h

employees, and 8 percent were people with disabilities. 

CIVIL RIGHTS 

Representatives fro

an

composition and initiatives are strategically aligned with the Department of Transportation’s 

current and future needs, as identified in the Department's Strategic and Human C

Plans. 

MARAD completed its national initiative to educate employees on equal employment 

o

Notification of Federal Employees Antidiscrimation and Retaliation (No Fear) Act. Th

training was offered to all headquarters and regional staff, as well as, the faculty and staf

the U.S. Merchant Marine Academy. The training was specifically designed for MARAD 

and facilitated by experienced contract civil rights professionals. 

MARAD, through its Women’s Council, continues to sponsor a v

mentoring program: WAVES-Working to Achieve Your Vision of Excellence and Success. 

43
This program is designed to provide all employees with a formal or informal experience for 

nd 

Left to right: Patricia Thomas, Mary Nash, 

Tracey Ford, and Phyllis Stephenson 

 on 

uits in 

dmiralty Act. 

he United States is currently 

n for damages 

caused to its vessels in two separate legal actions. One of these matters, the damages to the 

Mount Washington, Equality State, and the Diamond State, has

awaiting the decision of the court. Another, involving da

n Admiralty Extension Act claim has been filed by various insurance companies seeking 

llution damages to certain vehicles in Belgium at an estimated cost of $5 

illion. This claim is currently under review. 

t the end of the recording period, 12 personal injury plaintiff actions were pending in the 

seafarers injured aboard MARAD vessels. 

s 

trina. The 

atute of limitations for admiralty actions against the United States is two years. Additional 

ARAD began the fiscal year with 44 carryover Freedom of Information Act (FOIA) 

d received 171 new requests. Seventy-seven requests were 

personal and career growth by providing various training opportunities, workshops a

brown bag discussions. With the support of the Office of Human Resources, WAVES was 

able to bring in trainers and presenters from Federal and State agencies and the private 

sector to share expert knowledge in key areas of growth as well as the expert knowledge 

shared by MARAD’s own executives. 

WAVES Women’s Council Members

LEGAL SERVICES AND 

AGENCY DECISIONS 

MARAD is required to report

certain activities under the S

A

Admiralty Actions 

T

seeking compensatio

 been tried and the parties are 

mages caused by a tug and tow to a 

MARAD vessel, is awaiting trial. 

Admiralty Claims 

A

compensation for po

m

Admiralty Personal Injury Matters 

A

courts. Most of these claims involved 

Since the end of the recording period, MARAD has received two claims for personal injurie

arising out of MARAD’s operations on behalf of FEMA relating to Hurricane Ka

st

claims are possible. 

Freedom of Information Act 

M

requests for access to records, an

44
processed during FY 2005, and 72 requests were pending at year’s end. There was only

FOIA administrative appeal, which was upheld in its entirety. 

 one 

hip Disposal 

ssues continue relating to the recycling of non-retention National Defense 

eserve Fleet vessels. Litigation is related primarily to vessels in the James River Reserve 

003, MARAD entered into a contract with a United Kingdom (U.K.) recycling 

cility for 15 vessels. The U.S. Environmental Protection Agency (EPA) issued a letter of 

e 

rict Court allowed four vessels to leave the United States. 

ince the date of that decision, the parties filed cross motions for summary judgment. In 

he validity of the U.K. recycler’s 

arious environmental permits. These challenges ultimately resulted in a judicial finding that 

th 

 appeal these decisions, the U.K. recycler is currently applying for a new Waste 

anagement License and local planning approvals. A decision on these licenses is pending. 

ontrol Act approving the export of any listed vessels to the U.K. recycling facility. 

s from 

e James River Reserve Fleet. Another citizen suit has been filed seeking to compel the 

al of 

 any 

l 

S

Environmental i

R

Fleet. 

In FY 2

fa

enforcement discretion indicating that it would not legally challenge the export provided

certain conditions were satisfied. Various environmental groups challenged the export of th

vessels in U.S. District Court. 

In October 2003, the U.S. Dist

S

March 2005, the District Court ruled in favor of the United States. The environmental 

groups filed a motion for reconsideration of the Court’s decision. In November 2005, the

District Court denied the motion for reconsideration. 

Within the U.K., challenges were also mounted against t

v

the U.K. recycler’s amended Waste Management License was not issued in accordance wi

proper U.K. administrative procedures. The existing local planning approval for the 

recycling of “marine structures” was also determined not to encompass vessels within its 

meaning. 

