Maritime Administrator, FMC Chairman Underscore Need for Strong U.S. Fleet

April 2010

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Addressing the Maritime Trades Department executive board Feb. 26 in Orlando, Fla., U.S. Maritime Administrator David Matsuda and Federal Maritime Commission Chairman Richard Lidinsky reiterated the strong support of their respective agencies for the U.S. Merchant Marine.

The Maritime Administration (MarAd) is part of the U.S. Department of Transportation; its functions include promoting the use of waterborne transportation and the sustainment of a viable U.S. Merchant Marine.

The Federal Maritime Commission (FMC) is an independent agency responsible for regulating oceanborne transportation in America’s foreign commerce.

Matsuda praised the U.S. maritime industry’s strong response to the crisis in Haiti. He also expressed support for the laws that have helped preserve a viable domestic industry – most notably, the Jones Act, the Maritime Security Program (MSP), the America’s Maritime Highway initiative and the Title XI Shipbuilding Loan Guarantee Program.

He went on to stress President Obama’s appreciation of the American maritime industry, noting, “We have the right guy in the White House.”

Matsuda said that the response to the Haiti earthquake once again displayed “what the merchant marine is all about and how we contribute and help in times of need.”

He pointed out MarAd activated seven vessels for Operation Unified Response, and said it was a prudent move considering one ship can carry as much cargo as hundreds of airplanes.

“These ships are crewed by dedicated and skilled U.S. mariners represented by the unions here today,” he stated.

Looking ahead, he said one of the agency’s “major priorities is job creation and the future of our workforce.”

MarAd’s critical missions also include security, preparedness and response. For example, Matsuda described the MSP, which DOT administers, as “a program many of you here (in the MTD) had a hand in helping create. This program guarantees military access to commercial U.S.-flag ships, related logistic services and a workforce of trained U.S. mariners.”

He noted that since the start of 2009, the agency “has worked closely with the Coast Guard and U.S.-flag carriers to approve the reflagging of foreign ships to the U.S. registry under an expedited process. Seven new ships (have been added) since then – that’s approximately 300 new jobs. These U.S.-flag commercial ships, many of them in the MSP program, delivered around half a million containers of equipment and supplies to support U.S. troops in Iraq and Afghanistan.”

Lidinsky discussed the FMC’s history and priorities and drew on his working relationships with figures from labor’s past and present to underscore his commitment to preserving the Jones Act fleet.

He said he has worked in the industry for more than four decades in such places as the old House Merchant Marine and Fisheries Committee and in the Port of Baltimore. He stated it was an honor to know such legendary labor leaders as the late Paul Hall of the SIU.

According to the chairman, while the FMC dates its existence back to 1916, the present shape of the agency took hold in 1961 under a restructuring that gave MarAd control of most promotional programs and which made the FMC the entity in charge of regulation.

“Besides administering our parts of the Shipping Act that impact labor activity,” he said, “we stand in full support of the Jones Act, cargo preference requirements, protection of our mariners from piracy,
and other key laws that form the foundation of American-flag maritime policy.”

Lidinsky devoted much of his speech to “the state of the global maritime economy and its impact on our country and workers.” He said 2009 was an historically bad financial year in maritime, though the challenges certainly weren’t confined to one industry.

Further, he said that although most experts who track the industry aren’t predicting a full recovery in 2010, there are “small signs of the corner being turned and good news in the wings. In the Asia-Europe trades traffic is up nine percent. In our Pacific trade eastbound from Asia to the U.S., container traffic is up 2.2 percent. Experts are predicting growth in the westbound trade of 9.9 percent, with the eastbound trade growing 8.7 percent….

“On the port front,” he continued, “positive signs are being registered, such as Los Angeles, which had a 35 percent increase in containers in December over the previous year. Exports at that port were also up 40 percent. Overall, some economists [predict] a port recovery of 20.2 percent for West Coast ports and 13.1 percent for East Coast ports this year…. The bottom line is that full recovery will come to all maritime trades, so don’t lose determination and hope.”

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David Matsuda, Maritime Administrator

David Matsuda, Maritime Administrator

Richard Lidinsky, Federal Maritime Commission Chairman

Richard Lidinsky, Federal Maritime Commission Chairman