Marine Transportation System

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Stalled and Sinking

In Marine Highway, MTS Policy on June 10, 2012 at 11:13 pm

POLITICO, the Washington, DC daily journal, published a story on May 22nd by reporter Jessica Meyers on one of my favorite topics, marine highway development. I had hoped for more but then a partisan, as I am, is always hard to please.

It was the multiple titles sitting atop the various pages and editions of the piece that got to me. Like taunts from the headline writer. “Industry appears stalled on marine highways.” “Federal marine highways project hard to launch.”  And one that elicited a quiet groan, “Marine highways projects often sink.” All for a single article.

You’d think one title would suffice.

It’s hard to argue with the conclusions of a writer whose research uncovers little evidence of successful services, hears sources say there is no market or that it is still being identified, and then calls it as she or he sees it.

Let’s face it. The shelf isn’t lined with gleaming trophies of winning marine highway projects.

Then there was this piece that appeared the next day in Lloyd’s List entitled “Built in the USA.”  “Tobias Koenig’s decision to withdraw financial support from American Feeder Lines…has opened a fresh debate on the US-build requirement of the 1920 law.”

Whether the frustration of a European shipping investor (“we intend to profit from the opportunities, and to profit well”) who had hoped to reinvent American coastal shipping and ship building has given us a fresh debate, or is just another log to grow the flames of the US-build debate, isn’t so important.

The fact is the debate continues and the heat is being felt. Others–whether Hawaiian shippers or Connecticut-based Per Heidenreich–are among the more recent voices for change.  The US-build requirement is typically the target.

The above articles point to the challenge facing marine highway service start-ups and the broader Jones Act container/trailer carrier community whose market is pretty much limited to the non-contiguous trade and whose fleet has far too many old fuel burners for the new Emissions Control Area (ECA) age we are about to enter.

Two weeks prior to those articles going to print The Maritime Executive folks convened a long planned “Revitalizing the Maritime Industry” forum. It was a Jones Act centric program and audience, although there might have been some outliers in the room.

The two-day program opened with a plainly stated concern about how the Jones Act industry today finds itself in the position of having to defend the cabotage principle instead of the onus being on challengers to explain why it would be in the nation’s interest to allow the Jones Act walls to tumble.

John Graykowski, former Deputy Administrator of MARAD and Jones Act advocate, said at the opening of the forum that “the future isn’t as clear or…as bright as any of us would like it to be.” He noted “challenges” that don’t seem to diminish and “an ever present growing threat” to the Jones Act. He pointed to fewer maritime industry advocates today in government, and to challenges to the cargo preference program and the protected non-contiguous trade.

In the background, as one easily took from the forum’s title, was the fact that important elements of the Jones Act industry have been in decline for too long a time, a condition that the marine highway effort hopes to reverse.

Along the way there were unequivocal and unchallenged statements heard in the hall as to the importance of the domestic maritime sector to the nation, the competitiveness of American crews and the competitiveness of American shipyards. Also heard was the immutability of the Jones Act.

The problem isn’t that it is broke, the message went. The problem is that aggressors are gathering at the gate and our defenders are fewer. This is a time for a collective “gut check.” The walls must be defended. Whatever happens, the law ain’t gonna change.

A few people with microphones suggested the need for some flexibility in the law. A short term reflagging of suitable, foreign built ships to enable a demonstration of marine highway service in the North Atlantic is an example that I suggested. (I argued that position on behalf of American Feeder Lines in its attempt earlier this year to win government approval of a limited waiver with the condition that US-built ships would be ordered to replace them.)

There were Jones Act defenders in the room who themselves are frustrated with the no-exceptions perspective. But it is a frustration that is not given expression in public, certainly not in a gathering such as this.

Cabotage is a principle important to the national economy and defense. However, as I suggested in a presentation at the forum, the present law is nearly 100 years old.  “I don’t think that living in the twentieth century today is necessarily how we get” to a revitalized American industry. The principle is sound but how we get to a revitalized industry, including a stronger shipbuilding sector, is the question.  Once revitalized the industry can be more successful in defending both the principle and the gate.

MarEx Editor-in-Chief Tony Munoz, convener of the event, concluded the program by saying the forum and the attendees are the “tip of the spear” to “move this agenda forward.”

But, I wonder, will preserving every jot and tittle of the status quo be the only element of that agenda?  Pbea

An earlier version of this appeared in the “Deep Water Port notes” newsletter of the Connecticut Maritime Coalition.

