Washington, D.C. — The following are opening remarks, as prepared for delivery, from Ranking Member of the House Committee on Transportation and Infrastructure Rick Larsen (D-WA) and Ranking Member of the Subcommittee on Coast Guard and Maritime Transportation Salud Carbajal (D-CA) during today’s hearing titled, “Review of Fiscal Year 2024 Budget Request for Federal Maritime Transportation Programs, and Implementation of the Ocean Shipping Reform Act of 2022.”
Video of Larsen’s and Carbajal’s opening statements are here and here.
More information on the hearing can be found here.
Ranking Member Larsen:
Mr. Chairman, thank you for scheduling this afternoon’s hearing to review the Fiscal Year 2024 budget requests of the Maritime Administration and the Federal Maritime Commission—the first in a series of hearings to inform the Committee ahead of this year’s Coast Guard Authorization Act.
The Maritime Administration’s purpose is to promote the United States maritime industry while the Federal Maritime Commission protects consumers and monitors shipping company practices.
Ocean shipping is dominated by foreign shipping companies with U.S.-flagged operations comprising less than 2% of imports and exports. The supply chain crisis and ongoing international conflicts demonstrate the need for a robust U.S. maritime presence.
The President’s fiscal year 2024 budget request for the Maritime Administration includes a 2% increase and a 14% increase for the Federal Maritime Commission—both welcomed increases.
Under MARAD, this year’s budget request includes an increase for the United States Merchant Marine Academy to address long-term infrastructure needs and culture changes around sexual assault and sexual harassment.
Investment in the U.S. maritime industry is long overdue. For years, we have faced a mariner shortage as the incumbent workforce ages out and the industry struggles to appeal to younger Americans.
Admiral Phillips, I expect to hear how MARAD is promoting the industry and getting ahead of this growing issue.
I would be remiss if I did not bring up the work Admiral Phillips and Deputy Administrator Lessley have done to address sexual assault and sexual harassment both at the United States Merchant Marine Academy and across the commercial industry. Sexual assault and harassment have no place in our society. Every mariner deserves to be respected and feel safe out at sea. The industry will not grow if its workers do not feel safe and welcome.
The President’s budget includes increases for MARAD’s Marine Highway Program and the Port Infrastructure Development Program.
Infrastructure investments in U.S. seaports and their intermodal connections—both on the land and in the water—provide opportunities to bolster our economy, create and sustain jobs and enhance our international competitiveness.
Strong and sustainable federal investment in seaport-related infrastructure is critical to the economic and environmental health of the nation.
Small shipyards are vital to maintaining an industrial shipbuilding base and U.S. maritime presence while providing rewarding jobs to local communities.
As technology evolves and the industry invests in the development of alternative fuels, programs like the Small Shipyard Grant Program will be essential in ensuring our shipyards can bring these new fuels and technology online. Despite an increase in authorized amounts, I’m disappointed the President’s budget includes only $20 million for this program, which is the same as last year’s budget request.
Last Congress, we passed the Bipartisan Infrastructure Law which included $2.25 billion over 5 years for the Port Infrastructure Development Program—the largest investment since the launch of that important initiative. These grants will bring U.S. ports into the 21st century, providing needed funds to reduce emissions and strengthen the supply chain.
Since 2019, over $6 billion has been requested by applicants for Port Infrastructure Development grants, demonstrating the demand for port infrastructure investments and the importance of the funding in the Bipartisan Infrastructure Law.
Between 2010 and 2019, China invested billions in domestic and foreign ports to broaden their global maritime influence. Economic and national security relies on maritime power. China understands this and it is time we do too.
Small ports are lifelines to local communities and are a critical part of the supply chain that can ease congestion at larger ports. That is why it is so important robust funding is allocated for small ports in the Port Infrastructure Development Program.
In my district, the Swinomish Port Authority—a small port and one of the few Tribal-run port authorities—received $11 million to fund a master plan for the port and begin the design and engineering of a new commercial pier. The local impact of this project is immeasurable.
I commend Admiral Phillips and the Maritime Administration for their work in awarding the Bipartisan Infrastructure Law funding, and I look forward to seeing what projects are selected this fall.
Last Congress, this committee passed the Ocean Shipping Reform Act of 2022. Under Chairman Maffei’s leadership, the Federal Maritime Commission has been quick to implement new requirements for ocean carriers and to investigate unfair shipping practices.
The Federal Maritime Commission will require more funding and personnel to fully address the new investigative and prosecutorial authorities provided under the law. I am heartened to see that the President understands this and included in his budget request a 14% increase for the Federal Maritime Commission.
