WEBVTT 1 00:00:30.079 --> 00:00:33.840 Welcome to mid Rats with sal from Commander Salamander, an Eagle one from Eagle 2 00:00:33.880 --> 00:00:38.840 Speak at Seer Shore your home for a discussion of national security issues in all 3 00:00:38.840 --> 00:00:44.439 things maritime. And good day everybody. Glad to have you a board and 4 00:00:44.799 --> 00:00:48.840 have always of our live show. I'd like to extend an invitation if you 5 00:00:48.880 --> 00:00:51.920 are so inclined, to scroll down to the bottom of the show page and 6 00:00:51.960 --> 00:00:55.280 that's where you will find a link to the chat room. We've already got 7 00:00:55.320 --> 00:00:58.719 Paul and and he see they're standing athwart the quarter deck to welcome me on 8 00:00:58.799 --> 00:01:03.320 board. And that's the perfect place that if you have some observations you'd like 9 00:01:03.399 --> 00:01:06.599 to share during the course of the show, or even some questions you would 10 00:01:06.640 --> 00:01:10.200 like for us to bring to our guest over the next hour, it's a 11 00:01:10.239 --> 00:01:11.920 perfect place to do it. Will both be monitoring during the course of the 12 00:01:11.959 --> 00:01:17.040 show, and I also like to put out the alt call there if you 13 00:01:17.079 --> 00:01:19.319 don't already, whether you're with us live or even if you're getting us on 14 00:01:19.359 --> 00:01:23.400 the podcast. If you don't already, go over to iTunes, Spotify, 15 00:01:23.519 --> 00:01:27.879 Spreaker, wherever you get your podcasts, find the mid Rats podcast and go 16 00:01:27.920 --> 00:01:33.439 ahead subscribe to it that way, we will be there for you, perhaps 17 00:01:33.480 --> 00:01:36.359 at a time more to here convenience if you can't make us on the live 18 00:01:36.400 --> 00:01:41.920 show on a regular basis. And on today's show, we're going to dive 19 00:01:41.959 --> 00:01:46.359 into a topic we've touched on a lot recently, because as people look at 20 00:01:46.439 --> 00:01:49.719 China and they look at the developments in the Red Sea, there's an issue 21 00:01:49.760 --> 00:01:55.719 that keeps popping above the background noise, and that has to do with the 22 00:01:55.879 --> 00:02:00.560 US merchant marine and our maritime industry, especially with some of these We saw 23 00:02:00.599 --> 00:02:06.799 these issues come out in the latest buzz proposal by the President. And if 24 00:02:06.840 --> 00:02:13.199 people are policy and policy shaped decisions, then you get around to asking a 25 00:02:13.280 --> 00:02:17.240 question, why would a nation like the United States of America wind up neglecting 26 00:02:17.280 --> 00:02:22.240 what really should be a core sector not just of its economy, but really 27 00:02:22.280 --> 00:02:27.639 its strategic advantage given its location in its industrial capacity. And of course we're 28 00:02:27.680 --> 00:02:31.280 talking not just about military, we're talking about our civilian maritime industry. And 29 00:02:31.439 --> 00:02:35.919 our guest today we're going to use his recent article you can find it on 30 00:02:36.000 --> 00:02:40.039 g Captain in addition to a few other locations, titled the Urgent Need for 31 00:02:40.199 --> 00:02:46.120 US Maritime Reform. The guest and author of that is William Cahill. He's 32 00:02:46.120 --> 00:02:53.680 the president of Applied Maritime Sciences, a maritime technology and strategy consultancy, but 33 00:02:53.800 --> 00:02:57.439 he's really a coast guardsman at heart. Will it's great to have you on 34 00:02:57.520 --> 00:03:00.919 mid Rights at last, guys. Thank you so much for having me on, 35 00:03:01.120 --> 00:03:06.000 and also thank you for what you do. I think mid Rats and 36 00:03:06.319 --> 00:03:10.840 your daily drumbeat of bringing some strategic thinking and logic to maritime and national security 37 00:03:10.840 --> 00:03:15.199 affairs is more valuable than you can realize. And I've been a fan for 38 00:03:15.280 --> 00:03:17.759 years, so it's just it's a delight to be on here with you guys 39 00:03:17.759 --> 00:03:22.960 to talk about an issue that it does require urgent attention and that I'm very 40 00:03:22.960 --> 00:03:27.199 passionate about. And also thank you to the fantastic team over at the Boyd 41 00:03:27.280 --> 00:03:31.280 Institute who offered me the opportunity to put pen to paper on some potential policy 42 00:03:31.319 --> 00:03:37.719 options on how we can bring America's maritime approach into a more competitive mindset that 43 00:03:37.879 --> 00:03:42.599 is framed for a renewed era of great power competition, rather than continuing to 44 00:03:43.159 --> 00:03:46.159 hold on to things that don't seem to be working very well. And I 45 00:03:46.719 --> 00:03:51.039 like this fact that it's not a short article, but it's not too long. 46 00:03:51.120 --> 00:03:53.240 I stripped out all the graphics and everything, and it printed out to 47 00:03:53.319 --> 00:03:59.000 about five pages, very digestible, but it got a lot of the ish 48 00:03:59.240 --> 00:04:01.479 heavy. Probably won't touch on them on the next hour, but that's okay. 49 00:04:01.520 --> 00:04:05.000 Well, we'll try to hit the broad points. But when you look 50 00:04:05.000 --> 00:04:13.520 at trying to improve our nation's situation and perhaps repairing errors of the past while 51 00:04:13.520 --> 00:04:16.120 looking at what we need to do for the future, you need that creative 52 00:04:16.199 --> 00:04:25.439 friction, that argument, that critical thinking and critical feedback on how we're doing 53 00:04:25.480 --> 00:04:30.720 things to make sure that we're not static in collecting dust, that we continue 54 00:04:30.720 --> 00:04:33.480 to improve things. And I think it's like the third section, and I've 55 00:04:33.680 --> 00:04:38.759 this a little bit in free shipt and so i'll our guests this is coming 56 00:04:38.839 --> 00:04:43.800 up because it really did kind of tickle that part of the brain. About 57 00:04:43.800 --> 00:04:48.360 the third sentence of the article. You brought up a two phrase, two 58 00:04:48.360 --> 00:04:55.879 word phrase that I think it's really powerful when you look at it and when 59 00:04:55.920 --> 00:04:59.199 you hear it. If it doesn't make you internally at least think of two 60 00:04:59.240 --> 00:05:01.600 or three more questions, you'd need to go back and read the read the 61 00:05:01.639 --> 00:05:08.680 three sentences again. And it's a phrase policy neglect and first thing that came 62 00:05:08.720 --> 00:05:13.040 out in my mind, and you actually address these in part further of the 63 00:05:13.120 --> 00:05:18.199 article. It's a policy entitlement, policy inertia. But that's just what came 64 00:05:18.240 --> 00:05:23.199 out of my mind for the listener, because I think it really does frame 65 00:05:23.319 --> 00:05:25.800 a lot of your arguments and a lot of the things you point out later 66 00:05:25.879 --> 00:05:30.800 on in the article and really address broader issues even outside the article. What 67 00:05:30.319 --> 00:05:36.600 how do you define that policy neglect and how it manifests itself in this topic. 68 00:05:39.120 --> 00:05:42.120 Yeah, great, great framing. And let me let me start out 69 00:05:42.160 --> 00:05:46.199 with little historical context, Like if you go back in time and you look 70 00:05:46.240 --> 00:05:51.360 at our first really kind of cohesive national maritime strategy, there was a lot 71 00:05:51.360 --> 00:05:54.800 of goodness in there, and I would say that's the Merchant Marine Act of 72 00:05:54.839 --> 00:05:58.680 nineteen twenty. And if you look at the preamble, and I'm paraphrasing here, 73 00:05:59.800 --> 00:06:04.079 it is necessary for national defense and the proper growth of its foreign and 74 00:06:04.120 --> 00:06:10.399 domestic commerce, that the US have the best equipped, most suitable vessels to 75 00:06:10.480 --> 00:06:15.279 carry the greater portion of commerce and to serve as a naval auxiliary. And 76 00:06:15.319 --> 00:06:18.000 it is the policy of the United States to do whatever may be necessary to 77 00:06:18.120 --> 00:06:25.000 develop and encourage the maintenance of such a merchant marine in the making of rules 78 00:06:25.000 --> 00:06:30.399 and rigs and the administration of shipping laws to keep always in view this purpose 79 00:06:30.480 --> 00:06:33.399 as a primary objective to be attained. So that was written one hundred and 80 00:06:33.399 --> 00:06:38.920 twenty four years ago, and it sure doesn't look like we've done that. 81 00:06:38.920 --> 00:06:43.279 That's pretty righteous stuff. So if we can figure out a way, if 82 00:06:43.279 --> 00:06:47.959 we're going to actually treat the sector in a Mahonian fashion where we have a 83 00:06:48.079 --> 00:06:55.040 robust domestic American maritime sector that serves as a naval auxiliary and provides the workforce 84 00:06:55.120 --> 00:07:00.199 and dynamis and competition to allow the US to connect and trade competitively globally, 85 00:07:01.399 --> 00:07:06.040 we need to actually have a maritime sector. We have some scintillas of a 86 00:07:06.040 --> 00:07:10.800 maritime sector, but when you compare and can trust that what's taking place in 87 00:07:10.839 --> 00:07:15.759 the world where we have you know, over fifty thousand deep draft, self 88 00:07:15.759 --> 00:07:20.680 propelled ocean going vessels that are moving eighty percent of global trade, So over 89 00:07:20.759 --> 00:07:26.879 fifty thousand vessels, and how many have an American flag about one hundred and 90 00:07:27.040 --> 00:07:30.120 seventy five. I mean, it's just mind blowing when people hear these figures, 91 00:07:30.160 --> 00:07:33.759 like how is the US not really part of that ecosystem. That's a 92 00:07:33.839 --> 00:07:39.319 market. It's a market we're not really competing in with a few exceptions, 93 00:07:39.720 --> 00:07:43.560 and it's coming home to roost. So we basically need to look at what 94 00:07:43.720 --> 00:07:46.480 works, so we see that. You know, it's been great to see 95 00:07:46.480 --> 00:07:50.600 Secretary at dey'll Toro discussing some new options and kind of looking at this through 96 00:07:51.680 --> 00:07:56.439 you know, more strategic lens. And you know, you saw the recent 97 00:07:56.839 --> 00:08:01.160 study that the Chinese ship building industrial base is over two hundred and thirty times 98 00:08:01.199 --> 00:08:05.439 as expansive as America's. I think that's probably not much of a surprise to 99 00:08:05.319 --> 00:08:09.360 most people have been involved in the sector for a while, certainly on the 100 00:08:09.399 --> 00:08:13.600 policy front. But does this matter, what can we do about it? 101 00:08:13.680 --> 00:08:16.399 How should we go about it? And we could kind of see the playbook 102 00:08:16.519 --> 00:08:20.920 to some degree through policy lens. When you look at competitive maritime nations around 103 00:08:20.959 --> 00:08:24.959 the world, and one of the things that they have in commons is constant 104 00:08:26.160 --> 00:08:31.360 turn of their policies and the constant evolution, constant flux of taking an assessment 105 00:08:31.399 --> 00:08:37.000 of what's actually working, what's required to be competitive, and how do we 106 00:08:37.240 --> 00:08:43.840 adjust to maintain a position of the market authority and power and maintain the industry. 