Ohio Maritime Strategy (ODOT PID: )

Transcription

1 Ohio (ODOT PID: ) Working Paper 7 Ohio (Role of State of Ohio) Prepared for: Ohio Department of Transportation Prepared by: CPCS Transcom Inc. In association with: W.R. Coles and Associates Dr. Peter Lindquist, University of Toledo CPCS Ref: November 21, 2017

2 Ohio Working Paper 7 Ohio (Role of State of Ohio) Ohio The Ohio seeks to best leverage Ohio s maritime transportation system (MTS) to enable Ohio s economic competitiveness and growth. Acknowledgments The CPCS Team acknowledges and is thankful for the input of those consulted in the development of this Working Paper, as well as the guidance and the input of representatives from the State of Ohio. Opinions Unless otherwise indicated, the opinions herein are those of the authors and do not necessarily reflect the views of Ohio s Department of Transportation, the Ohio Maritime Strategy Steering Committee, or the State of Ohio. Contact Questions and comments on this Working Paper can be directed to: Marc-André Roy Project Manager T: x 306 mroy@cpcstrans.com Cover image source: CPCS

3 Ohio Working Paper 7 Ohio (Role of State of Ohio) Table of Contents Acronyms / Abbreviations... ii Executive Summary... iii 1 Strategic Context Ohio Next Steps... 7 i

4 Ohio Working Paper 7 Ohio (Role of State of Ohio) Acronyms / Abbreviations CPCS GDP MTS ODOT USACE USDOT CPCS Transcom Limited Gross Domestic Product Maritime Transportation System Ohio Department of Transportation United States Army Corps of Engineers United Stated Department of Transportation ii

5 Ohio Working Paper 7 Ohio (Role of State of Ohio) Executive Summary The Ohio seeks to best leverage Ohio s maritime transportation system (MTS) to enable Ohio s economic competitiveness and growth. This Strategy was informed by seven working papers that together inform the underlying Ohio Maritime Study. Working Paper 1 and Supporting GIS Maps of Ohio s MTS Working Paper 2 on Ohio MTS Governance Working Paper 3 on Role of MTS in Ohio s Economy Working Paper 4 on MTS Demand and Associated Requirements Working Paper 5 on Options for Expanding MTS Use Working Paper 6 on Best Practices and Related Options for Ohio Working Paper 7 on Ohio s Role Ohio Maritime Study The following contextual factors are material to the State of Ohio s : Billions of dollars in economic activity, and hundreds of thousands of jobs rely on Ohio s MTS. Maritime transportation is critical to the competitiveness of many of Ohio s most important key economic sectors - by keeping transportation costs low. Several JobsOhio Target Industries also rely on Ohio s MTS for parts of their supply chains to be competitive. Use of the MTS continues to evolve. Economically important opportunities are emerging and driving new or growing traffic to Ohio s MTS. Chemicals, plastics, and petroleum products, which are supportive of state strategic economic development objectives, are trending upward even as waterborne iron ore and coal volumes traditionally the largest commodity flows on Ohio s MTS by volume - decline. Few capacity issues within Ohio s MTS: Most maritime ports and terminals in Ohio are operating well below their physical capacity limits and can accommodate greater traffic levels. There are nevertheless capability limits to handling different types of cargo at specific ports and terminals and a range of other physical and operating constraints. Many of the constraints to competitiveness of the MTS are institutional. Policy, planning, regulatory and other institutional issues include limited recognition and integration of maritime transportation in federal, state and regional transportation and economic development plans, a host of MTS fees and charges on the Great Lakes, institutional barriers to modal connectivity, and evolving and at times inconsistent regulations. Limited State role in governance of Ohio s MTS: Governance of the marine highway system falls under federal jurisdiction. Ports and terminals, the on/off ramps providing access to the marine highway system, are governed locally (port authorities, economic development authorities, cities, counties) or in the private sector. The vast majority of docks and terminals in Ohio are privately owned (save for a few publicly owned general purpose terminals), and all are privately operated on a commercial basis. The State of Ohio s span of influence over the performance of Ohio s MTS is largely limited to the landside components of the system and economic development initiatives. Federal government and State of Ohio have many programs and agencies that can support investment in Ohio s MTS: These existing programs and agencies can possibly be utilized to leverage the advantages of Ohio s MTS and thereby to enable Ohio s economic competitiveness and growth. iii

