Maritime Administration at a glance

Established: 1950

Headquarters: 1200 New Jersey Avenue, SE

 Washington, DC 20590

 www.marad.dot.gov

FY 2007 Budget: $290.837 million

Total Employees: 785

Headquarters: 276

US Merchant Marine Academy: 233

	 Gateway Offices & Fleet Sites:	 276

Mission: To improve and strengthen the U.S. marine 

transportation system, including infrastructure, industry and 

labor, to meet the economic and security needs of the nation.
Maritime Administration 

Annual Report To Congress

Fiscal Year 2007

i

U.S. Department of Transportation

Secretary

Mary E. Peters

Maritime Administration

Administrator

Sean T. Connaughton

U.S. Department of Transportation

Headquarters

1200 New Jersey Avenue, SE

Washington, DC 20590

Table of Contents

INTRODUCTION iii

EXECUTIVE SUMMARY iv

INDUSTRY OVERVIEW 1

REDUCED CONGESTION 3

GLOBAL CONNECTIVITY 9

SECURITY, PREPAREDNESS AND RESPONSE 17

ENVIRONMENTAL STEWARDSHIP 24

Appendix: FINANCIAL STATEMENTS 29-58

PRESIDENTIAL PROCLAMATION 59

ORGANIZATIONAL CHART 60

ii
The Class of 2007 

graduates from the 

Nation’s maritime 

academies found 

many more 

opportunities for 

employment in the 

maritime industry 

than they have 

found in years past.

Introduction:

The Turning of the Tide

A Message from the Administrator

We are seeing important and exciting changes in the U.S. maritime industry, and 

at the Maritime Administration. The marine transportation industry is a highly 

sophisticated, global, intermodal transportation network that is absolutely vital 

to America’s economy and continued prosperity. The industry is in a period 

of renewal and expansion, with a 24-percent increase in industry fixed assets,

and more than 10,000 jobs added in the past five years. The Class of 2007

graduates from the Nation’s maritime academies found many more opportunities 

for employment in the maritime industry than they have found in years past. 

Industry is pointing the way toward greater use of our waterways to relieve 

congestion on the landside transportation system.

A half-century ago, the maritime industry pioneered the use of the container, 

now the standard instrument of trade all over the world. That paved the way for 

double-stacked trains and the development of door-to-door logistical operations, 

software and tracking systems. This evolution transformed the way we think 

about the business of moving freight and people, and has completely altered 

the transportation landscape and the role of transportation in our lives. Marine 

transportation is now a system of systems—an integrated network, not just 

within the United States, but around the world. It must operate seamlessly.

The Maritime Administration is developing a framework to help guide 

involvement and investment in the overall Marine Transportation System. 

To that end, the Maritime Administration has realigned its offices, programs,

resources, and initiatives to respond to this changing dynamic. The Maritime 

Administration wants to partner with the maritime industry in promoting and 

facilitating a U.S. maritime transportation system that improves the safe, secure 

movement of goods and people and promotes transportation solutions enhancing 

environmental stewardship. 

iii
This Annual 

Report outlines 

the financial status 

of the Maritime 

Administration, 

and reports on its 

accomplishments 

as they align 

with the strategic 

goals of the U.S. 

Department of 

Transportation.

Executive Summary

This Annual Report outlines the financial status of the Maritime Administration,

and reports on its accomplishments as they align with the strategic goals of the 

U.S. Department of Transportation.

The Industry Overview briefly outlines the status of the United States maritime

industry.

The accomplishments of the Maritime Administration’s Intermodal System

Development line of business are highlighted in the section on Reduced 

Congestion, which outlines this agency’s work in congestion mitigation, the 

establishment of Gateway Offices, successful projects in port development, and

work in developing the Marine Highway, America’s network of navigable rivers, 

lakes, seaways, and coasts.

The section on Global Connectivity sets out the accomplishments of the 

Business & Workforce Development line of business; including the Cargo 

Preference program, the Maritime Administration’s support of shipyard work, 

energy security, and the U.S. mariner development and employment. 

This section also notes the accomplishments of the office of the Assistant 

Administrator, covering policy, plans and international activities, specifically

the bilateral agreement reached with Vietnam.

The section on Security, Preparedness and Response gives the status and 

accomplishments of the National Security line of business; in the Maritime 

Security Program, the Voluntary Intermodal Sealift Agreement, the Ready 

Reserve Force, and in support of the U.S. Missile Defense Agency.

The accomplishments of the Environment & Compliance line of business are 

emphasized in the section on Environmental Stewardship, which outlines the 

Maritime Administration’s work in international environmental and safety agreements, as well as identifying progress made in battling aquatic invasive species 

and in ship recycling. 

iv

Marine 

transportation 

will become even 

more important 

to the nation’s 

economy as 

95 percent of 

America’s 

foreign trade is 

moved by ship.

Industry Overview

Since 2000, the total value of international trade has risen by over 40 percent, 

and it is becoming a larger part of the national economy. The combined value 

of foreign trade (imports and exports) represented 13 percent of U.S. Gross 

Domestic Product (GDP) in 1990, rising to nearly 22 percent in 2006. If this 

trend continues, it is projected that the value of U.S. foreign trade will be 

equivalent to 35 percent of the Nation’s GDP in 2020, and 60 percent in 2030. 

Marine transportation will become even more important to the Nation’s economy as 95 percent of America’s foreign trade is moved by ship.

America’s network of waterways moves more than 2.3 billion tons of domestic 

and foreign cargo each year. The top 50 ports in the U.S. handle about 84 percent of all waterborne domestic and international cargo tonnage; more than 1.9 

billion tons annually. In the coming years, demand at almost all U.S. ports will 

at least double. 

America’s great economic growth brings with it enormous challenges. American ports, the critical link in freight movement, are already challenged to face 

a projected surge in cargo over the next 10 to 15 years. The difficulties posed

by increased volume of cargo are compounded by environmental challenges, 

compelling security mandates, and a limited supply of land on which to expand 

congested road and rail linkages. 

In addition, current levels of dredging do not maintain navigation channels at 

their fully-authorized depths, which has some definite but unquantified economic impacts. Without improvements, some vessels cannot enter some channels 

fully loaded and new, larger ocean-going vessels have limited access to some 

of our ports.

The domestic “Jones Act” component, a fleet of more than 38,000 vessels, is

“Made in America” and represents an aggregate $48 billion investment. Building and maintaining the Jones Act fleet sustains roughly 150,000 jobs throughout

the U.S. economy. This fleet is being continuously upgraded and renewed, with

domestic maritime carriers moving almost one billion tons of cargo annually 

along U.S. coasts, rivers and lakes, on the Great Lakes, and both to and from 

Alaska, Hawaii, Puerto Rico and Guam. 

In addition to commercial functions, U.S.-flag ships and the connecting intermodal systems play an integral but often unheralded role in bringing critical supplies to military missions across the globe. The Nation’s sealift assets, strategic 

ports and supporting infrastructure are integral links in the defense-logistics 

chain, and the projection of American power. 

The U.S.-flag industry also brings life-saving food to the world’s most impoverished people. U.S. ships furnish support during times of need, such as using 

vessels in the aftermath of Hurricanes Katrina and Rita to support first responders and those involved in the rebuilding efforts. 

As well, the maritime industry supplies jobs for highly trained and qualified

American officers and mariners, not only for U.S. commercial interests but for

current and future national security needs. The maritime industry provides 

well-paying shoreside and shipyard jobs as well.

1

The Agency has 

begun a major 

effort to examine 

the Marine 

Transportation 

System with the 

port as the nexus.

Reduced Congestion

Congestion in the transportation system constrains growth and distorts business 

decisions. The lack of reliability in the transportation infrastructure drives up 

costs for retailers, who must hold more inventory to counter supply chain delays. 

This can lead to increased prices for goods, which has a negative impact on businesses, consumers and the U.S. economy. It means lost export opportunities for 

American businesses, particularly agricultural products. These are but some of 

the problems congestion brings, but there are also solutions to them.

It is imperative to develop better and smarter approaches to moving cargo and 

people through the entire intermodal system and to their eventual destinations. 

That means it is necessary to look at the entire system, not just the immediate 

vicinity of a port.

To this end, the U.S. Department of Transportation is developing a framework 

to help guide decisions on Federal, State, local, and private involvement and 

investment in the overall Marine Transportation System. This includes: looking at where the major waterside and shoreside bottlenecks exist; identifying the 

best way to eliminate these bottlenecks; estimating the public and private funds 

necessary to make a difference; and coordinating project execution.

The Maritime Administration is doing exactly that. The Agency has begun a 

major effort to examine the Marine Transportation System with the port as the 

nexus. This is a significant step forward and includes reaching out to interested

parties and the public, especially the many stakeholders of the Marine Transportation System and America’s ports. 

Gateway Presence 

There is no better way of gaining insight into the challenges facing the industry 

and finding ways to address them than by having a presence “on the ground.”

The Maritime Administration is providing that presence at major U.S. gateway 

ports, starting with 10 of the largest ports on the West, East, and Gulf Coasts, the 

Great Lakes, and the inland river system. Offices are planned or already located

in these critical areas. Replicating the model of the Agency’s Gateway Office in

Southern California, these offices work with headquarters staff, State and local

authorities, and a broad range of port, shipper and carrier stakeholders to cooperate on projects, identify Federal and State funding, and work on environmental 

and community challenges in the ports and their intermodal connections.

The potential success for these offices has been clearly demonstrated in the

Maritime Administration’s first Gateway Office in Southern California. That

office has worked with public and private sector participants to better understand

the connection among improved cargo flow, economic vitality, community

improvement, and environmental sustainability. The effort has led to an interagency (Federal, State and local) agreement to specifically address congestion

in and around the Nation’s busiest port area.

3
The Gateway Offices are the Agency’s day-to-day presence throughout the Marine Transportation System. They are critical to the viability and effectiveness 

of the Maritime Administration and its future programs.

Port Development

The Maritime Administration has been working with the public and private sectors over the past few years on various initiatives to expand the productive use 

of land, infrastructure, operations, and technology at U.S. ports and terminals. 

The Agency’s efforts have evolved into an infrastructure development program 

that has the expertise to manage multi-dimensional and multi-year projects, 

which will expand capacity at America’s ports. The Maritime Administration’s 

primary roles in the management of these projects are:

• Developing partnerships between the Maritime Administration 

 and stakeholders;

• Managing all federal and non-federal funds;

• Providing government oversight of all work performed; and

• Interfacing with all federal and state resource agencies.

The various projects in which this Agency has partnered demonstrate that 

existing strategies for developing infrastructure are no longer valid and have not 

taken into account new environmental concerns, the need for greater modal interconnectivity or technology improvements. Increasingly, ports, terminals, and 

their connections, have developed into bottlenecks, causing highway congestion, 

impacting air quality, slowing commerce, increasing energy consumption and 

threatening America’s quality of life.

Today there is a need for targeted, 

regional, major-freight-corridor 

solutions that are multi-dimensional 

to address needed system capacity 

and performance. For example, 

since 2003, the Maritime Administration has served as the lead Federal 

agency for the Port of Anchorage 

Intermodal Expansion Project since

2003 in order to effect significant

change beyond the wharf, and to 

assist in the improvement of the 

arteries that feed the port. The project 

is a major, 10-year, $500 million infrastructure development project, which

will add 135 acres of real estate, 

provide direct rail access, and improve road access to the port. It is 

expected to be completed in 2013 and 

will double the economic capacity 

of the port.

It is a major, 

10-year, 

$500 million 

infrastructure 

development 

project, which will 

add 135 acres of 

real estate, provide 

direct rail access, 

and improve road 

access to the port. 

4
 The Marine

 Highway: 

 A Vital Link

 in the

 Nation’s

 Economy

America is blessed with an abundance of navigable rivers, lakes, seaways, and 

coasts. For much of the history of the United States, these waterways were the 

primary means of interstate commerce and transportation for goods and people. 

The Maritime Administration supports the development of new North American 

Marine Highway services, and aligning and integrating them into the national, 

State and local transportation planning process. During fiscal year 2007, the

Maritime Administration produced a short documentary video entitled America’s 

Marine Highways and conducted the first showing at the Annual Metropolitan

Planning Organization Conference in Little Rock, AR. The Maritime 

Administration, in cooperation with the Short Sea Shipping Cooperative, 

also hosted a regional series of one-day workshops in St. Petersburg, FL, and 

Oakland, CA. These well-attended workshops provided a forum to cultivate 

a dialogue among domestic shippers, marine entities and public stakeholders 

regarding issues pertaining to the development of Marine Highway operations.

The Agency is also working with U.S. shipyards to develop and promote new

vessel designs and construction efficiencies to build and repair the vessels

needed to expand the Marine Highway System.

On Feb. 15, 2007, Maritime Administrator Sean T. Connaughton carried forward 

President Bush’s Ocean Action Plan, which included language to “accelerate 

short sea shipping,” by testifying before the House of Representatives. In 

his remarks, Mr. Connaughton made the case for increased use of the marine 

highways and noted that:

“Clearly, the Nation’s marine highway can help mitigate this congestion. 