107 00:08:43.080 --> 00:08:46.440 And meanwhile, in the US, that's not what we're doing. So 108 00:08:46.519 --> 00:08:50.360 that was kind of the premise for the article, because we've been effectively neglecting 109 00:08:50.679 --> 00:08:56.200 the necessary policies to develop this critical strategic industry. Well, what are some 110 00:08:56.240 --> 00:09:03.200 of the factors that have restrained our merchant or maritime industries from from developing as 111 00:09:03.200 --> 00:09:09.879 they as we as we believe they should have. Well, so an interesting 112 00:09:09.080 --> 00:09:16.559 historical context to that is there is at least a century worth of GAO and 113 00:09:16.720 --> 00:09:22.440 various other studies that come up with the same conclusions because we've actually been pretty 114 00:09:22.480 --> 00:09:26.120 far behind for you know, basically ever since the Antebellum period. But America 115 00:09:26.279 --> 00:09:31.679 was was absolutely dominant as a shipbuilder and a true maritime nation leading up to 116 00:09:31.720 --> 00:09:35.639 the Civil War, and we built clipperships, you know, the most beautiful, 117 00:09:35.720 --> 00:09:39.960 capable sailing vessels in the world. And then we kicked off the Civil 118 00:09:39.000 --> 00:09:45.000 War. In the meantime, the Brits invented steel, iron hauls, steam 119 00:09:45.000 --> 00:09:48.080 engines. We you know, a bunch of Northeast ship owners flagged out their 120 00:09:48.159 --> 00:09:52.120 vessels to avoid getting them sunk in the war. We passed laws to prevent 121 00:09:52.159 --> 00:09:58.080 them from coming back in because that was traitorous. The war ended, steam 122 00:09:58.080 --> 00:10:03.360 power had taken off, we didn't have any, and the appetite for wood 123 00:10:03.799 --> 00:10:07.519 and sale was a lot less because the world had evolved, and we've basically 124 00:10:07.559 --> 00:10:09.679 been trying to play catch up ever since. So we've had a couple fits 125 00:10:09.679 --> 00:10:15.480 and starts, you know, between Obviously, liberty ships are often referred to 126 00:10:15.519 --> 00:10:18.799 as, you know, an indication of America's amazing industrial base, and we 127 00:10:18.879 --> 00:10:22.360 turned that on pretty quickly. It's pretty amazing we pulled off on that, 128 00:10:22.600 --> 00:10:28.480 but that wasn't really a commercial play, and that fleet quickly dissipated away. 129 00:10:28.600 --> 00:10:31.360 There were laws passed associated with that. We had a similar build up towards 130 00:10:31.360 --> 00:10:33.679 the end of World War One. So we've had a couple surges. It 131 00:10:33.720 --> 00:10:37.600 doesn't look like we can replicate that. Now. We've been basically sitting back 132 00:10:39.080 --> 00:10:46.440 and it's become just such a hyper politicized sector that now every decision is focused 133 00:10:46.600 --> 00:10:52.559 very locally on how many jobs specifically in this congressional district rather than kind of 134 00:10:52.559 --> 00:10:54.679 the fate of nation. Are we a maritime nation or not? And that's 135 00:10:54.679 --> 00:11:03.320 what we need to decide, and I think it's also telling how much of 136 00:11:03.360 --> 00:11:07.919 a knock on effect the fact that we don't we don't sustain much of a 137 00:11:09.000 --> 00:11:13.279 maritime industry here, And you could almost look at the same thing for you 138 00:11:13.320 --> 00:11:16.720 know, you mentioned the United Kingdom, is it has a knock on effect 139 00:11:16.879 --> 00:11:20.360 on a lot industries. There was a very frightening chart that I saw a 140 00:11:20.360 --> 00:11:24.919 couple of weeks ago that had all of our precision weapons that everybody says we 141 00:11:24.960 --> 00:11:28.799 need to build more of, and it traced out the supply chain of where 142 00:11:28.799 --> 00:11:33.000 the material came from, and if we engage in a war west of the 143 00:11:33.039 --> 00:11:37.279 International Dateline, we're not going to have access to those sources anymore. And 144 00:11:37.519 --> 00:11:43.159 you get down to the point that I guess we'll be looking for as many 145 00:11:43.159 --> 00:11:48.440 surplus dumb bombs as possible. But we still have a few blast furnaces here, 146 00:11:48.440 --> 00:11:52.000 but the UK is shutting down their last blast furnace. And I'm maybe 147 00:11:52.080 --> 00:12:00.679 using the wrong term, but we had one last remaining plate ten mill I 148 00:12:00.679 --> 00:12:05.519 believe it was in West Virginia that is now shutting down. We lost the 149 00:12:05.559 --> 00:12:13.240 ability to mine lead here about half a decade plus ago, and it's part 150 00:12:13.279 --> 00:12:16.279 of the challenge we have in maintaining our industry is we've made a mistake that 151 00:12:16.440 --> 00:12:20.279 other nations have not made. And you know that maybe this is the time 152 00:12:20.279 --> 00:12:28.080 to talk about subsidies or tax incentives, but that we've lost the realization that 153 00:12:28.120 --> 00:12:35.480 the demand signal that comes from a sovereign shipbuilding industry doesn't just give you better 154 00:12:35.519 --> 00:12:41.480 control over your goods that travel at sea, but it also reinforces a lot 155 00:12:43.000 --> 00:12:50.600 of very strategic heavy industries that once they disappear, you can't recreate them in 156 00:12:50.600 --> 00:12:56.120 any short period of time. Yeah, that's that's great framing styles. The 157 00:12:56.399 --> 00:13:01.279 maritime sectors are absolutely enabling the story. And there's a there's an interesting piece 158 00:13:01.360 --> 00:13:05.840 recently about how, you know, China has been working up the value chain 159 00:13:05.879 --> 00:13:11.840 of shipbuilding and is now starting to build cruise ships, and cruise ships have 160 00:13:11.000 --> 00:13:15.960 so many component they might have two million components in a cruise ship and there 161 00:13:16.039 --> 00:13:20.159 might be four thousand different firms that that supports, and the type of knock 162 00:13:20.240 --> 00:13:24.879 on effects of having that demand signal within one one nation's economy has pretty strategic 163 00:13:24.879 --> 00:13:30.000 implications. And it's interesting that you mentioned steel because that's that was kind of 164 00:13:30.039 --> 00:13:35.200 the impetus for you know, for for my work on this on the associated 165 00:13:35.200 --> 00:13:39.320 policies. When I served on the National Security Council as Director Director for Strategic 166 00:13:39.360 --> 00:13:43.960 Planning, I was in the Strategy Office helping having a small part and helping 167 00:13:43.960 --> 00:13:46.759 write the twenty seventeen National Security Strategy. UH. And you know, our 168 00:13:46.759 --> 00:13:56.320 main focus was shift you basically reorienting whole of government approach to confront China's economic 169 00:13:56.320 --> 00:14:00.559 aggression and kind of see it clearly. And it was interesting because present was 170 00:14:00.679 --> 00:14:05.919 very focused on bringing back some of these industries like steel and aluminum, and 171 00:14:05.480 --> 00:14:11.639 well we had uncovered in my office. My boss was a hedge fund guy 172 00:14:11.679 --> 00:14:16.240 and a nuclear physicist and looked you had his own Bloomberg terminal and started looking 173 00:14:16.279 --> 00:14:20.320 at commodities and was like, whoa, there's something here with steel and metal, 174 00:14:20.360 --> 00:14:22.759 Like what's going on here in the US. And as it turns out, 175 00:14:22.759 --> 00:14:26.639 you know, we've shifted a lot of our steel production in this country 176 00:14:26.679 --> 00:14:33.279 from oxygen blast furnaces to mini mills where we melt down scrap metal. So 177 00:14:33.840 --> 00:14:37.759 what because basically we've run out of a lot of the veins up and by 178 00:14:37.799 --> 00:14:41.679 the Great Lakes where you would be pulling tchnite out of the earth. It's 179 00:14:41.679 --> 00:14:43.360 just not as productive as it once was. You know, a lot of 180 00:14:43.440 --> 00:14:48.320 China steel is coming from Australia and other parts of the world being shipped in. 181 00:14:48.960 --> 00:14:56.080 Meanwhile, we have an abundance of scrap metal, which is a much 182 00:14:56.080 --> 00:15:01.039 more economically viable production method for steel, because with an oxygen blast furnace, 183 00:15:01.080 --> 00:15:05.960 you basically have to be at ninety plus percent utilization to be running profitably, 184 00:15:07.080 --> 00:15:09.480 and if you don't have the feedstock to do that, you don't have the 185 00:15:09.480 --> 00:15:13.600 proximity to