[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]






   THE STATUS OF THE U.S. MARITIME SUPPLY CHAIN DURING THE COVID-19  
                                PANDEMIC

=======================================================================

                                (116-60)

                       REMOTELY ATTENDED HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                COAST GUARD AND MARITIME TRANSPORTATION

                                 OF THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED SIXTEENTH CONGRESS

                             SECOND SESSION

                               __________

                              MAY 29, 2020

                               __________

                       Printed for the use of the
             Committee on Transportation and Infrastructure




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                             transportation
                             
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                 U.S. GOVERNMENT PUBLISHING OFFICE
                 
42-965 PDF               WASHINGTON : 2021
                             
                             
                             
                             
                             
                             
                             
                             
                             
                             
                             
                             
                             
             COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

  PETER A. DeFAZIO, Oregon, Chair
SAM GRAVES, Missouri                 ELEANOR HOLMES NORTON,
DON YOUNG, Alaska                      District of Columbia
ERIC A. ``RICK'' CRAWFORD, Arkansas  EDDIE BERNICE JOHNSON, Texas
BOB GIBBS, Ohio                      RICK LARSEN, Washington
DANIEL WEBSTER, Florida              GRACE F. NAPOLITANO, California
THOMAS MASSIE, Kentucky              DANIEL LIPINSKI, Illinois
SCOTT PERRY, Pennsylvania            STEVE COHEN, Tennessee
RODNEY DAVIS, Illinois               ALBIO SIRES, New Jersey
ROB WOODALL, Georgia                 JOHN GARAMENDI, California
JOHN KATKO, New York                 HENRY C. ``HANK'' JOHNSON, Jr., 
BRIAN BABIN, Texas                   Georgia
GARRET GRAVES, Louisiana             ANDRE CARSON, Indiana
DAVID ROUZER, North Carolina         DINA TITUS, Nevada
MIKE BOST, Illinois                  SEAN PATRICK MALONEY, New York
RANDY K. WEBER, Sr., Texas           JARED HUFFMAN, California
DOUG LaMALFA, California             JULIA BROWNLEY, California
BRUCE WESTERMAN, Arkansas            FREDERICA S. WILSON, Florida
LLOYD SMUCKER, Pennsylvania          DONALD M. PAYNE, Jr., New Jersey
PAUL MITCHELL, Michigan              ALAN S. LOWENTHAL, California
BRIAN J. MAST, Florida               MARK DeSAULNIER, California
MIKE GALLAGHER, Wisconsin            STACEY E. PLASKETT, Virgin Islands
GARY J. PALMER, Alabama              STEPHEN F. LYNCH, Massachusetts
BRIAN K. FITZPATRICK, Pennsylvania   SALUD O. CARBAJAL, California, 
JENNIFFER GONZALEZ-COLON,            Vice Chair
  Puerto Rico                        ANTHONY G. BROWN, Maryland
TROY BALDERSON, Ohio                 ADRIANO ESPAILLAT, New York
ROSS SPANO, Florida                  TOM MALINOWSKI, New Jersey
PETE STAUBER, Minnesota              GREG STANTON, Arizona
CAROL D. MILLER, West Virginia       DEBBIE MUCARSEL-POWELL, Florida
GREG PENCE, Indiana                  LIZZIE FLETCHER, Texas
Vacancy                              COLIN Z. ALLRED, Texas
                                     SHARICE DAVIDS, Kansas
                                     ABBY FINKENAUER, Iowa
                                     JESUS G. ``CHUY'' GARCIA, Illinois
                                     ANTONIO DELGADO, New York
                                     CHRIS PAPPAS, New Hampshire
                                     ANGIE CRAIG, Minnesota
                                     HARLEY ROUDA, California
                                     CONOR LAMB, Pennsylvania
                                ------                                

        Subcommittee on Coast Guard and Maritime Transportation

 SEAN PATRICK MALONEY, New York, 
               Chair
BOB GIBBS, Ohio                      RICK LARSEN, Washington
DON YOUNG, Alaska                    STACEY E. PLASKETT, Virgin Islands
RANDY K. WEBER, Sr., Texas           JOHN GARAMENDI, California
BRIAN J. MAST, Florida               ALAN S. LOWENTHAL, California
MIKE GALLAGHER, Wisconsin            ANTHONY G. BROWN, Maryland
CAROL D. MILLER, West Virginia       CHRIS PAPPAS, New Hampshire, Vice 
SAM GRAVES, Missouri (Ex Officio)    Chair
                                     CONOR LAMB, Pennsylvania
                                     PETER A. DeFAZIO, Oregon (Ex 
                                     Officio)



















                                CONTENTS

                                                                   Page

Summary of Subject Matter........................................     v

                 STATEMENTS OF MEMBERS OF THE COMMITTEE

Hon. Sean Patrick Maloney, a Representative in Congress from the 
  State of New York, and Chairman, Subcommittee on Coast Guard 
  and Maritime Transportation:

    Opening statement............................................     1
    Prepared statement...........................................     4
Hon. Bob Gibbs, a Representative in Congress from the State of 
  Ohio, and Ranking Member, Subcommittee on Coast Guard and 
  Maritime Transportation:

    Opening statement............................................     6
    Prepared statement...........................................     7
Hon. Peter A. DeFazio, a Representative in Congress from the 
  State of Oregon, and Chairman, Committee on Transportation and 
  Infrastructure:

    Opening statement............................................     7
    Prepared statement...........................................     8
Hon. Sam Graves, a Representative in Congress from the State of 
  Missouri, and Ranking Member, Committee on Transportation and 
  Infrastructure, prepared statement.............................    61

                               WITNESSES

Christopher J. Connor, President and Chief Executive Officer, 
  American Association of Port Authorities:

    Oral statement...............................................    10
    Prepared statement...........................................    11
Michael G. Roberts, Senior Vice President, Crowley Maritime, 
  testifying on behalf of American Maritime Partnership:

    Oral statement...............................................    13
    Prepared statement...........................................    15
Jennifer A. Carpenter, President and Chief Executive Officer, The 
  American Waterways Operators:

    Oral statement...............................................    21
    Prepared statement...........................................    23
Lauren K. Brand, President, National Association of Waterfront 
  Employers:

    Oral statement...............................................    25
    Prepared statement...........................................    27
Eric P. Ebeling, President and Chief Executive Officer, American 
  Roll-On Roll-Off Carrier Group, testifying on behalf of USA 
  Maritime:

    Oral statement...............................................    31
    Prepared statement...........................................    33

                       SUBMISSIONS FOR THE RECORD

Letter of May 28, 2020, from Marine Engineers' Beneficial 
  Association; American Maritime Officers; Marine Firemen, 
  Oilers, Watertenders and Wipers Association; Sailor's Union of 
  the Pacific; International Organization of Masters, Mates & 
  Pilots; and Seafarers International Union; Submitted for the 
  Record by Hon. Sean Patrick Maloney............................     5
Letter of May 4, 2020, from Hon. Kurt Schrader of Oregon, Hon. 
  Alan S. Lowenthal of California, and Hon. Randy K. Weber, Sr., 
  of Texas, et al., Submitted for the Record by Hon. Alan S. 
  Lowenthal......................................................    56

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                              May 28, 2020

    SUMMARY OF SUBJECT MATTER

    TO:      Members, Subcommittee on Coast Guard and Maritime 
Transportation
    FROM:  Staff, Subcommittee on Coast Guard and Maritime 
Transportation
    RE:      Hearing on ``The Status of the U.S. Maritime 
Supply Chain During the COVID-19 Pandemic''
_______________________________________________________________________


                                PURPOSE

    The Subcommittee on Coast Guard and Maritime Transportation 
will hold a hearing on Friday, May 29, 2020, at 1:00 p.m. EDT 
to examine the state of the U.S. Maritime Supply Chain during 
the COVID-19 Pandemic. The hearing will take place remotely for 
members and witnesses via the Cisco WebEx virtual platform. The 
Subcommittee will hear testimony from the American Association 
of Port Authorities, American Maritime Partnership, the 
American Waterways Operators, the National Association of 
Waterfront Employers, and USA Maritime.

                               BACKGROUND

U.S. MARITIME INDUSTRY

U.S. MERCHANT MARINE AND FLEET 

    The U.S. Merchant Marine and the Nation's port system, and 
supporting industries (collectively referred to as the U.S. 
maritime industry), integrate our economy with a vast global 
maritime supply chain system that moves more than 90 percent of 
the world's trade by tonnage, including energy, consumer goods, 
agricultural products, and raw materials.\1\ These industries, 
vessels, infrastructure, and personnel also play critical roles 
in national security, supporting our Nation's ability to 
provide sealift for the Department of Defense (DoD) during 
times of war and national emergency.
---------------------------------------------------------------------------
    \1\ Maritime Administrator Mark H. Buzby Testimony before the House 
Committee on Transportation and Infrastructure Subcommittee on Coast 
Guard and Maritime Transportation (March 6, 2019).
---------------------------------------------------------------------------
    The U.S. Merchant Marine is the fleet of U.S. documented 
(flagged) commercial vessels and civilian mariners that carry 
goods to and from, as well as within, the United States. These 
vessels are operated by U.S. licensed deck and engineering 
officers and unlicensed seafarers. During times of peace and 
war, the U.S. merchant marine acts as a naval auxiliary to 
deliver troops and war material to military operations abroad. 
Throughout our history, the Navy has relied on U.S. flagged 
commercial vessels to carry weapons and supplies and ferry 
troops to the battlefield. During Operations Enduring Freedom 
and Iraqi Freedom, U.S. flagged commercial vessels transported 
90 percent of sustainment cargoes moved to Afghanistan and 
Iraq.\2\
---------------------------------------------------------------------------
    \2\ Id.
---------------------------------------------------------------------------
    The merchant marine was formally recognized in statute with 
the passage of the Merchant Marine Act of 1920 (46 U.S.C. 
Subtitle V). Section 50101(a) of title 46, United States Code, 
states that ``[i]t is necessary for the national defense and 
the development of the domestic and foreign commerce of the 
United States that the United States have a merchant marine . . 
.'' Sections 50101(b) and 51101 of title 46, United States 
Code, establish that ``[i]t is the policy of the United States 
to encourage and aid the development and maintenance of the 
merchant marine . . .'' and that ``merchant marine vessels of 
the United States should be operated by highly trained and 
efficient citizens of the United States . . .''
    Currently, there are approximately 41,000 non-fishing 
related commercial vessels flagged and operating in the United 
States.\3\ The vast majority of these vessels are engaged in 
domestic waterborne commerce, generally referred to as the 
``Jones Act trade,'' moving 115 million passengers and nearly 
$300 billion worth of goods between ports in the United States 
on an annual basis.\4\ Each year the domestic coastwise fleet 
carries nearly 900 million tons of cargo through the inland 
waterways, across the Great Lakes, and along the Atlantic, 
Pacific, and Gulf of Mexico coasts.\5\
---------------------------------------------------------------------------
    \3\ MARAD, https://www.maritime.dot.gov/data-reports/data-
statistics/data-statistics
    \4\ National Strategy for the Marine Transportation System: 
Channeling the Maritime Advantage 2017-2022 (Oct. 2017), http://
www.cmts.gov/downloads/
National_Strategy_for_the_Marine_Transportation_System_October_2017.pdf;
 Economic Contribution of the US Tugboat, Towboat, and Barge Industry 
(June 22, 2017), https://www.marad.dot.gov/wp-content/uploads/pdf/Econ-
Impact-of-US-Tugboat-Towboat-and-Barge-Industry-lh-6-22-17.pdf.
    \5\ The U.S. Waterway System Transportation Facts & Information, 
https://usace.contentdm.oclc.org/digital/collection/p16021coll2/id/
1429/
---------------------------------------------------------------------------
    The U.S. Government-owned fleet consists of 15 vessels 
operated by the Military Sealift Command and 46 vessels in the 
Maritime Administration's (MARAD) Ready Reserve Force. 
Together, these vessels provide the initial surge of military 
capability while the commercial fleet is responsible for the 
ongoing sustainment.
    Of the 41,000 U.S. flagged vessels, approximately 87 are 
operating in international commerce moving goods between U.S. 
and foreign ports.\6\ These vessels serve as a training and 
employment base for the civilian mariners who serve aboard the 
Government-owned fleet when they are called to deploy. The 
percentage of international commercial cargoes carried on U.S. 
flagged vessels has fallen from 25 percent in 1955 to 
approximately 1.5 percent today.\7\ Over the last 35 years, the 
number of U.S. flagged vessels sailing in the international 
trade dropped from 850 to 87 vessels.\8\ This decline 
corresponds with a decrease in U.S. mariners resulting in an 
estimated shortfall of approximately 1,929 qualified mariners 
needed to crew the Government-owned fleet.\9\ Since the DoD 
relies on civilian mariners to crew the Government-owned fleet 
through the Maritime Security Program (MSP) and the Voluntary 
Intermodal Sealift Agreement (VISA), maintaining a pool of 
highly trained mariners is imperative.
---------------------------------------------------------------------------
    \6\ U.S. Dep. of Transp. Maritime Administration United States Flag 
Privately-Owned Merchant Fleet Report (March 2020).
    \7\ MARAD Calculation using CBP, Census, and commercial data 
sources.
    \8\ U.S. Dep. Of Transp., ``Number and Size of the U.S. Flag 
Merchant Fleet and Its Share of the World Fleet,'' U.S. Bureau of 
Transportation Statistics, available at https://www.bts.gov/content/
number-and-size-us-flag-merchant-fleet-and-its-share-world-fleet, 
accessed May 22, 2020.
    \9\ Maritime Admin. Mark H. Buzby Testimony before the House 
Committee on Armed Services (March 8, 2018).
---------------------------------------------------------------------------
    Within the international U.S. flag fleet, up to 60 vessels 
are enrolled in the MSP.\10\ Under this program, militarily 
useful oceangoing commercial vessels each receive an annual 
operating stipend of $5 million, which will increase to $5.3 
million in fiscal year 2022, to provide military sealift for 
the United States Transportation Command within the DoD.\11\
---------------------------------------------------------------------------
    \10\ MARAD, https://maritime.dot.gov/national-security/strategic-
sealift/maritime-security-program-msp
    \11\ National Defense Authorization Act for Fiscal Year 2020.
---------------------------------------------------------------------------

U.S. PORTS AND MARINE TERMINALS

    Public ports in the United States play an indispensable 
role in local and regional economies throughout the nation.\12\ 
Ports generate business development and provide employment to 
more than 13 million Americans, which includes those that work 
at the ports themselves and those employed in global trade and 
import/export support services.\13\ According to the American 
Society of Civil Engineers (ASCE), there are 926 ports in the 
United States, each essential to the nation's competitiveness 
by serving as gateways through which 99 percent of U.S. 
overseas trade passes.\14\ Ports are responsible for $4.6 
trillion in economic activity--roughly 26 percent of the U.S. 
economy.\15\ The American Association of Port Authorities 
(AAPA) reports that, seaport activities alone accounted for 
$378.1 billion in federal, state, and local tax revenues in 
2018.\16\
---------------------------------------------------------------------------
    \12\ Global Trade Magazine, 2020 U.S. Ports Summary (last accessed 
May 26, 2020) available at https://www.globaltrademag.com/us-ports/.
    \13\ Id.
    \14\ ASCE, 2019 Infrastructure Report Card, Ports (Jan. 2017) 
available at https://www.infrastructurereportcard.org/wp-content/
uploads/2017/01/Ports-Final.pdf.
    \15\ Id.
    \16\ AAPA, The Economic Impact of U.S. Seaports (2019) available at 
http://aapa.files.cms-plus.com/2019_PortsFundingMap.pdf
---------------------------------------------------------------------------
    America's port authorities play a key role in the business 
of waterborne commerce. Their authority may also incorporate 
other global trade hubs such as airports, industrial parks, and 
Foreign Trade Zones. Many of these accommodate ocean-going 
cargo, as well as barges, ferries, and recreational watercraft. 
More than 150 deep draft seaports are located along the 
Atlantic and Pacific Oceans as well as the Great Lakes, the 
Gulf of Mexico, Alaska, Hawaii, Puerto Rico, Guam, and the U.S. 
Virgin Islands.\17\ Many of the country's most prominent ports 
work closely with private industry in the development and 
financing of maritime-related facilities. Within the Nation's 
ports are more than 3,500 publicly or privately held marine 
terminal operators (MTOs).\18\ MTOs provide wharfage, dock, 
warehouse, or other marine terminal facilities to ocean common 
carriers moving cargo in the ocean-borne, foreign commerce of 
the United States.\19\
---------------------------------------------------------------------------
    \17\ Global Trade Magazine, https://www.globaltrademag.com/us-
ports/
    \18\ MARAD, Maritime Transportation System Summary (2020) available 
at https://www.maritime.dot.gov/outreach/maritime-transportation-
system-mts/maritime-transportation-system-mts.
    \19\ Fed. Maritime Com. Marine Terminal Operators (2020) available 
at https://www.fmc.gov/resources-services/marine-terminal-operators/
---------------------------------------------------------------------------

PORT INFRASTRUCTURE DEVELOPMENT PROGRAM

    The ability of U.S. ports to increase capacity and move 
freight efficiently--both domestically and globally--is 
critical to U.S. competitiveness. Freight volumes are projected 
to increase by 31 percent and U.S. foreign trade are projected 
to double between 2015 and 2045.\20\ Without major improvements 
to multimodal transportation infrastructure and technologies, 
congestion resulting from greater volumes of freight could lead 
to growing delays and failures in the supply chain.
---------------------------------------------------------------------------
    \20\ DOT Bureau of Transp. Statistics, Freight Facts and Figures 
2017, Table 2-1.
---------------------------------------------------------------------------
    As required by 46 U.S.C. Sec.  50302, MARAD established a 
Port Infrastructure Development Program to better support the 
development of port facilities. The FY 2020 Consolidated 
Appropriations Act, P.L. 116-93, provided $225 million for the 
Port Infrastructure Development Program, with $200 million 
reserved for grants to coastal seaports and Great Lakes ports. 
Grants are provided for infrastructure improvement projects 
that are directly related to port operations, or intermodal 
connections to ports that improve the safety, efficiency, or 
reliability of the movement of goods into, out of, or around 
coastal seaports.

U.S. SHIPBUILDING INDUSTRY

    The U.S. shipbuilding and ship repair industry is a major 
component of the nation's maritime supply chain; essential for 
sustaining one of the world's largest navies, a coast guard 
that protects thousands of miles of U.S. coastline, and the 
domestic commercial fleet. Construction and repair shipyards 
also provide a critical backstop to American seapower, ensuring 
that the United States retains the capability to expand or 
recapitalize its Navy or Coast Guard without relying on other 
nations.
    Today, the U.S. shipbuilding industry includes 
approximately 125 active shipyards across the country.\21\ In 
addition, there are more than 200 shipyards engaged in ship 
repairs or capable of building ships, but not actively engaged 
in shipbuilding.\22\ According to the U.S. Maritime 
Administration, the U.S. shipyard industry supports more than 
100,000 direct shipyard jobs across the United States, produces 
$7.9 billion in direct labor income and contributes $9.8 
billion in direct GDP to the national economy.\23\
---------------------------------------------------------------------------
    \21\ Center for Strategic and Budgetary Assessments, Strengthening 
the U.S. Defense Maritime Industrial Base, A Plan to Improve Maritime 
Industry's Contribution to National Security (2020).
    \22\ Id.
    \23\ MARAD, https://www.maritime.dot.gov/sites/marad.dot.gov/files/
docs/resources/3641/maradeconstudyfinalreport2015.pdf
---------------------------------------------------------------------------
    Other than ships required to be U.S.-built under the Jones 
Act, U.S. commercial shipbuilding faces steep challenges from 
shipbuilders in China, South Korea, and Japan. These heavily 
subsidized foreign competitors accounted for over 90 percent of 
the global shipping tonnage delivered in 2018.\24\
---------------------------------------------------------------------------
    \24\ United Nations Conference on Trade and Development, available 
at https://unctadstat.unctad.org/wds/TableViewer/
tableView.aspx?ReportId=89493; Wall Street Journal, Costas Paris, Asia 
State Players Wield Subsidies to Dominate Shipping (Dec.2, 2018).
---------------------------------------------------------------------------

COVID-19 BACKGROUND AND IMPACTS

    The COVID-19 pandemic has upended the world economies and 
substantially impacted societies across the globe. According to 
the Centers for Disease Control and Prevention (CDC), the 
coronavirus (COVID-19) is a new virus strain that causes mild 
to fatal respiratory illness to those persons it infects. First 
identified at the end of 2019 in Wuhan, China, the virus is 
spread from person to person, usually via respiratory droplets 
or through physical contact with surfaces with the virus on it. 
As of mid-May 2020, COVID-19 had spread to more than 200 
countries with almost 5 million reported cases and more than 
300,000 deaths.\25\ In the United States, data released by the 
Johns Hopkins Coronavirus Research Center on May 21, 2020, 
totaled 1,562,714 reported cases and 93,863 deaths attributed 
to COVID-19.\26\
---------------------------------------------------------------------------
    \25\ World Health Org., Coronavirus Disease Dashboard (last 
accessed May 26, 2020) available at https://covid19.who.int/.
    \26\ Johns Hopkins Univ., COVID-19 Dashboard (last accessed May 26, 
2020) available at https://coronavirus.jhu.edu/map.html.
---------------------------------------------------------------------------
    According to CDC data and statistics, COVID-19 is the worst 
pandemic since 2009 when the H1N1 (swine flu) pandemic broke 
out and hit more than 214 countries while taking over 284,000 
lives across the globe. Several nations have closed their 
borders or instituted travel restrictions to prevent community 
spread of COVID-19. Many cities, states, and internationally 
entire countries remain on lockdown or are operating under 
stay-at-home orders, while other affected countries such as New 
Zealand, Australia, China and Italy have started to gradually 
re-open commerce and modified operations and activities.

GLOBAL SUPPLY CHAIN CHALLENGES

    According to the Organization for Economic Cooperation and 
Development (OECD), the global maritime industry has been 
severely impacted by COVID-19, leaving virtually no market 
segment spared.\27\ Ocean carriers across key trades, 
especially the trans-Pacific trades, enacted capacity cuts, 
either by increasing the number of blank sailings or by laying 
up vessels.\28\ According to recent reports, U.S. ports are 
projecting a 20 to 30 percent drop in container volumes in the 
first half of 2020 caused by general shutdowns across many key 
markets in nations affected by the COVID-19 pandemic.\29\ Even 
under the most optimistic projections, recovery isn't expected 
until the second half of the year and into 2021 assuming there 
is no second wave of the virus.\30\ International markets are 
experiencing similar declines. For example, Norway's global car 
and roll-on, roll-off (Ro-Ro) carrier Wallenius Wilhelmsen saw 
more than a USD $300 million decline in the first quarter.\31\ 
Reduction in ocean volumes are expected to be in the 50 percent 
range for second quarter 2020 compared to second quarter 2019, 
the carrier estimates.\32\ The setback has caused the company 
to take several mitigation measures including temporarily 
dismissing 2,500 employees in the U.S. and Mexico, slimming its 
active fleet by laying up vessels, and sending as many as four 
vessels for recycling.\33\
---------------------------------------------------------------------------
    \27\ OECD, COVID-19 and International Trade: Issues and Actions 
(2020).
    \28\ DHL, Global Freight Forwarding, Ocean Freight Market Update 
(May 2020) available at www.dhl.com/content/dam/dhl/global/dhl-global-
forwarding/documents/pdf/glo-dgf-ocean-market-update.pdf.
    \29\ Wall Street Journal, U.S. Ports Likely to See Slump in Cargo 
Volume from Coronavirus (Mar. 3, 2020).
    \30\ The LoadStar, https://theloadstar.com/no-bounce-back-in-
demand-for-container-shipping-this-year/
    \31\ JOC, Wallenius Wilhelmsen Shrinks Fleet (March 23, 2020) 
available at https://www.joc.com/breakbulk/breakbulk-carriers/
wallenius-wilhelmsen-shrinks-fleet-coronavirus-demand-
dip_20200323.html.
    \32\ Id.
    \33\ Id.
---------------------------------------------------------------------------
    Given the market lull, more than 250 scheduled liner 
sailings are expected to be withdrawn in the 2nd quarter 2020, 
as carriers react rapidly to fading demand.\34\ Blank sailings, 
where a carrier cancels a particular sailing, have increased 
rapidly in 2020 as a result of the COVID-19 pandemic, with some 
carriers choosing to focus on the trans-shipment segment of 
their business, which is experiencing a seasonal uptick in 
volume in the Asia-North America trade.
---------------------------------------------------------------------------
    \34\ Lloyd's Loading List, Forwarders may see 20%-30% volume drop 
in second quarter (April 20, 2020) available at https://
www.lloydsloadinglist.com/freight-directory/news/Forwarders-may-see-20-
30-volume-drop-in-second-quarter/76394.htm#.Xs7mBUBFw2y


   Figure 1_JOC, Trans-Pac blank sailings a harbinger of soft summer 
   imports (May 2020) available at https://www.joc.com/maritime-news/
   trade-lanes/trans-pacific/trans-pac-blank-sailings-harbinger-soft-
                      summer-imports_20200514.html

U.S. INDUSTRY REQUESTS FOR ASSISTANCE

    Ports and MTOs are finding creative ways to keep workers 
safe, considering the ability to obtain Personal Protective 
Equipment (PPE) is dependent upon a well-functioning global 
supply chain of critical medical supplies. U.S. ports, MTOs, 
and stevedores are seeking federal help to shoulder additional 
costs tied to COVID-19 and to weather the bigger impact from 
the loss of containerized, breakbulk, bulk, and Ro-Ro cargoes, 
as well as losses from the cruise industry which is completely 
shut down in the U.S. through July.
    The National Association of Waterfront Employers (NAWE) on 
behalf of its MTO members requested a one-time grant program of 
$400 million to go toward cleaning supplies and PPE, including 
plexiglass shields between truck gate operators and drayage 
drivers.\35\ AAPA asked Congress to consider a $1.5 billion 
grant program for ports, allowing them to maintain their 
workforces and weather financial shocks that could reportedly 
trigger the direct loss of up to 130,000 jobs.\36\
---------------------------------------------------------------------------
    \35\ Letter from NAWE to House Committee on Transportation and 
Infrastructure Subcommittee on Coast Guard and Maritime Transportation, 
May 6, 2020, Assistance for Marine Terminal Operators, Operating Ports 
and Related Companies.
    \36\ Letter from AAPA to House Committee on Transportation and 
Infrastructure Subcommittee on Coast Guard and Maritime Transportation, 
April 16, 2020, COVID-19 Relief Package.
---------------------------------------------------------------------------

                              WITNESS LIST

     LMs. Lauren Brand, President, National Association 
of Waterfront Employers
     LMs. Jennifer Carpenter, President and Chief 
Executive Officer, The American Waterways Operators
     LMr. Christopher J. Connor, President and Chief 
Executive Officer, The American Association of Port Authorities
     LMr. Eric Ebeling, President and Chief Executive 
Officer, American Roll-On Roll-Off Carrier, on behalf of USA 
Maritime
     LMr. Michael Roberts, President, American Maritime 
Partnership

