Marine Transportation System

Posts Tagged ‘MTS’

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Making a Last, Lasting Maritime Policy Impression

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

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

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

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

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

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

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

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

Today, the still unpublished document is nearing the end of the draft process.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

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

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

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

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

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

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

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

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

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

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

Would it be worth the wait?

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

Yes, it would be worth the wait.   Pbea

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Rx: Port Decongestant

In Competition, Government, Port Performance, Ports on April 14, 2016 at 1:14 am

The Secretary of Commerce received recommendations from her department’s Advisory Committee on Supply Chain Competitiveness (ACSCC). The paper: Recommendations to the Secretary of Commerce Regarding US Seaport and Connecting Infrastructure Congestion “for addressing and resolving” the “urgent national topic” of port congestion.

(From the humble perspective of a long time ports advocate in Washington, DC, home of the ten-ring circus, it is gratifying and reassuring that ports can sometimes make it to the spotlight and, even more, qualify as an urgent national topic…whether to the Commerce Secretary or to anyone. Not a bad career choice after all.)

Federal leadership is needed to advance a set of best port congestion reduction practices that the private and public owners and stakeholders of each port can individually adopt as appropriate. Our report contains a number of congestion reduction practices for this purpose. By advancing these practices, the Nation can achieve a comprehensive, holistic reduction in port congestion that improves national competitiveness and economic growth.

The February 4, 2016 transmittal letter to Secretary Penny Pritzker also noted that there is a limit to the role that Washington can play in addressing the issue but wanted to make the most of that role.

However, where Federal Government involvement can directly resolve port congestion issues, or reduce their impacts, Federal action should be swift and decisive.

The nine-page paper was drafted, discussed, and edited by the panel — a formal Federal Advisory Committee — over a good part of the previous year and then was approved at its January meeting. The folks who led the initiative are knowledgeable in freight logistics. And if certain others of the 30 to 40 persons usually present for the meetings had little personal knowledge of what happens in the life of an ocean shipping container it was explained to them.

(This is a good time to note that one sector that did not have a seat at that table is one that could have contributed greatly to the panel’s understanding of port terminal operations — the marine terminal industry. Further note: the newly selected class of ACSCC appointees to the 44 member advisory committee continues the seeming exclusion of representatives of the terminal industry.)

Port congestion, as it has come to be called, is a problem only in a few of the larger US ports but as those international gateways — New York/New Jersey, Los Angeles, Long Beach, Oakland, Virginia — handle a substantial share of the nation’s cargo, especially imports, slowed cargo throughput is a problem and can be costly to cargo interests and others involved in the port-centered supply chain. It is not that the other ports will never see port congestion. Others likely will, eventually. But even as this “urgent national” port topic has become an issue in Washington, and attracting the attention of multiple Federal agencies, most ports have seen none of the symptoms and few of the causes, of which there are many.

Simplistically, it might be compared to growing pains. Changes are happening to the port, terminal and other elements of the port-centered supply chain. Some of their moving parts are not moving as well as they had been. Cargo volumes are shifting. Shippers are diversifying ports of entry. Larger vessels mean more cargo to load or unload during one vessel call. Terminals were configured for the business of ten years ago. Ocean carriers relinquished ownership of chassis but not full control. A chassis or container depot is not convenient to the terminal. The truck driver makes multiple trips for one load. Drivers are told to to pick up the container when there might be better times to do it. Trucks spend hours in lines, sometimes needlessly. Discouraged drivers exit the business, causing shortages. Roads to the terminal are inadequate for the truck volume. Rail capacity is insufficient. Berths may work around the clock but gates do not because the container is destined for a warehouse not open until eight in the morning.

Throw in some sort of labor dispute (slowdown, etc) or a failure of the computerized terminal operating system and a combination of these factors can make for a quite a mess. The 2014-2015 West Coast experience during protracted labor contract negotiations — with two dozen and more ships at anchor offshore as evidence of the problem onshore — remains vivid in the minds of many whose cargo was slow to get to market and, in the case of farm exports, spoiled. The experience also is a vivid memory for  the people who worked to clear the ships and terminals of containers.

So, yes, there is a problem that some ports have been working to address. Indeed in those named ports multidisciplinary groups were organized to identify and tackle those problems. The first of those was the NY/NJ Port Performance Task Force, which for the implementation phase was succeeded by the Council on Port Performance.