HMTF: The Seven Billion Dollar Clue

In MTS Policy, Ports, Water Resources on February 11, 2012 at 6:04 pm

The Harbor Maintenance Trust Fund (HMTF) is overdue for a remedy. How do we know? The unspent balance of Harbor Maintenance Tax (HMT) receipts, plus interest, is a mere $7,000,000,000.

HMT receipts are accounted for in the channel “maintenance” trust fund. However (not to be too picky) the Federal channel system is not fully maintained, and not for lack of money (see “mere” above). That and other information can be found in this 2011 report by the Congressional Research Service.

(A Moment for Trivia: The HMT is considered by some folks a user fee but as the Supreme Court figured out, unanimously and with little effort, the value-based charge on cargo bears little relationship to the service being provided i.e., maintaining channel depths and other dimensions for vessels, and “therefore does not qualify as a permissible user fee” under the export clause of the Constitution.)

The HMT is collected on import and domestic cargo handled at most US ports. On cruise tickets, too. The majority of what is collected comes from the high volume, high value imports; much less from comparatively low value domestic cargo moving between American ports. US exports cannot be charged, sez the Supreme Court.

The HMT was set to cover 100 percent of the cost of coastal channel maintenance. But if 100 percent of the channel maintenance that is needed isn’t done then 100 percent of the funds isn’t spent. It’s the kind of math that even I can understand.

Well, you might say, that’s okay because the money is safe in a trust fund. It is dedicated for maintenance dredging, right? It will be there when it’s needed, right?

Sure, but the balance has grown every year since 1994 and, more to the point, full funding is justified now. According to the Corps of Engineers the total channel system, including small recreational harbors, would cost around $1.3 billion a year. And even if the money is sitting in a trust fund collecting interest, it actually is being put to an unrelated purpose. Turns out the HMTF is a handy offset, especially when you are running a Federal deficit. Makes the deficit a little lower–$7,000,000,000 lower.

The money is collected for a specific purpose but is not being spent fully for that purpose. More than a few folks argue that is not fair. Especially the ones who have a direct stake in channel dredging such as ports and dredging contractors.

But then fairness has been an issue since the HMT and the HMTF were made law.

In the mid-80s Congress deliberated how to offset the cost of Federal channel maintenance (originally by 40 percent and then a few years later by 100 percent). Some ports argued that because heavy cargo weighs down a ship the new user fee for maintaining channel depth should applied to cargo tonnage.

Other ports took the opposite view, pointing to how heavier cargoes are often low value as well as low margin US exports. They said the charge should be on cargo value, arguing that containerized cargo could afford the charge. And since the vessel operators had already succeeded in fending off a fee on the vessel (arguably the direct user of the channel) it came down to which ports and kinds of cargo had the most, or least, votes in Congress.

The “fairness” question was decided in favor of the greater number of ports, which were export oriented and/or whose channel maintenance costs might be expected to exceed channel fee collections in those harbors.

As was patently obvious the major international gateways would produce a substantial portion of the revenue. Indeed in 2005—yes, most HMTF data is musty stuff because the Federal government unreliably produces the mandated annual report—the top cargo value ports of LA (13.7%), NYNJ (12.2%) and Long Beach (12.2%) represented nearly $380 million, which was more than one-third of HMT receipts. The top ten ports by value handled over 68 percent.

Some of them, as it happens, also require little in the way of channel maintenance. (I’ll get more into that subject in a later post.)

The HMT and the HMTF are in ways unfair and they are imperfect by design. The value basis of the tax can be explained as a seaport maintenance policy crafted for nation where no seaport has the same cargo, cargo type, volumes or geography and whose Constitution forbids Congress giving “preference” to one port over another (Article 1, Section 9).

We can’t be so generous and understanding with the way the HMTF is crafted in law and managed in the budget process.

Changing the basis of the HMT is politically unlikely (see “snowball’s chance in Honolulu”). As for the HMTF, changing the law is not easy but it is doable. (To be continued.) Pbea

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

Make Time for Maritime Policy

In Federal Government, Marine Highway, MTS Policy on July 2, 2011 at 11:37 pm

The piece below appears in the June 2011 edition of the Eno Transportation Foundation newsletter, EnoBrief.  I appreciated the invitation to pen something on a maritime theme and decided to continue on the topic of American maritime policy, which is in need of attention.  Comments are welcome.  Pbea

“Now, what about our national maritime policy?” posed Norman Mineta in 2007, no longer Transportation Secretary, before answering himself. “Frankly, it is comparatively meager and unfocused.”

