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Tuesday, June 28, 2022

Maritime Logistics Professional

Wandering (Aimlessly) in Washington

Posted to Global Maritime Analysis with Joseph Keefe (by on September 20, 2013

The House Subcommittee on Coast Guard and Maritime Transportation holds a Hearing on “Maritime Transportation Regulations: Impacts on Safety, Security, Jobs, and the Environment.” That the crux of most of our problems emanates directly from inside the Beltway shouldn’t surprise anyone.

The House subcommittee hearing held last week in Washington centered on maritime transportation regulations and their ultimate impact on safety, security, jobs and the environment. Nevertheless, the lack of homework done by various subcommittee members in preparation for the meeting was also obvious. Likewise, the lack of understanding on the Hill with regard to the issues facing the maritime industry was simply breathtaking. The show provided a public venue for industry advocates to vent and for elected officials to call attention to various ‘rice bowl’ agendas, but in the end accomplished little more than that.


Chairman Hunter (R – CA) opened by criticizing the White House for weakening the U.S. merchant marine and Rep. Garamendi (D – CA) later agreed with Hunter. And since the benign neglect of the domestic waterfront has always been a bipartisan effort, their collective efforts to improve the situation would probably be a welcome change. And with that, the testimony of witnesses kicked off.


The first Panel of witnesses consisted of Rear Admiral Joseph Servidio, Assistant Commandant for Prevention Policy, United States Coast Guard, Mario Cordero, Chairman, Federal Maritime Commission and Paul “Chip” Jaenichen, Acting Administrator, Maritime Administration.


A second panel included Thomas A. Allegretti, President, American Waterways Operators, Captain William G. Schubert, USA Maritime (representing a coalition of U.S. flag interests), Ken Franke, President of the Sportfishing Association of California, Geoffrey Powell, Vice President of the National Customs Brokers and Forwarders Association of America, Rear Admiral Rick Gurnon, USMS, President, Massachusetts Maritime Academy (on behalf of Consortium of State Maritime Academies) and Patrick Wojahn, Public Policy Analyst, National Disability Rights Network.


The testimony predictably outlined the usual laundry lists of complaints and hot button issues and was followed by a line of questioning by subcommittee members. And, that’s where it got fun.


A primary focus of the meeting involved ongoing delays at DHS and the U.S. Coast Guard in getting regulations passed in a timely fashion. Indeed, ADM Servidio admitted to a backlog of some 68 projects (rulemaking efforts) that would still be in play by the end of this calendar year. Of particular interest to many in attendance was the proposed so-called subchapter “M” rule that will profoundly affect the inland towing industry, if and when a final rule ever gets passed. AWO’s Tom Allegretti, for example, correctly cited industry support of the subchapter M rule and urged DHS clearance this fall and final clearance before Coast Guard Commandant ADM Papp steps down in May. Predictably, ADM Servidio could give no such guarantees.


Servidio was also pressed on other issues, including the net effect of sequestration on the Coast Guard’s ability to do the job and the status of the much maligned TWIC controversy. For his part, Servidio told members that he preferred to focus on competencies rather than numbers when it came to sequestration. As for TWIC, he cited more than 150 comments submitted in reference to the final rule and advised that the Coast Guard was working with DHS and TSA on alternative security measures. Hence, we now know little more than we did before the hearing started.


Acting Marad Chief Jaenichen outlined his department’s efforts to help make U.S. flag shipping more competitive. Along the way, he gave a primer to subcommittee members on the Jones Act and the difference between coastwise shipping and those U.S. vessels engaged in international commerce. That our current Marad Administrator knows the difference is a refreshing sea change at DOT. It’s the little victories that I take pleasure in. This painful dialogue was necessary, apparently, because Rep. Tom Rice (R – SC) was, at various times, confused on the concept. Mr. Rice, by the way, wants less regulation and more U.S. flag ships. Before it was over, Jaenichen promised a symposium at the Department of Defense before the end of the year; something that will supposedly produce a unified “national maritime strategy.” I can hardly wait.


Depending on who you listened to, there was either too much regulation or, conversely, not enough regulation. Everyone agreed that there was not enough money. And while I encourage everyone to go to the House subcommittee site to tune in for the tape of the two-hour (+) drama, for those with less time to spend on such things, I’ve outlined just some of the hearing highlights (?) below:

  •  Maritime Security Program (MSP)

Today, all DOD cargoes must be carried on U.S. flag tonnage and 50 percent of all Food aid to foreign countries – down from 75% during this administration – must be loaded onto U.S. bottoms. The potential defunding of the MSP program due to sequestration cuts naturally came up during the hearing. It seems that this will not only result in the loss of ships and a similar reduction in seagoing billets for U.S. seafarers, but also cause certain companies to reflag tonnage currently in the fleet when the stipends end. Depending on who you talk to, the MSP fleet – now standing at 60 – could lose as many as 15 vessels. Congressman Cummings (D – MD) decried sequestration as the biggest problem facing the waterfront at the moment.

