America Builds: Maritime Infrastructure

Chairman Mike Ezell (R-MS)SPEAKER_07

The Subcommittee on Coast Guard and Maritime Transportation will come to order. I ask unanimous consent that the chairman be authorized to declare a recess at any time during today's hearing. Without objection, so ordered. I also ask unanimous consent that members not on the subcommittee be permitted to sit with the subcommittee at today's hearing and ask questions. Without objection, so ordered. As a reminder, if members insert a document into the record, please do so at email it to documentsti@mail.house.gov. I now recognize myself for the purpose of an opening statement for 5 minutes. Before I get to my remarks on the topic of the hearing today, I first want to send my condolences to all who were impacted by the tragic, last week, DCA airport crash. Suzette and I send our thoughts and prayers and thank all first responders, including the Coast Guard, that were there in the immediate aftermath. Today, the subcommittee meets for its hearing of the 119th Congress and continues the Transportation and Infrastructure Committee's America Builds series to discuss the nation's maritime infrastructure. It is clearly critical that we must build a safer and more efficient system. I'm also happy to say this is my first hearing as subcommittee chairman. I'm excited to lead the subcommittee this Congress in addressing the many important issues facing the maritime industry. I look forward to working under the leadership of Chairman Graves in this position. Continuing on today's topic, America's marine transportation system consists of navigable waterways, commercial ports, and landslide connections—landside connections, which help to move millions of passengers and billions of dollars worth of cargo every year. Nearly all the country's inbound or outbound cargo is transported by ships, requiring a robust of maritime infrastructure to ensure the movement of goods. Ports play a prominent role within this system, providing access to connections for cargo to move inland to final destinations and outward outbound for export overseas. Marine terminals within each port load and unload cargo. That cargo is then transported both domestically and to other points in the United States, which is also known as coastwise trade, or it is moved internationally to foreign markets. In order to participate in coastwise trade between two domestic points, a ship must be Jones Act qualified, meaning the ship is U.S.-built, U.S.-crewed, and U.S.-owned. The Jones Act is a fundamental statute for the domestic maritime industry. The Jones Act is quite literally the bedrock and foundation of our nation's shipbuilding industrial base because it helps to maintain a pool of qualified American mariners that we rely on to transport goods and our military in times of peace and war. Unfortunately, the rise of shipbuilding industries of global competitors has led to the decline in our own shipbuilding capacity. Coastal Mississippi and the Gulf Coast as a whole is home to several shipyards employing thousands of Americans. I look forward to discussing ways to reinvigorate this critical industry. In order to promote the domestic maritime industry, the Maritime Administration in the United States Department of Transportation administers several programs that fund projects to construct and expand maritime infrastructure and U.S. shipbuilding. I hope to look at the current operation of each of these programs to find ways we can improve them and look forward to recommendations from our stakeholders here today. Additionally, autonomous maritime technologies are creating new challenges, requiring us to reassess current maritime infrastructure to ensure their safe operation. United States Coast Guard is in charge of developing a framework from which these new technologies can safely operate. However, development of these technologies outpaces the regulatory rulemaking process. We understand the Coast Guard will need to focus on developing regulatory standards that provide for the adequate testing, safe integration of these technologies in the marine transportation system, and appreciate any insight you can provide. Thank you for all being here today, and I look forward to discussing the build-out of America's maritime infrastructure. I now recognize Ranking Member Carbajal for an opening statement for 5 minutes.

Ranking Member Salud Carbajal (D-CA)SPEAKER_01

Good afternoon, and thank you, Chairman Ezell, for calling today's hearing. And congratulations on your new post as chair of the Coast Guard and Maritime Transportation Subcommittee. I look forward to working together with you to get things done. I hear that we already share the same value on the Jones Act, so I appreciate your position on that. Before I turn to the matter at hand, I have to express some concern and discuss what I consider was an outrageous executive action directed at the Coast Guard, specifically the unprecedented, misguided, and clearly political firing of Coast Guard Commandant Admiral Linda Fagan. As the first female service chief of any branch of the military, Admiral Fagan served with honor and distinction and exhibited a true commitment to making things better for the service as a whole. It is deeply unfair for this administration to invent a false narrative for her termination and use that as a basis to engage in political theater and retribution. While we have made great strides in recent years in bolstering our ports, waterways, and maritime industry, we cannot take our foot off the pedal. The Bipartisan Infrastructure Law alone invested more than $17 billion in our ports and waterways. This funding has been used to fund repairs, upgrades, and replacements to reduce port and vessel congestion and to strengthen our supply chain. In addition, cutting emissions near ports by boosting electrification and investing in other low-carbon technologies to reduce overall environmental impacts is critically important as we continue to battle climate change. Since BIL funding expires in 2 years, I look forward to working together to draft BIL 2.0. U.S. ports accounted for almost $3 trillion in gross domestic product in 2024. The sheer volume of cargo moving in and out of ports would not be possible without robust infrastructure and strong workforce to support it. Another area that is primed for robust U.S. investment is offshore wind. Adding clean energy production into the maritime domain is a win-win for the U.S. maritime industry, creating jobs for mariners, business at ports, and shipbuilding opportunities for companies and shipyards, many of which have already made a significant investment. I believe we are at a crossroads in the maritime domain, facing a critical deficit in the number of U.S. shipyards, U.S. mariners, and U.S. vessels. And every mariner who does business in the United States knows the Jones Act is the foundation of the United States maritime industry. At its core, it is designed to protect the U.S. commercial shipbuilding industry and requires any vessel participating in coastwise trade to be United States-owned, United States-crewed, and United States-built. We have an opportunity now more than ever to leverage its built-in barriers and revitalize the maritime industry. If the United States intends on keeping pace with capacity and technology, to maintain the steady-state flow of goods, we must continue to prioritize programs such as the Port Infrastructure Development Program, the Small Shipyard Grant Program, and the Federal Ship Financing Program, Cargo Preference, and Title XI. Building our shipyards is a top priority for our nation's maritime governance and also our national security. Our commercial mariners and our military depend on reliable shipyards to build and repair our U.S. fleet. We know that having only four shipyards left in America is not sustainable, but building ships is not enough. To remain competitive internationally, we must ensure that U.S. flagships have cargo to carry. Even more so, I am concerned that the administration-manufactured turmoil at the Coast Guard will lead to serious risks in the maritime transportation system, risks that we cannot afford to make. I am hopeful that this hearing can shed light on the positive impacts that the loan and grant programs have had on this industry. Also, I want you to be critical and honest. What is it going to take to return the U.S. to global competitor in shipping and shipbuilding? Thank you, and I yield back.

Chairman Mike Ezell (R-MS)SPEAKER_07

I now recognize Mr. Larsen, the ranking member of the full committee, Mr. Larsen, for 5 minutes for an opening statement.

Full Committee Ranking Member Rick Larsen (D-WA)SPEAKER_04

Thank you. Thank you, Chair, for calling this hearing. And congrats on your new role.

Chairman Mike Ezell (R-MS)SPEAKER_07

Thank you.

Full Committee Ranking Member Rick Larsen (D-WA)SPEAKER_04

Your history of bipartisanship and support for the maritime industry and Coast Guard will greatly benefit the subcommittee. Before we dive into the topic of the hearing, I want to address news of a few weeks ago, which was the sudden termination of Commandant of the Coast Guard Admiral Linda Fagan. I think what the president did was unjustified. It was reckless. Never before in the history of the service has a commandant been relieved, let alone for political purposes. I want to thank Admiral Fagan for all that she has done for this country. Acting Commandant Lunday and the next commandant must continue to move the Coast Guard forward, building upon the foundation Admiral Fagan built. The Coast Guard needs to continue to make significant improvement regarding sexual assault and sexual harassment, needs to continue improvement on recruiting and retention, and ensuring that the service is more inclusive for everyone. That work has to continue. It is my hope for today's hearing, though, that we focus on the important work of building America's maritime infrastructure, but I am concerned that work that work is being undermined. The president's executive order to pause infrastructure funding from the Bipartisan Infrastructure Law and Inflation Reduction Act is putting billions of dollars, hundreds of thousands of jobs, and tens of thousands of projects at risk. While last week's broader memorandum from the Office of Management and Budget to freeze all federal assistance programs was rescinded, BIL funding, including the Port Infrastructure Development Program grants, remain in limbo. Continued threats and actions to claw back infrastructure funding are sowing chaos and will have devastating impacts on the maritime industry, national security, and economic security. Across the country, there are over 300 ports. Of these, 20 handle the vast majority of container cargo, and only two U.S. ports are in the top 20 ports globally, while China has seven of the top 10. This is not due to the lack of maritime activity in the U.S. It is because China heavily subsidizes port and maritime operations, while the U.S. does not. During the supply chain crisis in 2021, the Biden administration mobilized funding to increase capacity and productivity. These efforts by the Biden administration, coupled with the hard work of longshore workers and many others in maritime, pulled us out of the supply chain crisis. Since then, over $2.18 billion in Port Infrastructure Development Program funding has gone to ports across the country to bolster safety and reliability. Ports like Houston, Texas, received $25 million. Bay Bay St. Louis, Mississippi, received $4 million. The state of Alaska has received over $50 million for uses across the entire state just in this fiscal or just in fiscal year '24 alone. These states are benefiting from the Bipartisan Infrastructure Law. Let's keep it going. And I want to mention the Clean Ports Program that the Environmental Protection Agency administers and has assisted in the deployment of shore power to ports across the country, including a $63 million grant to the Port of Anacortes in my own district, which includes not just bringing shore power, but a total redevelopment of a wholly underutilized area of the Port of Anacortes to create jobs and bring private sector jobs there, including having a signed grant agreement that now the EPA has inexplicably paused and is delaying the creation of these private sector jobs. This is inexplicable, and I ask the EPA to provide an explanation of what it is doing to to get this grant going again, as well as the ones that are going to the Port of Bellingham, also in my district, and any other port that is expecting these these these grants from a signed grant agreement. Investing in shore power not only improves air quality and reduces pollution, it's consistent with standard operations at ports around the globe. Shipping companies want to cut pollution. Ports want to be competitive. Rescinding funding for ports that were passed as part of the Bipartisan Infrastructure Law and the Inflation Reduction Act puts our ports at a disadvantage. It is shortsighted, and we will not go quietly letting this happen. America's shipyards are an essential piece of maritime infrastructure. They are falling behind due to international competition, due to unfair and subsidized competition. Larger shipyards have no dedicated grant program and rely heavily on government and commercial contracts to stay afloat. Buy America requirements in the Jones Act help ensure shipyards maintain steady business by requiring shipbuilding and manufacturing to take place in the U.S., and I was heartened to hear Secretary Duffy's support for the Jones Act during his confirmation hearing. The Jones Act has strong support among members of this committee. It's critical to the maritime industry. Thanks to the historic levels of federal investment, this nation's transportation system and its infrastructure are better today than they were 4 years ago. Continuing this progress requires ongoing investment, especially in the maritime industry. Let's keep it going. Thank you. I yield back.