 
   THE STATUS OF THE U.S. MARITIME SUPPLY CHAIN DURING THE COVID-19 
                                PANDEMIC

                              ----------                              


                          FRIDAY, MAY 29, 2020

                  House of Representatives,
          Subcommittee on Coast Guard and Maritime 
                                    Transportation,
            Committee on Transportation and Infrastructure,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 1 p.m., via 
Webex, Hon. Sean Patrick Maloney (Chairman of the subcommittee) 
presiding.
    Mr. Maloney. The committee will come to order. Good 
afternoon, everyone.
    I ask unanimous consent that the chair be authorized to 
declare a recess at any time during today's hearing. Without 
objection, so ordered.
    I further ask unanimous consent that Members not on the 
subcommittee be permitted to sit with the subcommittee at 
today's hearing and ask questions. Without objection, so 
ordered.
    As this is a remote hearing, I would like to remind Members 
of some key regulations from the House Committee on Rules to 
ensure this hearing goes smoothly. I understand this is new to 
many of us and so I ask your indulgence.
    Before I do that, I would also like to just acknowledge 
that we are conducting this hearing as leaders in our 
communities at a time when our country is going through very 
difficult, very difficult circumstances. We have lost 100,000 
of our fellow citizens to a terrible pandemic and we are 
watching violence erupt in a major American city.
    And so I ask that we all take a moment to pray for our 
country and for the people of Minnesota, and with that spirit 
of prayerfulness and justice, that we conduct ourselves in a 
way that lends credit to the House of Representatives. And I 
know the ranking member joins me in those concerns.
    So bear with me, everyone. Let's just go through some of 
the new procedures and facets of this remote hearing, although 
in most ways it will be very familiar and resemble the hearings 
that we do all the time. So a few things from the House rules.
    First, Members must be visible on screen for purposes of 
identification when joining this hearing. Members must also 
continue to use the video function of today's software 
platform, that is Cisco WebEx, for the remainder of the time 
they are attending the hearing; your video must be on, unless 
experiencing connectivity issues, obviously, or other technical 
problems.
    If you are having such problems, please inform committee 
staff as quickly as possible so you can receive assistance. A 
chat function is available for the Members on the Cisco WebEx 
platform for this purpose. Members can also call the 
committee's main phone line at 202-225-4472 for technical 
assistance at any time.
    Members are also not to participate remotely in any other 
proceedings that may be occurring simultaneously.
    It is the responsibility of each Member seeking recognition 
to unmute their microphone prior to speaking. To avoid any 
inadvertent background noise, I request that all Members keep 
their microphone muted when not seeking recognition to speak, 
very similar to a committee hearing where you would not turn 
your microphone on unless you were speaking.
    So please, we all know the hazards of being unmuted when 
you don't want to be. My advice is, make sure you are muted 
right now. The default option, as I understand it, is that you 
will all be unmuted. So mute yourselves until you wish to be 
recognized. Should I hear any inadvertent background noise, I 
will request you to do so, that is, mute your microphone.
    Finally, despite being a remote hearing, I want to 
emphasize that all standard rules of decorum apply. As the 
chair of today's proceeding, I will make a good-faith effort to 
provide every Member experiencing any connectivity issues an 
opportunity to participate fully in the proceedings.
    Members will have the standard 5 minutes to ask questions. 
To insert a document into the record, please have your staff 
email it to the committee's clerk, Mike Twinchek.
    This hearing is also being livestreamed for the public to 
view. Let me repeat that. It is being livestreamed for the 
public to view. I know many of us have participated in informal 
Zoom chats over the last few weeks. This is a public livestream 
of the committee's proceeding.
    Well, good morning, and welcome to the Transportation and 
Infrastructure Committee's first ever video conference hearing 
to examine the state of the U.S. maritime supply chain amid the 
COVID-19 pandemic.
    It is unfortunate that this pandemic prevents us from 
conducting this hearing in person, but the Subcommittee on 
Coast Guard and Maritime Transportation has been around in one 
way or another throughout our country's history and I am 
confident in the subcommittee's ability to address the unique 
issues facing the maritime transportation system as well as the 
U.S. Coast Guard.
    As we all know and adjust to this new normal, I look 
forward to working with Ranking Member Gibbs and other members 
of the subcommittee to ensure this body rises to the challenge 
that our country now faces. And I would like to thank the 
ranking member, in particular, for his cooperation in our 
informal communications up to now. It is not the first time we 
have been in touch or working on the issues of concern to this 
committee, even though this is our first public livestreamed 
hearing. So I want to thank him for his generosity and his 
accommodation at every turn.
    One cannot overstate the importance of our Nation's 
maritime industry. In a typical year, over $4.6 trillion worth 
of commerce flows through a maritime transportation system that 
is rapidly becoming more complex and interconnected. 
Unprecedented safety measures and a recent decrease in cargo, 
some of which began before the onset of the pandemic, will 
challenge the industry for months and years to come.
    My hope is that this hearing will help the committee better 
understand the difficulties facing the maritime industry and 
identify areas of support that may be needed to ensure the 
seamless movement of cargo and protect the associated maritime 
jobs.
    The U.S. maritime industry includes four major components: 
the internationally trading U.S.-flagged fleet, the domestic or 
Jones Act trades, shipbuilders, and U.S. ports. Longstanding 
durable maritime statutes, such as the Jones Act, cargo 
preference, and the Maritime Loan Guarantee Program, have been 
supplemented by more recent programs, such as the Maritime 
Security Program, Small Shipyard Grant Program, and the Port 
Infrastructure Development Program. But these programs may not 
be enough to enable the industry to weather the current 
pandemic and the associated economic downturn.
    Unless you live near a port, the maritime industry 
typically goes unnoticed, even though 90 percent of our goods 
are at some point carried by water. While the industry has 
managed to maintain an acceptable level of service by adapting 
and instituting comprehensive safety measures, declining cargo 
volumes threaten the viability of vessel owners and operators, 
ports, shipyards, and the workers employed by those industries 
who are vital to our economic and national security.
    While our ports are projecting a 20- to 30-percent drop in 
business, some shipping trades are experiencing a 50-percent 
drop in cargo for the second quarter of 2020.
    It is unclear what the U.S. maritime transportation system 
will face in the coming months and years. What is clear is the 
need to maintain capacity across all maritime sectors. What may 
seem expensive now pales in comparison to the investment that 
would be needed to rebuild those industries from scratch.
    For instance, the Maritime Security Program, which supports 
60 vessels and employs thousands of mariners, ensures that the 
Department of Defense can project force internationally. While 
the program currently costs $300 million per year, U.S. 
Transportation Command has estimated that the cost to 
organically replicate the program's capacity would exceed $65 
billion.
    While I recognize that the Maritime Administration has 
recently released their long-awaited maritime strategy, the 
lack of a comprehensive plan with concrete goals, action items, 
and milestones remains a major hurdle for the maritime 
industry. Without a whole-of-Government approach that addresses 
the entire industry, our maritime supply chain is at risk. The 
pandemic only amplifies that risk.
    While I do not anticipate a positive message, I look 
forward to hearing from our witnesses and thank them for their 
participation.
    [Mr. Maloney's prepared statement follows:]
                                 
 Prepared Statement of Hon. Sean Patrick Maloney, a Representative in 
  Congress from the State of New York, and Chairman, Subcommittee on 
                Coast Guard and Maritime Transportation
    Good morning, and welcome to the Transportation and Infrastructure 
Committee's first ever videoconference hearing to examine the state of 
the U.S. maritime supply chain amid the COVID-19 pandemic.
    It is unfortunate that this pandemic prevents us from conducting 
this hearing in person, but the Subcommittee on Coast Guard and 
Maritime Transportation has been around in one form or another 
throughout our country's history, and I am confident in the 
Subcommittee's ability to address the unique issues facing the maritime 
transportation system as well as the U.S. Coast Guard. As we all adjust 
to the new normal, I look forward to working with Ranking Member Gibbs 
and the other Members of the Subcommittee to ensure this body rises to 
the challenges our country now faces.
    One cannot overstate the importance of our nation's maritime 
industry. In a typical year, over $4.6 trillion worth of commerce flows 
through a maritime transportation system that is rapidly becoming more 
complex and interconnected. Unprecedented safety measures and a recent 
decrease in cargo, some of which began before the onset of the 
pandemic, will challenge the industry for months and years to come.
    My hope is that this hearing will help the Committee better 
understand the difficulties facing the maritime industry and identify 
areas of support that may be needed to ensure the seamless movement of 
cargo and protect the associated maritime jobs.
    The U.S. maritime industry includes four major components: the 
internationally trading U.S. flagged fleet, the domestic (or Jones Act) 
trades, shipbuilders, and U.S. ports. Longstanding durable maritime 
statutes such as the Jones Act, Cargo Preference, and the Maritime Loan 
Guarantee Program, have been supplemented by more recent programs such 
as the Maritime Security Program, Small Shipyard Grant Program and the 
Port Infrastructure Development Program. But those programs may not be 
enough to enable the industry to weather the current pandemic and the 
associated economic downturn.
    Unless you live near a port, the maritime industry typically goes 
unnoticed even though 90 percent of goods are, at some point, carried 
by water. While the industry has managed to maintain an acceptable 
level of service by adapting and instituting comprehensive safety 
measures, declining cargo volumes threaten the viability of vessel 
owners and operators, ports, shipyards, and the workers employed by 
those industries who are vital to our economic and national security. 
While our ports are projecting a 20-30 percent drop in business, some 
shipping trades are expecting a 50 percent drop in cargo for the second 
quarter of 2020.
    It is unclear what the U.S. maritime transportation system will 
face in the coming months and years. What is clear is the need to 
maintain capacity across all maritime sectors. What may seem expensive 
now, pales in comparison to the investment that would be needed to 
rebuild these industries from scratch. For instance, the Maritime 
Security Program, which supports 60 vessels and employs thousands of 
mariners, ensures that the Department of Defense can project force 
internationally. While the program currently costs $300 million per 
year, the U.S. Transportation Command has estimated that the cost to 
organically replicate the program's capacity would exceed $65 billion.
    While I recognize that the Maritime Administration has recently 
released their long-awaited Maritime Strategy, the lack of a 
comprehensive plan with concrete goals, action items, and milestones 
remains a major hurdle for the maritime industry. Without a whole-of-
government approach that addresses the entire industry, our maritime 
supply chain is at risk. The pandemic only amplifies that risk.
    Although I do not anticipate a positive message, I look forward to 
hearing from our witnesses.

    Mr. Maloney. And I would ask unanimous consent to insert a 
joint letter signed by six U.S. maritime labor unions into the 
hearing record. Without objection, so ordered.
    [The information follows:]
                                 
Letter of May 28, 2020, from Marine Engineers' Beneficial Association; 
 American Maritime Officers; Marine Firemen, Oilers, Watertenders and 
   Wipers Association; Sailor's Union of the Pacific; International 
 Organization of Masters, Mates & Pilots; and Seafarers International 
      Union; Submitted for the Record by Hon. Sean Patrick Maloney
                                                      May 28, 2020.
Hon. Mike Pompeo,
U.S. Secretary of State,
2201 C St., NW, Washington, DC.
Hon. Mark T. Esper,
U.S. Secretary of Defense,
100 S Washington Blvd, Arlington, VA.

    Dear Secretary Pompeo and Secretary Esper:
    We are writing to request your immediate assistance on an urgent 
matter. Scores of U.S. mariners are presently trapped aboard cargo 
ships, unable to take leave or return home due to extreme COVID-19 
lockdown measures imposed by foreign governments. This humanitarian 
crisis, if not resolved as soon as possible, may threaten the essential 
supply chain for some 200,000 active U.S. military personnel now 
serving overseas.
    The cargo carried on these U.S. flagged ships supports our troops, 
our allies and the global economy.
    Ship's captains, officers and crew members who sail under the 
American flag and perform these essential functions for our country 
have not been able to set foot on dry land in months. Their workplaces 
have become floating prisons. Crewmembers are in danger of losing 
access to life-sustaining medicines. In many cases, they cannot contact 
their loved ones at home in the United States as some of these vessels 
lack Internet access.
    It is well documented that isolation and excessive time serving 
aboard ship can create increased fatigue and psychological stress, 
raising the risk of marine accidents. Thousands of mariners across the 
globe who work on foreign-flagged vessels are in the same predicament.
    U.S. mariners who are part of the U.S. Maritime Security Program 
typically serve a four-month assignment on ship and then rotate home by 
air to the United States for time off while awaiting their next 
assignment. A fresh crew flies in to relieve them. Right now, foreign 
governments are refusing to allow U.S. mariners to leave their ships, 
to enter overseas airports, or to use hotels or any other form of 
accommodation or transport which would allow them to return home.
    These extreme lockdown conditions, imposed due to the COVID-19 
pandemic, are not related to any meaningful health risks. Thanks to 
rigorous and comprehensive safety measures jointly implemented by 
employers and those aboard ship, in conjunction with our union, there 
have been no reported cases--none--of the deadly virus on U.S. Maritime 
Security Program vessels. These are not cruise ships suffering massive 
outbreaks; these are cargo ships staffed by mariners who have kept out 
an infectious disease by scrupulously following all required safety 
measures.
    These American men and women need to come home immediately. The 
longer they are stuck at sea without relief, the greater the risk that 
fatigue and stress will lead to accidents interrupting the delivery of 
vital food, medicine, military supplies and other cargo to our troops 
serving overseas.
    It is inconceivable that the United States--the wealthiest and most 
powerful nation on earth, with military bases, planes and facilities 
all over the globe--cannot relieve its own mariners who are stranded at 
sea. To date, however, our efforts to address this problem with members 
of your respective departments have yielded no results. That's why we 
are bringing this issue to your attention.
    COVID-19 has been a sudden and intense storm. We know that you and 
your staffs have a lot on your desks to contend with during this time 
of peril. Please make this a priority. Help us bring these stranded 
U.S. mariners home to safe harbor.
        Sincerely,
Marshall Ainley,
  President,
  Marine Engineers' Beneficial Association.
Paul Doell,
  President,
  American Maritime Officers.
Anthony Poplawski,
  President/Secretary-Treasurer,
  Marine Firemen, Oilers, Watertenders and Wipers Association.
Dave Connolly,
  President,
  Sailor's Union of the Pacific.
Don Marcus,
  President,
  International Organization of Masters, Mates & Pilots.
Michael Sacco,
  President,
  Seafarers International Union.

    Mr. Maloney. I would now like to call on the ranking member 
of the subcommittee, my friend Mr. Gibbs, for any opening 
remarks. And a reminder to unmute yourself, Bob.
    Mr. Gibbs. Thanks. That was helpful. Thank you, Chairman 
Maloney.
    And also, I want to concur with your initial comments about 
operating during this COVID-19 virus, unprecedented 
circumstances. And hopefully, we are going to get out of this 
sooner than later. And also the tragedy that happened in 
Minnesota. Hopefully that gets resolved. And I certainly don't 
condone any behavior that is going on out there with the riots 
and all that. So hopefully our friends, our former colleague, 
the Governor out there now, will be able to handle that.
    Today we are looking at impacts of COVID-19 on the maritime 
supply chain; however, the coronavirus is not the only large-
scale issue causing changes in the supply chain. Industry 
consolidation, rapid technological change, and changing trade 
relations with China have also had significant impacts. I hope 
we learn today about the relevant importance of all those 
issues.
    After 9/11, the United States and much of our world updated 
their port security infrastructure and the framework under 
which port security infrastructure is regulated. Those updates 
and initiatives were focused on responses to violent physical 
terrorist acts.
    Since that time, first cyber threats and now threats from 
the coronavirus have posed new challenges to ports and to the 
supply chain, which ports and vessels in the international and 
domestic trade vessels are a part of. Like recent cyber 
attacks, the coronavirus response will pressure test the post-
9/11 port security and determine whether post-9/11 upgrades 
were sufficient to respond to a wide array of pressures ports 
and vessel operators now face or if the upgrades were too 
specific a response to potential terrorist threats.
    In addition to those external threats, there have been 
significant economic changes post-2008. Those changes are the 
result of the consolidation of container shipping into 
increasingly larger vessels owned and operated by ever fewer 
and more interconnected carriers.
    In addition, the increasing technological sophistication of 
logistics operations has also led to tighter, more consolidated 
schedules and, again, more interconnections within the 
industry.
    I look forward to hearing from our witnesses today about 
the challenges they face in keeping up with the rapid changes 
in the elements of the supply chain. Of course, we are 
interested in which of those changes are new and related to the 
coronavirus and which are the culmination of long-term trends 
and industry changes.
    I appreciate Chairman Maloney calling this hearing today. I 
look forward to seeing what we have learned and what to learn.
    And I concur with you, Chairman, that the news might not be 
too good, but hopefully the news is going to show we are moving 
forward in the right way and things are improving.
    Finally, Chairman, I want to remind Members it is our 
responsibility to mute and unmute ourselves as we seek 
recognition and ask questions.
    With that, I will yield back and mute myself.
    [Mr. Gibbs' prepared statement follows:]

                                 
Prepared Statement of Hon. Bob Gibbs, a Representative in Congress from 
the State of Ohio, and Ranking Member, Subcommittee on Coast Guard and 
                        Maritime Transportation
    Today we are looking at the impacts of COVID-19 on the maritime 
supply chain. However, the coronavirus is not the only large-scale 
issue causing changes in the supply chain. Industry consolidation, 
rapid technological change, and changing trade relations with China 
also have significant impacts. I hope we learn about the relative 
importance of all these issues today.
    After 9/11, the United States and much of the world updated their 
port security infrastructure and the framework under which port 
security infrastructure is regulated. Those updates and initiatives 
were focused on responses to violent physical terrorist acts. Since 
that time, first cyber threats and now threats from the coronavirus 
have posed new challenges to ports and the supply chain, which ports 
and vessels in the international and domestic trades are a part of.
    Like recent cyber incidents, the coronavirus response will pressure 
test the post-9/11 port security system and determine whether post-9/11 
upgrades were sufficient to respond to the wide array of pressures 
ports and vessel operators now face or if those upgrades were too 
specific a response to potential terrorist threats.
    In addition to these external threats, there have been significant 
economic changes post-2008. These changes are the result of the 
consolidation of container shipping into increasingly larger vessels 
owned and operated by ever fewer and more interconnected carriers.
    In addition, the increasing technological sophistication of 
logistics operations has also led to tighter, more coordinated 
schedules, and, again, more interconnections within the industry.
    I look forward to hearing from our witnesses today about the 
challenges they face in keeping up with rapid changes in the elements 
of the supply chain. Of course, we are interested in which of those 
changes are new and related to coronavirus, and which are the 
culmination of long-term trends and industry changes.
    I appreciate Chair Maloney calling this hearing today and look 
forward to seeing what we learn.

    Mr. Maloney. Well, I thank the gentleman.
    I would now like to recognize the chairman of the 
Transportation and Infrastructure Committee, Mr. Peter DeFazio, 
whose leadership during this crisis has been nothing short of 
extraordinary, and I thank him for all he has done to respond 
to this unprecedented situation.
    Mr. Chairman.
    Mr. DeFazio. Thanks, Sean Patrick. Thanks to you and Bob 
Gibbs, ranking member, for being willing to conduct the first 
ever virtual hearing for the Transportation and Infrastructure 
Committee, a committee with more than 200 years of history.
    It is a fairly extraordinary day, but these are 
extraordinary times, and in order to get our work done, we have 
to take extraordinary measures. And this is the first big step 
toward fully actuating the committee so we can move forward not 
only with hearings and oversight, but we can also move forward 
in the very near future to marking up significant legislation 
that the country needs.
    We had a briefing, I think it was 2 weeks now, from the 
MARAD Administrator, and he painted a pretty grim picture of 
the conditions in the maritime industry, the loss of revenues 
and movement of freight and supplies. It is everywhere. It is 
not just in our major commercial ports. It is in many of our 
smaller ports. And the crisis runs bicoastal. It starts in 
small, mid-emerging ports like Coos Bay in my district, to the 
Port of Miami, Seattle, obviously down to L.A.-Long Beach. I 
see Alan there.
    And we have to take action. As you pointed out, Mr. 
Chairman, this is a critical part of America's supply chain. It 
is the most important component. And, unfortunately, given the 
definitions in the previous relief bills, we haven't done a lot 
for ports.
    They enjoy an odd sort of status, and they don't quite fit 
into any of the programs that have been adopted so far for the 
sorts of help they need. We need everything from personal 
protective equipment [PPE] for port workers, and we have heard 
a good deal about that, to assistance to deal with the marine 
terminal operators.
    Business is way down. They can't pay their rent. The ports 
can't afford to not get the rent. I mean, it just hurts up and 
down the whole chain: harbor pilots, assist tugs, drayage 
operators, fuel bunkers.
    We can't have them all go out of business, can't 
reconstitute this easily or quickly. So we have to deal with 
the totality of this industry, not a particular segment.
    We are looking to develop legislation to provide the 
Maritime Administration with specific emergency authority to 
allow it to provide financial relief and assistance to each 
link in the maritime supply chain that serves both foreign and 
coastwise trades of the U.S.
    And as you pointed out earlier, Mr. Chairman, at this 
hearing we will be making the case of the need for those funds 
so we can carry it forward to our appropriators and hopefully 
maintain the integrity of the system which we are going to need 
now more than ever.
    With that, I yield back the balance of my time.
    [Mr. DeFazio's prepared statement follows:]

                                 
   Prepared Statement of Hon. Peter A. DeFazio, a Representative in 
     Congress from the State of Oregon, and Chairman, Committee on 
                   Transportation and Infrastructure
    Thank you, Chairman Maloney, I commend you for quickly organizing 
this afternoon's hearing to examine the impacts on the U.S. maritime 
supply chain caused by the COVID-19 pandemic.
    I also want to extend my thanks to our witnesses for making 
themselves available, not only on short notice, but also under this new 
virtual format. I look forward to your participation this afternoon.
    It is vitally important that this committee understand how the 
pandemic has affected the reliability and efficiency of our maritime 
industry.
    With so much of U.S. trade and our national economy dependent on a 
seamlessly efficient global maritime supply chain, it is critical that 
we understand the impacts and implications moving forward as we shape 
future response and recovery actions.
    And make no mistake about it; our Nation will recover from this 
pandemic. The fundamental question is: how quickly?
    No one can know for sure what the answer is to that question.
    One thing I do know for sure, however, is that unless we begin now 
to take constructive actions to shore up and support all sectors in our 
maritime supply chain--from Coos Bay to PortMiami--we will only 
frustrate, and not facilitate, our efforts to re-float our economy as 
quickly as possible.
    I realize that the Congress has already committed trillions in 
spending to address the fall-out from the pandemic. Some members may 
feel that additional spending is unwarranted.
    But at this point, it would be ``penny wise and pound foolish'' to 
believe that we should not take aggressive action to shore up the 
lifeline to our national economy--the maritime supply chain.
    And that is why this afternoon's hearing is important. We need to 
understand the needs to be able to best tailor the assistance. But in 
doing so, we must first think holistically and recognize the 
interconnectedness of the entire enterprise itself.
    For it will do little good if we address the financial issues 
affecting our marine terminal operators, but we do nothing to ensure 
that our longshore workers and Coast Guard service members have the 
protective gear they need to stay safe and healthy on the job.
    Moreover, we can help our ports get through the steep drop in trade 
volumes, but it will come to naught if all of the services that make 
our ports function, such as harbor pilots, assist tugs, drayage 
operators, fuel bunkers and others are allowed to go out of business.
    We must treat the totality of the industry, not just one segment. 
And we need to call upon the various segments of the industry to work 
together for truly, you will all sink or swim together.
    That is why I am looking to develop legislation to finally provide 
the Maritime Administration with a specific emergency authority to 
allow it to provide financial relief and assistance to each link in the 
maritime supply chain that serves both the foreign and coastwise trades 
of the United States.
    Too much of our economic recovery and future prosperity rides on 
what we do over the next couple of months to ensure that when our 
economy re-starts, that we have a maritime industry and supply chain 
able to reliably and efficiently move that commerce. I urge members to 
join me in that effort.

    Mr. Maloney. I thank the gentleman.
    At this time I would like to recognize the ranking member, 
Mr. Graves.
    I don't see the gentleman. He may not be with us at the 
moment.
    Are you with us, Mr. Graves?
    Well, we can certainly come back to him if he is having 
connectivity issues.
    So let's move forward with our witnesses for today's panel. 
I thank them all for being here and welcome them to this remote 
hearing.
    Today we are joined by Mr. Christopher J. Connor, president 
and CEO of the American Association of Port Authorities.
    Mr. Michael Roberts, president of the American Maritime 
Partnership.
    Ms. Jennifer Carpenter, president and CEO, The American 
Waterways Operators.
    Ms. Lauren Brand, president, National Association of 
Waterfront Employers.
    And Mr. Eric Ebeling, president and CEO, American Roll-On 
Roll-Off Carrier Group, on behalf of USA Maritime.
    Thank you all for being here today. We look forward to your 
testimony.
    Without objection, our witnesses' full statements will be 
included in the record. Since those written statements are part 
of the record, the subcommittee requests that you limit your 
oral testimony to 5 minutes.
    With that, Mr. Connor, if you would please unmute yourself 
and you may proceed.

