2010-11_ANNUAL_REPORTS_-_FINAL_VERSION_(3)

Federal Transit Administration total about 15 percent. These cargoes represent from 7 percent to more
than 50 percent of each U.S.-flag ocean carrier’s annual revenues and are vital to retaining vessels under
U.S.-flag registry.
MARAD Analysis and Assistance to the Department of Defense
The Maritime Administration maximizes the use of U.S.-flag vessels through partnerships with the
Military Surface Deployment and Distribution Command (SDDC) for containerized cargo, and Military
Sealift Command (MSC) for break-bulk cargo. Specifically, MARAD reviews ocean shipment bids and
foreign-flag vessel waiver requests, in each case working with DOD schedulers and others to make
optimal use of available U.S.-flag assets as is required by law and regulation. Without MARAD
assistance, much of this cargo would move aboard foreign-flag vessels.
Surface Deployment and Distribution Command (SDDC)
When cargo cannot be booked using existing rates and/or services, SDDC issues a request for proposed
rates and services referred to as a One Time Only (OTO). In fiscal year 2010, SDDC issued
approximately 100 OTO awards representing over $6.7 million in cargo revenue. MARAD's assistance
in reviewing bids to resolve flag issues was requested 41 times. In fiscal year 2011, SDDC again issued
approximately 100 OTO awards representing over $13 million in cargo revenue, and MARAD assisted
in reviewing bids to resolve flag issues 35 times.
In FY 2011, MARAD also began assisting SDDC in reviewing cargo preference exemption requests for
DOD household goods moves. The Maritime Administration reviewed over 420 requests based on nonavailability,
and was able to locate available U. S. flag carriers for over 105 of the moves.
Military Sealift Command (MSC)
In support of MSC, MARAD reviewed dozens of DOD break-bulk and petroleum shipments in a
similarly expedited manner, ensuring that the U.S.-flag fleet was used to the greatest extent possible.
MARAD’s assistance to military contractors and shippers has increased the percentage of military cargo
preference compliance. Activities promoting cargo preference laws resulted in over 90 percent
compliance with respect to DOD dry cargo carriage in fiscal year 2011.
Total U.S.-flag revenue for military cargo shipments was $1.8 billion in FY 2010 and $2.0 billion in
fiscal year 2011. Much of this cargo was related to military operations in Iraq and Afghanistan.
Marine War Risk Insurance Program
MARAD is authorized to provide hull, liability and life insurance for vessel operations considered to be
in the interest of the national defense or national economy and for which commercial insurance is not
available on reasonable terms and conditions. MARAD may issue (1) insurance for which a risk-based
premium is charged and (2) non-premium insurance for vessels under charter operations for the Military
Sealift Command, and for which MARAD is indemnified for any losses by the U.S. Navy.
During fiscal year 2011, MARAD did not write any premium-based war risk insurance and wrote a total
of $436.5 million in non-premium war risk coverage for six companies on six vessels. As of September
30, 2011, there are no pending marine war risk claims. There is approximately $45 million in the Marine
War Risk Insurance Fund to reimburse operators covered by premium insurance. The Department of
Defense has indemnified MARAD for any claims arising under non-premium insurance.
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