	 The world’s waterways are an infinite system, and our marine highways

	 have infinite capacity. Unlike rail and roads, there are no fixed infra-

	 structure costs to develop transportation routes, and ships can carry

	 more cargo per dollar than any other method of transport. The full scope

	 of America’s Marine Highway – a system that includes not only our coastal

	 waters, but our inland waterway system and the Great Lakes, is enormous –

	 and, if properly utilized and integrated, can help us expand our way out of

	 the crises before us. That is why I am here today and, why I am so pleased

	 that the Members of this Committee have made the decision to investigate

	 the advantages of our marine transportation system.” 

America is blessed 

with an abundance 

of navigable rivers, 

lakes, seaways, 

and coasts.

5
6

Funding 

for marine 

infrastructure 

projects cannot 

come from the 

government alone. 

A barrier exists in those areas in which the Harbor Maintenance Tax (HMT) is 

imposed and collected. During fiscal year 2007, Congress began action on bills

affecting this tax. The Secretary of Transportation has championed the cause of 

the America’s Marine Highway Initiative, and on July 31, 2007, drafted correspondence to the chairman of the Ways and Means Committee of the House of 

Representatives supporting HMT reform for the Great Lakes (H.R. 981).

In her letter, the Secretary wrote: “This proposal would not provide an unwarranted subsidy to freight ferry operators, but would instead remove a marketentry barrier.” 

Given landside congestion, soaring trade growth, and limited federal funding 

for infrastructure, action cannot come soon enough.

Public Private Partnerships

Funding for marine infrastructure projects cannot come from the government 

alone. In a time of tight Federal, State and local government budgets for the 

foreseeable future, improved and innovative private financing methods are an

absolute necessity.

Public Private Partnerships--also known as P3s--are increasingly viewed as 

a major component of funding and developing a seamless, reliable and costeffective 21st century transportation system. Some of these partnerships are also 

involved in the actual management of these assets, such as ports and terminals. 

The Maritime Administration has continued its past policies of working with 

P3s, such as the Short Sea Shipping Cooperative, the Coastwise Coalition, and 

the I-95 Corridor Coalition.

Fiscal Year 2007 Intermodal 

System Development Program 

Accomplishments

	 •	 Advanced America’s Marine Highway Initiative through industry outreach

 workshops; educated Congressional staffs, as well as State and local gov-

 ernments; and produced a video documentary to increase public awareness 

 of the Initiative. Coordinated with State, regional, local and private sector 

 entities to identify funding for a Marine Highway project to reduce conges-

 tion in Hampton Roads, VA and on I-64. Initiated feasibility studies through 

 partnerships with both the I-95 Corridor Coalition and the U.S. Army Corps 

 of Engineers.
7

A priority of the 

Department of 

Transportation’s 

National Strategy to 

Reduce Congestion 

on America’s 

Transportation 

Network is to 

reduce the freight 

bottlenecks 

in Southern 

California. 

• Led a Federal interagency team that designed an interactive Marine Trans-

 portation System (MTS) data inventory Web site. The Web site provides 

 public access to various government and industry links that contain MTS-

 related data and information for use by stakeholders in decision-making and 

	 	 improving system efficiency.

• Initiated public/private sector dialogue to identify and access the U.S. 

 import cargo data elements needed to accurately map the marine transpor-

	 	 tation system throughout the U.S. and quantify the economic benefits it

 brings to the Nation.

• Transitioned the Maritime Administration’s regional organizations into 

	 	 Gateway Offices in key U.S. ports to more effectively work with Federal,

 State and local stakeholders to reduce congestion and address environ-

 mental and community challenges in the ports and their intermodal 

	 	 connectors. These offices also worked with Headquarters program staff to

 improve outreach, advance projects and remove barriers.

• Led the advancement of a multi-year public/private partnership expanding 

 the Port of Anchorage, Alaska; including attainment of essential Clean 

 Water Act permit and endangered species permits, construction projects 

 for a low-sulfur diesel pipeline, a 4-mile long construction road, and the 

 creation of over 45 acres of new port land.

A priority of the Department of Transportation’s National Strategy to Reduce

Congestion on America’s Transportation Network is to reduce the freight bottlenecks in Southern California. As lead for DOT on this initiative, the Maritime 

Administration negotiated for almost a year with the U.S. Environmental Protection Agency-Region 9, and nearly 20 key California’s state and local organizations, to improve regional freight throughput capacity in balance with environmental and community concerns. At the close of fiscal year 2007, this landmark

multi-agency Cooperation Agreement was approved for signature and set the 

stage to cooperate toward achieving sustainable and efficient freight transportation operations in the area in harmony with California’s Goods Movement 

Action Plan. 

The cargo 

preference 

programs 

generated over 10 

million revenue 

tons of cargo 

and $1.4 billion 

of ocean freight 

revenue.

Global Connectivity

While the marine transportation industry is increasingly global in nature, it is 

critically important to encourage and sustain American involvement and investment in it. This is important for the economy during times of peace and a matter 

of survival during times of war or national emergency. The maritime industry 

is also an important source of jobs and positive revenue for America’s balance 

of payments. The Maritime Administration must preserve and expand the U.S. 

maritime industry and increase investment in U.S. marine transportation infrastructure, including domestic shipping, shipyards and maritime personnel. 

The Maritime Administration administers a number of statutory programs, such 

as the Maritime Security Program, cargo preference, shipbuilding loan guarantees, tax deferred funds, training of entry–level licensed mariners, and implementation of U.S. cabotage laws. These programs are intended to foster a strong 

merchant marine and protect American jobs and investment.

Cargo preference is a good example of how these programs can succeed. For 

example, in 2007, 118 U.S.-flag vessels carried preference cargoes, which, provided more than 5,500 mariner jobs and a larger number of shoreside maritime 

and transportation-related jobs. The cargo preference programs generated over 

10 million revenue tons of cargo and $1.4 billion of ocean freight revenue. 

These cargoes represent from 7 percent to more than 50 percent of some U.S. 

carrier’s annual revenues and are vital to retaining vessels under the U.S. flag.

The U.S.-flag domestic fleet of more than 38,000 vessels transports about a billion metric tons of cargo between U.S. ports on the oceans and along the coasts, 

inland waterways and the Great Lakes. The business opportunities provided by 

U.S. cabotage laws, such as the Jones Act, have encouraged large investments in 

vessels, shipyard modernization and other marine transportation assets. 

Over the last five years, U.S. domestic carriers have significantly upgraded their

fleets, contributing to a 25-percent increase in the value of the industry’s vessel

assets, the highest five-year growth in 25 years. The U.S. Jones Act fleet and

trades are strong and healthy. The fleet employs tens of thousands of Americans

ashore and afloat. It is the backbone of America’s merchant marine and a solid

foundation upon which to build and expand the U.S. merchant marine into the 

future. At the same time, U.S. shipyards have made significant investments

in infrastructure and building technologies to better serve the Nation’s Marine 

Transportation System.

9
The primary 

purpose of the 

Title XI Program 

is to promote 

the growth and 

modernization of 

the U.S. merchant 

marine and U.S. 

shipyards. 

U.S. shipyards play an important role in bolstering our maritime presence. Not 

only do they build and repair the domestic fleet, but they have a significant

impact on the national economy. Shipyards directly contribute to the output of 

the U.S. manufacturing sector and also purchase components produced by other 

industries throughout America. In addition, the shipbuilding and ship-repair 

industry supports the growth and development of a skilled workforce.

America’s shipyards are also successfully building the most efficient and environmentally-sound tankers and tank barges in the world to replace single-hull 

vessels retired under the Oil Pollution Act of 1990 (OPA 90). Almost $5 billion 

worth of double-hull construction and conversion work will take place by 2015 

to meet the double-hull requirement under OPA 90.

Maritime Guaranteed Loan 

(Title XI) Program

The primary 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 Federal government to 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 financing or refinancing

	 	 either U.S.-flagged vessels or eligible export vessels constructed, recon-

 structed, or reconditioned in U.S. shipyards, and

(2)	 U.S. shipyards for the purpose of financing advanced and modern ship-

 building technology of a privately owned general shipyard facility 

 located in the United States.

The Title XI Program permits 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 2007

During fiscal year 2007, the Maritime Administration did not issue any new

commitments for Title XI loan guarantees.

The first of two high-speed ferries financed with a loan guarantee was delivered

by Austal USA L.L.C. in Mobile, AL to Hawaii SuperFerry, Inc. The 105-meter, high speed Roll-on/Roll-off (RO/RO) vessels will provide passenger, cargo, 

and vehicle ferry service among the four major Hawaiian Islands. The Alakai

arrived in Honolulu in July but could not commence service due to an injunction 

by environmental interests. The company and the Governor achieved special 

state legislation to enable the company to begin operating. The second vessel is 

scheduled for delivery in early 2009.

10
The Maritime 

Administration 

litigated issues 

in two earlier 

bankruptcies 

related to two Title 

XI companies, and 

one consolidated 

bankruptcy related 

to four Title XI 

companies. 

The Maritime Administration litigated issues in two earlier bankruptcies related 

to two Title XI companies, and one consolidated bankruptcy related to four Title 

XI companies. That litigation is in its final stages. The plan has been approved,

most claims have been settled, and final amended Proofs of Claim are being

prepared, which will determine MARAD’s share of the distribution of the Estate. 

As of September 30, 2007, the Title XI loan guarantee portfolio consisted of 

$2.69 billion in loan guarantees outstanding. Currently, all Title XI commitments have been funded. The portfolio consists of 69 projects, which include 

drill rigs, tankers, barges, containerships, Roll-on/Roll-off vessels, fast ferries, 

passenger vessels, supply vessels, tugs, and shipyard modernization projects. 

There currently are no pending applications for Title XI loan guarantees, and 

$7.35 million in subsidy appropriations remain available to issue new guarantee 

commitments. Additional information on the Title XI Program can be reviewed 

online at the program’s Web site: http://www.marad.dot.gov/Title XI. 

All companies in the Maritime Administration’s Title XI portfolio undergo periodic financial reviews; however, companies with a higher potential for default

receive additional monitoring. This activity involves the preparation of detailed 

financial reports for senior management review. Summaries of these programs

are presented to the DOT Credit Council. The Credit Council is an oversight 

and financial guidance body that objectively reviews all discretionary loans and

loan guarantees made by DOT. A total of $156 million in guaranteed projects, 

or 5.8 percent of the Title XI portfolio, has been identified as experiencing

financial difficulties and, as such, is receiving the highest level of monitoring. 

For the fifth straight year, the Title XI loan guarantee program did not

experience any defaults. 

During fiscal year 2007, the Maritime Administration continued to implement

the recommendations contained in program audits conducted by the DOT’s 

Inspector General and the Government Accountability Office. Included among

these activities was advanced development of a computer-based credit program 

portfolio management system that will be used by all of the DOT’s credit programs beginning in fiscal year 2009.

Bilateral Maritime Agreement: 

Vietnam

The Maritime Administration and Vietnam’s maritime policy agency signed a 

new bilateral maritime agreement on March 15, 2007, that will provide United 

States’ maritime interests with more far-reaching market access into Vietnam’s 

rapidly expanding transportation and logistics sectors. 

11
After five years, 

U.S. companies 

will be permitted 

to establish their 

own whollyowned companies 

and offer these 

services, with 

no joint-venture 

requirement.

The agreement was signed by Maritime Administrator Sean T. Connaughton, 

and Vietnam’s national maritime administration chairman, Vuong Dinh Lam. 

The official joint-signing ceremony took place at the U.S. Department of State’s

headquarters in Washington, DC. It represents the culmination of four rounds 

of negotiations that began in 2003 as part of the Bush Administrations continuing effort to strengthen U.S.–Vietnamese relations. The agreement put American ship operators on an equal footing in Vietnam, paved the way to forming 

U.S.-controlled joint ventures, and set a course to achieve wholly-owned foreign 

subsidiaries in Vietnam.

Prior to the agreement, U.S. companies were restricted to minority holdings 

in Vietnamese companies. Under the terms of the new, five-year agreement,

U.S. companies are given a controlling 51 percent share of the legal capital in 

joint venture enterprises. This allows those U.S. companies to take a lead role 

in providing a wide range of maritime services including cargo agency, cargo 

documentation, cargo management, ocean freight forwarding, storage/warehouse 

services, and container station and depot services.

After five years, U.S. companies will be permitted to 

establish their own whollyowned companies and offer 

these services, with no jointventure requirement.

12
When fully 

operational, 

these facilities 

will provide 1.35 

trillion cubic feet 

per year of natural 

gas to the Nation’s 

energy supply. 

Energy Security

The Maritime Administration plays a vital role in meeting Presidential energy 

directives, protecting the environment, building local economies, and improving 

mobility and safety in the Nation’s oceans and ports through the operation and 

licensure of deepwater port offshore energy receiving facilities.