    TESTIMONY OF CHRISTOPHER J. CONNOR, PRESIDENT AND CHIEF 
 EXECUTIVE OFFICER, AMERICAN ASSOCIATION OF PORT AUTHORITIES; 
 MICHAEL G. ROBERTS, SENIOR VICE PRESIDENT, CROWLEY MARITIME, 
TESTIFYING ON BEHALF OF AMERICAN MARITIME PARTNERSHIP; JENNIFER 
   A. CARPENTER, PRESIDENT AND CHIEF EXECUTIVE OFFICER, THE 
   AMERICAN WATERWAYS OPERATORS; LAUREN K. BRAND, PRESIDENT, 
   NATIONAL ASSOCIATION OF WATERFRONT EMPLOYERS; AND ERIC P. 
 EBELING, PRESIDENT AND CHIEF EXECUTIVE OFFICER, AMERICAN ROLL-
ON ROLL-OFF CARRIER GROUP, TESTIFYING ON BEHALF OF USA MARITIME

    Mr. Connor. Well, thank you, Chairman Maloney and Ranking 
Member Gibbs, for holding this important hearing on the impact 
of the COVID-19 pandemic on the U.S. maritime supply chain.
    My name is Chris Connor, president and CEO of the American 
Association of Port Authorities. AAPA is the unified voice of 
the seaport industry in the Americas, representing 78 public 
port authorities in the United States. My testimony today is 
given on behalf of State and local public agencies located 
along the Atlantic, Pacific, and gulf coasts, the Great Lakes, 
Alaska, Hawaii, Puerto Rico, Guam, and the U.S. Virgin Islands.
    Our Nation's seaports deliver vital goods to consumers, 
facilitate the export of American-made goods, create jobs, and 
support local and national economic growth. Ports also play a 
crucial role in our national defense, a point underscored by 
the designation of 17 of our Nation's ports as ``strategic 
seaports'' by DoD.
    According to Martin Associates, an internationally 
recognized economic and transportation consulting firm, the 
total economic value generated in terms of revenue to 
businesses, personal income, and economic output at U.S. 
coastal ports accounts for $5.4 trillion or 26 percent of GDP. 
Over 650,000 Americans are directly employed in jobs generated 
through the movement of marine cargo through vessel activity.
    Let me now tell you what seaports in your respective 
districts are currently experiencing.
    Containerized cargo declined by 18 percent in the month of 
March year on year. Furthermore, ports have seen a significant 
increase in blank sailings or canceled vessel calls, resulting 
in revenue losses for port authorities.
    While the data are still incoming for the months of April 
and May, initial indications show declines of 20 to 25 percent 
year on year.
    Following the shutdown of auto production facilities in the 
Americas, Europe, and Asia, we have seen major reduction in 
RORO cargoes. One major west coast auto port has experienced a 
90-percent--9-0-percent--reduction in RORO cargo, with only 1 
or 2 ship calls expected this month compared to a typical month 
of 16.
    At two of the largest bulk cargo ports in the United 
States, movements have declined 15 to 25 percent year on year. 
Bulk cargo movements, which includes agricultural products, 
energy commodities such as oil and coal, as well as chemicals, 
are down 27 percent year on year at one large gulf port.
    Tourism at our Nation's ports has completely evaporated. 
This has resulted in massive P&L impacts at ports that are 
heavily weighted in this sector. Indications are that certain 
South Atlantic seaports' overall business is down between 50 to 
80 percent as a result.
    Small ports around the country have been especially hard 
hit. At these ports there are often only one or two types of 
cargo being handled. If demand drops, port operations can 
nearly cease. There are over 800 of these emerging harbors, 
processing less than 1 million tons of cargo per year, around 
the U.S.
    We are beginning to see furloughs and layoffs in the port 
industry, and we are also beginning to see that some ports are 
looking to forego planning for and investment in capital 
improvement projects.
    The implications of deferring or canceling investment or 
other capital improvement programs will be felt long after this 
pandemic and won't bode well for American efficiency and 
logistics, nor its competitiveness in global markets.
    For ports, as for other industries, the future remains 
uncertain. At this stage of the pandemic, hope for a quick V-
shaped recovery has been replaced by the realization of a 
longer battle ahead.
    Many members of this subcommittee and a total of 85 Members 
of the House voiced support for port relief in a recent letter 
to House leadership. You said it best in the letter when you 
wrote, ``It is critical that all of our Nation's ports receive 
much needed assistance to keep supply chains moving and keep 
both employees and customers safe.''
    We agree, and AAPA urges that Congress include $1.5 billion 
in economic relief to our Nation's public ports in the next 
coronavirus relief bill. This request is not about recovering 
lost revenue.
    It is about ensuring that ports are able to make bond and 
other debt instrument payments, keep pace with the accelerating 
cost of protecting workers, and ultimately ensuring that 
America's seaports and port workers maintain a state of 
readiness for the eventual economic recovery.
    Thank you again for inviting AAPA to testify today on this 
important topic, and I look forward to answering any questions 
you may have.
    [Mr. Connor's prepared statement follows:]

                                 
   Prepared Statement of Christopher J. Connor, President and Chief 
      Executive Officer, American Association of Port Authorities
    Thank you Chairman Maloney and Ranking Member Gibbs for holding 
this important hearing on the impact of the COVID-19 pandemic on the US 
Maritime supply chain and for inviting the American Association of Port 
Authorities to testify.
    My name is Chris Connor, and I am the President and Chief Executive 
Officer of the American Association of Port Authorities (AAPA). AAPA is 
the unified voice of the seaport industry in the Americas, representing 
78 public port authorities in the United States. My testimony today is 
given on behalf of state and local public agencies located along the 
Atlantic, Pacific, and Gulf coasts, the Great Lakes, and in Alaska, 
Hawaii, Puerto Rico, Guam, and the U.S. Virgin Islands.
    Our nation's seaports deliver vital goods to consumers, facilitate 
the export of American made goods, create jobs, and support local and 
national economic growth. Ports also play a crucial role in our 
national defense--a point acknowledged through the designation of 17 of 
our nation's ports as ``strategic seaports'' by the Department of 
Defense.
    According to Martin Associates, an internationally recognized 
economic and transportation consulting firm, the total economic value 
generated in terms of revenue to businesses, personal income and 
economic output at U.S. coastal ports accounts for $5.4 trillion, 
roughly 26 percent of GDP, and over 650,000 Americans are directly 
employed in jobs generated through the movement of marine cargo and 
through vessel activity.
    Since the beginning of the COVID-19 pandemic, AAPA has remained in 
regular contact with our members in order to monitor the impact of the 
pandemic, communicate with them on the potential of federal relief and 
recovery efforts, and to give our member ports the opportunity to share 
best practices with one another as they manage this crisis. On this 
latter point I'd like to highlight how impressive the collaboration 
within the industry has been; typically the fiercest of competitors--
Ports have set aside market share aims in favor of keeping port workers 
safe and healthy, and getting goods to the frontline of the COVID-19 
battlegrounds, as well as to consumers like you and me.
    AAPA membership comprises ports large, medium, and small, and to 
that end there is a saying in the Port industry that ``if you have seen 
one port, you have seen one port.'' Accordingly, each of our members 
has been impacted in a myriad of different ways by COVID-19. But one 
thing is clear--all have been affected by this crisis.
    In an effort to detail the operating challenges and unmet needs 
facing America's seaports and our nation's maritime supply chain as a 
result of the COVID-19 pandemic, I offer the following comments:
                          Containerized Cargo
    We have seen containerized cargo decline by eighteen percent in the 
month of March over the same period in 2019. These declines are not 
limited to any particular geographic region, and container cargo 
volumes have declined across each and every region represented by our 
Association. Ports have seen a significant increase in blank sailings, 
or cancelled vessel calls, which can result in significant revenue 
losses.
    While data is still incoming for the months of April and May, 
initial indications show containerized cargo declines of twenty to 
twenty five percent in those months over the prior year.
                         Roll On/Roll Off Cargo
    As automobiles have worked their way through the global supply 
chain following the shuttering of auto production facilities in the 
Americas, Europe, and Asia, we have seen major reductions in roll-on/
roll-off cargos. One west coast port has experienced a ninety percent 
reduction in ro/ro cargos, with only one or two ship calls expected 
this month compared to a typical average of four ship calls per week.
    While the big three auto manufacturers have recently brought 
production back on-line, it remains uncertain what demand may look like 
and how consumer decisions may impact this market segment.
                               Bulk Cargo
    At two of the largest bulk cargo ports in the United States 
movements have declined fifteen to twenty five percent over the same 
period in 2019; bulk cargo movements, which include agricultural 
products, energy commodities such as oil and coal as well as chemicals, 
are down twenty seven percent compared to 2019 at one Gulf coast port. 
Other regions, including ports in the Great Lakes, have indicated that 
bulk cargo movements remain level compared to last year--though they 
expect significant declines in the near future.
                                Tourism
    Tourism at our nation's ports has completely evaporated. This has 
resulted in massive P&L impacts at ports heavily invested in this 
business--Indications are that certain South Atlantic Seaports overall 
business is down between 50 percent-80 percent.
                              Small Ports
    Small ports around the country have been especially hard hit. At 
these ports there are often only one or two types of cargo being 
handled and if demand drops port operations can nearly cease. There are 
over 800 of these `emerging harbors', processing less than 1 million 
tons of cargo per year, around the US.
    We are beginning to see furloughs and layoffs in the maritime 
industry and supply chain, and it is estimated by Martin Associates 
that a 20 percent annualized reduction in cargo throughput at our 
nation's ports could result in the direct loss of 130,000 jobs.
    We are also beginning to see that some ports are looking to forego 
planning for and investment in capital improvement projects, putting 
the readiness, capacity, and capability of our nation's trade 
infrastructure at risk.
    For ports and the maritime industry as for other industry sectors 
the future remains uncertain. However, projections from our members 
indicate that the impact of current market conditions on business for 
the month of June are likely to result in declines, year over year, 
that are equal to equal or greater than those seen in previous months.
    In a recent letter to House leadership 85 Members of Congress 
voiced support for port relief. I thank those that signed that letter, 
including Members of this Committee. In the letter, signers noted that 
``it is critical that all of our nation's ports receive much needed 
assistance to keep supply chains moving and keep both employees and 
customers safe.''
    We agree, and AAPA requests that Congress include $1.5 billion in 
economic relief to our nation's public ports in any future coronavirus 
response or recovery proposal. This request is not about recovering 
lost revenue; but rather about ensuring that Ports are able to make 
bond and other debt instrument payments, keep pace with the 
accelerating costs of protecting workers and keeping the workplace 
sanitized, and ultimately ensuring that Americas Sea Ports and port 
workers maintain a state of readiness for the eventual economic 
recovery.
    Thank you again for inviting the American Association of Port 
Authorities to testify today on this important topic, and I look 
forward to answering any questions you may have, on the impacts this 
crisis has had on ports, on what the future may hold, and on what 
infrastructure investments Congress could make to position the industry 
for success moving forward.

    Mr. Maloney. I thank the gentleman.
    Now proceed to Mr. Roberts.
    You may proceed. Please unmute. And the floor is yours.
    Mr. Roberts. Good afternoon, Chairman Maloney. Thank you 
and Ranking Member Gibbs, Chairman DeFazio, members of the 
subcommittee. I am honored to appear before you on behalf of 
the American Maritime Partnership, representing almost all 
segments of the domestic maritime industry and producing 
650,000 jobs across the Nation.
    My message is simple. I have seen firsthand how American 
maritime has responded to this crisis, and I must tell you, I 
am so very proud to be associated with this community.
    Nobody knew how this was going to unfold and there is still 
a lot we don't know. There are gaps in the rulebook from this 
black swan event. But decisions have to be made, and these are 
the times when character and culture take over, when we make 
the best choices we can in good faith.
    Our industry wouldn't say there is some risk in being 
outside our home, so we will stay inside safe and COVID-free. 
American maritime just wouldn't do that. We have to do that. We 
choose to go outside our homes so that the grocery stores in 
San Juan and Honolulu and Anchorage are stocked up, so that the 
basic commodities--lumber, iron ore, grains, petroleum, 
building blocks for almost everything--those commodities can 
keep moving on our rivers and Great Lakes, so that our harbors 
are kept clear, and so that we can keep building modern ships 
to keep our supply chain working.
    I am proud to be part of this community, and I am grateful 
for the leadership that we have seen from our Government. 
Admiral Buzby started industry calls in March and they have 
been invaluable for sharing information, what is working, what 
is not working, where we need help. I remember at the end of 
the first call, Admiral Buzby saying these are the kinds of 
times when leaders lead.
    The leadership we have seen throughout the industry has 
been extraordinary, from the top executives to the ship 
captains to the line mariners, who lead by setting the right 
example, by their behavior. We have seen other organizations 
that have behaved differently. They throw up their hands and 
say the Government hasn't told us what to do.
    Maritime hasn't handled it that way. We have to figure it 
out. And I will single out one specific team, among many, the 
Ship Operators Cooperative Program, which put together a 
thoughtful and detailed set of protocols for how to prevent 
COVID infection from reaching vessel crews and how to deal with 
it if it happens. Other groups have done similar work, and all 
of it needs to be updated almost constantly because more 
information keeps coming in.
    So my key message is that the character and culture of the 
American maritime industry is driving leaders at every level to 
find solutions to keep people safe and keep supply chains 
moving.
    I want to emphasize a point made in my written testimony, 
which is that a cargo ship should never be quarantined. A 
mariner who is sick with COVID should be removed and given 
treatment as safely and quickly as possible. The rest of the 
crew should safely come off the vessel and go to quarantine. 
The vessel should be thoroughly sanitized, a new crew brought 
in, and then resume providing the essential services to the 
communities they serve.
    Leadership in times like this requires exercising judgment, 
using a 360-view of everything impacted by a decision. 
Quarantining a ship, sending it to anchor is less safe to the 
local port community and everyone else involved than sending 
the ship to a secure terminal where the best controls are in 
place.
    Finally, it is the 100-year anniversary of the Jones Act, a 
perfect opportunity to celebrate the dedication of the men and 
women of American maritime, those whose actions throughout this 
crisis and many other crises over the years exemplify the 
character that I have been talking about.
    It is also disappointing that a few people have chosen to 
use this crisis to attack American maritime because we are not 
as cheap as the Chinese maritime industry. As this subcommittee 
heard last October, the Chinese maritime industry serves 
China's interests quite well, controlling ports at key 
locations around the world using Government subsidies to 
dominate shipbuilding and global shipping so that they can 
dominate global trade.
    And in this country, there are some who seem to think that 
is OK. They will gladly sideline American mariners and destroy 
this maritime industry that contributes so much to safety and 
security so that they might get shipping services a little 
cheaper.
    It is unfortunate that they try to use this terrible crisis 
and the 100-year anniversary of the Jones Act to pursue that 
goal, and we appreciate this subcommittee's support in 
rejecting those efforts.
    With that, I want to thank you, again, Chairman Maloney, 
Ranking Member Gibbs. Both of your leadership has been 
exceptional. And we will welcome your questions.
    Thank you.
    [Mr. Roberts' prepared statement follows:]

                                 
   Prepared Statement of Michael G. Roberts, Senior Vice President, 
Crowley Maritime, testifying on behalf of American Maritime Partnership
                            I.  Introduction
    Mr. Chairman, Mr. Ranking Member, Members of the Subcommittee. 
Thank you for the opportunity to be with you today. I am Michael 
Roberts, senior vice president of Crowley Maritime, a major American 
domestic shipping company. We are a diversified marine transportation 
and logistics company based in Jacksonville, Florida. We employ about 
3,000 American mariners, and have invested nearly $3 billion in vessels 
built by American workers in U.S. shipyards. Vessels in our fleet serve 
customers in Alaska, the U.S. West, East and Gulf coasts, the Caribbean 
and Central America. Thank you for the opportunity to talk to you today 
about ``the U.S. maritime supply chain during the COVID-19 pandemic.''
    I am here today in my capacity as president of the American 
Maritime Partnership (AMP). AMP is the largest maritime legislative 
coalition ever assembled. Our organization includes all elements of the 
American domestic maritime industry--shipping companies, ship 
construction and repair yards, mariners, and pro-defense organizations. 
our focus is America's domestic shipping law, the Jones Act, which 
requires that cargo moved by water between two points in the United 
States be transported on American vessels by American mariners.
    Before addressing the impacts of the pandemic on the U.S. maritime 
supply chain, I would be remiss if I failed to point out that today's 
hearing comes in the midst of a series of important milestones for our 
industry that highlight its vital strategic and commercial role in our 
country's history. Last Friday was National Maritime Day, a day that 
recognizes U.S. mariners and the importance of our strong maritime 
heritage throughout our nation. Last Monday was Memorial Day, a day 
particularly important to us because of the deep connection between 
American maritime and national security. And finally, one week from 
today is the 100th anniversary of the Jones Act. We are happy to mark 
the centennial of the Jones Act with such overwhelming bipartisan 
support from the Congress.
    Nowhere is that support more clear than on the Coast Guard and 
Maritime Transportation Subcommittee. As you know, the American 
domestic maritime industry supports 650,000 jobs and provides an 
economic impact of more than $150 billion annually. It provides 
important national, economic and homeland security benefits throughout 
our country. The national security and homeland security benefits have 
been well-documented through writings and statements by countless 
Members of Congress, the White House, U.S. Defense Department, U.S. 
Transportation Command, U.S. Department of Transportation, U.S. 
Maritime Administration, U.S. Coast Guard, and Customs and Border 
Protection officials, as well as independent experts.
    You may also know that the American domestic maritime industry 
today is modern, innovative and leads the world in safety and 
environmental stewardship. The world's first containerships powered by 
clean natural gas now serve the domestic market between Florida and 
Puerto Rico. America's tanker fleet is among the safest and most 
environmentally responsible, combining data-driven safety management 
systems with a relatively new fleet profile. These and other 
innovations throughout the industry are deployed on ships operated by 
well-trained American mariners who care about the safety and health of 
America's maritime environment, and the citizens they serve.
    In these challenging times in the face of a historic pandemic, our 
nation's security can only benefit from an all-American industry like 
ours.
                       II.  Summary of Key Points
    Today I would like to leave you with three main points:
    First, despite the men and women of the domestic maritime industry 
working tirelessly to deliver America's goods, there continues to be 
opportunistic calls for Jones Act waivers during this time. No waivers 
are required; there is ample capacity in the domestic fleet. Any waiver 
would only outsource American jobs to foreign workers at a time of 
record domestic unemployment while doing nothing to improve the already 
efficient marine trade lanes we serve. Our primary request today is 
that you continue to do what you have done consistently over time and 
particularly throughout the pandemic--resist the efforts of 
opportunists to use COVID-19 as an excuse to change the Jones Act. We 
are deeply grateful for the broad, bipartisan support for the Jones Act 
through this Congress.
    Second, this subcommittee can be assured that the American domestic 
maritime industry will continue to show up to work and deliver the 
goods that make this nation strong and secure despite one of the most 
challenging environments in a generation. We take our responsibility as 
essential workers very seriously and understand our obligation to 
ensure that America's critical supply chains remain moving.
    Third, we very much appreciate the leadership and flexibility shown 
thus far to ensure that the maritime industry can continue to do our 
work, and hope that this subcommittee will encourage the adoption of 
flexible guidelines for U.S. crew quarantine and other issues with the 
relevant agencies.
        III.  COVID-19 Impacts on the Domestic Maritime Industry
    The COVID-19 pandemic has challenged us as individuals, companies, 
industries and as a nation. The entire domestic maritime industry has 
been deemed ``essential'' by the Department of Homeland Security (DHS), 
meaning that we continue operating throughout the pandemic. This has 
produced extraordinary safety challenges as well as complex financial 
implications. On the one hand, we have maintained a keen focus on 
keeping as safe as possible the essential maritime workforce--our 
mariners, dockworkers, drivers, warehouse workers, repairmen, and 
others who could not do their work remotely, but have had to show up 
for work for the past three months the same as they always have. We are 
extremely grateful for the dedication of these men and women. On the 
other hand are the customers--businesses, governments and consumers--
who have relied on the maritime industry to keep supplies moving, and 
in some cases to survive. Simply shutting down operations to protect 
our workforce has not been an option.
    No playbook is available to direct how to operate safely in this 
environment. Companies have had to improvise to develop special 
operating protocols to protect employees based on the best information 
available. These efforts to protect our workforce have been frustrated 
by the scarcity of personal protective equipment (PPE) and other 
materials. Our industry is also not immune from supply chain 
disruptions. There are supply chain impacts in certain segments of the 
industry, including difficulties with longer repair and maintenance 
schedules and the potential for impacts to spare parts sourcing if the 
pandemic continues.
    It should be noted that regulatory authorities have faced 
unprecedented challenges in providing guidance to the industry on how 
best to operate safely. The challenges include limited pre-existing 
guidance, shifting scientific advice, multiple stakeholders, scarce 
resources, and the need to make real-time decisions affecting many 
lives. U.S. government maritime authorities--the U.S. Coast Guard, 
Maritime Administration, U.S. Transportation Command and others--are to 
be commended for their leadership, and for reaching out to all aspects 
of the maritime industry in working through these issues. The 
foundation of collaboration between government and industry that has 
been built on national security, safety, and other issues has enabled 
real progress to be made in these extraordinary times.
    The severity of the financial impacts of the COVID-19 pandemic on 
the domestic maritime industry has yet to be determined. Two factors 
contribute to the uncertainty. First is the skyrocketing cost of 
operations resulting from implementing the protocols necessary to keep 
our workforce safe. The magnitude of these incremental costs and the 
availability of funds to help defray them has not been determined. 
Second is the impact of COVID-19 and the economic shutdown on demand 
for maritime services. While these impacts differ for different 
segments of the industry, demand is almost universally much lower than 
in normal times. The industry has made enormous investments in vessels, 
terminals, equipment, and other assets to provide services to their 
customers. Financing for these investments was based on economic models 
that did not account for the black swan event we are now experiencing. 
These services must nevertheless continue operating through this crisis 
even though the revenues generated will not cover the costs of 
providing them.
    There is great uncertainty as to when the most serious economic 
impacts will hit, how severe they will be and how long they will last. 
The American maritime industry must prepare for the worst-case scenario 
while working for better outcomes. This includes deferring capital and 
other expenses wherever possible and taking other necessary measures. 
Government programs designed to provide a financial backstop to mid-
sized companies facing severe economic damage should be available to 
provide temporary support to the American maritime industry.
a.  Scope of domestic maritime industry
    Our American domestic maritime industry is engaged in transporting 
goods through all sectors of the economy. U.S.-flag vessels carry 
agricultural, coal, chemical, aggregate, petroleum, and other products 
on the inland waterways of the United States. American vessels carry 
essential goods in the non-contiguous trades of Alaska, Hawaii, and 
Puerto Rico. U.S. tankers and tank vessels transport critical crude oil 
and refined petroleum products along the West, Gulf, and East Coasts of 
the nation. The American bulk fleet carries iron ore, and other 
products, on the Great Lakes, including for America's major steel 
manufacturers. American dredging companies ensure that U.S. harbors, 
ports, and rivers are dredged and maintained.
    Virtually every sector of the maritime industry has been negatively 
impacted by the pandemic. AMP member companies have seen reduced cargo 
volumes in the non-contiguous trades, as business closures and stay-at-
home orders reduce demand. Great Lakes carriers have experienced 
declines in the carriage of commodities. The destruction of the airline 
and auto sectors has led to declines in the need for vessels to 
transport gasoline, diesel, and jet fuel. Overall demand for waterborne 
transportation of agricultural and other commodities has declined, 
amidst a nearly 5 percent decrease in freight transported on U.S. 
navigational channels. Port activity around the top 10 U.S. ports has 
seen declines of over 40 percent. Domestic shipyards have worked hard 
to mitigate the impact of the pandemic with enhanced sanitation 
practices and liberal leave policies.
    The domestic maritime industry carries many of the building blocks 
of our economy. From top to bottom, we have seen the total 
interconnectivity of our economy, and no port is safe from the storm. 
Stay-at-home orders and a nearly 20 percent drop in traffic on U.S. 
roads has meant fewer American vessels transporting oil; a 42 percent 
dip in auto sales has slowed the need for the ships that move American 
steel; an 85 percent drop in weekly U.S. travel spending has shattered 
tourism and hospitality for island economies like Hawaii; and a Defense 
Department order pausing domestic transportation of military goods has 
upended a system that moves 400,000 personal property shipments a year.
    How long the impacts will last remains unknown. America's maritime 
businesses are facing significant economic uncertainties as a result of 
COVID-19. And while American businesses are starting to open up again, 
it is very difficult to forecast demand for the remainder of this 
quarter and for Q3 and Q4 of 2020.
    As many as 25 million jobs worldwide could be wiped out by a 
worldwide recession brought on by the pandemic, and the Bureau of Labor 
Statistics industry estimates for water transportation workers in April 
2020 are already showing an 11 percent decrease in employment.
    However, despite the situation, America's maritime industry has 
been getting the job done, keeping the U.S. supply chain running. Why? 
Because we are Americans who support Americans, especially during times 
of national emergencies.
b.  Coordination with the U.S. Government for an Essential Workforce
    As you have seen, the domestic maritime industry is diverse and 
COVID-19 has tangible, but distinct, impacts on each of these segments. 
A common uniting factor among all these diverse segments, however, is 
the recognition that all of the men and women working in this industry, 
no matter what segment of the industry they work for, are classified as 
essential workers. These men and women have been on the front lines of 
this pandemic since the very beginning, working every day to ensure 
that our grocery stores are stocked, our fuel is delivered, and the 
vital commerce that sustains this nation remains flowing.
    Beyond that, the essential workers of the domestic maritime 
industry have gone above and beyond during this time. For example, the 
men and women of the domestic dredging industry went beyond the call of 
duty when the USNS Comfort needed to dock in New York Harbor. The berth 
at New York Harbor needed to be dredged an extra 40 feet to enable the 
USNS Comfort to dock. The dredging was expected to take two weeks. An 
American dredging company, using a crew of 60 and pulling double 12-
hour shifts a day, dredged the berth in eight days, allowing the USNS 
Comfort to start treating patients earlier than expected.
    While maritime workers are not as visible to the public as the 
other vital transportation workers that keep our nation moving, such as 
transit workers or truck drivers, they are an equally important part of 
our supply chain. We were grateful that the Cybersecurity and 
Infrastructure Security (CISA) recognized the importance of the 
maritime industry and ensured that maritime workers were broadly 
covered as part of the critical infrastructure guidance released in 
March.
    Of course, we in the industry and the members of this Committee who 
have supported our efforts throughout the years, have always understood 
the essential value of the domestic maritime industry. We are 
continually seeking ways to improve our connectivity, particularly in 
times of emergency, to government entities with whom we do not 
regularly interact. Our core partners, such as the Coast Guard, the 
Department of Transportation, and the Maritime Administration 
understand the operations of the industry, but as a whole we needed to 
improve our communications. To that end, last summer AMP, our industry 
and the federal government worked together to create the Maritime 
Sector Coordinating Council (MSCC) to enhance our efforts on emergency 
preparedness from a company and regional level to a federal level.
    You may not have heard of Sector Coordinating Councils (SCC). All 
16 critical infrastructure sectors recognized by the federal government 
have a SCC. They serve as a single point of entry for the government to 
communicate with an entire industry. SCC's work in concert with 
Government Coordinating Councils (GCC's) to discuss emergency 
preparedness and planning efforts for critical infrastructure. The 
SCC's were established immediately after 9/11 because the government 
realized that there was no streamlined way to communicate with 
industries responsible for critical infrastructure in case of an 
emergency.
    While we set up the MSCC before there was any hint of a pandemic 
like COVID-19 on the way, the MSCC has proven to be very helpful in 
coordinating emergency response efforts over the past few months. As I 
will explain later, there continues to be issues (such as availability 
of test kits or PPE) but the MSCC provides a way for the industry to 
express those concerns directly to agencies like CISA or FEMA. There 
are also direct benefits from the MSCC engagement. For example, FEMA is 
actively procuring and distributing cloth protective coverings to core 
transportation sectors, including maritime. Through the MSCC's network, 
we were able to coalesce hundreds of company, labor, and ports requests 
for these face masks over a 72-hour period, working with our partners 
at MARAD. While the ultimate task of distributing those masks remains 
with the government, the MSCC's ability to quickly collate an industry 
request and submit it for ultimate consideration speaks well to our 
industry's ability to quickly coordinate for an emergency request.
c.  Operational Resilience
    Many organizations have undertaken to establish written protocols 
to keep vessel crews safe as they continue providing essential services 
to the American economy. These include trade associations (e.g., 
American Waterways Operators), class societies (e.g., ABS), and 
collaborative efforts between industry and government authorities 
(e.g., the Ship Operators Cooperative Program). These efforts have 
helped provide guidance on a wide range of technical issues and have 
made possible significant progress as the industry works through 
challenging operational issues. The limitations of these protocols, of 
course, is that they reflect the information available to certain 
people at a point in time. As that information changes, the protocols 
need to be updated, which can materially change what is believed best 
practices for safe operations. Certain issues have raised particular 
concerns that merit specific and continued attention.
            1.  Testing at crew changes
    The U.S. maritime industry has worked to develop protocols to 
minimize the risk of crew member infection on board American vessels. 
Vessel crews usually number no more than 20-25 people, although 
American vessels in the offshore fishing fleet may have up to 150 or 
more workers on board. We note that the Jones Act fleet includes the 
offshore fishing fleet which has its own set of challenges that might 
present a unique set of problems. In general, vessel crews typically 
sign on to a ship for several weeks at a time. The main risk of 
infection comes during crew changes, when parts of the crew end their 
assignments and are replaced by new mariners coming on board. Among 
other tools to prevent an infected crew member from joining a vessel, 
testing the arriving crew members for active infection is likely the 
most effective way of screening. However, access to such testing was 
denied for the first several weeks of the pandemic and has been 
inconsistent since then. The primary reason is the shortage of test 
kits, which has led to prioritizing access to tests.
    In many cases mariners at crew rotations have been denied access to 
testing based upon the assertion that such testing would be 
inconsistent with CDC guidance. This does not appear to be an accurate 
interpretation of CDC guidance (since at least mid-April), which allows 
priority access for ``workers in congregate living settings'' with or 
without symptoms when ``prioritized by health departments or 
clinicians.'' The phrase ``congregate living setting'' certainly 
describes the shipboard environment where crew members eat, sleep, work 
and live, often for weeks at a time.
    Consistent with this interpretation, state and local health 
departments and clinicians including world-class health care 
organizations have begun providing rapid testing for active infection 
for mariners at crew changes. Test availability is extremely limited, 
however, and still not available in most locations, in part based on 
continued misinterpretation of CDC guidance. This Committee should 
encourage the Coast Guard, CDC and other government agencies to clarify 
that mariners at crew changes should have priority access to testing 
for active infection.
            2.  Management of Suspected Shipboard Cases
    Fortunately, the number of suspected COVID-19 cases involving 
American mariners has been relatively low. When such cases do arise, 
however, the question becomes how to effectively manage those cases 
given the vital role of maritime transportation in America. We believe 
there is a general understanding on this subject, but an urgent need to 
clarify and reinforce the message.
    A cargo ship with 20-25 mariners or a fishing vessel with 150 
mariners is very different than a cruise ship with thousands of 
passengers and crew. Both a cargo ship and a cruise ship may report a 
suspected COVID-19 case prior to entering a port. Sending the cruise 
ship to anchor may make sense to allow complex logistical arrangements 
involving thousands of people to be worked out. However, the cargo ship 
should be allowed to proceed to berth at a controlled-access secure 
terminal rather than being sent to anchor. The crew member suspected of 
having infection can be safely removed from the ship and tested, with 
results immediately available. If they test positive for COVID-19, the 
company would then implement plans for removing and testing / 
quarantining the rest of the crew and disinfecting the ship so that it 
can be safely and promptly returned to service with a new crew. This is 
the safest and most efficient way of proceeding, ensuring that a crew 
member with suspected COVID-19 quickly receives needed care, fellow 
crew members are properly isolated and quarantined, and the ships 
providing essential services to American consumers and businesses are 
allowed safely and promptly to resume service.
    This unfortunately has not been how some of the few instances of 
suspected infection have been handled. One vessel with a suspected case 
was sent to anchor, where a health care worker delivered by pilot boat 
climbed on board and administered a COVID-19 test. The specimen was 
rushed to the lab and was fortunately negative. Only then was the ship 
allowed to proceed to berth. In the same vein, an order issued by a 
county judge in Texas would have required any vessel with a suspected 
case be sent to anchorage and kept there for a 14-day quarantine 
period. One can only imagine the impacts on supply chains if that order 
was enforced.
    As a single vessel may account for a large portion of the weekly 
commerce of the communities in the noncontiguous U.S. trades, any 
delay, no matter how slight, may have a serious impact on those states 
and territories being served. We would like to ask for your support in 
urging the CDC and the USCG to review in advance industry response 
plans to incidents of positive tests on inbound crew members.
         IV.  American Domestic Maritime Industry Post-COVID-19
    The COVID-19 pandemic has reinforced recent policy trends that 
emphasize the importance of American self-reliance and resilience. For 
example, we cannot rely on foreign suppliers of pharmaceuticals and 
medical supplies to keep American citizens safe, even if those 
suppliers are cheaper. Indeed, we need to rebuild critical industries 
in America that have been sent overseas, preserve those that have 
remained, and fight back against efforts to outsource key American 
manufacturing and service industries. These same lessons apply fully to 
the domestic maritime industry.
a.  Secure supply chains
    If the COVID-19 response showed us nothing else, it showed how 
dangerous it was for the United States to rely on globalization for 
critically important resources and services. The U.S. defense maritime 
industrial base, as the Center for Strategic and Budgetary Assessments 
(``CSBA'') has labeled it, which includes our American domestic 
maritime sector, as one of those critical industries.
    During times of war or national emergency, it is important to have 
the domestic capacity to transport goods within the United States. As 
CSBA noted:

