MARK H. BUZBY
HOMELAND SECURITY SYMPOSIUM
CHRISTOPHER NEWPORT UNIVERSITY
FERGUSON CENTER FOR THE ARTS
NEWPORT NEWS, VA
FEB. 8, 2018
Good morning. . .
Thank you Dr. Busch for that introduction. . . It is my privilege to serve as the maritime administrator… and today i represent my hardworking team at the Maritime Administration and secretary of transportation Elaine L. Chao.
I have been looking forward to this important and timely meeting of stakeholders and leaders in the security and maritime industry. The stakes surrounding our nation’s homeland security and national defense have never been higher.
This morning, I hope to provide you an update on the state of the U.S. Merchant Marine’s role in the nation’s homeland security, and the Maritime Administration’s response to growing cyber-security and piracy threats impacting our industry.
Our primary responsibility at MARAD is – number one — to ensure that the U.S. merchant marine, which carries all the food, fuel, and sustainment supplies for the United States military, is up to the task at the drop of a hat. That translates into making sure we have enough fully equipped, modern vessels and enough highly-trained, fully-qualified mariners to meet our military sealift requirements in times of conflict and crisis.
That’s the most important part of my job, and it is MARAD’s fundamental mission. This goes hand in hand with maintaining a strong, resilient marine transportation industry, which we all know is vital to keeping America competitive, profitable, and moving forward.
The two feed off of each other; we need to maintain a strong, well-trained and equipped U.S. Merchant Marine for our national defense and homeland security. And we need a strong national maritime industry in order to sustain a strong U.S. Merchant Marine.
Unfortunately, we are living in a time when the U.S. flag commercial fleet has shrunk to unprecedented low levels — quite likely the lowest in modern history.
That’s troubling enough, but what’s more concerning is that this has led to critical loss of jobs – and job opportunities — among those fully-qualified, licensed mariners we need to operate these vessels in peace – and in war-time.
Today, of some 41,000 [i]large deep-sea merchant ships of 1,000 gross tons or larger in the world’s registries, only 82[ii] are U.S.-flag ships in international trade. That is distressing.
This number is down from 183 large,[iii]oceangoing international U.S.- flag vessels in 1992.[iv] That represents the loss of a quarter of our fleet! The decline in ships has caused a domino effect leaving us 2,000 short of the American merchant mariners needed, with the unlimited ocean licenses required to operate the large oceangoing vessels we would use in an international military conflict.[v]
That means that today we have about 11,000 U.S. mariners[vi] with unlimited credentials to operate these ships. Yet to crew our U.S. flag fleet in an extended crisis we’ll need well over 13,000, at a minimum.[vii]
Needless to say, without sufficient mariners to crew all of the sealift fleet, including our 61 government surge sealift assets, we simply cannot globally project and sustain our armed forces. We will cede our asymmetric advantage over every other country in the world, which is our ability to project and sustain combat power anywhere in the world.
We call it the away game, the ability to prevent a major conflict from landing on our shores. So, as you can see, this is a huge concern for our nation’s security.
It’s also a very complicated economic problem that we are working hard to solve in ongoing meetings with Congress and the White House. One thing is for certain — we need to shore up our mariner shortage.
There is a formula that has proven effective in protecting and bolstering the U.S. merchant marine – we call it the “Three Pillars,” and as Maritime Administrator I am working to champion all three. In the run up to my confirmation hearings I met with many of the senators and staffers on the Commerce, Science and Transportation Subcommittee who each grilled me on my priorities for MARAD.
At the top of my list was defending, and advocating for these Three Pillars — the Jones Act, our Maritime Security Program and Cargo Preference, all three of which – working together – help to keep our U.S. flag fleet in business so that we have enough mariners to sail in a crisis.
Most everyone in this room understands that the Jones Act is a backbone of the nation’s maritime industry.
Let me be clear —the Jones Act is not primarily an economic measure, nor is it primarily a trade measure. The Jones Act is fundamentally about defense and security. And it works. We need the Jones Act, and as Maritime Administrator, protecting and even strengthening it will continue to be a priority objective of mine moving forward.
