House Subcommittee Reviews U.S. Merchant Marine Status

by | Thursday, September 25, 2014 |

On September 15, the House Subcommittee on Coast Guard and Maritime Transportation held a hearing to review the U.S. Merchant Marine status, including issues that affect the domestic maritime industry, as well as the role the industry plays in the United States’ economy and national security.

As part of the hearing, witnesses and labor representatives testified before Subcommittee Chairman, Duncan Hunter (R-CA) and Ranking Member Rep., John Garamendi (D-CA). Mark Tabbutt, Chairman of the Board of Saltchuk, testified on the American Maritime Partnership’s behalf. Tabbutt told the Subcommittee that the maritime industry, as supported by the Jones Act, is strong and growing.

Said Tabbutt, “Our industry is experiencing an extraordinary renaissance and its contributions to America’s economic, national and homeland security have never been more important. The largest sector of our domestic marine transportation industry supports our energy infrastructure with the movement of crude, refined petroleum products, and chemicals and has seen dramatic growth as a result of the shale oil revolution. This is driving record levels of new vessel construction orders and deliveries in American shipyards.”

Similarly, Matthew Paxton, President of the Shipbuilders Council of America (SCA), testified that American commercial shipbuilding is strong and vibrant, and that the shipyards have experienced dramatic growth due to shale oil production and new vessel orders and deliveries.

Paxton stated, “The state of the U.S. commercial shipyard industry is the strongest it has been in decades. Our industry, which includes thousands of businesses supporting vessel construction, is a vibrant manufacturing sector employing hundreds of thousands of Americans in all 50 states. Commercial markets are witnessing a boom not seen in decades, representing billions of dollars in new investments to our economy. This is all while American shipyards continue to deliver the largest and most sophisticated Navy and Coast Guard in the world.”

Giving testimony on the current state of the U.S. Merchant Marine was Niels M. Johnsen, Chairman and CEO of International Shipholding Corporation. He talked about what the “precarious state” of the Merchant Marine could mean for the United States’ national security, and he urged the immediate development and establishment of a National Maritime Strategy complete with a fully-funded Maritime Security Program.

According to Johnsen, “Our industry is in the midst of a ‘perfect storm’ – dwindling United States Military cargoes, a precipitous drop in food aid cargoes, escalating costs and regulations from the USCG and other Federal agencies, and intense low-cost foreign competition. Any such National Maritime Strategy must preserve and enhance the Maritime Security Program; reinforce and expand existing United States flag cargo preference requirements, while ensuring strict compliance with those requirements by all Federal agencies and Departments; and include immediate efforts to expand trading opportunities for United States flag vessels with the key trading partners of the United States. USA Maritime is fully prepared to work with this Subcommittee on these initiatives.”

Currently, the United States maritime industry employs over a quarter of a million Americans, providing almost $30 billion in annual wages. There are over 40,000 commercial U.S.-flagged vessels, the majority of which engage in domestic commerce, moving over $400 billion worth of goods and 100 million passengers annually. The maritime industry in the U.S. accounts for over $100 billion in economic output per year.

To read full testimonies from the hearing, see below for links.

Full Testimonies:

Mr. Mark Tabbutt, Chairman, Saltchuk Resources | Written Testimony

Mr. Niels Johnsen, Chairman/CEO, International Shipholding Corporation | Written Testimony

Mr. Don Marcus, President, Masters, Mates and Pilots | Written Testimony

Mr. Matthew Paxton, President, Shipbuilders Council of America | Written Testimony

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