Sean Connaughton Delivers Keynote Speech at Maritime Education Summit

Theme of the summit, which took place at the Massachusetts Maritime Academy on April 16th, was entitled “Trending & Pedagogy for the Future.” Former MARAD Administrator and current ABS executive speaks to a wide range of issues facing the maritime community.

The Text of Connaughton’s Address to gathered maritime educators is as follows:

Good afternoon. Thank you for the invitation to be with you today and the opportunity to speak at the Maritime Education Summit being sponsored by the Massachusetts Maritime Academy. This is my first time back to the Academy since I left the office of Maritime Administrator. It is great to be back and a lot has happened over those several months. The most noteworthy event of course is the piracy standoff involving the Maersk Alabama. The successful freeing of the vessel’s master, a Massachusetts Maritime Academy graduate, and the actions of the vessel’s crew has brought global attention to the Somali piracy problem. It also highlighted the importance of a well trained and lead crew that can and does respond appropriately to whatever emergency is thrown at them. This Academy, Maersk Lines Limited, maritime labor, and all of our maritime schools should be proud of the quality of seafarer you have generated. The freeing of the Maersk Alabama and its crew is some good news during an otherwise difficult period. The U.S. and many other national economies are in recession. The U.S. unemployment rate is 8.5% and is higher in many localities. The WTO reports that world trade declined 9% in volume in the first quarter of 2009, the biggest contraction since the Second World War. Every day the maritime trade publications report falling rates, declining revenues, bankruptcies, and more laid up vessels. Given these economic conditions, it may seem an odd time to be holding a conference focused on recruiting, educating, and training men and women for the maritime industry. Surprisingly, even though current economic conditions have slowed the demand for new personnel and increased retention of existing staff, the seafarer job market remains strong. While world trade has fallen, it has done so from historic highs. Global trade is still more than double what it was just ten years ago and the majority of that trade moves by water. New ships continue to be delivered. The world’s merchant fleet is expected to remain approximately 1 billion gross tons for the foreseeable future even with declining shipyard order books and escalating scrapping. International trade has become an integral part of the American and world economy and it will again grow rapidly once the economy recovers. More trade means more ships and the need for more mariners and shoreside personnel. In addition to quantity we also face a quality challenge. There is a quiet revolution in the sophistication, size, type, equipment and machinery of ships as well as the handling of cargo. New technologies mean new skills and changes in what and how we train our people. Higher regulatory and security regimes limit the pool of potential seafarers. The nature of life at sea reduces both the quantity and quality of entry level seafarers. Limited port time, unappealing living conditions, good shoreside employment opportunities (especially for engineers), and criminal exposure are all disincentives to going to sea. As a consequence, finding sufficient numbers of qualified seafarers is and will remain a major challenge for the shipping industry. According to the just-released “Manning 2009” report prepared by Drewry Shipping Consultants, "Newbuilds may be cancelled, the order book may not be delivered and older vessels may be scrapped reducing the overall fleet, but the scale of officer shortfall will still be considerable." The February 2009 report says that there is still a shortage of as many as 33,000 officers for 2009, which will rise to 42,700 by 2013, even after adjustment for newbuilding cancellations and scrapping. Drewry Shipping Consultants says "the problem of officer shortfalls is not going away." Recently, the International Maritime Organization (IMO) and representatives of the international shipping industry met in March 2009 and declared that the shortage of seafarers is the biggest issue facing shipping. As a result, they agreed to intensify their efforts to address the shortage and are in the process of finalizing a strategy document on actions needed to attract, train, educate and retain seafarers. Among its recommendations, the draft plan urges more cadet berths and attacks the problems of criminalization of marine accidents and the denial of seafarer shore leave. The IMO is also supporting the “Go to Sea!” Campaign. This Campaign is intended to create a more favorable public perception of the maritime industry and greater knowledge among young people of the opportunities offered by a career at sea. The Campaign is also urging industry to make life at sea more closely in line with that available ashore. So the question for attendees at this summit is: what can we do about the challenge of recruiting, educating, training and retaining qualified seafarers? I would like to give you my thoughts on this issue in order to rephrase the question: how do we turn the current challenge into an opportunity? Recruitment: We live in a world in which our children are bombarded with information on practically every aspect of life, culture and entertainment. Jobs and careers are reality shows. In this environment, it is difficult to compete for our youths and their parent’s attention. Yet a basic but still very significant tool available to all of