Investments

This section provides a brief overview of some of the recent public and private investments made at Maritime Transportation System (MTS) ports. This list is not comprehensive; instead it illustrates the wide range of investments that can be made to help increase trade and traffic, as well as the variety of funding sources that ports are using to fund these investments. Greater detail on state, provincial, and federal funding programs is provided at on the port infrastructure strategy page.

Investments vary widely between ports and can be as simple as grading land to create more storage space, or as complex as construction of entirely new container terminals. Port investments do not have to be “on the water,” and many ports have made substantial investments in improving their road and railway connections to support the efficient movement of freight. Also, investments do not have to be limited to the construction of physical infrastructure; they can also take the form of new partnerships such as agreements to work on marketing port services.

Port investments, particularly public investments, often require a combination of funds from a variety of sources like national, regional, and local governments. In the case of Canadian ports, some of the investments profiled below also included elements of private funding.

In addition to funding programs, some states and provinces have chosen to engage in strategic planning to identify maritime needs and issues, and guide investment in their systems. Some Maritime Transportation System (MTS) states and provinces created their own maritime-specific funding programs, which are often intended to help ports pay for infrastructure upgrades, or improve connections to highways and railroads. Currently, three states or provinces have maritime-specific plans or strategies, and all states and provinces also have more generalized freight transportation plans.

The three maritime-relevant state or provincial plans are:

• Quebec Maritime Strategy (2015)
• Minnesota Statewide Ports and Waterways Plan (2014)
• Ohio Maritime Strategy (2017)

Some Maritime Transportation System (MTS) states and created their own maritime-specific funding programs, which are often intended to help ports pay for infrastructure upgrades, or improve connections to highways and railroads. This investment page provides examples of unique state and provincial programs that are explicitly intended to support maritime investments, or which have supported maritime investments in the past. In addition to the programs listed here, some states and provinces have general infrastructure or economic development grant programs for which maritime projects may be eligible, as well as nationally-mandated and state-administered freight investment programs. Therefore, the list of programs below is not comprehensive, instead it illustrates the diversity of state and provincial tools that have been used to invest in the maritime transportation system and provide opportunities for increased trade and traffic.

Green Marine is a voluntary environmental certification program for the maritime industry which is endorsed by a wide range of environmental groups and governments. Program participants such as shipowners, ports, terminals, Seaway corporations, and shipyards benchmark their annual environmental performance through exhaustive self-evaluation guides, which cover 12 performance indicators.

Green marine tracks the following performance indicators:

For ship owners:

• Oily water
• Pollutant air emissions – NOX
• Pollutant air emissions – SOX and PM
• Aquatic invasive species
• Greenhouse gas (GHG) emissions
• Garbage management
• Cargo residues
• Underwater Noise

For Ports, terminals and shipyards:

• Community impacts
• Dry bulk handling and storage
• Greenhouse gas (GHG) emissions
• Environmental leadership
• Spill Prevention
• Waste management
• Underwater Noise

Participants must have their results verified by an accredited external auditor and agree to the publication of their individual results annually.

The Infrastructure for Rebuilding America (INFRA) grant program is administered by the US Department of Transportation’s Build America Bureau. It was originally established by the 2015 Fixing America’s Surface Transportation Act (FAST), and is intended to support the renewal of deteriorating infrastructure. While INFRA is primarily highway- and bridge-focused, freight projects within the boundaries of ports or intermodal facilities are eligible.

Examples of Past or Current Investments

INFRA’s predecessor, FASTLANE was used to fund two Maritime Transportation System projects:

• $5 million (USD) for replacement of Lake Michigan ferry dock facilities in Ludington, Michigan, and Manitowoc, Wisconsin.
• $9.8 million (USD) for cargo handling efficiency improvements at Port of Indiana – Burns Harbor.

INFRA’s 2019 funding application deadline closed in March, but $1.0 billion has been allocated for FY2020 grants.

The Better Utilizing Investments to Leverage Development (BUILD) program is a discretionary grant program that supports investment in road, rail, transit and port projects. Before 2018, the program was known as Transportation Investment Generating Economic Recovery, or TIGER. BUILD/TIGER was created in 2009 as part of the American Recovery and Reinvestment Act of 2009 and has provided $7.1 billion (USD) for 554 projects. Available funds have varied over time, and the graphic below illustrates the amount BUILD/TIGER funds awarded each year since the program’s creation.

