Marine Transportation System

Posts Tagged ‘MARAD’

Europe is Breaking the Egg

In Efficiency, Energy/Environ, Infrastructure, MTS Policy, Ports on October 5, 2014 at 11:16 pm

Before we get to John Graykowski’s “Europe is Breaking the Egg” I would like to pose my own chicken-and-the-egg question as one might ask it here in Wonkington, D.C. Which comes first: the policy or the strategy? One might also ponder how good is a forward looking strategy when the policy is of the past century. The Maritime Administration is preparing a “National Maritime Strategy.” It is a principal objective of Administrator Chip Jaenichen and probably has been encouraged by congressional supporters of the U.S. flag industry who, like most of us, have not liked seeing the merchant fleet decline but who, unlike us, are in a position to redefine U.S. maritime policy. The piece below begs the question whether a new national maritime strategy would benefit by first fixing the national maritime policy that for the most part has been in place while the United States lost its prominent role in world shipping. Certainly it would make it easier on Mr. Jaenichen and the Secretary of Transportation to have an updated national policy framework as a basis for new strategies to get to where we need to be. John Graykowski’s article first appeared in Pacific Maritime Magazine on September 1, 2014. You can find it here. He poses the policy question in the context of a growing American supply of natural gas and the multiple benefits to be realized by fostering a bunker switch to LNG. This is the third in his series for MTS Matters on the subject of developing LNG distribution infrastructure to advance the adoption of LNG as a marine fuel. It also is a recurring theme in these pages.  Pbea

We may soon be able to retire the tiresome “chicken and egg” cliché to describe LNG development, since there has been movement in the last year in Europe and the United States that indicates the circle may be breaking; but it’s too soon to tell whether the movement is temporary or permanent. What is apparent, however, it that Europe has moved forward in a more focused and strategic way, to create LNG infrastructure and markets, which is yielding results. By 2016, permanent LNG bunkering facilities will be in operation in Rotterdam and Antwerp – both among the largest ports in the world – thereby signaling that the supply uncertainties have been resolved. It bears asking, therefore, how Europe has done this, and whether we should consider similar measures here if the goal is to expand LNG as a marine and transportation fuel throughout the United States.

In 2008, Norway effectively made LNG the preferred fuel choice for marine operators through a combination of regulatory mandates relating to Nitrogen Oxide (NOx) and financial incentives covering up to 80 percent of the capital cost of the LNG-related components. Following these actions, the number of Norwegian vessels using LNG as a primary fuel went from 3 to 12 vessels in five years, with more than 50 vessels of various types now under construction along with the supporting LNG infrastructure. Concurrent with this, Norway is addressing the regulatory and operational issues, and is now seen as a leader in marine LNG development.

The European Union (EU) is also pursuing a comprehensive effort to increase LNG as a marine fuel with the goal of developing LNG infrastructure in every major seaport by 2020, and every inland terminal by 2025; a total of 139 ports across Europe. This goal coincides with estimates that by 2020, 1,700 dual fuel vessels will be built or converted worldwide, with many of these operating in, or calling on, the EU.

By 2020, the United Arab Shipping Corporation (USAC) dual fuel container vessels will be operating between the Far East and Europe. This activity will spawn additional interest and movement in Europe and among its global trading partners leading to a rapid transition from diesel to LNG as a major transportation fuel.

The EU is employing a “carrot and stick” approach combining financial support for the conversion and construction of vessels and infrastructure with increased regulation. Projects such as the Trans-European Network for Transport (Ten-T) and the Rhine-Main-Danube initiatives have produced significant results. $139 million has already been allocated to 7 Ten-T projects to support vessel conversion and LNG infrastructure development, with more funding promised. Support of up to 50 percent of project costs is available for vessel conversion, construction and infrastructure, and just recently the first inland dual fuel barge was delivered and will shortly begin operations.

The EU adopted an approach that combines: (1) clear and defined goals that LNG will displace traditional marine fuels; (2) increased environmental regulations; (3) financial incentives to spur the initial transition; and (4) coordination among ports, governments; regulatory agencies and stakeholders to create uniform regulatory structures. Given the intrinsic advantages of LNG, there is recognition that the market would likely drive toward greater adoption of LNG without assistance. However, many vessel owners and gas suppliers are reluctant to be the first to make the investments in LNG vessels and infrastructure regardless of the advantages. The EU has determined that these measures are necessary in order to reduce perceived risks, accelerate market decisions, and attain the stated goals for LNG deployment.

