MARK H. BUZBY
THE PROPELLER CLUB OF WASHINGTON, D.C.
PHOENIX PARK HOTEL
520 NORTH CAPITOL STREET, NW
OCT. 18, 2017
12:15 – 1:30 PM
Good afternoon, and thank for hosting me today. I bring you greetings from Secretary of Transportation Elaine L. Chao, someone we are very lucky to have as our secretary and a strong supporter of the maritime industry. We have already worked together very well on a number of urgent matters impacting our industry since we both came on board.
As I look around, I see many good friends, some of them of long-standing, who know my story. For those who don’t, let me just say that like the members of this organization, I am also a very determined and passionate advocate and champion for the maritime industry.
I was destined for the life of a mariner almost from birth – I was born and grew up a block from the Atlantic Ocean on the Jersey Shore. I’ve been around water all of my life.
My love of the sea, of ships, and of the mariners who sail them, inspired my 34 years in the U.S. Navy, the last four of those as commander of the Navy’s Military Sealift Command. It is also why when I was asked to serve as Maritime Administrator, I said “absolutely.”
My upbringing, my family, my career path, gave me a deep respect for our nation’s maritime history. I treasure it because I know how important it has been historically to the growth of our nation.
And I’ve seen firsthand how it continues to be absolutely critical to our national security and economic strength.
That was born out on my first month on the job. As we know, it has been pretty busy with four powerful hurricanes wreaking havoc throughout Texas, Florida, the Gulf Coast, and the Caribbean.
There has been a lot going on. It was a great way to get up to speed quickly. I’ll have some specifics to talk about in that area a little later.
I also managed to get up to visit Kings Point four times in the first month because I wanted to get all the stakeholders – MARAD, the Supe and his staff, the faculty, the alumni, the parents, and the midshipman – all focused in on the same way ahead.
I invited the alumni back on campus, and told the regiment outright that the sexual assault/sexual harassment issues were largely in their hands to solve. I’ve had some very good discussions with all involved and I think we have a clear understanding.
We were able to get $16 million reprogrammed to begin the overhaul of Samuels Hall into a state of the art simulation center. Stay tuned for more news coming forward. I’ve got this.
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 were all interested in my priorities for the organization.
Near the top of my list was ensuring the readiness of the Ready Reserve Force — a key part of USTRANSCOM’s ability to execute its wartime mission of deploying and sustaining our nation’s combat forces. The RRF is an essential security asset for the nation.
Along with the civilian mariners of the Ready Reserve Force, I am determined that, both ship-wise and crew-wise, that fleet must be ready to go when needed. And I believe that by and large it is today.
But it’s getting more difficult each year as those ships continue to age.
I was standing in MARAD’s command center a few weeks ago when the FEMA rep came to ask if we could help with hurricane relief efforts as Harvey threatened Texas. And I had complete confidence in saying, “no problem – what do you need?”
Those devastating storms understandably presented some stiff challenges, but i couldn’t be more proud of the U.S. merchant mariners who crewed our vessels during and following this year’s extremely busy hurricane season.
In the midst of those disasters we had more RRF vessels activated for critical missions than we’ve had in a long time, both for hurricane relief, for potential storm evasion, and for existing USTRANSCOM missions around the globe.
MARAD activated four vessels, three school ships – the T/S Kennedy (Mass), the T/S Empire State (NY), and the T/S General Rudder (Texas) — and the Marine Corps Aviation Support Ship Wright. Wright has been in St. Thomas for the past three weeks delivering relief supplies and serving as base of operations and berthing facility for first responders. She is due to depart tomorrow.
Kennedy and Empire State remain in San Juan, having offloaded their relief supplies. They are also providing a base of support for about 1200 first responders. To date more than 20,000 meals have been served aboard those vessels. It’s a good news story, and the schools are very proud of their contribution to the relief effort.
Another top priority I shared with the good senators was my strong belief in the necessity for the Jones Act.
Beginning just two days after Maria hit, U.S.-flag Jones Act ships began bringing cargo into Puerto Rican terminals faster than it could be distributed. We began building the “iron mountain.” And that was in addition to supplies that had already been brought in for contingencies prior to the storm’s arrival.
And yet, those same shippers were vilified in the press for delaying the flow of relief supplies, and the Jones Act was once again cast as the cause of all the suffering.
A waiver was granted – 10 days (which has since expired) owing to a finding by the department of defense that it was “in the interest of national security.”
In that circumstance, the department of homeland security was required to issue the waiver – MARAD has no say in the matter. The same series of events occurred in Florida following Hurricane Irma. In both cases, a very small number of foreign flag vessels ultimately carried cargo. In both cases, there was excess us flag capacity available.
As of the end of last week, the four U.S. companies providing service to Puerto Rico – Tote, Crowley, Trailer Bridge, and North American – were operating 24 Jones Act commercial, U.S.-flag vessels in that trade, bringing in much needed food, fuel, water, emergency and recovery supplies.
They served both FEMA’s cargo needs as well as the regular flow of needs for the economy – delivering goods from Walmart, Home Depot, other businesses and supermarkets. And they have capacity for more.
I watched Geraldo Rivera reporting from the shoreline near San Juan, talking about the devastation and the long lines and then saying: “But look out here; since the president waived the Jones Act, look at all the ships that are arriving now!”
