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AAPA report highlights the need for increased funding

A wide-ranging report issued last week by the American Association of Port Authorities (AAPA) provides a detailed analysis into what needs to happen in order to meet the multimodal funding needs of United States seaports.

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By Jeff Berman, Group News Editor · May 21, 2018

A wide-ranging report issued last week by the American Association of Port Authorities (AAPA) provides a detailed analysis into what needs to happen in order to meet the multimodal funding needs of United States seaports.

The report, entitled “The State of Freight III: Rail Access + Port Multimodal Funding Needs Report,” like its predecessors, takes a deep dive on the needs of ports to effectively move goods into and out of their facilities by land and water, according to the AAPA.

Some of the key funding needs outline in the report included:

  • U.S. port authorities identified more than $20 billion in projected multimodal port and rail access needs over the next decade, while one-third cited pressing rail project needs costing at least $50 million for each of their ports;
  • 67% said that funding and financing options are the biggest obstacles in getting essential rail projects started to access their facilities.
  • 37% said that problematic at-grade rail crossings or height-restricted overpasses and tunnels near their ports are constraining cargo-handling capacity; and
  • 36 percent reported that land acquisition is a big problem in developing and planning port rail access projects

“In State of Freight III, we take a deep-dive into the freight transportation needs of our U.S. member port authorities, with an emphasis on rail access, said AAPA President and CEO Kurt Nagle in a statement. “The findings show that while the FAST (Fixing America’s Surface Transportation) Act has been essential in providing the building blocks for a national freight program, more must be done to ensure that multimodal goods movement projects have adequate resources to produce efficient and timely results. These transportation projects are crucial to address our nation’s increasing freight volumes and enhance America’s international competitiveness. Our nation’s ports have identified a vast array of projects, which are ready for investment and could move forward if the issues in this report could be addressed. It’s important that steps be taken to resolve the barriers identified in this report that are preventing these projects from progressing.”

The report made it clear that the “impact of our ports is astounding,” explaining that they serve as a key component of the supply chain and a major facilitator of trade to the nation, adding that ports rely on critical connections within the supply chain to get goods that consumers rely on to market. That becomes even more apparent when considering port cargo activity represents more than 23 million U.S. jobs and more than a quarter of GDP.

And this is where the importance of railroad and its importance to ports truly get highlighted, as the AAPA explained “of all the connections to ports, rail provides a unique, efficient and speedy method of moving cargo out of congested areas to distribution centers.”

The report also lays out a clear case for multimodal funding in citing “seismic population shifts” to metropolitan locales in close proximity to ports, as well as increasing project complexity brought about by integrating freight flow demands with passenger needs on highway and rail networks.

“With growing populations and rising freight volumes, rail access has been one of the vital tools in moving large volumes of freight to distribution centers outside major population centers,” the report stated.

As rail access has become a vital part of ports’ multimodal infrastructure, the report explained how ports are keen on adding or relying more heavily on rail for cargo movements for daily operations and long-range planning, things which need federal partnerships to succeed.

And data in the report firmly backs this up, too, with: 80% of AAPA ports seeking better rail access; 43% saying that better rail access would add more than 25% throughput capacity through their ports; 90% saying better rail access would help meet these growing demands and secure new cargo; and many ports said that projects are needed to build connections for Class I railroads or interior U.S. markets, where consumers depend on goods coming through U.S. seaports to the heartland.

The port’s wish list for rail projects and needs included rail acquisition, grade separation, overpass/tunnel heightening, on-dock rail, and distribution center. And the report said that 93% of AAPA ports have some type of rail access, with 69% having on-dock rail access, 15% with near-dock access, and 15% with some kind of “other” rail access.

“One of the report’s biggest takeaways is that we took great steps forward with the FAST Act and now have a freight program in the US DOT,” said John Young AAPA director of intermodal and surface transportation policy and legislation. “We have a formula program and a discretionary grant program. But one of the things we did not quite get in the first round was multimodal eligibility. There was $11 billion available in the FAST Act for freight investment, but only $1.13 billion is multimodal-eligible for multimodal projects, and after several more rounds of infrastructure grants, there is only $275 left for multimodal eligibility. We appreciate that there is the structure of a freight program, but there needs to be more flexibility or eligibility for the types of projects to connect the ports to the supply chain.”

Young made it clear that improved rail access will improve overall port efficiency, saying that it will augment system efficiency, too. And long-term sustainable funding is needed for that to truly occur, he said.

“Part of the issue is that the current freight program is funded by the Highway Trust Fund, which has been a great pusher for the infrastructure freight network, but is only eligible for highway projects,” he said. “It is really hard to pull the eligibility back and make it eligible for the multimodal projects or inside the gate projects that are needed.”

That leads to two things being at play, he said, with the first one being an eligibility issue, as well as a sustainability issue.

“With ports, there is kind of an added benefit in that it’s a different constituency,” he said. “There is some private sector stake in this so they need to know there is money there that is coming in on a pretty routine basis and that the federal government is a partner along with the ports. That is why funding sustainability is critical, as opposed to one large lump sum of funding. As much as we love the TIGER/Build program, it’s really hard to plan around that…and where we really are with the freight network is just beginning. They are starting to build out a 21st century freight network and to do that the funding and financing needs to be in place.”

About the Author

Jeff Berman, Group News Editor

Jeff Berman is Group News Editor for Logistics ManagementModern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman

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