Department of Transportation
Statement of the Maritime Administrator
David T. Matsuda

Before the

Sub-Committee on Coast Guard and Maritime Transportation
United States House of Representatives

On

Creating Jobs and Increasing U.S. Exports by Enhancing the Marine Transportation System

June 14, 2011

Chairman LoBiondo and Ranking Member Larsen, thank you for the opportunity to present testimony to the Subcommittee regarding the creation of jobs and increasing exports through enhancements to the Marine Transportation System.  I am David Matsuda, Maritime Administrator, testifying on behalf of U.S. Transportation Secretary Ray LaHood, Chair of the U.S. Committee on the Marine Transportation System or “CMTS.” 

Before I begin, I would like to note that today, Flag Day, we remember our Nation’s history and the many people who struggled, and sometimes perished, to ensure the freedom we enjoy today.  Less than a month ago, on May 19, we observed National Maritime Day, and were privileged to honor the memory of Richard Oliver Kelleher of New Jersey.  He joined the merchant marine during World War II to help preserve our Nation’s freedom.  He was just 19 years old when he died in a torpedo attack.  Richard’s story is an example of the courage and commitment to serve that still exists in the men and women who go to sea today.  I was proud to present six posthumous awards to Herb Kelleher, Richard’s brother, with gratitude for Richard’s courage in time of ultimate sacrifice.

The emphasis of today’s hearing is on the MTS, which accommodates 78 percent of U.S. exports and imports by weight and 48 percent by value. [1]  In addition to supporting the needs of U.S. exporters and industry, it is an important source of employment in its own right.  The scope of the system is huge, as it includes Federal navigation channels, harbors, port gateways, service industries and users, and intermodal connectors.  The MTS supports millions of American jobs, facilitates trade, and moves people and goods in a safe, secure, cost-effective and energy-efficient manner.  In addition to supporting the needs of U.S. exporters and industry, it is an important source of employment in its own right.

More than 95 percent of the world’s consumers live outside U.S. borders, representing a marketplace in which our Nation must compete successfully if we are to sustain and improve our quality of life during the coming decades.  Export markets are particularly important for our manufacturing and agricultural industries.  Transportation, including highways, rail, and water, provide an integrated system to support the movement of our exports.  In 2010, the first year of the National Export Initiative (NEI), coordinated by the Department of Commerce’s International Trade Administration, exports rebounded to near-2008 levels and have contributed to our nation’s overall economic recovery.  According to Secretary of Commerce Locke, after dropping 14.6 percent in 2009, exports grew 16.6 percent in 2010, compared with an average annual rise of 11.2 percent during 2002-2008.  Exports of goods and services in 2010 reached $1.83 trillion, the second highest annual total on record and the largest year-to-year percent change in over 20 years. In 2010, exports contributed to nearly half of the 2.9 percentage point growth in real GDP.[2]  In 2008, when exports of goods and services reached $1.84 trillion, U.S. goods and services exports supported an estimated 10.3 million jobs in the United States, of which goods exports supported 7.5 million jobs, including 3.7 million manufacturing jobs (27 percent of all jobs in the manufacturing sector) and 1 million jobs on and off the farm.[3]

MARAD continues to carry out a number of initiatives and grants as part of our efforts to support American exports.  I am pleased to report to the Subcommittee that I recently approved the Federal financing of a $290 million export project at Eastern Shipbuilding in Panama City, FL.  This project will result in the creation of 300 new shipbuilding jobs for skilled workers as they construct five new offshore supply vessels in the coming years for service in Brazilian waters.  Working closely with the shipyard and project sponsors to complete the financing package, the MARAD team pulled together to create a deal which satisfied Federal requirements and beat vigorous competition from foreign countries offering to build these ships.

MARAD is also implementing DOT’s program aimed at increasing the use of our system of inland waterways and coastal ports to move freight.  This program, America’s Marine Highway, will directly support the National Export Initiative.  For example:

• The California Green Trade Corridor project will establish a vessel service to shuttle containerized cargoes between the inland ports of Stockton and West Sacramento and the seaport of Oakland.  When this service becomes operational early next year, shippers of agricultural exports throughout the Central San Joaquin Valley- one of the world's most productive agricultural regions- will be able to load cargo for export closer to the place from which it is produced.  This could lower the transportation cost to export their goods, thereby making the region more competitive in world markets.  DOT is investing $30 million to help this project become a reality. 
• Similarly, a Marine Highway solution could open the door for even more trade with Canada, our largest trading partner, through the potential for waterborne-enabled exports offered by the Great Lakes.  In 2010, U.S. agricultural exports to Canada were valued at $16.8 billion.

Furthermore, these services offer a transportation solution that consumes less oil, generates fewer green house gas emissions and causes less damage to our roads, bridges and tunnels than the highway alternative – all the while helping open markets for export opportunities.

The President understands that continued economic growth and competitiveness in the global economy will require the significant expansion of U.S. exports. To achieve this goal, the President launched the NEI with the goal of doubling U.S. exports by the end of 2014.

American exporters cannot participate as effectively in the global economy if they cannot get their products to foreign markets in a cost-effective, reliable, and expeditious manner.  America’s highways, railways, bridges, waterways, runways, and ports represent the beginning of a very long global logistics chain that reaches almost every market in the world.

The 2009 American Recovery and Reinvestment Act (Recovery Act) provided billions that supported MTS-related projects including small shipyard grants, ferry boat discretionary grants, bridge alterations, port security grants, and civil works projects.  Congress’s creation of the Transportation Investment Generating Economic Recovery (TIGER) discretionary grant program under the Recovery Act has increased the nation’s port and rail investment.  This program has been subsequently reauthorized under the FY 2010 and 2011 Appropriations Acts.  Prior to TIGER, these sectors were difficult to reach with Federal dollars, even when we knew of major public benefits that would result from Federal investments in them.  DOT has used the TIGER program to fund major improvements to the MTS, making 14 port investments totaling more than $215 million in the States of Alaska, California, Florida, Hawaii, Illinois, Maine, Mississippi, Oregon, Rhode Island, Tennessee, and Washington.  

DOT has also made major TIGER investments in intermodal rail projects that link ports to the interior of the Nation.  Multimodal, multi-state projects to improve freight rail capacity were among the biggest recipients of TIGER investment.  The Crescent Corridor (Tennessee and Alabama), CREATE (Illinois), and National Gateway (Ohio, Pennsylvania West Virginia, and Maryland) freight rail projects each received about $100 million.  Many other important rail projects have also been funded under the two completed rounds of TIGER grants (a third round is ready to start).

The Federal investments in these port projects alone may ultimately generate approximately 2,300 job years of employment for Americans during their construction (of which two-thirds will be direct and indirect jobs).[4]  More importantly, however, many of these projects will facilitate the production and export of products from U.S. factories and farms to markets throughout the globe and will play a critical role in supporting the NEI and long-term employment in the United States.