Chairman Mike Ezell (R-MS)SPEAKER_07

gentleman yields. I now would like to welcome and thank our witnesses for being here today. Briefly, I'd like to take a moment to explain the lighting system to our witnesses. There are three lights in front of you. Green means go, yellow means you are running out of time, and red means to conclude your remarks. In my previous career, I explained lighting systems many times to people that ran a red light. I ask unanimous consent that witnesses' full statements be included in the record. Without objection, so ordered. I ask unanimous consent that the record today's hearing remain open until such time as our witnesses have provided answers to any questions that may be submitted to them in writing. Without objection, so ordered. I also ask unanimous consent that the record remain open for 15 days for any additional comments and information submitted by members or witnesses to be included in the record of today's hearing. Without objection, so ordered. As your written testimony has been made part of the record, the committee asks that you limit your oral remarks to five minutes. With that, Mr. Paul Anderson with Port Tampa Bay, you are recognized for five minutes for your testimony.

A. Paul AndersonSPEAKER_06

Thank you, Mr. Chairman, Ranking Member Carbajal. Thank you for the invitation to testify this morning on a topic that is important to both the nation's economic growth and our security: America's maritime infrastructure. And congratulations on your first meeting as chairman and your appointment to lead this important committee. As the president and CEO of Port Tampa Bay and the current chairman of the Coalition for America's Gateways and Trade Corridors, the immediate past chair of the American Association of Port Authorities, and as a former Federal Maritime commissioner, the work and growth of America's seaports is deeply personal to me, and I'm honored to be here today. At the outset, let me thank two Florida members of this subcommittee, Congressman Dan Webster and Brian Mast, for their tremendous ongoing support for Port Tampa Bay and all of Florida's ports. They recognize the critical role that ports and port operations play in ensuring the efficient movement of cargo to Florida's supply chain to serve our rapidly growing population of 23 million residents. We are proud of the role that Port Tampa Bay plays as Florida's largest and most diverse cargo seaport and as West Central Florida's largest economic driver. According to our most recent economic impact study, we have an almost $35 billion annual impact on our region and support more than 192,000 jobs. Shipbuilding and repair is also an essential operation at Port Tampa Bay and is woven into the history of the port. Today we are home to four shipbuilding and repair facilities at our port and generate nearly 3,000 full-time jobs with an economic impact of $233 million. Our port continues to make strategic investments for our future, including improving the resiliency of our port facilities, growing and expanding our containerized cargo, and, with this committee's support in WRDA 2024, the undertaking of a major new project to deepen our shipping channels to accommodate the growing fleet of large ships that will call at Port Tampa Bay. Through the foresight and support of our champions in Congress, especially members of this committee, America's ports, such as ours, have acquired and updated key equipment and modernized berths and operations and undertaken large projects that expand our ability to move the cargo for our nation. For instance, grant programs such as the Port Infrastructure Development Program have enjoyed bipartisan support since it was founded in 2009, and PIDP is a critical tool for ports to upgrade their infrastructure to keep pace with advancements and compete with ports around the world. I would also be remiss if I didn't mention how important the biennial WRDA process is to our nation's ports for economic and infrastructure progress. It was a great privilege for me to testify before the House Transportation and Infrastructure Committee in December 2023 to help the committee kick off the development of WRDA 2024, and I commend the members of the committee for their leadership in crafting and passing this hallmark legislation to keep WRDA on its biennial schedule. Ports abroad, both allied and adversarial, are investing heavily in their port infrastructure and rightly recognize ports as critical infrastructure. And America must respond in kind by investing in our ports to handle more exports and imports. I was heartened to hear Secretary Duffy in his confirmation hearing commit to doing all he can do to find ways in which to accelerate the processing of federal grants, reform bureaucratic processes at all levels, and deliver funds more efficiently so that ports like ours can deliver important projects on time and at or under budget. I was also very pleased to hear his support for the Jones Act. Thank you for your support of the men and women of the United States Coast Guard, who are unheralded partners in our work to secure America's ports and waterways, particularly in the growing threat of cybersecurity. We have a seamless working relationship with our Coast Guard partners in the greater Tampa Bay area, and we truly appreciate the work the men and women of the Coast Guard do for our nation. Thank you for your time, your consideration, and your pivotal role in shaping the future of our nation's maritime industry.

Chairman Mike Ezell (R-MS)SPEAKER_07

Thank you, Mr. Anderson. We now recognize Mr. Joe Rella with St. Johns Ship Building, Incorporated. You are recognized for 5 minutes for your testimony. Button.

Joe RellaSPEAKER_09

Can you hear me now? Okay. That was good: 10 seconds remaining. I hope I'll be as good with that. So, yeah. Uh Chairman Ezell, Ranking Member Carbajal, and distinguished members of the subcommittee, thank you for the opportunity to testify today on behalf of the U.S. shipyard industry. My name is Joe Rella. I am president of St. Johns Ship Building, based in Palatka, Florida. I'm here to discuss the critical role U.S. shipyards play in America's marine transportation system, the economic impact of our industry, the importance of investment in maritime infrastructure, and the state of the U.S. shipbuilding industrial base. Before diving in, I would like to share a bit about myself and St. Johns Ship Building. I'm a former enlisted U.S. Navy Nuclear Power School graduate with degrees from the U.S. Merchant Marine Academy in marine engineering and Spring Hill College, MBA, Spring Hill in Mobile, Alabama. I received a commission in the Navy Reserve upon graduation from the Merchant Marine Academy. I have sailed on, in the U.S. Merchant Marine, as a licensed engineer and participated in the Strategic Sealift supporting Operation Desert Shield. My experience in shipbuilding and repair includes U.S. Navy and commercial vessels and both blue- and brown-water service. I am a former president and chief operating officer at Austal USA, and now president of St. Johns Ship Building. St. Johns Ship Building is a full-service shipbuilding and marine repair company specializing in new construction and repair of a wide variety of aluminum and steel vessels. While the shipyard's history has been primarily commercial, we recently were awarded a contract with the U.S. Army Corps of Engineers for two stop-log barges, which signifies our entry into supporting the U.S. government with new construction and repair service. The U.S. shipyard industry is diverse and operates in several sectors, including government new construction, government repair and modernization, commercial repair and modernization, and commercial new construction. According to the Maritime Administration, there are 120 active shipyards in the United States, spread across 27 states, with shipyard-related and -induced jobs touching all 50 states. Shipyard companies have diversified their waterfronts to contribute to multiple sectors, and some are also utilizing their skilled workforce to contribute to non-maritime construction. A 2021 study by the U.S. Maritime Administration found that the industry supports more than 390,000 direct and indirect jobs across the United States and contributes $42.2 billion annually to the GDP. From our industry's perspective, the Jones Act is absolutely essential to the commercial shipbuilding sector. The Jones Act, which comes at no cost to the government, helps maintain a merchant marine to carry out our domestic waterborne commerce. The law also ensures that the U.S. maintains critical shipyard infrastructure and associated skilled workforce that can build, repair, modernize, and maintain more than 40,000 vessels of the domestic Jones Act fleet. This industrial base also ensures there is sufficient workforce to support the construction and repair of our critical national security fleets. U.S. shipyards build some of the most technologically advanced vessels in the world. For example, the world's first LNG-powered container ship was built in the U.S. and is now serving the Puerto Rican trade. Our shipyards also build world-class offshore service vessels for oil and gas exploration, offshore wind development and production, vessels of all types for the Coast Guard, and the most advanced and lethal fleet for the United States Navy. As we look at the current state of the U.S.-flagged maritime industry, we need to ask ourselves, What's next? At the end of the 118th Congress, bipartisan and bicameral legislation was introduced: the SHIPS for America Act, sponsored by Senator Mark Kelly, Senator Todd Young, Senator Trent Kelly, Congressman John Garamendi, and Congressman Mike Waltz, who happened to be our congressman at the time. The proposed legislation would provide, for the first time, a national maritime strategy to grow the entire maritime industrial base, from shipbuilding to maritime logistics to the merchant mariner workforce. The bill proposed the construction of a fleet of strategic commercial assets, including 250 vessels for international commerce and 100 tankers for the Tanker Security Program, among many other legislative proposals to better support the U.S. maritime industry and infrastructure for the education facilities that are in dire need of infrastructure improvement, such as the Merchant Marine Academy. If we were to undertake such a shipbuilding campaign, there will need to be substantial expansion in both shipyard facilities and workforce. Private industry will make the commitment based on the signals provided by the Congress and the administration and the legal certainty provided under this comprehensive legislative proposal. In conclusion, the U.S. shipyard industry plays a vital role in supporting the nation's economic and national security needs. Continued investment in maritime infrastructure and support for the domestic shipbuilding industrial base, including the Jones Act build requirement, is essential for maintaining a robust and competitive maritime industry. I urge the subcommittee to continue its support for these critical initiatives. Thank you for the opportunity to testify today. I look forward to answering any questions that you may have. And I have a minute and 16 seconds to go.

Chairman Mike Ezell (R-MS)SPEAKER_07

took some of his time. Thank you. Chair, now recognize Mr. Reynolds with Seasats. You're recognized for 4 and a half minutes for your testimony.