Importation of liquefied natural gas (LNG) and oil through a system of deepwater-port facilities assists in ensuring an adequate supply of energy for the United 

States, as well as addressing safety concerns and relieving port congestion. The 

Maritime Administration’s Office of Deepwater Ports and Offshore Activities is

responsible for processing applications submitted by private energy companies 

to construct, own, and operate deepwater ports off the Nation’s coasts. The 

deepwater port licensing process involves coordination with 15 Federal agencies as well as State and local governments of the adjacent coastal states for the 

proposed projects. 

During fiscal year 2007, the Office of Deepwater Ports and Offshore Activities

evaluated and assessed 10 license applications, participated in public hearings to 

support the licensing process, attended national and international public energy 

outreach forums, issued four Records of Decision, and granted three deepwater 

ports licenses. When fully operational, these facilities will provide 1.35 trillion 

cubic feet per year of natural gas to the Nation’s energy supply. 

Further, in an innovative public/private partnership that the Maritime Administration championed with the international LNG industry and maritime labor, 

companies will provide training and employment opportunities for U.S. citizen 

officers, cadets, and unlicensed mariners aboard their tanker fleets and at their

planned deepwater port terminals in the United States.

Current Planned Deepwater Ports

13
There is no better 

way of gaining 

insight into the 

challenges facing 

the industry and 

finding ways to 

address them 

than by having a 

presence “on the 

ground.”

During fiscal year 2007, four major energy companies signed such crewing

agreements. These agreements represent sound public policy and open up vital 

training and employment opportunities for U.S. mariners in the LNG industry.

Finally, the Maritime Administration has also obtained an applicant agreement to 

place the operation of its facility under the U.S. flag with full U.S. citizen crews. 

The applicant’s two vessels will be the first LNG tankers to carry the U.S. flag in

more than 25 years. 

Fiscal Year 2007 

Business & Workforce Development 

Program Accomplishments

• Approved 15 Capital Construction Fund applications.

• Completed development of Credit Program Performance Monitoring 

 System to automate monitoring of the $2.5 billion Title XI portfolio.

• Cargo preference activities generated over 10 million revenue tons of cargo 

 representing $1.3 billion of freight revenue for 118 international trading 

	 	 U.S.- flag vessels.

• Provided over $10 billion of war risk insurance on 126 vessels for the 

 military including numerous vessels working in Iraqi waters.

• Calculated 134 guideline rates for 2 million tons of food aid cargoes carried 

	 	 by 14 operators on 34 different U.S.-flag vessels resulting in savings of

 $3.2 million.

• Implemented the Small Shipyards Grant Program, which will make avail-

	 	 able $10 million in assistance to small shipyards in fiscal year 2008.

•	 Produced the first annual “Women on the Water” conference, bringing

	 	 together current and potential female maritime ship officers and maritime

 industry leaders. 

• Granted 75 waivers under the Small Vessel Waiver Program that allows 

 foreign-built vessels of more than 5 tons and carrying 12 or fewer passe-

 ngers to engage in limited domestic charter operations.

• Worked with elements of the Defense Department, State Department, Iraq 

	 	 port operators, vendors, and U.S.-flag carriers to smooth the flow of cargoes

 into Iraq to support both Operation Iraqi Freedom and also Iraqi 

 Reconstruction.

• The Federal and State maritime academies passed their 5-year audits to 

	 	 retain the Standards of Training, Certification and Watchkeeping

 endorsement.

14
The Mariner 

Outreach System 

participation more 

than doubled.

• The Maritime Administration has entered into several agreements with ship-

 ping companies to open up training billets aboard their vessels for U.S. 

 maritime academy cadets.

• The Mariner Outreach System participation more than doubled.

• Maritime Careers Outreach--Worked with Congressman Elijah Cummings 

 and maritime industry personnel in the development of lecture speakers 

 series and implementation of an ROTC program at Maritime Industries 

 Academy in Baltimore, MD.

15

For more than 

two centuries, 

America’s national 

defense has relied 

heavily on the U.S. 

commercial sector–

and continues to do 

so today. 

Security, Preparedness

and Response

The U.S. merchant marine has a proud history of protecting the Nation and helping to win the peace. For more than two centuries, America’s national defense 

has relied heavily on the U.S. commercial sector–and continues to do so today. 

This includes using ships as naval auxiliaries, vessels to transport military personnel and supplies, and trained seafarers for naval service. 

For the Marine Transportation System today, defense mobilization still equates 

to having a strong industrial base as well as sufficient U.S. commercial ships

and civilian crews available to meet defense sealift requirements, but now also 

includes the shoreside equipment and infrastructure necessary to keep the intermodal system moving.

Within the Maritime Administration, there are four core programs that support 

Department of Defense sealift requirements:

• The interlocking Maritime Security Program and Voluntary Intermodal 

 Sealift Agreement Program provide the Department of Defense assured 

 access to U.S. commercial ships and crews as well as their intermodal 

 equipment and facilities. The 60-vessel Maritime Security Program also 

 provides employment and training opportunities to U.S. seafarers in order to 

 ensure their availability in times of national crisis.

• The National Defense Reserve Fleet (NDRF) is comprised of government- 

 owned militarily useful cargo vessels that can be used in time of national 

 emergency. The NDRF includes the Ready Reserve Force (RRF) made up 

 of vessels in an enhanced state of readiness that permits them to be under

 way to support military operations in only a few days time. 

• The graduates of U.S. maritime academies with service obligations who are 

	 	 essential to ensuring that sufficient officers are available to meet both com-

 mercial and national defense requirements.

• The National Shipping Authority that permits the Maritime Administration 

 to assume responsibility for the Nation’s vessels and ports during a national 

 emergency. This responsibility includes the peacetime planning oversight 

 of 15 DOD-designated strategic commercial ports needed by the military for 

 deployment during contingency operations.

17
Maritime Security Program 

and Voluntary Intermodal 

Sealift Agreements

Defense sealift continues to rely heavily on the U.S. commercial sector. The 

National Security Sealift Policy of October 5, 1989, which remains in force today, states that a vital objective of the Nation is to ensure that sufficient military

and civil maritime resources will be available to meet defense deployment and 

essential economic requirements. 

Industrial globalization 

and consolidation have 

led to the decline of many 

traditional maritime 

fleets, including the

U.S.-flag general cargo

fleet. In order to ensure

that an active U.S. fleet of

militarily-useful general 

cargo ships will continue 

to adequately serve both 

the economic and national security objectives of U.S. maritime policy in the future, the Maritime 

Administration administers the Maritime Security Program (MSP) and Voluntary Intermodal Sealift Agreement (VISA), a complementary sealift readiness 

program approved by the Secretary of Defense. 

The MSP and VISA programs work together to provide militarily-useful commercial vessels and the crews to operate them (and government-owned reserve 

vessels). MSP vessel operators receive financial support to partially offset the

higher operating costs of keeping these vessels under the U.S.-flag and also

obtain priority consideration in the award of DOD peacetime cargoes. 

Through MSP and VISA, U.S.-flag vessel operators have made an extraordinary

commitment. More than 90 percent of all U.S.- flag dry cargo ships are enrolled

in one or both programs, obligating two-thirds of the carrying capacity of the 

entire U.S.-flag dry cargo fleet.

The vessel capacity, crews and intermodal systems made available through MSP 

and VISA advance the Department of Transportation’s Security, Preparedness 

and Response strategic goal by ensuring that the transportation system can respond to emergency needs. These programs also help ensure that DOD meets its 

strategic goals. Moreover, the design of MSP and VISA provides for a coordinated seamless transition from peace to war or national emergency while these 

vessels continue serving in the commerce of the United States.

Defense sealift 

continues to rely 

heavily on the U.S. 

commercial sector. 

18
Together these 

programs have 

resulted in an 

improvement in the 

amount of U.S.-flag 

sealift capacity that 

is readily available 

for U.S. military use.

The MSP also provides support for U.S.-flag tankers operating in international

trade. These tankers as well as others participate in the Maritime Administrationsponsored Voluntary Tanker Agreement (VTA). The VTA, like VISA, is a 

program designed to make commercial vessels (in this case, tankers) available to 

support contingency operations of DOD. 

Fiscal Year 2007 Program 

Accomplishments

MSP ships selected by the Maritime Administration in conjunction with the U.S. 

Transportation Command must be militarily useful and commercially viable. As 

of September 12, 2007, there were 60 ships enrolled in the MSP fleet, which

was composed of 40 containerships, 15 Ro/Ro vessels, two heavy lift vessels, 

and three tankers.

During fiscal year 2007, eight MSP ships were replaced with newer ships,

increasing the MSP fleet militarily-useful capacity by approximately 3,000 TEU

and more than 170,000 square feet. Notwithstanding those changes, MSP ships 

continued to support U.S. troops in Iraq and Afghanistan by transporting military cargoes and cargo supporting the rebuilding of Iraq. To date, 63 current or 

former MSP ships have contributed to this effort. MSP ships also continued to 

employ approximately 2,400 mariners, maintaining the pool of mariner positions 

that are critical to national security crewing requirements.

Prior to implementation of the MSP and VISA programs, projections indicated 

that the continued decline in the number of U.S.-flag general cargo vessels

would reduce the number and types of vessels available to the U.S. military to 

unacceptable levels. Together these programs have resulted in an improvement 

in the amount of U.S.-flag sealift capacity that is readily available for U.S. military use. From a qualitative standpoint, these readily available U.S.-flag vessels

are also more modern and the mix of vessel types better meets the needs of the 

military.

Ready Reserve Force

Since 1976, the Ready Reserve Force (RRF) fleet has been an important component of the Maritime Administration’s sealift capability that supports DOD 

sealift requirements. 

Sized to support DOD surge requirements, the RRF includes Ro/Ro vessels 

designed to carry wheeled and tracked vehicles, heavy lift vessels, specialized 

offshore petroleum discharge ships, auxiliary crane ships, special mission, and 

aviation logistic support ships.

19
The RRF has a 99 

percent success 

rate in activations 

and surpasses its 

goal of 85 percent 

of RRF readiness 

at any given time.

As of October 1, 2007, the Maritime Administration also maintains eight Fast 

Sealift Ships as surge vessels, bringing the RRF to a total of 52 vessels. The 

RRF provides approximately half of DOD’s “early surge” requirements for 10 

million square feet of sealift. DOD also maintains its own sealift vessels that 

provide the other half of Federally-owned surge sealift capacity.

This government-owned surge fleet provides jobs to U.S merchant mariners. 

All but two of the vessels have a nucleus crew of 10 mariners per ship, called a 

Reduced Operating Status (ROS) crew. These highly-skilled mariners work on a 

daily basis onboard the ships that they also operate during an emergency. When 

activated, the ROS crews are supplemented by commercial mariners available 

through U.S. maritime unions. 

The RRF has a 99 percent success rate in activations and surpasses its goal of 85 

percent of RRF readiness at any given time. Operating RRF vessels maintain 

over a 98 percent operation responsiveness rate following activations, making 

them sea power’s reliant partner.

New Role, Refitted Ship

The Maritime Administration expanded its role in national security in fiscal year

2007 by providing and managing a vessel to be used by the Missile Defense 

Agency (MDA). In 2005, the Maritime Administration was asked to provide a 

vessel that would support the government’s missile-testing program, and determined that the retiring Texas Maritime Academy training ship Texas Clipper II 

was well suited for conversion to MDA’s requirements.

20
The Ready 

Reserve Force 

activated vessels 

and successfully 

completed eight 

Operation Iraqi 

Freedom missions 

for 590 continuous 

days of operations. 

The ship’s first, fully-operational mission with its new name, Pacific Collector,

took place during May 2007 off the West Coast in support of MDA exercises.

While the vessel is not part of the Ready Reserve Force, it is kept in RRF-like 

status, docked at a commercial facility on the West Coast. Unlike RRF vessels, 

which are turned over to Military Sealift Command when in use, the Pacific Collector remains under direct control of the Maritime Administration. A second 

vessel is currently being considered as an addition from the NDRF for the MDA.

Fiscal Year 2007 National Security 

Program Accomplishments

•	The Maritime Administration was notified of DOD’s decision to transfer

 eight Fast Sealift Ships. The Maritime Administration will assume custody 

	 	 of the vessels in fiscal year 2008 and will assume full ownership of the

	 	 vessels in fiscal year 2009.

• The Ready Reserve Force activated vessels and successfully completed eight 

 Operation Iraqi Freedom missions for 590 continuous days of operation. 

• Activated four Ready Reserve Force vessels in support of military exercises 

 for 190 days of continuous operations. 

•	Conducted eight successful Turbo Activations (no-notice); one was a triple 

 activation of the Cape Taylor, the Cape Trinity and the Cape Texas. 

•	The Pacific Collector conducted its first mission for the Missile Defense

	 	 Agency (MDA) and successfully tracked the first intercept of an inter-conti-

 nental ballistic missile. 

• Eight Maritime Security Program (MSP) ships were replaced with newer 

	 	 ships, increasing the MSP fleet militarily-useful capacity by approximately

 3,000 TEU and more than 170,000 Ro/Ro square feet. Notwithstanding

 those changes, MSP ships continued to support our troops in Iraq and 

 Afghanistan by transporting military cargoes and cargo supporting the 

 rebuilding of Iraq. To date, 63 current or former MSP ships have contrib-

 uted to this effort. MSP ships also continued to employ approximately 2,400 

 mariners, maintaining the pool of mariner positions that are critical to 

 national security crewing requirements.