The 2016 recommendations to Secretary Pritzker do not stand alone. In 2014, the Federal Maritime Commission heard stakeholders during four regional listening sessions, and later issued staff reports. The FMC is about to launch what may be its last initiative — Supply Chain Innovation Teams to “develop commercial solutions to supply chain challenges and related port congestion concerns” at the San Pedro Bay ports. In March of this year, the cabinet secretaries of Commerce, Labor and Transportation hosted an invitation-only, “21st century seaports roundtable” that was organized by the White House’s National Economic Council. Bills were introduced on Capitol Hill in 2015 and one — the Port Performance Act — eventually became law. The Department of Transportation’s Bureau of Transportation Statistics is now working on implementing the resulting Port Performance Freight Statistics Program. All of which can reasonably be attributed to the lobbying of cargo interests, with the help of trucking, who smarted from the West Coast port mess and wanted to see improvements that included, but not were limited to, workforce issues.

Committee members noted, during the discussion of this Report, that these measures can be used by the ACSCC to help the U.S. Department of Transportation to develop the set of port performance metrics required by the Fixing America’s Surface Transportation Act. The Committee also encourages the U.S. Congress to consider additional investment in last-mile infrastructure, new technologies and intelligent systems, and on-dock and near-dock facilities towards reducing U.S. port congestion.

The recommendations of “best practices” delivered to Secretary Pritzker, the details of which you can read here, apply to ocean carriers; terminal operations; port authorities; Federal, State and local government; chassis equipment management; motor carriers; and transportation planners. It is interesting to note that the recommendations apply to just about everyone in the port-related supply chain except the importers and exporters who, as happens, were the principal writers and proponents of the document.

One might wonder if others in the supply chain would have “best practices” to suggest to that shipper community. I think they would.

The Port Performance Task Force report engaged representatives of stakeholders from most aspects of the supply chain and came up with twenty-three recommendations to try to implement. Some of those recommendations, perhaps many, are true challenges, asking competing parties to cooperate in establishing shared solutions such as a truck management system (a.k.a. “appointments”) and chassis pools. Most of the recommendations have little to do with Federal or State government and much to do with improving commercial relationships, embracing new technology, sharing information, adjusting operations, improving communications, and respecting a negotiated labor contract. A few of those are in the recommendations to the Secretary.

The interest of Federal agencies in the port congestion issue is not a bad thing but it is misleading to label it “port congestion.” It is a supply chain problem. Why did the advisory committee recommendations go to the Secretary of Commerce? I suppose the reason is — like the banks to Willie Sutton — because she is there, and the panel exists to advise the Secretary. But as the transmittal letter admits, there is not much that the government can do. Outside of facilitating meetings and providing some assistance in funding infrastructure projects, the lion’s share of the work to be done is there in the supply chain, by the parties that make up the supply chain…and not just at the marine terminal.   Pbea

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LNG: Ports as a Catalyst?

In Energy/Environ, Green Transportation, MTS Policy, Ports on October 10, 2013 at 8:47 am

MTS Matters welcomes a well-known and regarded figure in D.C. transportation circles. John Graykowski, a Principal of Maritime Industry Consultants, served as Deputy Administrator of the Maritime Administration, and for two years as Acting Administrator, during the Clinton Administration. He is an attorney with experience in both private and public sectors. The subject of LNG-fueled transportation and how it might develop in the context of maritime policy and port communities has been a focus of his attention in recent years. This is the first of his contributions to this blog’s musings on port/maritime policy—present and future.

Over the past year, LNG as a marine fuel has gone from novel concept to an accepted alternative fuel here in the United States. Some LNG-capable vessels are operating and more will be under construction as appreciation is growing for the environmental, economic and energy security benefits offered by LNG. This transformation of a marine cargo commodity to emerging marine fuel in here and elsewhere might lead one to conclude that the broad deployment of LNG throughout the U.S. is underway and faces no challenges or constraints—but this is not the case. Lagging behind LNG-fueled vessel development here are the necessary market and regulatory structures that promote its widespread development.

The most common platitude in any discussion of LNG is the “chicken and egg” problem. Ship owners are loathe to make the large capital investment in LNG technologies absent certainty of supply.  Meanwhile gas suppliers are averse to spending $150 million or more on bunkering infrastructure without firm, long term purchase contracts by ship owners. This reflects the lack of historic relationships between the gas supply industry and marine operators, who purchase bunker fuel in virtually every port on a spot basis and never needed long term contracts.