In contrast, the United States does not have a national policy to support LNG as a marine and transportation fuel. Instead, our LNG market is developing project-by-project, driven by first-adopters such as Harvey Gulf, Tote, Matson, and Crowley with no federal support or strategy; despite the tremendous benefits LNG offers to the country. While we have seen some movement in disparate locations, there is not so much as a policy statement that commits this country to the development of LNG as a transportation fuel; and there are certainly no programs to support the construction of vessels and infrastructure to make this possible nor to address regulatory uncertainties and enhance public acceptance of LNG.

The challenges and obstacles that exist here are no different from those in Europe, and LNG is new to everyone. It appears, however, that the EU has tackled this question in a more coherent, direct, and proactive way that is rapidly producing results. To be sure, there are major differences between the US and the EU in terms of governmental structures and processes. The EU can promulgate Europe-wide regulations and implement promotional programs, and has a history of doing so. Here, that role would be shared between Congress and the Executive Branch, and that is yet another challenge given the continuing dysfunction between both branches of government.

A policy declaring that LNG as a transportation fuel is in the national interest, and committing to the support, promotion and encouragement of its development would have several immediate effects:

  • It would be a clear signal to all potential stakeholders that LNG is “real” and has the backing of Congress and Administration;
  • It would put federal agencies on notice – and could require them– to collaborate with industry on practical and uniform regulation, reduced delays and greater certainty; and
  • It could include limited and temporary financial incentives such as loan guarantees or tax incentives to accelerate LNG conversion, because early adopters should be encouraged in order to build a sustaining market that benefits the entire country.

Federal resources are constrained, but without a national commitment, LNG may not gain the critical mass and momentum to create a long-term viable market. Regulatory direction is important, and does not involve direct costs, but if combined with properly structured and managed loan guarantees or tax incentives they would have a greater likelihood of jump-starting this industry at low risk and large benefit to the whole nation in emissions reductions, energy independence, economic activity in shipyards and elsewhere. The promise of LNG is so great it deserves this sort of recognition, attention, and effort. Clearly the EU sees it that way, and we should as well and the risk if we don’t address it in this way is diminished potential for LNG to transform this country and the lost opportunity to lead the world in LNG development and utilization.   John Graykowski

Congress Got It Done

In Congress, Government, Infrastructure, Legislation, Ports, Water Resources on May 23, 2014 at 1:13 pm

While strolling through the park one day
In the merry merry month of May
I was taken by surprise…

Two recent May events are fresh in mind. Maybe not of the surprising sort but perhaps, eventually, capable of the unexpected. On May 6th the Maritime Administration convened its second symposium aimed in the direction of a National Maritime Strategy. And just this week, Congress gave final approval to the first water resources development act legislation enacted in seven years. Both have significance to the maritime sector but, for the time being, we may be able to gauge the significance of just the one.

So, let’s talk WRDA…rather, WRRDA.

You don’t have to have inside-the-beltway know-how to know what “werda” is.  For nearly 50 years, and for more than a century earlier under different names, WRDA has been the path that harbor deepening and inland waterway projects—not to mention flood protection and shore and environmental restoration projects—have taken to Federal approval.

Project ideas graduate from feasibility studies to be authorized for funding by Congress. WRDA is how the Harbor Maintenance Tax and Trust Fund became law in 1986. It is how the near-completed 50-foot deepening in the Port of New York/New Jersey was authorized in 2000. And it is how the Corps of Engineers will be given the go-ahead to deepen and otherwise modify channels in the ports of Boston, Savannah, Jacksonville, Canaveral, Palm Beach, Freeport, and Corpus Christi.

Those ports, and various States and counties, will be relieved when the Water Resources Reform and Development Act of 2014, HR 3080, is signed by President Obama.

Passage of WRRDA 2014 was cheered in the halls of Congress. To be sure, some of the voices heard where those of lobbyists, but more prominent were the self-congratulatory speeches and tweets (#WRRDA) let loose by the legislators, especially those with projects at stake. Even Tea Partiers, who two years ago questioned why Congress should even have a role in public works, voted for the conferenced measure and made floor speeches hailing its importance to their town or to the national economic interest.

No small amount of pride was declared in proving to themselves and to the nation that Congress is capable of agreeing on major infrastructure legislation despite the fractious partisanship and anti-spending sentiment that has come to characterize this town. The bill’s reforms and deauthorization provision, which will dump $18 billion in previously authorized projects, provide the calculated and rhetorical coverage they consider essential to allow them to vote for a bill with an estimated, eventual cost in the neighborhood of $12 billion.

Yes, public works can be costly. Of course, not building such infrastructure also can be costly.

If there is an indicator that the conservatives have been hungry to vote in the affirmative on an [insert favorite jobs creation modifier] infrastructure bill and to show that Congress can do something, it is that only four House members opposed final passage despite it being a Heritage Action “key vote.” Only seven senators—also Republicans—opposed the final bill this week.