America’s Marine Highway program, although aimed primarily at the domestic movement of freight, will also serve to move containers with export cargos to U.S. ports and will provide jobs for mariners who will be accessible to the United States for crewing sealift capacity during times of national emergency.  With grant authority established by the National Defense Authorization Act for Fiscal Year 2010 and with $7 million in funds appropriated by the Consolidated Appropriations Act of 2010, DOT announced the award of three Marine Highway project grants and funding for three research studies of potential Marine Highway services.

MARAD’s Title XI and Small Shipyard Grant (Assistance to Small Shipyards) programs provide loan guarantees and grants, respectively, supporting the industry, which can be an engine for efficiency and capacity improvements and economic growth.

Congress created the Small Shipyard Grant Program in the National Defense Authorization Act of 2006 to support capital improvements to qualified shipyards.   Congress first funded the program with $10 million through the Consolidated Appropriations Act of 2008, followed in 2009 by $117.5 million in funding through the Omnibus Appropriations Act of 2009 ($17.5 million) and American Recovery and Reinvestment Act of 2009 (Recovery Act) ($100 million), $15 million in funding in the Consolidated Appropriations Act of 2010, and $9.8 million in funding in the Department of Defense and Full-Year Continuing Appropriations Act of 2011.  This program is intended to improve the ability of domestic shipyards to compete for domestic and international commercial ship (including tug and barge) construction. 

Overall, for the first 3 years of this program, MARAD awarded a total of 120 grants to 105 different shipyards (awards for the 2011 program are still pending).  These shipyards are located in 28 States and Guam.  Grants have been used to fund floating drydock construction and modernization, acquisition of large Travelifts (up to 1,000 tons), material handling equipment such as cranes and forklifts, steel working machinery, shipyard infrastructure improvements, and training of shipyard employees.  To date, the 70 small shipyard projects funded through the Recovery Act have generated a total of more than 800 job years, with about 650 of these being in direct and indirect jobs.  By the time all of the $98 million in Recovery Act small shipyard grant funds are expended (sometime in 2012), a total of almost 1,100 job years of work will have been generated.

The Department of Transportation (DOT), the U.S. Coast Guard (USCG), U.S. Army Corps of Engineers (USACE), National Oceanographic and Atmospheric Administration (NOAA) and many other Federal agencies all have a role in the MTS.  These agencies are working individually and in concert to ensure that the MTS continues to meet the present and future needs of our nation.  They meet to discuss issues under the auspices of the CMTS, an interagency forum comprised of the Federal agencies that have a role in the MTS.  The CMTS is actively engaged with the National Export Initiative Trade Policy Promotion Committee (TPCC) to facilitate the improvement of the U.S. supply chain.  CMTS individual and interagency efforts will focus on maintaining ports and waterways to support export trade through improving our supply chain competitiveness, and ensuring a safe and reliable MTS.

Examples illustrating this effort include integrating NOAA’s coastal ocean forecast modeling with its navigation data and USACE channel depths to allow bulk cargo and container vessels to load more heavily and to time arrivals and departures more accurately.  NOAA Physical Oceanographic Real-Time System (PORTS®) in particular is a very useful tool—available at a relatively low cost, but with substantial benefit to the environment and the economy.  NOAA and the USCG have collaborated to provide PORTS® information to mariners through the USCG Automated Identification System.  Given the limited channel depths available in most U.S. ports, port operators can use PORTS® integrated with other navigation data to maximize throughput and economic gain with less risk of running aground and injuring the environment or vessels. This adds to U.S. supply chain efficiency and competitiveness, and the benefits also add up quickly for U.S. exporters. Every additional inch of water draft available to a container ship means more containers on a larger vessel and a better value.  For example, an inch of draft can mean 9,600 more laptop computers, at a value of $8.5 million.

The Army Corps of Engineers makes considerable investment into our water infrastructure including locks, dams, and Federal channels.  The annual budget for its commercial navigation program is approximately $1.6 billion for FY 2012.  In allocating these funds, the Corps gives priority to investments in the assets that will provide the greatest economic return to the Nation, and to the maintenance of existing waterways with highest levels of commercial use.  In addition, NOAA is leading an interagency team to facilitate the coordination of Federal navigation services to the mariner in order to facilitate safer and more efficient marine transportation.

The International Trade Administration has been engaged with DOT in a proactive program to address national transportation supply chain components of the NEI as a drive of pricing and U.S. competitiveness.  ITA and DOT have joined in a series of transportation stakeholder listening sessions that are helping to define the foundational issues that shippers find help or hinder their ability to compete in the global marketplace.  This work complements the five pillars of the NEI which include improving trade advocacy, increasing access to credit, removing trade barriers, enforcing trade rules, and promoting balanced trade policies.

In a letter to the President, dated March 11, 2011, the President’s Export Council, which includes CMTS members, noted that a “robust, reliable, and efficient domestic transportation infrastructure is the critical ‘first-step’ on the road to more exports.”  The DOT and all CMTS member Departments and agencies recognize that the MTS is a critical cog in the U.S. supply chain between the navigable waterway and landside connectors to the stores and shelves of America’s heartland.

Shipping capacity to carry U.S. exports has been increasing.  In 2010, 7,579 oceangoing vessels made 62,747 calls at U.S. ports, accounting for nearly eight percent of vessel calls globally, a 13 percent increase over 2009.[5]  The vessels making these calls include bulk ships carrying iron, coal and grain for export; heavy-load vessels carrying cargo such as large airplane wings for Boeing 747 jets; containerships carrying general export and import cargo for markets around the U. S. and the world; tankers carrying oil and gas used to power our cars and heat our homes; and roll-on roll-off vessels carrying General Motors, Chrysler, and Ford vehicles for export.  These statistics, alone, emphasize the value of CMTS efforts to coordinate and integrate navigation services to provide the best information in support of best navigation practices and to reduce duplication of effort.

Bulk cargo exports, such as grain, are a significant contributor to the U.S. economy.  The U.S. Department of Agriculture recently reported that farm exports alone will support more than one million jobs in America this year.[6]  In May 2011, Secretary of Agriculture Tom Vilsack reported that farm exports reached an all-time high of $75 billion during the first half of Fiscal Year 2011.  This is 27 percent higher than the same period last year.[7]  Further, the U.S. Department of Commerce reports that for every $1 billion in overall goods and services we export, 5,000 U.S. jobs are supported. [8]  For ocean exporters, grain producers, manufacturing, and other industries, the MTS is a nexus between the United States and the global economy.

In 2010, the 10 largest U.S. ports by volume accounted for 58 percent of oceangoing vessel calls. Houston was largest for tanker calls; Los Angeles/Long Beach was the largest for container ship calls, and New Orleans was the largest for dry bulk calls.  The other 42 percent of cargo was spread among the 173 other commercial deep draft ports along the Atlantic, Gulf of Mexico, Pacific, and Great Lakes coasts, as well as ports in Alaska, Guam, Hawaii, Puerto Rico, Saipan, and the U.S. Virgin Islands. 