Compounding that is a lack of understanding and knowledge about each other’s industries. Marine operators are not familiar with gas production, transportation and market dynamics and gas suppliers have little direct knowledge about the marine industry practices, requirements, and the like. Emblematic of the divide between the two industries is the simple fact that marine operators purchase fuel on the basis of metric tons or barrels of oil, while the gas industry sells LNG on the basis of million BTUs. Potentially complicating this market disconnect, are increasingly stringent accounting rules that likely require a long term LNG contract to be carried as a contingent liability, thus impairing a balance sheet and constraining future capital expenditures for a marine company.

Beyond these market issues are significant regulatory challenges related to both operational procedures for bunkering vessels and, more importantly, the siting, permitting and operation of small and medium sized LNG marine terminals. It may come as a surprise to some, but there are no existing uniform federal regulatory structures that apply specifically to LNG marine fueling terminals.

The United States Coast Guard (USCG) and Pipeline and Hazardous Materials Administration (PHMSA) each have regulations that apply to LNG fueling terminals. These regulations, however, were developed with large scale export and import facilities in mind and thus are largely inapplicable to a small marine fuel terminal and the fueling of other than LNG carriers. In many cases these regulations may conflict, which creates a large area of potential regulatory confusion and will most likely result in ad hoc development of LNG regulations. Adding to this uncertainty is the probable requirement that these facilities will be subject to local permitting actions, which can provide opponents of LNG the opportunity to intervene and delay the project.

Where do ports fit in this puzzle of a marketplace?

Ports can and should be a catalyst to spur LNG development throughout the transportation industries since they are at the center of marine activities in the United States. They provide a ready-made, multi-modal market for LNG expansion beyond large oceangoing vessels, which includes ferries and harbor craft, trucking, and rail operations. Port agencies may have some degree of jurisdiction, and even control, over property where LNG operations will occur. Depending on the port, it may have a role in the siting, permitting, financing, development, or even operations of an LNG fueling terminal. As a responsible economic development agency, a port can also play a critical role in the public education and promotion of LNG and the mitigation of local opposition to such projects.

Public port agencies generally understand this is a constructive role they are in a position to play. We are seeing that in isolated initiatives, notably on the West Coast, as well on an international scale with Antwerp leading a working group that includes the Ports of Los Angeles and Long Beach.

The expansion of LNG and compressed natural gas (CNG) as a replacement fuel in port related operations, already showing benefits, is also a powerful tool that ports can use to achieve significant emissions reductions and thus reduce the cost and impact of increasingly more stringent environmental regulations or measures to meet local community demands. If LNG is used to fuel vessels’ auxiliary generators while in port there may be no need to install costly shore power systems for cold ironing since equivalent emissions results could be obtained with LNG.

Collectively, ports can be in the forefront of a “Green” initiative, leading to the expansion of LNG as a transportation fuel throughout the nation. Individually, ports that facilitate LNG bunkering operations could find them to be a competitive factor in attracting and retaining liner business as those companies bring LNG-capable vessels on line to meet IMO global standards by 2020.

Much has been written of the significant impact that domestically produced natural gas and its liquefied form will have on our on our nation. Ports are where all surface modes of commercial transportation intersect and where LNG distribution will naturally occur. They are in a position to be influential in the development of national policies that promote and accommodate the broad deployment of LNG as a transportation fuel.
John E. Graykowski

 

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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

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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

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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

 

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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

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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)

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WRDA: Commonsense Earmarking

In Federal Government, Infrastructure, Leadership, Politics, Water Resources on December 20, 2010 at 8:01 pm

A restaurant is moving into our nearby Del Ray Alexandria neighborhood (and not nearly soon enough, I might add).  It is unabashedly called Pork Barrel BBQ.

The name–chosen by a  couple of former Senate staffers now opening their first restaurant–has plenty of context in the Washington area where “pork barrel” is a mud that gets slung by persons of all partisan and ideological stripes  deservedly or not.  The observation goes…”One man’s pork barrel is another man’s needed project” (or favorite eatery, as the case may be).

But let’s reject the term for such time as it takes to rationally debate the issue of earmarking.

The previous post on this blog discusses how a broad brush is being used in the “earmark” debate in Congress where schizophrenia has been in great evidence as party members opine on the subject of how earmarking should be treated by House and Senate rules starting next year.

You can tell that rhetoric and ideology are getting their way when House GOP leadership is telling the rank and file to cut their griping and just deal with it.  It being a prohibition on all earmarking (writ broad).

The thinking person should have problems with that.  Putting aside an obvious constitutional argument, let’s consider how not all project types are alike.  And to keep this short, let’s stipulate that while some earmarks are  little more than grand ideas others have been subjected to considerable analysis.  Put water resource projects in the latter category.

