Posted:
July 3, 2013
By Tom Bethel
National President
Following a stretch of recent history that has presented far more in the way of challenges than it has hopeful signs for the long-term prosperity of the U.S. merchant marine, the past month brought with it a number of remarkable developments that bode well for the U.S.-flag fleet and the seagoing membership of our union.
Of immediate interest to American Maritime Officers was the announcement that American Petroleum Tankers had placed a new order for four tankers at General Dynamics NASSCO with options for four additional ships. AMO officers continue to do excellent work aboard APT's five State Class tankers, and we're looking forward to expanding our union's tradition of exceptional service with the new series of ships.
This construction order comes as the literal boom in domestic shale oil production surges through its third year, accelerating demand for Jones Act tanker capacity at a rapid pace. One recent report noted the portion of qualified ships under long-term charter reached 100 percent over the past year.
Congressional support
The sustainable success of the Jones Act hinges on congressional support. The same can be said of all aspects of U.S. maritime policy.
During the past month, we witnessed a demonstration of that support when the House of Representatives voted to defeat a legislative amendment seeking to impose the President's plan to cut as much as 45 percent of the funding for the domestic purchase of U.S. food aid for shipment overseas. The vote became a symbolic victory for us when the farm bill at which the amendment was aimed was also voted down by the House. Nonetheless, the vote was a very good sign in the face of what has become a multi-pronged assault on the PL-480 Food for Peace program.
Also in June, the House approved the National Defense Authorization Act for Fiscal Year 2014. The legislation includes authorization for the full funding level requested by the Maritime Administration for the Maritime Security Program in fiscal year 2014, as well as authorization for about $70 million for new shipbuilding loan guarantees supporting domestic vessel construction under the Title XI program, and a provision highlighting the need to recapitalize the U.S. Ready Reserve Force fleet and options for accomplishing this important objective.
Federal leadership
While we have witnessed clear congressional focus on the programs and statutes that support the peacetime prosperity of the U.S. merchant marine, the success of U.S. maritime policy also depends upon administrative attention and enforcement by the federal government.
During the past few years, we have seen the extent to which administrative leadership, or the lack thereof, can affect the U.S.-flag fleet for better or for worse.
On an encouraging note, Anthony Foxx, the former mayor of Charlotte, N.C., was sworn-in as the new secretary of transportation at the beginning of July, replacing Ray LaHood.
Responding to questions from three senators following his confirmation hearing in May, Foxx expressed his support for the Jones Act, the Maritime Security Program and U.S. cargo preference laws. He briefly outlined strategies for successfully administering these laws and programs, and among other things, pledged to "carry out the direction Congress has provided in legislation to maximize the use of U.S.-flag vessels in any future drawdown of the Strategic Petroleum Reserve and to improve transparency related to any waivers of the Jones Act."
Along with the presidents of the other U.S. seagoing unions, I will be meeting with Secretary Foxx as he takes the helm at the Transportation Department and sets a course for this important agency. I look forward to meeting with him and anticipate a productive discussion.
A month earlier, Paul "Chip" Jaenichen became acting maritime administrator after David Matsuda resigned from the Maritime Administration.
Jaenichen had been serving as deputy maritime administrator since July 2012, and I have had the opportunity and pleasure of meeting and working with him. A nuclear trained submarine officer with 30 years of service in the U.S. Navy, Jaenichen is informed and engaged on the issues that matter most to the U.S. merchant marine. I and many others are encouraged by the agency's prospects under his leadership, and are awaiting with great interest the appointment of the next maritime administrator.
Foxx and Jaenichen inherit in their agencies what, in terms of American maritime policy and the U.S. merchant marine, can be fairly described as a recent legacy of neglect.
Over the past few years, we have witnessed consistent failure to advocate, or even to articulate, a cohesive national strategy to promote the sustainment and expansion of the U.S. merchant marine and the American maritime industry.
During a hearing in May, California Democratic Congressman John Garamendi aptly described the Obama administration's maritime strategy as disjointed pieces of a puzzle, adding that some pieces are being taken off the board.
We have heard quite a bit from the Transportation Department about TIGER (Transportation Investment Generating Economic Recovery) grants. Now in its fifth round, the TIGER grant program provides funding for select transportation infrastructure improvements across the nation, including some port and maritime infrastructure projects. Grant applications consistently and vastly exceed the amount of funding available through the program.
In its early years, the TIGER grant program was touted and welcomed as an avenue for expansion of domestic short sea shipping through the America's Marine Highway program. Although TIGER grants have continued, the Maritime Administration in its fiscal year 2012 budget request sought to discontinue funding for Marine Highway grants, and essentially set the program aside for the immediate future. In the same budget request, MARAD also proposed the cancellation of $54.1 million of the funding available in the Title XI account for shipbuilding loan guarantees.
