With $1.2 million on the line, OHPA has no commitments for Feds required barge service

The Ocean Highway and Port Authority along with Port of Fernandina operator Savage reported it still has no signed commitments for a federally mandated barge service that was funded with a $1.2 million grant almost four years ago,

OHPA and Savage provided the U.S. Department of Transportation Maritime Administration (MARAD) with an update on the project last week as they seek to satisfy the grant requirements. If OHPA does not establish the barge service under the department's M-95 program, the district could be required to refund the $1.2 million to MARAD.

OPHA's original grant application touted barge service to Savannah, Georgia and Charleston, South Carolina as a way to reduce truck traffic to and from the Port of Fernandina.

OHPA used the majority of the $1.2 million grant to purchase the tugboat Fort Clinch. But the Fort Clinch is not designed to handle barge service. OHPA, which is financially strapped, would need another tugboat along with a barge to operate the service.

MARAD last week inquired about the status of OHPA clients who would use the barge service and when the port expected to begin the barge service program.

MARAD specifically asked the following: MARAD must determine that the new proposed project is an eligible Marine Highway Project. Therefore, MARAD requests that you identify the specific cargo/commodities that will be moved on the Marine Highway Transportation Service, what ports will be served by the service, and what the projected shipping schedule will be. As a reminder, the definition of marine highway transportation can be found at 46 USC 55601.

In its reply OHPA/Savage declined to identify what ports would be served nor the types of cargo that would be barged. It said "the proposed projects that we have identified and discussed previously with MARAD would utilize the marine highway and would be considered marine highway transportation for purposes of 46 USC 55601. We are still in the rate analysis phase and considering various ports and the related costs associated with each location. We are also reviewing the service components, including monthly, bi-weekly, and other frequency-related contributing factors in the potential rates. Given the

sensitive and confidential nature of our current discussions and analysis, we are happy to schedule a call to provide additional details."

MARAD also wanted to know what letters of commitments OHPA had obtained from customers.

"We are not yet able to provide letters of commitment from the businesses that are evaluating the marine service. Moreover, Florida law allows for broader disclosure that would potentially put such sensitive business information at risk," OHPA/Savage responded.

OHPA/Savage said it hoped to have the barge service active in the first half of 2024.

In its response to MARAD, OHPA/Savage said "We continue to engage in discussions with the businesses that we have previously identified and are looking at rate structures that would allow a marine highway barge option to effectively compete with current highway transportation models. As part of this analysis, we have also explored options and pricing for barge companies, as well as larger capacity tugs, should the blue-water barges mandate greater capacity."

The OHPA Commission is scheduled to meet Wednesday when the MARAD grant will be discussed.