SENATE COMMITTEE ON COMMERCE, SCIENCE, & TRANSPORTATION
Nomination Hearing
For questions on the note below, please contact the Delta Strategy Group team.
On October 22, the Senate Committee on Commerce, Science, and Transportation held a hearing to consider the nominations of:
- Stephen Carmel for Administrator of the Maritime Administration
- Laura DiBella for Federal Maritime Commissioner
- Robert Harvey for Federal Maritime Commissioner
- Timothy Petty for Assistant Secretary of Commerce for Oceans and Atmosphere (NOAA)
Below is a summary of the hearing prepared by Delta Strategy Group, which includes several high-level takeaways, followed by summaries of opening statements and discussion.
Key Takeaways
- Chairman Cruz (R-TX) outlined how President Trump has been vocal about restoring U.S. maritime dominance, expressing concerns that U.S. ports are falling behind those in Asia and Europe, particularly in their adoption of automated technology.
- Witnesses emphasized the importance of stability in the maritime industry, with the statutory focus on having a reliable ocean transportation system. Carmel highlighted that if the U.S. aims to expand its fleet, it must return to carrying a greater share of U.S. commerce and focus on more than just military operations.
- Senator Fischer (R-NE) asked what criteria would be prioritized to ensure agreements align with the Federal Maritime Commission’s (FMC) standards and support efficient freight movement. DiBella emphasized the importance of transparency, systematically identifying inefficiencies in cargo and container handling, and taking comprehensive action across the supply chain. Harvey added that the FMC regulations should encourage innovation, noting that fair and competitive markets would attract private capital to help address challenges.
- Senator Young (R-IN) highlighted his bipartisan legislation with Senator Kelly (D-AZ), the SHIPS for America Act, which aims to create the conditions for restoring U.S. dominance in the shipping industry, as he questioned Carmel on the key parts of the President’s agenda necessary to rebuild U.S. shipbuilding capacity and how the SHIPS Act fits into that effort. Carmel responded that the current U.S. capacity for building ships, particularly those used in international trade, is insufficient and must be rebuilt. He emphasized that the SHIPS Act provides the necessary tools, financial framework, and stability to support this goal, aligning with the President’s priorities.
- DiBella emphasized the importance of examining the full supply chain to identify export needs and support opportunities, noting that much of U.S. agricultural trade moves through middle America, and highlighting the need to strengthen import and export activity accordingly.
- Senator Klobuchar (D-MI) highlighted how her bipartisan Ocean Shipping Reform Act with Senator Thune (R-SD) strengthened oversight of ocean shipping, improved supply chain efficiency, and helped lower shipping rates. She emphasized that it requires foreign-owned shipping alliances to charge fair rates, avoid profiting at the expense of U.S. businesses, and prioritize shipping American-made products, confirming from both FMC nominees that they would vigorously enforce the Act. Ranking Member Cantwell (D-WA) noted the importance of the FMC working closely with the Maritime Administration (MARAD) to ensure that U.S. consumers and exporters are protected from unfair practices.
- Senator Klobuchar raised concerns about how the FMC will support inland ports in addition to coastal ones, with Senator Peters (D-MI) calling for the equitable distribution of funding through the Port Infrastructure Development Program (PIDP). Harvey noted that FMC is continuing investigations, including those related to Canada and balanced water regulations, to ensure Great Lakes ports are not disadvantaged and that the FMC has already secured some exemptions.
- Senator Klobuchar asked how maritime and intermodal supply chains can be made more resilient and efficient amidst port congestion, inland bottlenecks, and outdated infrastructure. Carmel responded that stability in demand, better management of port flows, and improved use of information are essential to strengthening supply chain resilience.
SUMMARY
Opening Statements and Testimony
Chairman Cruz (R-TX)
I am concerned that China’s maritime industrial base thwarts our own. The administration’s forthcoming maritime action plan will address this geopolitical challenge. We need a maritime strategy focused on attracting capital and removing regulatory barriers. U.S. shipyards can compete globally without heavy-handed protectionism, but only if they lean into nascent industries like seabed mining and nuclear-powered shipping, where we are at a distinct comparative disadvantage.
Ranking Member Cantwell (D-WA)
Investments in our shipyards, ports, workforce, and efforts to build new, larger ships in the U.S. are needed to build our future maritime workforce, economy, and support our national defense. There is strong bipartisan support on this Committee for American shipbuilding. We need to ensure that the investments we authorize will be implemented by this administration. I look forward to discussing how critical the U.S. maritime ecosystem is for addressing supply chain challenges, especially as these issues have become a dominant concern. The FMC plays a pivotal role for us. We want the FMC to remain strong and continue to be proactive, as a more global economy, and economic opportunities are outside the U.S., and there is a heavy concentration of foreign carriers. How do we make sure there are fair policies and that the commission is doing its job in protecting consumers? We do not want U.S. shippers’ product left on docks, we do not want unfair prices, and we do not want unfair rates. This committee has been very loud and clear about the importance of stock assessment, which requires the National Oceanic and Atmospheric Administration (NOAA) with expertise and resources.
