The Status of the U.S. Maritime Supply Chain During the COVID-19 Pandemic, House hearing transcript (May 29, 2020), GovInfo CHRG-116hhrg42965, PDF
Summary
This printed edition (116-60) records a remotely attended hearing of the House Subcommittee on Coast Guard and Maritime Transportation, chaired by Sean Patrick Maloney, on Friday, May 29, 2020 on the U.S. maritime supply chain during the COVID-19 pandemic. Witnesses included Christopher J. Connor of the American Association of Port Authorities, Michael G. Roberts of Crowley Maritime for the American Maritime Partnership, and Jennifer A. Carpenter of The American Waterways Operators. The subcommittee also heard from the National Association of Waterfront Employers and USA Maritime. Its background memo says the maritime supply chain moves more than 90 percent of the world's trade by tonnage.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
Full text
THE STATUS OF THE U.S. MARITIME SUPPLY
CHAIN DURING THE COVID–19 PANDEMIC
(116–60)
REMOTELY ATTENDED
HEARING
BEFORE THE
SUBCOMMITTEE ON
COAST GUARD AND MARITIME TRANSPORTATION
OF THE
COMMITTEE ON
TRANSPORTATION AND
INFRASTRUCTURE
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTEENTH CONGRESS
SECOND SESSION
MAY 29, 2020
Printed for the use of the
Committee on Transportation and Infrastructure
(
Available online at: https://www.govinfo.gov/committee/house-transportation?path=/
browsecommittee/chamber/house/committee/transportation
U.S. GOVERNMENT PUBLISHING OFFICE
42–965 PDF WASHINGTON : 2021
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COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
PETER A. DEFAZIO, Oregon, Chair
ELEANOR HOLMES NORTON, SAM GRAVES, Missouri
District of Columbia DON YOUNG, Alaska
EDDIE BERNICE JOHNSON, Texas ERIC A. ‘‘RICK’’ CRAWFORD, Arkansas
RICK LARSEN, Washington BOB GIBBS, Ohio
GRACE F. NAPOLITANO, California DANIEL WEBSTER, Florida
DANIEL LIPINSKI, Illinois THOMAS MASSIE, Kentucky
STEVE COHEN, Tennessee SCOTT PERRY, Pennsylvania
ALBIO SIRES, New Jersey RODNEY DAVIS, Illinois
JOHN GARAMENDI, California ROB WOODALL, Georgia
HENRY C. ‘‘HANK’’ JOHNSON, JR., Georgia JOHN KATKO, New York
ANDRÉ CARSON, Indiana BRIAN BABIN, Texas
DINA TITUS, Nevada GARRET GRAVES, Louisiana
SEAN PATRICK MALONEY, New York DAVID ROUZER, North Carolina
JARED HUFFMAN, California MIKE BOST, Illinois
JULIA BROWNLEY, California RANDY K. WEBER, SR., Texas
FREDERICA S. WILSON, Florida DOUG LAMALFA, California
DONALD M. PAYNE, JR., New Jersey BRUCE WESTERMAN, Arkansas
ALAN S. LOWENTHAL, California LLOYD SMUCKER, Pennsylvania
MARK DESAULNIER, California PAUL MITCHELL, Michigan
STACEY E. PLASKETT, Virgin Islands BRIAN J. MAST, Florida
STEPHEN F. LYNCH, Massachusetts MIKE GALLAGHER, Wisconsin
SALUD O. CARBAJAL, California, Vice Chair GARY J. PALMER, Alabama
ANTHONY G. BROWN, Maryland BRIAN K. FITZPATRICK, Pennsylvania
ADRIANO ESPAILLAT, New York JENNIFFER GONZÁLEZ-COLÓN,
TOM MALINOWSKI, New Jersey Puerto Rico
GREG STANTON, Arizona TROY BALDERSON, Ohio
DEBBIE MUCARSEL-POWELL, Florida ROSS SPANO, Florida
LIZZIE FLETCHER, Texas PETE STAUBER, Minnesota
COLIN Z. ALLRED, Texas CAROL D. MILLER, West Virginia
SHARICE DAVIDS, Kansas GREG PENCE, Indiana
ABBY FINKENAUER, Iowa VACANCY
JESÚS G. ‘‘CHUY’’ GARCÍA, Illinois
ANTONIO DELGADO, New York
CHRIS PAPPAS, New Hampshire
ANGIE CRAIG, Minnesota
HARLEY ROUDA, California
CONOR LAMB, Pennsylvania
----
SUBCOMMITTEE ON COAST GUARD AND MARITIME TRANSPORTATION
SEAN PATRICK MALONEY, New York, Chair
RICK LARSEN, Washington BOB GIBBS, Ohio
STACEY E. PLASKETT, Virgin Islands DON YOUNG, Alaska
JOHN GARAMENDI, California RANDY K. WEBER, SR., Texas
ALAN S. LOWENTHAL, California BRIAN J. MAST, Florida
ANTHONY G. BROWN, Maryland MIKE GALLAGHER, Wisconsin
CHRIS PAPPAS, New Hampshire, Vice Chair CAROL D. MILLER, West Virginia
CONOR LAMB, Pennsylvania SAM GRAVES, Missouri (Ex Officio)
PETER A. DEFAZIO, Oregon (Ex Officio)
(ii)
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CONTENTS Page
Summary of Subject Matter .................................................................................... v
STATEMENTS OF MEMBERS OF THE COMMITTEE
Hon. Sean Patrick Maloney, a Representative in Congress from the State
of New York, and Chairman, Subcommittee on Coast Guard and Maritime
Transportation:
Opening statement ........................................................................................... 1
Prepared statement .......................................................................................... 4
Hon. Bob Gibbs, a Representative in Congress from the State of Ohio, and
Ranking Member, Subcommittee on Coast Guard and Maritime Transpor-
tation:
Opening statement ........................................................................................... 6
Prepared statement .......................................................................................... 7
Hon. Peter A. DeFazio, a Representative in Congress from the State of Or-
egon, and Chairman, Committee on Transportation and Infrastructure:
Opening statement ........................................................................................... 7
Prepared statement .......................................................................................... 8
Hon. Sam Graves, a Representative in Congress from the State of Missouri,
and Ranking Member, Committee on Transportation and Infrastructure,
prepared statement .............................................................................................. 61
WITNESSES
Christopher J. Connor, President and Chief Executive Officer, American Asso-
ciation of Port Authorities:
Oral statement .................................................................................................. 10
Prepared statement .......................................................................................... 11
Michael G. Roberts, Senior Vice President, Crowley Maritime, testifying on
behalf of American Maritime Partnership:
Oral statement .................................................................................................. 13
Prepared statement .......................................................................................... 15
Jennifer A. Carpenter, President and Chief Executive Officer, The American
Waterways Operators:
Oral statement .................................................................................................. 21
Prepared statement .......................................................................................... 23
Lauren K. Brand, President, National Association of Waterfront Employers:
Oral statement .................................................................................................. 25
Prepared statement .......................................................................................... 27
Eric P. Ebeling, President and Chief Executive Officer, American Roll-On
Roll-Off Carrier Group, testifying on behalf of USA Maritime:
Oral statement .................................................................................................. 31
Prepared statement .......................................................................................... 33
SUBMISSIONS FOR THE RECORD
Letter of May 28, 2020, from Marine Engineers’ Beneficial Association; Amer-
ican Maritime Officers; Marine Firemen, Oilers, Watertenders and Wipers
Association; Sailor’s Union of the Pacific; International Organization of
Masters, Mates & Pilots; and Seafarers International Union; Submitted
for the Record by Hon. Sean Patrick Maloney .................................................. 5
Letter of May 4, 2020, from Hon. Kurt Schrader of Oregon, Hon. Alan S.
Lowenthal of California, and Hon. Randy K. Weber, Sr., of Texas, et al.,
Submitted for the Record by Hon. Alan S. Lowenthal ...................................... 56
(iii)
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MAY 28, 2020
SUMMARY OF SUBJECT MATTER
TO: Members, Subcommittee on Coast Guard and Maritime Transportation
FROM: Staff, Subcommittee on Coast Guard and Maritime Transportation
RE: Hearing on ‘‘The Status of the U.S. Maritime Supply Chain During the
COVID–19 Pandemic’’
PURPOSE
The Subcommittee on Coast Guard and Maritime Transportation will hold a hear-
ing on Friday, May 29, 2020, at 1:00 p.m. EDT to examine the state of the U.S.
Maritime Supply Chain during the COVID–19 Pandemic. The hearing will take
place remotely for members and witnesses via the Cisco WebEx virtual platform.
The Subcommittee will hear testimony from the American Association of Port Au-
thorities, American Maritime Partnership, the American Waterways Operators, the
National Association of Waterfront Employers, and USA Maritime.
BACKGROUND
U.S. MARITIME INDUSTRY
U.S. Merchant Marine and Fleet
The U.S. Merchant Marine and the Nation’s port system, and supporting indus-
tries (collectively referred to as the U.S. maritime industry), integrate our economy
with a vast global maritime supply chain system that moves more than 90 percent
of the world’s trade by tonnage, including energy, consumer goods, agricultural
products, and raw materials.1 These industries, vessels, infrastructure, and per-
sonnel also play critical roles in national security, supporting our Nation’s ability
to provide sealift for the Department of Defense (DoD) during times of war and na-
tional emergency.
The U.S. Merchant Marine is the fleet of U.S. documented (flagged) commercial
vessels and civilian mariners that carry goods to and from, as well as within, the
United States. These vessels are operated by U.S. licensed deck and engineering of-
ficers and unlicensed seafarers. During times of peace and war, the U.S. merchant
marine acts as a naval auxiliary to deliver troops and war material to military oper-
ations abroad. Throughout our history, the Navy has relied on U.S. flagged commer-
cial vessels to carry weapons and supplies and ferry troops to the battlefield. During
1 Maritime Administrator Mark H. Buzby Testimony before the House Committee on Trans-
portation and Infrastructure Subcommittee on Coast Guard and Maritime Transportation
(March 6, 2019).
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vi
Operations Enduring Freedom and Iraqi Freedom, U.S. flagged commercial vessels
transported 90 percent of sustainment cargoes moved to Afghanistan and Iraq.2
The merchant marine was formally recognized in statute with the passage of the
Merchant Marine Act of 1920 (46 U.S.C. Subtitle V). Section 50101(a) of title 46,
United States Code, states that ‘‘[i]t is necessary for the national defense and the
development of the domestic and foreign commerce of the United States that the
United States have a merchant marine . . .’’ Sections 50101(b) and 51101 of title 46,
United States Code, establish that ‘‘[i]t is the policy of the United States to encour-
age and aid the development and maintenance of the merchant marine . . .’’ and that
‘‘merchant marine vessels of the United States should be operated by highly trained
and efficient citizens of the United States . . .’’
Currently, there are approximately 41,000 non-fishing related commercial vessels
flagged and operating in the United States.3 The vast majority of these vessels are
engaged in domestic waterborne commerce, generally referred to as the ‘‘Jones Act
trade,’’ moving 115 million passengers and nearly $300 billion worth of goods be-
tween ports in the United States on an annual basis.4 Each year the domestic coast-
wise fleet carries nearly 900 million tons of cargo through the inland waterways,
across the Great Lakes, and along the Atlantic, Pacific, and Gulf of Mexico coasts.5
The U.S. Government-owned fleet consists of 15 vessels operated by the Military
Sealift Command and 46 vessels in the Maritime Administration’s (MARAD) Ready
Reserve Force. Together, these vessels provide the initial surge of military capability
while the commercial fleet is responsible for the ongoing sustainment.
Of the 41,000 U.S. flagged vessels, approximately 87 are operating in inter-
national commerce moving goods between U.S. and foreign ports.6 These vessels
serve as a training and employment base for the civilian mariners who serve aboard
the Government-owned fleet when they are called to deploy. The percentage of inter-
national commercial cargoes carried on U.S. flagged vessels has fallen from 25 per-
cent in 1955 to approximately 1.5 percent today.7 Over the last 35 years, the num-
ber of U.S. flagged vessels sailing in the international trade dropped from 850 to
87 vessels.8 This decline corresponds with a decrease in U.S. mariners resulting in
an estimated shortfall of approximately 1,929 qualified mariners needed to crew the
Government-owned fleet.9 Since the DoD relies on civilian mariners to crew the
Government-owned fleet through the Maritime Security Program (MSP) and the
Voluntary Intermodal Sealift Agreement (VISA), maintaining a pool of highly
trained mariners is imperative.
Within the international U.S. flag fleet, up to 60 vessels are enrolled in the
MSP.10 Under this program, militarily useful oceangoing commercial vessels each
receive an annual operating stipend of $5 million, which will increase to $5.3 million
in fiscal year 2022, to provide military sealift for the United States Transportation
Command within the DoD.11
U.S. Ports and Marine Terminals
Public ports in the United States play an indispensable role in local and regional
economies throughout the nation.12 Ports generate business development and pro-
vide employment to more than 13 million Americans, which includes those that
work at the ports themselves and those employed in global trade and import/export
2 Id.
3 MARAD, https://www.maritime.dot.gov/data-reports/data-statistics/data-statistics
4 National Strategy for the Marine Transportation System: Channeling the Maritime Advan-
tage 2017–2022 (Oct. 2017), http://www.cmts.gov/downloads/Na-
tionallStrategylforlthelMarinelTransportationlSystemlOctoberl2017.pdf; Economic
Contribution of the US Tugboat, Towboat, and Barge Industry (June 22, 2017), https://
www.marad.dot.gov/wp-content/uploads/pdf/Econ-Impact-of-US-Tugboat-Towboat-and-Barge-In-
dustry-lh-6-22-17.pdf.
5 The U.S. Waterway System Transportation Facts & Information, https://
usace.contentdm.oclc.org/digital/collection/p16021coll2/id/1429/
6 U.S. Dep. of Transp. Maritime Administration United States Flag Privately-Owned Merchant
Fleet Report (March 2020).
7 MARAD Calculation using CBP, Census, and commercial data sources.
8 U.S. Dep. Of Transp., ‘‘Number and Size of the U.S. Flag Merchant Fleet and Its Share of
the World Fleet,’’ U.S. Bureau of Transportation Statistics, available at https://www.bts.gov/con-
tent/number-and-size-us-flag-merchant-fleet-and-its-share-world-fleet, accessed May 22, 2020.
9 Maritime Admin. Mark H. Buzby Testimony before the House Committee on Armed Services
(March 8, 2018).
10 MARAD, https://maritime.dot.gov/national-security/strategic-sealift/maritime-security-pro-
gram-msp
11 National Defense Authorization Act for Fiscal Year 2020.
12 Global Trade Magazine, 2020 U.S. Ports Summary (last accessed May 26, 2020) available
at https://www.globaltrademag.com/us-ports/.
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vii
support services.13 According to the American Society of Civil Engineers (ASCE),
there are 926 ports in the United States, each essential to the nation’s competitive-
ness by serving as gateways through which 99 percent of U.S. overseas trade
passes.14 Ports are responsible for $4.6 trillion in economic activity—roughly 26 per-
cent of the U.S. economy.15 The American Association of Port Authorities (AAPA)
reports that, seaport activities alone accounted for $378.1 billion in federal, state,
and local tax revenues in 2018.16
America’s port authorities play a key role in the business of waterborne com-
merce. Their authority may also incorporate other global trade hubs such as air-
ports, industrial parks, and Foreign Trade Zones. Many of these accommodate
ocean-going cargo, as well as barges, ferries, and recreational watercraft. More than
150 deep draft seaports are located along the Atlantic and Pacific Oceans as well
as the Great Lakes, the Gulf of Mexico, Alaska, Hawaii, Puerto Rico, Guam, and
the U.S. Virgin Islands.17 Many of the country’s most prominent ports work closely
with private industry in the development and financing of maritime-related facili-
ties. Within the Nation’s ports are more than 3,500 publicly or privately held ma-
rine terminal operators (MTOs).18 MTOs provide wharfage, dock, warehouse, or
other marine terminal facilities to ocean common carriers moving cargo in the
ocean-borne, foreign commerce of the United States.19
Port Infrastructure Development Program
The ability of U.S. ports to increase capacity and move freight efficiently—both
domestically and globally—is critical to U.S. competitiveness. Freight volumes are
projected to increase by 31 percent and U.S. foreign trade are projected to double
between 2015 and 2045.20 Without major improvements to multimodal transpor-
tation infrastructure and technologies, congestion resulting from greater volumes of
freight could lead to growing delays and failures in the supply chain.
As required by 46 U.S.C. § 50302, MARAD established a Port Infrastructure De-
velopment Program to better support the development of port facilities. The FY 2020
Consolidated Appropriations Act, P.L. 116–93, provided $225 million for the Port In-
frastructure Development Program, with $200 million reserved for grants to coastal
seaports and Great Lakes ports. Grants are provided for infrastructure improvement
projects that are directly related to port operations, or intermodal connections to
ports that improve the safety, efficiency, or reliability of the movement of goods into,
out of, or around coastal seaports.
U.S. Shipbuilding Industry
The U.S. shipbuilding and ship repair industry is a major component of the na-
tion’s maritime supply chain; essential for sustaining one of the world’s largest na-
vies, a coast guard that protects thousands of miles of U.S. coastline, and the do-
mestic commercial fleet. Construction and repair shipyards also provide a critical
backstop to American seapower, ensuring that the United States retains the capa-
bility to expand or recapitalize its Navy or Coast Guard without relying on other
nations.
Today, the U.S. shipbuilding industry includes approximately 125 active ship-
yards across the country.21 In addition, there are more than 200 shipyards engaged
in ship repairs or capable of building ships, but not actively engaged in ship-
building.22 According to the U.S. Maritime Administration, the U.S. shipyard indus-
try supports more than 100,000 direct shipyard jobs across the United States, pro-
13 Id.
14 ASCE, 2019 Infrastructure Report Card, Ports (Jan. 2017) available at https://
www.infrastructurereportcard.org/wp-content/uploads/2017/01/Ports-Final.pdf.
15 Id.
16 AAPA, The Economic Impact of U.S. Seaports (2019) available at http://aapa.files.cms-
plus.com/2019lPortsFundingMap.pdf
17 Global Trade Magazine, https://www.globaltrademag.com/us-ports/
18 MARAD, Maritime Transportation System Summary (2020) available at https://
www.maritime.dot.gov/outreach/maritime-transportation-system-mts/maritime-transportation-
system-mts.
19 Fed. Maritime Com. Marine Terminal Operators (2020) available at https://www.fmc.gov/re-
sources-services/marine-terminal-operators/
20 DOT Bureau of Transp. Statistics, Freight Facts and Figures 2017, Table 2–1.
21 Center for Strategic and Budgetary Assessments, Strengthening the U.S. Defense Maritime
Industrial Base, A Plan to Improve Maritime Industry’s Contribution to National Security (2020).
22 Id.
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duces $7.9 billion in direct labor income and contributes $9.8 billion in direct GDP
to the national economy.23
Other than ships required to be U.S.-built under the Jones Act, U.S. commercial
shipbuilding faces steep challenges from shipbuilders in China, South Korea, and
Japan. These heavily subsidized foreign competitors accounted for over 90 percent
of the global shipping tonnage delivered in 2018.24
COVID–19 BACKGROUND AND IMPACTS
The COVID–19 pandemic has upended the world economies and substantially im-
pacted societies across the globe. According to the Centers for Disease Control and
Prevention (CDC), the coronavirus (COVID–19) is a new virus strain that causes
mild to fatal respiratory illness to those persons it infects. First identified at the
end of 2019 in Wuhan, China, the virus is spread from person to person, usually
via respiratory droplets or through physical contact with surfaces with the virus on
it. As of mid-May 2020, COVID–19 had spread to more than 200 countries with al-
most 5 million reported cases and more than 300,000 deaths.25 In the United States,
data released by the Johns Hopkins Coronavirus Research Center on May 21, 2020,
totaled 1,562,714 reported cases and 93,863 deaths attributed to COVID–19.26
According to CDC data and statistics, COVID–19 is the worst pandemic since
2009 when the H1N1 (swine flu) pandemic broke out and hit more than 214 coun-
tries while taking over 284,000 lives across the globe. Several nations have closed
their borders or instituted travel restrictions to prevent community spread of
COVID–19. Many cities, states, and internationally entire countries remain on
lockdown or are operating under stay-at-home orders, while other affected countries
such as New Zealand, Australia, China and Italy have started to gradually re-open
commerce and modified operations and activities.
Global Supply Chain Challenges
According to the Organization for Economic Cooperation and Development
(OECD), the global maritime industry has been severely impacted by COVID–19,
leaving virtually no market segment spared.27 Ocean carriers across key trades, es-
pecially the trans-Pacific trades, enacted capacity cuts, either by increasing the
number of blank sailings or by laying up vessels.28 According to recent reports, U.S.
ports are projecting a 20 to 30 percent drop in container volumes in the first half
of 2020 caused by general shutdowns across many key markets in nations affected
by the COVID–19 pandemic.29 Even under the most optimistic projections, recovery
isn’t expected until the second half of the year and into 2021 assuming there is no
second wave of the virus.30 International markets are experiencing similar declines.
For example, Norway’s global car and roll-on, roll-off (Ro-Ro) carrier Wallenius
Wilhelmsen saw more than a USD $300 million decline in the first quarter.31 Re-
duction in ocean volumes are expected to be in the 50 percent range for second quar-
ter 2020 compared to second quarter 2019, the carrier estimates.32 The setback has
caused the company to take several mitigation measures including temporarily dis-
missing 2,500 employees in the U.S. and Mexico, slimming its active fleet by laying
up vessels, and sending as many as four vessels for recycling.33
23 MARAD, https://www.maritime.dot.gov/sites/marad.dot.gov/files/docs/resources/3641/
maradeconstudyfinalreport2015.pdf
24 United Nations Conference on Trade and Development, available at https://
unctadstat.unctad.org/wds/TableViewer/tableView.aspx?ReportId=89493; WALL STREET JOUR-
NAL, Costas Paris, Asia State Players Wield Subsidies to Dominate Shipping (Dec.2, 2018).
25 World Health Org., Coronavirus Disease Dashboard (last accessed May 26, 2020) available
at https://covid19.who.int/.
26 Johns Hopkins Univ., COVID–19 Dashboard (last accessed May 26, 2020) available at
https://coronavirus.jhu.edu/map.html.
27 OECD, COVID–19 and International Trade: Issues and Actions (2020).
28 DHL, Global Freight Forwarding, Ocean Freight Market Update (May 2020) available at
www.dhl.com/content/dam/dhl/global/dhl-global-forwarding/documents/pdf/glo-dgf-ocean-market-
update.pdf.
29 WALL STREET JOURNAL, U.S. Ports Likely to See Slump in Cargo Volume from Coronavirus
(Mar. 3, 2020).
30 The LoadStar, https://theloadstar.com/no-bounce-back-in-demand-for-container-shipping-
this-year/
31 JOC, Wallenius Wilhelmsen Shrinks Fleet (March 23, 2020) available at https://
www.joc.com/breakbulk/breakbulk-carriers/wallenius-wilhelmsen-shrinks-fleet-coronavirus-de-
mand-dipl20200323.html.
32 Id.
33 Id.
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Given the market lull, more than 250 scheduled liner sailings are expected to be
withdrawn in the 2nd quarter 2020, as carriers react rapidly to fading demand.34
Blank sailings, where a carrier cancels a particular sailing, have increased rapidly
in 2020 as a result of the COVID–19 pandemic, with some carriers choosing to focus
on the trans-shipment segment of their business, which is experiencing a seasonal
uptick in volume in the Asia-North America trade.
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Figure 1—JOC, Trans-Pac blank sailings a harbinger of soft summer imports (May 2020) available at
https://www.joc.com/maritime-news/trade-lanes/trans-pacific/trans-pac-blank-sailings-harbinger-soft-sum-
mer-importsl20200514.html
U.S. Industry Requests for Assistance
Ports and MTOs are finding creative ways to keep workers safe, considering the
ability to obtain Personal Protective Equipment (PPE) is dependent upon a well-
functioning global supply chain of critical medical supplies. U.S. ports, MTOs, and
stevedores are seeking federal help to shoulder additional costs tied to COVID–19
and to weather the bigger impact from the loss of containerized, breakbulk, bulk,
and Ro-Ro cargoes, as well as losses from the cruise industry which is completely
shut down in the U.S. through July.
The National Association of Waterfront Employers (NAWE) on behalf of its MTO
members requested a one-time grant program of $400 million to go toward cleaning
supplies and PPE, including plexiglass shields between truck gate operators and
drayage drivers.35 AAPA asked Congress to consider a $1.5 billion grant program
for ports, allowing them to maintain their workforces and weather financial shocks
that could reportedly trigger the direct loss of up to 130,000 jobs.36
WITNESS LIST
• Ms. Lauren Brand, President, National Association of Waterfront Employers
• Ms. Jennifer Carpenter, President and Chief Executive Officer, The American
Waterways Operators
• Mr. Christopher J. Connor, President and Chief Executive Officer, The Amer-
ican Association of Port Authorities
• Mr. Eric Ebeling, President and Chief Executive Officer, American Roll-On Roll-
Off Carrier, on behalf of USA Maritime
• Mr. Michael Roberts, President, American Maritime Partnership
34 Lloyd’s Loading List, Forwarders may see 20%–30% volume drop in second quarter (April
20, 2020) available at https://www.lloydsloadinglist.com/freight-directory/news/Forwarders-may-
see-20-30-volume-drop-in-second-quarter/76394.htm#.Xs7mBUBFw2y
35 Letter from NAWE to House Committee on Transportation and Infrastructure Sub-
committee on Coast Guard and Maritime Transportation, May 6, 2020, Assistance for Marine
Terminal Operators, Operating Ports and Related Companies.
36 Letter from AAPA to House Committee on Transportation and Infrastructure Subcommittee
on Coast Guard and Maritime Transportation, April 16, 2020, COVID–19 Relief Package.
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THE STATUS OF THE U.S. MARITIME SUPPLY
CHAIN DURING THE COVID–19 PANDEMIC
FRIDAY, MAY 29, 2020
HOUSE OF REPRESENTATIVES,
SUBCOMMITTEE ON COAST GUARD AND MARITIME
TRANSPORTATION,
COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE,
Washington, DC.
The subcommittee met, pursuant to call, at 1 p.m., via Webex,
Hon. Sean Patrick Maloney (Chairman of the subcommittee) pre-
siding.
