FHWA Talking Freight Seminar Series

1. FHWA Talking Freight Seminar Series Observations on the: Marine Transportation System (MTS) 2nd Annual Short Sea Shipping Conference November 4-6, 2003 – Sarasota, Florida Sponsored by the U.S. Department of Transportation Maritime Administration (MARAD) Mark Yonge, Maritime Industry Consultant

2. Conference Mission Statement “The Conference will address the progress of the Maritime Administration’s Short Sea Shipping Initiative and future strategies for the development of Short Sea Shipping as a viable solution to the Nation’s Highway Congestion Problems”

3. Executives from industry and government presented updates, opinions, concerns and innovations , both from the presenting panels and a very interactive audience. Policy & strategy recommendations were developed from three (3) breakout groups composed of all the conference participants.

4. Makeup of Conference Attendees • Port authorities • Shippers • Terminal operators • Federal, state, local government agencies • Engineering/design firms • Shipyards • Vessel operators • Shipping companies • Shipping Associations • Technology firms/vendors • Public/private partnerships • Consultants

5. 1st day, November 5th – Conference Opening Speakers Highlights of Speaker’s Remarks Capt. Bill Schubert, Maritime Administrator, U.S. Maritime Administration “Welcome and Conference Objectives” • The DOT is focused on Freight and Short Sea Shipping • MARAD has formed a Short Sea Shipping Task Force • New DOT Task Force – focused on the SAF-T Bill • A Short Sea Shipping Cooperative (SCOOP) formed – MARAD needed a very focused Think-Tank • MARAD will have a new Comprehensive Maritime policy by Jan 1, 2004 • Short Sea Shipping Memorandum of Cooperation with Canada & Mexico • SSS Conference has a purpose and will be listened to Mr. Raymond Barberesi, Director, Office of Ports & Domestic Shipping , MARAD “Short Sea Shipping Status Report” • SSS Issues – HMT; Federal Support; Industry Co-op; Market & Frt. Analysis Update: • The Short Sea Shipping Cooperative (SCOOP) formed October 15, 2003 • MARAD Task Force • MTS-NAC report has emphasis on SSS • GOMSA formed • SSS co-operation between U.S., Canada & Mexico • I-95 coalition has awarded a grant to MARAD for SSS

6. 1st. Day – November 5th • Mr. Bob Kunkel, Chairman, Short Sea Shipping Cooperative Program (SCOOP) “Short Sea Shipping Cooperative Update” • SCOOP intends to lead the charge • Membership Outreach – looking for “action” participation • Goal – a seamless transportation network • Mr. David McDonald, Exe. Director – Port of Manatee, FL “Welcome to Florida” • State of FL has provided $1 Billion to port improvements • Mexico will be the No.1 trading partner to U.S. in the next 8-10 years

7. 1st Day, November 5th Opening Panel – Shipper Concerns on Near Coastal Trade “Will Shippers use short Sea Shipping Services?” Moderator: Mr. Peter Tirschwell, Editor – Journal of Commerce Panelist: Mr. Stephen Flott, Chairman, SeaBridge Overseas Ferries, LTD Mr. Ernest Gurlach, President – Gulf East Coast Intermodal Mr. Wayne Wesley, Traffic Manager – Rooms-to-Go – “Shippers Viewpoint” Ms. Mary Grace Parker, Operations Program Coordinator – I-95 Coalition Mr. Cliff Johnson, Director Business Development – TECO Ocean Shipping

8. Opening Panel – Shipper Concerns on Near Coastal Trade –“Will Shippers use short Sea Shipping Services?” • Obstacles: Port Infrastructure • Port Operations • Trip Frequency • Back-haul traffic • Shippers not engaged – need outreach to shippers • Truck industry cannot handle all future volumes • R/R train speeds have dropped • Rail offers possibilities of relief just as SSS • R/R’s expect a better climate for rate increases

9. Opening Panel – Shipper Concerns on Near Coastal Trade – “Will Shippers use short Sea Shipping Services?” Answer? Yes Key Shipper Statements Shippers view SSS as a truck & rail multiplier. Shippers needs – Speed, Price, not interested in experimentation, flexibility is key; reliability Shippers want to know “What’s in it for me?” Shippers do not want to pay more Longer transit not necessarily a barrier Shippers do not want greater risk

10. U.S. Shipyards, Shipbuilding and Technology Panel“Can shipyards support the construction of competitively priced Short Sea Shipping Vessels?” Moderator Ms. Jean E. McKeever, Associate Administrator for Shipbuilding, U.S. Maritime Administration Panelist Mr. Chris Pemberton, Vice President – Austal USA (Aluminum Ship Builder) Mr. Thomas Bender, Jr. President – Bender Shipbuilding and Repair Co., Inc. Mr. Darren Savoye, Program Manager – Bollinger Shipyards Mr. James M. Temenak, Staff V.P. for Maritime Services, General Dynamics, NASSCO Shipyard (Large “Tier 1” Shipbuilder) Mr. William Deaver, Senior Vice President/Chief Operating Officer – Totem Ocean Trailer Express (Ship Operating Company – U.S.W.C.)

