Marine Transportation System

Posts Tagged ‘Ports’

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Good Things to Hear — Pt. 2

In Efficiency, Infrastructure, Intermodal, Surface Transportation Policy on May 1, 2010 at 11:34 pm

This except from the opening of  “A National Intermodal Shift” by W. Cassidy and J. Boyd of the Journal of Commerce, April 5, 2010:

The Obama administration is forming a national freight transportation policy that can be boiled down to one concept: Get more trucks off the roads.

Key officials are increasingly making it clear they want to move a larger percentage of the nation’s intercity freight by rail or water, to take pressure off congested and crumbling highways and to help improve the environment.

“We want to keep goods movement on water as long as possible, and then on rail as long as possible and truck it for the last miles,” Deputy Transportation Secretary John Porcari said at a March 24 Senate committee hearing. [emphasis added]

In a single sentence, Porcari described what appears to be the most sweeping change in a generation in the federal government’s approach to shipping and transportation, promising an ambitious and concerted effort to redirect the way freight flows through the country’s long-standing supply networks.

The JOC cover story is intriguing to the reform minded (and unwelcome to the road-minded).  It builds on recent statements made by DOT officials in interviews and Hill hearings.  The view that is emerging from the Secretary’s office is a policy perspective that adheres less to modal stovepipes (and whether there is a pot of money devoted to a stovepipe) and more to intermodal efficiency.  It first asks if a project would provide public benefit and secondarily whether the infrastructure is in public or private hands.  Under Secretary for Policy Roy Kienitz testified at a March 17 House hearing.  He opened by outlining the principles that are guiding the Administration’s developing transportation policy.

Secretary [Ray] LaHood has decided to focus on five key strategic goals as priorities in our national transportation policy – safety, economic competitiveness, state of good repair, livability, and environmental sustainability.  Our policy on freight transportation grows out of our focus on these five key strategic goals. We want a freight policy that will allow us to target our investments on projects that are most effective in allowing us to achieve these goals.

Later in the statement Roy Kienitz said this:

Whether freight infrastructure is publicly-owned or privately-owned, it produces a mix of public and private benefits. Shippers and other customers of the freight transportation system derive private benefits from freight transportation, and the Nation as a whole derives public benefits from our freight transportation infrastructure, whether that infrastructure is publicly or privately owned. Freight that moves on more energy-efficient modes – whether the right-of-way is publicly or privately owned – enhances our energy independence and reduces adverse climate change effects. Freight that moves on a lower-cost right-of-way – whether publicly or privately owned – enhances our economic competitiveness by preserving capital for hiring and additional capital investments. The most sensible freight transportation policy will be one that directs transportation infrastructure investment to where it will have the greatest impact on our desired outcomes, regardless of whether those modes are publicly or privately owned, or whether they have their own source of trust fund revenues.

Given the opportunity to initiate a  multimodal grant program DOT is applying principles like  transportation efficiency and public benefit.  It explains over $300 million in TIGER grants going to expanding double stack rail corridor capacity and to port improvements.

These are not your typical Federally supported projects.  Then again, what we are starting to hear out of 1200 New Jersey Avenue is not your typical transportation policy.   Pbea

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What TIGER Tells Us

In Marine Highway, Surface Transportation Policy on February 23, 2010 at 12:39 pm

No, not that Tiger.

The eagerly awaited TIGER grants were announced last week.  An experiment in government.  Against their better judgment members of the House and Senate gave $1.5 billion to the Administration and left it to the discretion of USDOT program managers, modal administrators, the Secretary (and perhaps the White House, just in case) to decide what projects were worthy.  (Egads! The bureaucrats!)

The multimodal discretionary grants program—later assigned a name and acronym at USDOT—was created a year ago in the cauldron in which Congress cooked up the economic recovery package.  The context was job creation in a failing economy.  But the genius of TIGER’s tenacious sponsors—most visibly Sen. Patty Murray (D-WA)—was that it also was a good time to try something different.  Politics would always be lurking in the background (if not in the foreground) when doling out tax revenue for public works but this was not a time for the earmarking norm.

