Dr. Sal goes to Washington; a conversation with Sal Mercogliano fresh off his Senate hearing appearance

Episode Transcript
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SPEAKER_01 (00:01):
Ready to go.

SPEAKER_02 (00:10):
You're listening to By Land and By Sea, powered by
the Maritime Professor.
Washington turned its attentionto Maritime.
And guys, the conversation wasfocused, it was serious, and it
was productive.
Look, these words are not oftenused to describe congressional

(00:31):
hearings.
The Senate held a hearing in oneof its subcommittees that wasn't
just symbolic, but it wassubstantive.
And it focused on rebuildingAmerica's commercial
shipbuilding base and maritimestrength.
It was called Sea Change,Reviving Commercial
Shipbuilding, and it carried aclear message we've done this
before, and we can do it again.
Maybe better this time.

(00:52):
Hi, welcome back to My Land andby C, an attorney breaking down
the weekend supply chain,presented by me, the Maritime
Professor.
I'm Lauren Vegan, the founder ofthe Maritime Professor, former
FMC International AffairsAttorney, and founder of Call
Strategies.
My land and by C is your go-toresource for navigating the
regulatory side of global issuesshipping.
And me, I'm your favoritemaritime attorney.

(01:14):
As always, this podcast is foreducational purposes only and
should not be considered legaladvice.
You need an attorney, contact anattorney.
This is plain language maritime,created so that anyone, not just
lawyers or industry insiders,can understand what's happening
in the world of shipping.
So let's dive into this week'sepisode because as you know,
ocean shipping moves the world.

(01:35):
Well, this week we'respotlighting one of the most
productive and forward-lookinghearings we've seen in years the
Senate sea change revivingcommercial shipbuilding.
It wasn't just about politics orposturing, it was about
solutions.
This panel brought togethervoices from across the maritime
industry.
We had Matt Paxton, president ofthe Shipbuilders Council of
America.

(01:55):
We had Jeff Vogel, vicepresident of Legal at Toast
Services.
We had Tully Snow, talentacquisition and engagement
manager at Snow and Company.
And we had Dr.
Sal Mercagliano, a friend of theshow, professor at Campbell
University, former merchantmariner, adjunctor at King's
Point, and host of what's goingon with shipping.
Sal's testimony stood out forthe way he connected history,

(02:18):
policy, and strategy, remindingeveryone, all the senators, but
everybody watching, just howcentral maritime is to American
power overall.
He also introduced the idea ofmaritime reserves program, a
concept that Senator Cantwellimmediately picked up on during
the hearing and urged Congressto think creatively about
incentives for rebuilding bothships and mariners together, and

(02:41):
especially that maritimereserves program idea.
I caught up with Sal right afterthe hearing to unpack his
remarks from Ships for Americawarning and that maritime
reserves proposal to what hehopes to see in the maritime
action plan due out November 5thor thereabouts.
So let's go to that conversationnow.
I'm so excited to have back onthe show one of my favorite

(03:02):
people to talk maritime with,and honestly, one of our most
popular returning guests, Dr.
Sal Mercogliano.
Thanks for coming back, Sal.

SPEAKER_01 (03:11):
Thank you, Professor Began.
I appreciate the invite.

SPEAKER_02 (03:13):
Well, so great to have a fellow professor, writer
professor at CampbellUniversity, an adjunct professor
at King's Point, which isfantastic, a maritime historian,
a former merchant mariner, andthe voice behind the wildly
popular What's Going On withShipping YouTube channel.
And he's also a great friend ofthe show.
So always happy to have youback.

SPEAKER_01 (03:32):
Thanks, Lauren.
I you know I'm always excited totalk about anything with you.
So this is gonna be fun.

SPEAKER_02 (03:37):
It is, yeah.
Well, you had quite the week.
What a week you've had.
What a few weeks you've had,right?
You were in Australia.
We saw you all over on LinkedInin Australia and Western
Australia, not just like EasternAustralia where most people go.
You went out to Perth and thenuh yeah, you floated around over
there.
But this week, well, actually,yeah, let's stop there.
Let's let's hear a little bitabout your Australian adventures

(03:58):
for a minute.

SPEAKER_00 (03:59):
Yeah, I got invited out by uh Pabar Ports, who
operate the ports on the farnorthwestern coast of Australia.
So I was invited to a conferenceI hosted called the Safe Port
Safe Ship Forum.
And uh Tuesday, Wednesday lastweek, I gave the keynote on
Wednesday morning, but Iattended the whole conference.
It was great.

(04:20):
It was really interesting tohear a lot of what's going on in
these ports.
Uh there's a lot of focus onobviously net zero and framework
and uh involved.
But what's really interesting isthey're developing a hydrogen,
uh hydrogen, but an ammonia kindof kind of kind of green lane
there between Port Headland andAsia.

(04:42):
So it's gonna be reallyinteresting to see how that
develops.
And I actually went on Thursday,I flew up with the CEO of the
company to Port Headland, aplace nobody knows about.
It's on the far northwesternside.
It's like landing on Mars,Lauren.
It's like it's like number one,it's like 100 degrees.
Everything is like red, it'scovered in iron ore.
And I have never I've sailed andbeen to many ports.

(05:04):
I've never seen anything likethis.
There were a dozen and a halfbulk carriers there.
I'm talking everything fromhandy-sized to cape size vessels
loading iron ore, coal, andlithium.
This port, just this single portof Port Headland, loads 778

(05:24):
million tons a year of cargo outof it.
That's five percent of globaltotal tonnage.
It was absolutely incredible.
And what's interesting is thatthere's there were about 18
ships in port when I was there.
There were 40 ships out atanchorage waiting to come in,
and the whole system is gearedto get ships in and out

(05:45):
efficiency through a like athree-hour-long channel.
It was amazing.
They have 27 tugs, a dozenpilots.
It is a amazing move.
They they talk about the factthat for every hour they lose
business or something happens tothem, they lose$5 million.
So it was absolutely fascinatingto get a look at a port that

(06:07):
does that volume of businessthat efficiently.
And the focus is the port, notthe ships.
It's very funny talking to theCEO saying that our goal here is
to make sure that the port staysopen.
And it really hammered home forme something in the United
States that we don't take a lotof concern about, and that is
our port security and our portsafety.
You would think after the motorvessel Dolly, after everything

(06:28):
we've seen with the with howvulnerable our ports are to
closures, this issue was was wasabsolutely paramount there when
I was in Western Australia.

SPEAKER_02 (06:37):
That's great.
And what a great way tohighlight this area, too.
I mean, you know, it previouslywere not a place people go for
tourism, it sounds like.
And and right going north meansyou're going warmer because
they're in the southernhemisphere.
But that's incredible.
I didn't realize that they didall of the that that well, it's
bulk commodity right out of outof there.

SPEAKER_00 (06:56):
So yeah, that's it.
It it's the biggest port younever heard of.
And and it's just it's justabsolutely incredible.
And I'm pretty sure it's on theequator.
It was pretty hot when it wentthere.
So it was warm.

SPEAKER_02 (07:07):
Yeah.
Well, then you quickly came backto the uh the chilly
mid-Atlantic Northeast.
And yeah, you you testifiedbefore the Senate Subcommittee
on Coast Guard, Maritime andFisheries this week.
Your first, if I'm if I'mcorrect, Senate hearing, right?

SPEAKER_01 (07:20):
No, you are absolutely correct.

SPEAKER_00 (07:22):
So this is the first time I've ever gone before
Congress, let alone the theSenate uh committee on uh on
commerce there.
So yeah, that was that was a bitof a whirlwind.
I got contacted by SenatorSullivan's office.
Senator Sullivan is the is theright is the is the chairman of
the committee, subcommittee,excuse me.
And his staff contacted me.
I thought they were contactingme about questions they wanted

(07:42):
to ask, and and then abouthalfway through our
conversation, it became veryclear that it was something
different.
And then they asked me aboutgoing and testifying.
And of the date they gave me waswhen I was in Australia, so I
couldn't do it, but they woundup actually moving the the the
date.
So yeah, on Tuesday this week, Iflew up and and testified.
So that that was an amazingevent.

SPEAKER_02 (08:02):
That's incredible.
And and like you said, right?
So the subcommittee is chairedby Senator Dan Sullivan of
Alaska.
And honestly, you know, watchingthat hearing, there there was a
lot of focus on on certainlyshipbuilding and and that side
of things.
But the the title itself was SeaChange Reviving Commercial
Shipbuilding.
And that's something that I haveto talk about on this show, and
I think you do on your show aswell, where we're talking so

(08:25):
much about militaryshipbuilding.
We have to focus on thecommercial shipbuilding side
too, because that's where thelongevity comes in.
That's where we really need thekind of market-driven inertia
that that comes from making surethat we're focused on the
commercial side.
And it really felt this hearing,kind of my reaction to it, was
this is probably one of the mostactually technically substantive

(08:48):
maritime hearings in years,perhaps.
It really got down to the nutsand bolts of how to fix things.
And you know, the timing isimportant.
We've had a lot of maritimeinertia this year with the
executive order on restoringAmerica's maritime dominance,
the proposed Ships for AmericaAct, and then we're we're
anticipating, right?
November 5th is the date for themaritime action plan, sometime

(09:08):
in early November is what I keephearing.
But let's take kind of before wedive into all the specifics, why
was this particular hearing?
Why did it feel different?
What made the lawmakers actuallyreally understand it?
I felt like their questions werevery educated and targeted and
they understand what washappening.
And then you provided such greatcontext to helping them further

(09:31):
understand so that they can makebetter legislative decisions.

SPEAKER_00 (09:35):
I have to agree 100% with you, Lauren.
It was you and me watch thesehearings all the time.
And and and one of the thingsthat always strikes me,
especially when we talk aboutanything shipping right now, is
how bipartisan it is.
This is not a judiciary hearing,it's not armed services, it's
it's nothing like that.
This is there was a little briefof issue at the very beginning
there because of the closure ofthe government, but basically we

(09:56):
got right into it.
And and it is amazing howeducated the staffs and the
senators are on this topic.
I was I was very impressed bythat.
I was on the committee with uhMatt Paxton, who is the head of
the shipbuilding council ofAmerica, uh Jeff Vogel, vice
president for Tote, Talise Snow,who's whose family runs a
shipyard in in Seattle, Ibelieve it is Seattle Tacoma

(10:19):
area.
And then there was me, which Isaid, okay, I'm not exactly sure
why I am on this committeebecause it's I I'm like the one
person who's kind of outside ofit.
But one of the things thatSullivan's staff talked to me
about is like, we really needcontext.
We really need, and that's I gota lot of those questions was how
do we get here?
How what what happened?
Because you know, the knee-jerkreaction is it's the Jones Act.
It's you know, and it's like,okay, it's not.

(10:40):
There's a lot of subset here.
And one of the big things Ipointed on throughout the
hearing was we made thatdecision.
We we focused, we wanted tofocus on naval shipbuilding at
the expense of commercialshipbuilding.
And what we found out is that'sdetrimental, not just to
commercial shipbuilding, butactually to Navy shipbuilding,
because we don't have that depthof workforce that we once had.
And I think that was a big thingwe kept talking about throughout

(11:03):
the hearing was was it really iscomplimentary.
It's not it's not competitionbecause you will hear that from
some of the shipyards, GeneralDynamics, Huntington Ingalls,
who are the big Navycontractors, are very concerned
about this because they make theargument that if we build up
commercial shipbuilding, that'llbe at the expense of Navy
shipbuilding.
Because listen, there's a finiteworkforce out there, and that's

(11:25):
going to be a problem.
And I I fundamentally disagreewith that.
I really do.
It's like if there is a largerworkforce, then the workforce
can better absorb the shocksthat hit it, especially from the
military side, where contractsare peaking and troughing all
the time.
And so what I try to do isreally lay out, I really tried
to emphasize a couple of keythings in my opening statement.