21
MSP participants 

provide more than 

77 percent of 

VISA capacity 

commitments.

	 •	 Participation of U.S.-flag operators in the Voluntary Intermodal Sealift

 Agreement (VISA) program provides DOD with assured access to com-

 mercial sealift resources to support Defense Department requirements. 

 MSP participants provide more than 77 percent of VISA capacity com-

	 	 mitments. During fiscal year 2007, the Maritime Administration and the

 U.S. Transportation Command hosted a meeting of the VISA Joint Planning 

 Advisory Group in conjunction with VISA Venture 2007 exercise. The 

 exercise was to test activation of the VISA program to determine whether 

 program participants could meet DOD targets for commercial sealift in a 

 timely manner. The exercise was a success. 

• Approved the award of the Merchant Marine Medal for Outstanding 

 Achievement for more than 800 merchant mariners who participated in the 

 2005 tsunami relief efforts. This recognition went to those mariners who 

 served on Military Sealift Command ships carrying supplies and medical 

 care in support of tsunami relief efforts prompted by one of the worst 

 natural disasters in world history.

• Authorized 151 Merchant Marine Expeditionary Medals to the graduates of 

 the U.S. Merchant Marine Academy. This was the largest number to date. 

 The medals were distributed during the Class of 2007’s graduation ceremo-

	 	 ny. This medal is awarded to mariners who have served in a conflict

 or war zone, and it was awarded to the largest number ever in a 

 graduating class.

22
23
Environmental

Stewardship

The maritime community must obey an ever growing list of international regulations and conform to building and operating standards affecting not only the 

environment but extending to global security and safety concerns, as well.

In its recent Agency-wide 

realignment, the Maritime Administration created a new Office for

Environment and Compliance. This office is

committed to assisting 

industry in affecting the 

development of programs 

and regulations related to 

safety, security, and environmental protection as 

well as developing best management practices to ensure compliance. To achieve 

these goals, the Office of the Associate Administrator for Environment and

Compliance has formed partnerships with the maritime industry, Federal, State, 

and local governments to foster a positive working environment designed to 

enhance the overall efficiency and effectiveness of an integrated, safe, secure,

and environmentally sound U.S. transportation network.

The U.S. marine transportation industry complies with International Maritime 

Organization (IMO) safety agreements and protocols to which the United States 

is a signatory, and to International Labor Organization (ILO) maritime labor 

conventions. 

The Maritime Administration has a key role in developing both the IMO rules 

and the International Organization for Standardization (ISO) standards by reason 

of its expertise in ship design and engineering, operations, repair and maintenance experience; its relationship with the marine transportation community; 

and its contribution of ships for testing platforms. The Maritime Administration 

is a member of several technical committees in IMO and ISO.

The Agency is a principal in the interagency Ship Structure Committee (SSC). 

Currently, SSC is examining wind and wave loads and their impact on ship and 

offshore structures; the fatigue and fracture characteristics of composite, steel 

and aluminum building materials; hull inspection and maintenance issues; and 

detail design and fabrication technologies. 

In its recent 

Agency-wide 

realignment, 

the Maritime 

Administration 

created a new 

Office for 

Environment and 

Compliance.

24
The Agency also works in concert with the American Bureau of Shipping Technical Committees to review proposed rule changes governing shipbuilding.

Furthermore, the Maritime Administration provides technical assistance to the 

U.S. Navy Program Office overseeing various technical panels of the National

Shipbuilding Research Program/Advanced Shipbuilding Enterprise (NSRP/

ASE). This program is designed to address technical, management, training,

and other issues related to military and dual-use vessel construction.

Environmental Protection 

for Maritime Interests

The maritime transportation 

industry has increasingly become 

the focus of new environmental 

rules and regulations. Civil and 

criminal litigation against maritime interests has increased, 

resulting in judicial decisions 

that have widespread impacts on 

maritime operations. The Maritime Administration is committed to high standards of environmental excellence 

in the management of its own ships as well as those in its ship disposal program. 

It is also committed to encouraging and supporting environmental compliance 

efforts by the maritime community generally. 

Vessels that transit through many different countries and ports in different parts 

of the United States should not be expected to meet different and often conflicting rules and regulations. Further, burdensome local and State regulations may 

result in diversions of some ships to ports in neighboring countries. Therefore, 

the Maritime Administration plays a key role in asserting the need for consistent, 

uniform international and national laws and policies necessary for the protection 

of the environment.

Aquatic Invasive Species, 

Ballast Water and Hull Fouling 

While carrying goods that people want and need, vessels can also carry unwanted travelers--non-indigenous species. They are transported in ballast water, on 

vessel hulls and decks, or even in shipping containers. Once introduced into a 

body of water, they can displace native species causing harm to the local ecosystem, and to commercial and recreational fishing as well.

The maritime 

transportation 

industry has 

increasingly 

become the 

focus of new 

environmental 

rules and 

regulations.

25
The Agency is 

currently in talks 

with the State 

of Maryland 

for developing 

a long-term 

testing program 

for technologies 

for ballast water 

treatment.

These aquatic-nuisance species have been identified by the International Maritime Organization as a substantial threat to the world’s oceans and waterways. 

However, ballast water must be carried in order to insure safe and efficient vessel operation by providing balance and stability to ships. 

The Maritime Administration continues to provide leadership on both ballastwater policy and treatment technology as they affect marine transportation and 

freight movement. Although not mandated to do so, the Agency has stepped up 

to do its part. The Maritime Administration provides its ships as testing platforms for promising technologies for ballast water treatment.

In 2006, the Maritime Administration’s Baltimore-based Cape Wrath and Cape 

Washington were modified to allow skid-mounted technologies easy access to

the ships’ ballast water systems, without disrupting engine room operations. The 

Agency is currently in talks with the State of Maryland for developing a longterm testing program for technologies for ballast water treatment. IMO-compliant testing of a treatment technology is scheduled to commence in early 2008. 

As in other areas, the Maritime Administration participates in the development 

of laws and standards both at the national and international level related to ballast water management and hull fouling. It is vital to the Nation to harmonize 

environmental protection with healthy commerce. 

Ship Disposal

Environmental concerns related to ships do not end when they cease operation. 

The Maritime Administration retains the National Defense Reserve Fleet, a 

reserve of ships that may be activated to meet shipping requirements in national 

emergencies. Along with the custody of these ships comes the responsibility of 

properly disposing of them once they become obsolete. The Maritime Administration continues to pursue all feasible disposal alternatives. 

The domestic ship recycling industry (an employer of some 3,000 trained and 

skilled workers) is heavily dependent on the supply of Maritime Administration 

ships and the continued robust market demand for ferrous and non-ferrous scrap 

metal by both domestic and foreign smelters. The Maritime Administration 

works closely and cooperatively with the EPA and OSHA to ensure that domestic ship recycling facilities have the capability of dismantling ships in a manner 

that protects the environment, worker safety and health.

The Maritime Administration used four annual performance measures and goals 

during fiscal year 2007 for its Ship Disposal Program, and the program was

more than successful in each of those measures.

26
The Maritime 

Administration 

partnered with 

other government 

agencies, industry, 

and academia 

to complete 

innovative research 

projects. 

• Number of obsolete vessels from the National Defense Reserve Fleet 

 (NDRF) sites covered by disposal contract awards for subsequent disposal: 

 The target was 13; the actual number of contracts awarded for obsolete, 

	 	 non-retention ships was 23, exceeding fiscal year 2007’s target of 10 ships.

• Number of obsolete vessels removed from the NDRF sites for subsequent 

 disposal: The target was 13 vessels; the actual number of vessels removed 

	 	 in fiscal year 2007 was 20, exceeding fiscal year 2007’s target by

 seven ships.

• Number of obsolete vessels disposed of from the NDRF sites: The target 

 was 15; the actual number of vessels disposed in 2007 was 20, exceeding 

	 	 fiscal year 2007’s target by five ships.

• Cost-per-ton for obsolete vessel disposal actions from the NDRF: 

	 	 The target cost was $200 per ton; the actual cost-per-ton figure fiscal year

 2007 was $73.

The Maritime Administration also has two long-term ship disposal measures. 

One target is to maintain the number of high-priority ships available for disposal 

at no more than 5 percent of the total number of obsolete ships in the fleet: the

actual result was 2.4 percent.

The second long-term target was to remove more vessels in fiscal year 2007 than

previously. The Maritime Administration continues to communicate its disposal 

plans and impediments to the Congress on a semi-annual basis and continues to 

address the legal, legislative, and regulatory inter-agency issues to ensure the efficient disposal of ships with due regard for the environment and worker safety.

Moreover, in 2007, as a ship owner, operator and ship disposal agent, and as 

a representative of a ship-recycling nation, the Maritime Administration has 

a unique position to promote and fashion international solutions for shaping 

ship-recycling guidelines based on best management practices that protect the 

environment, worker safety and health on a global scale.

Fiscal Year 2007 

Environment & Compliance 

Program Accomplishments

• The Maritime Administration partnered with other government agencies, 

 industry, and academia to complete innovative research projects. The 

	 	 Office of Environment provided oversight and technical expertise for the

 Freight Routing Energy and Emissions Analysis Tool Project.

27
The focus of 

the GSI is the 

development of 

the technology 

necessary to 

prevent the 

introduction of 

aquatic-nuisance 

species into the 

Great Lakes by 

ocean-going ships.

	 •	 The Maritime Administration participated in various port and vessel

 emissions studies including: collaborating with the University of Delaware, 

 through a cooperative agreement, to identify optimal incentive strategies to 

	 	 reduce emissions at port facilities; testing water emulsification emission

 reduction technology on an oceangoing container vessel; and partnering 

 with the EPA and the Port of Los Angeles to analyze and characterize 

 energy sources and air pollution emissions from marine vessels affecting 

 the Port of Shanghai. 

	 •	 The Maritime Administration participated as an active member of the U.S.

 delegation to the International Maritime Organization (IMO) Maritime 

 Environment Protection Committee on the working groups for Ballast 

 Water Treatment, Air Emissions Annex VI, and the newly formed Green-

 house Gas group, and has led the delegation on Ship Recycling.

	 •	 Served as the Chair of the International Standards Organization (ISO) TC8/

 SC3 subcommittee on Piping and Machinery. ISO has developed and 

 published 14 international consensus standards. In addition, there are 22 

 additional proposed standards in various stages of development, adoption, 

 and publication.

	 •	 The Ship Operations Cooperative Program, supported and administratively

 managed by the Maritime Administration, created two new working 

 groups: Energy, and Environment. The workgroups form industry partner-

 ships to tackle environmental issues such as air emissions, energy use and 

 ballast water treatment.

	 •	 As a member of the Great Ships Initiative (GSI), the Maritime Administra-

 tion worked with NOAA, the Northeast-Midwest Institute and the Univer-

 sity of Wisconsin-Superior to develop a shore-based testing platform for 

 testing technology in the Great Lakes Region. The focus of the GSI is the 

 development of the technology necessary to prevent the introduction of 

 aquatic-nuisance species into the Great Lakes by ocean-going ships.

	 •	 The Maritime Administration, the University of Maryland Center for

 Marine Biotechnology, and the State of Maryland are working together in 

 the Port of Baltimore to conduct shipboard test of ballast water research 

 and technology.

28
Financial Statements 

As of September 30,

2007 and 2006

The Financial Statements include:

Balance Sheet pp. 30-31

Statement of Net Cost p. 31

Statement of Changes in Net Position pp. 32-33

Statement of Budgetary Resources pp. 34-35

Notes to Financial Statement pp. 36-58

There are 23 Notes to the Financial Statement, and 4 Supplemental Financial Information documents. 

They are available online for review at http://www.marad.dot.gov/Publications/genref.htm. 

The Notes are also included in this document.