Rather than

M

MARAD has also petitioned the EPA for an administrative rule under the Toxic Substances 

C

At the same time, environmental groups are attempting to restrict the export of vessel

th

removal from the James River of non-retention NDRF vessels. A consent order has been 

entered in that case. Under the consent decree, MARAD “agrees to proceed without 

unreasonable delay, to the extent consistent with applicable procedures, to consider 

proposals which have been received from qualified, responsible vendors for the dispos

non-retention vessels from the National Defense Reserve Fleet that are responsive to

MARAD disposal service acquisition or sales solicitation and, subject to the availability of 

appropriated funds and consistent with applicable law and procedures, to award contracts 

that are responsive to such proposal for as many non-retention vessels available for disposa

as possible on or before September 30, 2006.” 

Asbestos 

45
Former and current MARAD general agents and ship managers continue to tender for 

efense asbestos-related suits arising out of the operation of vessels by MARAD and its 

o 

ted 

’s award of certain Maritime Security Act contracts was 

hallenged in United States District Court for the Eastern District of New York. This 

n ferries under Title XI of the 

erchant Marine Act of 1936 Title XI was challenged in the District Court for Hawaii. 

. 

suance of licenses to construct, own, and operate deepwater port liquefied natural gas 

ut 

t 

uate 

 is responsible for implementation of the American 

isheries Act of 1998. This legislation increased the level of U.S. citizen ownership and 

ith a 

ders 

MARAD 

d

predecessor agencies. There are approximately 2,500 suits filed by seafarers and other 

individuals pertaining to the U.S. Government. In these suits, plaintiffs allege exposure t

asbestos aboard government-owned vessels that were operated for MARAD and its 

predecessor agencies. The tenders arise primarily out of litigation involving more than 

70,000 similar merchant seafarers’ asbestos suits that are consolidated before the Uni

States District Court for the Northern District of Ohio. 

Administrative Procedures 

During the past year, MARAD

c

challenge was subsequently withdrawn with prejudice. 

MARAD’s decision to guarantee the financing of certai

M

These ferries are intended to be operated in Hawaii as an inter-island, high-speed ferry

service. This legal challenge was based on whether MARAD’s National Environmental 

Policy Act (NEPA) analysis was sufficient. The District Court ruled in MARAD’s favor

MARAD is the responsible agency within the U.S. Department of Transportation for the 

is

facilities. MARAD works in conjunction in this area with the U.S. Coast Guard, other 

federal agencies, and State and local authorities. After accounting for comments and inp

from all of these authorities, MARAD issued a license to an LNG energy company for 

construction, ownership, and operation of a facility 38 miles off the coast of Louisiana. 

Plaintiffs have challenged the award of this license on the grounds that MARAD has no

complied with NEPA because the environmental impact statement used relied on inadeq

environmental information. This matter is currently pending before the United States Court 

of Appeals for the Fifth Circuit, the court with original jurisdiction under the statute. 

Division of Maritime Programs 

The Division of Maritime Programs

F

control required for a vessel to be eligible for documentation by the U.S. Coast Guard w

fishery endorsement. In addition, subsequent legislation set out the requirements for len

to meet in order to perfect a first preferred mortgage on such vessels. There are 

approximately 300 such vessels for which detailed information must be submitted by the 

vessel owner and analyzed by MARAD. More information may be found on the 

web site at http://www.marad.dot.gov/afa/afa.html. 

The Division of Maritime Programs in the Chief Counsel’s Office provides legal advice and 

services for MARAD's approval of foreign transfers of interests in U.S. vessels. Under 

Section 9 of the Shipping Act of 1916, a U.S.-flag vessel may not be transferred to foreign 

46
registry, and transfer of ownership or control of a U.S. citizen owned U.S.-flag vessel to a 

non-citizen may not be accomplished, without MARAD approval. 

Another principal activity advised by the Division of Maritime Programs includes the 

e 

y 

es of war or national emergency. Maersk Line Limited presently 

OOPERATIVE WORK

n important part of the work of the Maritime Administration (MARAD) is as a facilitator 

The 

hip Operations Cooperative Program 

MARAD is the lead partner for the Ship Operations Cooperative Program (SOCP), which 

petitiveness, 

hip 

s on projects 

ation. 