(11:46):
Number one, that this is thefirst substantial maritime
legislation we've had in 55years.
Yes, we had the Ocean ShippingReform Act, which dealt with
international trade, but interms of really domestic
maritime reform, you've got togo back to 1970.
And even that, that was kind ofa flawed Merchant Marine Act.
And then we talked about thehistorical nature of how did we

(12:06):
get the big shipbuildingprocesses in the past?
You know, how did Edward Hurleydo it in World War I?
How did Emory Land do it inWorld War II?
And, you know, I got thosequestions about do we require
massive subsidies?
What do we require to make thisthing work?
And I was, I was very shocked asmany questions as I got, because
I assumed everybody else wouldbe getting the questions.
You know, why go to theprofessor from the small private

(12:29):
college in North Carolina?
But I I did get a fair share ofthe questions.

SPEAKER_02 (12:34):
Well, and you did such a great job of really
providing that context, like yousaid.
But of course they went to youbecause that's where they needed
to find out well, where did wego wrong?
What changed?
And then therefore, how can wehow can we course correct?
Or how can we course correct toa better course, even?
And I think that that wassomething that you did really
well.
And I also think, you know, youyou took them through some of

(12:55):
that Jones Act of 1920 andMerchant Marine Act of 1936, and
you know, both times the UScoming off economic crisis and
using the policy to help rebuildthe industrial capacity and
jobs.
And I think that was somethingthat a few weeks ago when we had
the nomination hearings for boththe Maritime Administrator Steve
Carmel and then the two FMCnominees, Lord Bella and Bob
Harvey, one thing that Stevereally talked about was, you

(13:19):
know, we used to be able touplift if needed.
And he wasn't so certain thattomorrow we could do the same
thing, today or tomorrow.
And that that's part of thesevere urgency.
And it's it feels like it'salmost just glossed over, severe
urgency, but like it truly issuch a maritime national
security thing that if we can'tuplift and if we can't get to

(13:44):
even a place where we canquickly make a lot of military
vessels because we already havecommercial shipbuilding vessel
capacity, that's a problem forus as a country.
So you you provided a lot of ofcontext of 1920 and 1936, but
maybe for the listeners, so thateverybody's up to speed, a
little bit of uh what you sharedduring that hearing.

SPEAKER_00 (14:03):
Yeah, so I mean, my opening statement is I really
gave that kind of very quickfive minutes, man, five minutes
goes by very quick when you'redoing one of those things.
But you know, I gave that kindof synopsis.
And one of the things I talkedabout in particular was listen,
uh, World War I, one of thethings we found out was, you
know, we only hauled about 11%of our imports and exports.
And when World War I happenedand all of a sudden we, you
know, shipping disappeared, man,we suffered a massive economic

(14:26):
recession.
It was it was a big problem.
And out of it became theMerchant Marine Act 1920, the
Jones Act, which is more thancabotage.
It's section 27 of 32 sections.
So there's 31 other sections.
What do they deal with?
And they created a really acomprehensive national maritime
strategy or plan that wasexecuted for almost 40 years.

(14:46):
I mean, that was really thesystem we had.
You build on it in 36 with theact, and and you you start
building ships, you start, youknow, you have the idea of
differentials for bothconstruction and operation.
At the same time, the governmentkicks off a building program to
kind of, you know, uh kind of uhprime the pump, so to speak, to
get shipbuilding.
And I made the point that the 36Act put in place the shipyards

(15:09):
and the shipworkers in place sothat you could build the two
ocean navy acts of 38 and 1940.
And and you know, I basicallysaid, listen, we did this twice
in the 20th century.
The problem with doing it twicein the 20th century is for the
20 years after that, we hadbuilt enough ships that we
didn't have to build any ships.
And and what where we falteredwas in the 1960s, 1970s, and we
didn't really adjust to keep up.

(15:30):
And then plus, the system wecreated was designed to really
flood the marketplace withcommercial shipping, but not
American, but foreign shipping.
We i I mean, we could have satthere and been, you know, the
Roman Empire of shipping if wewanted to, but we didn't.
We we we repopulated the world'sfleets, we helped build rebuild
their shipyards, and for thebetter of the world, we created

(15:52):
a global economic system thathauled, you know, from half a
billion tons of cargo in 1950 to12 billion tons today, which is
fantastic, but to the detrimentof our own shipping industry, we
outsourced out that commercialshipping.
And one of the things I startedtalking about is is also the
threat of the Chinese.
It's the Chinese are a uniqueproblem.
It's they're not the BritishEmpire.

(16:13):
The British Empire was muchdifferent.
The Chinese are trying not justto control shipping, but they're
trying to control all aspects ofshipping.
It's very much econ 101 verticalintegration.
You know, every every aspectfrom the shipbuilding, ship
operations, ports, containerleasing, uh uh uh chassis, you
name it, even the mariners,they're controlling all aspects

(16:34):
about that.
And and that means that we arevulnerable to shocks to the
system because the Chinese canbetter absorb them than we can.
And that was what I was tryingto highlight to what why this is
such a security issue.
It's not just a matter of havingAmerican flags on ships.

SPEAKER_02 (16:51):
Well, and I think that's so right.
And actually, you know, thatspeaking of kind of current
events that are happening rightnow, here we are recording on
Thursday.
This will run tomorrow onFriday, where in the midst of
China trade deals just hoursago, where we heard that there's
a pause on the China port fees.
And that's part of it.
I mean, they had tens ofmillions of dollars of hits in
just the first two weeks thatthis USDR Section 301 port fee

(17:14):
was assessed, and it was mostlyhitting Costco and OCL.
And instead of, I was hearingthat most shippers weren't
feeling a thing that all ofthese ocean carriers said that
they weren't going to pass itthrough, hadn't been passing it
through over the past two weeks.
And so in turn, China, becausethey control, you know, all of
the operations of everything oftheir vessels, were just kind of

(17:35):
eating these charges.
So to me, it also certainlysignals I think we're getting a
trade deal out of this becausethey don't want to continue to
eat, because I think theirprojections were like$1.4
billion a year that they mightjust have to continue to eat
these fees should it continuethe way it was and not being
passed through.
So I mean, uh one example ofways that they can kind of

(17:57):
absorb changes to the industry.
But yeah, I think I think thatthis is uh an important thing.
I was expecting to see, andwe'll see what ultimately comes
out in the you know printeddocument.
I was expecting to see a littlebit more on shipbuilding.
I thought that the signal ofhaving the conversation in Korea
might signal that maybe I don'teven know, maybe there might be

(18:17):
a commitment out of China to buyUS built vessels, right?
Like I was kind of thinking thatmight be the cherry on top of a
full trade deal.
Do you think that we'll ever getto that point, perhaps?

SPEAKER_00 (18:29):
I I think a couple of things, Lauren, right off the
bat.
I mean, you you made me thinkabout a couple of things that we
talked about in the committeethat kind of relates to that.
Number one, one of the things,Senator Young, who's the
co-author of the uh of the ShipsAct with Senator Kelly, Kelly
was actually in there.
He wasn't on the committee, buthe was actually in the hearing
room.
Matter of fact, he came in totalk to us before we went out.
He was very gracious with histime.
But uh Young was very muchtalking about what does it mean

(18:52):
to have commercial shipping?
And I talked about the idea thatthis is economic soft power.
This is this is this is part,it's not just naval power that
you exercise to be a true, youknow, Maanian maritime power,
you need the commercial side.
And that's what China haslearned.
I made the argument that Chinahas swallowed Mahan, and they
understand this entirely.
And and that's what China haslearned too.
You know, we we worried, youknow, I got the question about

(19:15):
how can China impact us?
Well, we've impacted China quitea bit with the tariffs.
I mean, I don't think we reallyquite understand the impact that
the port fees and tariffs havehad on China.
We've realized, okay, we canactually wield this against
China, and so we can be sureabout that.
So I do think there's a lot atplay here.
You know, one of the stats Ihad, and I talked about this, if

(19:35):
you look at the last two years,China has grown in terms of
market share of ship orders fromabout 50, but from about, I
forget what it is, but it'sabout a 16% growth.
That's the exact number, by theway, Japan and Korea has
decreased.
And so, you know, in many ways,I was very concerned about this
being a Ships for Korea Act, nota Ships for America Act, because
Korea and Japan have have avested interest in this.

(19:58):
But I do think it's an allianceissue.
I think it's a very goodalliance issue to build this
kind of agreement on.
And I think China recognizesthat.
I think China recognizes that,you know, they they may have
been pushing too hard and nowhave caused a backlash in Japan
and Korea against theirshipbuilding programs.
Because that you're seeing this,you're seeing that investment

(20:19):
from Hanwa over in the UnitedStates.
We've got Hyundai coming in,we've got the Japanese now
talking about it, something theyhad not been talking about.
I think I think one of thethings this week that's kind of
under the radar was the formerJapanese prime minister was not
really much interested in this,but I think the new Japanese
prime minister is.
And, you know, if Trump had Abethere, I think he would have
been full force in this.

(20:39):
But now this new prime ministerseems to be more interested in
that.
And I think the the prospect ofa US-Japan-Korea shipbuilding
tri, you know, trifecta,whatever you want to call this,
is a bit of a concern for China.
And I think that's one of thereasons we saw the the lessening
on the port fees right now, andperhaps China willing to back
off a little bit.
And they have been hurt.

(21:00):
We've seen numbers coming out ofChina that orders are down, but
at the same time, they're stillthe behemoth.
I mean, they're not goinganywhere.

SPEAKER_02 (21:07):
That's right.
Well, and I think that's truetoo.
I mean, once you start to lookat some of the intellectual
property, you know, conversionsor requirements that China had,
and you know, just to dobusiness, there were some things
that made other countriesuncomfortable that I think that
is, I think you're you're spoton why people were so quick to,
if given a reason, to perhapsturn away from China as their

(21:27):
option for vessel purchases andstart looking for the other
options.
And so I think I think that thatis how I see things going too,
this trifecta, and and maybeeven larger than that, right?
I think Europeans are gonnastart looking at, you know,
potentially we we haveicebreaker orders out of Finland
right now from the US CoastGuard and just US generally.
But also I think that maybe morepartnerships are gonna be forged

(21:48):
there as well.
So we'll we'll see how all ofthat that shakes out.
You know, one thing that Ialways want to mention when we
start talking about the JonesAct, I think that your intro
remarks talking about perhaps anot a repeal, but a revisit, a
kind of an update.
It was a good point.
But also other countries havecabotage, other, which means
other countries have preferencefor their own flag.
And I think that that sometimesgets missed in the larger

(22:11):
conversation, that this isn'tjust a US protectionism idea.
This is kind of thing assomething that other countries
have have thought as a good ideatoo.
And so the problem, part of theproblem was it didn't, even
though we had this law, wedidn't really have all of the
support.
And one of the other things toothat you certainly brought up
was we need to have thoseeconomic drivers for the cargo

(22:33):
to help fuel and fill thosecargo vessels.
And so it's not just US flag andthat's it alone.
We have to have that economicengine that keeps it going
because otherwise we will findourselves in this same realm in
30, 40, maybe even sooner yearsif we don't have an industry
that can just keep itself going.

(22:54):
Subsidies are only going to lastso long.
And once that money dries up,which is kind of what happened,
you know, in this respect andwhy we are where we are now.
If we can have the economicengine take over, we don't have
to subsidize as much, maybe atall.
I you know, I don't necessarilywant to go all that way, but we
certainly there there's someeconomic drivers that happen
there.
So speak to that a little bit.
And you had brought up someincentives for shippers.

