Julie A. Nelson

Deputy Maritime Administrator

World Trade Week and National Maritime Day Observance

Propeller Club of Los Angeles and Long Beach

Wednesday, May 23, 2007

12 Noon

“FOCUSING ON THE FUTURE”

Thank you (Hudson Warren, president of LA/LB Propeller Club, principal of ChinaWest LLC) for that kind introduction, and thank you all for inviting me to be your Maritime Day speaker.  I bring greetings from President George W. Bush, Secretary of Transportation Mary Peters, and from Maritime Administrator Sean Connaughton. 
 

It is particularly appropriate that we are also celebrating World Trade Week. The worldwide maritime industry is almost synonymous with world trade. One glance at the ports of LA and Long Beach, with their heavy traffic of ships from all over the world, can tell us that.

National Maritime Day serves a twofold purpose. We honor the sacrifices of merchant mariners who gave their lives that we might continue to enjoy our freedom. We also honor the maritime industry of today, and look to the future of this industry that has brought us so much of our prosperity.

Yesterday, I had the privilege of speaking at the Maritime Day ceremony at the American Merchant Marine Veterans Memorial. That is a beautiful memorial, and it was a moving ceremony, very appropriate for remembering the many merchant mariners who have given their lives.

Today, I would like to focus on the future of the maritime industry, and how we at the Maritime Administration and the U.S. Department of Transportation see our role. A very important part of my portfolio as Deputy Administrator is working with Southern California National Freight Gateway Area, and particularly in addressing congestion here. Randy Rogers, who is with me today, heads our Southern California Gateway Office, and he facilitates this important effort.

In our vision of the future, we have four major areas to address: congestion, investment, employment, and agency reorganization.

Now, people in LA and Long Beach do not need me to tell you that congestion is an enormous problem, one which threatens our very freedom of movement, which is important to all Americans. Allow me to emphasize a few important numbers:

• Between 1983 and 2003, total vehicle miles traveled in the US has increased almost 90%.
• Today, the Interstate System, which comprises just over 1% of the Nation's total miles of roadway, carries almost 25% of all traffic.
• Highway congestion increased dramatically between 1983 and 2003, in both extent and duration. In the 10 most congested urban areas of the country, each rush hour traveler “pays” an annual virtual “congestion tax” of between $850 and $1,600 in lost time and fuel and spends the equivalent of almost 8 work days each year stuck in traffic.

The Department of Transportation’s National Strategy to Reduce Congestion includes urban partnership agreements, public private partnerships, the corridors of the future concept, work to reduce border congestion, and to increase aviation capacity. The Southern California Freight Congestion initiative is a very important part of the national strategy, and we are working with all players to generate viable congestion solutions, to address intermodal movement, to assist Southern California in fulfilling its national economic role to provide and support the conveyance of goods from and to the rest of the Nation, and to address and mitigate the air quality and other environmental effects and impacts of freight movement.

The Maritime Administration is emphasizing two important anti-congestion initiatives: the Marine Highway and our National Port Strategy. With the Marine Highway Initiative, we are working to integrate water transportation more fully into our overall transportation system. In some places, the Marine Highway is already at work. Let me give you one small example from the East Coast—the Columbia Coastal barge service which operates weekly, carrying containers between Baltimore and Norfolk. Every week it saves putting 1,824 trucks on the road. That’s eight miles of three lanes of trucks, bumper to bumper. Let me say that another way: if Columbia Coastal were not operating that service, there would be eight more miles of truck traffic, three lanes worth, bumper-to-bumper, most of it on I-95. I think you can probably identify places served by Interstate 5 that could use such a barge service.

There’s another good example of the Marine Highway at work north of here: Tote Ocean Transport, runs chassis and containers between Tacoma and Anchorage, a less-costly, timely alternative to the Alcan Highway. Other truck ferries take trucks across Long Island Sound, bypassing the congestion around New York City. We could make much wider use of truck ferries. Now, you may point out that the examples I’ve given serve niche markets, and that’s true. But we can look for more niches like this, and build more waterborne transportation into our network. The capacity of our waterways is vast, and we need only address issues at our ports to give us better access to the water.

That is why the Maritime Administration is developing a system-wide national port strategy. We are working now to identify those projects which, when completed, would relieve congestion in and around our ports; to identify projects with an impact beyond a single port, such as inland rail and highway chokepoints; to estimate costs and resources, to explore innovative financing mechanisms, to identify important issues and to develop data for freight volumes and types moving through our seaports now and into the future. We think this project is vital. It is critical that we have the participation of people like you—and, in some cases, you! People with firsthand knowledge of our ports and their place in the transportation system.

Much of the Maritime Administration’s contribution will come from what we have learned in administering the National Strategic Ports program. The Strategic Ports move military traffic in and out smoothly, without disruption to their commercial operations. All our ports need infrastructure and procedure improvements to handle their traffic, and the largest ports need special consideration. Ninety-percent of international trade coming into this country comes in through our top ten ports—such as the ones closes to us today.

The second part of our vision of the future involves investment. Briefly, some of the biggest issues in the current state of port investment are the need for increased efficiency and greater throughput, the fact that waterfront property is now becoming scarce, the increased costs of infrastructure, various environmental and regulatory barriers, and, let’s face it, public opposition to port expansion. These are facts of life for us. However, the annual rate of return on port investment is 12 to 15 percent, which attracts investment from all over the world: Hanjin America here at Long Beach is just one example. To increase port investment, we need to increase outreach to the public and private port community, make a business case for greater private investment, and improve the federal role in coordinating port projects.

In employment: we at the Maritime Administration are changing our policies to reflect the fact that most seagoing employment in the worldwide industry is not on U.S. flag ships. Recently, in granting licenses for deepwater ports for liquefied natural gas, the Maritime Administration has secured agreements to employ Americans on the LNG tankers serving those ports. That gives the United States a visible and important part to play in the rapidly-growing LNG industry. We intend to follow this up with other agreements to secure employment for Americans.

We have an abundant supply of an important resource—one in which there is a worldwide shortage—and that is trained mariners. Every year the maritime academies in the United States produce more trained mariners than all European countries combined. We need to expand the placement of American mariners on all ships, and not depend solely on U.S. flag to support American maritime employment.

In the maritime industry we envision, American ownership and participation will be increased at every level. The values we hold for fair treatment of mariners will be held by everyone who operates a ship. The maritime industry we envision behaves responsibly toward the environment everywhere in the world.

This brings me to the reorganization of the Maritime Administration, announced in February by Administrator Connaughton. We believe our reorganized agency will better serve the industry as it is today, and as it will be in the future. We continue our support of shipbuilding, our national security programs. Our national security has a new emphasis, with new programs looking to our role in emergency preparedness.

We are giving new emphasis to training and workforce development, to business development, to environmental work and regulatory compliance. I want each of you to be able to look at the offices in the Maritime Administration, and know which one is there to serve you.

Thank you for inviting me to share your National Maritime Day celebration. To celebrate the maritime industry is to recognize our rich heritage, to honor the maritime industry that gives us so much of our current prosperity. This maritime industry is an important part of the greatest transportation system the world has ever known, and I look forward to working with all of you to make it even better.

Thank you.