Hear the thundering hooves? Canada rushes from the backstretch, China closes on the inside. If the United States doesn’t keep pace, this won’t even be a photo-finish. The problem? A lazy trainer. US Seaports and private-sector partners can’t wait for slow-responding state and federal agencies to recognize an urgent need. The Industry has responded with five-year, $46-million infrastructure investment plan. A sizeable figure, true; but a necessary investment.
A recent American Association of Port Authorities (AAPA) survey revealed that US seaport agencies and their private-sector partners are prepared to take their fate into their own hands.
Over the next five years, partners plan to invest a combined $46 billion in a wide-ranging capital-improvements program designed to bolster value of marine operations and port properties.
It comes down to improving infrastructure. While port authorities and their business partners are making major investments into port facilities, studies show that the intermodal links to access these facilities—such as roads, bridges, tunnels and federal navigation channels—get scant attention from the state and federal agencies responsible for their upkeep. Such negligence results in traffic bottlenecks. The US government also should consider the increased product costs and how the problem hampers job growth, especially at a time when the nation cries out for work.
To help remedy problems, AAPA advocates a national freight infrastructure strategy and calls on the US Congress to quickly pass a reauthorized multi-year transportation bill that directs federal dollars toward economically strategic freight transportation infrastructure of national and regional significance.
Infrastructure investments in America’s ports, and their intermodal connections (both on the land and waterside) are in our nation’s best interest, says AAPA President and Chief Executive Officer Kurt Nagle. “They provide opportunities to bolster our economic and employment recovery, help sustain long-term prosperity, and pay annual dividends through the generation of more than $200 billion in federal, state and local tax revenue and more than $22 billion in customs duties,” he reveals
Nagle underscores the urgency by pointing to jobs. America’s seaports employ more than 13 million US workers, he points out, adding that the facilities “create 15,000 domestic jobs for every $1 billion in manufactured goods that US businesses export.”
Nagle may have found a kindred economic spirit in John C. Martin, Ph.D., president of the Lancaster, Pa.-based Martin Associates. Martin bolsters Nagle’s message. A prescient economist, Nagle untangles the US Bureau of Economic Analysis formulas to prove his points. As far as investment, he shows that a $46-billion investment in infrastructure at US ports creates more than 500,000 direct, indirect and induced domestic jobs, accounting for more than 1 billion person-hours of work.
“Those are really significant job numbers,” stresses Dr. Martin. “From a dollars-and-cents perspective, it’s hard to over-emphasize the value of investing in ports, particularly when you factor in how much these investments help lower the cost of imports and make our exports more competitive overseas.”
Nagle adds that, despite substantial investments by port authorities and their private-sector business partners, inadequate infrastructure connecting ports to landside transportation networks and water-side shipping lanes often creates bottlenecks, resulting in congestion and productivity losses. This translates into a global economic disadvantage for America. Congestion issues and productivity losses, Nagle says, potentially stymies “America’s ability to compete internationally and to create and sustain jobs.”
What’s the forward direction? In 2005, the World Economic Forum ranked the United States number-one in infrastructure economic competitiveness. Today, the US ranks sixteenth. Compare that ranking to fast-moving countries with vibrant economies. Canada now ranks 11th. That’s on the backstretch. Look who’s approaching up on the inside. That’s China. That nation has risen to 44th.
Change in ranking is due mostly to the fact that the US spends only 1.7 percent of its gross domestic product on transportation infrastructure while Canada spends four percent and China spends nine percent. Even as the global recession has forced cutbacks in government spending, other countries continue to invest into the expansion and updating of its transportation networks.
Consider the investments other countries are putting toward transportation infrastructure:
- India plans to invest US$60 billion, including both public and private funds, in creating seven new major ports by 2020 to handle a rapid expansion in exports of merchandise, which is forecasted to triple by 2017.
- Brazil expects tonnage at its coastal ports to more than double, to 1.7 billion tons by 2022, and has committed US$17 billion, including US$14 billion from the private sector, for port improvements.
- The world’s fourth largest marine terminals operator, DP World, plans to spend US$2.5 billion on London’s Deep-Water Gateway, the United Kingdom’s first such development in the last 20 years.
Meanwhile, what’s America doing?
AAPA completed its 2012 infrastructure investment survey at the end of May. The following is a regional breakdown of survey respondents:
Founded in 1912, AAPA today represents more than 130 of the leading seaport authorities in the United States, Canada, Latin America and the Caribbean. It mission is to keep seaports navigable, secure and sustainable. For more information, visit www.aapa-ports.org.