Maritime Protection Plan

The trend toward larger, containerized vessel fleets with smaller crew complements has presented the nation’s defense needs with a considerable challenge. As previously noted, although competitive factors have driven the movement toward containerized cargoes, military requirements frequently dictate the need for less efficient, but more militarily useful break-bulk vessels. Break-bulk vessels, in turn, necessitate a higher crew complement equipped with a different repertoire of seafaring skills. The challenge facing our nation’s defense infrastructure is to craft a maritime policy that will enhance the competitiveness of the U.S.-flag fleet during times of peace while concurrently accommodating our national defense needs during times of conflict. The government has responded to this challenge by developing an innovative array of programs designed to address the conflicting demands of commercial competitiveness and the logistics of national security.

Today U.S. strategic sealift needs for surge and sustainment shipping are being met with a mélange of active U.S.-flag merchant ships, commercial ships under long-term charter to the military, and Ready Reserve Force vessels under private commercial management contracts and crewed by citizen mariners.

Maritime Security Program

Enacted in 1996 as Public Law 104-239, the Maritime Security Program (MSP) provides for a fleet of militarily useful U.S.-flag commercial vessels, crewed by U.S. citizens that can be immediately called upon during national defense contingencies. The ten-year program, designed to replace the Operating Differential Subsidy program at less than half the cost, establishes a fleet of 47 U.S.-flag vessels engaged in the waterborne commerce of the United States. Eligible vessels may be built in the United States or in another country, and are subject to one-year renewable contracts. Funding for the program (approximately $97 million/year at its enactment) is subject to annual appropriations from Congress.

In 2004, the 108th Congress enacted the Maritime Security Act of 2003 which expanded on the Maritime Security Program by increasing the fleet from 47 to 60 vessels. The new ten-year program also calls for increased funding subject to annual appropriations (approximately $156 million at its enactment, increased to $174 million in 2010 and to $186 million in Fiscal Year 2013). In Fiscal Year 2016 the program received an appropriation level of $210 million ($3.5M per ship to support 60 enrolled vessels). In fiscal years 2017 and 2018, MSP was funded at the authorized level of $300 million for 60 vessels. The Consolidated (Omnibus) Appropriations Bill of FY2016 authorized annual funding for MSP through FY 2021 at $5.00 million per ship from FY 2018-2020, and $5.23 per ship in FY2021. Under the Maritime Security Act of 1996, this funding must be approved each year as a direct appropriation.

The program demonstrates the United States’ continued recognition of the vital role the U.S. maritime industry assumes in our nation’s national defense infrastructure. During times of peace, these vessels ply our deep-sea international trades, generating jobs for U.S. citizens while generating income for maritime carriers and tax revenue for the government. When called upon by the government, participating vessel operators are required to make their ships and other commercial transportation resources available to the Department of Defense.

As noted by military logisticians and defense planners, the MSP fleet provides our nation with a significant security asset at a substantially lower cost. DOD officials have testified that it would need more than $10 billion in capital costs and $1 billion in annual operations costs to replicate what the Maritime Security Program provides at a fraction of the cost. Furthermore, a 2006 National Defense Transportation Association report entitled “The Role of Commercial Shipping Initiatives in Military Sealift “affirms that the cost to the U.S. Government to replicate the vessels provided for by the MSP was estimated at $13 billion. An additional $52 billion would be needed to replicate the assets.” General William M. Fraser, Commander, U.S. Transportation Command (USTRANSCOM) testified before a House Armed Services Seapower Subcommittee hearing in 2013 that “the loss of mariner jobs, access to the related intermodal logistics networks these companies provide, and potential loss of competition in certain trade routes may degrade our current support to forces deployed overseas and likely increase transportation costs to the government.” General Fraser continued, noting that “USTRANSCOM relies heavily on the significant capabilities the U.S.-flag commercial sealift industry contributes to our nation.”

Voluntary Intermodal Sealift Agreement (VISA)

The Voluntary Intermodal Sealift Agreement (VISA) is a standby agreement intended to make commercial, intermodal, dry cargo capacity and supporting global infrastructure available to meet the “contingency deployment” requirements of the Department of Defense. VISA calls for comprehensive and integrated peacetime planning and exercises — something not done before the Gulf War. The Maritime Administration, U.S. Transportation Command (and its sealift-related strategic mobility elements, the Navy’s Military Sealift Command and the Army’s Surface Deployment and Distribution Command), and the U.S. intermodal ocean carrier industry and maritime labor are now motivated to devise arrangements that will meet Defense Department deployment requirements from existing commercial services to the maximum extent possible without causing serious disruption of normal services and contracts.

Modeled after the U.S. Air Force Civil Reserve Air Fleet (CRAF) program, VISA allows carriers to continue to serve commercial commitments and provide support — ships and trained crews, truck and rail transport, logistics planners and worldwide distribution networks, satellite communications, cargo-tracking systems, full in-transit visibility, and supporting systems — in three stages depending upon the severity and expected duration of the contingency. The level of contractual commitment of capacity at each of the three stages will determine, in part, a carrier’s participation in the carriage of Defense Department and other U.S. government peacetime cargo. This will also obviate the need to look for the cheapest supplier in an emergency and will ensure that the plans and procedures are in place to integrate efficiently and effectively national defense and contingency sealift requirements into the commercial system. By relying on the U.S.-flag fleet, the military receives, at no additional cost, access to a total global intermodal network of vessels, infrastructure, terminals, equipment, and 20,000 well-trained and motivated seafarers and 22,000 shoreside employees located around the world.

The VISA program is divided into three phases based upon the amount of capacity committed to military cargo upon demand. The most intensive phase, referred to as Stage III, requires participants to commit at least 50 percent of their non-MSP vessel capability and 100 percent of their MSP vessel assets. More than 80 percent of the militarily useful U.S.-flag dry cargo fleet are participants in the VISA Stage III program.

The VISA program is closely aligned with the Maritime Security Program. Of those vessels participating in the VISA Stage III program, 70 percent are enrolled in the MSP program as well.