6 Ohio Working Paper 7 Ohio (Role of State of Ohio) What should be the State of Ohio s role in the maritime transportation system? Six strategies are proposed for consideration, informed by the research and findings in this Ohio Maritime Strategy and the above contextual factors: 1. Leverage and build on Ohio Maritime Transportation Strategy in policy and planning. ODOT can leverage the Ohio as it seeks to better integrate Ohio s MTS in state multimodal transportation policy development and planning. It can also leverage this Strategy as a platform for deeper and sustained engagement with Ohio MTS stakeholders. 2. Provide leadership and coordination. ODOT should continue to maintain and support the maritime position to provide leadership and coordination in all strategy points listed, as well as being a point of contact for the maritime community and a voice for Ohio s MTS. In addition to the strategic objectives listed above, this position obtains and disseminates information, facilitates collaboration, and provides appropriate advocacy. ODOT can also coordinate engagement with industry through forums or user groups. 3. Engage with federal stakeholders to remove institutional barriers to MTS performance. For the Lake Erie component of Ohio s MTS, this could potentially be done through the Council of the Great Lakes Governors and Premiers, which already has a that includes federal engagement on the many key institutional issues identified in this Ohio (e.g. Seaway season optimization, reducing the cost of pilotage, funding for dredging, etc.). Federal engagement relating to the Ohio River component of the MTS should focus on stable funding for locks and dams, interaction with US Army Corps of Engineers and USDOT Maritime Administration programs and initiatives, and participation in key national and regional industry trade groups. 4. Promote the Marine Transportation System. ODOT should work closely with JobsOhio and other economic development agencies in the State (including those at the local level) to promote Ohio s MTS as a key component of Ohio s broader multimodal transportation System. 5. Improve access to existing funding programs and agencies. The State of Ohio should promote and leverage the full range of existing State and federal funding programs and agencies that can bolster the performance and use of Ohio s MTS. In addition to other ongoing programs, the State should continue to be reactive and flexible when it comes to making funding and other incentives available to secure large private sector investments by companies that need Ohio MTS access. 6. Prioritize State investment in Ohio s MTS in accordance to clear principles. Although there are few physical capacity issues within Ohio s MTS, State investments in the MTS could help increase the capabilities of ports and terminals. These investments should be prioritized based on a set of principles that align with this Ohio. Specific prioritization principles could include: a) investment in public ports/general purpose terminals (as distinct from single use private facilities), b) investments that address or are driven by realistic long term/future market needs, c) prioritization of State investments in projects that have a strong private sector/local government matching contribution (i.e. skin in the game ), d) projects that encourage concentration of critical mass of traffic in key MTS facilities, and e) investments that are in line with strategic state economic development objectives. Bottom Line: The maritime option in Ohio needs to be protected and made as competitive as possible, given its economic importance to the State. Near term focus should be on enabling better connectivity where maritime provides a competitive advantage and is in line with market needs. Implementation of these six strategies will enhance use of Ohio s MTS in supporting state economic development objectives. iv

7 Ohio Working Paper 7 Ohio (Role of State of Ohio) 1Strategic Context Six contextual factors are material to the State of Ohio s. These include: 1. Economic importance of the Maritime Transportation System (MTS) to the State s economy: Ohio s freight reliant industries produced $238 billion of GDP (2014), or close to 40 percent of Ohio s GDP and account for nearly 2 million jobs, or about 35 percent of total employment in the State. The economic sectors that are most reliant on Ohio s MTS include heavy manufacturing ($37 billion in GDP and 305,000 jobs), petroleum, chemical and plastics manufacturing ($33 billion in GDP and 100,000 jobs), and construction and civil works ($24 billion in GDP and 238,000 jobs). Other economic sectors including six out of nine JobsOhio Target Industries rely on Ohio s MTS for parts of their supply chains. The low-cost maritime transportation option provided by Ohio s MTS remains critical to enabling the competitiveness of many of Ohio s key economic sectors without which Ohio s economy would suffer. 2. Evolving market needs for Ohio s MTS: Many of the industries and related bulk commodities that have historically been the heaviest users of Ohio s MTS (e.g. coal, iron ore) are in structural decline, dragging down total MTS volumes. Economically important opportunities are emerging and driving new or growing traffic to Ohio s MTS. Chemicals, plastics, and petroleum products, which are supportive of state strategic economic development objectives, are trending upward. 1

