Prepared Remarks
U.S. Department of Transportation
Maritime Administrator 
Captain William G. Schubert

Connecticut Maritime Association
Shipping 2004 Conference
March 24, 2004

Thank you for your kind introduction and thank you for inviting me to speak before you today. It is great to be here among so many distinguished representatives of the shipping industry.

I like the theme of this year’s conference – kicking it up a notch – because that is exactly what we are doing at the Maritime Administration. We are ramping up for bigger things to come. The Department of Transportation has placed a renewed focus on core transportation issues within the Department and has initiated a new context from which MARAD now operates.

Today, I am going to talk about something we can all relate to and that is the maritime infrastructure of this country. Your companies, whether U.S.-flag or foreign flag, are all users of the U.S. marine transportation system, also known as the MTS.

The MTS is significant in terms of its geographical scope and its impact on the U.S. economy.

• 25,000 miles of inland, intercoastal and coastal waterways
• $200 billion in annual tax revenues and an annual contribution to the nation’s Gross Domestic Product that exceeds $742 billion.

And whether Americans realize it or not, every American benefits from a safe, low-cost, efficient marine transportation system. The success of businesses like Wal-Mart, Target, and Best Buy are proof of that. A competitive transportation system delivers accessible, affordable choices to American consumers across the country.

Despite the size of the system and the volume of cargo that passes through the nation’s ports and waterways each day, there is an impending capacity challenge. When things are going great for an industry, it’s never easy to highlight a potential weakness or a forecasted challenge. Business at the nation’s ports is booming and freight rates are sky high. However, there is a serious need to start planning today for the future of this country’s maritime infrastructure. Allow me to illustrate a few key points:

• America’s port and freight system is increasingly operating at the limits of its capacity. A slowdown or shutdown can have adverse consequences on both the US and global economies. A recent study found that urban congestion, exacerbated by increased movements of freight, already costs consumers $70 billion per year in wasted time and fuel.

• Adding to the capacity challenge, U.S. foreign trade and freight volumes at our ports are expected to increase by 50% universally, while doubling and even tripling at the busiest domestic ports by 2020. Land constraints, fueled by population growth in coastal states and around ports, will soon limit the expansion of our largest ports. The efficient use of intermodal connectors, also known as the last mile of highway between the interstate and the port, will become more critical.
• All ports in this country now facing new and important security requirements, are managing the delicate balance of security and commercial efficiencies.
• And where is U.S. port infrastructure in global terms? In 2009, the Port of Singapore alone will have more container capacity than our entire port system today. That is astonishing when you put our capacity in a global context.

With international trade booming across the globe, the Bush Administration realizes that U.S. ports, railroads, and highways must be prepared to handle projected trade growth as efficiently, reliably and safely as possible. Thanks to the personal engagement of Secretary Mineta, the Department of Transportation initiated the concept of a SEA-21 to address the infrastructure needs of the nation’s Marine Transportation System.

When it comes to developing and enhancing transportation infrastructure, the maritime mode is far behind its counterparts in the surface transportation and aviation modes. When it comes to investing federal dollars on maritime infrastructure needs, maritime lags behind its transportation counterparts. That is because this nation has never before had a coordinated, comprehensive action plan to address its Marine Transportation System. For the nation and the system that facilitates international, as well as domestic trade, this is not just unfinished business, but completely new business.

This is precisely why Secretary Mineta called for a comprehensive Marine Transportation System/maritime industry initiative, also known as SEA-21.

The Maritime Administration is leading a full-scale review of current policies and developing a series of recommendations for consideration that will seek to increase the competitive standing of our marine transportation system and our Nation’s maritime industry. This review – now underway and involving the efforts of MARAD and the Office of the Secretary – emphasizes the need to integrate all our transportation modes.

Just as the aviation and surface transportation modes have been transformed through significant federal investment and national attention, the SEA-21 effort will complement other transportation efforts taking place in the federal government and will emphasize a level of leadership undertaken by the Department of Transportation. Currently, 17 Federal agencies in six, separate cabinet-level Departments participate in maritime decision-making. In the past, this has lead to an inefficient patchwork of unconnected laws, policies, and programs. SEA-21 will look to streamline maritime leadership and decision-making.

While policy coordination is critical in the development of any initiative, the ultimate goal of a SEA-21 initiative is to ensure a more competitive and modern maritime transportation system for all users. Massive modernization and increased freight capacity projects are underway at ports belonging to key trading partners around the world. U.S. capacity is not keeping pace with the trade that is projected to enter our economy from those overseas ports – the very same ports that are on the verge of vast expansion. We are planning now to ensure that congestion and inefficiencies will not become obstacles to economic growth in our own country.

As part of the SEA-21 initiative, the Bush Administration is also taking a serious look at the concept of short sea shipping and how the maritime component of our transportation system can help move commercial goods more effectively and efficiently. As we progress with this initiative, I will be looking to the Short Sea Shipping Cooperative program that the Maritime Administration started last year for overall guidance and support from our industry partners. And for the skeptics out there, short sea shipping does not stand for suckers for subsidized shipping either. In order for short sea shipping to be successful, it must be part of a revolutionized maritime transportation system and short sea services must independently prove to be a competitive and attractive alternative method of shipping goods.

A comprehensive maritime initiative will recognize that responsibility for the Marine Transportation System is as much local and private sector as it is Federal and public sector. This means the Federal government’s role must be one of coordination – not control.

It recognizes that we must balance the necessity of homeland security with the necessity for the most efficient flow of commerce.

A SEA-21 will recognize that the impending capacity crunch just around the corner at our ports is so great that local government or private-sector sources cannot meet these challenges alone. That is why a strong emphasis will be placed on partnerships across the modes at each level of government – with private-sector partners every step of the way.

This initiative is about maintaining an efficient, globally competitive economy. It’s transportation that keeps the economy moving both here and abroad. Whether your are representing a European or Asian based shipping firm with foreign flag operations or one in the United States with a U.S.-flag operation, your business is dependent on the safe, efficient and reliable marine transportation system that this nation offers. And while today there may be no direct threat to your operations because the system is reliable and dependable, the demands of an international economy over the next ten, twenty and even thirty years will place new challenges on today’s infrastructure.

I appreciate the opportunity to address you and I hope you enjoyed the snapshot I have offered you regarding the Bush Administration’s planning for greater economic opportunity in a developing area of important activity. I’ll be happy to answer a few questions from the audience.

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