Monday, December 26, 2016

What Could Secretary Chao do for Maritime Infrastructure?

Since President-Elect Donald Trump announced his pick for Secretary of Transportation, Elaine Chao, last month, transportation experts and advocates are examining her history to determine what her priorities might be as Secretary and what programs she might help bolster - and which ones she might leave behind.

Of course, since Trump has talked a lot about the need to invest in our national infrastructure, much of the analysis thus far has concentrated on how she might help get a trillion-dollar infrastructure package passed through Congress. However, I want to write about how she might help maritime infrastructure in particular, given that she has served as deputy administrator of the Maritime Administration and as chair of the Federal Maritime Commission. While I was in graduate school, my capstone project involved recommending port performance metrics for the Maritime Administration (to help evaluate the efficacy of federal funding given to ports), so this is something that continues to interest me.

Housed within the U.S. Department of Transportation, the Maritime Administration "promotes the use of waterborne transportation and its seamless integration with other segments of the transportation system," including ports, rail links, and last-mile connectors (think of the highways and roads that lead into maritime ports). It runs a variety of programs that seek those ends, such as the StrongPorts program which provides expertise on port financing and infrastructure.

The Federal Maritime Commission, on the other hand, is more of a regulatory body, and as such works to "foster a fair, efficient and reliable international ocean transportation system and to protect the public from unfair and deceptive practices." The Commission monitors agreements among ocean common carriers and marine terminal operators to ensure the agreements don't result in substantial increases in transportation costs or reductions in services, and monitors carriers' rates, charges, and rules to ensure they are reasonable.

Trump hasn't said much about maritime transportation in particular: he usually talks about highways and bridges, occasionally expanding his definition of infrastructure to include airports and rail, as well as non-transportation infrastructure such as hospitals and schools. So it isn't clear to me right now that a Trump infrastructure package would include funding for maritime infrastructure, but nor is it a foregone conclusion that it won't.

That's where Secretary Chao could come in. If she believes strongly in investing more in our nation's ports, she could work with Senate leaders to ensure that an infrastructure package includes funding specifically for maritime transportation.

The money would go to good use: ports support millions of jobs throughout the supply chain and can catalyze major economic development in their regions. Stronger ports help increase import and export opportunities for our nation's businesses - so when our ports improve their operations, our businesses can plan to expand theirs. And with the rise of mega-ships and ocean carrier alliances, our ports are more strained than ever, moving more cargo in shorter timeframes and smaller spaces.

In spite of these needs, we don't currently have a long-term, dedicated funding stream for our nation's ports. Most frequently, federal financial assistance for port improvement comes through the Transportation Investment Generating Economic Recovery (TIGER) grant program. TIGER grants can go to all different kinds of transportation - and to date, only 11.6% of TIGER funding has gone to ports.

However, the U.S. DOT and Maritime Administration have started creating other opportunities for U.S. ports to get assistance. The Maritime Administration recently awarded nearly $5 million to six different Marine Highway projects spanning 17 states. Marine Highway projects are those that expand the use of navigable waterways to relieve landside congestion and provide other public benefits (such as reduced air emissions). Many of these projects are for container on barge services - those that move containerized freight via waterway thus taking them off our roads and highways to reduce congestion - but there's also money in there for a commuter ferry service between DC and Northern Virginia.

Secretary Chao could continue this trend of giving more federal funding to port and maritime infrastructure improvements. But does she want to? In her questionnaire to the Senate Commerce Committee, Chao wrote that "With or without a new infusion of funds, it is necessary to look at the existing processes for infrastructure development and find more efficient ways to address bottlenecks in planning and permitting." It isn't apparent yet whether this statement (particularly "with or without a new infusion of funds") is a general philosophy, or is meant to throw cold water on Trump's grand-scale infrastructure plans.

She also says that "given the nation's need to improve critical infrastructure, it is important to find ways to expedite the process of making repairs and building new constructions and decreasing the regulatory burdens when appropriate." This could, if she wants it to, apply to large port projects like dredging and river widening to help our ports accommodate those mega-ships.

There's still a lot to learn about Secretary-designate Elaine Chao and what her priorities would be as Secretary of Transportation. We'll likely learn more when the Senate Commerce Committee holds its hearing on her nomination - and until then, we can only speculate. But based on her history as someone who held several high-ranking jobs within the maritime transportation space, I think it's likely she's aware of the unique challenges our nation's ports are facing and recognizes that federal investment for these major drivers of economic development could help meet those challenges.

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