        In an era of great power competition, a robust maritime 
        industry, and the policies that support it, are increasingly 
        important to U.S. national security. Private shipyards build 
        and repair U.S. warships, sometimes alongside civilian vessels. 
        U.S. shipping companies and their civilian mariners transport 
        military personnel, equipment, and supplies overseas. And 
        private dredging, salvage, towing, intermodal transport, and 
        harbor services companies ensure the operation of America's 
        military and commercial ports and waterways.

    Furthermore, Section 50101 of title 46, United States Code, sets 
for America's maritime policy and represents the critical need for a 
robust American domestic maritime industry. It states:

        (a) Objectives.--It is necessary for the national defense and 
        the development of the domestic and foreign commerce of the 
        United States that the United States have a merchant marine--
                (1) sufficient to carry the waterborne domestic 
                commerce and a substantial part of the waterborne 
                export and import foreign commerce of the United States 
                and to provide shipping service essential for 
                maintaining the flow of the waterborne domestic and 
                foreign commerce at all times;
                (2) capable of serving as a naval and military 
                auxiliary in time of war or national emergency;
                (3) owned and operated as vessels of the United States 
                by citizens of the United States;
                (4) composed of the best-equipped, safest, and most 
                suitable types of vessels constructed in the United 
                States and manned with a trained and efficient citizen 
                personnel; and
                (5) supplemented by efficient facilities for building 
                and repairing vessels.

    This pandemic has only further solidified the need for such a 
policy and for a U.S. defense maritime industrial base. We have 
maintained supply lines as essential businesses and essential workers. 
America's Jones Act fleet and shipbuilding and repair yards have stood 
by our nation to ensure that goods and supplies are delivered, 
including to those in need. Our industry over the past 100 years 
operating under the Jones Act, and in fact since the nation's founding, 
have been an important element of the nation's supply chain 
capabilities.
    At a time when China is investing in maritime businesses around the 
globe--ships, ports, terminals, and other infrastructure--to support 
its One Belt, One Road initiative, it is as important now as it ever 
was for America to maintain one of the most fundamental laws that 
ensures the nation can meet its maritime policy objective as stated 
above--and that law is the Jones Act.
b.  Legislative and Administrative Jones Act Waivers
    AMP member companies, like Crowley, make significant investments to 
build, grow, and sustain a domestic fleet. Those are investments in 
U.S. shipyards; investments in American mariners; investments in 
shoreside infrastructure and people; and investments in logistics 
capabilities to meet the transportation needs of this country. We make 
those investments in reliance on U.S. law.
    Attacks on the law from opponents, seeking legislative or 
administrative waivers of the Jones Act, erodes the confidence of 
investors in the domestic maritime sector. We applaud the members of 
this subcommittee for their support for the law. It is that support 
that enables AMP member companies to invest with confidence.
    But we do not take anything for granted. We have seen too many 
times over the years where a small change in the law or an 
administrative determination can have significant consequences on the 
domestic industry. We saw that most recently when Customs and Border 
Protection (CBP) issued a modification and revocation of certain Jones 
Act private letter rulings. While some of the changes made by CBP were 
good and long overdue, others, such as the determination that foreign 
flag vessels can engage in certain transportation activities, 
undermined the law.
    Thankfully, this subcommittee has led the charge in correcting that 
situation, passing legislation through the House as part of the Coast 
Guard Authorization Act of 2019. The provision relating to installation 
vessels is important to protecting small lift boat operators and to 
preserving opportunities for larger Jones Act heavy lift operators in 
those trades. We urge Congress to adopt this measure.
    We also urge Congress to continue to reject proposals that would 
fundamentally alter the landscape for our Jones Act fleet, and to adopt 
measures that ensure the Jones Act remains strong.
    Finally, it is worth noting that because of the strong support of 
Congress, America's domestic maritime industry continues to invest in 
the Jones Act fleet--dredges; containerships; offshore wind vessels; 
Great Lakes bulkers; tugboats, towboats and barges; and passenger 
vessels. We appreciate your support, and to demonstrate our support, 
our industry continues to invest, innovate, and modernize.
          V.  Recognizing American Maritime Workers/Conclusion
    I would like to conclude my testimony with a word about American 
maritime workers. This year, in honor of the Jones Act's centennial, 
AMP and many others have honored what we have called ``American 
Maritime Heroes.'' And while some of the heroes are very high 
visibility individuals--like Malcolm McLean, the Jones Act innovator 
who invented containerization and changed the world--most of our heroes 
are everyday heroes. These are the men and women who deliver the goods 
across our nations--in the inland waterways, on the Great Lakes, along 
the coasts, in the Gulf and to the non-contiguous areas. These are the 
crews of the dredges, containerships, tugs, barges, bulkers and other 
vessels that serve as the grease for the American economy. These 
individuals, and the national maritime infrastructure that supports 
them, truly are heroes, delivering needed merchandise and the building 
blocks of the American economy without complaint as essential front 
line workers.
    When we think of American mariners, we can't help but think about 
the World War II merchant mariners, the group of individuals to whom 
Congress has recently awarded the Congressional Gold Medal. They 
delivered cargo under the most desperate conditions in World War II and 
their success in ensuring a supply chain of goods and supplies to the 
war zone is legendary. They paid the price with the highest casualties 
of any service in World War II, often sailing defenseless again German 
U-Boats. Their courage and valor was summed up in a description from a 
coming major motion picture: ``The only thing more dangerous than the 
front lines was the fight to get there.''
    That was then and now is now. Today, our war is the pandemic and we 
are proud to be doing everything in our power to keep America moving. I 
will be pleased to answer any questions you might have.

    Mr. Maloney. Thank you, Mr. Roberts.
    Ms. Carpenter, you may proceed.
    Ms. Carpenter. Thank you very much, Mr. Chairman, for the 
opportunity to testify on behalf of America's tugboat, towboat, 
and barge industry.
    The first thing I want to tell you today is that the 
domestic maritime supply chain has proven resilient in the face 
of COVID-19. While cargo volumes are down in many sectors due 
to depressed demand, mariners have continued to report to work, 
vessels have continued to operate, and the industry has adapted 
to maintain operational continuity and readiness.
    As our Nation takes the first steps toward reopening, the 
domestic maritime supply chain is capable of accommodating 
increased demand and well positioned to support the long road 
to recovery.
    Our industry has been able to maintain business continuity 
because employers recognized early on that protecting 
crewmember health and safety is the key to keeping commerce 
flowing. A tow on the river or an articulated tug barge unit at 
sea is effectively self-quarantined and companies quickly put 
in place procedures that keep the virus off their vessels. 
These include prescreening crewmembers prior to boarding, 
modifying crew change procedures, minimizing nonessential 
contact between crewmembers and noncrewmembers, and more 
stringent vessel cleaning and decontamination procedures.
    Crewmembers have taken seriously their status as essential 
workers and taken steps to safeguard their health while off 
duty. And the U.S. Coast Guard has been proactive and 
cooperative in working with industry to meet regulatory 
objectives while reducing health and safety risks.
    The result of these efforts has been to keep COVID-19 
infections among the mariner workforce to a minimum.
    Your leadership in holding this hearing tees up the 
question, what can Congress do to support the continued 
resilience of the maritime supply chain?
    In testimony before this subcommittee last spring, I 
highlighted four pillars that enable our industry to do its 
essential work: the Jones Act; modern, well-maintained ports 
and waterways infrastructure; a nationally consistent system of 
law and regulations governing vessels and interstate commerce; 
and maritime safety.
    Congress' support for these pillars is especially important 
today. The Jones Act is more relevant than ever as both the 
pandemic and the prevailing geopolitical situation underscore 
what a bad idea it would be to relinquish control of our 
domestic maritime supply chain to foreign companies and foreign 
mariners.
    Thank you for your leadership in opposing opportunistic 
calls to waive the Jones Act and break faith with the American 
companies and American mariners on the front lines of keeping 
our economy afloat.
    Investment in ports and waterways infrastructure is an 
investment in American jobs and competitiveness that will help 
our economy get back on its feet. We thank you for your past 
leadership and ask for your continued support to pass the Water 
Resources Development Act, increase investment in locks, dams, 
harbor maintenance, and dredging, build the next generation of 
Coast Guard buoy tenders, and ensure the funding to keep them 
operating.
    As we recover from the economic shocks of the pandemic, we 
need to ensure that our waterways are open for business and in 
condition to accommodate increased demand.
    Our industry's experience during COVID-19 has also 
underscored the importance of uniform Federal laws and 
regulations governing vessels and interstate commerce.
    As State and local stay-at-home orders proliferated this 
spring, we could have experienced catastrophic disruption in 
the maritime supply chain. We didn't, largely because the 
Federal Government acted quickly to codify the status of 
maritime businesses and workers as essential critical 
infrastructure that needed to continue unfettered operations.
    The lessons of this experience are clear. Just as a 
patchwork of stay-at-home orders is incompatible with the 
effective functioning of the maritime supply chain, so is a 
patchwork of State and local regulations established for other 
purposes.
    Finally, maritime safety. Our industry's experience with 
COVID-19 demonstrates that good safety is good business. As we 
manage the health and safety challenges posed by the pandemic, 
we urge Congress to support our efforts by supporting 
prioritized access to testing for COVID-19 for crewmembers, 
enacting targeted temporary liability protections for maritime 
employers who make good-faith efforts to abide by applicable 
public health guidelines to protect their employees from COVID-
19 while preserving legal remedies against employers who engage 
in reckless or willful misconduct, and enacting the Coast Guard 
authorization bill, which includes a number of provisions to 
promote marine safety.
    Thank you very much. We look forward to working with you to 
apply the lessons of this pandemic and strengthen the 
resilience of the maritime supply chain.
    [Ms. Carpenter's prepared statement follows:]
                                 
   Prepared Statement of Jennifer A. Carpenter, President and Chief 
          Executive Officer, The American Waterways Operators
    Good afternoon, Chairman Maloney, Ranking Member Gibbs, and Members 
of the Subcommittee. I am Jennifer Carpenter, President & CEO of The 
American Waterways Operators. AWO is the national trade association for 
the inland and coastal tugboat, towboat and barge industry. On behalf 
of AWO's over 300 member companies, thank you for the opportunity to 
testify at this important hearing on the status of the U.S. maritime 
supply chain during the COVID-19 pandemic.
    I come before you today with three overarching messages: 1) the 
U.S. domestic maritime supply chain is resilient; 2) business 
continuity does not--and cannot--mean business as usual, especially 
where health and safety are concerned; and, 3) Congress, and this 
Subcommittee, have a vital role to play in ensuring the stability of 
the public policy pillars that create the foundation for the supply 
chain's resilience and our nation's recovery. Allow me to elaborate on 
each of these points.
            The Domestic Maritime Supply Chain is Resilient
    While our industry, like all Americans, has been challenged by this 
global health crisis in profound ways, the domestic maritime supply 
chain has proven resilient in the face of COVID-19. The men and women 
of the tugboat, towboat and barge industry have played a key role in 
keeping our nation's economy afloat, remaining open for business and 
continuing to move essential cargoes such as agricultural products, 
fertilizer, coal, petroleum and petrochemicals, wood and paper 
products, steel and construction materials. Tugboats continue to guide 
ships, from containerships and tankers to the hospital ships USNS 
Comfort and USNS Mercy, safely into port. Tugboats and barges have 
begun a busy summer season of supplying native Alaskan villagers with 
everything they need to subsist in an unforgiving environment. While 
cargo volumes in many sectors have declined due to depressed demand, 
mariners have continued to report to work, vessels have continued to 
operate, and the industry has adapted to maintain operational 
continuity and readiness. As our nation takes the first steps toward 
reopening shuttered segments of the economy, the domestic maritime 
supply chain is flowing, capable of accommodating increased demand, and 
well positioned to support the long road to recovery.
               Business Continuity, Not Business as Usual
    Tugboat, towboat and barge companies have been able to maintain 
business continuity in large part because employers recognized early on 
that mariners are the lynchpin of their operations and protecting 
crewmember health and safety is key to keeping vessels moving and 
commerce flowing. The industry's extensive experience with contingency 
planning, safety management systems and incident command structures has 
served it well in managing the health, safety and operational 
challenges posed by the pandemic. A tow on the river or an articulated 
tug-barge unit at sea for two to four weeks at a time is effectively a 
self-quarantined environment, and companies quickly put in place--and 
have continued to refine--procedures aimed at keeping the virus off 
their vessels. These include, but are not limited to, pre-screening 
crewmembers prior to leaving home and again prior to boarding a vessel, 
often in conjunction with telehealth providers; modifying crew change 
procedures to keep crews together as a unit, minimize exposure during 
travel to vessels, and avoid large groups congregating on crew change 
days; minimizing non-essential contact between crewmembers and non-
crewmembers, including increased reliance on objective evidence of 
regulatory compliance and remote audit and inspection techniques; and 
developing more stringent vessel cleaning and decontamination 
procedures.
    Crewmembers, for their part, have taken seriously their status as 
essential critical infrastructure workers and taken steps to safeguard 
their health and safety while off duty. And, regulatory authorities, 
including the U.S. Coast Guard, have been proactive and cooperative in 
working with industry to employ flexibility to meet regulatory 
objectives while reducing unnecessary health and safety risks. Policies 
extending the validity of merchant mariner credentials, mariner medical 
certificates and Transportation Worker Identification Credentials; 
encouraging the use of remote audit and inspection techniques; and 
allowing deferrals of inspections and regulatory deadlines when 
necessary have been very helpful in reducing unnecessary interactions 
that could place the safety of vessel crewmembers and/or Coast Guard 
personnel at risk.
    The result of these concerted and cooperative efforts has been to 
keep COVID-19 infections among the mariner workforce to a minimum--a 
win-win for health and safety and for the resilience of the maritime 
supply chain. To maintain this situation, it will be extremely 
important for employers, mariners, and regulators to remain vigilant 
and not relax prematurely the prevention policies and social distancing 
procedures that have proven successful in keeping vessels largely 
virus-free.
        Congress's Role in Supporting the Maritime Supply Chain
    Chairman Maloney, Ranking Member Gibbs, your leadership in holding 
this hearing today to examine the state of the maritime supply chain as 
our nation battles the COVID-19 pandemic is an important expression of 
Congress's recognition of the criticality of maritime transportation, 
and we thank you for that. It also tees up the question, ``How can the 
Congress--and this Subcommittee--support the continued resilience of 
the maritime supply chain and the health and safety of mariners who 
make that possible?''
    To answer that question, I'd like to hark back to the testimony I 
provided to the Subcommittee last spring, highlighting four pillars 
that enable the tugboat, towboat and barge industry to do the essential 
work it does for American shippers and the American economy. Those 
pillars--the Jones Act; modern, well-maintained ports and waterways 
infrastructure; a nationally consistent system of laws and regulations 
governing vessels in interstate commerce; and maritime safety--are more 
important than ever amid the circumstances of the COVID-19 pandemic, 
and I want to thank the bipartisan leadership of this Subcommittee and 
the full Transportation and Infrastructure Committee for your 
longstanding support for them. Let me address each briefly.
The Jones Act
    The Jones Act, which celebrates its 100th anniversary on June 5, 
but whose antecedents date back to the earliest days of our country, 
has served our nation's economic, homeland and national security well. 
It is more relevant than ever today, as both the pandemic and the 
prevailing geopolitical situation underscore the inadvisability of 
relinquishing control of our domestic maritime supply chain to foreign 
companies (perhaps state owned) and foreign mariners. I want to thank 
Chairmen DeFazio and Maloney, and Ranking Members Graves and Gibbs, for 
your leadership in opposing opportunistic calls to waive the Jones Act 
and break faith with the American companies and American mariners on 
the front lines of keeping our economy afloat. Thank you, as well, for 
including in the Coast Guard authorization bill language to prevent the 
emergence of a Jones Act loophole related to the operation of heavy 
lift vessels servicing offshore energy installations.
Ports and Waterways Infrastructure
    Investment in our ports and waterways infrastructure is an 
investment in American jobs, in American competitiveness, and, given 
that maritime transportation is the greenest mode of transportation, 
with the smallest carbon footprint, in the health of our natural 
environment as well. Now more than ever, investing in infrastructure 
will help our nation's economy get back on its feet. This means passing 
a Water Resources and Development Act; increasing investment in locks, 
dams, harbor maintenance and dredging; and building the next generation 
of Coast Guard buoy tenders and ensuring the funding to keep them 
operating. As demand for waterborne commerce increases as we recover 
from the economic shocks of the pandemic, we need to ensure that our 
waterways are open for business and in condition to accommodate this 
demand. Again, this Subcommittee and full Committee have been leaders 
on these issues; we thank you for that and respectfully ask for your 
continued support.
Federal Preemption
    Our industry's experience during the COVID-19 pandemic has 
underscored the importance of a uniform national system of laws and 
regulations governing interstate maritime transportation. As state and 
local shelter-in-place and stay-at-home orders began to proliferate in 
March and early April, we could have experienced catastrophic 
disruption in the maritime supply chain. We did not, largely because 
the federal government recognized and took timely action to codify the 
status of maritime transportation businesses and workers as ``essential 
critical infrastructure'' that needed to continue unfettered 
operations. Guidance from the Department of Homeland Security's 
Cybersecurity and Infrastructure Security Agency, amplified by the U.S. 
Coast Guard, was vital to enabling marine transportation businesses to 
keep operating and vessel crewmembers and other maritime employees to 
travel to their jobs and report to work. The lessons of this experience 
are worth remembering as we move from the acute, to the chronic, and 
eventually to the recovery phase of the pandemic: just as a patchwork 
of state and local stay-at-home orders is incompatible with the 
efficient and effective operation of the maritime supply chain, so too 
is a patchwork of state and local laws and regulations established for 
other purposes. Uniform, nationally consistent regulations are 
essential to effective functioning of the maritime supply chain.
Maritime Safety
    Maritime safety is our industry's franchise to operate, and our 
experience during the COVID-19 pandemic to date reinforces the fact 
that good safety is good business. As our industry manages the unique 
health and safety challenges posed by the pandemic, we urge Congress to 
support our efforts by:
    1)  Supporting prioritized access to COVID-19 testing for mariners 
as essential critical infrastructure employees. While access to 
diagnostic testing has improved in many parts of the country, the 
paramount importance of keeping the virus off the boats to crewmember 
health and safety and the resilience of the maritime supply chain--
especially as opportunities for exposure off the job magnify with the 
relaxation of stay-at-home orders--underscores the need to increase 
access to testing as an optional part of the pre-screening process.
    2)  Enacting temporary, targeted liability protections for maritime 
employers who make good faith efforts to abide by applicable public 
health guidelines in working to protect their employees from exposure 
to COVID-19, while preserving the availability of legal remedies 
against employers who engage in reckless or willful misconduct. We are 
hopeful that a bipartisan consensus on time-limited and carefully 
crafted liability protections can be included in a forthcoming 
legislative package to support our national recovery from the many 
harmful effects of the COVID-19 pandemic.
    3)  Enacting the Coast Guard authorization bill, which includes a 
number of provisions that promote marine safety, including suspension 
of the towing vessel inspection user fee requirement until the Coast 
Guard promulgates regulations to establish specific fees based on 
whether a vessel uses the Towing Safety Management System or the Coast 
Guard option under Subchapter M. As the Subcommittee recognized in 
drafting that provision, the current fee structure provides a perverse 
disincentive to use of the TSMS option and imposes duplicative costs on 
vessel owners who are already paying many thousands of dollars more for 
the services of Coast Guard-approved third-party organizations.
                               Conclusion
    Chairman Maloney, Ranking Member Gibbs, thank you for the 
opportunity to testify today. The U.S. domestic maritime supply chain 
is resilient, and the tugboat, towboat and barge industry is well 
equipped to continue to serve our nation as we begin the long road to 
recovery from the economic disruption caused by this global public 
health crisis. We look forward to working with you to learn and apply 
the lessons of this experience to strengthen our resiliency as an 
essential critical infrastructure sector and a vital contributor to our 
nation's economy, security, environment and quality of life.
    I would be happy to answer any questions you may have.