Current MARAD programs, including the Maritime Security Program and the cargo preference programs, play a part in sustaining approximately 90 U.S.-flag ships in international commerce.  In addition to commercial cargos that support our economy, in 2009 these vessels recently carried over 3 million metric tons of petroleum and over 8 million tons of general and containerized cargo for the Department of Defense (DOD); shipped household goods for approximately 78,000 military overseas moves; and transported over 770,000 measurement tons of privately-owned vehicles for the military.  Additionally, U.S.-flag vessels carried about 2 million metric tons of humanitarian food aid worldwide annually in recent years.  Each vessel in the international trades supports upwards of 20 seafarer billets (equal to more than 40 full time equivalent officers and crew per vessel) or 3,000 – 3,700 seafarer jobs overall.  

MARAD is committed to improving the international competitiveness of the U.S.-flag fleet.  To that end, MARAD is conducting a study to obtain and analyze the broad range of impediments to the use of the U.S.-flag registry.  The study will help MARAD ensure that U.S. maritime policies are based, to the maximum extent possible, on the current state of international waterborne transportation markets.  MARAD is currently reviewing the Final Report and expects the study to be completed in the summer of 2011.

Meanwhile, MARAD is working with other Federal agencies to increase the competitiveness of U.S.-flag vessels, for example:

MARAD is updating its cargo preference regulations in consultation with the shipper agencies.  Two weeks ago, MARAD brought together all of the U.S. government agencies involved in cargo preference for the first ever Federal shipper forum on cargo preference.  It gave Federal agencies a chance to discuss the implementation of cargo preference programs.  This feedback will help MARAD make improvements to the program.

As you can see, much is being done within the Administration to ensure that the essential supply chain requirements are available to enhance the Marine Transportation System, create jobs, and support the National Export Initiative.  At this time, I will be pleased to answer any questions the Subcommittee may have.  Thank you.

##

STATEMENT OF

JOHN D. PORCARI
DEPUTY SECRETARY
U.S. DEPARTMENT OF TRANSPORTATION

BEFORE THE

HOUSE COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
SUBCOMMITTEE ON COAST GUARD AND MARITIME TRANSPORTATION

Maritime Transportation:  The Role of U.S. Ships and Mariners

May 21, 2013

Chairman Hunter and Ranking Member Garamendi, thank you for the opportunity to present testimony to the Subcommittee regarding the role of the U.S.-flag maritime fleet, the maritime workforce, and shipbuilding to protect the Nation's commercial and defense requirements.  The Department of Transportation (USDOT) has the responsibility for promoting the U.S.-flag fleet including U.S. cargo preference requirements for Federal agencies.  I am John Porcari, Deputy Secretary of Transportation, testifying on behalf of U.S. Transportation Secretary Ray LaHood.

RECENT TRENDS AND CURRENT CHALLENGES FOR THE U.S. MERCHANT MARINE

To understand the role of ships and mariners, it is necessary to understand U.S. maritime policy in its two primary dimensions, coastwise or cabotage trade and international trade.  Since the enactment of U.S. cabotage law in 1817, our national policy for coastwise commerce is to reserve this trade for U.S. ships and U.S. mariners.  Contemporary cabotage policy continues under the Merchant Marine Act of 1920, commonly referred to as the Jones Act, with coastwise trade also referred to as Jones Act trade.  The Jones Act was designed to encourage development of a national flag fleet and to protect that fleet from anti-competitive practices by foreign carriers.  The national policy for international maritime commerce was set forth in the Merchant Marine Act of 1936 which included the premise that a substantial portion of our foreign trade should be carried on U.S. ships.  Intersecting all of this is our national security policy which stipulates that our domestic merchant marine, both ships and mariners, shall serve as a naval auxiliary in times of war or national emergency.

There are many complex factors that influence current conditions and the long-term outlook in the domestic oceangoing trades of large self-propelled vessels, with some factors for Jones Act ships indicating that the industry is trending toward a growth phase in the oceangoing segment.  Self-propelled oceangoing vessels of 1,000 gross tons or more each in the Jones Act trades experienced a net decrease of 15 vessels since the beginning of 2010, with 91 vessels currently operating, primarily because of the retirement of older tankers as a result of the Oil Pollution Act of 1990.  At the same time, there has been an offsetting increase in large oceangoing tank barges, most in the form of articulated tug-barges (ATBs) that function in much the same way as self-propelled oceangoing vessels but with smaller crews and slower speeds.  Importantly, the recent surge in domestic crude oil production has increased demand for new domestic self-propelled tanker vessels.  One recent industry projection foresees roughly 10 to 14 new oceangoing tankers entering the fleet by 2018, and demand for even more vessels.  Recent announcements of new containership orders to work in the Jones Act trades are also encouraging signals for industry growth.  These containerships would be powered by U.S.-produced liquefied natural gas (LNG) and would be among the most environmentally friendly form of freight transportation on earth.  Of course, the numbers above do not include the many thousands of other smaller vessels, such as tugs, smaller barges, service boats, and others described below that are part of the inland and coastal waterway trades.

Jones Act commerce also encompasses the Great Lakes and inland waterways.  A recent MARAD study on the Great Lakes dry bulk fleet indicates that the fleet has weathered the recession and is generally healthy, although the drop in coal cargoes transported on the Lakes due to inexpensive natural gas and other factors is a concern to the industry.

The Bureau of Labor Statistics reports that the number of mariners involved in coastal and inland transportation has been holding constant or increasing slightly during the last several years, reaching almost 37,000 as of 2012.  A smaller pool of approximately 15,000 actively sailing mariners who hold the necessary U.S. Coast Guard (USCG) credential and international endorsement to sail in the commercial oceangoing U.S.-flag shipping industry is the primary source of mariners to crew the sealift ships that our Nation relies on in times of war, national emergencies, natural disasters, and other contingencies. 

The sufficiency of this mariner pool to support a large-scale activation of the DOD and USDOT sealift fleet depends upon the health and size of the commercial U.S.-flag oceangoing merchant fleet.  A fleet that is sufficiently sized will result in a critical mass of merchant mariners with the necessary credentials to meet the crewing requirements of both the commercial and sealift fleets during national emergencies.  As of today, the mariner pool is adequate for both of these sealift needs.  However, we are concerned that, the costs of operating under U.S. registry may result in continued reductions in the oceangoing commercial fleet.  MARAD is working closely with DOD and industry to support the U.S.-flag fleet and to facilitate the retention of these mariners including the establishment of a working group to develop a national sealift strategy that ensures the long term viability of the U.S. Merchant Marine as a naval auxiliary and as a U.S. presence in international trade.