Stephen Carmel, to be Administrator of the Maritime Administration
Maritime strength depends on people, and it must be built long before a crisis occurs. We are a formidable naval power, but we are not a true maritime power. Our industrial capacity has declined to a point of near irrelevance, both in our ability to carry our own commerce and the ability to build ships that do it. We have outsourced those capabilities and have sacrificed much of our independence in the process. A strong maritime sector is strategy. It means resilient supply chains that we control, credible logistics for our joint forces, good jobs across our coasts, rivers, and great lakes, and the freedom to move what the U.S. needs when and where needed.
Laura DiBella, to be a Federal Maritime Commissioner
Ports are vital economic engines to a region and state. Ports, although local in nature, are global in principle and must be viewed and protected as such. I have engaged heavily in international trade discussions with key trading partners around the globe, as well as economic development efforts involving the newest mode of transportation to intersect with maritime. I will uphold the statutory directives on the Ocean Shipping Reform Act of 2022 and ensure that the economic and homeland security needs of our country are always at the forefront of every discussion. I will work to eliminate unfair shipping practices by foreign governments and do everything in my power to guarantee that shippers, common carriers, ocean transport intermediaries, and ports regulated by the FMC are provided with a fair market environment in which to operate.
Robert Harvey, to be a Federal Maritime Commissioner
I will work to ensure that the FMC maintains a competitive and reliable ocean transportation system and protects U.S. consumers, exporters, and importers from unlawful, unfair, and deceptive ocean transportation practices. I look forward to ensuring fair conditions for all U.S. shipping.
Timothy Petty, to be Assistant Secretary of Commerce for Oceans and Atmospheres
I believe in the importance of science-based policymaking and that effective stewardship of our oceans and atmosphere requires not only technical expertise but collaboration and a commitment to transparency.
DISCUSSION
Chairman Cruz (R-TX): Why are U.S. ports so archaic compared to their foreign counterparts? Carmel: In terms of productivity, the U.S. in behind. The real issue is using technology in a way that leverages labor, makes labor more productive, and allows us to compete at the level of foreign ports. We should use technology in a way that does not displace jobs but enhances them and magnifies them so that workers can be productive. Productivity is what we have to deal with.
Chairman Cruz (R-TX): Is the problem a lack of federal spending or too much red tape and other factors? Carmel: It is a combination of both. Regulation can get in the way. We have to ignite innovation. The SHIPS Act has innovation in it, MARAD has the Maritime Innovation Center, and the Waterfront Workers have an innovation section. There are three competing programs for innovation. We need to leverage them, make sure that they are used in a way that is synergistic and provides value rather than competing, and find ways to make our workforce productive.
Chairman Cruz (R-TX): Will you ensure incidental take regulations expiring in April 2026 are renewed to prevent any permitting delays? Petty: We need to make sure that we have the focus on these areas of regulation. The President and the administration as well as the Secretary, have said that we need to focus on regulatory making it focused and short, so that we can move things in the right way. I am committed to making sure the laws are met, but the regulations are quick, decisive, and clear moving forward.
Chairman Cruz (R-TX): How will the environmental permitting process be streamlined? Petty: Streamlining needs to be a partnership with not only the different agencies that have oversight, not only commerce, but interior and other agencies. I think we can do that with the technology of interacting with the technology, so all these agencies can look at them at the same time and move things much more quickly.
Chairman Cruz (R-TX): With the FMC’s narrow mission of ensuring a competitive ocean transportation system, what are the statutory functions of the FMC, and will you commit to staying within the bounds of your authority? Harvey: The statutory commitment is to have a reliable ocean transportation system. We would stay in our lane in terms of jurisdiction, but we are there to review the agreements that are filed with our agency to ensure that those are fair and reasonable, and not anti-competitive. I believe in regulation to ensure competitiveness and enforcement when necessary; DiBella: We would work very collaboratively with other agencies like MARAD and the Surface Transportation Board (STB) to ensure the whole system is being addressed. We are responsible for the entire system to be efficient, competitive, and reliable. We do this by addressing the business needs of companies either operating in the U.S. or seeking to do so, serving as the authority that responds to their inquiries and takes appropriate action.
Ranking Member Cantwell (D-WA): Do you support the Jones Act? Carmel: Yes, I do.
