Richard D Stewart

Factoring a real value of cargo in port investment and funding decisions

Ports are marine gateways to economic activities. Ports’ ability to perform services depends on their facilities, harbor conditions, and other factors. Generally, ports have control over their facilities but must compete for funding to improve them. As for waterways, in the U.S., a Harbor Maintenance Trust Fund was established to fund dredging, which levies a 0.125% cargo value tax on most shippers using U.S. coastal and Great Lakes harbors. Yet, commonly, a gross tonnage metric is used to allocate the fund’s resources, resulting in under-maintenance of some harbors. This, reportedly, deters additional port funding and hinders valuable commerce. Supplemental economic metrics, such as value of commerce or cargo, can improve port financing decisions, but such data is not readily available. Container ports collect cargo value data in nominal terms, but bulk ports do not. When making economic decisions, however, real values must be used. Further, when allocating resources, decision-makers must be able to assess ports over time and relative to each other. Conforming to these criteria, this paper develops three port financing indicators based on a real value of cargo and illustrates their calculations using the U.S. Port of Duluth-Superior as a case study.

Development of the Adoption of Liquefied Natural Gas as a Fuel for Shipping on the Great Lakes

The adoption of the International Maritime Organizations emission control areas by the United States and Canada compelled operators of short sea vessels on the Great Lakes to seek alternatives to current fuel usage. Because of the concurrent discovery and extraction of large quantities of natural gas in the United States and Canada, ship owners have the opportunity to switch to natural gas. Converting to a new fuel is a complex process involving research and changes in operations, engineering, supply chains, and training. The Great Lakes Maritime Research Institute has been involved in a multiyear study supported by government agencies and industry to prepare for the adoption of natural gas as a primary fuel for U.S. vessels on the Great Lakes. This paper discusses the research process, including marine engineering studies, vessel operational issues, investigating regulatory issues, the development of supply chains, public outreach, and the analysis of fuel alternatives for vessels. The environmental benefits that accrue from conversion, as well as the potential operational costs, are compared. Steps in the conversion process, including siting of natural gas liquefaction plants and fuel taxation, are proposed.

Energy Inefficiency of Marine Transportation: Case Study of Flawed Data and Analysis

Policy makers at all levels of government use reports that analyze transportation data for planning, regulation, modeling, and budgeting. The value of a reports analysis is dependent on proper methodology and accurate data. Concerns about the accuracy of transportation data have been raised. A published analysis that represented the energy efficiency of marine transportation compared with other modes of transportation was assessed. The analysis was based on the best available data supplied by a government agency. The methodology, data, and data collection processes used in the case study and other related reports were examined. Recommendations were made for new maritime data collection processes along with changes in data analysis methodology.

PARAMETERS FOR A ROLL-ON ROLL-OFF MARINE INTERMODAL SERVICE ON LAKE SUPERIOR

The feasibility of reestablishing roll on–roll off (RO–RO) service linking Thunder Bay, Ontario, and the Twin Ports of Duluth, Minnesota, and Superior, Wisconsin, was examined. An analysis of similar services both on the Great Lakes and overseas was undertaken. Previous operations on the same route on Lake Superior and short sea service in the Baltic region were analyzed, and the attributes of an appropriate vessel type, such as ice strengthened scantlings and adequate speeds, were determined. A route schedule for a typical vessel was developed. A profile of a suitable vessel was prepared, and the market availability of the vessels was assessed. Issues in terminal design and operation were applied to potential docks in the ports of call to determine the adequacy of shoreside facilities. Cost factors for vessel operations and terminal operations were determined, and a spreadsheet model was developed for future application. Potential revenue streams from vessel and terminal operations were also explored. Revenue generators included day passengers as well as trailers and containers. The feasibility of linking the RO–RO service to a larger intermodal system serving Canada and the United States was also assessed.