Washington, D.C. — The following are opening remarks, as prepared for delivery, from Chair of the House Committee on Transportation and Infrastructure Peter DeFazio (D-OR) and Chair of the Subcommittee on Coast Guard and Maritime Transportation Salud Carbajal (D-CA) during today’s hearing titled, “State of the U.S. Maritime Industry: Impacts of the COVID-19 Pandemic.” Video of DeFazio and Carbajal’s opening statements are here and here. More information on the hearing can be found here.
Chair DeFazio:
Thank you, Chairman Carbajal and Ranking Member Gibbs for convening this hearing. After hearing excellent testimony from witnesses who represent workers across all modes of transportation last week, this hearing allows the committee to more closely examine the impacts of the COVID-19 pandemic on the U.S. maritime supply chain and the maritime workforce as well as strategies to improve our vital maritime transportation industry.
In the year since the virus was first detected in the United States, the maritime industry has endured significant hardships and has experienced substantial impacts to business.
It is vitally important that this committee understand how the pandemic has affected the reliability and efficiency of our maritime industry and its workers, the gaps that still exist in protecting the workforce from the virus, the lessons that have been learned from the Federal Government’s response to the pandemic so far, and potential next steps to better protect the maritime industry and workforce from COVID-19 and any future public health crisis we may confront.
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 recovery actions and future responses to national emergencies.
The situation is complicated by the fact that certain portions of the industry were not faring well before the pandemic. The internationally trading fleet for instance, has shrunk to a paltry 85 vessels and carries less than 1.5% of the goods entering and exiting our ports. Without a robust U.S. flag maritime industry, we would not have the mariners needed go to war or supply our internationally deployed members of the military.
Make no mistake about it; our Nation will recover from this pandemic. The question is, what will be left of our maritime industry?
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 our efforts to revitalize our economy. The economy cannot recover without a working maritime supply chain.
The critical workers employed throughout our maritime transportation system have kept vital goods moving to medical professionals and first responders, have ensured that our Nation’s shelves remain stocked, and have enabled commerce to continue flowing during these dangerous and uncertain times.
I realize that the Congress has already committed trillions in Federal aid to address the fall-out from the pandemic; however, no dedicated funding has been provided to assist the maritime transportation system.
That is why I developed the Maritime Transportation System Emergency Relief Act (MTSERA) last Congress which was included in the FY21 NDAA and subsequently became law on January 1, 2021. MTSERA finally provides the Maritime Administration with specific emergency authority to distribute financial relief and assistance to each link in the maritime supply chain.
That is why this morning’s hearing is important. We need to understand the needs in order to best tailor assistance. But in doing so, we must first think holistically.
It will do little good to address the financial issues affecting our marine terminal operators, and 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 U.S. flagged fleet in the short term with financial assistance, but if we do not address the system of unfair international competition created by the flag-of-convenience system, the fleet will not grow. This is our opportunity to “Build Back Better.”
Too much of our economic recovery and future prosperity rides on what we do over the next couple of months to ensure that we have a maritime industry, workforce, and supply chain able to move the Nation’s commerce reliably and efficiently. I urge members to join me in that effort.
And with that, I want to extend my thanks to our witnesses for making themselves available. I look forward to your participation in this important hearing.
Chair Carbajal:
Good morning, and welcome to the first Coast Guard and Maritime Transportation Subcommittee hearing in the 117th Congress. Today we will examine the state of the United States maritime industry amid the ongoing COVID-19 pandemic.
It is an honor to chair this vital subcommittee, and I look forward to working alongside my colleagues on both sides of the aisle to support our maritime community and United States Coast Guard. The maritime transportation system is vast and complex. It touches virtually every aspect of American life—from the movement of passengers, the clothes we wear, to the cars we drive and the fuel in those cars. When it is working well, it is easy to forget the importance of our maritime system, as well as the Coast Guard, and as Chair I will strive to uplift this important sector.
The Subcommittee on Coast Guard and Maritime Transportation has a long history of bipartisan cooperation and I look forward to working with Ranking Member Gibbs to conduct oversight and pass important legislation to support our maritime industry and the Coast Guard.
I am sorry we cannot physically meet in person today for this important first subcommittee hearing. I am sure though that we will rise to the challenge to conduct the important business, nonetheless.
I also want to thank the former Subcommittee Chair Sean Patrick Maloney for the great work he did last Congress. He worked tirelessly to improve our Coast Guard and strengthen the U.S. maritime industry and we will work to build upon those efforts. He leaves big shoes to fill.
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. Commercial shipping carries more than 95 percent by volume of U.S. overseas trade. And yet, the presence of the U.S. flag fleet operating in international trade is diminishing. In the past 35 years we’ve seen the U.S. flag fleet drop from over 850 vessels to merely 85. The U.S. merchant marine, which provides a living wage to its American mariners, pays taxes in America, and complies with American regulations simply cannot compete with foreign fleets that pay little to no taxes, comply with the bare minimum regulations, and pay substandard wages.
The Merchant Marine Act of 1920 or Jones Act safeguards our country and economy and provides guaranteed work to American merchant mariners; ensuring government and civilian goods, people and equipment are carried by U.S. flagged ships and U.S. citizens. The domestic Jones Act trade includes more than 41,000 vessels, not including fishing vessels.
In my district, which encompasses Santa Barbara and San Luis Obispo Counties, and portions of Ventura County, maritime and seafaring is an essential way of life. With the Ports of Los Angeles and Long Beach just to the south and the Pacific Ocean to the west, our community is rich in maritime heritage. My district is home to a vibrant passenger vessel industry but in the wake of this pandemic, much of this industry has had to shut down its business and furlough employees.
Many passenger vessels operating in the Jones Act trade have lost the entirety of their 2020 operating season. Of the companies operating, most have experienced reductions in revenue by as much as 90 percent and have laid off or furloughed as much as 80 percent of their employees. And while passenger vessels and ferries are one of the few sectors of the maritime industry to receive Federal assistance, they were left to compete for this assistance with other modes of passenger transportation.
The remainder of the maritime industry has been left to fend for itself. Operators have had to shoulder the burden of the increased costs of new safety measures, acquiring protective gear and complying with public health measures while other industries have received federal assistance. Requests for assistance have gone unanswered while demand on our ports and cargo carrying U.S. fleet only increases as American commerce increases.
I applaud President Biden for affirming support for the Jones Act; the industry needs strong Federal support in order to weather this storm.
One way to provide immediate assistance is by funding the Maritime Transportation System Emergency Relief program that was passed into law last Congress under the leadership of Chairman DeFazio. For the first time, it created a program within the Maritime Administration to provide financial assistance to the maritime industry in times of national emergency. We need to utilize this program and provide funding to protect American maritime jobs and assist operators struggling to stay afloat.
As we gather here today to hear from our witnesses on the current state of the U.S. maritime industry, I want to take a moment to stop and say thank you to our maritime workforce. These crucial frontline workers show up day in and day out to ensure our shelves are stocked, and that Americans get their essentials, while also facing their share of danger and loss from COVID-19. Without your dedication, we would not be able to weather this storm. So, thank you.
My hope is that this hearing will help inform the Committee of the ongoing difficulties facing the maritime industry and identify areas of support that will allow the industry to emerge stronger than when the pandemic began. We must ensure the marine transportation system continues to operate seamlessly and we must protect these essential, frontline workers. I look forward to hearing from our witnesses.
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