July 26, 2016 A Mounting Crisis

Volume 10 | Issue 4

U.S. Freight Congestion Must Be Addressed Immediately.

With U.S. freight volumes growing at a faster pace than transportation system enhancements can come on line, a congestion crisis is mounting, placing strains on Americans’ quality of life and ultimately, on their pocketbooks.

According to former U.S. Secretary of Transportation Norman Mineta, delayed deliveries and reduced productivity are costing Americans about $200 billion a year. Sec. Mineta also said that the retail industry “is slowly being strangled by transportation congestion,” which wastes 2.3 billion gallons of fuel annually, primarily from traffic bottlenecks.

But with so many competing priorities for funding, this nation cannot simply “build its way” out of the capacity problems it faces. We must also find ways to make more efficient use of existing infrastructure.

Take the case of America’s seaports.
Our public ports are finding that the weakest link in the logistics chain is often “outside the gate”…beyond their jurisdiction… where shallow navigation channels, congested roads or inadequate rail connections are causing delays and increasing costs.

Current projections from the U.S. DOT foresee overall cargo volumes through our nation’s ports doubling, and containerized cargo volumes tripling, by 2020 compared to 2000 volumes. To illustrate, some 44.4 million (international, domestic and empty) cargo containers (over 121,000 a day) transited U.S. ports in 2006 compared to 30.4 million in 2000. That’s a 46 percent increase in just six years, representing an average 7.6 percent annual growth rate.

Transportation congestion on America’s roads, rails and navigation systems is a mounting, but solvable, dilemma. The American Association of Port Authorities (AAPA) and its member ports are encouraging Congress to fully fund required navigation channel maintenance and enact legislation such as the pending 2007 Water Resources Development Act omnibus bill that includes projects for navigation channel deepening, dredged material disposal and storage facilities, and policy provisions to improve the Corps of Engineers project implementation process. AAPA and our freight industry partners are also working to ensure that freight-related surface transportation projects receive the attention and funding that they deserve.

In addition to promoting investment in physical capacity, AAPA member ports are also seeking ways to maximize the use of existing infrastructure and facilities through the operational improvements, pricing incentives and alternative transportation modes.

Waterside Infrastructure Needs
On the waterside, ports are challenged by the government’s inability to keep our federal navigation channels deep enough to accommodate today’s larger vessels.

It typically takes decades to complete the process of deepening channels for larger ships, during which time the entire state of the shipping industry can change, resulting in infrastructure being built for a bygone era.

Once the navigation channels are deepened, Congress doesn’t appropriate enough annually to the U.S. Army Corps of Engineers to maintain them at their required depth. The irony here is that while millions of dollars in harbor maintenance taxes are collected annually from importers and domestic shippers for placement in the Harbor Maintenance Trust Fund, much of the money is used for other government programs besides navigation maintenance, leaving many shipping channels to silt up and fill in. This silting and infilling creates unacceptable economic consequences for shippers, as well as grounding possibilities that could have serious navigation safety and environmental impacts.

Landside Congestion Challenges
On the landside, for decades the focus of transportation infrastructure investment has been
to address the needs of cars and people rather than freight mobility. From an economic perspective, prolonged congestion increases costs and shipment delays that affect consumers and the retail industry.

A 2005 study by Cambridge Systematics found that, by 2015, the funding shortfall to bring the U.S. transportation system to a level that benefits the nation’s productivity will have grown to $1.1 trillion, equaling the gross domestic product for all of Canada.

While there have been some positive steps for freight mobility in the various Congressional bills over the past several years, a dedicated program addressing funding for highway connectors to ports and other freight transportation hubs was deleted from the final SAFETEA-LU bill in 2005, despite being included in the Administration, Senate and House versions.

Future surface transportation authorization bills must make goods movement a high priority and ensure that freight projects receive a fair share of funding.

Maximizing Use of Existing Infrastructure
Nationwide, individual ports and their communities, as well as other freight stakeholders, are working on ways to tackle cargo congestion on a variety of fronts. With a need to increase overall throughput without substantially expanding the footprint of their marine facilities, U.S. ports of all types are increasingly pursuing operational refinements, capital improvements and other methods of maximizing productivity of existing terminals.

Some examples of congestion-reducing initiatives that America’s ports are undertaking include:

• Peak pricing initiatives – Similar to what some states and localities are doing with their toll roads, bridges and tunnels, a number of ports are successfully mitigating congestion by incorporating an appointment system with extended gate hours and price incentives to encourage truckers to bring loads to the terminals during nighttime and other off-peak hours.