Over 97% of our foreign trade is carried on foreign-flag vessels, particularly the growing number of larger containerships that are being widely deployed on the world’s oceans.  These large vessels, which exceed 5,000 twenty-foot equivalent unit (TEU) containers are already arriving at U.S. West Coast and East Coast ports.  As the expansion of the Panama Canal nears completion, some East Coast and some Gulf Coast ports are investing in the necessary infrastructure to compete for a share of this market.  The major West Coast ports already have channel depths and pier-side cranes that can service these vessels, as do two East Coast ports, and other major East Coast and Gulf Coast ports will be prepared for vessel calls by post-Panamax ships by the time the expanded Panama Canal is fully operational.  The American Association of Port Authorities reports that U.S. seaport agencies and their private-sector partners plan to invest a combined $46 billion over the next five years in capital improvements to their marine operations and other port properties.  MAP-21 directs USDOT to establish a national freight planning process that will, among other objectives, identify needs for improved intermodal connections between ports and the surface transportation system.

Not long ago there was a concern that two major U.S. commercial shipyards would be laying off employees, but the new construction projects are creating the prospects of much stronger employment in the future, replacing some of the void left from a reduction in U.S. Navy shipbuilding contracts.  Gulf Coast shipyards are now very busy building offshore platform supply vessels to support the oil and gas industry.  It is important to note that the U.S. shipyard industry is benefitting greatly from the Jones Act, which requires ships in the domestic trades to be built in U.S. shipyards.  Commercial orders filled by these yards also benefit the U.S. Navy as a result of increased shipyard efficiency associated with greater shipyard utilization and commercial production methods.  Smaller shipyards are also benefiting from investments made under the Small Shipyard Grant Program, enabling them to produce or service vessels more efficiently.

USDOT/MARAD ROLE IN SUSTAINING THE VIABILITY OF THE INDUSTRY

USDOT and MARAD have been working on many initiatives to provide support to the marine transportation system.  The initiatives include support to our foreign and domestic trading fleets, innovations in support to U.S. ports, assistance to shipyards, and strengthening of our nation’s ability to train new mariners.  Even so, we acknowledge that much of the progress and innovation in the U.S. maritime sector is driven by commercial companies and port authorities that handle the day-to-day investment in and operation of the marine transportation system.

International Trade:  Ensuring U.S. Maritime Capabilities to Meet National Security and Economic Needs

MARAD administers the Maritime Security Program (MSP), a fleet of 60 active, commercially viable, militarily useful, privately-owned vessels available to meet national defense and other security requirements.  On January 2, 2013, President Obama signed the Fiscal Year (FY) 2013 National Defense Authorization Act (NDAA) that authorizes the Secretary of Transportation to extend existing MSP operating agreements through September 30, 2025.  The current annual stipend payment per ship of $3.1 million was extended through FY 2018, increasing to $3.5 million in FY 2019-FY 2021 and $3.7 million in FY 2022-FY 2025.  

During the coming months, MARAD intends to make promulgating cargo preference related regulations a priority, but the timeframe to accomplish this is uncertain. These regulations will serve as implementing regulations, encompassing recent changes in the cargo preference program, including those enacted by MAP-21.   The regulations will also aim to eliminate ambiguity in current procedures and compliance requirements.

With regard to sealift, MARAD has made significant progress in improving the readiness and efficiency of the government-owned sealift fleet over the last several years.  In particular, it has restored the readiness of eight Fast Sealift Ships and brought these ships into the MARAD Ready Reserve Force (RRF) fleet, saving the government roughly $20 million per year in readiness costs.  MARAD has also identified efficiencies capable of producing an additional savings in federal vessel management and is working with the U.S. Navy on implementation.  MARAD demonstrated the national and homeland security values of this fleet through the quick-response activation and use of RRF and National Defense Reserve Fleet (NDRF) vessels during the relief effort for the earthquake in Haiti and during the response to Superstorm Sandy.

The President’s FY14 Budget proposes restructuring the P.L. 480 Title II food aid program to allow local and regional procurement of food and to improve the ability of U.S. food aid to reach emergency needs quickly and with less adverse impacts on markets and farmers in countries receiving the food aid.  Under the President’s proposal, 55 percent of Title II food aid funds would still be spent in the United States in FY 2014 and of that, 50 percent of the cargoes would move on U.S.-flag vessels.  DOD has stated that its initial assessment is that changes to the Food Aid Program will not impact the maritime industry’s ability to crew the surge fleet and deploy forces and cargo.  Furthermore, to mitigate any impact on vessels and mariners, the Administration is proposing a $25 million targeted operating subsidy for military-useful vessels.  Preliminary planning for this funding envisions a three-pronged approach whereby some of the funding would provide a stipend for militarily useful vessels not enrolled in the MSP, other sums would be used to reimburse eligible costs for mariners to retain and or renew active U.S. Coast Guard issued merchant mariner credentials, and some funds would provide apprentice training for key merchant mariner skills.  MARAD will work with stakeholders and our Federal partners on how best to use this funding to minimize any impact.

Domestic Trade:  Furthering U.S. Shipbuilding and Jones Act Trade

MARAD strongly supports and will continue to support compliance with the Jones Act.  In some cases, emergencies, national defense, or other circumstances may require limited waivers to U.S. carriage requirements of some cargoes, such as during the recent response to Superstorm Sandy.  Even in these situations, however, the use of Jones Act-eligible vessels must be maximized.  Accordingly, MARAD has developed an improved Jones Act Waiver Process to achieve greater transparency and U.S. stakeholder participation during times of emergency or national defense needs.  With regard to releases of oil from the Strategic Petroleum Reserve (SPR), MARAD has established precedent to avoid automatic large-scale blanket waivers of Jones Act requirements.  In a first for any Administration, MARAD specifically arranged for U.S.-flag participation in the SPR release of September 2011. 

MARAD has also obtained agreement with the Department of Energy to ensure U.S.-flag tank vessels and barges will have an opportunity for greater participation in any future drawdown.  In the past year, Congress has passed two pieces of legislation with the goal of improving communication and transparency in the Jones Act waiver and SPR crude oil transportation process.  In order to meet these new requirements, USDOT and MARAD have made preparations for better information sharing with industry and have developed a plan to reach out to industry leaders on Jones Act tank vessel availability whenever a drawdown of the SPR is imminent.  During the Superstorm Sandy fuel shortages, MARAD implemented innovative reporting requirements to provide transparency of Jones Act waiver utilization. [1]

USDOT and MARAD have undertaken numerous initiatives to help support the U.S. domestic maritime trades.  One source of support to the U.S. shipyard industry and U.S.-flag carriers is the Maritime Guaranteed Loan Program, widely referred to as the Title XI program.  MARAD is authorized to guarantee up to 87.5 percent of the obligations on private sector debt financing for ships constructed, reconstructed, or reconditioned in the United States.  Over the last four years, Title XI has enabled more than $650 million in new investments in U.S. shipbuilding.

