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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

Holy Grail, PortMan!

In Congress, Efficiency, Federal Government, Infrastructure, Legislation, Ports, Water Resources on May 31, 2016 at 11:20 am

If you polled US port directors as to their major objectives in Washington, DC most would put at or near the top of their lists full funding, every year, from the Harbor Maintenance Trust Fund. They would say, if a dollar is collected through the Harbor Maintenance Tax in a given year, then a dollar should be spent on maintenance dredging in ports large and small. One of the other things many would want to see is predictable, biennial water resource bills (WRDA) — say “wurda” — to advance navigation projects.

Well, this is your day, Mr. and Ms. Port Director!

The House Water Resources Development Act of 2016 (H.R.5303) is the timely followup to the Water Resources Reform and Development Act of 2014 (P.L. 113-121), and a hopeful return to a two-year cycle. It also would make it possible for for ports to realize the long desired full-use of the HMTF and the Corps of Engineers harbor maintenance program to be funded directly — as in do-not-stop-at-the-Appropriations-Committee.

But before you start counting long needed dredging dollars…there’s a catch. (We are talking about the congressional budget process, aren’t we?)  Too good to be true?  No….but there is a caveat to this good news. Let’s give it a name….call it “Delayed Port Director Gratification.”

Here’s the story.

Peter DeFazio (D-OR), the ranking Democrat on the Transportation & Infrastructure Committee, made it a priority to include in the new WRDA bill a provision that would shift the spending of HMTF resources from being in the discretionary category and subject to appropriations to being mandatory. It would mean less constrained budgeting by the Office of Management & Budget and more funding for channel and anchorage maintenance. Overtime, the underwater infrastructure would be more fully maintained to design dimensions. Around five years ago the Corps of Engineers estimated that sustained annual funding of $1,500,000,000 would keep American harbors adequately maintained.

Today even those Federal channels in major ports are not kept at their originally constructed depths and widths. Small harbors often get the short end of the spending stick and the resulting deferred maintenance means a decreasing ability to accommodate commercial and sometimes even recreation vessels. A few years ago the Corps of Engineers reported that almost 30 percent of commercial vessel calls at US ports are constrained due to inadequate channel depths. (Note: Peter DeFazio also included a provision for the small, “emerging” harbors.)

Congress has come to understand that while Harbor Maintenance Trust Fund monies are authorized for spending only for certain port navigation and administrative purposes, the low level of appropriations has resulted in an accumulating, unobligated balance approaching $9,000,000,000. The HMTF has been a convenient pot used by budgeteers to make the Federal deficit look smaller, not to make port channels more efficient. To their credit, House and Senate appropriators have gradually increased O&M funding to the point where the FY 2017 funding bills include $1,300,000,000. Still hundreds of millions of dollars short of meeting the navigation needs in US ports and full use of HMT revenue.

Such mandatory or “direct” spending as the DeFazio provision would make possible could put the trust back in the trust fund…eventually.

When “eventually?”

Eleven years from now….and for good reason.

The Budget Enforcement Act of 1990 requires that if Federal revenue is reduced, or spending is increased, it must be offset by a savings elsewhere or by new revenue. This was given the Monopoly game sounding name of PAYGO. A budget “score” indicates a proposal’s projected cost and that analysis has a ten-year horizon. If Congress were inclined to provide an immediate change in the HMTF statute to dedicate the full collection of the Harbor Maintenance Tax each year to be spent fully on navigation dredging projects each year the House and Senate would have to come up with ten years of replacement revenue for the Treasury.

However, if a change in revenue, such as the fencing of HMT receipts so they no longer would be blended with other Federal tax revenue, would become effective eleven years from now, that proposed change in the law would not require an offset under PAYGO. The House WRDA 2016 bill says it sweetly and simply:

Section 108(a). … [T]here shall be available to the Secretary [of the Army, who heads the Corps of Engineers], out of the Harbor Maintenance Trust Fund, without further appropriation, for fiscal year 2027 and each fiscal year thereafter, such sums as may be necessary…”

The need for an offset is what has discouraged committee action to fix the HMTF in the past. Bill sponsors have largely left unspecified how to cover that multi-billion dollar cost…as a detail to be addressed at another time.

Washington Senators Patty Murray and Maria Cantwell, both Democrats, introduced the Harbor Maintenance Trust Fund Reform Act (S.2729) last March. Their bill takes the immediate gratification route, both to address the “full use” issue and to address complaints among some of the large ports that have benefited little by current law.

The senators’ Seattle and Tacoma ports require little harbor maintenance funding and much the same is true in the San Pedro Bay ports of Long Beach and Los Angeles. S.2729 would redirect some trust fund resources to certain needs in those ports.

