Executives from four Pacific Northwest ports - small, medium, and large - were in WashingtonD.C. on Thursday, testifying before a Senate Finance subcommittee on problems exporters are encountering trying to get their products to the global marketplace. The hearing before the subcommittee on International Trade, Customs, and Global Competitiveness was called both to support President Barack Obama's initiative to double U.S. exports and to look into complaints by frustrated exporters.
Following the hearing, Sen. Maria Cantwell of Washington state, who sits on the subcommittee, sent a letter to the president, calling for development of a national freight mobility plan and for adding Transportation Secretary Ray LaHood to the president's "export cabinet."
Subcommittee Chairman Sen. Ron Wyden of Oregon opened the meeting telling of problems experienced by Oregon businesses, including a lumber company that had lost a contract to a Canadian company because it could not get its wood shipped to Japan in a timely manner, onion producers who were hurt when shipping lines reneged on their commitments, and rice growers who are having similar problems.
Exporters in the heartland are also finding it difficult to get their products to overseas buyers, and it's all unacceptable, Wyden said. It will be impossible to double exports if our shipping lanes are gridlocked as they are now, he added.
Phil Lutes, seaport deputy director of the Port of Seattle, Bill Wyatt, executive director of the Port of Portland, Larry Paulson, executive director of the Port of Vancouver USA, and Jeff Bishop, executive director of the Port of Coos Bay, told senators that the federal government needs to develop a national freight policy and to take the lead in supplying badly needed infrastructure.
Also testifying before the committee were Steve Larson of Caterpillar Logistics, Errol Rice of the Montana Stockgrowers Association, Leal Sundet of the International Longshore and Warehouse Union, Polly Trottenberg of the Department of Transportation, and Nicole Lamb-Hale of the Department of Commerce.
Lutes told the committee that the seaports are ready to handle double the exports, but the rest of the supply chain is not. Federal leadership is needed to coordinate the infrastructure for moving freight and to help clear bottlenecks. As an example, Lutes noted that building a railroad overpass might be more important for an exporter in a distant state than for the local folks who must approve taxing themselves to pay for it.
Although the weak dollar has generated a surge in demand for U.S. exports, containers to carry those exports are in short supply, Lutz said. There are several reasons for that, he said. Since U.S. exports are typically two to three times heavier per container than imports, ships carrying exports cannot be loaded to full capacity. In addition, more imported goods move to large metropolitan areas with lots of consumers, while many exports originate in rural areas. That means the empty containers must be moved from the cities to the country.
Wyatt noted that the Columbia River is the largest wheat export center in the United States with river ports handling more than 47 percent of the wheat exported by water. If you include corn, soybeans, and barley, the region is the third largest grain export gateway in the world. He cited the failure of the federal government to fund and implement waterway projects. The project to deepen the Columbia River navigation project is due to be completed this year, he said, "21 years after it began."
Paulson said that ports tend to "fall through the cracks" when it comes to federal funding even though they generate jobs and economic benefits for both the local community and the nation. Without funding for rail and other infrastructure, port operations will be compromised, he warned.
Bishop told the subcommittee about the challenges facing ports in rural areas, such as CoosBay. Some of these ports can expand the capacity of West Coast gateways to move cargo, he said and noted that in the past few years Coos Bay has hosted visitors exploring the possibilities of a new gateway for cargo from Japan, China, Taiwan, Korea, Australia, Canada, Holland and Norway. Maersk has even considered investing in a terminal there.
Using the example of the CanadianPort of Prince Rupert, Bishop said that rail service is the "most essential" requirement for the future of rural ports.
He urged the senators to help iron out the regulatory process to ensure that all federal and state agencies "on the same page" when it comes to the permitting process for capacity expansion. Delaying the process for too long will undermine the goals of expanding exports and creating jobs, he added.
Sundet said that the ILWU strongly supports increasing U.S. exports, but added that the government needs to take steps to "reinvigorate our industrial base and create manufacturing jobs so we can export value-added products." He supported funding of such projects as the replacement of the GeraldDesmondBridge in the Port of Long Beach and improvements to the Mercer Corridor in Seattle, but he took issue with other projects.
The $30 million grant for a barge system that would connect the Port of Stockton and the Port of West Sacramento with the Port of Oakland is not a wise use of money, Sundet said, claiming that the project will "not work" in the long run. Much of the port security funding is also questionable, he added.
"How many new fences and cameras are really necessary?" he asked.
- The Cunningham Report
