by Andrew Henderson

Two federal officials are working to help the Port of Oswego Authority expand into a container feeder port.

U.S. Senator Charles Schumer and Congressman John McHugh said they are both working on separate items that will benefit the local port, which is the first U.S. port and first deep-water port on the Great Lakes coming from the St. Lawrence Seaway.

Sen. Schumer told reporters last week that funding for the port project could be included of a transportation-funding bill planned for later this year. He also noted that legislation is needed to delineate which Great Lakes ports will receive container ships.

Congressman McHugh introduced legislation that would provide the tax incentives necessary to increase coastal and inland freight transportation, including through the St. Lawrence Seaway and the Port of Oswego.

The Short Sea Shipping Act of 2009 (H.R. 528) would exempt specific non-bulk commercial cargo from the Harbor Maintenance Tax.

“For too long, the Harbor Maintenance Tax has served as a barrier to the development of a robust and vital short sea shipping industry in the United States, which would have significant economic and environmental benefits,” said Rep. McHugh. “Providing this exemption to the HMT would give cargo shippers an incentive to move cargo via water rather than by trucks, combating high congestion, improving the flow of commerce, and reducing air pollution generated by ground transportation

“Across the country, enacting this legislation would spur significant activity in the shipbuilding industry, creating many employment opportunities,” he added. “An example in the 23rd Congressional District would be the potential for significant expansion at the Port of Oswego, which could result in millions of dollars in economic impact and the creation of dozens of jobs.”

Port Director Jonathan Daniels said the barrier must be removed if the port is to fulfill its potential as a container feeder port. The port is planning a $3 million project in preparation for potential cargo-containers from the motor-vessel Emma Maersk, the largest container vessel in the world.

The Emma Maersk is 170,000 gross registered tons—or about 10 times the size of a typical vessel, tonnage-wise—that calls the Port of Oswego. It is 397 meters or in excess of 1,200 feet in length. The Emma Maerks can transport approximately 7,000 40-foot containers, which equates to roughly 53 miles of containers.

The vessel, which became operational in 2006, is the basis for a new $300 million container terminal that is being developed in the Strait of Canso in Nova Scotia on Canada’s east coast. Construction of the new container terminal is expected to begin this year with completion estimated in 2010.

Why is a $300 million project in eastern Canada important locally?

The container distribution will be done in two ways. One is through the Canadian National Railroad System, which is a major east-west rail route from Halifax, Nova Scotia all the way to Vancouver. The other is a series of feeder ports in the

Great Lakes. And the first port of call in the United States and Lake Ontario is the Port of Oswego.

Daniels said that the current facility at the port is unable to handle containers.

The port’s proposed $3 million local project would consist of three phases: security operations and new road infrastructure, combined road and rail improvement, and a new landing area on the Fitzgibbons property, which is owned by the port authority. The project, if completed, would also alleviate congestion of traffic coming from the port through the City of Oswego, Daniels said.
The port has recently completed several smaller projects, including a $1.1 million reconstruction project of one of its buildings and a $175,000 rehabilitation project on the west pier. The port has also commenced engineering studies for the rehabilitation of its rail structure as well as a new maintenance facility.

Congressman McHugh’s legislation would exempt from the Harbor Maintenance Tax non-bulk commercial cargo that is loaded at a port in the United States mainland and unloaded at another port in the United States mainland after transport solely by coastal or river route or unloaded at a port in Canada located in the Great Lakes/St. Lawrence Seaway System.

Also, the bill’s exemption would apply to non-bulk commercial cargo that is loaded at a port in Canada located in the Great Lakes Seaway System and unloaded at a port in the United States mainland.

According to the bill, the Great Lakes Seaway System is defined as the waterway between Duluth, Minnesota, and Nova Scotia, and encompasses the five Great Lakes, their connecting channels, and the St. Lawrence River.

The Harbor Maintenance Tax is a levy that is imposed on the value of cargo that is imported to a port within the United States or that is transported between U.S. ports.

The tax, which is assessed at a rate of 0.125 percent of the cargo value, including passengers, is assessed only once on cargo that is transported between one U.S. port and another (either at the point of departure or arrival but not both). However, cargo that is carried from a foreign port may be taxed twice—upon arrival at the initial U.S. port and again if transported to another U.S. port aboard a different vessel.

Cargo that is transported along the inland waterways is subject to the Inland Waterways Fuel Tax instead of the Harbor Maintenance Tax, but the Great Lakes are not considered part of the inland waterways system.

Former Secretary of Transportation Mary E. Peters has stated that the Harbor Maintenance Tax is the “most significant impediment under current law to the initiation of such services to Great Lakes ports” because the “avoidance of the HMT is a main motivation for shipping cargo from Canada to the United States by trucks instead of water.”

Congressman McHugh’s legislation was referred to the House Committee on Ways and Means.