8 Ohio Working Paper 7 Ohio (Role of State of Ohio) The maritime option in Ohio needs to be protected and made more competitive, as possible. Focus should be on enabling better connectivity where maritime provides a competitive advantage and is in line with market needs and strategic economic development objectives. 3. Few capacity issues within Ohio s MTS: Unlike many coastal maritime ports that are facing physical capacity challenges due to growing traffic volumes, there are few similar capacity limitations within Ohio s MTS. Most maritime ports and terminals in Ohio are operating well below their physical capacity limits and can accommodate greater traffic levels. There are, nevertheless, capability limits to handling different types of cargo, such as oversized/dimensional cargo, at specific ports and terminals and a range of other physical and operating constraints: Constraints to landside access and related connections to ports, such as road geometry or bridge height/weight limits, or rail access limitations Draft issues at certain Lake Erie facilities, resulting from a combination of silting, a dredging backlog, and varying water levels due to a range of environmental factors Seasonality on Lake Erie, which restricts navigation and MTS access from late December to late March due largely to ice conditions Aging locks and dams on the Ohio River, causing unplanned delays or outages and creating risks to system resiliency Physical barriers to system performance largely relate to capability and connectivity. 2

9 Ohio Working Paper 7 Ohio (Role of State of Ohio) 4. Many of the constraints to competitiveness of the MTS are institutional: Policy, planning, regulatory, and other institutional issues include limited recognition and integration of maritime transportation in federal, state, and regional transportation and economic development plans, a host of MTS fees and charges on the Great Lakes (e.g. pilotage, Harbor Maintenance Tax, among others), institutional barriers to modal connectivity, and evolving and at times inconsistent regulations. These institutional factors contribute directly or indirectly to higher costs for MTS users, and by extension, are an impediment to the competitiveness of Ohio s MTS. 5. Limited State role in governance of Ohio s MTS: Governance of the marine highways falls under federal jurisdiction. Ports and terminals, the on/off ramps for the marine highway system, are governed locally. The vast majority of docks and terminals in Ohio are privately owned (save for a few publicly owned general purpose terminals), and all are privately operated on a commercial basis. The role of the State of Ohio in the governance of Ohio s MTS has been largely limited to broader transportation policy and planning efforts. The State of Ohio s span of influence over the performance of Ohio s MTS is largely limited to the landside components of the system and economic development initiatives. The State of Ohio s span of influence over the performance of Ohio s MTS is largely limited to the landside components of the system and economic development initiatives. 6. Federal government and State of Ohio have many programs and agencies that can support investment in Ohio s MTS: These existing programs and agencies can be utilized to leverage advantages of Ohio s MTS and thereby to enable Ohio s economic competitiveness and growth. At the State level, minor adjustments in eligibilities and policies might be needed in some programs, or the creation of new policies and programs could be considered where needs cannot be met effectively through existing programs. To a large extent, existing programs and agencies can be utilized to leverage advantages of Ohio s MTS, thus enabling Ohio s economic competitiveness and growth. 3

10 Ohio Working Paper 7 Ohio (Role of State of Ohio) 2Ohio What should be the State of Ohio s role in the maritime transportation system? Six strategies are proposed for consideration, informed by the research and findings in this Ohio and the above contextual factors: 1. Leverage and build on Ohio Maritime Transportation Strategy in policy and planning. ODOT can leverage the Ohio and underlying research and findings as it seeks to better integrate Ohio s MTS in state multimodal transportation policy development and planning. It can also leverage this Strategy as a platform for deeper and sustained engagement with Ohio MTS stakeholders. Specific strategic actions could include: Proactively plan investments in landside accesses to ports and terminals, as well as to other parts of Ohio s multimodal transportation system, where supported by market needs, strategic economic development objectives, and an appropriate public benefits case. Leverage the Ohio to build greater awareness of Ohio s MTS assets, capabilities, and opportunities within JobsOhio and other State agencies. Maintain and periodically update the Ohio MTS asset inventory database developed as part of this Strategy. Support a new principal port statistical area between Huntington and Pittsburgh. 2. Provide leadership and coordination. ODOT should continue to maintain and support the maritime position to provide leadership and coordination in all strategy points listed, as well as being a voice for Ohio s Marine Transportation System. In addition to the strategic objectives listed above, this position obtains and disseminates information, facilitates collaboration, and provides appropriate advocacy. ODOT can also coordinate industry outreach and coordination meetings. Specific strategic actions could include: Sustain engagement with Ohio s MTS stakeholders after the release of this Strategy to identify evolving system priorities and to increase participation of the maritime community in broader freight planning activities in Ohio on an ongoing basis. This could potentially be done through MTS system users group(s) or similar forums, coordinated by ODOT on a regular basis. 3. Engage with federal stakeholders to remove institutional barriers to MTS performance. State of Ohio leaders should maintain relationships with federal government agencies to address regulatory, policy/planning, funding and other institutional issues. For the Lake Erie component of Ohio s MTS, this could potentially be done through the Council of the Great 4

