Prepared Remarks of

Sean T. Connaughton

Maritime Administrator

Inland Rivers Ports & Terminals, Inc. (IRPT)

Mother’s Restaurant

New Orleans, LA

December 1, 2006

7:30 a.m.

Thank you, Randy Richardson, for that introduction, and for your work as President of Inland Rivers, Ports, and Terminals (IRPT).

It’s a great privilege to be with you today. I am honored to have Inland Rivers, Ports, and Terminals as an integral partner promoting, developing, and improving America’s vital maritime industry.

Before I get started, I want to comment upon the good fortune of having Mother’s Restaurant as the venue for our breakfast meeting. As I was born and raised in New York and have spent most of my career on the Eastern Seaboard, I have always thought of ‘New Orleans cuisine’ as including a ‘po-boy’ sandwich. And I hear Mother’s makes the best. Although it’s a bit early in the day for a po-boy, this has at least allowed me to sample the famous ham biscuits, and they are delicious! What a great way to start the day.

My purpose here this morning is to share briefly with you some of the Maritime Administration’s goals, plans, and current programs and how they support the directives of IRPT.

Yours is an organization devoted to regional waterways. And New Orleans, located at the mouth of the Mississippi River, is at the heart of this vast system, virtually maintaining the heartbeat of waterborne commerce for most of the central region of our great, sprawling land. Sure, America stretches ‘from sea to shining sea’, but it is the massive activities of our inland water route encompassing the mighty Mississippi and its tributaries that makes our heartland as open to commerce as our shorelines.

Most of you are engaged directly in maritime commerce and, as such, you probably already know that the shipping traffic on U.S. inland waterways was about three times greater than coastal shipments in 2005.

Of the 622 million tons of cargo moved in 2005, 30 percent was coal, 24 percent petroleum, 20 percent crude materials, and 11 percent farm products of which a large part was grain.

And this traffic on the inland waterway system was carried by about 22 thousand dry cargo barges and 3,300 tank barges. In addition, about the same number of towboats plied the waters of the inland waterway system.

It is estimated that by 2020, domestic tonnage of freight carried by all U.S. systems will increase by 67 percent while international trade is projected to double, triple, or even quadruple over the next two decades.

Growth of this magnitude makes it increasingly important that we pursue new and innovative transportation options. Not only is it going to be essential that we relieve the pressure on traditional surface transportation modes, such as highways and railways, but our waterborne system must be ready and able to keep pace with this growth, also.

That’s why the Bush Administration has placed unprecedented focus on how we can make more, and better, use of our “National Water Highway System” to improve our overall transportation system.

Most of you here are aware that the Maritime Administration’s Short Sea Shipping (SSS) efforts are one sure way to help alleviate surface transportation congestion.

What you might not know is that right now, my agency is identifying where SSS has been implemented and where it is succeeding. We already know that SSS is successful in various parts of the country, such as in the container trades from Boston/NYC and ferries carrying trucks in Bridgeport, Connecticut.

The next step involves looking to local/regional EPA and CMAQ funds, FHWA and FTA funding. And we are doing that.

Secretary Peters has promised President Bush that the DOT will not shy away from tough issues like congestion. Earlier this year, the Bush Administration launched a major congestion relief initiative. The Maritime Administration will play a large role in helping to identify and implement solutions to this threat to America’s economic prosperity.

We’ve taken the lead in researching and developing new methods that will allow us to use our shoreside and waterborne transportation infrastructure to move freight and passengers in more cost-effective, environmentally friendly, and efficient ways. At the same time, better use of these transportation systems will enable us to reduce the tie-ups in our ports and on our roads and railways.

Certainly, port congestion continues to be a major challenge. If we want to keep our economy strong we must improve the flow of commerce through our ports. That means we must continue to develop our ports and encourage private sector investments and stakeholder partnerships.

It has been my duty and my pleasure to visit with major stakeholders at the ports of Los Angeles/Long Beach and Seattle/Tacoma. These meetings have given me the opportunity to listen and learn, and to share and discuss ideas for addressing congestion issues in and around our ports. The Maritime Administration’s understanding of the complex issues involved is not only theoretical—it is matched by a series of definitive actions to support our ports.

Already, the Maritime Administration has people in Southern California working with other agencies to address congestion. The Department of Transportation’s Gateway Initiative offers a powerful planning tool—one that will enable all levels of public and private partnership participants to better see the connections between traffic flow of all kinds and our economy, community, and environmental concerns.

Furthermore, my agency is the lead federal agency in a cooperative program to redevelop the Port of Anchorage, Alaska—a program designed to increase the Port’s intermodal capacity.

As you may be aware, the Maritime Administration’s Great Lakes and Central Regions work closely with IRPT on the Heartland Intermodal Partnership (HIP). The Heartland of America has the intermodal and maritime resources to help cope with the unprecedented demands on the Nation’s transportation system. This area is endowed with natural and developed waterways, multiple rail and truck connections, and existing intermodal hubs--its ports. HIP is an effort to cope with the coming transportation crisis systematically--not a piece at a time--but in partnership. It is a partnership of federal, state, and local governments as well as industry and its modal components of rail, highway, and maritime.

Raising awareness of inland waterway issues is one of my top priorities as your new Maritime Administrator. Fortunately, we have a President who understands the critical importance of marine highways to our nation’s economic well being.

To ensure that our waterways will keep commerce flowing throughout our inland system, President George W. Bush’s 2006 fiscal budget recommended increasing the amount of money spent from the Inland Waterway Trust Fund to modernize priority, congressionally-approved locks and dams. Specifically, the Administration included a $150 million increase over the FY-2005 budget request to accelerate progress on high- return waterway projects.

As you know, the trust fund has built up a substantial surplus over the years. In fiscal year 2005, the Inland Waterway Trust Fund earned another $98.9 million through user fees paid by the barge and towing industry, as well as interest, while disbursements totaled $136.3 million. I’m sure most of you in this room have many ideas how the money should be used.

Ultimately, investment in our ports and waterways will create countless dividends and result in higher economic activity.

In addition to infrastructure, we need to make sure we are recruiting and training the personnel to man our ships, now and in the future. Yesterday, I met with the presidents of our maritime academies to discuss the current maritime labor force shortage. We discussed challenges and solutions, and I have pledged that the Maritime Administration will assist in bringing attention to the tight labor conditions and will promote efforts to increase potential recruits.

I have undertaken a number of other very clear maritime initiatives, among them:

v Instructed the Office of Data and Economic Analysis to conduct a survey of U.S. seafaring labor market;

v Providing a web site for potential seafarers to find information on educational and training opportunities;

v Providing a web site on Inland Waterways Research Projects to make it easier for researchers to search a central location to see what is being said, written, examined, and debated regarding the national waterway system;

v Conducting an analysis of the cargo movement and commodity flow between major U.S. geographical locations;

v Preparing an analytical framework to develop a conditions and performance analysis of the Marine Transportation System (MTS) to enable us to measure the performance of the marine transportation systems.

It is clear that change is ahead for the maritime industry and the Maritime Administration. In fact, we must bring about change in order to prosper, or we risk becoming victims of change.

I have made a commitment to transform the Maritime Administration’s organization and priorities to better address current and coming challenges in the industry.

And I want to have a clearer and more comprehensive understanding of the issues and concerns you face.

I call upon each of you, my colleagues in Inland Rivers, Ports, and Terminals, to continue the exemplary work you are doing. I look forward to working with you to achieve our shared goals and vision, and to doing so with a shared concern for the health and future of America’s maritime industry.

Thank you.

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