U.S. Maritime Administration A National Port Gateway & Freight Corridor Strategy

1. U.S. Maritime AdministrationA National Port Gateway & Freight Corridor Strategy American Waterways Operators, Inc. July 23, 2008 Draft - For Discussion Only

2. Why a National Strategy? • The Marine Transportation System is a Story of Success • The System is Facing Serious Challenges • We Need to Change Our Approach to Face Future Challenges • The National Port Gateway and Freight Corridor Strategy Draft - For Discussion Only

3. The Marine Transportation System (MTS) Success Story • The MTS: Channels, gateway ports, near-port connectors & interstate corridors that move our freight and passengers. • The MTS is the U.S. engine for International Trade • International Trade and GDP (Prosperity) are directly proportional. • Until now, the MTS has successfully supported America’s Prosperity and International Trade. Draft - For Discussion Only

4. The System is Facing Serious Challenges • Existing Landside Congestion is already a serious problem: • Congestion costs us as much as $ 200 Billion each year and climbing. • We waste 2.3 billion gallons and 3.7 billion hours each year. • Congestion slows freight, reduces reliability and increases cost. • Experts project a doubling of international freight by 2015. • Transportation Routes and Trends are changing: • Panama Canal Expansion • Ships are getting larger and deeper • Manufacturing centers are shifting • Environmental and community pressures influence freight choices • Energy costs are soaring • Exports are on the rise Draft - For Discussion Only

5. We Need to Change Our Approach SURFACE TRANSPORTATION Highways & Transit Railroads Draft - For Discussion Only

6. We Need to Change Our Approach WATER ACCESS SURFACE TRANSPORTATION Highways & Transit Maintenance Deepening Railroads Navigation Draft - For Discussion Only

7. We Need to Change Our Approach WATER ACCESS PORTS SURFACE TRANSPORTATION Highways & Transit Maintenance Deepening Railroads Navigation Draft - For Discussion Only

8. We Need to Change Our Approach WATER ACCESS PORTS SURFACE TRANSPORTATION Highways & Transit Maintenance Near-Port Connectors Deepening Railroads Navigation Marine Highways Draft - For Discussion Only

9. We Need to Change Our Approach The Marine Transportation System WATER ACCESS PORTS INTERSTATE CORRIDORS (Surface Transportation) Highways & Transit Maintenance Near-Port Connectors Deepening Railroads Navigation Marine Highways Draft - For Discussion Only

10. The National Port Gateway and Freight Corridor Strategy Views the Marine Transportation System as a single system with the ports at the nexus Objective: Ensure the MTS develops and shifts capacity in concert, maximizing reliability and minimizing congestion The Marine Transportation System and its Institutional Challenges Water Access Ports, Terminals and Landside Access Interstate Rail, Road and Marine Highway Links Draft - For Discussion Only

11. Balancing Capacity and Demand Capacity Demand Draft - For Discussion Only

12. Strategy Development to Date • Maritime Administration met with stakeholders: • Ports • Shippers and Carriers • Railroads • Trucking Interests • Industry Associations • Developed initial draft Strategy • Briefed American Association of Port Authorities (AAPA) leadership, Marine Transportation System National Advisory Council (MTSNAC) Draft - For Discussion Only

13. The Marine Transportation System and its Institutional Challenges • Overview • Governance • Funding • Port Infrastructure Development • National Defense • Findings Draft - For Discussion Only

14. Overview • Recent and Future Increase in Intermodal Cargo • Highway and Rail Challenges • Obstacles to Port Infrastructure Development • Time to Build • Cost • Permitting • Land Use • Intermodal Road and Rail Links Draft - For Discussion Only

15. Governance • 18 Federal Agencies Play a Role in MTS • Dredging • Regulation • Environmental • Role of the CMTS • State and Local Government Roles • State DOT • County, City, MPOs • Ports and the Private Sector • Landlord/tenant • Owner/operator • Role of MTSNAC Draft - For Discussion Only

16. Funding • Declining Federal Fund Sources • Federal Funding through States and MPOs • Public/Private Partnerships • Obstacles to PPP Draft - For Discussion Only

17. Port Infrastructure Development • Trend in Port Infrastructure Investment • Since 1946 - $465 Million Annually • Since 1999 - $1.5 Billion Annually • Future Growth is Impeded • Regulation • Environmental Review Obstacles and Community Concerns • Access to Land for Port Use • Intermodal Connectors • Water Access Draft - For Discussion Only

18. National Defense • Department of Defense relies on the commercial transportation system to deploy and support military operations • As ports near capacity, there is less space for DOD surge operations and unit staging areas • Designation as a Strategic Port does not provide funding to develop or maintain surge space Draft - For Discussion Only

19. Findings • Finding: The Federal government is fragmented in the governance, financing and operation of the marine transportation system. • Finding: Federal policy must encourage increased private sector investment in marine transportation system infrastructure. • Finding: Strategic Ports must retain the non-containerized surge capacity necessary to meet military deployment needs. Draft - For Discussion Only

20. Water Access • Overview – Current State and Future Trends • Maintenance Dredging • Channel Deepening • Harbor Maintenance Trust Fund • Findings Draft - For Discussion Only

21. Maintenance Dredging • Current State • Implications of Deferred Dredging • Encroachment on Waterways (bridges & piers) • Impediments to Maintenance Dredging • Shortage of Appropriated Funding • Environmental Review Draft - For Discussion Only