Mr. MALONEY. The committee will come to order. Good afternoon,
everyone.
I ask unanimous consent that the chair be authorized to declare
a recess at any time during today’s hearing. Without objection, so
ordered.
I further ask unanimous consent that Members not on the sub-
committee be permitted to sit with the subcommittee at today’s
hearing and ask questions. Without objection, so ordered.
As this is a remote hearing, I would like to remind Members of
some key regulations from the House Committee on Rules to en-
sure this hearing goes smoothly. I understand this is new to many
of us and so I ask your indulgence.
Before I do that, I would also like to just acknowledge that we
are conducting this hearing as leaders in our communities at a
time when our country is going through very difficult, very difficult
circumstances. We have lost 100,000 of our fellow citizens to a ter-
rible pandemic and we are watching violence erupt in a major
American city.
And so I ask that we all take a moment to pray for our country
and for the people of Minnesota, and with that spirit of prayerful-
ness and justice, that we conduct ourselves in a way that lends
credit to the House of Representatives. And I know the ranking
member joins me in those concerns.
So bear with me, everyone. Let’s just go through some of the new
procedures and facets of this remote hearing, although in most
ways it will be very familiar and resemble the hearings that we do
all the time. So a few things from the House rules.
First, Members must be visible on screen for purposes of identi-
fication when joining this hearing. Members must also continue to
use the video function of today’s software platform, that is Cisco
WebEx, for the remainder of the time they are attending the hear-
ing; your video must be on, unless experiencing connectivity issues,
obviously, or other technical problems.
(1)
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If you are having such problems, please inform committee staff
as quickly as possible so you can receive assistance. A chat function
is available for the Members on the Cisco WebEx platform for this
purpose. Members can also call the committee’s main phone line at
202–225–4472 for technical assistance at any time.
Members are also not to participate remotely in any other pro-
ceedings that may be occurring simultaneously.
It is the responsibility of each Member seeking recognition to
unmute their microphone prior to speaking. To avoid any inad-
vertent background noise, I request that all Members keep their
microphone muted when not seeking recognition to speak, very
similar to a committee hearing where you would not turn your
microphone on unless you were speaking.
So please, we all know the hazards of being unmuted when you
don’t want to be. My advice is, make sure you are muted right now.
The default option, as I understand it, is that you will all be
unmuted. So mute yourselves until you wish to be recognized.
Should I hear any inadvertent background noise, I will request you
to do so, that is, mute your microphone.
Finally, despite being a remote hearing, I want to emphasize
that all standard rules of decorum apply. As the chair of today’s
proceeding, I will make a good-faith effort to provide every Member
experiencing any connectivity issues an opportunity to participate
fully in the proceedings.
Members will have the standard 5 minutes to ask questions. To
insert a document into the record, please have your staff email it
to the committee’s clerk, Mike Twinchek.
This hearing is also being livestreamed for the public to view.
Let me repeat that. It is being livestreamed for the public to view.
I know many of us have participated in informal Zoom chats over
the last few weeks. This is a public livestream of the committee’s
proceeding.
Well, good morning, and welcome to the Transportation and In-
frastructure Committee’s first ever video conference hearing to ex-
amine the state of the U.S. maritime supply chain amid the
COVID–19 pandemic.
It is unfortunate that this pandemic prevents us from conducting
this hearing in person, but the Subcommittee on Coast Guard and
Maritime Transportation has been around in one way or another
throughout our country’s history and I am confident in the sub-
committee’s ability to address the unique issues facing the mari-
time transportation system as well as the U.S. Coast Guard.
As we all know and adjust to this new normal, I look forward to
working with Ranking Member Gibbs and other members of the
subcommittee to ensure this body rises to the challenge that our
country now faces. And I would like to thank the ranking member,
in particular, for his cooperation in our informal communications
up to now. It is not the first time we have been in touch or working
on the issues of concern to this committee, even though this is our
first public livestreamed hearing. So I want to thank him for his
generosity and his accommodation at every turn.
One cannot overstate the importance of our Nation’s maritime in-
dustry. In a typical year, over $4.6 trillion worth of commerce flows
through a maritime transportation system that is rapidly becoming
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more complex and interconnected. Unprecedented safety measures
and a recent decrease in cargo, some of which began before the
onset of the pandemic, will challenge the industry for months and
years to come.
My hope is that this hearing will help the committee better un-
derstand the difficulties facing the maritime industry and identify
areas of support that may be needed to ensure the seamless move-
ment of cargo and protect the associated maritime jobs.
The U.S. maritime industry includes four major components: the
internationally trading U.S.-flagged fleet, the domestic or Jones Act
trades, shipbuilders, and U.S. ports. Longstanding durable mari-
time statutes, such as the Jones Act, cargo preference, and the
Maritime Loan Guarantee Program, have been supplemented by
more recent programs, such as the Maritime Security Program,
Small Shipyard Grant Program, and the Port Infrastructure Devel-
opment Program. But these programs may not be enough to enable
the industry to weather the current pandemic and the associated
economic downturn.
Unless you live near a port, the maritime industry typically goes
unnoticed, even though 90 percent of our goods are at some point
carried by water. While the industry has managed to maintain an
acceptable level of service by adapting and instituting comprehen-
sive safety measures, declining cargo volumes threaten the viability
of vessel owners and operators, ports, shipyards, and the workers
employed by those industries who are vital to our economic and na-
tional security.
While our ports are projecting a 20- to 30-percent drop in busi-
ness, some shipping trades are experiencing a 50-percent drop in
cargo for the second quarter of 2020.
It is unclear what the U.S. maritime transportation system will
face in the coming months and years. What is clear is the need to
maintain capacity across all maritime sectors. What may seem ex-
pensive now pales in comparison to the investment that would be
needed to rebuild those industries from scratch.
For instance, the Maritime Security Program, which supports 60
vessels and employs thousands of mariners, ensures that the De-
partment of Defense can project force internationally. While the
program currently costs $300 million per year, U.S. Transportation
Command has estimated that the cost to organically replicate the
program’s capacity would exceed $65 billion.
While I recognize that the Maritime Administration has recently
released their long-awaited maritime strategy, the lack of a com-
prehensive plan with concrete goals, action items, and milestones
remains a major hurdle for the maritime industry. Without a
whole-of-Government approach that addresses the entire industry,
our maritime supply chain is at risk. The pandemic only amplifies
that risk.
While I do not anticipate a positive message, I look forward to
hearing from our witnesses and thank them for their participation.
[Mr. Maloney’s prepared statement follows:]
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Prepared Statement of Hon. Sean Patrick Maloney, a Representative in
Congress from the State of New York, and Chairman, Subcommittee on
Coast Guard and Maritime Transportation
Good morning, and welcome to the Transportation and Infrastructure Committee’s
first ever videoconference hearing to examine the state of the U.S. maritime supply
chain amid the COVID–19 pandemic.
It is unfortunate that this pandemic prevents us from conducting this hearing in
person, but the Subcommittee on Coast Guard and Maritime Transportation has
been around in one form or another throughout our country’s history, and I am con-
fident in the Subcommittee’s ability to address the unique issues facing the mari-
time transportation system as well as the U.S. Coast Guard. As we all adjust to the
new normal, I look forward to working with Ranking Member Gibbs and the other
Members of the Subcommittee to ensure this body rises to the challenges our coun-
try now faces.
One cannot overstate the importance of our nation’s maritime industry. In a typ-
ical year, over $4.6 trillion worth of commerce flows through a maritime transpor-
tation system that is rapidly becoming more complex and interconnected. Unprece-
dented safety measures and a recent decrease in cargo, some of which began before
the onset of the pandemic, will challenge the industry for months and years to come.
My hope is that this hearing will help the Committee better understand the dif-
ficulties facing the maritime industry and identify areas of support that may be
needed to ensure the seamless movement of cargo and protect the associated mari-
time jobs.
The U.S. maritime industry includes four major components: the internationally
trading U.S. flagged fleet, the domestic (or Jones Act) trades, shipbuilders, and U.S.
ports. Longstanding durable maritime statutes such as the Jones Act, Cargo Pref-
erence, and the Maritime Loan Guarantee Program, have been supplemented by
more recent programs such as the Maritime Security Program, Small Shipyard
Grant Program and the Port Infrastructure Development Program. But those pro-
grams may not be enough to enable the industry to weather the current pandemic
and the associated economic downturn.
Unless you live near a port, the maritime industry typically goes unnoticed even
though 90 percent of goods are, at some point, carried by water. While the industry
has managed to maintain an acceptable level of service by adapting and instituting
comprehensive safety measures, declining cargo volumes threaten the viability of
vessel owners and operators, ports, shipyards, and the workers employed by those
industries who are vital to our economic and national security. While our ports are
projecting a 20–30 percent drop in business, some shipping trades are expecting a
50 percent drop in cargo for the second quarter of 2020.
It is unclear what the U.S. maritime transportation system will face in the coming
months and years. What is clear is the need to maintain capacity across all mari-
time sectors. What may seem expensive now, pales in comparison to the investment
that would be needed to rebuild these industries from scratch. For instance, the
Maritime Security Program, which supports 60 vessels and employs thousands of
mariners, ensures that the Department of Defense can project force internationally.
While the program currently costs $300 million per year, the U.S. Transportation
Command has estimated that the cost to organically replicate the program’s capac-
ity would exceed $65 billion.
While I recognize that the Maritime Administration has recently released their
long-awaited Maritime Strategy, the lack of a comprehensive plan with concrete
goals, action items, and milestones remains a major hurdle for the maritime indus-
try. Without a whole-of-government approach that addresses the entire industry,
our maritime supply chain is at risk. The pandemic only amplifies that risk.
Although I do not anticipate a positive message, I look forward to hearing from
our witnesses.
Mr. MALONEY. And I would ask unanimous consent to insert a
joint letter signed by six U.S. maritime labor unions into the hear-
ing record. Without objection, so ordered.
[The information follows:]
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Letter of May 28, 2020, from Marine Engineers’ Beneficial Association;
American Maritime Officers; Marine Firemen, Oilers, Watertenders and
Wipers Association; Sailor’s Union of the Pacific; International Organiza-
tion of Masters, Mates & Pilots; and Seafarers International Union; Sub-
mitted for the Record by Hon. Sean Patrick Maloney
MAY 28, 2020.
Hon. MIKE POMPEO,
U.S. Secretary of State,
2201 C St., NW, Washington, DC.
Hon. MARK T. ESPER,
U.S. Secretary of Defense,
100 S Washington Blvd, Arlington, VA.
DEAR SECRETARY POMPEO AND SECRETARY ESPER:
We are writing to request your immediate assistance on an urgent matter. Scores
of U.S. mariners are presently trapped aboard cargo ships, unable to take leave or
return home due to extreme COVID–19 lockdown measures imposed by foreign gov-
ernments. This humanitarian crisis, if not resolved as soon as possible, may threat-
en the essential supply chain for some 200,000 active U.S. military personnel now
serving overseas.
The cargo carried on these U.S. flagged ships supports our troops, our allies and
the global economy.
Ship’s captains, officers and crew members who sail under the American flag and
perform these essential functions for our country have not been able to set foot on
dry land in months. Their workplaces have become floating prisons. Crewmembers
are in danger of losing access to life-sustaining medicines. In many cases, they can-
not contact their loved ones at home in the United States as some of these vessels
lack Internet access.
It is well documented that isolation and excessive time serving aboard ship can
create increased fatigue and psychological stress, raising the risk of marine acci-
dents. Thousands of mariners across the globe who work on foreign-flagged vessels
are in the same predicament.
U.S. mariners who are part of the U.S. Maritime Security Program typically serve
a four-month assignment on ship and then rotate home by air to the United States
for time off while awaiting their next assignment. A fresh crew flies in to relieve
them. Right now, foreign governments are refusing to allow U.S. mariners to leave
their ships, to enter overseas airports, or to use hotels or any other form of accom-
modation or transport which would allow them to return home.
These extreme lockdown conditions, imposed due to the COVID–19 pandemic, are
not related to any meaningful health risks. Thanks to rigorous and comprehensive
safety measures jointly implemented by employers and those aboard ship, in con-
junction with our union, there have been no reported cases—none—of the deadly
virus on U.S. Maritime Security Program vessels. These are not cruise ships suf-
fering massive outbreaks; these are cargo ships staffed by mariners who have kept
out an infectious disease by scrupulously following all required safety measures.
These American men and women need to come home immediately. The longer
they are stuck at sea without relief, the greater the risk that fatigue and stress will
lead to accidents interrupting the delivery of vital food, medicine, military supplies
and other cargo to our troops serving overseas.
It is inconceivable that the United States—the wealthiest and most powerful na-
tion on earth, with military bases, planes and facilities all over the globe—cannot
relieve its own mariners who are stranded at sea. To date, however, our efforts to
address this problem with members of your respective departments have yielded no
results. That’s why we are bringing this issue to your attention.
COVID–19 has been a sudden and intense storm. We know that you and your
staffs have a lot on your desks to contend with during this time of peril. Please
make this a priority. Help us bring these stranded U.S. mariners home to safe har-
bor.
Sincerely,
MARSHALL AINLEY, PAUL DOELL,
President, President,
Marine Engineers’ Beneficial American Maritime Officers.
Association.
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ANTHONY POPLAWSKI, DON MARCUS,
President/Secretary-Treasurer, President,
Marine Firemen, Oilers, Watertenders International Organization of Masters,
and Wipers Association. Mates & Pilots.
DAVE CONNOLLY, MICHAEL SACCO,
President, President,
Sailor’s Union of the Pacific. Seafarers International Union.
Mr. MALONEY. I would now like to call on the ranking member
of the subcommittee, my friend Mr. Gibbs, for any opening re-
marks. And a reminder to unmute yourself, Bob.
Mr. GIBBS. Thanks. That was helpful. Thank you, Chairman
Maloney.
And also, I want to concur with your initial comments about op-
erating during this COVID–19 virus, unprecedented circumstances.
And hopefully, we are going to get out of this sooner than later.
And also the tragedy that happened in Minnesota. Hopefully that
gets resolved. And I certainly don’t condone any behavior that is
going on out there with the riots and all that. So hopefully our
friends, our former colleague, the Governor out there now, will be
able to handle that.
Today we are looking at impacts of COVID–19 on the maritime
supply chain; however, the coronavirus is not the only large-scale
issue causing changes in the supply chain. Industry consolidation,
rapid technological change, and changing trade relations with
China have also had significant impacts. I hope we learn today
about the relevant importance of all those issues.
After 9/11, the United States and much of our world updated
their port security infrastructure and the framework under which
port security infrastructure is regulated. Those updates and initia-
tives were focused on responses to violent physical terrorist acts.
Since that time, first cyber threats and now threats from the
coronavirus have posed new challenges to ports and to the supply
chain, which ports and vessels in the international and domestic
trade vessels are a part of. Like recent cyber attacks, the
coronavirus response will pressure test the post-9/11 port security
and determine whether post-9/11 upgrades were sufficient to re-
spond to a wide array of pressures ports and vessel operators now
face or if the upgrades were too specific a response to potential ter-
rorist threats.
In addition to those external threats, there have been significant
economic changes post-2008. Those changes are the result of the
consolidation of container shipping into increasingly larger vessels
owned and operated by ever fewer and more interconnected car-
riers.
In addition, the increasing technological sophistication of logistics
operations has also led to tighter, more consolidated schedules and,
again, more interconnections within the industry.
I look forward to hearing from our witnesses today about the
challenges they face in keeping up with the rapid changes in the
elements of the supply chain. Of course, we are interested in which
of those changes are new and related to the coronavirus and which
are the culmination of long-term trends and industry changes.
I appreciate Chairman Maloney calling this hearing today. I look
forward to seeing what we have learned and what to learn.
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And I concur with you, Chairman, that the news might not be
too good, but hopefully the news is going to show we are moving
forward in the right way and things are improving.
Finally, Chairman, I want to remind Members it is our responsi-
bility to mute and unmute ourselves as we seek recognition and
ask questions.
With that, I will yield back and mute myself.
[Mr. Gibbs’ prepared statement follows:]
f
Prepared Statement of Hon. Bob Gibbs, a Representative in Congress from
the State of Ohio, and Ranking Member, Subcommittee on Coast Guard
and Maritime Transportation
Today we are looking at the impacts of COVID–19 on the maritime supply chain.
However, the coronavirus is not the only large-scale issue causing changes in the
supply chain. Industry consolidation, rapid technological change, and changing trade
relations with China also have significant impacts. I hope we learn about the rel-
ative importance of all these issues today.
After 9/11, the United States and much of the world updated their port security
infrastructure and the framework under which port security infrastructure is regu-
lated. Those updates and initiatives were focused on responses to violent physical
terrorist acts. Since that time, first cyber threats and now threats from the
coronavirus have posed new challenges to ports and the supply chain, which ports
and vessels in the international and domestic trades are a part of.
Like recent cyber incidents, the coronavirus response will pressure test the post-
9/11 port security system and determine whether post-9/11 upgrades were sufficient
to respond to the wide array of pressures ports and vessel operators now face or
if those upgrades were too specific a response to potential terrorist threats.
In addition to these external threats, there have been significant economic
changes post-2008. These changes are the result of the consolidation of container
shipping into increasingly larger vessels owned and operated by ever fewer and
more interconnected carriers.
In addition, the increasing technological sophistication of logistics operations has
also led to tighter, more coordinated schedules, and, again, more interconnections
within the industry.
I look forward to hearing from our witnesses today about the challenges they face
in keeping up with rapid changes in the elements of the supply chain. Of course,
we are interested in which of those changes are new and related to coronavirus, and
which are the culmination of long-term trends and industry changes.
I appreciate Chair Maloney calling this hearing today and look forward to seeing
what we learn.
Mr. MALONEY. Well, I thank the gentleman.
I would now like to recognize the chairman of the Transportation
and Infrastructure Committee, Mr. Peter DeFazio, whose leader-
ship during this crisis has been nothing short of extraordinary, and
I thank him for all he has done to respond to this unprecedented
situation.
Mr. Chairman.
Mr. DEFAZIO. Thanks, Sean Patrick. Thanks to you and Bob
Gibbs, ranking member, for being willing to conduct the first ever
virtual hearing for the Transportation and Infrastructure Com-
mittee, a committee with more than 200 years of history.
It is a fairly extraordinary day, but these are extraordinary
times, and in order to get our work done, we have to take extraor-
dinary measures. And this is the first big step toward fully actu-
ating the committee so we can move forward not only with hear-
ings and oversight, but we can also move forward in the very near
future to marking up significant legislation that the country needs.
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We had a briefing, I think it was 2 weeks now, from the MARAD
Administrator, and he painted a pretty grim picture of the condi-
tions in the maritime industry, the loss of revenues and movement
of freight and supplies. It is everywhere. It is not just in our major
commercial ports. It is in many of our smaller ports. And the crisis
runs bicoastal. It starts in small, mid-emerging ports like Coos Bay
in my district, to the Port of Miami, Seattle, obviously down to
L.A.-Long Beach. I see Alan there.
And we have to take action. As you pointed out, Mr. Chairman,
this is a critical part of America’s supply chain. It is the most im-
portant component. And, unfortunately, given the definitions in the
previous relief bills, we haven’t done a lot for ports.
They enjoy an odd sort of status, and they don’t quite fit into any
of the programs that have been adopted so far for the sorts of help
they need. We need everything from personal protective equipment
[PPE] for port workers, and we have heard a good deal about that,
to assistance to deal with the marine terminal operators.
Business is way down. They can’t pay their rent. The ports can’t
afford to not get the rent. I mean, it just hurts up and down the
whole chain: harbor pilots, assist tugs, drayage operators, fuel
bunkers.
We can’t have them all go out of business, can’t reconstitute this
easily or quickly. So we have to deal with the totality of this indus-
try, not a particular segment.
We are looking to develop legislation to provide the Maritime Ad-
ministration with specific emergency authority to allow it to pro-
vide financial relief and assistance to each link in the maritime
supply chain that serves both foreign and coastwise trades of the
U.S.
And as you pointed out earlier, Mr. Chairman, at this hearing we
will be making the case of the need for those funds so we can carry
it forward to our appropriators and hopefully maintain the integ-
rity of the system which we are going to need now more than ever.
With that, I yield back the balance of my time.
[Mr. DeFazio’s prepared statement follows:]
f
Prepared Statement of Hon. Peter A. DeFazio, a Representative in Con-
gress from the State of Oregon, and Chairman, Committee on Transpor-
tation and Infrastructure
Thank you, Chairman Maloney, I commend you for quickly organizing this after-
noon’s hearing to examine the impacts on the U.S. maritime supply chain caused
by the COVID–19 pandemic.
I also want to extend my thanks to our witnesses for making themselves avail-
able, not only on short notice, but also under this new virtual format. I look forward
to your participation this afternoon.
It is vitally important that this committee understand how the pandemic has af-
fected the reliability and efficiency of our maritime industry.
With so much of U.S. trade and our national economy dependent on a seamlessly
efficient global maritime supply chain, it is critical that we understand the impacts
and implications moving forward as we shape future response and recovery actions.
And make no mistake about it; our Nation will recover from this pandemic. The
fundamental question is: how quickly?
No one can know for sure what the answer is to that question.
One thing I do know for sure, however, is that unless we begin now to take con-
structive actions to shore up and support all sectors in our maritime supply chain—
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from Coos Bay to PortMiami—we will only frustrate, and not facilitate, our efforts
to re-float our economy as quickly as possible.
I realize that the Congress has already committed trillions in spending to address
the fall-out from the pandemic. Some members may feel that additional spending
is unwarranted.
But at this point, it would be ‘‘penny wise and pound foolish’’ to believe that we
should not take aggressive action to shore up the lifeline to our national economy—
the maritime supply chain.
And that is why this afternoon’s hearing is important. We need to understand the
needs to be able to best tailor the assistance. But in doing so, we must first think
holistically and recognize the interconnectedness of the entire enterprise itself.
For it will do little good if we address the financial issues affecting our marine
terminal operators, but we do nothing to ensure that our longshore workers and
Coast Guard service members have the protective gear they need to stay safe and
healthy on the job.
Moreover, we can help our ports get through the steep drop in trade volumes, but
it will come to naught if all of the services that make our ports function, such as
harbor pilots, assist tugs, drayage operators, fuel bunkers and others are allowed
to go out of business.
We must treat the totality of the industry, not just one segment. And we need
to call upon the various segments of the industry to work together for truly, you
will all sink or swim together.
That is why I am looking to develop legislation to finally provide the Maritime
Administration with a specific emergency authority to allow it to provide financial
relief and assistance to each link in the maritime supply chain that serves both the
foreign and coastwise trades of the United States.
Too much of our economic recovery and future prosperity rides on what we do
over the next couple of months to ensure that when our economy re-starts, that we
have a maritime industry and supply chain able to reliably and efficiently move that
commerce. I urge members to join me in that effort.
Mr. MALONEY. I thank the gentleman.
At this time I would like to recognize the ranking member, Mr.
Graves.
I don’t see the gentleman. He may not be with us at the moment.
Are you with us, Mr. Graves?
Well, we can certainly come back to him if he is having
connectivity issues.
So let’s move forward with our witnesses for today’s panel. I
thank them all for being here and welcome them to this remote
hearing.
Today we are joined by Mr. Christopher J. Connor, president and
CEO of the American Association of Port Authorities.
Mr. Michael Roberts, president of the American Maritime Part-
nership.
Ms. Jennifer Carpenter, president and CEO, The American Wa-
terways Operators.
Ms. Lauren Brand, president, National Association of Waterfront
Employers.
And Mr. Eric Ebeling, president and CEO, American Roll-On
Roll-Off Carrier Group, on behalf of USA Maritime.
Thank you all for being here today. We look forward to your tes-
timony.
Without objection, our witnesses’ full statements will be included
in the record. Since those written statements are part of the record,
the subcommittee requests that you limit your oral testimony to 5
minutes.
With that, Mr. Connor, if you would please unmute yourself and
you may proceed.
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TESTIMONY OF CHRISTOPHER J. CONNOR, PRESIDENT AND
CHIEF EXECUTIVE OFFICER, AMERICAN ASSOCIATION OF
PORT AUTHORITIES; MICHAEL G. ROBERTS, SENIOR VICE
PRESIDENT, CROWLEY MARITIME, TESTIFYING ON BEHALF
OF AMERICAN MARITIME PARTNERSHIP; JENNIFER A. CAR-
PENTER, PRESIDENT AND CHIEF EXECUTIVE OFFICER, THE
AMERICAN WATERWAYS OPERATORS; LAUREN K. BRAND,
PRESIDENT, NATIONAL ASSOCIATION OF WATERFRONT EM-
PLOYERS; AND ERIC P. EBELING, PRESIDENT AND CHIEF EX-
ECUTIVE OFFICER, AMERICAN ROLL-ON ROLL-OFF CARRIER
GROUP, TESTIFYING ON BEHALF OF USA MARITIME
Mr. CONNOR. Well, thank you, Chairman Maloney and Ranking
Member Gibbs, for holding this important hearing on the impact of
the COVID–19 pandemic on the U.S. maritime supply chain.
My name is Chris Connor, president and CEO of the American
Association of Port Authorities. AAPA is the unified voice of the
seaport industry in the Americas, representing 78 public port au-
thorities in the United States. My testimony today is given on be-
half of State and local public agencies located along the Atlantic,
Pacific, and gulf coasts, the Great Lakes, Alaska, Hawaii, Puerto
Rico, Guam, and the U.S. Virgin Islands.
Our Nation’s seaports deliver vital goods to consumers, facilitate
the export of American-made goods, create jobs, and support local
and national economic growth. Ports also play a crucial role in our
national defense, a point underscored by the designation of 17 of
our Nation’s ports as ‘‘strategic seaports’’ by DoD.
According to Martin Associates, an internationally recognized
economic and transportation consulting firm, the total economic
value generated in terms of revenue to businesses, personal in-
come, and economic output at U.S. coastal ports accounts for $5.4
trillion or 26 percent of GDP. Over 650,000 Americans are directly
employed in jobs generated through the movement of marine cargo
through vessel activity.
Let me now tell you what seaports in your respective districts
are currently experiencing.
Containerized cargo declined by 18 percent in the month of
March year on year. Furthermore, ports have seen a significant in-
crease in blank sailings or canceled vessel calls, resulting in rev-
enue losses for port authorities.
While the data are still incoming for the months of April and
May, initial indications show declines of 20 to 25 percent year on
year.