The National Trade Corridors Fund (NTCF) is part of the Government of Canada’s Transportation and Trade Corridors Initiative. This initiative was created in 2017 for the purpose of spending $10.1 billion (CAD) on transportation investments by 2028. The NTCF was allocated $2 billion (CAD) of that amount, and this $2 billion (CAD) in funding is being used to invest in strategic projects that:

• Support the flow of goods and passengers by reducing bottlenecks, and address capacity issues
• Help the transportation system withstand the effects of climate change and make sure it is able to support new technologies and innovation
• Address the unique transportation needs in Canada's territorial North to improve safety and foster economic and social development
• Build on investments made by a variety of public and private sector partners
• Increase the flow of Canadian trade around the world through ports, airports, roads, railways, intermodal facilities, bridges and border crossings

NTCF funding is available to a wide range of parties, including provincial, territorial, and municipal governments, indigenous groups, non-profits and for-profits, Crown Corporations, Canadian Port Authorities, and airport authorities.

Congress created the Port Infrastructure Development Program in 2010, with the goal of supporting improvements to port infrastructure. The program is administered by the Maritime Administration (MARAD), and provides planning, stakeholder engagement, operational and capital financing, and project management assistance to ports and port stakeholders.

While it was created in 2010, the Port Infrastructure Development Program did not receive funding until 2019, when $292.7 million (USD) was appropriated for port improvements.

Since the Port Infrastructure Development Program was only funded in early 2019, it has not yet been used to support any improvements on the Maritime Transportation System (MTS). While $292.7 million (USD) has been appropriated, about 1/3^rd of the funds are reserved for the United States’ 15 largest container ports. This means that MTS ports are only eligible for about $200 million (USD) of the program’s funding at most.

The St. Lawrence Economic Development Council (SODES) is a non-profit organization created in 1985 with the mission to “protect and promote the economic interests of the St. Lawrence maritime community from a sustainable development perspective.” Members of the organization include shipping carriers, ports, private terminals, provincial and federal governments, marine services and equipment suppliers, and marine industry associations.

To fulfill its mission, SODES has engaged in a wide range of marketing and outreach efforts, such as the ongoing Brought to you by ship – My river, my provider! promotional campaign, which includes outreach such as:

• Promotional websites,
• Posters and billboards, 
• Interactive educational games for students.

Public surveys commissioned by SODES have indicated that since the start of this campaign, more Quebec residents know about the maritime industry, and these residents have a more positive perception of the industry. Other SODES marketing efforts include art exhibitions and scholarships.

In addition to marketing work, SODES supports maritime interests through project such as:

• The Maritime Information System, which facilitates maritime data sharing and analysis.
• Coordination of Quebec’s Marine Advisory Board.
• Participation in various committees and working groups.

SODES’ promotional Brought to you by ship – My river, my provider! campaign will continue into 2019, as will its support and engagement in projects like the Maritime Information System. 

Highway H₂O is a group of Maritime Transportation System (MTS) stakeholders who have partnered to promote maritime transportation and create a shared “brand” for maritime transportation on the Great Lakes and St. Lawrence Seaway. The program was created in 2003, and is sponsored by the St. Lawrence Seaway Management Corporation and St. Lawrence Seaway Development Corporation.  The program is also supported by a variety of members including ports, private terminal operators, vessel operators, stevedoring companies, and local economic development agencies.

These members have access to a variety of benefits including annual conferences, marketing materials, business development support, workshops, webinars, and other research.

The overall objectives of Highway H₂O are to identify and promote opportunities for maritime transportation, and raise awareness of the MTS’s potential to address transportation challenges. As part of that work, the group has engaged marketing efforts intended to help communicate the benefits of maritime transportation and attract new traffic to the MTS. These efforts include:

• Seaway Toll discounts or incentives for new system users, or volume rebates.
• Route calculators providing shippers with estimates of travel time to foreign ports.
• Toll calculators to provide shippers with estimates of Seaway tolls.
• Sponsoring research on the economic and environmental competitiveness of the system.
• Hosting events such as an annual conference, workshops, and webinars.
• Purchasing booth space at transportation-related trade shows.

The Governors and Premiers’ Regional Maritime Strategy notes that the MTS needs a single-consistent brand, and recommends that the Highway H₂O brand be assessed for its potential as a starting point for future region-wide marketing plans.

