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American Shipper

Bottlenecks for bottlenecks

Bottlenecks for bottlenecks

Border checkpoints get stimulus assist, but trade capacity backlogs persist.




By Eric Kulisch



      The massive economic recovery plan enacted in February includes $720 million for improving infrastructure at land ports of entry. The General Services Administration (GSA) ' the federal government's main property manager ' received $300 million for facilities under its control and $420 million went to Customs and Border Protection for property it owns.

      The GSA said it would spend two-thirds of the money to upgrade the Mariposa border station outside Nogales, Ariz.; another $30 million for the crossing in Blaine, Wash.; $21.3 million for Otay Mesa, Calif.; $40 million for Van Buren, Maine; and smaller amounts for two other crossings in Maine and one in New Mexico. The money essentially accelerates projects already in the pipeline.

      CBP said it would use the money to modernize or make repairs to 43 small border crossings, most of them on the northern border. Separately, $42 million out of $100 million in stimulus money for CBP will be used to deploy passenger vehicle and large-scale cargo scanning equipment to the southwest border.

      The government estimates there is a $5 billion backlog of needed projects to modernize the nation's ports of entry, most of which do not have the physical space, access roads or optimal configuration for inspection technology to handle large volumes of commercial and traveler traffic without creating backups during peak periods.

      Doug Doan, who sits on the board of the Border Trade Alliance (BTA) and previously worked as the Department of Homeland Security's private sector liaison for border and transportation issues, criticized the use of stimulus money for low-volume, rural border crossings rather than to relieve congestion at big ports that handle the most trade.

      'If the stimulus money is to be used to stimulate the economy and help energize our recovery, why wouldn't you put your money where your trade really is instead of putting money in Los Ebanos, which is a wonderful pontoon bridge, but we're not going to get a lot of extra trade out of that pontoon?' he said during audience participation at the BTA's annual conference in Washington on April 20-21.

      Los Ebanos in Texas is the last hand-operated pull ferry on the Rio Grande River. The barge has capacity for three cars.

      Land ports were the conduits for $830 billion in trade between the United States, Canada and Mexico in 2008, making ports of entry 'the national cash registers,' Doan said in a follow-up interview.

      Incremental changes in capacity ' inspection booths, lanes, roads and bridges ' to make trade move a bit faster can have a profound effect in terms of lower inventories and maintaining just-in-time production cycles, he argued.

      'The border is grossly inefficient and it's in our national best interest to make it efficient. If you look at the dollars per square inch, land border ports of entry are the most valuable real estate in the world. So why wouldn't you want more of it?

      'Direct funds at where you get the biggest possible return on investment, which is measured in trade.'

      Doan said Nogales was already poised for expansion and lamented that the stimulus didn't include any new projects that would add capacity. The GSA, following recovery act guidelines, allocated funds for shovel-ready projects such as Nogales. CBP, unlike other agencies, has not stated that one of the decision-making factors for the money is identifying fast-start projects that can create jobs. Its priorities are port facilities with the most urgent operational deficiencies, as well as safety and security, officials say.

      The stimulus also failed to generate a multiplier effect by using federal dollars to attract other funding for big projects, he said.

      Creative thinking would have made the stimulus money go further, said Doan, who while at DHS in 2005 encouraged a private sector financing effort in Nogales that built two new expedited lanes for security-certified truck drivers without any federal dollars.

      A partnership approach could leverage federal investment to encourage additional funding from local, state, Mexican and Canadian government, and the private sector for a more comprehensive solution. Installing new entrance lanes and inspection technology won't improve congestion if there is lots of traffic and only a two-lane road leading to the facility, Doan argued, pointing to projects near San Diego and Buffalo, N.Y., as good candidates for more resources.

      The state of California and San Diego-area governments, for example, have proposed building a new border station in Otay Mesa, Calif., and a four-lane road linking it to the highway system, and then turning over the keys for the facility to CBP. Most of the project will be financed by revenue bonds backed by tolling the access road. The state has kicked in $75 million towards the estimated $700 million project and planners hope to get some federal transportation funding in the next surface transportation reauthorization bill.

      And the bi-national authority that oversees the Peace Bridge connecting Buffalo and Fort Erie, Ontario, wants to build a new $270 million customs plaza and a companion bridge to increase border capacity and efficiency. The Peace Bridge is the third-busiest commercial crossing with Canada, but the Port of Buffalo sits on a tiny 17-acre plot and has not been expanded or enhanced for several decades. The bridge authority plans to raise money through bonds, which would be repaid by lease payments from the GSA.

      'Federal money could have been the driver to get much more ' rather than dribbling it around,' Doan said.

      However, the Peace Bridge and Otay Mesa projects did not meet the criteria for the stimulus plan because they are not pre-approved and still require much design work. Both are still undergoing environmental impact reviews.

      The Border Trade Alliance and others have also approached the North American Development Bank (NADB) to expand its mission and finance more border transportation infrastructure.

      The NADB was established under the North American Free Trade Agreement treaty as a bilateral U.S.-Mexican institution to provide low-interest loans for infrastructure projects with environmental benefits, such as sewers, wastewater treatment and floodwater retention, located within 100 miles of the border.

