BrownWater News April 2011

DHS signs off on towing vessel inspection rules

Rep. Jeff Landry (R-La.) reported April 1 that Homeland Security Secretary Janet Napolitano has signed off on a set of safety regulations for towing vessel inspections.

“I am excited to hear that, after seven years, two congressional directives, and countless contacts to DHS by the American Waterways Operators (AWO) and other industry experts, Secretary Napolitano has finally agreed with the proposed towing vessel inspection rules,” Landry said. “My office and I have been working hard to get these congressionally mandated safety measures approved and enforced. I am hopeful the forthcoming rules will make significant safety contributions and give industry the certainty it needs to make new investments in vessels.”

Landry’s office said that Congress passed the regulations in 2004, and that the Coast Guard sent its Notice of Proposed Rulemaking to DHS for approval two years ago. Last year, the Coast Guard Authorization bill required publication of the notice by Jan. 13. 

“That deadline was not met until Congressman Landry grilled Coast Guard Commandant Adm. Papp,” Landry’s office said.

The new safety regulations will now go to the Office of Management and Budget for final approval.

DOT unveils new Marine Highway report

Transportation Secretary Ray LaHood has unveiled a new report that he said “will serve as a roadmap to the future in creating and further strengthening the nation’s marine highways.”

Congress requested the report on America’s Marine Highway, LaHood said, to show how water transportation can help move the nation to a more environmentally sustainable transportation system, reduce highway congestion and cut down on the maintenance and replacement costs of the nation’s roads and bridges.

LaHood said at the recent North American Marine Highways and Logistics Conference near Baltimore that when America’s fully integrated national Marine Highway system is finished, “Our legacy will be more than routes on water: It will be a country less dependent on foreign oil. It will be a 21st century means of moving people and goods. It will be a future that America is prepared to win.” 

The report, required by the Energy Independence and Security Act of 2007, directs the transportation secretary to establish a short-sea transportation program and to designate short-sea transportation projects under the program to mitigate landside congestion. The Maritime Administration implemented the program as the “America’s Marine Highway Program.”

The Maritime Administration (MarAd) has already taken a number of actions to implement the short-sea shipping provisions of the Energy Act. Among them was the designation of 18 Marine Highway corridors and selection of eight Marine Highway projects to operate on those corridors. In addition to the corridors, DOT awarded $215.3 million from TIGER I and TIGER II (Transportation Investment Generating Economic Recovery) programs to jumpstart or expand Marine Highway projects. 

DOT also commissioned a study of new ship designs to serve the Marine Highway markets and to be useful to the military if needed.

Other actions include the establishment of agreements with other U.S. agencies to use Marine Highway services, consultation with shippers on methods to promote the use of Marine Highway services, and establishment of an America’s Marine Highway Advisory Board.

Still under consideration by the administration are a number of legislative and regulatory suggestions offered by stakeholders, such as waiver of the Harbor Maintenance Tax for some non-bulk freight, and equal Customs notification requirements for waterborne container shipments from Canada via the Great Lakes St. Lawrence Seaway System relative to land-based shipments of the same containers.

The report said that the private sector has a big role to play in the success of America’s Marine Highway, but that the nation’s water assets will continue to be underutilized for freight transportation without strong leadership from the federal government.

The report described the importance of establishing reliable transportation services suitable to just-in-time supply chains as a means of overcoming shipper reluctance to try Marine Highway services.

The report also found that the initial cost of port facility and cargo handling equipment “can be a significant barrier to market entry for Marine Highway services.” 

Initial high-fixed costs for new port infrastructure, which must be passed on to shippers, “places Marine Highway services at a competitive disadvantage relative to established land-based modes,” the report said. An “especially critical component” of Marine Highway operating costs is loading and unloading the vessels at ports.

As the report noted, other disincentives to increased use of the Marine Highway would include the unfamiliarity of shippers with this domestic transportation alternative, the lack of an established network of frequent service for container and trailer cargoes, the need for coordinated investment in port infrastructure and vessels, tax issues, and the fact that public benefits attributable to the use of Marine Highway services do not factor into many private sector transportation decisions.

Current and future Marine Highway operators must demonstrate that they can provide frequent and reliable service to a wide range of destinations, the report said. Furthermore, the report said that the water transportation industry “must greatly improve efforts to educate the public, shippers, legislators and transportation planners about the public and private benefits of the Marine Highway for the movement of goods and passengers.”

Waterways industry faces budget hurdles

Cornel Martin, president and CEO of Waterways Council Inc. (WCI), updating reporters on the status of the waterways industry, said March 10 in Washington, D.C., that even though the Harbor Maintenance Trust Fund has a $6-billion surplus, “we can’t get our ports and waterways dredged to their authorized depths.”