SPEAKER_00 (23:17):
I I did.
You know, it's very interestingthat you know my Australia trip
actually coincided very nicewith this.
Because I gotta tell you, when Iwas in Australia and New
Zealand, one of the things theytalked about is really losing
their national fleet and beingat the really at the mercy of
some foreign shipping companieshere.
Because one of the thingsAustralia is taught is trying to
revive is this kind of nationalshipping line to provide a

(23:38):
linkage service between alltheir cities because their
internal transportation is notgreat.
I mean, their rail isn't thebest, the road is very
difficult, you know, to movearound a continent for a
population of 30 million.
New Zealand being at the tailend of a supply chain line is
always at the mercy of a supplyuh of a company that may want to
cancel service because it's notbeing profitable enough for

(24:00):
them.
And so I mean, we definitely seethat happening.
For the United States, you know,you know, Senator Cruz, when he
gave me his question, was it wasa huge question.
And I looked at that question asbeing a very elaborate question
that kind of delved into thisquite a bit.
You know, he asked me basically,you know, how do we do this
without massive subsidies?
You know, we don't want to dowhat the 1928 act did, which

(24:21):
just is throw money at itbecause that's going to open up
the the potential for waste andabuse.
And I agreed with him.
I told him, you know, one of thestats I came in with is the US
Americans are the you knowfourth largest owners of ships
in the world.
But our merchant marine isnumber 23, which means that we
don't mind owning ships.
We just don't want to ownAmerican ships, which means
we're fine to invest inshipping.
And what we have to do, and Itold the senator this, is we

(24:43):
need to adapt some of thosemethods outside that will make
money from the United Stateswant to go into American
shipping and not foreignshipping.
So uh, you know, a lot of that'sin the Ships Act.
You know, we've got the 25% taxreduction for for investment.
We've got Title XI, we have uh awhole batch of methods that
we're trying to do that.
I added a few more in there.
I talked about the ideas likelisten, if you haul an American

(25:05):
ship, you get a tax incentive.
You get you get basically, youknow, if I'm a shipper and I'm
hauling on an American good, Ishould be able to take right
that off of my taxes.
Hey, if I'm importing fromoverseas, maybe my tariffs don't
apply.
You know, maybe I come intariff-free.
I mean, if all of a sudden youcome in tariff-free, that may
generate a lot of cargo going onships.
I think we got to, again, lookoutside the box.

(25:25):
We have to open up shipping inthe United States.
I'd love to do liquefied naturalgas movement around the United
States.
It's going to take five years tobuild an LNG carry in the United
States.
I mean, we're not talking aboutseeing a ship till 2030.
So this is where my Jones Actthing comes in.
Maybe we need to waive aspectsof it to bring foreign-built-in
ships in for a temporary periodto do that.

(25:46):
I know I made a couple of peoplebehind me in that audience
probably cringe and not likethat idea.
And I made others kind of cheerabout it, but you know, you know
as well as I do the Jones Actand US shipping, you're bipolar
on this.
Either you're 100% for it oryou're 100% against it.
I I don't represent anybody butmyself.
And I could sit there and say,listen, it's a law, it made
sense in 1920.
And one of the things we failedto do since, you know, for 105

(26:10):
years is really keep our lawsand regulations updated.
And you know that better than Ido over at the FMC and
everything we've done with that.
We tend to be, I don't I want tosay 10 years behind, but I think
we're about 20, 30 years behindat times.
So we just need to have thatconversation.
And and I can have thatconversation.
I think I think it's one of thereasons I was on this on this
hearing, is because I'm atenured professor.

(26:32):
I can I can't be fired.
So I'm good to go.

SPEAKER_02 (26:34):
You're a free agent, you're good.
That's right.
Well, you know, it's it's sointeresting.
The 1920 Merchant Marine Act, sothat also had some FMC
application to it that I thinkit's often forgotten and has
often been used with such alight touch.
But we have the Foreign ShippingPractices Act, which pairs with
section 19 of the MerchantMarine Act, which gives the FMC

(26:55):
authority to do things likelooking at flags of convenience
and the unfair, unreasonablepractices that might be
associated with that.
Or more importantly, and I thinkmore of a leverage right now, is
this maritime choke pointsinvestigation that's still
ongoing.
They collected all the comments,but they were looking at seven
maritime choke points around theworld, one being the Northern

(27:16):
Sea route, that I think is areally interesting in the last
week thing that probably willcome to the FMC's attention, you
know, with China in the news.
China and Russia have announcedthat they will be working
together in the Northern Searoute, which the FMC identified
that that was a maritime chokepoint they were looking at
because they wanted to seewhether some unfair practices,

(27:38):
did you have to hire a certainice-breaking company?
Were the rates fair, not fair,right?
Was there subjectiveness or trueobjectiveness in the area?
I mean, it's almost wild to gothis far, but if China there's
not a lot of Russian flags,right?
So the recourse that the FMC cantake is they can either, as it
relates to US trade, right?
The vessels have to have somesort of a nexus to the US or FMC

(28:01):
authorities to really take hold.
We don't have a lot of Russianvessels.
If China can somehow get loopedinto that maritime choke point
of the Northern Sea route andbeing part of the conversation
of unfair or unfavorableshipping conditions for the
otherwise free and flow, freeflow and efficient movement of
goods, I mean the FMC asrecourse could turn away Chinese
flagged vessels.

(28:22):
I mean, talk about a hammer thatnow the US has to continue the
conference.
They didn't even need that forthis trade conversation.

SPEAKER_00 (28:30):
No, and and I I think, you know, my hearing, and
as you said, the confirmationslast week were really
interesting.
Laura DeBello and Robert Harveyup there for the FMC.
I mean, we're going to see someaspects from the FMC.
The FMC have been unleashed,though, largely.
And I that you and I have talkedabout this in the past.
They've got a new kind of windbehind their sail, so to speak.

(28:51):
And the choke points one is veryinteresting.
One of the things that SenatorSullivan, for example, talked
about uh very briefly in myhearing was the idea of
re-establishing ADAC as a Navybase.
That's in the Aleutian Islands.
And that's a really interesting.
I was always has I always kindof criticized the closing of
that ADAC naval base becausenumber one, it's astride this
Trans-Pacific route becausegreat circle, the world's not
flat, you know, right theshortest distance between China

(29:13):
and the US goes right past theAleutian Islands.
And then ADAC is right there atthat choke point coming out of
the Bering Sea.
And so there is a lot of aspectsgoing on here.
And what we've seen now is isnon-ICE strengthened ships going
through that route.
We're seeing that last year wasthe biggest tonnage going
through that route.
This is definitely something,especially as you start creating

(29:34):
this sanctioned fleet, this darkfleet, shadow fleet.
The Russians are going to bypassport state controls and all
these issues.
They can go directly, you don'thave to worry about going
through waters, confined,straight waters of European
nations.
They can just go directly toChina and do this route.
And I don't buy the shippingline sitting there saying we're
not going to go there because ofemissions issues.

(29:56):
Shipping companies will gowherever they want to go if the
profits are there.
And That's something that welearned very quickly.
So again, this goes to that softpower application that I think
is really important about havingcommercial shipbuilding and
commercial merch marine in theUnited States.
We're seeing that with theRussians right now, how they're
using it.
The Russian merch marine isabout the size of the US, but
they're using it a lot moreefficiently and directed than

(30:18):
the US is using its merchmarine.

SPEAKER_02 (30:20):
Yeah, and I think that's right too.
And you know, to kind of go backto the tax incentive, right?
The commercial shipping side ofthings, that was, as I under, as
I saw, it was in part of thedrafts of some of those ships
acts, the drafts before it wasactually introduced.
And, you know, the the word thatI was hearing was that shippers
were thrilled with the idea ofwhether it was exporting and you

(30:41):
get a tax incentive or tax ratefor exporting on US vessels, or
for the importers, whether itwas ad valorum based on the
value of the goods or it wasweight.
I mean, we have some reallyimportant imports that are
coming in, meat being one ofthose, where if there weren't
tariffs, particularly on Brazil,right?
That that's a big country thatwe import meat from for the lien
cuts that are important to theoverall making of a hamburger,

(31:03):
which is a bit about American ascherry pie, right?
But but had there been anincentive to move on a US flag
vessel, I think we wouldactually probably have too much
imports coming in on our demandthat you might see the rates
skyrocket just because you havetoo many people trying to
quickly move over to US flags.
So perhaps that's why I pulledback.

(31:24):
But I think that maybe havingthe same way that the US port,
the Section 301 port fees, agraduated once we get the
capacity there, once we get thevessels there, to continue to
push shippers throughincentives, not penalties, but
incentives to choose.
Because what we definitely sawpre-COVID was, you know, freight
rates ruled the day.
What we're seeing post-COVID isthat it's more about the

(31:47):
experience, it's more about thecontrol.
We're seeing so much morediversify diversification of
ports of entry, supply chainmethods.
Everybody wants to have a littlebit more of an understanding of
what it looked like.
Where previous to COVID, it waslike, all right, good.
It's my my my stuff showed up atthe port.
Let me figure out the inlandtransport now.
Now it's total system thatpeople understand the ocean

(32:08):
side.

SPEAKER_00 (32:09):
Oh, it it is reliability.
It is everything.
I mean, we keep talking aboutthat all the time.
You know, the classic supplychain issue we saw was pre-COVID
pre-supply chain, you know, wewere paying, you know, low fees
for great reliability.
You know, the cargo was arrivingin the port we wanted, which was
LA and Long Beach, without aproblem.
And then COVID hit and you'repaying a huge amount of fees,

(32:29):
but low reliability, it's notcoming in.
And what we saw is shipperschange.
They they realized, like, why amI going into the LA Long Beach
complex?
It's giving me nothing butheadaches because it's it it's
we're we're jamming the systemso much that the inland
transportation system is wherewe're seeing the fault happen.
And we fixed a lot of that.
I mean, there's a lot of issuesthat got fixed.
Warehouse management is muchbetter than it was.

(32:50):
But one of the things we saw isa much more diverse ability to
transport into the system.
And I think that is uh exactlykey.
And one of the reasons I wantedto bring that up was because,
again, we're in the markup phasenow for this bill, and it's it
we can bring that back in.
And I know there was hesitationabout entering it beforehand,
that we didn't want to get intoit.

(33:10):
But I think the incentives is areal key thing.
Because let's be clear, if we ifwe flax the port fees, for
example, that was the money thatwas going to be put into this
maritime trust fund that wasgoing to help finance the
shipbuilding.
And if all of a sudden port feesare gonna be down, we're not
gonna be collecting that youknow,$3 billion in port fees,
then we got a problem becausethen we've got to come up with

(33:31):
some other solution to do it.
And I'm not a big one who likesthe taxes, but incentives to me
are really good.
If we want to do that, becauseit because when I talked about,
for example, increasing themaritime security program, this
is the fleet of 60 ships thatdoes receive a subsidy to
basically flag into the U.S.
registry and carry.
We've got 60 cargo ships, 10tankers that are doing that.

(33:51):
But understand, even thatsubsidy is not enough to make
them economically viable.
They need cargo.
And one of the things that we'veseen is U.S.
cargo has reduced it under thisadministration.
There's not as much U.S.
cargo, either military or aidcargo going out.
And you know, one of thecomments I got before I did my
testimony is like, hey, we knowyou're gonna advocate for this,

(34:12):
but we don't want, we reallydon't want to see an expansion
of the MSP fleet because we'refighting for cargo right now.
Something I didn't really get achance to talk about a little
bit more in detail in the in thehearing, I would have loved to
do.
But I noted in my here in myopening, listen, this has got to
be concurrent with cargo.
And I don't want to go crazywith cargo because Steve Carmel
had done that the previous week.
But what I said is listen, youthis has got to be concurrent,

(34:34):
it's got to be part of anoverall strategy, and so we need
to raise the number of cargo andto meet incentives is the way to
do that.
Hey, I I want I want to go on anAmerican ship because it gets
me, it gets me priority goinginto U.S.
ports.
I'm losing, I'm not gonna pay atariff uh coming in or a much
lower tariff if I'm coming in.
So therefore, I want to be ableto do that.
And to me, that seems to be agreat solution.

(34:55):
You get the added protection andbenefits of being U.S.
registry over Marshall Islands,Liberia, and Panama, which is
which again, how do we make thathappen?
And I th I thought I laid out acouple of ideas for them to
think about.

SPEAKER_02 (35:08):
Yeah, and I think that that's so important too.
I, you know, going back tothinking about the Ships Act a
little bit more, I think thatyou made such a strong point
saying, let's not make the Shipsfor Korea Act, let's make this
the Ships for America Act, butbut not in a way that's
disparaging to our allies andpartners there.
But it was really kind of thatwarning against outsourcing the
entire industrial base again sothat we might be back here,

(35:31):
right?
So let's find ways of partneringwith our allies, but then
continuing on.
There's some other pieces of theSHIPS Act that I think are
really important that, you know,even within it, it talks about
workforce development, it talksabout technology advancements,
it talks about, you know, thethe US Center for Maritime
Innovation, it talks about somereally exciting new initiatives

(35:53):
that are moving forward thatalso perhaps will find its way
into the maritime action planand have kind of more of a house
for an overall national maritimestrategy.
One thing that that I have heardfloated around is even with our
mariners, perhaps recategorizingthem because they kind of fall
into this are they military, arethey not, right?

