FUNDING PORT MODERNIZATION

Unfortunately, the “out of sight out of mind” mentality seems to have largely been applied to the vastly strategic U.S. port system. The pandemic highlighted both the criticality of the nation’s ports and the woeful inadequacy with regard to port modernization. Images of backed-up container ships made headlines nationwide and many were quick to point a finger at the individual ports themselves. With a recent round of funding, compliments of the Inflation Reduction Act, Port Authorities across the country are finally getting a piece of the transportation funding pipeline. But is it too little, too late?

The latest tranche of funding provided some $700 million to ports. That amount becomes quite paltry with the revelation that it will be divided between some 44 different ports. To put that number in perspective for other infrastructure-related projects around the U.S., here are a few recent examples that made headlines:

• L.A.’s half-mile 6th Street Bridge, which was finished in 2022, cost some $588 million, reports the LA Times.

• In 2020, Salt Lake City spent a staggering $4 billion to rebuild its airport, Deseret News first broke.

• The Florida Department of Transportation plans to spend $2.02 million on a new 0.7-mile sidewalk in a rural Florida county, according to the FDOT Five Year Work Program.

• Phase 1 of a new canal drainage project in North Beach in Corpus Christi carries a price tag of $7 million, reports the Corpus Christi Business News.

Perhaps the greatest trick up Sean Strawbridge’s sleeves is his masterful use of media coverage as an outlet to get the word out about ports

“$700 million is a great start. But nowhere near the need,” Strawbridge says. Nearly 30% of our nation’s entire GDP is tied to ports. He went on to explain that unequivocally, seaports facilitate, if not create the opportunity altogether, for the transport of goods on a global scale. They hold national criticality for the economy, national security, energy, and a large degree of foreign policy. That last point has been especially highlighted with the war in Ukraine and subsequent sanctions imposed on Russia, as well as shipping arms and supplies to key allies in the region. To accomplish all of the tasks set forth for seaports, there must be a consistent approach to infrastructure investments.

Doing some quick math, Strawbridge reasoned that if seaports account for 26% of the GDP, and the 2021 U.S. GDP was $23 trillion, per the Bureau of Economic Analysis, nearly $6 trillion (with a T) of the GDP is tied to seaports. $6 trillion against $700 million in funding leaves a bit to be desired. Not to seem ungrateful, Strawbridge is excited to see the funding put to use, and show just how desperately needed it is. The funding will be available for the various Port Authorities under competitive bids and grants.

Typically, grants are awarded based on need. With how important seaports are socioeconomically, they do hold a certain degree of clout. And, as with most things in life, poli- tics do come into play. One port may lobby better for a given project, leaving another port the runner-up in the government’s version of the Hunger Games. The light at the end of the tunnel is AAPA, which helps even the playing field with fair representation at the national level for ports of all sizes.

Strawbridge sees his role as Chairman of the Board at AAPA as not so much seeing which port gets what, but rather recognizing that it is Congress who controls the purse, and getting them to see that current times dictate the purse needs to be opened wider than it has ever been historically for ports.

As vessel technology continues to evolve at a lightning pace, so must port infrastructure. Cranes need to be taller, berths made larger, and channels wider to handle larger classifications of vessels. Ports must also be realistic in what they can achieve, so they can be strategic in how they approach improving productivity for the long haul.

Balancing Relational Complexity Between Constituencies

As we’ve noted, ports are a bit of an oddball when it comes to who owns them. Ports are largely left to states or municipalities for governance even though they are intrinsically linked to our national economy and security. Local governments have their own politics at play and may not fully appreciate how critical port infrastructure is. This can have widespread rippling effects as local constituencies all vie for their own best interests. Strawbridge threw out the example of California ports, which bear the brunt of the American consumer appetite. Residents may not appreciate the congestion or emissions of all of the hustle and bustle the container imports initiate, and are quick to be vocal in their opposition of such to their local government.

Part of the AAPA’s role is to understand what the concerns are for all port stakeholders collectively. By bringing groups to the table like community leaders, social justice activists, business groups, elected officials, and labor unions you let everyone in a community have a voice. The macro and micro-complexities of all of these relationships between various constituencies make seeing the links between them indeed difficult. By bringing everyone to the table, Strawbridge seeks to facilitate widespread community buy-in for just how critical ports are now and will continue to be in the future.

When asked what he saw as his biggest challenge going forward, Strawbridge let out a sigh and was quick to say political instability was perhaps the greatest threat. The inertia causes a terribly detrimental effect on the fiscal success of a port in a given region. Our elected officials need to transcend the political divisiveness that has plagued our country, because the political discord has long-term negative impacts on ports, which in turn hurts working American families. His message to politicians: “Let’s agree that we’re not going to agree on everything, but we can agree to disagree without being disagreeable.” Amen, Mr. Ports. Amen.

About the author: Tyler Reed began his career in the world of finance managing a portfolio of municipal bonds at the Bank of New York Mellon. Four years later, he led the Marketing and Business Development team at a high-profile civil engineering firm with a focus on energy development in federal, state, and local pursuits and picked up an Executive MBA from the University of Florida along the way. Following an entrepreneurial spirit, he founded a content writing agency servicing marketing agencies, PR firms, and enterprise accounts on a global scale. A sought-after television personality and featured writer in too many leading publications to list, his penchant for research delivers crisp and intelligent prose his audience continually craves.

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