energy, energy costs, or high a lot of factors there versus 186 00:15:13.639 --> 00:15:18.120 a mini mill where you basically click a large reastack you can adjust the amount 187 00:15:18.120 --> 00:15:22.840 of feedstock and power in and steal out. And so you would think that 188 00:15:22.840 --> 00:15:26.960 this would be something we'd be really good at. And it turns out the 189 00:15:26.039 --> 00:15:31.200 US is the number one exporter of scrap metal on the planet by a significant 190 00:15:31.279 --> 00:15:35.240 margin. This is my numbers are a couple of years old, but I 191 00:15:35.279 --> 00:15:39.639 think we're around twenty million tons a year of scrap metal that we ship out 192 00:15:39.639 --> 00:15:43.720 of the country, and the next highest was either Japan or Germany at about 193 00:15:43.720 --> 00:15:48.639 seven million tons. And guess who who buys that scrap metal and melts it 194 00:15:48.679 --> 00:15:54.480 down and turns it into capital assets and shipyards and ships and infrastructure that gives 195 00:15:54.480 --> 00:15:58.399 back for a century or more. Well, not people that like us very 196 00:15:58.440 --> 00:16:02.159 much, And so why do we share all this strategic commodity out of the 197 00:16:02.200 --> 00:16:04.440 country. Well, we should be turning these supply chains inwards. And it 198 00:16:04.480 --> 00:16:08.559 turned out that part of the reason was we couldn't get the scrap metal to 199 00:16:08.639 --> 00:16:15.039 our own coastal minimals because we don't have any Jones Act bulkers zero, So 200 00:16:15.080 --> 00:16:18.759 we don't have that type of ship. So there's a limited amount of scrap 201 00:16:19.200 --> 00:16:25.080 that moves in smaller slugs and rail and barges and inland of the waterways to 202 00:16:25.080 --> 00:16:30.519 some degree, but a lot of the heavy stuff that basically congeals in major 203 00:16:30.559 --> 00:16:34.039 coastal areas and gets shipped out because it's much cheaper to sell it and transport 204 00:16:34.039 --> 00:16:37.639 it that way than not getting in front it back into the US production. 205 00:16:37.840 --> 00:16:41.879 We just can't do it. So that kind of opened up this whole aperture 206 00:16:41.919 --> 00:16:45.080 of like, WHOA, what's going on with the US fleet and the fact 207 00:16:45.120 --> 00:16:48.960 that we don't really have one, and then how does that impact US production 208 00:16:49.519 --> 00:16:56.960 in all these strategic industries. Yeah, you know, I think we're you 209 00:16:56.080 --> 00:17:00.480 touch on the Jones Act, you touch on some of the other laws impact 210 00:17:00.600 --> 00:17:06.799 us. And I'm looking at the effect of some of the NIMBI stuff where 211 00:17:06.880 --> 00:17:12.000 people don't want large steel mills in their neighborhood. They don't want you know, 212 00:17:12.079 --> 00:17:17.720 these non ecological UH things being around. I mean, I know I 213 00:17:17.759 --> 00:17:21.480 was at Hunter's Point Naval Shipyard, and I know that left a lot of 214 00:17:21.519 --> 00:17:26.319 debris. I know, Mayor Island Shipyard. We had all these these government 215 00:17:26.559 --> 00:17:30.559 run shipyards. We're down to too very few at the at the present time. 216 00:17:30.960 --> 00:17:34.720 You know, it's not just the the UH. This is a long 217 00:17:34.759 --> 00:17:38.640 way of saying it's not just the maritime laws that are impacting this, but 218 00:17:38.839 --> 00:17:42.039 there's a whole host of other reasons. Some of this stuff is has was 219 00:17:42.119 --> 00:17:48.160 bracked out of existence or just just nobody can afford to do the the studies, 220 00:17:48.640 --> 00:17:53.559 UH to to justify putting a ship od new shipyard, say into into 221 00:17:53.599 --> 00:17:59.799 San Francisco Bay. Yeah, I think that's that's a great point wherek the 222 00:18:00.240 --> 00:18:07.200 you know, what we saw is a significant factor in UH mitigating the development 223 00:18:07.400 --> 00:18:17.079 of coastal maritime heavy industries is real estate near the water is just expensive and 224 00:18:17.160 --> 00:18:21.200 it's going to go to the highest bidder, and often the highest bidder is 225 00:18:21.200 --> 00:18:23.839 going to be very politically connected and is going to get you know, is 226 00:18:23.880 --> 00:18:26.960 going to want to have some beautiful condos on the water, something that produces 227 00:18:27.079 --> 00:18:33.079 high ROI. And it's tough to compete if you have a you know, 228 00:18:33.200 --> 00:18:37.880 proposition to expand a shipyard or even a port or any of these you know, 229 00:18:37.000 --> 00:18:41.880 coastal heavy industries that that's an absolute challenge, especially in you know, 230 00:18:41.960 --> 00:18:48.720 in in a democracy where that is capitalism based, where ROI is a factor. 231 00:18:49.519 --> 00:18:53.039 But it goes back to, you know the fact that we need to 232 00:18:53.079 --> 00:18:57.200 decide as a as a people, are we a maritime nation? Does it 233 00:18:57.319 --> 00:19:03.079 matter? And then we need to have policies that set up the capability to 234 00:19:03.599 --> 00:19:06.839 allow that to flourish. And you know, one of the places, for 235 00:19:06.920 --> 00:19:12.920 example, that we were identifying as a really good candidate for new shipyard would 236 00:19:12.960 --> 00:19:18.039 be Puerto Rico. If you if you look at the economic profile of Puerto 237 00:19:18.119 --> 00:19:22.680 Rico and you look at the geographical if you look at trade lanes basically going 238 00:19:22.720 --> 00:19:29.319 from Panama Canal to anywhere, you're going through this American island that's literally called 239 00:19:29.400 --> 00:19:33.359 rich Port and has very little port activity and very little maritime activity and has 240 00:19:33.640 --> 00:19:42.039 optimal year round weather for shipbuilding, and a workforce that is largely unemployed. 241 00:19:42.920 --> 00:19:48.400 There's plenty of opportunities to line there to make a big deal on new shipyards. 242 00:19:48.599 --> 00:19:52.599 And there's there's all the reasons in the world where we should be looking 243 00:19:52.640 --> 00:19:56.759 all over the country to find, especially in special economic zones and areas where 244 00:19:56.759 --> 00:20:03.039 we can build the necessary work force over time a partner with allies, we 245 00:20:03.079 --> 00:20:07.599 should be building war shipyards. There's no question that that would be a smart 246 00:20:07.599 --> 00:20:14.079 move. I like to bring up to people where they talk about, well, 247 00:20:14.279 --> 00:20:17.000 you know, I don't care what Eric used to do. You know, 248 00:20:17.119 --> 00:20:19.240 it's too hard. We can't get there. It really can't be. 249 00:20:19.240 --> 00:20:26.519 Because let's go right on the edge of a living memory nineteen fourty five to 250 00:20:26.599 --> 00:20:33.960 nineteen fifty right after World War two kind of states and stood afort the entire 251 00:20:33.039 --> 00:20:40.160 planet as just a powerhouse. So now a maritime industry was beyond the powerhouse. 252 00:20:40.160 --> 00:20:45.920 It was unassailable, and there were nations is mainland in China we called 253 00:20:45.920 --> 00:20:52.240 it beat and especially after the Korean War, South Korea, which was completely 254 00:20:52.240 --> 00:20:56.240 destroyed. If you look at what the RAF and the Eighth Air Force did 255 00:20:56.279 --> 00:21:00.799 to the port of Hamburg that I was at a few years go, that 256 00:21:00.880 --> 00:21:06.319 was completely obliterated, and then they took the obliteration and shredded it. However, 257 00:21:06.359 --> 00:21:11.720 when you look at today, very very high standard of living, high 258 00:21:11.759 --> 00:21:18.400 tax, high income Hamburg, and then you work down from there South Korea 259 00:21:18.559 --> 00:21:22.720 and in China, they had these incredible shipbuilding businesses that had to do because 260 00:21:22.839 --> 00:21:29.400 of focus and policy. Are there some things that we could learn from the 261 00:21:29.440 --> 00:21:33.960 Germans and the Koreans and the Chinese in their rise that we could use as 262 00:21:33.960 --> 00:21:37.640 a benchmark if we make the decision that we want. Yeah, absolutely, 263 00:21:37.000 --> 00:21:41.079 Yeah, Again, the playbook is in front of us. You know, 264 00:21:41.119 --> 00:21:47.519 that's that's been the biggest challenge for growing American shipbuilding has been that the capex 265 00:21:47.599 --> 00:21:52.920 is just untenable. You know, typically building an equivalent ship with the same 266 00:21:52.000 --> 00:21:56.880 design and same components. You know, domestically in the US, you're looking 267 00:21:56.880 --> 00:22:03.200 at three to five x versus international market rates. And often that is you 268 00:22:03.240 --> 00:22:06.279 know, what is often blamed is, hey, we have a higher standard 269 00:22:06.319 --> 00:22:08.839 of living, we have higher wages. It's just you know, we and 270 00:22:10.000 --> 00:22:11.759 you know, they've got subsidies and the list goes on. Well, the 271 00:22:11.799 --> 00:22:18.839 fact is if you actually compare apples to apples on wages, US shipyard wages 272 00:22:18.039 --> 00:22:23.759 are lower than Korea and Japan and Germany, And so how are they doing 273 00:22:23.799 --> 00:22:30.240 it? And what it is is, in part it's dramatically higher productivity. 274 00:22:30.960 --> 00:22:36.200 And so if you look at what the Japanese have been doing with high levels 275 00:22:36.680 --> 00:22:44.519 of automated laser welding, what the Finns do with amazing icebreaker technology with explosion 276 00:22:44.559 --> 00:22:49.119 welding large plates to similar metals, these are things that are largely anathema here 277 00:22:49.160 --> 00:22:53.640 in the US. There's there's a lot of political inertia against things because it's 278 00:22:53.640 --> 00:22:57.480 often seen as a threat to jobs. But pretty soon you don't have any 279 00:22:57.559 --> 00:23:02.240 jobs because you don't have an industry. And it turns out a really good 280 00:23:02.279 --> 00:23:07.400 way to be uncompetitive is to not compete. And so we do have opportunity, 281 00:23:07.480 --> 00:23:12.160 and I would say a mandate here to turn on some policy solutions. 