It helps that some planned projects—including unsexy port channels for goodness sake!—have in recent years been regularly reported across the country as important to US competitiveness in global commerce. The House Transportation & Infrastructure Committee leadership used it early on to educate colleagues and the public alike. Who hasn’t heard that the Panama Canal is being expanded to accommodate big ships? They must not have been listening to the President, the Vice President, the news media, etc.  Those are the same ships that the aforementioned ports in Massachusetts, Georgia, Florida, New York and New Jersey, among others, hope will come their way.

WRRDA lacks the earmarking that turned some in Congress sour on public works legislation. Instead it prescribes a more detailed process by which the legislature will receive and act on project recommendations. It is a rational process, devised on the House side and intended to be something other than earmarking while reserving the prerogative for Congress to authorize projects i.e., not leave it to the Executive to make the decisions.

The added “R” in the bill is more than for show. Reforms to current law and practice are many. Some are intended to speed the famously bureaucratic civil works process. Others introduce new process and calculus to how Harbor Maintenance Trust Fund monies are budgeted and appropriated. (I may devote some words to that in a future post and so will limit my comment here to wishing “good luck and great wisdom” to the folks at Corps headquarters whose task it will be to interpret and implement the intent of Congress.)

It will have to be seen how well the reforms will enable the Corps of Engineers to meet, and will hold them to achieve, a 3-year study mandate, for example. One test of that will be the extent to which project sponsors are willing to leave the fate of their projects in the hands of Federal planners and analysts. That is because the bill gives more flexibility to project sponsors, such as port authorities, to study, construct and finance their projects. As we have seen in Florida and South Carolina, financial commitments are being made in State capitals in order to get projects constructed and completed well ahead of whenever Federal process and funding get done.

So there is a lot in WRRDA to cheer, not the least of which is the fact that it is done. And should the congressional committees actually live up to the sense of Congress, in Section 1052, to wit, “Congress should consider a water resources development bill not less than once every [two-year] Congress,” there will be even more to cheer in the years ahead.   Pbea

“What’s Taking So Long?”

In Marine Highway, Surface Transportation Policy on January 31, 2012 at 12:57 am

I filed a version of this with the good folks at the Connecticut Maritime Coalition whose Deep Water Port notes newsletter carries my perspectives from Washington…

A few years back the trade press started asking from their columns and story headlines why it was taking so long for marine highway progress—on the water and in government.  To some extent the questions “why” and “when” reflected skepticism and an understandable response to some of the slam-dunk rhetoric that advocates used in the first years of the last decade. The advocates’ logic was simple: Roads are congested; water is not. New highways are expensive; water is free.

Of course, it’s not that simple. (Just as the argument that Jones Act = No Marine Highway is too pat a dismissal.)

Even long-time marine highway supporter Clay Cook asked impatiently—and not without cause—in last year’s May/June Maritime Executive whether USDOT marine highway program efforts were “dead in the water?”

What is taking so long?

On the business side it doesn’t help that the economy went into the tank.  Cargo and freight volumes dropped. Capital became scarce. People and companies ducked into secure holes, stopped spending and started stuffing the mattress. Then there was the rapid rise of diesel prices only to drop just as marine efficiencies started to look attractive.

But that hardly explains it all. Modal shifts don’t happen on a dime. Yes, trucking has its challenges but driver shortages and HOS regs alone don’t steer companies to the water. Besides, intermodal rail has been doing very well and can be expected to be even more competitive in offering services to trucking.

One thing is simple: marine highway service has to make sense in economic and logistics terms to the folks who control the cargo.  Some truckers and shippers have said in public forums how water transport does make sense for their businesses. They even qualify as MH advocates. Their numbers can and will grow but more needs to be done to make the prospect for marine highway service more real and the information more available.

A few more operations on the water could make a difference. The long awaited M-580 “Green Trade Corridor” COB service between Stockton and Oakland will be up and running in a couple months. On the government side of things we also will see some steps that could make a difference.

  • In early February House Ways & Means will hold a hearing on maritime tax issues including a Harbor Maintenance Tax exemption for domestic moves of non-bulk cargo and the tonnage tax, which presently can frustrate the start of marine highway services. The chair of the subcommittee, Pat Tiberi (R-OH), is also sponsor of the exemption bill, HR 1533.
  • Related to that is the pending House Surface Transportation bill that may carry the HMT exemption legislation in a first ever “maritime title” in a surface transportation authorization bill.
  • The Navy/MARAD “dual use” project should get interesting in the coming months. Herbert Engineering’s October 28th report for MARAD, coordinated with market and operation studies, is a guide to vessel designs that could work for the commercial and, when needed, national defense markets. The strategy to replace the tired RRF with new, commercially viable ships is hinged on MH development taking off.  New incentives to help marine highway services to capitalize and get off the ground may be part of a dual use package considered within the Administration.
  • The M-580 project benefited by Federal capital grant money as have some other MH related projects.  Don’t expect marine highway program grants to be issued this or next year but USDOT is announcing a 4th round of TIGER grants (Notice of Funding Availability to be published January 31, 2012.)  Watch for MH related proposals.
  • Also, let’s not forget that the MARAD funded market/business plan studies for M-5, M-55 and M-95 corridors are to be released in the next few months.