Tom ReynoldsSPEAKER_02

Chairman Ezell, Ranking Member Carbajal, and distinguished members of the subcommittee, thank you for the opportunity to testify today. I'm Tom Reynolds, the Chief Strategy Officer at Seasats Inc., a small business based in California which develops and manufactures unmanned surface vessels for defense, scientific, and commercial customers. I am a member of the Association for Uncrewed Vehicle Systems International on their board of directors and the founder and the first chairman of AUVSI's Maritime Advocacy Committee. I am testifying today on behalf of AUVSI, the world's largest not-for-profit organization dedicated to the advancement of uncrewed systems, autonomy, and robotics. By way of background, I have over 22 years of operational and developmental experience with maritime unmanned systems. I'm a retired U.S. Navy explosive ordnance disposal officer and surface warfare officer, a former EOD branch chief at Joint Special Operations Command, the former 5th Fleet EOD and diving task group commander, the former 5th Fleet maritime intelligence task group commander, and the former commanding officer of the world-famous deep-sea divers at Mobile Diving and Salvage Unit 2 in Little Creek, Virginia. I became involved with unmanned systems as a member of an experimental Navy-Marine Corps unit established in the late '90s. I began working with them in 2002 to develop new unmanned underwater vehicles, which we then— I then planned and executed their first combat use in 2003 during the invasion of Iraq. I went on I went on to conduct five additional combat tours in Iraq and a few more combat deployments to other locations in 2012. Notably, all of these included the use of unmanned systems: maritime, air, and ground. I now have 13 years in industry. All of these have been dedicated to the design and manufacture of maritime robotic and unmanned systems with the end-user in mind. I have served as an executive in the largest unmanned underwater vehicle company in the world, as an executive with a leading U.S. shipbuilder, and now with a terrific small business there in Southern California, Seasats Inc. What I hope to express in this testimony is that robotic systems have a value to the United States in the maritime domain, that regardless of views or our position on them, our competitors are developing and deploying them faster and more effectively than we are because they have recognized this value. Yet, our current regulatory framework has not kept up with this advance in technology, and our current rules are impeding the development and operation of a modern maritime economy. In addition, the principal leader in our national maritime regulatory framework, the U.S. Coast Guard, operates no robotic or autonomous ships or boats or underwater vehicles of its own. Zero. It is unfair to expect that our Coast Guard can effectively regulate something it has not been equipped to experience itself. Finally, on behalf of AUVSI, I offer our association's full support and commitment to work with the government to develop responsible standards for safety certification, update to the rules of the road, as well as support the development of a workforce needed in this modern maritime economy. Thank you, and I am looking forward to your questions.

Chairman Mike Ezell (R-MS)SPEAKER_07

Thank you. Gentleman yields. I now finally recognize Mr. Brian Schoeneman with Seafarers International Union of North America. You are recognized for 5 minutes.

Brian W. SchoenemanSPEAKER_05

Welcome aboard, Chairman Ezell, and thank you, Ranking Member Carbajal and the rest of the Coast Guard Subcommittee for holding this hearing. My name is Brian Schoeneman, and I serve as political and legislative director for the Seafarers International Union. I'm also chair of USA Maritime, the coalition of shipping companies, associations, and unions that make up the fully manned, U.S.-flag international fleet. The goal of this hearing is to discuss the current state of our maritime infrastructure. I would rate our infrastructure a solid C. There's much work to be done if we're going to catch up to the rest of the world, particularly China, who has invested billions, if not trillions, into their maritime sector. In less than 30 years, China has emerged as the dominant commercial maritime power. They're the world's largest shipowner. They are the world's largest shipbuilder, and they control most of the world's trailer chassis, maritime cranes, and shipping container supply. In that same time period, the United States has invested a pittance, and our industry scrambles each year to convince Congress to spend the money needed to adequately fund our handful of government programs like the Maritime Security Program. And I would ask each of you to join us in that effort this year so that Congress will again give us full funding for these programs. Now, while we aren't failing when it comes to our infrastructure, we are on the brink of failure. Why? Because we, as a nation, have not made maritime a priority. Our strategic opponents have, and the proof is all around us. So how do we fix it? Fortunately, we have all the tools we need. We just need to use them. America needs more mariners. We need more cargo, and we need more ships of all types, from icebreakers and fireboats to ocean-going commercial vessels. We can fix these problems by making maritime a priority again, like it has been in our past. We continue to work hard to solve our current mariner shortage. Even before COVID-19 made a bad problem worse, the industry was focused on recruitment and retention. Since COVID, we've worked hard to claw back our losses and bring new mariners into the fleet. Some of this required legal changes, including a pilot program that helped us cut the time needed to create able seafarers in half, which we urge Congress to make permanent. The rest required a change in how we recruit. The world has changed. In the past, the Merchant Marine sold itself: see the world, visit exotic locations, and get paid to do it. That was the message, and it brought in all the mariners we needed. Today, your average mariner doesn't care nearly as much about pay or where they're going. They're more likely to ask, Is there Wi-Fi on the ship? Quality of life, more than anything else, is the name of the game now. Where we train mariners also needs work, and Joe alluded to this. The United States Merchant Marine Academy needs significant investment to repair crumbling infrastructure. And while our private-sector training schools, particularly our union schools, are world-class, Kings Point and the various state academies have long suffered from too little attention, a lack of funding, and declining enrollments. When it comes to ships, we're not living up to our aspirations. Current law says America must have a merchant marine sufficient to carry a substantial portion of our waterborne foreign commerce. We don't do this. Our fleet carries less than 2% of our foreign commerce and represents less than 0.4% of the world's shipping fleet. We saw the damage overreliance on foreign shipping creates during the most recent supply chain crisis. More U.S.-flag market share will help to strengthen the resilience of our national supply chain. The Jones Act keeps our domestic industry strong, but we have no such protections for the international fleet. American ships have become too dependent on government cargo. This cargo is barely enough to maintain the handful of ships we currently have. Defense cargo is down as we are supporting fewer warfighters across the globe, and in one of the first acts of the new administration, they suspended foreign aid cargo. Let me be clear. There is no more America first set of foreign aid programs out there than the Title II, P.L. 480 Food for Peace program and the Food for Progress programs. These are programs that work. They are programs where you buy food grown by Americans, carried by Americans on American ships to feed hungry people around the world. Food for Peace supports American mariners and farmers, and it helps expand demand for our products overseas. These aren't just giveaway programs. These programs must be restarted before it costs us even more ships and jobs than it already has. America also needs new sources of commercial cargo. The best way to get new cargo, in our view, is the creative use of the tax code, providing tax incentives and discriminating tariffs that benefit shippers when they put America first. Like Buy American laws, we want to create Ship American incentives that get businesses to contract with U.S. carriers to carry more cargo. For us to compete against China, we must change our priorities, and it needs to start today. We can't afford to wait any longer. Each day we wait, the price tag increases, the potential downside of doing nothing increases, and each day we wait, our strategic opponents grow stronger. The time for half-measures and incremental progress is over. We need bold, decisive action, and it must be now. Thank you, and I look forward to your questions.

Chairman Mike Ezell (R-MS)SPEAKER_07

Thank you, sir. I'd now like to recognize the former chairman of this subcommittee, Mr. Webster, for his opening 5 minutes of questions.

Rep. Daniel Webster (R-FL)SPEAKER_12

Thank you, Mr. Chairman. Congratulations to you, and thanks for putting this panel together. It's really awesome. It's a good hearing. I ask my good friend Paul Anderson from Port of Tampa: two hurricanes last year damaged a good portion of the Coast Guard's equipment, and some of it was damaged, some of it was actually destroyed, and we they're only limited to partial nighttime operations. And so, I was wondering what your thoughts are on ways we could repair or replace this equipment in a timely manner.

A. Paul AndersonSPEAKER_06

Yeah, thank you very much, Chairman Webster. The double impact of two hurricanes in a 12-day period was truly both extraordinary, unprecedented, and caused great damage to not only people's lives, but the impacts on the ability of Port Tampa Bay to carry cargo into the port. We supply over 10 million residents of the state of Florida and over 60 million visitors the fuel supply. Our fuel terminals were damaged, all seven of them. They were restored very quickly. But the most long-term damage we're still dealing with today, as you alluded to, is the ATONs, the aids to navigation, the the range lights, the channel markers. And it's causing restrictions on our 45-mile channel operations. They're restricting container vessels, but these are Asian service, the largest ships that come into the Gulf of Mexico, are restricted to daytime operations due to the fact that while the Coast Guard is doing everything they can do within their process to restore the navigational aids, the process itself is holding the Coast Guard back to be expedient and nimble in responding to restore repairing these ATONs. And I would propose today the committee consider that for future federal heavy weather events, natural disasters that are declared as a federal emergency, potentially, we could have repaired these with our contractors working with the Coast Guard and have those done. Here we are 5 months later. While the Coast Guard did have the emergency funding, it's going to take them at least until the end of summer, where we're going to be here almost a year without full operations. And I think we are great partners with the Coast Guard. They are doing everything they can. But as we all know, there are certain regulations. They do not have the authority to do a public-private partnership in this instance. I know, Chairman Ezell, we talked about this last year in the WRDA hearing. They can be very powerful multipliers of expediting projects. And in this case, it would get us back to full operations at Port Tampa Bay.

Rep. Daniel Webster (R-FL)SPEAKER_12

much. There's been a lot of talk about also the cranes in the in the port being manufactured by China. And you were you were the president of the whole association, American Association of Port Authorities, and what do you what do you think the security risk is in using those cranes, and what does it mean for America's ports and their supply chain?

A. Paul AndersonSPEAKER_06

Well, yes, you're referring to the American Association of Port Authorities. We did a study among American port members, and over 80% of the ports in the United States are manufactured, the size, by ZPMC, a CCP-controlled and funded company. Our port ourself, because we had low-bid state laws, required us to buy our first two post-Panamax heavy-lift cranes from China. But we are preparing to buy two additional cranes, three additional cranes, that will be by allied partner. There's only three in the world. This will be a German company, but manufactured in Ireland, and we're doing that because of the security risk that we feel there will be. I know that agencies within the government that have oversight of this also have looked deeply into this. And I do believe there is an ongoing risk with the, in the competitive aspect. Mr. Larsen outlined his concerns about China and their subsidies, unfair competitive advantage it gives and works against American companies. I do believe we should also move boldly, quickly, as I heard from my fellow testifier down at the table, to support the American manufacturing not only of shipyards, because cranes are built at shipyards. We have the capacity and the know-how to build these. We just need to move, and really, it needs to be led by all of you here in Congress, not only as authorizers, but as appropriators.