In his remarks to an industry finance audience he drew comparisons to the other modes that are more completely housed at USDOT, underpinned by substantial programs and funding, and enjoy large, strong and active stakeholder bases.

The former cabinet officer and present day Eno Board member’s prescriptions to address the sector’s ailments included things that might explain his waiting to address this “comparatively meager” sector only after he was out of office.

He said his recommendations can be accomplished “by overcoming the inevitable opposition – not only from without but from within.” He continued, “Within the maritime industry there are many agreements of mutual mediocrity.  People…will not want to see it changed.  The ground is shifting under their feet and they imperil needed financial investment and the innovation and the efficiencies it brings.”

He also mentioned some difficult issues that “need to be addressed within the industry” but “they are not reasons to oppose raising the importance of maritime issues on the national agenda.”

Secretary Mineta thought there was reason to issue an urgent call.  “Compared to the resources and focus that we have devoted to surface transportation and aviation, I believe we must quickly and dramatically increase our attention, our funding, and our national purpose with respect to maritime issues.  To fail is to become a second rate economic power with a decrease in our quality of life here at home and a reduced ability to effect change in international affairs.

“Simply put:  the United States must develop a comprehensive maritime policy and implement it through a thoroughly reorganized federal structure.” He said the public sector “must work with industry stakeholders to educate American citizens and their decision makers regarding U.S. reliance on a strong national maritime system.”

Four years later his concerns about maritime policy still deserve consideration.  And while Secretary Mineta’s remarks did not dwell on the issue of “ships and crews” the vessel aspect of present policy also warrants attention, especially if marine transportation is to play a role in addressing some of our nation’s transportation challenges.

The declining American flag presence in foreign commerce is being examined by the House Transportation & Infrastructure Committee, which prompted USDOT to commence a study, soon to be completed, to quantify the competitive disadvantage of American shipping.  Facing a competitor that flies flags of convenience, builds ships in China and Korea, and hires low wage crews the American operators will always find it tough to capture market share.

So let’s drill down to examine the protected American market. Not surprisingly, much of the Jones Act trade is carried in dry and liquid bulk vessels that lend themselves to commodities like grain and petroleum.  As for container shipping, the Jones Act fleet has only 26 vessels in service with a total carrying capacity of 56,631 TEU.  Most of those are in the Alaska, Hawaii and Puerto Rico trades. Sixty-eight percent of American container vessels (including barges) are at least 26 years old with 41 percent exceeding 30 years. (One can’t resist noting that a major program at the Maritime Administration is managing the disposal of U.S.-flag vessels.)

Meanwhile the capacity of U.S. commercial shipyards to build container and roll-on/roll-off ships is rapidly diminishing.  The Aker Philadelphia Shipyard is surviving for the moment on an emergency injection of State funds to build to ships on spec.  Aker, General Dynamics’s NASSCO Shipyard (CA) and Bay Shipbuilding (WI) announced layoffs last year. All 5,000 jobs at Northrup Grumman’s Avondale facility (LA)—a defense shipyard that could convert to commercial construction—are slated to end in 2011.

Why talk about U.S. container and ro/ro ship capacity?  Secretary Mineta, his successors at USDOT, and others have suggested that marine highway development is not only needed but inevitable for goods movement here.  The reasons include the mode’s inherent efficiency, its intermodal capabilities, public benefits to be derived from shifting part of the growing freight burden from land routes, and the extensive use of short sea and waterway service in other developed nations. Congress acknowledged as much by enacting the “short sea transportation” provisions of the Energy Independence and Security Act of 2007.

But to realize any of the above benefits—not to mention the renewal of a shrinking industry—these are needed: 1) a modern Jones Act fleet capable of meeting tough emissions standards effective in 2012, 2) cost-competitive commercial shipyard capacity to build the fleet, 3) vessel financing, 4) sufficient trained seamen and officers, and, let’s add, 5) a clear signal that Washington does not want America to lose its capacity to move goods on the water.

This telling is absent a call for or against Jones Act strictures. There are arguments for the status quo and for alteration.  But, as Secretary Mineta might say, the existence of the Jones Act in a world where cabotage requirements are commonplace is not reason “to oppose raising the importance of maritime issues on the national agenda” and reversing a decline in the American maritime sector.