      The BTA ' representing businesses, chambers of commerce, economic development agencies, local governments and others with trade and other interests along the northern and southern borders ' says the bank should consider clean air as part of its mandate and finance infrastructure that can reduce congestion and associated air pollution from engine idling.

      NADB officials say the institution's board has mostly stuck to a strict interpretation on financing port of entry infrastructure, such as highways and bridges.

      The board last October denied $23 million in aid to the city of Donna, Texas, for a new international crossing because it determined that the environmental benefit was minimal, NADB spokesman Juan Antonio Flores said.

      In February, however, the bank did approve a 138.4 million peso ($10.56 million) loan to a private concessionaire that is building a new commercial port of entry on the Mexican side of the border that will link to a new cargo facility near San Luis, Ariz.

      The new crossing is located outside the urban area and is expected to significantly reduce traffic congestion and diesel emissions from idling trucks. The development includes parking areas, paved lanes, offices, toll booths and customs inspection booths. The Mexican port will also include an electrification station that will allow trucks to connect their systems to available power outlets to run equipment and thus turn off their engines while waiting to pass through the inspection area.

      Construction on the U.S. side of the border is nearly complete and the port is expected to open in October. The original port, San Luis I, will then be converted to a pedestrian and passenger-vehicle only border crossing.

      The NADB board approved the loan as a pilot project and will not consider any other types of border facility projects until the results can be studied.

      Bank officials say the board would have more leeway to finance border infrastructure projects if its charter was amended.

      'The climate is right for some change. The United States and Mexico should consider expanding the role of the bank to allow financing all infrastructure projects whether or not there is an environmental impact,' Managing Director Jorge C. Garces, said at the BTA conference.

      Sentiment is growing among border state stakeholders and lawmakers for 'greater flexibility in the mandate, so we could finance port of entry infrastructure as long as it had an overall benefit to trade, economic development and the environment,' Flores added.

      'A more balanced look at the project's overall benefits would be taken into account rather than this strict environmental test.'

      Reforming the charter would have to be authorized by the U.S. and Mexican congresses.

      Increased use of tolling should also be considered to finance border infrastructure, said Victor Carrillo, a supervisor for Imperial County, Calif., at a Heritage Foundation seminar in late February.

      The Department of Homeland Security needs to understand that 'the only way to finance the necessary capacity expansions at our border crossings is by a pay-as-you-go system,' he said.

      Two studies have shown that border crossers would be willing to pay $3 to $5 to ensure shorter wait times at the border.

      'The reality is that toll lanes can help us deliver more lanes, more technology, more staffing and more security,' while generating more taxable economic activity that can provide more revenue to governments at all levels, Carrillo said.

      Aside from lack of adequate funding, border infrastructure upgrades suffer from a slow planning and approval process. Under the typical scenario, it takes seven years from the time GSA requests funding until a project is completed, according to James King, director of the agency's southern border program. And the GSA funding request must wait until the State Department issues a presidential permit for any infrastructure that abuts the border, which takes up to seven years to complete due to the need for an environmental impact assessment and input from other agencies. The combined amount of red tape means border communities often have to wait a dozen years or more to get a needed piece of infrastructure in place.

      Lurita Doan, the GSA administrator during the recent Bush administration before resigning in May 2008, recommended at the Heritage Foundation event that the presidential permit process be completed in 90 days or less once all required documents are submitted to the program. The need for regulatory reform is exemplified by the fact that the Army Corps of Engineers had to sign off on a navigable waterway prior to processing the permit for expansion of the Nogales port of entry.

      'Nogales is a ditch in the desert. It's filled with scorpions, snakes and beer cans. It is not a waterway,' she said.

      Congress and the administration should also separate into distinct accounts funding for seaports and land ports because they have different missions and types of expenditures, said Lurita Doan, who is married to Doug Doan.

      The GSA is working to speed up the way it brings expansion projects to completion. It recently awarded indefinite delivery/indefinite quantity contracts to 12 architectural and engineering firms to speed up the design and construction process, King told the BTA conference. Having an umbrella contract in place with several firms allows the agency to quickly issue task orders when it is ready to move on projects, saving several months in the acquisition process.

      The GSA also intends to use more design-build contract vehicles because the work is bundled and can be started faster than if farming the final design out to a separate construction contractor under a design-bid-build mechanism, he said.

      The agency is also working with CBP to standardize certain elements of border plazas, such as inspection booths, holding cells and lane systems. A final design for a uniform inspection booth that can be used throughout the country is nearly complete. The booths, which are undergoing testing, are designed to be more ergonomically appealing for officers. And they are built at an angle because Customs wants the officer to be able to look at the driver or pedestrian's face when questioning them instead of staring at oncoming traffic as they do in the current configuration, King explained afterwards.

      'We've got hundreds of booths across the country and new ports of entry coming on line. We want a standard booth we can have on the shelf for any location,' he said.

      The new booths will be installed in some of GSA's new projects.

      Designing a scalable lane system that is pre-wired to support radiation portal monitors, license plate readers and other technology will allow CBP to add new systems as needed without digging up the concrete every time, King added.

      The standard features will allow the government to quickly upgrade facilities in the future, he said.

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