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The Marine Transportation System and the Federal Role: Measuring Performance, Targeting Improvement - Special Report 279 � � � � � � Executive Summary Much of the freight transported within the United States, and the vast majority of that moved in international commerce, uses the nation’s marine transportation system (MTS). The system is varied and immense. It consists of thousands of miles of navigable channels, hundreds of port complexes, and thousands of terminals located along the nation’s lake, river, and coastal waterways. It involves tens of thousands of shippers and carriers, who operate a wide range of vessels from this country and abroad, from river barges to the largest oceangoing vessels. Manufactured goods are brought into and shipped out of the country in standardized marine containers transported by the thousands in vessels that regularly cross the oceans. Commodities essential to the economy and

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The Marine Transportation System and the Federal Role: Measuring Performance, Targeting Improvement - Special Report 279 � � � � � � daily lives of Americans, such as minerals, building materials, energy, and farm products, are moved in bulk across the country and to and from other regions of the world on the rivers, lakes, and oceans. The waterways are connected to the nation’s other modes of transportation, such as highways, railroads, and pipelines. Together they form a vast freight system that has become integrated with the production process itself. The performance of the MTS affects the location of businesses, their operations and practices, and the demand for the goods and materials they produce— and ultimately the productivity and competitiveness of U.S. producers and the prices paid by U.S. consumers. Even more than other parts of the nation’s transportation system, marine transportation is a joint private- and public-sector enterprise. The private sector owns and operates the vessels and most of the terminals— it is responsible for the commerce that flows through the system. The public sector provides much of the infrastructure at ports and on the waterways—it is responsible for keeping the system functioning in support of commerce, and for doing so in a safe, secure, and environmentally sound manner. The MTS is still a new and expanding concept. It encompasses not only the vessels, waterways, navigation aids, ports, and other traditional components of the marine sector, but also their connections to other modes of transportation, both public and private. As part of the broader freight transportation system, the marine sector is constantly being shaped and reshaped by economic and technological forces. At the same time, it continues to be heavily influenced by many long-standing political and institutional structures that reflect past economic arrangements and divisions of responsibility. In this regard, the very notion of an MTS is compelling. While an emphasis on “marine transportation” is in many ways restrictive in an increasingly multimodal freight system, explicit thinking about many components working together to form a national system makes good sense. Such a system perspective must be instilled in all decision-making structures, starting with those of the federal government.

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The Marine Transportation System and the Federal Role: Measuring Performance, Targeting Improvement - Special Report 279 � � � � � � GETTING THE FEDERAL ROLE RIGHT In this study, the MTS is examined in the broader context of its role in the freight system, but with a focus on the federal government’s role in supplying, financing, operating, and regulating the infrastructure and services that support the system’s efficient use in the public interest. The federal government has a strong interest in fostering an MTS that facilitates commerce and furthers other national interests. The Constitution calls for the federal government to regulate interstate commerce. By its very nature, the MTS is a long-distance mode of transportation that cuts across state and national borders. It has far-reaching impacts and implications that compel a prominent and effective federal presence. The system’s integration with other modes of transportation means that the federal role must be viewed within an even broader context that recognizes the high degree of modal interconnectivity characterizing the national freight system. The federal government today has a large and influential role in the MTS. It helps pay for the construction and maintenance of navigable channels. It helps manage the traffic that operates on the waterways and provides the aids to navigation, charts, and information on water and weather conditions used by mariners. It regulates the safety of vessels and their environmental compatibility, and it responds to marine accidents that threaten public safety and the environment. It helps finance the highways that connect marine ports and terminals to the larger transportation system. And now more than ever, it is seeking ways to ensure the security of the marine sector and the transportation system overall. While these federal responsibilities are substantial collectively, they are widely dispersed and not well coordinated. They are fulfilled by many federal programs administered by multiple federal agencies and governed by numerous statutory requirements, some reflecting past federal interests and institutional arrangements. In general, the institutional roles and divisions of responsibility in the federal government do not correspond well with how the MTS is organized and functions today.

