As you are probably aware, the Highway Trust Fund (HTF) will run out funds this August.  The Obama administration has asked for an 18 month extension of the program until it can figure out a new solution.  I suspect that the administration will get the extension and the HTF will continue to be funded for at least 18 more months.  This brings up the bigger question of what is the “right” answer.

Revenues from the gas tax which have traditionally funded the HTF have declined significantly.  There are a number of factors behind this including more fuel efficient vehicles, $4.00/gal gas last summer, and the overall downturn of the economy.  Regardless of the reason, it seems clear that relying on the gas tax is not a long term solution.

There have been a number of solutions tossed out there in the past few weeks including “per mile” taxes to capture revenue from fuel efficient drivers to levying additional taxes on the heavy users (trucks, rail, etc.).  While these solutions, and some of the others that have been proposed, do work at attacking the symptoms, none really address the illness.

What I haven’t heard proposed and talked about is a concerted effort to increase short-sea shipping in the US.  We know from other countries in the world that short-sea shipping works and it certainly would work to move more trucks off the road.  More trucks off the road mean less wear and tear of our highway system and less congestion on the roadways.

One significant hurdle to increasing our use of short-sea shipping is the Merchant Marine Act of 1920, otherwise known as the Jones Act.  This 89 year old law restricts the carriage of goods and personnel between US ports to US built and flagged vessels.  In addition, 75% of the crew must also be US citizens.  In 1920, I am sure this law made good sense.  It protected what was a large US industry and secured our shores from an uncertain political environment.

However, 89 years later, the law is financially punitive to an idea that could have a tremendous positive economic impact for the US.  If we allow foreign operators to run a “shuttle” services between US ports, you could have a low cost method for moving goods up and down the coasts.  Lower transportation costs would mean lower prices on the store shelves and more money in the consumer’s pocket.  In addition, the highways would be safer and would require less maintenance.

It seems like an easy, low cost way to work towards a solution to the HTF.  Certainly, it would be one piece in a complex puzzle, but it’s a start.