Lack of investment in waterways could strain project cargo industry when economy recovers

As the national gross domestic product tripled capital investment over the past 30 years, investment in public water resources infrastructure decreased by 70 percent. The Army Corps of Engineers has a current backlog of more than 500 projects with a cost of about $38 billion. At current funding levels, it would take 25 years to complete the active projects.

The lack of funding for maintenance dredging has reached crisis proportions. The Harbor Maintenance Tax was created in 1986 specifically to fund dredging projects, but Congress must appropriate the funds annually. More than $1.4 billion was collected and put into the Harbor Maintenance Trust Fund in fiscal 2007, yet only $751 million was allocated to the Corps of Engineers for maintenance dredging.

"Without dredging, many port facilities and navigation channels would be rendered unsafe and non-navigable to users in less than a year," the American Association of Port Authorities says.

The project cargo industry has largely been spared from negative impact of the nation’s aging inland waterways infrastructure, said Dennis Devlin, director of global projects and energy for BDP Project Logistics. Most project cargo moves inland by truck, and while ports continue to devote more resources to container operations, there are more marine terminals handling project cargo now than there were 10 years ago. The Gulf Coast ports of Houston, New Orleans, Beaumont, Freeport, Galveston and Port Arthur are adding breakbulk capacity or have the ability to do so, and there are many other options on both coasts.

Coordinating container and project shipments can be challenging. Vast amounts of ancillary equipment are needed to support projects, and much of it is containerized, including pipes, valves, pumps and instruments, Devlin said. BDP uses freight process management software from Houston-base HAL Inc. that is specifically designed to track all project-related cargo shipments door-to-door.

Although the nation’s marine ports have kept up with the demands of the breakbulk and heavy-lift industry, when the economy eventually improves, there will be an even greater demand for project cargo that could strain port capacity, said Frank Fogarty, senior vice president of sales and marketing for general stevedoring at Ports America. Without a secure, ongoing source of funding for maintenance dredging and infrastructure upgrades, some of those ports could be at risk.

"If we don’t improve our infrastructure over time, we will put some ports out of business," Fogarty said. "Shippers will be forced into less attractive or more expensive ports, and more cargo will have to go over land, further deteriorating our national infrastructure."