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The Marine Transportation System and the Federal Role: Measuring Performance, Targeting Improvement - Special Report 279 � � � � � � Several federal agencies and departments are collectively responsible for many of the functions listed above, as well as many others. Sponsors of this study include the U.S. Coast Guard, the National Oceanic and Atmospheric Administration, the U.S. Department of Homeland Security, the Maritime Administration, the U.S. Department of Transportation, the U.S. Department of Agriculture, and the U.S. Army Corps of Engineers. Together, they asked for an analytic framework that can be used in identifying their capital and operating needs, coordinating their program activities and infrastructure investments, and guiding other agency decisions so that they are consistent and complementary in furthering national interests. These federal agencies and their policy makers receive much advice on desirable levels of federal funding and on specific changes that are needed in federal programs and policies. However, they lack good information and analyses to support and coordinate these decisions. They—and Congress—need to know how well the MTS is functioning to meet the demands of commerce, safety, environmental protection, and national security. They also need means for identifying shared goals, assessing progress toward achieving them, and planning concerted actions to further this progress. The federal government has assumed important roles in the MTS, as mentioned above. In this report, the committee does not examine or question the bases for these roles, except to note that most are long-standing and rooted in the Constitution. Policy makers may choose to give more or less attention to any of these roles. The thrust of the committee’s recommendations is to ensure that federal decision makers have the information at hand to make determinations and decisions that further their goals. INFORMATION AND ANALYSIS FOR DECISIONS The committee finds that strengthening of the information and analytic bases for federal decisions relating to the MTS is urgently needed. Federal program expenditures on individual components of the MTS are large, and each expenditure must be justified in its own right. Even more important, the furtherance of safety, environmental protection, com-

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The Marine Transportation System and the Federal Role: Measuring Performance, Targeting Improvement - Special Report 279 � � � � � � merce, and security requires that federal policy makers coordinate decisions across programs with these broader interests in mind. To do so, they must have an understanding of how well the overall system is performing in each of these areas. Moreover, they must have knowledge of how the MTS is used and how it functions within the broader transportation system and economy. Such information and understanding are important for a number of reasons. Having so many responsibilities spread among so many programs, federal policy makers must know how these programs are working collectively to further national interests and where they may be working at cross-purposes. They must be able to identify problems and needs as they arise and take timely actions to address them. Lack of such understanding could lead to neglect of problems and missed opportunities for solving them, including transportation inefficiencies that persist and cascade through the national economy, environmental problems that may become crises, and failure to embed safety and security into the functioning of the system. Demands on the MTS are growing and continuously changing. Traffic demand, propelled by continued growth in international trade, is increasing. In addition, environmental, safety, and security demands are changing. A growing and increasingly integrated system will require more and better information to support decisions. Yet information on system performance is mostly program- and project-specific in its focus and use. For example, much information is collected on the incidence and length of delays at individual locks on the inland waterways. These data, while helpful, are not now being used in more comprehensive ways to assess congestion and delays on the system as a whole and their impacts on national freight transportation patterns and costs. Such data should be used to assess the current performance of the nation’s navigation infrastructure in facilitating commerce and to evaluate investments and policies to improve performance. Likewise, information is collected on vessel groundings and collisions and on oil spilled in U.S. waters; this information is helpful in assessing the safety of vessel operations and design. That information could be routinely used to guide federal investments in hydrographic

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The Marine Transportation System and the Federal Role: Measuring Performance, Targeting Improvement - Special Report 279 � � � � � � data and channel dredging to improve the safety of the marine operating environment, but this is not done. Expecting individual agencies to collect and analyze system-level performance information is unrealistic. Of necessity, each agency’s information needs will be driven by its specific program objectives, budgets, and statutory obligations. Nevertheless, one federal entity—the U.S. Department of Transportation (DOT)—has a clear responsibility to ensure that this national and system-level performance information is made available and is used for federal transportation policy making. DOT has the capability to develop this information by drawing on data collected by other federal agencies and nonfederal entities. It also has the responsibility to view the operations and performance of the MTS within the broader context of the nation’s transportation system and its relation to national interests. No other federal agency involved in the MTS has this overarching perspective and charge. DOT can communicate this information to Congress and the Office of Management and Budget, where the connections among federal agency budgets and policies must take place. Therefore, the committee urges the following: The Secretary of Transportation should seek a mandate from Congress for DOT to take the federal lead in measuring, monitoring, and assessing options to strengthen the MTS’s contribution to the furthering of key national interests, including commerce, environmental protection, safety, and security. While legislative authorization is imperative to sustain such an effort, DOT should assume this leadership role immediately—thereby demonstrating the value to Congress. Acting in this capacity, DOT should consult with the other federal agencies and users of the system in establishing performance goals for the MTS that relate to national interests, and it should seek a formal endorsement of these goals from Congress. Ultimately, a better-informed Congress will need to ensure that these goals are pursued through the commitment of resources and appropriate changes in the responsibilities, organization,

