The world’s largest ocean carriers have formed three main alliances so that now approximately 70 percent of the world’s container trade is being carried by only six global shipping lines. Midsize regional lines are sharing vessels and consolidating routes. To gain even greater efficiencies, older fleets are being replaced with larger ships that need deeper, wider channels, and longer berths with super-post-Panamax cranes. Yet only a handful of our nation’s seaports can handle these larger vessels.
According to the American Association of Port Authorities, more than a quarter of the US economy counts on traded goods moving through America’s seaports. For every additional $1 billion in US exports, 15,000 jobs are created.
Tax-exempt bond legislation and federal grants are important tools to help US seaports modernize and stimulate international commerce.
Infrastructure refinancing initiatives, such as tax-exempt bonds and advance refunding, help seaports manage costs for infrastructure improvements and further stretch limited capital improvement dollars. Without tax incentives, financing costs for projects increase, and ports must rely more on grants and other funding sources to complete critical capital projects.
In addition, the Harbor Maintenance Tax must be used as intended rather than for offsetting general federal spending. Unaddressed harbor maintenance limits vessel size and the amounts of cargo that can be loaded. This hurts our economy and employment, in addition to being unfair to shipping companies paying the tax.
I applaud federal grant programs, such as Infrastructure For Rebuilding America (INFRA) and Transportation Investment Generating Economic Recovery (TIGER), that stimulate growth by fostering private, state, and local investment. More funding needs to be directed to these programs.
US seaports require the continuation of existing tax incentives and grant programs to become more efficient and remain competitive in this new age of alliances, consolidation, and mega-ships. I am hopeful that Congress can identify long-term infrastructure financing strategies that provide tools to encourage and sustain seaport growth.