None of the above presently qualifies as full fledged game changers but the potential is there. There is more to come on the marine highway story in 2012.  Pbea

The Mineta Speech as a Starting Point

In Federal Government, MTS Policy, Surface Transportation Policy on March 30, 2011 at 11:34 pm

Former Secretary Norman Mineta provided a service in making his 2007 speech on the maritime sector (excerpts found starting here).  Since he went to the trouble, let’s use his suggestions as a starting point for an overdue discussion on rethinking and recharging US maritime policy.

Secretary Mineta called for moving maritime related functions of other agencies to the  Maritime Administration and renaming the agency according to the “Federal [ ] Administration” template used for the other modes.  There are 18 or so departments and agencies with program interest in marine transportation including USDA, NOAA, EPA and the Navy.  Reason enough to create an interagency Committee on the Marine Transportation System (CMTS).  Perhaps some functions could be consolidated in USDOT.  Others not so easily.  The navigation portion of the USACE civil works program, one that often is mentioned as a prospect, may not transfer well.  Not that the status quo is worth maintaining.  The excruciatingly-slow project evaluation and preparation process has ports pulling out their metaphorical hair.  But it’s not simply a Corps of Engineers process failing but one that Congress abets by being very unreliable in implementing the key stages of project authorization and funding.   The channel program is ripe for change.  But it is not a given that USDOT is the best place for it.  For that matter, program consolidation can cause problems as much as fix others.

The former Secretary suggests that MARAD must shift its focus to the condition of the nation’s ports and away from its long attention to “ships and crews.”  Actually that shift started during the Clinton Administration under Secretary Federico Pena.  He gave attention to port issues (including the dredging process) and MARAD has done all it can to grow its portfolio in this direction.  The agency has functioned as project manager for federally funded port projects in Alaska, Hawaii, Guam and elsewhere. (Mostly with DOD money.)  The 111th Congress authorized MARAD to manage such “port infrastructure projects”as money is made available.

I disagree with Mr. Mineta that there is too much focus on ships.  As long as there is a US flag requirement (see Jones Act), a diminishing shipyard industry and capability, and a US merchant fleet that is a shadow of its former self someone should pay it attention.  Clearly current law and policy isn’t getting the job done.  For that matter, I can’t recall a modern administration of either party that has cared much about cargo moving on US flag vessels.  (No, I won’t go back as far as Roosevelt.)

The suggestion also is made to rename the US Merchant Marine Academy and “give it our time and attention.” Reports issued during the Bush and Obama administrations, including one called “Red Sky in the Morning,” made clear that oversight and investment had been lacking at King’s Point.  So a turnaround effort continues today with Kings Point being .  But let’s face it.  Why bother making it a top notch maritime academy if the effort isn’t being made to grow the anemic maritime sector?  It would be nice if the young men and women who want a career in the merchant marine can actually find good paying jobs there.

Secretary Mineta suggested that if “ports and waterways funding is always being relegated to parts of the surface transportation bill, or the defense bill, they will remain second-class subjects…” He is saying that the sector needs, in effect, a SEA-21 much as there were TEA-21 and AIR-21—the highway and aviation authorization bills of the 1990s.  A dedicated maritime bill to advance maritime policy and related projects.  I think a maritime bill is in order, especially for addressing failings of current policy and the paucity of programs tuned to today.  But as long as Washington continues to think in terms of modal stovepipes the marine stovepipe will remain offshore and remote from the “surface” modes, system development and corridor planning where intermodal policy, transportation solutions, and major projects tend to be reserved for road and rail.

Marine transportation related provisions belong in an intermodal, multimodal surface–wet and dry surface, if you will–transportation  bill.

