By Sean Pribyl and Rear Admiral James Watson (USCG, ret.) During Maritime Week, the focus was on Washington, D.C.'s maritime sector. The Maritime Action Plan (MAP) gained attention for a good reason. If you're involved...
By Sean Pribyl and Rear Admiral James Watson (USCG, ret.)
During Maritime Week, the focus was on Washington, D.C.'s maritime sector. The Maritime Action Plan (MAP) gained attention for a good reason. If you're involved in operating, financing, insuring, building, or chartering ships, you're likely aware of the main issue: the U.S. needs a commercially viable U.S.-flag fleet and a solid industrial base to ensure effective surge sealift and logistics. The long-term success of the MAP relies not only on government-driven cargo (like military sealift and food aid) but also on fostering genuine commercial cargo. This commercial demand is essential for keeping fleets active during peacetime and lays the groundwork for rapid mobilization in times of need.
The MAP is comprehensive, but three key ideas will significantly impact its implementation: 1) strategic commercial fleet and cargo preference—because in this industry, cargo is king, 2) a maritime trust fund for steady, dedicated funding, and 3) Maritime Prosperity Zones (MPZs) to focus incentives on projects that can actually be built.
1) Cargo Really Is King
The U.S. strategic sealift capacity, including the Maritime Security Program (MSP) and Tanker Security Program (TSP), is crucial for maintaining a fleet of U.S.-flag ships. These programs work well only if there is enough work for the ships. Government cargo preference isn't just a policy issue; it represents the demand that keeps those vessels active and prepared for government needs. However, for a sustainable maritime sector, policymakers must consider more than just government cargo. Commercial cargoes, driven by private market demand, can ensure vessel employment and attract private investments, providing the consistent revenue needed for long-term commitments in ships, shipyards, and workforce training.
Why Commercial Cargo Matters: In an unstable market, effective policy must translate into moving cargo, but the most resilient fleets are supported by steady commercial trade rather than just government programs. “Cargo is king” because consistent commercial cargo volumes:
- create organic demand, allowing U.S.-flag economics to function without ongoing government subsidies (ensuring MSP ships remain viable and available)
- provide the predictability that enables operators, shipyards, and lenders to invest in ships and facilities, as private capital seeks stable orders
- ensure mariners remain employed, preventing a shortage in skilled labor
- keep ships and crews ready for rapid deployment rather than starting from scratch
- enhance operational efficiency, allowing yards, suppliers, and crews to shift from customized projects to more scalable solutions
What to Keep an Eye On: The specifics matter a great deal—especially how cargo preference is defined and enforced across different agencies, how waivers are managed, what documentation is required, and how strategic sealift participation rules evolve. It's also essential to foster an environment that encourages commercial cargo growth—not just government-driven movement—so the U.S.-flag fleet can develop real resilience. If you're involved with government-related or commercial cargo on U.S.-flag vessels, now is the time to verify that your contracts and documentation can withstand scrutiny.
A Note on MSP Expansion and Competition: The MAP suggests increasing the number of U.S.-built and U.S.-flagged commercial vessels, which could enhance the MSP and TSP. Supporters may claim this expansion would boost the pool of military-capable vessels and diversify the types of ships available for sealift. However, critics might worry that increasing MSP and TSP slots could intensify competition among U.S.-flag operators, leading to an oversaturation of the market and potentially diminishing profits.
Policymakers and industry must find a balance. Increasing participation could enhance U.S.-flag visibility in commercial trades and expand military surge capacity, but only if demand keeps up. Without additional commercial cargo opportunities, more vessels could lead to a situation where many are competing for the limited government cargo share, which might hurt profit margins and discourage new entrants.
The aim is not just to have more vessels but to build a commercially viable fleet that can handle extra capacity without harmful competition. If done correctly, an expanded fleet could drive renewal and market growth instead of merely fostering zero-sum competition. Without an increase in international commercial cargo demand, the risk is generating more ships than the U.S. fleet can profitably support. Nevertheless, the global economy is large enough to accommodate more profitable U.S.-flagged commercial vessels.
2) A Maritime Trust Fund: Stable Funding Beats One-Off Programs
Maritime policy often faces inconsistency, characterized by frequent starts and stops. A dedicated maritime trust fund could help by providing real, multi-year funding for priorities requiring years to develop, such as fleet refresh, port updates, shipyard modernization, workforce development, and technology adoption. However, it’s crucial that the program can disburse funds on realistic timelines that stakeholders can rely on. A trust fund that accumulates money faster than it allocates usable capital won't solve the sector's execution issues.
Key Elements for Success:
- Source of Funding: A reliable revenue stream that doesn’t reset every fiscal year.
- Eligible Expenditures: Clear criteria that balance fleet readiness with industrial capacity and infrastructure requirements.
- Decision-Making Process: Transparent standards, measurable results, and accountable reporting.
- Integration with Other Funding: Rules that allow federal support to be combined with state programs and private financing without adding compliance burdens.
