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JUNE 20, 2018

Thank you for inviting me to speak with you today about the U.S. Merchant Marine and the commercial maritime industry in the United States. I’m quite aware of this university and its reputation — a great post-graduate educational institution with some of the brightest and exceptional students and future maritime leaders and policymakers from across the globe.

As you can see from my biography, I am a graduate of our federal Merchant Marine Academy in Kings Point, New York, and proud of it.  Though I chose to pursue my sea-going career in my country’s Navy, I always stayed closely aligned to our merchant marine, so it was not a big stretch for me to refocus my efforts in that area after I left the Navy.   I’m happy to be here to share a bit about the maritime industry in the United States with you.

I was destined for the life of a mariner almost from birth – born and raised a block from the Atlantic Ocean on the New 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’s why, when asked to serve as Maritime Administrator, I didn’t hesitate.

Possibly like many of you here, my upbringing, my family, my career path, gave me a deep respect for Maritime’s rich history. I treasure it personally because i know how important it has been to the growth of my country.

That history of course dates back many centuries. The United States began with an ocean voyage aimed to grow maritime trade… and it was financed by maritime trade.

The maritime enterprise that began not so far from here – in Spain — transformed our unexplored north American continent into arguably one of the most influential nations on earth.  That was in the 1400s, when maritime trade with the far east enriched much of Europe.
Spain wanted a more efficient water route to the far east, so they financed an expedition… enlisted a fellow named “Christopher Columbus.” And… you know how that ended.

His route set the “new world” as a global destination for merchant mariners… and it led to new trade routes… the exploration of the “Americas,” and eventually led to colonies up and down our eastern coast.
Back then, oceanic exploration was as radical and uncharted a proposition as space travel was in the 20th century. Through shipping… our struggling early American colonies grew . . . And became self-sufficient.

Our young shipping culture fueled the American revolution . . . Providing patriots with weapons and supplies from transatlantic allies. Our westward expansion was likewise launched by explorers navigating our inland and coastal waterways.

Waterborne trade turned the nation’s early port settlements into our largest cities. By 1789, America’s first congress had passed special legislation to encourage U.S. shipbuilders, providing a 10 percent tariff rebate to all imports and exports shipped on American-made vessels.

They understood that… with the world’s largest oceans at our three coasts… and the planet’s biggest freshwater lakes on our northern border… we needed to build and maintain our own ships. “American built” and “American manned” ships meant freedom to trade with whoever we wanted. . . Whenever we wanted.

It meant we could defend our coasts… hold our own on the open seas… support our allies, and project American power and influence abroad. It meant independence. Today, if you ask any of the men and women involved in U.S. maritime commerce, they’ll tell you… everything that the maritime industry meant in 1789… it still means in 2018.

As Maritime Administrator I head an agency within the U.S. Department of Transportation– one of many agencies overseeing the various modes of transportation.

I am charged with ensuring the health and functionality of our nation’s waterborne transportation system. Making sure it is integrated with other American landside transportation modes, and, of course, helping to strengthen and support the viability of the U.S. Merchant Marine.

America’s merchant marine refers to our nation’s civilian mariners, and both commercial and federally owned merchant vessels.
These civilian mariners and vessels are engaged in the domestic and international transportation of commercial goods, in providing waterborne support during national emergencies, and in the transport of cargo and supplies for our military in times of war.
We also operate a federal academy from where I graduated in 1979 and support six state maritime academies which annually graduate about 1000 new merchant marine officers each year.  The Maritime Administration is also in the process of establishing support mechanisms for other institutions engaged in domestic maritime workforce training and education.
That’s the thumbnail sketch.

The men and women of the United States Merchant Marine have – really since our nation’s founding – been instrumental in advancing the American way of life — always among the first to be called to action in times of national and international crisis, both at home and abroad.

Whether it’s rushing aid to hurricane victims on our Gulf Coast or shipping food, water, and medicine to earthquake victims in Haiti… U.S.-flag vessels bring critical supplies – and hope— to the victims of natural disasters.