Also lurking was the thought: if this works it could set the example for a change in transportation policy.

Lisa Caruso of the National Journal asks in her transportation “experts” blog if TIGER should be replicated in the surface transportation authorization bill.  Can it serve as a model for the revised policy and programs that many of us look for in the bill?

So far the respondents (scroll thru the page) generally agree there is benefit in the approach.  What’s not to like? Livable community folks liked the selection of street car and pedestrian path projects.  Goods movement was given a strong boost with around $300 million going to rail projects.  And it was good to see that at least one of the promising marine highway initiatives was granted $30 million.  (The first of many one hopes.)  That award illustrates how TIGER–and Secretary Ray LaHood–was open to more than the usual road, transit and bike path projects.

By and large, very good projects were selected.  But the question posed by Caruso is whether TIGER represents a policy approach worth continuing.

Some of the respondents think TIGER is a good starting point but that it is important to change the underlying policy.   In particular Steve Heminger notes it is not enough to create a grants program that is mode neutral.  An improved Federal policy and program should have a clearer, focused national perspective e.g., goods movement and metropolitan mobility.  It is a view I share.

Bob Poole raises an important policy question worth debating by suggesting an underlying weakness of a multimodal approach if a highway tax is the sole source of support.

One person’s response I would be interested to see is that of Sen. Barbara Boxer (D-CA).  In January 2009 the chair of EPW, which is to produce highway and other portions of the next authorization bill, flatly opposed the multimodal discretionary grants provision in the draft Senate stimulus bill, even as Heminger and other Californians welcomed the idea of a mode-neutral program and projects judged on their merits.  Boxer and others in the transportation leadership of Capitol Hill will decide whether the TIGER approach is just a brief detour from projects as usual.   Pbea

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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

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Green Move at FMC

In Environment, Green Transportation, Ports on January 8, 2010 at 2:49 pm

The Federal Maritime Commission has formed a Maritime Environmental Advisory Committee.  This isn’t fresh news–the FMC announced the action last November–but it’s still worth noting.

It is a smart move by Chairman Rick Lidinsky.  He announced it, appropriately so, while on a visit to the San Pedro Bay ports.  Says the FMC press release: “I wanted to recognize these ports’ leadership in demonstrating that the maritime industry can remain commercially competitive while acting in a manner consistent with the country’s commitment to energy independence and environmental standards.”  While those two largest of US ports have led the way in greening seaport operations the Lidinsky comments were a particular reference to the ports’ more recent Clean Trucks Program. It was his way to demonstrate the agency’s new leadership.

The program–in conjunction with the efforts of an enlightened shipper community–has been very successful in reducing port drayage trucking diesel emissions by a praiseworthy 80 percent.  Doing it well ahead of schedule.  The program has inspired similar action in other parts of the country and, with the exception of one particular element, has the strong support of both public and private interests.  (The exception is the controversial “employee driver” provision in the Los Angeles plan that is being challenged by the American Trucking Association in court.)

The formation of the FMC panel followed by several months a decision in the FMC to halt its action against the ports of Los Angeles and Long Beach.  Their joint action raised technical issues under the Shipping Act and that prompted an FMC complaint in court as well as the decision to start an FMC enforcement investigation.   (The environmental objectives of the  clean trucks program were not challenged.)   The decision to withdraw the complaint took place before Lidinsky’s arrival at the FMC.

The bid in court  proved unproductive.  I’ve not the training to judge the merits of the  complaint.   But I do know that the new chairman–a sharp fellow–knew what he was doing when he asked his staff what was their understanding of the environmental issues that color and confront maritime related activity in the United States today.

On learning the answer Lidinsky took action.  A Maritime Environmental Advisory Committee was formed.  Strictly an internal panel, the press release notes that the staff committee’s purpose is “consistent” with Obama administration policy for the development of “green jobs”, etc.  A reference to creating jobs is de rigueur for a government  press release these days, likewise an ethos statement on seeking “a more sustainable approach to maritime issues.”