    Mr. Maloney. Thank you, Ms. Carpenter.
    Ms. Brand, you may proceed.
    Ms. Brand. Good afternoon, Chairman Maloney, Ranking Member 
Gibbs, Chairman DeFazio, and members of the subcommittee. My 
name is Lauren Brand, and I am president of the National 
Association of Waterfront Employers.
    The members of NAWE and I thank you for keeping our 
Nation's ports open during this global pandemic. Your 
designation of waterfront workers as essential and your 
recognition of the entire port ecosystem as being critical has 
strengthened all of our work commitment to work.
    NAWE is the voice for the U.S. marine terminal operators, 
stevedores, and operating port authorities. We represent 
interests in U.S. coastal ports and U.S. Territories. Members 
also include the associations responsible for labor relations 
and contract negotiations with the ILA and the ILWU, from Maine 
to Texas, then from Washington to California.
    Port operators are responsible for safely and effectively 
transporting cargoes between vessels, trucks, and rail. NAWE's 
members lease waterfront land from public port authorities and 
they build their own facilities. Within their terminal area, 
they hire labor, they fund the purchase of cargo-moving 
equipment, construct intermodal infrastructure, and design 
systems that track each shipment.
    We are experiencing four significant COVID-19-related 
challenges: taking care of waterfront workers, adjusting safety 
protocols while continuing terminal operations, rearranging 
terminal facilities to accommodate new needs, and maintaining 
liquidity.
    Taking care of waterfront workers has been our first 
priority. Commercial supply chains for PPE and cleaning 
supplies are now in place. The rapid price increases 
experienced for PPE these past 3 months, frankly, was 
crippling.
    Next, in an effort to increase safety while continuing to 
work, terminal operations and protocols have been adjusted. 
Every aspect of each operating terminal has been taken into 
consideration. It is important to note that labor and 
management are working together to implement the best decisions 
and provide protections.
    Also, terminal facilities have been rearranged to 
accommodate new needs. The storage of abandoned cargoes, while 
only 1.5 percent, is expected to grow. Envision 40,000 
chocolate bunnies within just one container that should have 
been delivered for the Easter holiday.
    Storage of stranded cargoes is increasing, requiring 
regular monitoring of units to ensure they are handled 
correctly. Examples of stranded cargoes include parts for 
manufacturing facilities, summer fashions, and automobiles.
    Exports are being impacted. The reduction in vessel calls 
to ports has resulted in higher value cargoes--that pay the 
vessel operator more to ship--being loaded first, delaying the 
exported lower valued items.
    Quarantines and the additional screening of workers under 
newly implemented safety protocols are having a direct impact 
on security duties, and costs.
    Maintaining liquidity in the face of reduced revenues and 
increased costs is our fourth challenge. Examples of stresses 
on liquidity include the management of empty containers that 
are stacking up in terminals on the gulf coast. NAWE member 
container yards have units in them that have not moved for 
months, generating a 100-percent decline in revenues.
    Another example are lease payments. Marine terminal 
agreements include a lease rate and a minimum annual guarantee 
based on volumes. As throughputs decline below normal levels, 
these guarantees result in increased operating costs for 
terminal operators.
    Certain COVID-related needs do remain unmet. The cost of 
ensuring that equipment and machinery are safe to use exceeds 
that of the cost of disinfectant. Added to this are 
safeguarding costs such as conducting regular temperature 
checks for several thousand employees and visitors as they 
enter each terminal facility daily.
    No sector or freight is immune to the impact of COVID-19. 
Beyond freight, our members also support the provisioning of 
cruise ships and assist cruise passengers. Cruise ships are now 
accepting bookings for cruises beginning late July and the 
public is responding. Marine terminal operators are 
strategically planning to protect employees, waterfront 
workers, and the guests who will transit through terminals on 
their way to vacation.
    It is the cost of all of these actions necessary to keep 
marine terminals open, people safe, and essential freight 
moving that is our problem.
    In conclusion, marine terminal operators, stevedoring 
firms, and operating port authorities remain committed to 
ensuring the transportation needs of the United States are met. 
We urge you to enact a bridge program that will assist 
waterfront employers and port authorities defray COVID-19-
related expenses, including lease and all other expenses 
necessary to keep the ports open, terminals operating, and 
workers employed.
    Thank you for this opportunity. We appreciate the 
dedication of this subcommittee and their continued support for 
U.S. port operators.
    [Ms. Brand's prepared statement follows:]

                                 
Prepared Statement of Lauren K. Brand, President, National Association 
                        of Waterfront Employers
    Good afternoon, Chairman Maloney, Ranking Member Gibbs, and members 
of the Subcommittees. My name is Lauren Brand, and I am the President 
of the National Association of Waterfront Employers, otherwise known as 
NAWE. Thank you for this opportunity to discuss the impact of the 
COVID-19 pandemic on the U.S. marine terminal operating and stevedoring 
industries. Even more importantly, the members of NAWE and I thank you 
for keeping our nation's ports open during this global pandemic. Your 
designation of waterfront workers as essential and your recognition of 
the entire port ecosystem as being critical has strengthened our 
commitment to work.
    NAWE is the voice in Washington for U.S. marine terminal operators, 
stevedores, and operating port authorities. The Association represents 
interests based at U.S. coastal ports and those based in U.S. 
territories. Members also include the associations responsible for 
labor relations and contract negotiations with the ILA and the ILWU 
from Maine to Texas and from Seattle to San Diego. Formed initially 
around common interests in providing compensation to injured 
longshoremen, NAWE was active in supporting maritime security 
regulation at our ports' facilities following 9/11. Today, NAWE's 
portfolio represents the full spectrum of port operators' interaction 
with the Federal Government, including informing the development of 
national freight policies, infrastructure funding, port safety, 
security protocols, the environment, and workforce policies. NAWE is 
honored to serve as a subject matter expert to Federal Agencies and 
Departments on issues related to intermodal transportation. It is 
important to note that 44 Federal Agencies within 14 Federal 
Departments oversee marine terminal operators, stevedoring firms and 
operating port authorities.\1\ NAWE's members remain committed to 
moving the freight needed and wanted by the people of the United 
States. We are here to ask for your consideration to help us remain on 
the job.
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    \1\ Source: https://www.cmts.gov/resources/compendium
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                        Who Are Port Operators?
    Port operators, while based in the United States and employing U.S. 
citizens, work with global markets. They receive goods sourced from 
around the world and ensure these are safely moved onto other domestic 
modes that will complete the delivery process. More importantly, they 
receive U.S. exports and ensure these are loaded onto the right vessel 
for delivery overseas. What happens in North, Central and South 
America, Europe, Asia, Africa, and other far flung regions impact the 
business of terminal operators. We are a critical part of the U.S. 
maritime transportation industry, responsible for safely, securely and 
efficiently transporting cargoes between vessels, trucks and rail. To 
do so, NAWE's members lease waterfront land from public port 
authorities and build their own facilities. Within their terminal area, 
they hire labor, fund the purchase of cargo moving equipment, construct 
intermodal infrastructure and design systems that track each shipment 
and communicate with their customers: vessel operators, truckers, 
railroads and, of course, cargo owners.
                            What is our ask?
    We are seeking a bridge for FY20 and FY21 that will help marine 
terminal operators, stevedores and port authorities through this 
difficult time as freight continues to react to the global pandemic. We 
ask that a bridge program be enacted that will assist these maritime 
partners defray COVID-19 related expenses including lease and other 
contractual expenses necessary to keep the ports open, terminals 
operating and workers employed.
       What are our most significant COVID-19 related challenges?
    Taking care of waterfront workers has been our first priority. 
While personal protective equipment (PPE) and cleaning supplies were 
difficult to obtain during February, March and April, the majority of 
NAWE's members are now able to procure supplies through commercial 
sources. None of our members approached regional Emergency Relief 
Agencies for supplies in an effort to help the medical profession who 
were also on the front lines of this crisis. Some terminal operators 
were assisted by public port authorities and have appreciated their 
efforts. The vast majority of items \2\ were purchased from regular 
commercial sources, but when those could not be delivered in time, 
alternate sources were found locally at Ace Hardware, Home Depot, 
Lowes, Walmart, and Dollar Stores. Commercial supply chains for these 
items are now in place. The rapid price increase experienced by all was 
crippling as these expenses were not expected by anyone. Continuous 
price increases for items was daunting; masks and gloves rose an 
audacious 25% in one week during April. One NAWE member obtained PPE by 
working with a local tequila producer who made tequila-based sanitizer 
in drums. The drums were distributed to terminals where they were 
bottled for individual use. (yes, warning labels were added to bottles; 
``do not drink the sanitizer'').
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    \2\ This list was compiled through the National Maritime Safety 
Association (http://nmsa.us/). It includes: Digital non-contact 
infrared thermometers; disinfecting soap and bottles / dispensers / 
sprayers; sanitizing wipes; masks (N95 preferred); non-permeable 
gloves/Nitrile preferred 6 mil or 8 mil; toilet paper; paper towels; 
tissues; disinfectant spray to sanitize equipment (Hospital grade); 
individual hand sanitizers to be distributed; hand sanitizers stations 
and refills; goggles; heavy rubber gloves for cleaning; foggers; 
coveralls; 2 gallon garden pump & spray. Note: disinfectant must be on 
the EPA list of approved COVID-19 fighting products at: https://
www.americanchemistry.com/Novel-Coronavirus-Fighting-Products-List.pdf
---------------------------------------------------------------------------
    In an effort to increase safety while continuing to work, terminal 
operations and protocols have been adjusted to care for workers and 
personnel. Every aspect of the design of each terminal was taken into 
consideration. Where do people normally congregate? Which surfaces are 
frequently touched? How many? When? How often? The questions are never 
ending. It is important to note that labor and management are working 
together to implement the best decisions and provide protections. All 
have been selflessly dedicated to the commitment to keep terminals open 
and freight moving. Examples of changes made include:
      Formerly two machines would be rotated among three people 
during a shift. Now one machine is shared between two people on a 
shift. This increases cost as more machines are needed online during a 
shift while it decreases exposure to personnel.
      A realignment of space within terminal facilities to 
accommodate storage of abandoned cargoes, stranded cargoes and empty 
containers.
      Separating essential cargoes from non-essential cargoes 
to allow for more efficient delivery of medical items and PPE. This 
requires closer coordination with cargo owners, as terminal operators 
do not normally know exactly what is in each container. They do however 
know which contain hazardous materials, which need temperature 
monitoring, etc. to facilitate proper handling of those units.
      An entire terminal management team was quarantined for 14 
days when they were exposed to a security guard who tested positive for 
COVID-19.
      Additional labor was brought in some regions to allow 
contingent teams to be organized if one was forced into quarantine. In 
other regions, fewer personnel were hired due to the reduction in 
vessel arrivals (blank sailings \3\).
---------------------------------------------------------------------------
    \3\ A `blank sailing' is a cancelled sailing. A blank sailing could 
mean a vessel skipping one port along the route, or the entire journey 
being cancelled.

    Terminal facilities are being rearranged to accommodate new needs. 
The storage of abandoned cargoes, while currently only at 1.5%, is 
expected to grow on the West Coast. Cargoes are considered abandoned 
once notification has been received from the consignee \4\ that they do 
not want to receive the shipment. The terminal then moves that 
container to a separate location within the terminal, securing it and 
ensuring its safety until a claim for the contents is settled. Examples 
of cargoes that have been abandoned at terminals include those for 
holidays that occurred during the COVID-19 pandemic: Valentine's Day, 
St. Patrick's Day, and Mother's Day. Also included are shipments of 
Spring and Summer fashions and other seasonal items that would normally 
have been delivered and sold in the months of February through May. To 
paint a picture, 40,000 chocolate bunnies are within just one container 
that should have been delivered in time to sell before the Easter 
holiday.
---------------------------------------------------------------------------
    \4\ The difference between a shipper and a consignee is that the 
consignee is the receiver of the shipment.
---------------------------------------------------------------------------
    Likewise, storage of stranded cargoes is increasing, requiring 
monitoring of these units to ensure they are handled according to the 
protocols set for each type of cargo. Is the cargo temperature 
sensitive? Is it hazardous? What are the special needs? Stranded 
cargoes are those that have arrived, are cleared for pick up, yet the 
consignee is not able to accept these at this time and asks the 
terminal operator to store it for them. So many stores and related off 
port storage facilities have been closed with new inventories wanted 
but not yet needed. Examples of stranded cargoes include parts for 
manufacturing facilities, Summer fashions and automobiles.
    What happens to an import container after it's been emptied? 
Hopefully, it has been filled with U.S. produced export cargo and it is 
returned to a marine terminal to be shipped overseas. Unfortunately, 
the United States has an imbalance of trade, with imports outpacing 
exports more than 2 to 1. Exports from the U.S. include a number of 
commodities made by industries that have been heavily impacted by the 
pandemic: commercial aircraft, fuel oil, automobiles, meat and poultry, 
autos and auto parts \5\. To date, exports in 2020 have declined to the 
lowest levels in over three years \6\, with the highest drop in higher 
value commodities. The reduction in vessel calls to ports has resulted 
in the remaining higher value exports--that pay the vessel operator 
more to ship--being loaded first, and lower value cargoes being left at 
the terminals. More unexpected freight for the port operator to 
securely store and safely monitor. Security oversight, as mandated by 
law, require resources that are not recoverable when cargo volumes are 
declining. Quarantines on passengers and crews and the additional 
screening of workers under newly implemented safely protocols are 
having a direct impact on security duties and costs.
---------------------------------------------------------------------------
    \5\ https://www.thebalance.com/u-s-imports-and-exports-components-
and-statistics-3306270
    \6\ https://tradingeconomics.com/united-states/exports
---------------------------------------------------------------------------
    Managing the fiscal impact of reduced revenues and increased costs 
while challenged by the overt uncertainty of what the future holds. We 
are aware that every link in the supply chain has lost revenue, and 
that the entire industry has been fiscally impacted. We are also very 
aware of the vital role of each partner in the supply chain. We want 
all to remain liquid and fulfill their role in our national 
transportation system. And we have a responsibility to ensure we are 
ready, open for business, with healthy teams ready to do our job 
safely, securely and as efficiently as possible. A prime example of 
stressors on liquidity include management of empty containers that are 
stacking up in terminals. Our transportation system usually cycles 
empties for exports or they are picked up by passing vessels to return 
them overseas to be refilled and brought back again. A normal business 
practice is to not charge for storage, but to assess a handling fee 
when containers arrive and depart. NAWE member container yards have 
units in them that have not moved for months, thereby generating a 100% 
decline in revenues. Another example are lease payments for marine 
terminals. Marine terminal agreements with their landlord port 
authorities include a 'minimum annual revenue guarantee' clause that is 
based on volumes. When expected volumes do not materialize, port 
authorities are not able to collect dockage, wharfage and other fees 
related to supporting the needs of vessels while they are in port.
    Moody's Investor Service issued a report May 13, 2020 that states 
``However, most US ports are organized as landlords and receive 40%-70% 
of revenues in the form of guaranteed payments under long-term leases 
from tenants.'' It also states, ``Port operators and customers will 
face significant pressure as throughput materially declines in the 
months ahead.'' They predict this decline will approach or exceed the 
decline of the 2008-2009 global financial crisis. The report continues 
with ``Tenants have expenditure flexibility to adapt to lower volumes, 
but a severe downturn would pressure stability.'' And ``Lower volume 
can be partially managed by operators' expenditure flexibility, but the 
impact of such an unprecedented shock is ultimately uncertain.'' We are 
seeing a severe downturn that will continue into the remainder of the 
year, impacting a port operator's ability to ensure continued 
liquidity.
    Landlord ports include this minimum annual revenue guarantee clause 
to help them recover potentially lost fees if volumes should decline. 
This is normally considered an incentive clause to encourage the 
terminal operator (tenant) to maximize volume throughput by working 
hard to attract new business to the port, and thereby their terminal. 
It has not been envisioned to become a punitive charge during a global 
pandemic, that increases lease payments at the same time volumes spiral 
downwards, operating costs increase, and revenues take a nosedive.
               What COVID-19 related unmet needs remain?
    Taking care of personnel: The on-going cost of PPE and cleaning 
supplies has been exceeded by the cost of having to sanitize equipment 
and machinery before and after each work shift. The application cost of 
ensuring equipment and machinery are safe to use exceeds that of the 
cost of disinfectant. NAWE members are spending between $75,000 and 
$335,000 per week on these new expenses. Documented costs for one 
coastal region alone exceed $1 million per week. Compounding this new 
financial burden is the cost of safeguarding the workplace such as 
conducting regular temperature checks for several thousand employees 
and visitors as they enter each terminal facility. No one is talking 
about ending cleaning protocols. A bridge is needed to allow waterfront 
employers time to engage with customers and adapt these new expenses 
into operations.
    Adjusting terminal operations: As volumes drop, terminal and gate 
hours must be adjusted to allow the existing business to support 
operations as much as possible. Reduced gate hours require truckers to 
be diligent in collecting containers. As each terminal supports a 
different profile of customers, we are seeing a range in business 
declines from a low of 17% to a high of 32%. The year 2020 will be one 
of the worst on record, with Q1 and Q2 an average of 20% below 
projections, Q3 generating uncertainty and another drop expected in Q4. 
Shipping is seasonal, with one more peak season ahead of us. The 
National Retail Federation issued a report May 11, 2020 \7\, confirming 
the forecast by Global Port Tracker, a firm that provides historical 
data and forecasts for 13 of the top U.S. coastal ports. They do not 
show a smart recovery in Q3. Included in Q3 shipments are back to 
school supplies, Fall fashions and fall/winter holiday goods. Rather, 
they are predicting a slow recovery beginning in Q4 or early 2021 (see 
chart).
---------------------------------------------------------------------------
    \7\ https://www.lloydsloadinglist.com/freight-directory/news/US-
box-import-declines-forecast-to-continue/76566.htm#.XsqYHy-z2L9

------------------------------------------------------------------------
                                                               Decline
                                         Estimate of TEU      from same
           Month in 2020              (number of containers   time last
                                            handled)          year, YTD
------------------------------------------------------------------------
April..............................  1.51 million..........       -13.4%
May................................  1.47 million..........       -20.4%
June...............................  1.46 million..........       -18.6%
July...............................  1.58 million..........       -19.3%
August.............................  1.73 million..........         -12%
September..........................  1.7 million...........        -9.3%
------------------------------------------------------------------------


    While the majority of this paper has referenced container terminal 
concerns, NAWE's members also operate roll on/roll off terminals for 
vehicle and heavy equipment movement, breakbulk terminals that move 
steel and lumber products, and bulk terminals that focus on 
construction materials. Imagine the cars that are sitting on terminal 
land, rows upon rows of new vehicles waiting to be moved to dealers 
across the nation. With Hertz, Avis and others cancelling their orders 
for new vehicles, how long will some of these autos continue to 
encumber limited space on terminals? Steel waits for manufacturing 
plants to reopen. No sector of freight is immune to the impact of 
COVID-19. And each stress the resources of the terminal operators.
    Beyond freight, our members also support the provisioning of cruise 
ships and the embarkation and disembarkation of cruise passengers--
matching each with their baggage both on and off the ship. Marine/
cruise terminal operators have a special duty of care to passengers. 
They are strategically planning to protect their employees, waterfront 
workers and the guests who will transit terminals on way to their 
vacation. Cruise ships have announced they will now accept bookings for 
cruises scheduled to sail late July and early August--and the public is 
responding. The costs to protect workers and guests will be a major 
issue. Security costs will be dramatically increased in these instances 
. . . even more expenses needed to be funded.
    NAWE's members are scouring Federal regulations seeking support for 
what COVID-19 can be considered. It defies definition of any prior 
crisis of our time. Port operators are moving forward with strategic 
planning, logical implementation of those plans, and making nimble 
adjustments when needed. It is the cost of these actions, necessary to 
keep marine terminal open and freight moving, that is our problem.
                             In conclusion
    We would like to take a moment to recognize the many Federal teams 
who have worked with us during this unprecedented time: the U.S. Coast 
Guard (USCG), Federal Maritime Commission (FMC), and the Maritime 
Administration (MARAD). While many Federal partners are working with 
us, these have gone above and beyond in their efforts to be of 
assistance. The USCG have maintained oversight as required under 33 CFR 
part 126 while balancing new protocols put into place to address the 
threat of COVID-19. The FMC has reached out to NAWE to see what they 
can do to be of assistance. Sometimes a call or a letter makes a big 
difference. MARAD has stepped up by hosting industry calls that include 
our members, allowing us to share information and concerns with our 
maritime transportation partners. MARAD heard our request for PPE and 
are working with FEMA to supply masks for the maritime industry. NAWE's 
members requested 240,250 masks and believe these will provide a 90-day 
supply for our workers.
    Marine terminal operators, stevedoring firms and operating port 
authorities are each experiencing reduced volumes in the face of 
dramatically increasing costs. They are committed to remaining open and 
ensuring the freight needs of the United States are met but cannot 
continue to do so without assistance. We ask that a bridge program be 
enacted that will assist waterfront employers and port authorities 
defray COVID-19 related expenses including lease and other contractual 
expenses necessary to keep the ports open, terminals operating, and 
workers employed.
    Again, thank you for this opportunity. We appreciate the selfless 
dedication of this Subcommittee and their continued support for U.S. 
port operators. We look forward to working with you to ensure the 
supply chain of the United States remains strong.

    Mr. Maloney. Thank you, Ms. Brand.
    I think that image was meant to alarm us, but I have to say 
you had me at 40,000 chocolate bunnies. It is about the best 
image I think I have had in days.
    So we have one more witness.
    Mr. Ebeling, you may proceed.
    Mr. Ebeling. Thank you, Mr. Chairman.
    My name is Eric Ebeling and I am testifying today on behalf 
of USA Maritime, a coalition consisting of American-flag vessel 
operators and owners, trade associations, and maritime labor 
committed to ensuring that the U.S. merchant marine will always 
be available to support our warfighters, enhance our economy 
through trade, and provide great jobs to thousands of Americans 
across the country.
    As president and CEO of American Roll-On Roll-Off Carrier 
Group [ARC], a USA Maritime company, it is my honor to lead an 
incredibly talented team of men and women at the largest U.S.-
flagged RORO operator. ARC has reflagged five new vessels in 
the U.S. registry since 2016, including three vessels in 2019, 
and all of our vessels are crewed by American mariners and fly 
the American flag.
    The U.S.-flag fleet operating in international trade 
primarily consists of the militarily useful and commercially 
viable Maritime Security Program, or MSP, fleet of 60 ships, 
the attendant global networks, and a mariner base of over 2,400 
highly trained and loyal U.S. citizen merchant mariners that 
support U.S. Transportation Command and the Joint Deployment 
and Distribution Enterprise. It would cost the Government tens 
of billions of dollars to attempt to try to replicate the 
capabilities provided.
    The success of a commercially viable U.S.-flag 
international fleet is predicated on several factors, all of 
which must be present together. The MSP readiness retainer 
stipend, which provides a strong base; U.S. Government 
generated preference cargoes that must move on U.S.-flag ships; 
and commercial cargo, which is not required to move on U.S.-
flag vessels but fills the remainder of the vessel.
    The COVID-19 crisis has devastated the cargo segments 
thereby undermining the central tenet of the U.S.-flag 
international fleet. The latest statistics compiled by MARAD 
for April 2020 show Government-impelled revenue declined by at 
least 47 percent across the MSP fleet versus April 2019. 
Globally, there are currently 524 containerships in lay-up, 
equivalent to 2.65 million TEU capacity, and on the RORO side, 
global light vehicle sales in April dropped 45 percent year on 
year.
    A particularly telling statistic is that the United States-
Mexico-Canada Agreement produced only 4,840 light vehicles in 
April, which would not even fill one pure car/truck carrier 
RORO vessel.
    Smart and effective maritime policy, whether legislative or 
executive action, has always underpinned the success or failure 
of the U.S.-flag fleet international trade, and the COVID-19 
crisis is no exception. Some have not unreasonably queried 
whether U.S.-flag carriers operating under MSP can access $17 
billion set aside for defense contractors under the CARES Act. 
Due to the DX-priority or valid top secret requirements, they 
cannot.
    The fundamental question is what level of readiness is 
being sought for the U.S.-flag MSP fleet in international 
trade. The stipend by itself is not enough to maintain any 
approximation of normal service.
    Congress and the administration should consider three 
actions to ensure that the MSP fleet and the thousands of 
mariner jobs that go with it remain at the ready to support 
national defense and economic security missions.
    First, Congress should consider an emergency stipend 
through the remainder of fiscal year 2020, and, if necessary, 
beyond, aimed at addressing the extraordinary costs of 
readiness that are being borne by MSP carriers.
    Put another way, carriers would be compensated for their 
maintenance of service and readiness as opposed to putting 
ships in cold lay-up or scrapping or recycling or flagging out 
as carriers might otherwise do if not dedicated to supporting 
DoD and the JDDE.
    As per its previously submitted detailed proposal, USA 
Maritime urges Congress to authorize and appropriate $109.8 
million or $1.83 million per MSP vessel for the current fiscal 
year, as well as to authorize $109 million for the first half 
of fiscal year 2021 to be appropriated, if needed. This is what 
is necessary to maintain full service levels, full employment, 
and minimize impacts to national security.
    Second, 100 percent of all Government-owned or financed 
cargoes should be required to move on U.S.-flag ships. It is a 
rather simple equation: Without cargo, carriers will not invest 
in ships, and without ships there will not be jobs for merchant 
mariners. And without those merchant mariners, the Government-
owned reserve fleet cannot be crewed.
    In a letter addressed to this committee dated May 15th, 
2020, signed by TRANSCOM Commander General Stephen Lyons, he 
called for requiring, quote, ``100 percent of all Government-
compelled cargoes to be transported on U.S.-flagged vessels,'' 
close quote. USA Maritime strongly endorses the recommendation.
    Third, consider accelerating the recapitalization of the 
Government-owned sealift fleet, specifically the Ready Reserve 
Force fleet, in the most cost-effective manner, which is to buy 
used foreign-built ships with a first priority for used MSP or 
VISA ships. Eighty-six percent of the thirty-five ROROs in the 
RRF today were foreign built, so this would hardly be treading 
new ground. RRF ships today average 45 years old and RRF 
sealift readiness rates are only 59 percent. But as a result of 
the COVID crisis, there are now more readily available used 
foreign-built ships. DoD should act on the seven authorizations 
already in place and Congress should authorize and appropriate 
for additional purchases in the near term.
    This subcommittee and the members of it have been stalwart 
supporters of our U.S. maritime industry. You understand well 
the many sacrifices that American mariners have endured to 
service this Nation, including during this pandemic as these 
essential workers continue to deliver the goods.
    I close by highlighting another excerpt from the 
aforementioned TRANSCOM letter to this committee dated May 15th 
in which General Lyons stated, quote, ``Given the economic 
downturn as a result of COVID-19, I urge you to favorably 
consider the relief request from VISA and MSP carriers.''
    Thank you for the opportunity to be here today. I look 
forward to any questions you may have.
    [Mr. Ebeling's prepared statement follows:]