282 00:23:12.480 --> 00:23:17.920 And we look at the amount of money that gets poured into silly things that 283 00:23:17.960 --> 00:23:22.839 we can't point a finger at what it accomplished. You know, it's mind 284 00:23:22.880 --> 00:23:26.200 boggling that like money is not an issue. We are a wealthy nation. 285 00:23:26.880 --> 00:23:30.799 Yes, we're running crazy deficits, but let's at least get something for it. 286 00:23:30.160 --> 00:23:33.640 And if we're going to be a maritime nation, then we need to 287 00:23:33.640 --> 00:23:37.319 put some more resources towards that. But we have to do them in smart 288 00:23:37.599 --> 00:23:45.759 performance, spased accountable forms of support. They can't simply be well, we 289 00:23:45.799 --> 00:23:48.200 can't point to where the money went, which has been a large part of 290 00:23:48.680 --> 00:23:52.839 what one we have had a little bit of this, you know, subsidization. 291 00:23:52.920 --> 00:23:59.079 It's really tough to point to what we're getting. Well, let's suppose 292 00:23:59.119 --> 00:24:03.400 we went to Charleston, South Carolina, where the shipyards, i mean, 293 00:24:03.400 --> 00:24:07.960 the dry docks are still there. They may be commercialized right now, but 294 00:24:07.759 --> 00:24:12.200 is it is it possible for some great tax policy in your mind to come 295 00:24:12.200 --> 00:24:15.960 in and say, okay, we will we don't want to subsidize you, 296 00:24:15.000 --> 00:24:18.119 but we're going to open the gates so you can employ people, will train 297 00:24:18.240 --> 00:24:22.359 people all that stuff to build the ships. And then and then we have 298 00:24:22.400 --> 00:24:26.200 a Merchant Marine Academy and and in fact, we have several of them around 299 00:24:26.200 --> 00:24:30.160 the country. Uh are we are? We just training maritime officers that have 300 00:24:30.240 --> 00:24:33.640 no place to go except to work in the offices of mariad or on some 301 00:24:33.240 --> 00:24:37.839 MSc ships where are all these people going uh, well they well they certainly 302 00:24:37.839 --> 00:24:41.680 aren't going to see uh. And and the ones that do are often having, 303 00:24:41.720 --> 00:24:47.720 despite graduating with the unlimited credentials, UH, are often having to serve 304 00:24:47.799 --> 00:24:51.160 as able body seamen to do their time for the union before they can they 305 00:24:51.160 --> 00:24:53.000 can join US officer. UH. And that's that's uh. You know, 306 00:24:53.000 --> 00:24:59.680 when the barrier to injury is that high where you're producing these arguably national assets 307 00:24:59.680 --> 00:25:03.680 of these trained mariners at our state maritime academies and Merchant Marine Academy, but 308 00:25:03.720 --> 00:25:07.279 then they can't get a job in the in the industry, and you know, 309 00:25:07.319 --> 00:25:11.160 their their mariads pretty kg. With the data on you know what percent 310 00:25:11.359 --> 00:25:17.039 of graduates from the maritime academies get underway. You know, we could track 311 00:25:17.119 --> 00:25:21.640 that with strategic sealift officers, and there's there's some level of fidelity with that, 312 00:25:21.759 --> 00:25:25.079 but you know, we don't even there's there's argument we don't even know 313 00:25:25.119 --> 00:25:29.200 how many merchant mariners we have evidently. Uh. You know, there was 314 00:25:29.200 --> 00:25:33.519 a merchant Mariner Working Group study a few years back that's often cited by policymakers 315 00:25:33.519 --> 00:25:41.559 as pay you know, in a full scale strategic sealift enduring kinetic situation, 316 00:25:42.039 --> 00:25:47.759 we're going to be about eighteen hundred mariners short. Now, if you look 317 00:25:47.799 --> 00:25:51.680 at that report, I would say that was largely sam as dot in in 318 00:25:51.720 --> 00:25:55.640 the NSC because we actually did some analysis and allow of that report didn't make 319 00:25:55.720 --> 00:26:00.160 much sense. The sad thing is we don't know how many we have. 320 00:26:00.440 --> 00:26:03.000 We know what the Coast Guard Credentialing Center, how many credentials are produced, 321 00:26:03.319 --> 00:26:08.640 and that sited in the report it was something like thirty thousand more merchant unlimited 322 00:26:08.640 --> 00:26:12.920 credential merchant mariners than the Merchant Mariner Working Group says, And they said, 323 00:26:12.920 --> 00:26:17.480 well, that will require additional study to figure out the delta. So if 324 00:26:17.480 --> 00:26:22.400 it's a is it a thirty thousand surplus or is an eighteen hundred deficit. 325 00:26:22.960 --> 00:26:26.960 The fact that we don't know how many merchant mariners we have and the fact 326 00:26:26.960 --> 00:26:32.119 that we send out you know, Marid sends out periodic surveys to say hey, 327 00:26:32.160 --> 00:26:34.720 are you still active or would you mobilize if you want it? If 328 00:26:34.720 --> 00:26:40.240 we needed clift and like I could tell you, China is not rolling nice 329 00:26:40.279 --> 00:26:45.720 on strategic mobility. The US needs to get its We need to figure out 330 00:26:45.799 --> 00:26:48.680 what we require, you know, mobility capability requirements, study what do we 331 00:26:48.720 --> 00:26:53.319 require of the auxiliary merchant fleet, and then if it's a strategic comparative, 332 00:26:53.640 --> 00:26:56.359 we need to fund it. We need to make it happen, because that's 333 00:26:56.400 --> 00:27:00.359 not what we're doing. Yeah, it's always amazed me. You know, 334 00:27:00.400 --> 00:27:03.720 here we are a nation of three hundred and thirty million, with our pretty 335 00:27:03.799 --> 00:27:10.880 much our own continent, with our Canada being America's hat and Mexico being our 336 00:27:11.519 --> 00:27:15.799 mid skill level production floor. We're very blessed. And yet you have other 337 00:27:15.880 --> 00:27:19.480 nations like Norway and Denmark that have what five and a half million population, 338 00:27:19.640 --> 00:27:27.079 but you do see them heavily in the maritime arena, and they historically, 339 00:27:29.079 --> 00:27:32.279 unless you want to throw the Vikings in the mix here, they don't have 340 00:27:32.319 --> 00:27:36.920 any more of a maritime tradition than we once had. And we are in 341 00:27:36.960 --> 00:27:42.039 many ways in controlling our own destiny. People are policy policy directs a nation, 342 00:27:42.319 --> 00:27:48.039 and we really shouldn't be able to blame anybody but ourselves when we look 343 00:27:48.039 --> 00:27:51.920 at what other nations are doing. And you use another phrase in your article 344 00:27:51.960 --> 00:27:57.480 that I kind of liked because it tickled by my optimistic cynicism in a way, 345 00:27:59.039 --> 00:28:03.799 as you called the street abyss K Street. Most people listeners here know 346 00:28:03.960 --> 00:28:08.359 that's the K Street in DC where a lot of the lobbyists are that are 347 00:28:10.920 --> 00:28:14.799 keeping us where so many of our laws and regulations are from the eighteen nineties, 348 00:28:14.839 --> 00:28:18.839 in the nineteen twenties and the years in between, not within living memory. 349 00:28:18.920 --> 00:28:23.279 Who's paying who the lobby for what in K Street that has dug out 350 00:28:23.319 --> 00:28:29.400 this abyss for our maritime industry. Well, let me just first say that 351 00:28:30.680 --> 00:28:33.799 K Streets doing their job right. I mean they're doing damn good job. 352 00:28:33.160 --> 00:28:37.319 Like they're doing damn good job of what they're you know, the folks that 353 00:28:37.359 --> 00:28:41.480 are paying them and saying whatever you do prevent change, man, they're winning. 354 00:28:42.200 --> 00:28:51.119 Now that has significant negative impacts to our national strategic competitiveness. But I 355 00:28:51.200 --> 00:28:55.200 had an interesting discussion the other day with the buddy on the Hill and we 356 00:28:55.200 --> 00:28:57.920 were discussing kind of some of the themes of the piece I put out and 357 00:28:59.200 --> 00:29:03.400 some of the discussions its churning up, and you know, he said, 358 00:29:03.400 --> 00:29:04.359 well, so, like what are the solutions, Like what do we do? 359 00:29:04.759 --> 00:29:07.759 And I said, well, what's the goal? You have to start 360 00:29:07.759 --> 00:29:12.559 with the goal And he said, well, that's easy. It's marginal improvement 361 00:29:12.640 --> 00:29:18.000 over the status quo, and I said, dude, that's what got us 362 00:29:18.000 --> 00:29:22.960 here. Like we are so two hundred and thirty times the ship buildings past 363 00:29:22.000 --> 00:29:29.759 with us in China? How is that acceptable? Ten thousand plus merchant chips 364 00:29:29.799 --> 00:29:33.119 often with party members on board and duly use capability of the sigant collection, 365 00:29:33.319 --> 00:29:37.559 and what do we like? How is this? It's so far behind, 366 00:29:37.960 --> 00:29:44.400 We are so far behind. It's such a big gap that marginal improvement over 367 00:29:44.440 --> 00:29:48.079 the status quo never gets us there, not even close. And I would 368 00:29:48.160 --> 00:29:52.119 argue, I think I mentioned in the piece. You know, one thing 369 00:29:52.160 --> 00:29:56.559 I haven't really seen articulated is we're kind of dropping the ball. As allies. 