The US Harbor Maintenance Tax (HMT) was created by the Water Resources Development Act of 1986. The HMT is a means for the US government to raise funds to pay for the dredging and maintenance costs of US coastal and Great Lakes ports, and specifically the dredging of harbor channels to meet required shipping standards. Other maintenance costs paid for by the HMT include repair of breakwaters, and the operation of the Soo Locks. Prior to 1986, US Treasury general funds were used to pay for this maintenance. The dredging of port berths has been, and remains the responsibility of individual port authorities or terminal operators.

The HMT is applied to the value of cargo being loaded or unloaded from a vessel, and is assessed on imported cargo, domestic cargo and the transport of passengers moving through US ports, including Maritime Transportation System (MTS) ports. The owner of the cargo, not the vessel operator nor port is responsible for paying the HMT, and export cargo is not taxed. The HMT is a tax imposed on cargo using the marine mode only: cargo moving on competing modes of transportation such as trucks and railroads does not pay HMT.

Tax revenues from the HMT are deposited into the Harbor Maintenance Trust Fund (HMTF), which was also created by the Water Resources Development Act of 1986. Each year, Congress appropriates the funds from the HMTF to the US Army Corps of Engineers (USACE) for harbor maintenance and dredging.

There is no direct link between the inflow of tax revenue from the HMT into the HMTF and outflow of dredging funds from the HMTF to the USACE. Congress appropriates funds for dredging, but not all of each year’s tax receipts are spent. In 2018, about $1.7 billion (USD) in revenue was received from the HMT, but only $1.54 billion (USD) was appropriated. As a result of many years of under-spending relative to revenue, HMTF has an estimated $9.3 (USD) billion surplus.

The US portion of the MTS currently has a significant backlog of USACE maintenance work, including:

• A $160 million (USD) backlog for dredging channels and harbors.
• A $320 million (USD) backlog for maintenance and replacement of breakwaters and other navigation structures.
• $75 million (USD) of upgrades for the Soo Locks. This cost of upgrades does not include the cost of construction of a new lock, which is discussed at [INSERT LINK TO SOO LOCKS CARD HERE].

Given these unaddressed maintenance needs, and the large HMTF surplus, Section 2101 of the 2014 Water Resources Reform and Development Act(WRRDA) called for full use of HMT tax receipts each year by 2025. The following 2016 Water Infrastructure Improvements for the Nation Act provided further guidance on targets for spending. For the past five years, Congress has met the spending targets established by the two acts above.

The Regional Maritime Strategy noted that the cruise tourism could generate substantial economic benefits for the Great Lakes. Cruise the Great Lakes is a response to this potential market, and is an international partnership intended to bring more cruise passengers to the Great Lakes. The partnership was organized by the Great Lakes and St. Lawrence Governors and Premiers in 2018, with the goal of creating a unique brand to market the Great Lakes to both consumers and cruise operators. Cruise the Great Lakes’ members include the provinces of Ontario and Quebec, and states of Michigan, Illinois, Minnesota, and Pennsylvania. Other partners include:

• Cruise operators such as Victory Cruise Lines, Blount Small Ship Adventures, and Pearl Seas Cruises
• Tourism agencies and chambers of commercesuch as Visit Detroit, Visit Duluth, Muskegon County Convention and Visitors Bureau, and Tourism Thunder Bay.
• Port authorities or agencies including the Port of Cleveland, Port of Milwaukee, and Detroit/Wayne County Port Authority.

Cruise the Great Lakes is currently developing its brand and implementing its marketing strategy through a variety of marketing efforts including:

• Creating a centralized website with basic information about cruising in the Great Lakes and all that the region has to offer;
• Engaging in digital marketing work including web search optimization and advertorial and editorial content about cruise itineraries and the regional cruising experience;
•  Creating printed materials, such as maps, to geographically locate the Great Lakes within North America, and to pinpoint each active port offering activities for cruise passengers;
•  Hosting familiarization tours; and,
• Organizing and participating in events to enhance visibility such as press events with elected officials.

Cruise the Saint Lawrence was created to promote cruise tourism in Quebec, and includes the nine cruise vessel ports of call on the St. Lawrence River. The main mandate of Cruise the Saint Lawrence is to build a brand for cruise tourism in the region by defining and coordinating development efforts and partner/port of call attributes.

