Failure to prepare for a coming storm can lead to disaster. So can the failure of public officials to take action when an approaching crisis is at hand. We have seen proof of this in everything from the financial crisis that led to the Great Recession to the failure to adequately protect against cyberattacks.
We also can see it coming in Washington, where a lack of preparation threatens to put our public ports at a competitive disadvantage.
After leading a recent two-day fact-finding mission to the Panama Canal, I returned with an urgent warning for my fellow lawmakers: We need to get serious about making our ports more competitive. Other West Coast ports are meeting, and in some cases exceeding, the advantages of our deepwater ports. If we don’t stay cutting edge, trade and jobs will go elsewhere.
I organized this Panama Canal mission to help stakeholders and policymakers better understand how the new set of super-wide locks at the canal will impact the competitiveness of Washington ports. (I should mention all of us paid our own way and no state funds were used.)
The delegation included lawmakers, union representatives and Washington port officials. What we learned should serve as a wake-up call. Roughly $5.5 billion has been spent to more than double the canal’s capacity by dredging at both ends and adding a set of super-wide “Panamax” locks.
These new locks will accommodate vessels that are nearly 25 percent longer and more than 53 percent wider, and will allow about 25 percent more vessel draft, allowing deeper hulls. This new, improved Panama Canal is set to open June 26.
Lawmakers in Texas, Georgia and South Carolina are jumping for joy. They know the wider canal will allow much more cargo to come into the U.S. through their ports, via larger container ships that will bypass altogether smaller or more costly West Coast options.
This is not good news for Washingtonians. With about 48,000 jobs associated with the movement of cargo, we are the most trade-dependent state in the nation.
It is typically cheaper to send one large ship through the locks than to send three smaller vessels to the Pacific Northwest and pay the additional cost of rail transport to points east.
If we lose port clients to the Panama Canal widening, we will never get them back. That would cost us jobs and easy export of agricultural commodities.
And the canal widening is but one of many challenges facing our ports. Competition from cheaper gateways in Canada and an unfair federal harbor tax also present obstacles. We must meet these challenges head-on or face damaging our economy long-term.
As chair of the Senate Government Operations Committee, I have purview over ports and will hold hearings at our key ports this summer to help put a spotlight on this issue.
I will also introduce legislation to establish vesting for port projects. The courts have recently ruled that common law vesting does not apply to our ports. Without some guarantees, the cost of expensive environmental impact statements will deter development at our ports.
In addition to state action, working with others, I will continue to urge our congressional delegation to reform the federal Harbor Maintenance Tax. The $110 to $140 charge per container is harming our competitiveness. Those fees are not charged in Canada.
All U.S. ports pay this fee, which is primarily used to dredge waterways, but not all ports benefit from them. Washington ports only get back a penny for each HMT tax dollar paid to the federal government. With our deepwater ports, we are now subsidizing others.
Finally, we will continue to work with the Northwest Seaport Alliance on additional strategies for strengthening our ports’ position.
The alliance, which consists of the ports of Tacoma and Seattle and represents the third-largest container gateway in North America, recently decided to make $119 million in enhancements to the Husky Terminal on Tacoma’s Blair Waterway.
This is the kind of action we need. By as soon as 2018, these enhancements could allow Tacoma to accommodate the world’s largest container ships – the kind we need to meet the demands of the 21st century.
But this is just the beginning. If we fail to act now to make our ports more competitive, we risk falling further behind, losing thousands of jobs and sailing into a crisis that could have been avoided.
We must show support for Washington’s key ports and makes it clear that we consider them a priority. The economic future of our state is in the balance.
State Sen. Pam Roach, R-Sumner, is the chair of the Government Operations and Security Committee. Contact her at Pam.Roach@leg.wa.gov