US ports need billions of dollars in landside investment to combat congestion

Reynolds Hutchins, April 21, 2015, JOC.com

One-third of U.S ports need at least $100 million in landside upgrades, both intermodal rail and road connections, to handle projected 2025 freight volumes, according to a report from the American Association of Port Authorities. Where ports will get that money was anyone’s guess at the AAPA’s annual springtime conference in Washington, D.C. Tuesday.

 

The impact of U.S West Coast port congestion may continue to fill headlines, AAPA leadership said Tuesday, but it’s other challenges facing American seaports that will long outlive West Coast congestion and threaten the vitality of America’s ports. According to an AAPA survey of its 83 U.S. member ports, more than one-third said congestion on their port’s intermodal connectors has caused port productivity to slip between 25 and 50 percent over the past decade.

 

Billions of dollars of investment are now necessary to keep American ports active and efficient, said Kurt Nagle, AAPA president and CEO. That’s thanks in large part — not to labor disputes or the arrival of ultra large container ships — but to crumbling landside infrastructure.

 

“It’s about more than just deepening and dredging projects,” said Kurt Nagle, AAPA president and CEO. “At issue is the condition of landside connections that serve as vital links between seaports and other segments of the nation’s freight transportation network.”

 

And while ports and their private-sector partners are investing heavily into their facilities as international trade continues to grow, he said, many of these connectors are antiquated, in disrepair and are causing congestion.

 

According to an AAPA survey of its 83 U.S. member ports, more than one-third said congestion on their port’s intermodal connectors has caused port productivity to slip between 25 and 50 percent over the past decade.

 

Congress’s 2012 passage of the Moving Ahead for Progress in the 21st Century Act, or MAP-21, made incremental steps toward providing resources for improving intermodal connectors, Nagle said. Surface Transportation Program funds are now eligible for infrastructure improvements at port terminals for direct intermodal interchange, transfer and port access.

 

Among AAPA survey respondents, however, just 33 percent said their port had applied for STP funds during the past two years. Moreover, among those that did apply, there were wide reports that low success rates in securing those funds made it even more difficult to make long-term commitments to infrastructure improvements.

 

“Our nation has a lot of work to do,” said Kristin Decas, AAPA chairwoman and CEO and director at the Port of Hueneme.

 

In her home state of California and further west in Hawaii, Decas said ports are in need of at least $6.5 billion in order to handle projected 2025 freight volumes.

 

According to AAPA, ports in the Pacific Northwest and Alaska, that number is $6.9 billion. In the Northeast, it’s $6.4 billion. In the Southeast, it’s $4.6 billion. Great Lakes ports will require $332 million before 2025. Gulf ports will need another $4.1 billion.

 

“This is a strong case for the creation of formula funding for states,” said Nagle. “We need dedicated and sustainable funding for freight transportation.”

 

Lawmakers have until May 31 to replenish the Highway Trust Fund. The fund, however, has faced chronic deficits over the past six years. Since 2008, its shortfalls have required the transfer of $62 billion from the general tax fund. In the meantime, potholes deepen, bridges crumble, traffic snarls major highways and America’s surface transportation network deteriorates.

 

Industry insiders and analysts have said Congress is unlikely to do much more than “kick the can” come May 31. Nagle agreed.

 

“With the May 31 deadline fast approaching, it seems unlikely they’re going to reach something beyond that,” Nagle said.

 

But, there are signs that the conditions are improving for a bigger and better deal some time down the road, he added.

 

“There is a general recognition now that you’re going to need in any reauthorization dedicated funding instead of just struggling to maintain the status quo of already being underfunded,” Nagle said.

 

Nagle said that the AAPA could actually support a kick-the-can measure, if a short-term extension could be give Congress enough time to draft a reauthorization bill worth passing.

 

“It would be a very short-term extension to allow more time to craft a long-term bill,” he said. “There are a variety of proposals that are out there and the result will likely be a combination of sources and cobbling together the funding.”

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