us is word of mouth. In fact, I will argue that in the face of so much information on television, cable, satellite, radio and the internet, word of mouth has become even more important as a method to confirm the veracity of what they gather from other sources. During my tenure as Administrator, I met cadets from every maritime academy and was struck by the fact that a majority them said they entered the maritime academy of their choice because a member of their family or a friend told them about it. Each of us needs to talk up the industry with neighbors, friends, and associates with organizations you are members. It does have an impact. We have to reach out to attract potential seafarers at an early age. Organizations such as the Sea Scouts, Sea Cadets, and Naval Junior Reserve Officer Training Corps introduce young men and women to the sea. Although their programs are limited, they provide some maritime exposure. Support and membership in these programs need to be encouraged. In addition, there is also growing interest in maritime high schools. At least 18 maritime high schools have begun operations in the United States in the last decade, and there are more in the planning stages. These schools have the potential to become a significant pipeline of young men and women into the maritime industry. In recognition of this, the U.S. Maritime Administration announced a new maritime high school curriculum to guide student educational program to ensure students are exposed to the opportunities that exist in the maritime sector. Under the proposed high school curriculum, during their freshman year, students will gain a general understanding of the maritime industry, its history and the role the maritime sector plays in the everyday lives of Americans. During their sophomore year, students will be introduced to the various jobs across the maritime industry and the requirements necessary to work in the industry. In their junior and senior years, the students can choose a career path between the merchant marine, shipbuilding and repair, and port operations to ensure they receive specialized training in their desired career. If implemented properly and refined over time, it is hoped that at the completion of a maritime high program, graduates will choose to go directly to work for a marine transportation company, a shipyard, a labor organization, the Coast Guard or the naval services. They could also continue their education by attending a maritime academy, college, or trade school. Education and Training: An essential part of our current and future success is our seven U.S. maritime academies: the U.S. Merchant Marine Academy, California Maritime Academy, Maine Maritime Academy, Massachusetts Maritime Academy, Great Lakes Maritime Academy, Texas Maritime Academy and the State University of New York Maritime College. These schools provide the majority of new licensed officers in the United States. Because of their educational backgrounds, graduates from these institutions are highly sought after both ashore and afloat. With their college degrees and officer licenses, many companies are looking to these schools to address their short term needs for seagoing personnel as well as their long term need for shoreside executives, managers and operations personnel. Companies are acutely aware of the coming shoreside shortage as their current senior managers reach retirement age. We must vigorously support and expand the maritime education programs at our maritime academies. Together, the seven maritime academies produce 700 new licensed officers a year. Jobs are available, particularly in the international fleet. We need to encourage all those who do attend these schools to obtain a license and to sail upon graduation. We have got to encourage all these graduates to stay and make a career in the maritime industry. A continuing problem, however, is cadet berths. The sea time requirements of STCW mean that cadets must be on board for longer periods of training. However, the size of crew accommodations on most modern commercial vessels is limited, making it difficult for many vessels to carry cadets. In addition, the limited size and availability of our current school ships means that it is becoming harder for cadets from state maritime academies to get the necessary sea time to sit for a license. Vessel owners and operators need to provide more seagoing cadet billets on their vessels. There is also a need to replace the current state school ship fleet with larger, more capable, and commercially relevant vessels. There needs to be greater use of modern educational tools such as distance learning and simulation. These tools are revolutionizing the ability to educate and assess students ashore and have endless possibilities for seafarers, particularly for navigation and engineering watchstanding. Unfortunately, these tools have not been fully accepted by some educational institutions and regulatory bodies. Given the nature of the maritime industry, it is essential use of these tools be utilized and expanded. We have also got to address the difficulties encountered by current or prospective non-U.S. mariners to obtain entrance into the United States to attend training programs. The United States has exceptional maritime training programs that can only maintain that status if they are available to the world’s seafarers. There needs to be a more efficient way to review and issue visas to enter the United States for training. Retention: There is a pending international regime that will set new labor standards for the industry. The International Labour Organization's Maritime Labour Convention, 2006 will provide