(MAC) 

acilitation of Dialog on Industry Issues - SOCP produces a newsletter that is 

disseminated to the maritime industry and hosts a Web site at http://www.socp.org

Maritime Security Program described earlier. The Division of Maritime Programs also

reviews and approves the U.S. citizenship of all participants in MARAD programs wher

U.S. citizenship is required. This program is implemented through 47 grant agreements, b

which 47 vessels were provided an operating payment in return for a militarily useful vessel 

being available to the 

U.S. Government in tim

obtains the service of 15 such vessels through time charter arrangements, but is seeking a 

transfer to itself of the underlying operating agreements. The MSP contractor, U.S. Ship 

Management, Inc., disputed any rights to transfer the operating agreements without its 

consent. At the end of the reporting period, MARAD was proceeding to sort out the 

respective legal rights of each party. 

C

A

and provider of expertise, drawing on the synergy created by cooperative work among 

different government agencies, non-governmental organizations, and private industry. 

accomplishments of these organizations often support multiple goals in MARAD’s strategic 

plan. 

S

works to promote and facilitate a maritime transportation system by improving safety and 

the efficient movement of goods and people. The SOCP is a cost-shared 

government/industry/labor partnership whose objective is to improve com

ship safety, productivity, profitability, training, environmental responsiveness, and 

quality of ship operations. Currently, there are 45 members, including commercial s

owners/operators, government organizations, educational institutions, labor 

organizations, researchers, classification societies, and others. SOCP focuse

in four categories: industry improvement projects; facilitation of dialog regarding 

industry issues; SOCP product development; and product and process testing/evalu

Industry Improvement Projects - Since the implementation of the 1995 Amendments to 

the International Convention on the Standards of Training, Certification, and Watchkeeping

(STCW), SOCP has focused on helping members to understand and meet STCW 

requirements. In FY 2005, the SOCP developed the Mariner Administrative Card 

System and prepared for a demonstration to highlight the potential capabilities for tracing 

mariner information such as training, sea service, and employment history, as well as other 

pertinent information, while enhancing maritime security. 

F

. During 

47
FY 2005, the SOCP conducted three membership meetings that provided valuable 

information to the maritime industry and promoted conversations regarding significant 

issues such as maritime security, ballast water management, and mariner staffing and

training. The SOCP meetings were webcast live and then archived on the SOCP Web si

SOCP developed an online survey to gauge the industry perspective and ultimately ge

a recommendation that was sent to MARAD to provide a maritime user perspective on the 

issue. 

te. 

nerated 

SOCP Product Development - In FY 2005, SOCP developed and produced a Crew 

Endurance Management (CEM) multimedia product designed to introduce the maritime 

nd 

ted 

eeting held in July 

2005 demonstrated an access control system that was eventually incorporated onto the State 

 of 

e Pacific Coast Maritime Consortium’s School-toork Program through funding for student mariner credentialing documents. Many 

hant 

am 

perative Program (CHCP), is working with 

termodal industry organizations to initiate an intermodal freight information flow 

 data 

nt the 

wed 

e U.S. Propeller Club sponsor the Adopt-A-Ship Program, which 

ontinues to gain popularity. The program facilitates the “adoption” of a ship by a 

classroom of students in grades five through eight. The students and the ship’s officer 

industry to the concept of CEM. The CEM interactive training product is available on

compact disc or online at the SOCP Web site and distributed to SOCP members at cost a

marketed to the rest of the maritime industry. In addition, the SOCP Web site was upda

to provide a more user friendly structure as well as enhanced graphics. 

Product and Process Testing/Evaluations - A vendor at a SOCP m

Of Maine training vessel and implemented for the cadets and crew. SOCP has also been 

involved in testing Alternate Watch Schedules (AWS), and the potential for diminished 

performance based on the traditional three-watch schedule. An SOCP member company 

volunteered its ship, the Master, and three deck officers to test AWS. At the conclusion

the test period, AWS benefits were identified and the participating company expressed a 

desire to continue using the system. 

SOCP also continued its work with th

W

students have been unable to fund various documents required in order to become merc

mariners. SOCP’s working group was able to provide passport and merchant mariner

document funding for nine students. 

Cargo Handling Cooperative Progr

MARAD, through the Cargo Handling Coo

in

optimization project. The goal is to identify bottlenecks to the flow of information and

between transportation modes. The CHCP is working with its members to docume

relationship between the physical movement of cargo and the transfer of data from one 

mode to the next. The project will identify the areas and impacts of not having data flow 

with cargo movement throughout a typical system chain event. This project will be follo

by an attempt to further define the need for data interchange efficiencies. 

