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MAY 2, 2018

Good afternoon and thanks for having me here today.

The United States of America is a superpower because of our global influence and ability to project power around the world at a moment’s notice. This ability was built in large part on the strength of our maritime industry, and in the eight months since I’ve been on the job, the U.S. Merchant Marine has made its influence felt around the globe.

When hurricanes ravaged Texas, Florida, Puerto Rico, and the U.S. Virgin Islands, the U.S.-flag commercial fleet answered the call with immediate support of federal relief and recovery efforts.

Between hurricanes Harvey and Maria, MARAD dispatched four of its vessels to locations in Texas, Florida, and the Caribbean, including Puerto Rico, providing thousands of berthing nights and meals to recovery teams.

And in spite of what some in the media were saying, our Jones Act fleet had cargo, food, water, and other supplies stacking up and waiting to be off-loaded at the Port of San Juan at almost the instant that hurricane passed. Our fleet and crews stood tall in that crisis, delivering life-sustaining resources on time and under the most trying of circumstances.
That all happened within the first few weeks I was on the job, and things haven’t really slowed down since.

So let me pause here to share some good news. Four weeks ago MARAD received its largest budget in history. At $979.6 million for fiscal year 2018, it’s nearly a half-a-billion-dollar increase over our 2017 budget.

Within that, congress provided $300 million dollars this year to build a new training ship for Suny Maritime College. This will be a new class of National Security Multi-Mission Vessel to bring our training operations up-to-date and prepare our young mariners for the 21st century. And more good news — it’s going to be built in a U.S. shipyard.

Congress also provided $45 million in funding for capital improvements at the U.S. Merchant Marine Academy – an increase of $34 million over FY 2017.

And our state maritime academies received $32 million for a range of important programs — an increase of $3 million over FY 2017.

These funds will go toward training the young mariners who will serve our military, strengthen our national security, crew our commercial shipping industry and serve the U.S. Merchant Marine in the years ahead.

Another $289.3 million in funding to MARAD from the Department of Defense in FY 2018 will allow us to begin service-life extensions of the 46 vessels in our Ready Reserve Force. This is the fleet that provides the bulk of our government-owned surge sealift capacity, and many have reached the end of their service life.

So we’ve had some encouraging developments. But now for a dose of reality. Suffice it to say I have concerns about our ability today to meet the nation’s sealift requirements for a military engagement.

In wars past we have been able to play what was known as the “away game,” able to keep the fighting away from our shores by projecting U.S. military power across the ocean through an extensive global, intermodal maritime network.

But because of the shrinking number of vessels in the U.S. merchant marine, and the impact it’s having on our pool of qualified mariners, we’re at the edge of not having enough people to support this great military we’re preparing to recapitalize.

Our mighty battleships will get out to sea in a conflict, but without the food, fuel, water and supplies carried by our commercial U.S.-flag fleet they will only last five-to-seven days. They’ll be sitting dead in the water – because it’s a hollow force without the U.S. Merchant Marine providing sustainment.

At MARAD our primary mission is to ensure that we have enough U.S.-flag ships and mariners to serve our nation’s commercial and military sealift requirements. That depends on a healthy maritime industry supporting enough ships and employing enough mariners to maintain an adequate surge sealift fleet.

Unfortunately, the U.S.-flag fleet in international trade currently carries less than 2 percent of our annual foreign trade. It has been in steady decline since World War II as a result of decreasing demand and rising costs compared to international fleets.

Today the U.S.-flag presence in international commercial trade is at an historic low level with only 81 ships. This means the pool of qualified mariners needed to crew a prolonged sealift mobilization is also at an historic low. MARAD recently estimated a shortfall of 1,800 mariners for a long term sealift effort.

And even if we somehow made that up, it still might not be enough.

In today’s modern military, our merchant marine will almost certainly be operating in a contested environment. It’s no longer business as usual. In past campaigns, we’d crank up our ships, load them up and sail off. But in the next campaign we’re going to have to do all that while getting shot at on the way over.

And we’re living in an age of rapidly advancing technologies that have the potential to greatly impact our operations. MARAD has issued several maritime alerts of late about GPS interference resulting in jammed, lost or otherwise altered GPS signals affecting bridge navigation and other communication equipment.

Mariners in a contested environment will have to cope with this kind of interference. They will have to be re-trained, in some instances, on how to use paper charts and navigate without radar, or even navigating by the stars.  Most ships and crews don’t use those techniques anymore.

And administratively we’re only just beginning to grapple with how this new environment is going to impact our U.S.-flag fleet. I’m talking about war risk insurance, disability and worker’s comp – among other factors — for these ships and mariners sailing in contested sea lanes.

We once had pretty much unfettered access to the sea lanes, but no more. Our adversaries know that logistics is our Achilles heel.

If a conflict breaks out and we start losing ships, we’re going to need even more ships and more mariners than the 1,800 I mentioned previously. Where will those come from? That’s what we’re working hard to try and figure out.

