The American Great Lakes Ports Association has released a policy agenda that includes harmonizing the St. Lawrence Seaway navigation season with the Soo Locks, a more “equitable” distribution of U.S. port infrastructure grants and reforming pilotage regulations.
The opening and closing dates of the St. Lawrence Seaway vary from year to year due to weather conditions and the demands of commerce. The system’s locks have opened as early as March 20 and as late as March 31. The closing date has ranged from December 24 to January 5.
“To enhance the reliability of the shipping system, attract new cargoes and foster employment in the maritime sector, the United States and Canada should harmonize the Seaway’s opening and closing dates with those of the Soo Locks in northern Michigan,” stated the AGLPA policy document.
”Doing so would establish a fixed navigation season for the entire Great Lakes navigation system from March 25th – January 15th.”
The Port Infrastructure Development Program (PIDP) is the primary source of federal investment in the nation’s port infrastructure, such as dock reconstruction, rail improvements, road access, storage expansion, and modernization of cargo handling equipment. The program is managed by the Maritime Administration, an agency of the U.S. Department of Transportation.
Port infrastructure grants are not being distributed equitably. Last year, the U.S. Department of Transportation distributed $653 million under this program and Great Lakes ports only received 2% of the funds. Over the 5-year life of the program, Great Lakes ports received only 8% of funds distributed. By comparison, West Coast received 38.5% and East Coast ports received 34%.
“Congress should require the U.S. Department of Transportation to distribute funds in an equitable manner between regions of the United States,” the AGLPA said.
Among other subjects covered in the policy agenda are the improvement of Great Lakes icebreaking services, the elimination of the Corps of Engineers maintenance backlog, completion of the $3.2 billion new Soo Lock currently under construction, funding of the Great Lakes Restoration Initiative, and an appeal to Great Lakes states to become much more involved in harbour assistance programs.
Improve U.S. Customs and Border Protection Services
In recent years, Great Lakes ports have been working to develop new business in two distinct areas: containerized cargo shipping, and passenger cruise tourism. These new business sectors have presented a challenge for U.S. Customs and Border Protection (CBP). The inspection and processing of shipping containers and passengers is more complicated than the processing of traditional Great Lakes bulk cargoes. Both require unique staffing, equipment, and facilities. CBP officials have explained that they face both funding and staffing limitations and have denied service at some ports, limiting economic growth.
CBP’s current service model discourages the development of new commerce and jobs at Great Lakes ports. In a real sense, it asks commerce to shape itself to the inspection regime, rather than shaping the federal CBP inspection service to the efficient flow of commerce.
Congress should provide more funding for CBP services, including staff, inspection facilities, and capital costs at seaports. To accomplish this goal, Congress should enact H.R. 6409, the CBP Space Act. This legislation allows revenue generated by the federal Merchandise Processing Fee (MPF) to be used for CBP capital needs at ports.
Finally, Congress should direct CBP to develop a small port, low volume, and seasonal clearance model that accommodates the unique conditions and scale of the Great Lakes cargo and cruise market.
Reform Great Lakes Pilotage
All ocean-going ships operating on the Great Lakes and St. Lawrence Seaway are required by law to hire a U.S. or Canadian marine pilot to assist with navigation.
The Great Lakes Pilotage Act of 1960, and its associated regulations, give form and structure to the pilotage regime in the sections of the Great Lakes under U.S. jurisdiction. In its current state the system is a regulated monopoly. Ship owners (the consumer) are required by federal law to employ pilots. Since there is only one pilotage service provider authorized in each geographic area, an effective monopoly exists. The Coast Guard exercises broad regulatory oversight over all aspects of Great Lakes pilotage, including the setting of fees.
Under Coast Guard management, Great Lakes pilotage has become a runaway cost for international trade on the Great Lakes-St. Lawrence Seaway navigation system. In the last ten years (2014-23), the overall cost of U.S. pilotage on the Great Lakes has tripled ($12.8 million – $37 million). Individual pilot compensation as set by the Coast Guard has soared to $440,658. Unreasonable costs threaten the competitiveness of international commerce on the Seaway system.
“Congress should update the Great Lakes Pilotage Act with the goal of maintaining safety, increasing efficiency, reducing costs, and improving the competitive position of the navigation system,” the AGLPA stressed.