370 00:29:56.000 --> 00:30:00.359 We're not a very good ally if we're not pulling our weight. We 371 00:30:00.400 --> 00:30:07.119 do so much in multilateral and international operations and I mean we're pulling, you 372 00:30:07.160 --> 00:30:10.640 know, pulling the cart in so many ways, but when it comes to 373 00:30:10.680 --> 00:30:15.839 maritime, we're not pulling our weight here, and we our allies deserve better, 374 00:30:15.200 --> 00:30:18.960 America deserves better. And a big part of the challenge is k Street's 375 00:30:19.000 --> 00:30:23.400 really good at doing their job, and these guys get paid extremely well, 376 00:30:23.920 --> 00:30:30.079 and the money that gets spent on lobbying to prevent change is really attractive money 377 00:30:30.079 --> 00:30:34.559 for politicians because it doesn't matter which party you are. All we ask is, 378 00:30:36.039 --> 00:30:38.079 don't do anything, and we'll max out your campaign and you can go 379 00:30:38.079 --> 00:30:41.720 into open secrets and you can map this all out. And I saw it 380 00:30:41.799 --> 00:30:45.160 play out in every discussion when I was on the NSC. You know, 381 00:30:45.200 --> 00:30:48.640 once you get up to the cabinet level or so in discussions, well what 382 00:30:48.759 --> 00:30:52.119 is Lejah Faris say? And then that's where things kind of fall apart, 383 00:30:52.119 --> 00:31:00.720 and so you'd have these ridiculously strategic, ready to go solutions and then you 384 00:31:00.720 --> 00:31:03.960 you know, get to the principal's committee level and it starts falling apart on 385 00:31:04.039 --> 00:31:10.880 anything maritime because what is Legia Fari say? And Legia Faras is answering often 386 00:31:10.920 --> 00:31:15.599 to their their next employer over on K Street, and anything maritime, no 387 00:31:15.759 --> 00:31:18.920 change, We can't do change. That's too scary, you know. So 388 00:31:18.000 --> 00:31:21.759 that's that's something we have to resolve for. And I think part of it 389 00:31:21.799 --> 00:31:26.599 is just this education piece and having these discussions and not really vilifying anyone. 390 00:31:26.640 --> 00:31:29.279 I mean, again, this is what we know, like this is everyone 391 00:31:29.319 --> 00:31:33.039 involved, you know, the various carriers, the Jones Zach carriers, the 392 00:31:33.559 --> 00:31:37.400 shipbuilders, counseled American American Maritime Partnership. You guys are all they're doing their 393 00:31:37.480 --> 00:31:41.920 jobs. This is what they know. But we need to as a nation 394 00:31:41.039 --> 00:31:45.240 decide, okay, like are we gonna are we gonna accept this or are 395 00:31:45.240 --> 00:31:49.240 we going to swing for the fences here and actually do the right thing and 396 00:31:49.240 --> 00:31:55.160 build up a maritime capability because it's not it's not certain that during the wartime 397 00:31:55.200 --> 00:32:00.519 economy that we're going to be able to summon international assistance to keep our domestic 398 00:32:00.559 --> 00:32:04.640 supply chains going. So we actually do have a true demand signal for having 399 00:32:04.680 --> 00:32:08.279 a viable domestic maritime sector. Uh, not to mention the obvious dual use 400 00:32:08.319 --> 00:32:15.160 purposes. Yeah, I soon remember that post desert storm, after the some 401 00:32:15.240 --> 00:32:21.200 of the fiasco of getting shipping to get stuff to the various sports in Saudi 402 00:32:21.240 --> 00:32:25.400 Arabia, that we we once again went to the to the they said, 403 00:32:25.400 --> 00:32:30.920 okay, we're going to build up our capabilities, our SEALSS capabilities, and 404 00:32:30.920 --> 00:32:34.480 and we did for a while. And but now all those ships are good 405 00:32:34.480 --> 00:32:39.160 guys, they're they're thirty thirty plus years old, and and uh, you 406 00:32:39.200 --> 00:32:44.720 know, we're not seeming to be able to replace them. Uh. Who 407 00:32:44.880 --> 00:32:46.920 you know, and we've got all these obviously, the laws like the jonesach 408 00:32:47.000 --> 00:32:50.799 law. Uh. I mean, it's under a lot of debate. Is 409 00:32:51.440 --> 00:32:53.319 it time to take a look at that and change it? I know in 410 00:32:53.400 --> 00:32:57.039 your article you talked about that, but you know, talk a little bit 411 00:32:57.079 --> 00:33:00.960 about what why we keep we keep thinking we're going to do something and then 412 00:33:00.079 --> 00:33:04.319 and then, and I guess maybe it's k Street and once you once you 413 00:33:04.359 --> 00:33:07.759 start doing someone, you can't if it goes too far out out of hand, 414 00:33:07.759 --> 00:33:08.680 then they have to they have to reel it back because it would be 415 00:33:08.680 --> 00:33:14.319 too big a change. Yeah, A couple of thoughts. So you mentioned 416 00:33:14.319 --> 00:33:19.880 desert storm. There's there's a great UH Transcom paper called I Believe So Many, 417 00:33:20.160 --> 00:33:23.680 So Fast, So Far, And it's a kind of a monograph retrospective 418 00:33:23.920 --> 00:33:32.160 on the logistical operations, and there is just amazing amounts of great information, 419 00:33:32.480 --> 00:33:37.720 super insightful. On the Selift side, they're very revealing about where we were 420 00:33:38.039 --> 00:33:43.720 in you know, nineteen ninety ninety one, where we were arguably in a 421 00:33:43.799 --> 00:33:49.880 much better position in terms of being a dominant hyperpower. And so you can 422 00:33:49.920 --> 00:33:54.279 imagine, you know, thirty plus years later, our fleets, you know, 423 00:33:54.400 --> 00:34:00.640 had the domestic or our US flag fleets half the size the mentioned the 424 00:34:00.680 --> 00:34:05.000 Ready Reserve Fleet is thirty years older. Often, you know, we have 425 00:34:05.039 --> 00:34:10.400 the world's largest steamship fleet, which is the Ready Reserve Fleet. The RRF 426 00:34:10.719 --> 00:34:17.320 is the you know, forty six or so auxiliary marid owned vessels that MSc 427 00:34:17.440 --> 00:34:24.280 would would turn on with a five day Some have a ten day readiness alert 428 00:34:24.880 --> 00:34:30.039 strip alert basically to get underway and help provide strategic mobility. Now, the 429 00:34:30.119 --> 00:34:34.320 challenge is, you know, we we had a turbo drill a couple of 430 00:34:34.360 --> 00:34:38.280 years ago where basically unannounced, some of the vessels have to get get underway 431 00:34:38.320 --> 00:34:42.679 to test out this capability because the rest of the year they're just sitting there 432 00:34:43.320 --> 00:34:46.599 with a skeleton crew that's basically trying to keep the thing afloat, and something 433 00:34:46.639 --> 00:34:51.880 like forty percent of the vessels couldn't get underway. So again, you know, 434 00:34:51.920 --> 00:34:57.800 we're our model is not working. We're we're rolling the dice on strategic 435 00:34:57.880 --> 00:35:01.079 mobility. That's something that we we need to figure out and get serious about 436 00:35:01.360 --> 00:35:06.239 rather than just continuing to admire the fact that, as you mentioned, there's 437 00:35:06.239 --> 00:35:08.440 always going to be like, Okay, we got to get serious about this. 438 00:35:08.559 --> 00:35:12.320 Like, oh, we got to I think part of the challenge is 439 00:35:13.559 --> 00:35:16.840 what's the demand signal? You know, what's the So there's a strategic demand 440 00:35:16.880 --> 00:35:23.159 signal that's obvious if you're transcom combatant commander for example. Uh, it's clear 441 00:35:23.320 --> 00:35:28.559 like what are we going to do here? And then you have there's there 442 00:35:28.599 --> 00:35:30.800 is an alliance. You know, we're not going to go it alone, 443 00:35:30.920 --> 00:35:35.360 god willing, but we we owe it to the republic to be able to 444 00:35:35.360 --> 00:35:40.280 have the capacity to move into theater and sustain operations because if we don't that 445 00:35:42.119 --> 00:35:45.000 that work comes home depending on the I mean that that that's not acceptable. 446 00:35:45.039 --> 00:35:51.360 And we have this amazing geography that has, you know, in traditional warfare 447 00:35:51.400 --> 00:35:57.000 allowed us to avoid that to a large degree. That that is quickly getting 448 00:35:57.039 --> 00:36:00.639 neutralized. Uh. And we need to have the the shipping capacity to maintain 449 00:36:01.039 --> 00:36:06.559 not only sea lift but also domestic supply chains. And just to give you 450 00:36:06.599 --> 00:36:09.360 an idea of how willful the current status is, as I mentioned before, 451 00:36:09.400 --> 00:36:15.000 we have we about one hundred and seventy some on US vessels of ships. 452 00:36:15.039 --> 00:36:19.159 And part of the challenge here there's a lot of slight at hand. You 453 00:36:19.159 --> 00:36:23.400 know, often when you discuss with industry Reps and Lobby and Mayrad and others. 