22. Channel Deepening • Current State • Implications of Deferred Deepening • Impediments to Successful Channel Deepening • Federal Share Difficult to Obtain • Environmental Review Process • Federal Funding and Delays Discourage PPP Draft - For Discussion Only

23. Harbor Maintenance Trust Fund • How the Harbor Maintenance Trust Fund Works • Skyrocketing Fund Balance • Access to the funding Draft - For Discussion Only

24. Findings • Finding: Maintenance dredging must keep existing channels and ports operating efficiently. • Finding: Deepening projects, including new starts, should be accelerated to meet the demands of anticipated increases in trade and larger vessels. • Finding: Expedited, streamlined environmental processes support the development of infrastructure to increase capacity. Draft - For Discussion Only

25. Ports, Terminals, and Landside Access 2018 2008 Draft - For Discussion Only

26. Challenges: Ports & Terminals • Anticipated Growth in Traffic • Infrastructure Requirements • Capacity vs. Demand • Lifts/Hour • Velocity of Cargo through System • Productivity • Throughput / Acre • Landside Access (Road, Rail) Draft - For Discussion Only

27. Landside Access • Port Land Use • Limited space to expand • Competition with other uses - Gentrification • Near Port Intermodal Connectors • MPOs not always linked to ports • Residential and urban limitations • Stove-piped (modal) funding structure and sources. Draft - For Discussion Only

28. Small & Medium Ports & Bulk Cargoes Small & Medium Ports: • Play a vital role in system of ports in the United States • Serve niche markets – Single essential commodity • Serve specific populations/regions • Provide redundancy and resiliency in emergencies Bulk Cargoes: • More tonnage moves in bulk and liquid than containers, and corridors that serve them differ Draft - For Discussion Only

29. Overarching Limitations & Opportunity • Environmental Impact • Green modernization & expansion • Financing & Private Investment in Ports & Terminals • To date, private equity mainly in existing facilities • Innovative Technology & Intermodal Systems • Agile Port • Agile Intermodal Networks • Land use & the community • San Diego Draft - For Discussion Only

30. Findings • Finding: Current modal statutes and proposed legislation impose constraints and barriers to multi-modal, and system-wide transportation policies and funding. • Finding: There is a need for expanded use and flexibility of public-private partnerships through national policy and statutory authority. • Finding: There is a need for streamlined environmental processes that reduce the cost and time to complete major transportation projects. This need exists at the federal, state and local governmental levels. • Finding: Federal leadership in the development of critical port and terminal infrastructure can assist in expediting the management and completion of marine transportation projects. Draft - For Discussion Only

31. Findings (Continued) • Finding: Increasing velocity of cargo through the transportation system has the potential to reduce congestion and environmental impacts in and around densely populated port/terminal areas. • Finding: Public sector collaboration with the private sector is essential as private entities implement initiatives to increase cargo throughput at ports and terminals. • Finding: Legacy equipment and associated highly polluting engine technology need to be replaced with more modern and environmentally sound equipment. Draft - For Discussion Only

32. Interstate Rail, Road and Marine Highway Links Draft - For Discussion Only

33. Container Ports at Major U.S. Gateways and Their Distribution Hubs Draft - For Discussion Only

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39. Major Freight Truck Bottlenecks Draft - For Discussion Only

40. North American Rail Network(Bottlenecks & Congestion Areas) Draft - For Discussion Only

41. America’s Marine HighwaySurface Transportation’s Third dimension • The U.S. has 25,000 miles of under-utilized navigable waterways • The Marine Highway can provide relief to landside congestion • The 2007 EnergyBill establishes aMarine Highwayprogram withinthe Maritime Administration Draft - For Discussion Only

42. Marine Highway Benefits MARINE HWY 1 Barge = 456 40’ Containers ENERGY 228 Railcars DBL Stacked = 456 40’ Containers RAIL TRUCK 456 Trucks = 456 40’ Containers Draft - For Discussion Only = 15 Barrels

43. Findings • Finding: Empirical analysis of the intermodal system is essential to determining and identifying chokepoints impeding the flow of cargo. • Finding: Shipper incentives can have a major impact on the movement of cargo around chokepoints. • Finding: The U.S. needs to increase and maximize capacity across all available surface transportation modes (rail, road and marine highway) on major domestic surface transportation corridors. • Finding: Critical interstate waterway corridor infrastructure, including locks, needs to be modernized to meet growing demands for the use of inland waterways and to mitigate landside congestion. Draft - For Discussion Only

44. Findings • Finding: Port connector road and rail projects need to be expedited. • Finding: Maximizing use of America’s Marine Highway can reduce landside traffic and environmental impacts of freight movement. • Finding: Harbor Maintenance Tax is a Disincentive to Marine Highway expansion. • Finding: Short line railroads can increase capacity and the flow of cargo between the waterside terminal and inland terminal and other satellite points. Draft - For Discussion Only

45. Appendices to the National Port Gateway & Freight Corridor Strategy A – Gateway and Corridor Projects B – Port Terminal Intermodal Information C – Deep Draft & Shallow Draft Navigation Projects Draft - For Discussion Only

46. A National Port Gateway & Freight Corridor Strategy Questions? Draft - For Discussion Only

47. Ports & Terminals • Productivity & Efficiency (existing infrastructure): • Lifts/Hour • Velocity of Cargo through System • Throughput / Acre • Increased Capacity through infrastructure development: • PPP Challenges • Environmental Review Process Draft - For Discussion Only