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Ports and Harbors – Transitions and Challenges

Ms. Doris J. BautchCommissioner, U.S. Section of PIANC

U.S. Maritime Administration

Presented at the Organization of American States

Inter-American Committee on Ports

Houston, Texas

December 7, 2005

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Overview of U.S. Ports

Most are landlord ports operated by State, County or Local Governments

Mixed GoalsVery capital intensive, but may not be

profitableInclude domestic and international trafficIntensely Competitive

3Port Capital Expenditures by Type – Share of Total Capital Expenditures

0

10

20

30

40

50

General Cargo SpecilizedGeneral Cargo

Infrastructure Dredging Other

Percent

1992-2001 2002-2006

Source – Marad Port Financial Survey - 2003

4U.S. Maritime Infrastructure Conditions and Concerns -

25,000 miles of waterway and harbor channels handle 2.4 billion tons of cargo vital to economy

Maintenance backlog increased to nearly $700 million under FY 2005 Budget

Lock Construction Projects underway to meet these needs have been delayed by 5-10 years due to funding shortfall

Harbor improvements are needed to handle new larger vessels

Billions of dollars in economic benefits of projects foregone due to delays in construction of harbor and waterways

5Evaluating Ports and Economic Development

We agree:Ports contribute to local, regional, and national

economic well beingPorts are expensive to construct and operate but

require corresponding investment by others

Are we adequately valuating the asset?Public Utility?Business Incubator?Convention Center?

6Ports are now Components of Global Supply Chains

Historically, limited inland transportation options defined a port hinterland – “local or captured cargo”

Today, transportation decisions are geographically “blind”.  

Extended hinterlands have allowed “investment corridors” development of economies of scale, resulting in lower transportation costs

Ports are part of system – not single nodeWhat correlation exists between a port’s success

and other external actors? How do port’s handle growth?

7Port Activities – Part of Larger Chain

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Challenges to U.S. Ports

Channel and Navigation AccessLandside AccessUrbanization

9What Metrics Best Present the Need to Improve the System?

Inventory Functions Engineering Operational Reliability Economical and Financial Safety and Security Non Navigational Users

10What is the U.S. Maritime Industry Doing?

PromotionCabinet Level MTSNew Maritime Studies

from interested GroupsPromoting Inland

Water systems

PlanningShort Sea ShippingAsset Management

StrategiesExtending Terminals

by using off-site terminals

Corps NETS ProgramTerminal ProductivityGreenfield/Brownfields