29
30

 FY 2007 FY 2006

Assets (Note 2) 

Intragovernmental:

 Fund Balance with Treasury (Note 3) 578,432 639,732 

 Investments (Note 4) 35,181 151,766 

 Accounts Receivable, Net (Note 5) 43,752 45,949 

 Loans Receivable 0 0 

 Other Assets (Note 6) 545 507 

Total Intragovernmental Assets 657,910 837,954 

 

Cash and Other Monetary Assets 10 10

Investments (Note 4) 74,085 0

Accounts Receivable, Net (Note 5) 508 0

 

Loans Receivable and Related Foreclosed Property, Net (Note 7) 28,201 28,357

Inventory and Related Property, Net (Note 8) 253,559 257,798

General Property, Plant and Equipment, Net (Note 9) 583,223 641,254

Other Assets (Note 6) 0 0

Total Assets 1,597,496 1,765,373

 

	 Stewardship PP&E (Note 10)	

 

Liabilities (Note 11) 

Intragovernmental:

 Accounts Payable 3,757 277

 Debt (Note 12) 194,409 271,307

 Other Intragovernmental Liabilities (Note 13) 354,034 229,292

Total Intragovernmental Liabilities 552,200 500,876

 

Accounts Payable 48,645 36,165

Loan Guarantee Liability (Note 7) 336,410 345,342

	 Federal Employee and Veterans’ Benefits (Note 11)	 21,523	 20,730

Environmental Cleanup and Disposal Liabilities (Note 15) 285,480 380,371

Grant Accrual (Note 14) 0 0

 

Other Liabilities (Notes 13, and 17) 57,363 124,863

Total Liabilities 1,301,621 1,408,347

 

Commitments and Contingencies (Note 17) 

Maritime Administration Financial Statements

Balance Sheet As of September 30, 2007 and 2006 (Dollars in Thousands) 
31

Maritime Administration Financial Statements

Balance Sheet As of September 30, 2007 and 2006 – Cont. (Dollars in Thousands) 

Maritime Administration Financial Statements

Statement of Net Cost for Periods Ended September 30, 2007 and September 30, 2006

(Dollars in Thousands)

 FY 2007 FY 2006

Net Position 

 Unexpended Appropriations - Earmarked funds (Note 18) 0 0

 Unexpended Appropriations - Other funds 99,031 197,812

 Cumulative Results of Operations - Earmarked funds (Note 18) 58,358 53,792

 Cumulative Results of Operations - Other funds 138,486 105,422

Total Net Position 295,875 357,026

 

Total Liabilities and Net Position 1,597,496 1,765,373

The accompanying Notes are an integral part of the financial statement.

 FY 2007 FY 2006

 

Program Costs (Notes 19 and 20): 

 

Gross Costs 931,137 851,955

Less: Earned Revenues 360,410 394,430

Net Cost of Operations 570,727 457,525

The accompanying Notes are an integral part of the financial statement.
32

Maritime Administration Financial Statements

Statement of Changes in Net Position 

for Periods Ended September 30, 2007 and September 30, 2006 (Dollars in Thousands)

Cumulative Results of Operations

 FY 2007 FY 2006

 

Beginning Balances 159,214 145,088

Adjustments (+/-) 0 0

 Changes in Accounting Principle 0 0

 Corrections of Errors 0 -200

Beginning Balances, Adjusted 159,214 144,888

 

Budgetary Financing Sources: 

 Other Adjustments (Rescissions, etc.) (+/-) 0 0

 Appropriations Used 605,877 564,778

 Non-Exchange Revenue 194 0

 Donations and Forfeitures of Cash and Cash Equivalents 2,422 2,151

 Transfers-In/Out Without Reimbursement (+/-) -58 10,700

 Other Budgetary Financing Sources (+/-) 0 -263

 

Other Financing Sources: 

 Donations and Forfeitures of Property 0 0

 Transfers-In/Out Without Reimbursement (+/-) -1,000 -104,943

 Imputed Financing From Costs Absorbed by Others 921 7,308

 Other (+/-) 0 -7,880

 

Total Financing Sources 608,357 471,851

 

Net Cost of Operations 570,727 457,525

 

Net Change 37,630 14,326

 

Cumulative Results of Operations 196,844 159,214

 
33

Maritime Administration Financial Statements

Statement of Changes in Net Position 

for Periods Ended September 30, 2007 and September 30, 2006 (Dollars in Thousands) 

Unexpended Appropriations

 FY 2007 FY 2006

 

Beginning Balances 197,812 203,255

Adjustments (+/-) 

 Changes in Accounting Principle 0 -114

 Corrections of Errors 0 0

 

Beginning Balances, Adjusted 197,812 203,141

 

Budgetary Financing Sources: 

 Appropriations Received 584,840 560,653

 Appropriations Transferred-In/Out (+/-) 0 5,342

 Other Adjustments (Rescissions, etc.) (+/-) -77,744 -6,546

 Appropriations Used -605,877 -564,778

 

Total Budgetary Financing Sources -98,781 -5,329

 

Total Unexpended Appropriations 99,031 197,812

The accompanying Notes are an integral part of the financial statement.

Above Statement of Changes in Net Position for FY 2007 and FY 2006 reflects

the total of MARAD’s earmark funds and other funds.
34

Maritime Administration Financial Statements

Statement of Budgetary Resources for Periods Ended September 30, 2007 and September 30, 2006

(Dollars in Thousands)

 FY 2007 FY 2006

 

Budgetary Resources: 

Unobligated Balance, Brought forward, October 1 (+/-) 516,882 553,165

Recoveries of Prior Year Unpaid Obligations 3,240 32,008

 

Budget Authority:

 Appropriations Received 585,480 560,653

 Borrowing Authority 225,000 269,300

 Contract Authority 0 0

Spending Authority From Offsetting Collections:

 Earned 0 0

 Collected 390,738 469,736

 Change in receivables from Federal Sources -2,731 6,820

	 Change in Unfilled Customer Orders	 0	 0

 Advance Received -6,262 -3,106

 Without Advance from Federal Sources -3,788 -51,980

Expenditure transfers from trust funds 0 10,700

 Anticipated for Rest of Year, Without Advances 0 0

 Previously unavailable 0 0

 Subtotal 1,188,438 1,262,123

Non Expenditure transfers, Net, Anticipated and Actual 0 5,342

Temporarily Not Available Pursuant to Public Law -4,945 0

Permanently Not Available -376,529 -261,573

Total Budgetary Resources 1,327,086 1,591,065

 
35

Maritime Administration Financial Statements

Statement of Budgetary Resources 

for Periods Ended September 30, 2007 and September 30, 2006 – Cont. (Dollars in Thousands) 

 FY 2007 FY 2006

 

Status of Budgetary Resources: 

Obligations Incurred:

 Direct: 585,643 692,894

 Reimbursable: 314,065 381,289

 Subtotal 899,708 1,074,183

Unobligated Balance:

 Apportioned 11,747 0

 Exempt from apportionment 1,359 6,378

 Subtotal 13,106 6,378

Unobligated Balance Not Available: 414,272 510,504

Total Status of Budgetary Resources 1,327,086 1,591,065

 

Change in Obligated Balance: 

Obligated Balance, Net,

 Unpaid obligations, brought forward, Oct 1st (+) 297,866 344,414

 Uncollected customer payments from Fed sources, brought forward, Oct 1(-) -123,141 -168,301

Total, unpaid obligated balance, brought forward, net 174,725 176,113

Obligations Incurred (+): 899,708 1,074,184

Gross Outlays (-) -896,050 -1,088,723

Obligated Balance Transfers, Net: 0 0

 Actual transfers, unpaid obligations (+ or -) 0 0

 Actual transfers, uncollected customer payments from Federal sources (+ or -) 0 0

Total, unpaid obligated balance transferred, net 0 0

Recoveries of prior-year unpaid obligations, actual (-) -3,240 -32,008

Change in uncollected customer payments from Federal sources (+/-) 6,519 45,159

Obligated Balances, Net, End of Period: 0 0

 Unpaid Obligations (+) 298,285 297,866

 Uncollected Customer Payments from Federal Sources (-) -116,622 -123,141

Total, unpaid obligated balance, net, end of period 181,663 174,725

 

NET OUTLAYS 

Gross Outlays (+) 896,050 1,088,723

Less: Offsetting Collections (-) -384,477 477,330

Less: Distributed offsetting receipts -17,638 -13,616

Net Outlays 493,935 625,009

Above Statement of Budgetary Resources for FY 2007 and FY 2006

reflects the total of budgetary resources and non-budgetary resources.
36

Notes to the Financial Statement

Note 2. Non-Entity Assets:

(Dollars in Thousands)

 9/30/2007 9/30/2006

 

Intragovernmental: 

 Fund Balance with Treasury (268) 186

 Investments - -

 Accounts Receivable - -

 Other Assets - -

Total Intragovernmental (268) 186

 Cash and Other Monetary Assets - -

 Accounts Receivable - -

 Loans Receivable and Related Foreclosed Property - -

 Inventory and Related Property - -

 General Property, Plant and Equipment - -

 Other Assets - -

Total Non-Entity Assets (268) 186

Total Entity Assets 1,597,496 1,765,374

 Total Assets 1,597,496 1,765,374

 

Entity Assets are assets which the reporting entity has authority to use in its operations. 

Non-Entity Assets are held by the reporting entity, but are not available to the entity. 

 

Non-Entity Asset amounts indicated above should agree with non-entity amounts indicated 

in other notes, such as accounts receivable, other assets, etc.

The accompanying Notes are an integral part of the financial statement.
Notes to the Financial Statement

Note 3. Non-Entity Assets:

(Dollars in Thousands)

 Entity Non-Entity 9/30/07 9/30/06

Fund Balances: Assets Assets Total Total

Trust Funds $ 9,980 $ - $ 9,980 $ 6,454 

Revolving Funds 429,935 - 429,935 408,391 

General Funds 139,061 - 139,061 240,707 

Other Fund Types (276) (268) (544) (15,820)

 Total $578,700 $(268) $578,432 $639,732

 

Status of Fund Balance with Treasury: 

Unobligated Balance

Available $(52,524) $33,259 

Unavailable (544) (15,820)

Obligated Balance Not Yet Disbursed 300,694 294,799 

Non-Budgetary FBWT (Credit Reform Financing Accounts 

or other FBWT that do not have budget authority) 330,806 327,494

 Total $578,432 $639,732

 

 

Fund Balances with Treasury are the aggregate amounts of the entity’s accounts with Treasury for 

which the entity is authorized to make expenditures and pay liabilities.

The accompanying Notes are an integral part of the financial statement.

37
38

As of September 30, 2007

 Amortized Market

 (Premium) Investments Other Value

 Cost Discount (Net) Adjustments Disclosure

Intragovernmental Securities:

 Marketable $35,299 $244 $35,543 $(615) $34,928 

 Non-Marketable:

 Par Value - - - - - 

 Market-Based - - - - - 

 Subtotal $35,299 $244 $35,543 $(615) $34,928 

 Accrued Interest 253 253 253

 Total Intragovernmental

 Investments $35,552 $244 $35,796 $(615) $35,181

 Amortized Market

 (Premium) Investments Other Value

 Cost Discount (Net) Adjustments Disclosure

Investments with the Public :

 Marketable $75,252 $484 $75,736 $(1,650) $74,085 

 Non-Marketable:

 Par Value - - - - - 

 Market-Based - - - - - 

 Subtotal $75,252 $484 $75,736 $(1,650) $74,085 

 Accrued Interest - - -

 Total Investments with the Public

 $75,252 $484 $75,736 $(1,650) $74,085

 

As of September 30, 2006 

 Amortized Market

 (Premium) Investments Other Value

 Cost Discount (Net) Adjustments Disclosure

Intragovernmental Securities:

 Marketable $152,615 $2,037 $154,652 $(3,233) $151,419 

 Non-Marketable:

 Par Value - - - - - 

 Market-Based - - - - - 

 Subtotal $152,615 $2,037 $154,652 $(3,233) $151,419 

 Accrued Interest 347 347 347

 Total Intragovernmental

 Investments $152,962 $2,037 $154,999 $(3,233) $151,766

The accompanying Notes are an integral part of the financial statement.

Notes to the Financial Statement

Note 4. Investments:

(Dollars in Thousands)
39

As of September 30, 2007 Gross Allowance for Net

 Amount Uncollectible Amount

Intragovernmental: Due Amounts Due

 Entity: 

 Accounts Receivable $43,752 $- $43,752 

 Accrued Interest - - - 

 Total Entity Intragovernmental $43,752 $- $43,752

 Non-Entity: 

 Accounts Receivable $- $- $- 

 Accrued Interest - - - 

 Total Non-Entity Intragovernmental $- $- $-

 Total Intragovernmental Receivables $43,752 $- $43,752

Public: 

 Entity:

 Accounts Receivable $508 $- $508 

 Accrued Interest - - - 

 Total Entity Public $508 $- $508

 Non-Entity:

 Accounts Receivable $- $- $- 

 Accrued Interest - - - 

 Total Non-Entity Public $- $- $- 

 Total Public Receivables $508 $- $508

 Total Receivables $44,260 $- $44,260

 

As of September 30, 2006 Gross Allowance for Net

 Amount Uncollectible Amount

Intragovernmental: Due Amounts Due

 Entity

 Accounts Receivable $45,949 $- $45,949 

 Accrued Interest - - - 

 Total Entity Intragovernmental $45,949 $- $45,949

 Non-Entity:

 Accounts Receivable $- $- $- 

 Accrued Interest - - - 

 Total Non-Entity Intragovernmental $- $- $-

 Total Intragovernmental Receivables $45,949 $- $45,949

Public: 

 Entity

 Accounts Receivable $- $- $- 

 Accrued Interest - - - 

 Total Entity Public $- $- $- 

 Non-Entity:

 Accounts Receivable $- $- $- 

 Accrued Interest - - - 

 Total Non-Entity Public $- $- $- 

 Total Public Receivables $- $- $- 

 Total Receivables $45,949 $- $45,949

The accompanying Notes are an integral part of the financial statement.

