Marine Transportation System Infrastructure Investment A State Perspective. August 28, 2012 Sean T. Connaughton Secretary of Transportation

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1 Marine Transportation System Infrastructure Investment A State Perspective August 28, 2012 Sean T. Connaughton Secretary of Transportation

2 Agenda Why Should States Invest in the Marine Transportation System? Challenges & Issues of MTS Investment How Can States Invest in the MTS? How Will Changes in National Perspective Affect State s Roles in MTS Investment? 2

3 3 Why Should States Invest in the Marine Transportation System?

4 Freight Movement Generates Economic Benefits States have a financial interest in building and maintaining intermodal connectors and highways to bring freight in and out of ports State marine highway systems reduce burden on interstates State Departments of Transportation (DOT) More than 30 have departments dedicated to freight planning and financing marine and rail projects Many own and operate port facilities and short line railroads Dedicated trust funds for port improvements Local sponsors for Army Corps maintenance dredging projects 4

5 America s MTS Connects Us to the Global Economy 5

6 America s MTS Connects Us to the Global Economy International Trade Lanes to Asia China to West Coast India/Southeast Asia to East Coast Through Suez Canal China to East Coast Through Panama Canal 6

7 It Starts With Connecting to the World Intermodal Connections Heartland Corridor National Gateway Crescent Corridor Chicago Europe St. Louis Virginia Memphis Atlanta Suez Canal International Trade Lanes The Port of Virginia s Deep Channels Make it the Only East Coast Port Able to Handle World s Largest Ships 7 Panama Canal Expansion South America

8 Panama Canal Expansion Increases Need for Investment Complete Expanded by 400 long, 70 wide, 18 deep Ships holding up to 18,000 TEUs will be able to traverse the canal Currently moves ships with 4,400 TEUs 8

9 East Coast Port Channel Depths Leveraging Connections to the MTS Federal deepening funds are getting harder to obtain * $277 M 44 Desired Depth (ft) Authorized Depth (ft) Current Depth (ft) $1.6 B $310 M $150 M $625 M $266 M 60 * Costs not available 9

10 States Benefit from the MTS Reduces highway traffic congestion A single vessel can shift over 450 trucks or 225 rail cars from road and rail corridors to underutilized waterways Lowers cost for transporting bulk commodities Inland vessels move one ton of freight 370% further than trucks (576 miles compared to trucking 155 miles) and 139% further than rail s 413 miles for the same cost Lowers air emissions vs. landside transportation On average, inland vessels generate 38% less greenhouse gases than truck and 28% less than rail per ton-mile Increases safety by taking trucks off of highways 10

11 11 Challenges & Issues of MTS Investment

12 Existing Impediments of MTS Infrastructure Slow Immobile Jones Act Condition Depth Width Locks Landside Connections 12

13 How Can States Invest in the MTS? 64 Express 13

14 States Invest in the Future of Marine Highways Integrating marine services into freight and surface planning Virginia Investing in Port infrastructure 64 Express Barge Service - Federal, State, Private Partnership Highway Funds VDOT, VPA, Dept. Commerce Terminal Operator VIT Regional MPO CMAQ funds Private: Owned and operated by James River Barge Line, LLC, a Norfolk Tug Holding 14

15 Virginia s 64 Express 12,000+ truck trips saved first year of operation Oversize/overweight emphasis 30+ gal. fuel saved per truck trip Emissions reductions Relieves congestion on I-64 & Hampton Blvd 15

16 Virginia s 64 Express Tugs used in barge operation burn ultra low sulfur fuel Reducing road traffic reduces hydrocarbons and Nitrogen Oxide emissions Every container moved via barge reduces diesel fuel consumption by 31 gallons 16

17 17 How Will Changes in National Perspective Affect State s Roles in MTS Investment?

18 New Federal Transportation Funding Bill MAP-21 directs USDOT to develop a National Strategic Freight Network of the interstate highway system Incentives for federal matching on freight projects if in State Freight Plan $500 M in grants for Projects of Regional & National Significance Port intermodal connectors are eligible 18

19 Questions Remain Why doesn t a marine highway subsidy equal FHWY funding of a road? Will the increased matches be an incentive for states to do these freight projects? Increased match does not mean increased funding Can we expect a later Congress to address maritime or rail issues (harbor maintenance reform, etc.)? How can states integrate marine and rail into State Freight Plans? 19