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Friday, December 14, 2018

Maritime Logistics Professional

A Good Day for the Collective Domestic Waterfront

Posted to Global Maritime Analysis with Joseph Keefe (by on March 29, 2018

Maritime asks and Washington delivers funding for myriad maritime projects, newbuilds and infrastructure renewals. There is something for everyone in the FY ’18 Omnibus.

The recent signing of the FY ’18 Omnibus Funding Bill contained a raft of good news for the domestic waterfront, its many stakeholders and the individual parts that make it up. The American Association of Port Authorities (AAPA) was especially pleased with the package, and they characterized the funding bill as the “first step toward funding President's goal of strengthening America's infrastructure.

The omnibus spending package will fund the federal government through September 30, 2018. Signed by President Trump on March 23, it contains funding for a number of AAPA’s top infrastructure and intermodal priorities, both on the landside and the waterside.

Infrastructure, Ports and Marad

On the waterside, the omnibus includes $6.83 billion for the U.S. Army Corps of Engineers (Corps), an increase of $789 million from fiscal 2017. The bill funds the Corps’ navigation program at $3 billion, with $123 million for General Investigations (GI), $2.085 billion for Construction General (CG), and $200 million for the Corps' regulatory program. The Corps’ Operations & Maintenance (O&M) program, which pays for crucial maintenance dredging in America’s deep-draft harbors and channels, is funded at $3.63 billion, with $1.4 billion coming from the Harbor Maintenance Trust Fund (HMTF) … an increase of $100 million over last year's appropriation. The bill also requires the administration include six new studies and five new construction starts in the Corps work plan.

Other notable items in the legislation included $100 million for the Port Security Grant Program, and Customs and Border Protection (CBP) will receive $14 million, a nearly 15 percent increase over fiscal 2017, in which $7.6 million will be used to hire 328 new CBP officers. In the maritime environment alone, AAPA advocates that a minimum of 500 new CBP officers are needed annually. But, this is a pretty good start.

Separately, a $15 million increase to $75 million for the Diesel Emissions Reduction Act (DERA) will provide increased grants to eligible entities, including ports, for projects that reduce emissions from existing diesel engines. But, the good news didn’t stop there.

$980 million was approved for the U.S. Maritime Administration (MARAD), an increase of $457 million over fiscal 2017 appropriations. According to AAPA, and among the MARAD programs important to ports, is its Marine Highways program, which received an increase to $7 million for fiscal 2018.

The NSMV Lives

For State Maritime Academies, the budget contained the long sought after funds to begin the recapitalization of the nation’s fleet of aging training vessels. $300 million was approved to begin the State Maritime Academy Training Ship Replacement Program. Known as the National Security Multi-mission Vessel (NSMV), this new-build replacement training ship program will improve the training and stabilize the production of mariners by the nation’s maritime academies for decades to come.

Work to advance this program began over eight years ago and thanks to much effort by the State Maritime Academies’ presidents & superintendents, our nation’s elected officials, maritime industry leaders, the Maritime Administration and the U.S. Department of Transportation, completion of the final design and construction of the first vessel can commence. These state-of-the-art training platforms will each carry 600 cadets and 100 officers and crew. They will also be designed to support the Federal Emergency Management Agency (FEMA) as a response vessel in times of national emergency.

A prepared note from RADM Fran McDonald at the Massachusetts Maritime Academy told stakeholders, “It is important to note that the first ship is scheduled to replace SUNY Maritime’s aging Empire State and that the second ship is scheduled to replace Massachusetts Maritime’s Training Ship Kennedy (built in 1967). It is critical that funding for the second ship, currently in the President’s FY19 Budget, receive the full support of Congress. As such, I encourage the entire Massachusetts Maritime Academy community to contact your Congressperson and Senator and encourage them to throw their full support behind the NSMV program.” That’s good advice.

Coast Guard Icebreakers

In FY17, Congress appropriated $150 million of Advance Procurement funding in the Navy's SCN account. The president’s FY19 budget request includes an additional $720 million for icebreaker construction to continue the planned recapitalization of the Coast Guard’s polar icebreaker fleet and associated non-recurring costs for the class. The total cost of the lead ship is expected to be less than $900M and the average total cost of the three ships is expected to be less than $750M.

The FY18 omnibus included $150 million under the Department of Defense title for advance procurement activities under the Shipbuilding and Conversion, Navy account.  The Department of Homeland Security title included $19 million for program management activities related to releasing the RFP, reviewing industry proposals, and ultimately leading to a detail design and construction award in FY19.

The $150M in FY18 (like the $150M in FY17) was provided to the Navy and supports the Navy-Coast Guard Integrated Program Office's work to award a contract for detail design and construction of the polar icebreaker class in FY19.  The $300 million fully funds detail design and long lead time materials for the first heavy polar icebreaker.

Production of the first and follow-on heavy polar icebreakers will, said a Coast Guard spokesperson, be funded in future fiscal years. The Coast Guard's FY19 request includes $750 million to continue these recapitalization efforts.

Christmas in March

It certainly feels like Christmas in March, but there’s a lot of work ahead for stakeholders in all the maritime sectors; government and commercial alike. That said; it isn’t often that this much good news in way of funding for the waterfront is out there to tell, certainly not all at once.

Outgoing Coast Guard Commandant ADM Zukunft exuded optimism at his recent (final) state-of-the-Coast-Guard address at the National Press club, and, by all appearances, this omnibus did not disappoint. Similarly, funding of the U.S. Army Corps of Engineers should leave commercial inland marine operators with a sense that the pace will quicken on the recapitalization of the nation’s aging inland locks and dams.

From my perspective, I was especially happy to see the funding for both the NSMV’s and the desperately needed icebreakers. Both were ‘must have’ items for different reasons and different stakeholders, but I honestly had my doubts as to whether both could survive in the same funding vehicle. It turns out, they can. It all bodes well for the domestic commercial waterfront, which, right about now, could use some good news. And, they got some.MLPro.

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Joseph Keefe is a 1980 (Deck) graduate of the Massachusetts Maritime Academy and lead commentator of MaritimeProfessional.com. Additionally, he is Editor of both Maritime Logistics Professional and MarineNews magazines. He can be reached at jkeefe@maritimeprofessional.com or at Keefe@marinelink.com. MaritimeProfessional.com is the largest business networking site devoted to the marine industry. Each day thousands of industry professionals around the world log on to network, connect, and communicate.

Tags: NSMV Massachusetts Maritime Academy ADM Zukunft Marad US coast Guard USACE

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