(36:14):
And perhaps even having, and andI don't know how you feel about
this, I'm kind of springing thison you now, but even a veterans'
preference for, you know,mariners in in the field.
Once they they, especially ifthey served in any sort of
capacity that was in a combatzone, right?
We're seeing that even nowadayswhere they're not getting a lot
of credit for being in the RedSea and getting fired upon,
right?
I mean, there's certainly thingsthat the the recognition of the

(36:38):
dangers that go along with itthat need to be recognized.
But also, how do you get morepeople into the maritime
industry and want to be part ofit?
And I think having it be a coolnew thing, it's always going to
have a sense of adventure to it,right?
That's gonna always be theinnate draw.
But but having a how do we getit to be something that boats

(36:59):
are still cool when you're inkindergarten, somewhere along
the line, they become maybe lesscool.
How do we keep it there?

SPEAKER_00 (37:06):
No, I I think that's first of all, I I love the idea
of veterans status for mariners.
I've talked about this for along time.
I've roped John Conrad intothis.
I I talk about this a lot.
I I laugh about the fact that mywife and I were on a ship
together in the Persian GulfWar, and you know, she was in
the Navy.
I was uh sailing for militarysea lift command as a civilian,
and you know, she got six medalsand she got the GI bill and she

(37:30):
got all these advantages.
I got to pay$35 to get a medal,and and then you know, it was
sent to me by Merit.
And that was it.
That's that's basically what Igot a medal?
I had to pay for it.
Yeah, I didn't order it, but Iyeah, I eventually got one.
But but no, I I I do I do think,you know, one of the things we
want to do is how do weincentivize shipping for our
mariners?
And you know, tax-free status,you know, you know, if you sell

(37:52):
you know more than 180 days onyour license, for example, in a
year, and I don't care if it'sinternational or domestic, it
creates mobility, you don't haveto pay federal income tax, or it
gets waived, or it's a write-offfor you.
Now all of a sudden, you know,you're making money akin to what
somebody is making in SiliconValley or something like that.
That's incentive.
That helps you pay off yourcollege, it does all these
things, it will bring people in.

(38:14):
And I think that's one of theelements because what we tend to
forget is is that these marinersare doing something very unique
in terms of not justcommercially moving goods, but
for the national security.
Uh uh Senator uh Tammy Bowenfrom Wisconsin was talking about
the Great Lakes.
I didn't get a chance to answera question for her because she
didn't really address it to me.
But you know, we just had a newship built up on the Great

(38:35):
Lakes.
Why are we not building up onthe Great Lakes?
Why is there not a fund toreplace the Great Lakes fleet,
which is age?
We're coming up on the 50thanniversary of the Edmund
Fitzgerald sinking.
You know, why are we not havinga program up there to replace
all the Lakers up there?
You know, that brings work intoWisconsin where uh FinCantier is
that's going to build the Navyfrigates.
That, you know, will create aworkforce up in the lakes region

(38:59):
that is absolutely essential.
And we should be building it.
When you build one ship in 40years, that's a work of art.
It's not a ship.
It's a one-of-a-kind thing.
It's it's you need to build 20of them to make this efficient.
And so we should be doing that.
I talked about in my openingstatement is like, hey, we need
to be replacing the fleet oftugboats, towboats, and ferries
in the United States.

(39:19):
One of the reasons I talkedabout that is because if you
build an ocean-going ship, it'sthree to five years till you see
it.
I can build a tugboat tomorrow.
I get a tugboat built in a year.
That's going to start, you know,getting the welders, the
electricians, the ship fitters,the uh the uh engineers going on
a smaller basis and they canstart working in small yards,
building those state-of-the-arttugs that I just saw in

(39:40):
Australia at a port, which werejust phenomenal, that we should
have in every port in the UnitedStates providing escorts for
ships coming in and out so wedon't have an incident like the
Dolly happen again that shuts anAmerican port down for two
months.
Imagine if that happened inHouston or New York or Savannah
or LA and Long Beach.
It'd be catastrophic.
It would be catastrophic forthat to happen.

(40:01):
And, you know, that's theincentive we need to be talking
about.
And that's what I wanted to kindof emphasize on that, because
that's where we can startgetting that employment in.
We can start getting marinersinto that program.
And, you know, I've talked aboutthis is marriage should be the
education process to tell peoplearound the United States that
these jobs are there.
You know, I'm a volunteerfirefighter, and every

(40:23):
volunteer, every call we ever goto, there's a little kid there.
We give him a little plastichelmet, we give them a coloring
book, and we say, hey, here yougo.
And what every little kid wantsto be is a firefighter.
That's what they want to be whenthey grow up.
And you know, we should be doingthat with kids around the
country, not just at highschools, at fairs or college
fairs, but in middle schools,talking about this so that they

(40:45):
know, hey, when I graduate fromcollege, I can go.
I had a very interestingquestion from Senator Young.
Senator Young was talking abouttrade schools and how do we do
education.
And I joked with him, is like, Iwent to a four-year state
maritime academy.
That's basically a trade school.
I got a college degree and atrade in the same thing.
That's what we need to beadvocating out there.
You graduate with the experienceso that you can go out into a

(41:07):
workplace.
I graduated on a, you know, onone day, and within a few weeks,
I was standing watch on abridge.
I didn't need transition, Ididn't need training.
I could do the job day one.
And that's what we need to beproducing for our shipyards
around the United States.
And that's why I thought Ms.
Snow sitting next to me wasreally good because she talked
about that on a very small levelin her family shipyard in

(41:28):
Seattle.

SPEAKER_02 (41:29):
Yeah, you know, and it's that's one thing.
So this the I laugh about theelementary school level.
There was a maritime roundtablediscussion at National Maritime
Day, and some of the NationalSecurity Council guys were
there.
And, you know, one thing that Ihave a young family, so uh I
have a first grader now, butlast year she was in
kindergarten.
So one of the things that I was,as I signed up for the PTO, was

(41:50):
trying to get a field trip toMass Maritime Academy, which is
about 20 minutes away from ourhouse, and they had never taken
a trip there before.
So, you know, I I didn't have ahigh schooler yet, I just had a
kindergartner.
So I mentioned I was trying toget a field trip for the school
to go over to Mass Maritime, andso they brought that up.
Well, PTO mom over here istrying to start them as young as
they uh getting the maritimegoing, which uh mass maritime is

(42:12):
so generous to welcome that ideawith open arms.

SPEAKER_00 (42:16):
But we think how much the kids would love to see
that, to be able to go on a shipand see that and and and
experience that.
I can remember when I went onIntrepid as a kid, and it was
just it was it was eye-opening.
It was like amazing to do that.
And you know, we have effortsthat are trying to do that,
trying to turn some ships intoyou know work centers, you know,
convert one of the old fast Clipships.

(42:36):
I'm working with a group thatwants to take the nuclear ship
Savannah down to Savannah tostart talking about doing that
maybe on another basis for thesemodular nuclear reactors that
we're talking about.
So I I I mean, this is the typeof effort we need to go.
Unfortunately, we kind of, youknow, again, sea blindness
overtook us.
And that's one of the big issuesI talked about in the hearing.

SPEAKER_02 (42:55):
Yeah.
So we have the USS Massachusettsin Fall River around here too,
and you can actually doovernight trips.
I think it's mostly Boy Scoutsand Girl Scouts that do that.
But the big Miami, you canactually go and spend an
overnight on this uh retiredvessel.
But yeah, I mean it's it's buthere we are in proximity to not
just one, but two, right?
Maine Maritime Academy as well,are are available to this

(43:17):
region, and it's not superingrained in just kind of every
day.
And this is where it's got tostart at least here.
Same thing.
I grew up in Travis City,Michigan, which is where the
Great Lakes Maritime Academy is.
I certainly know what they donow, I would have been a prime
candidate.
So had there been a little bitmore messaging of trying to
connect right to the community,which no fault to the academies,
because I think that they aredoing that well.

(43:37):
Uh, but that's where I think,and I hope that we'll see a
little bit more out of Merad forthat.
I think Sang has been doing thatfantastically, trying to get
more messaging going.
Um and I I I'm hopeful thatSteve will do the same thing
because I was very impressedwith this hearing.
But you know, the other thingfrom the SHIPS Act that you
talked a little bit about andyou know, some of the good
things that were happening, butwe also have the public student
loan forgiveness in the SHIPSAct that I think is a crucial

(43:59):
thing and ties back to theMaritime Transportation System
National Advisory Committee.
So MidSnack, of which I'vementioned that I was a member
previously, that was one of therecommendations that came from
there was look, if we're gonnahave students going through
four-year trade schools,four-year academies, where
they're coming out with debt,why shouldn't they be added to
the list, right?
Who knows?
Whatever, however, you feelabout public student loan

(44:20):
forgiveness generally, there's along list of people who qualify.
And so I'm I'm happy to see thatin the Ships Act as being
another incentive to try to getsome of the maritime interest in
the new mariners.

SPEAKER_00 (44:31):
I agree.
You know, one of the things thatI talk about a lot is most
people don't realize the biggestemployer of American merchant
mariners is Military Sea LiftCommand, the U.S.
Navy.
One out of five ships has acivilian crew on board that's
operating them.
These aren't contractors, theseare people integrated into the
unified command authority.
They're they're actuallyfollowing orders and actually
can give orders to Navy ships attimes when they're out there.

(44:54):
And yet, you know, they'retreated like you know, they're
just like you know, likegovernment employees working in
Washington, D.C.
They're not.
They are substantiallydifferent.
And the idea of a loanforgiveness for merchant
mariners, it it's so difficultfor the Americans to maintain
their merchant marinecredentials.
It's it's another issue.
It's a really difficult thing.

(45:15):
I I mine has lapsed because Iit's impossible to keep it up
because the the amount of timeand training, and it's really
the cost is just ridiculous.
Why are we not, you know, wewant this pool of merchant
mariners, we need them for ourreserve fleet.
How do we go about doing this?
And so, you know, all of thishas got to be kind of wrapped up
into the Ships Act and talkabout that.

(45:36):
And I think loan forgiveness isa big one for that.
And and again, you know, if ifI'm a merchant, if I'm a cadet
at one of these merchant marineschools, I'm not just paying for
my education, I gotta pay forfuel for my summer, you know,
two you know, 45 days on the onthe training ship, which isn't a
cruise ship.
It's not like you're on the loveboat, you're working on that
ship, and and and yet I gottapay a huge amount of money to

(45:57):
pay the fuel.
Why do we not pay the fuel?
It's crazy.
I don't understand that concept.
You know, we want we want theyou know, the young, the best,
and the brightest to do that.
And this is what I was talkingabout too, is like, you know,
shipyards are gonna change.
It's not gonna be just thestandard welding.
We're talking about AI, we'retalking about a lot of different
ways.
One of the good things about ourshipyards being sold is that
when we start retooling them,they're gonna be state of the

(46:19):
art.
I mean, we're gonna go from youknow, from the dark ages to the
modern age all of a sudden.
And that means you're gonnabring in some new technologies
that we didn't have in the past,you know, robotics, AI, all this
kind of stuff.
That opens the door to bring ina whole new generation of
shipyard workers.
And again, I think we need to betalking about that a lot more.
And again, that education shouldbe done not just by the maritime

(46:42):
academies and the unions and theshipping companies, but from
Marat.
I have been a harsh credit, youknow, of Marat.
I've talked about this a lot,that Mered has been underfunded,
under-resourced, you know, muchlike the FMC has done.
We've seen the FMC get theirplus up.
And I would have loved to seeSteve been a little bit more
proactive on what I want.
You know, it's just that's youropportunity when you're going

(47:04):
through that confirmationhearing to really set the bar
for what you want to see happen.
Hopefully he does that when hegets in.
Zhang Yi has been doing a greatjob.
I joke with him all the time.
Is like I see a picture of himwith a helmet on all the time.
He's somewhere getting Marat outthere, and that's exactly what
you want.
That kind of dynamic spirit outthere and getting the message
across.