Adopt-A-Ship 

MARAD and th

c

48
and crew have a “pen pal” relationship, which enables the students to learn through

ship’s travels. Teacher feedback indicates the students learn about geography, scien

mathematics, and language through the program. Each year, additional classrooms and

teachers register in the program. At present, 83 ships are enrolled, three more than 2004

69 teachers are currently enrolled – an increase of nine teachers over 2004. Information

about Adopt-A-Ship is available on the MARAD Web site, 

 the 

ce, 

; 

http://www.marad.dot.gov/education/adopt_a_ship. 

Short Sea Shipping Cooperative Program 

MARAD acts as the official sponsor of the Short Sea Shipping Cooperative Program 

as formed for the purpose of advancing short 

a shipping in North America. At the end of FY 2005, SCOOP grew to over 51 members 

ortsea.us/

(SCOOP), a public-private cooperative that w

se

from the private sector and 14 non-dues paying associates, mostly from educational 

institutions. 

More can be learned about the Short Sea Shipping Cooperative Program at 

http://www.sh

Support for the I-95 Corridor Coalition 

The I-95 Corridor Coalition is a regional partnership of major public and private 

tions serving the United States from Maine to 

lorida. With congestion an increasing concern, the Coalition sought to explore alternatives 

Executive 

 2001, MARAD established the Inland Waterways Intermodal Cooperative Program 

 transport system operators in 

romoting innovations in cargo handling and new technologies. With MARAD acting as the 

d 

g a 

ay 

• An effort by the University of Virginia’s Accelerated Master’s Program in System 

stitutional, legal and regulatory, 

transportation agencies and industry associa

F

to supplement road and rail freight transportation. Two years ago the Coalition’s 

Board approved a MARAD proposal to study Short Sea Shipping freight alternatives along

the I-95 corridor. The study, completed in FY 2005, highlighted suitable routes for expanded 

Short Sea Shipping operations. The study also recommended further analysis to identify the 

proper cargo types and flow patterns to maximize short sea shipping freight transportation 

opportunities. 

Inland Waterways Intermodal Cooperative Program 

In

(IWICP) to assist the nation's inland waterway intermodal

p

catalyst, a core group was formed representing port authorities, barge lines, shippers, an

trade organizations involved in doing business on the inland waterways. After considerin

number of initiatives, the members of the Cooperative agreed to focus their efforts on 

establishing a Container-on-Barge service between selected points along the inland waterw

system. 

Major activities that took place during the past year include: 

Engineering to examine the economic, operational, in

49
and technical factors that affect inland river container services and to develop near

and long-term requirements for expanding this service. 

A meeting of the Cooperative was held on May 27, 2005, in New Orleans, in 

conjunction with a joint meeting of the American Assoc

-

•

iation of State Highway 

tation 

Heartland Intermodal Partnership 

p (HIP), a coalition of senior public- and 

rivate-sector professionals from across the 24-states of the nation’s heartland. Its mission 

nies, 

other DOT 

e 

itute 

NMEI) program recognizes and encourages 

on-profit institutions with focused research and education programs contributing to 

sinime 

 up 

ration (MARAD) has five region offices: Norfolk, Virginia; New 

ork, New York; San Francisco, California; Chicago, Illinois; and New Orleans, Louisiana. 

10 

try and the general public; in three 

ases, they also perform much of the hands-on work for operating the Ready Reserve Force 

and the National Defense Reserve Fleet sites. The five regional offices and the three oneTransportation Officials’ (AASHTO) Standing Committee on Water Transpor

and the Heartland Intermodal Partnership. Discussions centered on the need to 

establish the economic feasibility of inland river transport of container on barge 

service. 

MARAD leads the Heartland Intermodal Partnershi

p

is to support economic competitiveness of the region’s business, industry and labor by 

improving intermodal transportation. HIP’s executive committee includes State 

departments of transportation, public planning organizations, railroads, trucking compa

ports, and barge and river interests, as well as representatives from MARAD and 

modal agencies. The Executive Committee’s special meeting took place in May, 2005, 

convened jointly with the Standing Committee on Water Transportation (SCOWT) of 

AASHTO. The meeting focused on dealing with increasing congestion, especially in th

flow of commodities, in the years ahead. 

National Maritime Enhancement Inst

The National Maritime Enhancement Institute (

n

advancement and innovation in the maritime industry. In FY 2005, the Great Lakes 

Maritime Research Institute (GLMRI), a partnership between the University of Wiscon

Superior and the University of Minnesota-Duluth, was designated as a National Marit

Enhancement Institute (NMEI). The GLMRI will host relevant research affiliates from 

other Great Lakes universities to serve as project researchers. Research affiliates will be 

invited to serve on the GLMRI Oversight Committee. An external advisory board, made

of regional maritime experts, will act as a steering group for focused research efforts. 