Notes to the Financial Statement

Note 5. Accounts Receivable:

(Dollars in Thousands)
40

Intragovernmental: 

 09/30/07 09/30/06

 Entity:

 Advances and Prepayments $545 $507 

 Undistributed Assets and Payments - - 

 Other (Fully Describe Below) - - 

 Other (Fully Describe Below) - - 

 Total Entity Intragovernmental $545 $507

 

 Non-Entity:

 Advances and Prepayments $- $- 

 Undistributed Assets and Payments - - 

 Other (Fully Describe Below) - - 

 Other (Fully Describe Below) - - 

 Total Non-Entity Intragovernmental $- $-

 

 Total Intragovernmental Other Assets $545 $507

 

 

Public: 

 

 Entity:

 Advances to the States $- $- 

 Other Advances and Prepayments - - 

 Undistributed Assets and Payments - - 

 Other (Fully Describe Below) - - 

 Other (Fully Describe Below) - - 

 Total Entity Public $- $-

 

 Non-Entity:

 Advances and Prepayments $- $- 

 Undistributed Assets and Payments - - 

 Other (Fully Describe Below) - - 

 Other (Fully Describe Below) - - 

 Total Non-Entity Public $- $-

 

 Total Public Other Assets $- $-

The accompanying Notes are an integral part of the financial statement.

Notes to the Financial Statement

Note 6. Other Assets

(Dollars in Thousands)
41

DOT administers the following direct loan and/or loan guarantee programs: 

 

(1) Railroad Rehabilitation Improvement Program 

(2) Amtrak Loans

(3) Transportation Infrastructure Finance Innovation Act (TIFIA) Loan Program 

(4) Federal Ship Financing Fund (Title XI) 

(5) OST Minority Business Resource Center Guaranteed Loan Program 

(6) Federal Ship Liquidating Fund (Title XI) 

 An analysis of loans receivable, allowance for subsidy costs, liability for loan guarantees, 

 foreclosed property, modifications, reestimates, and administrative costs 	associated with the

 direct loans and loan guarantees is provided in the following sections: 

 

Defaulted Guaranteed Loans from Post-1991 Guarantees 

 Value of 

 FY2007 Assets

 Loans Related to

 Receivable, Interest Foreclosed Allowance Loans

 Gross Receivable Property for Subsidy Receivable

(4) Fed Ship Financing Fund (Title XI) $7,501 $200 $19,000 $1,500 $28,201 

Total $7,501 $200 $19,000 $1,500 $28,201

 Value of 

 FY2006 Assets

 Loans Related to

 Receivable, Interest Foreclosed Allowance Loans

 Gross Receivable Property for Subsidy Receivable

(4) Fed Ship Financing Fund (Title XI) $7,713 $144 $19,000 $1,500 $28,357 

Total $7,713 $144 $19,000 $1,500 $28,357

Guaranteed Loans Outstanding 

 Outstanding Principal 

 of Guaranteed Loans, Amount of Outstanding

 Face Value Principal Guaranteed

(3) TIFIA Loans $- $- 

(4) Fed Ship Financing Fund (Title XI) 2,687,186 2,936,187 

(5) OST Minority Business Res - - 

(6) Fed Ship Liquidating Fund (Title XI) 2,204 6,781 

 Subtotal $2,689,390 $2,942,968

The accompanying Notes are an integral part of the financial statement.

Notes to the Financial Statement

Note 7. Direct Loans and Loan Guarantees, Non-Federal Borrowers:

(Dollars in Thousands)
42

Subsidy Expense for Loan Guarantees by Program and Component 

 

 FY2007

Loan Guarantee Programs	 Interest 	 Defaults	 Fees and Other	 Other	 Modifications/	

 Supplements Net Collections Subsidy Costs Re-Estimates Total

(3) TIFIA Loans $- $- $- $- $- $- 

(4) Fed Ship Financing Fund 

(Title XI) - 891 774 20,499 (31,096) (8,932)

(5) OST Minority 

Business Res - - - - - - 

Subtotal $- $891 $774 $20,499 $(31,096) $(8,932)

 FY2006

	 	 	 Interest	 Defaults	 Fees and Other	 Other	 Modifications/	

 Supplements Net Collections Subsidy Costs Re-Estimates Total

(3) TIFIA Loans $- $- $- $- $- $- 

(4) Fed Ship Financing Fund 

(Title XI) 3,377 - 12,707 (75,210) 106,654 47,528

(5) OST Minority 

Business Res - - - - - - 

 Subtotal $3,377 $- $12,707 $(75,210) $106,654 $47,528

Budget Subsidy Rates for Loan Guarantees for the Current Year Cohort 

 

 FY2007

Loan Guarantee Programs Interest Fees and Other

 Differential Defaults Collections Other Total

(3) TIFIA Loans 0.00% 0.00% 0.00% 0.00% 0.00%

(4) Fed Ship Financing Fund 

(Title XI) 0.00% 12.05% -4.88% 0.00% 7.17%

(5) OST Minority 

Business Res 0.00% 0.00% 0.00% 0.00% 0.00%

Subtotal 0.00% 12.05% -4.88% 0.00% 7.17%

Liability for Loan Guarantees (Present Value Method Post-1991 Guarantees): 

 FY 2007 FY 2006 

 Liabilities for Post-1991 Liabilities for Post-1991

Loan Guarantee Programs Guarantees, Present Value Guarantees, Present Value

 

(4) Fed Ship Financing Fund (Title XI) $336,410 $345,342 

(5) OST Minority Business Res - - 

 Total $336,410 $345,342

Notes to the Financial Statement

Note 7 continued. Direct Loans and Loan Guarantees, Non-Federal Borrowers:

(Dollars in Thousands)
43

Schedule for Reconciling Loan Guarantee Liability Balances (Post-1991 Loan Guarantees) 

Beginning Balance, Changes, and Ending Balance

 FY 2007 FY 2006

Beginning Balance of the Loan Guarantee Liability $345,342 $392,870 

Add: Subsidy Expense for Guaranteed Loans Disbursed

during the Reporting Years by Component: 

 Interest Supplement Costs - - 

 Default Costs (net of recoveries) 891 (3,377)

 Fees and Other Collections 774 (12,707)

 Other Subsidy Costs 3,298 75,210 

 Total of the Above Subsidy Expense Components $4,963 $59,126

Adjustments: 

	 	 Loan Guarantee Modifications	 - -

 Fees Received - - 

 Interest Supplements Paid - - 

 Foreclosed Property and Loans Acquired - - 

 Claim Payments to Lenders - - 

 Interest Accumulation on the Liability Balance 17,201 - 

 Other - - 

Ending Balance of the Loan Guarantee Liability 

Before Reestimates $367,506 $451,996

Add or Subtract Subsidy Reestimates by Component: 

Interest Rate Reestimate - - 

Technical/Default Reestimate (31,096) (106,654)

Total of the Above Reestimate Components $(31,096) $(106,654)

Ending Balance of the Loan Guarantee Liability $336,410 $345,342

 

The Federal Credit Reform Act of 1990 divides direct loans and loan guarantees into two groups: 

(1) Pre-1992 means the direct loan obligations or loan guarantee commitments made prior to FY 1992 and the 

resulting direct loans obligations or loan guarantees, and 

(2) Post-1991 means the direct loan obligations or loan guarantee commitments made after FY 1991 and the 

resulting direct loans or loan guarantees. The Act provides that, for direct loan obligations or loan guarantee commitments made after FY 1991, the present value of the subsidy costs (which arises from interest rate differentials, 

interest subsidies, delinquencies and defaults, fee offsets, and other cash flows) associated with direct loans and loan

guarantees be recognized as a cost in the year the direct or guaranteed loan is disbursed. Direct loans are reported net 

of an allowance for subsidy at present value, and loan guarantee liabilities are reported at present value. Foreclosed 

property is valued at the net realizable value. Loans receivable, net, or their value of assets related to direct loans, 

is not the same as the proceeds that they would expect to receive from selling their loans. DOT calculated the 

allowance for pre-1992 using the allowance for loss method. 

 

Administative costs could not be determined and disclosed because DOT has not fully implemented cost accounting 

Departmentwide. 

 

The accompanying Notes are an integral part of the financial statement.

Notes to the Financial Statement

Note 7 continued. Direct Loans and Loan Guarantees, Non-Federal Borrowers:

(Dollars in Thousands)
44

Notes to the Financial Statement

Note 8. Inventory and Related Property:

(Dollars in Thousands)

 Allowance 09/30/07 09/30/06

 Cost for Loss Net Net

Inventory: 

 

 Inventory Held for Current Sale $- $- $- $- 

 Inventory Held in Reserve for Future Sale - - - - 

 Excess, Obsolete and Unserviceable Inventory - - - - 

 Inventory Held for Repair - - - - 

 Inventory Work In Process - - - - 

 Other - - - - 

 Total Inventory $- $- $- $-

 

 

Operating Materials and Supplies: 

 

 Items Held for Use (SGL 1511) $182,786 $3,099 $179,688 $184,557 

 Items Held in Reserve for Future Use (SGL 1512) 69,998 - 69,998 69,414 

 Excess, Obsolete and Unserviceable Items (SGL 1513) - - - - 

 Items Held for Repair (SGL 1514) 3,873 - 3,873 3,827 

 Other - - - - 

Total Operating Materials & Supplies	 $256,658 $3,099 $253,559 $257,798

 

 Total Inventory and Related Property $253,559 $257,798 

 

The accompanying Notes are an integral part of the financial statement.
45

 Service Acquisition Accumulated 09/30/07 09/30/06

Major Classes Life * Value Depreciation Net Book Value Net Book Value

 

 Land $3,962 $- $3,962 $3,962 

 Buildings and Structures 20 SL 128,434 54,366 74,068 54,681 

 Furniture and Fixtures - - - - 

 Equipment 5-10 SL 23,329 23,062 267 327 

 ADP Software 1,012 532 480 682 

 Electronics 5-10 SL 738 738 - 1 

 Assets Under Capital Lease - - - - 

 Leasehold Improvements - - - - 

 Aircraft - - - - 

 Ships and Vessels 25 SL 1,656,764 1,176,540 480,225 543,358 

 Small Boats 10 SL 17,564 14,712 2,852 1,408 

 Other Vehicles - - - - 

 Construction in Progress 21,370 - 21,370 36,835 

 Property Not in Use - - - - 

 Other Miscellaneous Property - - - - 

 Total $1,853,173 $1,269,950 $583,223 $641,254

 

 

 

* Key: 

 

 Range of Service Life 

 1-5 - 1 to 5 years

 6-10 - 6 to 10 years

 11-20 - 11 to 20 years

 >20 - Over 20 years

 

The accompanying Notes are an integral part of the financial statement.

Notes to the Financial Statement

Note 9. General Property, Plant and Equipment:

(Dollars in Thousands)
46

Notes to the Financial Statement

Note 11. Liabilities Not Covered by Budgetary Resources:

(Dollars in Thousands)

1) Explain in a concise statement how the stewardship assets relate to the mission of the entity. 

Implied within the agency’s mission is the promotion of the nation’s rich martime heritage. One aspect of this 

entails the collection, maintenance and distribution of maritime artifacts removed from MARAD ships prior to 

their disposal. These artifacts are sought for public display in museums, aboard memorial ships, and in facilities 

used by government organizations and issued on a long-term loan basis for this purpose. 

2) Provide a description of the stewardship policies for the heritage assets. Stewardship policies 

for heritage assets are goals and principles the entity established to guide its acquisition, maintenance,

use, and disposal of heritage assets consistent with statutory requirements, prohibitions, and 

limitations governing the entity and the heritage assets. 

MARAD has established a list of artifact-type items that are typically found aboard agency-owned ships. As 

ships are assigned to a non-retention status in preparation for disposal, artifact items are collected, inventoried, 

photographed and relocated to secure shoreside storage facilities. This resulting inventory of artifacts is made 

	 available for long-term loan to qualified organizations for public display purposes. Qualified organizations have

access to the artifact inventory via web-based system. The artifact loan process is also managed on-line via this 

system. The program is also supports required NHPA processing prior to vessel disposal. Funding for the 

maintenance of heritage items is typically the responsibility of the organization requesting the loan. As all items 

are durable and restorable, disposal is not a consideration.

 

Notes to the Financial Statement

Note 10. Stewardship Property, Plant and Equipment (Heritage Assets): 

Intragovernmental: 09/30/07 09/30/06

 Accounts Payable $- $- 

 Debt 1,726 4,841 

 Other Liabilities 226,598 146,346

 

Total Intragovernmental $228,324 $151,187

 Accounts Payable $- $- 

Federal Employee and Veterans’ Benefits Payable	 21,523 20,730

 Environmental and Disposal Liabilities 285,480 380,371 

 Other Liabilities 80,371 117,527

 

Total Liabilities Not Covered by Budgetary Resources $685,924 $669,815 

Total Liabilities Covered by Budgetary Resources 1,301,622 738,532

 Total Liabilities $1,916,703 $1,408,347

Liabilities Not Covered by Budgetary Resources are Liabilities incurred which are not covered by 

realized budgetary resources as of the Balance Sheet date.