“Now, what about our national maritime policy?”  

The Mineta Speech as a Starting Point

In Federal Government, MTS Policy, Surface Transportation Policy on March 30, 2011 at 11:34 pm

Former Secretary Norman Mineta provided a service in making his 2007 speech on the maritime sector (excerpts found starting here).  Since he went to the trouble, let’s use his suggestions as a starting point for an overdue discussion on rethinking and recharging US maritime policy.

Secretary Mineta called for moving maritime related functions of other agencies to the  Maritime Administration and renaming the agency according to the “Federal [ ] Administration” template used for the other modes.  There are 18 or so departments and agencies with program interest in marine transportation including USDA, NOAA, EPA and the Navy.  Reason enough to create an interagency Committee on the Marine Transportation System (CMTS).  Perhaps some functions could be consolidated in USDOT.  Others not so easily.  The navigation portion of the USACE civil works program, one that often is mentioned as a prospect, may not transfer well.  Not that the status quo is worth maintaining.  The excruciatingly-slow project evaluation and preparation process has ports pulling out their metaphorical hair.  But it’s not simply a Corps of Engineers process failing but one that Congress abets by being very unreliable in implementing the key stages of project authorization and funding.   The channel program is ripe for change.  But it is not a given that USDOT is the best place for it.  For that matter, program consolidation can cause problems as much as fix others.

The former Secretary suggests that MARAD must shift its focus to the condition of the nation’s ports and away from its long attention to “ships and crews.”  Actually that shift started during the Clinton Administration under Secretary Federico Pena.  He gave attention to port issues (including the dredging process) and MARAD has done all it can to grow its portfolio in this direction.  The agency has functioned as project manager for federally funded port projects in Alaska, Hawaii, Guam and elsewhere. (Mostly with DOD money.)  The 111th Congress authorized MARAD to manage such “port infrastructure projects”as money is made available.

I disagree with Mr. Mineta that there is too much focus on ships.  As long as there is a US flag requirement (see Jones Act), a diminishing shipyard industry and capability, and a US merchant fleet that is a shadow of its former self someone should pay it attention.  Clearly current law and policy isn’t getting the job done.  For that matter, I can’t recall a modern administration of either party that has cared much about cargo moving on US flag vessels.  (No, I won’t go back as far as Roosevelt.)

The suggestion also is made to rename the US Merchant Marine Academy and “give it our time and attention.” Reports issued during the Bush and Obama administrations, including one called “Red Sky in the Morning,” made clear that oversight and investment had been lacking at King’s Point.  So a turnaround effort continues today with Kings Point being .  But let’s face it.  Why bother making it a top notch maritime academy if the effort isn’t being made to grow the anemic maritime sector?  It would be nice if the young men and women who want a career in the merchant marine can actually find good paying jobs there.

Secretary Mineta suggested that if “ports and waterways funding is always being relegated to parts of the surface transportation bill, or the defense bill, they will remain second-class subjects…” He is saying that the sector needs, in effect, a SEA-21 much as there were TEA-21 and AIR-21—the highway and aviation authorization bills of the 1990s.  A dedicated maritime bill to advance maritime policy and related projects.  I think a maritime bill is in order, especially for addressing failings of current policy and the paucity of programs tuned to today.  But as long as Washington continues to think in terms of modal stovepipes the marine stovepipe will remain offshore and remote from the “surface” modes, system development and corridor planning where intermodal policy, transportation solutions, and major projects tend to be reserved for road and rail.

Marine transportation related provisions belong in an intermodal, multimodal surface–wet and dry surface, if you will–transportation  bill.

More on this subject to come.  Comments welcome.   Pbea

The Mineta Speech, Pt.3

In Federal Government, Infrastructure, Leadership, MTS Policy, Ports, Water Resources on February 8, 2011 at 3:07 pm

Former Transportation Secretary Norman Mineta offered his audience at the North American Port and Intermodal Finance and Investment Summit recommendations “we can act on immediately” to address the inadequate “role of maritime issues in our national transportation policy.”    Here are Pt. 1 and Pt.2. Pt.3 follows…

It struck some people as a bit odd.  Here Norman Mineta was talking about changes that are needed to strengthen U.S. maritime policy but he waited until he was out of office  to raise them.  Perhaps these were ideas that coalesced in his mind only once relieved of the day-to-day tasks of office.  Maybe not.   Ultimately it didn’t matter.  At least he was raising them now.