MARAD serves on this advisory board. 

REGION OFFICES 

The Maritime Administ

Y

The Central Region office in New Orleans was evacuated to Port Arthur, Texas, for 

Hurricane Katrina. Then it had to be evacuated from Port Arthur because of Hurricane 

Rita. Nonetheless, the Central Region staff provided the bulk of the support for the 

MARAD ships helping in hurricane recovery and relief. 

Region offices provide outreach and interface with indus

c

50
person offices in Seattle, Washington; Long Beach, California, and St. Louis, Missouri also 

provide critical expertise in evaluating applications for port security grants, a process in 

which MARAD cooperates with the lead agency, the Department of Homeland Security. 

Members of regional staffs also maintain contact within the maritime industry and with 

professional organizations, port officials, vessel owners, intermodal companies, trade 

associations, government agency officials and MARAD’s customer base to promote agency

goals and objectives. 

North Atlantic Region 

artner agencies for the North Atlantic Region office in New York City include not only the 

. Army Corps of Engineers, but also other Federal, State, and local 

sponders, including the Port Authority of New York and New Jersey, the New York City 

vement Plan for the Port of New York and New Jersey, a 20-

ear program designed by key regional decision-makers to act as a roadmap guiding the longtee of 

th Atlantic Region office staff is working to 

stablish plans to prioritize the movement of vessels, international cargo, and first-responder 

e 

so 

ior representative and participating committee member in a special 

ards ceremony on September 17, 2005, in which the Secretary of Transportation 

y of New York and New Jersey to support 

e ongoing container-on-barge service between the Port of Newark, New Jersey and the 

y 

P

U.S. Coast Guard and U.S

re

Economic Development Corporation, the North Jersey Transportation Planning Authority 

Freight Committee, the National Cargo Bureau Operations Committee, and area Maritime 

Exchanges, which provide regional emergency communications and port access information

and support to MARAD. 

The North Atlantic Region Director is also a member of the Advisory Committee of the 

Comprehensive Port Impro

y

term strategic development of the port. This includes infrastructure improvements to 

accommodate an explosion in trade with Asia. 

As members of the Port of New York and New Jersey Port Recovery Steering Commit

the Area Maritime Security Committee, the Nor

e

operations following a transportation security incident. Region office staff also served as 

senior evaluators and as members of the design team for a major table top security exercise 

focused on the protection of cruise ships, as well as their passengers and crews, in the Port 

of New York and New Jersey. Conducted by the Area Maritime Security Committee of th

Port, the exercise tested the applicability and effectiveness of the port’s area maritime 

security plan in responding to a transportation security incident involving an attack on a 

large passenger liner. 

In accordance with MARAD’s role in port security, the North Atlantic Region director al

acted as MARAD’s sen

aw

presented USDOT 9/11 Maritime Lifesaving Medals to more than 700 members of the New

York and New Jersey maritime industry who risked their lives to evacuate 500,000 persons 

from Lower Manhattan on September 11, 2001. 

Short Sea Shipping and Improved Intermodal Operations -The North Atlantic Region 

office actively participates with the Port Authorit

th

Port of Albany, New York. Port officials in these ports requested MARAD assistance in 

extending Federal Government aid to this successful intermodal Short Sea Shipping 

initiative, which is helping to remove up to 7,500 trucks from the New York State Thruwa

51
each year. In another effort to reduce traffic congestion and boost overall transportation 

capacity in the New York and New Jersey region, MARAD has also encouraged stud

the North Jersey Transportation Planning Authority aimed at establishing the projected costs

and operational feasibility of using very large, fast freight ferries to move rail cars and truc

across New York Bay from Brooklyn to Jersey City. 

Great Lakes Region 

ies by 

ks 

ARAD’s Great Lakes Region Office, located near Chicago, does a large part of its work 

 agencies to facilitate waterborne transportation on the Great Lakes 

d the inland waterways. This office provides leadership for the Heartland Intermodal 

reat Lakes Commission, a bi-national compact organization that is dedicated to promoting 

ents 

 Great Lakes 

ationally as a world class resource in need of protection and restoration. The Task 

. Unless a 

able, reliable navigation channel is maintained on the Missouri River, commercial 

 of 

iver 

ARAD’s South Atlantic Region Office in Norfolk, Virginia, is in charge of a large segment 

ce, and of the National Defense Reserve Fleet site at Fort Eustis, 

irginia, referred to as the James River Reserve Fleet (JRRF). 

 in the FY 2005 work plan, 

making improvements of the day-to-day operations according to the Reserve Fleet 

M

coordinating with other

an

Partnership, the Great Lakes Maritime Research Institute, and the evaluation and selection 

process for port security grants. All of these activities are outlined elsewhere in this report. 

