Marine Transportation System

Posts Tagged ‘rail’

LNG: Ports as a Catalyst?

In Energy/Environ, Green Transportation, MTS Policy, Ports on October 10, 2013 at 8:47 am

MTS Matters welcomes a well-known and regarded figure in D.C. transportation circles. John Graykowski, a Principal of Maritime Industry Consultants, served as Deputy Administrator of the Maritime Administration, and for two years as Acting Administrator, during the Clinton Administration. He is an attorney with experience in both private and public sectors. The subject of LNG-fueled transportation and how it might develop in the context of maritime policy and port communities has been a focus of his attention in recent years. This is the first of his contributions to this blog’s musings on port/maritime policy—present and future.

Over the past year, LNG as a marine fuel has gone from novel concept to an accepted alternative fuel here in the United States. Some LNG-capable vessels are operating and more will be under construction as appreciation is growing for the environmental, economic and energy security benefits offered by LNG. This transformation of a marine cargo commodity to emerging marine fuel in here and elsewhere might lead one to conclude that the broad deployment of LNG throughout the U.S. is underway and faces no challenges or constraints—but this is not the case. Lagging behind LNG-fueled vessel development here are the necessary market and regulatory structures that promote its widespread development.

The most common platitude in any discussion of LNG is the “chicken and egg” problem. Ship owners are loathe to make the large capital investment in LNG technologies absent certainty of supply.  Meanwhile gas suppliers are averse to spending $150 million or more on bunkering infrastructure without firm, long term purchase contracts by ship owners. This reflects the lack of historic relationships between the gas supply industry and marine operators, who purchase bunker fuel in virtually every port on a spot basis and never needed long term contracts.

Compounding that is a lack of understanding and knowledge about each other’s industries. Marine operators are not familiar with gas production, transportation and market dynamics and gas suppliers have little direct knowledge about the marine industry practices, requirements, and the like. Emblematic of the divide between the two industries is the simple fact that marine operators purchase fuel on the basis of metric tons or barrels of oil, while the gas industry sells LNG on the basis of million BTUs. Potentially complicating this market disconnect, are increasingly stringent accounting rules that likely require a long term LNG contract to be carried as a contingent liability, thus impairing a balance sheet and constraining future capital expenditures for a marine company.

Beyond these market issues are significant regulatory challenges related to both operational procedures for bunkering vessels and, more importantly, the siting, permitting and operation of small and medium sized LNG marine terminals. It may come as a surprise to some, but there are no existing uniform federal regulatory structures that apply specifically to LNG marine fueling terminals.

The United States Coast Guard (USCG) and Pipeline and Hazardous Materials Administration (PHMSA) each have regulations that apply to LNG fueling terminals. These regulations, however, were developed with large scale export and import facilities in mind and thus are largely inapplicable to a small marine fuel terminal and the fueling of other than LNG carriers. In many cases these regulations may conflict, which creates a large area of potential regulatory confusion and will most likely result in ad hoc development of LNG regulations. Adding to this uncertainty is the probable requirement that these facilities will be subject to local permitting actions, which can provide opponents of LNG the opportunity to intervene and delay the project.

Where do ports fit in this puzzle of a marketplace?

Ports can and should be a catalyst to spur LNG development throughout the transportation industries since they are at the center of marine activities in the United States. They provide a ready-made, multi-modal market for LNG expansion beyond large oceangoing vessels, which includes ferries and harbor craft, trucking, and rail operations. Port agencies may have some degree of jurisdiction, and even control, over property where LNG operations will occur. Depending on the port, it may have a role in the siting, permitting, financing, development, or even operations of an LNG fueling terminal. As a responsible economic development agency, a port can also play a critical role in the public education and promotion of LNG and the mitigation of local opposition to such projects.

Public port agencies generally understand this is a constructive role they are in a position to play. We are seeing that in isolated initiatives, notably on the West Coast, as well on an international scale with Antwerp leading a working group that includes the Ports of Los Angeles and Long Beach.

The expansion of LNG and compressed natural gas (CNG) as a replacement fuel in port related operations, already showing benefits, is also a powerful tool that ports can use to achieve significant emissions reductions and thus reduce the cost and impact of increasingly more stringent environmental regulations or measures to meet local community demands. If LNG is used to fuel vessels’ auxiliary generators while in port there may be no need to install costly shore power systems for cold ironing since equivalent emissions results could be obtained with LNG.

