America’s maritime action plan and the Arctic

This is a reproduction of an article that first appeared on Sixty Degrees North. If you would like to read more posts by Peter Rybski, you can sign up for his blog here.

Around a year ago, the White House released Executive Order 14269 called “Restoring America’s Maritime Dominance.” Section 3 provided the main tasking:

Sec. 3. Maritime Action Plan. (a) Within 210 days of the date of this order, the Assistant to the President for National Security Affairs (APNSA), in coordination with the Secretary of State, the Secretary of Defense, the Secretary of Commerce, the Secretary of Labor, the Secretary of Transportation, the Secretary of Homeland Security, the United States Trade Representative (USTR), and the heads of executive departments and agencies (agencies) the APNSA deems appropriate, shall submit a Maritime Action Plan (MAP) to the President, through the APNSA and the Director of the Office of Management and Budget (OMB Director) to achieve the policy set forth in this order.

You can find some good commentary and analysis on the initial E.O. from CDR Salamander and Claude Berube. Claude no longer publishes his Substack, but has left his archive available.

The response to this Executive Order, America’s Maritime Action Plan (MAP), was released on February 13.

The MAP essentially outlines a whole-of-government approach to revitalizing the Maritime Industrial Base. It is, in essence, a whole-of-government industrial strategy.

At 42 pages long, it is worth a full read. I’ll provide a brief overview and a few points directly related to Arctic and Antarctic vessels.

Overview:

Pillar I: Rebuild U.S. Shipbuilding Capacity and Capabilities

Pillar I of this comprehensive, coordinated action plan lays out the urgent steps needed to rebuild the Nation’s shipbuilding capacity, including:

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• Increasing Domestic Shipbuilding Capacity;
• Incentivizing Investment in U.S Shipyards;
• Establishing Maritime Prosperity Zones to incentivize and align new domestic and allied investment in U.S. maritime industries and waterfront communities;
• Addressing myriad supply and demand issues; and,
• Reducing dependence on unreliable suppliers through heightened cooperation with allies and partners.

Some recommended policy actions (my summary):

• Increase funding of existing programs (Figure 1)

• Streamline/ease requirements and application process for existing programs
• Establish a Universal Fee on Foreign-Built Vessels from any Nation Entering U.S. Ports. (Fee on cargo imported cargo, not the ships themselves)
• Establish Maritime Prosperity Zones for tax and regulatory relief
• Establish new initiative modelled on MARAD’s Capital Construction Fund enabling tax-deferred earnings to be used in investment
• Stimulate U.S.-Flag Fleet Growth
• Establish a new grant program for shipyards of all sizes similar to the Assistance for Small Shipyards program
• Encourage Bilateral and Multilateral Agreements

Comment: The section about encouraging bilateral and multilateral agreements seems modeled on what Davie is doing with the Arctic Security Cutters:

International agreements that link market access to joint industrial development will help ensure allied investment directly contributes to reduced reliance on unreliable supply chains. A potential “Bridge Strategy” provides a multi-ship buy wherein the first ships in the contract are built in a foreign shipbuilder’s home shipyard while concurrent direct capital investments are made in a U.S. shipyard they have purchased or partnered with to eventually onshore construction.

Pillar II: Reform Workforce Education and Training

• Expanding mariner training and education to address workforce challenges in the maritime sector through maritime educational institutions and workforce transitions;
• Providing financial and regulatory incentives for the training of shipbuilders and U.S. credentialed mariners;
• Modernizing the USMMA through Federal investment to address urgent deferred maintenance projects and other mission-critical repairs and develop a five-year capital improvement plan based on the long-term Master Facilities Plan for the modernization fo the campus; and
• Otherwise enhancing maritime training capabilities to meet industry needs

Some recommended policy actions (my summary):

• Support development of country-to-country agreements for bilateral exchange opportunities within industry and academia
• Extend U.S. Navy workforce initiative to other Federally Funded shipyard projects (provides matched funding for Registered Apprenticeship and retention programs)

Comment: This is probably the toughest problem that will take the longest to solve.

According to many reports (such as this one from USNI), many U.S. shipyards are currently facing workforce challenges. And it isn’t going to get any easier, as according to some estimates, the U.S. will need an additional 200,000 to 250,000 maritime employees over the next ten years to meet expected demand. If demand increases, more will be needed.

There is also a need for more American crews on ships.

Pillar III: Protect the Maritime Industrial Base:

Pillar III of the MAP lays out the urgent steps needed to protect the MIB and strengthen demand signals, including:

• Strengthen requirements for shipping government-impelled and commercial cargoes on U.S.-flagged vessels;
• Impose a Land Port Maintenance Tax to balance payments from importations across land ports versus maritime ports;
• Streamline and improve acquisition processes for USG vessels while reducing change orders; and
• Consider actions, as appropriate, based on USTR’s investigation of the People’s Republic of China’s (PRC) targeting of the maritime, logistics, and shipbuilding sectors for dominance.