I will go into the Murray-Cantwell bill in greater detail in another post. Suffice it to say that by not waiting patiently for eleven years to roll around the bill likely would require an offset of 10 x $1,600,000,000, to use current year revenue as an example. The odds against finding consensus in Congress on how to raise/save $16,000,000,000 is enough to eventually discourage most any optimistic lawmaker.

The provision in the recently adopted WRDA 2016 bill is credited to Peter DeFazio, who has the support and cooperation of Committee Chairman Bill Shuster (R-PA), but a little history is worth noting. The objective of direct or mandatory spending from the HMTF and other infrastructure trust funds was an objective of this committee back when Bill Shuster’s late father, Bud Shuster (R-PA), was chairman of the committee and introduced the Truth in Budgeting Act.

What are the chances of the provision staying in the bill and becoming law? It’s hard to say. Even the delayed gratification strategy will run up against opposition in Congress and the Executive Branch. I expect it will hear objections from the Appropriations and Budget Committees. The former would likely would lose jurisdiction and the latter just doesn’t like mandatory spending even if it is secured by a dedicated tax or user fee. The White House Office of Management & Budget thinks similarly. Long considered the fiscal and policy nemesis of the civil works program, OMB will have a hard time dealing with the idea of the Corps getting its hands on more money. (Legislative Trivia: the House Budget Committee that in a separate report made its arguments against Bud Shuster’s Truth in Budgeting bill was chaired by John Kasich (R-OH)).

To be clear, there are legitimate arguments to be made against making spending from the HMTF mandatory, but if one is looking for a solution to the long-standing problem of under investment in the maintenance of the nation’s navigation system one finds no other practical options.

Okay, so the DeFazio provision will encounter opposition, perhaps debilitating opposition, in the next months. For the moment let’s focus on who will like the policy change represented by the DeFazio provision. Those are the port directors. Also port authority commissioners, maybe some elected municipal officials, governors, and of course, the industries and other stakeholders who depend on reliable harbor maintenance. They will have to make themselves heard on the issue if it has a chance of staying in the bill.

And if it succeeds in becoming law, they will just have to wait until 2027, knowing that the wait will be worth it.  Pbea

Measuring Port Performance

In Efficiency, Federal Government, Legislation, MTS Policy, Port Performance, Ports, Transportation Policy on January 26, 2016 at 4:35 pm

The issue of measuring port performance was a contentious one over the last half of 2015. Now that there is such as thing in law as the Port Performance Freight Statistics Program the action has shifted to what to do about it. USDOT — really the Bureau of Transportation Statistics — is tasked with implementing the new law that requires the collection of data to express throughput and capacity in ports. BTS is expected to anonymize the competitively sensitive data for public consumption and report annually to Congress.

Implementation will prove no less a contentious matter, at least among the interests who were most active as the bill was being debated and now hope to inform BTS decisions. Nor does it promise to be a simple task for the agency.

Helpful to BTS is that some of the original bill requirements as to specific metrics and stepped up data collection during collective bargaining was left on the legislative cutting room floor. (The Port Performance Act, S.1298, as reported from committee listed eight metrics that must be used — such as average container lifts per hour and average cargo dwell time — and then added another five data types to be reported monthly to Congress around the time of port labor contract negotiations.)

The final version frees BTS to assemble a program that, perhaps, a transportation statistical agency might consider valid for assessing both port condition and performance, both being information that the department wants to have on the total freight system. Port related metrics are a segment of supply chain data that BTS previously said it lacked.

Not so helpful to BTS is that the mandate to build a new program was not accompanied by money to pay for the effort. Indeed, the agency’s authorized annual budget limit for the next five years is $26 million as set by Congress in the FAST Act. That is less than the agency has been given in past year appropriations and less than the $29 million requested by the Administration. (The American Statistical Association provides this perspective: “$26 million is the same level of the BTS budget in FY05, which means BTS will see a 30% decline in purchasing power from FY05 to FY20 due to inflation.”)

The port performance program is not a simple matter to stand up. That was made patently clear recently when BTS held a session on the subject at the TRB Annual Meeting. The agency took advantage of the fact that Washington was temporarily populated with scads of transportation economists, planners, engineers, industry representatives, consultants and other data hounds. At this session labeled “Port Data Users Forum” Rolf Schmitt, Deputy Director of BTS, sat on the dais making notes on his laptop as he heard a variety of comments and issues from persons at the standing mic. Specific questions were posed to get responses from the 70 or so folk in the room.

  1. What are the different port types from which data would need to be drawn?
  2. How could they be ranked (given that the law calls for data from the top 25 ports as measured by TEUs, tonnage and dry bulk cargo but ranking would not be a simple as that might seem)?
  3. What are some widely accepted and used types of port statistics?
  4. What is the best way to measure performance to determine efficiency and productivity?

