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OCT. 23, 2018

Thanks Andy.

Good morning, it’s great to be with you all here at the fall meeting.   As someone who’s had a little bit of experience planning and organizing this event in the past, Andy I’ve got to tell you that you and the NDTA staff – and the TRANSCOM staff – continue to exceed the bar every year.  You’ve put together a great line up again this year.  Well done.

When Andy called late last week and said: “Hey Buz, we’ve had a change in the schedule for Tuesday morning, can you help fill in?” I of course said sure no problem – you want me to be like a substitute teacher?   He said “yeah” So thinking about it – what do substitute teachers usually do?   Show a movie, right?

So I’ll show you a movie in a few minutes.

So I’ve been the maritime administrator for almost 15 months now, and I’ve gotta tell you that I have not had one day where I was bored at the end of the day!

It started with three major hurricanes back to back to back right after I took over last August, and hasn’t let up very much since.

I came into the job with a pretty good understanding of sealift and the important role it plays in the joint deployment and distribution enterprise.  But given the opportunity to dive into the nuts and bolts of it a bit deeper, I’ve gotten some additional education.   I’m not to John Kaskin’s doctorate level yet – but I’m getting smarter.

What has sort of crystalized for me over these past months is that things are beginning to change in a big way in the sealift world, – some good, some not as good – and there are some big decisions looming ahead.

Those decisions are on both sides of the sealift equation – the organic government fleet and the commercial fleet as well.

So the theme for this year’s meeting: “delivering readiness and resiliency in an unpredictable world” I think has particular applicability in the sealift area.

On the commercial side, our 60-ship maritime security program provides reliable access to militarily-useful us flag tonnage, and the global logistics and distribution networks they operate in, day to day.  Just as important are the highly skilled mariners who crew those ships and provide a source to man the government owned sealift fleet.

The MSP is authorized by congress out to 2025, and that’s not so far off, so we need to work with industry now to lay-out what the next generation of MSP should look like in terms of capacity, capability, ship type, and terms of participation.  We also need to acknowledge that the cost differential is only getting larger between us and foreign flag ships – now averaging $6.7 m per year.  That work has begun alongside our industry partners, and TRANSCOM.

We have a nearer term cliff approaching in 2022 when the current $5 million a year MSP stipend slips back to $3.7 million.  Clearly that needs to be addressed, and is on our scope.

We also need to be looking at the role cargo preference plays going forward, along with MSP, to ensure that we have a viable peacetime fleet that will be there if we call upon them in times of crisis.   We’ve heard it loud and clear from industry that cargo – not just stipends – are necessary to make this work.

The government sealift fleet – as we all know – is not getting any younger with an average age of 43 years, and the cost of maintaining this antique fleet is skyrocketing, and must be recapitalized soon.

I had to make the difficult decision to take a ship out of class a few months ago because I could not afford to dock her for the repairs she needed, and had to apportion the funds to higher priority ship maintenance.  Admiral Mewbourne at MSC is facing similar challenges with his 15 sealift ships.  Many of the operating companies sitting in this room are dealing with it firsthand every day.

The plan that navy has come with to deal with our recapitalization is called “sealift that the nation needs” and has three parts:

  • Invest in service live extensions for certain ships out to 60 years old,
  • Acquire a number of used vessels– (26) based on guidance from USTRANSCOM and Navy (2021-31)
  • New construction (18)- (fy28)

I won’t go into all of the details of the plan here, but funding across the period of the plan comes at a time when the navy will be challenged with a number of high priority ship procurement programs such as replacing the Nimitz-class carriers and the Ohio-class ballistic missile submarines.  And there are others.   Big ticket stuff.    So there are some mighty big decisions ahead.

I think the silver lining to all this – if there is one – is that congress is paying attention, and so is the White House staff.  Certainly the GAO by virtue of their recent report on the condition of sealift shipping has gotten an eyeful too.

We’re also starting to see more articles and pieces in the press that are reporting on the razor thin edge of “readiness and resiliency” of the force to execute their mission.

I myself have been recently quoted regarding my concern that much of our sealift force may have to cross oceans without benefit of a full time naval escort.

I’m encouraged that at least getting the issue into the light of day will help move us toward action.  Though i can’t go into details yet, there are some options on the table that will help restore some of that readiness and resiliency.  It won’t be easy.

Ok– so after those somewhat sobering words, let me finish on a happier note, and try to tie this all together.  I did promise you a movie. Some of you have probably heard that MARAD is building a new ship – a multi-mission training vessel.

Let me introduce you to her: play video.

I show you this not only so you can see what NSMV is all about; but to talk about the way we are going to procure her.

We’re using a vessel construction manager to contract the ship for us with a us shipyard. It’s a novel approach which we think will save millions and deliver a ship on time and on budget.

Might have applicability or serve as a model for sealift replacement….?

MARAD’s broader mandate begins and ends with a single, distinct objective — which is to help ensure that our nation has the capacity to deploy combat equipment and supplies anywhere in the world on short notice… to surge and sustain our armed forces while they are in theater… and re-deploy safely when their mission is done

The U.S. Merchant marine and our maritime industrial base are absolutely vital to the national security and economic success of our nation.

With that, class, I’m happy to take a few questions. Thanks.

Updated: Monday, November 19, 2018