Report identifies æmarine highwayÆ challenges
While 'marine highways' have potential as an alternative to road and rail transport, a recent Congressional Research Service report found obstacles to moving more freight by water.
“Marine highways may be commercially viable in certain circumstances. In many instances, however, they have succeeded in capturing only a negligible share of container shipments along a given route,” said the report, Can Marine Highways Deliver “There are questions, therefore, whether marine highways will divert enough trucks to provide public benefits commensurate with their costs.”
It pointed to a container-on-barge service that operated between the Port of New York and New Jersey and Albany in 2003-2006, which it said received $5.3 million of federal funding that “enabled the transportation of 8,486 containers over the service's three-year life. This equates to a federal outlay of $625 per container, which is in the neighborhood of what a shipper would pay for trucking a container between New York and Albany. Thus, the federally supported project roughly doubled the nation's freight bill for these container movements.
“The prevailing perception is that coastal and river navigation is too slow to attract shippers that utilize trucks, and that the additional cargo handling costs at ports negate any potential savings from using waterborne transport. While there are other significant obstacles as well, under highly specific circumstances, marine highways might attract truck freight,” the reports said.
“Freight corridors characterized by an imbalance in the directional flow of container equipment; shippers with low value, heavy cargoes, and waterside production facilities; and connections with coastal hub ports over medium distances may be suitable for container-on-barge or coastal shipping services. It also appears that marine highways are more suitable to international rather than domestic shippers because the former have lower service expectations.
“Domestic shipments are much less likely to use marine highways because, even with highway congestion, shippers are accustomed to relatively consistent on-time performance. Importers and exporters of containerized freight, on the other hand, are accustomed to delays routinely caused by weather, customs, and labor unrest here or overseas. In the context of an ocean voyage lasting two or three weeks, a one- or two-day delay is not unexpected or calamitous.”
The report, dated Jan. 14, discusses efforts to repeal the harbor maintenance tax for containerized domestic shipments to help spur short sea shipping, but said the $1.25 per $1,000 of shipment value tax “remains largely unenforced with respect to domestic shippers.” It said the Army Corps of Engineers estimates “only about 10 percent of what is potentially owed is being collected from domestic shippers.”
It contends “repealing the tax raises equity issues because waterway users already benefit from reduced federal user charges compared to trucks, and their other competitor, the railroads, are largely self-financed.”
The report also discussed the Jones Act that requires ships operating between U.S. ports be built in U.S. shipyards, and be owned, crewed, and operated by Americans.
“Since the construction cost of U.S.-flag deepwater cargo ships is generally believed to be three or four times that of ships in the world market, the Jones Act may be a significant barrier to domestic shipping in oceangoing vessels.” It noted that as of the end of 2008, there were 42 active Jones Act-compliant ships suitable for deepwater marine highway service, including 27 containerships and 15 roll-on/roll-off ships.
“Of these, 29 (70 percent) were built before 1984 and thus approaching the end of their useful lives, normally 20 to 25 years for saltwater vessels. The United States is the only industrialized nation that has a domestic build requirement for domestic shipping, and no such requirement exists for other U.S. freight modes,” the report says. It adds barges are subject to the same requirements but that “additional construction and manning costs may be less significant than is the case with oceangoing ships.” ' Chris Dupin
Report identifies ?marine highway? challenges