Some recommended policy actions (my summary):

• Improve procurement and contract efficiency for USG vessels (many initiatives included)
• Leverage commercial designs and standards including existing designs
• Engage International Partners to learn and incorporate best practices
• Expand use of Other Transaction Authorities and sole-source contracting
• Introduce contract incentives that reward past performance.

Comment: All of the recommended policy actions that I cited above are related to improving U.S. Government shipbuilding. Many of them have been incorporated in the recent Arctic Security Cutter contracts.

Most contracts (such as the Polar Security Cutter) were awarded to the lowest-cost bid that met all of the technical requirements. However, the shipyard in question (VT Halter) had no refence builds (a record of successfully building similar vessels). Incorporating incentives that reward past performance in new contracts is common in commercial shipbuilding and would help to alleviate the high-risk to schedule and cost that comes from a low bid made by an inexperienced shipyard.

Pillar IV: National Security, Economic Security, and Industrial Resilience:

• Strengthening the security and resilience of the MIB through strengthening component supply chains;
• Increasing the fleet of commercial vessels trading internationally under the U.S. flag;
• Establishing a Maritime Security Trust Fund;
• Fostering the development of the autonomous maritime technology industry;
• Developing a strategy to secure Arctic waterways and enable American prosperity in the face of evolving Arctic security challenges and associated risks; and
• Prioritizing the recapitalization of government owned sealift vessels.

Some recommended policy actions (my summary):

• Prioritize Robotic and Autonomous Systems by improving the regulatory framework
• Improve Supply Chain Resilience
• Establish a Strategic Commercial Fleet of internationally trading U.S. built vessels
• Fund the Maritime and Tanker Security Programs to Authorized Levels
• Establish the Maritime Security Trust Fund for long-term funding
• Recapitalize the Ready Reserve Fleet
• Secure the Arctic (more on this below)

Comment: Much in this section is about funding— funding to support supply chain resilience, funding to build a strategic commercial fleet, funding for more U.S-flagged vessels, and funding to recapitalize the Ready Reserve Fleet.

The Maritime Security Trust Fund is designed to provide long-term, stable funding for these and other initiatives. The MSTF would be funded from a mandatory funding steam. The original E.O. directs OMB and DOT to come up with a legislative proposal as to how this would work.

Securing the Arctic

Pillar IV’s section on the Arctic has fourteen recommended policy actions. I’ve divided them into categories and provided some comments:

Government Infrastructure investments: Polar operations require special ships, sensors, and better satellite coverage:

• Enhance Arctic Presence: build more ice-capable vessels
• Improve Domain Awareness: build and integrate additional sensors designed for the challenging polar conditions (including solar disturbances)
• Improve Positioning, Navigation, and Timing (PNT) in the Arctic Region: GPS is less accurate in the polar regions due to satellite positions
• Enhance Communications Infrastructure and Partnerships
• Develop and Protect Defense and Security Infrastructure: Arctic port infrastructure does not currently support increased DHS and DOW presence.

Cooperation with Allies to Challenge Adversaries: Working in the Arctic, the U.S. Navy and Coast Guard will be able to accomplish more, including responding to excessive maritime claims of the Russians and checking Chinese presence.

• Empower Arctic Allies
• Respond to Excessive Maritime Claims
• Ensure Freedom of Navigation
• Enhance International and Multilateral Cooperation (specifically mentions Arctic Coast Guard Forum)

Support Economic Development: There are resources available in the U.S. Arctic that will become more cost-effective to develop in the coming years. Without a system to protect U.S. sovereignty and support economic development, others may exploit these resources. Like many of these statements, this also applies to Antarctic waters.

• Build a Safe and Secure U.S. Arctic Marine Transportation System (MTS)
• Develop and Protect Sustainable Fisheries
• Expand Seabed Activities
• Secure Energy Development Opportunities
• Increase Maritime Access for Terrestrial Mining Resources

Not Just the Arctic- but Polar

Although the MAP refers specifically to the Arctic, many of the actions will also support U.S. presence and efforts in Antarctica. Antarctica is governed by an international treaty that in many ways rewards scientific research and presence with a larger voice in the region’s government. China has been expanding its operations in the Antarctic, while the U.S. struggles to replace and update its aging infrastructure.

Next Step

Key Takeaways:

• The MAP seeks to incentivize expansion of the U.S. Maritime Industrial Base by simplifying and increasing access to government funding and unlocking private investment.
• The MAP creates several new programs and funding mechanisms to encourage demand for U.S.-built and operated vessels.
• The MAP proposes significant acquisition reform for U.S. government programs.
• The MAP recommends international cooperation modeled on the ICE Pact.
• The Securing the Arctic section demonstrates that icebreaker acquisition is but one part of securing the polar regions.

Thoughts and Comments:

If you have the time, read or skim the MAP.

Shortly after the MAP came out, the European Commission released a similar document called the European Union’s Industrial Maritime Strategy. I’ll be doing a similar write up on that later this week.

Also coming soon are an update on Sweden’s icebreaker acquisition program and other news.

Until next time.

All the Best,

PGR