Just as the Maritime Administration moves forward on creating a national maritime strategy that supporters say should endorse marine highways, a new study says such links between coastal ports and waterways remain too costly to be viable.
The study by researchers at the University of New Orleans adds a new voice of uncertainty to the future of this type of freight transportation, also called short-sea shipping.
The concept has been considered by U.S. policymakers for more than 20 years and has been the subject of numerous studies, workshops and trial projects across the country, but not much progress has been made in making it a part of U.S. transportation policy, or committing long-term federal funds to its future.
Many, however, still see it as an important transport link. They want the federal government to provide subsidies for coastal shipping and include it as part of the evolving national maritime strategy, citing its potential to ease congestion on rails and highways and reduce pollution.
“The Impact of Modifying the Jones Act on U.S. Coastal Shipping,” just released by the University of New Orleans Department of Planning and Urban Studies, concludes that “coastal services are uncompetitive with present truck and rail services” even if the U.S. build requirement of the Jones Act did not apply. The study was commissioned by the Louisiana Transportation Department.
Researchers took a different approach than previous studies, focusing on coastal shipping that would be exempt from U.S.-build requirements of the Jones Act. They looked at the impact of the U.S.-built exemption on the cost of coastal shipping and the competitiveness of these exempt services. Case studies involving domestic cargoes and international feeder services were examined.
In all cases – domestic short range, long range and international feeder services – coastal shipping was not economically viable. Higher costs, limited scope of service, insufficient port-to-port traffic volume and high port costs were cited as reasons.
In addition, the study said that favorable financial terms offered for U.S. ships built in U.S. yards essentially wipes out any savings advantage of building vessels in foreign yards.
“Exempt coastal services are not competitive with exiting rail and truck services,” the study said. “Commercial coastal shipping of containers and trailers in the U.S. has dim prospects, regardless of the Jones Act. Short-term domestic services cannot compete with trucks; long-range, domestic services cannot compete with rail; and short-range feeder cannot cope with high port costs.”
Researchers based their conclusions on an analysis of truck freight rates and services, port infrastructure and traffic volume. They looked at several coastal shipping routes. In the case of the Boston to New York corridor, they said that feeder coastal shipping service is 30 percent more expensive than trucking, even when foreign ships and crews are used. Shippers would also face longer transit time and infrequent and inflexible service schedules.
“The feeder-short viability is highly dependent on port costs in New York and Boston, along with drayage cost in the Boston area,” the study said. “A concerted effort by the ports of Boston and New York to induce such a service could result in substantial cost savings that could bring the cost of coastal feedering down to the level of trucks, or perhaps below it.’’ But, the study said, a service based on subsidies might not be viable in the long-term.
In addition, the New York-Boston route will likely face competition from foreign-flag feeder services based in low-cost foreign transhipment hubs in Canada and the Caribbean.
