WRRDA Leads to “Smoother Sailing” in North America

Posted by PortVision

America’s waterborne transportation infrastructure recently received a boost courtesy of the Water Resources Reform and Development Act (WRRDA), which was signed into law in early June by President Barack Obama.

Barges-Inland-River-WRRDA

The WRRDA, which was officially passed on June 10 by a bipartisan majority, will give critical funding support to the country’s harbors and inland waterways as well as to the Army Corps of Engineers for storm and flood risk management, environmental restoration initiatives and navigation improvements. Additionally, the Clean Water State Revolving Fund will also be enhanced to provide assistance for wastewater management and sustainable water management technologies at the municipal/community level.

The new legislation comes at a crucial time as the Panama Canal expands and mega ships are becoming a bigger part of the industry. It has been estimated that on a yearly basis, U.S. ports, handle over 2 billion tons of domestic, import and export cargo. Annually, the country’s top 50 ports move almost 93 percent of all U.S. waterborne commerce, while 15 ports handle most of the nation’s imports and exports, to the tune of more than $3 billion per year. Many ports have had to wait on much needed maintenance, dredging and other infrastructure activities because there hasn’t been the funding to support these vital projects.

Since 1986, ports have been funded by the Harbor Maintenance Trust Fund (HMTF), with the Harbor Maintenance Tax (HMT) has been used as revenue-building activity. The HMTF collects tax on both imports and domestic ocean cargo moving through the ports that are federally-maintained. Taxes are deposited into the Trust Fund to support ports and harbors, particularly with dredging.

However, traditionally, the division of funds among the country’s ports haven’t been aligned with their inherent capacities. Ports with smaller commercial value are still getting major funding based on a century-old system based on smaller ships that carried the majority of goods. With the advent of modern shipping and larger vessels, ports that have the potential to deal with these large ships have not had funding in place to make much-needed upgrades. Now the signing of the WRRDA means new funding allocations.

Approved projects include the Boston Harbor Dredging Project, estimated to be funded at $310 million, which will increase the Conley Terminal's capacity by nearly double its annual handling of 1.5 metric tons of cargo and deepen the port beyond its current 45 foot depth. The positive economic impact of this initiative will reportedly be about $2.7 billion according to the Army Corps of Engineers.

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The Savannah Harbor Expansion Project, which has a price tag of $706 million  (to be shared between the State of Georgia and the Army Corps of Engineers) will see the harbor dredged to 47 feet from its current 42 foot depth, while expanding the Kings Island Turning Basin and increasing the harbor’s entrance channel by up to seven miles. The Port of Savannah is also looking to double its annual throughput from 3 million to over 6 million at its Garden City Terminal while keeping its environmental footprint in check and making ready for post-Panamax vessels. More than 352,000 State jobs are supported annually by Georgia’s ports and inland barge terminals, at a contribution totalling about $18.5 billion.

The new law will also enable West Coast ports to benefit by finally being able to reap some monetary reward in the form of Harbor Maintenance Fund tax rebates. Presently, some cargoes bound for these and other U.S. ports have diverted to Canada or Mexico in order to avoid the costly tax and it is hoped the legislation will help change this.

The Great Lakes waterway system has also been identified to receive funding for dredging activities through the HMTF which will bode well for the region’s economic outlook. Not since 1997 when water levels topped a record high, have ships been able to carry cargo loads at full capacity. This has been due to ports and connecting waterways being clogged by at least 18 million cubic yards of sediment, according to the according to the Army Corps of Engineers.

In total, U.S. ports account for almost one-third of the nation’s Gross Domestic Product, generating $200 billion in local, state and federal tax revenues and about 30 million direct and indirect jobs. Optimism is returning to the maritime community with the passing of the WRRDA, which should translate into smoother sailing for America’s waterborne trade.

PortVision has been focused on “smoother sailing” since 2007, providing vessel tracking tools, technology, data, and systems to improve efficiency and safety across the industry.  Our AIS data network includes both satellite AIS and terrestrial sources, resulting in over 50 million ship position reports processed daily.  You can learn more at www.portvision.com .
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Posted on Feb 17, 2015, 1:24:00 PM

Topics: Blog