Paul N. Jaenichen - Maritime Administrator, United States Maritime Administration

Posted by Nicole Ventimiglia October 10, 2014

Paul “Chip” Jaenichen was appointed by President Obama and sworn in as Maritime Administrator on July 25, 2014.

Before his appointment, Administrator Jaenichen served as Acting Administrator beginning in June 2013. He joined the U.S. Department of Transportation, Maritime Administration in July 2012 when he was appointed Deputy Maritime Administrator. A career naval officer, retiring in 2012 after serving 30 years as nuclear trained Submarine Officer in the U.S. Navy, Jaenichen’s final assignment was Deputy Chief of Legislative Affairs for the Department of the Navy from October 2010 to April 2012. Prior to that, he commanded a Los Angeles Class Fast Attack Submarine, as well as an entire Submarine Squadron. His shore tours included assignments as Director, Submarine/Nuclear Officer Distribution where he was responsible for career progression and assignment of over 5,200 officers and as Chief, European and North Atlantic Treaty Organization (NATO) Policy Division on the Joint Staff where he was responsible for military-to-military engagement on security cooperation and involvement in coalition operations with all 26 NATO member nations. Jaenichen earned a Bachelor of Science in Ocean Engineering from the United States Naval Academy and a Masters in Engineering Management from Old Dominion University. Although no stranger to the waterfront itself, Jaenichen is better known on the naval side of the equation. That said; he brings common sense to a position which surely demands it and has shown himself to be a quick study in all things that impact commercial, domestic maritime stakeholders. Throughout his short tenure at the U.S. Maritime Administration, he has been known as a capable advocate for department and the maritime sectors that he helps foster. Listen in this month as he provides a thorough SITREP on the domestic waterfront.

You are 15 months into the job as U.S. Maritime Administrator and have been approved by the U.S. Senate. You’ve been with Marad for more than two years. Give us your impressions of working at Marad and also tell us what you brought to the Administrator’s office.
Since arriving at MARAD I have found the professionalism, diligence and dedication of MARAD employees impressive and among the best I have seen in Government. Without question, they are working hard every day to reinforce America’s future course as a maritime Nation. I think what I brought to MARAD was a focus and prioritization on the issues of most importance to the maritime industry in those areas where MARAD can make a difference and achieve the best affect or outcome. In any government organization, you are faced with limited resources. Once you lose focus on the most important areas or fail to prioritize actions, the organization is spread so thin that you don’t get much done nor do you get appreciable return on the organization’s investment either in funding or human capital. As you’re aware, there has been no real attempt to develop a National Maritime Strategy since the late 1960s, and obviously—a new one is long overdue. This was something I was able to discuss with Secretary Foxx shortly after his arrival, and he got it right away. He clearly understood the importance and need for a seamless integration between maritime, rail and road, as well as how important this industry’s continued success means to our Nation’s economic and national security. The Secretary’s support put a lot of momentum behind the development of the strategy, and it will enable us to take it to the next level.

Marad’s role is described by some as being “America’s Maritime Cheerleader.” But, it is much more than that. Tell the readers why and how.
While MARAD is a staunch advocate for an irreplaceable but largely invisible industry, we manage numerous programs geared toward keeping American freight moving efficiently by increasing the utilization of our Nation’s marine transportation resources and infrastructure. For instance, StrongPorts delivers development assistance to U.S. ports, helping them continue to meet our growing population’s increasing demands for goods that travel by water. Additionally, the Department of Transportation announced the next round of Transportation Investment Generating Economic Recovery or TIGER grants in mid-September. Through the first five rounds, we invested over $420 million in 33 ports, inland and coastal both large and small. So ports and Marine Highways will continue to be well represented in future rounds of TIGER. The Marine Highway program looks to improve intermodal efficiency in freight transport by shifting from congested roadways and rail lines to underutilized rivers, waterways, the Great Lakes and near coast routes, where it makes sense to do so. This effort will become increasing more important when you look our Nation’s expected population growth by 2050. The addition of nearly 80 million more people will require us to move 14 billion more tons of freight than is currently moving today. So it is an absolute necessity that our marine transportation system be part of the solution. Our financing initiatives (including Title XI shipbuilding loan guarantees) enable U.S. shipyards to support the Jones Act build requirement and in some cases compete globally to help our Nation maintain our essential shipbuilding infrastructure and capacity. That industrial base is a critical strategic asset to our Nation and can never be lost. Additionally, our national security programs ensure that the Department of Defense has assured access to U.S.-Flag vessels and Merchant Mariners required to support any sealift effort to support global projection of the U.S. Armed Forces in the event of a contingency involving armed conflict or national emergency.