Collectively, ports can be in the forefront of a “Green” initiative, leading to the expansion of LNG as a transportation fuel throughout the nation. Individually, ports that facilitate LNG bunkering operations could find them to be a competitive factor in attracting and retaining liner business as those companies bring LNG-capable vessels on line to meet IMO global standards by 2020.

Much has been written of the significant impact that domestically produced natural gas and its liquefied form will have on our on our nation. Ports are where all surface modes of commercial transportation intersect and where LNG distribution will naturally occur. They are in a position to be influential in the development of national policies that promote and accommodate the broad deployment of LNG as a transportation fuel.
John E. Graykowski

 

The Murray-Cantwell Approach to Problem Solving

In Competition, Congress, Infrastructure, Intermodal, Water Resources on September 23, 2013 at 7:05 pm

This past week State of Washington Senators Patty Murray and Maria Cantwell introduced the Maritime Goods Movement Act of 2013 (S. 1905). Their inspiration for legislation came from what I have described as the unintended consequences of the Harbor Maintenance Tax, starting with complaints from the ports of Seattle and Tacoma that the Canadian competition to the north and the shippers, who are obliged to pay the Harbor Maintenance Tax when entering U.S. ports, were taking full advantage of the cost-differential where the HMT does not apply.

It is a complaint that was given some appearance of validity in a Federal Maritime Commission report issued last year and, a bit more convincingly, by data comparisons published by The Journal of Commerce last month.

At the request of the senators the FMC studied the role played by the HMT (0.125% of cargo value) in decisions to use the Vancouver and Prince Rupert gateways. The report, adopted by the FMC commissioners on a party line vote, didn’t make a strong case as to cause and effect. It did suggest that if an equivalent of the tax were applied in Canada “a portion of the U.S. cargo…likely would revert to using U.S. West Coast ports.” The report concluded by suggesting any remedy is in the hands of Congress not the regulatory agency.

The JOC looked at the issue by comparing market share within the PNW and among U.S. West Coast ports, where the HMT is uniformly applied. This is their finding in a nutshell:

Port data collected by The Journal of Commerce shows clearly that while Seattle and Tacoma have lost no market share relative to U.S. West Coast ports, their market share in the Pacific Northwest, a region that includes the Canadian ports of Vancouver and Prince Rupert, has slipped significantly in recent years.

That may not be conclusive of HMT culpability but it is indicative of competitive weakness just south of the 49th Parallel.  The comparative strength in British Columbia could be attributed to the HMT in addition to other factors, among them the efficient intermodal delivery system established as part of Canada’s ongoing Pacific Gateway Transportation Strategy.

Enter the Maritime Goods Movement Act User Fee proposed in the bill. The HMT would be repealed and then, for all practical purposes, recreated as the “MGMA User Fee.” In virtually every respect it would be like the HMT. The principal difference is that it also would be applied to U.S. bound cargo that first enters North America through Canada or Mexico.  Shippers would pay when the cargo crosses the land border.  On this bill rest the hopes of Puget Sound’s largest ports.

But the senators didn’t stop there. They also decided to try to fix the issue that is troubling most U.S. ports—the Harbor Maintenance Trust Fund. The bill would make several changes—including expanded uses of the HMTF such as are found in the Senate-passed WRDA (S. 601)—but let’s here focus on the greatest failing of the law as it now stands. That is the under-spending of HMTF funds.

Unlike the RAMP Act that would rely on a parliamentary mechanism to leverage full funding over the objections of appropriators, and unlike the WRDA bills of the Senate and House that set funding targets at which appropriators might aim, the MGMA bill uses a direct approach. At the bottom of page 10 is this: “[N]o fee may be collected…except to the extent that the expenditure of the fee [for allowable activities] is provided for in advance in an appropriations Act.” It is a rarely used means tying revenue collections to the spending of those revenues. The transaction would occur outside the section 302 allocations that cap appropriations committee spending. In doing so it would remove the incentive for appropriators to limit allocations and would treat the HMTF more like a dedicated trust fund.

