MARAD accepting applications for Marine Highway designations

The United States Maritime Administration (MARAD) recently said it is now accepting project applications for Marine Highway designations through September 30, 2016.

MARAD officials said that “eligible projects should establish new or enhance existing Marine Highway services that reduce landside congestion and increase the use of domestic marine transportation,” adding that “proposed projects no longer have to have parallel landside routes. While all applications must be sponsored and submitted by public entities, public/private partnerships are encouraged.”

While the concept of Marine Highways has been lauded in the past for its potential as a freight alternative, it has not gained the needed traction to move forward when compared to other modes.

In April 2011, the United States Department of Transportation issued a report on U.S. Marine Highways, which was requested by Congress to demonstrate how water-based transportation can help the U.S. reduce highway congestion and lessen wear and tear and replacement costs for roads and bridges, focuses on the benefits of leveraging coastal and river transportation as part of the country’s new clean energy economy.
Among the notable components of the report were:
-the justification for expanding the utilization of Marine Highway services and the interests of the Federal government in encouraging greater use of Marine Highways;
-improving economic competitiveness while creating and sustaining jobs; and
-providing an environmentally sustainable transportation system that requires less energy and reduces greenhouse gas emissions per ton-mile of freight moved, among others.

In April 2010, former DOT Secretary Ray LaHood heralded the inception of “America’s Marine Highway Program,” in an effort to shift freight to waterways from congested U.S. highways.
As part of this effort the DOT’s Maritime Administration (MARAD) was charged with helping to identify rivers and coastal routes that could carry cargo efficiently, bypassing congested roads around busy ports and reducing greenhouse gases.

The April 2010 announcement followed $58 million in grants for projects supporting the expansion of Marine Highway services, which were awarded through the DOT’s TIGER grants program. Another $7 million was awarded later in 2010.

Despite the fact that maritime shipping is not the most expedient form of freight transportation from point A to point B, shippers whom plan accordingly can leverage the reliability of knowing when a shipment is going to arrive and can plan accordingly for it. What’s more, the advantage of additional capacity available on marine highways that can allow shippers to move cargo and avoid congestion-related bottlenecks can also be a driver for these efforts if freight volumes pick up. This could prove to be advantageous for barge operators looking to start new marine services.

But not everyone is sold on the benefits of maritime highways, though. A previous research report by Stifel Nicolaus analyst John Larkin, noted that for most modally competitive origin-destination pairs, short sea shipping is currently not an economically attractive mode. He added that when fuel prices are relatively low trucking is typically a more attractive option for shippers when considering cost and service levels.

“Short sea shipping appears to be gaining more attention from carriers, shippers and those in Washington, but it remains a viable shipping alternative for only a small portion of domestic freight,” wrote Larkin. “In addition, it is clear to us that short sea shipping is not an economically attractive alternative in most lanes, at least at current fuel prices and without government subsidies. We view short sea shipping as an alternative that may become more attractive during periods of tight truckload capacity and/or high fuel prices.”