                                 
 Prepared Statement of Eric P. Ebeling, President and Chief Executive 
Officer, American Roll-On Roll-Off Carrier Group, testifying on behalf 
                            of USA Maritime
                              Introduction
    Good afternoon Chairman Maloney, Ranking Member Gibbs, and members 
of the Committee. Thank you for the opportunity to appear before you 
today to discuss the state of the U.S.-flag international fleet and the 
impact of the COVID-19 pandemic on the U.S. maritime supply chain.
    My name is Eric Ebeling and I am testifying today on behalf of USA 
Maritime, a coalition consisting of American-flag vessel owners and 
operators, trade associations, and maritime labor. USA Maritime is 
committed to ensuring the U.S. Merchant Marine will always be available 
to support our warfighters, enhance our economy through trade, and 
provide great jobs to thousands of Americans across the country.
    As we just celebrated Memorial Day earlier this week, and National 
Maritime Day last Friday, May 22nd, I take the opportunity to reflect 
on all those men and women who died while serving in the U.S. military 
to defend our freedoms, and all those serving in the maritime industry 
past, present and future. At the confluence of these holidays, and on 
the 75th anniversary of the end of World War II, it is right and proper 
that we remember World War II merchant mariners, who were recently 
recognized through the ``Merchant Mariners of World War II 
Congressional Gold Medal Act of 2020'', sponsored by Congressman John 
Garamendi (D-CA) and Senator Lisa Murkowski (R-AK), and signed into law 
by President Trump on March 14, 2020. Thank you to all of you who 
supported this long overdue recognition.
    As President and CEO of American Roll-On Roll-Off Carrier Group 
(ARC), it is my honor to lead an incredibly talented team of men and 
women at the largest U.S.-flag Ro-Ro operator. We own and operate ten 
roll-on roll-off (Ro-Ro) vessels in international trade, all of which 
are enrolled in the Voluntary Intermodal Sealift Agreement (VISA \1\), 
and eight of which are enrolled in the Maritime Security Program (MSP 
\2\). ARC Group is committed to investing in the U.S.-flag fleet and 
U.S. Merchant Marine \3\ to support our armed forces around the world. 
We have re-flagged five new vessels into U.S. registry since 2016, 
including three vessels in 2019. All our vessels are crewed by American 
mariners and fly the American flag. These Ro-Ro \4\ ships have unique 
capabilities to handle rolling stock--trucks, tanks, helicopters, heavy 
equipment--and breakbulk that is crucial to supporting military 
sealift. In addition, we provide stevedoring and related terminal 
services, multimodal, 3PL, and personal property support services to 
the Department of Defense (DoD), other federal departments and 
agencies, and commercial customers.
---------------------------------------------------------------------------
    \1\ Voluntary Intermodal Sealift Agreement (VISA): jointly 
sponsored program by the U.S. Maritime Administration and TRANSCOM. 
VISA provides TRANSCOM with assured access to U.S.-flag assets, 
specifically the staged, time-phased availability of U.S.-flag 
commercial carriers' shipping services and intermodal systems. Through 
pre-negotiated contracts, TRANSCOM is able to meet DOD contingency 
requirements in the most demanding defense-oriented situations. The 
MSP/VISA fleet is always active in commercial trade but can be 
activated for defense purposes by the Commander of TRANSCOM with the 
approval of the Secretary of Defense. Throughout any stages of this 
agreement, DOD may utilize voluntary commitment of sealift capacity or 
systems.
    \2\ Maritime Security Program (MSP): a federal maritime financial 
sustainment program that provides for a fleet of modern U.S.-flagged 
and U.S.-crewed militarily useful sealift assets operating in 
international trade. The MSP fleet enables the U.S. Government to 
provide sealift for U.S. armed forces utilizing the resources of the 
U.S.-flag commercial fleet, and the presence of a U.S.-flagged 
commercial fleet operating in international trade enables the 
government to pursue generous overseas economic and agricultural 
assistance programs. The MSP fleet provides a U.S. national security 
asset at a substantially lower cost than the government owning and 
maintaining an equivalent capability. An amendment to the Merchant 
Marine Act of 1936, it was first passed in 1996, and originally 
comprised a fleet of 47 U.S.-flag militarily useful vessels. When MSP 
was reauthorized in 2003, the fleet was expanded to 60 ships. The 
program is currently authorized through 2035. MSP provides its U.S.-
flag ship-operating participants with a stipend that helps to offset 
the relatively higher costs of flagging, crewing, and operating a U.S.-
flag vessel.
    \3\ U.S. Merchant Marine: often referred to as ``The Fourth Arm of 
Defense'', the United States Merchant Marine has its origins in 1775 
and the Revolutionary War and throughout its existence, as exemplified 
by its flag motto of ``In Peace and War'', has had a dual nature to 
support the nation's trade during times of peace but to switch into a 
supporting role in time of war. The term can refer to either U.S. 
civilian mariners or to U.S. civilian and federally owned merchant 
vessels. Merchant Mariner officers may also be commissioned as military 
officers by DoD.
    \4\ Roll-on Roll-off (Ro-Ro): self-sustaining cargo ships designed 
with ramps primarily to carry wheeled cargo such as cars, trucks, 
buses, semi-trailer trucks, trailers, locomotives, railcars, 
helicopters and other vehicles driven on and off the ship on their own 
wheels or using an assisting platform vehicle. Common Ro-Ro vessel 
types include pure car carriers (PCCs), pure car/truck carriers 
(PCTCs), large car/truck carriers (LCTCs), Ro-Ros (focused on high and 
heavy equipment), container/Ro-Ros (Con-Ros), and Ro-Ro passenger (Ro-
Pax) vessels. The MSP Ro-Ro fleet is comprised of primarily PCTCs.
---------------------------------------------------------------------------
    The U.S.-flag fleet operating in international trade primarily 
consists of the militarily useful and commercially viable MSP fleet of 
60 ships and attendant global networks. There are also a handful of 
vessels operating in international trade outside the MSP fleet. The MSP 
fleet provides crucial readiness, capacity, and a core mariner base of 
over 2,400 highly trained and loyal U.S. citizen merchant mariners to 
U.S. Transportation Command (TRANSCOM \5\), its components, and the 
Joint Deployment & Distribution Enterprise (JDDE \6\). Without the 
ships, networks and mariners provided by the MSP fleet, it would cost 
the government tens of billions of dollars to attempt to try to 
replicate the capabilities provided.
---------------------------------------------------------------------------
    \5\ U.S. Transportation Command (TRANSCOM): one of eleven unified 
combatant commands of the United States Department of Defense. The 
command is located at Scott Air Force Base, Illinois, was established 
in 1987 and coordinates missions worldwide using both military and 
commercial transportation resources. Its components include Air 
Mobility Command (AMC), Military Sealift Command (MSC), and Surface 
Deployment & Distribution Command (SDDC). Commercial industry is often 
referred to as the ``fourth component'' of TRANSCOM.
    \6\ Joint Deployment & Distribution Enterprise (JDDE): an 
integrated DoD system consisting of assets, materiel, personnel, 
leaders, organizations, tools, training, facilities, and doctrine 
capable of providing prospective joint force commanders with the 
ability to rapidly and effectively move and sustain joint forces in 
support of major combat operations or other joint operations.
---------------------------------------------------------------------------
                   U.S.-Flag Fleet & COVID-19 Impacts
    The success of a commercially viable U.S.-flag international fleet 
is predicated on several factors, all of which must be present 
together: (1) the MSP readiness retainer stipend, which provides a 
strong base; (2) U.S. government generated preference cargoes that must 
move on U.S.-flag ships; and (3) commercial cargo, which is not 
required to move on U.S.-flag vessels but fills the remainder of the 
vessel. The cargo groupings vary in terms of relative importance by 
vessel type and by relative volume over time, but ultimately function 
together with the stipend to partially offset the higher costs of 
operating and crewing U.S.-flag vessels vs. foreign flag ships, which 
is directly attributable to compliance with U.S. laws. The COVID-19 
crisis has devastated the cargo segments, thereby undermining the 
central tenet of the U.S.-flag international fleet.
    International Monetary Fund (IMF) forecasts for 2020 indicate that 
the U.S. economy is expected to shrink by 4.6% for the year, the Euro 
area is expected to shrink by 7.0%, and China is expected to grow by 
1.2%. The idle global container fleet has reached record levels, 
greater than even during the Global Financial Crisis, with 524 ships 
idle, equivalent to 2.65M twenty-foot equivalent unit (TEU \7\) 
containers. The global container fleet, which consists of three primary 
alliances, 7 major carriers and several smaller carriers, is 
experiencing hundreds of blanked or voided sailings. According to one 
recent industry report, global container liner providers could lose 
upwards of $23.4 billion in 2020. In the heavy lift or multipurpose 
(MPP \8\) sector, which is focused on project cargos and infrastructure 
development in remote locations year-on-year MPP vessel utilization is 
down by 75-90%, and ``handysize \9\'' freight rates are down 50-70% in 
Atlantic trades and over 70% in Pacific trades.
---------------------------------------------------------------------------
    \7\ Twenty-foot Equivalent Unit (TEU): a container shipping 
industry standard used to describe the capacity of container ships and 
container terminals based on the volume of a 20-foot-long (6.1 m) 
intermodal container, a standard-sized metal box which can be easily 
transferred between different modes of transportation, such as ships, 
trains and trucks. There is also a standard container with the same 
width but double length called a 40-foot (12.2 m) container known as a 
forty-foot equivalent unit (FEU).
    \8\ Multi-Purpose Vessel (MPP): sometimes also referred to as MPV 
or heavy lift vessels, encompasses ships built for the carriage of a 
wide range of cargoes including but not limited to large dimension 
projects, wood, steel, building materials, rolls of paper and bulk 
cargo.
    \9\ Handysize: naval architecture term for smaller bulk carriers 
generally with deadweight of up to 50,000 tons.
---------------------------------------------------------------------------
    Turning to the global Ro-Ro fleet, a recent trade press article 
noted that some major car carrier routes are showing a 50% drop in 
demand. Global light vehicle sales in April showed a 45% drop year-on-
year, with the U.S. down 45.6%, and some regional year-on-year drops 
approaching 80%. Production rates vary by region but have often fallen 
below 50% of normal levels due to supply chain disruptions, weak 
demand, and the operational constraints of social distancing. The 
European Commission is considering an economic stimulus package that 
could include a 20 billion Euro offer to consumers in the EU; details 
are not finalized but it is expected to incent environmentally friendly 
passenger cars. In the U.S., some automotive plants have resumed 
production, and GM, Ford and Fiat-Chrysler are in the process of 
reopening. However parts shortages forced Mercedes to suspend 
production at its Alabama plant following reopening in earlier May. The 
USMCA \10\ area produced only 4,840 light vehicles in April, which 
would not fill even one pure car truck carrier (PCTC) Ro-Ro vessel. 
Year to date, global PCTC calls are down nearly 17%, with most of the 
declines in April and May.
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    \10\ USMCA: United States-Mexico-Canada Agreement, a free trade 
agreement that is a successor to the North American Free Trade 
Agreement (NAFTA).
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    For the U.S.-flag fleet generally, the DoD ``stop move'' policy, 
which is in effect through June 30th, is the major issue, although we 
have seen slowly increasing cargoes moving by exception to policy, 
whether for military unit cargo, sustainment, or personal property over 
the past several weeks. There has been a concerted effort by TRANSCOM 
and its Army component, Surface Deployment & Distribution Command 
(SDDC), to improve forecasting, which is very helpful to carriers as 
they plan and adjust their networks. However, cargo volumes, whether 
commercial or preference cargo, are simply not there, and it is unclear 
whether, when and to what extent underlying demand may return. Further 
details by U.S.-flag shipping segment:
      The internationally trading U.S.-flag container fleet, 
consisting of 120,000 TEUs of container capacity, is comprised of the 
three largest international container lines and operates in four main 
strings (1 trans-Pacific, 2 trans-Atlantic, and 1 Mideast); U.S.-flag 
impelled cargo generally fills about 10-15% of the total vessel. While 
these container liner strings continue to carry DoD sustainment and 
certain commercial cargoes, it is expected that total combined volumes 
will decrease by 30% in Q2.
      The MSP Ro-Ro fleet provides over 3.1 million square feet 
of capacity and exists almost exclusively to carry defense rolling 
stock and breakbulk cargoes. There are select cargoes moving by 
exception to the ``stop move'' policy but U.S.-flag Ro-Ro cargoes in Q2 
may be down by as much as 75-90%.
      The DoD ``stop move'' order is also impacting the MPP 
heavy lift sector, and U.S. Export-Import Bank \11\ and other civilian 
agency project cargoes are being delayed into 2021; several such 
vessels have entered into warm layup and others may be left with no 
choice but to join.
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    \11\ U.S. Export-Import (EXIM) Bank: established in 1934 as the 
official export credit agency (ECA) of the United States. Operating as 
a wholly owned federal government corporation, the Bank assists in 
financing and facilitating U.S. exports of goods and services. EXIM 
promotes U.S. goods and services at no cost to U.S. taxpayers, 
protecting ``Made in America'' products against foreign competition in 
overseas markets and encouraging the creation of American jobs. There 
are strict U.S. content rules associated with EXIM financing, and 
certain project cargoes financed by EXIM must move on U.S.-flag 
vessels.
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      In the tanker space, while there is a lag in impact due 
to the nature of the market space, the U.S.-flag market cargo 
expectation is a reduction of at least 25-30% in liquid preference 
cargoes for the year.

    The continued availability of the MSP fleet's capabilities to 
TRANSCOM and the JDDE is critical to DoD's ability to meet the sealift 
requirements of the Mobility Capability Requirements Study (MCRS \12\) 
and in the national interest from an economic and national security 
standpoint. DoD's commercial partners and the mariner base must remain 
viable to support DoD needs regardless of the global economic 
environment. TRANSCOM is currently conducting an update to the MCRS, 
which will help identify long term organic and commercial sealift 
capacity requirements to meet operational needs. In an address last 
week on National Maritime Day (May 22, 2020), TRANSCOM Commander 
General Stephen Lyons noted ``the United States' ability to project 
across trans-oceanic distances remains a strategic comparative 
advantage and is admired by both friends and adversaries. TRANSCOM, 
working with the Maritime Administration (MARAD) and key industry 
partners, provides an essential element of deterrence and if necessary, 
the unquestionable ability to respond with overwhelming decisive force, 
most of which will be moved by sealift. The resultant combined effort 
is a world order that encourages peace and opportunities for freedom, 
while deterring great power war for over 75 years and counting.'' There 
remains an enduring need to think long term, beyond the current crisis, 
on how commercial partners must remain viable to support DOD needs 
despite the global economic environment. This is why, notwithstanding 
the impacts of COVID-19, MSP carriers have been continuing to deliver 
the goods when and where needed.
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    \12\ Mobility Capability Requirements Study (MCRS): a series of 
mobility studies undertaken by TRANSCOM and the Cost Assessment and 
Program Evaluation (CAPE) organization within the Office of the 
Secretary of Defense (OSD), the most recently completed of which is 
designated MCRS-18. The studies asses the number of tanker aircraft, 
airlift aircraft and sealift ships needed to meet future combatant 
commander requirements and are generally undertaken pursuant to 
Congressional National Defense Authorization Acts (NDAAs).
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                            In Peace and War
    The historical highpoints for the U.S.-flag international shipping 
industry have occurred in the years following World War II, during and 
immediately after both the Korean War and the Vietnam War, and most 
recently during Operation Iraqi Freedom (OIF) and Operation Enduring 
Freedom (OEF) in Afghanistan. Over 90% of all military equipment is 
shipped overseas by sea because of the scale and scope of the cargo, 
and the cost efficiency of moving it by sea versus air, with the 
preponderance of it generally shipped via the U.S.-flag international 
fleet. There is a direct correlation between declining defense spending 
and the decline of the U.S.-flag fleet and merchant marine. More to the 
point, when DoD is most active, and defense spending is higher, the 
cargo base is larger and therefore the fleet sizes up accordingly. In 
the 1960s, national defense spending averaged 8-9% of GDP but by the 
end of 1970s, it was 5%. In the 1980s, it recovered to 6%, before 
declining again with the end of the Cold War, and by the end of the 
1990s, it was under 3%. Defense spending reached a recent peak of 4.5% 
in 2009 before resuming a decline.
    Not coincidentally, the U.S.-flag fleet has fallen from a recent 
high of 107 ships in international trade in 2010-2011 to a recent low 
of 77 ships in 2016 due to major decreases in defense and other 
preference cargoes, as well as the failure of the MSP stipend to keep 
pace adequately with rising costs generally and in particular a 
widening discrepancy between U.S.-flag operating and foreign-flag 
costs. The MSP fleet has stabilized over the past several years due to 
an increase in the MSP stipend that took effect in FY17. In December 
2019, Congress wisely reauthorized MSP through 2035, which provides 
much needed longer-term stability as carriers invest in new assets and 
their networks for the long term. Having only just stabilized over the 
past several years, the U.S.-flag fleet now faces the twin catastrophes 
of imploding government and commercial cargo markets, impacting 
carriers' ability to maintain service, and in turn negatively impacting 
fleet, network and mariner readiness and by extension TRANSCOM/JDDE 
readiness.
    All container operators and most Ro-Ro carriers in MSP operate in 
liner service, which is a standard industry term for regularly 
scheduled service with a fixed port range. U.S.-flag container carriers 
operate on a fixed weekly service schedule, with round trips ranging 
from 35 days to 77 days. Ro-Ro liner service follows the same general 
principle although it is usually more flexible on port range but less 
frequent. Liner services generally fulfill the schedule unless the 
vessel is unduly delayed due to natural or man-made causes. When any 
liner service sailing is blanked, the vessel in question will be idle 
until the next opening in the string to resume trading. To maintain 
service (and by extension, readiness for DoD), carriers may decide to 
operate higher cost U.S.-flag service when cheaper non-flag options may 
exist in a given carrier network. The remainder of MSP vessels operate 
on a contract of carriage or fixture basis, providing worldwide 
transport without a fixed trade lane, often to remote locations; such 
vessels are reliant on a base cargo that is often accompanied by 
smaller lot cargos for different customers. COVID-19 has dramatically 
impacted base cargoes resulting in idling of vessels.
    Thus, while there are major differences in the reductions by market 
segment, due in part to the underlying service profiles, all U.S.-flag 
services are being dramatically impacted by the changing cargo 
dynamics. The extra costs of dealing with the crisis combined with lost 
revenues total hundreds of millions of dollars in total impacts. MARAD 
has compiled statistics showing a decline of $58.8M in government-
impelled cargo revenues to MSP carriers in just the first quarter of 
2020 vs. Q1-2019, and due to the lag effect on supply chains and cargo, 
most of the impacts, which only started in mid-March 2020, will be much 
harder felt in the second quarter and beyond. The latest statistics 
compiled by MARAD for April 2020 show government-impelled revenue 
declined by at least 47% across the MSP fleet vs. April 2019.
    U.S.-flag carriers have taken various steps to manage costs, stay 
competitive, and maintain service. These include slow steaming; 
omission of port calls where there is insufficient volume to justify 
the cost of a port call; and eliminating holiday, weekend, and other 
overtime work where possible. Verifying cargo availability and accurate 
forecasting are critical, as is optimizing vessel utilization given the 
impacts to overall cargo volumes. Absent any national security and DoD-
related readiness-driven considerations, U.S.-flag carriers would be 
even more aggressively adjusting to the dramatic decreases in cargo and 
revenue and taking assets and crews out of service.
    Carriers are working closely with maritime labor, the U.S. Coast 
Guard, state and local authorities, agents, ports, and other parties as 
appropriate on COVID-protection measures. Social distancing, cleaning, 
and personal protective equipment (PPE) protocols are important to 
maintaining the health and safety of our people. Access to testing 
kits, certain overseas crew changes for select MSP vessels that do not 
call U.S. ports, and PPE remain challenges. However, the result of our 
joint efforts to date is that there have been no known outbreaks of 
COVID-19 on U.S.-flag MSP ships. It is probably unrealistic to believe 
that this trend will continue indefinitely, but it is a testament to 
the collective efforts of labor and management, balancing safety and 
health while continuing to meet the mission, that it endures today.
                       Challenges & Opportunities
    Smart and effective maritime policy, whether legislative or 
executive action, has always underpinned the success or failure of the 
U.S.-flag fleet in international trade, and the COVID-19 crisis is no 
exception. In a theoretical free enterprise economic model, and absent 
DoD cargoes, other preference cargoes, and MSP, there would be no 
American citizen crews and no U.S.-flag international carriers. Today, 
as a result of the commitment of the Department of Defense to the 
utilization of the U.S.-flag commercial fleet and the support of the 
Maritime Security Program, the U.S.-flag fleet in international trade 
is largely stable, but the COVID crisis threatens that stability, and 
the thousands of mariner jobs that go with it.
    It should be noted that the CARES Act and other legislative and 
Administration actions have helped to stabilize certain aspects of the 
situation for parts of the industry, including payroll protection and 
access to loans. While USA Maritime appreciates the actions taken so 
far, the work is incomplete. Some have not unreasonably queried whether 
U.S.-flag carriers operating under MSP can access the $17 billion set 
aside for defense contractors under the CARES Act. Fundamentally, the 
$17 billion is for loans to businesses critical to maintaining national 
security. One might think that U.S.-flag carriers supporting DoD 
sealift might reasonably qualify, but due to the DX-priority \13\ or 
valid top-secret requirements, they do not. The fundamental question is 
what level of readiness is being sought for the U.S.-flag MSP fleet in 
international trade. Today's MSP rules allow operators a substantial 
degree of freedom provided they meet 180 minimum operating days per 
fiscal year, and under normal circumstances, when both government and 
commercial cargoes are moving in reasonable volumes, most carriers can 
not only meet that threshold but also the 320 minimum operating days 
necessary to receive the full MSP stipend for the fiscal year. But with 
both cargo sets decimated, the stipend by itself is not enough to 
maintain any approximation of normal service.
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    \13\ DX priority: a priority rating under the Defense Priorities & 
Allocations Systems (DPAS). DPAS ratings assure the timely availability 
of industrial resources to meet current national defense and emergency 
preparedness program requirements and to provide an operating system to 
support rapid industrial response in a national emergency. The Defense 
Production Act of 1950 authorized the President to require preferential 
treatment of national defense programs. All prime contracts, 
subcontracts or purchase orders in support of an authorized program are 
given a priority rating. A DX rating is assigned to those programs of 
the highest national priority. Per DoD 4400.1-M, OSD AT&L approves DO 
rated orders and nominates to the Secretary of Defense for approval of 
DX rated orders. An unrated order is a commercial order or a DoD order 
that is not ratable. A DX rating takes priority over a DO rating which 
takes priority over an unrated order. Rated programs are also given a 
program identifier symbol. DPAS issues are supposed to be resolved at 
the lowest level possible.
---------------------------------------------------------------------------
    Congress and the Administration should consider three actions to 
ensure that the militarily useful and commercially viable MSP fleet, 
and the thousands of merchant mariner jobs that go with it, remain at 
the ready to support national defense and economic security missions:
      First, in recognition of the close partnership between 
DoD/TRANSCOM and commercial carriers, specifically DoD's reliance on 
commercial sealift to deploy and sustain the force, Congress should 
consider an emergency stipend through the remainder of FY20, and if 
necessary beyond, aimed at addressing the extraordinary costs for 
readiness that are being borne by MSP carriers. Put another way, 
carriers should be compensated for their maintenance of service (and 
readiness), as opposed to putting ships in cold layup, or scrapping/
recycling, or flagging out, as carriers might otherwise do if not 
dedicated to supporting DoD. As per its previously submitted detailed 
proposal, in order to ensure continued readiness as well as maximum 
mariner employment feasible, USA Maritime urges Congress to authorize 
and appropriate $109.8 million ($1.83 million per MSP vessel) for the 
period April 1, 2020 to the end of the current fiscal year, as well as 
to authorize $1.82 million per vessel with a total authorization of 
$109 million for the period October 1, 2020 to March 31, 2021 to be 
appropriated as needed. This is what is necessary to maintain full-
service levels and full employment and minimize impacts to national 
security levels.
      Second, under America's cargo preference laws \14\, 100% 
of all military cargoes and at least half of all civilian agency 
cargoes must be shipped on U.S.-flag vessels. This has been the 
official policy of the Federal Government since at least 1904, and it 
has long been a cornerstone of American national defense. Whether by 
legislation or executive order, 100% of all government-owned or 
financed cargoes should be required to move on U.S.-flag ships. It is a 
rather simple equation: without cargo, carriers will not invest in 
ships, and without ships, there will not be jobs for merchant mariners. 
Without those merchant mariners, the Government-owned reserve fleet 
cannot be crewed. In a letter addressed to this Committee dated May 15, 
2020 signed by TRANSCOM Commander General Stephen Lyons, he called for 
requiring ``100 percent of all government-impelled cargoes to be 
transported on U.S. flagged vessels''; USA Maritime strongly endorses 
the recommendation.
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    \14\ Cargo preference laws: the reservation by law for 
transportation on U.S.-flag vessels of all, or a portion of all, ocean-
borne cargo which moves in international trade either as a direct 
result of the Federal Government's involvement, or indirectly because 
of the financial sponsorship of a Federal program or guarantee provided 
by the Federal Government. The U.S. cargo preference laws are part of 
the overall statutory program to support the privately-owned and 
operated U.S.-flag fleet and merchant marine. Cargo preference requires 
that U.S. Government-financed cargoes be shipped on U.S.-flag vessels, 
provided that such vessels are available at fair and reasonable rates. 
Preference cargoes are the key incentive for U.S.-flag operators 
operating in international trade to remain under U.S. registry and 
provide a vital cargo base to help offset foreign flag cost advantages. 
The primary U.S. cargo preference laws are set forth in the Cargo 
Preference Act of 1904, Public Resolution 17 (1934), and the Cargo 
Preference Act of 1954. The 1904 Act requires that 100% of all military 
cargoes--purchased for or owned by U.S. military departments--be 
shipped exclusively on vessels of the United States or belonging to the 
United States. PR 17 requires that all cargoes generated by the U.S. 
Export-Import (Ex-Im) Bank be shipped on U.S.-flag vessels unless a 
waiver is granted by the Maritime Administration. The Cargo Preference 
Act of 1954 requires that at least 50% of civilian agency cargoes be 
transported on U.S.-flag vessels.
---------------------------------------------------------------------------
      Third, consider accelerating the recapitalization of the 
government-owned sealift fleet, specifically the Ready Reserve Force 
(RRF \15\) fleet, in the most cost-effective manner, which is to buy 
used foreign-built ships, with a first priority for buying used ships 
through U.S.-flag carriers. Some may raise the notion that such ships 
should be built in U.S. shipyards, and that is a laudable goal, 
although it is a relatively little-known fact that 86% of the 35 Ro-Ros 
in the RRF today were foreign built, so this would hardly be treading 
new ground. But the state of the RRF is woeful now (average ship age 45 
years old), the U.S. Navy has many other competing budgetary 
shipbuilding priorities, and as a result of the COVID crisis there are 
more readily available used foreign built ships available now. TRANSCOM 
Commander General Stephen Lyons noted in testimony earlier this year 
that RRF ``sealift readiness rates have declined to 59% compared 
against a goal of 85%, with vessel material condition and age as the 
primary factors''. As we consider sealift that the nation needs, 
specifically whether to continue to pursue service life extensions, 
build new, or buy used, let us not let perfect be the enemy of good. 
DoD should act on the seven authorizations already in place for buy 
used, and Congress should authorize and appropriate for additional 
purchases in the near term. Including a first priority for used U.S.-
flag foreign built MSP/VISA ships over foreign-flag foreign built ships 
would be a ``win/win'', as carriers could sell or charter assets to the 
government that are much younger than today's RRF ships, and in turn 
use the proceeds to reinvest in newer tonnage for the MSP/VISA fleet.
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    \15\ Ready Reserve Force (RRF): a subset of the National Defense 
Reserve Fleet (NDRF), the RRF component was established in 1976 to 
provide rapid deployment of military equipment and currently consists 
of 46 vessels (35 of which are Ro-Ros) that are crewed with a reduced 
crew but kept available in reduced operating status (ROS) for 
activation within a set timeframe (usually 5 days). Upon activation, 
RRF vessel control transfers to Military Sealift Command (MSC), the 
naval component of TRANSCOM [MSC also has reporting lines to Navy Fleet 
Forces Command for Navy-unique matters and to the Assistant Secretary 
of the Navy (Research, Development and Acquisition) for procurement 
policy and oversight matters]. The RRF fleet budget for FY19 was 
$310,805,000 (average of $6.76 million per ship) and for FY20 was 
$352,044,000 (average of $7.65 million per ship).
---------------------------------------------------------------------------
                               Conclusion
    The National Defense Strategy (NDS) focuses on the return of Great 
Power competition and all that it entails. In furtherance of NDS 
readiness mission assurance, the Defender Europe 2020 exercises 
comprised the largest NATO exercises in 25 years. There was a concerted 
sealift component to the exercises, and although Defender 20 was 
eventually significantly curtailed due to COVID-19, it is still 
ongoing, and indeed ARC recently carried redeploying unit cargo from 
Germany and Poland back to the United States. With assets and networks 
valued in the tens of billions of dollars, the active U.S.-flag 
commercial fleet operating in international trade continues to be a 
``best buy''--significantly more cost-effective to the Government than 
acquisition, operation, and maintenance of Government-owned/operated 
assets or attempting to build such networks.
    I started this testimony by emphasizing remembering our World War 
II mariners, but let us also bear in mind the need to ensure we 
maintain a strong U.S.-flag fleet today so that we ensure we have the 
necessary assets and hard-working U.S. merchant mariner crews that are 
essential to the pursuit of national and economic security objectives 
today and tomorrow. I close by highlighting another excerpt from 
TRANSCOM Commander General Stephen Lyons in the aforementioned letter 
to this Committee dated May 15th in which he stated ``given the 
economic downturn as a result of COVID-19, I urge you to favorably 
consider the relief requests from VISA and MSP carriers''. Thank you 
for the consideration and thank you for the opportunity to be here 
today. I look forward to your questions.

