Marine Transportation System

Posts Tagged ‘freight’

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The Next Maritime Administrator

In Federal Government, Leadership on January 27, 2010 at 11:50 pm

David Matsuda –the President’s pick to serve as Maritime Administrator–is ready to serve.

He returned to familiar turf this week when he appeared at his nomination hearing.  He worked for the same committee that will be voting on his nomination.  His work in the Senate had to do with railroads, ports, transit, trucking and aviation.  He worked for a senator whose state’s second largest employment sector is logistics and which is host to the New York Harbor and Delaware River gateways.

Since mid 2009 David Matsuda has been running the Maritime Administration as the top political appointee at the modal agency.  He has the confidence of Transportation Secretary Ray LaHood who first knew him as Deputy Assistant Secretary for Policy.

Importantly for MARAD–and for the marine transportation system–he has knowledge and experience to help shape a new transportation policy for the administration to recommend to Congress.  That transportation policy has to include, for the first time, a national freight policy.  And by rights it should put the marine transportation system squarely in that policy.

David Matsuda’s prepared statement for the hearing was brief and straightforward.  He reminded the committee that the “impacts of our nation’s maritime industry are not limited to coastal states.”

“Items brought in by ship make their way to store shelves and factory lines throughout the nation. Some raw materials we mine, goods we produce, and agricultural products we grow for export leave through our seaports or travel down rivers or across great lakes to distant markets.  In all, 36 states have a maritime port—whether it’s on a river, lake, gulf, or ocean. Merchant mariners live in just about every state in the Union, and midshipmen nominated by you and your colleagues to study at the U.S. Merchant Marine Academy can claim home to all but one state. Some states have shipyards or marine manufacturers which can be the largest sources of jobs in an entire community or region.”

He noted acknowledged the challenges.

“Today’s industry is struggling with many tough challenges: a lagging economy, climate change, the threats of invasive species, piracy and other security issues, a greatly expanded Panama Canal opening in 2014, and an aging workforce, to name a few.”

One of the challenges facing the next Administrator is to make something of the marine highway program.  It is just getting started.  With no assurance of a reliable funding stream for the program, MARAD–hopefully with strong support from the Secretary’s office–will have to make the most of its modest resources to develop a credible and creative program that will be central to MARAD’s mission for many years to come.

“I feel my experience working within the federal government, and especially working in the Senate, has allowed me a broad understanding of how these challenges can be approached successfully: by working with all stakeholders in good faith and with transparency in decision-making.”

We wish him well.    Pbea

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The Opportunity in Obstacles

In Marine Highway on January 14, 2010 at 1:47 am

Jim Kruse and colleagues at the Texas Transportation Institute (TTI)  completed a study that identifies obstacles to marine highway development.  It’s a good report.  At least I can say that the presentation I saw last evening outlined a lot of useful information.  The report itself is not yet available.

I can’t wait to read about the failed domestic shipping services that the TTI team examined.  (They looked at successes, too.)

Clearly there are obstacles.  There are the perceptions.  The operational issues.  The insufficient demand, particularly during tough economic times.   The potential customer expectations…assuming you can him to the point of talking about expectations.

There are the governmental hindrances.  The ingrained logistical practices.   The costs of multiple handling  of cargo.   The scarcity of financing for start-ups.

But wait!  There is good news.  Folks don’t see the Jones Act as much of a problem.  (Seriously, that’s in the report.)

“North American Marine Highway Operations” is a useful study, commissioned by TRB–the Transportation Research Board of The National Academies–as part of the federally funded National Cooperative Freight Research Program.  And it appears that more will be done on this subject.

Are we surprised there are many of these obstacles?  No.  A number of them have been well known.  Prime Example: the Harbor Maintenance Tax as applied to non-bulk cargo clearly needs to be addressed.

Can we learn from this study.  Yes, indeed.

Truth is, we have a lot to learn.  A lot to address.

At the TRB Annual Meeting (as if thousands of people can “meet”) some other things caught my attention.