The Title XI program has never had to disapprove a creditworthy application due to a lack funding.  There is currently enough budget authority to guarantee approximately $420 million worth of shipbuilding projects while the Title XI program currently has applications pending for over $500 million in loan guarantees.  However, no determination on the creditworthiness of the pending applications has been completed.  MARAD recognizes the need to expedite responses to Title XI applications.  As a result, reform actions are being implemented including reevaluating application timing procedures and issuing guidance to improve the efficiency of the process. 

The Small Shipyard Grant Program, established under the FY 2006 NDAA, supports capital improvements to qualified shipyards.  Since 2009, USDOT has provided more than $149 million for more than 120 projects to help modernize U.S. shipyards located in 28 states and Guam.  These grants have been helpful to shipyards in obtaining new contracts, including contracts to export vessels, and have contributed to the U.S. being a net exporter of commercially built vessels six out of the last 10 years, with a surplus of nearly $410 million.

MARAD has made major progress in establishing the America’s Marine Highway Program, which, over the long run, offers an important new market for Jones Act vessels.  Under this program, MARAD supports and promotes the movement of freight in containers and trailers between domestic U.S. ports, helping to relieve congestion on the Nation’s highways and railroads.  Over the last four years, MARAD established the formal program by issuing a final rule, designated 18 Marine Highway Corridors, issued a report to Congress on the status and outlook of the America’s Marine Highway Program, invested $129.7 million in 16 projects supporting Marine Highway objectives (largely through Transportation Investment Generating Economic Recovery (TIGER) grants), created concept designs for a potential new marine highway vessel, and undertook three market analyses of potential marine highway services.  MARAD is currently in the process of coordinating the designation of additional Marine Highway Corridors, which will facilitate the ability of companies to establish services and to qualify for project grants.  TIGER funds were appropriated and were in the FY 2014 budget.

First Time Funding for Ports

USDOT and MARAD have supported port investment through the award of TIGER grants to port authorities.  Of those, 10 (totaling $122 million) were for Marine Highway projects and 15 (totaling $226.6 million) were awarded to improve and modernize ports and rail infrastructure serving ports, expand commerce, create jobs, and increase exports.  These Federal funds were the first ever competitively awarded by USDOT for port infrastructure.  MARAD also sponsored two National Port Summits that brought together the Nation's port directors for policy discussion with the Secretary of Transportation regarding the integration of waterborne transportation into the Nation’s overall transportation system.

Merchant Marine Academy Improvements:

The U.S. Merchant Marine Academy (USMMA) at Kings Point, NY is a national asset and a top priority for USDOT and MARAD.  The mission of the Academy is to educate and graduate licensed merchant mariners and leaders who will serve America’s marine transportation and defense needs in peace and war.  Along with the six State maritime academies, Kings Point plays a central role in preparing the Nation’s licensed maritime workforce.

Strengthening Capabilities to Assist Industry with Maritime Operational Issues

MARAD has been providing important assistance to the maritime industry on issues that will reduce the cost of operating under the U.S.-flag.  To do so, it has developed a comprehensive strategy for environmental, safety, and security initiatives.

The Act to Prevent Pollution from Ships implements the provisions of the International Convention for the Prevention of Pollution from Ships (known as MARPOL), including the annexes to MARPOL to which the U.S. is a party.  MARPOL provisions address pollution from ships in the course of their normal operations, including in respect to oil, noxious liquid substances, garbage, and air emissions.  Compliance with these provisions can impose significant costs on vessel owners.  MARAD is working to assist U.S. vessel owners in their efforts to comply with these requirements.  In concert with other federal, state and industry stakeholders, it is also assisting in the development of improved shipboard air pollution control technology, investigating the use of pier-side fuel cells to enable vessel cold ironing while in port, and exploring the possible use of renewable fuels, such as biofuel, in commercial vessels.  In other work relevant to protecting the marine environment, MARAD has advanced a ballast water testing initiative and funded the first U.S. Coast Guard-certified lab for ballast water testing.   

Organizational Outreach

MARAD will continue to push for improvements in its support to industry and the public through a variety of initiatives pertaining to organizational excellence.  In FY 2010, MARAD, in collaboration with USDOT, re-established the Marine Transportation System National Advisory Council (MTSNAC) to advise the Secretary of Transportation on MTS issues, paying specific attention to the expansion and development of the Nation’s marine highway and port system through its marine highway subcommittee and the Secretary’s Port Advisory Council.

Thank you for the opportunity to discuss the role of U.S. ships and mariners in meeting our Nation’s commercial and defense needs. I am happy to respond to any questions you have.

STATEMENT OF

DAVID T. MATSUDA
MARITIME ADMINISTRATOR
MARITIME ADMINISTRATION

BEFORE THE

HOUSE COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
SUBCOMMITTEE ON COAST GUARD AND MARITIME TRANSPORTATION

The Maritime Administration’s
Fiscal Year 2014 Budget Request

April 16, 2013

Good afternoon Chairman Hunter, Ranking Member Garamendi, and Members of the Subcommittee.  Thank you for the opportunity to discuss the President’s Fiscal Year (FY) 2014 budget priorities and initiatives for the Maritime Administration (MARAD).  I am pleased to appear before you to highlight how the President’s budget request will support maritime transportation and its contributions to the U.S. economy, national security and resiliency, and environmental sustainability.

MARAD’s mission is to foster a merchant marine that meets both the economic and security needs of the Nation.  The scope of our mission includes port and intermodal infrastructure, capable vessels and shipbuilding facilities, national policies which encourage a sustained investment in U.S. shipping, and of course, maritime education, training, and other support for the skilled men and women who have developed maritime careers in this vital industry.

We accomplish this primarily through a mix of Federal readiness programs, some of which sustain government-owned reserve sealift ships crewed by civilian mariners and some which provide operating stipends to commercial maritime companies.  Each of these programs help to ensure that the transportation services our Nation requires at a moment’s notice will be available to us when needed.  Late last year, a major milestone was reached when the President signed into law legislation requested by the Administration effectively extending the Maritime Security Program (MSP) from 2015 to 2025.  This law helps provide long-term stability to ensure a militarily-useful U.S. flag fleet and provides increasing stipend levels over the next 10 years.  I thank the Subcommittee for supporting the passage of this legislation.

FY 2014 BUDGET REQUEST

The President’s FY 2014 budget request for MARAD is $365 million, which will support the agency’s coordinated program of activities and initiatives advancing Departmental and national maritime transportation objectives.  The budget request highlights new initiatives for port infrastructure development and a mariner retention incentive program. 

KEY PRIORITIES

The U.S Merchant Marine Academy (USMMA) continues to be an area of focus for the agency and is a top priority for the Department.  Raising the profile and prestige of the USMMA in conjunction with improving the institution both administratively and academically is a management imperative.  MARAD has made important progress in shaping the course and direction of the USMMA, including the appointment of new leadership, Superintendent Rear Admiral James Helis and Deputy Superintendent Rear Admiral Susan Dunlap, and issuance of a new Strategic Plan to guide Academy strategic management and program development.  The President’s FY 2014 budget request continues the Department’s commitment to maintenance and improvement of Academy facilities that helps to create an enriching educational environment.