SPEAKER_02 (47:24):
That's right.
Well, and that's what Marat issupposed to be, the promotional
arm of US Maritime, right?
The FMC is the regulatory arm,the judicial side of it.
And you have Marad who is builtfor promoting the US interests,
right?
FMC is arguably flag neutral.
You know, yeah, there's so muchhere that that is still, you

(47:45):
know, one thing that I want tosay is Mid Snack has provided a
lot of recommendations over thepast 20 years that are really
circling around some of thegreat ideas that are coming out
now.
That it's it's a testament tothe engagement with the
industry, right?
And I think that that wasprobably something that was
lacking in focus on where thegovernment side wanted to go.

(48:10):
And I think that Mitsnack wasalways kind of sitting right
there, ready and able andwanting, right, just passionate
people in the industry thatwanted to move forward.
I love most of the Ships Act.
The one thing that I still kindof take issue with in the SHIPS
Act is that it will moveMidSnack membership to the
congressman instead of being awithin MARAD kind of populated

(48:34):
member thing.
And my only fear is that then itbecomes or potentially could
become favored positions givento people who maybe kind of care
about the industry.
Whereas right now, MidSnack andthe membership, the nominations,
the applications that go into itare just a bunch of passionate
people that want to help theindustry.
And so, you know, I I I as longas there still is that federal

(48:57):
advisory engagement between theindustry and the stakeholders
and the government entities,it's important.
But I'm I'm so nervous aboutthat turning into a you pay a
bunch of money, you become alobbyist, you you petition the
congressman, and then you justget that favored position.
So we're going to get thelargest companies only
populating this mid snackinstead of, you know, people

(49:19):
like you and me, maybe being onit, right?
Or anybody else who who justreally is passionate and has
some great ideas on how tochange things.

SPEAKER_00 (49:27):
Well, and you know, it was funny.
At the end of the hearing,Senator Sullivan asked each of
us, you know, our our you know,what's our one takeaway, our big
issue about it?
And we went down the line.
And when it came to me, youknow, one of the things I
mentioned was leadership.
It's like, it's like, who'sleading this?
Who's leading this effort?
Under the Ships Act, there'ssupposed to be a maritime uh
security advisor, a nationaladvisor, I forget what the title

(49:47):
is.
And then under them, a amaritime board.
And Midznak should be a part ofthat.
I mean, obviously, you know,that's my point is is bringing
that group together under thatadvisor is key.
You know, you need that.
You know, I talked about thefact that it was Edward Hurley
in World War I, it was Embraer SLand in World War II.
Who's gonna do that now?
Is it gonna be Steve Carmel overat Merritt?
I don't know.

(50:08):
He's got a lot to tackle overthere.
Is it gonna be whoever's gonnabe the chairman of the FMC,
which I imagine will be eitherLaura or or Richard, probably
going in there, or or that's whoI envision is gonna be one of
those two going in, or you know,who's gonna be in charge?
And you know, midst that there'sa lot of great organizations.
I mean, I mean, the maritimeschools.
I mean, there's so much you canpull in there.

(50:29):
And I think one of the bigproblems has been it's been so
diverse, it's been so kind ofdispersed out there that there
has been no one who's reallybeen able to articulate that and
really put it together to helpbring, you know, bring the
forces of maritimeadministration and the FMC
together, for example, becausebecause you know, I think both
of them can do a lot, theregulatory side, the promotion

(50:50):
side, domestic versusinternational, very important.
Bring the shipbuilders intothis.
You know, I think that's anelement that's really key.
And and and and so I agree, Ihave my hesitations about the
SHIPS Act too.
You know, I've I voiced myconcern.
I'm worried that this becomesships for Korea, not ships for
the United States.
And so I want to make sure thatit still, you know, is doing

(51:10):
what it's setting out to do.
I I have a I have a feelingabout the SHIPS Act that it's
not the final iteration of whatwe see coming in.
That's why I kind of referred tothe Merchant Marine Act of 2025.
I think it's going to be aseries of things that come
together to finally give us ournew national maritime policy.

SPEAKER_02 (51:28):
That's right.
And I think that that's socrucial that even though we have
little comments and suggestionshere and there, it is such a
breath of fresh air to be havingthis level of inertia and
movement and excitement in themaritime industry, moving things
forward, really kind of bringingus out of the doldrums.
And I don't want to say that wewere total doldrums, but we

(51:49):
needed this new energy andexcitement and inertia that
began in the springtime.
You know, I think allowing forrepositioning of vessels and the
port fees and kind of the, youknow, the adjustment of the
market so that we didn't get anyovernight changes to now here we
are in the fall.
We're we're celebrating the newtraining ship, state of Maine

(52:10):
coming out, and we're justcontinuing to build on these
successes and theseconversations and the actual com
uh actual questions and goodquestions out of senators
instead of maybe even just fiveor six years ago, the senators
confusing FMC and Marat.
And even the ones who were themost educated on the different
agencies were still confusingthe two agencies.

(52:31):
That I love this movementbecause I think that it's so
needed.
I also see that states arestarting to take things into
their own hands too, and we'reseeing a lot of maritime
strategies pop up.
One notably, Michigan, is isforming together a maritime
strategy that will kind ofcombine both the technical
colleges that they have, theGreat Lakes Maritime Academy,

(52:53):
the components of shipbuildingthat they have available there
that help support some of theother shipbuilding in the
maritime, in the midres region,you know, the Laker fleet and
the importance there.
But I think that one thing thatThule talked about, Thule Snow
on the panel, was that sometimesit's hard for just even letting
people know what's out there.
And I see these state-basedmaritime strategies as the menus

(53:17):
that states have to offer in themaritime world.
What are some of the things thatyou want to elevate and how do
you put that out there?
Well, a maritime strategy soundslike a great place to start.

SPEAKER_00 (53:28):
I agree.
I mean, you look at Michigan,I'll go even further.
Uh uh, South Carolina's talkingabout this with maybe the
creation of a maritime academythrough the Citadel.
Georgia has talked about thiswith a supply chain kind of
university through their schoolsystem.
Louisiana is talking about maybebeing the lead agency for a
Gulf, you know, agency or entitycoming together.

(53:48):
I think there's there's huge,you know, again, for us, you
know, you're right.
There was always people who wereadvocating this.
Helen Bentley, we can go back.
We can always find the people inthe group who were advocating
for it.
But what's different today isthat everybody realizes wait a
minute, this is really importantto me.
You know, I go back to DustyJohnson, the this the
congressman from South Dakota,Republican with John Garamendi

(54:09):
pushing through the OceanShipping Reform Act.
Republican from South Dakota istalking about shipping reform.
That's because he realized thathis farmers could not get grain
exported.
And so I think the supply chaincrisis has woken everybody up to
this.
And my my fear, much like yourfear, is that this is fleeting.
Something else, you know, isgoing to, you know, some other

(54:31):
distraction is going to happen,squirrel, you know, and all of a
sudden we're distracted, and nowall of a sudden we're not paying
attention.
Uh, I think I think we need tobe harnessing those strategies
on the state level, talkingabout them.
You know, one of the things isstates have mechanisms to get
this out into their schoolsystems, which I think is
really, really important.
I think MARAD should be workingon education programs full-time

(54:54):
to put out to school systemsthat they can tap into, you
know, for the K through 12, sothat if I'm a teacher, if I'm a
homeschooler, I can pull up amaritime history of the United
States, you know, pull that upas it we we've had that with the
National Endowment of the Artsthrough places like Mystic, for
example.
Why don't we see thatpartnership with the Center of
Maritime Excellence up at MysticSeaport that works on that on

(55:15):
the maritime history side?
Let's do the maritime policyside today for job
opportunities.
There are institutions.
I was just up in Norfolk at theVirginia Maritime Association.
Education was a forefront issuethey were talking about.
How do we educate people in theHampton Roads area of the
opportunities in the maritimesector?
And I'm not just talking aboutbeing a longshoreman, operating

(55:37):
a crane.
I'm talking about, hey, you canwork in the corporate office,
you can be the accountant, youcan do the financing.
There's there's there's tons ofdifferent areas that are out
there for them.
And so I think we need to tapinto the ports entities that are
out there, the terminals thatare out there, the shipping
lines.
I mean, again, it is a verytough thing to do.
And my problem is like we reallyneed coherent strategy for that.

(56:01):
And that's why I go back to thatnational maritime advisor to
really do that.
Uh, again, if if if I was inSteve's seat, you know, for the
maritime administrator beinginterviewed, I would have a
list, a litany list.
This is what I want to do.
I need I need to plus up myeducation, I need to plus these
guys up.
This is what I want.
And and that's how we startdoing it.
And you know, we've had a veryseries of proactive

(56:22):
administrations.
The first Trump, even the Bidenadministration was was was
talking about this with theOcean Shipping Reform Act.
Now we have this in in thesecond Trump administration.
This is not going away, I don'tthink.
I really don't see thiseclipsing right now because it's
on the forefront of not just theeconomics, but also the military
side.
Even the military understandsthat the la our vulnerabilities

(56:43):
in in shipping are there.
And everybody's talking aboutthis.

SPEAKER_02 (56:48):
You know, and I yeah, that's that's so right.
And I love, you know, I thinkSteve is going to do a fantastic
job as maritime administrator.
But let me let me put this outthere.
One day we will have a maritimeadministrator, Mercagliano, and
it is going to tongue tieeverybody.
And perhaps maybe you'll beMaret, I'll be over at FMC, and
then the two of us with ourpowers combined, we will be

(57:10):
moving forward US maritimedominance.
We'll we'll we'll certainly waitour turn, but uh wouldn't that
be great to have both of us upthere?

SPEAKER_01 (57:18):
I I I don't know.
I don't know if if if themaritime professors are of that
capability for us to be there.
Do they really want to unleashus on everything?
Uh it would be great.
Don't get me wrong, Lauren.
It would be it'd be uhtremendous amount of fun.
And I think we would we would doa great job.

SPEAKER_00 (57:33):
I I I think you know, I'm I was I was so honored
and and and really just humbledto go up and talk before
Congress with this and to putthis out there and really lay
out what I thought was reallyimportant.
And and I I was even morehumbled by the questions, by the
interests of the senators.

(57:53):
Uh, this was not cannedquestions that were coming in.
This was we really, I mean, youcould tell that the staffs are
involved in this, that theyunderstand what's happening.
There's a lot more attentionbeing drawn to this.
I mean, I had a discussion withSenator uh Curtin from Utah that
was basically five minutes ofjust back and forth.
And I could tell that he reallywanted to know more.

(58:14):
How do I, you know, in Utahagain, you know, it's not like a
huge shipping state.
There's not a big port on uh,you know, in Ogden or on the on
on the Great Salt Lake.
But I mean, he realizes howimportant this is.
And so I thought that was reallytelling.

SPEAKER_02 (58:27):
Yeah, well, and and I think that that's you know,
well, before we go too far, I dowant to bring it back to Senator
Cruz made a surprise appearance.
Um, and and it's significantbecause not only was he well
prepared, very prepared for thehearing, but then he's so
interested in the topic that hemade a surprise appearance,
right?
You said that he walked in andand I mean he's the the chairman

(58:50):
of the Senate CommerceCommittee, so he's above this
subcommittee that it was in.
But this is such an importantissue.
And he brought up certainly, youknow, Texas as a maritime
powerhouse and highlightingGalveston and icebreaker builds.
But what was that like when hejust walked in?

SPEAKER_00 (59:06):
Well, even before he came in, Senator Cantwell, who
is the ranking member of thecommittee, was there to begin
with.
So see, you know, the thesubcommittee is is is Senator
Blunt Rochester from Delaware,but Cantwell was there from the
very beginning.
But when Cruz rolled in, and hedid roll in, he comes in, he sat
down next to Senator Sullivan,and Sullivan kind of immediately
turned it over to him.
Cruz was direct.

(59:26):
Number one, he's the guy whonailed my name perfectly.
He was absolutely got my lastname correctly.
But his question that he gave tome, I you know I went back and
listened to his questionafterwards, and I was like, wow,
that is a really in-depth, wellthought out, excellent question.
And I hate I like I feel like II could have I I could have
talked about that question foran hour.
Um what was it again?

SPEAKER_02 (59:46):
Just so the listeners are all on the same
page.

SPEAKER_00 (59:48):
So his question, I I I will absolutely chop it up
because it was it was a reallywell articulated question, but
basically, he ran through thehistory real quick that we've
used subsidies in the past.
How do we ensure?
For a shipbuilding effort in theUnited States against China,
which we can't be competitiveagainst.
How do we fund this?