MSP and Cargo Preference
The two other pillars of our merchant marine that require constant vigilance are the Maritime Security Program and Cargo Preference. Working together with the Jones Act, they help ensure the survival of the fleet.
MSP currently provides $5 million in stipends for the 60 vessels enrolled to be on call in the U.S.-flag fleet.[viii] This helps them offset the higher costs of operating under the U.S. flag compared with, often, far cheaper international competitors. It was fully funded again in FY 18, which is great news for our fleet.
We are now working with USTRANSCOM and industry stakeholders on the next version of MSP to ensure it provides us the right kind of ships needed for military sealift.
As for Cargo Preference, my staff has been involved for weeks in discUSSions with the White House staff regarding the proper percentage needed. Currently it stands at 50% for government cargos[ix] – and we’d like to see more — as would others.
But there are also those who’d like to see it go away all together. So that dialogue continues, and, with our secretary’s backing, MARAD is making our voice heard.
We will continually echo the message that all Three Pillars are necessary to maintain a strong, resilient U.S.-flag domestic and international fleet, that enables us to employ enough fully qualified and licensed mariners to crew them.
The Three Pillars allow us to take care of our mariners in peace time, so they are available in war-time. Honestly it’s a message that can’t be repeated too much. Our national defense and homeland security depend on all three working and thriving. And at present, they aren’t.
This is a huge concern for our national security. The economics of flying the U.S.-flag are simply making it difficult for American shippers to make a profit, compared with our less expensive foreign competitors.
And it has robbed us of the qualified mariners we need to sustain an extended engagement overseas. The public at large doesn’t get it, because in 2018 our ships, ports, and mariners are out of sight and out of mind.
Technology and cyber threats
At the same time, the technological challenges and cyber threats to our maritime industry are growing by the day.
The young mariners I’m talking about — the next wave of our merchant marine — need to step into this fast-evolving world with the right training and expertise. This demands that we adopt new training curricula at the nation’s maritime academies, union training schools and other maritime training institutions.
We cannot continue to cede technological advantages and market share to our international competitors.
The recurring concerns you hear raised regarding cyber threats are the ability to protect safe navigation and ship-handling, as well as to ensure seamless, resilient operation of the maritime transportation system.
The recent collisions at sea of manned ships like USS John S. Mccain and USS Fitzgerald this past summer — not to mention many other commercial ships throughout the year — sadly illustrate that it’s fairly easy to join two pieces of metal violently at sea.
As we enter the age of autonomous, unmanned vessels, we must as an industry quickly adapt, or ignore these innovations and risk being marginalized, or worse.
We’ve dealt with incidents related to hackers attempting to gain information or access to ships’ software or security systems via the internet. The results could have been disastrous.
This past July of 2017, a ransomware cyber-attack shut down a number of Maersk’s terminals and halted their ability to move cargo. It attacked their I.T. business systems and container terminal operating systems, and they couldn’t load their ships for two weeks. It reportedly cost Maersk $300 million.
The truth is, the maritime domain has only recently begun addressing what other industries have been spending multiple millions of dollars annually to prevent – sophisticated cyber-attacks.
We are still far behind in addressing these threats. A number of organizations, such as the American Bureau of Shipping, among others, are developing best practices for industry-wide cybersecurity practices. These efforts are helping us better identify cyber threats and vulnerabilities. It’s important work!
At the Maritime Administration, our role is to serve as a clearing house facilitating strategic connections and communications between government and industry to address these problems.
Our Office of Maritime Security, as well as our website, offer a wealth of information about resources and networks to help assess your cyber-threat risks and find solutions to address them.
Perhaps the best advice we can offer is something that has been counter-intuitive and slow in coming to the maritime industry.
And that is to adopt the kind of effective data and information sharing relationships – even between competitors – that we see in practically every other major industrial sector.
Compile, assess, and share your threat information, because if they hit one of you, chances are they will hit all.
We need to be actively communicating with one another to protect the industry from cyber-attacks.
MARAD’s Office of Maritime Security works with the National Security Council staff, the U.S. Coast Guard, our partners within the Department of Homeland Security, and all of our maritime industry stakeholders. We help them keep close tabs on the unique cyber-security challenges and needs of the U.S. maritime industry.