This approach is employed in other areas of government where a user fee is collected to support a specific function of government. The only downside is that to meet the requirements of budget rules Congress also would have to identify offsetting revenue to fill the hole that would be created when, as a first step to creating the new MGMA User Fee, the HMT would be repealed, thereby eliminating 10 years of projected revenue.  Yes, it gets murky down deep in the budget process. But the result would be the very easily understood concept of “dollars in, dollars out,” as a Murray aide summarized.

Finding the offset, in the range of billions of dollars, presents a real challenge to the bill sponsors. There is a reason why other attempts at legislative solutions have produced little more than “sense of Congress” statements of principle and funding targets that are…well…just targets. The climb up this legislative Hill is very steep and the obstacles—including leadership objections and the search for offsetting revenue—have been daunting.

While we are noting the degree of incline ahead, let’s add to this particular bill the likelihood of complaints to the State Department from Mexico and Canada, who are major U.S. trading partners, and opposition from shippers and the railroads that carry their cargo into the U.S.

But that doesn’t mean it is the wrong solution to an HMTF problem that has existed since the early 1990s. It is the right one because it would be a more effective and lasting way to link the revenue to the reason for the revenue, which is to keep American harbor channels maintained and our ports competitive.  Pbea

The Late Senator Frank Lautenberg

In Congress, Environment, Federal Government, Leadership, MTS Policy, New York Harbor, Politics, Ports, Security, Surface Transportation Policy, Water Resources on June 9, 2013 at 11:53 pm

Frank_Lautenberg,_official_portrait

Senator Frank Lautenberg
1924 – 2013

Last Friday was a somber day of steady rain as New Jersey Senator Frank Lautenberg was buried at Arlington National Cemetery. News reports this past week cited how his passing was notable because he was the last sitting senator of the “greatest generation,” that chamber’s last veteran of World War II. His death came just months after Hawaii’s Senator Daniel Inouye, a wounded veteran of that war, took his resting place among the nation’s noted military and civilian leaders at Arlington.

(They also had a common  interest in the MTS—the marine transportation system. Inouye was a reliable and principal advocate for American shipping; Lautenberg for the landside elements—the ports and intermodal connections. Both were friends of labor.)

It need be said that Senator Lautenberg’s death on June 3, also is notable because it marked the passing of a champion of Federal policy to making communities healthier, the environment cleaner, and industry and travel safer and better. It was a personal agenda well suited to his home State of New Jersey but carried out with no less than the nation in mind.

In his 28 years as a senator he served on virtually every committee and subcommittee that touched on authorizing and funding transportation, civil works and environmental policy. For a period he chaired the Transportation Subcommittee on Appropriations while as a senior member of the Environment & Public Works Committee (EPW).  For a few years after the attack of September 2001 he also was on the Homeland Security & Governmental Affairs Committee. In recent years he chaired the Surface Transportation and Merchant Marine, Infrastructure, Safety and Security Subcommittee of the Senate Commerce, Science & Transportation Committee (CST). In recent years he served on EPW, CST and Appropriations, including the Corps funding subcommittee, concurrently.

As was evident in his committee work his approach to legislating was to cover all the bases, or at least as many as he could. He championed improving airports and the aviation system, expanding the use of transit and passenger rail, modernizing freight transportation, bringing American port infrastructure to world standards, and securing them all from the those who would do us harm.

He was appointed to the President’s Commission on Aviation Security and Terrorism after the tragic downing of Pan Am Flight 103 over Lockerbie, Scotland, and returned to the Senate, after a two-year hiatus, to help write and oversee anti-terrorism law after the downing of the World Trade Center towers. In those towers he had served on the Board of Commissioners of the Port Authority of New York & New Jersey before being elected senator in 1982. His time with the Port Authority–and his building the Automatic Data Processing Corporation (ADP) from scratch–were credits on his resume in which he took great pride and enjoyed telling people about if the occasion would allow.

Frank Lautenberg put much effort into environmental issues. He gave his attention to the recovery of old industrial wastelands through brownfields initiatives and Superfund legislation and to making the Toxic Substances Control Act more effective. He was protecting the coastline whether the recreation beaches or the nurturing marshlands. In his last year he walked the Jersey Shore in the wake of Superstorm Sandy, secured bi-partisan support for his toxic substances legislation and, from his wheel chair, cast his final vote in support of tighter gun legislation.

