Floating into the future

Marine highway could bypass bottlenecks for exporters

Posted on May 15, 2017 :: Global
Posted by , Insight on Manufacturing Staff Writer

Sometimes the past can show the best path to the future.

When it comes to finding ways to bypass the bottleneck of moving goods by rail and truck through Chicago, one of the region’s first super highways — Lake Michigan — is getting a new look. A recent study from the University of Wisconsin-based Center for Freight & Infrastructure Research & Education says creating a marine highway from Marinette to Chicago could increase capacity, lower costs and reduce harmful vehicle emissions.

It also would mean fewer trucks on the road, helping to further ease the congestion.

“It’s really the best means we have of dealing with the congestion, particularly the rail yards, around Chicago,” says Dean Haen, director of Brown County’s Port and Resource Recovery department. “It’s one of the top priorities we have at the Great Lakes Port Association.”

It was the Great Lakes system that brought early explorers to the region and provided for the efficient movement of goods between the cities that ring the water. It could offer a new, more efficient avenue for New North exporters to get their goods overseas.

Exports are an important part of the regional economy. The five metropolitan statistical areas within the New North region shipped products valued at nearly $4.4 billion in 2015, an increase of more than $120 million, or 2.8 percent, from 2014.

Overall, the MSAs that make up the New North region account for more than 19.5 percent of the state’s $22.4 billion export trade. A total of 8,857 Wisconsin companies were exporters, supporting 118,958 jobs statewide — 93 percent of which were supported by the export of manufactured goods.

The problem is a lot of that must pass via truck and rail through Chicago, which has become a chokepoint for traffic. Lake Michigan offers a chance to bypass those rail and roadway backups.

While a lot of cargo already moves on the lakes, that traffic is limited to bulk goods such as iron ore, cement or ethanol. Researchers at CFIRE have suggested that establishing a container shipping service connecting the ports on the lake’s western shore could compete with Interstates 41, 43 and 94 to get goods to Chicago and then into an international container service based in Cleveland.

As proposed, the I-41/M-90 corridor would run from Marinette to Chicago, also stopping at the ports of Green Bay, Manitowoc and Milwaukee. While a water route would certainly take longer than truck, it could provide an economical outlet for less time-sensitive cargo, the report states. 

In addition to giving regional companies another outlet for moving products, the investment to upgrade the ports, as well as operating the new service, is expected to create additional opportunities.

“Investments in our marine highways and our ports benefit our state in a number of ways, from creating high-value jobs to mitigating the environmental effects of moving freight,” says Ernest Perry, a CFIRE researcher who leads the center’s Wisconsin Commercial Ports Development Initiative. “Our data show that this is a great place to focus if we’re interested in supporting our manufacturers, producers and shippers.”

There is no getting around the slower pace of delivery — three to four hours by truck versus 19 to 20 by ship. But what the marine highway lacks in timeliness, it makes up for in capacity, fuel efficiency, cost competitiveness and reduction of pollutants such as carbon dioxide.

Many of the ports also would need infrastructure improvement to facilitate handling cargo containers for shipping. Since the report was issued in late 2016, the Wisconsin Commercial Ports Association, WisDOT, the Wisconsin Economic Development Corp., the Wisconsin Department of Natural Resources, the Wisconsin Coastal Management Program, UW-Madison, and the Wisconsin Department of Agriculture, Trade and Consumer Protection, along with five participating ports, have formed the WCPA Implementation Working Group that will continue working on the concept.

“This group will continue to focus on growing Wisconsin’s commercial ports as well as advance collaboration among the participating ports,” says Kathy Heady, sector development manager, transportation, energy and workforce development for WEDC. “Ultimately, we are growing Wisconsin’s economy.”

There is a significant hurdle that would need to be overcome, though, before marine highways for container shipping could become common on the Great Lakes: federal tax regulations.

The challenge is the U.S. Harbor Maintenance Tax, part of a larger transportation act passed in 1986, that charges a tax on cargo whenever a ship enters port. The problem is twofold: Because the tax is assessed on cargo only if it moves by ship, it serves as a disincentive to move freight by water and encourages greater highway congestion; because the tax is paid each time a ship enters port, a container moving from Marinette to Chicago would be subject to tax four times en route to its destination.

“It is the issue,” Haen says. “We’ve been meeting with our congressional delegations and we’ve been close, but it never seems to quite make it.”