The Trump administration's efforts to revive America's maritime industry came back into focus on Wednesday as lawmakers examined the budget requests for the fiscal year 2027 from the Maritime Administration (MARAD) and...
The Trump administration's efforts to revive America's maritime industry came back into focus on Wednesday as lawmakers examined the budget requests for the fiscal year 2027 from the Maritime Administration (MARAD) and the Federal Maritime Commission (FMC). Officials presented plans to grow the U.S.-flag fleet, modernize shipyards, enhance sealift capacity, and improve oversight of global shipping markets.
This hearing, held by the House Coast Guard and Maritime Transportation Subcommittee, highlighted maritime policy as a rare bipartisan issue in Washington. Concerns about supply chain disruptions, military sealift readiness, and China's influence in global shipbuilding have driven this focus.
"Current world events remind us that American businesses and consumers are linked to global supply chains," said Subcommittee Chairman Mike Ezell (R-Miss.) in his opening remarks. "These supply chains are vulnerable to disruptions, and when they are disrupted, costs rise."
Ezell highlighted the Maritime Action Plan from the Trump administration and the bipartisan Ships for America Act as proof that there is growing support to revitalize the U.S. maritime industry.
"It's a unique moment where there's a strong agreement that we need to address past neglect," Ezell said. "We must seize this opportunity."
MARAD Requests $2.6 Billion
MARAD Administrator Stephen Carmel informed lawmakers that the administration is seeking a total of $2.6 billion for the agency in FY 2027, which includes $1.2 billion in discretionary funding and $1.4 billion from a proposed Maritime Security Trust Fund established under President Trump's "Restoring America's Maritime Dominance" executive order.
Carmel described the Maritime Action Plan as the administration's blueprint for rebuilding the country's maritime industry and reversing years of decline.
Among the most significant requests are:
- $400.5 million for the Maritime Security Program (MSP) to support up to 60 U.S.-flag commercial vessels.
- $167.6 million for the Tanker Security Program, which aims to expand the program from 10 to 20 U.S.-flag product tankers.
- $500 million for the Port Infrastructure Development Program, funded through a mix of discretionary and trust fund resources.
- $105 million for the Small Shipyard Grant Program.
- $550 million for modernization at the U.S. Merchant Marine Academy.
Carmel cautioned that both the Maritime Security Program and Tanker Security Program are facing challenges due to decreasing cargo volumes and weak enforcement of cargo preference.
"As cargo preference declines, the program's stability is jeopardized," Carmel stated regarding the MSP, indicating that weak enforcement and inconsistent government cargo strategies threaten the fleet's future viability.
He also suggested that military fuel shipments should have the same support as dry cargo under domestic sourcing rules, arguing that tanker operators need a stronger cargo base to support a larger fleet.
A significant moment in the hearing occurred when Rep. Rick Larsen (D-Wash.) questioned officials about the administration's choice to issue a temporary waiver of the Jones Act during the Strait of Hormuz crisis. Larsen argued that this waiver undermined efforts to revive the U.S.-flag fleet and domestic shipbuilding, calling it "kicking out one of the legs from under the table."
Carmel clarified that MARAD was not involved or consulted in the decision-making process regarding the waiver.
"The Jones Act waiver was issued by the Department of War and Homeland Security," Carmel explained. "We were informed only after the decision was made and not consulted beforehand."
This exchange highlighted a perceived inconsistency in the administration's commitment to restoring U.S. maritime dominance.
FMC Emphasizes Enforcement Efforts
Federal Maritime Commission Chairman Laura DiBella, speaking before the subcommittee for her first time, emphasized the agency's increasing enforcement role and requested $40 million for FY 2027.
DiBella stated that the FMC's mission is focused on protecting U.S. shippers, promoting fair competition, and preventing unfair practices in international ocean shipping.
She highlighted ongoing investigations into:
- Flags of convenience registries.
- Global maritime chokepoints, such as the Panama Canal and Suez Canal.
- Restrictions by Spain on certain U.S.-flag vessels in the Maritime Security Program.
- Canadian ballast water regulations that may disproportionately affect U.S.-flag vessels.
DiBella also noted recent enforcement successes, including a $22.67 million penalty imposed on the Mediterranean Shipping Company for deceptive billing practices, which was paid to the U.S. Treasury earlier this year.
The FMC has become more active in disputes arising from the Ocean Shipping Reform Act of 2022. DiBella remarked that the agency successfully defended several major regulations in federal court, including those governing export refusals and detention and demurrage practices.
Rejections of Hormuz Surcharges
One notable aspect of DiBella's testimony was the FMC's reaction to surcharge requests from carriers during the Strait of Hormuz crisis.
DiBella revealed that several ocean carriers sought permission to impose war-risk and bunker surcharges shortly after Operation Epic Fury was initiated against Iran. The FMC rejected these requests, stating that carriers had not provided adequate justification for bypassing standard notice requirements.
"The FMC's rejection of these special permission requests protected U.S. shippers from sudden price increases," DiBella noted, emphasizing that American shippers were "the only shippers globally who benefited from this market stability and protection."
The hearing underscored the growing bipartisan agreement on maritime policy, with lawmakers recognizing that shipping, shipbuilding, and maritime workforce development are crucial for both economic security and national defense.
As Congress considers the Ships for America Act and the implementation of the Maritime Action Plan, it is clear that maritime issues, which historically received little attention in Washington, are now becoming central to U.S. industrial and national security policy.