We consider it a growing part of our mission to make our U.S. maritime industry partners aware of major cybersecurity threats, cybersecurity resources and cybersecurity best practices. So use us.
We have found that sharing cyber threats, cyber incidents and cyber resources between companies is required for effective threat awareness and mitigation.
Other critical infrastructure sectors in the U.S. do this very well. Even corporate competitors use anonymous – but shared — reporting mechanisms to alert one another to possible cyber-attacks through Industry Operated Information Sharing and Analysis Centers and Organizations (ISACS and ISAOS).
Maritime clearly has unique challenges. The GPS receivers we use to navigate our vessels are specific to the maritime industry. They are often orders of magnitude higher technically than other industries, making it harder to identify and understand vulnerabilities and risks.
You simply can’t apply the same models to maritime that work widely for other platforms.
The signals broadcast from the maritime GPS satellite constellation to GPS receivers on the ground, for example, are relatively weak. They are susceptible to interference and very vulnerable to cyber threats.
At MARAD we recognize that, while we can’t possibly defend against all threats around the globe, we can help industry identify known vulnerabilities, implement resilient processes, backup and recovery systems, and then put them into practice.
If you were to ask me, on a scale of one to ten, where we are in cyber-preparedness, I’d say a two or a three.
Again, I see our biggest assets as being the excellent young mariners coming into the industry from Kings Point and state maritime academies across the nation.
The academies are adding more cyber-related curricula and our young mariners are entering the workforce more literate than their predecessors. They better understand the technical challenges and cyber threats arrayed against our industry.
So in addition to employing enough mariners to man our U.S.-flag vessels, we urgently need them to have the technical know-how to deal with today’s threats.
Of course piracy remains a significant threat in certain hot spots globally. After a very bad few years of ship hijackings and ransoms, new industry counter-piracy “best management practices” have proven effective in reducing the piracy threat around the world. This includes the use of privately contracted armed security teams.
MARAD serves as a standing member of the U.S. government’s Counter Piracy Steering Group.
We work closely with the departments of state, defense, and homeland security, along with the intelligence community.
We also work closely with our international maritime security partners and other industry stakeholders to develop and advocate for effective counter-piracy measures and ensure that pirates are held accountable for their crimes.
This problem is likely to be with us for some time and we need to be diligent in reducing the risk to life, property, and cargo.
Finally, MARAD is also a participant in the federal government’s “Maritime Security Communications with Industry” (MSCI) alerts and advisories system.
This system, managed by the global Maritime Operational Threat Response (MOTR) Coordination Center, with assistance from the National Geospatial-Intelligence Agency (NGA), transmits alerts and advisories to ships at sea.
It helps to keep maritime industry stakeholders advised of maritime security threats as quickly as possible, and provides real-time recommendations to vessels through emails, NGA broadcasts, and online.
So that is an overview of how MARAD sees and responds to the major threats to our homeland security.
It’s a challenging environment that is getting more complex and demanding by the day. But maintaining a strong U.S. merchant marine, working together, sharing information on cyber security and other threats, and developing and adopting best maritime practices is the key.
I’m happy to answer questions. Our director of MARAD’s Office of Maritime Security, Cameron Naron, is also here with me today. He can also answer any questions you might have. Thank you again for having us today.
[i] MARAD Merchant Fleet of the World 2016
[ii] MARAD Testimony before the COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE SUBCOMMITTEE
ON COAST GUARD AND MARITIME TRANSPORTATION 1/17/18
[iii] MARAD Testimony before the COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE SUBCOMMITTEE
ON COAST GUARD AND MARITIME TRANSPORTATION 1/17/18
[iv] MARAD Testimony before the COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE SUBCOMMITTEE
ON COAST GUARD AND MARITIME TRANSPORTATION 1/17/18
[v] MARAD (Joel Szabat) written response to Bloomberg 12/11/18
[vi] MARAD (Joel Szabat) written response to Bloomberg 12/11/18
[vii] MARAD (Joel Szabat) written response to Bloomberg 12/11/18
[viii] MARAD FY 2017 Budget Enacted https://www.transportation.gov/sites/dot.gov/files/docs/mission/budget/281151/marad-fy-018-cj-budget.pdf
[ix] Code of Federal Regulations