  • In the foreseeable future trucking will no longer be at a disadvantage when compared to marine transportation emissions on a ton-mile basis.
  • When this decade the U.S. implements its self imposed Emission Control Area (ECA or “ee-ka”) limiting emissions within two hundred miles of the coastline vessels will have to adopt use of cleaner fuels, which will put vessels at a complete economic disadvantage vis a vis trucking.

Accepting these at face value, marine highway advocates also will have to address some fact of life environmental obstacles.  But then we knew that, too.

The I-95 Corridor Coalition long term “vision” for the 16-state members see marine corridor services as part of the multi-mode capacity solution to the Atlantic states’ growing system problem.

Marine highway services are operating in the U.S. now.  Ten years hence marine highways will be more a part of the national transportation system.  How much of a part of the system will depend on how well government and industry transition marine transport to meet commercial  and public needs and do so in a changing environment.

The obstacles in front of us are not fortress walls.  The obstacles just show us where we need to get to work.   Pbea

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Rail + Road + Water = Surface Freight System

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

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

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

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

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

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

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

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

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

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

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

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Vision Ingredients (Part 1)

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

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

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

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

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

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

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

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

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

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

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

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California Trailblazing to a Miami Tunnel

In Intermodal, Ports, Surface Transportation Policy on November 17, 2009 at 11:04 pm

When earth was turned in 1997 for the Alameda Corridor project in the San Pedro Bay port region more than one kind of ground breaking was occurring.  The Port of Miami is a beneficiary.

In freight transportation policy circles the Alameda Corridor project one day may be legend.  The ports of Los Angeles and Long Beach were the gaping end of a freight funnel that emptied import boxes onto the exit rails and streets.  In essence the solution was to eliminate grade crossings by building a blow-grade rail way out of town.  A big project with a $2.4B price tag.  A key to the financing was Federal credit assistance.  The project and two others in California were the first to benefit by this innovation.  A paper on the FHWA website tells the story.

Due to Federal budgetary constraints, however, the grant was not deemed to be a fiscally or politically viable option. An alternative form of Federal support for this project was needed, and by 1997 the answer was clear: Federal credit enhancement in the form of a junior-lien loan to ACTA.

The fiscal year 1997 Omnibus Consolidated Appropriations Act (Public Law 104-208) provided $58.7 million for DOT to cover the capital reserve charges associated with making a direct loan of up to $400 million to ACTA for the Alameda Corridor Project. This represents an actual budgetary cost of 14.7 percent of the face value of credit assistance. The legislation also provided that the loan be repaid within 30 years from the date of project completion and that the interest rate on the loan not exceed the 30-year Treasury rate.

Inspired by the success of leveraging non-Federal investment for large infrastructure project, particularly private financing, Congress in 1998 fashioned a fully articulated TIFIA program.  It was adjusted in SAFETEA-LU with a lowered threshold to make more projects eligible.

Nearly $7 billion in projects in 13 states have benefited since TIFIA was created by Congress.  The Port of Miami’s rail freight tunnel had an uncertain future but with the October announcement the financing is in place and a $607 million construction project soon will be underway.  Not bad.   Pbea

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Ports on the Secretary’s To-Do List

In Federal Government, MTS Policy on November 8, 2009 at 11:49 pm

The DOT Secretary’s blog–Fast Lane–noted this past Thursday that “port managers have a difficult dual mission to fulfill-–providing the critical interface between water and surface transportation, while handling both commercial and military cargo.”  The prior day he met with the National Port Readiness Network, including some port representatives.

Secretary Ray LaHood acknowledged in his blog that that dual mission “is much easier said than done. ”  “And I get that only the commercial side of their mission provides the ports compensation.”  He said “DOT wants to do all we can to help them meet these obligations.”

Back in March when Secretary LaHood addressed the spring meeting of the American Association of Port Authorities he was asked from the floor what the new administration was thinking in the way of a freight policy.  The cabinet member said his department had yet to give it attention, that implementation of the stimulus package was USDOT’s  immediate focus, and toward the end of the year he may convene stakeholders to start to develop a perspective on freight.

It sounds like he is ready to act on that idea.  In recent weeks he indicated to Kurt Nagle of the AAPA that USDOT will call port directors together for purposes that include an examination of freight issues.  The plan is to have a meeting–perhaps in New Orleans–this coming January.

