Schumer: Oswego Needs Federal Loan to Modernize Port Before Rail Link Breaks Down - Feds Must Expedite Connector Project & Other Upgrades to Ensure CNY Businesses, Global Users Have Reliable Supply Chain to Keep Port in the Game

Press Release

Today, at the Port of Oswego, Senator Schumer unveiled a plan to ensure that the Port of Oswego can make critical upgrades to infrastructure and equipment so that it can meet future shipping demands, increase productivity, and preserve its role as a critical resource for businesses throughout Central New York and even across the globe. Schumer urged the Federal Railroad Administration (FRA) to provide a much-needed $1.5 million loan to the Port of Oswego through its Railroad Rehabilitation and Improvement Financing (RRIF) program, which aims to finance development of railroad infrastructure. The Port would use this funding to upgrade rail along the docks, which customers like Trafigura aluminum and Goldman Sachs rely on, and that has deteriorated to the point of shutting down.

Schumer also noted that the Port of Oswego is in need of a specialized forklift to better handle large, overweight materials at the port, like aluminum. Therefore, Schumer urged the federal government to transfer one such forklift to the Port through a surplus equipment program. Schumer also announced his support for the Harbor Maintenance Act of 2013, which would unlock critical dredging funding that the U.S. Army Corps of Engineers (USACE) needs in order to dredge the Port and maintain operations. While the Port's popularity with the shipping industry has grown significantly in recent years--and boosted economic growth across Central New York--its ability to maintain existing business, and attract future suppliers hinges on these critical upgrades.

"The Port of Oswego is gearing up for a boost in ship traffic and imports in valuable commodities, but the federal government holds the keys to unlocking the full potential of this trade hub in Central New York," said Schumer. "The fact that the Port of Oswego's rail line - a critical link between the port and local supply chains - has been left to decay is unacceptable, and the Federal Railroad Administration should immediately provide funding to revamp this crucial one mile of rail. I am also urging the feds to transfer a surplus specialized forklift to the Port of Oswego that is currently collecting cobwebs so that critical funding is not unnecessarily spent on outside contractors. Finally, I am supporting a proposal to provide federal funds to dredge the Port of Oswego so that the numerous cargo vessels that come through each day can continue to pump over one billion dollars into the local economy each year."

Schumer was joined by Jonathon Daniels, Executive Director of the Port of Oswego, other Port officials, members of the Oswego County Legislature and the City's Mayor, Tom Gillen. Over the past several years, the port's popularity with the shipping industry has exploded due to its status as the only deep-water port on the U.S. shores of Lake Ontario. The port has transformed into a critical asset for retaining existing businesses reliant on shipping and for attracting new growth opportunity to Central New York. Commodities shipped out of the port include soybeans, windmill components, cement, chemicals, ores and minerals, like road salt, which represent some of the major businesses taking advantage of the port throughout Central New York.

However, the Port of Oswego could soon be rendered useless should its rail link, which would transport these commodities to the outside world, be shut down. A $1.5 million direct loan from the RIFF program would allow critical upgrades to a mile of rail to prevent that from happening.

Schumer noted that the RRIF program was established by the Transportation Equity Act for the 21st Century (TEA-21) in 1998 and amended by the Safe Accountable, Flexible and Efficient Transportation Equity Act: a Legacy for Users (SAFETEA-LU) in 2005. The RRIF program authorizes the FRA Administrator to provide direct loans and loan guarantees up to $35 billion to improve railroad infrastructure. Eligible borrowers include railroads, state and local governments, government-sponsored authorities and corporations, joint ventures that include at least one railroad, and limited option freight shippers who intend to construct a new rail connection.