“What is the path to victory?  I have ten recommendations we can act on immediately.  Some are major and some seem to be minor, but are critical to success.

“First, the Federal government must reorganize the Maritime Administration – MARAD.  I would rename it for what it should become – the Federal Maritime Administration, and I would combine virtually all of the Federal maritime responsibilities there.  It should reinvigorate the uniformed Federal Maritime Service and transfer the aids to navigation responsibilities from the Coast Guard to it.

“The portion of the Army Corps of Engineers whose responsibilities and capabilities for our domestic ports and waterways should be relocated to the Federal Maritime Administration.  The Army performing as domestic civil Federal engineers is not a role for the military and the country would save money and get a better product if these services were transferred to a single maritime agency.

“Secondly, the new agency must shift its focus to the condition of the nation’s ports and waterways and the role of this infrastructure in the totality of the U.S. transportation system.  The current agency has too many of its resources and its structure focused on the issue of ships and crews.

“Thirdly, the Merchant Marine Academy in Long Island should be renamed the National Maritime Academy.  It should be a Federal service academy where every graduate must perform his or her service in the Federal Maritime Service or as a commissioned officer in one of the other services as they do now including the Department of Homeland Security.  This Academy is one of the major assets of the Federal government and we need to give it our time and attention.

“Fourthly, the Federal government must develop a legislative reauthorization process that puts maritime issues on the same priority and level of importance that surface and aviation assets currently have.  If ports and waterways funding is always being relegated to parts of the surface transportation bill, or the defense bill, they will remain second-class subjects where the hope is to get your particular project an earmarked status.

“Fifth, the U.S. must revitalize its role in international maritime organizations and its maritime relations with other countries.  Whether its treaties or issues involving security and trade, the U.S. needs to give more time and attention to these areas.

“Earlier I said to achieve this refocus on maritime importance, state and local governments, port authorities, and other government entities reliant upon maritime trade must work with industry stakeholders to educate American citizens and their decision makers regarding U.S. reliance on a strong national maritime system.

“Therefore, I believe the next set of actions should begin with port and waterway interests and industry stakeholders – including financial players who want to enter this sector – creating a national association whose charter is to accomplish the following action items:

“Educate the Congress and the presidential candidates on the role of the national maritime system and get hard commitments to take action.  Educate American decision makers and others on the role maritime assets play in how freight and goods are delivered to them.  Then enroll them in the effort to get maritime’s fair share of infrastructure resources.

“My final recommended action is that you accomplish all of the above by overcoming the inevitable opposition – not only from without but from within.  Within the maritime industry there are many agreements of mutual mediocrity.  People are familiar with this system and will not want to see it changed.  The ground is shifting under their feet and they imperil needed financial investment and the innovation and the efficiencies it brings.

“Also, there are issues that need to be addressed within the industry – labor agreements, the role that technology will play in the labor force, and how security issues will be addressed.  These are important issues that need to be vigorously debated and resolved – but they are not reasons to oppose raising the importance of maritime issues on the national agenda.  Take a side in these issues, fight for them, but do not let it dominate the larger objective.

“Finally, for those of you who are looking for quick investments in ports and maritime infrastructure, I’m not sure I’ve given you a lot of useful information.  And for you I’m afraid there is more bad news.  There are no quick rates of return to be made here.  Private investment into ports and infrastructure will have to be a true and long-term partnership.

“The up side as we say is that this is an industry that has the potential for tremendous growth and to have a real impact on our national transportation system.”

So there you have it.  A message that is important not so much for the specific recommendations made–although there are some good ones there–but for the fact that he was putting the spotlight on a problem that few public officials and industry people bother to talk about or even acknowledge.  See the next post for some additional  thoughts.   Pbea

The Mineta Speech, Pt.2

In Federal Government, Infrastructure, MTS Policy on February 2, 2011 at 11:16 pm

This is the second installment of a speech by former Secretary of Transportation Norman Mineta, who pointed to some ways that U.S. maritime policy was lacking.  While by no means a comprehensive critique of a policy and sector in need, his remarks were a high altitude flare signaling something needs attention. The first of three installments are here. The speech didn’t garner much attention at the time.  It is worth going back to take a look.