He noted in this blog of November 5th two action items–a “port summit” and “a Presidential initiative to integrate planning” with DHS.

The former appears to be focused on the port authorities–the public agencies with port jurisdiction.  A government to government conversation makes sense.   But will the Secretary at some point also enlist the private sector side of the ports–the terminal and vessel operators–in a confab to examine freight issues?  And will this be the start of a concerted effort in the Secretary’s office to develop an overdue Federal freight policy?

The latter is a reference to a $15M item in the current year budget–also in the Senate version of the DOT appropriations bill.  “This will help develop and modernize the freight infrastructure that links coastal and inland ports to highway and rail networks,” LaHood said in the blog.  We’ll have to wait and see how that  intention will materialize in actual projects.  Earlier this year MARAD folks said that some or all of it may be applied to marine highway initiatives.

We’ll see how these two items on the Secretary’s to-do list develop.  In the mean time it’s good to know that Secretary LaHood wants to listen to the ports and focus some resources on the MTS.   Pbea

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Putting an ! on Intermodal

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

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

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

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

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

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

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

It will be the starting shot.   Pbea

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HMT on the Marine Highway: Once is Too Much

In Marine Highway, Surface Transportation Policy on October 18, 2009 at 11:09 pm

The Harbor Maintenance Tax (HMT) discourages new customers for the marine highway.  It may not be the only number in the logistics calculus but it tops most to-fix lists.  Why?

Vessel operators, maritime labor, ports, and others agree that the HMT is most in need of a policy fix.  But the diversity of perspective sometimes means the prescriptions for a fix will vary…as will the way of explaining the issue.

If you ask someone to explain the HMT issue the response may be:  “It’s a double tax on cargo.”   I have heard  that  lone, simple statement made many times including by an  industry witness at a committee hearing.  It is how others are coming to know the issue.  A key Member of Congress recently explained the issue that same way.  Double taxation,  period.

The double hit of the ad valorem tax is a valid reason.  Imported cargo pays on entering a U.S. port, and then, when transshipped by coastal service to another American port, pays again.  But that explanation leaves out an equally important reason for Congress to approve legislation such as the Cummings bill in the House (H.R. 638) or the Lautenberg bill in the Senate (S. 551).

The single hit of the HMT on domestic cargo–much of which moves in trailers–is the other principal reason.   Domestic freight represents the greater percentage of goods moving on the roads today…far more than international boxes.   When the Port Authority of  New York & New Jersey studied trucking in that congested metro region less than 5 percent of the trucks on the road were carrying containers to or from the port.  This is hardly surprising.

So whether the cargo is riding in a 53′ trailer, or is a vehicle itself, that is the freight we need to attract to the marine highway.  Unlike the imports the domestic freight would pay only once.  That also is too much.

If the marine highway is to fulfill our expectation to enhance the surface transportation system and mitigate the interstate burden the J.B. Hunts, the FedExs and other companies should participate in blue and brown water services.

Exempting both international and domestic non-bulk cargo moving in the American domestic trade, and among Great Lakes ports, is the objective. It is a low-cost way to remove a disincentive for the use of efficient marine transportation and signal  a policy change to the logistics industry where the business decisions are made.

That says it all.    Pbea

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Say It Again, Solon

In Marine Highway, MTS Policy, Surface Transportation Policy on October 5, 2009 at 5:33 pm

Some things are worth repeating. Especially on the subject of putting our waterways and waterfront to greater productive use.

Here’s a for-instance — excerpts from a recent statement by Rep. John Mica (R-FL), the ranking minority member of the House Transportation & Infrastructure Committee, as submitted to the America’s Marine Highways website.