Following the shutdown of auto production facilities in the Amer-
icas, Europe, and Asia, we have seen major reduction in RORO car-
goes. One major west coast auto port has experienced a 90-per-
cent—9–0-percent—reduction in RORO cargo, with only 1 or 2 ship
calls expected this month compared to a typical month of 16.
At two of the largest bulk cargo ports in the United States, move-
ments have declined 15 to 25 percent year on year. Bulk cargo
movements, which includes agricultural products, energy commod-
ities such as oil and coal, as well as chemicals, are down 27 percent
year on year at one large gulf port.
Tourism at our Nation’s ports has completely evaporated. This
has resulted in massive P&L impacts at ports that are heavily
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weighted in this sector. Indications are that certain South Atlantic
seaports’ overall business is down between 50 to 80 percent as a
result.
Small ports around the country have been especially hard hit. At
these ports there are often only one or two types of cargo being
handled. If demand drops, port operations can nearly cease. There
are over 800 of these emerging harbors, processing less than 1 mil-
lion tons of cargo per year, around the U.S.
We are beginning to see furloughs and layoffs in the port indus-
try, and we are also beginning to see that some ports are looking
to forego planning for and investment in capital improvement
projects.
The implications of deferring or canceling investment or other
capital improvement programs will be felt long after this pandemic
and won’t bode well for American efficiency and logistics, nor its
competitiveness in global markets.
For ports, as for other industries, the future remains uncertain.
At this stage of the pandemic, hope for a quick V-shaped recovery
has been replaced by the realization of a longer battle ahead.
Many members of this subcommittee and a total of 85 Members
of the House voiced support for port relief in a recent letter to
House leadership. You said it best in the letter when you wrote,
‘‘It is critical that all of our Nation’s ports receive much needed as-
sistance to keep supply chains moving and keep both employees
and customers safe.’’
We agree, and AAPA urges that Congress include $1.5 billion in
economic relief to our Nation’s public ports in the next coronavirus
relief bill. This request is not about recovering lost revenue.
It is about ensuring that ports are able to make bond and other
debt instrument payments, keep pace with the accelerating cost of
protecting workers, and ultimately ensuring that America’s sea-
ports and port workers maintain a state of readiness for the even-
tual economic recovery.
Thank you again for inviting AAPA to testify today on this im-
portant topic, and I look forward to answering any questions you
may have.
[Mr. Connor’s prepared statement follows:]
f
Prepared Statement of Christopher J. Connor, President and Chief
Executive Officer, American Association of Port Authorities
Thank you Chairman Maloney and Ranking Member Gibbs for holding this impor-
tant hearing on the impact of the COVID–19 pandemic on the US Maritime supply
chain and for inviting the American Association of Port Authorities to testify.
My name is Chris Connor, and I am the President and Chief Executive Officer
of the American Association of Port Authorities (AAPA). AAPA is the unified voice
of the seaport industry in the Americas, representing 78 public port authorities in
the United States. My testimony today is given on behalf of state and local public
agencies located along the Atlantic, Pacific, and Gulf coasts, the Great Lakes, and
in Alaska, Hawaii, Puerto Rico, Guam, and the U.S. Virgin Islands.
Our nation’s seaports deliver vital goods to consumers, facilitate the export of
American made goods, create jobs, and support local and national economic growth.
Ports also play a crucial role in our national defense—a point acknowledged through
the designation of 17 of our nation’s ports as ‘‘strategic seaports’’ by the Department
of Defense.
According to Martin Associates, an internationally recognized economic and trans-
portation consulting firm, the total economic value generated in terms of revenue
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to businesses, personal income and economic output at U.S. coastal ports accounts
for $5.4 trillion, roughly 26 percent of GDP, and over 650,000 Americans are directly
employed in jobs generated through the movement of marine cargo and through ves-
sel activity.
Since the beginning of the COVID–19 pandemic, AAPA has remained in regular
contact with our members in order to monitor the impact of the pandemic, commu-
nicate with them on the potential of federal relief and recovery efforts, and to give
our member ports the opportunity to share best practices with one another as they
manage this crisis. On this latter point I’d like to highlight how impressive the col-
laboration within the industry has been; typically the fiercest of competitors—Ports
have set aside market share aims in favor of keeping port workers safe and healthy,
and getting goods to the frontline of the COVID–19 battlegrounds, as well as to con-
sumers like you and me.
AAPA membership comprises ports large, medium, and small, and to that end
there is a saying in the Port industry that ‘‘if you have seen one port, you have seen
one port.’’ Accordingly, each of our members has been impacted in a myriad of dif-
ferent ways by COVID–19. But one thing is clear—all have been affected by this
crisis.
In an effort to detail the operating challenges and unmet needs facing America’s
seaports and our nation’s maritime supply chain as a result of the COVID–19 pan-
demic, I offer the following comments:
CONTAINERIZED CARGO
We have seen containerized cargo decline by eighteen percent in the month of
March over the same period in 2019. These declines are not limited to any par-
ticular geographic region, and container cargo volumes have declined across each
and every region represented by our Association. Ports have seen a significant in-
crease in blank sailings, or cancelled vessel calls, which can result in significant rev-
enue losses.
While data is still incoming for the months of April and May, initial indications
show containerized cargo declines of twenty to twenty five percent in those months
over the prior year.
ROLL ON/ROLL OFF CARGO
As automobiles have worked their way through the global supply chain following
the shuttering of auto production facilities in the Americas, Europe, and Asia, we
have seen major reductions in roll-on/roll-off cargos. One west coast port has experi-
enced a ninety percent reduction in ro/ro cargos, with only one or two ship calls ex-
pected this month compared to a typical average of four ship calls per week.
While the big three auto manufacturers have recently brought production back on-
line, it remains uncertain what demand may look like and how consumer decisions
may impact this market segment.
BULK CARGO
At two of the largest bulk cargo ports in the United States movements have de-
clined fifteen to twenty five percent over the same period in 2019; bulk cargo move-
ments, which include agricultural products, energy commodities such as oil and coal
as well as chemicals, are down twenty seven percent compared to 2019 at one Gulf
coast port. Other regions, including ports in the Great Lakes, have indicated that
bulk cargo movements remain level compared to last year—though they expect sig-
nificant declines in the near future.
TOURISM
Tourism at our nation’s ports has completely evaporated. This has resulted in
massive P&L impacts at ports heavily invested in this business—Indications are
that certain South Atlantic Seaports overall business is down between 50 percent–
80 percent.
SMALL PORTS
Small ports around the country have been especially hard hit. At these ports there
are often only one or two types of cargo being handled and if demand drops port
operations can nearly cease. There are over 800 of these ‘emerging harbors’, proc-
essing less than 1 million tons of cargo per year, around the US.
We are beginning to see furloughs and layoffs in the maritime industry and sup-
ply chain, and it is estimated by Martin Associates that a 20 percent annualized
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reduction in cargo throughput at our nation’s ports could result in the direct loss
of 130,000 jobs.
We are also beginning to see that some ports are looking to forego planning for
and investment in capital improvement projects, putting the readiness, capacity,
and capability of our nation’s trade infrastructure at risk.
For ports and the maritime industry as for other industry sectors the future re-
mains uncertain. However, projections from our members indicate that the impact
of current market conditions on business for the month of June are likely to result
in declines, year over year, that are equal to equal or greater than those seen in
previous months.
In a recent letter to House leadership 85 Members of Congress voiced support for
port relief. I thank those that signed that letter, including Members of this Com-
mittee. In the letter, signers noted that ‘‘it is critical that all of our nation’s ports
receive much needed assistance to keep supply chains moving and keep both em-
ployees and customers safe.’’
We agree, and AAPA requests that Congress include $1.5 billion in economic relief
to our nation’s public ports in any future coronavirus response or recovery proposal.
This request is not about recovering lost revenue; but rather about ensuring that
Ports are able to make bond and other debt instrument payments, keep pace with
the accelerating costs of protecting workers and keeping the workplace sanitized,
and ultimately ensuring that Americas Sea Ports and port workers maintain a state
of readiness for the eventual economic recovery.
Thank you again for inviting the American Association of Port Authorities to tes-
tify today on this important topic, and I look forward to answering any questions
you may have, on the impacts this crisis has had on ports, on what the future may
hold, and on what infrastructure investments Congress could make to position the
industry for success moving forward.
Mr. MALONEY. I thank the gentleman.
Now proceed to Mr. Roberts.
You may proceed. Please unmute. And the floor is yours.
Mr. ROBERTS. Good afternoon, Chairman Maloney. Thank you
and Ranking Member Gibbs, Chairman DeFazio, members of the
subcommittee. I am honored to appear before you on behalf of the
American Maritime Partnership, representing almost all segments
of the domestic maritime industry and producing 650,000 jobs
across the Nation.
My message is simple. I have seen firsthand how American mari-
time has responded to this crisis, and I must tell you, I am so very
proud to be associated with this community.
Nobody knew how this was going to unfold and there is still a
lot we don’t know. There are gaps in the rulebook from this black
swan event. But decisions have to be made, and these are the times
when character and culture take over, when we make the best
choices we can in good faith.
Our industry wouldn’t say there is some risk in being outside our
home, so we will stay inside safe and COVID-free. American mari-
time just wouldn’t do that. We have to do that. We choose to go
outside our homes so that the grocery stores in San Juan and Hon-
olulu and Anchorage are stocked up, so that the basic commod-
ities—lumber, iron ore, grains, petroleum, building blocks for al-
most everything—those commodities can keep moving on our rivers
and Great Lakes, so that our harbors are kept clear, and so that
we can keep building modern ships to keep our supply chain work-
ing.
I am proud to be part of this community, and I am grateful for
the leadership that we have seen from our Government. Admiral
Buzby started industry calls in March and they have been invalu-
able for sharing information, what is working, what is not working,
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where we need help. I remember at the end of the first call, Admi-
ral Buzby saying these are the kinds of times when leaders lead.
The leadership we have seen throughout the industry has been
extraordinary, from the top executives to the ship captains to the
line mariners, who lead by setting the right example, by their be-
havior. We have seen other organizations that have behaved dif-
ferently. They throw up their hands and say the Government
hasn’t told us what to do.
Maritime hasn’t handled it that way. We have to figure it out.
And I will single out one specific team, among many, the Ship Op-
erators Cooperative Program, which put together a thoughtful and
detailed set of protocols for how to prevent COVID infection from
reaching vessel crews and how to deal with it if it happens. Other
groups have done similar work, and all of it needs to be updated
almost constantly because more information keeps coming in.
So my key message is that the character and culture of the
American maritime industry is driving leaders at every level to
find solutions to keep people safe and keep supply chains moving.
I want to emphasize a point made in my written testimony,
which is that a cargo ship should never be quarantined. A mariner
who is sick with COVID should be removed and given treatment
as safely and quickly as possible. The rest of the crew should safely
come off the vessel and go to quarantine. The vessel should be thor-
oughly sanitized, a new crew brought in, and then resume pro-
viding the essential services to the communities they serve.
Leadership in times like this requires exercising judgment, using
a 360-view of everything impacted by a decision. Quarantining a
ship, sending it to anchor is less safe to the local port community
and everyone else involved than sending the ship to a secure ter-
minal where the best controls are in place.
Finally, it is the 100-year anniversary of the Jones Act, a perfect
opportunity to celebrate the dedication of the men and women of
American maritime, those whose actions throughout this crisis and
many other crises over the years exemplify the character that I
have been talking about.
It is also disappointing that a few people have chosen to use this
crisis to attack American maritime because we are not as cheap as
the Chinese maritime industry. As this subcommittee heard last
October, the Chinese maritime industry serves China’s interests
quite well, controlling ports at key locations around the world
using Government subsidies to dominate shipbuilding and global
shipping so that they can dominate global trade.
And in this country, there are some who seem to think that is
OK. They will gladly sideline American mariners and destroy this
maritime industry that contributes so much to safety and security
so that they might get shipping services a little cheaper.
It is unfortunate that they try to use this terrible crisis and the
100-year anniversary of the Jones Act to pursue that goal, and we
appreciate this subcommittee’s support in rejecting those efforts.
With that, I want to thank you, again, Chairman Maloney, Rank-
ing Member Gibbs. Both of your leadership has been exceptional.
And we will welcome your questions.
Thank you.
[Mr. Roberts’ prepared statement follows:]
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f
Prepared Statement of Michael G. Roberts, Senior Vice President, Crowley
Maritime, testifying on behalf of American Maritime Partnership
I. INTRODUCTION
Mr. Chairman, Mr. Ranking Member, Members of the Subcommittee. Thank you
for the opportunity to be with you today. I am Michael Roberts, senior vice president
of Crowley Maritime, a major American domestic shipping company. We are a diver-
sified marine transportation and logistics company based in Jacksonville, Florida.
We employ about 3,000 American mariners, and have invested nearly $3 billion in
vessels built by American workers in U.S. shipyards. Vessels in our fleet serve cus-
tomers in Alaska, the U.S. West, East and Gulf coasts, the Caribbean and Central
America. Thank you for the opportunity to talk to you today about ‘‘the U.S. mari-
time supply chain during the COVID–19 pandemic.’’
I am here today in my capacity as president of the American Maritime Partner-
ship (AMP). AMP is the largest maritime legislative coalition ever assembled. Our
organization includes all elements of the American domestic maritime industry—
shipping companies, ship construction and repair yards, mariners, and pro-defense
organizations. our focus is America’s domestic shipping law, the Jones Act, which
requires that cargo moved by water between two points in the United States be
transported on American vessels by American mariners.
Before addressing the impacts of the pandemic on the U.S. maritime supply chain,
I would be remiss if I failed to point out that today’s hearing comes in the midst
of a series of important milestones for our industry that highlight its vital strategic
and commercial role in our country’s history. Last Friday was National Maritime
Day, a day that recognizes U.S. mariners and the importance of our strong maritime
heritage throughout our nation. Last Monday was Memorial Day, a day particularly
important to us because of the deep connection between American maritime and na-
tional security. And finally, one week from today is the 100th anniversary of the
Jones Act. We are happy to mark the centennial of the Jones Act with such over-
whelming bipartisan support from the Congress.
Nowhere is that support more clear than on the Coast Guard and Maritime
Transportation Subcommittee. As you know, the American domestic maritime indus-
try supports 650,000 jobs and provides an economic impact of more than $150 bil-
lion annually. It provides important national, economic and homeland security bene-
fits throughout our country. The national security and homeland security benefits
have been well-documented through writings and statements by countless Members
of Congress, the White House, U.S. Defense Department, U.S. Transportation Com-
mand, U.S. Department of Transportation, U.S. Maritime Administration, U.S.
Coast Guard, and Customs and Border Protection officials, as well as independent
experts.
You may also know that the American domestic maritime industry today is mod-
ern, innovative and leads the world in safety and environmental stewardship. The
world’s first containerships powered by clean natural gas now serve the domestic
market between Florida and Puerto Rico. America’s tanker fleet is among the safest
and most environmentally responsible, combining data-driven safety management
systems with a relatively new fleet profile. These and other innovations throughout
the industry are deployed on ships operated by well-trained American mariners who
care about the safety and health of America’s maritime environment, and the citi-
zens they serve.
In these challenging times in the face of a historic pandemic, our nation’s security
can only benefit from an all-American industry like ours.
II. SUMMARY OF KEY POINTS
Today I would like to leave you with three main points:
First, despite the men and women of the domestic maritime industry working tire-
lessly to deliver America’s goods, there continues to be opportunistic calls for Jones
Act waivers during this time. No waivers are required; there is ample capacity in
the domestic fleet. Any waiver would only outsource American jobs to foreign work-
ers at a time of record domestic unemployment while doing nothing to improve the
already efficient marine trade lanes we serve. Our primary request today is that you
continue to do what you have done consistently over time and particularly through-
out the pandemic—resist the efforts of opportunists to use COVID–19 as an excuse
to change the Jones Act. We are deeply grateful for the broad, bipartisan support
for the Jones Act through this Congress.
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Second, this subcommittee can be assured that the American domestic maritime
industry will continue to show up to work and deliver the goods that make this na-
tion strong and secure despite one of the most challenging environments in a gen-
eration. We take our responsibility as essential workers very seriously and under-
stand our obligation to ensure that America’s critical supply chains remain moving.
Third, we very much appreciate the leadership and flexibility shown thus far to
ensure that the maritime industry can continue to do our work, and hope that this
subcommittee will encourage the adoption of flexible guidelines for U.S. crew quar-
antine and other issues with the relevant agencies.
III. COVID–19 IMPACTS ON THE DOMESTIC MARITIME INDUSTRY
The COVID–19 pandemic has challenged us as individuals, companies, industries
and as a nation. The entire domestic maritime industry has been deemed ‘‘essential’’
by the Department of Homeland Security (DHS), meaning that we continue oper-
ating throughout the pandemic. This has produced extraordinary safety challenges
as well as complex financial implications. On the one hand, we have maintained a
keen focus on keeping as safe as possible the essential maritime workforce—our
mariners, dockworkers, drivers, warehouse workers, repairmen, and others who
could not do their work remotely, but have had to show up for work for the past
three months the same as they always have. We are extremely grateful for the dedi-
cation of these men and women. On the other hand are the customers—businesses,
governments and consumers—who have relied on the maritime industry to keep
supplies moving, and in some cases to survive. Simply shutting down operations to
protect our workforce has not been an option.
No playbook is available to direct how to operate safely in this environment. Com-
panies have had to improvise to develop special operating protocols to protect em-
ployees based on the best information available. These efforts to protect our work-
force have been frustrated by the scarcity of personal protective equipment (PPE)
and other materials. Our industry is also not immune from supply chain disrup-
tions. There are supply chain impacts in certain segments of the industry, including
difficulties with longer repair and maintenance schedules and the potential for im-
pacts to spare parts sourcing if the pandemic continues.
It should be noted that regulatory authorities have faced unprecedented chal-
lenges in providing guidance to the industry on how best to operate safely. The chal-
lenges include limited pre-existing guidance, shifting scientific advice, multiple
stakeholders, scarce resources, and the need to make real-time decisions affecting
many lives. U.S. government maritime authorities—the U.S. Coast Guard, Maritime
Administration, U.S. Transportation Command and others—are to be commended
for their leadership, and for reaching out to all aspects of the maritime industry in
working through these issues. The foundation of collaboration between government
and industry that has been built on national security, safety, and other issues has
enabled real progress to be made in these extraordinary times.
The severity of the financial impacts of the COVID–19 pandemic on the domestic
maritime industry has yet to be determined. Two factors contribute to the uncer-
tainty. First is the skyrocketing cost of operations resulting from implementing the
protocols necessary to keep our workforce safe. The magnitude of these incremental
costs and the availability of funds to help defray them has not been determined.
Second is the impact of COVID–19 and the economic shutdown on demand for mari-
time services. While these impacts differ for different segments of the industry, de-
mand is almost universally much lower than in normal times. The industry has
made enormous investments in vessels, terminals, equipment, and other assets to
provide services to their customers. Financing for these investments was based on
economic models that did not account for the black swan event we are now experi-
encing. These services must nevertheless continue operating through this crisis even
though the revenues generated will not cover the costs of providing them.
There is great uncertainty as to when the most serious economic impacts will hit,
how severe they will be and how long they will last. The American maritime indus-
try must prepare for the worst-case scenario while working for better outcomes. This
includes deferring capital and other expenses wherever possible and taking other
necessary measures. Government programs designed to provide a financial backstop
to mid-sized companies facing severe economic damage should be available to pro-
vide temporary support to the American maritime industry.
a. Scope of domestic maritime industry
Our American domestic maritime industry is engaged in transporting goods
through all sectors of the economy. U.S.-flag vessels carry agricultural, coal, chem-
ical, aggregate, petroleum, and other products on the inland waterways of the
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United States. American vessels carry essential goods in the non-contiguous trades
of Alaska, Hawaii, and Puerto Rico. U.S. tankers and tank vessels transport critical
crude oil and refined petroleum products along the West, Gulf, and East Coasts of
the nation. The American bulk fleet carries iron ore, and other products, on the
Great Lakes, including for America’s major steel manufacturers. American dredging
companies ensure that U.S. harbors, ports, and rivers are dredged and maintained.
Virtually every sector of the maritime industry has been negatively impacted by
the pandemic. AMP member companies have seen reduced cargo volumes in the
non-contiguous trades, as business closures and stay-at-home orders reduce demand.
Great Lakes carriers have experienced declines in the carriage of commodities. The
destruction of the airline and auto sectors has led to declines in the need for vessels
to transport gasoline, diesel, and jet fuel. Overall demand for waterborne transpor-
tation of agricultural and other commodities has declined, amidst a nearly 5 percent
decrease in freight transported on U.S. navigational channels. Port activity around
the top 10 U.S. ports has seen declines of over 40 percent. Domestic shipyards have
worked hard to mitigate the impact of the pandemic with enhanced sanitation prac-
tices and liberal leave policies.
The domestic maritime industry carries many of the building blocks of our econ-
omy. From top to bottom, we have seen the total interconnectivity of our economy,
and no port is safe from the storm. Stay-at-home orders and a nearly 20 percent
drop in traffic on U.S. roads has meant fewer American vessels transporting oil; a
42 percent dip in auto sales has slowed the need for the ships that move American
steel; an 85 percent drop in weekly U.S. travel spending has shattered tourism and
hospitality for island economies like Hawaii; and a Defense Department order paus-
ing domestic transportation of military goods has upended a system that moves
400,000 personal property shipments a year.
How long the impacts will last remains unknown. America’s maritime businesses
are facing significant economic uncertainties as a result of COVID–19. And while
American businesses are starting to open up again, it is very difficult to forecast
demand for the remainder of this quarter and for Q3 and Q4 of 2020.
As many as 25 million jobs worldwide could be wiped out by a worldwide reces-
sion brought on by the pandemic, and the Bureau of Labor Statistics industry esti-
mates for water transportation workers in April 2020 are already showing an 11
percent decrease in employment.
However, despite the situation, America’s maritime industry has been getting the
job done, keeping the U.S. supply chain running. Why? Because we are Americans
who support Americans, especially during times of national emergencies.
b. Coordination with the U.S. Government for an Essential Workforce
As you have seen, the domestic maritime industry is diverse and COVID–19 has
tangible, but distinct, impacts on each of these segments. A common uniting factor
among all these diverse segments, however, is the recognition that all of the men
and women working in this industry, no matter what segment of the industry they
work for, are classified as essential workers. These men and women have been on
the front lines of this pandemic since the very beginning, working every day to en-
sure that our grocery stores are stocked, our fuel is delivered, and the vital com-
merce that sustains this nation remains flowing.
Beyond that, the essential workers of the domestic maritime industry have gone
above and beyond during this time. For example, the men and women of the domes-
tic dredging industry went beyond the call of duty when the USNS Comfort needed
to dock in New York Harbor. The berth at New York Harbor needed to be dredged
an extra 40 feet to enable the USNS Comfort to dock. The dredging was expected
to take two weeks. An American dredging company, using a crew of 60 and pulling
double 12-hour shifts a day, dredged the berth in eight days, allowing the USNS
Comfort to start treating patients earlier than expected.
While maritime workers are not as visible to the public as the other vital trans-
portation workers that keep our nation moving, such as transit workers or truck
drivers, they are an equally important part of our supply chain. We were grateful
that the Cybersecurity and Infrastructure Security (CISA) recognized the impor-
tance of the maritime industry and ensured that maritime workers were broadly
covered as part of the critical infrastructure guidance released in March.
Of course, we in the industry and the members of this Committee who have sup-
ported our efforts throughout the years, have always understood the essential value
of the domestic maritime industry. We are continually seeking ways to improve our
connectivity, particularly in times of emergency, to government entities with whom
we do not regularly interact. Our core partners, such as the Coast Guard, the De-
partment of Transportation, and the Maritime Administration understand the oper-
ations of the industry, but as a whole we needed to improve our communications.
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To that end, last summer AMP, our industry and the federal government worked
together to create the Maritime Sector Coordinating Council (MSCC) to enhance our
efforts on emergency preparedness from a company and regional level to a federal
level.
You may not have heard of Sector Coordinating Councils (SCC). All 16 critical in-
frastructure sectors recognized by the federal government have a SCC. They serve
as a single point of entry for the government to communicate with an entire indus-
try. SCC’s work in concert with Government Coordinating Councils (GCC’s) to dis-
cuss emergency preparedness and planning efforts for critical infrastructure. The
SCC’s were established immediately after 9/11 because the government realized that
there was no streamlined way to communicate with industries responsible for crit-
ical infrastructure in case of an emergency.
While we set up the MSCC before there was any hint of a pandemic like COVID–
19 on the way, the MSCC has proven to be very helpful in coordinating emergency
response efforts over the past few months. As I will explain later, there continues
to be issues (such as availability of test kits or PPE) but the MSCC provides a way
for the industry to express those concerns directly to agencies like CISA or FEMA.
There are also direct benefits from the MSCC engagement. For example, FEMA is
actively procuring and distributing cloth protective coverings to core transportation
sectors, including maritime. Through the MSCC’s network, we were able to coalesce
hundreds of company, labor, and ports requests for these face masks over a 72-hour
period, working with our partners at MARAD. While the ultimate task of distrib-
uting those masks remains with the government, the MSCC’s ability to quickly col-
late an industry request and submit it for ultimate consideration speaks well to our
industry’s ability to quickly coordinate for an emergency request.
c. Operational Resilience
Many organizations have undertaken to establish written protocols to keep vessel
crews safe as they continue providing essential services to the American economy.
These include trade associations (e.g., American Waterways Operators), class soci-
eties (e.g., ABS), and collaborative efforts between industry and government au-
thorities (e.g., the Ship Operators Cooperative Program). These efforts have helped
provide guidance on a wide range of technical issues and have made possible signifi-
cant progress as the industry works through challenging operational issues. The
limitations of these protocols, of course, is that they reflect the information available
to certain people at a point in time. As that information changes, the protocols need
to be updated, which can materially change what is believed best practices for safe
operations. Certain issues have raised particular concerns that merit specific and
continued attention.