The accompanying Notes are an integral part of the financial statement.
Notes to the Financial Statement

Note 12. Debit:

(Dollars in Thousands)

Intragovernmental Debit:

As of September 30, 2007

 FY 2007 Net Change FY 2007 

 Beginning During Ending 

 Balance Fiscal Year Balance

 Covered by Budgetary Resources: 

 Debt to the Treasury $271,307 $(76,899) $194,408 

 Debt to the Federal Financing Bank - - - 

 Debt to Other Federal Agencies - - - 

 

 Total Covered by Budgetary Resources $271,307 $(76,899) $194,408 

 

 Not Covered by Budgetary Resources: 

 Debt to the Treasury $- $- $- 

 Debt to the Federal Financing Bank - - - 

 Debt to Other Federal Agencies - - - 

 Total Not Covered by Budgetary Resources $- $- $- 

 Total Intragovernmental Debt $271,307 $(76,899) $194,408 

 

The accompanying Notes are an integral part of the financial statement.

47
48

Notes to the Financial Statement

Note 13. Other Liabilities: 

(Dollars in Thousands)

As of September 30, 2007

 Non-Current Current FY 2007

Intragovernmental: Liabilities Liabilities Total

 Covered by Budgetary Resources:

 Advances and Prepayments $- $89,939 $89,939 

Accrued Pay and Benefits - - -

 Undisbursed Loans - - - 

 Federal Employees Compensation Act Billings - - - 

 Uncleared Disbursements and Collections - (3,444) (3,444)

 Deferred Credits - 34,972 34,972 

 Deposit Funds - - - 

 Other - Employer Contribution and Payroll Taxes Payable - - - 

 Other Liabilities - 5,970 5,970 

 Total Intragovernmental Covered by 

 Budgetary Resources $- $127,437 $127,437

 

 Not Covered by Budgetary Resources: 

 Federal Employees Compensation Act (FECA) 

 2006 Bill (Current) $- 2,506 $2,506 

 2007 Bill (Non-Current) 2,162 - 2,162 

4th Quarter of FY 2007 (Non-Current)	 479 - 479

Unbilled Accrued Benefits (Non-Current)	 - - -

 Total FECA Liabilities $2,641 $2,506 $5,147 

Other Accrued Liabilities - Ocean Freight Differential from USDA - 221,000 221,000 

Other Accrued Liabilities - Deferred Credits - - 

Other Accrued Liabilities - Advances and Prepayments - - 

Other Accrued Liabilities - Custodial Liabilities 3 3 

 Other Unfunded Employment Related Liabilities - 447 447 

 Total Intragovernmental Not Covered by 

 Budgetary Resources $2,641 $223,956 $226,598

 Total Intragovernmental Other Liabilities $2,641 $351,393 $354,034

 

Public: 

 Covered by Budgetary Resources:

 Accrued Unbilled State Payments $- $- $- 

 Other Accrued Unbilled Payments - - - 

Accrued Pay and Benefits - 3,261 3,261

 Uncleared Disbursements and Collections - 3,588 3,588 

 Advances and Prepayments - $248 248 

 Deposit Funds - - - 

 Deferred Credits (30,104) - (30,104)

 Capital Leases - - - 

 Other (FULLY DESCRIBE BELOW) - - - 

 Other (FULLY DESCRIBE BELOW) - - - 

 Total Public Covered by Budgetary 

 Resources $(30,104) $7,097 $(23,007)

 

 Not Covered by Budgetary Resources: 

Accrued Pay and Benefits $- $- $-

 Deposit Funds - - - 

 Legal Claims 2,146 - 2,146 

 Capital Leases - - - 

 Other - Unfunded Leave 7,044 - 7,044 

 Other - Other Deferred Revenue 71,183 - 71,183 

 Other - Custodial Liabilities -3 10/87 - (3)

 Total Public Not Covered by Budgetary 

 Resources $80,371 $- $80,371

 Total Public Other Liabilities $50,267 $7,097 $57,363
49

Notes to the Financial Statement

Note 13 Continued. Other Liabilities: 

(Dollars in Thousands)

As of September 30, 2006

 Non-Current Current FY 2007

Intragovernmental: Liabilities Liabilities Total

 Covered by Budgetary Resources:

 Advances and Prepayments $- $95,694 $95,694 

Accrued Pay and Benefits - - -

 Undisbursed Loans - - - 

 Federal Employees Compensation Act Billings - - - 

 Uncleared Disbursements and Collections - (19,249) (19,249)

 Deferred Credits - - - 

 Deposit Funds - - - 

Other Employer Contribution & Payroll Taxes Payable - 532 532

 Other Liabilities - 5,970 5,970

 Total Intragovernmental Covered by 

 Budgetary Resources $- $82,947 $82,947

 

 Not Covered by Budgetary Resources: 

 Federal Employees Compensation Act (FECA) 

 2005 Bill (Current) $- $1,921 $1,921 

 2006 Bill (Non-Current) 2,506 - 2,506 

4th Quarter of FY 2006 (Non-Current)	 622 - 622

Unbilled Accrued Benefits (Non-Current)	 97 - 97

 Total FECA Liabilities $3,225 $1,921 $5,146 

 Other - Ocean Freight Differential Financing 141,679 - 141,679 

 Other - Unfunded Employment Related Liabilities (479) - (479)

 Total Intragovernmental Not Covered by 

 Budgetary Resources $144,425 $1,921 $146,346

 Total Intragovernmental Other Liabilities $144,425 $84,868 $229,292

 

Public: 

 Covered by Budgetary Resources:

 Accrued Unbilled State Payments $- $- $- 

 Other Accrued Unbilled Payments - - - 

Accrued Pay and Benefits - 2,526 2,526

 Uncleared Disbursements and Collections - 3,482 3,482 

 Advances and Prepayments - 88 88 

 Deposit Funds - - - 

 Deferred Credits - 1,172 1,172 

 Capital Leases - - - 

Other Employer Contribution & Payroll Taxes Payable - 68 68

 Other (FULLY DESCRIBE BELOW) - - - 

 Total Public Covered by Budgetary 

 Resources $- $7,336 $7,336

 

 Not Covered by Budgetary Resources: 

Accrued Pay and Benefits	 $- $- $-

 Deposit Funds - - - 

 Legal Claims (Contingent Liabilities) 3,276 - 3,276 

 Capital Leases - - - 

 Other - Deferred Credits 115,175 - 115,175 

 Other - Unfunded Employment Related Liabilities (280) - (280)

 Unfunded Leave (645) - (645)

 Total Public Not Covered by Budgetary 

 Resources $117,526 $- $117,526

 

 Total Public Other Liabilities $117,526 $7,336 $124,863

The accompanying Notes are an integral part of the financial statement.
50

Notes to the Financial Statement

Note 15. Environmental and Disposal Liabilities:

(Dollars in Thousands)

 9/30/2007 9/30/2006

Covered by Budgetary Resources: 

 Environmental Cleanup Liabilities:

 Environmental Cleanup (Describe) $- $-

Asset Disposal Liabilities:

 Asset Disposal (Describe) - - 

 Total Covered by Budgetary Resources $- $- 

 Not Covered by Budgetary Resources: 

 Environmental Cleanup Liabilities:

 Environmental Cleanup (Describe) $285,480 $380,371 

 Environmental Cleanup (Describe) - - 

 Asset Disposal Liabilities:

 Asset Disposal (Describe) - - 

 Total Not Covered by Budgetary Resources $285,480 $380,371

 Total $285,480 $380,371 

Disclose Environmental Cleanup and Asset Disposal Liabilities in accordance with Statements of Federal Financial Accounting Standards No. 5 and 6. For environmental hazards resulting from ongoing operations, include the: (1) Sources of cleanup 

requirements, (2) Method for assigning estimated total cleanup costs to current operating periods, (3) Unrecognized portion of 

estimated total cleanup cost associated with General Property, Plant and Equipment, (4) Material changes in total estimated 

cleanup costs due to changes in laws, technology, or plans, and the portion of the change in estimate that relates to prior period 

operations, and (5) Nature of estimates and the disclosure of information 	regarding possible changes due to inflation, deflation,

technology, or applicable laws and regulations.

The accompanying Notes are an integral part of the financial statement.

Notes to the Financial Statement

Note 17. Contingencies and Commitments:

Describe any contingencies. A loss contingency is an existing condition, situation, or set of circumstances involving uncertainty as to possible loss to an entity. The uncertainty should ultimately be resolved when one or more future events occur or fail 

to occur. The likelihood that the future event 	or events will confirm the loss or the incurrence of a liability can range from probable to remote. Statement of Federal Financial Accounting Standards (SFFAS) No. 5, as amended by SFFAS No. 12, 

contains the criteria for recognition and disclosure of contingent liabilities. In addition to the contingent liabilities required by 

SFFAS No. 5, the following shall also be disclosed: (1) An estimate of obligations related to canceled appropriations for which 

the reporting entity has a contractual commitment for payment, and (2) Amounts for contractual arrangements which may require 

future financial obligations (commitments), e.g., undelivered orders. 

1. Legal Claims - Probable (SGL 2920) 2,146 

2. Legal Claims - Reasonably Possible 6 

3. MARAD faces liability primarily by virtue of the actions of its predecessor, the War Ship Administration, 

 for its share of liability for remediation under CERCLA at various sites. We are currently unable 

 to quantify our liability in this area. 

The accompanying Notes are an integral part of the financial statement.
Notes to the Financial Statement

Note 18. Earmarked Funds:

Notes to OA: If your organization has more than one earmarked fund, please provide a separate explanation for each earmarked fund in Sections A-C. If the category of earmarked funds is not listed for your OA, 

please add as appropriate.

War Risk Insurance Fund - MARAD is authorized to insure against loss or damage from marine war risks until 

commercial insurance can be obtained on reasonable terms and conditions. This insurance includes war risk hull 

and disbursement interim insurance, war risk protection and indemnity interim insurance, second seaman’s war risk 

interim insurance and war risk cargo insurance standby program.

Special Study, Services & Project Fund - All payments for work or services performed or to be performed under the 

Act shall be deposited in this separate accounts which may be used to pay directly the costs of such work or services.

Gifts and Bequests Fund - The Secretary is authorized to accept, hold, and administer gifts and bequests of property,

both real and personal for the purpose of aiding or facilitating the work of Department of Transportation. 

	 Section B: The sources of revenue or other financing for the period and an explanation of the extent to which they

	 are inflows of resources to the Government or the result of intragovernmental flows.

Section D:

Balance Sheet as of September 30, 2007

 Maritime

Assets Administration

Fund Balance with Treasury $18,595

Investments, Net 35,817

Accounts Receivable, Net -

Property, Plant & Equipment 3,946	 	 	

Other -

Total Assets $58,357 

Liabilities and Net Position

Liabilities (explain the types of liabilities) $- 

Accounts Payable - 

FECA Liabilities - 

Grants Accrual -

Other Liabilities - 

Unexpended Appropriations - 

Cumulative Results of Operations 58,357

Total Liabilities and Net Position 58,357

 

Statement of Net Cost for the Period Ended September 30, 2007 

Program Costs $2,943 

Less Earned Revenue 4,893 

Net Program Costs (1,949)

Costs Not Assigned to Programs - 

Less Earned Revenues Not Assigned to Programs - 

Net Cost of Operations $(1,949)

 

Statement of Changes in Net Position For the Period Ended September 30, 2007 

Beginning Net Position $53,792 

Budgetary Financing Sources 2,616 

Other Financing Sources - 

Net Cost of Operations (1,949)

Net Position End of Period $58,357

51
52

Notes to the Financial Statement

Note 18 continued. Earmarked Funds:

Balance Sheet as of September 30, 2006 Maritime

Assets Administration

Fund Balance with Treasury $12,156 

Investments, Net 37,412 

Accounts Receivable, Net - 

Property, Plant & Equipment	 4,225

Other - 

Total Assets $53,793

 

Liabilities and Net Position 

Liabilities (explain the types of liabilities) $- 

Accounts Payable 1 

FECA Liabilities - 

Grants Accrual - 

Other Liabilities - 

Unexpended Appropriations - 

Cumulative Results of Operations 53,792 

Total Liabilities and Net Position $53,793

 

Statement of Net Cost for the Period Ended September 30, 2006 

Program Costs $2,699 

Less Earned Revenue 1,286 

Net Program Costs 1,413

 

Costs Not Assigned to Programs - 

Less Earned Revenues Not Assigned to Programs - 

Net Cost of Operations $1,413

 

Statement of Changes in Net Position For the Period Ended September 30, 2006 

Beginning Net Position $53,054 

Budgetary Financing Sources 2,151 

Other Financing Sources - 

Net Cost of Operations 1,413 

 

Net Position End of Period $53,792

The accompanying Notes are an integral part of the financial statement.
Notes to the Financial Statement

Note 19. Net Program Costs:

(Dollars in Thousands)

Maritime 

 Program 1 (Ship Construction - 1708) $(5,697) $(2,977)

 Program 2 (Operating Diff. Subsidy - 1709) 2,595 220 

 Program 3 (Ready Reserve Fleet - 1710) 1,182 691 

 Program 4 (Maritime Security Program - 1711) 155,597 154,700 

Program 5 (Operations & Training - 1750)	 104,865 149,242

 Program 6 (Ocean Freight Diff. - 1751) 272,766 161,088 

 Program 7 (Federal Ship Financing Fund - 4301) (20) (258)

 Program 8 (War Risk Insurance - 4302) (1,318) (1,238)

 Program 9 (Vessel Op. Revolving Fund - 4303) 6,344 31,144 

 Program 10 (MGL Program - 1752) 17,704 46,003 

 Program 11 (MGL Financing - 4304) (1,000) (104,943)

 Program 12 (Gift and Bequest - 8503) 2,853 2,371 

 Program 13 (Special Studies - 8547) (3,484) 281 

 Program 14 (Ship Disposal - 1768) 18,339 21,201 

 Program 15 (MGL Escrow Fund - 6040) - - 

 Program 16 (General Fund Proprietary Receipt - 3220) - - 

 

 Total Maritime Program Costs $570,727 $457,525

 

 Notes to the Financial Statement

 

 

 Cross-Cutting 06/30/07 06/30/06

 Program 1 (Describe) $- $- 

 Program 2 (Describe) - - 

 Program 3 (Describe) - - 

 Program 4 (Describe) - - 

 Program 5 (Describe) - - 

 Program 6 (Describe) - - 

 Program 7 (Describe) - - 

 

 Total Cross-Cutting Program Costs $- $-

 

 

Full Costs should be allocated to programs.