Another key priority for MARAD is fulfilling its role in meeting the economic and security needs of the Nation.  Defense sealift relies heavily on the U.S. commercial sector and MSP funding is essential for the maintenance of a U.S. presence in ocean-borne foreign commerce.  In addition to providing employment for 2,700 U.S. merchant mariners, the MSP fleet also ensures the military’s ability to obtain assured access to commercial vessels and intermodal networks and mariners.  The President’s FY 2014 budget also includes $25 million for a new initiative aimed at mitigating the impact on sealift capacity and mariner jobs resulting from food aid program reform. 

The President’s budget request will also advance the agency’s contribution to environmental sustainability by supporting the disposal of obsolete National Defense Reserve Fleet (NDRF) vessels, preservation and license activities for retention of the Nuclear Ship SAVANNAH, maritime environmental technology assistance, and advancements in ocean policy.  The National Ocean Policy coordinates and aligns coastal and ocean-related actions of the Federal agencies to bolster our ocean economy, improve ocean health, support local communities, strengthen our security, and access the best available information to ensure we are using our ocean resources to the maximum benefit of all Americans.  Because the Policy is implemented through agency action under existing authorities and missions, there is no separate line item for the National Ocean Policy in the President’s Fiscal Year 2014 budget. 

Other priorities for MARAD in FY 2014 include the continued oversight and stewardship of Transportation Investment Generating Economic Recovery (TIGER) grant funding for maritime projects, and improving the management of our human, information, and financial resources.

ECONOMY

Maritime transportation is a vital industry, contributing roughly $15 billion per year to the national economy, in terms of value added.  U.S. waterborne commerce exceeds 2 billion metric tons per year.  MARAD programs help strengthen and improve the Marine Transportation System, relieving pressure on highways by helping to increase the use of our Nation’s waterways.  Because waterborne transport provides a cost-effective transportation alternative, it can help mitigate congestion in other transportation modes, and significantly reduce fuel consumption per ton-mile, with a related carbon footprint reduction.  

MARAD’s mariner training activities focus on preparing individuals for maritime careers while developing and maintaining a vital and viable U.S. merchant marine for commerce, emergency response, and national security.  The USMMA and State Maritime Academies educate and graduate merchant marine officers ready to serve the maritime industry and Armed Forces.  In addition, MARAD’s work with shipping, shipbuilding, and port and vessel operations supports the maritime industry, which comprises more than 250,000 jobs.

United States Merchant Marine Academy

The President’s FY 2014 Budget requests $81 million for the Academy.  Of this, $67 million will support Academy Operations and $14 million will fund the Capital Improvement Program.  The FY 2014 request will enable the Academy to effectively achieve its core responsibility of providing the highest caliber academic study with state of the art learning facilities for the Nation’s future merchant marine officers and maritime transportation professionals.  The Academy anticipates graduating 248 licensed merchant marine officers for service in the maritime industry and the Armed Forces in 2014.

The agency’s strong commitment to improved Academy facilities is reflected in the FY 2014 request for $14 million for the Capital Improvement Program.  The funding, together with carry-over funds, will support four priorities identified in the Academy’s Five-Year Capital Improvement Plan, including architectural and engineering designs for renovation of Samuels Hall/Bowditch Hall academic buildings, Samuels Hall renovation and construction, Zero Deck construction, and initiation of repairs to the seawall to help protect against further erosion.

We have made significant progress in improving institutional management, oversight and controls at the Academy.  In the last eight months, we have appointed a new Superintendent and Deputy Superintendent, issued new policies, completed a reorganization reflecting a better functional alignment, and issued a new Strategic Plan, establishing objectives for academics, leadership, facilities management, and outreach. 

As a result of our emphasis on oversight and strengthening controls at the Academy, we have provided the Government Accountability Office (GAO) with documentation for corrective actions and process improvements addressing all of their recommendations for the Academy.  GAO has confirmed closure of 33 recommendations in the 2009 audit report, and we have indications from GAO that additional closures are expected to be confirmed shortly.  We also have provided documentation of our improvements to Academy capital improvement program management and oversight, addressing the concerns identified in GAO’s 2012 audit report.  Congress’ assistance has been instrumental to guiding our efforts to provide the funding and leadership the Academy needs to train and prepare the next generation of midshipmen to meet the country’s rapidly-evolving defense and maritime transportation needs.

State Maritime Academies

The President’s FY 2014 budget requests $17.1 million, unchanged from FY 2012, for the State Maritime Academy (SMA) program.  This $17.1 million request includes $2.4 million to fund the Student Incentive Payment (SIP) program, enabling enrollment of 300 students to be able to meet identified Armed Forces reserve requirements; $3.6 million for annual direct payments to the six SMAs to provide for operational support; and, $11.1 million to fund maintenance and repair costs for Federally-owned training ships on loan to the SMAs.

The state academies regard the SIP program and support for their training ships as among the most important recruiting tools to encourage potential state maritime academy cadets to pursue careers as merchant marine officers.  MARAD anticipates approximately 650 students in the license program will graduate from the academies in 2014.  Annually, the six SMA training vessels provide for approximately 123,000 cadet sea days, opportunities for important hands-on technical training.  Maintaining the operating condition of these NDRF training vessels is important as the ships can also be called up to respond to emergencies or relief efforts. 

In November and December 2012 the Training Ship (TS) EMPIRE STATE and TS KENNEDY were deployed to provide support to FEMA for Hurricane Sandy relief efforts.  Combined with the NDRF vessel WRIGHT, a Ready Reserve Force (RRF) aviation support ship, these three ships housed nearly a thousand emergency responders and relief workers daily at a highly cost-effective rate during a critical time when warm beds, hot meals, and places to recharge communications devices all came at a premium given the dearth of local hotel space.

Additionally, the National Maritime Heritage Act authorizes 25 percent of sales from recycling of obsolete NDRF ships to be provided to the SMAs.  In the past fiscal year, MARAD provided approximately $2.3 million to the SMAs from the vessel scrap sales, capping a four-year period in which Federal support to the state maritime academies by MARAD was increased 83 percent.

Maritime Security Program (MSP)

The MSP is the agency’s largest appropriated program.  The primary purpose of the MSP is ensuring the military’s access to a global intermodal system with sealift capacity and ready U.S. mariners, while also maintaining a U.S.-flag fleet capable of supporting a U.S. presence in foreign commerce.  MSP vessel participants have the global, multi-modal reach that delivers cargoes supporting overseas deployments of U.S. forces.  MSP ships are carrying the bulk of military supplies and equipment in support of U.S. forces in and out of Afghanistan.  Presently, 90 percent of the cargo transported to and from Afghanistan is carried by MSP carriers.  As of April 1, 2013, 60 vessels were enrolled by 13 U.S. operators. 

