In Defense of Short-Sea Shipping

A disclaimer for what you’re about to read: I have a personal interest in short-sea shipping. My maritime career began at Hampton Roads and Richmond, Va., today connected by a James River barge link. And Port Canaveral, Fla., where I served as CEO for nearly a decade, has always been at the forefront of short-sea discussions, because of its location close to the sprawling Orlando market to the west and a short trip to Atlantic shipping channels to the east, without the congestion of more mature cargo ports.

Through much of the 1990s and early 2000s, short-sea shipping was the next great thing for U.S. ports, before being forced into the shadows by the expansion of the Panama Canal. It got a catchy new name, far from the ancient coast-wise shipping and the tongue-tying short-sea shipping: America’s Marine Highways, built around a new federal program that included some funding. It borrowed ideas from a European program with an equally catch name: the Marco Polo Initiative.

The concept, however, hasn’t gained traction. The usual factors were discussed as late as May 2012 in a Politico article titled, “Federal Marine Highways Projects Hard to Launch,” including the Harbor Maintenance Tax and the Jones Act, but a bit broadly, “no retail connection to the maritime industry.”

But what about the other side of the ledger — the strain on our national highway transportation system because of high diesel prices, driver shortages and highway congestion, not to mention the environmental benefits of waterborne transport, the usual factors we were led to believe would make short-sea shipping compelling, and a reality in this country?

To a purist, short-sea shipping is defined as taking domestic shipments off the road and making them waterborne. Why? Because international containers have moved between U.S. ports for years. Columbia Coastal Transport has barge services that connect Norfolk, Baltimore and Philadelphia, for example. Barges haul containers up the James River in Virginia and between the ports of Oakland and Stockton. I’ve been told that the practice was more widespread in the past, and some U.S. ports actually used to function as legitimate transshipment hubs and fed containers into other U.S. ports, a role apparently relinquished to offshore hubs such as Freeport in the Bahamas and Kingston, Jamaica.

But whether the cargo moving is domestic or international, the marketplace is peppered with failed attempts, even supported by federal money. A lot of very smart people in the public and private sectors have been working for years to turn the concept into a commercial, unsubsidized success

They’ve failed. Here’s an attempt to explain why.

  • The model of the flow of commerce in Europe doesn’t translate well to the United States. One reason is that short-sea shipping in Europe is conducted on a blanket of rivers, many close to main industrial centers, not the coastwise patterns often proposed as U.S. Marine Highways. The economics differ as a result.
  • At least one study I reviewed showed the better U.S. economics for longer, true coastwise routes. But here’s the rub: These markets already are connected by rail. So the second point is that, perhaps, in the U.S., the domestic markets best suited for coastwise marine transport already are well-served by rail. Maybe piggyback is our short-sea shipping — we simply haven’t acknowledged it. Nor have we acknowledged that our rail system is more developed than Europe’s, another reason why the short-sea models can’t be compared.
  • The marketplace is a cruel mistress. Shippers won’t change modes of shipping simply because one is greener, and they won’t react to sustained driver shortages or high diesel prices until there is the clear potential to impact their business. If short-sea shipping can reduce rates below current truck and rail pricing, or increase service levels without increasing costs, or if the strain on our highway system becomes an intolerable reality, then waterborne transport may become more attractive to shippers. If not, there will be little reason for shippers to change. I have always believed that for the concept of short-sea shipping to be viable, it must have the strong support of those impacted by the strains on our highway system — truckers, in other words — for it to reach the next level of viability, or at least the promise of it.
  • When Florida Governor Rick Scott rejected federal funds for high-speed rail between Orlando and Tampa, I tongue-in-cheek suggested the money be diverted to U.S. shipyards to build a fleet of vessels for the coastwise trade — with flexibility that allowed the ships to be utilized for military purposes if needed or if pilot projects with private operators failed.My point was lost in translation, but it was this: Spreading whatever little federal funding is available, if any, hasn’t produced significant results.

Here’s another idea: Remove each and every governmental restriction or mandate cited as an obstacle to short-sea shipping in this country for a term of years and let market forces decide the viability of the concept. Why not test the dream for real?

Maybe short-sea shipping will remain a dream, a concept that all support, but none can execute. We may never know.

To their credit, the U.S. Department of Transportation and Maritime Administration are keeping the dream alive, just designating two more marine highways in September, one for cargo along the Missouri River and another for passenger service along the Occoquan, Potomac and Anacostia Rivers through Virginia, Maryland and Washington, D.C.  The DOT and Marad also will hold a National Maritime Strategy Symposium in Washington Jan. 14-16, which seems like a perfect venue for an update on short-sea shipping — America’s Marine Highways, I mean.

J. Stanley “Stan” Payne has held senior leadership roles at the Virginia Port Authority and the Canaveral Port Authority during periods of dramatic transformation and great growth, but also has spent a significant part of his career in the private sector unrelated to transportation. He is the author of “The Right of a Port to Cargo in the Age of Containerization: Going, Going … Not Quite Gone” in the Transportation Law Journal, University of Denver School of Law. Contact him at stanpayne@cfl.rr.com.

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