2012 Freight in the Southeast Conference America’s Marine Highway Services March 16, 2012 Lauren Brand, Director Office of Marine Highways & Passenger Vessel Services US DOT – Maritime Administration 1

2 Vision America’s Marine Highways are a routine intermodal choice among shippers and freight forwarders, providing reliable scheduled liner services; Expanded use of Marine Highways make measurable improvements to environments impacted by transportation; Shippers request Marine Highway services as a more efficient means of moving their goods because of both its cost effectiveness and its pubic benefits; Marine Highway services are self sustaining and profitable across the U.S., using both ships and barges;

M-5 M-95 M-10 M-90 M-70 M-55 M-5 (AK) M-71/77 M-65 M-40 M-49 M-87 M-64 M-A1 M-75 M-84 M-580 Marine Highway Grants - September 2010 M-2 LEGEND MH Corridor MH Connector MH Crossing U.S. Interstate M-55 M-70 M-95 M-5 M-90 M-90

M-5 M-95 M-10 M-90 M-70 M-55 M-5 (AK) M-71/77 M-65 M-40 M-49 M-87 M-64 M-A1 M-75 M-84 M-580 America’s Marine Highway - Programmatic NEPA Project in Five Major Regions M-2 LEGEND MH Corridor MH Connector MH Crossing U.S. Interstate M-55 M-70 M-95 M-5 M-90 M-90 West Coast (4 States) Gulf Coast (5 States) East Coast (15 States) Great Lakes & St. Lawrence Seaway (7 States) Inland Waterways (13 States)

M-5 M-95 M-10 M-90 M-70 M-55 M-5 (AK) M-71/77 M-65 M-40 M-49 M-87 M-64 M-A1 M-75 M-84 M-580 Marine Highway Cooperative Agreements- Sept M-2 LEGEND MH Corridor MH Connector MH Crossing U.S. Interstate M-55 M-70 M-95 M-5 M-90 M-90

Examining the potential for marine highway services to provide relief of congested landside corridors and to provide additional transportation options. Identifying types of vessels which would be suited for marine highway routes. Collecting data from various modes and sources regarding the most congested corridors and types of freight being moved. Identifying markets which could be served. Initiatives & Market Studies 6

2005 GAO Short Sea Shipping Option Shows Importance Global Insight & Reeve and Assoc: Four Corridor Case Studies CCDoTT Operational Dev of SSS to Serve the Pacific Coast 2009 NAASCO/ General Dynamics: Shipbldrs Assessmt of Marine Highways 2011 Herbert Engineering & Mercator Dual Use Vessel Study 2012 TEC & Erik Stromberg M-5 West Coast Marine Highway Study 2012 The RNO Group M-55 Inland River Marine Highway Initiative 2012 Parsons Brinckerhoff M-95 East Coast Marine Highway Study 2012 CCDoTT 3 AMH Dual- Use Vessel Design Project Describe why short sea shipping is considered and factors affecting its viability; the government's role in SSS development and issues to be considered by govt when making investment decisions re: freight mobility challenges Assess viability of short sea operations on four potential domestic Corridors; as alternatives to overland freight transportation. Analysis of short sea service along Pacific Coast handling domestic and feeder cargoes; using a door to door model A shipbuilder's perspective based on previous two reports Assess M- 95, M-5 and M- 10 plus the NEMH project (Maine to NY/NJ) AMH markets & prepare 11 Ship concept designs Conduct a study that examines the potential for Marine Highway service(s) to provide relief to the M-5 and connecting Marine Highway Corridors Conduct a study that examines the potential for Marine Highway service(s) to provide relief to the M-55 and connecting Marine Highway Corridors Conduct a study that examines the potential for Marine Highway service(s) to provide relief to the M-95 and connecting Marine Highway Corridors Refine three of the 11 MARAD concepts with cost data and calculate RFRs 7

2005 GAO Short Sea Shipping Option Shows Importance Global Insight & Reeve and Assoc: Four Corridor Case Studies CCDoTT Operational Dev of SSS to Serve the Pacific Coast 2009 NAASCO/ General Dynamics: Shipbldrs Assessmt of Marine Highways 2011 Herbert Engineering & Mercator Dual Use Vessel Study 2012 TEC & Erik Stromberg M-5 West Coast Marine Highway Study 2012 The RNO Group M-55 Inland River Marine Highway Initiative 2012 Parsons Brinckerhoff M-95 East Coast Marine Highway Study 2012 CCDoTT Three AMH Dual-Use Vessel Design Project Federal Highway Admin reports and study of two operations Global Insight's Transearch database 2003 State DOT stats of Business Economic Areas (WA, OR and CA)/US Bureau of Economic Analysis regional economic data previous studies Extensive interviews with shipping companies confirmed by analysis of Global insights 2009 Transearch data base FHWA's Freight Analysis Framework 2007; US Census Foreign trade Division trade data; US Census County Business Patterns; US Bureau of Economic Analysis (BEA) regional economic data Old fashioned market analysis within a targeted geographic area; work based on research, meetings and interviews Corridors and services identified in the Marine Highway applications titled: The AMH 1-95 Corridor Service Project (ports of New Bedford, Maryland, Canaveral); New Jersey Marine Highway Platform as a Marine Highway Project Builds on 2011 HEC market analysis with peer review confirmation 8

Multiple shippers interviewed – key concerns are: Reliability Consistency of schedule Visibility Cost Risk of delays in ports SHIPPER CONCERNS 9

 Under current market and regulatory conditions, sustainability of services are difficult to predict  Therefore, policy and regulatory changes are required in order for services to be economically sustainable. Bottom Line 10

11 Revision in the collection of the Harbor Maintenance Tax Government support for Ship Construction Tax credits for shippers who use more environmentally sustainable modes of transportation Investment in Port Infrastructure Amend the Tonnage Tax for U.S. flag ships Implement Marco Polo type startup assistance program Fund LNG fuel distribution capability Ensure users and beneficiaries pay for services commensurate with costs of providing them. Policy Options 11

12 HMT & Tonnage Tax

Focus on States MAP 21 (Moving Ahead for Progress in the 21 st Century) S. 1813: MAP 21 (Moving Ahead for Progress in the 21 st Century) S. 1813:  February 29, 2012 recommended for consideration by the Senate  Maritime projects will be able to compete in State DOT programs for: CMAQ funds Up to $400 million for infrastructure projects more cost effective than highway options Up to $1 billion for infrastructure projects of national or regional significance

Focus on States 38 State DOTs influence America’s Marine Highways Which State DOT department will consider it? 9 = maritime, ports, waterways or marine 8 = planning 6 = intermodal 4 = freight 3 = rail & marine/railroads & harbors 1 = aviation & ports 1 = trade development 6= have no department that addresses maritime

Next Steps 2012 MTSNAC – Marine Highway Subcommittee Regional Roundtables Issue “Call for Projects” 15

America’s Marine Highways Program Existing MH Corridors Map Existing MH Corridor, Project and Initiative descriptions References (Studies) Report to Congress (April 2011) Lauren Brand America’s Marine Highways Program Existing MH Corridors Map Existing MH Corridor, Project and Initiative descriptions References (Studies) Report to Congress (April 2011) Lauren Brand