Norman Mineta was Secretary of Transportation when the Bush White House in late 2004 released the Administration’s U.S. Ocean Action Plan.  The Plan was a response to the recommendations made by the blue ribbon U.S. Commission on Ocean Policy.  The Plan included a presidential directive to elevate an existing inter-agency coordinating panel to be the cabinet-level Committee on the Marine Transportation System or CMTS.  USDOT was made one of the coordinating entities–the others being NOAA, USACE, and USCG–in the 18 agency CMTS.

During Mineta’s tenure and that of his successor, Mary Peters, the DOT Secretary’s Office evidenced more interest in a functioning, productive Committee on the Marine Transportation System than did the department’s own marine transportation agency.  To a certain extent it was understandable.  MARAD generally played second maritime fiddle to the Coast Guard when that uniformed service was under USDOT.  Now, with the Coasties out of USDOT and under the newly created Department of Homeland Security, MARAD leadership had little interest in sharing a coordinating role with other agencies since MARAD considered itself the U.S. maritime agency.

One even heard that Secretary Mineta made an attempt to gain program control over the construction and maintenance of navigation channel infrastructure, long the responsibility of the Army Corps of Engineers.  After all, the Department of Transportation had jurisdiction over other modal infrastructure and USACE had its share of critics.  I don’t know if any serious attempt was made then but, obviously, nothing ever came of it.  Not surprising.  Washington turf  comes in an especially change-resistant variety.  Nevertheless it remained a policy objective, as you will see.

The dispersal of marine transportation related matters among a dozen-and-a-half government agencies was just one of the conditions the former secretary pointed to 2007.  The Mineta Speech continues…

“Now, what about our national maritime policy?  Frankly, it is comparatively meager and unfocused.  Jurisdictions are scattered throughout the government.  One agency advocates for maritime trade, another oversees aids to navigation.  Another helps build and maintain ports and waterways, another regulates shipping, and another oversees security.

“With respect to congressional funding, surface transportation and aviation each have  major reauthorization bills with billions of dollars budgeted for projects, while maritime funding is scattered, uncoordinated, and subject to diversions for other purposes.

“Some of this is a result of history.  Our aviation system was essentially created by the federal government at the birth of commercial aviation prior to World War II.  And the federal government’s role in our national road system was guaranteed by the postwar vision of President Eisenhower who had witnessed the benefits of the German autobahn.

“But America was a collection of ports before it ever was a nation.  Most Americans became Americans by transiting on ships.  And the long history from colonies, territories and states with their own ports has created a tangled network of jurisdictions and authorities.

“Let me quickly add that I am not advocating for a central maritime system.  We only need to look at the knot of federal environmental laws and custom regulations to see how the federal government can inhibit the process with good intentions poorly implemented.

“However, in the increasing globalized economy; in a just-in-time-freight logistics system; in unprecedented energy challenges; and in ports that are at risk of becoming outdated; the Federal government must respond – and its response must be more than opening its checkbook.  And the private industry must do more than look for low hanging investment fruit opportunities.

“What is the path to victory?”

The text continues in the next post: The Mineta Speech, Pt.3.   Pbea

 

The Mineta Speech, Pt.1

In Federal Government, Infrastructure, Leadership, MTS Policy on February 2, 2011 at 12:09 am

Little over three years ago in Coral Gables, Florida, Norman Mineta addressed the North American Port and Intermodal Finance and Investment  Summit.  Six months earlier he took his leave from the George W. Bush cabinet where the Democrat served five years, with some distinction, as Secretary of Transportation. The subject of the speech was, in so many words, the poor state of the U.S. maritime sector and national maritime policy.  The speech didn’t garner much attention.  It is worth going back to take a look.

Norman Mineta’s 2007 remarks to the assembled didn’t amount to your typical boring whatever conference speech.  It ventured into waters not usually discussed by someone of his stature, especially once out of office when one doesn’t have to do the obligatory National Maritime Day luncheon address.  Former Cabinet members don’t usually waste their time talking about marine transportation.  There are much bigger and sexier things to talk about.

The well regarded former Transportation and Commerce Secretary (the latter under President  Clinton) and Chairman of the House Public Works & Transportation Committee knew what he was talking about when he observed that American maritime policy was a poor cousin to aviation and surface transportation policy.  (After all he helped craft major new policy directions for the aviation, highway and mass transit sectors.)  It is “comparatively meager and unfocused.”  The likable former Secretary was too kind.

