In Search of a New National Maritime Strategy

The Maritime Administration (MARAD) hosted a second National Maritime Strategy Symposium last week and focused on problems plaguing the industry. These problems include aging infrastructure, congestion, inefficiency, and lack of federal funding. They are not new. The same concerns were expressed 15-20 years. The difference now is that the problems have become so extreme that if they are not immediately addressed the industry will suffer irreparable damage.

The Big Picture

As everyone in the industry knows, 95 percent of the goods that arrive in this country arrive at its seaports. These seaports, however, have not received the amount of funding that has been given to surface modes of transportation. The majority of TIGER funding has gone to highway projects. In addition, Harbor Maintenance Tax funds aren't used to dredge harbors; instead, they are used to offset the nation's debt. Many symposium attendees recommended that the Administration fully fund the maritime industry, not drain it.

Attendees also recommended the Department of Transportation incorporate the new maritime strategy into the larger National Freight Strategic Plan. DOT intends to use the new plan to increase U.S. exports. Since the majority of exports are transported on ships, it would be beneficial to include maritime in the National Freight Strategic Plan. The country can't successfully export items if its ports are crumbling and its harbors full of silt.

MARAD should also play a larger role in the development of Environmental Protection Agency, Transportation Security Administration, and Coast Guard regulations. MARAD is congressionally mandated to promote the maritime industry. The other three agencies regulate it and sometimes forget that regulations can place costly burdens on an industry already struggling to compete against its foreign counterparts. These counterparts are not held to the same high standards, and the U.S. government should not place domestic companies at an even greater disadvantage.

Role of the States

Several participants also discussed the need to increase outreach efforts with state governors to improve awareness at the state and local levels of the role the maritime industry plays in state economies. Governors are responsible for the growth of their respective states’ ports, and it is in their interest that the industry expand.

Governor Nathan Deal of Georgia is an excellent example of a governor who “gets it.” He understands the importance of the maritime industry to his state. He is the Port of Savannah's strongest advocate. Governor Deal is working closely with the federal government to make sure that Savannah is ready for new business opportunities in a post-Panama Canal expansion world. Other governors should follow his lead.

Encouragingly, the maritime industry is now a talking point for candidates campaigning to be governor. Clay Pell is running for governor of Rhode Island, and he recently released his plan to rebuild the state's economy. It specifically includes expanding the state's maritime industry. The “Ocean State” under Mr. Pell's leadership will focus on maritime research and development in addition to increased exports. With six months to go before the November 2014 elections, there is plenty of time for other candidates to add maritime issues to their campaign platforms.  

Exporting LNG – A Golden Opportunity?

The most intriguing panelist at the symposium last week was Bill Cooper, President of the Center for Liquefied Natural Gas (CLNG). According to Mr. Cooper, the U.S. will have the capacity to support both domestic and international natural gas markets. Exporting LNG, however, will require vessels, and there are currently no U.S. vessels capable of transporting U.S. LNG overseas. Building these vessels will require capital and a bank's willingness to finance construction. Banks will be watching the U.S. closely to see if the Administration supports the use of U.S. vessels and crews.

Acting MARAD Administrator Chip Jaenichen asked attendees to recommend possible growth opportunities for the industry. Using U.S. crews and vessels to export LNG certainly meets this goal. U.S. shipyards would gain additional work by building the vessels. More mariners would be employed crewing them. And at the end of their useful lives, domestic metal recyclers would dismantle them in environmentally sound conditions. These jobs are all well-paying, and all of them will help grow local economies.

MARAD’s goal for releasing the new strategy is September 30. Completing this document in the next five months will not be easy. Other federal departments like Energy will not support using U.S. crews and vessels to transport LNG. Sister agencies will also oppose giving more money to maritime projects under the TIGER program. If the industry is to survive, however, these changes must occur, and Jaenichen will need everyone's assistance in making sure they become reality. Let’s give him all the support we can. – MarEx

Ms. Krepp is a former Chief Counsel of the Maritime Administration.