Marine Transportation System

Archive for October, 2009|Monthly archive page

Short Sea Grants on the Horizon

In Marine Highway on October 29, 2009 at 2:02 pm

In 2007 Congress approved marine highways as a new policy direction in a measure signed into law by President George W. Bush.  The Secretary of Transportation “shall designate short sea transportation routes as extensions of the surface transportation system…” and is authorized to “designate” short sea transportation projects.

Yesterday President Barack Obama signed a bill containing an addition to the policy and program.   “The Secretary shall establish and implement a short sea transportation grant program to implement projects or components” of a designated project.

Originally sponsored by Senator Frank Lautenberg (D-NJ) the grant provision was part of a Maritime Administration Authorization Act, subsequently folded into a Defense Department Authorization bill (see title XXXV) that went to the White House.

This is a welcome addition to the still new policy initiative to increase marine highway use in the United States.  It is a modest but important enhancement of the 2007 law.  Money gives meaning to policy.  Even if it is just $15 million, the amount that the Administration is prepared to spend if Congress were to appropriate it.   (The  Senate version of the still unresolved DOT appropriations bill contains funding.)  Indeed the Maritime Administration budget plan includes $15 million for each of  the next couple of years.

The new grant program is broadly writ.  To be eligible to apply for funding a project must be “financially viable” and demonstrate that “a market exists” for the project services.  The Federal grant could be no more than 80 percent of the cost for which the money would be used.  That use presumably would be to cover capital costs.  We will see how the Maritime Administration further defines the new grant program through regulation in the months ahead.   Before they do that  MARAD will finalize the rulemaking first published for comment in October 2008 regarding the designation of routes and projects.   Pbea

HMT on the Marine Highway: Once is Too Much

In Marine Highway, Surface Transportation Policy on October 18, 2009 at 11:09 pm

The Harbor Maintenance Tax (HMT) discourages new customers for the marine highway.  It may not be the only number in the logistics calculus but it tops most to-fix lists.  Why?

Vessel operators, maritime labor, ports, and others agree that the HMT is most in need of a policy fix.  But the diversity of perspective sometimes means the prescriptions for a fix will vary…as will the way of explaining the issue.

If you ask someone to explain the HMT issue the response may be:  “It’s a double tax on cargo.”   I have heard  that  lone, simple statement made many times including by an  industry witness at a committee hearing.  It is how others are coming to know the issue.  A key Member of Congress recently explained the issue that same way.  Double taxation,  period.

The double hit of the ad valorem tax is a valid reason.  Imported cargo pays on entering a U.S. port, and then, when transshipped by coastal service to another American port, pays again.  But that explanation leaves out an equally important reason for Congress to approve legislation such as the Cummings bill in the House (H.R. 638) or the Lautenberg bill in the Senate (S. 551).

The single hit of the HMT on domestic cargo–much of which moves in trailers–is the other principal reason.   Domestic freight represents the greater percentage of goods moving on the roads today…far more than international boxes.   When the Port Authority of  New York & New Jersey studied trucking in that congested metro region less than 5 percent of the trucks on the road were carrying containers to or from the port.  This is hardly surprising.

So whether the cargo is riding in a 53′ trailer, or is a vehicle itself, that is the freight we need to attract to the marine highway.  Unlike the imports the domestic freight would pay only once.  That also is too much.

If the marine highway is to fulfill our expectation to enhance the surface transportation system and mitigate the interstate burden the J.B. Hunts, the FedExs and other companies should participate in blue and brown water services.

Exempting both international and domestic non-bulk cargo moving in the American domestic trade, and among Great Lakes ports, is the objective. It is a low-cost way to remove a disincentive for the use of efficient marine transportation and signal  a policy change to the logistics industry where the business decisions are made.

