Marine Transportation System

Archive for January, 2012|Monthly archive page

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“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

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Time for a Maritime Title

In Intermodal, Marine Highway, MTS Policy, Surface Transportation Policy, Water Resources on January 30, 2012 at 1:16 am

In a few days we will see if there is a maritime title, or section, in what is traditionally the highway bill.  What’s that, you say?  You heard right.

Back in July 2011  House Transportation & Infrastructure Committee Chairman John Mica (R-FL) let us peek at the planned contents of the surface transportation bill that finally will get its debut in committee on February 2nd.

That summary, aptly named A New Direction, included a description of maritime transportation provisions, which would have as much symbolic as substantive significance for those of us working the water.  Including a few marine transportation provisions in the once-in-a-decade highway and transit legislation could prove to be a foot-in-the-door for more of the same when the next big surface bill comes along.  (Some of us impertinently suggest that marine transportation in fact is a surface mode…the wet one.)

But one can argue that the foot has been in the door for quite some time.  The passenger-oriented Ferry Boat Discretionary Program has been the lone marine transportation element in surface transportation policy and program since 1991 and the landmark ISTEA. Interestingly, the ferry program is managed by the Federal Highway Administration–a fact that some folks in the Maritime Administration probably still have difficulty acknowledging–because that is where the money is.

John Mica has for years talked about having a transportation “vision” that is intermodal, multimodal and makes greater use of the maritime.  The Chairman’s intentions revealed last year with regard to a maritime title included three basic objectives:

  • Ensure full use of the Harbor Maintenance Trust Fund resources; only 60 percent of annual revenues are appropriated for channel maintenance.
  • Encourage  more maritime related activity including “short-sea shipping” by exempting cargo from the Harbor Maintenance Tax when moving between US ports.
  • Improve Corps of Engineer civil works project delivery.

This week the committee will meet to produce the bill.  There may be a maritime title with some placeholders to be added later.  Here’s what we see in our crystal ball:

  • The Corps project piece is not expected to be in the bill.  Such typical WRDA subject matter may be held back more as a matter of legislative strategy than anything.
  • Jurisdiction over the particular legislative remedy for the HMTF issue–contained in HR 104–is shared with the House Rules Committee where there is opposition to the so-called RAMP approach.  Appropriators are fighting it as well.  If RAMP isn’t included in the bill it won’t be for lack of trying by many stakeholders in the port navigation sector who have encouraged over 150 legislators to co-sponsor.
  • Maybe the topic that has the best chance of getting in the new maritime title is the HMT exemption for non-bulk cargo. But because the subject is within the jurisdiction of the Ways and Means Committee Mica’s transportation panel is expected to defer to the tax committee on bill language (likely to look like HR 1533).  So keep an eye on the Ways and Means hearing to occur this Wednesday. The HMT and HMTF issues will be heard and when that committee later meets to take up the transportation bill’s tax-related provisions we may find the HMT provision added.  (The subject of the vessel tonnage tax also is to be brought up at the Wednesday hearing.)

It looks like a maritime title will have, at best, a couple provisions. But if by the time the surface transportation measure goes to the House floor its 1000 or so pages include a maritime title–maybe only a wet highway provision to go with the dry highway ones–we should take a minute to savor a small provision and an encouraging direction for transportation policy.  Pbea