MARAD’s Great Lakes Region Office is a charter member of the Great Lakes Dredging 

Team and the Great Lakes Waterways Management Forum. MARAD is an observer to the 

G

sound public policy on a range of regional issues that include environmental protection, 

resource management, transportation, and sustainable development. 

Great Lakes Regional Working Group - MARAD’s Great Lakes Region Office repres

DOT on this Working Group. Its purpose is to raise the profile of the

n

Force/Working Group has established a process for collaboration among the Federal, State, 

and local governments; tribal nations; and non-governmental organizations. 

Missouri River Master Manual Revision - MARAD has reviewed and commented on the 

Final Environmental Impact Statement for the Master Water Control Manual

st

navigation may have to abandon the river and a major tributary of the inland navigation 

system will be lost. The Final Environmental Impact Statement allows for the possibility

an artificial spring rise, which would release water needed during the summer. The 

statement also suggests mid-season draw down, which may negatively impact Missouri R

and Mississippi River commercial navigation. These conditions contribute to the unreliable 

nature of the commercial navigation channel and make it difficult for transportation

contracts to be negotiated. 

South Atlantic Region 

M

of the Ready Reserve For

V

In FY 2005, the JRRF accomplished the following goals: 

• Successfully met all goals and requirements as outlined

Manual and the Performance Work Statement; 

52
• Managed and tracked a $1.3 million operational budget, completed three major dry 

docking availabilities (starting a fourth), and four major topside availabilities (with n

added help from other resources) were complete

o 

d within budget and without causing 

• o-day basis exercising good judgment 

and leadership working closely with JRRF employees; South Atlantic Region 

Management; MARAD Chief, Division of Reserve Fleet; Ship Managers; State 

PUBLI , REPORTS, AND WEB SITES 

n addition to its Annual Report to Congress, MARAD has a 

eports to 

ongress, which are also available to the general public. 

major scheduling impact to fleet services; and 

Increased customer service relations on a day-t

environmental officers; U.S. Coast Guard; Commander, Fort Eustis; and U.S. Navy 

and U.S. Marine Corps organizations to meet operational goals and training 

objectives. 

CATIONS

Left: MARAD’s Labor - Management Affiliations Guide 

I

variety of publications for the general public and r

C

MARAD also maintains on its Web site, 

http://www.marad.dot.gov, information of interest to the 

specialist and general public alike. The Office of Congres

and Public Affairs issues a monthly newsl

which is available through a link on the home page of the W

site. 

sional 

etter, MARAD Update, 

eb 

Office of Statistical and Economic Analysis 

Web site: http://www.marad.dot.gov/Marad_Statistics/index.html provides comprehensive 

water transportation information for MARAD and public use. 

International Maritime Statistics Forum (IMSF) Web site:

http://www.marad.dot.gov/imsf/index.html An informal organization interested in 

improving the quality of maritime statistics and expanding the amount and scope of 

niversities, research and 

stics. 

s 

statistics available. Members include carriers, data providers, u

other international organizations that have an interest in and need for maritime stati

This site is being supported by the MARAD as a service to the IMSF. However, the 

contents of the site are solely the responsibility of the organization and in no way reflect

any official position of the Maritime Administration or the U.S. Government. 

53
Joint MARAD and U.S. Army Corps of Engineers Web site: 

http://www.marad.dot.gov/statistics/usfwts/index.html Provides official monthly, 

quarterly, and annual U.S. Foreign Waterborne Transportation Statistics. 

The Office of Statistical and Economic Analysis also provides daily newsletters on marinerelated issues; sources of information are CI-Online News Alert and Fairplay–Daily News. 

Customer Satisfaction Report 

MARAD conducts a series of surveys each year to produce its Customer Satisfaction Report. 

Program areas evaluated in FY 2005 were the Cargo Preference Program, Environmental 

Activities Program, Ship Disposal Program, and the Vessel Transfer Program. MARAD 

addresses suggestions and concerns raised by participants in the survey to enhance its 

customer satisfaction on a continuing basis. The FY 2005 Customer Satisfaction Report 

may be accessed at http://www.marad.dot.gov . Forms to participate in the Customer 

Satisfaction Survey are available at http://www.marad.dot.gov/survey/. 

