American Jobs and Prestige Depend on US Ports

Thursday, 20 Jun 2013 08:00 AM

By Neal Asbury

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Our ports are the lifeblood of our economy. The value of imports cleared through U.S. ports in 2012 was $2.3 trillion, resulting in 13 million American jobs. On the export side, U.S. exports set another record in 2012, growing 4.4 percent ($66 billion) and reaching $1.56 trillion despite significant economic headwinds from abroad.

Combined, our imports and exports make up a whopping 25 percent of the U.S. economy.

The picture looks pretty rosy until you recognize that half of the world's top 20 container ports are in China. Los Angeles ranks number 16, and Long Beach just misses the cut at 21. We are losing our dominance as the world's leading trading nation.

One reason is that the United States has failed to invest in America's infrastructure to prepare U.S. ports for today's larger cargo ships. This includes Post-Panamax ships that carry 5,000 to 8,000 containers, have widths of 14 to 20 containers and need a channel 17 meters deep. Super Post-Panamax vessels can carry more than 9,000 containers. These ships carry 27 percent of the world's cargo.

Many of our ports can't accommodate these ships. In this year's Report Card for America's Infrastructure, which is prepared by the American Society of Civil Engineers once every four years and provides a comprehensive assessment of the nation's major infrastructure categories, U.S. ports received a grade of C.

The U.S. Army Corps of Engineers estimates that more than 95 percent (by volume) of overseas trade produced or consumed by the United States moves through our ports.

The Report Card states: "To sustain and serve a growing economy and compete internationally, our nation's ports need to be maintained, modernized and expanded. While port authorities and their private sector partners have planned over $46 billion in capital improvements from now until 2016, federal funding has declined for navigable waterways and landside freight connections needed to move goods to and from the ports."

Why don't we have the federal money to enhance the infrastructure of our ports? Well, while the Water Resources Development Act imposed a fee on shippers that generated $8.1 billion during 2012 that was supposed to go into a federal trust fund intended for harbor maintenance and dredging, most of the money isn't being allocated. They don't seem to recognize that our ports are our revenue generators and job creators — but some states do.

For example, Florida Gov. Rick Scott pledged $112 million in state funds to the Port of Miami Deep Dredge Project. "Port Miami will be the only U.S. east coast port south of Virginia to be at the required minus 50 feet level in time to welcome the new generation of larger container cargo vessels arriving via the expanded Panama Canal," Miami-Dade County Mayor Carlos Gimenez told Reuters. The deepening of Miami's channel will create 33,000 new jobs and double cargo traffic.

The Savannah Harbor Expansion Project, with a price tag of $569 million, is being funded about one-third from the state of Georgia and two-thirds from the federal government. At least that was the plan. But President Obama's proposed budget for fiscal year 2012 included just $600,000 for the project, for pre-construction engineering and design but no money for construction.

We are falling further and further behind in making U.S. ports a preferred shipping destination.

In 1914, the Panama Canal opened to commercial shipping traffic. After 34 years of on-and-off construction and a price tag of $375 million — more than $8 billion in today's dollars — the canal became one of the biggest and most expensive infrastructure projects in human history and was a boon to U.S. ports.

Now, 100 years later, it's happening again. By the end of 2014, the Panama Canal is scheduled to have completed its greatest expansion, more than doubling its capacity and allowing it to handle the world's most massive ships.

But it may be too little, too late. China is making the bold move of negotiating with Nicaragua to award a Chinese company a 100-year concession to build an alternative to the Panama Canal. Nicaragua's new waterway would be a higher-capacity alternative to the 99-year-old Panama Canal.

The American Association of Port Authorities' infrastructure spending survey found that "U.S. ports and their marine terminal partners indicated that, cumulatively, they plan to spend nearly $46 billion on improvements to their facilities over the next five years. That's about $9 billion annually.

Compare that with the paltry $62 million in grants that went to port-related infrastructure in the third-round of the U.S. Department of Transportation's Transportation Investment Generating Economic Recovery program, known as TIGER III, and only $104 million appropriated in fiscal 2012 for channel deepening and related improvements. It's clear the U.S. government isn't living up to its part of the freight transportation infrastructure bargain."

With so many people unemployed and underemployed, our ports are one of the most important investments we can make. We must continue to invest in a vibrant and robust global trade infrastructure. They are our gateway to the world where so many jobs are won and lost.

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