Marine Transportation System

Making a Last, Lasting Maritime Policy Impression

In Congress, Federal Government, Legislation, MTS Policy, Ports, Transportation Policy on September 21, 2016 at 11:37 am

An earlier version of this appeared in the Deep Water Notes newsletter of the Connecticut Maritime Coalition.

Summer is coming to a close. The same might be said of the Obama Administration and the 114th Congress, both timing out at or soon after the end of the year. And, as of this writing, the 2016 presidential campaign ends in under 50 days. All of which means we are entering a familiar, but critical period in governing.

It is decision time for all. They ask themselves — What can we get done in the time remaining? What will be the lasting impression and effect of this congress, this presidency, this election?

I won’t try to speculate on the last of those. Besides, nary a whisper has been heard on the stump about the port/maritime sector. (Surprised? Not at all.) Instead, here are some thoughts on two matters pending and percolating in the two branches of government.

National Maritime Transportation Strategy.    From the start, some people scoffed at the idea of preparing such a document. The Maritime Administrator was sincere when he started a public thought-process in January 2014. It was to culminate, a year later, in a document that might give direction to US activity and, in the process, highlight policy areas that could use attention and support from the maritime community and policy makers. Not surprising, there was plenty of skepticism, doubting that higher-ups in the department and in the White House would care when the draft came their way and they picked up their red pencils.

For that matter, some organizations in the maritime sector itself were less than enthusiastic about assembling a national strategy document for reasons that 1) they alone would have to explain, and 2) frustrated the stakeholder discussion and drafting efforts at MARAD.

It doesn’t help if members of your core constituency are afraid of what might result or are so jaded that they don’t want to bother.

Today, the still unpublished document is nearing the end of the draft process. That is a hopeful characterization for a paper that has spent the last ten months in “interagency review” garnering three hundred or so comments, to which MARAD is responding, and then to go through the wringer again for one last review. With around 20 agencies and departments having some interest – whether direct or remote — in ports and maritime transportation, one imagines 20 red pencils worn to the nub.

In gestation for over two years, having gone through wringers, reviews, and collecting dust in offices where US maritime policy is little considered, it is anyone’s guess as to the document’s ultimate value for the port/maritime sector. The most that we, and Administrator Paul “Chip” Jaenichen, can hope for is that the final draft will be released for comment before the Administration loses its license to operate.

Put any skepticism aside. It would be useful to have a “maritime strategy” document circulating among the transition teams and the policy planners and makers of the executive and legislative branches starting in 2017.

If anything it could spark attention to a subject area that has been easily ignored and misunderstood at higher levels of government for far longer than the last eight years. Officials and their staff could benefit by reading about the need for investing in ports, preparing the transportation system for the effects of larger ships, adapting to and adopting new technology, growing the domestic maritime service, preparing the next skilled workforce, and improving the port/maritime environment.

Those are consequential topics. That is what the document is about.

Water Resources Development Act of 2016 (WRDA 2016).   It is possible that Congress will complete action on a WRDA bill. The Senate last week passed its version (S.2848). On the other side of the Hill, Majority Leader Kevin McCarthy (R-CA) said the House version (H.R.5303) will have to wait until after the election when the legislators will reconvene for a lame duck session.

That is a disappointing delay for WRDA advocates but we can take some comfort in hearing both McCarthy and Speaker Paul Ryan (R-WI) mention WRDA 2016 as something to get done this year.  Still, with no more than a week of legislative days left before the election break, and facing an unspecific period for what can be an unpredictable lame duck session, most anything can get in the way of bill completion.

Committee leaders want to demonstrate that they can send a WRDA bill to the White House just two years after the 2014 act, and in the process provide some biennial predictability to authorizing water resource projects like navigation and flood control improvements.

The port/maritime sector has a lot at stake in this bill, which would authorize the Corps of Engineers to undertake Portsmouth, Charleston, Ft. Lauderdale, and Brownsville channel improvement projects. Those ports have been waiting for this key step to be taken by Congress. If the bill dies this year, it could be another two years before the next one.

The House and Senate versions of WRDA 2016 contain a large number of policy provisions that would improve a burdensome Corps’ civil works process, strengthen the leverage of ports in the study and implementation phases of Federal navigation projects, and, eventually, improve channel maintenance funding.

The last and most consequential of those is a provision in the House bill that would lead to full use of the Harbor Maintenance Trust Fund and its user-paid Harbor Maintenance Tax revenues. It would enable something like direct funding of the Corps for maintenance work. For reasons explained by arcane congressional budget rules, the legislation would make that change effective eleven years hence.