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The Marine Transportation System and the Federal Role: Measuring Performance, Targeting Improvement - Special Report 279 � � � � � � and expectations of the federal programs and agencies. The information that DOT supplies will be especially important in ensuring that federal policies and programs pertaining to the MTS are made in the context of its role in the national freight system. By itself, good information on system performance is not enough to bring about more rational and coordinated federal decision making, but it is a start—and one that has precedent in other federal transportation programs. Congress has come to demand regular reporting of the performance and needs of the nation’s aviation and surface transportation systems. A long-standing analytic effort, and one that is a good model for the MTS, is DOT’s biennial Report to Congress on the Status of the Nation’s Highways, Bridges, and Transit: Conditions and Performance (C&P report). This report, developed by DOT with the help of the Federal Highway and Transit Administrations, is mandated by Congress and provides policy makers with regular national-level information on system performance—not only measurements of current conditions and performance, but also assessments of future demands and expectations, as well as options for meeting them. Hence, as a central part of fulfilling the role recommended above, the committee recommends the following: DOT should immediately begin to develop, and seek a mandate from Congress to produce on a regular basis, reports on the use, condition, performance, and demands of the MTS modeled after the biennial C&P reports developed for the federal highway and transit programs. Not only should these reports portray current conditions and performance, they should also look to the future by assessing the funding levels and investments required to improve system conditions and performance over time. A wide range of metrics, data, and analyses will be required to measure and monitor aspects of the MTS. The focus should be on metrics that translate into performance (e.g., trends in safety and transportation costs) as opposed to simple measures of program output (e.g., miles of channel

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The Marine Transportation System and the Federal Role: Measuring Performance, Targeting Improvement - Special Report 279 � � � � � � dredged, number of vessels inspected). None can be expected to be comprehensive, and all will be open to interpretation. Information will need to be obtained from many different sources, including federal agencies, state and local authorities, and the private sector. The very act of gathering, synthesizing, and analyzing such information and relating it to performance should prompt more critical thinking about the scope and effect of federal involvement in the MTS. It should provide many insights into system performance trends that are not now apparent from the scattering of information across parts of the system. The idea is to provide credible, objective, and accessible information on a regular basis that will be useful in prioritizing investments and making policy decisions relating to national interests. OTHER CONCERNS AND RECOMMENDED ACTIONS With goals for and good information on MTS conditions and performance, federal policy makers will be in a much better position to ensure that federal programs are well devised and resources well placed. Moreover, the experience from other transportation modes suggests that the analyses and regular performance reporting recommended above will draw the attention of both the public and Congress to the needs of the MTS. The notice drawn to the needs of highway and transit is an important intangible of the C&P reports for these modes and should not be overlooked. Such system-level information should not supplant detailed assessments of specific federal projects and investments, such as the benefit– cost evaluations performed by the Corps of Engineers for its navigation infrastructure. Instead, this information will provide decision makers with a more detailed picture of how federal infrastructure functions collectively. This will be important in assessing federal funding policy and methods of managing the infrastructure components as a connected enterprise. Efforts to understand system functions and needs have proved helpful in convincing users of the aviation and highway systems that their financial contributions to the federal infrastructure programs are being well spent.

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The Marine Transportation System and the Federal Role: Measuring Performance, Targeting Improvement - Special Report 279 � � � � � � The information derived from regular system condition and performance analysis and reporting will, in the committee’s view, help guide these congressional spending decisions, including the design and targeting of federal efforts to meet identified problems and needs. In the interim, however, consideration must be given to early actions for meeting MTS needs. The beginnings of an analytic framework for helping to identify MTS needs and priorities, as well as opportunities for meeting them, are presented in Chapter 6. The perspectives taken into consideration are those of the federal agencies, MTS users, and system components. In the committee’s view, such a multidimensional framework will help to sort and coordinate federal priorities and to ensure that they are consistent with one another and compatible with furthering national interests. Other insights from the federal aviation and surface transportation programs suggest that simply developing and reporting system condition and performance is not enough. The creation of national, broad-based trust funds for the federal aviation and highway programs, coupled with multiyear congressional authorizations and contractual obligations for the use of these funds, has helped foster a federal commitment to fully reinvest user-generated revenues back into the system to improve conditions and performance. Similar devices and commitments by Congress and the executive branch to prevent the diversion of user-financed trust funds established for waterway infrastructure do not exist. Without this commitment, users are reluctant to support additional user financing, and they have come to question the federal commitment to improving the system. On the basis of its review of other federal transportation programs, the committee is convinced that user financing of the MTS must be accompanied by a federal commitment to reinvest all of the generated funds back into the system. The extent to which federal funding for marine transportation programs should be derived from user fees is something for Congress to decide. Greater acceptance of this financing approach by users, however, requires a demonstrated commitment to reinvest the revenues that are being collected. The committee therefore recommends the following:

