On Wednesday, February 6th, the House Subcommittee on Coast Guard and Maritime Transportation held its first hearing of the 119th Congress under the new leadership of Chairman Mike Ezell (R-MS). The hearing, a continuation of the Transportation and Infrastructure Committee’s larger “America Builds” series, was titled America Builds: Maritime Infrastructure. 

While the hearing title indicates a focus on infrastructure, the conversation was a bit broader and largely reminiscent of a roundtable hearing last July which covered an array of issues related to the U.S. fleet and global competitiveness – issues which are clearly still deserving of congressional attention.  

The committee invited testimony from the following witnesses: 

• Paul Anderson, President and Chief Executive Officer, Port of Tampa Bay 

• Joe Rella, President, St. Johns Ship Building, Inc., on behalf of the Shipbuilders Council of America 

• Tom Reynolds, Chief Strategy Officer, Seasats, on behalf of Association for Uncrewed Vehicle Systems International 

• Brian Schoeneman, Political and Legislative Director, Seafarers International Union of North America, on behalf of USA Maritime 

While some partisan frustrations were expressed, the hearing conversation was very bipartisan with agreement on the necessity of devising solutions for the U.S. maritime industry. For the former, Rep. Salud Cabajal (D-CA) and full committee Ranking Member Rick Larsen (D-WA) utilized some of their time to express concerns about the new administration.  

The ongoing confusion around the pause of infrastructure funding from the Infrastructure Investment and Jobs Act (IIJA) and Inflation Reduction Act (IRA) are still top of mind for many with both members asking witnesses how these pauses could impact ports and various maritime grant programs. An additional concern discussed was the termination of United States Coast Guard (USCG) Commandant Admiral Linda Fagan by the new administration – a move which Rep. Carbajal called “unprecedented, misguided, and clearly political.” Rep. Larsen echoed this sentiment and mentioned his hope that the acting commandant, as well as the future USCG leader, will continue Adm. Fagan’s work in addressing sexual assault and harassment issues and recruiting and retention challenges within the USCG.   

Beyond the maritime topics related to the change in administration, the remainder of the conversation was focused on how the U.S., with congressional support, can make new strides to rebuild the nation’s lagging maritime industry. Discussion points were focused on a few major topics including competitiveness, funding and grant programs, workforce, cargo, and various legislative elements which could position the nation’s maritime industry for success.  

Competitiveness 

Recalling some of the information discussed in the hearing from last July, essentially, the U.S.-flagged fleet of around 5,000 post-WWII vessels has fallen to somewhere around 90 ships today. The U.S. fleet makes up less than 0.4 percent of the global fleet, and the nation’s ships are moving less than two percent of the country’s foreign commerce. Meanwhile, China is controlling the global market as the world’s largest shipowner and shipbuilder, and the country controls most of the world’s chassis, maritime cranes, and shipping container supply. At this time, the U.S. only maintains two ports in the top 20 globally while China has seven ports in the top 10. 

Without dwelling on this point excessively, China has injected untold billions of dollars into various infrastructure sectors worldwide, which begs many questions on how the U.S. can begin to make up this ground. Right now, according to a U.S. Maritime Administration (MARAD) stat cited in Rella’s testimony, the U.S. only has 120 active shipyards spread across 27 states. While these sites produce jobs and are economic engines for the country, it is a far cry from the investment and production rates seen from China.  

Funding and Grant Programs 

Moving back to the topics of what the U.S. can do right now, different funding options and grant programs were discussed frequently throughout the hearing with significant emphasis on the need to keep these funds moving with reliability. The Port Infrastructure Development Program (PIDP) was probably the most mentioned of the hearing. The PIDP is a discretionary grant program administered by MARAD, and the IIJA provided $2.25 billion over the five-year period of the bill for this program (in addition to some annual appropriations). Various ports have seen major investment stemming from this funding availability including a $25 million grant for the Port of Houston (weekly shoutout to my home state/town), a $4 million grant for Bay St. Louis, Mississippi, and $50 million for the state of Alaska in fiscal year 2024 alone which were all mentioned by Rep. Larsen.  

On the shipbuilding side, witnesses and members alike harped on the importance of a few additional programs and financing options including the Small Shipyard Grant Program and the Federal Ship Financing Program (commonly referred to as “Title XI”). The Small Shipyard Grant Program provides grants to support small shipyards for capital and related improvements, or training for workers related to shipbuilding and repair (or related industries). Title XI provides long-term loans to modernize and grow the merchant marine industry and the nation’s shipyards. While Rella did mention that the match on the Small Shipyard program could be a bit burdensome, both programs are critical for the growth and competitiveness of the shipping industry.  

Although support for these programs was spread amongst panelists, as is often the case with government funding, there was discussion about some of the red tape surrounding these, and other disbursement, programs. Anderson was well-positioned to discuss these challenges given his in-depth knowledge of port operations. He relied on the Port of Tampa Bay’s recent experience with an awarded grant to convey this point. The time from when the grant was awarded to when a check came out the door spanned two years, and during that time, the project cost increased by 40 to 50 percent due to inflation. To get the most impact for the dollars being spent, the grant process needs to be expedited.  

