HANSA 03-2018

Häfen | Ports
U.S. ports demand 66 bn $ in investments
Quite a few ports in the United States reported growth and positive balances recently.
But despite positive circumstances and good prospects, they urge the Federal Government
for huge investments. By Michael Meyer
According to figures presented by AAPA
(American Association of Port Authorities),
U.S. seaward trade increased
by 10% within the first eleven
months of 2017. »Overall for
2017, foreign trade tonnage was
the highest it’s been since 2008,
with exports experiencing double-digit
growth to a record high
and the fourth consecutive year of
gains for imports,« AAPA President
Kurt Nagle told HANSA.
Experts continue to caution infrastructural
deficiencies may slow
down the US economic boom. Even
though the Trump administration has
introduced a comprehensive investment
package to Congress recently, an agreement
with the Democrat opposition is not expected.
Some Republican party members also expressed
reservations. After the Panama Canal expansion,
ports consider being prepared for the launch of
large container ships one of the most important issues – not merely
in terms of quayside handling. Port and hinterland processing of
cargo also poses problems for the operators. Traffic jams and blockages
are the result cargo owners and freight forwarders complain
about. In addition, ports need to invest in green technologies as
harsher regulations require a reduction in emissions.
Rather positively, AAPA is looking at political achievements:
»AAPA is looking forward with great anticipation to a focus on
America’s infrastructure investment needs by the Trump Administration
and Congress in 2018,« Nagle says.
Seaport cargo activity accounts for 26% of U.S. GDP, over
23 mill. American jobs, and generates over 320 bn $ annually in
federal, state and local tax revenues. To ensure these jobs, tax
revenues and freight volumes continue to grow and support the
American economy, AAPA has worked to identify 66 bn $ in federal
port-related infrastructure investments over the next ten
years, on both the waterside and the landside. This level of federal
investment into port-related infrastructure is needed to support
the nearly 155 bn $ in infrastructure investments that U.S. ports
and their private-sector partners plan to invest up and including
2020. Federal support for land and waterside infrastructure improvements,
together with security and environmental protection,
are key priorities for America’s ports in 2018 and beyond.
Nagle adds, »AAPA member ports are pleased that the Congress
continues to provide strong funding for the Corps’ Navigation program,
including making progress towards full use of annual Harbor
Maintenance Tax (HMT) revenues.« The association is also
advocating congressional appropriations in other programmes for
freight transportation, port security, diesel emissions reduction
grants, additional customs and border protection.
Photo: AAPA
As part of the »Tax Cuts and Jobs Act« bill
passed 2017, AAPA says it was successful
in urging Congress to maintain most tax
exemptions on Private Activity Bonds
(PABs) to help finance infrastructure
projects. The association’s advocacy efforts
also were rewarded when Congress
voted to maintain the tax credit
for wind energy projects. Because
PABs provide a significant source of
financing for port-related and municipal
infrastructure projects, AAPA
worked with several transportation
and bond-related coalitions to advocate
against the elimination of tax exempt status
for PABs. »We were extremely pleased
the final legislation kept PABs mostly tax-exempt.
Maintaining PABs as tax-exempt will
Kurt Nagle, CEO
help foster investments, not just in and around
American Association of Port Authorities ports, but also in needed infrastructure development
throughout the nation. It was estimated
that ports would have had to pay approximately
19 mill. $ in extra debt service costs for every 100 mill. $ borrowed
had the PAB tax exemption been lost. These significantly increased
costs would have harmed ports’ ability to make needed investments,
and likely would have delayed or even killed some projects.
As Congress and the Trump Administration consider a broad
infrastructure investment package, U.S. seaports have identified
66 bn $ in necessary infrastructure investments over the next decade
to keep freight moving efficiently. On the waterside, this works
out to about 33.8 bn $. On the landside, the amount is estimated to
be 32.03 bn $. On the waterside, there is a need for 27.6 bn $ to maintain
channels and harbours, and 6.2 bn $ to modernize them. Of the
27.6 bn $, 18.6 bn $ would come from full use of annual HMT revenues,
which includes providing more equity to donor ports, plus
9 bn $ from the current HMT surplus to address the chronic dredging
maintenance backlog at deep-draft ports. Of the 6.2 bn .$ modernization
amount AAPA has identified, 3.1 bn $ is needed for the
federal share of 15 current congressionally-authorized construction
channel improvements and another 3.1 bn for the federal share of
constructing projects undergoing feasibility studies.
For the landside portion of the infrastructure investment need,
28.9 bn $ is necessary up and including 2025 to build vital road and
rail connectors, plus 3.13 bn $ to improve port infrastructure, allowing
more funding for multi-modal freight projects. »A top priority,
going forward, is getting Congress to make HMT spending
mandatory, while addressing donor equity and tax fairness issues,«
the AAPA President explains. Because U.S. ports and their
private-sector partners have told AAPA they plan to invest some
155 bn $ into port-related infrastructure and other capital projects
between 2016 and 2020, AAPA says to continue to urge the Federal
Government to make the 66 bn $ in port-related investments.
78 HANSA International Maritime Journal – 155. Jahrgang – 2018 – Nr. 3