Dan Smith of The Tioga Group that has studied terminal productivity, Bruce Lambert of the Institute for Trade and Transportation Studies, Anne Aylward of USDOT’s Volpe Center and former Boston port  director, Paul Bingham of the Economic Development Research Group, and Anne Kappel of the World Shipping Council were among the knowledgeable persons who offered suggestions and cautions. The comments collected gave Schmitt plenty to chew on.

The folks at BTS were given some formal help by Congress. The new PPFSP (it being Washington we have to mine initials to mysteriously label programs) includes the formation of a temporary “working group” of Federal agency, stakeholder and other sector representatives to assist BTS in determining what metrics to use in data collection and how to go about getting the data. Those stakeholders and some other likely working group members were among the persons (I among them) who lobbied and competed for preferred legislative language. One might expect those opposing views to surface again in some form during the working group discussions.

In his opening comments Rolf Schmitt noted that while the legislation uses the “working group” phraseology — perhaps an attempt by bill writers to avoid mandating formation of a formal advisory committee under the Federal Advisory Committee Act — it will be a Federal Advisory Committee in every sense of the word. That means a formal process starting with a notice in the Federal Register, the writing of a charter, and a host of other administrative requirements. A rulemaking process also is necessary to complete the task of establishing the data collection program. Schmitt noted that Federal law says that agencies such as his must minimize the burden put on those affected by such rules. Always good to know.

There was no lengthy list of suggested metrics offered that evening by those at the microphone in response to the question that held the most interest. Cargo dwell time and rail turn times were mentioned and indicated as among data that the marine terminal would keep. Since many terminals are privately operated, port authorities are not in possession of that data and, as one person noted, that is especially true in ports where private terminals are not tenants of a port authority.

Truck turn times were also mentioned but, as another person noted, collecting turn times that include waiting outside the gate will require capital investments in measuring equipment. The Port of Oakland is experimenting with Bluetooth technology. On the previous day Reade Kidd, Home Depot’s Director of International Logistics, offered the opinion of probably most cargo interests that metrics should reflect berth, rail, yard and gate operations.

When the hour was up, Rolf Schmitt left the convention center, no doubt thinking he had more questions and problems to solve on leaving than when he arrived.  Pbea

Stormy Washington

In Congress, Federal Government, Politics, Washington, DC on January 21, 2016 at 12:35 am

Folks here are talking about actual weather, not metaphorical meteorology of the sort that can be a useful device when writing about Official Washington rhetoric and policy e.g., windy, hot air, foggy, drought…not to mention the occasional political lightning.

No, this is the lots-of-wet-snow kind.  Ninety percent chance of a few inches. Fifty percent chance of 12 inches. Maybe even a couple feet. “Colossal storm to unload a foot of snow from DC to Philadelphia, NYC” is the Washington Post weather page headline, that hours later could be modified in either direction depending on which predictive model is finding favor. I may wake up tomorrow to find the weekend storm will be Very Colossal or just Sorta Big. The fearful watch for snow passes for excitement in this Mid-Atlantic town. (What do you mean you’re out of snowblowers? You’re Home Depot, for godsakes!)

The snow starts here during the morning commute on Friday. The Nation’s Capital doesn’t manage heavy snow very well. We’re taking odds on the government sending people home even before they get to work. Get ready to hear spinning tire much of the day and night hours, and see sidewalks whose residents wouldn’t think of getting ankle deep in the wet stuff to shovel when the sun will eventually do it for you. (Wanna bet when the District’s downtown streets finally get plowed?)  Ah! Winter in Washington!

Then there is the financial storm front, forecast as likely to be of historic dimensions, that has been battering that other center of American power — Wall Street. Instead of snowfalls the headline is “Dow Falls.” The price of oil is sending economic shock waves through new and old producing states and here as well. Speculation has begun that the Federal Reserve will eventually be drawn back into a resumption of quantitative easing policy or some other response that confirms an economy in reverse gear. (You see! Obama is making things worse for American producers by lifting sanctions on Iranian oil.) The multiple committee oversight hearings are inevitable…for starters.

Let’s not leave out that other major disturbance now forming in the early primary states. Talking heads and party leaders are acknowledging the growing odds that political disruptors can win the party nominations. If it’s not Trump it’s Cruz. And what does that mean for the other Republicans on the ticket? Will Democrats regain the majority? Panic is setting in. (Jeb!)

Claire McCaskill (D-MO) resorted to using a “hammer and sickle” reference when talking about Bernie Sanders’s (I-VT) as he grows stronger against her candidate, Hillary Clinton…who sent her daughter out to make specious claims against Sanders and worked the other end of the spectrum by suggesting that the Brooklyn-born Sanders is reliably doing NRA’s bidding. (Did she actually say that!) The patently silly talking point — to which Sanders responded by proudly pointing to his D- grade on the NRA report card — put quizzical faces on half the bronzes in Statuary Hall.

Then there is Donald Trump who yesterday said that there could be a place in his administration for Sarah Palin.