454 00:36:23.719 --> 00:36:27.320 Oh, well we have thirty thousand. You know, we have this 455 00:36:27.440 --> 00:36:31.920 robust ecosystem. The Jones Act has provided us this huge domestic shipping fleet of 456 00:36:31.920 --> 00:36:36.719 thirty thousand vessels. But you'd start looking into it's like, well, twenty 457 00:36:36.719 --> 00:36:38.840 five thousand of those are fun powered barges. Got a couple thousand tugs. 458 00:36:38.960 --> 00:36:43.480 Get how many ships? Do we have the thing that actually can move bolk 459 00:36:43.519 --> 00:36:46.840 commodities and provide you know, back to that preamble the Merchant Marina Act in 460 00:36:46.920 --> 00:36:52.320 nineteen twenty where it actually talked about moving hundreds of American commerce, like how 461 00:36:52.360 --> 00:36:55.199 do we get to that? Can we get to that? And part of 462 00:36:55.199 --> 00:37:05.960 the challenge is that it's the fleet has basically retreated into only the supply chains 463 00:37:06.480 --> 00:37:10.800 that can support the extreme costs. And again, if you have a capex 464 00:37:10.840 --> 00:37:15.280 for the domestic side of three to five x, and then you have an 465 00:37:15.280 --> 00:37:21.559 apex of operating US flagship that's about three hundred percent of market rate for the 466 00:37:21.559 --> 00:37:23.960 rest of the world, how do you compete? You can't compete. And 467 00:37:24.000 --> 00:37:29.239 so that even is reflected in our domestic supply chains where if you look at 468 00:37:29.239 --> 00:37:35.039 the Jones a fleet which is about it's about ninety ninety or so ships right 469 00:37:35.039 --> 00:37:38.159 now, and you break that out by deadweight, tonnage, by application, 470 00:37:38.679 --> 00:37:45.880 something like eighty percent of the fleet is product tankers. So you can basically 471 00:37:45.920 --> 00:37:49.239 track out the economics of well, you know, that's a that's a highly 472 00:37:49.280 --> 00:37:54.400 inelastic good regardless of price. People need energy, and so we can ever 473 00:37:54.599 --> 00:38:00.360 so slightly beat out you know, foreign imports on you know, West West 474 00:38:00.360 --> 00:38:05.840 Coast of Florida importing finished product from Gulf Coast refiners. So it's the most 475 00:38:05.840 --> 00:38:09.199 inelastic possible supply chains that support these things. And so what we end up 476 00:38:09.199 --> 00:38:15.320 having is a fleet that is not the most well equipped and suitable for moving 477 00:38:15.840 --> 00:38:22.239 American heavy industries and anything that's manufacturing, any manufacturing that is transportation intensive, 478 00:38:22.920 --> 00:38:29.440 is very what will thrive in an environment and an economy that has complex supply 479 00:38:29.519 --> 00:38:34.679 chains or can facilitate complex supply chains, including maritime commerce. And there's a 480 00:38:34.679 --> 00:38:39.360 great infographic of an airbus I think as an airbus a three twenty being built 481 00:38:39.400 --> 00:38:45.239 in Europe and basically breaks out where all the various components come from and how 482 00:38:45.280 --> 00:38:47.360 they get there, what the modal shares are, and a lot of it 483 00:38:47.400 --> 00:38:52.719 is various types of maritime transportation. And so if you can't replicate that in 484 00:38:52.760 --> 00:38:58.480 a country, then you don't have that industry. So there are significant impacts 485 00:38:58.519 --> 00:39:05.239 to what industries the US can support absence having strategic mobility for the economy. 486 00:39:07.039 --> 00:39:09.639 That's a great lead into a question I really wanted to get to on today's 487 00:39:09.639 --> 00:39:14.480 show, and you set it up for it because and we've talked about a 488 00:39:14.480 --> 00:39:17.719 lot here and I love talking about logistics to get the other side of the 489 00:39:17.719 --> 00:39:22.119 International date line or you know what it's like to chug at eleven not across 490 00:39:22.159 --> 00:39:28.679 the Atlantic to the far into the Mediterranean on a shallow boat. But you 491 00:39:28.719 --> 00:39:32.400 know, let's look, let's look internally here. Everybody should get a globe, 492 00:39:32.599 --> 00:39:36.079 if not get a paper chart or if you have to just bring up 493 00:39:36.119 --> 00:39:39.559 Google Earth. And one thing that the Good Lord has blessed the United States 494 00:39:39.599 --> 00:39:46.679 with is the Mississippi River. And we have improved an already good interior lines 495 00:39:46.719 --> 00:39:52.800 of communication by water by for instance, the Inn Coastal Waterway. And one 496 00:39:52.840 --> 00:39:58.400 of the first things you learn in logistics economics one oh one is the most 497 00:39:58.440 --> 00:40:05.119 efficient way to move move items is by water. Uh. Then after that 498 00:40:05.400 --> 00:40:15.199 rail ground then air. However, you brought up an example that that really 499 00:40:15.440 --> 00:40:19.679 kind of set me back, and I will that's a perfect example of the 500 00:40:19.719 --> 00:40:24.079 problem that we have is globally in the energy marketplace, the United States is 501 00:40:24.239 --> 00:40:30.159 one of the powerhouses when it comes to liquefied natural gas. But in spite 502 00:40:30.199 --> 00:40:37.039 of that, and in spite of our blessing of natural and improved waterways, 503 00:40:37.920 --> 00:40:40.480 we've got a little problem with our own huge energy product. Talked a little 504 00:40:40.480 --> 00:40:45.599 bit about that, the the LNG paradox that we have intentionally inflicted our economy. 505 00:40:45.599 --> 00:40:51.960 How that operationalizes sure, so so the the other, uh, the 506 00:40:52.000 --> 00:40:55.320 other motor transportation that kind of beats everything when it comes to energy as pipelines, 507 00:40:55.519 --> 00:40:59.880 right, So that's that's like in an optimal system, you would have 508 00:41:00.079 --> 00:41:04.199 of pipelines probably for just about everything, you know, whether it be a 509 00:41:04.280 --> 00:41:07.039 hyper loop or it's a traditional pipeline, but pipelines make a lot of sense. 510 00:41:08.440 --> 00:41:15.719 And we have this this ridiculous situation where where the number one producer of 511 00:41:15.840 --> 00:41:22.199 natural gas on Earth, and yet Americans are the only humans on the planet 512 00:41:22.440 --> 00:41:27.519 that are not allowed to buy American energy. And so that's a challenge because 513 00:41:27.519 --> 00:41:32.119 we don't have pipelines everywhere. We don't have nearly enough pipelines to what's called 514 00:41:32.159 --> 00:41:35.920 Pad one A, which would be New England. So we've got you know, 515 00:41:35.960 --> 00:41:39.599 twenty million or so people up there with very restricted pipeline energy access, 516 00:41:40.079 --> 00:41:45.800 retiring coal plants, retiring nuclear plants, increasing the demand for natural gas, 517 00:41:46.159 --> 00:41:50.719 but no way to get it there aside from shipping it in. And so 518 00:41:51.320 --> 00:41:53.079 you know, you've got the inn. I mean, it's just it's mind 519 00:41:53.119 --> 00:41:57.880 boggling that we're really good at this. And we have LNG export terminals as 520 00:41:57.880 --> 00:42:01.719 close as Maryland in Savannah and along the Gulf coast, but we can't move 521 00:42:02.400 --> 00:42:07.480 LERG to ourselves as an economy because we don't have any Jones Act compliant so 522 00:42:07.480 --> 00:42:12.719 we don't have any US built, US crewed, US owned US flag LNG 523 00:42:12.880 --> 00:42:20.920 carriers and LERG carriers are on the on the spectrum of vessel built complexity would 524 00:42:20.960 --> 00:42:24.679 be very high, very challenging for a number of reasons. You have, 525 00:42:24.800 --> 00:42:30.840 you know, one hundred and seventy thousand cubic meter cryogenically cooled prismatic tank. 526 00:42:30.360 --> 00:42:35.519 You know, that's not just something you can build from from scratch from the 527 00:42:35.519 --> 00:42:37.920 ether. You have to have an industry that already does that or slowly build 528 00:42:37.960 --> 00:42:43.920 it if there's a demand to do that. So you know that that that's 529 00:42:43.960 --> 00:42:51.480 a number of challenges for US if you have on occasion Russian product coming in 530 00:42:52.159 --> 00:42:57.239 to the US economy at very high costs to keep Grandmam from freezing during a 531 00:42:57.239 --> 00:43:00.719 polar vortex. UH, and then the same vessel loads up with American freedom 532 00:43:00.760 --> 00:43:06.159 molecules at very low costs and then goes off to somewhere like Pakistan at one 533 00:43:06.199 --> 00:43:08.039 third of the price. And so how how does that make any sense? 534 00:43:08.079 --> 00:43:13.679 And and part of the challenge there is when when we tried to address this 535 00:43:13.719 --> 00:43:19.079 specific issue in NSC forty five, you would think that you would think we 536 00:43:19.119 --> 00:43:22.679 pushed Grandma off a cliff, God forbid an attack on the every every, 537 00:43:22.159 --> 00:43:28.840 every challenge that we tried to UH encounter head on and come up with pro 538 00:43:28.960 --> 00:43:35.719 American solutions that were strategically grounded on the maritime sidle ended in shouting matches over 539 00:43:35.719 --> 00:43:39.639 the Jones Act. And so that was that was quite insightful. And you 540 00:43:39.679 --> 00:43:44.760 know what we what we had been working on was UH, the ability to 541 00:43:45.719 --> 00:43:51.480 waive Navigation and Inspection law was specifically for this challenge, and in a manner 542 00:43:51.480 --> 00:43:57.039 that would be accompanied by building the domestic industry and sunsetting the waiver as soon 543 00:43:57.079 --> 00:44:00.719 as the US have the capability, and in the meantime, the waiver would 544 00:44:00.760 --> 00:44:07.599 only apply to Allied owned Allied crude lergy carriers which preserve slots billets for American 545 00:44:07.599 --> 00:44:12.599 mariners, because low and behold, when you don't have that type of a 546 00:44:12.639 --> 00:44:15.840 fleet, you don't have mariners trained to operate that type of fleet. So 547 00:44:15.920 --> 00:44:19.719 perhaps it would make sense to knock out all these birds with one stone and 548 00:44:19.800 --> 00:44:24.880 in the process make some of these LNG projects down off of Venezuela that have 549 00:44:25.639 --> 00:44:30.920 she Maduro and putin fingers in them vaporized, because we could supply our own 550 00:44:31.119 --> 00:44:37.239 energy better than depending upon operations down there that currently provide American energy, which 551 00:44:37.239 --> 00:44:42.119 is again baffling. But as a result of that effort, I believe there 552 00:44:42.119 --> 00:44:46.559 were four to six pages of new language in the twenty twenty NBAA, basically 553 00:44:46.800 --> 00:44:54.719 eliminating the executive branch Navigation Inspection waiver capability, or at least truncating it to 554 00:44:54.760 --> 00:45:00.079 the point where it's impossible to use. So again, that was my e 555 00:45:00.199 --> 00:45:07.400 Street story for this one. Yeah, as an old oil and gas company 556 00:45:07.480 --> 00:45:13.079 lawyer, the pipeline problem into New England is caused by New York. They 557 00:45:13.079 --> 00:45:17.519 have vetoed having a pipeline go up there. So yeah, it is totally 558 00:45:17.639 --> 00:45:22.519 nimby and what we talked about earlier, but we can talk about that for 559 00:45:22.559 --> 00:45:24.039 hour. What we really need to do is get through some of your solutions 560 00:45:24.079 --> 00:45:29.599 for the for the mess working. And you've listed some in your in your 561 00:45:29.639 --> 00:45:30.920 paper, and I don't want to read them out loud, but you kind 562 00:45:30.920 --> 00:45:35.599 of run down what we can do with with the with in your in your 563 00:45:36.199 --> 00:45:37.119 as you said out in your paper, what can we do about the mess 564 00:45:37.159 --> 00:45:42.960 we got? Well, so again, you know, one thing we can 565 00:45:43.000 --> 00:45:46.039 do is look at what works, and we see, you know, there's 566 00:45:46.039 --> 00:45:50.800 a couple of different paths here. We see China's gone from you know, 567 00:45:50.880 --> 00:45:52.760 fifteen years ago they were kind of a blip on the reader and shipbuilding and 568 00:45:52.800 --> 00:45:57.440 today they're the you know, fifty plus fifty plus percent of ship's order last 569 00:45:57.639 --> 00:46:02.079 or built Chinese shipyards. And and that becomes a strategic problem domestically for US 570 00:46:02.079 --> 00:46:07.760 as well, because we even have US flag carriers constantly spending money in Chinese 571 00:46:07.800 --> 00:46:13.280 state owned shipyards, which is baffling as well because with the money they save, 572 00:46:13.400 --> 00:46:16.440 they then you know, throw galas to Basically it's wild, it makes 573 00:46:16.440 --> 00:46:22.000 no sense. But we should absolutely have a prohibition on US flag and Jones 574 00:46:22.079 --> 00:46:27.760 JAFF shipwork in Chinese state owned shipyards. Like that's number one. Very easy 575 00:46:27.840 --> 00:46:31.920 solution on that. Let's stop paying tribute to the Chinese maritime sector. So 576 00:46:32.320 --> 00:46:37.280 a couple of things. We need to look at what works from a holistic 577 00:46:37.679 --> 00:46:43.760 perspective, and we need to attach comparative advantages and leverage those. One thing 578 00:46:43.840 --> 00:46:47.559 that's going to be I think really big and that we're working on in my 579 00:46:47.679 --> 00:46:57.480 team is applying some nuclear logic to the maritime sector. So we have this 580 00:46:57.559 --> 00:47:02.440 amazing seventy one percent of the globe covered in water, we have this massive 581 00:47:02.559 --> 00:47:08.639 shipping logistic industry, and a huge amount of capital decisions in shipping and shipbuilding 582 00:47:08.639 --> 00:47:15.719 by the carriers are driven by things like emissions caps from the International Maritime Organization. 583 00:47:15.800 --> 00:47:21.639 IMO. The real answer to resolve a lot of these things is a 584 00:47:21.639 --> 00:47:25.880 return to civil nuclear propulsion. Now this isn't an a savannah, this is 585 00:47:27.039 --> 00:47:30.920 advanced generation for small modular reactors. There's all the reasons in the world. 586 00:47:31.280 --> 00:47:36.519 Why the US should be at the forefront of this and currently on the microreactor 587 00:47:36.599 --> 00:47:39.239 side and the SMR side, US is years ahead of everyone. So we 588 00:47:39.239 --> 00:47:46.159 should leverage that advantage to kickstart American dynamism in the maritime sector. And there's 589 00:47:46.159 --> 00:47:51.280 many reasons why why that makes sense. But it's a it's a it's a 590 00:47:51.400 --> 00:47:55.480 very it's a win win all around growing strategic industry with one that we need 591 00:47:55.519 --> 00:48:00.920 to rebuild. Let's marry those together. And we've got the capital, we've 592 00:48:00.920 --> 00:48:05.599 got the workforce on the on the nuclear side, we can we can blend 593 00:48:05.639 --> 00:48:09.800 those two things in a very smart way. I'm convinced. So another area 594 00:48:09.880 --> 00:48:13.639 we you know, another solution that makes all the sense in the world, 595 00:48:13.719 --> 00:48:19.639 is we do need to modernize our various maritime loss So not just the Jones 596 00:48:19.639 --> 00:48:22.760 Act, Merchant of the Foreign Gradi Act of nineteen oh six, Passenger Vessels 597 00:48:22.760 --> 00:48:27.079 Services Act. We need to look at how what is the goal. Are 598 00:48:27.079 --> 00:48:31.400 we trying to build national shipping capability? Are we trying to build strategical mobility? 599 00:48:32.000 --> 00:48:36.360 None of it's working. How do we accomplish that? Well, one 600 00:48:36.519 --> 00:48:40.559 thoughtful way that seems to make a lot of sense would be to work with 601 00:48:40.559 --> 00:48:45.840 our allies, and the bar Is solo that I believe we could do this 602 00:48:45.880 --> 00:48:50.360 in a way that lifts all ships, so to say, and doesn't harm 603 00:48:50.400 --> 00:48:52.320 what we have, and we could structure this in a way that does no 604 00:48:52.400 --> 00:48:59.039 harm by having basically the price of admission. If you want to enter into 605 00:48:59.079 --> 00:49:05.559 the US domestic shipping market, which some of our allies have intimated very strong 606 00:49:05.639 --> 00:49:09.039 interest in doing because it's a latent opportunity because it's so undeveloped, one of 607 00:49:09.079 --> 00:49:14.480 the options would be then the price of admission is some percentage of your fleet 608 00:49:14.920 --> 00:49:17.599 needs to be built in the US, so there's your demand signal. And 609 00:49:17.679 --> 00:49:23.760 also some percentage, perhaps the majority of billets aboard whatever vessels you admit, 610 00:49:24.119 --> 00:49:29.719 need to be preserved for American merchant manners. And again the bar Is solo 611 00:49:30.760 --> 00:49:34.519 that anything like this, anything would help, but we need to swing for 612 00:49:34.559 --> 00:49:37.440 the fences, and I think this one would have a number of advantages. 613 00:49:37.840 --> 00:49:39.960 Now, part of the challenge, as I mentioned before, is if the 614 00:49:40.320 --> 00:49:45.360 policy it's hyper political, and even if you look into the SEC filings of 615 00:49:45.400 --> 00:49:49.280 some of the JONZAC carriers, you look at the ten K risk section, 616 00:49:49.360 --> 00:49:53.760 the number one thing for risk of all the carriers is any modification of the 617 00:49:53.840 --> 00:49:59.599 law, and that includes partnering with allies like explicitly. You actually find that 618 00:49:59.679 --> 00:50:07.119 in in the ten case. And there's another interesting incentive asymmetry here where the 619 00:50:07.159 --> 00:50:14.280 next biggest risk is any competition, and that's specifically that's not just competition from 620 00:50:14.880 --> 00:50:20.360 foreign carriers, that's competition from domestic careers or within one's own fleet. So 621 00:50:20.440 --> 00:50:25.880 any increase in capaci long one's fleet reduces the rates, and so that's spelled 622 00:50:25.880 --> 00:50:30.480 out. So then there's a disincentive to recapitalizing or expanding fleets, and over 623 00:50:30.519 --> 00:50:36.599 time that drives cargo into oblivion. And then you have challenges like that I've 624 00:50:36.599 --> 00:50:39.679 never seen articulated, but is observable with things like the Maritime Security Program, 625 00:50:40.119 --> 00:50:45.920 which is the five plus million dollars per haul stipends that basically enroll in the 626 00:50:46.480 --> 00:50:53.320 Visa Voluntary Intermodal Sealiftact. So basically U S flag vessel foreign belt US flag, 627 00:50:54.000 --> 00:50:59.559 so US crew often end of life would otherwise be on the shores of 628 00:50:59.599 --> 00:51:02.480 the Bengal or for breaking, but you know, half back Lloyd or Marisk 629 00:51:02.519 --> 00:51:07.639 might be able to eke out a couple more years of operations and the numbers 630 00:51:07.719 --> 00:51:10.840 might work with with these stip ins dangerous if you say subsidies. Mara doesn't 631 00:51:10.920 --> 00:51:16.000 like that. And so part of the challenge is every time that there's stipe 632 00:51:16.039 --> 00:51:19.840 and there. Right now it's about five million a ship. There's efforts under 633 00:51:19.880 --> 00:51:22.320 way to revise that up to six and a half seven and a half eight 634 00:51:22.320 --> 00:51:25.320 and a half million per year per ship. What that does is that drives 635 00:51:25.440 --> 00:51:31.280 up It's the same workforce laborpool for the Jones athleete domestically, and so as 636 00:51:31.320 --> 00:51:38.320 soon as that the preponderance of that differential is labor. So three x on 637 00:51:38.440 --> 00:51:43.639 op X for US flag, ninety plus percent of that is labor, just 638 00:51:43.679 --> 00:51:46.559 what it is. And so when the MSP rates go up, that drives 639 00:51:46.599 --> 00:51:50.480 up the cost of labor within the Jones ax fleet as well, because it's 640 00:51:50.480 --> 00:51:53.039 the same labor pool that's competing for those bills. So you end up having 641 00:51:53.719 --> 00:52:00.480 this disincentive to shifting because it becomes more expensive within the Jones athlete every time 642 00:52:00.559 --> 00:52:04.119 the MSP increases. So we have to kind of figure out how to square 643 00:52:04.199 --> 00:52:07.480 those circles. Because again the intent is good, it's just not working. 644 00:52:08.960 --> 00:52:15.280 And there's also the intellectual competition I've gone on. I wanted to circle back 645 00:52:15.320 --> 00:52:22.760 to something and on a not unrelated topic, I tweeted it out earlier today, 646 00:52:22.199 --> 00:52:28.119 since twenty fourteen one thing that I've just beat my head against the wall. 647 00:52:28.239 --> 00:52:30.440 I love the National Guard and I love reservists to death, but I've 648 00:52:30.480 --> 00:52:37.519 always thought that, while making it incredibly professionally rewarding for your ambitious young officers, 649 00:52:38.000 --> 00:52:45.000 that we really should send our best senior threes junior fours as observers to 650 00:52:45.159 --> 00:52:49.360 Ukraine even right now, just to be able to learn and to get a 651 00:52:49.360 --> 00:52:53.320 different perspective. And you've brought up an interesting idea going back to the merchant 652 00:52:53.400 --> 00:52:59.119 mercer marine academies that I kind of like talk for a little bit about your 653 00:52:59.360 --> 00:53:06.280 maritime fullbright exchange idea and how do you think this could help the larger issue? 