  • “As construction costs rise, and as the resources to address our growing infrastructure needs become stretched thinner by the day, it is…important that we use all of our transportation assets more wisely and effectively.
  • “I have advocated for the development of a national strategic transportation plan that considers our various modes of transportation as components of one comprehensive system, drawing on the strengths of each mode, rather than as separate unrelated transportation systems.
  • “The nation would clearly benefit from the greater use of coastwise trade on our nation’s marine highways as part of a national transportation strategy” …. “Marine highways are energy efficient and can yield positive environmental benefits.
  • “If waterborne routes are to be fully used, industry must develop new options that are better suited for moving higher value and more time-sensitive goods.
  • “However, there are still roadblocks that may limit the establishment of new waterborne transportation routes. Chief among these is the imposition of the Harbor Maintenance Tax on cargo carried by vessel between U.S. ports.
  • “Of course, all proposals to better use our transportation system faces challenges…. Financing ships without the commitment of cargo is not easy. Obtaining a commitment for cargo without existing ships and an established schedule is not easy. Financing and permitting for the expansion of port facilities is never a simple or easy task….  However, these are challenges we can and must overcome.”

John Mica is an influential Member of Congress who is playing a key role in the crafting of the replacement for SAFETEA-LU, along with his counterpart Chairman Jim Oberstar, another supporter of the marine highway.   Mica is one of a small number of legislators who has spoken in terms of national strategic transportation planning, modal components being of a single transportation system, and the importance of developing the marine highway…all in the context of surface transportation policy.

That’s worth repeating…and reading in full.  With any luck his colleagues of the House and Senate will listen.   Pbea

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Rendell Bets on a Delay

In Infrastructure, Surface Transportation Policy on September 25, 2009 at 7:44 am

Governor Ed Rendell, a leading figure in the call for infrastructure reform and investment in the U.S., said that any surface transportation bill that Congress could pass this year would be a “very mediocre bill in terms of the needs of the country.”

In a story yesterday by Bob Edmonson of the Journal of Commerce the governor acknowledged, “In one sense a delay is hurtful, but in another sense the delay would give us a chance to look at new ideas, and build new concepts, and try to get a bill that will really revolutionize.”  Rendell spoke at a American Road and Transportation Builders Association conference.

The governor apparently assumes that the Senate and Administration will succeed in getting an 18 month extension of  the expiring SAFETEA-LU.  Chairman Jim Oberstar (D-MN) on the House side doesn’t want to put off major revenue and policy decisions that long.

On September 23rd when the House debated, and passed, a three month extension, through December, Steven LaTourette (R-OH) agreed that action is needed now.  His House Republican leadership opted to object to a prospective gas tax hike, which was not even on the table, rather than identify themselves with the need to maintain highway and transit programs.  LaTourette stood in the well–exasperated, looking at his own party members–and said, “I am constantly amazed at how both parties are able to snatch defeat from the jaws of victory.”  He foresees his party in the months ahead fighting a major transportation bill in the cause for low taxes.

In a recession the desire to improve the economic environment for employment is genuine and politically vital.  It’s easy to understand the impatience.  Oberstar and others want to move as quickly as possible to produce a 5-year, $450 Bn transportation bill.   Then again, there is that knotty problem of how to pay for it, as noted in this prior posting.

Whatever other thinking may be behind Governor Rendell’s frank remarks to the “road builders” he makes an important point.  On the surface is this one:  Jim Oberstar may be ready to move a bill but the Senate and administration are not.  But Rendell seems to go deeper than that.  Crafting a major bill, with its inherently difficult revenue issues and bearing the weight of expectations that this one must break new policy ground, will take more time.

Rendell is right.  After reaching the pinnacle that is SAFETEA-LU we don’t need another “mediocre” bill.   The hearing record of recent years is loaded with testimony calling on Congress to not repeat past mistakes and, as the governor put it, to produce “a bill that will really revolutionize.”  Freight policy, high-speed rail, transportation policy in a new energy/environment policy framework, performance measures, marine highways, livable communities, and the broader question raised by the Secretary as to how to integrate the MTS more fully into surface transportation policy.  These are just some of the policy challenges.

The Oberstar bill is a clear step in that direction.  And while the Senate committees have been plotting their TEA contributions the administration can’t say the same.  The White House and the Department of Transportation, which remains immersed in implementing the economic stimulus package with its multi-billion dollar new programs,  are nowhere near ready to be a full participant in the crucial dialogue on next generation surface transportation program and policy.  It will take more time.   Pbea