Washington is on its way to becoming a psychological mess.  Pbea

Politicians and the Pope

In Congress, Federal Government, Leadership, Politics on September 22, 2015 at 9:08 am

Occasionally I stray from strictly MTS matters. An historic appearance by the Bishop of Rome before a joint session of Congress–Mons Vaticanus to Capitol Hill–is as good an excuse as any to stray.

Today Pope Francis arrives in Washington. The advance logistics resemble those for presidential inaugurations. Security and transportation implications (“get ready for some epic traffic jams!”), with visitors in the hundreds of thousands predicted, are such that I and many others will be somewhere other than in the District of Columbia for the remainder of the week. Roll Call reports (“Members Will Be Blocked 2 Ways From Touching Pope Francis”) that “[O]ver-the-top precautions are a reflection of the unique protocol, security and political concerns attendant to the first papal address to a joint meeting of Congress. It has come to resemble a state visit, State of the Union address and presidential inaugural rolled into one.” The U.S. Office of Personnel Management has reassured us that the “Federal Government in the Washington, DC, area will remain ‘OPEN’ during these 3 days” but “to help alleviate traffic congestion and minimize distraction to law enforcement and security officials, agencies are urged to permit employees to use their workplace flexibility options,” such as teleworking.

The pope’s deep footprints will be left all around town — on the Hill, at the White House, in the NW sector where he will reside, and in places of worship for the faithful and of shelter for the homeless. Whether you are an observant Roman Catholic or not, Pope Francis’s visit here will be something to see, if only on the screen at home. How will this significant and inspiring religious figure affect the significant and sometimes uninspiring (and secular, politically speaking) elite of this town? The political press have an opinion, of course.

“Republicans want to use Pope Francis’s visit to Congress this week…to highlight their opposition to abortion rights. Democrats…hope the pope will lend new momentum to their efforts to address climate change, reform immigration law and win public approval for a nuclear deal with Iran. Papal experts say Francis’s address to a joint session of Congress Thursday [likely will be] more of a headache for Republicans.”

Yes, the GOP leadership’s focus on Planned Parenthood funding neatly coincides with his visit but the pope, whose schedule includes spending time with the have-not population in this town, also will be associated by the Dems with their present push to ease the 2011 budget caps on non-defense spending including programs to help the disadvantaged.

Pope Francis, who said in 2013 that “a good Catholic meddles in politics,” also issued an encyclical about man’s contribution to global warming, endorsed the Iran nuclear deal, and announced that Cuba would be his last stop before the US — all since Speaker John Boehner (R-OH), a Catholic, made the invitation to address Congress.

Ultimately, Washington is the nation’s political capital and so among the many thousands of the faithful who are expected to be here this week will be The Politician. We will see both parties’ selective scoring of the pope’s visit and we will watch Capitol Hill — and the president — make whatever they want out of the historic visit. Some assessments are already being heard and, judging by the reports, Republicans are especially quotable.

“I think we know the pope’s views on [abortion] and he’s right in that instance,” said Senate Majority Whip John Cornyn (R-TX).

“I just think the pope was wrong,” said NJ Governor Chris Christie with reference to the pope’s views on US and Cuba relations. “The fact is that his infallibility is on religious matters, not on political ones.”

“When the pope chooses to act and talk like a leftist politician [with respect to climate change], then he can expect to be treated like one,” wrote Paul Gosar (R-AZ), who said he will boycott the address.

“The pope has become a political football,” as The Hill reports, but, as we have seen in the last few years, and may see this week, Francis is quite the political athlete himself.   [Above unlinked quotes from The Hill]   Pbea

Ports Then, Ports Now

In Congress, Federal Government, Infrastructure, Ports, Surface Transportation Policy on May 4, 2015 at 10:08 pm

Not all that long ago U.S. ports—principally through the public port authorities—were minor and largely absent players in the Federal transportation policy discussion. Port authorities and marine terminals engaged attorneys who tended to the infrequent channel project and to regulatory matters before Federal commissions. Seaports were (and still are) creatures of states and municipal level government. There was no Federal funding to speak of. Ports were assisted in the form of navigation channels constructed and maintained by the U.S. Army Corps of Engineers through the Civil Works program—a program in the control of legislators, who reserved the authority to approve projects, and engineers, who were told to implement the projects. Even in the case of port channels the appropriated sums did not go to port authorities but were cycled within the Federal government and to its contractors.

Back then U.S. maritime related policy was tightly focused on promoting U.S. flag shipping, American shipyards and American crews. Ports were in a policy no-man’s-land between the water and land modes. In its early years the U.S. Department of Transportation had maritime jurisdiction through the U.S. Coast Guard. USDOT was all about building the interstate highway system and tending to railroads, aviation and mass transit. It was not until 1981 when the Maritime Administration moved into USDOT after 31 years in the Commerce Department. Even then the agency continued to be concerned with vessels, not ports and harbors.

