For centuries, seaports throughout the Western Hemisphere have served as economic lifelines, handling the export of goods and services worldwide and delivering prosperity for those living in the regions and nations served by the ports.
Today, 99.6 percent of U.S. international trade by volume moves through seaports, and international trade accounts for more than a quarter of GDP. Approximately 15,000 jobs are created for every $1 billion in goods exported, and port activities support more than 13 million jobs. About $3.8 billion worth of goods move in and out of U.S. seaports each day.
As 2011 dawns, the country’s port authorities in the U.S. look forward to working with returning and new members of Congress, the Obama administration, and state and local officials to advance the industry’s agenda of making freight movement more efficient, enhancing the coastal environment and ensuring the security of port facilities and cargo. These initiatives will foster economic vitality and support job growth.
President Obama has established a goal of doubling U.S. exports in five years. For that to become reality, U.S. ports will have to play a critical role.
U.S. waterborne exports in the first eight months of 2010 grew 24.6 percent by value and 17.4 percent by volume compared to the same period in 2009. Investments in ports and connecting infrastructure help U.S. exporters such as farmers, while U.S. manufacturers benefit from import and export transportation savings because they often rely on imported parts, components and bulk commodities.
Federal programs supporting ports’ agenda of reducing diesel emissions in and around their facilities and improving energy efficiency in maritime operations help make U.S. ports more environmentally sustainable while creating jobs. Federal investments in seaport facility and cargo security also help to reduce terrorism threats at America’s “water borders.”
As the 112th Congress and the Obama administration develop policy and funding strategies to reach our national goals, the AAPA is focused on several key federal programs and tax incentives related to ports that will promote job creation, enhance sustainability, increase security and provide long-term economic growth and prosperity for the nation.
Since its inception in 1986, the Harbor Maintenance Trust Fund has accumulated a $5.6 billion surplus — money collected from shippers via the Harbor Maintenance Tax — while serious dredging needs have been neglected. The federal government spends only about half the tax collected for its intended purpose: deep-draft navigation maintenance.
Insufficient appropriations make it impossible to maintain most federal navigation channels at their authorized dimensions.
Projects to maintain these critical waterways would create jobs and provide transportation savings to benefit U.S. businesses. With decreases in the cost of freight transportation, these sectors can enhance their global competitiveness and create more jobs. Congress should act to ensure 100 percent of the annual amount collected from the HMT is used to maintain federal navigation channels.
Several programs funded through the U.S. Department of Transportation also can improve port access, efficiency and modernization. The following programs would create jobs if additional funds were provided:
- State highway projects for intermodal connectors into ports — roads, railways, tunnels and rail crossings — and to mitigate traffic congestion.
- The National Corridor Infrastructure Improvement Program and the Projects of National and Regional Significance, both of which address the movement of freight.
- The Transportation Investments Generating Economic Recovery program, or TIGER, which awarded $1.5 billion and $600 million, respectively, in two rounds of discretionary stimulus grants for freight and port infrastructure. The AAPA is pressing for at least 25 percent of TIGER funding go toward port-related infrastructure.
The Secure Efficient Ports Initiative, a new program to promote short-sea shipping, which can help alleviate road congestion and deliver more cargo via our marine highways.
Investments in environmental enhancements at U.S. seaports can help reduce emissions while creating jobs.
A federal program with great promise is the Environmental Protection Agency’s Diesel Emissions Reduction Act grants program. Ports receiving DERA funds can retrofit cargo-handling equipment; purchase lower-emission trucks and equipment; retrofit ships, including dredges and tugs; and retrofit rail locomotive engines. DERA grants have yielded immediate buying power, creating U.S. jobs.
The program is up for reauthorization in the House and Senate, and we are recommending renewal at the $200 million-a-year level.
Programs that protect the people and cargo moving through our ports help secure our homeland, keep goods moving and stimulate jobs. Releasing the hundreds of millions of dollars in previously obligated Port Security Grant Program funds, reauthorizing the 2006 SAFE Port Act at the $400 million-a-year grant level and waiving the 25 percent cost-share requirement for ports would encourage new security measures and jobs while allowing existing projects to be completed.
We also recommend the Federal Emergency Management Agency, which manages the Port Security Grant Program, permanently allow grants to help pay for port security personnel, the greatest security expense for most ports.
Tax and Trade
Several tax incentives also could enhance goods movement and bolster U.S. competitiveness. They include:
- Exempting certain U.S. port-to-port movements of maritime cargo from the federal HMT. Many in the maritime industry recommend an exemption from the Harbor Maintenance Tax to promote short-sea shipping, which would create maritime jobs, reduce road congestion and wear, and cut pollution. This change would remove a federal disincentive to utilizing water transportation.
- Elimination of the Alternative Minimum Tax on private activity bonds issued by public entities. Private activity bonds are necessary for infrastructure development projects, but the AMT reduces the attractiveness of bond issues to investors. Because of the AMT, public port authorities must discount the bonds, reducing the funds available for investment infrastructure, as well as the jobs and income that would have been created.
- Passing pending and new free trade agreements, including those with Panama, Colombia and South Korea. Free trade agreements help small and large U.S. businesses sell their products overseas, increasing exports, which create jobs for U.S. farmers, manufacturers, freight transportation workers and others. Timely ratification of these trade agreements should be part of congressional efforts to create jobs.
Now is the time to develop and implement policy and programs that will sustain and improve America’s critical gateways for global trade. By raising the priority of seaports and their connecting infrastructure, the U.S. can achieve modern, navigable seaports that are safe, secure and environmentally sustainable, while creating jobs.
Kurt Nagle is president and CEO of the American Association of Port Authorities in Washington and can be contacted at email@example.com.