The hurdles faced by the industry begin at the White House, where the administration “now opposes the Inland Waterways Capital Development Plan and offers no alternative,” Martin said in a slide presentation. “The Sierra Club and Isaac Walton League are constantly calling for deauthorization of lock improvement projects on the Upper Mississippi and Illinois rivers.”

Martin’s slides showed that construction at Olmsted Lock and Dam and Lower Monongahela Locks and Dams 2, 3 and 4 are well over budget. Olmsted, originally estimated at $775 million in 1988, is now building at a current estimate of $2 billion, with the industry share climbing from $388 million to $1 billion from the Inland Waterways Trust Fund (IWTF). The Monongahela locks and dams were estimated to cost $554 million in 1992, but are now estimated at $1.7 billion. The industry share of that project soared from $277 million to $850 million from the IWTF.

Gibbs endorses more funding for Corps of Engineers

Rep. Bob Gibbs (R-Ohio), chairman of the House Water Resources and Development Subcommittee, has endorsed more funding for the Army Corps of Engineers.

Noting that the administration asked for only $4.6 billion for the Corps in Fiscal Year 2012, 6 percent less than what Congress enacted in FY 2011, Gibbs said at a recent Corps budget hearing that “only if our ports and waterways are at their authorized depths and widths will products be able to move to their overseas destinations in an efficient and economical manner. Since only two of the nation’s 10 largest ports are at their authorized depths and widths, the president’s budget does nothing to ensure our competitiveness in world markets.”

“Given the fact that the navigation projects and flood damage reduction projects provide economic benefits to the nation, I would like to see the administration place a higher priority on these types of job-creating water resources investments,” Gibbs said.

Senate panel paves way toward new WRDA

The Senate Committee on Environment and Public Works is getting ready to start work on the next Water Resources Development Act (WRDA), the authorizing legislation for the programs and projects of the civil works program of the Army Corps of Engineers.

In mid-February, Sen. Barbara Boxer (D-Calif.), chairman of the committee, and Sen. James Inhofe (R-Okla.), ranking member of the committee, asked senators in a “dear colleague” letter to provide the committee with their states’ resources priorities, “so that we have a complete perspective of the nation’s critical infrastructure needs.”

The two senators said that letters asking for specific projects should include request forms, request spreadsheets and any required certifications. All of that material was due to the committee by March 28.

Maintenance dredging draws new attention 

Sen. Jim DeMint (R-S.C.) has introduced a bill that he says would reform the way harbor dredging and other water resources projects are funded.

Co-sponsored by Sen. Lindsey Graham (R-S.C), the bill, the U.S. Army Corps of Engineers Reform Act, would set up a Water Resources Commission to prioritize water resource projects.

DeMint’s bill calls for the establishment of a harbor maintenance block grant program to help pay for harbor maintenance and deepening projects. 

DeMint says that his plan (S. 573) would eliminate Corps earmarks by increasing transparency, empower the Corps to undertake studies and construction projects based on national priority instead of politically directed earmarks, and reform the administration of the Harbor Maintenance Trust Fund (HMTF) to allow states to choose where to use the harbor maintenance taxes collected at their own ports.

“The era of earmarks is over and Congress must pass urgently needed reforms to ensure taxpayer dollars are spent on national priorities or not spent at all,” said DeMint. “For too long, Congress has relied on a corrupting system that funded projects based on politics instead of merit. Politicians have tried to justify their existence with politically driven handouts to low-priority projects in their states, but the time of using taxpayer-dollars as a favor factory must end.”

On another front, Rep. Jeff Landry (R-La.) has asked his House colleagues to join him in sending a letter to the House Budget Committee urging the panel to “apportion all proceeds of the Harbor Maintenance Trust Fund to the fund’s intended purpose — maintenance dredging — and rejecting the administration’s request to expand the authorized uses of the fund.” The administration would expand the authorized uses of the fund to finance government programs other than maintenance dredging.

The fund is financed through a 0.125 percent tax on cargo imported through a port or moved between domestic ports. Even though the administration assumes the fund will collect more than $1.5 billion this year, its proposed budget calls for only $789 million in harbor and channel dredging funds.

Also complaining about the money not being spent for dredging was John D. Baker, president of the Great Lakes Maritime Task Force, who said that the administration’s proposed dredging budget for Fiscal Year 2012 “will not spend one dollar” on 13 Michigan ports that collectively average more than 31 million tons of cargo per year.

“This despite the fact that those tons were taxed and the revenue deposited in the Harbor Maintenance Trust Fund that bankrolls the government’s dredging program,” Baker said. “It is impossible to fathom the rationale behind this abandonment of vital ports. We are talking about ports that in some instances can annually handle more than 10 million tons of cargo in a strong economy.”

Categories: Maritime News