Would it be worth the wait?

Put it this way: Ports have waited since 1986, when the HMT and HMTF were created, for maintenance of navigation infrastructure to be funded at needed levels, and for the trust fund to be taken “off-budget” and protected from being used to balance against deficit spending in the larger Federal budget.

Yes, it would be worth the wait.   Pbea

Competing Agencies, Maybe. Not Ideas

In Competition, Data, Efficiency, Port Performance, Ports on August 31, 2016 at 10:53 am

The information revolution has dramatically altered the way companies manage their supply chains, and has spawned a variety of new inter-organizational logistics management approaches. … This inter-organizational form is a consequence of the fact that many partners who are adjacent on the supply chain can both gain from sharing information that was previously accessible to only one of them. [Introduction to “Sharing Logistics Information Across Organizations: Technology, Competition and Contracting“]

When the Commerce Department’s Advisory Committee on Supply Chain Competitiveness (ACSCC) next meets it will take up recommendations developed “in response to [Secretary Penny Pritzker’s] request for information on the maritime container cargo data elements that US shippers, supply chains, and other seaport users and stakeholders need to be able to have and to share in advance of vessel arrival in the US…”

The meeting announcement explained that the data is necessary to improve coordination and information-sharing among supply chain and port stakeholders with the idea of ensuring that the operational elements of the port-related supply chain function well i.e., with each other. The point being to make cargo move smartly and better, especially in major ports where any number of challenges have arisen in recent years. Such challenges include insufficient chassis supply and equipment management; large ships discharging ever more boxes on a single call; not enough equipment to handle the load; gate congestion; too many trucks at one time; too few drivers working off-peak; too few longshoremen when they are needed; too many boxes collecting free time at the terminal; too few Customs inspectors; technology failures…you name it.

The agenda for the September 7th meeting at Commerce — actually a conference call — will have the forty-some panelists reviewing, probably adopting, draft recommendations that will go to the Secretary. What Secretary Penny Pritzker will do with it remains to be seen.

Timely cargo data-sharing among the principal logistics stakeholders is referred to by some as improved transparency. It is what port stakeholder groups in New York/New Jersey, Los Angeles/Long Beach, Norfolk, Charleston, and maybe other ports have had as central to their collaboration objectives.

Information management plays a role in the intermodal transportation system and the shipping industry. Today, the compelling need to effectively manage supply chains has made the need for real-time information a key component of port logistics. [NY/NJ Port Performance Task Force report].

It may sound simple, but implementation of that notion is not. One year ago, as a follow-up to the bistate port’s stakeholder task force report, the Port Authority of New York & New Jersey launched the Terminal Information Portal System (TIPS). It was an important first step, giving real-time information on export booking and import container availability to BCOs, truckers and others. TIPS will eventually increase in its interactive functionality.

Getting there took a while. Years, really. Ports like the East Coast’s largest gateway have multiple, independently owned and operated container terminals and a supply chain with enough moving parts, self-interest and opinions to make finding common cause among stakeholders a discouraging quest. But progress is possible. Slow, but possible.

The Commerce Department’s advisory panel put “improving stakeholder communication and data sharing” at the top of its list of objectives and recommendations to the Secretary.

Ocean carriers…should provide data to gray chassis pool operators on a scheduled basis to allow the pool operators to plan capacity and usage… [Later in the document:] Port complexes and terminal operators should implement integrated scheduling programs and appointment systems at major terminals, in order to improve information and data sharing, forecasting, and cargo flow. [Recommendations to the Secretary]

It is fair to say that the principal driver of the ACSCC recommendations in January was the shipper community. The principal lobbying force seeking “transparency” in port performance data, and who ultimately succeeded with the enactment of the Port Performance Freight Statistics Program (see MTS Matters post), were the shippers. The influence of cargo interests has been seen in on Capitol Hill, at Commerce, and at the Federal Maritime Commission, where shipper and trucker concerns about port congestion led to a few years of regional port listening sessions, staff reports and, now, stakeholder collaborations such as those taking place in the ports, but at a national level.

One might explain — as I have on occasion, for good reason — that official Washington’s receptivity to the demand for data as a response to stalled exports and slowed imports during the 2014-2015 West Coast contract talks. But just as we could not miss noticing dozens of ships sitting at anchor off the Southern California coast, waiting for berth space, we cannot ignore the other fact that information-sharing and data usage are evermore common elements in how our economy, the logistics industry, and other aspects of society operate today.