11. U.S. Shipyards, Shipbuilding and Technology Panel“Can shipyards support the construction of competitively priced Short Sea Shipping Vessels?” Panel answer: “Yes” • Need support of Title XI funding*** • Large amounts of R&D money needed • Existing facilities will need upgrades • Shipyards will need financial support***(Title XI) • 22 mid-sized yards in U.S. (13 States) • Shipyards need minimum orders of 3 but optimal at 6 • Shipyards need: Series orders (Same design/size) • Economic imperative – Ship designs must have military applicability • Shipyards need back-log of orders and delivery dates • Shipyard Partnering – off site design geared to multi-site construction • Cooperative shipyard agreements needed – utilize smaller yards as fabricators • SSS provides some hope for an aging industry

12. Landside Infrastructure and Labor“What will be needed to facilitate new service?” Moderator Mr. David McDonald, Chairman of the Florida Ports Council and Exe. Director, Port of Manatee, FL Panelist: Mr. Robert E. Gleason, Secretary-Treasurer – International Longshoreman’s Association (ILA) Mr. Lloyd Thompson, Transportation Economist/Planner – Moffatt & Nichol International Mr. William H. Jonkman, General Manager Logistics, - Rotterdam Municipal Port Management Mr. Lorenzo Alexander, Manager, Office of SeaPorts – Florida Department of Transportation Ms. Lauren Kotas, Director of Marketing and Trade Development – Canaveral Port Authority Mr. Mark Sisson, P.E., Principal – JWD Group

13. Landside Infrastructure and Labor“What will be needed to facilitate new service?” • International Longshoreman's Association (ILA) has existing agreements that could be used for Short Sea Shipping • ILA ready to work with stakeholders • “ILA committed to offering a competitive package which allows for a agile waterborne solution to our dilemma and offers opportunities to our members with this new market segment” • Road infrastructure servicing ports needs improvements • Need for new municipal ports • Catchment Areas are critical to locating service • SSS Start-up’s require support to get to utilization levels • 2 year secured operations strategy needed • Must compete with trucks on their own terms • SSS needs federal funding to keep it going

14. International Short Sea Shipping Progress Moderator: Mr. Gary Springer, Secretary General, Gulf of Mexico States Accord Panelist: Mr. Emile Di Sanza, Director General, Marine Policy – Transport Canada Mr. Jose Tomas Lozano Pardinas, General Director of Merchant Marine – Mexico Mr. Xander Van Holk, Senior Policy Advisor, Ministry of Transport – The Netherlands

15. International Short Sea Shipping Progress Canada SSS Observations • Canada Established workshops across the country • Canada Initiated Studies • Set up a web site • Objectives: exchange of views; develop a business case; identify applications; assess impediments • Promote multi-modal • Partnering • SSS holds promise but government support needed • Need to change the way SSS is perceived

16. Netherlands • SSS is growing faster than road transport • Biggest bottleneck is Image and familiarity • Industry was fragmented • Analysis was done to determine if SSS was for certain industries • SSS Promotion Center – Representative body for industry • EU funding is 55,000,000 Euros per year • 2007 funding focusing on integration • Lessons Learned: • Create awareness • SSS 1st in logistical chains • Keep SSS on a political agenda • Bring commercial parties together – involve shippers • Create understanding on both sides of the line • Shipper’s most important • Government plays a role

17. Luncheon Speech: Mr. Emil Frankel Asst Secretary for Transportation PolicyU.S. Department of Transportation Highlights from Speech • Secretary Mineta a strong believer in an “Integrated Transportation System” • Freight Gateways Program – Sets aside funds for intermodal and freight terminals; Publicly owned transport freight projects; Freight Gateway fees • Maritime Industry has a stake in the 6 year Authorization • DOT believes SSS is a key element in transportation plans • SSS needs to be part of the logistics & supply chain • Freight can flow around congested areas a plus • A shipbuilding program has to be a part of the plan • Need a partnerships with states, port authorities & private industry • Problem: Freight does not vote • States have a big part in this