Workforce 

As in many instances, workforce needs can be addressed with education, recruitment, and retention. While Schoeneman joined the conversation to discuss a lot of the workforce needs, each witness provided their own input. Under the education umbrella, this portion is two-fold, including educational awareness of merchant marine career options and investment in the actual education programs for mariners. Unlike the other military branches, the military route of seafaring is rarely publicized in the same way. Fortunately, last December, Congress authorized funding and is requiring the Navy to launch a campaign around merchant marine recruitment. Similarly, some funding will also be dedicated to capital improvements at the United States Merchant Marine Academy (USMMA). Congress has recognized the multiple needs related to education and is dedicating resources to spread awareness of the career options and enhancing the educational institutions and programs, but there is still plenty of work to be done.  

While recruitment efforts are related to the education discussion, Schoeneman had additional comments on this topic related to the quality of life provided for seafarers. He stated that historically this career sold itself on the basis of mariners having the opportunity to see the world and be paid to do so. Today, younger generations have other interests and a desire for a different quality of life that the industry needs to address. Adjustments can be more complex, but some can be as simple as having Wi-Fi available on these ships so mariners can more easily access online information or speak with family and friends at home.  

As the industry works to bring new individuals into this career path, it is always necessary to continue investing in those employees and provide the job security needed. This can be more complicated reaching into different areas like ongoing education and training for emerging technologies, quality of life and adequate pay, and certainty of the availability of work and cargo to move.  

Cargo  

In his testimony, Schoeneman talked about the need for strengthening the U.S. workforce, but this topic was closely intertwined with the need for the U.S. to have enough cargo for these mariners to transport. The government has taken a few approaches to safeguarding some cargo for the American industry, but these protections do not extend to international cargo. Two of these methods include the Jones Act and cargo preference requirements. For the Jones Act, this legislation mandates that cargo carried between U.S. ports be moved on ships that are U.S.-built, -owned, and -crewed. While this century-old legislation sustains minimum demand levels for U.S. domestic shipping, it does not provide the same kind of protection for international cargo. This can create challenges for competitiveness in international shipping due to the overall higher cost of doing business in the U.S. Employee protections like Occupational Safety and Health Administration (OSHA) and wage requirements, coupled with other processes like permitting, place the U.S. at a disadvantage internationally. Rella explained all of this during Q&A. While expressing support for American treatment of employees, the higher cost prevents the U.S. from being on a level playing field.  

The U.S. also maintains other cargo preference requirements under a general program. These preference requirements apply to cargo that is owned, procured, furnished, or financed by the U.S. Government, or cargo that is shipped under an agreement with the U.S. government or as part of a government program. While this covers a variety of cargo, the Food for Peace and Food for Progress programs were two discussed during the hearing. Both of these programs are designed to provide assistance to foreign countries and help these countries modernize and strengthen their agricultural sectors.  

While these have existed for decades, in 2013, the percentage of cargo required to be U.S.-carried was cut to 50 percent from 75 percent. According to Schoeneman, this resulted in the loss of more than a dozen ships from the U.S. fleet. He expressed significant concern that the country may see a similar trend as one of the new administration’s early acts was to suspend foreign aid cargo. He explained that these programs not only supply cargo for U.S. ships to move, but they also help support the nation’s agricultural industry and keep the U.S. engaged with these countries. “Wherever we walk away, China walks in.” 

Legislative Fixes: What can Congress do? 

The witnesses were all in agreement that one of the best things Congress does, and can continue to do, is produce an on-time, biennial Water Resources Development Act. The certainty of funding for these programs is critical to the industry, and the ability for ports to do long-term planning, create the sense of security needed for stability in the industry. Another keep-doing-what-you-are-doing was supporting the Jones Act. New Transportation Secretary Sean Duffy expressed support for the Jones Act in his confirmation hearing, and members and panelists both echoed the need to keep the Act’s requirements in place.  

Beyond the topics that were discussed throughout the hearing like investing in USMMA and maintaining various grant programs, there were a few additional comments of how Congress could better bolster the shipping industry. Rella mentioned that the Ships for America Act, which was introduced at the end of the 118th Congress, was one of the best comprehensive approaches to the industry. This legislation would provide for the first national maritime strategy to grow the entire industry, ranging from shipbuilding to maritime logistics and mariner workforce. This Act would include construction of strategic commercial assets like 250 vessels for international commerce and 100 tankers for the Tanker Security Program. It would also provide funding to the educational institutions in dire need and expand domestic shipyard facilities. Schoeneman’s comments on the topic echoed this and went further with the need to have a Ship American Program similar to Build America Buy America. He expanded on the need to find new sources of commercial cargo for American shipping which he believes could be achieved through tax incentives for the use of American shipping.  

In all, the subcommittee received a lot of important information from the witnesses which covered the major elements of the U.S. maritime industry. With funding as an overarching need, the witnesses all cautioned the committee that the U.S. industry falls further behind with each passing day the country does not implement any new solutions. We will see if the new political alignment in Washington will bring more and quicker support to the maritime sector.