(01:00:08):
What are the means and processeswe need to be putting in place
so that we can startresurrecting our shipbuilding?
And that was basically the corehe got to.
And I talked about the fact thatagain that we were investing
outside in foreign shipping, notin American shipping.
We've got to, you know, Ibasically laid out the issues of
what's wrong.
And then he said, Great, now howdo you fix that?

SPEAKER_02 (01:00:28):
Well, you also posed the question, and then he goes,
Well, then answer your ownquestion.

SPEAKER_00 (01:00:32):
Yeah, and he said, answer your own question, which
is like foiled.
It's like it's like it was sucha good answer, and now I got to
answer, which I was ready for.
And I said, Okay, this is whatwe need to do.
And you know, and again, I thinkthat's what they want to hear.
It's like they don't want to goagain.
What they don't want to do isthe answer, it's it's subsidies,
therefore we got to throw moneyat this.
We have got to create a systemthat is going to be not it's not

(01:00:54):
gonna be holy, there's got to begovernment involvement here.
There's no way to do it becausewhen you look at China, Japan,
and Korea, that there'sgovernment there all the time,
and they're they're providing alot of assistance, either
directly or indirectly.
But we need to create anenvironment which I think works
both with Democrats andRepublicans when they like the
idea, hey, tax incentives forthe consumers, for the shippers

(01:01:16):
moving the cargo, that's youknow, that's helping them.
And at the same time, you cantalk about, hey, this is going
to get cargo onto US ships,which means US shipping
companies and U.S.
mariners are gonna benefit fromthat.
And we can start seeing thatkind of revitalized.
So, yeah, it was it was it wasreally interesting to see not
just members of thesubcommittee, but members of the

(01:01:36):
general committee, the SenateCommittee on Commerce come in.
And there were senators in thecrowd coming in, staffers coming
in.
And so we had a batch of ofmembers coming in and out
throughout the hearing.
And like I said, we had a lot,you know, Senator Young gave a
second set of questions forthat.
Senator Sullivan, Senator BluntRochester from Delaware.
She gave a great talk, BluntRochester, about her grandfather

(01:01:59):
in the maritime industry.
I thought that was reallyimportant to talk about the kind
of connection there, and thenhad a series of great questions.
Uh, it was it was it was very itwas a very impressive hearing.
You know, I'm always impressedby watching a hearing, but to be
there and see the senators askthe questions they did were were
really important.

SPEAKER_02 (01:02:16):
Yeah, and and right, I think her grandfather worked
at the Philly shipyard way backwhen.
So she was recalling, you know,she they had recently found
something, and she I think shewas getting texts as the the
hearing was on.
From her sister.

SPEAKER_00 (01:02:28):
Her sister was sending stuff, right?
Right during the hearing, justbefore the hearing started and
during the hearing.

SPEAKER_02 (01:02:31):
Yeah, well, and it was great too to have Jeff Fogle
there, right?
Of TOEP.
So they're the VCM, the vesselconstruction manager, which I
mean, essentially the theproject manager of all of these
training ships going through.
And it's really, I think thatyou all highlighted this well,
that it helps eliminate thosechange orders that slum things
down, that and it also helpseliminate some of the really

(01:02:52):
molasses slow procurement andand you know, things that happen
on the government side that itjust removes that.
So, like if the government hassome new requests, send it to
TOETE.
But then TOE can actually takequick movement, realign supply
chains, figure out where partsneed to come in, because it
takes a while for a vessel to bebuilt.
And sometimes your needs change.

(01:03:12):
And by having that privateentity in between is so helpful
to speed things up, keep it onbudget, maybe even under budget,
even uh ahead of schedule,right?
There's been such a value tothis.

SPEAKER_01 (01:03:26):
No, my one thing I'm in a hearing is you can't just
bird out, you know, burst outanything.
So you got to wait till you'recalled upon.

SPEAKER_00 (01:03:33):
And there was a series of questions that went to
Vogel and Matt Paxton, largelyby Senator Sullivan, talking
about you know theinefficiencies, how do you do
that?
And you know, Jeff was greattalking about how Tote really
maximizes that, cuts down thosethose orders.
And but but Sullivan asked himat one point, you know, what's
the biggest hurdle?
And I so much wanted to just keymy mic and say it's the Navy,

(01:03:53):
it's Navy C Systems Command,it's NAPC, that's the problem,
because it's it's the governmentchange.
You're exactly right.
It's the ridiculousness of whatwe burden the shipyards with to
make them completelyunproductive.
I was talking to a friend who isjust on one of the most recent
Navy oilers, and he was talkingabout the piping that's on these

(01:04:14):
ships is unbelievable.
It's it's all stainless steel,and it's like, why would they do
that?
It's so expensive.
And it's like, well, they wantthe the ability to carry various
fuels, but in every tank, isthat the requirement?
Because it creates a huge amountof money.
Whereas, you know, in Tote, youknow, with the vessel manager
program, they can, you know,logically have discussions and
sit there and say, what do weneed on this ship?

(01:04:35):
What can make this ship work?
And I think, you know, the theprogram has issues.
It's not 100%, you know, eventotal tell you that.
There's been issues.
We've had some issues with someof the ships.
Yes, they do a hundred percentbetter than what the government
does, but that's our model weneed to follow.
And I think that's really key.
And and I think I think it wasgreat to have uh Jeff Vogel from

(01:04:56):
Tote there to be able to talkabout that.

SPEAKER_02 (01:04:58):
Yeah, and I I that's also true in that you can still
have change requests, right?
I mean, good new ideas, or evenas they're building these new
training ships, there have beenmodifications and updates that
have been made from the lessonslearned from the last vessel
that have this just been agovernment order of five
vessels, you might not have beenable to fix problems.
And so you might just continueto have the same problem all

(01:05:20):
over all five because, well,that's what it says on the
order, right?
And you can't go change it.

SPEAKER_00 (01:05:25):
No, and you know, the other concern I have,
Lauren, is this is we were veryfocused on Hanwood Philly
Shipyard.
And the my concern is it'sHanwood Philly Shipyard.
It's the only shipyard we'retalking about here for building
commercial shipping.
It's like, okay, we need otheryards.
It's it's like we need, youknow, who else is gonna build
this?
Because we can't buildeverything in Philadelphia.
It's just it's not gonna bephysically possible to ramp up.

(01:05:47):
So that means who else are wegonna get?
Is NASCO under General Dynamicsgonna come into this?
Are we talking about HuntingtonEngels, Pascagoula coming in?
Newport News has said they don'twant anything to do with this,
you know.
So are we are we talking aboutBollinger?
Are we talking about aconsortium of Schwest and maybe
Hyundai coming in?
Or not yeah, I think it'sHyundai coming in.

(01:06:09):
You know, where is thiscommercial going to be built?
Or are we talking aboutGreenfields?
Are we talking about brand newshipyards coming in?
Because that's the other issue,is that that investment has got
to be there to be able to dothat?
And that was the other thing Iwas talking about is listen, I
want to invest in shipping, butI'm not gonna see a return for a
batch of years.
So what does that mean?
Are we talking about bonds forshipping?

(01:06:29):
Are we talking about some sortof other kind of financial
mechanisms that a 401kinvestment opportunity that we
develop for shipping?
You know, what are we doing toget money into this, especially
if all of a sudden our port feesare going to go down and we're
not gonna have that money that'savailable?

SPEAKER_02 (01:06:45):
And that was something that was even coming
about when offshore wind andthat industry was kind of
booming was you know, there's alot of vessel creation and
excitement for, okay, now weneed new vessels for this new
purpose that could bemulti-purpose, but also how do
we get that going?
And how like who's to say thatthis industry will need this
installation vessel in another20 years?
That this concept of havinglongevity to the kind of value

(01:07:10):
of this really heavy,financially big investment at
the beginning will havelong-term staying power, or even
utilizing those vessels.
I think Jeff made this point tooof utilizing those vessels or
promising some sort of militaryuse for them so that if they
become the commercial reason tohave them isn't quite there,
then they still have a purpose.

(01:07:31):
You keep the mariners going, youkeep the vessel going, and you
keep that kind of commitment tothe long-term, you know, there
was a lot of beating up of WallStreet, it sounded like from the
panel of let's get Wall Streetkind of in investing in this
side.
How do we make it an incentivefor Wall Street?
Was part of the theme there too.
But I also think that it's thegrassroots effort coming from
these states, elevating, heyguys, we have a shipyard.

(01:07:55):
You might not have thought aboutthis new nuance to our shipyard.
Florida, right?
A shipbuilding state.
The state of Washington, anothershipbuilding state.
That having their we do thiswell might be something that if
every state had a menu of thingsthat they do well, and it's not
just shipyards and shipbuilding,it could be we have a great port
for, you know, Philly's reallygood for imports of cold

(01:08:17):
storage.
Like putting that out there,saying Philly's really good for
imports of cold storage.
So if we were to ever get to aport strategy, we, you know, the
ports still need to compete,right?
That's the whole essence of FMCauthority is competition.
But having that part of ournational strategy of how can we
get better about theinfrastructure around some of
these areas or what is actuallyout there that is good.

(01:08:38):
We don't really have a roadmapfor that.

SPEAKER_00 (01:08:41):
No, we don't.
And you know, that that's againone of those key things.
Go back to Carmel's hearing, andhe was asked about ports, and
that's something that I thinkMarriage should be doing is
overall looking at the ports.
Who's that big, you know,outside agency looking at port,
port safety, port strategy, portsecurity?
I think it's extremelyimportant.
It's one of the things I hoppedon with the smaller shipyards,
talking about tugs, towboats,and and and ferries.

(01:09:03):
Start building up thatinfrastructure.
Really important to do with it.
I I you know, I get, you know, Imay get accused of being too
rah-rah-rah with the Trumpadministration, but let me go
against the Trump administrationhere for a second.
Their strategy against wind ishurting the shipping industry.
You know, the fact that theywent 180 on wind, that was a
huge investment shipping wasgoing.
They were looking at that windindustry to be a real big effort

(01:09:25):
to kind of fire them up just inNorfolk again.
I saw Charybdis, this windinstallation vessel, sitting
there at the berth inPortsmouth, not doing anything
because you know, wind is iskind of in this kind of flux
state right now for it.
And so, you know, you you caninvest, you can start.
I mean, I mean, we don't talkenough about those yards on the
Gulf Coast, Shi West, and allthose other yards down there

(01:09:48):
that can pump out supply boats,you know, in a year.
I mean, that's they can do itwell, they can do it
efficiently, they can do it atgood cost too.
Again, we were not talking aboutyou know the big you know,
container ships that are three,four times what you pay for in
Korea, Japan, or China, butwe're talking about on the
coast, those are ships that canbe built out, and I agree a
hundred percent with what Jeffand Matt were talking about.

(01:10:10):
Listen, those little OSBs can beused too for unmanned for the
Navy for a variety of differentprojects.
You know, as long as you havethat, you know, what I one of
the things I talked to SenatorCruz about is we need to provide
protection for the shippingcompanies on the downward side.
Hey, my business has gone down.
Now I'm stuck with this huge,massive cost ship that's nothing
but a hole in the water.
I'm throwing money in.

(01:10:31):
What do I do with it?
It's like, well, hey, put it inthe reserve fleet.
We'll take it off your hands,we'll put it in a reserve fleet
because it's a tanker, it's acargo ship, and we can use it
for activations for ourstrategic reserve, which is what
the original plan was back inthe 70s for the reserve fleet,
is we'll take those ships thatwere funded through the
offshore, the the uh theconstruction and operational

(01:10:52):
differentials off your handafter 20 so years so that you
can build a new ship.
And and and keep this is whatthe Chinese strategy is, by the
way.
Build ships that are good for15, 20 years so you can keep
that thing churning.
That's kind of what we need toget ourselves into.
And again, that goes to a largermaritime strategy.
One of the things I worry aboutthe Ships Act, it's very many
ways focused on shipbuilding,but it's not looking at how we

(01:11:15):
integrate this into the overallstrategy of shipping.
And, you know, that that's whatwe need.
Marat has paid for this thingfrom Center of Naval Analysis, a
strategy.
We just have not seen it yet.
I'm hoping that when SteveCarmel gets in, we finally hear
what this strategy is, or do weneed something different?