1. Testing at crew changes
The U.S. maritime industry has worked to develop protocols to minimize the risk
of crew member infection on board American vessels. Vessel crews usually number
no more than 20–25 people, although American vessels in the offshore fishing fleet
may have up to 150 or more workers on board. We note that the Jones Act fleet
includes the offshore fishing fleet which has its own set of challenges that might
present a unique set of problems. In general, vessel crews typically sign on to a ship
for several weeks at a time. The main risk of infection comes during crew changes,
when parts of the crew end their assignments and are replaced by new mariners
coming on board. Among other tools to prevent an infected crew member from join-
ing a vessel, testing the arriving crew members for active infection is likely the most
effective way of screening. However, access to such testing was denied for the first
several weeks of the pandemic and has been inconsistent since then. The primary
reason is the shortage of test kits, which has led to prioritizing access to tests.
In many cases mariners at crew rotations have been denied access to testing
based upon the assertion that such testing would be inconsistent with CDC guid-
ance. This does not appear to be an accurate interpretation of CDC guidance (since
at least mid-April), which allows priority access for ‘‘workers in congregate living
settings’’ with or without symptoms when ‘‘prioritized by health departments or cli-
nicians.’’ The phrase ‘‘congregate living setting’’ certainly describes the shipboard
environment where crew members eat, sleep, work and live, often for weeks at a
time.
Consistent with this interpretation, state and local health departments and clini-
cians including world-class health care organizations have begun providing rapid
testing for active infection for mariners at crew changes. Test availability is ex-
tremely limited, however, and still not available in most locations, in part based on
continued misinterpretation of CDC guidance. This Committee should encourage the
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Coast Guard, CDC and other government agencies to clarify that mariners at crew
changes should have priority access to testing for active infection.
2. Management of Suspected Shipboard Cases
Fortunately, the number of suspected COVID–19 cases involving American mari-
ners has been relatively low. When such cases do arise, however, the question be-
comes how to effectively manage those cases given the vital role of maritime trans-
portation in America. We believe there is a general understanding on this subject,
but an urgent need to clarify and reinforce the message.
A cargo ship with 20–25 mariners or a fishing vessel with 150 mariners is very
different than a cruise ship with thousands of passengers and crew. Both a cargo
ship and a cruise ship may report a suspected COVID–19 case prior to entering a
port. Sending the cruise ship to anchor may make sense to allow complex logistical
arrangements involving thousands of people to be worked out. However, the cargo
ship should be allowed to proceed to berth at a controlled-access secure terminal
rather than being sent to anchor. The crew member suspected of having infection
can be safely removed from the ship and tested, with results immediately available.
If they test positive for COVID–19, the company would then implement plans for
removing and testing / quarantining the rest of the crew and disinfecting the ship
so that it can be safely and promptly returned to service with a new crew. This is
the safest and most efficient way of proceeding, ensuring that a crew member with
suspected COVID–19 quickly receives needed care, fellow crew members are prop-
erly isolated and quarantined, and the ships providing essential services to Amer-
ican consumers and businesses are allowed safely and promptly to resume service.
This unfortunately has not been how some of the few instances of suspected infec-
tion have been handled. One vessel with a suspected case was sent to anchor, where
a health care worker delivered by pilot boat climbed on board and administered a
COVID–19 test. The specimen was rushed to the lab and was fortunately negative.
Only then was the ship allowed to proceed to berth. In the same vein, an order
issued by a county judge in Texas would have required any vessel with a suspected
case be sent to anchorage and kept there for a 14-day quarantine period. One can
only imagine the impacts on supply chains if that order was enforced.
As a single vessel may account for a large portion of the weekly commerce of the
communities in the noncontiguous U.S. trades, any delay, no matter how slight, may
have a serious impact on those states and territories being served. We would like
to ask for your support in urging the CDC and the USCG to review in advance in-
dustry response plans to incidents of positive tests on inbound crew members.
IV. AMERICAN DOMESTIC MARITIME INDUSTRY POST-COVID–19
The COVID–19 pandemic has reinforced recent policy trends that emphasize the
importance of American self-reliance and resilience. For example, we cannot rely on
foreign suppliers of pharmaceuticals and medical supplies to keep American citizens
safe, even if those suppliers are cheaper. Indeed, we need to rebuild critical indus-
tries in America that have been sent overseas, preserve those that have remained,
and fight back against efforts to outsource key American manufacturing and service
industries. These same lessons apply fully to the domestic maritime industry.
a. Secure supply chains
If the COVID–19 response showed us nothing else, it showed how dangerous it
was for the United States to rely on globalization for critically important resources
and services. The U.S. defense maritime industrial base, as the Center for Strategic
and Budgetary Assessments (‘‘CSBA’’) has labeled it, which includes our American
domestic maritime sector, as one of those critical industries.
During times of war or national emergency, it is important to have the domestic
capacity to transport goods within the United States. As CSBA noted:
In an era of great power competition, a robust maritime industry, and the
policies that support it, are increasingly important to U.S. national security.
Private shipyards build and repair U.S. warships, sometimes alongside ci-
vilian vessels. U.S. shipping companies and their civilian mariners trans-
port military personnel, equipment, and supplies overseas. And private
dredging, salvage, towing, intermodal transport, and harbor services compa-
nies ensure the operation of America’s military and commercial ports and
waterways.
Furthermore, Section 50101 of title 46, United States Code, sets for America’s
maritime policy and represents the critical need for a robust American domestic
maritime industry. It states:
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(a) Objectives.—It is necessary for the national defense and the development of
the domestic and foreign commerce of the United States that the United States
have a merchant marine—
(1) sufficient to carry the waterborne domestic commerce and a substantial
part of the waterborne export and import foreign commerce of the United
States and to provide shipping service essential for maintaining the flow of
the waterborne domestic and foreign commerce at all times;
(2) capable of serving as a naval and military auxiliary in time of war or
national emergency;
(3) owned and operated as vessels of the United States by citizens of the
United States;
(4) composed of the best-equipped, safest, and most suitable types of vessels
constructed in the United States and manned with a trained and efficient
citizen personnel; and
(5) supplemented by efficient facilities for building and repairing vessels.
This pandemic has only further solidified the need for such a policy and for a U.S.
defense maritime industrial base. We have maintained supply lines as essential
businesses and essential workers. America’s Jones Act fleet and shipbuilding and
repair yards have stood by our nation to ensure that goods and supplies are deliv-
ered, including to those in need. Our industry over the past 100 years operating
under the Jones Act, and in fact since the nation’s founding, have been an impor-
tant element of the nation’s supply chain capabilities.
At a time when China is investing in maritime businesses around the globe—
ships, ports, terminals, and other infrastructure—to support its One Belt, One Road
initiative, it is as important now as it ever was for America to maintain one of the
most fundamental laws that ensures the nation can meet its maritime policy objec-
tive as stated above—and that law is the Jones Act.
b. Legislative and Administrative Jones Act Waivers
AMP member companies, like Crowley, make significant investments to build,
grow, and sustain a domestic fleet. Those are investments in U.S. shipyards; invest-
ments in American mariners; investments in shoreside infrastructure and people;
and investments in logistics capabilities to meet the transportation needs of this
country. We make those investments in reliance on U.S. law.
Attacks on the law from opponents, seeking legislative or administrative waivers
of the Jones Act, erodes the confidence of investors in the domestic maritime sector.
We applaud the members of this subcommittee for their support for the law. It is
that support that enables AMP member companies to invest with confidence.
But we do not take anything for granted. We have seen too many times over the
years where a small change in the law or an administrative determination can have
significant consequences on the domestic industry. We saw that most recently when
Customs and Border Protection (CBP) issued a modification and revocation of cer-
tain Jones Act private letter rulings. While some of the changes made by CBP were
good and long overdue, others, such as the determination that foreign flag vessels
can engage in certain transportation activities, undermined the law.
Thankfully, this subcommittee has led the charge in correcting that situation,
passing legislation through the House as part of the Coast Guard Authorization Act
of 2019. The provision relating to installation vessels is important to protecting
small lift boat operators and to preserving opportunities for larger Jones Act heavy
lift operators in those trades. We urge Congress to adopt this measure.
We also urge Congress to continue to reject proposals that would fundamentally
alter the landscape for our Jones Act fleet, and to adopt measures that ensure the
Jones Act remains strong.
Finally, it is worth noting that because of the strong support of Congress, Amer-
ica’s domestic maritime industry continues to invest in the Jones Act fleet—dredges;
containerships; offshore wind vessels; Great Lakes bulkers; tugboats, towboats and
barges; and passenger vessels. We appreciate your support, and to demonstrate our
support, our industry continues to invest, innovate, and modernize.
V. RECOGNIZING AMERICAN MARITIME WORKERS/CONCLUSION
I would like to conclude my testimony with a word about American maritime
workers. This year, in honor of the Jones Act’s centennial, AMP and many others
have honored what we have called ‘‘American Maritime Heroes.’’ And while some
of the heroes are very high visibility individuals—like Malcolm McLean, the Jones
Act innovator who invented containerization and changed the world—most of our
heroes are everyday heroes. These are the men and women who deliver the goods
across our nations—in the inland waterways, on the Great Lakes, along the coasts,
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in the Gulf and to the non-contiguous areas. These are the crews of the dredges,
containerships, tugs, barges, bulkers and other vessels that serve as the grease for
the American economy. These individuals, and the national maritime infrastructure
that supports them, truly are heroes, delivering needed merchandise and the build-
ing blocks of the American economy without complaint as essential front line work-
ers.
When we think of American mariners, we can’t help but think about the World
War II merchant mariners, the group of individuals to whom Congress has recently
awarded the Congressional Gold Medal. They delivered cargo under the most des-
perate conditions in World War II and their success in ensuring a supply chain of
goods and supplies to the war zone is legendary. They paid the price with the high-
est casualties of any service in World War II, often sailing defenseless again Ger-
man U-Boats. Their courage and valor was summed up in a description from a com-
ing major motion picture: ‘‘The only thing more dangerous than the front lines was
the fight to get there.’’
That was then and now is now. Today, our war is the pandemic and we are proud
to be doing everything in our power to keep America moving. I will be pleased to
answer any questions you might have.
Mr. MALONEY. Thank you, Mr. Roberts.
Ms. Carpenter, you may proceed.
Ms. CARPENTER. Thank you very much, Mr. Chairman, for the
opportunity to testify on behalf of America’s tugboat, towboat, and
barge industry.
The first thing I want to tell you today is that the domestic mari-
time supply chain has proven resilient in the face of COVID–19.
While cargo volumes are down in many sectors due to depressed
demand, mariners have continued to report to work, vessels have
continued to operate, and the industry has adapted to maintain
operational continuity and readiness.
As our Nation takes the first steps toward reopening, the domes-
tic maritime supply chain is capable of accommodating increased
demand and well positioned to support the long road to recovery.
Our industry has been able to maintain business continuity be-
cause employers recognized early on that protecting crewmember
health and safety is the key to keeping commerce flowing. A tow
on the river or an articulated tug barge unit at sea is effectively
self-quarantined and companies quickly put in place procedures
that keep the virus off their vessels. These include prescreening
crewmembers prior to boarding, modifying crew change procedures,
minimizing nonessential contact between crewmembers and non-
crewmembers, and more stringent vessel cleaning and decon-
tamination procedures.
Crewmembers have taken seriously their status as essential
workers and taken steps to safeguard their health while off duty.
And the U.S. Coast Guard has been proactive and cooperative in
working with industry to meet regulatory objectives while reducing
health and safety risks.
The result of these efforts has been to keep COVID–19 infections
among the mariner workforce to a minimum.
Your leadership in holding this hearing tees up the question,
what can Congress do to support the continued resilience of the
maritime supply chain?
In testimony before this subcommittee last spring, I highlighted
four pillars that enable our industry to do its essential work: the
Jones Act; modern, well-maintained ports and waterways infra-
structure; a nationally consistent system of law and regulations
governing vessels and interstate commerce; and maritime safety.
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Congress’ support for these pillars is especially important today.
The Jones Act is more relevant than ever as both the pandemic
and the prevailing geopolitical situation underscore what a bad
idea it would be to relinquish control of our domestic maritime sup-
ply chain to foreign companies and foreign mariners.
Thank you for your leadership in opposing opportunistic calls to
waive the Jones Act and break faith with the American companies
and American mariners on the front lines of keeping our economy
afloat.
Investment in ports and waterways infrastructure is an invest-
ment in American jobs and competitiveness that will help our econ-
omy get back on its feet. We thank you for your past leadership
and ask for your continued support to pass the Water Resources
Development Act, increase investment in locks, dams, harbor main-
tenance, and dredging, build the next generation of Coast Guard
buoy tenders, and ensure the funding to keep them operating.
As we recover from the economic shocks of the pandemic, we
need to ensure that our waterways are open for business and in
condition to accommodate increased demand.
Our industry’s experience during COVID–19 has also under-
scored the importance of uniform Federal laws and regulations gov-
erning vessels and interstate commerce.
As State and local stay-at-home orders proliferated this spring,
we could have experienced catastrophic disruption in the maritime
supply chain. We didn’t, largely because the Federal Government
acted quickly to codify the status of maritime businesses and work-
ers as essential critical infrastructure that needed to continue un-
fettered operations.
The lessons of this experience are clear. Just as a patchwork of
stay-at-home orders is incompatible with the effective functioning
of the maritime supply chain, so is a patchwork of State and local
regulations established for other purposes.
Finally, maritime safety. Our industry’s experience with COVID–
19 demonstrates that good safety is good business. As we manage
the health and safety challenges posed by the pandemic, we urge
Congress to support our efforts by supporting prioritized access to
testing for COVID–19 for crewmembers, enacting targeted tem-
porary liability protections for maritime employers who make good-
faith efforts to abide by applicable public health guidelines to pro-
tect their employees from COVID–19 while preserving legal rem-
edies against employers who engage in reckless or willful mis-
conduct, and enacting the Coast Guard authorization bill, which in-
cludes a number of provisions to promote marine safety.
Thank you very much. We look forward to working with you to
apply the lessons of this pandemic and strengthen the resilience of
the maritime supply chain.
[Ms. Carpenter’s prepared statement follows:]
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f
Prepared Statement of Jennifer A. Carpenter, President and Chief
Executive Officer, The American Waterways Operators
Good afternoon, Chairman Maloney, Ranking Member Gibbs, and Members of the
Subcommittee. I am Jennifer Carpenter, President & CEO of The American Water-
ways Operators. AWO is the national trade association for the inland and coastal
tugboat, towboat and barge industry. On behalf of AWO’s over 300 member compa-
nies, thank you for the opportunity to testify at this important hearing on the status
of the U.S. maritime supply chain during the COVID–19 pandemic.
I come before you today with three overarching messages: 1) the U.S. domestic
maritime supply chain is resilient; 2) business continuity does not—and cannot—
mean business as usual, especially where health and safety are concerned; and, 3)
Congress, and this Subcommittee, have a vital role to play in ensuring the stability
of the public policy pillars that create the foundation for the supply chain’s resil-
ience and our nation’s recovery. Allow me to elaborate on each of these points.
THE DOMESTIC MARITIME SUPPLY CHAIN IS RESILIENT
While our industry, like all Americans, has been challenged by this global health
crisis in profound ways, the domestic maritime supply chain has proven resilient in
the face of COVID–19. The men and women of the tugboat, towboat and barge in-
dustry have played a key role in keeping our nation’s economy afloat, remaining
open for business and continuing to move essential cargoes such as agricultural
products, fertilizer, coal, petroleum and petrochemicals, wood and paper products,
steel and construction materials. Tugboats continue to guide ships, from container-
ships and tankers to the hospital ships USNS Comfort and USNS Mercy, safely into
port. Tugboats and barges have begun a busy summer season of supplying native
Alaskan villagers with everything they need to subsist in an unforgiving environ-
ment. While cargo volumes in many sectors have declined due to depressed demand,
mariners have continued to report to work, vessels have continued to operate, and
the industry has adapted to maintain operational continuity and readiness. As our
nation takes the first steps toward reopening shuttered segments of the economy,
the domestic maritime supply chain is flowing, capable of accommodating increased
demand, and well positioned to support the long road to recovery.
BUSINESS CONTINUITY, NOT BUSINESS AS USUAL
Tugboat, towboat and barge companies have been able to maintain business con-
tinuity in large part because employers recognized early on that mariners are the
lynchpin of their operations and protecting crewmember health and safety is key to
keeping vessels moving and commerce flowing. The industry’s extensive experience
with contingency planning, safety management systems and incident command
structures has served it well in managing the health, safety and operational chal-
lenges posed by the pandemic. A tow on the river or an articulated tug-barge unit
at sea for two to four weeks at a time is effectively a self-quarantined environment,
and companies quickly put in place—and have continued to refine—procedures
aimed at keeping the virus off their vessels. These include, but are not limited to,
pre-screening crewmembers prior to leaving home and again prior to boarding a ves-
sel, often in conjunction with telehealth providers; modifying crew change proce-
dures to keep crews together as a unit, minimize exposure during travel to vessels,
and avoid large groups congregating on crew change days; minimizing non-essential
contact between crewmembers and non-crewmembers, including increased reliance
on objective evidence of regulatory compliance and remote audit and inspection tech-
niques; and developing more stringent vessel cleaning and decontamination proce-
dures.
Crewmembers, for their part, have taken seriously their status as essential crit-
ical infrastructure workers and taken steps to safeguard their health and safety
while off duty. And, regulatory authorities, including the U.S. Coast Guard, have
been proactive and cooperative in working with industry to employ flexibility to
meet regulatory objectives while reducing unnecessary health and safety risks. Poli-
cies extending the validity of merchant mariner credentials, mariner medical certifi-
cates and Transportation Worker Identification Credentials; encouraging the use of
remote audit and inspection techniques; and allowing deferrals of inspections and
regulatory deadlines when necessary have been very helpful in reducing unneces-
sary interactions that could place the safety of vessel crewmembers and/or Coast
Guard personnel at risk.
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The result of these concerted and cooperative efforts has been to keep COVID–
19 infections among the mariner workforce to a minimum—a win-win for health and
safety and for the resilience of the maritime supply chain. To maintain this situa-
tion, it will be extremely important for employers, mariners, and regulators to re-
main vigilant and not relax prematurely the prevention policies and social
distancing procedures that have proven successful in keeping vessels largely virus-
free.
CONGRESS’S ROLE IN SUPPORTING THE MARITIME SUPPLY CHAIN
Chairman Maloney, Ranking Member Gibbs, your leadership in holding this hear-
ing today to examine the state of the maritime supply chain as our nation battles
the COVID–19 pandemic is an important expression of Congress’s recognition of the
criticality of maritime transportation, and we thank you for that. It also tees up the
question, ‘‘How can the Congress—and this Subcommittee—support the continued
resilience of the maritime supply chain and the health and safety of mariners who
make that possible?’’
To answer that question, I’d like to hark back to the testimony I provided to the
Subcommittee last spring, highlighting four pillars that enable the tugboat, towboat
and barge industry to do the essential work it does for American shippers and the
American economy. Those pillars—the Jones Act; modern, well-maintained ports
and waterways infrastructure; a nationally consistent system of laws and regula-
tions governing vessels in interstate commerce; and maritime safety—are more im-
portant than ever amid the circumstances of the COVID–19 pandemic, and I want
to thank the bipartisan leadership of this Subcommittee and the full Transportation
and Infrastructure Committee for your longstanding support for them. Let me ad-
dress each briefly.
The Jones Act
The Jones Act, which celebrates its 100th anniversary on June 5, but whose ante-
cedents date back to the earliest days of our country, has served our nation’s eco-
nomic, homeland and national security well. It is more relevant than ever today, as
both the pandemic and the prevailing geopolitical situation underscore the inadvis-
ability of relinquishing control of our domestic maritime supply chain to foreign
companies (perhaps state owned) and foreign mariners. I want to thank Chairmen
DeFazio and Maloney, and Ranking Members Graves and Gibbs, for your leadership
in opposing opportunistic calls to waive the Jones Act and break faith with the
American companies and American mariners on the front lines of keeping our econ-
omy afloat. Thank you, as well, for including in the Coast Guard authorization bill
language to prevent the emergence of a Jones Act loophole related to the operation
of heavy lift vessels servicing offshore energy installations.
Ports and Waterways Infrastructure
Investment in our ports and waterways infrastructure is an investment in Amer-
ican jobs, in American competitiveness, and, given that maritime transportation is
the greenest mode of transportation, with the smallest carbon footprint, in the
health of our natural environment as well. Now more than ever, investing in infra-
structure will help our nation’s economy get back on its feet. This means passing
a Water Resources and Development Act; increasing investment in locks, dams, har-
bor maintenance and dredging; and building the next generation of Coast Guard
buoy tenders and ensuring the funding to keep them operating. As demand for wa-
terborne commerce increases as we recover from the economic shocks of the pan-
demic, we need to ensure that our waterways are open for business and in condition
to accommodate this demand. Again, this Subcommittee and full Committee have
been leaders on these issues; we thank you for that and respectfully ask for your
continued support.
Federal Preemption
Our industry’s experience during the COVID–19 pandemic has underscored the
importance of a uniform national system of laws and regulations governing inter-
state maritime transportation. As state and local shelter-in-place and stay-at-home
orders began to proliferate in March and early April, we could have experienced cat-
astrophic disruption in the maritime supply chain. We did not, largely because the
federal government recognized and took timely action to codify the status of mari-
time transportation businesses and workers as ‘‘essential critical infrastructure’’
that needed to continue unfettered operations. Guidance from the Department of
Homeland Security’s Cybersecurity and Infrastructure Security Agency, amplified
by the U.S. Coast Guard, was vital to enabling marine transportation businesses to
keep operating and vessel crewmembers and other maritime employees to travel to
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their jobs and report to work. The lessons of this experience are worth remembering
as we move from the acute, to the chronic, and eventually to the recovery phase of
the pandemic: just as a patchwork of state and local stay-at-home orders is incom-
patible with the efficient and effective operation of the maritime supply chain, so
too is a patchwork of state and local laws and regulations established for other pur-
poses. Uniform, nationally consistent regulations are essential to effective func-
tioning of the maritime supply chain.
Maritime Safety
Maritime safety is our industry’s franchise to operate, and our experience during
the COVID–19 pandemic to date reinforces the fact that good safety is good busi-
ness. As our industry manages the unique health and safety challenges posed by
the pandemic, we urge Congress to support our efforts by:
1) Supporting prioritized access to COVID–19 testing for mariners as essential
critical infrastructure employees. While access to diagnostic testing has im-
proved in many parts of the country, the paramount importance of keeping the
virus off the boats to crewmember health and safety and the resilience of the
maritime supply chain—especially as opportunities for exposure off the job
magnify with the relaxation of stay-at-home orders—underscores the need to
increase access to testing as an optional part of the pre-screening process.
2) Enacting temporary, targeted liability protections for maritime employers who
make good faith efforts to abide by applicable public health guidelines in work-
ing to protect their employees from exposure to COVID–19, while preserving
the availability of legal remedies against employers who engage in reckless or
willful misconduct. We are hopeful that a bipartisan consensus on time-limited
and carefully crafted liability protections can be included in a forthcoming leg-
islative package to support our national recovery from the many harmful ef-
fects of the COVID–19 pandemic.
3) Enacting the Coast Guard authorization bill, which includes a number of provi-
sions that promote marine safety, including suspension of the towing vessel in-
spection user fee requirement until the Coast Guard promulgates regulations
to establish specific fees based on whether a vessel uses the Towing Safety
Management System or the Coast Guard option under Subchapter M. As the
Subcommittee recognized in drafting that provision, the current fee structure
provides a perverse disincentive to use of the TSMS option and imposes dupli-
cative costs on vessel owners who are already paying many thousands of dol-
lars more for the services of Coast Guard-approved third-party organizations.
CONCLUSION
Chairman Maloney, Ranking Member Gibbs, thank you for the opportunity to tes-
tify today. The U.S. domestic maritime supply chain is resilient, and the tugboat,
towboat and barge industry is well equipped to continue to serve our nation as we
begin the long road to recovery from the economic disruption caused by this global
public health crisis. We look forward to working with you to learn and apply the
lessons of this experience to strengthen our resiliency as an essential critical infra-
structure sector and a vital contributor to our nation’s economy, security, environ-
ment and quality of life.
I would be happy to answer any questions you may have.
Mr. MALONEY. Thank you, Ms. Carpenter.
Ms. Brand, you may proceed.
Ms. BRAND. Good afternoon, Chairman Maloney, Ranking Mem-
ber Gibbs, Chairman DeFazio, and members of the subcommittee.
My name is Lauren Brand, and I am president of the National As-
sociation of Waterfront Employers.
The members of NAWE and I thank you for keeping our Nation’s
ports open during this global pandemic. Your designation of water-
front workers as essential and your recognition of the entire port
ecosystem as being critical has strengthened all of our work com-
mitment to work.
NAWE is the voice for the U.S. marine terminal operators, steve-
dores, and operating port authorities. We represent interests in
U.S. coastal ports and U.S. Territories. Members also include the
associations responsible for labor relations and contract negotia-
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26
tions with the ILA and the ILWU, from Maine to Texas, then from
Washington to California.
Port operators are responsible for safely and effectively trans-
porting cargoes between vessels, trucks, and rail. NAWE’s mem-
bers lease waterfront land from public port authorities and they
build their own facilities. Within their terminal area, they hire
labor, they fund the purchase of cargo-moving equipment, construct
intermodal infrastructure, and design systems that track each ship-
ment.
We are experiencing four significant COVID–19-related chal-
lenges: taking care of waterfront workers, adjusting safety proto-
cols while continuing terminal operations, rearranging terminal fa-
cilities to accommodate new needs, and maintaining liquidity.
Taking care of waterfront workers has been our first priority.
Commercial supply chains for PPE and cleaning supplies are now
in place. The rapid price increases experienced for PPE these past
3 months, frankly, was crippling.
Next, in an effort to increase safety while continuing to work,
terminal operations and protocols have been adjusted. Every aspect
of each operating terminal has been taken into consideration. It is
important to note that labor and management are working together
to implement the best decisions and provide protections.
Also, terminal facilities have been rearranged to accommodate
new needs. The storage of abandoned cargoes, while only 1.5 per-
cent, is expected to grow. Envision 40,000 chocolate bunnies within
just one container that should have been delivered for the Easter
holiday.
Storage of stranded cargoes is increasing, requiring regular mon-
itoring of units to ensure they are handled correctly. Examples of
stranded cargoes include parts for manufacturing facilities, sum-
mer fashions, and automobiles.
Exports are being impacted. The reduction in vessel calls to ports
has resulted in higher value cargoes—that pay the vessel operator
more to ship—being loaded first, delaying the exported lower val-
ued items.