That says it all.    Pbea

The Marine Highway Route to Climate Action

In Green Transportation, Marine Highway, Surface Transportation Policy on October 15, 2009 at 7:26 pm

BlogActionDayCall me silly, but I give benefit of the doubt to John McCain, Barack Obama, Al Gore (yes, him, too) and the slew of scientists who have convinced leaders around the globe that the time for action to address global warming is…yesterday.   (With such heavy stakes I’m betting on the smart guys–people of science.)

Closer to home, I trust people like marine biologist Marisa Guarinello, who on Sunday told me of her recent stint in Antarctica.  She witnessed the consequences of diminishing ice habitat and the effects on native species.

I also trust my gut, paunchy thing that it is.  I never expected in my lifetime to see terra-evolution.  From my early years in grammar school I learned, as we all did, about  the  Ice Age and other such periods that lasted over the course of  tens of thousands  of years.  When I see ongoing evidence of change (the Melting Age?) occurring in my lifetime it’s a bit unnerving.

Want an example?  How about the shrinking of the Arctic?  So much so that studies and early planning are underway for Arctic shipping routes as ice is reduced to being less of an obstacle.  I understand that there is opportunity in them thar high latitude shortcuts, but that opportunity has the look of silver lining an awfully dark cloud.

The Marine Transportation System can do more than take advantage of a disturbing, ecological change to Planet Earth.   It also can contribute to the reversal of GHG factors.

In fact the future of the MTS–the prospect for growth in maritime-centered mobility–is dependent on marine transportation being relevant in the Climate Change Era (CCE).

Our friends in USDOT might agree with that assertion.  They are preparing the administration’s view as to the next surface transportation policy.  Even as the policy is in development clear themes are being voiced by Secretary Ray LaHood and his team.  Sustainability.  Livability.  Mobility.

The Secretary sees the MTS as fitting neatly in that framework of principles.  He said marine transportation, specifically the development of the American Marine Highway (AMH), as transformational for the national transportation system.

Marine transportation is highly efficient.  It moves large volumes of  things using less fuel than  the other surface modes.  It has advantages from a GHG perspective.   However it isn’t a slam dunk for “Green Mode of the Year.”  But with the right investments it can do even better in contributing to our environmental and energy security.  Fuel switching.  Operational adjustments.  New technologies.

Government and the private sector have roles to play here.  Federal policy should aggressively foster both the use and greater advances in marine transportation.  Investments in technology, new equipment and AMH services by the private sector, or its public sponsors, should be rewarded.  Research should be supported.  Transportation policies in this CCE should be unified through the integration of modal policies and some programs.

Like it or not, change is happening.  There are implications for the Marine Transportation System.  Let’s make it work both for future generations and for the industry that supports millions of jobs.   Pbea

A Slice of Pie for Hungry Ports

In Infrastructure, Ports on October 13, 2009 at 11:25 pm

I’m not sure if this is a troubling sign but Sally Fields comes to mind when I think of TIGER grants.

Those are the multi-modal, discretionary grants that were created in the economic stimulus bill Congress approved last February.  The pleased folks at USDOT dubbed the program TIGER–a suitable acronym–and put flesh on the bones. Pleased because this was one of those rare times when Congress was willing to say: “Here, Mr. Secretary, is 1,500,000,000 dollars for you to spend, outside of existing modal grant programs, at your discretion.

There were some rules of course, but none of the earmarked projects Congress is so fond of TIGERpiedesignating to the fullest extent of available funds.

And with a reform-oriented SAFETEA-LU sequel due to be written by Congress it was not lost on USDOT that if the TIGER program were managed well–whatever “well” might mean to congressional overseers–it could be a model for replication.  USDOT may be entrusted to award more competitive grants on the basis of project merit and worth to the country.  Imagine that.  (Indeed, the Senate DOT appropriations bill for FY 2010 includes $1.1 Bn for additional TIGER grants.)

In the months that followed enactment of the $750 Bn stimulus package–some $48 Bn of which was allocated to USDOT for near term implementation–Secretary Ray LaHood told port officials and others involved in the MTS that port project applications would be welcomed for TIGER grants.  He told the D.C. Propeller Club audience in May that the maritime sector has been neglected and TIGER grants were an opportunity.