SPEAKER_02 (01:11:32):
And and you know, I guess my fear goes back to we've
been so focused on militaryships that Center for Naval, you
know, it I'm just afraid thatthat strategy will be so
militarily focused instead ofthe side.

SPEAKER_01 (01:11:44):
It will be, I guarantee you that.
I guarantee you.

SPEAKER_02 (01:11:46):
Which is why I'm so excited for Steve.
And and I think Sang does thisreally, really well too, that
they focus on the commercialside, right?
That they focus on the actualindustry and and market driving
factors.
And you know, I I'm still nottotally convinced that offshore
wind is entirely dead.

SPEAKER_01 (01:12:02):
I do Oh, I don't think it is either.
I agree with you on that.

SPEAKER_02 (01:12:05):
Yeah, I I think that if it can find a way to for the
business to make sense and makemoney and and not entirely be
subsidized, I think that wasmaybe perhaps one of the
sticking points that that youknow, if if there was a
reworking and a restructuring ofthe model, that perhaps if it
does make money, I mean, I feellike even Trump can be
convinced, even though it seemslike this is a personal
vendetta, but perhaps not,right?

(01:12:26):
Perhaps not, not that if there,if there's a business case, I
mean, anybody can be convinced.
And I think Trump is is nodifferent there.
And also I think that it kind ofgoes back to what we were
talking about earlier, too,where there can be a little bit
of gun shyness in the industry.
Like we've heard excitementbefore, and we don't want the
bottom to drop out.
And having offshore wind goaway, it was kind of enter

(01:12:48):
commodity here.
Maritime was getting excited,and now is perhaps.
I mean, we can be a little bitof a jaded, we're a very
passionate industry, but we canbe a little bit of a jaded
industry, and that just anotherexample of the bottom dropping
out.
And I don't think that that isfollowing through, but but it
certainly isn't soon forgotteneither.
And and there were some biginvestments being made into some

(01:13:10):
of these supply vessels andinfrastructure vessels.
And I think that was a goodpoint that you made that like we
were excited to be movingforward on that.
I'm I we continue to be excitedon the overall movement for
maritime for sure.

SPEAKER_01 (01:13:21):
I I think I I number one, I think the mascot for the
maritime industry should be likeEeyore, because that's that's
basically everybody in themaritime industry.
It's like, oh, whoa, is me.
This is this is it's only amaritime till things go bad.

SPEAKER_00 (01:13:33):
We're not Tigger, we're definitely not Tigger, but
it's it's definitely that.
I I I think you know, again, thewind industry for me is a
perfect example of things likethe Jones Act reform.
We should be talking about, forexample, the amount of money we
spent to build the windinstallation vessel, Charybdis,
was was tremendous.
It was it was a one-of-a-kindvessel, it was a huge
investment, and we probablycould have built that vessel
overseas faster and cheaper,gotten it into the fleet, and

(01:13:56):
then we could have focused onbuilding the supply vessels, all
you know, all the vessels, theancillary vessels that will
service the wind wind windfarms, which is where the money
actually is, you know, in theshipping side, because you got
to go out there all the time anddo it.
The the wind installationvessels are really, you know,
one of the kind, very expensivevessels, which will generate

(01:14:17):
money once you start doing it,because it will have business to
do it, but it's a massive slowinvestment to get that ship up
and running.
Uh, and again, this is where weneed to think about it.
I do agree that that the Trumpadministration can be brought
around and talked about, youknow, when you understand that
wind is not the end-all be-all,you know, I had this question
from Senator Marino from Ohio,you know, can can wind generate

(01:14:38):
enough power for a shipyard?
And and right now the answer isno in the United States.
There isn't, but you can seethat it's done in Europe.
There are some yards that can befully renewable energies.
So it's always hard to answerone of those yes-no questions
because it's like I I live as ahistorian who sits here and says
there's no yes-no answers.
It's always kind of hard.

(01:14:58):
But but I agree with you.
But again, what we need to do ishave advocacy for that and talk
about this.
Like, this industry isgenerating construction on a
smaller scale in our shipyards.
It's putting mariners to work,it's creating business in the
ports.
I mean, I mean, Virginia hadturned the Portsmouth Terminal
into a wind terminal.
If I when I was there, therewere turbines there, there were,

(01:15:19):
there was, you know,installation vessels, there was
everything geared up to beputting wind farms off the coast
of Virginia.
And now that's all on hold.
So that that does create a bitof a problem.

SPEAKER_02 (01:15:29):
And the installation vessels were also kind of
hopeful for this.
And and this doesn't by no meansis this a rah-rah, go offshore
wind, but but just the the factthat installation vessels is a
near shore job that providesmore sea time, right?
It's not it's not giant goacross the world sea time, but
it's still sea time, right?
I mean, that's and and that'ssome some of the mariners out

(01:15:49):
there are looking for.
I don't want to be gone for sixor nine or 12 months at a time,
and and maybe a little jadedfrom COVID, where they got stuck
on these vessels for anadditional six or nine or 12
months at a time.
They just want something thatmaybe a week or two and then
they'll come back and they canstill be part of their family's
life.

SPEAKER_00 (01:16:05):
No, and and I'm not advocating for any type of power
at all, but for for the shippingaspect, it was really important,
especially because how themaritime industry got kind of
got burned on offshore oil, andthat was completely off, you
know, that was completelyoutsourced offshore.
And so the the the maritimeindustry really lost out on that
in many ways.
And so I mean, here is thispotential for it.

(01:16:26):
And again, I I think if we putthis into coherent strategy, I
think the president, theadministration, a lot of people
will sit there and say, okay,this is actually part of a
larger strategy that is actuallynot a bad thing for us to be
looking at.
Because, like you said, a lot ofmariners, you know, don't want
the job working for military sealift command and being deployed
for four to six months away fromhome.

(01:16:47):
But sailing on a supply boat outof the Gulf Coast or working 28
days, 28 days, 28 days on, 28off, you know, I can do that.
I have I like that schedule.
And it allows me a lot offlexibility.
Plus, I'm I'm in and out of U.S.
port, so I'm not gone all thetime.
And it gives us that reservoirof pool of mariners we need so
that if we ever do have toactivate the reserve fleet and

(01:17:09):
do a military operation, we havethat pool in which to draw from.
And again, that goes to my issueabout leadership.
Where is the leadership in thisissue?
Because what we need is reallyvisionary leadership to do it.
I I I don't ever buy the big mantheory of history or big woman
thing of history, or or thatdidn't come out the way I want
it to sound.
But it's just it it's you know,I don't there's got to be the

(01:17:32):
the the kind of the the the youknow the head coach with his
staff under Nietzsche need himand his assistants to
orchestrate and build that.
And I think that's what we needmore than anything else to help
us get this over the line.
Because right now, the Senate,you can see it in my hearing,
are listening from a diversegroup of people.
What they really need in someways is a central repository or

(01:17:53):
a central place to go to to getthat information.
They're getting it now, but Ithink I think there's going to
be an information overloadeventually on this.

SPEAKER_02 (01:18:02):
Yeah, and I I think that this is totally right.
I think that we're, you know,we're all on board.
We want to make sure that thisis all moving forward.
We want to get the mariners outthere.
You know, I often talk aboutkind of that boomerang effect,
right?
We have these 20, you get out ofMaritime Academy, you go out to
sea, right?
If you get your unlimitedunlimited license, because not
every mariner that comes out ofan academy is actually getting
an unlimited.

(01:18:22):
Although I will say Great LakesMaritime Academy, 100% of their
grads get unlimited license.
It's not just a Great Lakeslicense, it is a an unlimited,
unlimited tonnage, but they theydon't all get them, contrary to
maybe what you might assume.
But also you try it for a coupleof years and then maybe you get
married, and then maybe you havea kid, and then you don't have

(01:18:42):
that same desire to be gone forso long.
That sense of adventure becomesa sense of burden.
And so we lose people because italmost is like, I'm not going
back out there.
And so they drop their license,they don't want it anymore.
And then flash forward 15, 20years, their kids are off to
college and they're like, I kindof want to go back out.
I think that'd be fun.
Or even maybe I could go be acharter captain down in the

(01:19:06):
Caribbean, right?
Or something.
But like, wouldn't that be greatto use my license?
I was talking to somebody whowas in the nursing community,
and something similar washappening during COVID where
people were kind of leaving theindustry saying, I'm not gonna
renew this, this is too much,I'm not coming back, to give it
a couple of years almost of acool down, and then now they're
having this return that they'vemodified.
I I haven't looked into thisspecifically, but this is what I

(01:19:28):
was told modified nurse licensereturn so that it's an easier
thing because you haven't lostall your skills or your
knowledge.
You just didn't keep us current.
So maybe it's a abbreviated getyou back up to speed license on
what's been going on recently.
I don't know if one time you getan airline pilot's license and
that's it, and you have itforever is the option, right?

(01:19:48):
Because that's been talked abouta lot is that you only need to
take the test once and then yougot it forever.
But I I think every five yearsis is probably a little fast.
I have my 50 ton license, andevery five years I have to renew
it.
I go for the the I don't evenuse it that much.
I mean, but but I go for thedoctor's appointment for the DOT
health screen, you know, all thedrug tests, the everything.

(01:20:09):
Uh and it's five years is prettyfrequent, to be honest, too.
And and you know, it I'mprobably one of the categories
of wouldn't that be nice if weever needed her locally?

SPEAKER_00 (01:20:18):
I no, I was 100% agree.
Senator Kelly gives this greattalk.
He was up at Marine Money thisyear, and again, talking about
the other issue is is how to getWall Street involved.
I mean, you had Senator Kelly upin Marine Money this year in
June, had an entire day talkingabout America.
It was the best attended day ofMarine Money was that day.
And so we're even seeing WallStreet brought in.
I want to see more of thatintegration in some ways because

(01:20:40):
I thought that was a reallyinteresting day.
But to go to license issue,Kelly talks about the fact that
he has three licenses on hiswall.
One's his pilot license, one'shis third mate license, one's
his third assistant engineers.
He goes, the pilot license isgood, the other two aren't,
because you can't keep them up.
And you know, I was youbasically explained me.
It's like I sailed for fiveyears, I came ashore, got
married, and then after I was,you know, married for five

(01:21:01):
years, my wife was like, You cango back to sea now.
It's it's good, you know, youcan get back out.
No, I know it would have beennice to go out when I started
teaching, for example, in thesummertime, go out on one of the
school training ships, go, youknow, do a do a tour on that.
But it's so hard to bring thatback.
I'm of the opinion that you keepthe license, but what you need
to bring back are theendorsements.
You know, you need STCW, youneed all the, you know, get

(01:21:22):
those.
And then we should havemechanisms in place to keep the
there should be a merchantmarine reserve program, not
under the Navy, but a merchantmarine reserve program where,
hey, I want to keep my licenseup.
Well, you do that by doing aweekend uh, you know, a month
and maybe a uh two weeks a year,and you go on one of the ready
reserve force ships, you know,scattered around the United
States.
I go to Charleston or Norfolk,go on board the ships there and

(01:21:45):
you know, get my license up todate, go maybe to mid-Atlantic
Maritime or to one of the one ofthe union schools and get my
license up to date, you know,and and that shouldn't be at my
expense.
It should be if that's anational, you know, that's
something that helps the UnitedStates in time of conflict.
And I agree that in time of war,I'll I'll man a ship.

(01:22:05):
Again, this this is the type ofstuff that I would love the
Maritime Administration to bedoing.
I would love this nationalmaritime advisor to be doing.
I think these are the type ofthings that that make the
industry a lot more.
And, you know, one of the thingsI've advocated for to the state
maritime academies and to thefederal maritime academies, you
need to mandate a course inmaritime industry policy

(01:22:29):
history.
You know, you need we need weneed a course because every
graduate of those institutionsshould go out talking about the
role of shipping in the historyof the United States and what is
out there in the industry rightnow for your advancement.
I learned how to pilot a shipfrom point A to point B.
What I failed to learn orappreciate is the business
aspect ashore.