According to yesterday’s banter, sequestration is already eating into MSP funds, resulting in a net loss of one vessel. Mr. Jaenichen further explained to the subcommittee that the 60 ships = 2,700 U.S. mariners and that the loss of one ship equated to the loss of 45 seagoing billets. He then patiently explained that MSP payments are “retainers” paid to shipping companies in exchange for their participation and referred to these stipends as the “best bang for the taxpayer’s buck”. I might agree with him on that final point, if, that is, ANY of the vessels being paid the stipends were actually built in the United States. With or without MSP, these seagoing billets, at best, are “temp” jobs for U.S. mariners, until their operators decide to flag them back out again. That’s a fact. Meanwhile, Rep. Cummings bemoaned the potential loss of those vessels to foreign flag, but conveniently forgot (or didn’t know) that all 60 of these vessels are foreign built and flagged in for the sole purpose of getting the government stipend. Maybe a better question to ask is why those stipends aren’t tied to actually using a U.S.-built ship for the purpose. Food for thought.


  • TWIC

The Coast Guard assured Rep. Janice Hahn (D – CA) that they were exploring “alternatives” to the Transportation Worker Identification Card (TWIC) program. The often criticized program is frequently cited as a failure by industry and members of Congress. A recent GAO report – one everyone likes to bring up when they talk about TWIC – paints an unflattering picture of the technology and its potential to succeed in its original security mission as envisioned by those who dreamed it up. Actually, the program is finally poised to succeed.

So, why do we need to look at alternatives to TWIC? Card reader technologies that work – notably from Schneider Electric and SSA Terminals on the U.S. West Coast – are readily available. Schneider’s version recently passed TSA testing and SSA’s hardware was borne (partly) out of frustration from the lack of card readers on the market. Problem solved.

The California congresswoman pressed ADM Servidio on the potential crisis  brewing due to the fact that hundreds of thousands of these cards were due to expire at the exact same time. Apparently unaware of the ongoing use of TWIC card readers at marine terminals in her own state, she also didn’t know that SSA has successfully required thousands of truckers on the West Coast to do just that. It seems that if you don’t have a valid TWIC card, you don’t get in. Imagine that.

Between May 2012 and May 2013 SSA recorded over one (1) million TWIC card transactions at its Terminals in Long Beach. Employing 33 Electronic Readers at their terminals, the access turnstiles fire in less than 2 seconds, and in Biometric Mode in under 4 seconds. These 1 million TWIC Card Transactions convincingly show how the SSA System box successfully forced Industry to renew or purchase new TWIC Cards, and comply with the mandates of the Federal Government (well prior to the government’s ability to enforce such a program).

That’s exactly how the program was supposed to work. There’s no reason why it can’t, everywhere else, too. The next time Rep. Hahn is back on the left coast, she ought to drop in for a demonstration.


  • Less Regulation?

Separately, Congressman Rice was adamant that less maritime regulations would be the panacea for an ailing U.S. flag blue water merchant fleet. No doubt he’d get some agreement from the maritime industry in that opinion. Along the way, he implored the regulators to “leave those fishing fleets alone.” Rice, through no fault of his own, is probably unaware of a recent study comparing a particular aspect of minimally regulated commercial fishing vessels (CFVs) and their highly regulated small passenger vessels (SPVs) of 100 tons or less. He, like everyone else, will have to wait until the 3Q edition of Maritime Professional magazine hits the streets. He might be surprised at the data.


  • Shipbuilding

Finally, I take issue with Rep. Rice on his take on the “demise of the U.S. shipbuilding industry.” On the contrary, the resurgence of the domestic shipyards has been a refreshing change on the waterfront. The so-called tier II yards, in particular, are doing great business. Some are exporting – we have a trade surplus in that department, actually – and competing well with foreign yards in terms of price and quality. Closer to home, the bigger yards are signing deals regularly for commercial tankers and containerships. Admittedly, these are somewhat recent developments but I’d venture to say that the gentleman from South Carolina needs to catch up on his trade news. The New Wave suite of titles, Maritime Reporter and Engineering News, Maritime Professional and MarineNews, are all great places to start.


  • Aimless Wandering

I could probably take down the Internet discussing what transpired in the hearing, but I think I’ll put the brakes on right here. In general, industry and the regulatory arms of government did a credible job of explaining what was happening. Nothing got solved, mind you. More disturbing, in my view, was the lack of understanding exhibited by House subcommittee members in terms of the issues, what is happening in industry itself and what to do about any of it.

I never fail to be disappointed by these events. As always, promises are made to “get back to Congress with answers.” Rarely does any of it amount to anything of substance down the road and eventually, we find ourselves discussing the same old nonsense, six months later. Yesterday’s two hours and fifteen minutes of dialogue was consistent with that sequence. I’ve always said that the domestic maritime industry needs to do a better job telling their story, and arguably, it has ramped up its game in recent years. That said; and as our elected officials wander aimlessly around the halls of government, you have to wonder if anyone is listening. – MarPro


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Joseph Keefe is the lead commentator of MaritimeProfessional.com. Additionally, he is Editor of both Maritime Professional and MarineNews print 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.