Tuesday, February 7, 2012

Heed Canada's Strategic, Coordinated Cargo Transportation

By Don Meyer
Port of Tacoma Commissioner and Connecting Washington Task Force Member

January 2012

Canada has its freight transportation act together, and it’s time the United States did the same if it wants to stay competitive.

Eighty percent of the American population lives east of the Mississippi River. Puget Sound ports traditionally have competed with southern California ports to reach those customers. In recent years, though, a host of new competitors have emerged in Canada, the US Gulf and East Coasts as shippers have sought alternate ways to reach the main US population centers.

Canadian port cargo volumes have surged. Port Metro Vancouver has seen its containerized cargo volumes increase by 14 percent since 2006 despite the bruising recession. The newly formed Port of Prince Rupert grew in its first three years to handle more than 300,000 20-foot equivalent (TEU) units, and it continues to add new services.

The Harbor Maintenance Tax remains a sore subject between US and Canadian ports. Discussions are likely to continue for some time over whether it’s fair for the tax to be charged on international cargo destined for US markets that come through US ports but not Canadian ports.

But one immediate lesson we can learn from Canada is the value of strategic transportation investments.

A key factor in improving their competitiveness is the massive, coordinated investment being made by the Canadian government through the Asia-Pacific Gateway and Corridor Initiative. Investments include more than $1 billion in road and rail connections that reach across western Canada and into the economic heartlands of North America. They are also taking a similar approach with the Atlantic Gateway and Corridor strategy that is currently under way.

But capacity alone does not guarantee service, so Canada is also linking infrastructure investments to performance standards that help them measure efficiencies and service expectations in the overall logistics chain. What is even more amazing is this is all being done on a collaborative basis between public and private entities.

We need something similar in the United States.

Our multimodal freight transportation system is a national asset that we have failed to appreciate and support.

In recent years, the chorus of voices calling for a “vision” for our transportation future has swelled. Nowhere is this need more pressing than in the freight system that provides for our nation’s commerce. Without strategic corridor investments to expand capacity and increase efficiency, US productivity and global competitiveness will suffer, costs will increase and investment will lag.

The benefits of freight improvements are substantial.

Sustainable goods movement lies at the center of our productivity and quality of life, not just for the availability of consumer products. Improvements to freight infrastructure can result in reduced congestion, better air quality and less wasted time and fuel. In addition, employment in the logistics sector is one of the fastest-growing sources for job creation in the US economy.

Productivity growth in freight transportation has long been a driving force for the growth of US overall productivity and contributed directly to the growth of the US GDP, according to the Bureau of Transportation Statistics.

International trade, combined with domestic growth, has created millions of new job opportunities and a higher standard of living for Americans. But these benefits will last only if we are able to keep moving our freight on a competitive basis.

A seamless system through the northern United States will be critical in our nation’s ability to implement President Barack Obama’s National Export Initiative to double exports in the next five years.

To create more jobs through more exports, the nation’s road and rail connections, and the nation’s ports, must have the capacity to handle more cargo efficiently and cost-competitively.

We must do as Canada has done, to view the system in its entirety, with coordinated investments under one overarching freight strategy.

This is not just a federal issue. State and local investments also must tie into the system.

To address state needs, Gov. Chris Gregoire recently formed the Connecting Washington Task Force. The group is charged with reviewing statewide transportation needs, recommending the most promising investment options and revenue sources to address the top priorities.

I am joined on that task force by nearly three dozen other locally elected officials, members of state legislative transportation committees, tribal members, organized labor, and trade associations and businesses.

The discussions have been painful as we wrestle with making recommendations to the 2012 Legislature because the needs are so great. Our initial list identified $50 billion in needed transportation investments throughout the state.

In difficult economic times such as these, however, we need to focus our limited resources on completing key freight corridors that spur jobs and connect people to job centers.

One regional example that fits the criteria is the completion of State Route 167 from Puyallup to the Port of Tacoma.

Despite its broad support as a priority in Pierce County for more than 20 years, SR 167 still ends abruptly in Puyallup, dumping cars and trucks onto surface streets for the last 6 miles to Interstate 5 and the Port.

Completing the highway would provide a direct link to the manufacturing and distribution centers in the Kent and Puyallup River valleys. It also would provide the “last mile” connection for agriculture products grown in eastern Washington to reach Port docks for export.

We in the shipping, agricultural, manufacturing and logistics industries all need to communicate the urgent need for – and the broad economic benefits of – transportation investments.

Let’s do it before more cargo finds a home elsewhere.

Don Meyer is a Port of Tacoma commissioner and a member of Washington State Governor Christine Gregoire’s Connecting Washington Task Force. He is also the former executive director of the Foss Waterway Development Authority and a former deputy executive director of the Port of Tacoma.