Rep. Daniel Webster (R-FL)SPEAKER_12

Thank you very much. Uh, I yield back, Mr. Chairman.

Chairman Mike Ezell (R-MS)SPEAKER_07

gentleman yields. Chair now recognizes Mr. Larsen for his 5 minutes of questioning.

Full Committee Ranking Member Rick Larsen (D-WA)SPEAKER_04

Thank you. Thank you, Mr. Chair. Mr. Anderson, you're going to be highlighted a little bit early on here. So, I noted during my initial statement that the Port of Anacortes and the Port of Bellingham as well had their Clean Ports grants frozen or paused, or we're not we're not quite sure what the right verb is yet. It's it's a dumb move. It's disastrous. I noted Tampa, Port Tampa Bay has a $1.8 million planning grant under the under the program. And there's ports in Alaska with having $45 million, ports around the country. No idea if all those are frozen or paused. Can you give me the status of your particular grant?

A. Paul AndersonSPEAKER_06

Yeah. So, thank you, Mr. Larsen. Our entire industry is very alarmed and concerned about the pause on on grant funding. There's a lot of uncertainty. In fact, just last week, we had an emergency board call of many of our members representing the West Coast, Great Lakes, East Coast, and the Gulf ports. And it will be very difficult and burdensome for ports that have had planning and strategic planning involving the use of federal grants. I believe we're very, very early on in in this new administration. I think and we discussed, we just need, I think, patient, let this work its way out. We just can't stop delivering funds. I think once they're reevaluated and looked at, pragmatism will win the day. We believe that these grants, including all the grants in the Bipartisan Infrastructure Law, the Port Infrastructure Development Program, and the other grants are critical to competing on the world stage with ports around the country.

Full Committee Ranking Member Rick Larsen (D-WA)SPEAKER_04

Yeah, I think these investments— the administration has been clear they don't believe in climate change or don't want to fund climate change, and if that's their view, that's fine. But my dad was a lineman for the Snohomish County Public Utility District. They put electric wires up everywhere, and we didn't call it anything but utilities. That's all it is. It's nothing nothing more than that. And it's getting wrapped up in this other discussion, when in fact, moving forward, in our case, at the Port of Anacortes, we developed a wholly undeveloped underdeveloped piece of property that's been sitting unused to its maximum jobs potential for a long, long time. And now that's on pause. I imagine that story is being told in every Democratic and Republican district in this country right now because of this uncalled-for uncalled-for pause. Mr. Schoeneman, you discussed somewhat the issue of P.L. 480. Have you heard concerns specifically about the Trump administration's— my questions say changes. I wouldn't say changes. Destruction of USAID,

Brian W. SchoenemanSPEAKER_05

Right now for us, this is a major issue. We've had— at least I talked to our biggest, one of our biggest food aid carriers, and they've got ships that are currently sailing. One of them has already been laid up because they don't have cargo. Another one is on its way back from Africa, and it'll get laid up when it gets here. And every time they lay a ship up, that's 20, 30 jobs for my members and for the rest of the industry, and we don't know how long those ships are going to be out of service. In addition, the company is owed $6 million on these contracts, and they're worried about never getting paid. We're not talking about big, massive corporations here. We're talking about small, family-owned businesses that need that money, that are operating on a pretty shoestring. And I want to make sure my mariners get paid. I want to make sure my mariners are not trapped in Africa for months at a time if they get a stop-work order while they're unloading a ship, and they just got to sit there. We've had that happen before. It happened a couple years ago on a Food for Progress trip, and my mariners were stuck for months. So we're really concerned about this. And I think, as the president is looking at AID, and I'm regardless of what happens to AID, I think these programs, Food for Peace, Food for Progress, they are critical to not only U.S. farmers, but to the U.S. Merchant Marine, and they are one of our major cargo bases. And if it goes away, I'll tell you, in 2013, the percentage of cargo that we carried under law, we previously had carried 75% minimum food aid cargo. It was cut to 50%. And over the next 10 years, we lost more than a dozen ships from the fleet permanently because the cargo just wasn't there to sustain the work. And if this continues for a while, I expect that's going to happen again. So

Full Committee Ranking Member Rick Larsen (D-WA)SPEAKER_04

Yeah, thanks. I don't want to misquote. I certainly— I think I'm paraphrasing accurately our former colleague Roger Wicker, who's the Senate chair of the House Senate Armed Services Committee yesterday when he outlined the fact that USAID he believed was a good counter to the Belt Road Initiative, China's Belt Road Initiative. And now that tool is potentially, if not already, been taken away to counter China.

Brian W. SchoenemanSPEAKER_05

Absolutely. The bottom line is wherever we walk away, China walks in, and we can't afford to be putting ourselves in a position where we take a step back on the world stage. I was talking to some of my labor colleagues yesterday at the Solidarity Center. We've been working on a lot of these—USAID has been working along with us on a lot of these issues overseas, trying to raise quality of life and provide union support for workers in other countries. And that's the best way for us to raise the standard of living so that our American workers can compete against foreign workers, is to make sure that they're getting the same pay and benefits and treatment that our guys get so that that isn't an issue. So not having AID out there doing that is pretty bad.

Full Committee Ranking Member Rick Larsen (D-WA)SPEAKER_04

All right, thank you. I yield back except to say I love the Small Shipyard Grant Program, too, Mr. Rella.

Chairman Mike Ezell (R-MS)SPEAKER_07

Gentleman yields. I now recognize myself for 5 minutes for questions. Mr. Anderson, you mentioned in your testimony the catastrophic damage caused by Hurricanes Helene and Milton has devastated navigational aids in your shipping channel. There's been discussion on how public and private partnerships may be used to benefit both the Coast Guard and ports. Can you expand on this just a little bit?

A. Paul AndersonSPEAKER_06

Yes, Mr. Chairman. I believe that if the Coast Guard had the authorizing language to be able to rapidly respond during post-hurricane, heavy weather, natural disaster events to repair facilities with the port partner as a public entity, but delivering private— we have private contractors on retainer, ready to go. We have emergency disaster, the largest companies in the world, BELFOR, others that could respond in days instead of months or even a year. This is not in no way a criticism of the men and women of the Coast Guard. We have had meetings with the admiral last Monday. We've had with the captain and sector commander of the Coast Guard. It's their ability to be able to work through the rules. So I think this committee could allow them in a future bill to give them the flexibility and the authorization and a mechanism to be able to be much more responsive. And your ports, Mr. Chairman, they are potential at risk for the same type of issues. All the Gulf ports are at risk, Atlantic Coast where you have hurricanes. So I think it would be very prudent for the committee to consider that.

Chairman Mike Ezell (R-MS)SPEAKER_07

Last Congress, Mr. Anderson, I introduced legislation to expand the eligible uses of the Capital Construction Fund to include marine terminal operators, MTO. In your opinion, how would this legislation improve the efficiency at our ports?

A. Paul AndersonSPEAKER_06

Mr. Chairman, clarify that the authorization for marine terminal operators.

Chairman Mike Ezell (R-MS)SPEAKER_07

Yeah. To expand the Capital Construction Fund to include marine terminal

A. Paul AndersonSPEAKER_06

operators. Yes, I think it would be very important. I mentioned earlier that the terminals that China is building, they're all subsidized. Our nation needs to do more to work. There are American terminal operators that could expand much more quickly, more rapidly. They could fill the voids. Again, I heard one of my fellow testifiers here talk about when we pull out or we don't invest, China fills the void. And I believe that capitalizing and supporting the capitalizing of marine terminal— for example, in our case, we have Ports America as our terminal operating partner. They're the largest in North America, 44 terminals, I believe. And they co-invest with us in our terminal operations. We're a landlord port, they're the operator. When we buy these cranes I mentioned in my earlier testimony, they are co-investing with us as a private terminal, having— and they also invest with us on the warehouses, on the the the the infrastructure for the cranes, the power, and all of the other marine infrastructure. So I believe that would be a very positive step for marine terminals.

Chairman Mike Ezell (R-MS)SPEAKER_07

Thank you, Mr. Rella. There's been an increased attention on revitalizing the United States maritime industry and increasing competitiveness of the domestic shipbuilding industrial base relative to foreign competitors. What do you see as the biggest challenge into accomplishing this for our shipbuilding industry?

Joe RellaSPEAKER_09

Well, it's really not a level playing field. That's the biggest problem, right? We have, our shipbuilders wear steel-toe shoes. They wear hard hats. We have OSHA oversight to make sure our employees are safe. We have permitting requirements, inspections for contaminants and hazardous waste management. We have USL&H insurance requirements. So we have a heavy burden to run a shipyard in the U.S. for the right reasons, right? Not necessarily for the wrong, Not but we care about our people a lot more than some of our competitors do. So we need to understand that. Number one, it's about the people that work in the shipyards, too. So there are ways, for example, one of the easy things to do is with government contracts where Does that mean I only have 6 seconds?

Chairman Mike Ezell (R-MS)SPEAKER_07

Go ahead. Now finish up.

Joe RellaSPEAKER_09

Okay. So the government contract entity where large shipyards are building Navy vessels or larger vessels, and for any of the government defense sectors, a small business component requirement. Now that exists, but it doesn't always have teeth, right? So you can have a small shipyard, and that includes set-asides for disabled, you know, disabled veterans, woman-owned businesses, HUBZone entities. So building those into the contracts with teeth, a mandatory compliance with the set-aside work for small businesses, will stimulate the overall maritime economy. It'll help the small shipyards out. It'll build the feedstock of employees for the future, for the bigger yards, because a lot of times, small shipyards are where shipbuilders start and then it becomes their profession, right? And then they go into larger shipyards where there's a steady flow of business. Because the biggest reason we have a hard time retaining employees in the small shipyard world is the lack of a horizon on the work. How do we know? How do I know I'm going to have a job—I want to buy a house—how do I know I'm going to have a job when we only have two ships to build and it's for an OSV operator, right? We need block buys, we need consistent build programs, and the ability to tag into through the contract mods with small business clauses for the smaller shipyard component of it. That's a start.