Secretary Mineta’s speech, with just a bit edited out to reduce text, is provided below and in the next two posts.  One can find things to nitpick in the remarks but don’t let that get in the way of his message that current maritime policy is in need of major attention.

He set up his remarks by noting how then (and present) Defense Secretary Robert Gates made an “extraordinary speech” the week before.  Gates cited the need for the U.S. to place less reliance on American military power in the larger world, “readjust  its capabilities,” and put more resources into the non-military aspects of international engagement.

“I submit we have a similar challenge with respect to the role of maritime issues in our national transportation policy.  Compared to the resources and focus that we have devoted to surface transportation and aviation, I believe we must quickly and dramatically increase our attention, our funding, and our national purpose with respect to maritime issues.  To fail is to become a second rate economic power with a decrease in our quality of life here at home and a reduced ability to effect change in international affairs.

“And for those of you here today looking for private investment opportunities or to learn about trends in the port and intermodal industry, if you and I do not become part of this effort, I believe investment in this sector will be fraught with unmanageable risk and this space will have limited appeal for investors seeking to put their money in U.S. infrastructure.

“Simply put:  the United States must develop a comprehensive maritime policy and implement it through a thoroughly reorganized federal structure.  And to achieve this, state and local governments, port authorities, and other government entities reliant upon maritime trade must work with industry stakeholders to educate American citizens and their decision makers regarding U.S. reliance on a strong national maritime system.

“For the last half a century we have had a strong federal policy for surface transportation and aviation.  In surface transportation we have an interstate highway system; billions in federal aid for mass transit and passenger rail; and policies for interstate commerce that have encouraged strong freight rail and the commercial trucking industry.  The U.S. Department of Transportation is a major funding source, standard setting authority, and safety regulator.

“In aviation, the Federal DOT is essentially the operator for the national aviation system and its authority in running the air traffic control system, setting operational requirements, and safety standards is virtually absolute.

“Now, what about our national maritime policy?”

The text continues in the next post.   Pbea

I’m Dreaming of a New Congress

In Federal Government, Intermodal, Marine Highway, MTS Policy, Surface Transportation Policy, Water Resources on January 4, 2011 at 12:25 am

The new two-year Congress commences on January 5th and it promises to be different in ways beyond the changed list of sworn-in men and women.

In fact I think that we could see the start of some structural changes in Washington and maybe…just maybe…something good could come out of it.  Am I betting on it?  No. Washington is too fond of the fetal position.

However this time issues of a more fundamental nature are getting attention.  Those issues have been around for a long time, long before ARRA, TARP and the big dollar spending and tax cuts necessitated by the severe drop in the economy.  And it appears that some spines were stiffened in the last election and not just on the Republican side.  There appears to be more universal acknowledgment than ever before as to:

  • Growing entitlement programs that dominate non-defense spending and with predicted revenue shortfalls.
  • A large defense budget we can’t afford to leave off the table when cutting spending.
  • A tax system in need of a significant overhaul and simplification.
  • An infrastructure policy of disinvestment that makes our transportation less efficient and dooms us to second place status in the world economy.
  • Our economic and national security in the hands of oil producing countries most of which, at best, do not share our democratic values.

There is a potential for consensus that could slowly build around putting in order the nation’s fiscal house and addressing other policy deficits.  It is possible.  (Then again I thought it was reasonable to expect the Giants to take on the New Jersey label when they made the move to the Meadowlands.)

Still, hope persists because those are serious problems that undermine our long term competitiveness.

Closer to home…there are comparatively smaller issues that are fundamental in their own way and deserve attention in the new Congress.  Wading into the policy weeds, here are some things I would like to see Congress address over the next two years:

  • A vigorous marine highway program built on the converging imperatives to reduce petroleum consumption and emissions in the transportation sector.
    • Leverage private investment dollars in new vessel construction and incentives for users of blue and brown water service.
    • Encourage State initiatives to adopt marine highways as elements in the interstate transportation system.
    • Waive the Harbor Maintenance Tax for intermodal cargo moving in the domestic trade.
  • Improving understanding of marine transportation and the contribution it makes and, even more, can make.
    • Examine what is needed to update a US maritime policy to enable the private sector to break the cycle of decline and the public sector to incorporate US flag shipping in surface transportation improvements.
    • Improve funding and human resources for the Maritime Administration, which remains a lesser modal agency in the USDOT family.
    • Renew the effort to coordinate and elevate maritime related issues among the many agencies including more buy-in by USDOT, the one department that has the most to gain.
  • Fixing Federal water resources policy, especially as regards navigation.
    • Ensure port channel maintenance funding on a par with Harbor Maintenance Tax collections.
    • Fix the too-long flawed, too-long Federal (WRDA) process of planning, funding and constructing navigation projects.
    • Distinguish between frivolous earmarking and the prosecution of fully vetted navigation projects that provide economic security in most regions of the country.

