U.S. Ports Critical to Global Competitiveness

With more than one-quarter of U.S. gross domestic product hanging in the balance, U.S. seaports need to be improved if they want to be more competitive in today’s global economy. Today, ports find themselves on the never-ending treadmill of maintaining efficient operations and installing costly infrastructure upgrades to maintain U.S. competitiveness. Fighting for survival in the middle of an economic recession will require an unique strategy that includes non-traditional public-private investments.

U.S. ports contribute over $2 billion each year in capital improvement projects on their terminals. Besides needs such as dredging to enhance port access, these funds are oftentimes used to attract federal cost-share dollars from grant programs like the National Infrastructure Investment (TIGER) program. Although U.S. ports received an insignificant portion in previous years, in FY 2011, $527 million was available from this program. Despite such investments, port infrastructure, including bottlenecks in and around seaports resulting in congestion, remains insufficient and these inadequacies lead to higher-cost U.S. exports.

U.S. Exporters are Concerned.

Stephen P. Larson VP of Caterpillar

Stephen P. Larson VP of Caterpillar

Last year during a U.S. Senate Finance Committee hearing conducted on “Doubling U.S. Exports: Are U.S. Sea Ports Ready for the Challenge?” Steve Larson of Caterpillar, Inc., one of the largest heavy equipment exporters, noted, “…the lack of capacity at U.S. ports and inadequate mode integration are impeding the flow of both imports and exports through the U.S. port system. Capacity constraints at major ports are forcing shippers to disperse their shipments through multiple ports instead of using a single port of entry, or divert shipments altogether through Canadian or Mexican ports.”

Because there’s more room outside the Box…

Clearly, in order to attract the needed amounts of capital to maintain competitiveness of U.S seaports, non- traditional methods must be employed to supplement their own infrastructure investments.  The best way for U.S. policymakers to quickly inject needed capital for infrastructure is through reforms to the U.S. tax code. Such tax reforms targeted to public infrastructure development can provide a stimulating impact and supplement the flow of private capital for expansion and modernization of U.S. ports.

Tax Incentives: Unleash Private Capital!

For instance,the Federal Reserve recently reported that corporate businesses maintain $2 trillion in liquid assets, but remain on the sidelines.  Appropriate tax incentives (applied to investment capital) will unleash portions of those assets. The longer such tax incentives remain in place, the more certainty it will inspire in infrastructure investment and sustain longer term economic growth. U.S. taxpayers will benefit from such infrastructure enhancements (i.e our ports, rural healthcare, energy, etc.) created by these types of tax incentives.

It’s time for U.S. policymakers to maximize the participation of multiple private financing sources in worthwhile investments targeted toward the overall public good.  To do otherwise, continues to place the U.S. at a competitive disadvantage in the global economy.


Cansler Consulting is an experienced lobbying firm in budgeting, transportation & infrastructure, rural healthcare, and energy policies and through our Congressional relationships we can help you influence the policy makers on Capitol Hill. You can contact us at [email protected] or at (202) 220-3150.

Tim Cansler