MarEx Mailbag:
This week’s Mailbag contains four letters, three of which address last week’s lead editorial. The fourth provides some feedback from an article referencing piracy in our 17 September online edition.
Last week our lead piece referenced the continuing effort(s) to promote a vibrant shortsea shipping segment of the U.S. maritime industry. Stuck seemingly in neutral gear for a long time – and for many reasons – there is hope that a resurgence of this important concept might be on the horizon. Or, maybe not. Read our 1 October editorial entitled, “Shortsea Shipping: It’s Good For What Ails You” by clicking HERE. Or, simply read on to see what our readers thought about the matter:
Thanks for your pieces on marine highways. Glad you brought some attention to Wayne’s website.
You ask a good question. Here are a couple more to go with it:
Is there a compelling reason to believe the less-than-robust American maritime sector will grow without development of the short sea market and a domestic marine transportation system?
Should we be satisfied with maintaining a 20th century American maritime industry in the 21st century?
What is the American maritime sector—business and labor—willing to do to generate new services, develop new customers, and build new vessels that will be competitive with cleaner and more efficient land modes?
You and I have something in common. We have both brought some attention to Wayne’s Q&A series. See my blog: www.mtsmatters.com.
Paul H Bea Jr
PHB Public Affairs
MarEx Editor’s Remarks: Mr. Bea’s Blog is an interesting read. I encourage you to navigate there. Here’s another:
Mr. Keefe,
I think both you and your friend are exactly right. Shortsea shipping is a great idea that is going nowhere fast. The perceived risk of investing in this concept is currently too great to move the parties necessary to make it happen. Fear and greed are the primary motivators for action in any business, and neither is currently adequate to drive the move to shortsea shipping.
A lot of diverse parties need to come together to make shortsea shipping a reality. This will not happen without a comprehensive strategic vision that everyone can buy into. Proponents need to be able to show tangible benefits to all the stakeholders involved.
I think the development of offshore container ports may be the catalyst necessary for shortsea shipping (something analogous to the Louisiana Offshore Oil Port). LOOP made sense because tanker sizes were increasing to a point that made navigating the Mississippi River impossible. The new generation of container vessels may pose the same problems.
For example, a Louisiana (or NY/NJ) Offshore Container Terminal could address a number of logistical and security issues while serving as a catalyst for shortsea shipping. I believe some areas of northern Europe are already experimenting with a new vessel type (shortsea containers) which would be very suitable for servicing these types of terminals. This type of vessel could be the backbone of the American Marine Highway concept.
A decision to develop offshore container terminals on the Gulf and East Coasts would provide opportunities and benefits to numerous stakeholders:
1. Homeland Security – Coast Guard and Homeland Security would be able to conduct security screening of containers and vessels away from densely populated urban ports.
2. Ship Designers – opportunity for new business designing a new vessel type
3. Shipyards/Ship Builders – new ship construction opportunities; Gulf shipyards have been building vessels for offshore oil service for years; they could leverage that experience to build coastal container vessels competitively and profitably
4. Infrastructure Designers – bigger vessels have been presenting challenges to existing infrastructure (bridge clearances, I-95 congestion, etc.); offshore terminals and coastal container vessels would address these issues and make more efficient use of our inland waterway system
5. Ports – inland ports with intermodal capabilities would have the opportunity to become container hubs (something currently reserved for coastal ports)
6. Shippers – additional logistical options would be available from decoupling their cargo from a handful of major container ports
I don’t pretend that my idea of offshore terminals serviced by shortsea vessels is the “right” one (or even a good one). But I think that any idea has to be opportunity and profit-focused and be able to show tangible benefits to the major stakeholders. What new business opportunities and incremental revenue can shortsea shipping bring? If you can answer that question, you can attract attention and get cooperation.
Best regards,
Dave Milla
Vice President / Resurgence, Inc.
MarEx Editor’s Remarks: I remain a staunch supporter of shortsea shipping, no matter what the obstacles. In the end, there is so much good that can come from the effort that I think that the practice will be enormously profitable – for someone. Beyond that, the intangible benefits to the domestic transportation sector may not be readily quantifiable, but that makes these metrics no less real. Read on for one more:
Hi Joe,
Great article... I definitely missed a great opportunity. Here's my responses to Wayne's questions if you're interested. Thanks for your continued support of our efforts.
1.) Is there the potential for a Marine Highway Program in the United States?
The Marine Highway Program that is being written under the US DOT's Maritime Administration is certainly providing the framework to engage public and private stakeholders. This is proving beneficial by helping people envision the socioeconomic and environmental endgame of collaborative efforts. It's tough to market successfully and it's even tougher to have to educate the public prior to marketing, but that is what is happening here. It's a process that there is no way around. People have to understand what they're being asked to support or be involved in, whether they're a private carrying partner or a supportive legislator.
