Cozen O’Connor: MARAD Seeks to Reestablish Voluntary Tanker Agreement

MARAD Seeks to Reestablish Voluntary Tanker Agreement

November 1, 2019

On November 1, 2019, the Maritime Administration (MARAD) published a notice seeking public comment on its draft Voluntary Tanker Agreement (VTA). After being dormant since 2013, MARAD is seeking to reestablish the VTA under the voluntary agreement authority of the Defense Production Act of 1950 (DPA), to provide the U.S. Transportation Command (USTRANSCOM) with assured access to tanker capacity to meet national defense needs. The program shares a number of similarities with the successful Voluntary Intermodal Sealift Agreement (VISA), which provides USTRANSCOM with assured access to vessels, intermodal systems and equipment, terminal facilities, and related vessel management services.

In addition to potentially providing participants with access to Department of Defense charters and liquid bulk cargoes, the VTA also implements the DPA’s blanket antitrust defense for claims arising out of actions taken in the course of developing or carrying out the agreement. Participation is open to all operators of tankers, integrated tug-barges (ITBs), and articulated tug-barges (ATBs) greater than 20,000 deadweight tons (DWT). Operators of tankers, ITBs, and ATBs of less than 20,000 DWT are also eligible to participate if MARAD and USTRANSCOM determine that the operator’s vessels meet U.S. security needs.

Comments on the draft VTA are due by December 2, 2019. MARAD will also hold an open meeting to develop the VTA’s final text, consistent with the DPA’s requirements. The date of the public meeting has not been announced.

The VTA is an integral part of MARAD’s larger strategic plan to grow the U.S.-flag tanker fleet. Section 3511 of the current draft National Defense Authorization Act for Fiscal Year (FY) 2020 would authorize the creation of a Tanker Security Fleet, similar to the existing 60 vessel Maritime Security Program (MSP) fleet. The program would allow for the enrollment of 10 U.S.-flag tankers, which would each receive a $6 million annual stipend payment through FY 2035. In the same manner as the MSP, tankers enrolled in Tanker Security Fleet would be required to operate in U.S. foreign commerce and must be enrolled in an emergency preparedness agreement, i.e., the VTA.

 

Please contact the author if you have any questions about the VTA or Tanker Security Fleet, or if you are interested in submitting comments on the draft agreement. Cozen O’Connor’s maritime attorneys, with their unparalleled direct overseeing — and guiding clients through all aspects of – the MSP, VISA, and MARAD’s DPA authority, are ready to help you navigate these emerging opportunities in the U.S. tanker market.


Authors

Jeff R. Vogel

Member

jvogel@cozen.com

(202) 304-1453

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