Quarantines and the additional screening of workers under
newly implemented safety protocols are having a direct impact on
security duties, and costs.
Maintaining liquidity in the face of reduced revenues and in-
creased costs is our fourth challenge. Examples of stresses on li-
quidity include the management of empty containers that are
stacking up in terminals on the gulf coast. NAWE member con-
tainer yards have units in them that have not moved for months,
generating a 100-percent decline in revenues.
Another example are lease payments. Marine terminal agree-
ments include a lease rate and a minimum annual guarantee based
on volumes. As throughputs decline below normal levels, these
guarantees result in increased operating costs for terminal opera-
tors.
Certain COVID-related needs do remain unmet. The cost of en-
suring that equipment and machinery are safe to use exceeds that
of the cost of disinfectant. Added to this are safeguarding costs
such as conducting regular temperature checks for several thou-
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sand employees and visitors as they enter each terminal facility
daily.
No sector or freight is immune to the impact of COVID–19. Be-
yond freight, our members also support the provisioning of cruise
ships and assist cruise passengers. Cruise ships are now accepting
bookings for cruises beginning late July and the public is respond-
ing. Marine terminal operators are strategically planning to protect
employees, waterfront workers, and the guests who will transit
through terminals on their way to vacation.
It is the cost of all of these actions necessary to keep marine ter-
minals open, people safe, and essential freight moving that is our
problem.
In conclusion, marine terminal operators, stevedoring firms, and
operating port authorities remain committed to ensuring the trans-
portation needs of the United States are met. We urge you to enact
a bridge program that will assist waterfront employers and port
authorities defray COVID–19-related expenses, including lease and
all other expenses necessary to keep the ports open, terminals op-
erating, and workers employed.
Thank you for this opportunity. We appreciate the dedication of
this subcommittee and their continued support for U.S. port opera-
tors.
[Ms. Brand’s prepared statement follows:]
f
Prepared Statement of Lauren K. Brand, President, National Association of
Waterfront Employers
Good afternoon, Chairman Maloney, Ranking Member Gibbs, and members of the
Subcommittees. My name is Lauren Brand, and I am the President of the National
Association of Waterfront Employers, otherwise known as NAWE. Thank you for
this opportunity to discuss the impact of the COVID–19 pandemic on the U.S. ma-
rine terminal operating and stevedoring industries. Even more importantly, the
members of NAWE and I thank you for keeping our nation’s ports open during this
global pandemic. Your designation of waterfront workers as essential and your rec-
ognition of the entire port ecosystem as being critical has strengthened our commit-
ment to work.
NAWE is the voice in Washington for U.S. marine terminal operators, stevedores,
and operating port authorities. The Association represents interests based at U.S.
coastal ports and those based in U.S. territories. Members also include the associa-
tions responsible for labor relations and contract negotiations with the ILA and the
ILWU from Maine to Texas and from Seattle to San Diego. Formed initially around
common interests in providing compensation to injured longshoremen, NAWE was
active in supporting maritime security regulation at our ports’ facilities following 9/
11. Today, NAWE’s portfolio represents the full spectrum of port operators’ inter-
action with the Federal Government, including informing the development of na-
tional freight policies, infrastructure funding, port safety, security protocols, the en-
vironment, and workforce policies. NAWE is honored to serve as a subject matter
expert to Federal Agencies and Departments on issues related to intermodal trans-
portation. It is important to note that 44 Federal Agencies within 14 Federal De-
partments oversee marine terminal operators, stevedoring firms and operating port
authorities.1 NAWE’s members remain committed to moving the freight needed and
wanted by the people of the United States. We are here to ask for your consider-
ation to help us remain on the job.
WHO ARE PORT OPERATORS?
Port operators, while based in the United States and employing U.S. citizens,
work with global markets. They receive goods sourced from around the world and
1 Source: https://www.cmts.gov/resources/compendium
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ensure these are safely moved onto other domestic modes that will complete the de-
livery process. More importantly, they receive U.S. exports and ensure these are
loaded onto the right vessel for delivery overseas. What happens in North, Central
and South America, Europe, Asia, Africa, and other far flung regions impact the
business of terminal operators. We are a critical part of the U.S. maritime transpor-
tation industry, responsible for safely, securely and efficiently transporting cargoes
between vessels, trucks and rail. To do so, NAWE’s members lease waterfront land
from public port authorities and build their own facilities. Within their terminal
area, they hire labor, fund the purchase of cargo moving equipment, construct inter-
modal infrastructure and design systems that track each shipment and commu-
nicate with their customers: vessel operators, truckers, railroads and, of course,
cargo owners.
WHAT IS OUR ASK?
We are seeking a bridge for FY20 and FY21 that will help marine terminal opera-
tors, stevedores and port authorities through this difficult time as freight continues
to react to the global pandemic. We ask that a bridge program be enacted that will
assist these maritime partners defray COVID–19 related expenses including lease
and other contractual expenses necessary to keep the ports open, terminals oper-
ating and workers employed.
WHAT ARE OUR MOST SIGNIFICANT COVID–19 RELATED CHALLENGES?
Taking care of waterfront workers has been our first priority. While personal pro-
tective equipment (PPE) and cleaning supplies were difficult to obtain during Feb-
ruary, March and April, the majority of NAWE’s members are now able to procure
supplies through commercial sources. None of our members approached regional
Emergency Relief Agencies for supplies in an effort to help the medical profession
who were also on the front lines of this crisis. Some terminal operators were as-
sisted by public port authorities and have appreciated their efforts. The vast major-
ity of items 2 were purchased from regular commercial sources, but when those could
not be delivered in time, alternate sources were found locally at Ace Hardware,
Home Depot, Lowes, Walmart, and Dollar Stores. Commercial supply chains for
these items are now in place. The rapid price increase experienced by all was crip-
pling as these expenses were not expected by anyone. Continuous price increases for
items was daunting; masks and gloves rose an audacious 25% in one week during
April. One NAWE member obtained PPE by working with a local tequila producer
who made tequila-based sanitizer in drums. The drums were distributed to termi-
nals where they were bottled for individual use. (yes, warning labels were added to
bottles; ‘‘do not drink the sanitizer’’).
In an effort to increase safety while continuing to work, terminal operations and
protocols have been adjusted to care for workers and personnel. Every aspect of the
design of each terminal was taken into consideration. Where do people normally
congregate? Which surfaces are frequently touched? How many? When? How often?
The questions are never ending. It is important to note that labor and management
are working together to implement the best decisions and provide protections. All
have been selflessly dedicated to the commitment to keep terminals open and freight
moving. Examples of changes made include:
• Formerly two machines would be rotated among three people during a shift.
Now one machine is shared between two people on a shift. This increases cost
as more machines are needed online during a shift while it decreases exposure
to personnel.
• A realignment of space within terminal facilities to accommodate storage of
abandoned cargoes, stranded cargoes and empty containers.
• Separating essential cargoes from non-essential cargoes to allow for more effi-
cient delivery of medical items and PPE. This requires closer coordination with
cargo owners, as terminal operators do not normally know exactly what is in
each container. They do however know which contain hazardous materials,
2 This list was compiled through the National Maritime Safety Association (http://nmsa.us/).
It includes: Digital non-contact infrared thermometers; disinfecting soap and bottles / dispensers
/ sprayers; sanitizing wipes; masks (N95 preferred); non-permeable gloves/Nitrile preferred 6 mil
or 8 mil; toilet paper; paper towels; tissues; disinfectant spray to sanitize equipment (Hospital
grade); individual hand sanitizers to be distributed; hand sanitizers stations and refills; goggles;
heavy rubber gloves for cleaning; foggers; coveralls; 2 gallon garden pump & spray. Note: dis-
infectant must be on the EPA list of approved COVID–19 fighting products at: https://
www.americanchemistry.com/Novel-Coronavirus-Fighting-Products-List.pdf
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which need temperature monitoring, etc. to facilitate proper handling of those
units.
• An entire terminal management team was quarantined for 14 days when they
were exposed to a security guard who tested positive for COVID–19.
• Additional labor was brought in some regions to allow contingent teams to be
organized if one was forced into quarantine. In other regions, fewer personnel
were hired due to the reduction in vessel arrivals (blank sailings 3).
Terminal facilities are being rearranged to accommodate new needs. The storage
of abandoned cargoes, while currently only at 1.5%, is expected to grow on the West
Coast. Cargoes are considered abandoned once notification has been received from
the consignee 4 that they do not want to receive the shipment. The terminal then
moves that container to a separate location within the terminal, securing it and en-
suring its safety until a claim for the contents is settled. Examples of cargoes that
have been abandoned at terminals include those for holidays that occurred during
the COVID–19 pandemic: Valentine’s Day, St. Patrick’s Day, and Mother’s Day. Also
included are shipments of Spring and Summer fashions and other seasonal items
that would normally have been delivered and sold in the months of February
through May. To paint a picture, 40,000 chocolate bunnies are within just one con-
tainer that should have been delivered in time to sell before the Easter holiday.
Likewise, storage of stranded cargoes is increasing, requiring monitoring of these
units to ensure they are handled according to the protocols set for each type of
cargo. Is the cargo temperature sensitive? Is it hazardous? What are the special
needs? Stranded cargoes are those that have arrived, are cleared for pick up, yet
the consignee is not able to accept these at this time and asks the terminal operator
to store it for them. So many stores and related off port storage facilities have been
closed with new inventories wanted but not yet needed. Examples of stranded car-
goes include parts for manufacturing facilities, Summer fashions and automobiles.
What happens to an import container after it’s been emptied? Hopefully, it has
been filled with U.S. produced export cargo and it is returned to a marine terminal
to be shipped overseas. Unfortunately, the United States has an imbalance of trade,
with imports outpacing exports more than 2 to 1. Exports from the U.S. include a
number of commodities made by industries that have been heavily impacted by the
pandemic: commercial aircraft, fuel oil, automobiles, meat and poultry, autos and
auto parts 5. To date, exports in 2020 have declined to the lowest levels in over three
years 6, with the highest drop in higher value commodities. The reduction in vessel
calls to ports has resulted in the remaining higher value exports—that pay the ves-
sel operator more to ship—being loaded first, and lower value cargoes being left at
the terminals. More unexpected freight for the port operator to securely store and
safely monitor. Security oversight, as mandated by law, require resources that are
not recoverable when cargo volumes are declining. Quarantines on passengers and
crews and the additional screening of workers under newly implemented safely pro-
tocols are having a direct impact on security duties and costs.
Managing the fiscal impact of reduced revenues and increased costs while chal-
lenged by the overt uncertainty of what the future holds. We are aware that every
link in the supply chain has lost revenue, and that the entire industry has been
fiscally impacted. We are also very aware of the vital role of each partner in the
supply chain. We want all to remain liquid and fulfill their role in our national
transportation system. And we have a responsibility to ensure we are ready, open
for business, with healthy teams ready to do our job safely, securely and as effi-
ciently as possible. A prime example of stressors on liquidity include management
of empty containers that are stacking up in terminals. Our transportation system
usually cycles empties for exports or they are picked up by passing vessels to return
them overseas to be refilled and brought back again. A normal business practice is
to not charge for storage, but to assess a handling fee when containers arrive and
depart. NAWE member container yards have units in them that have not moved
for months, thereby generating a 100% decline in revenues. Another example are
lease payments for marine terminals. Marine terminal agreements with their land-
lord port authorities include a ’minimum annual revenue guarantee’ clause that is
based on volumes. When expected volumes do not materialize, port authorities are
not able to collect dockage, wharfage and other fees related to supporting the needs
of vessels while they are in port.
3 A ‘blank sailing’ is a cancelled sailing. A blank sailing could mean a vessel skipping one port
along the route, or the entire journey being cancelled.
4 The difference between a shipper and a consignee is that the consignee is the receiver of
the shipment.
5 https://www.thebalance.com/u-s-imports-and-exports-components-and-statistics-3306270
6 https://tradingeconomics.com/united-states/exports
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Moody’s Investor Service issued a report May 13, 2020 that states ‘‘However, most
US ports are organized as landlords and receive 40%–70% of revenues in the form
of guaranteed payments under long-term leases from tenants.’’ It also states, ‘‘Port
operators and customers will face significant pressure as throughput materially de-
clines in the months ahead.’’ They predict this decline will approach or exceed the
decline of the 2008–2009 global financial crisis. The report continues with ‘‘Tenants
have expenditure flexibility to adapt to lower volumes, but a severe downturn would
pressure stability.’’ And ‘‘Lower volume can be partially managed by operators’ ex-
penditure flexibility, but the impact of such an unprecedented shock is ultimately
uncertain.’’ We are seeing a severe downturn that will continue into the remainder
of the year, impacting a port operator’s ability to ensure continued liquidity.
Landlord ports include this minimum annual revenue guarantee clause to help
them recover potentially lost fees if volumes should decline. This is normally consid-
ered an incentive clause to encourage the terminal operator (tenant) to maximize
volume throughput by working hard to attract new business to the port, and thereby
their terminal. It has not been envisioned to become a punitive charge during a
global pandemic, that increases lease payments at the same time volumes spiral
downwards, operating costs increase, and revenues take a nosedive.
WHAT COVID–19 RELATED UNMET NEEDS REMAIN?
Taking care of personnel: The on-going cost of PPE and cleaning supplies has been
exceeded by the cost of having to sanitize equipment and machinery before and after
each work shift. The application cost of ensuring equipment and machinery are safe
to use exceeds that of the cost of disinfectant. NAWE members are spending be-
tween $75,000 and $335,000 per week on these new expenses. Documented costs for
one coastal region alone exceed $1 million per week. Compounding this new finan-
cial burden is the cost of safeguarding the workplace such as conducting regular
temperature checks for several thousand employees and visitors as they enter each
terminal facility. No one is talking about ending cleaning protocols. A bridge is
needed to allow waterfront employers time to engage with customers and adapt
these new expenses into operations.
Adjusting terminal operations: As volumes drop, terminal and gate hours must be
adjusted to allow the existing business to support operations as much as possible.
Reduced gate hours require truckers to be diligent in collecting containers. As each
terminal supports a different profile of customers, we are seeing a range in business
declines from a low of 17% to a high of 32%. The year 2020 will be one of the worst
on record, with Q1 and Q2 an average of 20% below projections, Q3 generating un-
certainty and another drop expected in Q4. Shipping is seasonal, with one more
peak season ahead of us. The National Retail Federation issued a report May 11,
2020 7, confirming the forecast by Global Port Tracker, a firm that provides histor-
ical data and forecasts for 13 of the top U.S. coastal ports. They do not show a smart
recovery in Q3. Included in Q3 shipments are back to school supplies, Fall fashions
and fall/winter holiday goods. Rather, they are predicting a slow recovery beginning
in Q4 or early 2021 (see chart).
Estimate of TEU Decline from
Month in 2020 (number of same time
containers handled) last year, YTD
April ..................................................................................................................................... 1.51 million ........... –13.4%
May ...................................................................................................................................... 1.47 million ........... –20.4%
June ...................................................................................................................................... 1.46 million ........... –18.6%
July ....................................................................................................................................... 1.58 million ........... –19.3%
August .................................................................................................................................. 1.73 million ........... –12%
September ............................................................................................................................ 1.7 million ............. –9.3%
While the majority of this paper has referenced container terminal concerns,
NAWE’s members also operate roll on/roll off terminals for vehicle and heavy equip-
ment movement, breakbulk terminals that move steel and lumber products, and
bulk terminals that focus on construction materials. Imagine the cars that are sit-
ting on terminal land, rows upon rows of new vehicles waiting to be moved to deal-
ers across the nation. With Hertz, Avis and others cancelling their orders for new
vehicles, how long will some of these autos continue to encumber limited space on
terminals? Steel waits for manufacturing plants to reopen. No sector of freight is
7 https://www.lloydsloadinglist.com/freight-directory/news/US-box-import-declines-forecast-to-
continue/76566.htm#.XsqYHy-z2L9
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immune to the impact of COVID–19. And each stress the resources of the terminal
operators.
Beyond freight, our members also support the provisioning of cruise ships and the
embarkation and disembarkation of cruise passengers—matching each with their
baggage both on and off the ship. Marine/cruise terminal operators have a special
duty of care to passengers. They are strategically planning to protect their employ-
ees, waterfront workers and the guests who will transit terminals on way to their
vacation. Cruise ships have announced they will now accept bookings for cruises
scheduled to sail late July and early August—and the public is responding. The
costs to protect workers and guests will be a major issue. Security costs will be dra-
matically increased in these instances . . . even more expenses needed to be funded.
NAWE’s members are scouring Federal regulations seeking support for what
COVID–19 can be considered. It defies definition of any prior crisis of our time. Port
operators are moving forward with strategic planning, logical implementation of
those plans, and making nimble adjustments when needed. It is the cost of these
actions, necessary to keep marine terminal open and freight moving, that is our
problem.
IN CONCLUSION
We would like to take a moment to recognize the many Federal teams who have
worked with us during this unprecedented time: the U.S. Coast Guard (USCG), Fed-
eral Maritime Commission (FMC), and the Maritime Administration (MARAD).
While many Federal partners are working with us, these have gone above and be-
yond in their efforts to be of assistance. The USCG have maintained oversight as
required under 33 CFR part 126 while balancing new protocols put into place to ad-
dress the threat of COVID–19. The FMC has reached out to NAWE to see what they
can do to be of assistance. Sometimes a call or a letter makes a big difference.
MARAD has stepped up by hosting industry calls that include our members, allow-
ing us to share information and concerns with our maritime transportation part-
ners. MARAD heard our request for PPE and are working with FEMA to supply
masks for the maritime industry. NAWE’s members requested 240,250 masks and
believe these will provide a 90-day supply for our workers.
Marine terminal operators, stevedoring firms and operating port authorities are
each experiencing reduced volumes in the face of dramatically increasing costs. They
are committed to remaining open and ensuring the freight needs of the United
States are met but cannot continue to do so without assistance. We ask that a bridge
program be enacted that will assist waterfront employers and port authorities defray
COVID–19 related expenses including lease and other contractual expenses necessary
to keep the ports open, terminals operating, and workers employed.
Again, thank you for this opportunity. We appreciate the selfless dedication of this
Subcommittee and their continued support for U.S. port operators. We look forward
to working with you to ensure the supply chain of the United States remains strong.
Mr. MALONEY. Thank you, Ms. Brand.
I think that image was meant to alarm us, but I have to say you
had me at 40,000 chocolate bunnies. It is about the best image I
think I have had in days.
So we have one more witness.
Mr. Ebeling, you may proceed.
Mr. EBELING. Thank you, Mr. Chairman.
My name is Eric Ebeling and I am testifying today on behalf of
USA Maritime, a coalition consisting of American-flag vessel opera-
tors and owners, trade associations, and maritime labor committed
to ensuring that the U.S. merchant marine will always be available
to support our warfighters, enhance our economy through trade,
and provide great jobs to thousands of Americans across the coun-
try.
As president and CEO of American Roll-On Roll-Off Carrier
Group [ARC], a USA Maritime company, it is my honor to lead an
incredibly talented team of men and women at the largest U.S.-
flagged RORO operator. ARC has reflagged five new vessels in the
U.S. registry since 2016, including three vessels in 2019, and all of
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our vessels are crewed by American mariners and fly the American
flag.
The U.S.-flag fleet operating in international trade primarily con-
sists of the militarily useful and commercially viable Maritime Se-
curity Program, or MSP, fleet of 60 ships, the attendant global net-
works, and a mariner base of over 2,400 highly trained and loyal
U.S. citizen merchant mariners that support U.S. Transportation
Command and the Joint Deployment and Distribution Enterprise.
It would cost the Government tens of billions of dollars to attempt
to try to replicate the capabilities provided.
The success of a commercially viable U.S.-flag international fleet
is predicated on several factors, all of which must be present to-
gether. The MSP readiness retainer stipend, which provides a
strong base; U.S. Government generated preference cargoes that
must move on U.S.-flag ships; and commercial cargo, which is not
required to move on U.S.-flag vessels but fills the remainder of the
vessel.
The COVID–19 crisis has devastated the cargo segments thereby
undermining the central tenet of the U.S.-flag international fleet.
The latest statistics compiled by MARAD for April 2020 show Gov-
ernment-impelled revenue declined by at least 47 percent across
the MSP fleet versus April 2019. Globally, there are currently 524
containerships in lay-up, equivalent to 2.65 million TEU capacity,
and on the RORO side, global light vehicle sales in April dropped
45 percent year on year.
A particularly telling statistic is that the United States-Mexico-
Canada Agreement produced only 4,840 light vehicles in April,
which would not even fill one pure car/truck carrier RORO vessel.
Smart and effective maritime policy, whether legislative or exec-
utive action, has always underpinned the success or failure of the
U.S.-flag fleet international trade, and the COVID–19 crisis is no
exception. Some have not unreasonably queried whether U.S.-flag
carriers operating under MSP can access $17 billion set aside for
defense contractors under the CARES Act. Due to the DX-priority
or valid top secret requirements, they cannot.
The fundamental question is what level of readiness is being
sought for the U.S.-flag MSP fleet in international trade. The sti-
pend by itself is not enough to maintain any approximation of nor-
mal service.
Congress and the administration should consider three actions to
ensure that the MSP fleet and the thousands of mariner jobs that
go with it remain at the ready to support national defense and eco-
nomic security missions.
First, Congress should consider an emergency stipend through
the remainder of fiscal year 2020, and, if necessary, beyond, aimed
at addressing the extraordinary costs of readiness that are being
borne by MSP carriers.
Put another way, carriers would be compensated for their main-
tenance of service and readiness as opposed to putting ships in cold
lay-up or scrapping or recycling or flagging out as carriers might
otherwise do if not dedicated to supporting DoD and the JDDE.
As per its previously submitted detailed proposal, USA Maritime
urges Congress to authorize and appropriate $109.8 million or
$1.83 million per MSP vessel for the current fiscal year, as well as
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to authorize $109 million for the first half of fiscal year 2021 to be
appropriated, if needed. This is what is necessary to maintain full
service levels, full employment, and minimize impacts to national
security.
Second, 100 percent of all Government-owned or financed cargoes
should be required to move on U.S.-flag ships. It is a rather simple
equation: Without cargo, carriers will not invest in ships, and with-
out ships there will not be jobs for merchant mariners. And with-
out those merchant mariners, the Government-owned reserve fleet
cannot be crewed.
In a letter addressed to this committee dated May 15th, 2020,
signed by TRANSCOM Commander General Stephen Lyons, he
called for requiring, quote, ‘‘100 percent of all Government-com-
pelled cargoes to be transported on U.S.-flagged vessels,’’ close
quote. USA Maritime strongly endorses the recommendation.
Third, consider accelerating the recapitalization of the Govern-
ment-owned sealift fleet, specifically the Ready Reserve Force fleet,
in the most cost-effective manner, which is to buy used foreign-
built ships with a first priority for used MSP or VISA ships.
Eighty-six percent of the thirty-five ROROs in the RRF today were
foreign built, so this would hardly be treading new ground. RRF
ships today average 45 years old and RRF sealift readiness rates
are only 59 percent. But as a result of the COVID crisis, there are
now more readily available used foreign-built ships. DoD should act
on the seven authorizations already in place and Congress should
authorize and appropriate for additional purchases in the near
term.
This subcommittee and the members of it have been stalwart
supporters of our U.S. maritime industry. You understand well the
many sacrifices that American mariners have endured to service
this Nation, including during this pandemic as these essential
workers continue to deliver the goods.
I close by highlighting another excerpt from the aforementioned
TRANSCOM letter to this committee dated May 15th in which
General Lyons stated, quote, ‘‘Given the economic downturn as a
result of COVID–19, I urge you to favorably consider the relief re-
quest from VISA and MSP carriers.’’
Thank you for the opportunity to be here today. I look forward
to any questions you may have.
[Mr. Ebeling’s prepared statement follows:]
f
Prepared Statement of Eric P. Ebeling, President and Chief Executive Offi-
cer, American Roll-On Roll-Off Carrier Group, testifying on behalf of USA
Maritime
INTRODUCTION
Good afternoon Chairman Maloney, Ranking Member Gibbs, and members of the
Committee. Thank you for the opportunity to appear before you today to discuss the
state of the U.S.-flag international fleet and the impact of the COVID–19 pandemic
on the U.S. maritime supply chain.
My name is Eric Ebeling and I am testifying today on behalf of USA Maritime,
a coalition consisting of American-flag vessel owners and operators, trade associa-
tions, and maritime labor. USA Maritime is committed to ensuring the U.S. Mer-
chant Marine will always be available to support our warfighters, enhance our econ-
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omy through trade, and provide great jobs to thousands of Americans across the
country.
As we just celebrated Memorial Day earlier this week, and National Maritime
Day last Friday, May 22nd, I take the opportunity to reflect on all those men and
women who died while serving in the U.S. military to defend our freedoms, and all
those serving in the maritime industry past, present and future. At the confluence
of these holidays, and on the 75th anniversary of the end of World War II, it is right
and proper that we remember World War II merchant mariners, who were recently
recognized through the ‘‘Merchant Mariners of World War II Congressional Gold
Medal Act of 2020’’, sponsored by Congressman John Garamendi (D–CA) and Sen-
ator Lisa Murkowski (R–AK), and signed into law by President Trump on March
14, 2020. Thank you to all of you who supported this long overdue recognition.
As President and CEO of American Roll-On Roll-Off Carrier Group (ARC), it is
my honor to lead an incredibly talented team of men and women at the largest U.S.-
flag Ro-Ro operator. We own and operate ten roll-on roll-off (Ro-Ro) vessels in inter-
national trade, all of which are enrolled in the Voluntary Intermodal Sealift Agree-
ment (VISA 1), and eight of which are enrolled in the Maritime Security Program
(MSP 2). ARC Group is committed to investing in the U.S.-flag fleet and U.S. Mer-
chant Marine 3 to support our armed forces around the world. We have re-flagged
five new vessels into U.S. registry since 2016, including three vessels in 2019. All
our vessels are crewed by American mariners and fly the American flag. These Ro-
Ro 4 ships have unique capabilities to handle rolling stock—trucks, tanks, heli-
copters, heavy equipment—and breakbulk that is crucial to supporting military sea-
lift. In addition, we provide stevedoring and related terminal services, multimodal,
3PL, and personal property support services to the Department of Defense (DoD),
other federal departments and agencies, and commercial customers.