Schumer added that the rail along the docks at the Port has been in place since 1963, and has not undergone any major rehabilitation since that time. The rail has deteriorated to the point where CSX has at times shut down activity, and rail at the north end is out of alignment, which causes derailments on a consistent basis. Furthermore, the port has eight switches on site - none of which work properly - which is hazardous now that the port handles 1,000 cars annually. In the near future, should the Port of Oswego be able to meet expected demand, frequent shipments of soybeans, wheat, corn, aluminum and other cargo could increase bringing another 250-500 cars annually within the next year. However, continued deterioration of the rail could force closure of rail along dock and reduce the Port's appeal to potential users and new business interested in locating in Central New York.

While upgrades to rail infrastructure are most critical, Schumer also emphasized his request for the transfer of a specialized forklift -- known as a container reach stacker -- from the federal government's surplus equipment program. Port Authority - a state entity - would apply for the surplus equipment. The forklift would be used to handle and shift containers at the port, in a way that the Port of Oswego does not currently have the capacity to do. Specifically, the Port lacks any ability to handle containers of overweight shipments like aluminum, without renting a crane from an outside contractor, which poses an unnecessarily large expense to the Port. The Federal Surplus Property Program offers public law enforcement entities like the Port Authority the chance to acquire used equipment

Schumer also announced his push for the Harbor Maintenance Act of 2013, which would free up critical dredging funding that the U.S. Army Corps of Engineers (USACE) needs in order to dredge the Port of Oswego and keep the port accessible to the numerous vessels that arrive each day. Each day, sediment settles at the bottom of Lake Ontario, reducing water depth and creating a safety hazard for the cargo vessels -- all of which help pump over one billion dollars into the local economy every year. Schumer is backing legislation that would release funding that is stuck in the Harbor Maintenance Trust for dredging in Oswego and other harbors across New York. The recently-introduced Harbor Maintenance Act of 2013 would ensure that incoming money from the Harbor Maintenance fee is spent on harbor maintenance projects, like dredging Oswego Harbor, rather than stuck in the account.

A copy of Schumer's letter appears below:

February 18, 2013

Mr. Joseph Szabo, Administrator

Federal Railroad Administration

1200 New Jersey Avenue, SE

Washington, DC 20590

Dear Administrator Szabo:

I write today on behalf of the Port of Oswego, located right along Lake Ontario. The Port of Oswego is accessible from any international port in the world and one of the most productive in North America with nearly 120 vessels and more than one million tons of cargo moving through its site on an annual basis. This heavy and growing demand is the reason I write. We must work together to keep the Port competitive and equipped for today's shipping demands.

Oswego's Port boasts international clients and cargoes alike. As you know, these users often require multiple transportation models to move goods. Local and global customers of the Port also demand trucking and rail transportation choices. However, the Port's rail system is in trouble and at risk for irreversible disrepair unless we act soon.

The one mile of rail line that sits along the terminals of the Port has been in place since 1963. Since then, only routine maintenance measures have been in place to meet safety standards. These routine measures are no match for the wear and tear caused by fifty years of use. In fact, the rail along the dock of the Port has deteriorated so badly that CSX has had to actually shut down rail transportation activity. Rail cars have often derailed, and were it not for the gifted mechanics on the Port's staff, productivity would be taking a major hit.

With over 1000 rail cars now handled annually by the Port of Oswego, I am urging your administration to act swiftly and approve a Railroad Rehabilitation and Improvement Funding (RRIF) loan for the Port. A loan of $1.5 million to address the one mile of inadequate rail could increase rail usage by nearly 50% within one year of remediation. This loan could also increase shipping numbers for a myriad of commodities transported by local and global clients. However, unchecked, the continued deterioration could force a delay or a closure of the Port's rail line.

I am confident that with your support the Port of Oswego can remedy this very serious rail issue. With the expedient help of the Federal Railroad Administration (FRA), both current and prospective rail users at the Port stand to benefit. Therefore, I respectfully request you work in conjunction with my office to expedite a loan review for the Port of Oswego as it relates to the RRIF program. I invite you to call upon me should you require any further details to ensure rail service in one of New York's most crucial ports remains functioning and competitive.

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