Information-sharing and transparency are not just a matter of interest to the Commerce Department and its advisory panel. It also is what the Federal Maritime Commission is nurturing in its “Innovation Teams” effort, which is managed by Commissioner Rebecca Dye. The FMC invited volunteer panelists — many with an interest in the San Pedro Bay ports — to participate in three parallel teams. Looking for “actionable process innovation,” Dye asked them what would be most useful in addressing port-related supply chain congestion. Interestingly enough, all three, meeting separately, chose information-sharing as their focus.

At our May Supply Chain Innovation Teams launch, our teams quickly identified supply chain “visibility” as one of the most effective ways to increase supply chain reliability and effectiveness….  Most supply chain obstacles are created from poor information transmission, inaccurate information, or information unavailable at the right time…. To increase supply chain visibility and effectiveness, all three of our Innovation Teams agreed to pursue the development of a national supply chain information portal that could be adapted for use by any port in the country. [Commissioner Rebecca Dye]

The three FMC advisory teams continue to operate, albeit in private sessions. Those meetings started in early May and perhaps are nearing the time when they will report to the commissioners. Meanwhile, the Commerce Department advisors will meet on September 7, to review their draft recommendations on information-sharing. Two government entities awaiting recommendations from the subject experts. I am not the only person to think there is a bit of interagency competition going on.

Will we see very different approaches to information-sharing among port supply chain stakeholders? Probably not. One product will be a list of recommendations; the other, a somewhat developed model for web-based data sharing. Both groups of advisors include representation of cargo interests, ports and modal operators who have been giving thought to the issues for quite some time.

Even if Commerce and the FMC are in a sort of competition to highlight solutions, their panels of experts are not. In fact, there is commonality among the participants.

We can’t compare names of all involved. The FMC initiative has been annoyingly out of public sight but we do know that the innovation teams include marine terminal, trucking, cargo interests, and other stakeholders who are involved in the same kind of discussions at the local port level. Maybe all we also need to know is that the three FMC teams are being moderated by executives of the three most symptomatic American ports. And those same execs — New York/New Jersey’s Beth Rooney, Long Beach’s Jon Slangerup, and Los Angeles’ Eugene Seroka — also serve on the panel over at Commerce. Bases covered.   Pbea

Meeting of Agendas at the Metrics Meeting

In Federal Government, Labor, MTS Policy, Port Performance on July 20, 2016 at 2:11 pm

The Working Group that is to advise the Bureau of Transportation Statistics on port performance statistics metrics had a memorable first meeting. The panel consisting of Federal agency and stakeholder representatives — appointments that nearly comply with congressional direction — includes proponents and opponents of the notion that the Federal government should collect port performance data. They, and others who had stayed clear of the 2015 congressional debate that concluded with the creation of the Port Performance Freight Statistics Program, part of the surface transportation FAST Act, voiced their views, doubts and questions at the inaugural meeting.

Part of the day’s program was designed to get participants on the same page. While some of them may never agree on why or what data should be collected they could at least start working from a certain understanding as to terminology, what a port looks like, and how terminals operate. It was the task of consultants Daniel Hackett (Hackett Associates) and Dan Smith (Tioga Group) to provide tutorials. It was a lot to absorb. Especially for those at the table who spend little, if any, time in the maritime world.

The hour that Dan Smith spoke could have been doubled considering the volume and value of the information he shared on terminal configurations, the diversity of metrics used in ports, and other pertinent details. If anything, the Working Group members could start to appreciate the challenge presented by the congressional mandate that USDOT collect data employing uniform metrics in a sector where even the term “ton” comes in different forms and meanings. A hundred or so commercial ports, and many more marine terminals, operate in the US. Uniformity may be inevitable but it may take a while to get there.

Several people in the room — representatives for the railroads, a port, and organized labor — questioned why collecting port data was even necessary. John Gray of the American Association of Railroads started, matter of factly. “Just because Congress says go collect data doesn’t make it a good idea.” It was a view likely not shared by Senate staff in the room.

The shippers in the room — National Retail Federation, Lowe’s and Home Depot, at the table, and agriculture exporters in audience — represented the interest sector most responsible for the creation of the new port performance program. Advocates for an answer to what happened on the West Coast and for the industry and longshore labor to answer for it. The shippers who won seats at the WorkinHg Group table explained their need for transparency and reliability but seemed not to want to be the oft-heard advocates in the room.

