"Here comes our stuff... but how it gets to the dock and beyond should concern Californians"
By Jock O'Connell
(This op-ed was published in the Forum section of the Sacramento Bee on Sunday, December 4, 2011. To read the artice on the paper's website, go to: http://www.sacbee.com/2011/12/04/4096359/here-comes-our-stuff-but-how-it.html.)
As we Californians all know, the shelves at our department stores are restocked nightly with merchandise handmade by unseen elves. Our factories are similarly supplied with raw materials and components conjured up by leprechauns, the gasoline sold at the corner filling station is divined by wizards from underground springs, and fresh produce is grown on grocery store roofs by a Green Giant who, if not jolly, at least seems quite pleased with himself.
Admittedly, the statements in the first paragraph are mostly untrue. Aunt Philomena long ago admonished me to never dispute the existence of leprechauns.
But how else but a belief in magic would explain why we Californians have been so relentlessly cavalier these past few decades about maintaining a transportation infrastructure that, in many other parts of the worlds, would be treated as an absolutely essential force in fueling economic prosperity?
To be sure, the economic and social importance of our roads, highways, bridges, airports, seaports, border crossings and public transit systems has hardly escaped official notice. The problem has been a lack of consistency over the years in applying appropriate remedies, in part because of a paucity of dedicated funding sources for transportation projects and in part because of the near veto power exercised by militantly anti-transportation constituencies throughout much of the state.
The consequences are evident, as an October report from the California Transportation Commission observed: “The future of the state’s economy and our quality of life depend on a transportation system that is safe and reliable, and which moves people and goods efficiently.”
It then warned: “Today, California’s transportation system is in jeopardy.”
No hyperbole there. Tertiary roads in rural France are in better shape than long stretches of our major thoroughfares; public transit is apparently something the world’s eighth largest economy cannot afford, and the amount of time required to bring on-line new freight-handling facilities can be measured in decades rather than years. Even projects intended to ease traffic congestion and reduce air pollution such as the proposed Southern California Intermodal Gateway at the Port of Los Angeles are being stymied by a state that seems intent on running out the clock on prosperity.
Let’s take a closer look at how neglect is affecting one key element of our transportation infrastructure that directly affects our prosperity: the seaports, which link California with the global economy and which provide well-compensated blue-collar employment for tens of thousands of California workers.
With exporting now a national economic priority, the condition of our seaports and the connective tissue of road and rail systems serving them becomes all the more critical. That’s because, apart from our trade with neighboring Canada and Mexico, most of America’s merchandise trade – more than 66 percent by value and 99 percent by weight -- moves by ship.
Until 25 years ago, East Coast ports handled the majority of America’s maritime trade. But with the rise of Asian-Pacific economies and especially with the emergence of China as a low-cost manufacturing center, the balance shifted decisively to the West Coast and particularly to California’s three big container ports -- the ports of Los Angeles and Long Beach in Southern California and the Port of Oakland.
The growth in trade through these ports has been nothing short of astonishing. In the decade prior to 2007, when the global recession started to roil world trade, the number of metal shipping containers moving between the United States and China trade rose six-fold. For the most part, the burden of coping with that surge in trade fell on California ports and the highways and railroads connecting those ports with the rest of the country.
That volume of trade entails upsides as well as downsides.
The California Marine and Intermodal Transportation System Advisory Council calculates that the state’s seaports account for approximately 500,000 jobs statewide and an estimated $7 billion in state and local tax revenues. The council also estimates that at least another 2 million jobs nationwide are tied to the operations of California’s seaports.
While the economic value of logistics jobs in transportation and warehousing is sometimes exaggerated, maritime trade has traditionally been among the more egalitarian sources of employment paying middle-class wages and benefits to tens of thousands of California workers lacking the education or skills needed in the more high-tech and financially rewarding sectors of our economy.
But like most large industrial enterprises, seaports do not necessarily make for the best of neighbors. Transporting all those containers can be dirty work, although certainly much less now than in the past. Until recently, steamships calling at our seaports burned notoriously noxious bunker fuel. The fleets of trucks used to ferry containers to and from the ports spewed particulate matter as did the railroad locomotives that drove the trains connecting the ports with markets throughout the country.
Reducing air pollution associated with port operations has been a costly endeavor, often involving the development and implementation of new, expensive technologies. For example, supplying electrical power to ships at berth allows them to shut down their diesel engines and emissions. But “shore-powering,” as the practice is known, is a complex and expensive solution.
While their operations are heavily regulated by the state, the ports receive very little state assistance. Instead, California’s ports are largely self-financed public-private partnerships whose revenues come from rents and fees charged those using the ports.
The costs of doing business in California and of complying with “California-only” air quality regulations make it more expensive to move shipments through the state’s seaports. This, understandably, involves a delicate balance.
There are decided logistical advantages to routing goods through the state’s seaports. But if shippers deem the costs excessive, they could divert containers to other West Coast ports or, once an expanded Panama Canal opens in 2014, to ports along the Gulf Coast and Eastern Seaboard.
California’s ports have made considerable strides in recent years in reducing the adverse consequences of moving huge volumes of trade. Yet, any significant diversion of cargo, for whatever the reason, will ironically deprive California’s ports of revenue needed to continue to finance even cleaner operations.
The future of California’s seaports is not simply a matter of spending money on needed infrastructure. There is, as well, the more fundamental question of whether California’s political leadership is really serious about vying for the world’s business.
At a time when the public officials in other coastal states are aggressively soliciting trade and seeking ways of expanding their port facilities, only the least powerful of our statewide leaders, Lt. Gov. Gavin Newsom, has been a conspicuous advocate of international trade. Even though some of his specific proposals – most notably the re-opening of state trade offices abroad -- may merit the lack of attention he has been getting from Gov. Jerry Brown, he at least has been making the case that a growing international trade is vitally important to California’s future.
As for the fellow at the top, there is no excusing the fact that, now in the 11th month of the Brown administration, we still have no secretary to run the Business, Transportation and Housing Agency, the California Department of Transportation is being led by an interim director, and the debate over transportation policy initiatives at the state capitol remains stuck on the topic of high-speed passenger rail.
At minimum, the governor should be setting the tone for the Legislature and for policymakers within his administration by emphasizing how absolutely crucial international trade is to this state’s economy, how vital the role played by the ports is, and how imperative it is to facilitate the smooth, efficient and safe flow of goods on our major highway and railway corridors and along our inland waterways
More specifically, the governor should be lobbying federal officials on a broad range of pro-trade issues, from making it easier for business people, students and scientists to obtain visas, to easing the often Kafkaesque restrictions on technology exports, to releasing hundreds of millions of dollars in port improvement monies that now sit largely sequestered in the Harbor Maintenance Tax (HMT) trust fund.
Every year, California’s port users pay more than $400 million in fees into a federal fund with assurances that the money will be available to finance channel operations and other navigational improvements necessary to keep the ports functioning efficiently. Yet, even though California’s ports account for nearly a third of the HMT revenues collected nationally, our ports have lately been receiving only a small fraction of the funds being dispersed.
While state lawmakers squabble over the need for a shiny new bullet train linking California’s major metropolitan areas, it would be nice if they were to spare a few moments to focus on the more mundane, here-and-now imperatives of safely and economically transporting goods -- whether they be imported consumer products or agricultural exports from the Central Valley -- throughout a state whose economic prospects are inextricably linked to its ports.
After all, you can’t very well expect to run the world’s eighth largest economy by forever entrusting the movement of goods to an odd assortment of elves, wizards, and giants – not to mention Aunt Philomena’s leprechauns.