Chairman Mike Ezell (R-MS)SPEAKER_07

Thank you. Chair now recognizes Mr. Carbajal for his 5 minutes of questioning.

Ranking Member Salud Carbajal (D-CA)SPEAKER_01

Thank you, Mr. Chairman. Mr. Anderson, I appreciate the information you provided in your testimony. Quote, "increases in infrastructure spending could spur the economy-wide returns of $2 to $3 for every dollar spent." This statement really lends itself to the benefit of the federal investment in programs like the Port Infrastructure Development Program and the Marine Highways. As you know, these programs are funded by the Bipartisan Infrastructure Law. The Trump administration has released conflicting information calling on funding from the Bipartisan Infrastructure Law and the Inflation Reduction Act to be paused while also exempting some programs. This subcommittee has yet to be to get clear answers from MARAD regarding the status of current grant programs. Can you detail, one, what that would mean for ports if the Port Infrastructure Development Program were paused? And two, are you aware of any ports that have been ordered a work pause and unable to recoup grant awards?

A. Paul AndersonSPEAKER_06

Thank you, Mr. Carbajal. I am not aware of specifically any ports that have been told to pause directly as of, as of last week. I think this is an evolving situation that we are all patiently waiting further guidance. You know, ports do strategic planning. Our plan is a 2030 plan. We're amending it to a 2035. It's not a next year plan. We need to plan projects with confidence that our federal and our state partners will co-invest with the ports, because typically our federal grants are a 50%. We're investing 50%. We count on those dollars. So in general, I absolutely think that it's critical that ports continue to receive funding. And I'll go back to my comments. When you have an adversary, We're in an economic war with a nation that is building ships faster than us, building cranes, building ports, and we're not investing in our ports to maintain our competitive stature as well as for strategic national events. It's very concerning.

Ranking Member Salud Carbajal (D-CA)SPEAKER_01

Thank you. Mr. Anderson, on January 29th, the new Secretary of Transportation directed the department to prioritize projects that, quote, "give preference to communities with marriage and birth rates higher than the national average." I'm having trouble understanding how birth and marriage rates contribute to making grant awards that strengthen our national supply, let alone the legality of it. I would venture to guess that this panel of witnesses combines over 100 years of maritime experience. Does anyone know how marriage and birth rates help determine sound maritime investments? Anybody? Anybody on the panel? Your silence says it all. Mr. Anderson, do you know how Port Tampa Bay and the surrounding area compares to the national birth and marriage rates, and does this concern— does it concern you that such factors are being considered in awarding grants?

A. Paul AndersonSPEAKER_06

I have no information or knowledge of what that would be. I was very pleased to see the now Secretary support the Jones Act, which is critical to our port, our shipyards, the workforce, the men and women who wear those hard hats, the steel-toed shoes, the welders,

Ranking Member Salud Carbajal (D-CA)SPEAKER_01

Thank you, Mr. Anderson. I appreciate your pivot, but didn't quite answer the issue. Thank you very much. Mr. Schoeneman, as we discuss maritime infrastructure, we have to include the Jones Act. Without it, domestic commerce would be controlled by foreign interests, shipyards would disappear, and mariner jobs would follow. Can you discuss the importance of the Jones Act and the impact of waivers?

Brian W. SchoenemanSPEAKER_05

100%. The bottom line is, and I believe Chairman Ezell mentioned this in his opening statement, the Jones Act is a bedrock foundation of American maritime law. It has been forever, at least since 1920, and there have been laws on the books since the First Congress that provide preferences to American ships and restricted domestic commerce to American ships. We wouldn't be here as a country if there was no Jones Act. We wouldn't be here as a Merchant Marine with no Jones Act. We would have no shipping at all, and my mariners would have no jobs. So for us, protecting the Jones Act is fundamental. It's about making sure that the United States maintains its status as a maritime power. And regardless of who is opposing it or saying nasty things about it, the bottom line is even the most hardcore of conservative thinkers, Adam Smith, The Wealth of Nations man himself, flat-out said that when it comes to—and I have a quote here—when it comes to, "Defense, however, is of much more importance than opulence." And that's what the Jones Act proves. The bottom line is of all the laws that you can put on the books, if you're going to be protectionist, do it for national security reasons. And the Jones Act is that fundamentally for us. So for us, we have to do everything we can to protect it because we wouldn't be here without it.

Ranking Member Salud Carbajal (D-CA)SPEAKER_01

Thank you, Mr. Chairman. I yield back.

Chairman Mike Ezell (R-MS)SPEAKER_07

The chair now recognizes Mr. McDowell for his questioning. Five minutes.

Rep. Addison McDowell (R-NC)SPEAKER_03

Thank you, Mr. Chairman. And thank you to the witnesses for testifying before the subcommittee today. We appreciate you joining us. And my first question is for you, Mr. Rella. Of the financial assistance programs that the Maritime Administration administers that you mentioned in your testimony, which do you feel is the most valuable to the shipbuilding industry?

Joe RellaSPEAKER_09

The Small Shipyard Grant Program is probably one of the more significant ones. The Title XI program is good for the operators to contract to build ships, and especially for foreign operators. I participated in the construction of

SPEAKER_UNKNOWN

a

Joe RellaSPEAKER_09

foreign-built, or a vessel for a foreign operator, through the Title XI program back in my day. So, it brings folks to the shipyards in the US. So, Title XI is good, but for smaller yards, the Small Shipyard Grant Program is great. It would be great if it was more of a 25% match instead of a 50% match, but still, it's very helpful to allow shipyards to be— and it's productivity. It's about productivity, right? So, anything we do has got to be earmarked against a productivity improvement. And that's how small shipyards, we've been scrapping and fighting for many years now. We've gotten pretty good at doing it and diversifying our product mix. So, and the way you do that is through keeping, getting the best, keeping the best people you have, but also innovation and technology, right? So, advancing with the latest and greatest in metal fabrication.

Rep. Addison McDowell (R-NC)SPEAKER_03

Sure.

Joe RellaSPEAKER_09

And shipbuilding.

Rep. Addison McDowell (R-NC)SPEAKER_03

What are, what are ways that Congress can work to improve the existing funding programs or take action to help bolster this industry?

Joe RellaSPEAKER_09

Could you repeat the question? Sure.

Rep. Addison McDowell (R-NC)SPEAKER_03

Yeah. So what are ways that Congress can work to improve existing funding programs or take other action to help bolster the industry?

Joe RellaSPEAKER_09

Well, it's that's an easy one to answer. I think the SHIPS for America Act is probably the best way to do that, right? That's the most comprehensive, broad-reaching bill that or initiative, I would call it, because I wasn't always involved in all the bills that come through, but I can tell you the SHIPS for America Act engages all components of the maritime industry, from the education institutions all the way through to the ship operators. And it's a path to us getting the ships that we need to support our overseas theaters of operation.

Rep. Addison McDowell (R-NC)SPEAKER_03

Sure. Mr. Anderson, a question for you. According to your testimony, your organization has $34.6 billion in economic impact on the region. How can Congress provide support for growth and shippers' cargo business capacity?

A. Paul AndersonSPEAKER_06

Yeah, thank you, Congressman. The very— again, very easy support for continue. I believe the— as I've previously testified, a regular biennial WRDA bill is so important that this committee do for our nation's ports. For Port Tampa Bay, it included during the last WRDA bill authorization for the deepening of our channel, which we absolutely will need to continue to handle the larger ships that are waiting to come into the Gulf of Mexico. Our other— our adversary nations are making these investments. We need to be more competitive. I think the speed of delivery on how grants come out the door is very critical. The awards that we've received in the Port Infrastructure Development Program, for example, whereas from award to delivery of the check was 2 years. In the meantime, inflationary pressure increased the cost of the project by 40 or 50%. So finding efficiencies in that process could be very helpful as well.

Rep. Addison McDowell (R-NC)SPEAKER_03

Gotcha. So I don't have much time left. Mr. Reynolds, what do you see as the biggest barriers to continued U.S. leadership in maritime robotics and autonomous systems?

Tom ReynoldsSPEAKER_02

Thank you for the question. I'd say the first barrier I would think of relevant to this subcommittee would be regulations, the regulatory framework. And again, I point to the fact that the U.S. Coast Guard is our leading body when it comes to the development and then enforcement of those regulations. And I think they're great guardsmen out there. I've— they They serve, they're always operating. While I was in the Navy, sometimes I would be at peace, but then I would go and operate. Our guardsmen are always operating, and yet it still frankly, it surprises me a bit that they do not have any robotic systems. I will point to one success they have on the National Security Cutter. The ScanEagle has been deployed, and I think it's being replaced by a different unmanned aircraft. And that's been very successful. I understand they like it very much. I'd suggest that when it comes to unmanned underwater or unmanned surface vessels, they would gain some wisdom and want to gain some operational capability, but also really appreciate how to how to better regulate this technology. Thank you. Sorry I went over.

Rep. Chris Pappas (D-NH)SPEAKER_13

No worries. Thanks, sir.

Rep. Addison McDowell (R-NC)SPEAKER_03

Chairman,

Chairman Mike Ezell (R-MS)SPEAKER_07

gentleman yields. Chair now recognizes Mr. Pappas for 5 minutes.

Rep. Chris Pappas (D-NH)SPEAKER_13

Thank you, Mr. Chairman, and congratulations on taking the helm of this subcommittee. And I want to thank all of our witnesses for their testimony today. I do think that strengthening U.S. maritime has to be the highest priority in the halls of Congress because the status quo simply is inadequate to meet our economic challenges and our national security needs. In New Hampshire, my state is home to a number of merchant mariners who have chosen to call my state home. Helps to have no state income tax. But I'm concerned about the number of individuals that are pursuing this career. The U.S.-flag fleet is as small as it's been historically, and the mariner pool has shrunk to near record lows. So I was glad that Congress has passed funding last December to ensure that our government invests in capital improvements for the Merchant Marine Academy, and also language requiring the Navy to create a recruiting campaign on behalf of the Merchant Marine, the first since World War II in terms of a major campaign. Mr. Schoeneman, I appreciate your testimony today. As we think about workforce, we continue to face a historically tight labor market. This is the case across various sectors of our economy, certainly the case with maritime. Can you assess some of the efforts around workforce development post-pandemic, some of the investments in the maritime, the Merchant Marine Academy, and where Congress should really focus its attention with respect to workforce?

