Federal, regional, state, and local policies have shaped and will continue to shape the development of maritime freight in the United States, the Marine Transportation System (MTS), and the MAFC region. Because the US domestic waterways span state and national boundaries, the federal government has managed the vast majority of MTS infrastructure since 1824 under the interstate commerce clause of the US Constitution. A timeline of major events marking the evolution of federal maritime freight structure is found in Appendix A.

Underlying all of the issues described in this section is the historic policy encapsulation of the modes as distinct systems funded solely by a class of facility users. While a user-cost approach is generally considered an economically efficient approach to funding, the significance of the benefits and the broad range of benefactors related to a multimodal system present equity issues based on the current mode-by-mode funding and management approach. The current approach to funding and management across the mode has a large opportunity cost related to lumpy development of corridors and networks, lost opportunities for intermodal development, the unsustainable reliance on single modes, and the failure to capture the potential energy and environmental efficiencies associated with a multimodal freight system.

This section will briefly summarize the issues and areas of federal policy that state and regional stakeholders must address in order to ensure a maritime regional freight network that is compatible with the MAFC region’s broader development goals.

Federal Maritime Infrastructure

The capacities and condition of the federal channels, locks, dams, and harbors in the MRS and the Great Lakes Navigation System (GLNS) are crucial to the viability of maritime shipping in the region. Much of the infrastructure in both waterways is older than its planned service life. In 2013, AASHTO rated the nation’s inland waterway infrastructure D-, noting that planned and unplanned maintenance of locks are causing increasing delays, and adding to costs and doubts about the long term viability of the system. A critical failure of important locks in the MRS and at Sault St. Marie on Lake Michigan could impose extreme costs on shippers and carriers, and may result in abandonment of maritime shipping for more costly and environmentally harmful alternatives. On the GLNS, inadequate dredging at Great Lakes harbors is also undermining the efficiency and long-term viability of Great Lakes shipping. An additional problem with older locks found on parts of the MRS is the smaller sized, which limits the operational efficiencies and adds to shipper costs. Appendix B details the infrastructure needs of the Mississippi River System. Appendix C details the infrastructure needs of the GLNS.

The American Society of Civil Engineers (ASCE) estimates that underinvestment in America’s inland waterways cost American businesses $33 billion in 2010, and that without significantly increased investment those costs could rise to $49 billion (in constant dollars) by 2020.

Federal Maritime Infrastructure Funding

The adequacy, efficiency, equity, and reliability of federal funding of the MRS and GLNS system help determine how competitive maritime shipping is with other modes, how well maritime shipping achieves broader societal objectives, and whether funds are used effectively. Many of the problems with US maritime infrastructure stem from inadequate and unreliable funding. These problems in turn are the result of a stalemate in Congress over the efficiency and fairness of the current funding system as well as partisan posturing. Federal funding of the Inland Waterway System (IWS) comes from a mix of general revenue sources and the Inland Waterway Trust Fund (IWTF). Federal funding of deep-water commercial navigation channels comes from a mix of general-purpose revenues and the Harbor Maintenance Trust Fund (HMTF). Issues associated with both the IWTF and HMTF are summarized in Appendix I.

Federal Maritime Transportation Regulation

Federal regulations (or lack thereof) that apply specifically to maritime activities and to other policy areas (such as other modes of transportation, public safety, economic development, and environmental protection) influence the competitiveness maritime freight, and private investment and use of the MRS and GLNS for freight movement. Section 27 of the Merchant Marine Act of 1920 (popularly known as the Jones Act) is the most controversial federal law governing domestic maritime shipping. The law requires that commercial vessels operating between US ports must be constructed in the United States, crewed by US citizens, and registered in the United States. Intended to protect domestic maritime industries and workers, the law has been heavily criticized for unintentionally having the opposite effect. For example, the law prevents multinational shipping companies from establishing routes that make multiple stops between both US and Canadian ports. This is a potential barrier to establishing international container service on the Great Lakes. Critics also charge that the Jones Act, by requiring commercial vessels to be constructed by higher wage US workers, is a disincentive to investing in new vessels and vessel technologies that could improve the competitiveness of maritime shipping. They point out the lack of new Great Lakes freighter and river barge construction over the last few decades. Supporters of the act don’t find the last argument convincing because freshwater ships and barges last much longer than their salt-water counterparts. Further, demand at facilities such as Jeff Boat was delivering more than one barge a week to customers for a period in 2012-2013.