He was pointing at one of Tote’s new Marlin Class container ships on its way in, and in the background was a triple-deck barge with “Crowley” painted on the side. Amazing….
Let there be no ambiguity that the U.S. Merchant Marine stood tall in this crisis and flexed. It did its job despite all of the accusations and false narratives being thrown about in this town and throughout the media.
My sense is still that — other than a few notable vocalists — Congress is still firmly behind the Jones Act. But we cannot, and should not take that for granted. Clearly there is a need to tell the rest of the story about the criticality of the Jones Act.
It’s not news to most in this room, but it is the backbone of our shipbuilding and repair industry, supporting 110,000 employees who add $9.2 billion in income to the U.S. economy annually.
The Jones Act annually generates $10 billion dollars in freight revenue and provides as much as $355 million in federal and state tax revenue. This industry and supply chain is the same one we depend on to build and repair ships for our Navy.
The Jones Act is responsible for over 38,000 on-the-water jobs, and for $4.7 billion in wages, salaries and benefits.
Unfortunately, very few outside of our industry understand it. But the military relies on these U.S. civilian merchant mariners to crew both the commercial and government cargo ships needed in wartime.
This is a national security issue!
Our entire system of military deployment and sustainment depends on a viable, qualified, sufficient pool of talent.
This is the heart of my message. Whenever i talk about the U.S.-flag merchant marine – I acknowledge that the hardware — the need for modern ships — is certainly important. But it’s the “people.”
We need people to crew these ships. And a study that we are just concluding for Congress shows that we are about 1200 mariners short of need for a full mobilization and sustainment.
Of course, all this is happening at a time when our nation is struggling just to keep enough ships in the U.S. Merchant Marine to employ sufficient numbers of qualified mariners to serve the nation’s defense and emergency-related sealift requirements.
Eighty-one deep-sea, internationally trading us flag vessels and 99 large Jones Act ships are what we are dealing with today.
The severity and duration of some of these most recent events underscores the importance of our national defense reserve fleet, Ready Reserve Force vessels, and maintaining an adequate pool of qualified, licensed mariners.
Moving forward, an important part of the equation will be recapitalizing some our aging RRF vessels, and acquiring funding for a national security multi-mission school ship.
Without replacement, we will not have — in the very near term — the empire state and the Kennedy to send to the rescue, or to serve as training platforms for cadets at mass or Fort Schuyler. We have to be thinking about Maine and Cal too, as their ships are right at 30.
In the case of the sealift assets in the RRF, we are working on strategies with the Navy and with USTRANSCOM to accomplish this. We do have some friends on the hill, and I’m going to be working hard in next couple of years to add to — and build upon — our strategic sealift capability.
My friend Jim Caponiti was a long-time associate administrator at MARAD way before I came on board. Years ago, his staff worked hard to ensure the readiness of our RRF fleet in the years leading up to the second Iraq war and the war in Afghanistan.
They worked with USTRANSCOM to devise a strategy for recapitalization then – and came up solutions resulting in building or reconstructing 19 new vessels — significantly improving our sealift capacity. That work has served us well.
Today we’re faced with the same challenges — the growing need to modernize and recapitalize our fleet. We think we need to replace about 24 of the 46 sealift ships, and as I mentioned, we are looking at a variety of means to do that.
Turning briefly to the other two pillars of our merchant marine – which are also priorities of mine that I shared with the members — we need to keep working the Maritime Security Program and Cargo Preference. Together with the Jones Act. They are absolutely critical to the survival of the fleet.
The MSP currently provides $5 million in stipends for the 60 vessels enrolled to be on call in the U.S.-flag fleet. We expect that program to be fully funded again in FY 18. It needs to be fixed for the future though.
Though the program is authorized through 2025 (funding for increased stipend is authorized through 2023), it is only appropriated year to year.
As we ask carriers to bring in new tonnage, we are forcing them to assume a substantial 30-year financial risk on the hope of an annual appropriation. We are starting work with USTRANSCOM and industry on the next version of MSP to ensure it provides us the right kind of ships we need for sealift.
Finally, there is a lot of scuttlebutt around town about Cargo Preference. My staff has been involved in weeks of discussions with the white house staff regarding the proper percentage needed. Currently it stands at 50% for government cargos – and we’d like to see more. So would others.
But there are also those who’d like to see it go away all together. That discussion continues, and MARAD is making our voice heard with our secretary’s backing. Some of you may even have better insight than I, but we are doing our best to make the case. More cargo equates to more ships which equates to a larger mariner pool.
As I’ve said, all three pillars are necessary to maintain a strong, resilient U.S.-flag domestic and international fleet, and to employ the mariners needed to crew them.
We need to take care of our mariners in peace time, so that they are available in war-time. That message can’t be emphasized enough, but it’s a message that hasn’t been reaching enough ears.
The challenge of getting people to see the “big picture” of the importance of our U.S. Merchant Marine to our national and economic security is never-ending.
For that reason, I appreciate the strong support that the propeller club has voiced for decades — for both the mariners and the industry they work in.
Your voice has never been more important and I personally appreciate your commitment to help the general public, and our elected representatives, understand what they are doing when they turn their backs on the U.S.-flag merchant marine.
Like our song says: Heave ho my lads, heave ho, we’ve got a long, long way to go! I’m glad to be sailing with you! Thank you and God bless.