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Sepsze sasto sapeca vessels in de litery Security Program, we are coses seg Sacose spea adees franse viage yo ad all concerned to find corse goeie w e rely dance de bred interests of the U.S. marts deses Aberea

e ipistee sation must be persuaded Bu ad Rssa Euty be exceptionally vulnerable, al Congess s i a alta resante US. Weetase Marine, based on U.S. built bores. unei ze spese Sketsadeves by well trained, loyal US.

Thank you , M. Carme Tezgasi syoe and tie panel for your thoughts
D es me for you toeste S comments

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TESTIMONY OF

Jordan M. Truchan

Before The

House Armed Services Special Oversight Panel

on the Merchant Marine

on the Maritime Security Program

July 16, 2002

Ne Cima and Members of the Parel, my same is Jordan Truchen I am feest ud CEO of Patrice Bolsas American Ship Management (ASM) and Paide Contas Srmes PSL sl based in Walnut Creek, California lapen befor you todas peak ahut the Marame Security Progam (MSP) and the role at Corted States

a tusens fafi n that orang MSP is absolutely essential D fare conting RSEN er tre gencan Merchant Marine and therefor the national dense and

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November 12, ASM affiliate PCS purchased the MARAD RRF contracts previously held by APL with the approval of MARAD.

ASM controls these nine US Flag vessels through a bareboat charter agreement with Wilmington Trust Company, a US Citizen Trust and is considered the “desponent owner" under the law. As part of our responsibilities, ASM provides officers and crew including assignment and payroll, places all insurances for the vessels and their cargo, outfits and provisions the vessels, maintains the vessels in a seaworthy condition at all times, ensures regulatory and statutory compliance for the operation of the vessels, manages all hull, machinery, personnel & indemnity insurance claims, enforces crew discipline and compliance with collective bargaining agreements, provides emergency response and contingency plaming for the vessels operations, performs all purchasing functions and provides and/or contracts for husbanding (agency services) in all US ports. ASM then time charters the nine vessels to APL for commercial operation in the US trades with Asia. ASM assumed five of these MSP vessels under the US flag at the time of delivery and within one month “flagged in” to the US Flag the additional four MSP enrolled vessels at minimal cost and without service disruption.

In 1998, ASM “flagged in” to the US Flag three additional containerships to be used by APL in US Flag service. This exercise again was accomplished by ASM personnel at minimal cost and with out service interruption. Two of these vessels currently remain under the US Flag. Although these ships are not enrolled in MSP they are enrolled in VISA.

ASM is based in Walnut Creek, California. Much of the original shore side staff of approximately 35 were ex-APL employees made redundant by the sale of APL to Singapore based NOL as their jobs were focused on US Flag ship management for APL. ASM would now provide these management and operational functions for APL through their own experienced US employees. Over the last five years, the number of APL veterans has significantly diminished through attrition and retirement. These positions have been filled and expanded by qualified US citizens as the Company has grown. Today ASM and its affiliate PCS employ over 50 highly qualified and motivated shore based staff trained in the unique discipline of US Flag ship management. We are headquartered in Walnut Creek, Ca, with additional branch offices in New Orleans, La and Newport News, Va.

ASM maintains collective bargaining agreements with six maritime unions with which it has strong, close and lasting collective bargaining relationships. ASM is represented on all its contracted unions Taft-Hartley Benefit Plans, actively providing leadership and oversight to these key collective bargaining compensation components. ASM has worked aggressively with its contracted labor unions to expand job opportunities for American seafarers, pursuing successfully the LMSR operating contract with the Military Sealift Command and the successor MARAD RRF contract, effectively doubling ASM seafarer employment opportunities from November 1997 levels over a five year period. In addition, ASM has been a driving force in developing advanced training for American zatres variang with contracted Umons a implementang Standards for m e Canication and Watch-iceeping (STCW training to meet international regulatory surements and CS Government Operations training to meet the requirements of the US Government sind management contracts it has been awarded and the others ASM continues to pursue

As a concerned S citizen Company. ASM has worked diligentiy to develop opportunities for Annencan seafarers and recrut new seafarers to atgrnent and rent the aging and dimentsiting American seafarer workforce ASM participates in vanos industry forums and Initiatives such as the MARAD sponsored Ship Operations Cooperative Program SOCP and the Vanner Recruitment and Retention maten address this critical issex ASM 3 especially proud of our involvement as a fourting

restee of the Maritime Technologies Training Program at Mar Vista High School Sam Jeg fornia. This innovative prior program trains high school students as apprentes

as who will be qualified to serve in skilled positions aboard US flag vesseis upce Simon The program has been enthusiastically received by L the community,

se te government and the student marcipants. There are plans to expand the m another California high schools in the near future

American Sain Management, MSP Present and Futare

LSM - seness model is the prototype for the current MSP Section extized operator to men Fag ships on behalf of non-US citizen carriers in the US Fin e Thes

BEST srangement provides the canner with the ability to carry S Government melles zes mieroviding strategic sealift capacity to the government and ats in t eresana score based workers. It was ASM wiadcreioped and implemente model and who has expanded upon this more successfully to the beneft m a tterne industry, maritime labor and the US Government ASM S

eugung participanon in the current MS and ASM Semily committed to mitsudes parties to accomplish reauthorizaiton and expansion of HSP. We e

galicipation in the current program and our steady growth over the last

des an excellent opportunity for us to participate in the resuthorized w ing Section 2 citizenship management and operation effectively and

I was new program, it has become apparent to us over the last five years. - urgent need to attract additional and alternative vessels to the US lag - Wmmercial, government and military sealt requirements. ASM strongly - suwomplish these goals, a reauthorized long-term program with enhanced - 4 escalator linked to the CPI is needed and warranted

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een expanded and enhanced MSP post 2005, ASM is developing
**ditional non-US citizen owners to enter the US Flag with alternative

e tonnage, such as roll on roll off (RO RO), float on float off (FLO and break bulk vessels. US citizen Section 2 ship manageri operators S ing alternative and innovative US Flag business solutions from a

we auspices of an expanded and enhanced MSP

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