More on this subject to come.  Comments welcome.   Pbea

The Mineta Speech, Pt.3

In Federal Government, Infrastructure, Leadership, MTS Policy, Ports, Water Resources on February 8, 2011 at 3:07 pm

Former Transportation Secretary Norman Mineta offered his audience at the North American Port and Intermodal Finance and Investment Summit recommendations “we can act on immediately” to address the inadequate “role of maritime issues in our national transportation policy.”    Here are Pt. 1 and Pt.2. Pt.3 follows…

It struck some people as a bit odd.  Here Norman Mineta was talking about changes that are needed to strengthen U.S. maritime policy but he waited until he was out of office  to raise them.  Perhaps these were ideas that coalesced in his mind only once relieved of the day-to-day tasks of office.  Maybe not.   Ultimately it didn’t matter.  At least he was raising them now.

“What is the path to victory?  I have ten recommendations we can act on immediately.  Some are major and some seem to be minor, but are critical to success.

“First, the Federal government must reorganize the Maritime Administration – MARAD.  I would rename it for what it should become – the Federal Maritime Administration, and I would combine virtually all of the Federal maritime responsibilities there.  It should reinvigorate the uniformed Federal Maritime Service and transfer the aids to navigation responsibilities from the Coast Guard to it.

“The portion of the Army Corps of Engineers whose responsibilities and capabilities for our domestic ports and waterways should be relocated to the Federal Maritime Administration.  The Army performing as domestic civil Federal engineers is not a role for the military and the country would save money and get a better product if these services were transferred to a single maritime agency.

“Secondly, the new agency must shift its focus to the condition of the nation’s ports and waterways and the role of this infrastructure in the totality of the U.S. transportation system.  The current agency has too many of its resources and its structure focused on the issue of ships and crews.

“Thirdly, the Merchant Marine Academy in Long Island should be renamed the National Maritime Academy.  It should be a Federal service academy where every graduate must perform his or her service in the Federal Maritime Service or as a commissioned officer in one of the other services as they do now including the Department of Homeland Security.  This Academy is one of the major assets of the Federal government and we need to give it our time and attention.

“Fourthly, the Federal government must develop a legislative reauthorization process that puts maritime issues on the same priority and level of importance that surface and aviation assets currently have.  If ports and waterways funding is always being relegated to parts of the surface transportation bill, or the defense bill, they will remain second-class subjects where the hope is to get your particular project an earmarked status.

“Fifth, the U.S. must revitalize its role in international maritime organizations and its maritime relations with other countries.  Whether its treaties or issues involving security and trade, the U.S. needs to give more time and attention to these areas.

“Earlier I said to achieve this refocus on maritime importance, state and local governments, port authorities, and other government entities reliant upon maritime trade must work with industry stakeholders to educate American citizens and their decision makers regarding U.S. reliance on a strong national maritime system.

“Therefore, I believe the next set of actions should begin with port and waterway interests and industry stakeholders – including financial players who want to enter this sector – creating a national association whose charter is to accomplish the following action items:

“Educate the Congress and the presidential candidates on the role of the national maritime system and get hard commitments to take action.  Educate American decision makers and others on the role maritime assets play in how freight and goods are delivered to them.  Then enroll them in the effort to get maritime’s fair share of infrastructure resources.

“My final recommended action is that you accomplish all of the above by overcoming the inevitable opposition – not only from without but from within.  Within the maritime industry there are many agreements of mutual mediocrity.  People are familiar with this system and will not want to see it changed.  The ground is shifting under their feet and they imperil needed financial investment and the innovation and the efficiencies it brings.

“Also, there are issues that need to be addressed within the industry – labor agreements, the role that technology will play in the labor force, and how security issues will be addressed.  These are important issues that need to be vigorously debated and resolved – but they are not reasons to oppose raising the importance of maritime issues on the national agenda.  Take a side in these issues, fight for them, but do not let it dominate the larger objective.

“Finally, for those of you who are looking for quick investments in ports and maritime infrastructure, I’m not sure I’ve given you a lot of useful information.  And for you I’m afraid there is more bad news.  There are no quick rates of return to be made here.  Private investment into ports and infrastructure will have to be a true and long-term partnership.

“The up side as we say is that this is an industry that has the potential for tremendous growth and to have a real impact on our national transportation system.”

So there you have it.  A message that is important not so much for the specific recommendations made–although there are some good ones there–but for the fact that he was putting the spotlight on a problem that few public officials and industry people bother to talk about or even acknowledge.  See the next post for some additional  thoughts.   Pbea

The Mineta Speech, Pt.2

In Federal Government, Infrastructure, MTS Policy on February 2, 2011 at 11:16 pm

This is the second installment of a speech by former Secretary of Transportation Norman Mineta, who pointed to some ways that U.S. maritime policy was lacking.  While by no means a comprehensive critique of a policy and sector in need, his remarks were a high altitude flare signaling something needs attention. The first of three installments are here. The speech didn’t garner much attention at the time.  It is worth going back to take a look.

