Short Sea Shipping Initiative

Presented at:

FHWA’s Talking Freight Seminar

December 17, 2003

Carl J. Sobremisana U.S. Maritime Administration

Presentation Outline

• Introduction and Description of Maritime Administration (MARAD) and Short Sea Shipping (SSS) Initiative

• Lessons Learned from European SSS• Overview of U.S. Waterway System• Needs and Activities of SSS• Challenges and Accomplishments • Conclusions and Recommendations

U.S. Maritime Administration

Mission

History of Short Sea Shipping (SSS)

SSS in the Western World began between 1200 B.C. and 900 B.C. by the Phoenicians in the Mediterranean Sea and in the U.S. in 1600 A.D. along the East Coast.

Working Definition

“SSS is defined as commercial waterborne transportation that does not transit an ocean. It is an alternative form of commercial transportation that utilizes inland and coastal

waterways to move commercial freight off already congested highways, thereby providing more efficient and safer

roadways for car passengers while alleviating congestion at critical choke points. A secondary effect of SSS would be reduction of air pollution and overall fuel consumption

through economies of scale. Without building more highways, SSS can provide additional capacity with the National Transportation System through greater use of

waterborne carriage and can enhance linkages to our North and South American trading partners.”

Lessons from North Europe

•Short Sea Shipping: strong and growing

•Reduces road congestion

•Economizes on fuel & reduces pollution

•Viable services require

•reliability

•high frequencies

•short transit times

•imaginative infrastructure

3

Rotterdam mainport

RotterdamRotterdam

1,300 km (80 0 miles)350 million people

950 km (600 miles)220 million people

500 km (300 miles)160 million people

8

Hinterland connections

RailRoad

Shortsea - feederPipeline

Inland shipping

U.S. Waterway System

U.S. Army Corps of EngineersNational Data Center - National Waterway System

Source: Federal Highway Administration

Top Gateways for International Freight Exports and Imports in Tons

Exports

Imports

Source: Federal Highway Administration

Water transportation is efficientWater transportation is efficientThis ONE barge is equal to...

180 Trucks

•25,000 miles of inland and coastal waterways•Waterways connections to 152,000 miles of rail•Waterway links to 460,000 miles of pipelines•Port connections to 45,000 miles of interstate highways

Distance covered per cargo - tonDistance covered per cargo - tonwith the same quantity of fuelwith the same quantity of fuel

Port of Portland Terminal 5

Barges and deep-seavessels are worked on the same wharf with the same cranes

Source: JWD Consultants

Barges in Portland

Source: JWD Group

Source: JWD Consultants

Matson Barge for Hawaii Service

Source: JWD Group

SSS New Development Activities

• NY- NJ Port Inland Distribution Network

• MARAD High Speed Ferry and Coastwise Vessel Studies

• State of Florida Intra-coastal and Inland Waterway www.dot.state.fl.us/publictransportation/Documents/WaterwayStudy/WaterwayStudy.htm

• Gulf of Mexico and U.S. Short Sea Shipping www.gomsa.org

Drivers of Success for Short Sea Vessels

• Line haul vessel costs, costs at origin, costs at destination

• Adapt vessel to land rather than vice versa

• Environmental, Safety, and QOL Factors

• Policy Focus and Incentives

TAKING A FRESH APPROACH: Port Inland Distribution Network A Port Authority of New York / New Jersey Concept

A SPECIALIZED VESSEL DESIGNED TO CARRY ROCKETS FROM THE INLAND WATERWAY STYSTEM TO CAPE KENNEDY:

• Operates in Shallow Rivers and Low Bridges.

• Also carries commercial cargo

TAKING A FRESH APPROACH: DELTA IV ROCKET TRANSPORT

Why the U.S. needs SSS?- Congestion increases for passengers and freight

- Air pollution increases in urban areas

- Accidents increase: Surface truck traffic in mix with passengers causes safety issues

- Economic growth relies on a smooth flow of goods

- Existing infrastructure cannot handle the increases

1. Not integrated

2. Highway centric

3. Aging infrastructure

4. Not set up for urban population increases

5. Transport nodes are in urban centers

GROWTH BY REGION: US INTER & INTRA-REGIONAL TONNAGE GROWTH

TO 2020

Source: Federal Highway Administration

THE ISSUES:

•U.S. global maritime trade expected to double by 2020

•10,000 more trucks per day projected on the I-95 corridor

•Cost of expanding U.S. highway system is significant:

New highway can cost $32 Million per lane mileNew highway interchanges can cost over $100 million

Challenges to SSS

THE CHALLENGE: USE ALL ELEMENTS OF THE TRANSPORTATION SYSTEM

TO MEET GROWING DEMAND

Projected highway congestion in 2020: Source - Federal Highway Administration

US/Mexico Truck Traffic on US Highway Network, 2020 (Tons)

Source: Federal Highway Administration

US Department of Transportation

1. FrequencyOne sailing per week insufficient

2. Container sizeDomestic market favored bigger boxes

3. Overweight containers4. Drayage expense to and from port facility

S.S. Manulani

Market Challenges

Source: TRB Marine Board Spring Meeting

Shipping System Market Integration and Ship Operating Challenges

• Formation of partnerships with trucking industry

• Implement single bill of lading interface and shore-side distribution systems

• Develop reliable schedules with trucking, rail, and/or ocean container connections

• Structure and implement low cost ship operating crew complement

Source: TRB Marine Board 2003 Spring Meeting

Source: TRB Marine Board 2003 Spring Meeting

SSS Challenges (Continued)

• Terminal Operational Challenges– Federal Harbor Maintenance Tax, Stevedoring

Costs, Terminal Location, Terminal Facilities

• Jones Act Challenges– High Capital Costs of Ships and Crews

• Ship Financing Challenges– Mitigating Financial Risks

Source: TRB Marine Board 2003 Spring Meeting

Matson’s Pacific Coast Shuttle

Distance/Transit Time

Los Angeles to Seattle: 1,144 miles - 2.5 days

Seattle to Oakland: 807 miles - 1 day, 16 hours

Successes and Snags in U.S. Short Sea Shipping

MARAD SSS Accomplishments

• New York City SSS Conference

• Establishment of MARAD Task Force on SSS

• Creation of of SSS Cooperative (SCOOP)

• Sarasota, FL SSS Conference

• MOC with U.S./Canada/Mexico

• MOC with Gulf of Mexico States Accord (GOMSA) and Gulf of Mexico States Partnership

International Cooperation on SSS

MARAD shared information on SSS in the U.S. at the “Pentaport Seminar to Develop the Port of Incheon as a Logistics Hub in Northeast Asia”

Conclusions

National Freight Policy

• There is a need to establish an intermodal freight policy in USDOT that integrates robust SSS within the U.S. Marine Transportation System

• Educating the public-at-large, including state departments of transportation, metropolitan planning organizations, shippers, railroads, and truckers of the benefits of SSS

Future SSS Initiatives

• Development of Partnerships with the Public and Private sectors

• U. S. Department of Transportation Strategic Plan

• MARAD Strategic Plan

• Creation of a MARAD SSS Program

For further information contact:

Carl J. Sobremisana

Secretary of the MARAD SSS Task Force

(202) 366-5471

E-mail: carl.sobremisana@marad.dot.gov

MARAD Web Site: www.marad.dot.gov