U.S. Maritime Administrator Phillips faces challenges to U.S. shipbuilding, mariner safety, crew shortages & U.S. naval security

In an exclusive interview with AJOT, Rear Admiral Ann C. Phillips, U.S. Navy (Ret.), the 20th Administrator for the Department of Transportation’s Maritime Administration (MARAD), discussed challenges facing the U.S. maritime industry.

Phillips mission with MARAD is to oversee programs to “improve and modernize the nation’s maritime network by administering the … investment in ports and waterways made possible by the Bipartisan Infrastructure Law, including $2.25 billion to be awarded over the next five years through the Port Infrastructure Development Program and $25 million for the America’s Marine Highway Program."

During the interview, Phillips discussed the following:

Tanker Security Program

Phillips said that the United States needs more ocean-going tankers to support U.S theater requirements in the Pacific: “And that is where Air Force General Jacqueline Van Ovost, head of the U.S. Transportation Command (USTRANSCOM) is very, very focused on. Can she maneuver enough fuel around the ... Pacific to meet the theater campaign requirements? No, she cannot. That need generated the Tanker Security Program (TSP). On July 25th, MARAD announced that nine ships have been enrolled in the Tanker Security Program. TSP establishes a U.S. fleet “of active, commercially viable, militarily useful, privately owned product tank vessels … that will meet national defense and other security requirements and maintain a United States presence in international commercial shipping. The companies selected for enrollment are Overseas Shipholding Group, Inc. (three tank vessels); Crowley-Stena Marine Solutions, LLC. (three tank vessels); and Seabulk Tankers, Inc. (three tank vessels).

Port Infrastructure Development Program Grants (PIDP)

In March Phillips told Congress that in 2022 “MARAD awarded more than $703 million in PIDP grants. This total included the first tranche of $450 million in funding provided by the Biden Administration’s Bipartisan Infrastructure Law (BIL) … The 2022 PIDP awards will fund 41 projects in 22 states and one territory. More than 60% of the PIDP awards made in 2022 benefit ports in historically disadvantaged communities. More than $150 million in the funding awarded last year focuses on port electrification to improve air quality, while nearly $100 million of the awarded funding supports projects that will advance offshore wind farm development. These efforts are helping to advance the important objectives of the Bipartisan Infrastructure Law … This year, thanks again to the BIL and the funding provided in the FY 2023 appropriations measure, more than $662 million in funding is available for PIDP grants.”

Sexual Assault and the EMBARC Program

Hope Hicks' disclosure as “Midshipman X”, that she was raped while a midshipman attending the U.S. Merchant Marine Academy (USMMA) focused national attention on the continued problems of sexual assaults against women at sea and at U.S. maritime schools. In November 2022, Phillips announced the appointment of Rear Admiral Joanna Nunan, retired from the U.S. Coast Guard, to be the U.S. Merchant Marine Academy's first female Superintendent. At the Coast Guard, Nunan served as the Assistant Commandant for Human Resources. In that role, she helped spearhead efforts to expand diversity and inclusion in the Coast Guard, focused on increasing the retention of women and served as a member of the Coast Guard’s Sexual Assault Prevention, Response, and Recovery Committee. At that time, Phillips stated: “Rear Admiral Nunan is uniquely prepared to lead and strengthen USMMA on every front.”

In the interview, Phillips said “MARAD has to do more to protect mariners and cadets at maritime schools: "What we are trying to do is to change the culture in the maritime industry. That is what we are about. The goal is to ensure safety at sea for all mariners. Since we are the owners of the [U.S. Merchant Marine Academy at] Kings Point and overseers of Kings Point, we have responsibilities to ensure first and foremost the safety of our cadets at sea. Sailing on commercial vessels ensuring the safety of mariners at sea … so that they are not operating or working in an environment where they fear bullying, assault, harassment, or other criminal activity.” Phillips said satellite phones have now been issued to enhance safety: “We gave every midshipman a voice activated satellite phone so that they had a way of communicating privately with anyone they wanted to …They can call anyone they feel they need to. Should they feel threatened they can call back to the Academy.”

