After 15 years of relentless struggle, the U.S. Army Corps of Engineers approved a 47-foot channel for the Port of Savannah; two years later, USACE approved a 52-foot channel for the Port of Charleston. Having a 52-foot channel, provides Charleston with an important competitive advantage: the ability to serve a fully loaded 13,500-TEU, new-Panamax ship. The subsequent USACE decisions to deepen two adjacent ports serving the same ships to different depths was made by applying the same economic assessment methodology, based on national benefit/cost ratio. Why was Savannah, twice the size of Charleston, so harshly discriminated relative to its archrival located just 104 nautical miles to the north?
The apparent explanation for the disparate treatment is that USACE’s methodology is based on speculative and, in some areas, flawed assumptions, especially on the benefit side. The latter mandates developing a highly detailed, 50-year forecast of the ports’ traffic by trade lane, service pattern and vessel size in the notoriously volatile shipping market. Strangely, the forecast disregards port competition and therefore contains an unavoidable internal contradiction: It is reasonable to expect that Charleston’s much deeper channel will increase its market share and respective national benefits at the expense of Savannah’s.
Should the USACE redo Savannah’s study and adjust its channel depth accordingly? The benefits are derived from the differential in shipping cost between two hypothetical scenarios, with and without deeper channels, which, at least in the case of Savannah, I found flawed (see: www.asafashar.com), along with other assumptions on tide delays and ship’s load factors.
Access channels are integral parts of port facilities, and port facilities essentially are regional infrastructure, which, because of intermodalism, also can serve a nationwide market. Most of the investments in ports already are made by regional governments: port authorities, cities, counties and states. Recently, the states’ share has been on the rise as was demonstrated in the decision by Florida’s enterprising governor to invest heavily in his state’s ports in an attempt to “repatriate” his state’s cargo presently handled by other states — as well as to capture the cargo of other states.
It is time to end the fiasco around our port channels. The federal government should transfer the economic responsibility for channel deepening and maintenance to regional port authorities, along with the right to collect user’s fees (HMT included) to cover their channel cost — as they already do with all other port-related infrastructure.
Asaf Ashar, Professor Research, Emeritus, National Ports & Waterways Initiative, University of New Orleans