The U.S.-flag fleet operating in international trade primarily consists of the mili-
tarily useful and commercially viable MSP fleet of 60 ships and attendant global
networks. There are also a handful of vessels operating in international trade out-
side the MSP fleet. The MSP fleet provides crucial readiness, capacity, and a core
mariner base of over 2,400 highly trained and loyal U.S. citizen merchant mariners
to U.S. Transportation Command (TRANSCOM 5), its components, and the Joint De-
1 Voluntary Intermodal Sealift Agreement (VISA): jointly sponsored program by the U.S. Mari-
time Administration and TRANSCOM. VISA provides TRANSCOM with assured access to U.S.-
flag assets, specifically the staged, time-phased availability of U.S.-flag commercial carriers’
shipping services and intermodal systems. Through pre-negotiated contracts, TRANSCOM is
able to meet DOD contingency requirements in the most demanding defense-oriented situations.
The MSP/VISA fleet is always active in commercial trade but can be activated for defense pur-
poses by the Commander of TRANSCOM with the approval of the Secretary of Defense.
Throughout any stages of this agreement, DOD may utilize voluntary commitment of sealift ca-
pacity or systems.
2 Maritime Security Program (MSP): a federal maritime financial sustainment program that
provides for a fleet of modern U.S.-flagged and U.S.-crewed militarily useful sealift assets oper-
ating in international trade. The MSP fleet enables the U.S. Government to provide sealift for
U.S. armed forces utilizing the resources of the U.S.-flag commercial fleet, and the presence of
a U.S.-flagged commercial fleet operating in international trade enables the government to pur-
sue generous overseas economic and agricultural assistance programs. The MSP fleet provides
a U.S. national security asset at a substantially lower cost than the government owning and
maintaining an equivalent capability. An amendment to the Merchant Marine Act of 1936, it
was first passed in 1996, and originally comprised a fleet of 47 U.S.-flag militarily useful ves-
sels. When MSP was reauthorized in 2003, the fleet was expanded to 60 ships. The program
is currently authorized through 2035. MSP provides its U.S.-flag ship-operating participants
with a stipend that helps to offset the relatively higher costs of flagging, crewing, and operating
a U.S.-flag vessel.
3 U.S. Merchant Marine: often referred to as ‘‘The Fourth Arm of Defense’’, the United States
Merchant Marine has its origins in 1775 and the Revolutionary War and throughout its exist-
ence, as exemplified by its flag motto of ‘‘In Peace and War’’, has had a dual nature to support
the nation’s trade during times of peace but to switch into a supporting role in time of war.
The term can refer to either U.S. civilian mariners or to U.S. civilian and federally owned mer-
chant vessels. Merchant Mariner officers may also be commissioned as military officers by DoD.
4 Roll-on Roll-off (Ro-Ro): self-sustaining cargo ships designed with ramps primarily to carry
wheeled cargo such as cars, trucks, buses, semi-trailer trucks, trailers, locomotives, railcars, hel-
icopters and other vehicles driven on and off the ship on their own wheels or using an assisting
platform vehicle. Common Ro-Ro vessel types include pure car carriers (PCCs), pure car/truck
carriers (PCTCs), large car/truck carriers (LCTCs), Ro-Ros (focused on high and heavy equip-
ment), container/Ro-Ros (Con-Ros), and Ro-Ro passenger (Ro-Pax) vessels. The MSP Ro-Ro fleet
is comprised of primarily PCTCs.
5 U.S. Transportation Command (TRANSCOM): one of eleven unified combatant commands of
the United States Department of Defense. The command is located at Scott Air Force Base, Illi-
nois, was established in 1987 and coordinates missions worldwide using both military and com-
mercial transportation resources. Its components include Air Mobility Command (AMC), Mili-
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ployment & Distribution Enterprise (JDDE 6). Without the ships, networks and
mariners provided by the MSP fleet, it would cost the government tens of billions
of dollars to attempt to try to replicate the capabilities provided.
U.S.-FLAG FLEET & COVID–19 IMPACTS
The success of a commercially viable U.S.-flag international fleet is predicated on
several factors, all of which must be present together: (1) the MSP readiness re-
tainer stipend, which provides a strong base; (2) U.S. government generated pref-
erence cargoes that must move on U.S.-flag ships; and (3) commercial cargo, which
is not required to move on U.S.-flag vessels but fills the remainder of the vessel.
The cargo groupings vary in terms of relative importance by vessel type and by rel-
ative volume over time, but ultimately function together with the stipend to par-
tially offset the higher costs of operating and crewing U.S.-flag vessels vs. foreign
flag ships, which is directly attributable to compliance with U.S. laws. The COVID–
19 crisis has devastated the cargo segments, thereby undermining the central tenet
of the U.S.-flag international fleet.
International Monetary Fund (IMF) forecasts for 2020 indicate that the U.S. econ-
omy is expected to shrink by 4.6% for the year, the Euro area is expected to shrink
by 7.0%, and China is expected to grow by 1.2%. The idle global container fleet has
reached record levels, greater than even during the Global Financial Crisis, with
524 ships idle, equivalent to 2.65M twenty-foot equivalent unit (TEU 7) containers.
The global container fleet, which consists of three primary alliances, 7 major car-
riers and several smaller carriers, is experiencing hundreds of blanked or voided
sailings. According to one recent industry report, global container liner providers
could lose upwards of $23.4 billion in 2020. In the heavy lift or multipurpose
(MPP 8) sector, which is focused on project cargos and infrastructure development
in remote locations year-on-year MPP vessel utilization is down by 75–90%, and
‘‘handysize 9’’ freight rates are down 50–70% in Atlantic trades and over 70% in Pa-
cific trades.
Turning to the global Ro-Ro fleet, a recent trade press article noted that some
major car carrier routes are showing a 50% drop in demand. Global light vehicle
sales in April showed a 45% drop year-on-year, with the U.S. down 45.6%, and some
regional year-on-year drops approaching 80%. Production rates vary by region but
have often fallen below 50% of normal levels due to supply chain disruptions, weak
demand, and the operational constraints of social distancing. The European Com-
mission is considering an economic stimulus package that could include a 20 billion
Euro offer to consumers in the EU; details are not finalized but it is expected to
incent environmentally friendly passenger cars. In the U.S., some automotive plants
have resumed production, and GM, Ford and Fiat-Chrysler are in the process of re-
opening. However parts shortages forced Mercedes to suspend production at its Ala-
bama plant following reopening in earlier May. The USMCA 10 area produced only
4,840 light vehicles in April, which would not fill even one pure car truck carrier
(PCTC) Ro-Ro vessel. Year to date, global PCTC calls are down nearly 17%, with
most of the declines in April and May.
For the U.S.-flag fleet generally, the DoD ‘‘stop move’’ policy, which is in effect
through June 30th, is the major issue, although we have seen slowly increasing car-
goes moving by exception to policy, whether for military unit cargo, sustainment,
or personal property over the past several weeks. There has been a concerted effort
by TRANSCOM and its Army component, Surface Deployment & Distribution Com-
tary Sealift Command (MSC), and Surface Deployment & Distribution Command (SDDC). Com-
mercial industry is often referred to as the ‘‘fourth component’’ of TRANSCOM.
6 Joint Deployment & Distribution Enterprise (JDDE): an integrated DoD system consisting
of assets, materiel, personnel, leaders, organizations, tools, training, facilities, and doctrine capa-
ble of providing prospective joint force commanders with the ability to rapidly and effectively
move and sustain joint forces in support of major combat operations or other joint operations.
7 Twenty-foot Equivalent Unit (TEU): a container shipping industry standard used to describe
the capacity of container ships and container terminals based on the volume of a 20-foot-long
(6.1 m) intermodal container, a standard-sized metal box which can be easily transferred be-
tween different modes of transportation, such as ships, trains and trucks. There is also a stand-
ard container with the same width but double length called a 40-foot (12.2 m) container known
as a forty-foot equivalent unit (FEU).
8 Multi-Purpose Vessel (MPP): sometimes also referred to as MPV or heavy lift vessels, encom-
passes ships built for the carriage of a wide range of cargoes including but not limited to large
dimension projects, wood, steel, building materials, rolls of paper and bulk cargo.
9 Handysize: naval architecture term for smaller bulk carriers generally with deadweight of
up to 50,000 tons.
10 USMCA: United States-Mexico-Canada Agreement, a free trade agreement that is a suc-
cessor to the North American Free Trade Agreement (NAFTA).
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mand (SDDC), to improve forecasting, which is very helpful to carriers as they plan
and adjust their networks. However, cargo volumes, whether commercial or pref-
erence cargo, are simply not there, and it is unclear whether, when and to what
extent underlying demand may return. Further details by U.S.-flag shipping seg-
ment:
• The internationally trading U.S.-flag container fleet, consisting of 120,000 TEUs
of container capacity, is comprised of the three largest international container
lines and operates in four main strings (1 trans-Pacific, 2 trans-Atlantic, and
1 Mideast); U.S.-flag impelled cargo generally fills about 10–15% of the total
vessel. While these container liner strings continue to carry DoD sustainment
and certain commercial cargoes, it is expected that total combined volumes will
decrease by 30% in Q2.
• The MSP Ro-Ro fleet provides over 3.1 million square feet of capacity and exists
almost exclusively to carry defense rolling stock and breakbulk cargoes. There
are select cargoes moving by exception to the ‘‘stop move’’ policy but U.S.-flag
Ro-Ro cargoes in Q2 may be down by as much as 75–90%.
• The DoD ‘‘stop move’’ order is also impacting the MPP heavy lift sector, and
U.S. Export-Import Bank 11 and other civilian agency project cargoes are being
delayed into 2021; several such vessels have entered into warm layup and oth-
ers may be left with no choice but to join.
• In the tanker space, while there is a lag in impact due to the nature of the mar-
ket space, the U.S.-flag market cargo expectation is a reduction of at least 25–
30% in liquid preference cargoes for the year.
The continued availability of the MSP fleet’s capabilities to TRANSCOM and the
JDDE is critical to DoD’s ability to meet the sealift requirements of the Mobility
Capability Requirements Study (MCRS 12) and in the national interest from an eco-
nomic and national security standpoint. DoD’s commercial partners and the mariner
base must remain viable to support DoD needs regardless of the global economic en-
vironment. TRANSCOM is currently conducting an update to the MCRS, which will
help identify long term organic and commercial sealift capacity requirements to
meet operational needs. In an address last week on National Maritime Day (May
22, 2020), TRANSCOM Commander General Stephen Lyons noted ‘‘the United
States’ ability to project across trans-oceanic distances remains a strategic compara-
tive advantage and is admired by both friends and adversaries. TRANSCOM, work-
ing with the Maritime Administration (MARAD) and key industry partners, pro-
vides an essential element of deterrence and if necessary, the unquestionable ability
to respond with overwhelming decisive force, most of which will be moved by sealift.
The resultant combined effort is a world order that encourages peace and opportuni-
ties for freedom, while deterring great power war for over 75 years and counting.’’
There remains an enduring need to think long term, beyond the current crisis, on
how commercial partners must remain viable to support DOD needs despite the
global economic environment. This is why, notwithstanding the impacts of COVID–
19, MSP carriers have been continuing to deliver the goods when and where needed.
IN PEACE AND WAR
The historical highpoints for the U.S.-flag international shipping industry have oc-
curred in the years following World War II, during and immediately after both the
Korean War and the Vietnam War, and most recently during Operation Iraqi Free-
dom (OIF) and Operation Enduring Freedom (OEF) in Afghanistan. Over 90% of all
military equipment is shipped overseas by sea because of the scale and scope of the
cargo, and the cost efficiency of moving it by sea versus air, with the preponderance
of it generally shipped via the U.S.-flag international fleet. There is a direct correla-
tion between declining defense spending and the decline of the U.S.-flag fleet and
merchant marine. More to the point, when DoD is most active, and defense spend-
11 U.S. Export-Import (EXIM) Bank: established in 1934 as the official export credit agency
(ECA) of the United States. Operating as a wholly owned federal government corporation, the
Bank assists in financing and facilitating U.S. exports of goods and services. EXIM promotes
U.S. goods and services at no cost to U.S. taxpayers, protecting ‘‘Made in America’’ products
against foreign competition in overseas markets and encouraging the creation of American jobs.
There are strict U.S. content rules associated with EXIM financing, and certain project cargoes
financed by EXIM must move on U.S.-flag vessels.
12 Mobility Capability Requirements Study (MCRS): a series of mobility studies undertaken
by TRANSCOM and the Cost Assessment and Program Evaluation (CAPE) organization within
the Office of the Secretary of Defense (OSD), the most recently completed of which is designated
MCRS–18. The studies asses the number of tanker aircraft, airlift aircraft and sealift ships
needed to meet future combatant commander requirements and are generally undertaken pursu-
ant to Congressional National Defense Authorization Acts (NDAAs).
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ing is higher, the cargo base is larger and therefore the fleet sizes up accordingly.
In the 1960s, national defense spending averaged 8–9% of GDP but by the end of
1970s, it was 5%. In the 1980s, it recovered to 6%, before declining again with the
end of the Cold War, and by the end of the 1990s, it was under 3%. Defense spend-
ing reached a recent peak of 4.5% in 2009 before resuming a decline.
Not coincidentally, the U.S.-flag fleet has fallen from a recent high of 107 ships
in international trade in 2010–2011 to a recent low of 77 ships in 2016 due to major
decreases in defense and other preference cargoes, as well as the failure of the MSP
stipend to keep pace adequately with rising costs generally and in particular a wid-
ening discrepancy between U.S.-flag operating and foreign-flag costs. The MSP fleet
has stabilized over the past several years due to an increase in the MSP stipend
that took effect in FY17. In December 2019, Congress wisely reauthorized MSP
through 2035, which provides much needed longer-term stability as carriers invest
in new assets and their networks for the long term. Having only just stabilized over
the past several years, the U.S.-flag fleet now faces the twin catastrophes of implod-
ing government and commercial cargo markets, impacting carriers’ ability to main-
tain service, and in turn negatively impacting fleet, network and mariner readiness
and by extension TRANSCOM/JDDE readiness.
All container operators and most Ro-Ro carriers in MSP operate in liner service,
which is a standard industry term for regularly scheduled service with a fixed port
range. U.S.-flag container carriers operate on a fixed weekly service schedule, with
round trips ranging from 35 days to 77 days. Ro-Ro liner service follows the same
general principle although it is usually more flexible on port range but less frequent.
Liner services generally fulfill the schedule unless the vessel is unduly delayed due
to natural or man-made causes. When any liner service sailing is blanked, the ves-
sel in question will be idle until the next opening in the string to resume trading.
To maintain service (and by extension, readiness for DoD), carriers may decide to
operate higher cost U.S.-flag service when cheaper non-flag options may exist in a
given carrier network. The remainder of MSP vessels operate on a contract of car-
riage or fixture basis, providing worldwide transport without a fixed trade lane,
often to remote locations; such vessels are reliant on a base cargo that is often ac-
companied by smaller lot cargos for different customers. COVID–19 has dramati-
cally impacted base cargoes resulting in idling of vessels.
Thus, while there are major differences in the reductions by market segment, due
in part to the underlying service profiles, all U.S.-flag services are being dramati-
cally impacted by the changing cargo dynamics. The extra costs of dealing with the
crisis combined with lost revenues total hundreds of millions of dollars in total im-
pacts. MARAD has compiled statistics showing a decline of $58.8M in government-
impelled cargo revenues to MSP carriers in just the first quarter of 2020 vs. Q1–
2019, and due to the lag effect on supply chains and cargo, most of the impacts,
which only started in mid-March 2020, will be much harder felt in the second quar-
ter and beyond. The latest statistics compiled by MARAD for April 2020 show gov-
ernment-impelled revenue declined by at least 47% across the MSP fleet vs. April
2019.
U.S.-flag carriers have taken various steps to manage costs, stay competitive, and
maintain service. These include slow steaming; omission of port calls where there
is insufficient volume to justify the cost of a port call; and eliminating holiday,
weekend, and other overtime work where possible. Verifying cargo availability and
accurate forecasting are critical, as is optimizing vessel utilization given the impacts
to overall cargo volumes. Absent any national security and DoD-related readiness-
driven considerations, U.S.-flag carriers would be even more aggressively adjusting
to the dramatic decreases in cargo and revenue and taking assets and crews out of
service.
Carriers are working closely with maritime labor, the U.S. Coast Guard, state and
local authorities, agents, ports, and other parties as appropriate on COVID-protec-
tion measures. Social distancing, cleaning, and personal protective equipment (PPE)
protocols are important to maintaining the health and safety of our people. Access
to testing kits, certain overseas crew changes for select MSP vessels that do not call
U.S. ports, and PPE remain challenges. However, the result of our joint efforts to
date is that there have been no known outbreaks of COVID–19 on U.S.-flag MSP
ships. It is probably unrealistic to believe that this trend will continue indefinitely,
but it is a testament to the collective efforts of labor and management, balancing
safety and health while continuing to meet the mission, that it endures today.
CHALLENGES & OPPORTUNITIES
Smart and effective maritime policy, whether legislative or executive action, has
always underpinned the success or failure of the U.S.-flag fleet in international
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trade, and the COVID–19 crisis is no exception. In a theoretical free enterprise eco-
nomic model, and absent DoD cargoes, other preference cargoes, and MSP, there
would be no American citizen crews and no U.S.-flag international carriers. Today,
as a result of the commitment of the Department of Defense to the utilization of
the U.S.-flag commercial fleet and the support of the Maritime Security Program,
the U.S.-flag fleet in international trade is largely stable, but the COVID crisis
threatens that stability, and the thousands of mariner jobs that go with it.
It should be noted that the CARES Act and other legislative and Administration
actions have helped to stabilize certain aspects of the situation for parts of the in-
dustry, including payroll protection and access to loans. While USA Maritime appre-
ciates the actions taken so far, the work is incomplete. Some have not unreasonably
queried whether U.S.-flag carriers operating under MSP can access the $17 billion
set aside for defense contractors under the CARES Act. Fundamentally, the $17 bil-
lion is for loans to businesses critical to maintaining national security. One might
think that U.S.-flag carriers supporting DoD sealift might reasonably qualify, but
due to the DX-priority 13 or valid top-secret requirements, they do not. The funda-
mental question is what level of readiness is being sought for the U.S.-flag MSP
fleet in international trade. Today’s MSP rules allow operators a substantial degree
of freedom provided they meet 180 minimum operating days per fiscal year, and
under normal circumstances, when both government and commercial cargoes are
moving in reasonable volumes, most carriers can not only meet that threshold but
also the 320 minimum operating days necessary to receive the full MSP stipend for
the fiscal year. But with both cargo sets decimated, the stipend by itself is not
enough to maintain any approximation of normal service.
Congress and the Administration should consider three actions to ensure that the
militarily useful and commercially viable MSP fleet, and the thousands of merchant
mariner jobs that go with it, remain at the ready to support national defense and
economic security missions:
• First, in recognition of the close partnership between DoD/TRANSCOM and
commercial carriers, specifically DoD’s reliance on commercial sealift to deploy
and sustain the force, Congress should consider an emergency stipend through
the remainder of FY20, and if necessary beyond, aimed at addressing the ex-
traordinary costs for readiness that are being borne by MSP carriers. Put an-
other way, carriers should be compensated for their maintenance of service (and
readiness), as opposed to putting ships in cold layup, or scrapping/recycling, or
flagging out, as carriers might otherwise do if not dedicated to supporting DoD.
As per its previously submitted detailed proposal, in order to ensure continued
readiness as well as maximum mariner employment feasible, USA Maritime
urges Congress to authorize and appropriate $109.8 million ($1.83 million per
MSP vessel) for the period April 1, 2020 to the end of the current fiscal year,
as well as to authorize $1.82 million per vessel with a total authorization of
$109 million for the period October 1, 2020 to March 31, 2021 to be appro-
priated as needed. This is what is necessary to maintain full-service levels and
full employment and minimize impacts to national security levels.
• Second, under America’s cargo preference laws 14, 100% of all military cargoes
and at least half of all civilian agency cargoes must be shipped on U.S.-flag ves-
13 DX priority: a priority rating under the Defense Priorities & Allocations Systems (DPAS).
DPAS ratings assure the timely availability of industrial resources to meet current national de-
fense and emergency preparedness program requirements and to provide an operating system
to support rapid industrial response in a national emergency. The Defense Production Act of
1950 authorized the President to require preferential treatment of national defense programs.
All prime contracts, subcontracts or purchase orders in support of an authorized program are
given a priority rating. A DX rating is assigned to those programs of the highest national pri-
ority. Per DoD 4400.1-M, OSD AT&L approves DO rated orders and nominates to the Secretary
of Defense for approval of DX rated orders. An unrated order is a commercial order or a DoD
order that is not ratable. A DX rating takes priority over a DO rating which takes priority over
an unrated order. Rated programs are also given a program identifier symbol. DPAS issues are
supposed to be resolved at the lowest level possible.
14 Cargo preference laws: the reservation by law for transportation on U.S.-flag vessels of all,
or a portion of all, ocean-borne cargo which moves in international trade either as a direct result
of the Federal Government’s involvement, or indirectly because of the financial sponsorship of
a Federal program or guarantee provided by the Federal Government. The U.S. cargo preference
laws are part of the overall statutory program to support the privately-owned and operated U.S.-
flag fleet and merchant marine. Cargo preference requires that U.S. Government-financed car-
goes be shipped on U.S.-flag vessels, provided that such vessels are available at fair and reason-
able rates. Preference cargoes are the key incentive for U.S.-flag operators operating in inter-
national trade to remain under U.S. registry and provide a vital cargo base to help offset foreign
flag cost advantages. The primary U.S. cargo preference laws are set forth in the Cargo Pref-
erence Act of 1904, Public Resolution 17 (1934), and the Cargo Preference Act of 1954. The 1904
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sels. This has been the official policy of the Federal Government since at least
1904, and it has long been a cornerstone of American national defense. Whether
by legislation or executive order, 100% of all government-owned or financed car-
goes should be required to move on U.S.-flag ships. It is a rather simple equa-
tion: without cargo, carriers will not invest in ships, and without ships, there
will not be jobs for merchant mariners. Without those merchant mariners, the
Government-owned reserve fleet cannot be crewed. In a letter addressed to this
Committee dated May 15, 2020 signed by TRANSCOM Commander General
Stephen Lyons, he called for requiring ‘‘100 percent of all government-impelled
cargoes to be transported on U.S. flagged vessels’’; USA Maritime strongly en-
dorses the recommendation.
• Third, consider accelerating the recapitalization of the government-owned sea-
lift fleet, specifically the Ready Reserve Force (RRF 15) fleet, in the most cost-
effective manner, which is to buy used foreign-built ships, with a first priority
for buying used ships through U.S.-flag carriers. Some may raise the notion
that such ships should be built in U.S. shipyards, and that is a laudable goal,
although it is a relatively little-known fact that 86% of the 35 Ro-Ros in the
RRF today were foreign built, so this would hardly be treading new ground. But
the state of the RRF is woeful now (average ship age 45 years old), the U.S.
Navy has many other competing budgetary shipbuilding priorities, and as a re-
sult of the COVID crisis there are more readily available used foreign built
ships available now. TRANSCOM Commander General Stephen Lyons noted in
testimony earlier this year that RRF ‘‘sealift readiness rates have declined to
59% compared against a goal of 85%, with vessel material condition and age as
the primary factors’’. As we consider sealift that the nation needs, specifically
whether to continue to pursue service life extensions, build new, or buy used,
let us not let perfect be the enemy of good. DoD should act on the seven author-
izations already in place for buy used, and Congress should authorize and ap-
propriate for additional purchases in the near term. Including a first priority
for used U.S.-flag foreign built MSP/VISA ships over foreign-flag foreign built
ships would be a ‘‘win/win’’, as carriers could sell or charter assets to the gov-
ernment that are much younger than today’s RRF ships, and in turn use the
proceeds to reinvest in newer tonnage for the MSP/VISA fleet.
CONCLUSION
The National Defense Strategy (NDS) focuses on the return of Great Power com-
petition and all that it entails. In furtherance of NDS readiness mission assurance,
the Defender Europe 2020 exercises comprised the largest NATO exercises in 25
years. There was a concerted sealift component to the exercises, and although De-
fender 20 was eventually significantly curtailed due to COVID–19, it is still ongoing,
and indeed ARC recently carried redeploying unit cargo from Germany and Poland
back to the United States. With assets and networks valued in the tens of billions
of dollars, the active U.S.-flag commercial fleet operating in international trade con-
tinues to be a ‘‘best buy’’—significantly more cost-effective to the Government than
acquisition, operation, and maintenance of Government-owned/operated assets or at-
tempting to build such networks.
I started this testimony by emphasizing remembering our World War II mariners,
but let us also bear in mind the need to ensure we maintain a strong U.S.-flag fleet
today so that we ensure we have the necessary assets and hard-working U.S. mer-
chant mariner crews that are essential to the pursuit of national and economic secu-
rity objectives today and tomorrow. I close by highlighting another excerpt from
TRANSCOM Commander General Stephen Lyons in the aforementioned letter to
Act requires that 100% of all military cargoes—purchased for or owned by U.S. military depart-
ments—be shipped exclusively on vessels of the United States or belonging to the United States.
PR 17 requires that all cargoes generated by the U.S. Export-Import (Ex-Im) Bank be shipped
on U.S.-flag vessels unless a waiver is granted by the Maritime Administration. The Cargo Pref-
erence Act of 1954 requires that at least 50% of civilian agency cargoes be transported on U.S.-
flag vessels.
15 Ready Reserve Force (RRF): a subset of the National Defense Reserve Fleet (NDRF), the
RRF component was established in 1976 to provide rapid deployment of military equipment and
currently consists of 46 vessels (35 of which are Ro-Ros) that are crewed with a reduced crew
but kept available in reduced operating status (ROS) for activation within a set timeframe (usu-
ally 5 days). Upon activation, RRF vessel control transfers to Military Sealift Command (MSC),
the naval component of TRANSCOM [MSC also has reporting lines to Navy Fleet Forces Com-
mand for Navy-unique matters and to the Assistant Secretary of the Navy (Research, Develop-
ment and Acquisition) for procurement policy and oversight matters]. The RRF fleet budget for
FY19 was $310,805,000 (average of $6.76 million per ship) and for FY20 was $352,044,000 (av-
erage of $7.65 million per ship).
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this Committee dated May 15th in which he stated ‘‘given the economic downturn
as a result of COVID–19, I urge you to favorably consider the relief requests from
VISA and MSP carriers’’. Thank you for the consideration and thank you for the
opportunity to be here today. I look forward to your questions.