On a more basic level, however, the new advisory committee would help the commissioners understand what is going on in the maritime realm and tune the agency’s work–its deliberations and services–to what is an undeniably changed environment–regardless of the party in power–in which business and government now has to operate.  And smartly so.   Pbea

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Obama Jobs Initiative: Meaning in Missing Words?

In Infrastructure, Ports on December 8, 2009 at 4:19 pm

This is what is in the president’s jobs proposal announced today with respect to infrastructure investment:

2. Investing in America’s Roads, Bridges and Infrastructure

Additional investment in highways, transit, rail, aviation and water. The President is calling for new investments in a wide range of infrastructure, designed to get out the door as quickly as possible while continuing a sustained effort at creating jobs and improving America’s productivity.

Support for merit-based infrastructure investment that leverages federal dollars. The Administration supports financing infrastructure investments in new ways, allowing projects to be selected on merit and leveraging money with a combination of grants and loans as was done through the Recovery Act’s TIGER program.

The second paragraph is a reference to the over-subscribed TIGER grant program for which a broad range of transportation projects are eligible and awardees will be announced no later than February.  The administration has shown an affinity for “merit-based” grants (as opposed to congressional earmarks and formula funding).   USDOT loves it because it puts the Secretary in the position to judge what projects are worth funding and to apply White House principles such as emission reduction.

With so little in the way of detail we might infer from the first paragraph that the Marine Transportation System may not be as much as part of the next jobs bill as it was in ARRA signed in February.  Does the Obama administration include port or marine transportation as eligible for job stimulus funding?  Especially for  the “out the door” quickly category?

Certainly connecting roads and rail are valuable elements of the MTS but when the president’s proposal for infrastructure funding uses the term “water” it may not mean maritime.  I think it means water and sewer infrastructure, which would appeal greatly to capital starved municipal governments but do little for marine highway and other MTS infrastructure needs.

Prior references by Congress and the administration to funding maritime related projects as part of ARRA used the word “port“ along with rail, highway and transit projects.  No mention of port or maritime in the White House statement or the president’s remarks at the Brookings Institution today.

That said, port/maritime projects were eligible for TIGER grants, which the White House appears to want to continue.  But almost by definition TIGER grant money doesn’t flow in a matter of couple months.  The first grant announcements won’t be made until close to a year after the funds were appropriated by Congress in February 2009.  Indeed, I’m told that White House officials said after the president’s remarks that some part of the infrastructure element of the s announcement today may not be intended to pour money into the system over the short term.

The White released an outline today.   The administration and Congress will put flesh on the bones and maybe once the House and Senate take up legislation early next year ports and  marine transportation, including capital needs for marine highway development, will be eligible.

For that to happen, the industry will have to make its case.     Pbea

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What Industry Knew and Congress Didn’t Want to Hear

In Security on December 4, 2009 at 1:18 am

A General Accountability Office (GAO) report and the testimony of the Secretary Janet Napolitano of the Department of Homeland Security were the centerpiece of a Senate hearing on transportation security two days ago.  The report covered several issues but one was of particular interest:  How well Customs and Border Protection is implementing a congressional mandate to scan 100 percent of US-bound containers.  According to GAO –

CBP has not developed a plan to scan 100 percent of U.S.-bound container cargo by 2012, but has a strategy to expand [Secure Freight Initiative] to select ports where it will mitigate the greatest risk of WMD entering the United States. CBP does not have a plan to scan cargo containers at all ports because, according to agency officials, challenges encountered thus far in implementing SFI indicate that doing so worldwide will be difficult to achieve.    ….   Recognizing that its strategy will not meet the requirement to scan all U.S.-bound cargo containers, DHS plans to issue a blanket extension to all foreign ports by July 2012 to be in compliance with the 9/11 Act.