11 Ohio Working Paper 7 Ohio (Role of State of Ohio) Lakes Governors and Premiers, which already has a that includes federal engagement on the many key institutional issues as those identified in this Ohio Maritime Strategy (e.g. Seaway season optimization, reducing the cost of pilotage, funding for dredging, etc.) 1. Federal engagement relating to the Ohio River component of the MTS should focus on stable funding for locks and dams, and interaction with US Army Corps of Engineers and USDOT Maritime Administration programs and initiatives, and participation in key national and regional industry trade groups. 4. Promote the marine transportation system. ODOT should work closely with JobsOhio and other economic development agencies in the State (including those at the local level) to promote Ohio s MTS as a valuable resource in certain economic development activities and as a key component of Ohio s broader multimodal transportation system. Specific related actions could include: Collaborating closely/systematically with JobsOhio in investment attraction initiatives where investment would benefit from the Ohio MTS transportation option (ODOT can provide input on transportation advantages/assets, funding programs, etc.). Providing a specific point of contact within ODOT for economic developers who need information regarding marine transportation options. Facilitate creation of a state-wide interactive web site for identifying locations, contact information and general capabilities for ports and terminals in Ohio. Facilitate creation of a template which could be used by individual ports and terminals to convey basic factual information in a consistent and communicative format. Facilitating, or otherwise providing seed funding for industry-led Ohio MTS promotion activities and related meetings, websites, and other outreach activities. 5. Improve access to existing funding programs and agencies. The State of Ohio should promote and leverage the full range of existing state and federal funding programs and agencies that can bolster the performance and use of Ohio s MTS. Specific strategic actions could include: Develop, together with JobsOhio and other agencies, a comprehensive list of existing programs, agencies and related tools that can be accessed by Ohio MTS stakeholders and related eligibility criteria (Federal and State). This list should be managed, updated and promoted by ODOT to all relevant Ohio MTS stakeholders, including MTS asset owners/operators, MTS shippers, economic development agencies, including JobsOhio and local economic development 1 Council of the Great Lakes and St. Lawrence Governors and Premiers, Strategy for the Great Lakes-St. Lawrence River Maritime Transportation System, 5

12 Ohio Working Paper 7 Ohio (Role of State of Ohio) agencies. ODOT can then help direct Ohio MTS stakeholders to the appropriate programs and agencies that can help them realize their projects. Continue to be reactive and flexible when large economic development opportunities arise in order to secure large private sector investments by companies that need Ohio MTS access. Facilitate assessment of existing state financial assistance programs and evaluate whether some adjustments in eligibility or priorities could broaden applicability appropriate for Ohio s ports and terminals. 6. Prioritize State investment in Ohio s MTS in accordance with clear principles. Although there are few physical capacity issues within Ohio s MTS, State investments in the MTS could help increase the capabilities of ports and terminals. These investments should be prioritized based on a set of principles that align with this Ohio. Specific prioritization principles could include: a) investment in public ports/general purpose terminals (as distinct from single use private facilities), b) investments that address or are driven by realistic long term/future market needs, c) prioritization of State investments in projects that have a strong private sector/local government matching contribution (i.e. skin in the game ), d) projects that encourage concentration of critical mass of traffic in key MTS facilities, and e) investments that are in line with strategic state economic development objectives. Related types of investment in public /general purpose terminals could include investments in: Shoreside handling equipment such as mobile material handling equipment, cranes, pipelines or conveyor systems Storage facilities such as warehouses, transit sheds, silos, tanks, etc. Improved road and rail connections to port facilities, as was recently announced in Toledo in relation to the new Cliff s facility Docks, mooring structures and related fixed assets Support for priority economic development initiatives (incentives that will help attract shippers to Ohio that require maritime transportation). 6

13 Ohio Working Paper 7 Ohio (Role of State of Ohio) 3Next Steps We will develop a succinct ( +/-20 page) and visual Ohio report, largely comprising the content from the Executive Summaries of previous Working Papers. This summary report will have an ODOT look and feel (i.e. not CPCS report), with the related form and associated details to be agreed. 7