Brian W. SchoenemanSPEAKER_05

Absolutely. I think we've made a lot of progress since COVID-19. I think, as I mentioned, we've been dealing with a mariner shortage for a while now, and it's caused by a variety of things, not the least of which is a lot of our mariners are older. They're getting older, they're aging out, and they're retiring, and we're not replacing them as quickly as we need to be. We were very happy to see that the language was passed in the NDAA to create the the the recruitment drive, and we're hoping that we can work with the Navy Department to put something together. As I mentioned in my testimony, we've been telling American kids be all you can be and aim high and be one of the few, the proud, forever. But since World War II, we haven't talked about the Merchant Marine at all. And our biggest issue, as we find, is people don't know what we do. They have no idea that these jobs are even available. And when we go into the community and say, Look, I can take a kid off the street, 18-year-old kid, put them through our training program, in a year, we'll make them a merchant mariner, we'll give him his first job, guarantee it out of school. And in two or three years, he's going to be making a solid, middle-class living. And by the time he ends his career, he's going to make a lot of money. And these are tough jobs. They're hard jobs, but they are good jobs. And for the most part, our guys will work six months of the year. They have the other six months to do whatever they want. We cover their vacation. We provide them with benefits. The pay is good. The food is getting much better. That's one of the things the guys want on the ships a lot. And a lot of the vessels in the fleet have started putting on Wi-Fi and things like that. So we're doing our best to make sure that we are putting ourselves in a good position to be able to recruit. What Congress can help us with, obviously, is the recruitment drive. Funding for all of the training schools is critical. Fully funding the Centers of Excellence program that MARAD put together is is important, I think. And just making sure things like student incentive payments that the the maritime academies provide, the state academies and everything, those are always fully subscribed, and they don't cover the entire cost. We need we need to expand those programs and make sure that we're not passing on and making it harder for mariners to join the industry because they've got to pay for things like fuel for their ships when they go on on a sea cruise over the summer, which no other college kid is going to have to pay. So there's a lot of I think a lot of room for improvement there, and we're looking forward to working with you guys on that.

Rep. Chris Pappas (D-NH)SPEAKER_13

Well, thank you, and I appreciate your comments as well, Mr. Schoeneman, with respect to the Food for Peace Program and reflections on the important role that government cargo plays in strengthening U.S. maritime. Obviously, it can't begin and end there, but that's a critical component. It's a win-win for our national interests as well as for our farmers and for our economy. So I hope we can continue to find ways to support that and so many other critical programs that are a lifeline for U.S. maritime. Thank you for all of your comments, and I yield back my time.

Chairman Mike Ezell (R-MS)SPEAKER_07

Gentleman yields. Chair now recognizes Mr. Van VanDrew 5 minutes.

Rep. Jefferson Van Drew (R-NJ)SPEAKER_08

Thank you, Mr. Chair. Congratulations. Look forward to working with you, as always. While autonomous vehicles— vessels present both opportunities and challenges for the maritime transportation industry, I'm concerned about safety, security, and regulatory oversight. It's important. There are workforce implications that are important that come along with this technology. Safety must remain our top priority. I think that goes without saying. Mr. Reynolds, thank you for being here today. How will these vessels interact with crewed ships, ships that have crews on them, port operations, and emergency response efforts?

Tom ReynoldsSPEAKER_02

Thank you for your question, Congressman. So I think safety at sea is safety at sea, whether there are people on board or not. I believe that the COLREGs, although they have not been updated in quite some time, are very well suited just for considering manned vessels. But consider also the state of sensors and artificial intelligence and other advances that have that have gone into the industry already. In a calm sea, the sensors work very well and and are very comparable to what you have on a manned vessel. But in heavy seas, because you don't need to worry about the human element, about being seasick, about being tired, about being rocked around on a vessel, there are actually some artificial intelligence and sensors onboard vessels that can make ships at sea even, even, even safer. I would, though, defer to the U.S. Coast Guard to really work out how to how to do that, and AUVSI is is committed to working with the Coast Guard to come up with those regulations.

Rep. Jefferson Van Drew (R-NJ)SPEAKER_08

Thank you for the answer. So, I mean, if I was to summarize that or capsulize that, there's tremendous potential, but we do have to be careful.

Tom ReynoldsSPEAKER_02

Of course. Yes, yes, sir. You know,

Rep. Jefferson Van Drew (R-NJ)SPEAKER_08

um, cybersecurity protocols, are they adequate to protect these vessels from emerging cyber threats, which again is another concern?

Tom ReynoldsSPEAKER_02

Yes, sir. Actually, AUVSI is a trusted partner in cybersecurity, particularly with the U.S. Navy. And I would also submit that cybersecurity is an issue whether it's a manned vessel or not. That's an issue for all systems on every vessel.

Rep. Jefferson Van Drew (R-NJ)SPEAKER_08

Okay i've been vocal in the past about autonomous vehicles, whether they're on ground or in the water. I do think we have to be careful. The technology, I believe, has—and I'm stating the obvious, I think you would agree, I think you would all agree that it must be further researched. We still need to be careful. We still need to know more. We have to see what could go sideways because we don't want that to happen. There also must be a viable regulatory framework for these vessels. I'm a guy that doesn't love regulations, but in this case, obviously, you need them. We need to be careful. And I know there's already efforts to do this, but there are, in my opinion, some significant gaps. Mr. Reynolds, back to you for a minute. What specific regulatory changes are needed to test maritime robotic and autonomous systems? What specifically would you like to see?

Tom ReynoldsSPEAKER_02

Well, yeah thank you again for that. So currently, there are no overall regulations that would govern this. Currently, the captains of a port of a Coast Guard port are just given, I guess delegated the authority to allow whether a vessel can go out to sea and do any testing or not based on their judgment. Again, most of these captains of port have never operated or been around unmanned systems before, and it is just something that they're trusted or expected to work out. So they work closely with industry, very much in a personal relationship. And it's actually a patchwork. We have a captain of port in one area that will be different from a captain of port in another.

Rep. Jefferson Van Drew (R-NJ)SPEAKER_08

Real quick, Mr. Reynolds, are we where we should be? In other words, are— I'll talk about something else that falls under transportation, aviation. We're definitely We're about a decade, at least a decade behind in drone technology and UAS technology compared to China and some other countries. Are we behind? Are we where we should be? Are we ahead? If you had to quickly give me a word, what would that word be?

Tom ReynoldsSPEAKER_02

So it's— so I'll give a 2-part answer to that. Um, yes, we're definitely behind, but we're also behind because there's not enough, I guess, incentive by, uh, by industry to really go out and develop this technology. There's so many roadblocks.

Rep. Jefferson Van Drew (R-NJ)SPEAKER_08

Not your fault, and forgive me for interrupting, and I know my time is up. I'm going to yield back. I'm so tired. In every committee that we talk about technology in the United States Congress, I ask that question about a myriad of things, and the word is always, we're behind, we're behind. America leads. It's time we take the lead. We've been behind for the last 4 years. Hopefully, now we're going to move forward. Mr. Reynolds, I thank you for your answers, and I yield back, Chairman.

Tom ReynoldsSPEAKER_02

Thank you.

Chairman Mike Ezell (R-MS)SPEAKER_07

Gentleman yields. Chair now recognizes Ms. Scholten for 5 minutes of questioning.

Rep. Hillary Scholten (D-MI)SPEAKER_00

Thank you, Mr. Chairman, and congratulations. Wonderful to have you at the at the helm here in this committee. I want to thank our panel of witnesses today for your commitment to this incredibly important topic. We appreciate your insights in this thoughtful conversation about maritime infrastructure. As a representative from Grand Rapids, Michigan, Coast Guard City, USA, making sure that we have a strong and successful maritime industry is important to me. Like many of my colleagues on this subcommittee, I'm concerned with the rise of global competitors' shipbuilding industries. Adversarial nations like China have bolstered their shipbuilding capabilities, while domestic capacity has decreased. That is why the Maritime Administration's federal assistance programs to boost U.S. shipyard competitiveness are absolutely critical not only to our nation's economy, but to our security. Mr. Rella, can you speak to how any potential freeze in the Maritime Administration's federal assistance programs could hinder progress in domestic shipyard activities and undermine our competitiveness?

Joe RellaSPEAKER_09

Yes. So, the Small Shipyard Grant Program is the one most obvious, I think, that if that's frozen for this year, that would delay any new productivity improvements that would be assisted with the government with that program. I mentioned Title XI, sort of similar thing for other— for shipbuilders or operators to come and build with us. And and the, you know,. just essentially, uh, any, any, uh, assistance in training and education, uh, would would also potentially hamper, you know, with our workforce development. So we'll find, you know, we find a way to get by. It just delays our progress.

Rep. Hillary Scholten (D-MI)SPEAKER_00

And getting by doesn't necessarily put us at the cutting edge of competitiveness, I would imagine.

Joe RellaSPEAKER_09

No.

Rep. Hillary Scholten (D-MI)SPEAKER_00

Supporting our ports, including ports like Muskegon and Grand Haven in my district, is also critical to our national security as well as the smooth operation of our supply chains. While the Bipartisan Infrastructure Law made historic investments in our ports, we have to keep pace to unlock port capacity across the country, especially in our Great Lakes. Mr. Anderson, how can Congress build on previous investments to ensure our ports can accommodate our commercial and recreational needs in addition to protecting our supply chain?