Let me just say that if the fleet continues to lose ships and qualified mariners, a lengthy, mass deployment could require U.S. forces to rely on foreign-flagged ships.

And if history is any indication, that’s not a winning formula. During operation desert shield in 1991, for instance, DOD had to employ 177 foreign vessels to meet sealift needs. This was in addition to approximately 170 U.S.-flagged vessels.

But when it counted most — at the point of delivering critical supplies to our troops — thirteen of the foreign vessels either hesitated or refused to enter the area of operations. Meanwhile, U.S.-flagged ships provided steady, reliable support.

But those foreign ships that balked cost us 34 transit days while trying to supply our troops.

These challenges keep me up at night. I’ve been working closely with the USTRANSCOM, the Military Sealift Command, the U.S. Coast Guard, and maritime industry partners to address these issues. There are no silver bullets or easy answers.

As my friend General Darren McDew, commander of the United States Transportation Command, recently testified before congress, “Our nation is at an inflection point, and we must evolve to remain viable in the future.”

He detailed how volatile geopolitics, shifting demographics, and emerging technologies are changing the character of war. And changing the way we fight, why and where wars are fought, and who is fighting them.

Even so, when the United States goes to war, USTRANSCOM moves 90 percent of its sustainment cargo with the combined strategic sealift force of MARAD’s government-owned ships and the commercial U.S.-flagged fleet.

Deploying a decisive military force is foundational to the national defense strategy, but if we can’t project and sustain that power, the size and lethality of that force is of little consequence.

That is why General McDew has stated, and I quote: “the readiness of the entire strategic sealift portfolio, both organic and commercial, remains the top priority of USTRANSCOM.” Let me repeat – General McDew has said it’s his top priority.

We’re living in the most complex and volatile security environment in recent history. And our past successes do not ensure success tomorrow.

I commanded powerful battleships during my 34-year navy career, and I agree with General McDew’s opinion that we have taken our “domain dominance” for granted for many years.

But that dominance is no longer a given. Our U.S. military and the U.S. Merchant Marine must now plan for direct multi-domain attacks, cyber warfare, blockades to combat zones and compromised logistics support. And we also have to plan for attrition within our merchant sealift fleet.

In its recent wargames and summits, USTRANSCOM found that adversaries can gain strategic advantage from cyber-attacks alone — meaning an enemy no longer has to stop us with bombs or bullets; they can do it with ones and zeroes through cyberspace.

Gentlemen, this is now our reality, and I don’t have to tell you we’re behind the curve compared with many of our fiercest competitors and potential adversaries.

We must quickly grow and adapt, invest and recapitalize, because the joint force’s ability to accomplish its mission is impossible without the U.S.-flagged fleet escorting them to the fight.

Here’s the bottom line. To ensure we have enough mariners and U.S.-flag vessels to meet our national security objectives, i have three tools at my disposal. They are the Maritime Security Program, or MSP, Cargo Preference, and the Jones Act.

The MSP has been fully authorized for the remainder of fiscal year 2018, which is great news. But MARAD and USTRANSCOM are reviewing MSP this year to ensure that the program’s next evolution truly addresses the new realities of national defense.

We continue to advocate for robust Cargo Preference levels to help U.S.-flag commercial shipping companies compete and employ an adequate pool of qualified mariners.

And the Jones Act is, of course, essential to the health of the U.S. maritime industry.

Since I’ve come on board at MARAD, it has come under attack like never before. Let’s just say the loss of the Jones Act would have a devastating effect on domestic shipyards and vessel operators, and would be an immediate threat to national defense.

More concerning is the impact eliminating the Jones Act would have on our mariner pool. As I mentioned, we have 81 deep draft ships in international trade, as well as 100 large Jones Act ships.

That means the mariners manning our large Jones Act ships make up a larger percentage of the available mariner pool than our international ships do. Take away the Jones Act and you’ve more than halved the amount of mariners available to man our sealift ships.

It comes back around to cargo, strategic planning, and investment. Our U.S.-flag fleet has got to have enough freight to carry to justify having more ships to carry it and provide a place for these mariners to work. That’s why our merchant marine flag says: “in peace and war.”

We need a strong merchant marine serving our economic needs in peacetime so that it can also do double duty as this country’s dependable ride to battle.

The stakes involved for our nation are incredibly high. We are doing everything we can to support and strengthen the three pillars. And my colleagues and i at MARAD continue to educate both our stakeholders and the public on the significance of these issues to our national security.

All of the pieces fit together. Lose one component and it can drag down a host of others. If we can’t reverse the dwindling size of the U.S.-flag fleet, we’ll have to reassess our approach and rethink policies of the past to cope with an increasingly volatile future.

Actions we take today to improve readiness and modernize our fleet must be adequate to strengthen and solidify our stature as a preeminent global military power. Anything less puts our nation at grave risk.

Thank you, and I’m happy to answer any questions.

Updated: Monday, November 19, 2018