Ranking Member Cantwell (D-WA): What do you have in mind when you are looking at unfair and deceptive practices when we are trying to build a maritime nation again? How will we show the international community that is calling on our ports that we are going to be serious about unsubstantiated increases in rates or practices where we are being left with U.S. products on our docks? Are you willing to use your authority when you see problems that exist? Harvey: That is where reviewing of the agreements and watching the alliances that operate to ensure there are not anti-competitive practices, because it is a unique ecosystem in the maritime industry where there is very limited amount of providers and agreements that can help in making the system more efficient and making capacity more available, but they are also very capable of being anti-competitive. Nothing gets an industry member’s attention like an enforcement action; DiBella: The carriers make the market. It is a bit of a balance that we have to have with them. We need to provide good oversight, and I hope for additional transparency, and that relationship will improve so that we will be able to have a more efficient system.
Senator Fischer (R-NE): What importance do you put on the three programs that ensure U.S. flag vessels are available for the seal lift, specifically the Jones Act, Cargo Preference, and the Maritime Security Program (MSP)? How could MARAD possibly improve those three programs? Carmel: All three programs are critical to sustaining the fleet we have now. They alone will not help us grow it, but they are critical to making sure we do not go backwards. Those programs themselves do what they are intended to do. At the end of the day, it is not about ships, but cargo. If we do not have enough cargo, how many ships we have is irrelevant. We need to do a better job at generating cargo. For MSP and the Tanker Security Program, that means focusing on preference cargo. There is not enough of that around to scale either program. We also need to find ways to generate cargo that does not come from the U.S. taxpayer. If we want the size of fleet that we are talking about, we are going to have to get our fleet back to carrying the nation’s commerce, not just focused on the military.
Senator Fischer (R-NE): What criteria will you prioritize to ensure agreements align with FMC standards and facilitate efficient freight movement overall? DiBella: Going back to more transparency and understanding the realities of why certain cargos and containers are left and are resulting in such detention and demerge charges, uncovering where the inefficiencies are, and going back to looking at things systematically. It is about taking a comprehensive look at every aspect of the supply chain and understanding where the issue is created and taking action; Harvey: I want to ensure that regulations coming from the FMC encourage innovation. If we can create fair and competitive markets, private capital is going to flow and help solve some of these problems.
Senator Moreno (R-OH): What is the state of the maritime industry in the U.S.? Carmel: I am not even sure that we are on the scale.
Senator Moreno (R-OH): What is going to be done to revitalize the Great Lakes shipping industry? Harvey: There is no way to restore America’s maritime dominance without restoring our industrial dominance. We have to be aware that everything we do at the FMC in terms of rules and regulations not only helps the international carriers but also focuses on what is happening on the Great Lakes.
Senator Moreno (R-OH): How do we ensure we do not have a southern-centric view of the shipping industry? DiBella: I would take the same approach that we did at the state level when thinking about where the export needs are and ways that we could potentially help. There is a lot of agriculture that comes in and out of middle America, so it is really examining the supply chain, noticing what is dominating import and export activity and how we can help.
Senator Young (R-IN): What is the state of commercial shipping and shipbuilding in the U.S.? Carmel: The state of our shipping and shipbuilding industry is basically on a lifeline. We do not carry our own commerce. Merchant Marine is supposed to be for carrying the nation’s commerce, and we need to find a way to get back to that. Our shipbuilding is not even comparable to international-scale shipbuilding.
Senator Young (R-IN): How can the SHIPS Act and the President’s plan get us back on the right track? Carmel: The SHIPS Act says we cannot build ships at scale. I would go a step further and say that for ships that matter and international trade, we cannot build them at all. That capacity does not exist here, and we need to bring it back. The SHIPS Act is a great thing because it addresses the pillars that we need in order to do that. The executive order gave us a vision of what needs to be done. The SHIPS Act gives us the levers and the resources to do it and that is what is important. One of the reasons we failed over the years is instability, and the SHIPS Act will give us stability.
Senator Klobuchar (D-MI): Will you commit to vigorously enforcing the Ocean Shipping Reform Act? DiBella: Yes, I will. Harvey: Yes.
Senator Klobuchar (D-MI): How will the FMC support the needs of our inland needs, and not just those on the coast? Harvey: We will continue investigations like we have done with Canada and the balanced water regulations and to make sure that U.S. shippers and lakes are not harmed. The FMC has been able to carve out some exemptions for some of that.
Senator Klobuchar (D-MI): When shippers are delayed by port congestion, inland freight bottlenecks, and outdated infrastructure, causing products to arrive late and businesses to suffer, how can our maritime and multimodal supply chains be strengthened to become more resilient and efficient? Carmel: We need to have stable and predictable demand. We need to be able to manage flows through our ports so that we do not have too much stuff trying to go at one time and not enough going at others. We can use information better than we do now.
Senator Peters (D-MI): Will you support robust funding for our ports through the Port Infrastructure Development Program (PIDP) and ensure the funding is distributed fairly so that our Great Lakes and Gulf Ports are not left at a competitive disadvantage? Carmel: I look forward to working with you to advance that agenda.