Likewise, you also insist that logistical situations or short term inconveniences on the rail and road can also prompt shippers to look for a better way. Where have you seen that happen?
Several start-up services demonstrate how Marine Highways are a viable method of moving our Nation’s freight. Since 2008, the M-64 Express has been running a service between Richmond and Norfolk, Virginia. While it initially operated once a week, demand doubled by 2012 and tripled by 2013. It has saved over 10,000 truck trips last year alone, providing public benefits in the form of reduced air emissions and savings on road maintenance costs. We’re seeing similar successes where geography and the right markets coincide, like with Couch Lines in the La Porte, Texas area, and Columbia Coastal, which operates on the M-95 from Norfolk to Baltimore and Philadelphia. Unfortunately, there are also challenges as we discovered with the M-580 Green Trade Corridor project, but we will take those lessons learned and apply them to future Marine Highway projects.

Marad is the only modal arm office in the U.S. Department of Transportation that has – for the most part – little in the way of regulatory powers. How does this impact your mission to better the domestic waterfront and where do you make up for organizational shortcomings to make a real difference?
A regulatory agency has to maintain a certain degree of separation from industry in order to maintain an objective position and credibility in enforcement. One of the advantages that MARAD has in the absence of a large regulatory role is that we are able to work much more closely with stakeholders and operate in a more effective manner as a partner with the industry. This allows us to roll up our sleeves and work directly to help the industry where it is needed. In that context, being largely non-regulatory is actually a strength, not a limitation. I will note that MARAD was tasked in the Duncan Hunter National Defense Authorization Act for Fiscal Year 2009 with enforcing the Nation’s Cargo Preference laws. We are currently in the process of drafting a proposed rulemaking and should have it be ready for government interagency review soon. This will give MARAD a greater regulatory role once the rulemaking is implemented, but that, as you know, is a lengthy process.

Trucking, rail, air freight and maritime – they all form essential parts of the intermodal equation. Too often, maritime gets lost in the noise. Beyond this, the trucking and rail lobbies are pretty good at what they do. What can we from the waterfront do to convince trucking and rail that maritime can be a complement to, without detracting from their share of the pie?
The shipping container was developed out of the need to move freight more efficiently. The fact that it works on three modes should send a strong message. Our future freight system must be intermodal, all of the modes will need to work together to accomplish fluid, non-congested freight flow. It will take continued teamwork between the stakeholders and operators from all the modes as well as the intermodal yards and facilities to maintain efficient freight movement across our Nation and accommodate the larger freight volumes that our expected population growth by 2050 will bring. Our focus for the maritime industry is to grab a large piece of the future pie, not the current one. The size of our industry, if you look at it only in individual segments is relatively small, but collectively it is large. That is why the National Maritime Strategy that MARAD is developing has to include ports, shipbuilding and repair, maritime labor, domestic and international shipping. It is through our collective voice that will have the strength to achieve the results we are looking for. However, because freight tends to migrate to the most efficient way of transport, part of our job is also to provide viable alternatives that can help our freight system avoid bottlenecks, congestion and safety issues.

From the waterfront, one of your more vocal mantras has been that we as the maritime component of the intermodal picture have to speak with one voice, if we want to be heard. Flesh that out for the readers.
The railroad industry has seven Class One Railroads. There are 50 states focused on highway maintenance and construction. The maritime industry has 360 ports, 30,000 inland operators, numerous organized labor organizations and thousands of ocean going ships flying dozens of flags. Last year alone, we had over 68,000 vessel calls in the U.S. with over 90 percent of our imports by volume coming by water. The incredible number of stakeholders in the maritime industry makes not only building consensus difficult but also limits our ability to communicate one message with one voice. As I pointed out before, that is why we must be focused on developing a National Maritime Strategy. I am not saying it is going to be easy, but MARAD is committed to doing it. We really have no choice since doing nothing and waiting for a different outcome is not an option.