The difference between the list above and the list below is that the latter is more politically doable…if Congress and the Administration would pay it attention.   Pbea   (this entry is a revised version 1.4.11)

Thank you, Mr. Chairman. Good Luck, Mr. Chairman.

In Infrastructure, Leadership, MTS Policy, Politics, Surface Transportation Policy on November 17, 2010 at 12:08 pm

Capitol Hill institution is a phrase that some incoming freshmen Members may not appreciate or find at all useful.  After all, some of them are arriving with the intent to de-institutionalize the place.

Democrat Jim Oberstar was de-institutionalized on Election Day.  He lost his re-election bid as did some other senior congressmen, including two other committee chairs.  Gene Taylor (D-MS) of the Seapower Subcommittee was one.

The chairman of the House Transportation & Infrastructure Committee is both an institution and a creature of one, where he spent 36 years representing his Minnesota district.  He started on Capitol Hill in the early 1960s as a staffer for an earlier iteration of that committee.  His remarks the other day to reporters (as reported by Sarah Abruzzese of E&E) reflect a perspective born in another time that looks out of place in the litmus-test politics of today.

“I think you will see coming in a lack of institutional understanding and also it appears a lack of willingness to follow seasoned leaders,” Oberstar said.

That’s speculation on his part but not without cause.  A real question giving those of us here pause is how well the 112th Congress will function and, therefore, govern.  Many of us end the 111th Congress with doubtful expectations for the next one.  (Paul Page of the Journal of Commerce wonders about the prospects for governing also.)

Not to suggest it is the center of the policy universe but in the transportation sector there is much at stake.  Here are three instances.  Long pending aviation program and policy legislation has been immobilized and needs to reach the President’s desk.  Likewise, the significant surface transportation “reauthorization” legislation—to include reforms that hopefully will make up for the excesses and diversions of SAFETEA-LU—is overdue and guaranteed to take at least another year to address, if we are so lucky.  Whether this next “TEA” bill will contain the multi-modal sensibility, including marine elements, that many of us look for, is one of the consequential unknowns.  And speaking about bills that are rarely on time, how will the Army Corps of Engineers’ civil works program–the basis for navigation infrastructure and commerce since the nation’s founding days–be made to function well in the next decades if Congress does not take up water resource (WRDA) legislsation?

There are bigger fish to fry in this town, of course – the government’s off-balance fiscal policy, the economy, and our international presence. But let’s consider the prospects on a smaller and more easily understood scale of those, nonetheless significant, challenges that face the transportation and public works panels of the House and Senate.  There is much to do in part because not much has been done over the years to address the nation’s infrastructure deficit or to focus on neglected sectors like the U.S. maritime.   As for the incoming class, Jim Oberstar’s conjecture is reasonable.

Among the members-elect, “there is little appetite for or appreciation of the broader policy questions that the nation faces with transportation,” he said — emphasizing that this was his opinion from reading about election outcomes across the country.

***

[Oberstar] expressed admiration for Rep. John Mica (R-Fla.), who served as the committee’s ranking member and is now almost certain to take over as chairman. “Mr. Mica and I developed over these four years a very close working relationship,” Oberstar said. “He and I were both quick to say we have disagreements on policy issues, but we found a way to mitigate those differences.”Oberstar listed multiple bills that the two parties were able to come to an agreement on and shepherd out of the committee, including a Water Resources and Development Act that successfully overcame a presidential veto, an Amtrak bill that the president signed, an aviation authorization bill (twice), and a Coast Guard authorization bill.

***

“I would have brought to the new Congress that history of cooperation and seeing and trusting, that’s even more important, trusting my partner in this process,” Oberstar said. “Going forward, you’ll have to rebuild all those personal relationships and committee structural relationships. And that will take time and will take something out of the process.”

How true.  While still holding out hope for what is to come, we will miss Jim Oberstar, the institution and that diminishing breed.   Good luck, Chairman Mica.   Pbea