Office of Sealift Support 

The Maritime Labor-Management Affiliations Guide contains information on industry and labor 

organizations, maritime businesses, and other organizations concerned with the maritime 

industry. 

Cargo Preference 

The Cargo Preference Office issues a monthly newsletter, News4U, with news of interest to 

shippers. 

It also administers a Web site outlining the Cargo Preference program and its guidelines: 

http://www.marad.dot.gov/offices/cargo_pref.html. 

For information on U.S.-Flag Service (Destinations from U.S. to Foreign Countries), click on 

http://www.marad.dot.gov/usflag/.

For the Humanitarian Food Aid Report, click on 

http://www.marad.dot.gov/offices/CAPOS%20Reports/.

For information on Public Resolution - 17 Waivers, click on 

http://www.marad.dot.gov/offices/pr17waiver.html.

In FY 2005, the Office of Cargo Preference enhanced its Web site to speed up the process 

of finding a U.S.-flag vessel applicable to a shipper’s needs in transporting cargo. An

assistance form, composed of six questions, is available at 

http://www.marad.dot.gov/offices/cargo/Assistance_Form.html 

54
Maritime Law: Office of the Chief Counsel 

Office of Chief Counsel staff coordinates Web sites and publishes annually a Compilation of 

Maritime Laws. This is also available on: 

http://www.marad.dot.gov/Publications/genref.htm - This publication covers amendments 

through the Second Session of the 108th Congress for The Merchant Marine Act, 1936, the 

Maritime Security Act of 2003, the Shipping Act of 1984, and related Acts. 

Freedom of Information Act Web site: http://www.marad.dot.gov/Business/foia.html 

This site grants the right to access of many government records about how MARAD and 

DOT operate. Under the Freedom of Information Act, any person has a right to a copy of 

certain records. 

Ethics Training Web site: http://intramarad.dot.gov/ethics.html This site offers required 

Annual Agency Ethics Training, Prohibitions Relating to Political Activities and Ethics Guidance on 

Post Employment Matters, Negotiating for Future Employment, and Retention of Records. 

American Fisheries Act Web sites: http://www.marad.dot.gov/afa/afa.html and 

http://www.marad.dot.gov/afa.html - The American Fisheries Act Program charged 

MARAD the American Fisheries Act of 1998 (AFA) with the responsibility of determining 

whether vessels of 100 feet or greater in registered length comply with the new ownership, 

control, and financing requirements imposed by the AFA and are therefore eligible to be 

documented with a fishery endorsement. 

Office of Policy and International Trade 

MARAD Web site for MTSA Course Certification - Maritime Security Training. 

http://www.marad.dot.gov/MTSA/MARAD%20Web%20Site%20for%20MTSA%20Cou

rse.html

A web site servicing U.S. training providers of several standardized maritime security 

training courses designed for maritime security professionals who work on vessels and in 

seaports of the United States. 

Publication: Information Concerning Employment and Training in the U.S. Merchant Marine. A brief 

outline of maritime careers available, typical salaries, and contact information. 

 

Brochure: Your Maritime Service Obligation. This pamphlet provides information on service 

obligations of Federal and State Maritime Academy graduates. Information is also available 

on the MARAD Web site: https://mscs.marad.dot.gov. 

 

Business Opportunities 

Virtual Office of Acquisition (VOA) Web site at https://voa.marad.dot.gov/ 

Provides for access to agency business opportunities, allows for on-line proposal 

dissemination, proposal submission and evaluation and award posting. VOA further 

provides links to pertinent acquisition guidance and allows industry to post questions and 

comments. 

55
Research and Development 

Web site: https://www.marad.dot.gov/research. This Web site includes news and current 

events, MARAD initiatives, and lists of resources. 

Office of Advanced Technology: Newsletters 

Energy Technologies - An energy technologies-focused newsletter that provides an 

overview of current activities and future plans to foster and highlight energy-related 

improvements in the maritime industry, such as new technologies and fuels to improve 

marine power plant efficiency and to reduce air emissions. In addition, the publication 

provides guidance and information on related regulatory and policy issues. 

New Generation Polar Research Vessel – A newsletter that informs readers of recent and 

pending activities conducted in conjunction with the National Science Foundation and 

related to the design of a new polar research vessel. 