    Mr. Maloney. I thank the gentlemen.
    We will now proceed to Members' questions.
    Just a word to those who may be new to the technology. If 
you participate using the grid view, you will also see one of 
the grids is occupied by the 5-minute clock. For purposes of 
monitoring your own time it may be useful.
    Also a reminder, your fourth or fifth today, you are 
presumptively unmuted. So you all have yourselves muted. Please 
continue to do so unless you are recognized.
    Now proceed to the 5-minute rounds of questioning, and I 
would like to yield to the chairman.
    Mr. Chairman.
    Mr. DeFazio. Thank you, Sean Patrick. I appreciate the 
opportunity to go first.
    To Michael Roberts on the issue of quarantining. Is this an 
ongoing problem where crews are being quarantined on freighters 
or have we gotten past that?
    Mr. Roberts. Thank you for the question.
    It is an issue of grave concern in most markets. There was 
an article today about a tanker in Brazil that had been 
quarantined for over a month and is continuing under 
quarantine.
    That has not happened in the United States. We, with great 
cooperation from the maritime labor, we have had very few 
incidents of infection onboard ships, and we have had good 
indications that if and when that happens, that there will be 
an appropriate response at the local level, that the ship will 
not be sent to anchor, that it will be sent to a secure 
terminal facility where the infected person can be taken off 
safely and taken to treatment quickly, the crew can be 
quarantined, the ship can be sanitized, and it can be returned 
to service.
    That is extremely important in certain markets where these 
ships provide just-in-time cargo to consumers. The concern is 
that that is not a nationally recognized standard at this 
point, that there have been incidents where there was a 
suspected case where the ship was sent to anchor. And then you 
have to have the medical staff climb the ladder to get on the 
ship to administer this test. And it is very, very unsafe and 
it is not the best place to respond to that sort of incident.
    So we really hope that the Coast Guard and CDC will work 
together with the industry to recognize what the right response 
plans are in each port.
    Mr. DeFazio. Great. I think that would be something for the 
committee to follow up on. That is an excellent point. Thank 
you on that.
    Thanks also for bringing up the 100th anniversary of the 
Jones Act. Yeah, I have been jumping on those who are looking 
at this as an opportunity to undermine the Jones Act and thus 
far we have been pretty successful in pushing back on them.
    To Eric Ebeling. You mentioned for ROROs, they weren't 
eligible for--I have run into this before. How much money did 
you say was in that fund that they weren't eligible for because 
they aren't doing highly classified work?
    Mr. Ebeling. Yes, sir. That is the CARES Act, and there is 
$17 billion in the fund that is available to national defense. 
But U.S.-flag carriers are not eligible for it because we are 
not under those classifications.
    Mr. DeFazio. Yeah. I think we should--I have run into that 
with a trucking company that does a lot of DoD work, too. And I 
think staff will need to follow up with Treasury and see how 
much of that money has been committed. Maybe we need to look at 
modifying the rules for who is eligible and who isn't eligible 
if the money is just sitting there unallocated. So thanks for 
bringing that up.
    Then the last question to Lauren Brand. I am obviously 
still a bit dubious about cruise lines at the end of July, but 
I understand they are selling tickets and some of them do 
intend to sail, and hopefully they won't be populated by the 
people who were at the pool party and the bar in Lake of the 
Ozarks.
    So can you tell us what measures are going to be taken, 
particularly landside? I guess once these people sail, it is up 
to them. And oh, by the way, if they are flagged in Malta and 
they have a problem, they should call for the Maltese Navy, or 
if they are flagged in Liberia, they should call for the 
Liberians to send medical assistance.
    But if you would comment on what we are going to do on the 
landside that would be helpful. If you can do that quickly, my 
time is about up.
    Ms. Brand. Thank you for that question.
    Sir, I am not prepared to answer it in completeness. And 
what I would like to do is get the information and submit it on 
Monday. Is that acceptable?
    Mr. DeFazio. Absolutely. That is fine. Thank you.
    Ms. Brand. Thank you.
    Mr. DeFazio. Thanks, Sean Patrick. Appreciate it. Thank 
you.
    Mr. Maloney. Thank you. Reclaiming my time.
    I am at this time going to recognize Mr. Gibbs.
    Mr. Gibbs. Thank you, Mr. Chairman.
    First of all, I would like to say to all the witnesses, 
thank you for [inaudible]. I hear optimism [inaudible] In your 
leadership [inaudible] Tough times ahead, and I just want to 
recognize [inaudible] Challenges. And hopefully Congress will 
be able to enact some of your proposals' assistance.
    After 9/11, the United States and much of the world, we 
updated our port security infrastructure framework, mostly to 
focus on responses from violent physical terrorist attacks. 
Then, of course, we had cyber challenges.
    And now with the recent coronavirus response, I think that 
is going to pressure test our systems designed to keep U.S. 
ports safe and secure; that added pressure will determine if 
existing regulatory systems are sufficient to provide ports 
with the broad resilience they need, or if the schemes are 
focused too narrowly on the response to terrorist attacks.
    And my first question is to any of the panelists, I guess. 
Do current port safety and security regimes in the United 
States provide the level of resiliency necessary to protect our 
ports and our supply chains that rely on the ports against the 
spread of the coronavirus from vessels to land, cyber threats, 
and also national disasters? If not, what actions do you 
recommend that we take domestically to improve our port 
infrastructure and supply chain resiliency against all of the 
threats the industry now faces? I will open it up to any of the 
panelists.
    Mr. Connor. Yeah. I can take a first shot at that. This is 
Chris Connor. And thank you for that question, Congressman.
    I think cyber attacks are always a threat and it would be a 
very risky response from me to be cavalier and say that we have 
got that mastered because I don't think anyone ever will and we 
need to stay resilient. And it is also fair to say that the 
distractions brought on by the current pandemic certainly may 
leave us compromised in some ways.
    Saying that, I will say that the port industry, in 
particular, spends a lot of time on that. We have a technical 
committee within our association that focuses on security. Some 
of our members are quite sophisticated and are willing to share 
some of their expertise with other members to better prepare 
them. And we also work with DHS and through CISA to make sure 
that we are on top of all the risks.
    But there is no doubt there are increased threats at the 
particular time. I think it is hitting people on many levels, 
not just on the business level, but also on the individual 
consumer level with actors out in the theater. So this is an 
area that gets a lot of attention from the port industry.
    Thank you.
    Ms. Brand. If I may supplement what Mr. Connor just said. 
The National Association of Waterfront Employers also has a 
security committee and we talk about everything Mr. Connor just 
mentioned, and we also address drones.
    There is technology that is changing that, frankly, is 
frightening and I am not sure that we have enough protocols in 
place to address everything. We work very closely with DHS and 
the other agencies that impact this issue.
    Mr. Gibbs. Thank you. I want to get another question in. In 
addition to short-term COVID-19-related needs, U.S. ports, 
vessel operators, and marine terminals still face long-term 
capital and operating needs. What are the long-term, unfunded 
needs of ports, marine terminals, and U.S.-flag vessels due to 
longer structural changes in international shipping? What kind 
of money are we looking at? What are you looking at long term? 
Any idea?
    I guess I might go to Ms. Brand maybe.
    Ms. Brand. Thank you very much for the question, sir.
    Unfortunately, you cut out a little bit. I just wanted to 
make sure that the question is: what is the projection of what 
would be needed to assist with the COVID-related expenses that 
we are enduring right now?
    Mr. Gibbs. Yes.
    Ms. Brand. Our association believes that about $400 million 
should help ports and terminal operators with just PPE; PPE, 
cleaning supplies, and incidental changes made to facilities 
separating people, social distancing, the things recommended by 
the CDC. As I said before, cleaning of equipment costs more 
than the actual cost of the disinfectant itself. So about $400 
million, which is that one expense, sir. And $1.5 billion might 
cover everything else.
    Mr. Gibbs. OK. Does anyone else want to respond?
    OK. Well, I am just about out of time. I will yield back, 
Mr. Chairman.
    Mr. Maloney. I thank the gentleman.
    I would now like to proceed to Mr. Larsen, although I 
understand Mr. Larsen may be having connectivity issues.
    Rick, are you with us?
    Mr. Larsen. Yeah. Yes, I am with you.
    Mr. Maloney. Oh, hello. We can see you.
    Go ahead. You may proceed.
    Mr. Larsen. Thanks. I think I have it figured out, but I 
will pass on later what I think happened.
    So thanks so much.
    First question is for Ms. Brand. Let me just bring it up 
here. It has to do with maybe challenges--it is probably all 
ports, but a lot of temperature-sensitive cargo goes to the 
Pacific Northwest in egg products, seafood, and so on.
    With the pandemic impacts on supply chains, are you seeing 
any issues with the export of these temperature-sensitive 
products? And what are your members doing to resolve that?
    Ms. Brand. Naturally, the members know when the product 
hits the terminal what kind of special care that that commodity 
needs or that container would need. I have not had any 
complaints from anyone about things being left behind that are 
temperature-controlled and sensitive like food products. So I 
will look into it and I will give you a report back early next 
week if that is acceptable.
    Mr. Larsen. That is fine.
    Ms. Brand. I would also like to say the only product I have 
heard that is being left at the dock are the real low-value 
items, waste paper, items like that.
    Mr. Larsen. OK. Also in terms of the supply chain, have any 
of you--maybe I will start with Mr. Roberts. What we are doing 
in our office, just as a matter of course, we are looking at 
what we need to keep doing after we get through the pandemic 
and what we are going to stop doing and get rid of and never do 
again because of the pandemic.
    Are you learning any lessons about the supply chain that 
you are going to incorporate moving forward that would be 
helpful for us to understand and know about in terms of our 
future legislative planning? For Mike Roberts.
    Mr. Roberts. Yes. Thank you. That is a very good question.
    We are certainly paying a lot of attention to and seeing 
extraordinary changes in how we do work in the office and on 
the docks and on the ships. And I am certain there will be 
lessons applied going forward. Certainly technology, use of 
technology, as we see today, is an eye opener in terms of how 
we function.
    But as far as the supply chains themselves, I need to think 
about that and get back to you. I don't have a great answer for 
you right now.
    Mr. Larsen. Mr. Connor.
    Mr. Connor. Yeah. I will say that the industry, in general, 
has experienced remarkably low incidence of COVID outbreaks on 
the port footprints. And I think that speaks to the amount of 
emphasis that both labor and port authorities and marine 
terminal operators have put into keeping port workers safe.
    I think it would be a sad outcome to this terrible pandemic 
we have gone through not to have some profound changes in the 
way we all work. I have no doubt we will see very interesting 
developments into terms of especially where people are touching 
equipment and things like that, seeing significant 
improvements. It has already happened. And not to mention the 
more obvious one where administrative employees found out that 
we, in many cases, can be pretty darn productive working in a 
noncongregated environment.
    So I think there are lots of lessons and that story will be 
told for years to come.
    Mr. Larsen. I find my staff is a lot more productive, too, 
when I am not going by their desks and asking them to do all 
sorts of things as well.
    Mr. Connor. 10-4 on that.
    Mr. Larsen. Ms. Carpenter, do you have an answer to that 
question? Any changes you see coming?
    Ms. Carpenter. Highlight, in particular, the use of remote 
audit and inspection techniques.
    So our segment of the industry, the tugboat, towboat, and 
barge industry, is halfway through the phasing in of a very 
significant regulatory change, towing vessel inspection or 
subchapter M. By July 20th of this year, 50 percent of the U.S. 
towing vessel fleet needs to have certificates of inspection.
    And then COVID-19 hit. And so we had to work creatively 
with the Coast Guard to figure out how we are going to keep 
getting audits and inspections done while keeping mariners 
safe, recognizing sometimes you need to defer. This is going to 
be with us for a long time, and we need to figure out how to do 
business safely.
    So we have had very good success working with the Coast 
Guard, working with Coast Guard-approved third-party 
organizations, to use remote audit and inspection techniques to 
supplement what takes place face-to-face. And I think that is 
something we are going to continue to refine and improve going 
forward.
    Mr. Larsen. OK. Thank you.
    Thank you, Mr. Chairman.
    Mr. Maloney. I thank the gentleman.
    Mr. Weber.
    Mr. Weber. Well, thank you, Mr. Chairman.
    I appreciate you all holding this and appreciate you making 
the recommendation that when you go to grid view--can you all 
hear me OK?
    Mr. Maloney. We can hear you fine.
    Mr. Weber. Thank you.
    When I finally got to grid view, I got to see Alan 
Lowenthal, and I thought, man, he is wearing a mask, one of 
those COVID masks. But it actually turns out he has a beard. I 
don't know how many of you all thought that.
    But anyway, it is great to be on with all of you. I 
appreciate the opportunity.
    Some questions I want to start with probably for Chris 
Connor.
    You said in your remarks, Mr. Connor, that the supply 
chains were changing and there is autos and others and you 
named a whole bunch of stuff. How long--I know this is 
speculation, pure speculation, and we will go to Jennifer maybe 
and Ms. Brand later--how long do you think supply chains are 
going to be interrupted to the point that, from a strategic 
planning point, you all are going to begin to outline new 
supply chain processes, and hoping we can keep as much in the 
United States? Have you all looked at that? Any projections, 
Mr. Connor?
    Mr. Connor. Well, as I mentioned, I think initially, like 
most of us, you know, everybody back in March thought, or 
hoped, really--it was more hope than thought--we would have a 
quick, V-shaped recovery.
    I think time and the reality of the complexities of this 
pandemic have been a reality check for all of us, and we now 
project this is going to be with us, I think, reasonably, at 
least through the end of this calendar year, 2020. So that is 
the volume downturn that we are going to experience.
    I think supply-chain disruptions is probably a different 
discussion and maybe a more complex one, as we try and 
repatriate certain essential products and certain goods back to 
the U.S. so that we don't put ourselves in this exposed 
position ever again in the future.
    Mr. Weber. Well, that is our hope, of course. Have you 
identified certain other countries--and, of course, I know 
China is the main one in the discussion right now--but other 
areas where we might be thinking of maybe drawing back and 
trying to do a little bit more business at home? Have you 
identified those potential interruptions?
    Mr. Connor. Not as yet. I think we have been kind of 
fighting through the crisis. But I think that is a conversation 
that I think not only the seaports industry but the entire 
logistics industry would like to be a part of, because I think 
it is an important one we should have as a Nation.
    Mr. Weber. All right. Thank you.
    Mr. Ebeling, you made some comments that there was an 
emergency stipend needed for MSP carriers or they might wind up 
flagging out. Explain that.
    Mr. Ebeling. Yes, sir. So this is more of a maintenance of 
readiness issue.
    So, as I think the committee is well aware, the MSP stipend 
today is $5 million per ship per year, and there are 60 
enrolled vessels, for a total programmatic cost of $300 million 
per ship per year.
    Usually that works in concert with the carriage of U.S.-
flag preference cargoes and U.S.-flag commercial cargoes. This 
is more of a but-for issue here. So, normally, carriers would 
probably be taking actions in terms of laying ships up or 
reducing or changing service profiles. And what is happening 
with the MSP fleet is they are all maintaining service.
    But, in order to maintain that service and, therefore, 
readiness for the Department of Defense, we believe that it is 
appropriate to have an additional stipend of $1.83 million per 
MSP vessel in order for those ships to remain in service and 
the crews fully employed onboard those ships.
    So I apologize if I made a misleading statement there, 
but----
    Mr. Weber. So that would include PPE, sanitization, and all 
of those kinds of things? Is that what you are driving at?
    Mr. Ebeling. Some of it is the additional costs that are 
being borne by carriers, and some of it is the lost revenues. 
Those total in the hundreds of millions of dollars, and this is 
not necessarily to make up for that. It is more just the 
maintenance of service and the maintenance of readiness in 
support of our partners at DoD.
    Mr. Weber. Thank you for that.
    And, finally, I go to Ms. Brand.
    We are glad you are here. You talked in your remarks about 
tequila being made into hand sanitizer. Was that done in 
Galveston, Texas, do you know?
    Ms. Brand. Yes, sir, it was.
    Mr. Weber. My district, just wanted to say.
    Mr. Chairman, I yield back.
    Mr. Maloney. Well, I thank the gentleman, and I thank him 
for his comments on Members' appearance.
    Might be a good time to reference House Resolution 965, 
Regulation (d)(2), which requires Members to conform to the 
standards of proper attire as required to participate in the 
committees' in-person proceedings. I think that one probably 
speaks for itself.
    With that, Mr. Garamendi.
    Mr. Garamendi, you may need to unmute.
    You need to unmute, John.
    I think we may have lost Mr. Garamendi.
    Mr. Garamendi. I am muted.
    Mr. Maloney. I think you are having also a connectivity 
issue, but I can hear you now.
    Mr. Garamendi. Good. I am ashamed that you should start my 
session with my dress code.
    Mr. Maloney. The Chair's remarks were directed to the 
gentleman from the South, but----
    Mr. Garamendi. If the shoe fits, wear it. I got it.
    Mr. Maloney. We are used to Californians being 
appropriately casual.
    You may proceed, sir.
    Mr. Garamendi. I want to cover a couple of different issues 
here. First of all, this one is for Mr. Connor.
    I just introduced this week the Special Districts Provide 
Essential Services Act. We have about 20 co-authors on it. It 
is specifically designed to address the issue that you spoke 
to, about ports not being able to participate in the CARES Act 
and presently not able to participate in the Heroes Act either. 
I represent 237 special districts, ranging from fire to a port 
district.
    So I want to really ask you, Mr. Connor, if the American 
Association of Port Authorities would consider supporting this 
effort so that we might provide the necessary support that you 
described in your testimony.
    Mr. Connor. Congressman, the answer is a resounding 
``yes.'' But my staff has made me aware of that proposed 
legislation, and we see that as, you know, one channel to bring 
necessary funding into the industry. So thank you for your 
leadership on that.
    Mr. Garamendi. And I notice that there are about 15 of my 
colleagues on here, so this is my opportunity to give you a 
heads-up to get onboard.
    Mr. Lowenthal, specifically, I don't think you are onboard 
yet, but you do represent a couple of ports, special districts, 
keeping that in mind.
    My next question goes to Mr. Ebeling.
    You reference three different things that need to be done. 
All of those are now in play, specifically some of it in the 
NDAA. And I suspect Chairman Maloney will also speak to the 
Coast Guard bill, which is moving along.
    Specifically with regard to cargo preference, we are now 
working on the NDAA to put in a very comprehensive, all-of-
Government cargo being on American ships. I think you are aware 
of this, and I would hope that you are supporting that effort 
to require that all--I mean every mask, every swab, and every 
other thing from the military on be on American-flagged 
vessels.
    Are you familiar with that, and are you in support of that 
effort?
    Mr. Ebeling. Yes, USA Maritime is familiar with that, and 
we are supportive of a 100-percent cargo preference for all 
Government-impelled cargo.
    Mr. Garamendi. The other issue you spoke to, you just 
handled that. Hopefully we will be able to put that into the 
NDAA, possibly into the Coast Guard bill also. And that is, 
dealing with the additional stipend necessary to keep the ships 
on the present program. So we will be working on that.
    Again, this is more to my colleagues that are not yet 
onboard with these issues or familiar with these issues. Those 
are the two things that I have in mind.
    The other thing I want to just bring to all of our 
attention--and I know that all of the witnesses have been 
engaged in this--and that is the national fleet strategy, 
essentially using and repurposing the Jones Act ships so that 
they can be made militarily useful to address the shortfall 
that occurs in the sea surge potential that we do not yet have 
but should going forward.
    So that national fleet strategy is basically using the 
Jones Act, repurposing some of the ships to make them 
militarily useful, and then new ships that would go into the 
Jones Act be made in a way that is militarily useful, and 
supporting that with Federal money out of the Department of 
Defense.
    So I will let it go at that. Thank you for the opportunity. 
Mr. Maloney, thank you very much for being the first-ever real 
hearing. And I will watch my dress code henceforth.
    I yield back.
    Mr. Maloney. I thank the gentleman. More than accustomed to 
being the first ever.
    Mr. Gallagher, you may proceed.
    Mr. Gallagher. Thank you, Mr. Chairman. I put a tie on as 
soon as you mentioned that, because I didn't want to shame you. 
I will not pan the camera down, however, to apprise you as to 
whether I am wearing shorts or slacks. But I appreciate that.
    Mr. Maloney. As usual, we appreciate the gentleman bringing 
credit to the House of Representatives. You may proceed. Your--
--
    Mr. Gallagher. Thank you.
    Mr. Maloney [continuing]. Time is running.
    Mr. Gallagher. Thank you, sir.
    When I spoke to the Port of Green Bay, in my district, 
about their coronavirus needs, the first thing they mentioned, 
actually, was constructing a new Great Lakes icebreaker.
    And I know that may seem like a bit of a non sequitur, but 
the Great Lakes are dependent on icebreaking from the Coast 
Guard during the winter season, which was still ongoing when 
coronavirus hit. We are expecting a second wave of coronavirus 
to hit during the winter season.
    So my question for the whole panel, but perhaps Ms. 
Carpenter could start, is: What would happen if the Mackinaw 
icebreaker was suddenly out of service for maintenance? How 
might that affect the region both economically and in response 
to the virus during the months we have ice?
    Ms. Carpenter. Thanks very much, Congressman. You know, it 
is a great question, and the answer is, we would be in a world 
of hurt, which I think really gets to a key need that we have 
here.
    While we have talked about coronavirus-specific needs, like 
priority access to testing for mariners, there are a host of 
things that fall under the regular jurisdiction of the 
Transportation and Infrastructure Committee that are critically 
important to keeping the supply chain moving.
    So icebreaking, buoy tending, dredging by the Corps of 
Engineers, passage of Coast Guard authorization bills--those 
are the things that need to happen now more than ever in order 
to ensure that we don't have something mess up a recovery as it 
is getting going.
    So I really want to thank you for your leadership as a 
subcommittee in helping us attend to those important needs.
    Mr. Gallagher. And I would ask any other panelists who 
would like to comment on our icebreaker needs, please.
    And if not, I will move on to my second and final question, 
which is: Another, sort of, key connection point or single 
point of failure for the Great Lakes, which runs through the 
Soo locks, which close during icy winters, they reopened on 
March 25--again, just as coronavirus was really hitting the 
United States.
    So I guess my question is: Hypothetically, what would have 
happened had the Soo locks malfunctioned at the beginning of 
this crisis? How might this have impaired the Midwest's ability 
to respond to the outbreak, including transporting basic PPE to 
combat coronavirus?
    And I don't know--who wants to take that? I will pick on 
Ms. Carpenter again if no one else does.
    Ms. Carpenter. Sure. Thanks, Congressman.
    I think that goes directly to the conversation we were just 
having, which is: It would have been terrible. You know, we 
have had enough disruption because of coronavirus. Layering on 
top of that waterways infrastructure failures, inability to 
break ice, inability to do the kinds of waterways management 
functions that enable the supply chain to function, pandemic or 
not, is just--those are problems that we can ill-afford anytime 
and especially not now.
    Mr. Gallagher. I appreciate that.
    And I guess, you know, my only point with this line of 
questioning is, I think, as we learn a big lesson with 
coronavirus beyond the subject we are talking today about 
various single points of failure in our supply chain and our 
economy, we had preexisting single points of failure when it 
comes to icebreakers and Soo locks and a lot of things that 
directly affect the Midwest every single year, and we can't 
take our eye off that ball.
    And, with that, I yield the remainder of my time, Mr. 
Chairman.
    Mr. Maloney. I thank the gentleman.
    Mr. Lowenthal.
    Mr. Lowenthal, you may be having connectivity issues. You 
are cutting in and out, Alan. You may also need to unmute.
    Mr. Lowenthal. Can you hear me now?
    Mr. Maloney. I believe you can proceed. Go ahead, Alan. 
Give it a try.
    It appears you are still muted, though, Alan. You may want 
to check your mute as well.
    Very well. I think we will return to Mr. Lowenthal in the 
order--I think that brings up--the next Democrat in the order 
would be Mr. Brown.
    Alan, if you rejoin, I am sure we can restart.
    Why don't you go ahead, Anthony.
    Mr. Brown, are you available? Would you like to proceed?
    Mr. Brown. Thank you, Mr. Chairman. With all these 
different platforms, I always lose track of where the unmute 
button is. But thank you for hosting this subcommittee hearing. 
Important topic. And, certainly, first out of the gate in the 
Transportation and Infrastructure Committee in holding a 
virtual or online remote hearing.
    The Port of Baltimore is arguably the most diverse port on 
the east coast. It has a portfolio of containers, automobiles, 
farm equipment, roll-on/roll-off cargo, and forest products, 
and it is ranked first among all U.S. ports in the volume of 
vehicle cargo for the ninth consecutive year.
    And while the Port of Baltimore saw a record-breaking year 
in 2019, the COVID-19 pandemic has had a severe impact on its 
business, as we have seen in ports across not only the country 
but the world. In April of this year, total cargo tonnage fell 
11.8 percent from the same time the previous year--the steepest 
decline since the coronavirus pandemic began.
    For the most part, the Port of Baltimore has remained open 
and operational. However, Ports America Chesapeake, the private 
operator in the port's public-private partnership, continues to 
adjust their operating hours at the Seagirt Marine Terminal. 
They have closed Seagirt six times in the last 2 months due to 
lower international container volumes.
    Mr. Connor, a question for you--a fairly general, broad 
question. The automobile industry is key to the Port of 
Baltimore's success. In your written testimony, you mentioned 
that, while the big three automakers have recently brought 
production online, it remains uncertain what demand may look 
like and how consumer decisions may impact this market segment. 
So how can Congress better support the port--all ports, but 
certainly the Port of Baltimore--if the automobile roll-on/
roll-off cargo volumes do not bounce back?
    Mr. Connor. Yes, thank you, Congressman, for that question. 
And, simply stated, I would say, you know, the relief that is 
being asked for here today would go a long way to bridging the 
gap to normal volumes.
    And what Baltimore is experiencing, as you referenced, in 
April, I would say that what they are going to experience in 
May and June will be much worse. And the reason I say that is 
because, in April, they had residual volumes that were still 
going through the supply chain. In May and June, they are going 
to have very little, if any, volumes, because production is 
only now starting to resume from European plants, from Asian 
plants, as well as U.S. plants exporting overseas.
    So I think what Congress could do is accord us with the aid 
that is being requested here today.
    Thank you.
    Mr. Brown. All right. Thank you.
    One more question, with my time remaining, for Ms. 
Carpenter.
    In your written testimony, you mentioned the need for 
nationally consistent regulations to help make the maritime 
supply chain more effective. Are there any specific examples of 
conflicting State or local regulations that threaten disruption 
of vessel traffic during the outbreak of the pandemic? And what 
takeaways can you give us?
    Ms. Carpenter. Thanks, Congressman.
    I think what we actually see from the pandemic is a really 
good example of how things can work in terms of cooperative 
action between Federal and State government.
    So the Federal Government, the Cybersecurity and 
Infrastructure Security Agency, very quickly designated 
maritime transportation as an essential critical infrastructure 
sector. So when States and localities began to issue stay-at-
home orders, many of them incorporated that guidance by 
reference.
    In a couple of cases, they didn't, and we have the 
potential for some bottlenecks when, for example, mariners 
going from Louisiana to Texas were potentially going to have to 
seek permission on a case-by-case basis to enter the State. 
What we saw there was very good cooperation in recognizing the 
criticality of maritime transportation and working through the 
issue so that we didn't have a bottleneck. We would love to see 
that replicated going forward.
    Mr. Brown. All right. So the takeaway seems to be that 
things are working well, coordination is happening. That is 
your takeaway?
    Ms. Carpenter. I think my key takeaway would be it starts 
with Federal leadership, as it did in this case, and then the 
States and the Feds can work together. But we would have had a 
real problem if the Federal Government hadn't acted first and 
said maritime transportation is essential.
    Mr. Brown. Excellent.
    Thank you, Mr. Chairman. I yield back.
    Mr. Maloney. I thank the gentleman.
    Mrs. Miller.
    And if we have Mr. Lowenthal back for this, we will proceed 
to Mr. Lowenthal after Mrs. Miller.
    Mrs. Miller, you may proceed.
    Mrs. Miller. Thank you, Chairman Maloney and Ranking Member 
Gibbs.
    And thank you to you all witnesses for taking the time to 
meet with us today, considering the difficult circumstances we 
have all getting together and punching all the right buttons.
    Shipping is so essential to our economy, even in inland 
southern West Virginia. The Huntington Tri-State Port, in my 
district, is one of the largest in the country and plays an 
essential role in connecting the vast resources and products of 
Appalachia to the rest of the world. The COVID-19 pandemic has 
threatened this connection, and Congress must do what it can to 
make sure that it can be repaired now and made stronger once we 
are safe from this invisible challenge.
    While many Americans have the ability to work from home 
during this pandemic, the maritime industry has been hard at 
work ensuring that the United States has all the goods it needs 
to weather the crisis. I personally want to thank you all and 
the workers in the maritime industry who have put themselves at 
risk to make sure that we have PPE, foods, material, and have 
been able to continue to stock our shelves and get the 
inventory into our homes that most of the Americans do need. 
And I want to say thank you for that.
    Ms. Carpenter, what deregulatory actions can Congress take 
to alleviate burdens on vessel operators and help them focus on 
maintaining their operations?
    Ms. Carpenter. Thanks very much, Congresswoman.
    I will give you a specific example in a bill that has 
already passed the House that was authored by this 
subcommittee. There was a provision in the Coast Guard 
authorization bill that would suspend the imposition of towing 
vessel inspection user fees until the Coast Guard promulgates a 
fee structure that is fair and reasonable.
    Right now, we have a situation where a company that is 
operating 100 towing vessels could be paying $500,000 over 5 
years in fees that are duplicative of moneys that they are 
already spending on Coast Guard-approved third parties who are 
performing the same services.
    And those fees also serve to disincentivize the Towing 
Safety Management System option, which the Coast Guard has said 
is its preferred option because of its safety benefit.
    So suspending those fees will promote safety, will 
eliminate costs, and will not have any deleterious effects. It 
is a no-brainer. And we really thank this subcommittee for its 
leadership and look forward to a bill passing as soon as 
possible.
    Mrs. Miller. Well, good. Thank you.
    In your testimony, you mentioned the need for nationally 
consistent regulations to help make the maritime supply chain 
more effective.
    Are there any specific examples of conflicting State or 
local regulations that continue to threaten disruption of 
vessel traffic during the outbreak of the pandemic?
    Ms. Carpenter. Thanks very much.
    And, you know, as I mentioned in response to Congressman 
Brown's question, we really saw a very good example during the 
pandemic of how we can keep the maritime supply chain moving. 
The Federal Government exercised leadership, and then the 
States were able to work with them to address specific needs, 
as in the Texas example that I gave.
    I think that is a model that we really need to look to 
elsewhere, because, just as a patchwork of stay-at-home orders 
could completely bollocks up the functioning of the maritime 
supply chain, so could a patchwork of State and local 
regulations established for environmental or safety reasons.
    So the Federal Government taking assertive action to ensure 
that we have nationwide standards that are high, that protect 
the environment, that protect workers, and that gives States 
confidence that we have an effective regulatory floor I think 
is a critical first step.
    And then where there are State-specific needs, we have the 
opportunity to work together to ensure that those are met. But, 
again, Federal leadership, it needs to start there.
    Mrs. Miller. You sound positive, and that makes me feel 
good. Thank you.
    Mr. Roberts, in your testimony, you mentioned serious 
concerns for the domestic shipping industry. Can you explain 
further some of the challenges that domestic, particularly 
inland, maritime shipping face during this crisis?
    Mr. Roberts. Yes. Thank you for that question.
    The industry generally has risen to the challenge to keep 
the supply chains open and cargo moving and stores stocked and 
so on. The biggest challenge? It is hard to put your finger on 
it, but certainly the focus has been on keeping our crews safe. 
They can't work remotely. They have to get on the ship. They 
have to do their jobs. And when we ask them to do that, we have 
to do everything we can to try and make sure that they are 
safe.
    So access to testing has been a top priority, and we are 
making progress there. There has been misunderstanding about 
how it is prioritized through the CDC, but I think we are 
making progress there. Certainly the technology of producing 
more test kits will get us out of this sooner or later. But I 
will say that is the largest issue that we have been dealing 
with.
    Mrs. Miller. Is the testing?
    Mr. Roberts. Yes.
    Mrs. Miller. OK.
    Thank you so much. I yield back.
    Mr. Maloney. I thank the gentlewoman.
    I am going to give Mr. Lowenthal an opportunity, although I 
am afraid he may still be experiencing connectivity issues.
    Alan, I think you also need to unmute.
    Mr. Lowenthal?
    Right. In that case, we will move directly to Mr. Lamb.
    Mr. Lamb, you are recognized for 5 minutes.
    Mr. Lamb. Thank you, Mr. Chairman. And I actually only 
really have one question, so if Dr. Lowenthal comes back, we 
can certainly give him the time.
    I have a question for Ms. Carpenter about infrastructure 
for the inland waterways.
    One thing we have really been advocating and pushing for is 
a change in the Federal cost share to allow the Federal 
Government to pick up a greater share of the tab for some of 
these new projects.
    Like, in my area of western Pennsylvania, we have some 
projects that have been going on for a really long time and 
some that have been getting delayed for a really long time just 
a few spots down the list of priorities.
    So would you able to address whether, if we went to, like, 
a 75/25 type of cost share, or 80/20 or whatever, the impact 
that that could make on some of these problems and how it might 
be able to speed up the work that we are doing and, kind of, 
put a lot of people back to work?
    Ms. Carpenter. Absolutely, Congressman. And I want to thank 
you personally for your leadership and support on inland 
waterways infrastructure issues. It is so important to our 
industry, and, as I said in my testimony, it really is an 
investment in the competitiveness of the Nation.
    So the example that you have mentioned, increasing the cost 
share for construction and major rehabilitation projects on the 
inland waterways system from its current 50 percent Treasury, 
50 percent Inland Waterways Trust Fund, an industry-paid user 
fee, to, say, 75 percent Treasury, 25 percent--I hadn't even 
thought of 80/20, but I like that better. So if we can work 
together to get that done, that would be fantastic.
    What this will do is it will expedite the completion of 
projects that are so important to getting goods to market, to 
increasing the competitiveness not just of vessel owners and 
operators but of the American shippers who depend on those.
    So it is going to be putting a little more money into the 
system now, which enables us to get the job done more quickly, 
saves us money over time. And, again, it is an investment in 
American jobs just throughout the system, from the workers who 
are constructing these infrastructure structures to the 
mariners on the vessels, to the shippers at the plants and 
mines and factories and farms whose goods move to market by 
water.
    So thanks so much for everything this subcommittee, this 
committee has done. Really look forward to working with you to 
make some positive change there.
    Mr. Lamb. Thank you very much.
    I don't think people really make the connection to the 
workforce benefits, but I had a chance to be on a call with a 
lot of our local contractors and trade unions here in 
Pennsylvania. Lock and dam work is a huge source of work for 
the same groups of workers that do things like road and bridge 
work.
    And I also don't think people really make the connection 
with the environmental benefits, but you save a lot of fossil 
fuels by sending goods on the river. You know, in parts of the 
country like mine, the ability to construct the locks and dams 
really has made a lot of the water drinkable and navigable, 
obviously makes the roads less crowded.
    So there is just a whole cascading series of benefits that 
I am trying to make sure people realize could be a good 
investment to make right now. So thank you very much for your 
input on that.
    Thank you, Mr. Chairman, for having me, and I yield back.
    Mr. Maloney. I thank the gentleman.
    I would like to confirm, I don't believe there are any 
further Republican Members with questions?
    And hearing none, I would like to give Mr. Lowenthal an 
opportunity if he has joined us by telephone.
    Are you there, Alan?
    Still no?
    I think we all can sympathize with the technology issues. 
If you haven't experienced them over the last few weeks, I 
would be surprised. We have all been in these forums.
    So, with apologies to Mr. Lowenthal, who is, I believe, 
attempting to join by telephone, which is provided, given the 
connectivity issues he is having with the video, we will 
proceed to Mr. Pappas.
    Mr. Pappas, you have 5 minutes.
    Mr. Pappas. Well, thank you very much, Mr. Chairman, and to 
the ranking member as well. We are all getting better with this 
technology, and in a couple more weeks I think we will all be 
at 100 percent with it.
    But I appreciate the panelists for their thoughts and 
answering the questions today and for what your organizations 
do to keep maritime transportation strong and resilient, 
especially during this crisis.
    Most of my questions have been answered, but one issue I 
just wanted to delve a little bit more into is the testing 
issue that a few of you have brought up.
    I know, Ms. Carpenter, you mentioned this is a priority, to 
ensure that we have a national strategy on how to ensure that 
we can get priority for workers in the industry. And I 
absolutely agree with that. We know that other screening 
measures have their limitations--you know, taking temperatures, 
for instance.
    Where up to half of the individuals who have COVID-19 
aren't going to exhibit symptoms and where you can transmit the 
virus when you are presymptomatic, it is critically important 
that all of our essential workers, especially in this 
particular industry where you are working in close quarters, 
have access to this testing capability.
    So I am just wondering what the experience has been of 
members to date and what Congress can do to help support 
increased testing for our maritime industry.
    Ms. Carpenter. Thanks very much, Congressman. Really 
appreciate that.
    You know, we have seen some improvement, thankfully, in 
access to diagnostic testing, but we think that, you know, as 
we are now in what I am going to call the chronic phase of this 
pandemic--we have a long way to go before we are out of it--
being able to optionally incorporate testing into the 
prescreening process for crewmembers is just going to be 
critical, especially as stay-at-home orders are lifted 
nationwide and there is just going to be a lot more opportunity 
for exposure off the job.
    So, while I mentioned that we feel like it is a positive 
thing that we have been able to keep infections onboard vessels 
to a minimum, we take nothing for granted. Anything that 
Congress can do to encourage the prioritization of access to 
testing for critical infrastructure workers, especially those 
like mariners who work in close proximity, would be most, most 
appreciated, whether that happens legislatively, whether that 
happens via encouragement to FEMA and other authorities.
    As a positive example, we were just able, as an industry, 
to work with FEMA and the maritime industry to secure a very 
large shipment, more than 2 million, of cloth facial coverings 
to help protect workers as they are working closely together. 
Those were being distributed free of charge, or are being 
distributed now free of charge, to ports, to maritime entities, 
and it is a real positive step.
    So, if we can do something similar with respect to testing, 
we would take a massive step forward in securing the maritime 
supply chain so we don't see mariners getting sick and vessels 
having to be idle just as we are getting the economy moving 
again.
    Mr. Pappas. Any of the other panelists, do you have 
comments on that?
    Mr. Ebeling. Yeah, I would be happy to comment on that.
    So I think it is important, as we look at this, to 
consider, when you look at the Jones Act, domestic fleets, it 
is really about domestic supply-chain security, which is, of 
course, very essential. And then on the international U.S.-flag 
fleet, I think it is also very important to bear in mind the 
national security, defense supply chain aspects.
    So, between the two U.S.-flag fleets, domestic and 
international, we really have some massive benefits that are 
important contributions to the economy and national security. 
So I would just echo everything Jennifer said in terms of any 
prioritization of access to testing kits would be hugely 
helpful.
    Thank you.
    Mr. Connor. Congressman, if I could jump in with one last 
comment.
    So, within the port industry, there has been a lot of 
collaboration between ports who are typically fierce 
competitors. But everybody has been collaborating to kind of 
show the best ways to get the right protocols and processes in 
place.
    And the physical layout of no two ports are exactly the 
same. So, to kind of smooth that out, one area of contention 
that we could use some assistance is, we have had difficulties 
in getting treatment from CBP. In some ports, CBP staff who 
come into the same facility as does Labor and Port Authority 
have not agreed to subject themselves to the testing. And that 
kind of creates an A-team-versus-B-team kind of scenario, which 
is a little bit uncomfortable. So we have been trying to work 
that through the system, but we probably could use a little 
shove in that direction.
    Mr. Pappas. OK. Well, I appreciate your comments.
    And I yield back my time.
    Mr. Maloney. I thank the gentleman.
    We have been rejoined by Mr. Lowenthal again. In the 
absence of a Republican Member, unless, Mr. Gibbs, I am 
mistaken, I would like to recognize Mr. Lowenthal for 5 
minutes.
    Alan?
    Mr. Lowenthal. Thank you, Mr. Chairman. You can hear me 
now?
    Mr. Maloney. Perfectly clear.
    Mr. Lowenthal. That is wonderful.
    And, first, I want to thank everyone--all the Members; the 
witnesses; you, the chair; vice chair; ranking member; and also 
Chairman DeFazio--for holding this very important hearing.
    I would like to first ask, Chairman Maloney, if I could 
have unanimous consent to insert into the record a letter that 
the Congressional PORTS Caucus developed and sent to leadership 
urging Congress to provide relief to ports in future 
coronavirus legislation.
    Mr. Maloney. Without objection.
    Mr. Lowenthal. Thank you.
    [The information follows:]

