Revitalizing Coastal Shipping for Domestic Commerce (CRS Report for Congress)
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| Release Date |
May 2, 2017 |
| Report Number |
R44831 |
| Report Type |
Report |
| Authors |
Frittelli, John |
| Source Agency |
Congressional Research Service |
Summary:
In recent years, domestic shipborne commerce has lost much of its market to other modes.
Although potential shipping routes run parallel to congested truck, railroad, and pipeline routes
along the Atlantic and Pacific coasts and in the Great Lakes region, the volume of cargo carried
by domestic ships has declined by 61% since 1960, while the volume carried by other modes,
including river barges, has more than doubled. Use of domestic ships has retreated to routes
where overland modes are not available, such as between Hawaii, Puerto Rico, and Alaska and
the U.S. mainland, and where oil pipelines do not exist or are at capacity.
One reason for the comparatively lower usage of domestic coastal and Great Lakes shipping is
that despite their inherent efficiencies, ships are often not the lowest-cost option for domestic
shippers.
U.S.-built ships cost six to eight times more to build than the equivalent cargo
capacity provided by rail and barge equipment. The comparatively high cost is
related to the absence of foreign competition in shipbuilding and the lack of
economies of scale at U.S. shipyards.
U.S. container ports are widely considered to be much less efficient than ports in
Europe and Asia, some of which are fully automated. A 2013 study examining
the feasibility of coastal container services on the East Coast found that port
handling costs were the largest cost element ship operators would face.
Ship crewing costs are inflated by subsidies provided to U.S. crews aboard U.S.
international trading ships that have government-impelled cargoes reserved for
them. Domestic ship lines compete with the international fleet when hiring
maritime officers.
U.S. cargo shippers have responded to the comparatively high cost of domestic ship transport by
turning to land modes, exporting goods instead of selling them domestically, and utilizing
oceangoing barges instead of ships for coastal transport. Oceangoing barges cost less to construct,
and can require only a third as many crew as coastal ships. Since 1960, coastwise and Great
Lakes tonnage carried by barges has increased 356%, while ship tonnage carried on these waters
has decreased by 61%. However, oceangoing barges have significant disadvantages: they are less
efficient for longer voyages, and their use does not preserve the shipbuilding and maritime
crewing capabilities Congress has sought to protect. Oceangoing barges mainly carry petroleum
products, suggesting that commercial shippers do not find them attractive for other types of cargo.
Reviving coastal shipping would dramatically increase the capacity of the nation’s freight
network. Moreover, some of the necessary infrastructure is largely in place, as many of the
harbors the federal government dredges for deep-draft vessels currently have little or no ship
traffic. The question is whether a different mix of federal policies would make coastal trade an
attractive option for shippers and ship owners. To revive coastal shipping, the cost issues would
need to be addressed. Further information on the causes of the high cost of U.S.-built ships, the
justification for the crewing disparity between oceangoing barges and coastal ships, and whether
automation would lower cargo-handling costs at ports would be useful in evaluating policies that
might revitalize coastal shipping
