Mr. Chairman, Congressman Allen, and Members of the Merchant Marine Panel of the House Armed Services Committee, I appreciate the opportunity to testify on the Maritime Security Program (MSP).

I wholeheartedly support reauthorization of MSP beyond expiration of the current authority on September 30, 2005. The MSP is a vital element of our military's strategic sealift and global response capability. As we look at operations on multiple fronts in support of the War on Terrorism, it is clear that our limited defense resources will increasingly rely on partnerships with industry to maintain the needed capability and capacity to meet our most demanding wartime scenarios. That makes MSP reauthorization even more important as we look toward the future. MSP is a cost effective program that assures guaranteed access to required commercial U.S. Flag shipping and U.S. Merchant Mariners, when needed. The alternative to MSP is, ultimately, reliance on foreign flag vessels manned by foreign crews during crisis. MSP provides the security of resources we must have in a very uncertain world fraught with asymmetric threats. MSP ensures the development and sustainment of critical strategic partnerships favorable to the United States. And, MSP helps ensure the viability of America's merchant mariner pool needed to activate the Reserve Fleet. MSP makes sense. We can't afford not to invest in MSP. I strongly advocate for swift reauthorization.

MSP is a critical component of our strategy which recognizes and relies upon significant augmentation from the U.S. commercial sealift industry to support the warfighter's needs. We limit our organic fleet to those assets that the commercial sector cannot provide. Only 33% of the vessels we may require reside in our organic fleets. The remainder of the sealift capacity needed to transport military equipment and supplies comes from the commercial Looking ahead, the War on Terrorism could eventually push our baseline requirement for commercial sealift even higher.

sector.

MSP reauthorization is, without question, the linchpin in our

wartime U.S. commercial sealift capability, through its integral support of the Voluntary Intermodal Sealift Agreement (VISA). VISA is a three-phased program that enables time-phased access to militarily useful U.S. Flag commercial dry cargo sealift capacity. VISA is cost-efficient because it contractually provides assured access to commercial U.S. sealift assets, mariners, and intermodal capacity when required, releasing the American taxpayer from otherwise bearing the procurement, overhead, and maintenance costs of a profoundly larger organic military capability. Our current organic military fleet is much improved over just 10 years ago and is structured to support our surge requirements in time of conflict.

However,

the bulk of large-scale sustainment sealift in times of major conflict resides with the commercial sector that we also depend on for day-to-day support of peacetime requirements. That is what makes the VISA-MSP link such a perfect fit. MSP and VISA are truly complementary force multipliers. need both MSP and VISA. MSP's guaranteed access to vessels, combined with VISA's capacity and supporting global intermodal infrastructures fulfills the sealift requirements to meet war fighter needs.

We

The U.S. commercial maritime industry has markedly reduced in the face of economic competition from less costly and, in some cases, greatly expanding, foreign firms. To ensure the existence of a U.S. flagged fleet to meet wartime requirements, MSP incentives help defray the added costs to sail commercial vessels under the U.S. flag. The overall state of the domestic maritime industry is indeed an issue for national debate, but not one which should preclude timely reauthorization of MSP. We need MSP now. MSP in its current construct offers great return on investment supporting a sizeable and capable fleet of 47 U.S flagged vessels for relatively little annual cost. If we fail to reauthorize or make program participation unattractive, the

potential erosion and eventual disappearance of a viable U.S. flagged fleet and, ultimately, the U.S. merchant mariner pool, would force increased and potentially total reliance on ships of foreign registry, entrusting precious military cargo to non-U.S. crews in times of great crisis. This cannot happen if the U.S. is to retain an ability to "go it alone."

Our actions now are critical. MSP reauthorization will indeed be a landmark decision for the U.S. maritime industry. The United States Transportation Command's (USTRANSCOM) industry and labor partners have all indicated their strong support for MSP and we all agree that we need a holistic approach. I firmly believe that industry has a responsibility to come to consensus on a plan that is right for them and right for the country. I am confident industry can meet this challenge.

While MSP offers guaranteed capability, it also provides the security we, as a nation, must have to go it alone." While foreign companies dominate the world maritime market, MSP ships sail under the U.S. flag, are crewed by U.S. mariners, are operated by U.S. companies, and are subject to U.S. laws. As a warfighter and as a concerned American this is what I must have, and I have it in MSP. Currently, MSP comprises both Section 2 and Documentation Citizens. Both Section 2 and Documentation Citizens must execute the same contingency contracts with DOD committing vessels to VISA Stage III and thereby assuring us we will have access to their vessels. is important because VISA Stage III is our highest sealift mobilization level and provides government access to all 47 ships enrolled in MSP. As a warfighter, my requirements are met by both Section 2 and Documentation

Citizens.

This

We simply cannot, as a nation, fight the fight without the partnership of the commercial maritime industry. We rely on the commercial maritime industry to provide the primary source of manpower to crew our organic vessels. Our nation's organic sealift capability, in the form of highly

capable prepositioned, fast sealift ships (FSS), large medium speed roll on and roll off ships (LMSR), and Ready Reserve Force (RRF) ships which provide emergency and surge response capabilities to globally deploy our combat and support forces, would literally be useless without the support of the commercial maritime industry. As such, MSP supports not only our commercial wartime sealift, but is absolutely essential to providing the labor pool of U.S. merchant mariners for our organic fleet. This is a huge aspect of MSP. Given that the events of 9/11 have forever changed how we view the world, the absolute, unequivocal necessity for U.S. mariners, ready and able to crew a guaranteed fleet of U.S. flagged vessels in times of crisis, mandates MSP

reauthorization.

Our latest assessment indicates a requirement range of 50-60 dry cargo ships in MSP. This scenario driven assessment is based upon wartime requirements resident in the Mobility Requirements Study (MRS-05), a study that is already 2 years old and predates the War on Terrorism. More specifically, MRS-05 requires a U.S. Flag commercial container capacity of about 130 thousand Twenty-foot Equivalent Units (TEUS) and 825 thousand square feet of roll-on/roll-off capacity, assuming moderate risk, against a two major theater war (2 MTW) scenario. This equates to approximately 50-60 ships required in MSP. The number of ships is variable because the exact number needed is driven by size, speed, capacity, and cycle time considerations which are largely scenario dependent. It is possible that War on Terrorism scenarios, when factored into a future MRS-05 like baseline, could drive the aforementioned capacity requirements higher. From a warfighting perspective, it is in USTRANSCOM's interest to maintain a mix of dry cargo ships which optimize support for the multiple scenarios considered in MRS-05 while meeting the most demanding requirement of the 2 MTW scenario. We need MSP reauthorization soonest. Guaranteed access to U.S. Flag

shipping, the viability of the U.S. merchant mariner pool, and the associated