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JUNE 13, 2018

Good evening, and thanks for inviting me.  Great to be with you all this evening.  It’s always a pleasure to break bread with the Navy League.

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.   Tonight I have grave concerns about our ability to meet the nation’s sealift requirements for a prolonged military engagement.

That mission’s success requires a healthy maritime industry supporting enough ships and employing enough mariners to maintain an adequate surge sealift fleet.

In the past our nation has been able to project U.S. military power across the ocean through an extensive global, intermodal maritime network.

But the shrinking number of vessels in the U.S. Merchant Marine, and the impact it’s having on our pool of qualified mariners, puts us at the edge of not having enough people to support our powerful military.

Our battle groups will get out to sea in a conflict, but without the food, fuel, water and supplies carried by our commercial U.S.-flag fleet, their ability to sustain the fight will be counted in days.  They’ll be a “shoot and done” – because it’s a hollow force without the U.S. Merchant Marine providing sustainment.

Today the U.S.-flag presence in international commercial trade is at an historic low level. 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.
In the area of mariners, my greatest concern is for crewing up the 99 large Jones Act ships, and the 82 U.S.-flag ships still sailing internationally that require mariners with unlimited ocean tickets.

Out of those 181 ships comes the pool of mariners that we have to rely on to man our peacetime fleet, but also to be able to man my 46 surge sealift Ready Reserve Force assets and 15 more from MSC. And for that I would tell you that, as we speak, I am 1800 people short to support an extended mobilization. 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 load up our ships and sail off. But in the next campaign we’re more than likely going to have to do all that while being challenged on the way over.

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, and will have to be re-trained, in some instances, on how to use paper charts and navigate without radar, or even re-learn how to navigate by the stars.  Many ships and crews don’t use those techniques anymore.

We once had pretty much unfettered access to the sea lanes, but no more. Our adversaries know that logistics is our asymmetric advantage – but also 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.

Those foreign ships that balked cost us 34 transit days in the midst of trying to supply our troops. Of course our U.S.-flag vessels worked round-the-clock, faithfully, dependably delivering the goods.

I’ve been working closely with USTRANSCOM, military sealift command, the Coast Guard, and maritime industry partners to address these issues.

As my friend General Darren Mcdew, Commander of U.S. Transportation Command, recently testified before Congress, “Our nation is at an inflection point, and we must evolve to remain viable in the future.”

But what hasn’t changed is that 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.

Our national defense strategy requires the ability to deploy a decisive military force, but if we can’t project and sustain that power, the size and lethality of that force means little.

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.

In today’s complex and volatile security environment, our past successes do not ensure future success. Our domain dominance is no longer a given.

We must now plan for direct multi-domain attacks, cyber warfare, blockades to combat zones and compromised logistics support. And we must plan for attrition within our merchant sealift fleet.

Folks, this is now our reality, and 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 getting 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 currently 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. MARAD and USTRANSCOM are reviewing the MSP program 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. I’ll just say that since I’ve come on board at MARAD, it has come under attack like never before.

My primary mission that I’ve discovered over the past 10 months as administrator has been education: trying to explain how all of our maritime programs work, and how knickering with one will cause irreparable harm to many others.

The loss of the Jones Act would have a devastating effect on domestic shipyards and vessel operators, and will immediately result in a degradation to our military’s readiness.

More concerning is the impact eliminating the Jones Act would have on our mariner pool. As I mentioned, we have 82 deep draft ships in international trade, as well as 99 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. It’s why our merchant marine flag says: “In peace and war.”

The strong support and loud voice of the Navy League in this area is so crucial to getting our message out there.

I thank you for that support and for being one of the very few organizations that truly “gets it” when it comes to the role of our sealift forces and U.S.-flag merchant marine in our national defense.

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

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

Updated: Monday, November 19, 2018