The federal government also should partner to help with freight transportation, Rep. Lowenthal said Friday during the Congressional PORTS Caucus briefing.
Public-private partnerships (P3s) should be leveraged to spur port infrastructure development, but federal investments are still needed for infrastructure improvement across the supply chain, speakers said Friday at the Congressional PORTS Caucus briefing in Washington, D.C.
“One of the most powerful vehicles, though, for strengthening a port and its capability is in the form of a public-private partnership, which you see with concession-type models,” said Chris Garbarino, chief operating officer of the Port Newark Container Terminal (PNCT), which is operated by Ports America. “When a port authority opens the door for a long-term agreement with a terminal operator, long-term investment and infrastructure development can follow in earnest under that model.”
He said the PNCT restructured its lease in 2011 with the Port Authority of New York and New Jersey, which gave Ports America the right to operate the land occupied by the terminal until 2050 if it invests $500 million by that time. The port authority funded the construction of a new rail bridge about five years ago, Garbarino said, which was rolled into the lease until 2050, which he called “a prime example” of a P3.
The P3 was strengthened by a $14.9 million TIGER grant in 2014, which “jump-started that $500 million of spending to basically recreate the terminal, so much so now that by the end of this year … the vast majority of our development and of our $500 million commitment will have already been achieved,” he explained.
PortMiami used a 2010 TIGER grant to restore on-dock rail at the port, said Juan Kuryla, port director and CEO.
“Now it’s like air conditioning: You need it,” he said of on-dock rail. “It makes sense. It helps you grow your business. It helps you reduce emissions.”
PortMiami also has used a P3 with a container terminal run by APM in a joint venture with CMA to help the port’s cruise sector and invest in the terminal, Kuryla said. The port took 20 acres of land from the terminal to add two additional cruise berths in exchange for a $42 million investment in the terminal’s yard, which made the terminal RTG ready.
“Their operational capacity is increasing 60%, so it’s a win-win,” Kuryla said. “Now they’re paying us less rent, but we get to make it up with cruise.”
Funding for the Corps of Engineers for dredging and maintenance work also is crucial for a port’s success, he said.
Tom Jensen, senior vice president for transportation policy at UPS Global Public Affairs, said disruptions at ports are felt across the entire supply chain. The keys to freight movement are the interdependence on the different systems, the fluidity of the network and the increase of the velocity, and all three of those should be addressed by an operational and policy perspective, he said.
“We do support increase, dedicated and sustained funding in this regard,” Jensen said, adding “user pay, user benefit.”
“Perhaps we can do a better job on the freight side for the benefits of the ports and the fluidity and velocity of the networks,” he later added.
Rep. Alan Lowenthal, D-Calif., co-chairman of the PORTS Caucus, said the federal government needs to play an increased role in helping freight transportation.
“Ultimately we’re all connected and we’re all part of the national system, and it’s time for the federal government to also become a partner in all of this,” he said. “Not just sometimes giving out grants … but a real partner in providing resources.”
Lowenthal earlier this week introduced the National Multimodal and Sustainable Freight Infrastructure Act to Congress that would establish the Freight Transportation Infrastructure Trust Fund, paid for through a national 1% waybill fee on the transportation cost of goods. The funds would be distributed through both a formula-based and competitive program.
“I truly believe that we’re going to have to really understand the concept of user fees more than we have before,” Lowenthal said Friday. “I believe freight has to have its own dedicated revenue stream that’s just paid for by freight and benefited by freight.”
Video of the briefing, which was streamed on the American Association of Port Authorities’ Facebook page, may be found here.