Adequate Funding for Dredging Great Lakes Deep-Draft Ports and Waterways

GOAL: Ensure that the Lakes receive their fair share of the increased funding for dredging mandated by the Water Resources Reform and Development Act (WRRDA) of 2014.

BACKGROUND: Decades of inadequate funding for dredging the Great Lakes have left more than 17 million cubic yards of sediment clogging ports and waterways throughout the system.  As a result, even in periods of high water, the largest vessels still cannot carry full loads.  Worse, during periods of low water such as late 2012 and early 2013, the largest ships may have to forfeit more than 10,000 tons of cargo each trip.

Lack of funding was never a reason for dredging to not be adequately funded.  The Federal government taxes maritime cargo and the receipts are deposited in the Harbor Maintenance Trust Fund (HMTF).  The HMTF takes in about $1.6 billion per year, but annual expenditures nationwide have never exceeded $1.2 billion.  As a result, the HMTF has a surplus nearing $9 billion.

GLMTF took a leading role in addressing the dredging crisis, and as a result, the Water Resources Reform and Development Act of 2014 took courageous action and demanded that the Federal government use the HMTF for intended purpose – dredging and harbor structure maintenance – and required that expenditures increase incrementally up to 100 percent of receipts by 2025.  The Great Lakes Navigation System (GLNS) also gets 10 percent of the increased dredging dollars.

Equally important is a provision in WRRDA that directs the U.S. Army Corps of Engineers to maintain the GLNS as a system in terms of dredging.  Previously, the Corps pitted the 60 Federally maintained GLNS ports against one another for dredging dollars rather than view their worth collectively.  This was a major reason the Lakes received fewer dredging dollars on a ton-of-cargo-basis than the inland rivers.

ECONOMIC BENEFITS: The 60 Federally-maintained deep-draft ports and six connecting channels the Corps of Engineers must dredge on the Great Lakes include 25 of the nation’s largest ports.  The twin ports of Duluth, Minnesota/Superior, Wisconsin, alone will handle, on average, approximately 40 million tons per year.  Systemwide, annual cargo movement can top 175 million tons in a strong economy.

Cargo movement on the Great Lakes drives both the region’s and the nation’s economies.  In a strong economy iron ore for the steel industry tops 60 million tons.  Limestone and coal collectively total more than 55 million tons.  Grain and general cargo shipments via the St. Lawrence Seaway contribute another 20 million tons.

A recent study, The Economic Impacts of the Great Lakes St. Lawrence Seaway System, has determined that waterborne commerce on these waters generates 227,000 jobs; $54 billion in annual personal income, business revenue, and local purchases; and $4.6 billion in Federal, state/provincial, and local taxes in the U.S. and Canada.  The cargos carried by U.S.-flag lakers alone create and sustain 103,000 jobs and economic output valued at more than $20 billion.  In addition, a study conducted by Dawson & Associates for Lake Carriers’ Association concluded that Great Lakes navigation supports approximately 400,000 export jobs in the United States.  With the national emphasis on increasing exports, the Great Lakes Navigation System (“GLNS”) should be a focal point for Federal funding for maintaining and improving navigation channels and infrastructure.

Dredging is key to the efficiency of Great Lakes shipping.  The largest U.S.-flag “lakers” forfeit nearly 270 tons of cargo for each 1-inch reduction in loaded draft.  Oceangoing vessels lose roughly 115 tons of cargo for each 1-inch loss of draft.

ACTION: Work with House and Senate appropriators to ensure that the FY18 Energy and Water Development Appropriations bill provides nationwide maintenance dredging funding at 74% of projected FY17 HMTF revenue as called for in WRRDA 2014.  Work with the U.S. Army Corps of Engineers to ensure that the Lakes receive at least 10% of appropriated HMTF funding.  Work with House and Senate authorizing Committees in the 115th Congress' WRDA bill to solidify the GLNS HMTF allocation.  Additionally, in order to restore the functionality of the GLNS and make progress in reducing the sediment backlog, the Administration should include $175 million in its FY18 budget request for GLNS navigation maintenance.  This amount would reduce the sediment backlog by 10 percent, increase dredged material disposal capacity and reduce the risk of an unplanned Soo Lock outage through funding of its asset renewal plan.