Labor did.  The AFL-CIO, ILWU, and other union reps made clear their opposition to any data collection that oculd reflect on workforce performance.  Inevitably, it would be used by others during contract talks, they explained. (Of course, everyone at the bargaining table — unions and management alike — would already have every potentially useful statistic at their disposal.) Besides, they said, better infrastructure is where the need is, implying that port data are not useful in showing where inadequate infrastructure contributes to port congestion.

They reminded folks who knew the legislative history, and informed those who did not, of the original Senate legislation — the Port Performance Act. Inspired, as it was, by the slowed cargo on the West Coast during the 2014-2015 talks, and by appeals from the cargo interests, the bill’s authors wanted to mandate more frequent reporting of port performance data to Washington around the time of collective bargaining.

Labor representatives did not fail to note that a shippers coalition letter to Transportation Secretary Anthony Foxx, sent after the bill became law, urged the collection of monthly figures on container lifts, a key KPI on workforce productivity. Labor pointed to it as evidence that, even though provisions on specific metrics and collective bargaining did not make it into to law, the shippers were persisting in urging USDOT to secure data that could be used to create legal or political pressure against the workers’ interest.

The unions were aided in discouraging consideration of crane-related metrics when, later in the meeting, POLA’s Gene Seroka and others said crane lift data was of questionable value outside of the terminal itself. As if to put a period on the issue, Lowe’s Rick Gabrielson said he does not care about the reporting of crane hours. Capacity is the issue.

Over the course of the day persons questioned the rationale for nationally collected port data but no one questioned the value of metrics used in addressing port terminal problems at the local level. Former Lowe’s executive Mike Mabry, now chair of MARAD’s Marine Transportation System National Advisory Committee, was one to ask how data would be used. He discouraged BTS collecting data just to have data. “You can drown in input metrics,” he said. What’s important is to know how the data would be used and then tailor a decision on metrics to that.

Congress told BTS to collect data that would help capture US port “capacity and throughput.” Port of Houston’s Roger Guenther asked rhetorically, and doubtfully, if private marine terminals would want to say what is their capacity. Alternatively, he said that a crucial metric for determining how well a port or terminal is functioning is how adequately it is staffed by Customs officers. Insufficient numbers of CBP inspection personnel contribute to terminal congestion and slowed throughput. Others concurred.

At a July 7, hearing the Port of Baltimore’s David Espie told House subcommittee members of the problems presented by inadequate Federal security support in the form of aging radiation portal monitors in need of replacement, unknown maintenance records, and overworked Customs officers.”CBP is very strapped,” said Espie. Low-level personnel work long hours at the RPMs and are “bored,” suggesting a morale issue.

At the BTS meeting the BCOs reiterated their statement of record, that there is no interest in comparing one port to another but rather a port’s improvement (or not) overtime. The railroads’ John Gray, experienced in working with industry numbers, observed that the intended use of collected data notwithstanding, once data is published it will be used by persons incorrectly if they would find that useful.

If there was something on which all folks at the table could agree it might have been that statistics can be helpful in bringing more investment, including Federal grants, to port-related infrastructure. Noting that in recent years ports have become eligible for Federal grants MARAD’s Lauren Brand said collecting port data would be helpful to convince policy makers that capacity requirements and other infrastructure needs warrant greater Federal investment. BTS’s Rolf Schmitt admitted that his agency knows the capacity of the highway system but has no knowledge of the American port system’s capacity. He could have added that some of the Republican bill’s wording came from the Obama Administration’s proposed Grow America Act to —

…authorize a port performance statistics program within the Bureau of Transportation Statistics to provide nationally consistent statistics on capacity and throughput for all maritime ports to assess performance for freight transportation planning and investment analysis; and require advice from major stakeholders who collect and use port information.

The other unavoidable fact is that BTS is under the gun to implement what Congress wrought in law. Former Massport executive director, Anne Aylward, managed well as meeting moderator. She patiently urged participants to “find areas of commonality” and “work with what is in the law now.” She invited the Working Group members, and those who were not at the table, to send, by August 1, initial ideas as to suitable uniform metrics and how the data could be collected.

The Working Group is to issue a final report to BTS by the December 4, statutory deadline. The respected statistical agency is faced with a challenge and must make its first report to Congress a month later. There’s no time to waste.  Pbea