Specific marketing materials and efforts from Cruise the St. Lawrence include:

• Familiarization tours for members and partners.
• Reservation agent training.
• Itinerary planning help for cruise lines.
• Advertising services cruise lines offering itineraries on the St. Lawrence.

The America’s Marine Highway Program (also known as the Short Sea Transportation Program) is administered by the Maritime Administration (MARAD), with the goal of developing and further incorporating maritime transportation into the US surface transportation system. The Marine Highway system encompasses the United States’ commercially-navigable waterways, including the Great Lakes. The Marine Highway was program was created by the Energy Independence and Security Act of 2007 with the intent of reducing congestion and reducing air emissions on highways and railroads through the designation of “Marine Highways.” Examples of intended benefits from the Marine Highways program include:

• Creating and sustaining jobs in U.S. vessels and in U.S. ports and shipyards;
• Increasing the state of good repair of the U.S. transportation system by reducing maintenance costs from wear and tear on roads and bridges;
• Increasing the US’s economic competitiveness by adding new, cost-effective freight and passenger transportation capacity;
• Increasing the environmental sustainability of the U.S. transportation system by using less energy and reducing air emissions (such as greenhouse gases) per passenger or ton-mile of freight moved. Further environmental sustainability benefits come from the mandatory use of modern engine technology on designated projects;
• Increasing public safety and security by providing alternatives for the movement of hazardous materials outside heavily populated areas;
• Increasing transportation system resiliency and redundancy by providing transportation alternatives during times of disaster or national emergency;

The Maritime Transportation System (MTS) has been designated as “M-90” (a parallel route to I-90 in the U.S.). The system also has two small sub-routes the M-75 Detroit-Windsor crossing, and the M-177 Lake Erie crossing.

The Marine Highways program has supported at least three research projects relevant to the MTS. These projects are are intended to help their respective applicants identify appropriate actions and resources to develop proposed short sea shipping services:

• M-75 Detroit/Wayne County Ferry Project, a proposed cross-border passenger service between Detroit and Windsor.
• M-90 Great Lakes Shuttle Service, a proposed truck and general freight ferry service between Milwaukee and Muskegon. The goal of the service is to reduce freight-related congestion, road maintenance, and emissions in the Chicago area, and provide competitive service.
• M-90 Lake Erie Shuttle, a project to carry containerized automotive cargo between Monroe, Michigan and Cleveland, Ohio.

MARAD provides Marine Highway Grants to support the implementation of previously-identified projects such as the ones above. Currently no MTS projects are funded by Marine Highway Grants, but the program could be used to fund MTS-relevant projects in the future.

The Smart Ships Coalition was formed by the Great Lakes St. Lawrence Governors and Premiers, the Michigan Office of the Great Lakes, and Michigan Technological University (MTU) and includes academic, state and federal agencies, private and non-profit industry, and international organizations working to advance the development and application of autonomous technologies operated in marine environments. The Great Lakes Research Center at MTU is supporting the Smart Ships Coalition and has established the Marine Autonomy Research Site (MARS) as a test bed for autonomous vessel research. Work groups have been established to advance collaboration in the following areas: Smart Ships Coalition Steering Group; Workforce Development, Education, and Training Group; Technology Development and Applications Group; and Autonomous Technology Operations and Policy Group. The Governors and Premiers released a Smart Ships Action Plan in August 2018 with policy recommendations to help the region become a leader in this sector.

The Regional Maritime Strategy notes that some cargo is transported on the Great Lakes during the winter, but this activity is restricted in areas due to winter ice cover and relies on icebreaking services from the U.S. and Canadian Coast Guards. Additionally, the Soo Locks, Welland Canal, and Montreal-Lake Ontario sections of the Seaway are closed for maintenance during the winter preventing any international trade and much of the domestic trades.

As a result of this seasonal shutdown, shippers have to use alternative modes of transportation, or stockpile inventories during the winter. This need to negotiate alternate shipping arrangements or stockpile goods increases the cost of using the Great Lakes-Seaway portion of the MTS. Given these seasonality considerations, shipping on the Great Lakes section of the MTS has traditionally focused on a narrow set of bulk commodities which can be stockpiled during the winter, while the remainder of the MTS (such as ports in Montreal and Quebec) supports more diverse trade. The Regional Maritime Strategy notes that this focus on select bulk goods inhibits the development of multi-modal logistics operations and economic clusters in the Great Lakes.