18. . Policy & strategy recommendations from three (3) Conference breakout groups The recommendations agreed upon can be summarized as follows: • Government Title XI Loan Guarantee Programs that will improve access to needed capital for vessel construction, port infrastructure, start-up costs • Open Capital Construction Fund deposits for building of new U.S.Short Sea Shipping vessels for the intermodal coastal trades. • Exemption from Harbor Maintenance Tax for domestic Short Sea Shipping movements engaged in the intermodal coastal trades. • $5,000,000 grant for Freight Flow Analysis, Infrastructure Analysis, Supply Chain “user” Identification. • Research & Development funding that will encourage technology development and deployment • Awareness/Outreach – education to elected officials, shippers, operators, and the general public on the benefits of Short Sea Shipping

19. Other Significant Events at the Conference • Announcement of a MARAD Short Sea Shipping Task Force by Captain Bill Schubert, Maritime Administrator • Announcement of the formation of the Short Sea Shipping Cooperative Program (SCOOP) by Captain Bill Schubert, Maritime Administrator • Signing of Memorandum of Cooperation Maritime Administration, Gulf of Mexico States Accord, and Gulf of Mexico States Partnership, Inc. • Signing of Memorandum of Cooperation on Short Sea Shipping – Canada, Mexico and the United States • Statements of policy support of Short Sea Shipping from Assistant Secretary for Transportation Policy, U.S. Department of Transportation – Mr. Emil Frankel

20. Summary • This 2nd Annual Short Sea Shipping Conference provided greater in depth detail and understanding of the challenges and issues facing transportation capacity today and in the future as well as how short sea shipping can become a part of our integrated transportation system.

21. “Short Sea Shipping as a viable solution to the Nation’s Highway Congestion Problems?” Strategic Considerations (Mark Yonge Opinion) • Transportation goes directly to the heart of our economy and our national security. • The Nation’s highway congestion and capacity problem will not fix itself. • Short Sea Shipping offers a viable alternative. • Short Sea Shipping is a not a “Maritime” issue -It is a “Transportation” issue • Government – State and Federal - must take the lead to make it happen. • Short Sea Shipping must be viewed as a new highway or transportation alternative not as a competitor to truck and rail and must be integrated into the nation’s “seamless integrated transportation system” as an equal to all modes of transportation.

22. SCOOP Organization:(Established 15 Oct 2003) • Chair: Mr. Robert Kunkel, Apex Marine, RKunkel@apexmar.com • Vice Chair: Mr. John Tirpak, Saltchuk Resources - johnt@saltchuk.com • Vice Chair: Mr. Peter Shaerf, AMA (Banker) -pshaerf@amausa.com • Treasurer: Mr. Joseph Cox, Chamber of Shipping - jcox@knowships.org • Members = $1,500 annual dues - vote • Associates = $500 annual dues - no vote • Educational Institutions = $0 no vote

23. Short Sea Shipping reference websites • European Shippers Council (ESC) http://www.europeanshippers.com/public/statements/Archives/081100Sp.htm • European Commission (Europa) http://europa.eu.int/comm/transport/maritime/ • European Short Sea Network http://www.sssbe.com/ENGELS/33_html/main_set.htm • Marco Polo Program on Europa site http://www.europa.eu.int/comm/transport/marcopolo/index_en.htm • European Virtual Maritime Institute – www.evimar.org • Port of Rotterdam - http://www.portofrotterdam.com/UK/index.asp • Florida Transportation Plan www.fladot.com/planning/2020ftp • Florida Strategic Intermodal System (SIS) – www.dot.state.fl.us/planning/sis • Transportation Research Board (TRB) Marine Board, National Research Council – www.trb.org/trb/marineboard • I-95 Corridor Coalition - http://www.i95coalition.org/ • Gulf of Mexico States Accord (GOMSA) - http://www.gomsa.org/ • Transport Canada - http://www.tc.gc.ca/en/site/menu.htm • Marine Transportation System National Advisory Council (MTS-NAC) – http://www.mtsnac.org/

24. Thank you for your time Contact Information Mark Yonge, Maritime Industry Consultant 85 Hendricks Isle Ft. Lauderdale, FL 33301 Phone: 954-761-1718 FAX: 954-763-1291 Email: mwy@peoplepc.com