Mr. MALONEY. I thank the gentlemen.
We will now proceed to Members’ questions.
Just a word to those who may be new to the technology. If you
participate using the grid view, you will also see one of the grids
is occupied by the 5-minute clock. For purposes of monitoring your
own time it may be useful.
Also a reminder, your fourth or fifth today, you are presump-
tively unmuted. So you all have yourselves muted. Please continue
to do so unless you are recognized.
Now proceed to the 5-minute rounds of questioning, and I would
like to yield to the chairman.
Mr. Chairman.
Mr. DEFAZIO. Thank you, Sean Patrick. I appreciate the oppor-
tunity to go first.
To Michael Roberts on the issue of quarantining. Is this an ongo-
ing problem where crews are being quarantined on freighters or
have we gotten past that?
Mr. ROBERTS. Thank you for the question.
It is an issue of grave concern in most markets. There was an
article today about a tanker in Brazil that had been quarantined
for over a month and is continuing under quarantine.
That has not happened in the United States. We, with great co-
operation from the maritime labor, we have had very few incidents
of infection onboard ships, and we have had good indications that
if and when that happens, that there will be an appropriate re-
sponse at the local level, that the ship will not be sent to anchor,
that it will be sent to a secure terminal facility where the infected
person can be taken off safely and taken to treatment quickly, the
crew can be quarantined, the ship can be sanitized, and it can be
returned to service.
That is extremely important in certain markets where these
ships provide just-in-time cargo to consumers. The concern is that
that is not a nationally recognized standard at this point, that
there have been incidents where there was a suspected case where
the ship was sent to anchor. And then you have to have the med-
ical staff climb the ladder to get on the ship to administer this test.
And it is very, very unsafe and it is not the best place to respond
to that sort of incident.
So we really hope that the Coast Guard and CDC will work to-
gether with the industry to recognize what the right response plans
are in each port.
Mr. DEFAZIO. Great. I think that would be something for the
committee to follow up on. That is an excellent point. Thank you
on that.
Thanks also for bringing up the 100th anniversary of the Jones
Act. Yeah, I have been jumping on those who are looking at this
as an opportunity to undermine the Jones Act and thus far we
have been pretty successful in pushing back on them.
To Eric Ebeling. You mentioned for ROROs, they weren’t eligible
for—I have run into this before. How much money did you say was
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in that fund that they weren’t eligible for because they aren’t doing
highly classified work?
Mr. EBELING. Yes, sir. That is the CARES Act, and there is $17
billion in the fund that is available to national defense. But U.S.-
flag carriers are not eligible for it because we are not under those
classifications.
Mr. DEFAZIO. Yeah. I think we should—I have run into that with
a trucking company that does a lot of DoD work, too. And I think
staff will need to follow up with Treasury and see how much of
that money has been committed. Maybe we need to look at modi-
fying the rules for who is eligible and who isn’t eligible if the
money is just sitting there unallocated. So thanks for bringing that
up.
Then the last question to Lauren Brand. I am obviously still a
bit dubious about cruise lines at the end of July, but I understand
they are selling tickets and some of them do intend to sail, and
hopefully they won’t be populated by the people who were at the
pool party and the bar in Lake of the Ozarks.
So can you tell us what measures are going to be taken, particu-
larly landside? I guess once these people sail, it is up to them. And
oh, by the way, if they are flagged in Malta and they have a prob-
lem, they should call for the Maltese Navy, or if they are flagged
in Liberia, they should call for the Liberians to send medical assist-
ance.
But if you would comment on what we are going to do on the
landside that would be helpful. If you can do that quickly, my time
is about up.
Ms. BRAND. Thank you for that question.
Sir, I am not prepared to answer it in completeness. And what
I would like to do is get the information and submit it on Monday.
Is that acceptable?
Mr. DEFAZIO. Absolutely. That is fine. Thank you.
Ms. BRAND. Thank you.
Mr. DEFAZIO. Thanks, Sean Patrick. Appreciate it. Thank you.
Mr. MALONEY. Thank you. Reclaiming my time.
I am at this time going to recognize Mr. Gibbs.
Mr. GIBBS. Thank you, Mr. Chairman.
First of all, I would like to say to all the witnesses, thank you
for [inaudible]. I hear optimism [inaudible] In your leadership [in-
audible] Tough times ahead, and I just want to recognize [inaudi-
ble] Challenges. And hopefully Congress will be able to enact some
of your proposals’ assistance.
After 9/11, the United States and much of the world, we updated
our port security infrastructure framework, mostly to focus on re-
sponses from violent physical terrorist attacks. Then, of course, we
had cyber challenges.
And now with the recent coronavirus response, I think that is
going to pressure test our systems designed to keep U.S. ports safe
and secure; that added pressure will determine if existing regu-
latory systems are sufficient to provide ports with the broad resil-
ience they need, or if the schemes are focused too narrowly on the
response to terrorist attacks.
And my first question is to any of the panelists, I guess. Do cur-
rent port safety and security regimes in the United States provide
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the level of resiliency necessary to protect our ports and our supply
chains that rely on the ports against the spread of the coronavirus
from vessels to land, cyber threats, and also national disasters? If
not, what actions do you recommend that we take domestically to
improve our port infrastructure and supply chain resiliency against
all of the threats the industry now faces? I will open it up to any
of the panelists.
Mr. CONNOR. Yeah. I can take a first shot at that. This is Chris
Connor. And thank you for that question, Congressman.
I think cyber attacks are always a threat and it would be a very
risky response from me to be cavalier and say that we have got
that mastered because I don’t think anyone ever will and we need
to stay resilient. And it is also fair to say that the distractions
brought on by the current pandemic certainly may leave us com-
promised in some ways.
Saying that, I will say that the port industry, in particular,
spends a lot of time on that. We have a technical committee within
our association that focuses on security. Some of our members are
quite sophisticated and are willing to share some of their expertise
with other members to better prepare them. And we also work with
DHS and through CISA to make sure that we are on top of all the
risks.
But there is no doubt there are increased threats at the par-
ticular time. I think it is hitting people on many levels, not just on
the business level, but also on the individual consumer level with
actors out in the theater. So this is an area that gets a lot of atten-
tion from the port industry.
Thank you.
Ms. BRAND. If I may supplement what Mr. Connor just said. The
National Association of Waterfront Employers also has a security
committee and we talk about everything Mr. Connor just men-
tioned, and we also address drones.
There is technology that is changing that, frankly, is frightening
and I am not sure that we have enough protocols in place to ad-
dress everything. We work very closely with DHS and the other
agencies that impact this issue.
Mr. GIBBS. Thank you. I want to get another question in. In ad-
dition to short-term COVID–19-related needs, U.S. ports, vessel op-
erators, and marine terminals still face long-term capital and oper-
ating needs. What are the long-term, unfunded needs of ports, ma-
rine terminals, and U.S.-flag vessels due to longer structural
changes in international shipping? What kind of money are we
looking at? What are you looking at long term? Any idea?
I guess I might go to Ms. Brand maybe.
Ms. BRAND. Thank you very much for the question, sir.
Unfortunately, you cut out a little bit. I just wanted to make sure
that the question is: what is the projection of what would be need-
ed to assist with the COVID-related expenses that we are enduring
right now?
Mr. GIBBS. Yes.
Ms. BRAND. Our association believes that about $400 million
should help ports and terminal operators with just PPE; PPE,
cleaning supplies, and incidental changes made to facilities sepa-
rating people, social distancing, the things recommended by the
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CDC. As I said before, cleaning of equipment costs more than the
actual cost of the disinfectant itself. So about $400 million, which
is that one expense, sir. And $1.5 billion might cover everything
else.
Mr. GIBBS. OK. Does anyone else want to respond?
OK. Well, I am just about out of time. I will yield back, Mr.
Chairman.
Mr. MALONEY. I thank the gentleman.
I would now like to proceed to Mr. Larsen, although I understand
Mr. Larsen may be having connectivity issues.
Rick, are you with us?
Mr. LARSEN. Yeah. Yes, I am with you.
Mr. MALONEY. Oh, hello. We can see you.
Go ahead. You may proceed.
Mr. LARSEN. Thanks. I think I have it figured out, but I will pass
on later what I think happened.
So thanks so much.
First question is for Ms. Brand. Let me just bring it up here. It
has to do with maybe challenges—it is probably all ports, but a lot
of temperature-sensitive cargo goes to the Pacific Northwest in egg
products, seafood, and so on.
With the pandemic impacts on supply chains, are you seeing any
issues with the export of these temperature-sensitive products?
And what are your members doing to resolve that?
Ms. BRAND. Naturally, the members know when the product hits
the terminal what kind of special care that that commodity needs
or that container would need. I have not had any complaints from
anyone about things being left behind that are temperature-con-
trolled and sensitive like food products. So I will look into it and
I will give you a report back early next week if that is acceptable.
Mr. LARSEN. That is fine.
Ms. BRAND. I would also like to say the only product I have
heard that is being left at the dock are the real low-value items,
waste paper, items like that.
Mr. LARSEN. OK. Also in terms of the supply chain, have any of
you—maybe I will start with Mr. Roberts. What we are doing in
our office, just as a matter of course, we are looking at what we
need to keep doing after we get through the pandemic and what
we are going to stop doing and get rid of and never do again be-
cause of the pandemic.
Are you learning any lessons about the supply chain that you are
going to incorporate moving forward that would be helpful for us
to understand and know about in terms of our future legislative
planning? For Mike Roberts.
Mr. ROBERTS. Yes. Thank you. That is a very good question.
We are certainly paying a lot of attention to and seeing extraor-
dinary changes in how we do work in the office and on the docks
and on the ships. And I am certain there will be lessons applied
going forward. Certainly technology, use of technology, as we see
today, is an eye opener in terms of how we function.
But as far as the supply chains themselves, I need to think about
that and get back to you. I don’t have a great answer for you right
now.
Mr. LARSEN. Mr. Connor.
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Mr. CONNOR. Yeah. I will say that the industry, in general, has
experienced remarkably low incidence of COVID outbreaks on the
port footprints. And I think that speaks to the amount of emphasis
that both labor and port authorities and marine terminal operators
have put into keeping port workers safe.
I think it would be a sad outcome to this terrible pandemic we
have gone through not to have some profound changes in the way
we all work. I have no doubt we will see very interesting develop-
ments into terms of especially where people are touching equip-
ment and things like that, seeing significant improvements. It has
already happened. And not to mention the more obvious one where
administrative employees found out that we, in many cases, can be
pretty darn productive working in a noncongregated environment.
So I think there are lots of lessons and that story will be told
for years to come.
Mr. LARSEN. I find my staff is a lot more productive, too, when
I am not going by their desks and asking them to do all sorts of
things as well.
Mr. CONNOR. 10–4 on that.
Mr. LARSEN. Ms. Carpenter, do you have an answer to that ques-
tion? Any changes you see coming?
Ms. CARPENTER. Highlight, in particular, the use of remote audit
and inspection techniques.
So our segment of the industry, the tugboat, towboat, and barge
industry, is halfway through the phasing in of a very significant
regulatory change, towing vessel inspection or subchapter M. By
July 20th of this year, 50 percent of the U.S. towing vessel fleet
needs to have certificates of inspection.
And then COVID–19 hit. And so we had to work creatively with
the Coast Guard to figure out how we are going to keep getting au-
dits and inspections done while keeping mariners safe, recognizing
sometimes you need to defer. This is going to be with us for a long
time, and we need to figure out how to do business safely.
So we have had very good success working with the Coast Guard,
working with Coast Guard-approved third-party organizations, to
use remote audit and inspection techniques to supplement what
takes place face-to-face. And I think that is something we are going
to continue to refine and improve going forward.
Mr. LARSEN. OK. Thank you.
Thank you, Mr. Chairman.
Mr. MALONEY. I thank the gentleman.
Mr. Weber.
Mr. WEBER. Well, thank you, Mr. Chairman.
I appreciate you all holding this and appreciate you making the
recommendation that when you go to grid view—can you all hear
me OK?
Mr. MALONEY. We can hear you fine.
Mr. WEBER. Thank you.
When I finally got to grid view, I got to see Alan Lowenthal, and
I thought, man, he is wearing a mask, one of those COVID masks.
But it actually turns out he has a beard. I don’t know how many
of you all thought that.
But anyway, it is great to be on with all of you. I appreciate the
opportunity.
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Some questions I want to start with probably for Chris Connor.
You said in your remarks, Mr. Connor, that the supply chains
were changing and there is autos and others and you named a
whole bunch of stuff. How long—I know this is speculation, pure
speculation, and we will go to Jennifer maybe and Ms. Brand
later—how long do you think supply chains are going to be inter-
rupted to the point that, from a strategic planning point, you all
are going to begin to outline new supply chain processes, and hop-
ing we can keep as much in the United States? Have you all looked
at that? Any projections, Mr. Connor?
Mr. CONNOR. Well, as I mentioned, I think initially, like most of
us, you know, everybody back in March thought, or hoped, really—
it was more hope than thought—we would have a quick, V-shaped
recovery.
I think time and the reality of the complexities of this pandemic
have been a reality check for all of us, and we now project this is
going to be with us, I think, reasonably, at least through the end
of this calendar year, 2020. So that is the volume downturn that
we are going to experience.
I think supply-chain disruptions is probably a different discus-
sion and maybe a more complex one, as we try and repatriate cer-
tain essential products and certain goods back to the U.S. so that
we don’t put ourselves in this exposed position ever again in the
future.
Mr. WEBER. Well, that is our hope, of course. Have you identified
certain other countries—and, of course, I know China is the main
one in the discussion right now—but other areas where we might
be thinking of maybe drawing back and trying to do a little bit
more business at home? Have you identified those potential inter-
ruptions?
Mr. CONNOR. Not as yet. I think we have been kind of fighting
through the crisis. But I think that is a conversation that I think
not only the seaports industry but the entire logistics industry
would like to be a part of, because I think it is an important one
we should have as a Nation.
Mr. WEBER. All right. Thank you.
Mr. Ebeling, you made some comments that there was an emer-
gency stipend needed for MSP carriers or they might wind up flag-
ging out. Explain that.
Mr. EBELING. Yes, sir. So this is more of a maintenance of readi-
ness issue.
So, as I think the committee is well aware, the MSP stipend
today is $5 million per ship per year, and there are 60 enrolled ves-
sels, for a total programmatic cost of $300 million per ship per
year.
Usually that works in concert with the carriage of U.S.-flag pref-
erence cargoes and U.S.-flag commercial cargoes. This is more of a
but-for issue here. So, normally, carriers would probably be taking
actions in terms of laying ships up or reducing or changing service
profiles. And what is happening with the MSP fleet is they are all
maintaining service.
But, in order to maintain that service and, therefore, readiness
for the Department of Defense, we believe that it is appropriate to
have an additional stipend of $1.83 million per MSP vessel in order
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for those ships to remain in service and the crews fully employed
onboard those ships.
So I apologize if I made a misleading statement there, but——
Mr. WEBER. So that would include PPE, sanitization, and all of
those kinds of things? Is that what you are driving at?
Mr. EBELING. Some of it is the additional costs that are being
borne by carriers, and some of it is the lost revenues. Those total
in the hundreds of millions of dollars, and this is not necessarily
to make up for that. It is more just the maintenance of service and
the maintenance of readiness in support of our partners at DoD.
Mr. WEBER. Thank you for that.
And, finally, I go to Ms. Brand.
We are glad you are here. You talked in your remarks about te-
quila being made into hand sanitizer. Was that done in Galveston,
Texas, do you know?
Ms. BRAND. Yes, sir, it was.
Mr. WEBER. My district, just wanted to say.
Mr. Chairman, I yield back.
Mr. MALONEY. Well, I thank the gentleman, and I thank him for
his comments on Members’ appearance.
Might be a good time to reference House Resolution 965, Regula-
tion (d)(2), which requires Members to conform to the standards of
proper attire as required to participate in the committees’ in-person
proceedings. I think that one probably speaks for itself.
With that, Mr. Garamendi.
Mr. Garamendi, you may need to unmute.
You need to unmute, John.
I think we may have lost Mr. Garamendi.
Mr. GARAMENDI. I am muted.
Mr. MALONEY. I think you are having also a connectivity issue,
but I can hear you now.
Mr. GARAMENDI. Good. I am ashamed that you should start my
session with my dress code.
Mr. MALONEY. The Chair’s remarks were directed to the gen-
tleman from the South, but——
Mr. GARAMENDI. If the shoe fits, wear it. I got it.
Mr. MALONEY. We are used to Californians being appropriately
casual.
You may proceed, sir.
Mr. GARAMENDI. I want to cover a couple of different issues here.
First of all, this one is for Mr. Connor.
I just introduced this week the Special Districts Provide Essen-
tial Services Act. We have about 20 co-authors on it. It is specifi-
cally designed to address the issue that you spoke to, about ports
not being able to participate in the CARES Act and presently not
able to participate in the Heroes Act either. I represent 237 special
districts, ranging from fire to a port district.
So I want to really ask you, Mr. Connor, if the American Associa-
tion of Port Authorities would consider supporting this effort so
that we might provide the necessary support that you described in
your testimony.
Mr. CONNOR. Congressman, the answer is a resounding ‘‘yes.’’
But my staff has made me aware of that proposed legislation, and
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we see that as, you know, one channel to bring necessary funding
into the industry. So thank you for your leadership on that.
Mr. GARAMENDI. And I notice that there are about 15 of my col-
leagues on here, so this is my opportunity to give you a heads-up
to get onboard.
Mr. Lowenthal, specifically, I don’t think you are onboard yet,
but you do represent a couple of ports, special districts, keeping
that in mind.
My next question goes to Mr. Ebeling.
You reference three different things that need to be done. All of
those are now in play, specifically some of it in the NDAA. And I
suspect Chairman Maloney will also speak to the Coast Guard bill,
which is moving along.
Specifically with regard to cargo preference, we are now working
on the NDAA to put in a very comprehensive, all-of-Government
cargo being on American ships. I think you are aware of this, and
I would hope that you are supporting that effort to require that
all—I mean every mask, every swab, and every other thing from
the military on be on American-flagged vessels.
Are you familiar with that, and are you in support of that effort?
Mr. EBELING. Yes, USA Maritime is familiar with that, and we
are supportive of a 100-percent cargo preference for all Govern-
ment-impelled cargo.
Mr. GARAMENDI. The other issue you spoke to, you just handled
that. Hopefully we will be able to put that into the NDAA, possibly
into the Coast Guard bill also. And that is, dealing with the addi-
tional stipend necessary to keep the ships on the present program.
So we will be working on that.
Again, this is more to my colleagues that are not yet onboard
with these issues or familiar with these issues. Those are the two
things that I have in mind.
The other thing I want to just bring to all of our attention—and
I know that all of the witnesses have been engaged in this—and
that is the national fleet strategy, essentially using and
repurposing the Jones Act ships so that they can be made mili-
tarily useful to address the shortfall that occurs in the sea surge
potential that we do not yet have but should going forward.
So that national fleet strategy is basically using the Jones Act,
repurposing some of the ships to make them militarily useful, and
then new ships that would go into the Jones Act be made in a way
that is militarily useful, and supporting that with Federal money
out of the Department of Defense.
So I will let it go at that. Thank you for the opportunity. Mr.
Maloney, thank you very much for being the first-ever real hearing.
And I will watch my dress code henceforth.
I yield back.
Mr. MALONEY. I thank the gentleman. More than accustomed to
being the first ever.
Mr. Gallagher, you may proceed.
Mr. GALLAGHER. Thank you, Mr. Chairman. I put a tie on as
soon as you mentioned that, because I didn’t want to shame you.
I will not pan the camera down, however, to apprise you as to
whether I am wearing shorts or slacks. But I appreciate that.
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Mr. MALONEY. As usual, we appreciate the gentleman bringing
credit to the House of Representatives. You may proceed. Your——
Mr. GALLAGHER. Thank you.
Mr. MALONEY [continuing]. Time is running.
Mr. GALLAGHER. Thank you, sir.
When I spoke to the Port of Green Bay, in my district, about
their coronavirus needs, the first thing they mentioned, actually,
was constructing a new Great Lakes icebreaker.
And I know that may seem like a bit of a non sequitur, but the
Great Lakes are dependent on icebreaking from the Coast Guard
during the winter season, which was still ongoing when
coronavirus hit. We are expecting a second wave of coronavirus to
hit during the winter season.
So my question for the whole panel, but perhaps Ms. Carpenter
could start, is: What would happen if the Mackinaw icebreaker was
suddenly out of service for maintenance? How might that affect the
region both economically and in response to the virus during the
months we have ice?
Ms. CARPENTER. Thanks very much, Congressman. You know, it
is a great question, and the answer is, we would be in a world of
hurt, which I think really gets to a key need that we have here.
While we have talked about coronavirus-specific needs, like pri-
ority access to testing for mariners, there are a host of things that
fall under the regular jurisdiction of the Transportation and Infra-
structure Committee that are critically important to keeping the
supply chain moving.
So icebreaking, buoy tending, dredging by the Corps of Engi-
neers, passage of Coast Guard authorization bills—those are the
things that need to happen now more than ever in order to ensure
that we don’t have something mess up a recovery as it is getting
going.
So I really want to thank you for your leadership as a sub-
committee in helping us attend to those important needs.
Mr. GALLAGHER. And I would ask any other panelists who would
like to comment on our icebreaker needs, please.
And if not, I will move on to my second and final question, which
is: Another, sort of, key connection point or single point of failure
for the Great Lakes, which runs through the Soo locks, which close
during icy winters, they reopened on March 25—again, just as
coronavirus was really hitting the United States.
So I guess my question is: Hypothetically, what would have hap-
pened had the Soo locks malfunctioned at the beginning of this cri-
sis? How might this have impaired the Midwest’s ability to respond
to the outbreak, including transporting basic PPE to combat
coronavirus?
And I don’t know—who wants to take that? I will pick on Ms.
Carpenter again if no one else does.
Ms. CARPENTER. Sure. Thanks, Congressman.
I think that goes directly to the conversation we were just hav-
ing, which is: It would have been terrible. You know, we have had
enough disruption because of coronavirus. Layering on top of that
waterways infrastructure failures, inability to break ice, inability to
do the kinds of waterways management functions that enable the
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supply chain to function, pandemic or not, is just—those are prob-
lems that we can ill-afford anytime and especially not now.
Mr. GALLAGHER. I appreciate that.
And I guess, you know, my only point with this line of ques-
tioning is, I think, as we learn a big lesson with coronavirus be-
yond the subject we are talking today about various single points
of failure in our supply chain and our economy, we had preexisting
single points of failure when it comes to icebreakers and Soo locks
and a lot of things that directly affect the Midwest every single
year, and we can’t take our eye off that ball.
And, with that, I yield the remainder of my time, Mr. Chairman.
Mr. MALONEY. I thank the gentleman.
Mr. Lowenthal.
Mr. Lowenthal, you may be having connectivity issues. You are
cutting in and out, Alan. You may also need to unmute.
Mr. LOWENTHAL. Can you hear me now?
Mr. MALONEY. I believe you can proceed. Go ahead, Alan. Give
it a try.
It appears you are still muted, though, Alan. You may want to
check your mute as well.
Very well. I think we will return to Mr. Lowenthal in the order—
I think that brings up—the next Democrat in the order would be
Mr. Brown.
Alan, if you rejoin, I am sure we can restart.
Why don’t you go ahead, Anthony.
Mr. Brown, are you available? Would you like to proceed?
Mr. BROWN. Thank you, Mr. Chairman. With all these different
platforms, I always lose track of where the unmute button is. But
thank you for hosting this subcommittee hearing. Important topic.
And, certainly, first out of the gate in the Transportation and In-
frastructure Committee in holding a virtual or online remote hear-
ing.
The Port of Baltimore is arguably the most diverse port on the
east coast. It has a portfolio of containers, automobiles, farm equip-
ment, roll-on/roll-off cargo, and forest products, and it is ranked
first among all U.S. ports in the volume of vehicle cargo for the
ninth consecutive year.
And while the Port of Baltimore saw a record-breaking year in
2019, the COVID–19 pandemic has had a severe impact on its busi-
ness, as we have seen in ports across not only the country but the
world. In April of this year, total cargo tonnage fell 11.8 percent
from the same time the previous year—the steepest decline since
the coronavirus pandemic began.
For the most part, the Port of Baltimore has remained open and
operational. However, Ports America Chesapeake, the private oper-
ator in the port’s public-private partnership, continues to adjust
their operating hours at the Seagirt Marine Terminal. They have
closed Seagirt six times in the last 2 months due to lower inter-
national container volumes.
Mr. Connor, a question for you—a fairly general, broad question.
The automobile industry is key to the Port of Baltimore’s success.
In your written testimony, you mentioned that, while the big three
automakers have recently brought production online, it remains
uncertain what demand may look like and how consumer decisions
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may impact this market segment. So how can Congress better sup-
port the port—all ports, but certainly the Port of Baltimore—if the
automobile roll-on/roll-off cargo volumes do not bounce back?
Mr. CONNOR. Yes, thank you, Congressman, for that question.
And, simply stated, I would say, you know, the relief that is being
asked for here today would go a long way to bridging the gap to
normal volumes.
And what Baltimore is experiencing, as you referenced, in April,
I would say that what they are going to experience in May and
June will be much worse. And the reason I say that is because, in
April, they had residual volumes that were still going through the
supply chain. In May and June, they are going to have very little,
if any, volumes, because production is only now starting to resume
from European plants, from Asian plants, as well as U.S. plants ex-
porting overseas.
So I think what Congress could do is accord us with the aid that
is being requested here today.
Thank you.
Mr. BROWN. All right. Thank you.
One more question, with my time remaining, for Ms. Carpenter.
In your written testimony, you mentioned the need for nationally
consistent regulations to help make the maritime supply chain
more effective. Are there any specific examples of conflicting State
or local regulations that threaten disruption of vessel traffic during
the outbreak of the pandemic? And what takeaways can you give
us?
Ms. CARPENTER. Thanks, Congressman.
I think what we actually see from the pandemic is a really good
example of how things can work in terms of cooperative action be-
tween Federal and State government.
So the Federal Government, the Cybersecurity and Infrastruc-
ture Security Agency, very quickly designated maritime transpor-
tation as an essential critical infrastructure sector. So when States
and localities began to issue stay-at-home orders, many of them in-
corporated that guidance by reference.