For FY 2014, a total of $208 million in new budget authority is requested for the Maritime Security Program (MSP) account.Within the total, $183 million is included for the base MSP program, $3 million less than the authorized level.  The difference is projected to be funded by program recoveries of unpaid obligations (funds obligated but unpaid and recovered in 2014).  Funding at this level will enable DOT to continue to maintain a U.S.-flag international trade merchant fleet crewed by U.S. citizens to serve the Nation’s economic, homeland and national security needs.

The President’s FY 2014 request also shifts $25 million of the efficiency savings in a new food aid program reform initiative to help preserve mariner employment on militarily useful vessels not enrolled in the MSP fleet with priority given to eligible vessels under 46 U.S.C. 53102(b) in consultation with the Department of Defense.These funds will provide a means to help sustain a qualified pool of citizen merchant mariners through vessels’ stipends, mariner credentialing, and apprentice training.This will also help sustain an adequate labor pool to be readily available to support crewing government RRF sealift ships when needed.MARAD will work with stakeholders to best leverage these resources to gain viable alternatives on ways to preserve U.S.-flag ships and mariners available to support government sealift vessels.

Port Infrastructure Development

The President’s FY 2014 budget request highlights a new Port Infrastructure Development Program, with a request for $2 million.  The 2010 National Defense Authorization Act (P.L. 111-84) directs the Department to implement a Port Infrastructure Development Program.  Consistent with the legislation, the new program will support development of guidelines and planning for port infrastructure improvements and master plans, including implementation of a pilot grant program to help ports determine optimally effective investment strategies.  Of the request, $1.7 million would be devoted to a pilot program for competitive matching grants advancing sophisticated port infrastructure and investment planning methods, and providing an incentive for close coordination among state transportation authorities.  The balance of the funding will be allocated to partnering with stakeholders to develop guidance and performance measures for evaluating marine transportation benefits and guidelines for the development of port investment plans. 

Maritime Guaranteed Loan Program (Title XI)

Title XI offers loan guarantees for shipyard modernization projects and for building vessels in U.S. shipyards for operation under U.S.-flag registry.  The loan guarantees enable applicants to secure long-term financing at favorable interest rates, sustaining facilities for shipbuilding and ship repair within the U.S., and promoting system capacity and jobs.  The current Title XI subsidy balance for new grantees is $38 million. This will support approximately $421 million in shipyard projects assuming average risk category subsidy rates.  The President’s FY 2014 budget requests $2.7 million for administration of the Title XI guaranteed loan portfolio to ensure agency compliance with the Federal Credit Reform Act, borrower compliance with loan terms, and to process new loan applications.  The current portfolio is $1.8 billion, covering approximately 325 vessels and we are currently evaluating two applications totaling more than $400 million.

ENVIRONMENT

MARAD environmental programs are aimed at reducing pollution and the adverse environmental effects of maritime transportation and facilities on communities and livability; with a focus on obsolete vessel disposal, reducing marine air emissions, and treating ballast water. 

Ship Disposal

The President is requesting a total of $2 million for the Ship Disposal Program in FY 2014.  The FY 2014 request will support the continued steady progress in the removal of obsolete ships from the NDRF for disposal, with emphasis on vessels that are a high disposal priority, most of which remain in the Suisun Bay Reserve Fleet (SBRF). 

There currently are 32 total non-retention ships remaining in MARAD’s three fleet sites awaiting disposal, which is an historic low. With the requested funding level, and available carry-over balances, MARAD will be able to continue the disposal momentum with the expedited removal for recycling of approximately 15 obsolete ships from all three fleet sites in 2014, which will include approximately six SBRF vessels.  The requested funding level is consistent with the requirements of the court-ordered settlement with California.  The agency has already seen to the disposal of 39 of the 57 vessels in the consent decree, and is essentially a year ahead of expectations.

Funding in the President’s request will also cover the costs related to risk mitigation for compliance with the National Invasive Species Act (NISA) and Clean Water Act (CWA), as well as lessen the environmental risk at the fleet sites and recycling facilities.

Nuclear Ship SAVANNAH

The President’s FY 2014 request includes $2.8 million for the inactive Nuclear Ship SAVANNAH, providing for the continuation of support activities including nuclear license compliance, radiological protection, ship husbandry and custodial care, decommissioning planning and preparation, and historic preservation.  

Though management and custodial care of the legacy asset, which is both licensed and regulated as a nuclear power facility and designated as a National Historic Landmark, remains with MARAD’s Ship Disposal Program, the FY 2014 budget requests funding in the agency Operations and Training account to focus on the Nuclear Regulatory Commission’s required nuclear reactor core decommissioning activities, which must be initiated by 2026 and completed by 2031. 

Maritime Environment and Technology Assistance

The most pressing environmental issues facing the maritime industry are invasive species in ballast water, energy use, and air emissions.  The President’s FY 2014 budget requests $2 million for environmental sustainability efforts for these areas. 

MARAD has been called upon by industry and government agencies to help address these environmental pollution issues, and we recognize that more must be done to transition toward a greener maritime future.  The budget request will continue to advance critical research to develop a ballast water discharge standard, advance infrastructure and methodologies for certifying and verifying ballast water technologies, and improve vessel emissions data.

These represent the key policy proposals and initiatives highlighted in the President’s FY 2014 budget.  We will continue to keep this Committee apprised of the progress of our programs in these areas in the coming year, including our continuing USMMA management improvements.

Mr. Chairman, I wish to express my appreciation for the opportunity to present and discuss the President’s FY 2014 request for MARAD, and for the Committee’s continuing support for maritime programs and those that benefit from them, including the maritime industry, employees, shippers, travelers, and consumers of goods.  I look forward to working with you on advancing maritime transportation in the United States, and am happy to respond to any questions you and the members of the Committee may have. 

Thank you.

STATEMENT OF

KAREN L. VAN DYKE
DIRECTOR, POSITIONING, NAVIGATION, AND TIMING
& SPECTRUM MANAGEMENT
U.S. DEPARTMENT OF TRANSPORTATION

BEFORE THE

SUBCOMMITTEE ON COAST GUARD AND
MARITIME TRANSPORTATION
U.S. HOUSE OF REPRESENTATIVES

Hearing on

The Federal Radionavigation Plan, H.R. 1684, the Foreign Spill Protection Act,
and H.R. ----, the National Icebreaker Fund Act of 2015

July 28, 2015

Chairman Hunter, Ranking Member Garamendi and Members of the Subcommittee:

Thank you for the opportunity to appear before you today to discuss the Federal Radionavigation Plan and the importance of positioning, navigation, and timing systems to America’s national security, homeland security, economic security and efficiency.