A. Paul AndersonSPEAKER_06

Yes. As I previously mentioned, I believe regular passage of WRDA is vital to all of our nation's ports. I think I can speak for all of our nation's ports as a member of the American Association of Port Authorities and past chair that we will support any type of programs that support port infrastructure that is, as you mentioned, strategic to our national defense, our competitiveness in a global marketplace, and we are in many cases behind, particularly adversarial countries. So, grant programs, efficiencies in regulatory regimes that sometimes have slowed the delivery of grant-related projects that are in many cases hundreds and hundreds of millions of dollars that get delayed, so looking at how we can improve those, making sure whatever administration is administering those grants, that we get velocity through the grant programs. They don't get hung up in the bureaucratic process. I think this committee could look at some of those, encourage. And whatever name that program turns out to be, and I think we all recognize that funding is an absolute linchpin to the competitiveness of our nation's ports today and going forward.

Rep. Hillary Scholten (D-MI)SPEAKER_00

Thank you. In addition to investing in our infrastructure, it is incumbent on Congress to uplift our workforce. Making sure that we have this capacity to do these projects means nothing if we don't have the workers to actually do them. These are skilled laborers who are at the forefront of our maritime industry. However, we know that there is a critical labor shortage right now. Mr. Schoeneman, I know you have been active in calling out our mariner shortage. How can we adjust our recruitment and retention efforts? I know we saw incredible gains in the Coast Guard under Admiral Fagan's leadership, and we want to make sure that we can keep that going in our Coast Guard and match it with mariners across the country, particularly so that we can leverage increasing trends of Gen Z entering the skilled trades, which is a great thing.

Brian W. SchoenemanSPEAKER_05

Well, absolutely. I think, from our perspective, number one, and I mentioned it before, is we just got to make sure people know these jobs exist. They don't. You see a truck on a road, you know there's a truck. You see an airplane flying in the sky, you know there's an airplane. If you are not on a port, if you're not in a district like Congressman Mast or somewhere where you're going to see ships all the time, you don't think about it. How does something get to Walmart? Well, it goes on a truck. No, it goes on a ship first. And trying to get people to understand that is hard. So, we have to do our better a better job in promoting ourselves. And I think that's something the industry really needs to focus on. And I'm looking forward, hopefully, with this new Navy program that was in last year's NDAA that we can start doing that. I think other than that, it's just working on quality of life. We need to make it make it clear that we are not recruiting for the same people that we have been over the years. They have different priorities, and we need to make sure we're meeting those priorities. Otherwise, they're going to find something else to do that's not going to take them away from their home as often as this job does. Yeah,

Rep. Hillary Scholten (D-MI)SPEAKER_00

thank you. You've got strong partners, uh, on this committee and certainly in me to make it happen. So thank you. I yield back.

Chairman Mike Ezell (R-MS)SPEAKER_07

Gentlelady yields. Chair now recognizes Mr. Mast for 5 minutes.

Rep. Brian Mast (R-FL)SPEAKER_11

Thank you, Mr. Chairman. Appreciate you all taking the time to be here today, share your expertises with each and every one of us. I want to talk a little bit about trucking. I want to speak specifically to you, Mr. Anderson, right now, a little bit about the Port of Tampa and help you guys to help me understand as we go through different driver classifications, CDL, and the Class A, Class B, Class C, all the different endorsements that we could look at out there for an individual. And I want to ask very specifically related to drivers that are 18 years old, not yet 21 years old, right, that a lower age driver, do you have a problem with 18-year-old drivers coming in and out of your port, moving goods from A to B, whether it just be to another location just outside the port because that's where it's going to be, let's say, circling the wagons to to bring it across the state or across the country, or whether directly out of the port directly to interstate commerce somewhere over the road, just out to Texas or who knows where? Do you have a problem in general with somebody being 18 years old doing that?

A. Paul AndersonSPEAKER_06

Thank you, Congressman. First, no, don't have a problem. I want to thank you for your support for everything we have done in our port. And as we look at it as many of our testimony has talked about today, there's a graying in the workforce, particularly in the maritime industry, trucking industry, and we would wholeheartedly support—we average about 10,000 truck moves a day in and out of our port complex. It's a critical function. Our trucking companies are having difficulty finding truck drivers. Getting a CDL at a young age with a with the proper training, safety. You know, we ask 18-year-olds to sail on the bridge of an Aegis-class destroyer and drive that ship in and out of our port or other ports. We ask 18-year-olds to get behind an Abrams tank and drive it. I think they can drive a truck with the proper training. I think we need to do a better job as a nation in promoting the quality of life that can be in today's trucking world. It's not the trucking that our mom and dads thought of when these are long hauls, you're gone for weeks. There are really quality trucking opportunities. You're home every night, the benefits are good, and these can be long-term careers, and they can turn into owning your own operation and business.

Rep. Brian Mast (R-FL)SPEAKER_11

All I can say to that is damn right. I couldn't have said it any better myself, right? You're moving across the seas as a part of our Navy or moving a tank across, you know, the desert somewhere, you name it. I think you have the opportunity to go out there and serve over our roads as well. But let's be a little bit— and I think this comes down to, do we have trust in our training systems or do we not? Do we have trust in the licensure or do we not? Because whether you're 18, 28, 38, 48, whatever it might be, either we believe in the training that you have and then the experience that you've garnered thereafter, or we don't believe in it, right? So let's go more more specific, you don't have a problem with somebody handling over 26,000 pounds being 18 years old?

A. Paul AndersonSPEAKER_06

I do not.

Rep. Brian Mast (R-FL)SPEAKER_11

Anybody have an issue with that? Don't have a problem if somebody can go out there and get their hazmat credentials? You're not worried about the, the age for them as long as they go through the proper vetting, get the proper clearance to do it, as long as they get the proper training?

A. Paul AndersonSPEAKER_06

I do not. And there's somebody on this panel, I believe, who was an EOD. They didn't ask him his age when he was doing that training.

Rep. Brian Mast (R-FL)SPEAKER_11

Yeah, we just got to be able to kick well, right? We just kick it with the end of our boot. So no, that's not how we do EOD work. But, uh, don't have a problem with, uh, you know, an H endorsement or an X endorsement for somebody regardless of age as long as they have the proper training. Fair to say?

Joe RellaSPEAKER_09

So I can't keep my mouth shut because I hire people all the time for the shipyards, right? You know, they have to meet certain criteria, clean record, drug testing, you know, and make sure that, you know, they're doing the right things too, right? Sometimes the biggest problem is finding someone, you got to get them young because before they have a chance to screw up too much. Well,

Rep. Brian Mast (R-FL)SPEAKER_11

that's certainly, that's a part of the credentialing, right? You're not going to get that hazmat credentialing if you haven't lived the proper lifestyle in that way. What about, let's go to one other thing you kind of touched on it with, you know, your Navy and and tanker analogy. Uh, what about, uh, let's speak a little bit military training transferring over to those that want to start moving goods over the road. Just compare and contrast to me a little bit. Where do you think our military truck driving training is at? Should somebody be able to come right out of service, take off the uniform, put on a different pair of boots, and, and step into the rig, or Do you think they're not meeting the— the military is failing somewhere, not getting them up to the same level, or they are? Anybody?

Joe RellaSPEAKER_09

Again, I'll chime in. Uh, so it has to be comparable equipment, right? So I mean, if they're trained on a military piece of equipment, if you could learn to drive a tank, yes, yeah, but you need to learn how to drive a truck, right?

Rep. Brian Mast (R-FL)SPEAKER_11

Military drives 9/16, they call it.

Joe RellaSPEAKER_09

Yeah, so you just make sure there's uh, you know, uh, apples for apples sort of match to that. Where you

Rep. Brian Mast (R-FL)SPEAKER_11

feel the training is comparable?

Joe RellaSPEAKER_09

I don't— honestly, I can't comment on that. I don't really— I can't really comment on that. But I can tell you that what we look for is, uh, when we hire welders, is weld certifications, right? And have they— you know, is there a standard by which we can hire them as a second-class or a first-class welder, right? So they come in with credentials, we, we look at them, and we, we even and test them, right, before we hire them to make sure they can do what they say they can do.

Rep. Brian Mast (R-FL)SPEAKER_11

Yeah. And do you— you'll just indulge me for one point, Mr., uh, Chairman? And it would simply be to say, for our military, if they're not being trained at a level that is commensurate to everybody else, that's an issue for our military to be looking at, because it's nonsensical to have somebody trained at a lower level. And if they are being trained at the appropriate level and we're putting a roadblock in front of them from getting immediately into the workforce after they've served their country, then that's very nonsensical as well. So on the

Brian W. SchoenemanSPEAKER_05

maritime side, that's something we've been working on for a while. The bottom line is military to maritime, we've been working on this for years. If a guy gets out of the Navy, he's been 20 years as a boatswain in the Navy, there's no reason why he should not be able to come over in the Merchant Marine and sail and be at that level immediately, the same one, guys, and with their licenses. So for us, this has been critical, and it all comes down to making sure that regulations and, and the rules the Coast Guard puts together and all that stuff makes sense, and that they take into account the fact that you can have 20 years at sea, and that should count for something when you come back into the industry.

Rep. Brian Mast (R-FL)SPEAKER_11

Damn right. Thank you, Mr. Chairman.

Chairman Mike Ezell (R-MS)SPEAKER_07

Gentleman yields. Chair recognizes Representative Strickland, 5 minutes.

Rep. Marilyn Strickland (D-WA)SPEAKER_10

Thank you, Chairman Ezell, Ranking Member Carbajal. I have the privilege of representing the South Puget Sound in Washington State, and we have lots of ports there. And I appreciate all of your testimony today because you've talked about a lot of things, the need for more shipbuilding, but I would say more importantly, the workforce development part of this, and they're all connected to each other. In every industry or every panel I'm on, I always hear a conversation about worker shortage. And I'm going to quote Mr. Rella, who said, "Get them while they're young." And I think that's a really smart strategy. Can you talk a bit, Mr. Schoeneman, about what concrete steps we at the federal government can take to make the merchant marine and maritime-supporting skilled trades a more viable career path for younger people? When I host my academy night, there are students who show up, they don't even know what the Merchant Marine Academy is or that it exists. And so just some ideas about what you think we can do better to reach out to younger people.

