US port-related infrastructure investments reap dividends



Kurt Nagle, President, American Association of Port Authorities (AAPA), Virginia, US



For centuries, US seaports and the waterways that connect them have served as a vital economic lifeline by bringing goods and services to people around the world, facilitating trade and commerce, creating jobs, helping to secure US borders, supporting the military and serving as stewards of valuable coastal environmental resources.

As the primary gateway for overseas trade, seaports are essential for economic prosperity, and federal funding for infrastructure in and around ports pays dividends for the country. Deepdraft coastal and Great Lakes ports are the nexus of critical transportation infrastructure that connects America’s exporters with markets overseas. They also provide access for imports of raw materials, components, and consumer goods that are a key part of US manufacturing and standards of living.

Investments in port infrastructure and the intermodal connections that serve seaports – both land and waterside – help the nation prosper and provide an opportunity to bolster the employment and economic recovery.

Economic impacts

Today, international trade accounts for more than a quarter of America’s gross domestic product, while ocean-going vessels that load and unload cargo at US seaports move 99.4 percent of the nation’s overseas trade by volume and 65.5 percent by value. Furthermore, customs collections from seaport cargo provide tens of billions of dollars a year to the US federal government, including $23.2 billion in financial year 2007, $24.1 billion in financial year 2008, $20.3 billion in financial year 2009 and $22.5 billion in financial year 2010.

In the latest economic impacts analysis conducted in 2007, US seaport activities generated $3.15 trillion in annual economic output, with $3.8 billion worth of goods moving in and out of seaports every day. The impacts go far beyond the communities in which seaports are located. On average, any given US state uses the services of 15 different ports around the country to handle its imports and exports.

From a jobs standpoint, America’s seaports support the employment of 13.3 million US workers, and seaport-related jobs account for $649 billion in annual personal income. For every $1 billion in exports shipped though US seaports, 15,000 domestic jobs are created. With ambitious greening initiatives nationwide, seaports have begun generating jobs outside of their traditional sectors, such as opportunities in the environmental sciences.

In addition to handling international trade, US seaports, and the waterways that serve them are also important transportation modes for the movement of domestic freight. Greater utilization of America’s coastal and inland water routes for freight transportation complements other surface transportation modes, helping to provide a safe and secure alternative for cargo while offering significant energy savings and traffic congestion relief.


While US investment in its waterways infrastructure is trending downward, countries like India, Brazil and even the UK are committing the equivalent of billions of dollars to modernize their ports and channels. The first major expansion of the Panama Canal in more than a century is slated for completion in 2014, and it is driving ports around the world to deepen their navigation channels and improve harbor facilities.

India plans to invest $60 billion, including both public an  private funds, in creating seven new major ports by 2020 to handle a rapid expansion in exports of merchandise, which is forecast 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 $17 billion, including $14 billion from the private sector, for port improvements. In the UK, the world’s fourth largest marine terminals operator, DP World, plans to spend $2.5 billion on London’s Deep-Water Gateway, the country’s first such development in the last 20 years.

Back in the US, public funding for new navigation channel improvements has all but dried up as lawmakers focus on reducing the deficit and eliminating appropriation ‘earmarks’ that have traditionally funded federal navigation deepening projects. At the same time, funding for projects already approved and underway is slow, incremental and insufficient.

Insufficient appropriations also make it impossible to maintain most federal navigation channels at their authorized and required dimensions. The US Army Corps of Engineers is responsible for improving and maintaining the nation’s water access to ports. Nevertheless, the federal government annually spends only about half of the tax that it collects specifically for deep-draft channel maintenance. The rest – more than $6 billion since 1986 – has essentially ‘disappeared’ into the US Treasury, while serious dredging needs have been neglected.


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