Federal water projects go back to 1824 when Congress told the US Army Corps of Engineers to make rivers safe for navigation.  Today the Corps’ civil works mission includes navigation (the Federal system of coastal and inland channels), protection against floods and shore erosion, and other project types.  Today projects are put through  an extensive and expensive series of wringers: environmental, engineering and economic analysis, EISs, White House sign-offs, reports to Congress, contracts between local project sponsors and the Federal government (covering sharing of costs, provision of lands, etc.), congressional authorization of projects that satisfy the various tests (see WRDA), and  subsequent funding decisions by Congress.  Oh, and there’s the public input opportunities along the way as well as more recent provisions for “peer” review of Corps feasibility studies.

As Amy Larson of the National Waterways Conference put it in her letter to Republican leaders, “water resources projects are scrutinized, arguably, to a greater extent than any other capital investment program in the government…”

In his letter of November 29, 2010, Kurt Nagle of the American Association of Port Authorities told the leaders “it is vital to find a solution that provides a process that enables investments in needed improvements in transportation infrastructure to move forward in a non-earmark environment, especially new-start construction projects.”

Yes, you are bound to find “pork” by someone’s definition even among scrutinized water resources projects but that can be managed through oversight by appropriators.  But if the leadership is not taking the time to understand differences among project types, the high hurdles that navigation projects must overcome to qualify for authorization and funding, or the simple fact that most of the nation’s navigation system consists of FEDERAL channels that Congress is obliged to maintain and improve in the national interest, then they appear to be engaging in little more than indiscriminate mud slinging.   Pbea

 

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What Are We Doing?

In Efficiency, Infrastructure, Intermodal, Surface Transportation Policy on October 7, 2010 at 10:09 pm

Canada announced a waiver of its 25 percent import tariff on general cargo vessel, tankers, and ferries longer than 129 meters.  The decision will save shipowners $25 million per year over the next decade.

“This duty relief will accelerate the renewal of the Canadian marine fleet across the country and will help replace aging vessels with cleaner, safer and more efficient ships,” said the Chuck Strahl, Minister of Transport, Infrastructure and Communities.  “All the while, it will build on unprecedented investments our Government has made in Canada’s infrastructure and gateways by contributing to the upgrading of marine transportation links across the country.”  (Marine Log, October 4, emphasis added)

The announced tariff initiative should bring into the Great Lakes newer and more efficient competition for the existing commercial fleet flying the US flag.  Perhaps it will stimulate new shipping activity on the Lakes, which would be good.  Ships will move goods more efficiently to the benefit of energy savings and air quality.

If you have the feeling that our friends to the north are thinking and acting strategically, with an eye to the large American market, it is because they are…as they should.

Will Washington watch and learn?  Or will the dusty ol’ status quo continue to be good enough  for US?  In using this most recent example of Canadian initiative I refer to nothing so specific as Jones Act requirements but, broadly, to the insufficient attention and action to address the glaring need here, especially on the marine transportation system.

Much is known as to the general direction of the Obama Administration’s thinking on transportation policy—passenger rail, public transit, livable communities, sustainability, etc.—if not about detailed proposals.   But when it comes to goods movement little has been said.

Officials at USDOT acknowledge having been slow to focus on the subject of freight.  Early on there was the view that the heavy volume of international cargo ramping onto US highways and rails was the sort of thing not meriting Federal attention–“making imported flip-flops even cheaper” was the oft quoted line–as if that were the sum total of goods movement pressures in the country.   The thinking since last year boiled down to the notion that the freight sector will take care of itself, as Transportation Under Secretary for Policy Roy Kienitz acknowledged last week.  The private sector nature of goods movement could lead one to that view, I suppose.

However, Roy Kienitz went on to indicate that more thought is going into the subject now.  He said that a presentation by Canada’s ministry of transportation on their gateway strategy made a strong impression on him.  The strategy is a public/private initiative.  He noted it is intended to attract more North American import/export trade through their British Columbia and Atlantic ports and thus make Canadian operations significant players deep into the American Midwest market.

In the Canadian initiative he can appreciate how government can play an important role working with the freight sector.  Hopefully USDOT also understands that the American transportation sector can lose business if we just sit and watch while others press ahead.

In fairness, a good percentage of USDOT-issued TIGER grants went to rail, marine highway and other freight related projects earlier this year.  We take that as a positive sign.  But the longer it takes official Washington to actually do something structural about America’s aging infrastructure, the capacity to handle growing freight volumes, and a listless maritime sector the more ground we lose.

The examples of strategic planning and investing abound around the world including just north of here.

What are we doing down here?    Pbea