While the port maintenance and infrastructure improvement projects funded by TIGER grants are important, the program has indeed provided a "disjointed" patchwork of maritime progress without contributing to a cohesive national strategy for a successful industry.
In February of 2010, Matsuda told the House Subcommittee on Coast Guard and Maritime Transportation: "Improving the profile and prestige of the U.S. Merchant Marine Academy is Secretary LaHood's number one priority for the Maritime Administration."
In the years since, we have seen that to be true as MARAD channeled a very significant amount of money into repairing and improving the facilities and infrastructure at Kings Point.
Without delving into some of the widely criticized aspects of the agency's involvement at Kings Point over the past few years, I do agree the deteriorating and outdated infrastructure at the academy was in dire need of refurbishment. The work to improve and modernize Kings Point for all enrolled there is welcomed by the U.S. maritime industry.
What I object to is MARAD's application of overbearing focus on one educational institution while at the same time failing to work aggressively, or to do much of anything, to secure the viability of the maritime industry in which the young men and women enrolled at Kings Point will be seeking employment upon graduation.
We have heard quite a bit from MARAD and the Transportation Department about the improvements at the U.S. Merchant Marine Academy. We heard little when the U.S.-flag share of U.S. food-aid cargoes was cut by one third. We heard less when the administration issued a record number of Jones Act waivers for the transportation of oil drawn from the Strategic Petroleum Reserve.
At the beginning of July, Kings Point welcomed its incoming class of 2017 - 238 plebe candidates from across the nation comprising what the academy's superintendent described as one of the most diverse classes in history.
Developments over the prior month - installation of new transportation leadership at the federal level, a strong showing of congressional support for the U.S.-flag maritime industry and the ongoing expansion of the Jones Act tanker fleet - hold strong and substantial promise for this incoming class of future U.S. merchant marine officers.
In what will continue to be a vigorous struggle to sustain key elements of U.S. maritime policy, these developments also serve as bright beacons of opportunity and hope for the membership of American Maritime Officers, and for the U.S. merchant marine as a whole.
As always, I welcome your comments and questions. Please feel free to call me on my cell phone at (202) 251-0349.
New developments on several fronts hold strong promise for U.S.-flag fleet
By Tom Bethel
National President
Following a stretch of recent history that has presented far more in the way of challenges than it has hopeful signs for the long-term prosperity of the U.S. merchant marine, the past month brought with it a number of remarkable developments that bode well for the U.S.-flag fleet and the seagoing membership of our union.
Of immediate interest to American Maritime Officers was the announcement that American Petroleum Tankers had placed a new order for four tankers at General Dynamics NASSCO with options for four additional ships. AMO officers continue to do excellent work aboard APT's five State Class tankers, and we're looking forward to expanding our union's tradition of exceptional service with the new series of ships.
This construction order comes as the literal boom in domestic shale oil production surges through its third year, accelerating demand for Jones Act tanker capacity at a rapid pace. One recent report noted the portion of qualified ships under long-term charter reached 100 percent over the past year.
Congressional support
The sustainable success of the Jones Act hinges on congressional support. The same can be said of all aspects of U.S. maritime policy.
During the past month, we witnessed a demonstration of that support when the House of Representatives voted to defeat a legislative amendment seeking to impose the President's plan to cut as much as 45 percent of the funding for the domestic purchase of U.S. food aid for shipment overseas. The vote became a symbolic victory for us when the farm bill at which the amendment was aimed was also voted down by the House. Nonetheless, the vote was a very good sign in the face of what has become a multi-pronged assault on the PL-480 Food for Peace program.
Also in June, the House approved the National Defense Authorization Act for Fiscal Year 2014. The legislation includes authorization for the full funding level requested by the Maritime Administration for the Maritime Security Program in fiscal year 2014, as well as authorization for about $70 million for new shipbuilding loan guarantees supporting domestic vessel construction under the Title XI program, and a provision highlighting the need to recapitalize the U.S. Ready Reserve Force fleet and options for accomplishing this important objective.
Federal leadership
While we have witnessed clear congressional focus on the programs and statutes that support the peacetime prosperity of the U.S. merchant marine, the success of U.S. maritime policy also depends upon administrative attention and enforcement by the federal government.
During the past few years, we have seen the extent to which administrative leadership, or the lack thereof, can affect the U.S.-flag fleet for better or for worse.
On an encouraging note, Anthony Foxx, the former mayor of Charlotte, N.C., was sworn-in as the new secretary of transportation at the beginning of July, replacing Ray LaHood.
