Ensuring Warfighter Readiness Through Industry Networks
The US-flag fleet is ranked 22nd internationally. Its numbers fall well below the top three nations of Panama, the Marshall Islands, and Liberia, which collectively account for 40 percent of registered ships. Ninety percent of the world’s ships are built in Asia, primarily China, the Republic of Korea, and Japan. Of the Top 20 container ports in the world, only one (LA/Long Beach) is in the United States, and it barely made the list. Should we be satisfied with this state of affairs? Eric Ebeling, President & CEO, American Roll-on Roll-off Carrier Group, posed this question to the audience during his keynote speech at the 2019 NDTA-USTRANSCOM Fall Meeting.
Ship count by itself is a crude and sometimes misleading metric but provides some insight he explained. The number of US-flag ships engaged in foreign commerce in 1993 was 116 ships, falling to 76 ships by 1997. This number rebounded slightly back to 85 ships by 2002. In 2012 the US was close to 120 ships, but that is currently back down around 85 ships. What happened during that timeframe? The numbers were affected by the Maritime Security Program (MSP) in 1996 and the Voluntary Intermodal Sealift Agreement (VISA) shortly after that on the policy side, and Operations Enduring Freedom and Iraqi Freedom on the cargo side.
Digging a bit deeper, one finds there has been an ongoing shift from a primarily container fleet to a more balanced fleet, including more Ro-Ros and heavy-lift multipurpose ships. This shift was in direct response to the demand signal from DOD and other segments of government preference cargoes. In 2005, there was only 1.2M square feet of Ro-Ro capacity. But by 2019, that was 3.1M square feet. If you include the heavy lift segment, the total rises to 3.4M square feet. Container fleet ships are bigger and more flexible than ever, and the same is true for much of the airlift side as well. This demonstrates a clear correlation—if the cargo and the right incentives are there, industry will invest and make the requisite commitments in assets and networks that ultimately ensure warfighting readiness.
Most Army logisticians are familiar with the detailed planning of Time Phased Force Deployment Data and getting unit equipment and personnel from fort to port of embarkation, as well as from port of debarkation to the foxhole and fight. But how does it get from POE to POD, and often from door-to-door? Ninety to ninety-five percent of that cargo moves via strategic sealift, due primarily to size, scale, and mass—whether via the organic/gray-hull or the US-flag commercial fleet.
Today, the concepts of contested environment, distributed maritime operations, and other related strategic imperatives are changing the geographic and temporal coverage required of logistics. Vessels may need to operate more independently—perhaps at risk in a contested physical or cyber environment, which may make the commercial fleet even more valuable in some respects, said Ebeling. The distinction between these two fleets (organic and commercial) can be boiled down to the fact that the former has to be activated, often at great cost, while the commercial fleet is always active. The latter is a fleet-in-being, hiding in plain sight, deployed around the world, and available to call ports and provide intermodal services where DOD either doesn’t want to have a footprint or cannot otherwise access.
In addition, it is the loyal, well-trained American citizen merchant mariners that serve in the commercial fleet that must be called upon to crew the government-owned reserve fleet, said Ebeling. To that end, he offered a brief comment in support of “Military-to-Mariner” programs to help DOD service members transition to merchant mariner status, pointing out that without a commensurate increase in cargo and therefore the size of the commercial fleet, there will not be many employment opportunities for new mariners.
Most DOD Mobility and Capability Requirements Studies over the past decades have shown an enduring need for 19-20M square feet of capacity. The MSP/VISA/Allied commercial fleets provide about 4M square feet of that, mostly through the MSP fleet. The cost to the government to acquire, operate, maintain and recapitalize those assets and networks would be somewhere in the tens of billions of dollars.
Without MSP, there would be no US-flag international carriers. Without the Jones Act, there would be no US-flag domestic carriers. Without cargo preference, there would be no US-flag carriers at all. And without those carriers, said Ebeling, the quality, capacity, and capability that DOD relies on wouldn’t be there either.
Your very best industry partners, he continued, whether sealift, airlift or other modes, are connected to a versatile global supply chain offering far more than just ships or planes. While those assets are the entry price of admission to the respective industrial base programs, it’s about far more than just the steel.
Today’s US-flag fleet is more capable and flexible than it was just 10-15 years ago, and it continues to evolve. Liner networks continue to be the backbone of the industry and provide ready-made access and capability to commercial customers and DOD in Europe, the Middle East, and elsewhere. But strategic unpredictability, operational unpredictability, and ever-changing demand signals are also commercial facts of life, and this makes your US-flag carriers more adaptable, including for DOD notions such as dynamic force employment.
It is important to be cognizant of the challenges of operating in open, competitive global markets. Look no further than the pending IMO 2020 low sulfur fuel challenge as an example of such challenges. Of course, it’s impossible to predict what will happen, but based on current trends and forecasts, we conservatively estimate that the cost across the US-flag MSP fleet will be at least $150M per year, Ebeling explained. That’s just the increase and is equivalent to half the value of MSP annual funding, for which we fight so hard for annual appropriations.
Collectively, he said, we have a unique opportunity to shape the DOD supply chain and logistics of tomorrow. How do we challenge long-held assumptions on sealift, pre-po, fixed infrastructure such as warehousing, and leverage networked logistics so that we are more diffuse and effective? Where is the innovation in logistics today, and where will it be tomorrow? A clear and obvious starting point is ensuring we have the assets and programs already in place.
To truly move the needle, we need a national conversation, a national sealift policy, and the national willpower to meet such challenges. I believe all recognize that this has to be a partnership, and not a vendor type relationship if we are to be collectively successful, he stated. Without the ability to provide Soldiers, Sailors, Airmen, and Marines with the resources needed to win on the battlefield, the development of advanced tactics and technology will not have the opportunity to matter.
As we examine current and emerging high-end threats to the DOD logistics enterprise, Ebeling encouraged DOD to bring key commercial logistics and asset providers into classified meetings as appropriate. Industry partners have to innovate and develop new and improved value propositions to survive and could help mitigate threats to the DOD logistics enterprise by jointly developing concepts such as disaggregation, deception, hardening, resilience, etc. The importance of both airlift and sealift is not properly war-gamed, and as industry continues to invest hundreds of millions of dollars in assets and networks to support DOD, it seems right and proper to discuss the risks of attrition, cyber, A2AD, risks to commercial civilian airmen and mariners, and the like.
The best of commercial industry is vibrant, can handle today’s workload, and has proven itself ready willing and able to size itself to the DOD workload throughout history, said Ebeling. Carriers can and do compete like hell in the commercial and government market spaces, but there is an awesome—in the truest sense of the word—willingness to put aside differences and work collaboratively with our DOD partners when the nation needs it.
For more information on the Fall Meeting, visit www.ndtahq.com/events/fall-meeting/.