Well, the ports listened.  Shades of Sally Fields!  When in 1985 she won her second golden statue for her role in Places in the Heart the former “Flying Nun” famously cried, “You really like me!”

The ports took to heart the Secretary’s encouragement. He really wanted them to apply for grants and apply they did.  Ninety-five applications were submitted for port related projects totaling $3.3 Bn.  Certainly the smallest of the modal slices on the pie chart, but not an overwhelming difference when compared to rail.

Toward what end?  We’ll learn in February what projects are approved and how many are for ports.  The TIGER grants and pending legislation to grant MARAD infrastructure improvement authorities are signs that change may be in the wind.  The Feds are becoming more open to assisting ports with more than just channel construction and maintenance.  Certainly MARAD is eager to claim new program areas.  And some of the ports, perhaps an increasing number, are welcoming the help of Uncle Sam…maybe even inside the gate.   Pbea

A Tale for a New Age

In Green Transportation, Surface Transportation Policy on October 8, 2009 at 5:18 pm

“My jolly body shall a story tell
And I will clink for you so merry a bell
That it shall waken all this company;
But it shall not be of philosophy,
Nor yet of physics, nor quaint terms of law;
There is but little latin in my maw.”
(from The Sailor’s Prologue by Chaucer)

Give the sailor a new story to tell.

For all of the new thinking that is going in transportation circles the maritime sector would appear to be an industry that lingers in the past.  We know that some companies are plotting real innovation.   The use of renewable energy, more efficient vessel designs, and replicating nationally the Alaska Marine Highway trailer trade.   We know that there are inherent efficiencies to hail and some companies would build on that.

But in the absence of an organized effort to tell how the industry and its skilled labor force is trending into a new age –and have virtues of particular relevance today–the outward appearance amounts to a familiar, 20th-century one.

Not so with the railroad industry.  The once Iron Horse now has the look of a low emission, high performance thoroughbred.  The appearance is a calculated one that to some degree is also deserved.  When new equipment is brought on line with green power plants there is no question about it.

“I have to say, the folks there have really turned out something cutting-edge. The NS 999 cranks out 1500 horsepower relying solely on rechargeable batteries. And, it releases no diesel exhaust emissions. None.”

Those aren’t words from some Norfolk Southern executive.  They’re from the USDOT Secretary’s blog.    The Class Ones have a story to tell and they’ve been telling it.  Good for them if the Transportation Secretary wants to join in.  (And why not?  The President likes to tout the new Detroit from the podium.)

What’s the maritime story?  One that will turn heads in Congress…that will prompt a sustainability-conscious president to urge more use of and investment in marine highways?  One that says our waterways are the nation’s past and future?

A maritime industry lobbying effort is in the works.  A collective “fly-in” (Washington lobbying lingo) by labor, business and ports is being organized for spring 2010.  What will be the message?  That the industry produces many great paying jobs?  That the maritime sector is important to the economy and our national security?  All factually correct and important to say.  But it’s an old–in some ways ho-hum–story.

It isn’t message enough when the government is tackling climate, energy, congestion and freight transportation issues, and will be setting policies and programs to last the next 5 years and more.  And it isn’t relevant enough when businesses, including customers of freight services, are developing strategies to bypass congestion, reduce fuel costs and carbon footprints, and earn EPA SmartWay credentials.

We are approaching fast the convergence of government policy and business imperatives.

It is no wonder that the railroads are projecting themselves–successfully so–as worthy of a hearty handshake from Al Gore.  Will the maritime sector also be ready and relevant?  Will the policy makers know why it makes sense to use marine transportation in this new age?  There’s only one way they will know.

Give the sailor a new and true story to tell.    Pbea

Say It Again, Solon

In Marine Highway, MTS Policy, Surface Transportation Policy on October 5, 2009 at 5:33 pm

Some things are worth repeating. Especially on the subject of putting our waterways and waterfront to greater productive use.