By 1980 only a handful of ports had need for Washington representation focused on Capitol Hill and transportation programs and policy, beyond that provided by the American Association of Port Authorities (AAPA).

The 1980s were a time of change. Transportation regulation was giving way to forms of deregulation. By the close of 1978 we saw deregulation take hold; railroad, motor carrier and aviation policies were being reshaped. At times ports were very interested stakeholders as Congress ushered in deregulation. If anything, they wanted to be assured of sufficient rail service, preferably the competitive kind. The Shipping Act of 1984 took the maritime sector a few steps toward deregulation, with some implications for harbors, but greater reforms had to wait until the Ocean Shipping Act of 1998.

It was not until the mid-eighties that ports entered the center ring of Washington policy deliberation. Most of the Carter and Reagan years constituted a legislative dry spell for water resource bills. Ready plans for navigation improvements and proposed feasibility studies awaited action. “User fee” had a certain cachet in the Reagan years. The message to Congress was clear: in return for the president’s willingness to sign a projects bill some reforms would be required and Federal project costs would be offset. Local project sponsors would have to share the cost of improving channel projects. Port users would have to cover a substantial portion of Federal channel maintenance costs. Defining who was to pay, and how much, divided ports into two opposing coalitions. It was not a lasting split but it highlighted differences among the harbors, their physical characteristics, their cargo volume, and their cargo kind.

The resulting Water Resources Development Act of 1986 was landmark legislation that reset navigation and other water resources policy. It also triggered an awareness on the part of ports to be present and active in Washington, both through individual representation and associations.

In the 1990s the Department of Transportation developed an interest in the port sector and the condition of water and land access routes to marine terminals. The department’s jurisdiction did not include the system of channels–and the Corps of Engineers jealously guarded that historic jurisdiction–but it rightly saw the importance of efficient access to the port facilities regardless of the mode taken. Moreover, port and other freight interest groups collaborated in calling on policy makers to give their attention to freight mobility.

In 1991 Congress enacted surface transportation legislation–its prior iterations known simply as “the highway bill”–and in doing so finally adopted intermodalism as a desirable direction for policy. The Intermodal Surface Transportation Efficiency Act of 1991 did not create an avenue for Federal aid for port facilities but it did hint at a line that would be crossed years later, when Federal dollars helped make improvements inside the terminal gates. The ISTEA sausage-making experience inspired trade groups to form the Freight Stakeholders Coalition. In the twenty-five 25 years that followed the coalition celebrated some successes and today is still at work looking to strengthen Federal freight infrastructure policy.

One of the first intermodal efforts by USDOT, in conjunction with the National Academy of Sciences’ Transportation Research Board, was to examine the state of access to ports by the land modes. TRB’s 1993 report, Landside Access to U.S. Ports was followed the next year when the ISTEA-created National Commission on Intermodal Transportation published its report, Toward a National Intermodal Transportation System. The case was being made with evidence mounting. In 2000, the results of another congressional mandated study was reported by USDOT on National Highway System Intermodal Connectors. Freight infrastructure as it led to and departed from marine terminal areas was in poor condition. Actually doing something about it had to wait a while longer for SAFETEA-LU (2005) and MAP-21 (2012).

One other marker along the policy path deserves mentioning. In 1997 Transportation Secretary Rodney Slater initiated a look into what he referred to as the “marine transportation system,” which by definition is port-centered and extends beyond the terminal gate to include the access modes and intermodal operations. USDOT convened stakeholder sessions in port cities and then a national conference on the MTS. The resulting 1999 report–An Assessment of the U.S. Marine Transportation Systemincluded recommendations, among them the facilitation of landside access to ports and the formation of an interagency Committee on the Marine Transportation System and a stakeholder Marine Transportation System National Advisory Council. Those and certain other recommendations were implemented and have contributed to improvements in both freight operations and the port policy discussion.

In September 2001 the rationale for port security measures was instantly revised, making it so much more than a matter of smuggling and cargo theft. Securing both the ports and vessels took on an urgency that made for a sharp learning curve for government and private sector alike. A ship entering a port represented a new vulnerability for the U.S. For a start, Congress produced the Maritime Transportation Security Act of 2002. The Coast Guard was given new responsibility, multi-stakeholder port security committees were formed, and facility plans were required. Fences and cameras went up where there had been none. The Transportation Worker Identification Credential (TWIC) was created for the maritime sector. The Port Security Grants Program was created and before long it was funded annually at $400 million, the dollar level being a particular success of the ports’ American Association of Port Authorities.