Environmental Impacts

Maritime freight transportation systems can reduce the environmental footprint of freight movement in many ways compared to competing modes. They also create impacts of their own. Although waterway infrastructure requires less space and fewer resources than other modes of surface transportation, it is located at or near freshwater resources that are of the highest value to natural systems and society. MAFC maritime shipping operates on waterways that are critical to human health, a wide range of economic activities (agriculture, energy production, industry, fishing, recreation, tourism), quality of life, and critical ecosystems. Due to the cargo capacity of vessels and because water is such an efficient medium of dispersing contaminants, the generally excellent safety record of maritime shipping compared to other modes is somewhat offset by concerns over catastrophic events. Devising policies that mitigate adverse impacts in the most efficient, cost-effective and equitable manner is a critically important but complex undertaking.

Major environmental problems identified with maritime shipping on the MRS and GLNS include:

• Water quality impacts. Associated contaminated dredged materials, accidents. and cargo spills.
• Degradation of ecosystems/habitat and native species due infrastructure construction and maintenance (channelization, altered water levels, dredging and contaminated dredged materials).
• Aquatic invasive species introduced by vessel ballast tanks or through man-made channels.
• Mixed land use such as industrial ports and new residential development.

These potential detriments of increased waterborne traffic then must be balanced against the overwhelming benefits of the system that include:

• Reduced visual, noise, and spatial intrusion.
• Decreased emissions per ton of freight moved.
• Increased fuel efficiency.
• Reduced accidental spillage and contamination based on reduced accident rates

Moving Forward: Federal Maritime and Multimodal Freight Planning and Policy

For many types of commodities, maritime freight on internal waterways is not well integrated into the national freight network, and is underutilized compared to highways and railroads. This is partly due to accidents of geography and history and partly due to policies that favored development of rail and highway systems and segregation of modes. When the United States was relatively undeveloped and the costs of fuel and other transportation inputs were relatively inexpensive, faster and more flexible trains and trucks were viewed as preferable to maritime shipping for movement of many commodities. Federal transportation agencies have evolved to administer specific modes rather than attempt to address the federal freight network comprehensively.

As the country developed and competition for resources increased, the cost of expanding rail and highway infrastructure and operations has also increased. Over the last few decades the environmental and social costs of traffic congestion and infrastructure expansion have become increasingly apparent, causing policy makers to reexamine the relative benefits of maritime shipping.

The Maritime Administration’s Marine Highways program and the recently enacted MAP-21 transportation authorization are recent attempts to better integrate internal maritime freight with other modes to increase the effectiveness of all.

At the federal level steps are being taken to develop a freight system policy and planning perspective rather than a modal perspective. To expand beyond the typical modal silos, US DOT convenes the Freight Policy Council, which consists of the various modal directors, and agency leads. This group is intended to support the one-DOT concept and align freight policy in a systems context rather than in the traditional silos. Additionally, the diversity of policy input has been expanded via the National Freight Advisory Committee, which the US DOT has assembled to guide and assess the development of the nation’s freight policy. Activities included in their charge include:

• Implementation of the freight transportation requirements of MAP-21;
• Establishment of the National Freight Network;
• Development of a National Freight Strategic Plan;
• Development of strategies to help States implement State Freight Advisory Committees and State Freight Plans;
• Development of measures of conditions and performance in freight transportation;
• Development of freight transportation investment, data, and planning tools; and
• Legislative recommendations.

Freight planning at the state level is recommended but not required in MAP-21. Further still, many states lack waterways programs and staffing expertise to create or manage multimodal freight plans that include the waterways. The lack of attention to freight and waterways is changing rapidly. And as the MAFC states are nearly all located on waterways and have historically been significant freight movers, the timing is right to capture the policy momentum. The time seems optimum to institutionalize waterways within the US DOT and state DOTs. With freight traffic continuing to increase, and with the interest in freight and its economic benefits growing, waterways can play a major role in efficient utilization and optimization of our region’s multimodal freight systems.

The MAFC region relies heavily on the waterways and is positioned to increase utilization. However, the need for speed to market for some products, the seasonality and reliability of marine service, and in many cases, antiquated equipment and facilities hamper market expansion on the waterways. To turn the tide, states should continue to work to develop marine freight plans in unison with their general planning efforts. The freight advisory activities at the national and state levels should include waterway advocates, and the states should continue to champion marine freight development. Additionally, states and regions should consider branding their waterways as state assets worthy of business attraction through lower cost and environmentally friendly freight service. Finally, additional research and attention is needed to understand the modal choice process and factors related to increased market attraction and sustainable market development for marine freight systems.