Brian W. SchoenemanSPEAKER_05

I think, I think obviously, number one is make sure they know what it is. And I think, when it comes to Kings Point, Kings Point is the diamond in the rough. People just don't realize. They think about the service academies, they think about Annapolis and Colorado Springs, and they think about West Point, but they don't think about Kings Point. And it's one of these things where I told my son, you're looking for colleges, I know one that's pretty good. How about you check over here? When it comes to what Congress can do, I think obviously making sure that we have the ships and the cargo and the long-term jobs. That's the number one thing. Nobody wants to get started in an industry that people think is dying,

Full Committee Ranking Member Rick Larsen (D-WA)SPEAKER_04

right?

Brian W. SchoenemanSPEAKER_05

Joe talked about it. When you have series construction in a shipyard, that means you've got work for a long time. People are going to want to do those jobs. And the merchant marine is the same way. My guys want to know that that ship is going to be moving and that it's going to have cargo and that those routes are going to exist. And if they get started, they're not going to end up spending 10 years and then have to transition into another job. So from our perspective, anything Congress does that supports the Maritime Security Program, that supports the Tanker Program, increased funding for those programs, getting the funding so that it's done properly every year, that keeps those jobs in existence and that makes it possible for us to go out and recruit. And the same thing for when it comes to the recruitment thing I've been mentioning over and over again. We've got to get that stood up so that we're telling people, hey, this is a viable career and you should try it out. And I think once we do that and we put the money that we need to into our training and the service academies and the state academies, I think we'll be in a much better position than we are right now.

Rep. Marilyn Strickland (D-WA)SPEAKER_10

Yeah. So what I just heard you say is investing in our maritime manufacturing industrial base so there's certainty, and also, I would say good trade policy to make sure that we know commerce is going to be there. Mr. Reynolds, did you want to add something, sir?

Tom ReynoldsSPEAKER_02

Yes, ma'am. So I think I spent a couple of weeks this past, well, about a year ago, up at the Maine—Massachusetts Maritime Academy, and working with the Massachusetts Department of Transportation, and actually bringing unmanned systems to that campus. And I want to point out that we talk about unmanned systems, the first thing I suggest we think about is they're not in lieu of manned systems. I'm not trying to threaten my friend here to my left one bit, but they're very complementary. And unmanned systems can go where we already don't send people.

Rep. Brian Mast (R-FL)SPEAKER_11

Yeah.

Tom ReynoldsSPEAKER_02

And they can provide some of the— it's trite, but I'll just say the dull, dirty, dangerous tasks. And I also believe that young people are interested and attracted to flying an unmanned aerial vehicle to inspect aids of navigation, operating unmanned underwater vehicles to go do surveys around, you know, wind farms or subsea infrastructure. And so I just wanted to add, one, we're not trying to replace people. We think we can augment, you know, the maritime industry, and that including this at Merchant Marine Academies or in education, I think would attract, you know, a younger generation.

Rep. Marilyn Strickland (D-WA)SPEAKER_10

Absolutely, and we have a younger generation that is very tech-savvy. And so, to your point, it's not meant to supplant. It's meant to supplement and make us more effective. And I just want to do one plug—I'm going to come to you, Mr. Rella—that in Tacoma, Washington, where I'm from, and I'm the former mayor, so I did a lot of work with the ports, Tacoma Public Schools and the Port of Tacoma are partnering to create a maritime skills center, Maritime 253. And I say this because I hear rumblings about this administration trying to eliminate the Department of Education. The Department of Education provides a lot of funding to our public school system. So, if we're talking about supplementing and enhancing programs that help us solve these problems as well, we have to think about the Department of Education, local school districts, and how our ports, which are local taxing districts, all need to work together. Mr. Rella.

Joe RellaSPEAKER_09

Sure. We talked about the maritime academies, and they certainly are a pipeline for leaders in the maritime industry. But then you have the needs, say for example, in a shipyard, the skills trades that you need to build ships. And when I ran Austal, I started, and we had 700 employees at the time, and when I left, we had 2,500 in 5 years. So, we had a really great state and also local support, local government support. They helped fund a lot of our training programs. They put up a maritime training center right next to the shipyard. So, having incentive, maybe federal-state partnerships in the maritime where there's some incentives for the state to help support that maritime industry growth, the training growth. Alabama—and I speak for Alabama because I spent a lot of time there, I live in Florida now, but it's the Alabama Industrial Development Training, AIDT, and they trained folks to our procedures, to the shipyard's procedures, and they had to qualify to that. And then we made the hire decision. Right? And it was all free of charge to the potential employee. Yeah So, those sorts of things are really how you can build a workforce quickly. It comes from different angles.

Rep. Marilyn Strickland (D-WA)SPEAKER_10

Yeah.

Joe RellaSPEAKER_09

It's the state, it's the county, it's the city and the federal government participating together to build that workforce.

Rep. Marilyn Strickland (D-WA)SPEAKER_10

Yeah, and in public schools. And so thank you all for your testimony. And again, we have to let more young people know that this is even a career option because it's such a vast industry. Thank you, Mr. Chair. I yield back.

Chairman Mike Ezell (R-MS)SPEAKER_07

Gentlelady yields. I want to recognize myself for one question. Mr. Anderson, we had some conversation about low bid. You were telling me about an issue you had with having to buy two cranes from China because of low bid. I have, over a course of many years in public service, had my issues with low bid. Could you tell me the problem that you had with the cranes that you bought, that you had to buy because of the low bid?

A. Paul AndersonSPEAKER_06

Yeah, so Mr. Chairman, we are required under Florida statute to, when we do procurement over a certain amount, we go throughout an RFP process, and the statute requires that you accept the low bidder in that process. And in that instance, the other crane manufacturers recognizing in a bidding process with a low bid requirement, the Chinese company being subsidized by the CCP, that they could not compete on a price basis. So they just didn't bid. On this second go-around, we are piggybacking off another bid that was done, which we are allowed to do. But there needs to be, just like I was asking earlier for the Coast Guard to have some flexibility and authorization to use some private-public partnership to expedite things, there are situations where low bid isn't—when it comes to national security, you shouldn't be required to have a low bid requirement. We are using the existing law to purchase these cranes from that'll be built in Ireland, so we've navigated around that. But I believe that that is sometimes harmful to our nation's interest.

Chairman Mike Ezell (R-MS)SPEAKER_07

Would anybody else like to say anything about having to deal with low bid and national security or anything else with low bid? Okay, thank you very much, and I recognize Mr. Carbajal for 5 minutes.

Ranking Member Salud Carbajal (D-CA)SPEAKER_01

Thank you, Mr. Chairman. Mr. Rella, I understand that one of your business lines is constructing offshore wind support vessels. The current administration has a stated goal of dismantling offshore wind projects. How do you expect the termination of offshore leases to affect your businesses if that's the case?

Joe RellaSPEAKER_09

We did have a focus and have delivered three crew transfer vessels for the offshore industry. We're building two more, and we're close to signing a contract for another. So it's still vibrant for us, but any future builds might be in question. The shipyard has diversified into other product lines, not just relying on the offshore wind, including commercial steel vessels. The CTVs that we're building for the offshore wind are aluminum-hulled, so they're high-speed craft, typically multihull. So we've diversified our product mix for commercial steel and also commercial aluminum vessels, such as research vessels and other types of vessels for the marine industry. And we're also looking to the— obviously I mentioned earlier, we're entering the government sector with the Army Corps of Engineers. So, well, there are things that were attractive. And the investment tax credits were something that we enjoyed the benefit of as a shipbuilder, so that's a good program wherever it goes, however it's applied. I think, for the shipyard to receive the tax credit to that effort is good. So that goes with the wind farm future, to see where that goes. But we have already flexed, and what the wind farm industry has done for us, in the shipbuilding sector at least, is enable the shipyard to gain the expertise in aluminum ship welding, aluminum fabrication. So we can take that expertise and flex and move it to other markets, which is what we're doing.

Ranking Member Salud Carbajal (D-CA)SPEAKER_01

Thank you, Mr. Reynolds. With a 10% shortfall in the Coast Guard's workforce and a budget that is significantly below the needs of the service, can you discuss in more detail the opportunity that autonomous technology could offer? And, understanding the constraints on the Coast Guard's budget, what is the fastest and most cost-effective way for the Coast Guard to adopt these technologies?

Tom ReynoldsSPEAKER_02

Thank you, Congressman. I'll say the first thing here is that the Coast Guard only has an R&D budget of about $18 million a year, and that's for for the entire Coast Guard's budget. The U.S. Navy, as well as actually Department of Commerce and NOAA, are already investing and operating a wide range of unmanned systems in various states of development. I would suggest close collaboration between DHS, DOD, as well as DOC to leverage these existing government investments. I'll also add that the the investment on the on the commercial side, basically, industry wants to lean forward. Industry believes that that there is something here. And so you see quite a bit of private investment going into this technology. And I think our first thing we we believe is that if you get it in the hands of the Guardsmen just to develop their own comfort level with this kind of technology, they will then understand what requirements they need and understand how to best utilize this technology. Again, I'll point to what the national security cutter has done with an unmanned air vessel. It was aircraft contractor-owned, contractor-operated. So the Coast Guard doesn't actually own this technology, but it is employed on the national security cutters. And from what I understand from past testimony, the Coast Guard is is thrilled with how this has really improved and really extended the the capability of that platform without removing any people. It's been it's been additive. And so the Coast Guard mission is extremely arduous. They go into places that a lot of people won't want to go. They conduct missions that maybe a robotic system could go do, maybe more safely, or or help them do it. So my first thought would be partner with the the U.S. Navy and and NOAA. I think they'd be I hope they'd be open to that. And then let's work with with industry about maybe what we could deliver and just get in the hands of their hands of the Guardsmen for something like a pilot project for them to learn about themselves.

Ranking Member Salud Carbajal (D-CA)SPEAKER_01

Thank you, Mr. Chair. I yield back.

Chairman Mike Ezell (R-MS)SPEAKER_07

Thank you, gentlemen. Yields. If there are any other members of the subcommittee who've not been recognized, Seeing none, that concludes our hearing today. I would like to thank each and every one of you today for being here and providing us this important testimony. Subcommittee stands adjourned. Thank you. We'll see you later.