Background
On October 17, 2023, the U.S. Department of Transportation, Maritime Administration (MARAD) announced full enrollment of vessels in the Maritime Security Program (MSP) and its sister program, the Tanker Security Program (TSP).1 The MSP, established in 1996, boasts a fleet of sixty U.S.-flagged commercial ships committed to supporting the U.S. Department of Defense during times of need.2 The MSP fleet is largely focused on meeting military sustainment sealift requirements.3 Similarly, the goal of the TSP is to ensure access to liquid fuel products for the armed forces during a national emergency or times of armed conflict.4 Both programs also help protect national supply chains.5
The TSP is meant to preserve the United States’ presence in international commercial shipping and to fulfill its national defense and national security needs.6 In exchange for a stipend of $6 million annually per TSP vessel, participating operators are required to make their commercial transportation resources available at the request of the Secretary of Defense.7 The TSP now has a fleet of ten U.S.-flagged commercial product tankers, but Ann Philips, Administrator of MARAD, told journalists in September that MARAD is looking to enroll another ten vessels in the TSP next year.8 Thus, qualifying vessel owners should be cognizant of the TSP as they enter the new year.
What are the requirements of the Tanker Security Program?
To be eligible to enter into a TSP Operating Agreement, the vessel owners, charterers, and operators must show that one of the U.S. citizenship requirements outlined in the Federal Regulations and U.S. Code will be met for the duration of the agreement.9 For a vessel to be eligible, it must provide transportation in United States foreign commerce, be self-propelled, be ten years old or newer on the date it enters into the TSP fleet (though special rules may allow for the entry of older vessels),10 be suitable for national defense or military purposes in times of war or a national emergency, be commercially viable, and be U.S.-flagged by the time the vessel it joins the TSP fleet.11 Additional requirements related to telecommunications and other electronic equipment also apply.12
Aside from the age requirements alluded to above, vessels face several additional eligibility requirements for the TSP. Currently, suitable vessels for the TSP include medium range tankers between 30,000 and 60,000 deadweight tons with fuel cargo capacity of 230,000 barrels or greater.13 The vessels must have sufficient deck space and size for the installation of four Consolidation (CONSOL) stations, two on each side, and the ability to accommodate up to twelve additional crew for specific purposes.14 If chosen, the vessel must enter into an Emergency Preparedness Agreement under 46 U.S.C. § 53407.15 There are additional limitations imposed in the TSP Operating Agreements themselves, including a limit on time charters over 180 days.16
Who has been awarded TSP Operating Agreements?
MARAD announced the enrollment of Overseas Shipholding Group, Inc. (three tankers),17 Crowley-Stena Marine Solutions, LLC. (three tankers), Seabulk Tankers, Inc. (three tankers), and U.S. Marine Management, LLC (one tanker)18 into the TSP this year. While some of these TSP vessels are presently under the U.S. flag, others are scheduled to reflag in the U.S.19 The TSP Operating Agreements in place are effective for one fiscal year and may be renewed annually through 2035.20
Questions?
The attorneys on the Seward & Kissel Maritime Practice Team have extensive experience with a vast array of maritime practices. If there are any questions about the TSP, MSP, or their respective requirements, please contact any attorney on the Seward & Kissel Maritime Practice Team.
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1 “USDOT Strengthens Economic Supply Chain and Defense Operations.” U.S. Department of Transportation, 17 Oct. 2023, https://www.transportation.gov/briefing-room/usdot-strengthens-economic-supply-chain-and-defense-operations. Press release.
2 “Maritime Security Program (MSP).” U.S. Department of Transportation, Maritime Administration, 31 May 2023, https://maritime.dot.gov/national-security/strategic-sealift/maritime-security-program-msp.
3 “Maritime Security Program (MSP).” U.S. Department of Transportation, Maritime Administration, 31 May 2023, https://maritime.dot.gov/national-security/strategic-sealift/maritime-security-program-msp.
4 “Tanker Security Program.” U.S. Department of Transportation, Maritime Administration, 25 July 2023, https://maritime.dot.gov/national-security/strategic-sealift/tanker-security-program.
5 “USDOT Strengthens Economic Supply Chain and Defense Operations.” U.S. Department of Transportation, 17 Oct. 2023, https://www.transportation.gov/briefing-room/usdot-strengthens-economic-supply-chain-and-defense-operations. Press release.
6 U.S. Department of Transportation, Maritime Administration, “Solicitation of Application for the Award of One Tanker Security Program Operating Agreement.” 88 Fed. Reg. 47,942 (July 25, 2023).
7 U.S. Department of Transportation, Maritime Administration, “Solicitation of Application for the Award of One Tanker Security Program Operating Agreement.” 88 Fed. Reg. 47,942 (July 25, 2023).
8 Saul, Jonathan. “US Government Boosts Oil Tanker Fleet in National Shipping Overhaul.” Reuters, 18 Sept. 2023, www.reuters.com/markets/commodities/us-government-boosts-oil-tanker-fleet-national-shipping-overhaul-2023-09-18/.
9 46 C.F.R. § 294.11; see 46 U.S.C. § 50501.
10 46 C.F.R. § 294.13.
11 46 C.F.R. § 294.9(a).
12 46 C.F.R. § 294.9(b).
13 U.S. Department of Transportation, Maritime Administration, “Solicitation of Application for the Award of One Tanker Security Program Operating Agreement.” 88 Fed. Reg. 47,942 (July 25, 2023).
14 U.S. Department of Transportation, Maritime Administration, “Solicitation of Application for the Award of One Tanker Security Program Operating Agreement.” 88 Fed. Reg. 47,942 (July 25, 2023).
15 U.S. Department of Transportation, Maritime Administration, “Solicitation of Application for the Award of One Tanker Security Program Operating Agreement.” 88 Fed. Reg. 47,942 (July 25, 2023).
16 46 C.F.R. § 294.21(e).
17 “U.S. Department of Transportation Announces First Ships Enrolled in the Tanker Security Program.” U.S. Department of Transportation, 25 July 2023, https://www.transportation.gov/briefing-room/us-department-transportation-announces-first-ships-enrolled-tanker-security-program. Press release.
18 “USDOT Strengthens Economic Supply Chain and Defense Operations.” U.S. Department of Transportation, 17 Oct. 2023, https://www.transportation.gov/briefing-room/usdot-strengthens-economic-supply-chain-and-defense-operations. Press release.
19 “U.S. Department of Transportation Announces First Ships Enrolled in the Tanker Security Program.” U.S. Department of Transportation, 25 July 2023, https://www.transportation.gov/briefing-room/us-department-transportation-announces-first-ships-enrolled-tanker-security-program. Press release.
20 46 C.F.R. § 294.21.