Potential investments to optimize the operating season of the Great Lakes portion of the MTS include:

• Investments in navigational aids, such as all-season buoys.
• Investments to increase the MTS’ icebreaking assets, which could help maintain passages for shipping later in the fall, and earlier in the spring.
• Optimizing the operating season of the Seaway so that additional traffic can be accommodated at the beginning or end of the season.
• Improved harmonization of lock closure dates between the Soo Locks and the St. Lawrence Seaway. Currently, the Welland Canal and Montreal-Lake Ontario section of the Seaway close before the Soo Locks, which reduces opportunities for traffic from Lake Superior to reach the Atlantic.

Currently, year-round operation of the St. Lawrence Seaway is unfeasible, as winter closures are needed to conduct critical maintenance and rehabilitation work. The feasibility of investments to optimize the length of the navigation season is not fully understood, and the Regional Maritime Strategy recommends that U.S. and Canadian agencies identify costs and benefits of season optimization.

The Soo Locks linking Lake Superior to the lower Great Lakes, particularly the Poe Lock, represent the single most critical navigation structure in the Great Lakes maritime transportation system (MTS). Some 80 million tons of cargo - primarily downbound iron ore for steel manufacturing, coal for electric power generation, and export grain - transit the Soo Locks annually. An economic impact study conducted by Martin Associates estimated that maritime commerce moving through the Soo Locks in 2017 supported 123,172 jobs in the U.S. and Canada, and generated $22.6 billion (C$29.3 billion) in economic activity. Currently there are two locks at the Soo available to cargo carriers, the 800-foot long, 80-foot wide MacArthur Lock built in 1943, and the 1,200-foot long, 110-foot wide, Poe Lock, enlarged to its current size in 1968. As Great Lakes commercial vessels have grown larger, reliance on the Poe has increased: it now handles over 90 percent of the cargo transiting the Soo. Given the criticality of the Soo Locks to the North American industrial supply chain, the 2016 Regional Maritime Strategy prioritized modernization of the locks through two major investments: 1) Acceleration of an asset renewal program for both the MacArthur and Poe Locks; and 2) Construction of a second large, Poe-class lock on the site of two long-retired locks.

Cruise tourism on the Great Lakes and St. Lawrence River is projected to grow in coming years and could generate economic benefits for communities hosting cruise vessels and businesses that support the industry. However, a lack of customs clearance facilities for cruise passengers and inconsistent application of customs regulations could hinder this expansion. Cruise operators, passengers, and port authorities require a consistent and efficient regulatory framework that can provide certainty and ensure the long-term viability and growth of regional cruising. The U.S. Customs and Border Protection (CBP) requires specific facilities in which to ensure security and safety while screening passengers. To address these needs, a coalition comprising governors, port authorities, cruise operators, and other stakeholders is working with CBP to develop a long-term solution. The proposed plan includes a system of four permanent locations for processing cruise passengers in the U.S. portion of the Great Lakes St. Lawrence system: Cleveland, Ohio; Detroit, Michigan; Duluth, Minnesota; and Sault Ste. Marie, Michigan. Facilities already exist in Detroit and Sault Ste. Marie, Michigan, which can be used for cruise passengers. To complete the regional network, CBP is working with port authorities in Cleveland and Duluth to identify potential customs clearance facility locations and to discuss specific requirements.

In the U.S., the 2019 federal appropriations bill included support to improve ice-breaking capacity on the Great Lakes by allocating $5 million to the research and design of a new Mackinaw Cruiser. Further funding will be required to build an additional icebreaker following its design.

In Canada, the federal government announced $15.7 billion (CAD) for Canada’s coast guard fleet renewal.

Historically, navigation buoys in the Great Lakes and St. Lawrence River Maritime Transportation System have been a high-maintenance component of MTS infrastructure. The ice coverage that largely closes navigation in the system for the winter months requires that buoys be deployed early each spring and retrieved in the late fall. To reduce the costs of this work, the Canadian federal government announced in October, 2018 that the Canadian Coast Guard had procured 184 four-season lighted navigation buoys at a cost of $12 million (CAD) to be deployed in the St. Lawrence River shipping channel, between Québec and Montréal. According to the announcement, the four-season buoys are “unique in the world, designed using Canadian Coast Guard expertise to withstand the severe ice and tidal conditions found in the St. Lawrence shipping channel.” They will remain in the water year-round and only require maintenance every two to four years.