Norman Mineta was Secretary of Transportation when the Bush White House in late 2004 released the Administration’s U.S. Ocean Action Plan.  The Plan was a response to the recommendations made by the blue ribbon U.S. Commission on Ocean Policy.  The Plan included a presidential directive to elevate an existing inter-agency coordinating panel to be the cabinet-level Committee on the Marine Transportation System or CMTS.  USDOT was made one of the coordinating entities–the others being NOAA, USACE, and USCG–in the 18 agency CMTS.

During Mineta’s tenure and that of his successor, Mary Peters, the DOT Secretary’s Office evidenced more interest in a functioning, productive Committee on the Marine Transportation System than did the department’s own marine transportation agency.  To a certain extent it was understandable.  MARAD generally played second maritime fiddle to the Coast Guard when that uniformed service was under USDOT.  Now, with the Coasties out of USDOT and under the newly created Department of Homeland Security, MARAD leadership had little interest in sharing a coordinating role with other agencies since MARAD considered itself the U.S. maritime agency.

One even heard that Secretary Mineta made an attempt to gain program control over the construction and maintenance of navigation channel infrastructure, long the responsibility of the Army Corps of Engineers.  After all, the Department of Transportation had jurisdiction over other modal infrastructure and USACE had its share of critics.  I don’t know if any serious attempt was made then but, obviously, nothing ever came of it.  Not surprising.  Washington turf  comes in an especially change-resistant variety.  Nevertheless it remained a policy objective, as you will see.

The dispersal of marine transportation related matters among a dozen-and-a-half government agencies was just one of the conditions the former secretary pointed to 2007.  The Mineta Speech continues…

“Now, what about our national maritime policy?  Frankly, it is comparatively meager and unfocused.  Jurisdictions are scattered throughout the government.  One agency advocates for maritime trade, another oversees aids to navigation.  Another helps build and maintain ports and waterways, another regulates shipping, and another oversees security.

“With respect to congressional funding, surface transportation and aviation each have  major reauthorization bills with billions of dollars budgeted for projects, while maritime funding is scattered, uncoordinated, and subject to diversions for other purposes.

“Some of this is a result of history.  Our aviation system was essentially created by the federal government at the birth of commercial aviation prior to World War II.  And the federal government’s role in our national road system was guaranteed by the postwar vision of President Eisenhower who had witnessed the benefits of the German autobahn.

“But America was a collection of ports before it ever was a nation.  Most Americans became Americans by transiting on ships.  And the long history from colonies, territories and states with their own ports has created a tangled network of jurisdictions and authorities.

“Let me quickly add that I am not advocating for a central maritime system.  We only need to look at the knot of federal environmental laws and custom regulations to see how the federal government can inhibit the process with good intentions poorly implemented.

“However, in the increasing globalized economy; in a just-in-time-freight logistics system; in unprecedented energy challenges; and in ports that are at risk of becoming outdated; the Federal government must respond – and its response must be more than opening its checkbook.  And the private industry must do more than look for low hanging investment fruit opportunities.

“What is the path to victory?”

The text continues in the next post: The Mineta Speech, Pt.3.   Pbea

 

The Mineta Speech, Pt.1

In Federal Government, Infrastructure, Leadership, MTS Policy on February 2, 2011 at 12:09 am

Little over three years ago in Coral Gables, Florida, Norman Mineta addressed the North American Port and Intermodal Finance and Investment  Summit.  Six months earlier he took his leave from the George W. Bush cabinet where the Democrat served five years, with some distinction, as Secretary of Transportation. The subject of the speech was, in so many words, the poor state of the U.S. maritime sector and national maritime policy.  The speech didn’t garner much attention.  It is worth going back to take a look.

Norman Mineta’s 2007 remarks to the assembled didn’t amount to your typical boring whatever conference speech.  It ventured into waters not usually discussed by someone of his stature, especially once out of office when one doesn’t have to do the obligatory National Maritime Day luncheon address.  Former Cabinet members don’t usually waste their time talking about marine transportation.  There are much bigger and sexier things to talk about.

The well regarded former Transportation and Commerce Secretary (the latter under President  Clinton) and Chairman of the House Public Works & Transportation Committee knew what he was talking about when he observed that American maritime policy was a poor cousin to aviation and surface transportation policy.  (After all he helped craft major new policy directions for the aviation, highway and mass transit sectors.)  It is “comparatively meager and unfocused.”  The likable former Secretary was too kind.

Secretary Mineta’s speech, with just a bit edited out to reduce text, is provided below and in the next two posts.  One can find things to nitpick in the remarks but don’t let that get in the way of his message that current maritime policy is in need of major attention.

