Octopodial Chrome

Stuff that Made Sense at the Time

The Personal Weblog of Bob Uhl

Saturday, 24 July 2010

Ship by Ship

Phillip Longman argues quite persuasively that we should increase our use of water transport. It looks like where water travel is possible that it uses less than 20% of the fuel that trucking does; it has less than .7% the fatality rate of trucking. And it can be faster—the Boston to Orlando can legally be made by truck in 54 hours, while it’s only 33 hours by ship.

Why don’t we ship more goods by water? Well, it comes down to perverse incentives: we subsidise high-polluting, road-damaging trucking (e.g. a truck causes 41¢ per mile in damage but only pays 9¢ in tolls & taxes). Another issue is that while trucks are taxed by weight, ships are taxed by cargo value; this means that shipping companies must track the value of all goods they ship, unlike trucking companies. Worse, the tax is extremely high: the example given was of identical loads where the ship pays $625 while the truck pays $3.25.

This is a good example of how the free market is subverted by the state. It’s also an example of how policy can be uncoordinated: on the one hand we’re concerned about congestion and road-building; on the other, we’re encouraging congestion and road damage.

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