United States port authorities and private companies plan to invest six times more in ports through 2020 than the federal government, according to a recent survey from the American Association of Port Authorities.
United States port authorities and private terminal operators plan to make capital expenditures of $154.8 billion during the next five years to modernize, expand and repair marine facilities, according to a member survey conducted by the American Association of Port Authorities. The investment total is six times the amount the federal government, under a best-case scenario, is likely to spend on land and water-side improvements for ports.
The vast difference between the local and federal investment plans raises concerns, especially considering the need for increased dredging of federal channels to make harbors accessible for cargo ships, and more road and rail connections so goods can efficiently get in and out of ports, AAPA President Kurt Nagle said.
“Infrastructure investments in America’s seaports and their intermodal connections – both on the land in the water – are in our nation’s best interest because they provide opportunities to bolster our economy, create and sustain jobs, enhance our international competitiveness, and pay annual dividends through the generation of more than $321 billion in federal, state and local tax revenue,” Nagle said in a statement.
Increasing federal investment in freight infrastructure, including ports, has been one of the AAPA’s longstanding policy priorities. In the 2014 Water Resources Reform Development Act it successfully pushed for increasing the amount of money authorized to be spent annually from the Harbor Maintenance Trust Fund so that in 10 years the entire amount of tax collected from shippers each year will be utilized by the Army Corps of Engineers for maintaining channel depths and widths. It has also fought for speedier project approvals for harbor deepening projects and for ports to receive their fair share of grants from the discretionary TIGER funding program run by the U.S. Department of Transportation.
The investment numbers for ports are skewed by private sector activity in the Gulf region, including along the Houston Ship Channel, where energy companies are adding refineries, export terminals, piers and chemical plants to take advantage of the fracking revolution that has resulted in a massive increase in domestic oil and natural gas production from shale fields. Port authorities nationwide say they expect to spend $22.6 billion over five years on terminals, berths, piers, equipment, dredging, wharf strengthening, security, on-dock rail and environmental improvements. Projected private sector developments in the Gulf alone are $122.8 billion through 2020, according to the AAPA survey. Many of those facilities are not within port authority property, but work closely with the ports to address common environmental, security and navigational issues.
The AAPA’s analysis of federal funding is based on projected appropriations for the U.S. Army Corps’ civil works budget for seaports, grants awarded through the multi-modal TIGER program, and the $11 billion in freight-related funding in the FAST Act surface transportation bill enacted at the end of 2015. Trade association officials said they gave the government the benefit of the doubt that it would come in on the high end of potential investment when estimating federal spending on ports will total $24.8 billion.
AAPA noted that the federal government has historically underinvested in the nation’s freight system. America’s highway network is only ranked 16th by the World Economic Forum, while federal navigation channels aren’t maintained at their authorized depths.
“The take-away from this survey is that we must have increased and sustainable funding at and on both sides of our ports,” Nagle said.
AAPA highlights gap between federal, local investment in ports