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The Marine Transportation System and the Federal Role: Measuring Performance, Targeting Improvement - Special Report 279 � � � � � � The administration, supported and informed by DOT and the U.S. Army Corps of Engineers, should seek from Congress the commitment to fully and promptly reinvest all user-generated revenues back into the MTS. The commitment should be accompanied by the kinds of statutory and political devices used in the federal aviation and surface transportation programs to make it binding. During the course of this study, the committee interviewed users of the MTS and reviewed reports identifying critical system shortcomings and needs. The committee observed that a number of problems and concerns were raised repeatedly. When they are examined on the basis of the analytic framework offered in Chapter 6, many of these problems and concerns appear to fall outside or transcend the jurisdictions of individual federal agencies. Often they have been allowed to persist because they require the attention of more than one federal agency, are emerging and not well defined or understood, or arise in part from efforts to address other important needs and problems. All are candidates for the kinds of performance measuring and monitoring urged in this report. Some, in the committee’s opinion, deserve early attention because they have the potential to be exacerbated by escalating transportation demand. They include the following: The capability of highways and other intermodal facilities at major ports to handle increasing container traffic. The challenges involved in integrating the nation’s freight transportation systems, and the jurisdictional issues that arise, are perhaps most apparent at the interconnections of the nation’s public seaports, public highway systems, and private railroads. At these points, federal, state, local, and private-sector interests and responsibilities intersect, but they are especially difficult to coordinate because of differing planning horizons, resource constraints, and investment priorities. The ability of the federal government to respond effectively to changing vessel traffic, sizes, and uses in the provision of navi-

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The Marine Transportation System and the Federal Role: Measuring Performance, Targeting Improvement - Special Report 279 � � � � � � gation infrastructure. As it seeks to provide harbor channels, locks, and other navigation infrastructure, the federal government faces multiple and sometimes conflicting demands. Most notably, demands for the increased use and capacity of the nation’s waterway infrastructure often conflict with demands for environmental protection. Absence of systematic and comprehensive efforts to strengthen marine safety, security, and environmental protection. The fragmented roles of the federal agencies in promoting marine safety, security, and environmental protection have led to many prevention, mitigation, and response activities, each tending to focus on specific subsets of problems. The result is a mix of efforts, such as economic protections afforded domestic shipbuilders and carriers in the name of promoting national security and the regulation of vessel designs and operations to promote safety and protect the marine environment. Other options to help achieve these goals may be considered, such as improving infrastructure and navigation information, but seldom in a systematic way. An examination of safety, security, and environmental needs will be important in ensuring that the nation’s commerce is unhindered and that the pressures from increased commerce do not compromise such needs. In each of these three areas, more information and analyses are required. In some cases, a restructuring and reshaping of the federal government’s roles and divisions of responsibility may be necessary. There is a need to start addressing these issues and concerns more directly. Experiences from other federal transportation programs suggest opportunities for doing so. In the committee’s view, such opportunities should be vigorously pursued to help bring about integration of the nation’s freight transportation systems. The following three recommendations are offered in this spirit: The Secretary of Transportation should seek from Congress a more balanced set of tools to make national transportation investment and policy decisions that recognize the increasing

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The Marine Transportation System and the Federal Role: Measuring Performance, Targeting Improvement - Special Report 279 � � � � � � integration of the transportation modes and the effects that federal decisions concerning one mode have on other modes. As a first step, DOT should examine and advise Congress on ways to expand the scope and flexibility of existing federal transportation investment and finance programs so that they can be used more effectively for the development of multimodal and intermodal transportation facilities. It is not enough to encourage federal policy makers to take a multimodal perspective on transportation investment and policy making; they must also have sufficient tools at their disposal to act from this perspective. The Secretary of Transportation should seek from Congress the means to undertake, in collaboration with industry and other federal agencies, an applied research and technology program aimed at furthering the capacity, safety, environmental protection, and security of the nation’s ports, intermodal connections, and other marine facilities and services. This effort should include collaboration with the U.S. Army Corps of Engineers to explore opportunities for applying technology, including intelligent transportation systems, to the inland waterway system and with the Department of Homeland Security and its agencies to pursue technologies to strengthen system security. Experience from other federal transportation programs suggests the value of federal support of research in improving the national transportation system; thus, a comparable supporting role in the furthering of the national MTS deserves consideration. As part of its efforts to measure and monitor MTS performance, DOT should aim to develop a more thorough understanding of the operations, capacity, and use of the system, and of the freight system in general. Such an understanding will help identify ways to better integrate security, environmental protection, and safety features and capabilities into the system as it facilitates the nation’s commerce. Examining the implications of federal investments and activities across modes will also be important in

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The Marine Transportation System and the Federal Role: Measuring Performance, Targeting Improvement - Special Report 279 � � � � � � ensuring that these investments are compatible with one another and with these national interests. Such outcomes can no longer be treated as mutually exclusive or conflicting goals of national policy, but rather as interdependent and essential to one another. CONCLUDING OBSERVATION The integration of the nation’s transportation modes, particularly for the movement of freight, is a long-term phenomenon that may ultimately compel changes in federal responsibilities and institutions. Short of such change, much can be done to ensure that the federal government remains responsive to the needs of commerce and the public. The actions recommended in this report represent first steps in ensuring that the MTS, and intermodalism in general, has a meaningful influence on federal policies and decision-making processes.

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