Here’s a for-instance — excerpts from a recent statement by Rep. John Mica (R-FL), the ranking minority member of the House Transportation & Infrastructure Committee, as submitted to the America’s Marine Highways website.

  • “As construction costs rise, and as the resources to address our growing infrastructure needs become stretched thinner by the day, it is…important that we use all of our transportation assets more wisely and effectively.
  • “I have advocated for the development of a national strategic transportation plan that considers our various modes of transportation as components of one comprehensive system, drawing on the strengths of each mode, rather than as separate unrelated transportation systems.
  • “The nation would clearly benefit from the greater use of coastwise trade on our nation’s marine highways as part of a national transportation strategy” …. “Marine highways are energy efficient and can yield positive environmental benefits.
  • “If waterborne routes are to be fully used, industry must develop new options that are better suited for moving higher value and more time-sensitive goods.
  • “However, there are still roadblocks that may limit the establishment of new waterborne transportation routes. Chief among these is the imposition of the Harbor Maintenance Tax on cargo carried by vessel between U.S. ports.
  • “Of course, all proposals to better use our transportation system faces challenges…. Financing ships without the commitment of cargo is not easy. Obtaining a commitment for cargo without existing ships and an established schedule is not easy. Financing and permitting for the expansion of port facilities is never a simple or easy task….  However, these are challenges we can and must overcome.”

John Mica is an influential Member of Congress who is playing a key role in the crafting of the replacement for SAFETEA-LU, along with his counterpart Chairman Jim Oberstar, another supporter of the marine highway.   Mica is one of a small number of legislators who has spoken in terms of national strategic transportation planning, modal components being of a single transportation system, and the importance of developing the marine highway…all in the context of surface transportation policy.

That’s worth repeating…and reading in full.  With any luck his colleagues of the House and Senate will listen.   Pbea

Let’s Hear It For Congress

In Federal Government on October 2, 2009 at 11:51 am

At risk of speaking too soon and jinxing the whole thing…  A toast to Congress!

This time next week Congress should complete action on the Energy & Water Development Appropriations for FY 2010 (HR 3183).   With any luck the funding bill for the Federal water resources and energy programs will be approved by the Senate next week and become law just a couple weeks past the start of the fiscal year.  (We may even hear popping corks from within Capitol Hill locker rooms.)

Well, yes, nowadays we do set low the bar for achievement in Washington.  But that is not to diminish the significance of a job completed.

Just a few decades ago our Federal government started the fiscal year with enacted appropriations measures–one produced by each of the appropriations subcommittees.  But that is a distant memory.  Instead Continuing Resolutions (CR) by which Congress gives itself more time to finish bills and ensure government doesn’t grind to a halt now are predictable fixtures in appropriations sausage-making.  Same for “omnibus” spending measures into which congresses loads all incomplete funding bills as a last, exhausted effort to get the job done.

What’s the big deal about meeting the fiscal deadline?  Well, besides clearing the legislative calendar for other pressing issues, there is the matter of how well government functions and the ripple effect on lower levels of government and the entities whose programs,  projects, and budgets depend on that Federal money and its timing.

In the case of the E&W bill, Corps of Engineers commercial navigation, flood control and other projects involve public agency partners and private contractors.  If the Corps doesn’t have a clear funding signal from Congress contracts  and other work are delayed.   If it is a dredging project, factor in whether the project is in a region where the construction season is limited by weather, and if there are additional calendar restrictions based on aquatic critters mating habits, etc.  There are many more practical considerations, of course.  The end results are heightened costs and delayed benefits for all involved.

In the past seven years the E&W bill was completed by the October 1st deadline zero times.  It was delayed anywhere from one to six months.  In  FY 2007 Congress just gave up and adopted a full year CR, with all its attending disruptions to projects and programs.

So, let’s acknowledge Congress for getting the E&W bill done.    A toast!    Pbea

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