Ship Operations Cooperative Program 

The Ship Operations Cooperative Program (SOCP) Web site www.socp.org is administered 

by the Office of Associate Administrator for Financial Approvals and Cargo Preference. 

The SOCP Web site serves as an information source to SOCP members and maritime 

industry. The Web site contains information on upcoming and past SOCP meetings, live 

Web cast, and current and completed SOCP projects i.e., Mariner Administrative Card, 

SOCP Advisory Working Groups, and Industries Improvement). In addition, the SOCP 

Web site is host to the National Maritime Center/U.S. Coast Guard STCW-95 draft policy 

letters, where they are posted for maritime industry review and comment before they are 

finalized. 

Office of Ports and Intermodal Activities/Public Affairs Office 

Glossary of Shipping Terms. Updated 2005. 

Shipbuilding 

U.S. Private Shipyards – Major Shipbuilding and Repair Base. 

Great Lakes 

Great Lakes Region brochure: in the process of being updated – A highlight of MARAD’s 

Great Lakes Region’s office locations, the programs/activities of each office, and contact 

information. 

Combined Basic/Advanced Marine Firefighting Training: expected completion and printing in 

August 2006 – A description of MARAD’s fire fighting school’s programs, location, and 

contact information. 

56
U.S. Great Lakes Merchant Seaman Employment Fact Sheet, January 2005: This document 

focuses on assisting merchant seamen gain employment on U.S -flag vessels within the Great 

Lakes. (Handout and listing on MARAD Web site) 

Reports to Congress 

Report to Congress on the Performance of Ports and the Intermodal System. (June 2005) A report 

directed by Congress on the performance of the intermodal system with respect to the 

efficiency of the most congested ports. 

Report to the House and Senate Committees on Appropriations on the Interoperability of Information 

Resources Among Strategic Ports (Part One – Assessment of Current Capabilities), October 2004. 

Report to the House and Senate Committees on Appropriation on the Interoperability of Information 

Resources Among Strategic Ports (Part Two – Vision and Opportunities for Improvement), February 

2005. 

Report to Congress on the Progress of the Vessel Disposal Program, April 2005. 

Report to Congress on Maintenance and Repair Reimbursement Pilot Program, March 2005. 

 

Report to Congress on Title XI Defense Priority, August 2005. 

 

Report to Congress on Title XI Organizational Framework, September 2005. 

57
58
59
60
61

For Immediate Release 

Office of the Press Secretary 

May 19, 2005 
For Immediate Release 

Office of the Press Secretary 

May 19, 2005 

National Maritime Day, 2005 

A Proclamation by the President of the United States of America 

America's merchant mariners make our Nation more secure and our economy stronger. 

Throughout our history, they have promoted commerce and protected our freedom. On National 

Maritime Day, we honor the dedicated service of the United States Merchant Marine. 

Each year, the men and women of the U.S. maritime transportation system move more than 2 

billion tons of cargo along our waterways and across the open seas. Many of the raw materials 

Americans purchase are transported by merchant vessels, and merchant mariners ship 

agricultural products and finished goods in and out of the United States every day. 

Merchant mariners have also served in every conflict in our Nation's history. The U.S. Merchant 

Marine helps provide our Nation's Armed Forces with crucial supplies and equipment. These 

brave men and women demonstrate courage, love of country, and devotion to duty, and we 

especially honor those who have made the ultimate sacrifice in defense of our Nation. The United 

States is safer and the world is more peaceful because of the work of our merchant mariners, and 

we are grateful for their service. 

In recognition of the importance of the U.S. Merchant Marine, the Congress, by joint resolution 

approved on May 20, 1933, as amended, has designated May 22 of each year as "National 

Maritime Day," and has authorized and requested that the President issue an annual 

proclamation calling for its appropriate observance. 

NOW, THEREFORE, I, GEORGE W. BUSH, President of the United States of America, do 

hereby proclaim May 22, 2005, as National Maritime Day. I call upon the people of the United 

States to celebrate this observance and to display the flag of the United States at their homes 

and in their communities. I also request that all ships sailing under the American flag dress ship 

on that day. 

IN WITNESS WHEREOF, I have hereunto set my hand this nineteenth day of May, in the year of 

our Lord two thousand five, and of the Independence of the United States of America the two 

hundred and twenty-ninth. 

GEORGE W. BUSH 

# # # 

62
63
64
65
 

U.S. Department of Transportation 

Maritime Administration 

400 7th Street, SW 

Washington, DC 20590 

http://www.marad.dot.gov 

66