(01:22:49):
I I mean, if I wish I knew thata little bit more, or else I
would have you maybetransitioned to a shore-based,
you know, working the businessside of it.
Same thing on the engineer side,you know, what's that
shore-based business look?
And how do we integrate them in?
The unions are doing this now.
If you talk to the maritimeunions, they're not going for
the recruit that's gonna be withthem for 20, 30 years now.
They understand they may getthose, but they're probably

(01:23:11):
gonna get somebody for two tofive years.
And how do you sell that is alittle bit different.
Hey, you're gonna make a lot ofmoney very fast.
If you need to pay off loans andget yourself out of debt, this
is the way to do it.
Plus, if you stay in the unionwhile you go ashore, maybe after
a few years you can come back inand make money on the side.
You don't have to sail everyyear, but maybe you pick up a

(01:23:32):
charter here or there in acontract and do that.
And so I I think again, we'restarting to see that change in
the industry come around.

SPEAKER_02 (01:23:40):
And I really like the idea of that maritime
reserve because exactly that,right?
One one weekend a month, you getto go out on a boat.
You get to go out on a vessel,sounds pretty good to me.
You get that sense of adventure,but then you get to go back to
to your everyday nine to five,whatever it is, life.
And I mean that there's somereally, really good value there.
I would also say we can't forgetabout the hospipers too, right?

(01:24:02):
And and I think that there'ssome reform that needs to be
made in Hospipers being theunlicensed side of things.
We need to make sure that it'seasier for them to get all of
their licensure or their theircertifications.
Because as part of Midstack, oneof the interviews that we did to
learn more was we talked tosomeone who was trying to go
through the hospital program,and they had to fly all around

(01:24:22):
the US just to piecemeal how toget to the certificate, the
baseline certifications thatthey could go to work for it.
But it's something that not onlyshould there be a page on the
Mered website that says, so youwant to be a mariner, right?
And like kind of it outlines howyou do that.
Because you're thinking aboutit, you'd probably Google how to
be a mariner, right?
That would that would be afantastic first page.

(01:24:44):
But then if you want to belicensed or you want to be
unlicensed, how to piecetogether my skills to form where
I need to go next.
I mean, I think Nemepa wasstarting to do something like
that where they were working onhow to get interest in the
industry into actual practicaljobs in the industry.
They they had a kind of a wholewhole booklet that talks about

(01:25:04):
it, but it's a role for merit,right?
I mean, there's they have a loton their plate, they have a lot
to get get going on.
And I'm I'm confident that theywill make some good strides, but
I think that that's all part ofit.
So we have gone so, so, so long.
I so appreciate all of your timehere today.
But but I'd be remiss if I say,well, two things.
One, we have the NationalMaritime, the Maritime Action

(01:25:26):
Plan coming out next week.
We will probably do a wholereaction, both your show, my
show.
Maybe we do a joint show wherewe react to it.
So we're not going to go downthat rabbit hole.
But is there anything else fromthis Senate hearing that you
really wish you you mentioned afew things throughout our
conversation today, but is thereanything else that you really
wish you would have gotten timeor been asked throughout the
course that you really didn'tget a chance to, or anything

(01:25:47):
that you want to elevate as kindof a final thought that you you
were hopeful from of thishearing?

SPEAKER_00 (01:25:52):
Yeah, I mean, there was a couple of issues that
obviously, you know, you youyou're very time-limited in your
response, your five-minuteopening, and then your responses
back or just a minute or two.
So you don't have a chance toreally go a lot in depth.
I I was I was very happyafterwards.
Senator Young came up afterwardsand we had a great conversation,
and and he wanted to talk alittle bit more.

(01:26:13):
And you know, Senator Sullivangave homework to Jeff Vogel and
to uh Matt Paxton, which Ithought was very funny, for
answering questions.
I I mean, I guess I would say mymy big takeaway was was was
really this is that you knowwhat's in you know, what I want
to do is is we're under a timecrunch.
The Ships Act has got to getpassed.
It is not perfect by any means.

(01:26:33):
And you know, we highlight anddiscuss that in many ways.
One of the things that we talkedabout kind of off committee in
between everybody else was toget the house on board.
That's more my big fear.
The Senate is on board with theSHIPS Act.
I don't have a problem withthinking the Ships Act's gonna
come out of the Senate without aproblem.
The problem is the House, wherethe House right now has that in
about a dozen committees.

(01:26:55):
And I'm hoping to see it.
Uh the talk that Senator Kellytalked about was maybe they'll
bring it down to a couple ofcommittees, maybe transportation
and infrastructure and and housearmed services, which I don't
think it needs to be in armedservices, but it will wind up
there because of the militaryapplications.
And the House is the one thatworries me because that's the
one that's gonna need the bettereducation on it.

(01:27:16):
The Senate seems very wellversed on this.
The House is gonna be a hardersell, and I think that's gonna
be a big issue going forward.
So I I think I think themaritime action plan will
actually help because it's gonnaidentify some key things that
need to be done.
And I think you know, keepingthis education going forward, I
would have loved to see you knowthose two FMC slots and the

(01:27:38):
maritime administrator filledsooner rather than later.
Uh, I hope that the confirmationgoes through faster now that
they've had their hearings andthe votes take place so they can
get in the buildings.
I think those are reallyimportant to do.
And I think just, you know, you,me, and everybody else who has a
voice keep talking about thisand keep educating people about
it, uh, because we we do have aninfluence.

(01:27:59):
I I I don't think I would be onthat committee if I didn't have
an influence with the YouTubechannel and and the writing I
do.

SPEAKER_01 (01:28:05):
It's uh it was it was kind of weird uh to be asked
uh to do that.
So that's kind of what I wouldadd, Laura.

SPEAKER_02 (01:28:10):
Well, Dr.
Sal goes to Washington.
You did a great job representingthe industry well, uh
petitioning for initiatives thatwe all think are good ideas.
Maybe that shipper incentivelanguage is something, right?
It seems like shippers have agood connection to to
congressmen and and housemembers.
And you know, maybe we're gonnasee Dusty Johnson come back
around.
I think he was celebrated as theAG congressman of the year when

(01:28:33):
he pushed through when he wasworking on Osra.
So yeah, we'll we'll see.
I think that those are all greatthoughts.
I I think even in itsimperfection, the Ships Act is
necessary.
We have to see it go forward, wehave to get it moving, right?
I mean, that's it.
We can't just keep stalling out.
And, you know, in in many waysright now, Congress is stalling
out.
So we'll hopefully we can getback to work, we can get back to

(01:28:55):
moving.
But it's also nice to see thatmaritime has not stopped, right?
Obviously, we don't.
Even during the middle of COVID,we didn't stop where this is an
essential workforce, and you 90%of everything moves by ocean
transit, and maybe that'll moveas we see a little trade
balancing, but it's still goingto be a significant number.
If it's not the actual good,it's the commodity that helps
support it.
That maritime and ocean shippingwill always be one of the most

(01:29:18):
important things you've neverheard of.

SPEAKER_00 (01:29:20):
So I you know, I said at the beginning of my
statement, you know, in 35 yearsof doing shipping, this is the
most visible action I've seen init.
Uh, and you know, in my 35years, I've seen the maritime
industry just decline.
So it gives me, you know,optimism, encouragement.
I don't know what the word touse here, but it's it's it's the

(01:29:40):
best.
Now, the maybe it's toooptimistic, but we'll we'll wait
and see.

SPEAKER_02 (01:29:44):
You know, yeah, you you say that it's Eeyore, maybe
it's Mickey Mouse.
I think it might be MickeyMouse.
He doesn't only have good days,he has some.
I I'm I'm gonna say the maritimeindustry is Mickey Mouse.
We're hopefully optimistic.
We're gonna keep it.

SPEAKER_00 (01:29:55):
I think Donald Duck, at least he's got the sailor
outfit.
We can go we go Donald Duck.

SPEAKER_02 (01:29:59):
That's right.
That's that's a good one.
All right.
Well, we'll wait for your puppetshow on Donald Duck doing goes
to Washington.
Well, thank you so much.
So great to see you as always.
We really appreciate your time,and we'll we'll have you back
soon, hopefully.

SPEAKER_01 (01:30:13):
Lauren, it's always a pleasure.
You know how much I love talkingto you.

SPEAKER_02 (01:30:16):
Likewise.
Thanks, Sal.
It's always so fun having Sal onthe show.
What a powerful conversation.
What an interestingconversation.
And honestly, one of the mostencouraging hearings, like I
said, that we've seen in a verylong time.
This hearing showed what happenswhen lawmakers listen to
mariners, shipbuilders, andlogistics professionals in the

(01:30:36):
same room.
It wasn't about a soundbitesession, it was a strategy
session.
Sal reminded everyone that U.S.
shipbuilding isn't a nostalgiaproject, it's national
infrastructure.
And his testimony offered aclear roadmap, learn from our
history, rebuild capacity athome, and remember that ships,
shipyards, and sailors all haveto rise together.

(01:30:59):
And Sal did what he does best,bringing context and clarity to
these complex issues.
His Ships for America warning,instead of a ships for Korea
warning, was a reminder that wecan't outsource our industrial
base.
And his proposal for a maritimereserves program, which Senator
Cantwell picked up on, like Isaid earlier, gave Congress a

(01:31:19):
practical framework for linkingworkforce readiness to maritime
security.
A few takeaways that stood outfor me, we've done this before,
we can do it again.
History shows that when Americaaligns industrial policy with
maritime investment, we win bothjobs and security.
Also, the allies are partners,not proxies.
Working with trustedshipbuilding nations is smart

(01:31:42):
and important and essential, butownership and control of core
capacity needs to stay here too.
As Sal said, collaboration iswelcome, but dependence isn't.
Mariners are the missing linkhere too.
Without a trained ready maritimeworkforce, new shipbuilding
initiatives will stall beforethey start.
Sal's maritime reserves ideareally deserves serious

(01:32:04):
attention.
Readiness isn't just about thehulls and the bases and the
ships, it's about the people.
And look, my biggest takeaway,the momentum is real and it
continues with the MaritimeAction Plan due November 5th and
the Ships for America Act ondeck for perhaps this year, next
year.
This is the most forward motionwe've seen in a generation.

(01:32:24):
And I'm really hopeful for thenext, I'll call it six months,
maybe by April.
We'll let's we'll continue towatch this obviously from now
and then, but maybe, maybe byApril.
We'll have some legislation.
We'll certainly have the bonesof where we're going.
We'll hopefully have a nationalmaritime strategy.
I am hopeful for where we'regoing next.
And this hearing was wonderfulto watch and great to catch up

(01:32:45):
with Sal and hear the thingsthat he didn't have time to say
during the hearing.
Look, if today's episode has youwondering where the FMC fits
into all of this conversation,or maybe where Mered's authority
begins or ends, check out myjust in time learning course,
FMC vs.
Meredith, who does what?
It's available now at theMaritimeProfessor.com.
This just in time learningseries is a series of courses

(01:33:07):
that are 30 minutes or less,just what you need to know plain
language education.
A quick thank you to ourpartners at Manifest, the future
of supply chain.
Coming this February in LasVegas, it's where the entire
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(01:33:30):
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Look, if you like this episode,be sure to like, follow,
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Want to go deeper on thesetopics or bring this kind of
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explore corporate trainings,tailored briefings, and
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(01:33:51):
practical and easy tounderstand.
Because if you understand therules, you make better
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And if your organization needshelp navigating the legal and
strategic side of ocean shippingregulations, head over to Squall
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That's where I provide myconsulting services, regulatory
guidance, and overall generalindustry information that's
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As always, this podcast is foreducational purposes only and

(01:34:14):
should not be considered legaladvice.
There's no attorney clientpreference created by this video
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But until next time, I'm LaurenBeegan, the Maritime Professor,
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.css-14f5ked{margin:0;word-break:break-word;display:-webkit-box;-webkit-box-orient:vertical;box-orient:vertical;-webkit-line-clamp:2;overflow:hidden;}Dr. Sal goes to Washington; a conversation with Sal Mercogliano fresh off his Senate hearing appearance

Episode Transcript

Popular Podcasts

.css-r6mb8g{margin:0;word-break:break-word;display:-webkit-box;-webkit-box-orient:vertical;box-orient:vertical;-webkit-line-clamp:1;overflow:hidden;}On Purpose with Jay Shetty

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Dr. Sal goes to Washington; a conversation with Sal Mercogliano fresh off his Senate hearing appearance

On Purpose with Jay Shetty