He was a tough fellow and could be an relentless advocate.  Just ask the trucking industry that couldn’t budge him from the centerline where he stood in the way of increasing truck size and weight limits year after year after year. Ask the FAA whose employees’ merit increases were at risk while their work was incomplete on the redesign of East Coast airspace in the Newark/LaGuardia/JFK market. Ask Norfolk Southern and CSX who found the Senator immovable on key issues pertaining to assuring competitive rail service for his home port when Conrail’s assets were on the block. Was he always the advocate that some of us wanted him to be? No, but then you rarely find a senator who is that agreeable.

From start-to-finish Senator Frank Lautenberg was an advocate for his New Jersey and his United States, which he strove to make  better by improving the quality of people’s lives and the means of commerce.    Pbea

(A version of this ran on The Ferguson Group blog.)

 
 

Our Friend and Partner, Mr. Truck

In Efficiency, Intermodal, Marine Highway, Surface Transportation Policy on May 12, 2010 at 12:16 am

Everyone who thinks there are too many rigs on the roads, raise your hand.  If today you used something that arrived on a truck, raise your other hand.

You can put both hands down.

Bill Graves, President of the ATA, has taken umbrage at some of the recent rhetoric in Washington.  Not much love is being heard.  Just “take trucks off the road.”

It must have hurt to read this sharpened lead in a recent Journal of Commerce cover story:  “The Obama administration is forming a national freight transportation policy that can be boiled down to one concept: Get more trucks off the roads.”

In his April 30, 2010 letter to Secretary Ray LaHood Mr. Graves points to USDOT’s favorable references to, and funding of, intermodal rail and marine highway as ways to “take trucks off the road.”  The Trucker-in-Chief disagrees.

Of course Secretary LaHood has good reason to point to rail and water.  We all know intermodal rail is more fuel efficient than moving packages downhill on a Soap Box Derby special.  (That’s the only image the RRs have yet to use in their non-stop ads.)  So much more efficient that environmental organizations have become the railroads’ best advocates here in town.

And barges can carry even more tonnage on a whiff of what is in a locomotive’s fuel tank.   Too bad far fewer people know it (although the barge industry is trying to do something about that).

There are great efficiencies to be realized in the rail and marine modes.  Moving some truck loads to rail and water routes can be both good business and policy.

But here’s a shocker.  Trucks aren’t going away.  Not unless you want to have to trek down to the docks to pick up your new flat screen.  Or to the farm to get your cabbage.

The “off the road” talk is shorthand.  Not the full story.  The policy talk doesn’t single out just trucks.  It’s just that one doesn’t hear politicos say “take cars off the road” nearly as much.  Yet that also is part of USDOT’s “livable community” message.

Under Secretary Roy Kienitz said in his March testimony about the TIGER-like National Infrastructure Investments program that it  “focuses funding on investments in whichever modes are most effective in achieving our national transportation goals…”

The policy talk is about making the most of each of the modes.  Using the modes where they are most efficient in moving the goods.  Where possible make the long haul on rail much as trucking increasingly is hopping the freight…much as trucks will become customers of freight ferries and other coastal services.  Maybe even become owners.

And notwithstanding some of the words used by short sea advocates, the marine highway effort is not about putting trucks and their drivers off the road and out of business.  It’s about giving trucking logistics another route to take and an opportunity to rationalize operations.

Bill Graves is right to complain about glib “off the road” talk.  There are better ways to describe the future role of trucks, water and rail in the national transportation system.   Pbea

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

Rail + Road + Water = Surface Freight System

In Efficiency, Intermodal, Surface Transportation Policy on December 1, 2009 at 1:32 pm

Federal Railroad Administration (FRA) released a study in November comparing truck and rail fuel efficiency.  It’s an update of a 1991 FRA report.

The new study identifies rail as more efficient.  No surprise there.

The report, Comparative Evaluation of Rail and Truck Fuel Efficiency on Competitive Corridors (November 19, 2009), should be useful to Secretary Ray LaHood in developing a new freight policy.  But he should not leave it at road and rail.  Marine transport–the wet surface transportation–should be in the mix.