If structured correctly, the trust fund shifts risk calculations. Operators, shipyards, manufacturers, and investors can plan around something more dependable than one-off funding sources. For project sponsors, clearer program guidelines can help reduce bureaucratic delays that hinder good projects. Moreover, a well-designed trust fund can also facilitate co-financing for upgrades and infrastructure improvements.
3) MPZs: Put Incentives Where the Work Can Happen
Maritime Prosperity Zones (MPZs) apply a straightforward strategy to a complex industry: concentrate public incentives, regulatory attention, infrastructure planning, and private investment in areas where maritime work can thrive. For industry stakeholders, the challenge is not so much about drawing a map but rather ensuring that the designation effectively mobilizes waterfront assets, supplier networks, workforce initiatives, and financing into actionable projects.
The MAP borrows the concept of targeted investment incentives, but maritime projects do not behave the same way as typical real estate or startup investments. Traditional incentives tend to reward investors when profits are realized or at exit points. Shipyards, repair facilities, and port infrastructure often require something different: upfront financial support, long-term financing stability, and incentives that enhance project economics before contracts are signed. Thus, for MPZs, the central issue is whether the incentives are practical at the point when commitment of capital is necessary, rather than offering tax benefits that materialize long after the fact.
If the MAP achieves its goals, MPZs could accelerate projects—such as shipbuilding, port-side manufacturing, logistics, mariner training, and the adoption of new maritime technology—by making incentives easier to locate, access, and finance.
MPZ criteria will influence who benefits from these incentives. Pay attention to how “readiness” is defined, including whether there is an existing industrial base, usable waterfront, utility access, community backing, environmental considerations, and credible job creation. The strongest proposals will come with tangible project plans, including site control, permitting strategies, workforce plans, and realistic timelines. Energy capacity may also become a critical factor. A seemingly ideal location can still falter if the local infrastructure cannot support the required industrial loads, advanced systems, and future growth. Zone applicants need to show not just the location of the work but also how energy supplies will meet those needs—considering options like onsite generation, microgrids, or innovative power solutions.
What Should Industry Do Next?
The MAP presents a clear direction. The challenge lies in how it will be legislated and turned into actionable programs—including definitions, eligibility, enforcement, and funding criteria. The upcoming legislative discussions will shape how much of the MAP can be implemented, such as the management of MPZs, cargo preferences, dedicated funding, and workforce initiatives. Here are some steps companies can take now to prepare and guide these developments:
- Understand Your Cargo Paths and Paperwork: Cargo owners, primes, and logistics providers should identify which cargo may be affected by preference rules, where waivers might apply, and whether your documentation is robust enough to withstand any challenges. It’s also important to spot potential growth regions for commercial cargo as U.S.-flag economics improve.
- Review Your MSP Strategy: MSP operators should closely examine eligibility criteria, crew training, compliance, cyber readiness, and how any policy changes—including potential expansions of government cargo preferences—might affect revenue and financing. Understanding demand dynamics is crucial as the MSP fleet expands.
- Prepare Projects for Trust Fund Eligibility: Shipyards, ports, OEMs, and developers should clarify project scopes, budgets, permitting processes, workforce plans, and intended outcomes, enabling prompt action once funding regulations are finalized. Include assessments of energy readiness, including current capacities and necessary upgrades, as part of your project proposals.
- Initiate Your Zone Strategy: Identify potential sites, engage local partners, and compile the essential elements (site control, utilities, permitting, workforce) that differentiate viable applications from mere aspirations.
- Engage with Congress Early and Provide Draft Proposals: If you want the MAP to function effectively, don't delay. Share real-life examples and suggest specific legislative language on definitions (what constitutes covered cargo, how commercial incentives can complement preferences), waiver criteria, enforcement protocols, eligibility thresholds, MSP expansion guidelines, and reporting practices. The most effective feedback is specific enough for legislative staff to utilize directly.
- Form or Join the Right Coalition: Where interests align, a unified message from industry representatives, labor, ports, and local leaders will carry more weight—particularly concerning workforce issues, shipyard operations, and balancing fleet growth with economic sustainability. Finding common ground in discussions around the MAP will be beneficial for all involved, including zone criteria, funding eligibility, cargo growth, and infrastructure enhancement.
- Involve Legal Counsel Early: The legal and regulatory landscape is rapidly evolving. Collaborate with experienced maritime and government contracts attorneys to help shape legislation, understand the federal budget allocations across sealift programs, cargo preferences, trust fund priorities, and MPZ incentives, and identify investment opportunities that align with emerging eligibility criteria.
In Conclusion: Those who prepare and engage early—both in project readiness and in policy formation—will likely be the near-term winners. The MAP will quickly transition from concept to legislative text and guidance once it gains momentum. If you wish to influence the outcomes—including the balance between MSP expansion, cargo preferences, and commercial cargo incentives—the time to act is now.