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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).
                                                                                                                                        (v)




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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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                                                                                                                  viii
                                                                  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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                                                                                                                                             ix
                                                                    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.




                                                                              ~   II   7   a   !II   10   f I   12   fl   1..t   1:1,   15   17   1&   19 20 21   Z2.   231   z.a   25 2'6 21 211 2!1       30


                                                                                                                                             -"·                                                ...
                                                                                                                                                                                             ·-
                                                                                                                                                                                                      ,~)



                                                                  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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                                                                                                                      2

                                                                     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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                                                                                                                      3

                                                                  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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                                                                                                                      4
                                                                                                             f

                                                                  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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                                                                                                                      5
                                                                                                             f

                                                                  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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                                                                                                                      6
                                                                  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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                                                                                                                      7

                                                                    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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                                                                                                                      10
                                                                  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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                                                                                                                      12
                                                                  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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                                                                   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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                                                                  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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                                                                                                                      56

                                                                    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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                                                                                                                      57
                                                                  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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                                                                                                                      58

                                                                     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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                                                                                                                      60

                                                                       [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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