The accompanying Notes are an integral part of the financial statement.

53
54

Notes to the Financial Statement

Note 20. Intragovernmental Costs and Exchange Revenues:

(Dollars in Thousands)

 FY 2007 FY 2006

Maritime Transportation: 

Intragovernmental Gross Costs 344,189 226,079

Less: Intragovernmental Earned Revenue 354,214 393,609

Intragovernmental Net Costs (10,025) (167,530)

 

 

Gross Costs with the Public 586,739 625,876 

Less: Earned Revenues from the Public 5,988 821

Net Costs with the Public 580,752 625,055 

Total Net Cost $570,727 $457,525

 

 

Cross-Cutting Programs: 

Intragovernmental Gross Costs - - 

Less: Intragovernmental Earned Revenue - - 

Intragovernmental Net Costs - - 

 

 

Gross Costs with the Public - - 

Less: Earned Revenues from the Public - - 

Net Costs with the Public - - 

Total Net Cost $- $-

 

 

Costs Not Assigned to Programs - - 

 

 

Less Earned Revenues Not 

Attributed to Programs - - 

 

 

Net Cost of Operations $570,727 $457,525 

The accompanying Notes are an integral part of the financial statement.
Notes to the Financial Statement

Note 21. Statement of Changes in Net Position:

(Dollars in Thousands)

Prior Period Adjustments: 

 09/30/07 09/30/06

(1) Prior Period Adjustment for Cumulative Result $- $(200)

 ($13,632 of year-end closing entries for FY 2006 were recorded improperly.)

(2) Prior Period Adjustment for Unexpended Appropriation - 114 

(3) Other (FULLY DESCRIBE BELOW) - - 

(4) Other (FULLY DESCRIBE BELOW) - - 

 Total $- $(86)

Fully describe the nature of any prior period adjustments

and any other information relative to prior period adjustments. 

Correction of prior year Revenue -65

Non-Exchange Revenue:

 

 09/30/07 09/30/06 

Taxes and Other Non-Exchange Revenue: Gasoline $- $- 

Diesel and Special Motor Fuels - - 

Passenger Ticket - - 

Trucks - - 

Gasohol - - 

International Departure - - 

Fuel (Air) - - 

Waybill - - 

Fines and Penalties - - 

Investment Income - - 

Other Non-Exchange Revenue (Describe) - - 

 Total Taxes $- $-

 Less: Transfers - - 

 Gross Taxes $- $-

 Less: Refunds and Other Credits - - 

 Net Non-Exchange Revenue $- $-

The accompanying Notes are an integral part of the financial statement.

55
56

Notes to the Financial Statement

Note 22. Statement of Budgetary Resources:

(Dollars in Thousands)

 09/30/07 09/30/06

The amount of direct and reimbursable obligations incurred against amounts

apportioned under Category A, B and Exempt from apportionment 

as of the end of the period: $899,708 $1,074,184 

 

THIS AMOUNT SHOULD AGREE WITH THE AMOUNTS REPORTED ON 

LINES 8A AND 8B IN THE STATEMENT OF BUDGETARY RESOURCES. 

 

Available Contract Authority as of the end of the period: $- $- 

Available Borrowing Authority as of the end of the period: $225,000 $269,300,000 

Undelivered orders, Unpaid at the end of the period: $240,728 $251,427 

 

Describe repayment requirements, financing sources for repayment, and 	 	

other terms of borrowing authority used: 

 

Adjustments during the fiscal year to Beginning Balance of Budgetary Resources: 	 	 	 	

 

 Cumulative Authorizations in Excess of Obligation Limitation $- $- 

 Rescissions - - 

 Prior Year Recoveries - - 

 Temporarily Not Available - - 

 Cancelled Authority - - 

 Permanently Not Available - - 

 Other Adjustments (Describe) - - 

 

 Total Adjustments to Beginning Balance of Budgetary Resources $- $- 

 

The accompanying Notes are an integral part of the financial statement.
Notes to the Financial Statement

Deferred Maintenance:

(Dollars in Thousands)

DOT Asset Cost to Return to

Entity Major Class of Asset Method of Measurement Condition* Acceptable Condition**

 

FAA	 Buildings	 Condition Assessment	 4 & 5	 $-

 Survey

 

Other Structures and 	 Condition Assessment	 4 & 5	 -

 Facilities Survey

 

Other (Describe) - 

 

MARAD Vessels, Ready Reserve Condition Assessment 2 22,600 

 Force Survey

 

Real Property, Anchorage Condition Assessment 3 14,695 

 Survey

 

Other (Fleet Craft) Condition Assessment 3 2,520 

 Survey

 

Other (Pier and Berthing Estimate 3 235 

Surveys and Studies) 

 

Other	 Other (Heritage Assets)	 Condition Assessment	 3 & 4	 200

Survey

 Total $40,250 

*Asset Condition Rating Scale: 

 1 - Excellent 

 2 - Good 

 3 - Fair 

 4 - Poor 

 5 - Very Poor 

 

**Acceptable Condition is: 

 FAA Buildings 3 - Fair 

 FAA Other Structures and Facilities 3 - Fair 

 MARAD Vessels, Ready Reserve Force 1 - Excellent - Ships are seaworthy and ready for mission assignments within prescribed time limits.

 MARAD, Real Property, Anchorage 3 - Fair - Adequate water depth, shore power, and mooring capabilities. 

 MARAD, Real Property, Buildings 3 - Fair - Buildings are safe and inhabitable. 

 Other (Describe) 

Deferred Maintenance is maintenance that was not performed when it should have been or was

scheduled to be performed and delayed until a future period. Maintenance is keeping fixed assets in

acceptable condition, and includes preventative maintenance, normal repairs, replacement of parts and 

structural components, and other activities needed to preserve assets in a condition to provide 

acceptable service and to achieve expected useful lives.

The accompanying Notes are an integral part of the financial statement.

57
Notes to the Financial Statement

Heritage Assets Summary:

Annual Stewardship Information, September 30, 2007 

Number of Physical Units

 Units as of Units as of

Heritage Assets: 09/30/06 Additions Withdrawals 09/30/07 

 

Personal Property: 

 

 Collections 

Artifacts 38 2 - 40 

 Museum 458 - 1 457 

 Other Collections 101 - - 101 

 

Total Collections 597 2 1 598 

 

Total Personal Property 

 Heritage Assets 597 2 1 598

 

Heritage Assets: Units as of Units as of 

 09/30/06 Additions Withdrawals 09/30/07 

Real Property: 

 Buildings and Structures - - - - 

 

Total Real Property 

 Heritage Assets - - - -

 

Artifacts are those of the Maritime Administration. Maritime Administration artifacts are generally on loan to 

single purpose memorialization and remembrance groups, such as AMVets and preservation societies. 

 

Museum and Other Collections are owned by the Maritime Administration. They are merchant marine artifacts, 

composed of ships’ operating equipment, obtained from obsolete ships. They are inoperative and in need of preservation and restoration. Museum items are on loan to organizations whose purpose is historic preservation, education, and remembrance, open to the public during regularly scheduled hours. Other collections are on loan to public 

and private entities, the display of which is incidental to maritime affairs, such as county and state buildings, port

authorities, pilots associations, public and college libraries, and other organizations. 

 

Buildings and Structures include Union Station in Washington, D.C. Union Station is an elegant and unique turn-ofthe-century rail station in which one finds a wide variety of elaborate, artistic workmanship characteristic of the period. 

Union Station is listed on the National Register of Historic Places. The station consists of the renovated original building 

and a parking garage which was added by the U.S. Park Service. The Federal Railroad Administration received title to 

Union Station through appropriated funds and assumption of a mortgage. Mortgage payments are made by Union Station 

Venture Limited which manages the property. Union Station Redevelopment Corporation, a non‐profit group instrumental

in the renovation of the station, sublets the operation of the station to Union Station Venture Limited. 

 

Financial information for multi-use heritage assets is presented in the principal statements and notes. 

The condition of the heritage assets is included in the Deferred Maintenance section of the Required Supplementary Information. 

The accompanying Notes are an integral part of the financial statement.

58
59

National Maritime Day 2007

A Proclamation by the President of the United States of America 

America has a proud maritime history, and the United States Merchant Marine has played a vital role in helping 

meet our country’s economic and national security needs. On National Maritime Day, we honor merchant mariners 

for their dedication to promoting commerce and protecting our freedom. 

During times of peace, the U.S. Merchant Marine helps ensure our economic security by keeping the oceans open 

to trade. Ships operated by merchant mariners transport goods across our Nation’s waterways and on the high seas 

around the world to connect American businesses and consumers with valuable foreign markets and commodities. 

The skill and expertise of merchant mariners facilitates trade and helps to strengthen our economy. 

In times of war, the Merchant Marine is the lifeline of our troops overseas. By carrying critical supplies, equipment, 

and personnel, merchant mariners provide essential support to our Armed Forces and help advance the cause of 

freedom. Today, merchant mariners are supporting operations in Afghanistan and Iraq, and their devotion to duty is 

a tribute to the generations of men and women who have served our Nation with courage and determination in every 

conflict in America’s history. On this day, and throughout the year, America is 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, 2007, as National Maritime Day. I call upon the people of the United States to mark this observance by honoring 

the service of merchant mariners and by displaying 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 eighteenth day of May, in the year of our Lord two 

thousand seven, and of the Independence of the United States of America the two hundred and thirty-first.

GEORGE W. BUSH
60

Administrator

Deputy Administrat

or

Office of Civil Rights

Assista

nt 

Administrator

International 

Activities

Policy and Plans

Congressional

and Public Affairs

United States 

Merchant Mariner 

Academy

Maritime Administration

Budget

Other Resources

Accounting

National Security 

Resource Management

Administration National Security and

Emergency Preparedness

Budget and Programs Environ

ment 

and Complia

nce

Intermodal System

Development

Business and 

Workforce Development

Management and 

Administrative Services

Human Resources

C

hief Informatio

n

Office

Acquisitions

Environ

mental

Safety

Security

Infrastructure Development

and Congestion Mitigation

Deepwater Ports and 

Offshore Activities

Marine Highways and

Passenger Services

Gateways

Ship Operations

Natio

nal

Emergency 

Prepa

Security Plans

redness

Ship Disposal

Financial Approvals 

& Marine Insurance

Cargo Prefere

nce

and

Domestic Trade

Shipyards and

Marine Financin

g

Maritime Workforce

Development

Office of

Chief Counsel
61

Photo Credits

Cover (left to right):

Trailer Bridge, U.S. Department of Transportation official photo, 

Marty Skrocki, United States Merchant Marine Academy, 

Port of New Orleans, Donn Young

Susan Clark, Maritime Administration

Great Lakes Fire Training School

Maersk Sealand

 U.S. Military Sealift Command

Alaska Tanker Company

Charles Csavossy, Port of Los Angeles/Long Beach

California Marine and Intermodal Systems Advisory Council

Susan Clark, Maritime Administration

Greg Hall, Maritime Administration

Windsor Star

Port of Anchorage

American Waterways Operators

White House website

U.S. Agency for International Development

Donn Young, Port of New Orleans

Seafarers International Union

BoatNerd.com

Aker Philadelphia Shipyard

California Maritime Academy

James Tourtellotte, U.S. Customs and Border Protection

Dominion Cove Point LNG, LP


U. S. Department of Transportation

Maritime Administration 

1200 New Jersey Avenue SE