Since passage of the Ocean Shipping Reform Act of 2022, container prices have fallen, ships lingering offshore have dropped 30% and the FMC has improved the reporting process leading to an increase in charge complaints from American businesses. One of which resulted in a $2 million settlement over findings that the shipping company knowingly and willfully violated the Shipping Act. This means lower costs for consumers thanks to quick action by Congress and the President.
The Committee also has jurisdiction over the Marine Debris Program at the National Oceanic and Atmospheric Administration (NOAA). Through this program, NOAA determines the sources of, reduces, prevents and removes marine debris from our oceans to mitigate its impact on the marine environment and navigation safety. I’m interested in bolstering the work of the Marine Debris Program as part of the Coast Guard Authorization.
I look forward to engaging our witnesses on the administration’s ongoing work to strengthen our supply chain and grow the United States commercial maritime fleet.
Chair Carbajal:
Thank you, Chair Webster, for scheduling today’s hearing on the “Review of Fiscal Year 2024 Administration Budget Request for Federal Maritime Transportation Programs and Implementation of the Ocean Shipping Reform Act of 2022”.
I look forward to hearing from Chair Maffei of the Federal Maritime Commission, or FMC, and Administrator Phillips of the Maritime Administration, or MARAD, on the President’s budget request and their agency priorities for the upcoming year.
I am particularly eager to hear from the FMC about its implementation of the Ocean Shipping Reform Act, which passed out of this subcommittee last Congress before becoming law, and how its new authorities will help maintain a resilient and efficient supply chain.
As the federal agency tasked with ensuring fairness in international shipping, the FMC has key authorities which allow it to safeguard transparent and equitable maritime commerce. As the recent supply chain issues have demonstrated, stability in international shipping is integral to a strong economy.
During the COVID-19 pandemic, weaknesses in our supply chain system were amplified as landside port congestion and unfair shipping practices by foreign ocean carriers led to backlogs and price increases, which have contributed to inflation.
The reforms in our bill strengthened the FMC’s authority to investigate unfair ocean shipping carrier fees and facilitate the efficient movement of cargo through U.S. ports. I am proud to say that since the passage of the Ocean Shipping Reform Act, vessel congestion at ports has decreased and the FMC has refunded over $700,000 in undue charges by carriers.
Further, the FMC is currently undertaking a rulemaking aimed at ensuring that exporters are given fair access to cargo space. It is important that the FMC is sufficiently funded so that it can properly carry out these reforms, which will greatly benefit American businesses and the American consumer.
I look also forward to learning about MARAD’s plans to revitalize the American maritime industry, from ports and infrastructure to our shrinking U.S. flagged fleet and the dwindling availability of American merchant mariners.
Administrator Phillips has done an excellent job continuing to pursue systemic change to the toxic culture that has resulted in sexual violence at the U.S. Merchant Marine Academy and in the commercial maritime industry. This issue is of the utmost importance and, while our work is not done, I commend her leadership on efforts to make the maritime industry a safe and desirable workplace for all.
MARAD oversees vital grant programs that fund projects to modernize our infrastructure, including the Maritime Environmental and Technical Assistance program, or META, and the Port Infrastructure Development Program.
The President’s budget request includes $8.5 million for META, which is a $2.5 million increase over last year’s budget. This supports the research, development, installation and use of low or zero-carbon technologies. These technologies are crucial for reducing harmful emissions and protecting the environment, especially for port communities, where air pollution is statistically worse.
Included in this request for META is $1.5 million for the research and reduction of underwater noise from vessels. Underwater noise disproportionately affects marine mammals, such as whales. Last Congress I worked with my colleagues across the aisle to include an increased authorization for META and language to address vessel sound. While this request is small, I am happy to see MARAD prioritize protecting our whales from the impacts of vessels.
The Port Infrastructure Development Program also supports decarbonization projects, which help reduce our carbon footprint and build a more resilient, reliable marine transportation system. When we invest in renewable energy, like electrification at ports, it creates jobs and adds resilience to disruptions that can occur with traditional fossil fuels.
I’m particularly interested in how the Port Infrastructure Development Program could support the Morro Bay offshore wind project in my district. Building out the port infrastructure to receive and transmit this energy, as well as creating laydown space for shoreside wind turbine staging, is of critical importance and requires a significant investment.
Thank you to our witnesses and attendees for their participation today. I look forward to a robust discussion about how the 2024 budget request can support investments in a stronger maritime industry.
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