US dredging issue reaches crisis stage

MM&D MAGAZINE, MARCH/APRIL 2011

The Great Lakes industry on the US side is pushing for more funds from its federal government for dredging—calling it a “crisis situation”.

The last time the Great Lakes ports had sand and silt dredged completely was 2009, says Steve Fisher, executive director of the Washington-based American Great Lakes Ports Association.

Fisher explains the amount that needs to be dredged each year on average is 3.3 million cubic yards of sand and silt out of the navigation channels in the various harbours. But this year, the federal budget “only contains funds to dredge about half that amount”.

In the US, dredging is performed by the Army Corps of Engineers. Because it falls under the federal government it is subject to the ups and downs of the federal budget and so it fluctuates from year to year. Fisher says it’s been under-funded nationally and especially in the Great Lakes area for a number of years. This happens to be a tougher year.

In fact, Glen Nekvasil, vice-president corporate communications for the Cleveland, Ohio-based Lake Carriers Association, says the federal budget allocated is the lowest ever in recent memory. It means only 11 of the 83 US ports on the Great Lakes will be dredged.

“This is just a crushing blow for our industry,” he says. “We’re calling it a dredging crisis.”

Fisher says for every year the dredging budget is under-funded, the sand and silt still accumulate. “Mother Nature keeps depositing sand and silt into the navigation channels and if the government doesn’t come in every year and remove it, over time the harbours will actually silt up,” says Fisher. “The consequence is that ships can’t operate in the harbour because the depth isn’t adequate.”

And that is hurting the shipping industry. It affects the economy and makes shipping much less efficient. It also means shipping is more costly and those costs will have to be passed onto the consumer.

Nekvasil says shippers are having a difficult time getting by, literally. For the ships to make it through the channels and harbours they’re having to reduce their carrying capacity. If the lakes were dredged as they should be, Nekvasil says the biggest ships would be carrying 70,000 tons of iron ore or coal. But last year the best loads just topped 66,000 tons. So the industry is losing 5,000 to 6,000 tons on its biggest ships. There have also been times when water levels were so low those same ships were only carrying 60,000 tons.

Nekvasil says the Great Lakes Delegation, which is made up of senators and members of congress who represent the eight Great Lakes states, will be heading to Washington to push for new legislation, Bill S.412, the Harbor Maintenance Act of 2011; and Bill H.R.104, the Realize America’s Maritime Promise Act or RAMP Act.

Both bills, says Nekvasil, require that the Harbor Maintenance Trust Fund be used on navigation infrastructure. The trust fund was created through the Harbor Maintenance Tax, which is a federal tax imposed on shippers based on the value of the goods being shipped through ports. The tax is placed in the trust fund to be used for maintenance dredging of federal navigational channels.

According to Nekvasil, the trust fund is “not coming back to us. It’s not being spent on dredging.”

“It boils down to sometimes we are not able to meet all of our customers’ requirements,” he says. “We have just so many days a year that we can sail and we can’t make ships go faster—they would burn so much fuel that it just becomes uneconomical. And it’s not as if you can say ‘let’s make five more trips this year to carry as much cargo as we did last year, so kick her up a few notches.’ You can’t do that. Our backs are to the wall.”