Then, in 2009, the severe recession prompted the new administration and Congress to formulate an economic stimulus package that included a $1.5 billion dollar competitive grant program for “shovel ready“ construction projects. What came to be called TIGER grants were awarded not just for the usual road and transit systems but also to ports and heavy rail. Freight related projects snared a third of the grants to the surprise of everyone including the folks at USDOT who realized that freight investments could be evaluated in cost/benefit terms more readily than Biden in Charlestonthe usual stretch of highway or transit rail. To date, TIGER grants have gone to 24 port projects in 16 states for a total of over $344 million in Federal funds alone.

Today the Federal government takes great interest in ports. They are seen as vital gateways for U.S. exports and critical modal connectors that when not functioning well can diminish American competitiveness. They are potentially vulnerable to terrorist attacks and are bell-weathers for our economic well-being. And they make impressive backdrops for politicians.

In 1985 I convened a meeting of a few port lobbyists to talk about shared issues. Thirty years later, a considerably larger Washington Port Reps group continues to meet and discuss a much larger issue agenda.  Pbea

(Thank you, Lillian Borrone and Jean Godwin, for your memory-jogging assistance.)

Bottom Line Thoughts on the MTS

In Congress, Federal Government, Infrastructure, Marine Highway, MTS Policy, Ports on September 17, 2013 at 11:30 pm

AASHTO, the association of State DOT chiefs, issued this summer the last of its “bottom line” modal reports. This one–Waterborne Freight Transportation–is a useful addition to the studies and papers that indicate a marine transportation system in great need of policy attention. It is not that the MTS is in failing condition–certainly not that part engaged in international commerce–but “the very success of the MTS has masked serious underlying structural problems” that, if left unaddressed, “pose critical threats to the long-term health of the MTS and the nation as a whole.”

The report notes that unlike the American interstate highway system the MTS “has evolved without larger scale coordinated policy and planning.” Indeed the ports and related infrastructure and services that developed without a “master plan” make the MTS a “collection of competitors.”  Persons who follow action in the ports of Charleston and Savannah, both overseen by State port authorities and championed by their respective State legislatures, can be fascinated watching that competition in real time.

The AASHTO report, the focus of which lands principally on the MTS infrastructure, identifies areas requiring attention. Waterway maintenance needs are not being met, navigation projects often take far too long to accomplish, funding for MTS expansion needs is uncertain, national investments are not being effectively targeted to meet national needs, and responsibility for the MTS in official Washington is widely diffused.  That last item can be easily understood by looking at the “comprehensive matrix” spreadsheet on the CMTS website.

In a statement that could apply to maritime elements of the private sector as much as it most definitely does to government policy, the AASHTO report offers this bottom line thought: “Embracing business as usual will inevitably lead to significant further declines in MTS condition and performance, and to lost opportunities for our transportation system and economy.” Today, former Pennsylvania Governor Ed Rendell, the nation’s inconvenient truth teller on matters infrastructure, and National Association of Manufacturers CEO Jay Timmons used the Philadelphia port as a backdrop for a similar message that is bolstered by a survey of manufacturers. “Improving our ports, highways, and bridges is essentially an economic driver. Modernized ports and transportation systems enable American manufacturers and businesses to export their goods to countries around the world, which strengthens our economy here at home,” said Rendell.

Much of that message in Philly and the AASHTO report is centered on international commerce, understandably. Ports and their modal connectors enable U.S. exports to make it to other markets in competitive fashion. They also speed imported goods to Costco shelves and components to American assembly plants.

One had to look for it, but the AASHTO “bottom line” document also makes the suggestion, however briefly, that the MTS can play an increasingly important role stateside. With reference to the potential for Marine Highway freight transport the document notes that “with growing highway congestion, waterborne transportation becomes an even more attractive transportation alternative.” It concludes with the statement that “[w]aterborne trade and transportation will be cornerstones of the 21st century economy.”

Among the actions called for in the report is the establishment of an office of multimodal freight at USDOT, an oft-made recommendation by various stakeholders and in the reports of appointed and self-appointed commissions. Among the tasks of the office would be to create a “system map and classification of MTS facilities, analogous to the National Highway System and the National Freight Network.” Congress specified in MAP-21 that the designated NFN be highway only, a decision that reflects more the congressional committee jurisdictions and the “highway bill” tradition than it does the multimodal operating freight sector. (A recently introduced House bill, H.R. 2875, grandly named the “Waterfront of Tomorrow Act,” would amend MAP-21 to “ensure that ports and harbors are incorporated into the national freight network.”)

The recommended freight office would also be used to prepare a “long-range vision plan for the national MTS development and investment to meet national transportation and economic development objectives.” The report also calls for full utilization of Harbor Maintenance Trust Fund monies for navigation infrastructure maintenance as well as an exemption from the Harbor Maintenance Tax for “domestic Marine Highway services.”