Phillips said that MARAD established the EMBARC (Every Mariner Builds a Respectful Culture) program in December 2021 “to help prevent sexual assault and sexual harassment during the Sea Year (cadet program), to support survivors, strengthen a culture of accountability, and improve safety for all mariners.” The Fiscal Year 2023 NDAA (National Defense Authorization Act) gave MARAD the authority to withhold payments from companies participating in federal programs “if they do not comply with the policies and requirements established by MARAD for the protection of cadets from sexual assault and sexual harassment.”

The new rules also apply to Maritime schools: Phillips said MARAD will be looking at how enforcement is working at each institution: “We meet monthly with the six State Maritime Academy superintendents.”

Phillips also noted new responsibilities placed on vessel captains: “There is now a requirement for a Master of a vessel to report harassment, in addition to assault or any other criminal activity on the ship to the Coast Guard, which is different. … and the Coast Guard will then decide how they're going to take action.”

The Marine Highway

The Marine Highway program is designed to support transport of waterborne cargoes between two U.S. ports by U.S. built ships and tug/barges and help reduce truck congestion on America’s highways. Phillips told Congress that the Fiscal Year 2024 Budget “requests $11 million for the United States Marine Highway Program. Marine Highways support our maritime supply chains and enable more cost-effective transportation options for U.S. shippers and manufacturers.” Phillips said some changes have been made in the program: “What changed was … we are no longer limited to container transport. Any product can be transported … so liquid, bulk, breakbulk, you name it, grant applications can be made in support of any of these … products. So, I think that's opened up the program tremendously and that we're going to see even more need ... and interest. We see plenty of interest and (MARAD) Gateway directors have made sure that I get to places like Fort Smith, Arkansas, ... and St. Louis and other places to look at inland ports and talk to the folks that are part of the inland port world.”

Title XI Shipbuilding Loan Guarantees

At a time when the U.S. flag fleet is dwindling and the ability of the U.S. Navy to support military sealift ships is challenged, the Title XI Loan Guarantee program is only able to provide a small number of loan guarantees for new shipbuildings at U.S. shipyards, according to a June 2023 MARAD report: “The approximate subsidy available for Title XI is $35.4 million, as of June 2023 … based on the average risk for projects MARAD previously guaranteed could support approximately $475 million in loan guarantees.” On the issue of underfunding, Phillips said: “The challenge with Title XI is we now have a lot more interest in loans in the program than we have funding support to buy down that risk. So, Congress knows this, the Department of Transportation (DOT) knows this. And what we are doing is we are processing loan applications and we're going to keep going until we run out of money. And then, we're going back and ask for more." Furthermore, “There is bipartisan interest from both sides. I get asked about this a lot in testimony by everybody: ‘Is there enough money in this program for the loan applications that we have? No, there is not. And so, they all go: ‘mm-hmm’. And they walk away. So, there's a lot of interest here. And we absolutely want to be able to take advantage of this opportunity and help industry … to increase their capacity.”

Phillips added that loan guarantees are now available for vessels working in the offshore wind industry.

Mariner Shortages

In Congressional testimony, Phillips reported: “In a 2017 study, MARAD estimated that we are approximately 1,800 mariners short of the number of licensed and unlicensed mariners needed to operate the commercial fleet and the RRF (Ready Reserve Fleet) in the … event of a full mobilization exceeding 4-6 months. Based on MARAD’s meetings with the industry and maritime labor unions, it appears that the shortage may have worsened in the post-COVID work environment.” As a result, Phillips said: “Last fall, I hosted a summit with industry and federal stakeholders to discuss the mariner shortfall. Participants identified the need to address barriers to entry in the merchant marine as well as the need to ensure quality of life aboard ships such as ensuring internet connectivity for crew members.” Phillips has also noted shortfalls in the U.S. Coast Guard’s ability to process licenses for mariners “… the existing Coast Guard licensing system (Merchant Mariner Licensing and Documentation system) relies on labor-intensive paper copies and manual entries and is not set up to provide critical data regarding the number of and availability (of) mariners with various credentials.”

National Security Multi-Mission Vessels

Phillips told Congress: “The FY 2024 Budget request also includes funding for vessel management, logistics, and maintenance oversight to prepare the (state maritime academies) schools to receive and operate the National Security Multi-Mission Vessels (NSMV). Funding would also be available to address unanticipated increases in steel costs for the NSMVs ...There are now four NSMVs under construction.”