Secretary Napolitano’s testimony spoke to the “challenges” in meeting the 100 percent mandate.  “Certain challenges are logistical….  there are multiple points of entry, and cargo is “transshipped”….  ports are not configured to put in place detection equipment….   limitations inherent in available technology….  the absence of technology [to] automatically detect suspicious anomalies within cargo containers….  x-ray systems have limited penetration capability….  currently unworkable without seriously hindering the flow of shipments or redesigning the ports themselves, which would require huge capital investment.

“While DHS is pursuing technological solutions to these problems, expanding screening with available technology would slow the flow of commerce and drive up costs to
consumers without bringing significant security benefits,” the Secretary said.

As Bob Edmonson of the Journal of Commerce reported,  Commerce, Science & Transportation Committee chair Jay Rockefeller (D-WV) acknowledged that, “I don’t think we have any choice.”  “I don’t want to do it, but it’s something that can’t realistically, and in some ways responsibly, be done — and in some cases does not need to be done.”

Most if not all of the challenges reported by Secretary Napolitano are pretty much what ports and the logistics community told the legislators back in 2006/2007.   But Democrats, mostly, prevailed in making the issue of 100 percent scanning of imported cargo second only to the DP World fiasco as the most familiar port issue in American households.

Either the wisdom that comes from the passing of time, or the change of administration, appears to be helping legislators comprehend what Napolitano’s Republican predecessor and the trade logistics community tried to explain back then.    Pbea

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California Trailblazing to a Miami Tunnel

In Intermodal, Ports, Surface Transportation Policy on November 17, 2009 at 11:04 pm

When earth was turned in 1997 for the Alameda Corridor project in the San Pedro Bay port region more than one kind of ground breaking was occurring.  The Port of Miami is a beneficiary.

In freight transportation policy circles the Alameda Corridor project one day may be legend.  The ports of Los Angeles and Long Beach were the gaping end of a freight funnel that emptied import boxes onto the exit rails and streets.  In essence the solution was to eliminate grade crossings by building a blow-grade rail way out of town.  A big project with a $2.4B price tag.  A key to the financing was Federal credit assistance.  The project and two others in California were the first to benefit by this innovation.  A paper on the FHWA website tells the story.

Due to Federal budgetary constraints, however, the grant was not deemed to be a fiscally or politically viable option. An alternative form of Federal support for this project was needed, and by 1997 the answer was clear: Federal credit enhancement in the form of a junior-lien loan to ACTA.

The fiscal year 1997 Omnibus Consolidated Appropriations Act (Public Law 104-208) provided $58.7 million for DOT to cover the capital reserve charges associated with making a direct loan of up to $400 million to ACTA for the Alameda Corridor Project. This represents an actual budgetary cost of 14.7 percent of the face value of credit assistance. The legislation also provided that the loan be repaid within 30 years from the date of project completion and that the interest rate on the loan not exceed the 30-year Treasury rate.

Inspired by the success of leveraging non-Federal investment for large infrastructure project, particularly private financing, Congress in 1998 fashioned a fully articulated TIFIA program.  It was adjusted in SAFETEA-LU with a lowered threshold to make more projects eligible.

Nearly $7 billion in projects in 13 states have benefited since TIFIA was created by Congress.  The Port of Miami’s rail freight tunnel had an uncertain future but with the October announcement the financing is in place and a $607 million construction project soon will be underway.  Not bad.   Pbea

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Ports on the Secretary’s To-Do List

In Federal Government, MTS Policy on November 8, 2009 at 11:49 pm

The DOT Secretary’s blog–Fast Lane–noted this past Thursday that “port managers have a difficult dual mission to fulfill-–providing the critical interface between water and surface transportation, while handling both commercial and military cargo.”  The prior day he met with the National Port Readiness Network, including some port representatives.

Secretary Ray LaHood acknowledged in his blog that that dual mission “is much easier said than done. “  “And I get that only the commercial side of their mission provides the ports compensation.”  He said “DOT wants to do all we can to help them meet these obligations.”