These recommendations are pointed in a constructive direction. But there is a missing element in the report. More significantly, it also is missing from the national transportation policy discussion on Capitol Hill, in those many departments and agencies tagged on the CMTS spreadsheet, and in the White House, then and now.  What is missing is visible interest in what the national maritime policy need be. The weakest element of the multifaceted American marine transportation system, oddly enough, is marine transportation. The long, sloping trend line representing flagging support for U.S.-flag merchant shipping, an aging Jones Act coastal fleet that frustrates Marine Highway development, and a shrinking ship building sector needs to be reversed.  It’s far from being the cornerstone of the economy that it once was and perhaps still can be.  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.)

 
 

What’s the Big Deal about Public Works?

In Congress, Federal Government, Infrastructure, Ports, Surface Transportation Policy, Water Resources on March 9, 2013 at 12:04 am

Questions of the Remotely Curious:

  • Why should I care if Congress approves a WRDA bill…and what’s WRDA anyhow!
  • So what if the surface transportation bill expires!
  • What business does Washington have to do with the  sewage treatment plant the county is trying to build!
  • And why the hell does the Army Corps of Engineers have anything to say about clearing the muck from the marina where I keep my boat!

Yeah, and what’s the big deal about public works!

The average person who has no experience with government-at-work might be given a pass if he made such not-really questions.  The average Federal elected official should be expected to know…or at least quickly learn…the answers.

Would it surprise you to learn that too many folks in Congress today don’t know and…judging by the rhetoric…may not care.

Over 200 persons were first sworn into House of Representatives membership in just the past four years.  Many of them came to reside in Congress without prior legislative or other public office experience; many came with the intent to shrink government and cut spending. While those objectives are worthy of debate we are seeing in the fiscal brinksmanship and political gun play (“Call of Duty 6: Fiscal Warfare”?) how the give and take of real debate has been hard to come by here in Washington. (Consensus? Fugetaboutit.) New congressional Republicans, those of the Tea Party strain, have been a particular challenge for their Republican colleagues who came…well…to legislate.

Not too deeply into the last Congress Rep. John Mica (R-FL), then chair of the House Transportation & Infrastructure Committee, came to publicly bemoan how a troubling number of freshman who were assigned to his committee had little interest in producing the aviation and surface transportation bills that were overdue for Hill attention.  Mica publicly would cite the large number of legislative neophytes who–oddly–were poised to vote against the meat-and-potato policy and program of a public works committee. Why? Because they said they took the trip to Washington to gut government and its budget.

So it is to Chairman Mica’s credit that his committee eventually did produce the transportation authorization bills, albeit ones that didn’t adequately address the full cost of tackling the nation’s infrastructure needs.

Today, Rep. Bill Shuster (R-PA) heads the committee.   He faces the same challenge as his predecessor, Mica, and expectations as his father, Bud.  From the get-go he identified his committee objectives, which include the first water resources bill (WRDA) since 2007 and a robust surface transportation reauthorization bill including possible funding initiatives to repair the failing revenue stream for the Highway Trust Fund.

The chairman knows a price tag comes with maintaining and improving American infrastructure but he is all too aware that for some in the House and Senate it is a price they may be unwilling to pay. So before Shuster rushes headlong into bill writing he wants his colleagues on the committee and in the House to learn why it is essential for Congress to take up these issues. He has been conducting “roundtable” sessions for his committee members so they may hear from trade associations and other public and private sector stakeholders. He convened a hearing with a 101 course title–The Federal Role in America’s Infrastructure—and a Peaceable Kingdom kind of witness list.  And he has called on any and all persons who want to see transportation and infrastructure bills to get past third base to start their own education efforts on Capitol Hill.

Maybe, just maybe, the 113th Congress can be the did-something Congress.

FMC on HMT: Unintended Consequences

In Congress, Federal Government, Infrastructure, Ports, Water Resources on October 18, 2012 at 11:52 am

In July the Federal Maritime Commission released a study that claims a relationship between the Harbor Maintenance Tax (HMT) charged in U.S. ports and logistics decisions that result in some imports bypassing U.S. gateways and moving through Canadian ports to American destinations.

Concerns at the Ports of Seattle and Tacoma that the HMT are tilting the competitive field prompted the study.  These are long standing concerns that predate the cargo fee.

In the mid-80s Congress eventually acceded to the Reagan Administration’s insistence that the cost of maintaining Federal coastal channels be recovered through a new user fee.  The main question was how to collect the fee, which at that time was proposed to cover 40 percent of channel O&M.  It is now 100 percent.

The issue of maintenance fees and cost-sharing on improvement projects—another Reagan demand—prompted a split among port authorities. A “small port coalition,” consisting of ports of all sizes, many of which handled cargo that made it easy to find political allies, wanted to avoid a fee that would burden low margin cargo such as export grain and coal.  Some of those ports with outsize channel maintenance requirements fought any suggestion that the new policy require their dredging costs to be supported by fees collected in their ports.  If a port had to rely on its cargo volume to cover its dredging costs the New Yorks, Norfolks, and Oaklands would have an advantage, not to mention those ports with naturally deep water.