                                 
Letter of May 4, 2020, from Hon. Kurt Schrader of Oregon, Hon. Alan S. 
  Lowenthal of California, and Hon. Randy K. Weber, Sr., of Texas, et 
        al., Submitted for the Record by Hon. Alan S. Lowenthal
                                                       May 4, 2020.
The Honorable Nancy Pelosi,
Speaker of the House,
U.S. House of Representatives, Washington, DC.
The Honorable Steny Hoyer,
Majority Leader,
U.S. House of Representatives, Washington, DC.
The Honorable Kevin McCarthy,
Minority Leader,
U.S. House of Representatives, Washington, DC.

    Dear Speaker Pelosi, Majority Leader Hoyer, and Minority Leader 
McCarthy:
    We start this letter by offering our sincere thanks to you and your 
staff for all the work that you have done to help the American people 
during this emergency. The bipartisan work being done here in Congress 
is unprecedented and shows what we can do together to overcome 
extraordinary events.
    Our nation continues to suffer from the effects of the COVID-19 
crisis. Congress has done tremendous work advancing multiple pieces of 
legislation to mitigate the impact, but it is increasingly obvious that 
more must be done. We are advocating here that our nation's ports must 
be included in any future packages. This is a sector of our economy 
that has so far been left out of proposals but needs assistance to 
carry on their essential work. Ports remain vitally important to the 
well-being of our communities during this time and will be critical for 
recovery efforts once this crisis is over. However, due to their unique 
governing structures, these entities have not been eligible for many of 
the recently enacted relief programs. Our ask here is simple: we must 
include relief specifically set aside for our ports in the next COVID-
19 package.
    Funding sources vary for ports, but all have seen their budgets hit 
hard by the ongoing business closures and stay-at-home orders. Yet, 
port staff are not able to just lock up their facilities and go home. 
Their vital work must continue to move the goods the American people 
need and to maintain safety and security for these essential workers. 
Congress should recognize the enormous impact this is having by 
including them in the next package.
    Most important is that the next package disperses aid to ports of 
all sizes, both large and small alike. Our solution must make sure that 
all our ports receive the resources they need. Small ports are often 
the lifeblood of communities and are the hardest hit by these events. 
We must not forget them when crafting these policies. Any effort 
enacted here must be able to flow down to the smallest port to help 
them weather this emergency.
    Ports come in all sizes, provide gainful employment, and serve a 
wide variety of industry sectors--import/export, energy/chemical, 
manufacturing, commercial fishing, agriculture, and so forth. Our 
nation's ports serve as the vital link between our people and the goods 
they buy for their families as well as ensuring American made products 
can be purchased in foreign markets. Previous aid has served other 
sectors of the transportation industry deemed essential and now it is 
critical that all of our nation's ports receive much needed assistance 
to keep supply chains moving and keep both employees and customers 
safe.
    We stand ready to work with you to address these problems and make 
sure that all Americans receive assistance during these challenging 
times. Without this aid, industries served by ports will not be able to 
offer essential services to get our communities back into shape once we 
start to recover from this crisis.
        Sincerely,
                                             Kurt Schrader,
                                                Member of Congress.
                                            Alan Lowenthal,
                                                Member of Congress.
                                               Randy Weber,
                                                Member of Congress.
Jerry McNerney (CA-09).
Peter A. DeFazio (OR-04).
Derek Kilmer (WA-06).
Donald Payne, Jr. (NJ-10).
Anthony Brindisi (NY-22).
Julia Brownley (CA-24).
Robert Wittman (VA-01).
Adam Smith (WA-09).
Tim Walberg (MI-07).
John Katko (NY-24).
Val Demings (FL-10).
Lizzie Fletcher (TX-7).
Steven M. Palazzo (MS-4).
Stacey E. Plaskett (VI-AL).
Tony Cardenas (CA-29).
Stephen Lynch (MA-08).
Donna E. Shalala (FL-27).
Suzanne Bonamici (OR-01).
J. Luis Correa (CA-46).
Henry Cuellar (TX-28).
Marcia L. Fudge (OH-11).
Barbara Lee (CA-13).
Brenda Lawrence (MI-14).
Rick Larsen (WA-02).
Frederica Wilson (FL-24).
Juan Vargas (CA-51).
Stephanie Murphy (FL-07).
Suzan DelBene (WA-01).
Tom Graves (GA-14).
Filemon Vela (TX-34).
Joe Cunningham (SC-01).
Mike Kelly (PA-16).
Cedric Richmond (LA-02).
Pramila Jayapal (WA-07).
Earl Blumenauer (OR-03).
Denny Heck (WA-10).
Bradley Byrne (AL-01).
Scott Peters (CA-52).
Albio Sires (NJ-08).
Judy Chu (CA-27).
Bill Huizenga (MI-02).
Vicente Gonzalez (TX-15).
David Rouzer (NC-07).
Kathy Castor (FL-14).
Brian Fitzpatrick (PA-01).
Charlie Crist (FL-13).
Ed Case (HI-01).
Brian Mast (FL-18).
Mike Gallagher (WI-08).
Peter Visclosky (IN-01).
Chris Pappas (NH-01).
Gus M. Bilirakis (FL-12).
Tom Rice (SC-07).
Chellie Pingree (ME-01).
William R. Keating (MA-09).
Joe Wilson (SC-02).
Pete Stauber (MN-08).
Don Young (AK-AL).
A. Donald McEachin (VA-04).
Mike Rogers (AL-03).
John Rutherford (FL-04).
Al Lawson, Jr. (FL-05).
Alcee L. Hastings (FL-20).
Jaime Herrera Beutler (WA-03).
Elaine G. Luria (VA-02).
Steve Cohen (TN-09).
Salud Carbajal (CA-24).
David N. Cicilline (RI-01).
Lucille Roybal-Allard (CA-40).
Earl L. ``Buddy'' Carter (GA-01).
Nanette Diaz Barragan (CA-44).
Susan A. Davis (CA-53).
Adriano Espaillat (NY-13).
John P. Sarbanes (MD-03).
Anthony Gonzalez (OH-16).
Jenniffer Gonzalez-Colon (PR-AL).
C.A. Dutch Ruppersberger (MD-02).
Robert C. ``Bobby'' Scott (VA-03).
Brendan F. Boyle (PA-02).
Henry C. ``Hank'' Johnson, Jr. (GA-04).
David P. Joyce (OH-14).
Conor Lamb (PA-17).
    Mr. Lowenthal. You know, I have been talking to many of the 
terminal operators in my district and other districts, and it 
is the same issues--issues of cleaning supplies and issues of 
PPE and work hours to adjust to safety issues.
    And I would like to respond to, I think it was, earlier, 
Representative Larsen's--in my district, the Port of Long Beach 
and, in my adjacent, the Port of L.A., they have adjusted the 
gate hours portwide to allow cleaning between crews that come 
in. And so, you know, our ports are open 16 hours a day, and, 
typically, they backed up one to another, but now they have 
adjusted those port hours to separate them. And I think that is 
one of the kinds of protective measures that will continue in 
the future, along with others, about how people congregate and 
separate people.
    We have known that--my questions have to do with the 
financial strains that are on terminals and port authorities. 
And I have pressed Congress and the administration to take 
steps to aid ports like opening up municipal lending facilities 
to port authorities.
    So my first question is to Mr. Connor. What kind of impact 
would that have for ports across the country if they had access 
to zero- or low-interest Federal loans to help them make bond 
payments, maintain their payrolls? What issues are port 
authorities seeing with Federal loan facilities?
    Mr. Connor. Thank you, Congressman Lowenthal.
    So I think as Chairman DeFazio mentioned in his opening 
remarks, you know, the ports, the way that the CARES Act was 
written, have found themselves in a place where, unfortunately, 
they have nowhere to turn. That is partly due to the unique 
governing natures of ports, whether it is city-, county-, or 
State-based, and the various governing structures that exist 
and partly based on the interpretation by the Fed of what the 
eligibility was for the MLF fund.
    If that would be a desirable outcome, sir, if those funds 
could be made available to port authorities, I think our 
preference is very much in line with what I requested in both 
my written testimony and our oral testimony, which is the 
grant-in-aid, but, certainly, to have that access to MLF would 
also be a good outcome.
    Thank you.
    Mr. Lowenthal. Ms. Brand, can you elaborate--I was 
interested in your comments about abandoned cargo piling up at 
port terminals. Do you see that affecting the congestion that 
is taking place and also revenues of terminal operators?
    Ms. Brand. Thank you for that question.
    I did state it is 1.5 percent right now of volumes. And it 
is on the west coast; it is a phenomenon on the west coast. So, 
no, it is not impacting space as yet, but we are watching and 
we are monitoring.
    It does require its own area, and it does become a claim 
issue when the container is abandoned by the company. The 
marine terminal operator contacts the ship line that delivered 
it, and it becomes something that the ship line has to resolve 
with who owns that cargo and who gets access to it.
    So we are monitoring it. It is something that is a sign, 
and we are watching the signs.
    Mr. Lowenthal. Thank you.
    I also would like to respond to Representative Garamendi. 
Thank you for reminding me about your legislation. We will see 
about getting on that right away.
    Thank you, and I yield back.
    Mr. Maloney. I thank the gentleman. And we thank him for 
his patience with the technology issues.
    That concludes, I believe, the first round of questioning. 
We do not plan to do a second round of questioning, but, at 
this time, I would allow Mr. Gibbs to request a second round.
    Or, if you have other Members, Bob, who I am not seeing.
    Mr. Gibbs. I am fine. I think we are good. I don't think 
there are any other Members on, are there? I can't tell.
    Mr. Maloney. I don't believe so.
    And if there are any Democratic Members who wish to ask a 
second question, we could certainly permit that at this time.
    But seeing none, for purposes--and I am pretty sure I know 
the answer, but for purposes of a clean record, and despite--
let me just take 30 seconds to ask each of our witnesses for a 
short answer on the record.
    Despite the leadership of Chairman DeFazio and some of us 
who feel very strongly about a direct assistance, maritime-
specific assistance to address COVID-19 needs, it is pretty 
clear, though, to a lot of us that the CARES Act, despite the 
many critical things it did, fell short in this area.
    So, for each of the witnesses--and a simple ``yes'' or 
``no'' would do--would you confirm that you support dedicated 
maritime-specific assistance to address the COVID-19 pandemic?
    Mr. Connor. Chris Connor, AAPA. Absolutely.
    Ms. Brand. Lauren Brand, National Association of Waterfront 
Employers. Yes, sir.
    Mr. Ebeling. Eric Ebeling for USA Maritime. Yes. Thank you.
    Ms. Carpenter. Jennifer Carpenter----
    Mr. Roberts. Mike Roberts--oh, Jennifer, you go.
    Ms. Carpenter. Sorry, Mike.
    Jennifer Carpenter, American Waterways Operators. Yes, sir.
    Mr. Maloney. Mike?
    Mr. Roberts. Mike Roberts, American Maritime Partnership. 
Yes, sir.
    Mr. Maloney. Well, I appreciate that and the crispness of 
those responses.
    And seeing no further questions from the Members, just a 
short bit of housekeeping, and I will release you to your 
weekends.
    I would ask unanimous consent that the record of today's 
hearing remain open until such time as our witnesses have 
provided answers to any questions that may have been submitted 
to them in writing, particularly those that may have been lost 
due to technical issues.
    I would also ask unanimous consent that the record remain 
open for 15 days for any additional comments and information 
submitted by Members or witnesses to be included in the record 
of today's hearing.
    Without objection, so ordered.
    If no other Members have anything to add, with thanks to 
all of our witnesses, this subcommittee is adjourned.
    [Whereupon, at 2:41 p.m., the subcommittee was adjourned.]



                       Submissions for the Record

                              ----------                              

  Prepared Statement of Hon. Sam Graves, a Representative in Congress 
     from the State of Missouri, and Ranking Member, Committee on 
                   Transportation and Infrastructure
    Thank you, Chairman Maloney.
    The U.S. economy is heavily dependent on international trade, and 
our agricultural exports are a foundation of the economy in the 
Midwest.
    Most of the public discussion about the impacts of the COVID-19 
pandemic on ports and the supply chain has been about container 
shipping and large coastal ports. That's important of course, but I'm 
also concerned about the associated restrictions and market impacts on 
agricultural commodities shipped either by container or by bulk.
    I look forward to hearing from the witnesses today about whether 
COVID-19 has caused restrictions which have either reduced consumer 
demand for U.S. agriculture products or made it more difficult to ship 
these products domestically or internationally.
    If problems do exist, I'm interested in hearing the witnesses' 
suggested solutions.
    Chairman Maloney, thank you for having this important hearing 
today, and for leading our Committee's first virtual hearing.

                                    
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