The Secretary has spoken about the need to understand how marine transportation can be better integrated with the surface transportation system.  He has identified marine highway development–and the capacity it would bring to domestic freight transportation system–as an administration objective.

The MARAD-funded TTI modal comparison report is very helpful in understanding how barge transportation compares to rail and road.  Does that tell us all we need to know?  After all, there’s more to domestic marine freight movement than tugs and barges.  More to the point, there’s more in store for coastwise and inland services than what is on the water today.  How would the planned, new Ro-Ro and container vessels compare to rail and truck?   Policy makers need complete 3-mode data to make complete policy decisions.

The freight logistics industry has pointed to the lack of a national freight policy.  The Freight Stakeholders Coalition announced in May its suggested “platform” for a freight policy.  As the platform suggests the policy should “foster operational and environmental efficiencies in goods movement.”  The platform also calls for the establishment of a “multi-modal freight office” in the Office of the Secretary (OST) in the interest of advancing freight mobility.

A multi-modal view that is not hampered by an old view of how transportation works is what is called for today.  Greater fuel efficiency isn’t an ideological issue.  It’s very much an economic matter to business and a bi-partisan policy matter as we understand the country’s interest in energy security.  Likewise we see environmental issues–emissions, particularly–becoming more of a business and policy concern.

That’s why the developers of the GIFT model are attracting interest.   Dr. James Corbett of the University of Delaware and Dr. James Winebrake of the Rochester Institute of  Technology–with the support of USDOT, MARAD and others–are developing the Geospatial Intermodal Freight Transportation (GIFT) model.  GIFT enables the fuel and emission comparison of modes for specific freight routes.  In other words, logistics planners soon will have a tool that goes beyond the one-sided “carbon calculator” analysis available on some rail and marine transportation company websites.

Corbett and Winebrake add further value with their IF-TOLD Mitigation Framework that they describe as “A Context for Mode Shifting Discussions.”

Some good work is being done to provide more information for making modal decisions and enable the development of smarter freight policy.  With any luck the policy makers will determine what multi-modal information is available as well as what additional information is needed before deciding on a long overdue national freight policy and the successor to SAFETEA-LU.   Pbea

Vision Ingredients (Part 1)

In Federal Government, Leadership, Surface Transportation Policy on November 28, 2009 at 8:19 pm

Thinking of George H. W. Bush can conger up a few unfortunate (for him), lasting images. For me it’s the former president’s food judgments (pork rinds good/broccoli bad), his unfamiliarity with the price of  milk, and Dana Carvey’s exaggerated but dead-on impersonation.  Then there was, “oh, the vision thing.”  It sounded like he thought it a useless factor in governing–perhaps more so than he may have intended–but it stuck.

As a practical matter civil servants and political appointees often aren’t given the time to engage in “visioning”. Sometimes when it is done it can amount to little more than a facilitated exercise.  But what may seem like a luxury, or a waste, arguably is essential for a new administration and even newly sworn congressional leadership.

At USDOT some part of a vision is in place, though I don’t know how much is the result of planning or predisposition.

The two elements of an Obama transportation vision that I can identify are high speed passenger rail and livable communities.  The first is courtesy of President Obama himself.  In an out-of-the-blue moment earlier this year the White House said the economic stimulus package being written in Congress must include billions to start a high speed rail program.  (It was one of a few Obama “musts” in a measure that was mostly dismissed by Republicans as a “Pelosi” bill.)   The rail piece was the president’s vision, and an inspired one to be sure.

The second quickly became a regularly voiced theme by Secretary Ray LaHood and his policy staff.  It suits an administration that is oriented toward energy conservation, the urban environment and, not to be forgotten, the voting pedestrian/commuter.  Does it qualify as vision?  I think so.  It’s more than a policy view because a livable community objective could transform urban and town landscapes and it entails a broad range of policy solutions.

Meanwhile a more complete administration surface transportation policy is still in the cooker.  Congressional committees are wondering what and when policy recommendations for a successor to SAFETEA-LU will emerge from USDOT headquarters.  Perhaps no sooner than mid 2010.