Notwithstanding the efforts of the “large port coalition” that dominated the container trade and favored a charge on cargo tonnage, the small port coalition had success in defining the revenue mechanism. Key committee leaders, most notably Chairman Bob Packwood (R-OR) of the Senate Finance Committee, settled on a fee that would go easy on American export commodities and, as it happens, raise a tidy sum for the new Harbor Maintenance Trust Fund. The new HMT would be applied to cargo value, not tonnage.

Seattle and Tacoma (members of the large port coalition, for the curious reader) opposed the HMT provision. They sought to be exempt from the cargo fee, fearing the advantage it would create for nearby Vancouver, B.C. in the container trade. (Did they even imagine a Prince Rupert was in their future?) Their objections to the HMT won them only a section in the new WRDA ’86 law that tasked the Treasury Department, where the Customs Service was located, to study and report to Congress on any effect the HMT had on diverting cargo from U.S. ports.

A year or so later Customs reported back with its conclusion: no effect of diversions.  With no formal report to refer to one wondered how Customs arrived at that determination.

In the 25 years that passed since the HMT became law we have seen the tax increase from 0.04% to 0.125%, the Supreme Court quickly came to a 9-0 decision and voided the HMT on exports, and the Harbor Maintenance Trust Fund’s unexpended and seemingly untappable balance has ballooned to over $7,000,000,000.

Through those years, and with the addition of Prince Rupert to American West Coast woes, the Sea-Tac ports have pressed the argument that the HMT contributes to the loss of cargo. The fact that those ports benefit little by the HMT revenues—they require little in the way of dredging—is salt in the wound.

Enter the Federal Maritime Commission. Washington State senators asked the FMC for analysis of the extent to which the “HMT and other factors impact container cargo diversion from U.S. west coast ports to west coast Canadian and Mexican ports.”

The FMC was fertile ground for such a request. In the 1980s Maryland Port Administration attorney Richard Lidinsky energetically fought “Canadian diversion.”  Today he chairs the FMC.

The FMC inquiry commenced in late 2011, public comments were received, and the resulting “Study of U.S. Inland Containerized Cargo Moving Through Canadian and Mexican Seaports” was released in July 2012.  The conclusion: no FMC related law or regulation is violated in the use of the Canadian ports but the HMT plays a role to the extent that it adds to the cost of transportation.

The FMC study noted that ports compete on “a wide variety of variables.” (Such was the essence of the shipper and carrier comments–easily the most detailed and responsive comments submitted in the public process–that didn’t confirm the report’s presumption that the HMT is a factor in decisions to use Rupert.)  The study found no significant difference in cargo transit times moving through the U.S. and Canadian gateways. It acknowledged that the rates through Prince Rupert are lower but stated that other factors in the supply chain make it “difficult to conclude that transportation costs are significantly lower.”

The study employed a ports elasticity model developed years before by Dr. Robert Leachman. The FMC concluded that if the HMT (estimated to average $109 per FEU) were eliminated in the Sea-Tac ports, or if an equivalent charge were put on the U.S. bound cargo when crossing the land border, “up to half” of the containers “could revert to using U.S. west coast ports.” The report concluded that the HMT “does appear to be one competitive force that is not based on natural competition, but may indeed be a legislative disadvantage on some U.S. ports” i.e., an unintended consequence.

What is one to make of the study?  It is not conclusive in the way we like to have questions settled.  The FMC document has its critics within the agency, with two commissioners voting against its release. One called it “a political policy paper to justify a predetermined conclusion.” The other wondered why, if the HMT is such a discouragement, does Canada-bound cargo use U.S. ports?

After 25 years do we yet know the extent of the problem, assuming it is a problem?

If anything, the study gives Sea-Tac and their advocates in Congress something to quote as they lobby for a fix. One such fix, an exemption from the HMT, is not in the cards. (Why would other ports go along with that?)

Legislation has been drafted to apply an equivalent charge on U.S. cargo when it crosses the land border (a “land border loophole”?), the revenue from which might be put to making freight improvements. But is the FMC study enough to convince Federal policy makers to slap a fee on cargo entering through Canada or Mexico? Dress it up to look like a user fee to support infrastructure improvements but it still will come off as a penalty for not using an American gateway. The cargo interests will fight it, probably the railroads, too. And don’t expect the Commerce and State Departments and the White House Trade Representative to be mute on the question.

The valuable but imperfect HMT (title  for another blog entry?) continues to create problems while feasible solutions elude us.  Meanwhile, look to the east. There on the horizon are Nova Scotia ambitions to establish a Rupert-on-the-Atlantic.

The fight against the HMT is 25 years long and counting.  Pbea

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