comprehensive rights and protection at work for the world's more than 1.2 million seafarers. The Convention consolidates and updates more than 65 international labour standards related to seafarers adopted over the last 80 years. The Convention sets out seafarers' rights to decent conditions of work on a wide range of subjects, and aims to be globally applicable, easily understandable, readily updatable and uniformly enforced. Once implemented, ship owners and operators will have to revise their personnel practices. These regulatory standards are basic, and shipping companies still need to review their personnel strategies to ensure they retain seafarers once that are recruited into the industry and complete their necessary training. Competitive pay, benefits and leave are essential to retaining seafarers and encouraging them to advance their qualifications. Living and work conditions have to be attractive, not simply adequate. A problem for American seafarers is tax liability. Americans working abroad are exempt from paying federal income taxes on the first $80,000 they earn; American seafarers serving abroad must pay taxes on all their income. This is a disincentive to recruiting and retaining American seafarers because of the need for employers to withhold U.S. taxes as well as diminishing the take-home pay of the seafarer. Last year, the Bush Administration supported extending tax exempt status to Americans serving on foreign LNG carriers. Tax exempt status should be extended to all American seafarers. Regulatory: There is the ongoing review of the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers (STCW). Last comprehensively updated in 1995, this review is intended to ensure that seafarers are adequately trained to meet the new challenges facing the shipping industry today and in the years to come. Substantial progress has been made on the comprehensive review of the STCW Convention and STCW Code, and it is intended to hold a Diplomatic Conference in 2010. It can be expected that this review of STCW will raise the bar even further for qualifying for and retaining a license or certification. While undoubtedly improving safety, it will also reduce the pool of potential seafarers able to enter or advance in the industry. Industry and academia need to be actively involved in this review to ensure that it reflects current practices and provides a framework for evolving crewing and training needs. Legislative: The federal government has a commitment to, and a vested interest in, maritime education and training. According to 46 U.S.C. Sec. 51101, “It is the policy of the United States that merchant marine vessels of the United States should be operated by highly trained and efficient citizens of the United States and that the United States Navy and the merchant marine of the United States should work closely together to promote the maximum integration of the total sea power forces of the United States.” Current law outlines the implementation of this policy, focusing primarily on the U.S. Merchant Marine Academy and the State Maritime Academies. The current statute is the Maritime Education and Training Act of 1980. Obviously, much has happened since this law was conceived over 30 years ago. Unlike 1980, the United States has an opportunity to provide young men and women for today’s global commercial deep sea fleet. There is a need for limited license education programs to serve the offshore, coastal and inland fleets as well as modern school ships to provide adequate training platforms. There is no statutory structure or financial support for maritime high schools and other programs to recruit young men and women to our industry. Federal law does not adequately incorporate international regimes that now govern global education and training. There is nothing addressing the shoreside needs of the maritime industry. It is time to revisit the federal scheme for maritime education and training. There is no better time for Congress to initiate this review and provide the framework for enhancing and expanding the educational and employment opportunities available in the global maritime industry. This will stimulate real job creation in an otherwise bleak economic environment. Leadership: I began this presentation with a reference to the current and growing importance of trade to the United States. Trade has become an integral part of the United States economy and it is essential that the primary means of carrying on that trade, marine transportation, have strong and visionary leaders. I believe that there is a need for a National Maritime Executive Leadership program to serve the industry. Such a program could be either publicly or privately sponsored and supported. The purpose of the program would be to identify mid-level men or women who have been recognized for their talent, leadership and advancement potential. These individuals would be invited to participate in a short but focused program that would introduce them to different aspects of the industry, emerging business trends, public policy issues, and management strategies. The curriculum will also focus on building their leadership skills in the maritime arena. There is also a need for a Senior Maritime Executive Forum. This Forum would bring industry, government, academic and public interest group leaders together on a regular basis to discuss global trends and maritime-specific challenges and opportunities. The purpose would be to foster dialogue and discussion among the nation’s and the world’s maritime leadership and identify ways forward. In conclusion, I am very much aware that it will soon be the 30th anniversary of...