Vision and policy are not synonymous.  One can have a new vision, and implementing policy, for passenger rail while maintaining a decades-old freight policy.  Somehow that doesn’t sound like this administration.

It’s one thing for the recent Bush administration and Secretary Mary Peters to articulate a scant administration view  about transportation that amounted to little more than less Federal government, more State responsibility, and greater private sector financing and management.  It made for a transportation policy only a Cato could appreciate.

But we might reasonably expect more from Messrs Obama and LaHood given the administration’s expansive environmental and energy view.  Transportation’s role in addressing those issues is significant and goes beyond putting passengers on trains and encouraging transit use and bicycling.

So here’s the question: What is the total vision that will steer administration action and guidance to congress over the next three, maybe seven, years?  Will it be more than passenger rail and livable communities?    Pbea

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

.

Putting an ! on Intermodal

In Intermodal, Marine Highway on November 6, 2009 at 6:39 pm

It’s been talked about for a while but the talking is over.  J.B. Hunt Transport Services did a major deal with Norfolk Southern Railway.  According to the Journal of Commerce (November 6, 2009):

Hunt said the accord “will further establish the parties as the leading providers of transcontinental and local intermodal service in the eastern half of the United States.”

***********

The new deal with NS, the trucker said, gives both partners “a platform to accelerate the conversion of traditional truck traffic to cost effective, environmentally friendly intermodal transportation with service that is competitive with truckload moves.”

It makes great sense (not that the folks at the two companies need affirmation from this quarter).  But if one thinks in total system terms, they are only making use of two-thirds of the surface system capability.  They are using only one-half of the available high capacity, high efficiency modes.

If the maritime stakeholders make the effort to fix Federal policy and put the U.S. Flag in fighting trim it’s only a matter of time before a Hunt or a Schneider–or, yes, a CSX–will do a deal with, or acquire, a “Blue Water Transport”.   The press release will tout…

“a new deal that gives partners a platform to accelerate the transition of traditional  land mode traffic to cost effective, environmentally friendly intermodal transportation with service that is competitive with coastal corridor moves along the congested interstate highway.”

It will be the starting shot.   Pbea

Will Ports Be Ready? (Part 2)

In Environment, Ports on September 15, 2009 at 5:14 pm

Will U.S. ports, especially those on the Atlantic and Gulf coasts, be ready to operate in the changing domestic and international commercial environment? With major shifts on the way the ports that adequately prepare will be the ones to maintain and gain market share.  The change in environment—at local, national and global levels—will be a constant factor not easily addressed.

Environmental Concerns
From 2002 to 2007 many ports found it necessary to have a proactive environmental policy to get community approval to operate and expand.  Most major ports experienced double digit volume increases that resulted in problems with surrounding communities over increasing road congestion, noxious air emissions, and safety concerns.  In the San Pedro Bay ports communities voiced their anger to local politicians and in short order port projects were put on hold.

With the collapse of global trade, the pressure subsided as the number of containers and trucks decreased.  However, all indications suggest that world trade will rebound and cargo volumes will double by 2040.  Community concerns and political problems will re-emerge as well.  Other environmental issues may also emerge to affect port business practices—consumption of non-renewable resources, bio-hazards, and concerns about species redistribution that may persist even with ballast water regulation.  A proactive policy may again be a necessity for certain major ports if their environmental performance is seen as problematic for their neighbors.

Green house gases (GHG) are probably going to be the biggest environmental game changer for businesses as climate change policy is put in place and businesses calculate the added expense.  The U.S. contributes 20 percent of the world’s emissions from burning fossil fuels; India contributes 4 percent.  Will there be a carbon tax or cap and trade policy established worldwide?  What will be the cost penalty for oceanborne cargo here or worldwide?  How fast will engine room and terminal equipment technology adapt?  Those questions await answers and clarification.

As climate change concerns and political acceptance addressing those concerns increase, the pressures to aggressively address GHG will be enormous.  (That is likely notwithstanding the relative environmental and energy per-ton/mile efficiency of the marine and rail elements of MTS related transportation.)  These issues will have even greater impacts on the cost of ports, particularly if dealt with retroactively.

Next: Consumer demand and the bottom line.

T. H. Wakeman

Follow

Get every new post delivered to your Inbox.