In a couple of cases, they didn’t, and we have the potential for
some bottlenecks when, for example, mariners going from Lou-
isiana to Texas were potentially going to have to seek permission
on a case-by-case basis to enter the State. What we saw there was
very good cooperation in recognizing the criticality of maritime
transportation and working through the issue so that we didn’t
have a bottleneck. We would love to see that replicated going for-
ward.
Mr. BROWN. All right. So the takeaway seems to be that things
are working well, coordination is happening. That is your
takeaway?
Ms. CARPENTER. I think my key takeaway would be it starts with
Federal leadership, as it did in this case, and then the States and
the Feds can work together. But we would have had a real problem
if the Federal Government hadn’t acted first and said maritime
transportation is essential.
Mr. BROWN. Excellent.
Thank you, Mr. Chairman. I yield back.
Mr. MALONEY. I thank the gentleman.
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Mrs. Miller.
And if we have Mr. Lowenthal back for this, we will proceed to
Mr. Lowenthal after Mrs. Miller.
Mrs. Miller, you may proceed.
Mrs. MILLER. Thank you, Chairman Maloney and Ranking Mem-
ber Gibbs.
And thank you to you all witnesses for taking the time to meet
with us today, considering the difficult circumstances we have all
getting together and punching all the right buttons.
Shipping is so essential to our economy, even in inland southern
West Virginia. The Huntington Tri-State Port, in my district, is one
of the largest in the country and plays an essential role in con-
necting the vast resources and products of Appalachia to the rest
of the world. The COVID–19 pandemic has threatened this connec-
tion, and Congress must do what it can to make sure that it can
be repaired now and made stronger once we are safe from this in-
visible challenge.
While many Americans have the ability to work from home dur-
ing this pandemic, the maritime industry has been hard at work
ensuring that the United States has all the goods it needs to
weather the crisis. I personally want to thank you all and the
workers in the maritime industry who have put themselves at risk
to make sure that we have PPE, foods, material, and have been
able to continue to stock our shelves and get the inventory into our
homes that most of the Americans do need. And I want to say
thank you for that.
Ms. Carpenter, what deregulatory actions can Congress take to
alleviate burdens on vessel operators and help them focus on main-
taining their operations?
Ms. CARPENTER. Thanks very much, Congresswoman.
I will give you a specific example in a bill that has already
passed the House that was authored by this subcommittee. There
was a provision in the Coast Guard authorization bill that would
suspend the imposition of towing vessel inspection user fees until
the Coast Guard promulgates a fee structure that is fair and rea-
sonable.
Right now, we have a situation where a company that is oper-
ating 100 towing vessels could be paying $500,000 over 5 years in
fees that are duplicative of moneys that they are already spending
on Coast Guard-approved third parties who are performing the
same services.
And those fees also serve to disincentivize the Towing Safety
Management System option, which the Coast Guard has said is its
preferred option because of its safety benefit.
So suspending those fees will promote safety, will eliminate
costs, and will not have any deleterious effects. It is a no-brainer.
And we really thank this subcommittee for its leadership and look
forward to a bill passing as soon as possible.
Mrs. MILLER. Well, good. Thank you.
In your testimony, you mentioned the need for nationally con-
sistent regulations to help make the maritime supply chain more
effective.
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Are there any specific examples of conflicting State or local regu-
lations that continue to threaten disruption of vessel traffic during
the outbreak of the pandemic?
Ms. CARPENTER. Thanks very much.
And, you know, as I mentioned in response to Congressman
Brown’s question, we really saw a very good example during the
pandemic of how we can keep the maritime supply chain moving.
The Federal Government exercised leadership, and then the States
were able to work with them to address specific needs, as in the
Texas example that I gave.
I think that is a model that we really need to look to elsewhere,
because, just as a patchwork of stay-at-home orders could com-
pletely bollocks up the functioning of the maritime supply chain, so
could a patchwork of State and local regulations established for en-
vironmental or safety reasons.
So the Federal Government taking assertive action to ensure
that we have nationwide standards that are high, that protect the
environment, that protect workers, and that gives States con-
fidence that we have an effective regulatory floor I think is a crit-
ical first step.
And then where there are State-specific needs, we have the op-
portunity to work together to ensure that those are met. But,
again, Federal leadership, it needs to start there.
Mrs. MILLER. You sound positive, and that makes me feel good.
Thank you.
Mr. Roberts, in your testimony, you mentioned serious concerns
for the domestic shipping industry. Can you explain further some
of the challenges that domestic, particularly inland, maritime ship-
ping face during this crisis?
Mr. ROBERTS. Yes. Thank you for that question.
The industry generally has risen to the challenge to keep the
supply chains open and cargo moving and stores stocked and so on.
The biggest challenge? It is hard to put your finger on it, but cer-
tainly the focus has been on keeping our crews safe. They can’t
work remotely. They have to get on the ship. They have to do their
jobs. And when we ask them to do that, we have to do everything
we can to try and make sure that they are safe.
So access to testing has been a top priority, and we are making
progress there. There has been misunderstanding about how it is
prioritized through the CDC, but I think we are making progress
there. Certainly the technology of producing more test kits will get
us out of this sooner or later. But I will say that is the largest issue
that we have been dealing with.
Mrs. MILLER. Is the testing?
Mr. ROBERTS. Yes.
Mrs. MILLER. OK.
Thank you so much. I yield back.
Mr. MALONEY. I thank the gentlewoman.
I am going to give Mr. Lowenthal an opportunity, although I am
afraid he may still be experiencing connectivity issues.
Alan, I think you also need to unmute.
Mr. Lowenthal?
Right. In that case, we will move directly to Mr. Lamb.
Mr. Lamb, you are recognized for 5 minutes.
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Mr. LAMB. Thank you, Mr. Chairman. And I actually only really
have one question, so if Dr. Lowenthal comes back, we can cer-
tainly give him the time.
I have a question for Ms. Carpenter about infrastructure for the
inland waterways.
One thing we have really been advocating and pushing for is a
change in the Federal cost share to allow the Federal Government
to pick up a greater share of the tab for some of these new projects.
Like, in my area of western Pennsylvania, we have some projects
that have been going on for a really long time and some that have
been getting delayed for a really long time just a few spots down
the list of priorities.
So would you able to address whether, if we went to, like, a 75/
25 type of cost share, or 80/20 or whatever, the impact that that
could make on some of these problems and how it might be able
to speed up the work that we are doing and, kind of, put a lot of
people back to work?
Ms. CARPENTER. Absolutely, Congressman. And I want to thank
you personally for your leadership and support on inland water-
ways infrastructure issues. It is so important to our industry, and,
as I said in my testimony, it really is an investment in the competi-
tiveness of the Nation.
So the example that you have mentioned, increasing the cost
share for construction and major rehabilitation projects on the in-
land waterways system from its current 50 percent Treasury, 50
percent Inland Waterways Trust Fund, an industry-paid user fee,
to, say, 75 percent Treasury, 25 percent—I hadn’t even thought of
80/20, but I like that better. So if we can work together to get that
done, that would be fantastic.
What this will do is it will expedite the completion of projects
that are so important to getting goods to market, to increasing the
competitiveness not just of vessel owners and operators but of the
American shippers who depend on those.
So it is going to be putting a little more money into the system
now, which enables us to get the job done more quickly, saves us
money over time. And, again, it is an investment in American jobs
just throughout the system, from the workers who are constructing
these infrastructure structures to the mariners on the vessels, to
the shippers at the plants and mines and factories and farms
whose goods move to market by water.
So thanks so much for everything this subcommittee, this com-
mittee has done. Really look forward to working with you to make
some positive change there.
Mr. LAMB. Thank you very much.
I don’t think people really make the connection to the workforce
benefits, but I had a chance to be on a call with a lot of our local
contractors and trade unions here in Pennsylvania. Lock and dam
work is a huge source of work for the same groups of workers that
do things like road and bridge work.
And I also don’t think people really make the connection with the
environmental benefits, but you save a lot of fossil fuels by sending
goods on the river. You know, in parts of the country like mine, the
ability to construct the locks and dams really has made a lot of the
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water drinkable and navigable, obviously makes the roads less
crowded.
So there is just a whole cascading series of benefits that I am
trying to make sure people realize could be a good investment to
make right now. So thank you very much for your input on that.
Thank you, Mr. Chairman, for having me, and I yield back.
Mr. MALONEY. I thank the gentleman.
I would like to confirm, I don’t believe there are any further Re-
publican Members with questions?
And hearing none, I would like to give Mr. Lowenthal an oppor-
tunity if he has joined us by telephone.
Are you there, Alan?
Still no?
I think we all can sympathize with the technology issues. If you
haven’t experienced them over the last few weeks, I would be sur-
prised. We have all been in these forums.
So, with apologies to Mr. Lowenthal, who is, I believe, attempt-
ing to join by telephone, which is provided, given the connectivity
issues he is having with the video, we will proceed to Mr. Pappas.
Mr. Pappas, you have 5 minutes.
Mr. PAPPAS. Well, thank you very much, Mr. Chairman, and to
the ranking member as well. We are all getting better with this
technology, and in a couple more weeks I think we will all be at
100 percent with it.
But I appreciate the panelists for their thoughts and answering
the questions today and for what your organizations do to keep
maritime transportation strong and resilient, especially during this
crisis.
Most of my questions have been answered, but one issue I just
wanted to delve a little bit more into is the testing issue that a few
of you have brought up.
I know, Ms. Carpenter, you mentioned this is a priority, to en-
sure that we have a national strategy on how to ensure that we
can get priority for workers in the industry. And I absolutely agree
with that. We know that other screening measures have their limi-
tations—you know, taking temperatures, for instance.
Where up to half of the individuals who have COVID–19 aren’t
going to exhibit symptoms and where you can transmit the virus
when you are presymptomatic, it is critically important that all of
our essential workers, especially in this particular industry where
you are working in close quarters, have access to this testing capa-
bility.
So I am just wondering what the experience has been of mem-
bers to date and what Congress can do to help support increased
testing for our maritime industry.
Ms. CARPENTER. Thanks very much, Congressman. Really appre-
ciate that.
You know, we have seen some improvement, thankfully, in ac-
cess to diagnostic testing, but we think that, you know, as we are
now in what I am going to call the chronic phase of this pan-
demic—we have a long way to go before we are out of it—being
able to optionally incorporate testing into the prescreening process
for crewmembers is just going to be critical, especially as stay-at-
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home orders are lifted nationwide and there is just going to be a
lot more opportunity for exposure off the job.
So, while I mentioned that we feel like it is a positive thing that
we have been able to keep infections onboard vessels to a min-
imum, we take nothing for granted. Anything that Congress can do
to encourage the prioritization of access to testing for critical infra-
structure workers, especially those like mariners who work in close
proximity, would be most, most appreciated, whether that happens
legislatively, whether that happens via encouragement to FEMA
and other authorities.
As a positive example, we were just able, as an industry, to work
with FEMA and the maritime industry to secure a very large ship-
ment, more than 2 million, of cloth facial coverings to help protect
workers as they are working closely together. Those were being dis-
tributed free of charge, or are being distributed now free of charge,
to ports, to maritime entities, and it is a real positive step.
So, if we can do something similar with respect to testing, we
would take a massive step forward in securing the maritime supply
chain so we don’t see mariners getting sick and vessels having to
be idle just as we are getting the economy moving again.
Mr. PAPPAS. Any of the other panelists, do you have comments
on that?
Mr. EBELING. Yeah, I would be happy to comment on that.
So I think it is important, as we look at this, to consider, when
you look at the Jones Act, domestic fleets, it is really about domes-
tic supply-chain security, which is, of course, very essential. And
then on the international U.S.-flag fleet, I think it is also very im-
portant to bear in mind the national security, defense supply chain
aspects.
So, between the two U.S.-flag fleets, domestic and international,
we really have some massive benefits that are important contribu-
tions to the economy and national security. So I would just echo ev-
erything Jennifer said in terms of any prioritization of access to
testing kits would be hugely helpful.
Thank you.
Mr. CONNOR. Congressman, if I could jump in with one last com-
ment.
So, within the port industry, there has been a lot of collaboration
between ports who are typically fierce competitors. But everybody
has been collaborating to kind of show the best ways to get the
right protocols and processes in place.
And the physical layout of no two ports are exactly the same. So,
to kind of smooth that out, one area of contention that we could
use some assistance is, we have had difficulties in getting treat-
ment from CBP. In some ports, CBP staff who come into the same
facility as does Labor and Port Authority have not agreed to sub-
ject themselves to the testing. And that kind of creates an A-team-
versus-B-team kind of scenario, which is a little bit uncomfortable.
So we have been trying to work that through the system, but we
probably could use a little shove in that direction.
Mr. PAPPAS. OK. Well, I appreciate your comments.
And I yield back my time.
Mr. MALONEY. I thank the gentleman.
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We have been rejoined by Mr. Lowenthal again. In the absence
of a Republican Member, unless, Mr. Gibbs, I am mistaken, I
would like to recognize Mr. Lowenthal for 5 minutes.
Alan?
Mr. LOWENTHAL. Thank you, Mr. Chairman. You can hear me
now?
Mr. MALONEY. Perfectly clear.
Mr. LOWENTHAL. That is wonderful.
And, first, I want to thank everyone—all the Members; the wit-
nesses; you, the chair; vice chair; ranking member; and also Chair-
man DeFazio—for holding this very important hearing.
I would like to first ask, Chairman Maloney, if I could have
unanimous consent to insert into the record a letter that the Con-
gressional PORTS Caucus developed and sent to leadership urging
Congress to provide relief to ports in future coronavirus legislation.
Mr. MALONEY. Without objection.
Mr. LOWENTHAL. Thank you.
[The information follows:]
f
Letter of May 4, 2020, from Hon. Kurt Schrader of Oregon, Hon. Alan S.
Lowenthal of California, and Hon. Randy K. Weber, Sr., of Texas, et al.,
Submitted for the Record by Hon. Alan S. Lowenthal
MAY 4, 2020.
The Honorable NANCY PELOSI,
Speaker of the House,
U.S. House of Representatives, Washington, DC.
The Honorable STENY HOYER,
Majority Leader,
U.S. House of Representatives, Washington, DC.
The Honorable KEVIN MCCARTHY,
Minority Leader,
U.S. House of Representatives, Washington, DC.
DEAR SPEAKER PELOSI, MAJORITY LEADER HOYER, AND MINORITY LEADER MCCAR-
THY:
We start this letter by offering our sincere thanks to you and your staff for all
the work that you have done to help the American people during this emergency.
The bipartisan work being done here in Congress is unprecedented and shows what
we can do together to overcome extraordinary events.
Our nation continues to suffer from the effects of the COVID–19 crisis. Congress
has done tremendous work advancing multiple pieces of legislation to mitigate the
impact, but it is increasingly obvious that more must be done. We are advocating
here that our nation’s ports must be included in any future packages. This is a sec-
tor of our economy that has so far been left out of proposals but needs assistance
to carry on their essential work. Ports remain vitally important to the well-being
of our communities during this time and will be critical for recovery efforts once this
crisis is over. However, due to their unique governing structures, these entities have
not been eligible for many of the recently enacted relief programs. Our ask here is
simple: we must include relief specifically set aside for our ports in the next
COVID–19 package.
Funding sources vary for ports, but all have seen their budgets hit hard by the
ongoing business closures and stay-at-home orders. Yet, port staff are not able to
just lock up their facilities and go home. Their vital work must continue to move
the goods the American people need and to maintain safety and security for these
essential workers. Congress should recognize the enormous impact this is having by
including them in the next package.
Most important is that the next package disperses aid to ports of all sizes, both
large and small alike. Our solution must make sure that all our ports receive the
resources they need. Small ports are often the lifeblood of communities and are the
hardest hit by these events. We must not forget them when crafting these policies.
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Any effort enacted here must be able to flow down to the smallest port to help them
weather this emergency.
Ports come in all sizes, provide gainful employment, and serve a wide variety of
industry sectors—import/export, energy/chemical, manufacturing, commercial fish-
ing, agriculture, and so forth. Our nation’s ports serve as the vital link between our
people and the goods they buy for their families as well as ensuring American made
products can be purchased in foreign markets. Previous aid has served other sectors
of the transportation industry deemed essential and now it is critical that all of our
nation’s ports receive much needed assistance to keep supply chains moving and
keep both employees and customers safe.
We stand ready to work with you to address these problems and make sure that
all Americans receive assistance during these challenging times. Without this aid,
industries served by ports will not be able to offer essential services to get our com-
munities back into shape once we start to recover from this crisis.
Sincerely,
KURT SCHRADER,
Member of Congress.
ALAN LOWENTHAL,
Member of Congress.
RANDY WEBER,
Member of Congress.
JERRY MCNERNEY (CA–09). DAVID ROUZER (NC–07).
PETER A. DEFAZIO (OR–04). KATHY CASTOR (FL–14).
DEREK KILMER (WA–06). BRIAN FITZPATRICK (PA–01).
DONALD PAYNE, JR. (NJ–10). CHARLIE CRIST (FL–13).
ANTHONY BRINDISI (NY–22). ED CASE (HI–01).
JULIA BROWNLEY (CA–24). BRIAN MAST (FL–18).
ROBERT WITTMAN (VA–01). MIKE GALLAGHER (WI–08).
ADAM SMITH (WA–09). PETER VISCLOSKY (IN–01).
TIM WALBERG (MI–07). CHRIS PAPPAS (NH–01).
JOHN KATKO (NY–24). GUS M. BILIRAKIS (FL–12).
VAL DEMINGS (FL–10). TOM RICE (SC–07).
LIZZIE FLETCHER (TX–7). CHELLIE PINGREE (ME–01).
STEVEN M. PALAZZO (MS–4). WILLIAM R. KEATING (MA–09).
STACEY E. PLASKETT (VI–AL). JOE WILSON (SC–02).
TONY CÁRDENAS (CA–29). PETE STAUBER (MN–08).
STEPHEN LYNCH (MA–08). DON YOUNG (AK–AL).
DONNA E. SHALALA (FL–27). A. DONALD MCEACHIN (VA–04).
SUZANNE BONAMICI (OR–01). MIKE ROGERS (AL–03).
J. LUIS CORREA (CA–46). JOHN RUTHERFORD (FL–04).
HENRY CUELLAR (TX–28). AL LAWSON, JR. (FL–05).
MARCIA L. FUDGE (OH–11). ALCEE L. HASTINGS (FL–20).
BARBARA LEE (CA–13). JAIME HERRERA BEUTLER (WA–03).
BRENDA LAWRENCE (MI–14). ELAINE G. LURIA (VA–02).
RICK LARSEN (WA–02). STEVE COHEN (TN–09).
FREDERICA WILSON (FL–24). SALUD CARBAJAL (CA–24).
JUAN VARGAS (CA–51). DAVID N. CICILLINE (RI–01).
STEPHANIE MURPHY (FL–07). LUCILLE ROYBAL-ALLARD (CA–40).
SUZAN DELBENE (WA–01). EARL L. ‘‘BUDDY’’ CARTER (GA–01).
TOM GRAVES (GA–14). NANETTE DIAZ BARRAGÁN (CA–44).
FILEMON VELA (TX–34). SUSAN A. DAVIS (CA–53).
JOE CUNNINGHAM (SC–01). ADRIANO ESPAILLAT (NY–13).
MIKE KELLY (PA–16). JOHN P. SARBANES (MD–03).
CEDRIC RICHMOND (LA–02). ANTHONY GONZALEZ (OH–16).
PRAMILA JAYAPAL (WA–07). JENNIFFER GONZÁLEZ-COLÓN (PR–AL).
EARL BLUMENAUER (OR–03). C.A. DUTCH RUPPERSBERGER (MD–02).
DENNY HECK (WA–10). ROBERT C. ‘‘BOBBY’’ SCOTT (VA–03).
BRADLEY BYRNE (AL–01). BRENDAN F. BOYLE (PA–02).
SCOTT PETERS (CA–52). HENRY C. ‘‘HANK’’ JOHNSON, JR. (GA–
ALBIO SIRES (NJ–08). 04).
JUDY CHU (CA–27). DAVID P. JOYCE (OH–14).
BILL HUIZENGA (MI–02). CONOR LAMB (PA–17).
VICENTE GONZALEZ (TX–15).
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Mr. LOWENTHAL. You know, I have been talking to many of the
terminal operators in my district and other districts, and it is the
same issues—issues of cleaning supplies and issues of PPE and
work hours to adjust to safety issues.
And I would like to respond to, I think it was, earlier, Represent-
ative Larsen’s—in my district, the Port of Long Beach and, in my
adjacent, the Port of L.A., they have adjusted the gate hours
portwide to allow cleaning between crews that come in. And so, you
know, our ports are open 16 hours a day, and, typically, they
backed up one to another, but now they have adjusted those port
hours to separate them. And I think that is one of the kinds of pro-
tective measures that will continue in the future, along with oth-
ers, about how people congregate and separate people.
We have known that—my questions have to do with the financial
strains that are on terminals and port authorities. And I have
pressed Congress and the administration to take steps to aid ports
like opening up municipal lending facilities to port authorities.
So my first question is to Mr. Connor. What kind of impact
would that have for ports across the country if they had access to
zero- or low-interest Federal loans to help them make bond pay-
ments, maintain their payrolls? What issues are port authorities
seeing with Federal loan facilities?
Mr. CONNOR. Thank you, Congressman Lowenthal.
So I think as Chairman DeFazio mentioned in his opening re-
marks, you know, the ports, the way that the CARES Act was writ-
ten, have found themselves in a place where, unfortunately, they
have nowhere to turn. That is partly due to the unique governing
natures of ports, whether it is city-, county-, or State-based, and
the various governing structures that exist and partly based on the
interpretation by the Fed of what the eligibility was for the MLF
fund.
If that would be a desirable outcome, sir, if those funds could be
made available to port authorities, I think our preference is very
much in line with what I requested in both my written testimony
and our oral testimony, which is the grant-in-aid, but, certainly, to
have that access to MLF would also be a good outcome.
Thank you.
Mr. LOWENTHAL. Ms. Brand, can you elaborate—I was interested
in your comments about abandoned cargo piling up at port termi-
nals. Do you see that affecting the congestion that is taking place
and also revenues of terminal operators?
Ms. BRAND. Thank you for that question.
I did state it is 1.5 percent right now of volumes. And it is on
the west coast; it is a phenomenon on the west coast. So, no, it is
not impacting space as yet, but we are watching and we are moni-
toring.
It does require its own area, and it does become a claim issue
when the container is abandoned by the company. The marine ter-
minal operator contacts the ship line that delivered it, and it be-
comes something that the ship line has to resolve with who owns
that cargo and who gets access to it.
So we are monitoring it. It is something that is a sign, and we
are watching the signs.
Mr. LOWENTHAL. Thank you.
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59
I also would like to respond to Representative Garamendi. Thank
you for reminding me about your legislation. We will see about get-
ting on that right away.
Thank you, and I yield back.
Mr. MALONEY. I thank the gentleman. And we thank him for his
patience with the technology issues.
That concludes, I believe, the first round of questioning. We do
not plan to do a second round of questioning, but, at this time, I
would allow Mr. Gibbs to request a second round.
Or, if you have other Members, Bob, who I am not seeing.
Mr. GIBBS. I am fine. I think we are good. I don’t think there are
any other Members on, are there? I can’t tell.
Mr. MALONEY. I don’t believe so.
And if there are any Democratic Members who wish to ask a sec-
ond question, we could certainly permit that at this time.
But seeing none, for purposes—and I am pretty sure I know the
answer, but for purposes of a clean record, and despite—let me just
take 30 seconds to ask each of our witnesses for a short answer on
the record.
Despite the leadership of Chairman DeFazio and some of us who
feel very strongly about a direct assistance, maritime-specific as-
sistance to address COVID–19 needs, it is pretty clear, though, to
a lot of us that the CARES Act, despite the many critical things
it did, fell short in this area.
So, for each of the witnesses—and a simple ‘‘yes’’ or ‘‘no’’ would
do—would you confirm that you support dedicated maritime-spe-
cific assistance to address the COVID–19 pandemic?
Mr. CONNOR. Chris Connor, AAPA. Absolutely.
Ms. BRAND. Lauren Brand, National Association of Waterfront
Employers. Yes, sir.
Mr. EBELING. Eric Ebeling for USA Maritime. Yes. Thank you.
Ms. CARPENTER. Jennifer Carpenter——
Mr. ROBERTS. Mike Roberts—oh, Jennifer, you go.
Ms. CARPENTER. Sorry, Mike.
Jennifer Carpenter, American Waterways Operators. Yes, sir.
Mr. MALONEY. Mike?
Mr. ROBERTS. Mike Roberts, American Maritime Partnership.
Yes, sir.
Mr. MALONEY. Well, I appreciate that and the crispness of those
responses.
And seeing no further questions from the Members, just a short
bit of housekeeping, and I will release you to your weekends.
I would ask unanimous consent that the record of today’s hearing
remain open until such time as our witnesses have provided an-
swers to any questions that may have been submitted to them in
writing, particularly those that may have been lost due to technical
issues.
I would also ask unanimous consent that the record remain open
for 15 days for any additional comments and information submitted
by Members or witnesses to be included in the record of today’s
hearing.
Without objection, so ordered.
If no other Members have anything to add, with thanks to all of
our witnesses, this subcommittee is adjourned.
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[Whereupon, at 2:41 p.m., the subcommittee was adjourned.]
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SUBMISSIONS FOR THE RECORD
Prepared Statement of Hon. Sam Graves, a Representative in Congress
from the State of Missouri, and Ranking Member, Committee on Trans-
portation and Infrastructure
Thank you, Chairman Maloney.
The U.S. economy is heavily dependent on international trade, and our agricul-
tural exports are a foundation of the economy in the Midwest.
Most of the public discussion about the impacts of the COVID–19 pandemic on
ports and the supply chain has been about container shipping and large coastal
ports. That’s important of course, but I’m also concerned about the associated re-
strictions and market impacts on agricultural commodities shipped either by con-
tainer or by bulk.
I look forward to hearing from the witnesses today about whether COVID–19 has
caused restrictions which have either reduced consumer demand for U.S. agriculture
products or made it more difficult to ship these products domestically or internation-
ally.
If problems do exist, I’m interested in hearing the witnesses’ suggested solutions.
Chairman Maloney, thank you for having this important hearing today, and for
leading our Committee’s first virtual hearing.
Æ
(61)
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