In Allocating Virus Crisis Relief, U.S. Policymakers Can’t Ignore America’s Ports
COVID-19 has profoundly altered our ways of life. Thankfully, one aspect has remained relatively stable…the movement of essential goods through our ports.
During the pandemic, America’s ports have ensured store shelves remain stocked and commerce continues to flow. Due to the supply chain in which ports are a central link, people have been able to safely navigate through their daily activities with the knowledge that critical medical supplies, consumer products, personal protection equipment (PPE), energy commodities and raw materials used in U.S. exports are available.
Last year, the American Association of Port Authorities (AAPA) reported cargo activities at U.S. ports were responsible for $5.4 trillion in annual economic activity, supporting 30.8 million jobs and providing $378.1 billion in tax revenue to federal, state, and local governments.
However, the economic downturn we’re now facing has caused significant economic damage to our ports, with an estimated decline of 20% to 30% of their total annual receipts. On top of that – the cruise industry at U.S. ports has come to a standstill, which in 2018 contributed an additional $53 billion to the U.S. economy.
As a result, direct job losses at America’s seaports this year are estimated to reach 130,000. That’s 20% of the U.S. maritime workforce at full employment.
According to the American Society of Civil Engineers’ 2017 Infrastructure Report Card, the nation’s ports earned a mediocre C+. The Report Card cites impacts of natural disasters and other crises at ports that result in billions of dollars in damage a year and the loss of long-term economic activity, and that was prior to the COVID-19 pandemic.
Consequently, some ports are postponing plans for and investment in capital improvement projects, putting the readiness, capacity and capability of our nation’s trade infrastructure at risk.
An April 2020 report prepared for the U.S. Committee on the Marine Transportation System shows that increasing port-related transportation infrastructure investments above a “business-as-usual” scenario will help the nation recover from a long pattern of infrastructure underspending. It notes that greater infrastructure investments will enable higher growth, improve trade performance, expand employment opportunities and enhance value of household incomes.
To provide near-term pandemic relief for the marine sector, U.S. House Transportation and Infrastructure Committee Chairman Peter DeFazio and Coast Guard and Maritime Transportation Subcommittee Chairman Sean Patrick Maloney introduced H.R. 7515, the Maritime Transportation System Emergency Relief Act (MTSERA) on July 9. U.S. Senator Jeff Merkley and Senate Commerce Committee Security Subcommittee Chairman Dan Sullivan introduced an identical companion bill on July 30. These bills would establish a program to provide dedicated maritime assistance and emergency relief grants and would make funds available to U.S. public port authorities for emergency response, cleaning and sanitization, staffing, workforce retention and paid leave, procurement and use of personal protective equipment, debt service payments, and for infrastructure repair following disaster or pandemic.
AAPA strongly supports this proposed legislation and is urging Congress to allocate a modest $1.5 billion in direct grants to help ports cover operations, equipment and infrastructure costs, and debt service expenses.
Every day, America’s seaports are delivering critical goods and materials to the front line of the COVID-19 battlegrounds. Essential port workers, who aren’t able to work remotely, are also ensuring consumer goods get to the doorsteps of countless millions of Americans who are safely working from home.
Policymakers cannot and should not ignore our nation’s ports in their time of need. The relief we’re seeking isn’t about replacing lost carrier, cargo and cruise passenger revenue. It’s about ensuring that ports are able to keep pace with the accelerating costs of protecting their workers while keeping their workforce employed, ensuring bond and other debt instrument payments aren’t missed, and ultimately, about maintaining a state of readiness so ports can significantly aid in the nation’s eventual economic recovery.