Can SSS be implemented on a contiguous national scale? The answer is unquestionably -- yes. It's a matter of when and how. With the current stimulus funds and coming T-Bill, never before has there been a more favorable and supportive public climate. The national emphasis on rebuilding infrastructure and increasing environmentally focused goods movement & multi-modal connectivity is increasing this positive climate. It's this kind of public incentive that will be needed in this strapped economic climate to entice industry to keep an eye towards SSS as a transportation solution as global fuel competition drives up fuel prices. Of course, the "how" needs to be answered as well. The structure of business development platforms is where creativity comes into play.
Individual regional Marine Highway Programs are also increasingly making public and private sense. Some MH projects aim to by-pass congested metropolitan routes. Others aim to plug isolated or rural areas into networks that would offer greater market access and these are being seen as economic development strategies. This is helping these types to gain audiences outside transportation circles which is garnering additional support. Enough of these individual regional programs could grow a bottom-up approach to SSS expansion that would augment a top-down national policy.
2.) What are some of the barriers to making MH a reality on a larger scale?
If shippers are given a cost competitive or service-advantageous intermodal freight option, such as intermodal rail -- and if carriers are interested in carrying, as is the case with SSS -- then possibly what's missing is recognition by the port-side drayage, stevedoring, labor and port authority interests that Marine Highways constitute a new market, revenue and job creating mechanism. That's an over simplification, but it comes back to understanding, consensus and the pursuit of a program that meets the needs of all the players. The HMT isn't helping either. There are several other freight program challenges, such as vessel, speed, frequency, and door-to-door integration -- but these challenges aren't insurmountable.
3.) Is MH a part of a National Transportation System?
I would say no, not officially, but it seems to be getting close. Marine Highway interests at least have the benefit of being able to point and say, "See, look: We've been doing this in some regions for decades. We just want to open this mode up and do it in a consolidated fashion that provides access to all kinds of different shippers on a vessel and all at the same time. This isn't a new mode, just a new way of using it in the contiguous states." With increased understanding comes increased support and increased consensus. With that, it'll become a part of the National Transportation System.
Stephen J Pepper, President
Humboldt Maritime Logistics
MarEx Editor’s Remarks: I’m happy to put Mr. Pepper’s opinions and positions on line. He makes several interesting and worthwhile points. The next letter references the scourge of piracy and specifically, an article that we carried almost three weeks ago.
In our September 24 on line edition, we carried an account from EU NAVFOR, wherein on the late afternoon of Sunday 20th of September, a bulk carrier reported an approach of a skiff while in the Internationally Recommended Transit Corridor in the Gulf of Aden. On board the Bulk Carrier, a unit of the Yemeni Navy was embarked. On sighting of these military personnel the skiff abandoned the approach and tried to flee as reported by the merchant vessel to the UK Maritime Trade Organization in Bahrain. UKMTO alerted other merchant vessels and the Counter Piracy Forces on MERCURY, the EU introduced common counter piracy communication system. You can read that account by clicking HERE or you can read the remarks of our writer who has been there and done that, himself:
Dear Mr. Keefe,
Good Day,
I recently read the latest issue of the Maritime Executive which contains the article on EU NAVFOR. Felt like sharing my personal experience of 3 transits through the International Security Corridor in the Gulf of Aden from April 2009 till June 2009.
On the first transit, I was in command of ‘ULCC Danesh’, on a voyage from Kharg Island, Iran to Ain Sukhna, Egypt. There were about 12 vessels in the convoy for our vessel speed (14 Kts) and the vessel 0.8 NM ahead of ours was attacked by 3 skiffs. The pirates on those skiffs threw grenades on that oil tanker & two of those grenades detonated near the accommodation superstructure. Fortunately, there was one EU NAVFOR vessel from the Spanish navy in the vicinity (approx. 4 NM away) so we could establish contact immediately and get some help. However, there have been several incidents similar to this one that could not receive any assistance from the EU NAVFOR or other co-alition naval vessels in the area because they were simply too far off, even for choppers! I know of this because of the frantic distress calls we heard on the VHF!
The point is that despite all that the US Navy & EU NAVFOR are doing, the area affected by piracy is so vast that it is impossible for every transiting merchant vessel to be escorted or assisted in an instance of an attack. Most vessels use the International Security Corridor but there are attacks taking place even within that corridor.
On our return voyage from Yanbu, Saudi Arabia to Bataan, Philippines, our vessel was attacked in a position north of Bab El Mandeb (Red Sea), which actually is considered a ‘safe’ area. We were yet to embark the security team (Ex British Naval Commandoes) from Djibouti when this happened. The pirates, because of the longer range vessels (hijacked tugs, or even yachts) available to them, have extended their area of operation to even 500 NM off the Horn of Africa in the Indian Ocean.
A lot is being done by the EU NAVFOR & US Navy with the co-alition warships to prevent such attacks, but the vastness of the affected area makes it an extremely difficult task.
I’m now in business school & thank my stars for being out of there, but something more needs to be done to make those seas safer.
Regards,
Manbir Waraich
Candidate, MBA in Global Management
MarEx Editor’s Remarks: The reader brings up some good points and also brings to the table some real life experience. We thank him for reading and for writing.