Positioning, Navigation, and Timing (PNT) capabilities are critical for transportation safety, efficiency and capacity-increasing programs, including major initiatives such as the Federal Aviation Administration’s air traffic control mission, Intelligent Transportation Systems (ITS), and Positive Train Control (PTC). The Global Positioning System (GPS), in particular, is used for every mode of transportation, and there are numerous safety and efficiency applications of this enabling technology that provide tremendous benefit to America’s transportation infrastructure.  GPS is a key technology for vehicle collision-warning and crash-avoidance systems while enabling shorter routes, increased time and fuel savings, and reduced traffic delays across all modes of transportation.

As designated by the 2004 National Security Presidential Directive (NSPD)-39, the Department of Transportation (DOT) has the lead responsibility for the development of requirements for civil applications from all United States Government civil Departments and Agencies. In addition to the transportation applications, GPS is essential for the safe and efficient operations of first responders, search and rescue, resource management, weather forecasting, earthquake monitoring, surveying and mapping, precision agriculture, telecommunications and financial transactions. 

The Deputy Secretary of Defense and Deputy Secretary of Transportation co-chair the National Executive Committee (EXCOM) for Space-Based Positioning, Navigation, and Timing, which includes representatives from seven cabinet agencies, the National Aeronautics and Space Administration (NASA), and the Joint Chiefs of Staff.

Since 1980, the Federal Radionavigation Plan (FRP) has been the official source of positioning, navigation, and timing strategy and planning for the Federal Government. It is jointly developed biennially by DOT, the Department of Defense (DoD), and the Department of Homeland Security (DHS).

The 2014 FRP contains six sections:

• Section 1 – Introduction to the Federal Radionavigation Plan: Describes the purpose, scope, and objectives of the plan, including an overview of the National PNT Architecture, and discusses PNT system selection considerations.
• Section 2 – Roles and Responsibilities: Presents DoD, DHS, DOT, and other Federal agencies’ roles and responsibilities for the planning and providing of PNT services.
• Section 3 – Policy: Describes the U.S. policy for providing each Federal PNT system identified in this document.
• Section 4 – PNT User Requirements: Summarizes performance requirements for availability, accuracy, integrity, etc. for civil applications.
• Section 5 – Operating Plans: Summarizes the plans of the Federal Government to provide PNT systems and services for use by the civil and military sectors. This section also presents the research and development efforts planned and conducted by DoD, DHS, DOT, and other Federal departments and agencies.
• Section 6 – PNT Architecture Assessment and Evolution: Summarizes the activities and plans of the Federal Government to implement the National PNT Architecture.

The FRP also contains appendices covering System Parameters and Descriptions, PNT Information Services, and Geodetic Reference Systems and Datums.

Section 5.1.2 of the FRP recognizes the need to mitigate disruptions to GPS. Like all radio-based services, GPS is subject to interference from both natural and human-made sources. A loss of GPS service, due to either intentional or unintentional interference, in the absence of any other means of navigation, would have varying negative effects on operations. As stated in the FRP, the U.S. Government encourages all GPS users to be aware of the impacts of GPS interference and incorporate or integrate alternative PNT sources where needed to ensure continued operations. The Federal Aviation Administration (FAA), for instance, is currently developing requirements and recommendations for future alternative PNT solutions that address mitigations for GPS disruptions.

Sub-sections of section 5.1.2 document sector-specific mitigations and operational procedures to mitigate vulnerabilities to GPS. The FAA currently maintains a ground-based navigation aid infrastructure that serves as the aviation backup to GPS.  The ground infrastructure, as documented in the FRP, includes Very High Frequency (VHF) Omni Directional Ranging (VOR), Distance Measuring Equipment (DME), and the Instrument Landing System (ILS).  The FRP also documents research into use of multi-sensor PNT systems such as inertial navigation systems, light detection and ranging (LIDAR), and map matching.

Modern transport-category aircraft with inertial systems may be able to continue navigating safely for a period of time after losing PNT position updating, depending on the route or procedure being flown. In some cases, this capability may prove adequate to depart an area with localized interference, or alternatively the flight can proceed under visual flight rules (VFR) in appropriate weather conditions. However, inertial performance without PNT updates degrades with time and will eventually fail to meet airspace requirements.

Integrated GPS/inertial avionics, as well as improvements in antennas and algorithms, could provide increased interference resistance, effectively reducing the area affected by GPS jamming or unintentional interference. Industry research is proceeding to enhance these technologies, with an expectation that they might be marketed to a broader cross section of the aviation community at some point in the future.  

GPS enables the safe and efficient movement of waterborne commerce along the U.S. Marine Transportation System, and is especially critical as ports become increasingly congested with larger containerships, tankers, and passenger vessels.  In the event of a GPS disruption, methods of conventional navigation, such as shipboard radar, visual aids to navigation, fathometers, and paper charts, may help maintain the flow of commerce along waterways and in ports.  However, ports may have to reduce the number of allowed vessel movements, and port congestion may become even more problematic and costly, in addition to an increased risk of maritime accidents.  In addition, USCG exercises a certain amount of control over the waterways, under the authority vested in the Captain of the Port, and may close waterways or restrict marine activity during adverse conditions or special operations.

Surface transportation agencies are working with industry to ensure that safety-critical systems that use GPS and its augmentations consider the loss of these PNT services and are able to mitigate its effects. The Federal Railroad Administration (FRA) encourages an integrated approach to technology by railroads that incorporates systems that are interoperable, synergistic, and redundant. These technologies and procedures include dead reckoning from fixed points using wheel tachometers, inertial navigation systems (INS), sensor circuits, signaling systems, and dispatcher operations. These redundant systems and procedures ensure the safe and efficient operation of the railroad system during the loss or disruption of GPS.

Because it is expected that signal availability from GPS may not be adequate for surface users experiencing canopy or urban canyon obstructions, the integration of complementary and/or alternate systems that perform a verification test on the GPS navigation solution and that support continued operation in the event of degradation to the GPS signal will be employed in a multi-sensor system-of-systems configuration.

The PNT EXCOM is currently investigating use of an eLoran system to serve as a backup PNT capability to GPS. In March of 2015, the Department of Transportation invited comment from the public and industry regarding consideration of an eLoran system as a backup PNT capability to GPS.

There were approximately 200 responses to the Federal Register Notice.  Most responses were not application-specific, other than for maritime use.  The aviation community, in general, favored use of existing ground-based navigation aids.

In closing, I would like to say a few words about the Nationwide Differential GPS (NDGPS) service which augments GPS by providing increased accuracy and integrity using land-based reference stations to transmit correction messages over radiobeacon frequencies.

As discussed in Section 5.3.4 of the FRP, DHS, in coordination with DOT, is analyzing the future requirements for NDGPS to support investment decisions beyond Fiscal Year 2016. Future investment decisions might include maintaining NDGPS as currently configured, decommissioning NDGPS as currently configured, or developing alternate uses for the NDGPS infrastructure.

Discussion on the future of NDGPS, as well as on a backup PNT capability, is planned for the next meeting of the National Space-Based PNT Executive Committee in September.

Thank you and I look forward to answering your questions.

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