Short Sea Shipping developments

SSS solutions across the continents

In European, cities are generally located close to one another (particularly in comparison to the US) and often have easy access to water. Fuel taxes and other costs make overland trucking relatively expensive, promoting the search for alternative transportation methods. The European commission has a long standing policy to promote SSS and created the Marco Polo program as part of Trans European Transport Network (TEN-T) to support expansion of SSS services, reducing congestion and environmental impact.
The US Department of Transportation through the Maritime Administration (MarAd) has made SSS one of its six high-priority freight initiatives through the National Freight Action Agenda. The major water freight systems in the US operate on the Mississippi River, the Great Lakes, and the St. Lawrence Seaway, and typically transport bulk cargoes (such as grain, coal, petroleum, and lumber) for which delivery is not time-sensitive. According to MarAd:
‘Domestic waterborne transportation is safe, reliable, efficient and an established mainstay of America's national transport system. This environmentally friendly form of surface transportation handles a combined total of over 1.1 billion short tons of cargo, which is about 23 percent of the ton-miles of all domestic surface transportation traffic. Domestic waterborne transportation contributes $7.7 billion to the gross domestic product annually in the form of freight revenue.’[1]
The key drivers of SSS in North America are the increasing road congestion, concerns about the environment (particularly the air pollution from trucking on congested roads), and continuing growth of cities[2]. MarAd sees promoting the use of waterways as one means of easing traffic congestion and reducing air pollution.    It has supported the development and adoption of the 2003 Canada–US Memorandum[3].   Further, in December 2007, the US Senate passed the latest Energy Law (HR 6), which has a section dedicated to the promotion of SSS as a sustainable mode that can alleviate highway congestion[4].
More recently through ‘America’s Marine Highway Program’, the US is actively looking to expand SSS operations.  ‘Expanding the Marine Highway can be cost effective and will require less new infrastructure than surface transportation alternatives, represents significant fuel savings, while offering a resilient and redundant means of transportation’[5].
Surveys among US shippers agree that on-time reliability and door-to-door capability are the leading factors in their choice of transportation mode. However, despite the wide acceptance of SSS among US transportation stakeholders as an environmentally friendly alternative, there are various administrative, legal, operational and financial obstacles that delay the expansion of short sea services. These obstacles are:
1.     Additional handling costs. Instead of trucks carrying the cargo directly from origin to destination, short sea vessels take over the longer haulage, and trucks make only the local pick-up and final delivery. At the transfer points or intermodal terminals, there are additional handling costs for the loading and unloading of the cargo.
2.     Image problem. Traditionally, SSS has the image of a slow, unreliable and obsolete mode of transport which affects the shipper’s decision to use this mode. Short Sea operators need to alter that image by effectively promoting the advantages of SSS to the shippers and facilitating the c-operation among transportation modes.
3.     Harbour Maintenance Tax (HMT). The HMT is assessed as a 0.015% ‘ad valorem’ fee on the value of the commercial cargo, which is transported on vessels using the US ports. It is applied on both domestic and international containers that are been transported by vessels, but not on the cargo that is transported by trucks or rail. This is a major obstacle to SSS, since it is applied on every transhipment point. Many transportation industry stakeholders are calling for the waiver of HMT for the domestic SSS transportation. The recent repeal of the HMT in the Great Lakes is a major support for SSS.
4.     Jones Act. In the US, one of the major obstacles to the development of coastal shipping is the ‘cabotage’ system. Certain provisions of the Merchant Marine Act of 1920, also known as Jones Act, which requires that any vessel operating between two US ports must be US-built, US-owned, and manned by US citizens, significantly increases the capital and the operating costs for any short sea operation. Thus, it makes SSS more expensive and less competitive. [6]
Asia has a long history of freight movements on sea and river routes and hub and spoke feeder ship traffic are already used extensively. One of the reasons for this is that many locations have non-existent or underdeveloped road and rail alternatives. The shipping sector in the regions is therefore very competitive.  For Asia the motivation to further utilise sea transport is therefore a function of the geography of the region.  However, in order to increase maritime traffic, Asia needs to invest more in ports and infrastructure to provide effective hinterland connections from the ports as part of an integrated transport system.  Research is needed to determine how best to achieve optimum operating efficiencies in all situations, including future trade pattern developments across the ASEAN region and globally. It has been suggested that a “common transport policy” for the ASEAN region is desirable[7]. This is likely to entail some discussion of competitive and co-operative behaviour between ports.
There is general consensus across the regions as to the desirability of SSS in order to alleviate congestion and environmental impacts. Some of the obstacles and problems are common to all, notably the image of shipping and the issue of additional handling costs from transhipment.  Promotion of SSS is seen as an important policy issue in all regions, although European Policy in this area is at a slightly more advanced stage that that of the US and Asia.  A factor here is perhaps the geography of Europe, its coastline and the density of industrial centres.

[2] Brooks M. R. and J. D. Frost , (2004), ‘Short sea shipping: a Canadian perspective’, Maritime Policy and Management, 31, 4, 393-407 
[3] Memorandum of Cooperation on Sharing Short Sea Shipping Information and Experience Between the Transportation Authorities of the United States of America and Canada, 16 July 2003.
[4] US CONGRESS, 2007, Energy Independence and Security Act of 2007, 101st Congress, first session, HR. 6
[5] U.S. Army Corps of Engineers, ‘‘Waterborne Commerce of the United States’’ (2005).
[6] Perakis, Anastassios N. and Denisis, Athanasios(2008)'A survey of short sea shipping and its prospects in the USA',Maritime Policy & Management,35:6,591 — 614
[7] Short Sea Shipping – A European  and ASEAN Perspective