MANAGING GROWTH

MANAGING GROWTH

It is a welcome development for shippers as well as the maritime industry that serious attention is being given to the coastal feeder system in the U.S. and how it will evolve over the coming decade.

Few policymakers have ever given more than a second thought to coastal freight transportation, but until now it hasn't much mattered. Most ports have been well-served by international carriers, and containers that had to be transported from one region to another could - and still can - be moved by rail or truck.

But the situation is beginning to change. As shipping lines search for cost efficiencies, they're building larger ships and scheduling fewer port calls on those ships' itineraries. Carriers won't make direct calls at ports that don't generate a sufficient amount of cargo. Witness the Port of Boston's current struggles to retain direct vessel calls following last month's breakup of the Vessel Sharing Agreement. And congestion on highways and limited rail intermodal capacity is generating interest in fast ferries to handle purely domestic freight. There is little question that on the East and Gulf coasts only a few ports, perhaps New York and Charleston on the East Coast and Houston on the Gulf, will emerge as true ''hub'' ports for line-haul container ships.

To a certain extent, that's already happening, as the emergence of Columbia Coastal Transport on the East and Gulf coasts illustrates. Founded in 1990, the company expects to transport more than 220,000 20-foot and 40-foot containers this year, mostly international cargo moved between ports for ocean carriers. The result of the shipping lines' shift to larger vessels with fewer port calls is that more and more cargo will be hitting land far from its ultimate destination. The question is how it will move onward from its initial port of landing, or be delivered to its port of embarkation if it's an export load. As we report on Page 14, a working group in Washington comprised of labor, domestic carriers and ports has begun to study that question. Two recently published studies, one sponsored by the National Defense Transportation Association and the other jointly sponsored by the Maritime Administration and the Defense Department, delve further into the matter.

The reality driving the studies and discussions is that the volume of international container trade is expected to continue its rapid growth. It could double in as little as a decade. Such growth, if absorbed by trucking, could overwhelm already congested highways, such as I-95 on the East Coast. What to do? A basic premise is that it's sound policy to steer as much of that growth as possible to the water. It makes sense for economic, safety, environmental and even national security reasons, though such a policy is sure to be resisted by railroads and truckers.

A federal policy initiative could make a lot of difference. If an efficient system of moving containers up and down the East Coast by water were to be created, it would require construction of port facilities and access roads connecting ports, highways and marine terminals. The government could get behind such projects, and provide more incentives for construction of coastal vessels.

Bruce A. Fenimore, president of Columbia Coastal, believes state governments will play the primary role in fostering the coastal intermodal system. He says the basic concept is already in place in Massachusetts and North Carolina, two states with secondary ports, Boston and Wilmington, respectively. Massachusetts offers shippers a credit for the Harbor Maintenance Tax they pay to the federal government on every container they move through Boston. North Carolina offers shippers a break on their corporate income taxes, but only based on the additional cargo they move through the state's ports from one year to the next. Fenimore says those programs, while well-intentioned, are largely ineffective, and that the states must go much further if they're to keep cargo moving through their ports.

''If the port authorities are going to be successful and survive, they are going to have to make it attractive for the shippers in their regions to use them,'' he said. Otherwise, he fears some secondary ports may disappear - spelling disaster for the future of coastal transportation. Longshore labor has an important role to play as well, Fenimore says, because every coastal move is handled twice by longshoremen - once at each end.

It's a good time to study this issue. Domestic carriers and labor can rest assured for the moment that the Jones Act, which limits shipping between U.S. ports to vessels owned, crewed and built by Americans, is secure politically - not the case just a few years ago. And other nations, such as Japan and those in Europe, have shown that it's possible to successfully shift cargo from roads to water without creating undue hardship for shippers.

What are we waiting for?