Back in March when Secretary LaHood addressed the spring meeting of the American Association of Port Authorities he was asked from the floor what the new administration was thinking in the way of a freight policy.  The cabinet member said his department had yet to give it attention, that implementation of the stimulus package was USDOT’s  immediate focus, and toward the end of the year he may convene stakeholders to start to develop a perspective on freight.

It sounds like he is ready to act on that idea.  In recent weeks he indicated to Kurt Nagle of the AAPA that USDOT will call port directors together for purposes that include an examination of freight issues.  The plan is to have a meeting–perhaps in New Orleans–this coming January.

He noted in this blog of November 5th two action items–a “port summit” and “a Presidential initiative to integrate planning” with DHS.

The former appears to be focused on the port authorities–the public agencies with port jurisdiction.  A government to government conversation makes sense.   But will the Secretary at some point also enlist the private sector side of the ports–the terminal and vessel operators–in a confab to examine freight issues?  And will this be the start of a concerted effort in the Secretary’s office to develop an overdue Federal freight policy?

The latter is a reference to a $15M item in the current year budget–also in the Senate version of the DOT appropriations bill.  “This will help develop and modernize the freight infrastructure that links coastal and inland ports to highway and rail networks,” LaHood said in the blog.  We’ll have to wait and see how that  intention will materialize in actual projects.  Earlier this year MARAD folks said that some or all of it may be applied to marine highway initiatives.

We’ll see how these two items on the Secretary’s to-do list develop.  In the mean time it’s good to know that Secretary LaHood wants to listen to the ports and focus some resources on the MTS.   Pbea

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Next WRDA a Policy Bill?

In Infrastructure, Water Resources on November 3, 2009 at 3:29 pm

WRDAlite2

WRDA (say “wurr-da”) sometimes is an elusive, even mythical, thing.  When it appears out of the Capitol Hill mist–like Brigadoon–it’s not with the reliable–albeit once-in-a-hundred years–clockwork of that fabled village.   It is usually defined as a biennial water resources authorization bill but it rarely takes such predictable, finished form as a president might come to expect on his desk every two years…assuming he wants it there.

Part of WRDA lore (and lure) is that it is tailor made for end-of-congress action on the eve of congressional elections.  Before returning home Members would wrap up the bill and their press releases touting what WRDA holds for their districts.  For, above all, a Water Resources Development Act is a projects bill.  Indeed part of the legend–not without  good reason–is that for WRDA to get through Congress it must be laden with projects.  No projects, no critical mass.  No critical mass, not enough aye votes.

WRDA 2007, the most recent version made law, was propelled in part by the huge Everglades project.  It was not without controversy but as an environmental restoration project the Everglades project gave the bill essential critical mass and acceptability among many in the environmental community which often is critical of project bills.

Legislators submit their wish lists.  Even many Members who disdain the practice of earmarking.  Port channels.  Beach replenishment.  Flood control.  Environmental projects…these ever more so.  They include wastewater treatment, water supply and the like.

The foundation of any WRDA is projects that move “through the pipeline,” much as the Everglades restoration project did.  They are subjected to Federal feasibility and environmental studies and then Secretarial and White House review.  An interminable process to some.  Projects exit the pipeline, usually, as recommendations for formal authorization,  WRDA being the next step in a civil works project’s journey through government.

When it comes to critical mass, it looks as if WRDA 2010 could end up WRDA Lite.  Fewer projects and lower cost.  So far only a couple of projects have emerged from the pipeline.  Some folks suggest we may have more of a WRDA policy bill than a projects bill.  That’s possible.

As one example, ports have wanted the law changed to secure the Harbor Maintenance Trust Fund.   Harbor Maintenance Tax revenues go into the general treasury and only around 60 percent of the proceeds actually are spent on channel maintenance.   There’s meat for a WRDA.

We will have to see whether there will be sufficient oomph of any sort to power this next WRDA.  We may get a clue later this month.  The House Water Resources & Environment Subcommittee will hold its first WRDA hearing  on November 18th. Pbea

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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

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