He set up his remarks by noting how then (and present) Defense Secretary Robert Gates made an “extraordinary speech” the week before.  Gates cited the need for the U.S. to place less reliance on American military power in the larger world, “readjust  its capabilities,” and put more resources into the non-military aspects of international engagement.

“I submit we have a similar challenge with respect to the role of maritime issues in our national transportation policy.  Compared to the resources and focus that we have devoted to surface transportation and aviation, I believe we must quickly and dramatically increase our attention, our funding, and our national purpose with respect to maritime issues.  To fail is to become a second rate economic power with a decrease in our quality of life here at home and a reduced ability to effect change in international affairs.

“And for those of you here today looking for private investment opportunities or to learn about trends in the port and intermodal industry, if you and I do not become part of this effort, I believe investment in this sector will be fraught with unmanageable risk and this space will have limited appeal for investors seeking to put their money in U.S. infrastructure.

“Simply put:  the United States must develop a comprehensive maritime policy and implement it through a thoroughly reorganized federal structure.  And to achieve this, state and local governments, port authorities, and other government entities reliant upon maritime trade must work with industry stakeholders to educate American citizens and their decision makers regarding U.S. reliance on a strong national maritime system.

“For the last half a century we have had a strong federal policy for surface transportation and aviation.  In surface transportation we have an interstate highway system; billions in federal aid for mass transit and passenger rail; and policies for interstate commerce that have encouraged strong freight rail and the commercial trucking industry.  The U.S. Department of Transportation is a major funding source, standard setting authority, and safety regulator.

“In aviation, the Federal DOT is essentially the operator for the national aviation system and its authority in running the air traffic control system, setting operational requirements, and safety standards is virtually absolute.

“Now, what about our national maritime policy?”

The text continues in the next post.   Pbea

I’m Dreaming of a New Congress

In Federal Government, Intermodal, Marine Highway, MTS Policy, Surface Transportation Policy, Water Resources on January 4, 2011 at 12:25 am

The new two-year Congress commences on January 5th and it promises to be different in ways beyond the changed list of sworn-in men and women.

In fact I think that we could see the start of some structural changes in Washington and maybe…just maybe…something good could come out of it.  Am I betting on it?  No. Washington is too fond of the fetal position.

However this time issues of a more fundamental nature are getting attention.  Those issues have been around for a long time, long before ARRA, TARP and the big dollar spending and tax cuts necessitated by the severe drop in the economy.  And it appears that some spines were stiffened in the last election and not just on the Republican side.  There appears to be more universal acknowledgment than ever before as to:

  • Growing entitlement programs that dominate non-defense spending and with predicted revenue shortfalls.
  • A large defense budget we can’t afford to leave off the table when cutting spending.
  • A tax system in need of a significant overhaul and simplification.
  • An infrastructure policy of disinvestment that makes our transportation less efficient and dooms us to second place status in the world economy.
  • Our economic and national security in the hands of oil producing countries most of which, at best, do not share our democratic values.

There is a potential for consensus that could slowly build around putting in order the nation’s fiscal house and addressing other policy deficits.  It is possible.  (Then again I thought it was reasonable to expect the Giants to take on the New Jersey label when they made the move to the Meadowlands.)

Still, hope persists because those are serious problems that undermine our long term competitiveness.

Closer to home…there are comparatively smaller issues that are fundamental in their own way and deserve attention in the new Congress.  Wading into the policy weeds, here are some things I would like to see Congress address over the next two years:

  • A vigorous marine highway program built on the converging imperatives to reduce petroleum consumption and emissions in the transportation sector.
    • Leverage private investment dollars in new vessel construction and incentives for users of blue and brown water service.
    • Encourage State initiatives to adopt marine highways as elements in the interstate transportation system.
    • Waive the Harbor Maintenance Tax for intermodal cargo moving in the domestic trade.
  • Improving understanding of marine transportation and the contribution it makes and, even more, can make.
    • Examine what is needed to update a US maritime policy to enable the private sector to break the cycle of decline and the public sector to incorporate US flag shipping in surface transportation improvements.
    • Improve funding and human resources for the Maritime Administration, which remains a lesser modal agency in the USDOT family.
    • Renew the effort to coordinate and elevate maritime related issues among the many agencies including more buy-in by USDOT, the one department that has the most to gain.
  • Fixing Federal water resources policy, especially as regards navigation.
    • Ensure port channel maintenance funding on a par with Harbor Maintenance Tax collections.
    • Fix the too-long flawed, too-long Federal (WRDA) process of planning, funding and constructing navigation projects.
    • Distinguish between frivolous earmarking and the prosecution of fully vetted navigation projects that provide economic security in most regions of the country.