Responding to questions from three senators following his confirmation hearing in May, Foxx expressed his support for the Jones Act, the Maritime Security Program and U.S. cargo preference laws. He briefly outlined strategies for successfully administering these laws and programs, and among other things, pledged to "carry out the direction Congress has provided in legislation to maximize the use of U.S.-flag vessels in any future drawdown of the Strategic Petroleum Reserve and to improve transparency related to any waivers of the Jones Act."
Along with the presidents of the other U.S. seagoing unions, I will be meeting with Secretary Foxx as he takes the helm at the Transportation Department and sets a course for this important agency. I look forward to meeting with him and anticipate a productive discussion.
A month earlier, Paul "Chip" Jaenichen became acting maritime administrator after David Matsuda resigned from the Maritime Administration.
Jaenichen had been serving as deputy maritime administrator since July 2012, and I have had the opportunity and pleasure of meeting and working with him. A nuclear trained submarine officer with 30 years of service in the U.S. Navy, Jaenichen is informed and engaged on the issues that matter most to the U.S. merchant marine. I and many others are encouraged by the agency's prospects under his leadership, and are awaiting with great interest the appointment of the next maritime administrator.
Foxx and Jaenichen inherit in their agencies what, in terms of American maritime policy and the U.S. merchant marine, can be fairly described as a recent legacy of neglect.
Over the past few years, we have witnessed consistent failure to advocate, or even to articulate, a cohesive national strategy to promote the sustainment and expansion of the U.S. merchant marine and the American maritime industry.
During a hearing in May, California Democratic Congressman John Garamendi aptly described the Obama administration's maritime strategy as disjointed pieces of a puzzle, adding that some pieces are being taken off the board.
We have heard quite a bit from the Transportation Department about TIGER (Transportation Investment Generating Economic Recovery) grants. Now in its fifth round, the TIGER grant program provides funding for select transportation infrastructure improvements across the nation, including some port and maritime infrastructure projects. Grant applications consistently and vastly exceed the amount of funding available through the program.
In its early years, the TIGER grant program was touted and welcomed as an avenue for expansion of domestic short sea shipping through the America's Marine Highway program. Although TIGER grants have continued, the Maritime Administration in its fiscal year 2012 budget request sought to discontinue funding for Marine Highway grants, and essentially set the program aside for the immediate future. In the same budget request, MARAD also proposed the cancellation of $54.1 million of the funding available in the Title XI account for shipbuilding loan guarantees.
While the port maintenance and infrastructure improvement projects funded by TIGER grants are important, the program has indeed provided a "disjointed" patchwork of maritime progress without contributing to a cohesive national strategy for a successful industry.
In February of 2010, Matsuda told the House Subcommittee on Coast Guard and Maritime Transportation: "Improving the profile and prestige of the U.S. Merchant Marine Academy is Secretary LaHood's number one priority for the Maritime Administration."
In the years since, we have seen that to be true as MARAD channeled a very significant amount of money into repairing and improving the facilities and infrastructure at Kings Point.
Without delving into some of the widely criticized aspects of the agency's involvement at Kings Point over the past few years, I do agree the deteriorating and outdated infrastructure at the academy was in dire need of refurbishment. The work to improve and modernize Kings Point for all enrolled there is welcomed by the U.S. maritime industry.
What I object to is MARAD's application of overbearing focus on one educational institution while at the same time failing to work aggressively, or to do much of anything, to secure the viability of the maritime industry in which the young men and women enrolled at Kings Point will be seeking employment upon graduation.
We have heard quite a bit from MARAD and the Transportation Department about the improvements at the U.S. Merchant Marine Academy. We heard little when the U.S.-flag share of U.S. food-aid cargoes was cut by one third. We heard less when the administration issued a record number of Jones Act waivers for the transportation of oil drawn from the Strategic Petroleum Reserve.
At the beginning of July, Kings Point welcomed its incoming class of 2017 - 238 plebe candidates from across the nation comprising what the academy's superintendent described as one of the most diverse classes in history.
Developments over the prior month - installation of new transportation leadership at the federal level, a strong showing of congressional support for the U.S.-flag maritime industry and the ongoing expansion of the Jones Act tanker fleet - hold strong and substantial promise for this incoming class of future U.S. merchant marine officers.
In what will continue to be a vigorous struggle to sustain key elements of U.S. maritime policy, these developments also serve as bright beacons of opportunity and hope for the membership of American Maritime Officers, and for the U.S. merchant marine as a whole.
As always, I welcome your comments and questions. Please feel free to call me on my cell phone at (202) 251-0349.