If you had to choose just one effort and/or accomplishment that Marad can point to as a serious victory for the domestic waterfront under your leadership, then what would that be?
I think it is way too early to be talking about my legacy at MARAD. Quite frankly, it is not about me, but rather it is about the maritime industry and whether we can point the Agency and the industry in the right direction. If I had to pick one accomplishment, it would be bringing the industry together to recognize that we have what may be a once in a lifetime opportunity. Over the course of four days in January and May 2014, over 600 maritime stakeholders took part—either in-person or via internet— in two National Maritime Strategy Symposiums hosted at the Department of Transportation. Participants identified issues, had constructive dialogue, looked for opportunities and developed ideas for the sustainable future of our industry. MARAD has since translated those conversations into actionable items that will guide responsible marine transportation policies our Nation will need in the future. There is a lot of work and collaboration that still needs to be done, but it is a real start to finding a way for the maritime industry to take advantage of this opportunity.

Marad describes America’s Marine Highways as “the nation’s 25,000-plus miles of underutilized coastal, intracoastal and inland waterways that can help mitigate the landside congestion that is creating gridlock on our highways and railroads.” How well we are moving in the right direction to achieve those goals?
Just this August, Secretary Foxx designated a new Marine Highway Corridor—the M-35, running on the Upper Mississippi River between St. Louis and Minneapolis. The request for the designation was co-sponsored by five state DOTs and reflects what we’ve seen in other requests -- growing coalitions between state governments, local municipalities, ports, cargo owners and other stakeholders—all working together to identify alternative opportunities for freight movement, emphasizing a shift to water. Additionally, the Obama Administration historic decision to allow marine transportation infrastructure to compete with land-based infrastructure for TIGER Grants as well as the freight provision outlined in the Moving Ahead for Progress in the 21st Century Act (MAP-21) provides concrete proof that steps are being taken at the Federal level to develop an interconnected national freight system planning perspective, rather than the modal mindset of years past. We’ve reached a point where the maritime mode has joined the other modes at the transportation funding and planning table—and I have no plan to get out of my seat.

LNG power for marine vessels: a hot button issue to be sure. What is Marad doing to stay relevant – and engaged – in the conversation, as the trend gathers momentum here at home?
There are a lot of questions regarding LNG’s potential in the maritime world, and MARAD is pushing for answers and to gain the knowledge that our industry needs to move LNG forward. Our Office of Environment and Compliance has been working overtime and linking up with a number of partners—from renowned research universities to key industry stakeholders—on crucial LNG research initiatives. Additionally, we released a study in September that analyzes the issues and challenges associated with bunkering and the landside infrastructure needed to store and distribute LNG. We are making headway outside of research as well—by remaining fully engaged as a co-Chair of an interagency alternative energy task force with the Department of Energy and are partnering with the U.S. Coast Guard to assess research data as well as opportunities for the greater use of LNG as a marine propulsion fuel.

Fostering the Domestic Shipbuilding industry is one of Marad’s most important tasks. Give us a “state-of-the-industry” situation report on the domestic shipbuilding and repair front. Arguably, it is doing quite well. Where do you have concerns (if any?) and what can be done about them?
In a large part driven by our country’s energy boom, the domestic shipbuilding industry is seeing robust activity, the most over three decades. Billions of dollars are being invested to meet the demands of oil production, and nearly 30 large, self-propelled, oceangoing Jones Act-eligible tankers and containerships are under construction or are on-order at U.S. Shipyards. Although times are good, throughout history, shipbuilding has followed a very cyclical pattern. Right now we are experiencing a big upswing in smaller vessels, offshore supply vessels, and large commercial ships. However, if we don’t reinforce a stable shipbuilding base, we’re going to face a similar crisis during the next downturn. It is essential that we keep our eye on the ball and go after what will sustain this industry in the long run.

Give us one key mission that Marad performs that readers might not be aware of. Why is that mission important?
MARAD’s recently formed StrongPorts program bundles existing initiatives with new products and services to provide our ports a one-stop shop for infrastructure assistance. That program includes MARAD’s Port Conveyance Program which transfers surplus Federal Property to state and local governments for the development of port facilities—for no cost. The program is designed to facilitate the expansion of our Nation’s marine transportation system, as well as create jobs, strengthen port communities, meet national defense needs and improve goods and freight movement. Since the program’s inception, MARAD has transferred over 2,700 acres of former Federal Property, to ports including Los Angeles, Long Beach, Hueneme and Stockton in California; Tacoma and Benton in Washington; Orange County in Texas; Davisville in Rhode Island; and Mid-America Port Authority in Granite City, Illinois. MARAD is currently working with the Department of Defense to execute the conveyance of several other surplus Federal Properties. It is a program that is not very visible, but ports have benefited greatly from it.