The difference between the list above and the list below is that the latter is more politically doable…if Congress and the Administration would pay it attention.   Pbea   (this entry is a revised version 1.4.11)

Toward Developing MTS Related Policy

In Federal Government, Leadership, MTS Policy, Surface Transportation Policy on February 15, 2010 at 1:07 pm

Sitting the USDOT leadership in front of an audience has become a bit of a tradition each January.   Most of the brass, sans Secretary LaHood, appeared en panel at the recent TRB annual convention.  The policy and modal chiefs offered brief overviews as to what is on their plates.  Here are notes from two that have particular relevance to MTS related policy.

Under Secretary for Policy Roy Kienitz covered the big item — the next surface transportation authorization bill.   This year the Secretary’s office will pull together recommendations for the Obama White House to consider in preparing a package for Congress.

Roy stated the vision:  A renewed sense of strong federal leadership in transportation centered on meeting national needs.

He defined national needs: safety, state of good repair, economic competitiveness, livability, and environ sustainability.

The department’s priorities: organizing programs around those needs and recommending ideas to congress.

The challenges he described:  getting Americans excited about the vision and finding a politically acceptable way to pay for it.

David Matsuda, the Maritime Administration’s acting Administrator, is awaiting Senate confirmation.  He offered his take on what is what is driving the need to develop a vision for the marine transportation system as it applies to nation’s economic competitiveness.

The Panama Canal widening has the potential to significantly alter land and water routes.  Add to that potential changes relating to the use of the Suez, an Artic route, etc.    In short, we’re facing a whole new freight delivery market.

The Federal government must play an active role such as help “coordinate” investments in port access and intermodal connectors.  Few studies and data are available.  MARAD is commissioning a study to fully explore the impacts of a widened canal on our transportation system.

David said the study outcome is expected to shape national policies and help assess the capacity of channels, connections, etc.  He spoke of the need to factor in the capacity of port terminals and landside connections, the ingenuity of port authorities and terminal operators, and the competitive measures Canada and Mexico ports will take.  To understand how fuel prices affect freight economics.   And to identify marine highways to relieve surface congestion and move goods in a more energy efficient manner on the water.

There’s work to be done at the Department of Transportation.  And plenty reason for the freight community to plug into it.   Pbea

The Next Maritime Administrator

In Federal Government, Leadership on January 27, 2010 at 11:50 pm

David Matsuda –the President’s pick to serve as Maritime Administrator–is ready to serve.

He returned to familiar turf this week when he appeared at his nomination hearing.  He worked for the same committee that will be voting on his nomination.  His work in the Senate had to do with railroads, ports, transit, trucking and aviation.  He worked for a senator whose state’s second largest employment sector is logistics and which is host to the New York Harbor and Delaware River gateways.

Since mid 2009 David Matsuda has been running the Maritime Administration as the top political appointee at the modal agency.  He has the confidence of Transportation Secretary Ray LaHood who first knew him as Deputy Assistant Secretary for Policy.

Importantly for MARAD–and for the marine transportation system–he has knowledge and experience to help shape a new transportation policy for the administration to recommend to Congress.  That transportation policy has to include, for the first time, a national freight policy.  And by rights it should put the marine transportation system squarely in that policy.

David Matsuda’s prepared statement for the hearing was brief and straightforward.  He reminded the committee that the “impacts of our nation’s maritime industry are not limited to coastal states.”

“Items brought in by ship make their way to store shelves and factory lines throughout the nation. Some raw materials we mine, goods we produce, and agricultural products we grow for export leave through our seaports or travel down rivers or across great lakes to distant markets.  In all, 36 states have a maritime port—whether it’s on a river, lake, gulf, or ocean. Merchant mariners live in just about every state in the Union, and midshipmen nominated by you and your colleagues to study at the U.S. Merchant Marine Academy can claim home to all but one state. Some states have shipyards or marine manufacturers which can be the largest sources of jobs in an entire community or region.”

He noted acknowledged the challenges.

“Today’s industry is struggling with many tough challenges: a lagging economy, climate change, the threats of invasive species, piracy and other security issues, a greatly expanded Panama Canal opening in 2014, and an aging workforce, to name a few.”

One of the challenges facing the next Administrator is to make something of the marine highway program.  It is just getting started.  With no assurance of a reliable funding stream for the program, MARAD–hopefully with strong support from the Secretary’s office–will have to make the most of its modest resources to develop a credible and creative program that will be central to MARAD’s mission for many years to come.

“I feel my experience working within the federal government, and especially working in the Senate, has allowed me a broad understanding of how these challenges can be approached successfully: by working with all stakeholders in good faith and with transparency in decision-making.”

We wish him well.    Pbea

Follow

Get every new post delivered to your Inbox.