654 00:53:06.519 --> 00:53:09.679 Yeah, so absolutely. I think as we've discussed, like the workforce 655 00:53:09.840 --> 00:53:15.199 is a big challenge, we have to make the maritime sector, especially seafaring 656 00:53:15.320 --> 00:53:19.480 jobs which you're often away from home a lot like how do you compete? 657 00:53:19.519 --> 00:53:22.000 How do you make that attractive? So it's something we need to we need 658 00:53:22.039 --> 00:53:29.360 to tackle, and one way to get much better would be across the maritime 659 00:53:29.440 --> 00:53:31.800 sector would be to look at our partners and allies who are just knocking out 660 00:53:31.800 --> 00:53:37.159 of the park and figure out how to learn from them directly. And you 661 00:53:37.199 --> 00:53:40.480 know, the State Department has this great fulbright program, and wouldn't it wouldn't 662 00:53:40.480 --> 00:53:49.480 it be spectacular for the strategic industry if the government could fund Americans going over 663 00:53:49.559 --> 00:53:52.519 to our partners and allies with comparative advantage in maritime sector and learning from the 664 00:53:52.559 --> 00:53:58.039 best. And I would see this as a as an expansive program, not 665 00:53:58.079 --> 00:54:07.480 necessarily just for people seeking naval architecture degrees or merchant Marine Academy grads or naval 666 00:54:07.519 --> 00:54:13.079 officers. This could be the model of cross pollinating work, or at least 667 00:54:13.360 --> 00:54:16.880 pollinating and coming back and then maybe there's some type of exchange could be expansive 668 00:54:17.000 --> 00:54:23.440 for even our our ratings and uh aboard our ships and our maintainers and our 669 00:54:23.480 --> 00:54:30.800 shipbuilders. This should be like absolutely happening at scale, but certainly would be 670 00:54:30.840 --> 00:54:34.880 smart to start where we have the most control, which would probably be what 671 00:54:35.039 --> 00:54:37.199 kind of like what you're suggesting with with some of our you know, top 672 00:54:37.239 --> 00:54:44.239 performers coming out of various government sponsored training pipelines, let's get get them overseas 673 00:54:44.239 --> 00:54:46.440 and learn from the people who are doing really well with this and that you 674 00:54:46.480 --> 00:54:53.199 know, relationships matter, uh, And it's not just the the intellectual stimulation 675 00:54:53.360 --> 00:54:58.639 and learning that is being brought back, but it's lifelong relationships with people who 676 00:54:58.639 --> 00:55:00.800 are really good at this industry that we need to get much better at. 677 00:55:04.920 --> 00:55:10.559 So I gather as part of that the shipyard concept that we're asking that the 678 00:55:10.719 --> 00:55:15.360 Japanese and the Koreans to come help us out. I mean that that's a 679 00:55:15.360 --> 00:55:20.239 program that would benefit a great deal. I would think from having our engineers 680 00:55:20.280 --> 00:55:25.719 and architects and marine architects and stuff go over and see how they're doing things 681 00:55:25.719 --> 00:55:30.239 and the technology which you've already talked about, and what Finland is doing, 682 00:55:30.320 --> 00:55:38.639 what of these other countries are doing helping to assemble these merchant ships in ways 683 00:55:38.440 --> 00:55:43.679 that I'm not sure we have anywhere in the country, the capability of DONA. 684 00:55:43.880 --> 00:55:46.920 I could be wrong, but it seems to me that that would be 685 00:55:47.079 --> 00:55:51.880 a very important thing for our guys to see. Absolutely. I think it's 686 00:55:52.039 --> 00:55:59.960 extremely refreshing to hear the Secretary of Navy going with developing policy options to bring 687 00:56:00.440 --> 00:56:04.159 our allies here to the US to help build our industrial base, and not 688 00:56:04.320 --> 00:56:07.880 to mention there's potentially, you know, if they're thinking strategically, which often 689 00:56:07.159 --> 00:56:13.360 you know they do press better than us, that provides some defense in depth 690 00:56:13.760 --> 00:56:17.719 of their strategic industry. Because when the balloons go up in indopay com, 691 00:56:19.920 --> 00:56:24.199 you can guarantee that those those shipyards, our allies shipyards there are targets. 692 00:56:24.800 --> 00:56:30.079 So having some defense in depth and building that here in the US would have 693 00:56:30.119 --> 00:56:34.639 profound benefits, especially because competition is so low currently. I mean, we 694 00:56:34.679 --> 00:56:38.679 only have three active shipyards in the US building vessels over one hundred you know, 695 00:56:38.800 --> 00:56:42.639 ships over one hundred and fifty meters, like we don't we're not building 696 00:56:42.679 --> 00:56:45.800 any ships, you know, certainly not at a meaningful rate. So there 697 00:56:45.800 --> 00:56:52.719 would be all types of reasons would be beneficial to us, perhaps a little 698 00:56:52.719 --> 00:56:57.000 more a little more difficult articularly why it's beneficial to them, But there are 699 00:56:57.079 --> 00:57:00.039 reasons. Again, the defense in depth one would be particularly strategy. Now, 700 00:57:00.039 --> 00:57:05.920 there is a little bit of cognitive dissonance when we have, you know, 701 00:57:05.960 --> 00:57:09.880 announcement about US steal being bought by Nippon, and then there's a lot 702 00:57:09.880 --> 00:57:14.840 of political furor over hey, well, you're taking away this American industry. 703 00:57:14.840 --> 00:57:15.920 Well, but can you come over here to Bill Chips. You know, 704 00:57:15.960 --> 00:57:21.239 like there's a little bit of dissonance there that we need to reconcile. But 705 00:57:21.320 --> 00:57:25.800 we should absolutely to look at all of the commercial industries that we're thriving in 706 00:57:27.199 --> 00:57:32.199 have massive international supply chains. You you mentioned earlier that some of those are 707 00:57:32.719 --> 00:57:38.840 going to be put to test if China decides to make it challenging for us. 708 00:57:39.039 --> 00:57:43.920 So we need to keep that in mind as we build this this early 709 00:57:44.800 --> 00:57:46.840 new partnership. And part of the challenge too is, you know, a 710 00:57:46.840 --> 00:57:51.920 lot a lot of the steel for shipbuilding that's imported is coming from China. 711 00:57:51.960 --> 00:57:57.920 A lot of the vessel components are coming from China, thankfully, h engines 712 00:57:58.360 --> 00:58:05.400 high high propulsion systems often coming from Northern Europe, uh some Korean firms. 713 00:58:05.440 --> 00:58:08.880 But the shipbuilding and what little limited shipbuilding was taking place in the US is 714 00:58:08.920 --> 00:58:15.400 already backed by significant international supply chains. But somehow we're still again three to 715 00:58:15.440 --> 00:58:20.480 five x is expensive using the same components and everything, So we have to 716 00:58:20.480 --> 00:58:27.239 address that with productivity enhancing investments. Amen to that, it would be nice 717 00:58:27.280 --> 00:58:30.400 to have a little bit of the sparkly stuff that you see in other places 718 00:58:30.400 --> 00:58:36.480 that with then Livy memory, their shipyards were nothing but mud banks and reeds. 719 00:58:36.960 --> 00:58:38.920 Uh And and well we have reached the end of the hour. Been 720 00:58:38.960 --> 00:58:44.639 a great fast hour for the for the listener. If they wanted to keep 721 00:58:44.719 --> 00:58:46.440 track of you, where's a good place for them to keep an eyeball? 722 00:58:46.719 --> 00:58:50.639 And he has some other projects that you're working on that we should keep an 723 00:58:50.639 --> 00:58:54.039 eye out for. Yeah, so I think that that was that was I 724 00:58:54.039 --> 00:58:58.079 feel like we just started, uh started getting there and we didn't even get 725 00:58:58.079 --> 00:59:01.079 into the ports issues. But uh, work to do on all that. 726 00:59:01.920 --> 00:59:07.559 I am. I'm mostly active on LinkedIn, uh not not really out there 727 00:59:07.599 --> 00:59:09.039 on the socials other than that, but I find that to be a pretty 728 00:59:09.800 --> 00:59:15.440 pretty potent uh venue for some cerebral activity. Uh. And the main, 729 00:59:15.639 --> 00:59:20.679 main, main thing my my team's working on right now is figuring out ways 730 00:59:20.679 --> 00:59:29.639 to accelerate, uh the development and partnerships and regulations necessary to set the conditions 731 00:59:29.639 --> 00:59:36.239 for a lot more American dynamism in the maritime sector, particularly leveraging our growing 732 00:59:36.320 --> 00:59:40.760 nuclear advantage. And then I would say we're also looking at things like artificial 733 00:59:40.800 --> 00:59:49.000 intelligence, robotics at sea, and perhaps some advanced manufacturing offshore, including shipyards, 734 00:59:49.239 --> 00:59:53.119 so stay tuned. Well, I know Paul actually asked about AI and 735 00:59:53.599 --> 00:59:58.559 in shipyard and ships earlier on in the show, so maybe we could have 736 00:59:58.880 --> 01:00:01.400 a conversation later on on that when y'all get some work done on it. 737 01:00:01.880 --> 01:00:07.079 Thank you very much and I hope you have a great spring. Likewise, 738 01:00:07.440 --> 01:00:10.719 pleasure to join you guys, and thanks for what you do. Thank you 739 01:00:10.800 --> 01:00:16.000 will. It was good show and we appreciate it, and we appreciate everybody. 740 01:00:16.079 --> 01:00:20.360 Join us for another edition in mid Rats until next time. I hope 741 01:00:20.360 --> 01:00:38.000 you have a great navy and Coast Guard day. 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