Economic recession stymies efforts to shift domestic cargo from trucks to water routes

Efforts in the United States to encourage short-sea shipping through a program known as America's Marine Highway have broad support in the transportation industry and among environmentalists. To date, however, success in getting cargo to shift to vessels from trains and trucks has been very limited.

While the U.S. Maritime Administration (MarAd) has established a department to push the concept forward, major funding has yet to be allocated and some policy issues remain unresolved. The economy, meanwhile, remains cool. That has resulted in lower fuel prices and less highway congestion, leaving overland shippers less inclined to seek marine alternatives. And state and local governments have less money to develop facilities.

The initiative does appear to be gaining ground, albeit slowly. "We're confident that it is going to happen," said James Pugh, director of the office set up within MarAd to oversee the short-sea program. Pugh assumed the post in 2008 to help bring focus to the initiative, first outlined in the Energy Independence and Security Act of 2007.

Specifically, the program is supposed to establish coastal and inland transportation corridors analogous to the interstate highway program; approve and support projects that improve routes, ports and fleets; and analyze coastal shipping issues.

As of now, MarAd has completed its broader goals, but there is still much work to do, Pugh said. Officials are still working up application rules for operators and public entities to be designated Marine Highway projects and the U.S. Department of Transportation is still working to establish coastal and inland waterway corridors.

Major funding, meanwhile, remains uncertain. The Maritime Administration Authorization Act of Fiscal Year 2010 sponsored by Sen. Frank R. Lautenberg, D-N.J., would allocate grant money specifically for the Marine Highway program. It would also establish a grant program to upgrade ports.

{C}A barge that is part of the 64 Express container service between Hampton Roads and Richmond, Va., is loaded in Portsmouth, Va. Operated by Norfolk Tug Co., the service is made possible by a $2.3 million federal grant.

The Senate approved the bill on July 23 as part of a defense bill, which is likely to come up for a final vote in late August or early fall after the House takes action. Specifics on how much money might be allocated were not available.

The program could also get a cash infusion from the federal stimulus bill, but competition for that money remains intense.

While funding would certainly give the Marine Highway program a much needed jolt, it has already proven to be valuable as an advocate for regional and local groups working to establish short-sea shipping independently.

When Ed Whitmore of the James River Barge Line in Virginia saw an opportunity to set up a short-sea route running between the Port of Richmond on the James River and the Port of Hampton Roads at the mouth of Chesapeake Bay, having the blessings of the Marine Highway program helped provide clout when selling the plan to local officials and potential customers.

The result was 64 Express, which is being subsidized with $2.3 million in federal funds obtained by the Richmond Metropolitan Planning Organization. Some of the money was used to convert a bulk-cargo hopper barge into a container barge, but most of it goes to subsidizing day-to-day operations.

Having signed on some steady customers — such as MeadWestvaco, a packaging and paper manufacturer, and Altria, the parent company of Philip Morris USA — 64 Express, is gaining momentum. Whitmore acknowledges that the company would not survive without federal funds, but he regards them as a temporary boost that will lead to sustainability when the economy recovers, fuel prices increase and heavy traffic once again clogs up the highways.

"Balancing the flow will take a lot of work and you can't get it right on day one," Whitmore said. "But it will become economically sustainable."

He added that short-sea shipping is a "deeply complicated web" that involves not only fleets, ports and routes, but also trucking and rail companies — all beneath multiple layers of regulations, taxes and incentives.

Gary Randall

By Professional Mariner Staff