• Chassis pools – Around the country, ocean carriers are contracting with third-party management firms to create pools of container chassis that all carriers can use. The benefits of these chassis pools are that there is no wasted time marrying the right chassis to freight from specific carriers and fewer chassis are needed in storage, creating more terminal space for other uses. Furthermore, sharing in chassis pools increases trucker turn-times, resulting in increased productivity and less congestion.

• Marine terminal efficiency improvements – Virtually all U.S. container ports are making strides in improving traffic flows through their terminal gates through the use of innovative programs and new technologies. These include terminal operating systems, automated container scanning and identification technologies that eliminate the need for manual entry of container and driver data, and new processes, simulations and modeling for planning terminal operations.

No Time To Waste
As roads become more congested and trade volumes continue to increase, U.S. ports and businesses are also looking for alternatives to moving cargo over congested surface transportation routes to their final destinations. Expanding these systems is extremely expensive, time consuming and difficult to fund. Short sea shipping—which places containers and other cargo onto barges and smaller vessels for the purpose of transporting them between ports—provides a cost-effective alternative that is capable of complementing existing transportation modes while offering new work opportunities in the maritime industry.

One of the biggest obstacles hampering short sea shipping development is the Harbor Maintenance Tax on domestic and U.S.-Canada moves. This tax can greatly reduce any savings shippers may experience from switching from trucks and trains to ships and barges for transporting their goods within North America. AAPA and its member ports support the repeal of this portion of the Harbor Maintenance Tax in order to promote short sea shipping alternatives.

Through operational enhancements, Congressional action to increase infrastructure investment and promote goods movement policies, collaboration and partnerships between public and private sector entities, and increased public awareness of the alternatives, America’s transportation problems can be appropriately addressed. But we must act now.

2007 AAPA Convention Attendees Will “Discover New Worlds”
The American Association of Port Authorities (AAPA) will hold its 96th Annual Convention in Norfolk, Va., Sept. 30-Oct. 4. The convention theme, “Discovering New Worlds,” is appropriate because not only will participants discover how much ports have changed since the English first settled Jamestown (the colony and the port) in 1607, they will discover new ways in which ports are serving their communities today. As part of the week-long program being hosted by the Virginia Port Authority at Norfolk’s beautiful Marriott Waterside Hotel, attendees will discover together that, while much has changed in the U.S. maritime industry in the 400 years since Jamestown’s founding, seaports can still capture the imagination and allure of trade with far-off lands.

The convention’s business program includes discussions that focus on the changing dynamics of world trade, new and emerging centers for manufacturing, ship routing and shipping hub developments, the ever-increasing size of the ships that carry the freight and bigger environmental challenges that come with handling more trade. Western Hemisphere ports are working to meet the demands of the new breed of “super-sized” vessels, with their accompanying freight logistics requirements and turn-around schedules. The ability to service these larger vessels and deal with moving the goods to and from the ships without creating traffic gridlock or adverse environmental impacts is among the top issues facing AAPA-member ports today.

To address these challenges, convention participants will examine the global impacts anticipated for moving goods in the future in order to prepare for “what lies ahead.” This includes taking a look at the expanding logistics industry, which affects services from trucking and distribution facilities to third-party logistics providers. Discussion leaders will focus on how demands placed on logistics services are increasingly creating needs for new infrastructure and new business practices, another key issue for which AAPA member ports must rise to the challenge.

The last day of the convention will focus on port sustainability. AAPA’s Sustainability Task Force will offer its insights on how to balance and address the factors that contribute to ensuring a sustainable port, including environmental, economic, social responsibility, operational efficiency and security matters. Port sustainability is one of AAPA’s increasing areas of focus and one that is generating much discussion, both in terms of identifying the common issues and finding the right balance between them, especially considering the many operational variances between the 160 AAPA member ports.

Kurt Nagle is President/CEO, American Association of Port Authorities, an alliance of 160 leading ports in the Western Hemisphere. It protects and advances the common interests of its diverse members as they connect their communities with the global transportation system. The association has four main goals: advocate governmental policies that strengthen and expand opportunities for member ports; advance professionalism in all facets of port management and operations; promote information-sharing and relationship-building opportunities for all members; and achieve greater understanding of the essential role and economic value of ports. For information visit www.aapa-ports.org.

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