That longstanding legacy was born out on my first month on the job, almost a year ago, as three powerful hurricanes slammed into Texas, Florida, the Gulf Coast, and the Caribbean.
In the midst of those disasters we activated four government vessels to deliver relief supplies, and serve as base of operations and berthing facilities for first responders. More than 22,000 meals were served aboard those vessels.

Immediately after Hurricane Maria struck Puerto Rico, vessels in our U.S.-flag commercial fleet had food, water, medicine, construction equipment and all manner of emergency and relief cargo stacking up in their port.

Our U.S.-flag fleet has served this same humanitarian role throughout our nation’s history. More recently after the devastation of Hurricane Katrina in New Orleans, after Superstorm Sandy, which inundated our east coast, and also following the massive earthquake in Haiti.

Those are just a few examples, but in every case, the U.S. Merchant Marine sped to the scene, assisting, easing the suffering, and helping those communities cope and recover.

I do not exaggerate when I say that without the support of the merchant marine, the United States may not be the free, economically strong nation it is today.

In addition to contributing mightily to our country’s economic prosperity and national security, its ranks have engineered some truly innovative and pioneering achievements.

Malcolm Mclean was just such a pioneer, an American transport entrepreneur who developed the modern intermodal shipping container. It revolutionized transport and international trade in the second half of the 20th century, significantly reducing the cost of freight transportation by eliminating the need for repeated handling of individual pieces of cargo.

Mr. Mclean’s company launched the first “container ship” in 1956, serving routes between New York, Florida and Texas.
In spite of initial resistance in the industry, within a couple of decades it had gone global. Today we can’t remember when there weren’t container ships transporting every consumer good imaginable to us.

The U.S. Merchant Marine continues to be an incubator for progressive technologies and cleaner burning fuels.

The U.S.-flag shipping company – Tote Maritime- launched the first LNG, or Liquefied Natural Gas powered containership in 2015, signaling a major shift in the industry’s efforts to leave a smaller environmental footprint.

By switching to LNG, Tote reduced the worst toxic emissions on its ships by as much as 98 percent – like nitrogen, carbon dioxide and particulate matter.

Of course the world is now entering the age of autonomous, unmanned technology, cyber-security systems… robotics, and my organization is helping to smooth the transition with a number of collaborative research and development initiatives.

Compared to some countries, the United States is probably behind the curve in some respects of international shipping. But at the risk of losing additional market share to our competitors — we’re working hard to catch up.

So what does the U.S. maritime industry look like in 2018? Despite our nation’s rich maritime heritage, I hate to say it, but our fleet is at an all-time low.

Due to rising costs and fierce international competition, today only 82 U.S.-flagged ships operate in international trade. That’s a 25 percent reduction in just the past five years.

We move less than six percent of our nation’s domestic freight on the water.

And U.S.-flagged ships currently carry less than 2 percent of our annual trade by tonnage. These same cycles and trends are impacting the maritime industries of many other nations as well.

MARAD is fighting to ensure that the U.S. merchant marine stays strong through a variety of federal programs and funding.

We know we have no choice but to reverse this trend and find ways to ensure reliable jobs for our mariner workforce. But there are no easy answers,
In the United States, as elsewhere, it comes down to cargo — enough cargo for these vessels to transport in order to employ well-qualified mariners.

The same market forces that threaten U.S. commercial shipping threaten shipping industries of countries around the world.

On a global level – maritime is in a state of dynamic flux, tested as never before.

But I will tell you what I recently told the graduates at my alma mater, midshipmen at the United States Maritime Academy at Kings Point, New York.

In spite of our many challenges, this industry’s value has never been greater. I told them that the best news for our industry is you.

You, talented maritime professionals from the U.S., from around the world, are the new leadership. You have been well prepared for this moment.

You are being groomed and educated at one of the world’s esteemed centers of maritime excellence. You will be the ones to define the future of our industry internationally and sustain it as a source of global economic stability and growth.

It has been an honor to be here. Thank you, and now I’ll answer any questions you might have.

Updated: Monday, November 19, 2018