There’s nothing the staff of WCIT loves more than a free breakfast. Ok, not entirely true. There’s nothing that the staff of WCIT loves more than a free breakfast combined with a great discussion of trade policy! And apparently dozens of people agree, because nearly sixty business and port leaders joined us last Wednesday to discuss trends in ocean shipping and the competitiveness issues facing Washington state ports.
Steve Block, attorney at Foster Pepper PLLC (who provided us with that lovely free breakfast), kicked off the morning by sharing legislative and regulatory updates on issues impacting Washington port competitiveness, such as the Harbor Maintenance Tax (HMT) and establishment of a National Freight Strategic Plan.
Then, a panel that included Don Esterbrook, COO, Port of Tacoma; Commissioner Courtney Gregoire, Port of Seattle; Luke Duvall, Director of Business Development, NW Region, OHL International; and Captain Mike Moore, Vice President, Pacific Merchant Shipping Association helped answer the question that most of you ask yourself every day: “What are the top six priorities we should focus on to improve Washington port competitiveness?” Well, lose sleep no more over this important query, because here is their answer:
1. Negotiate new free trade agreements.
All panelists agreed that trade agreements increase the volume of cargo coming into our ports and create local jobs. For example, after the U.S.-Korea Free Trade Agreement (KORUS) was implemented, the Port of Tacoma saw a 16% increase in cargo from Korea. The Trans-Pacific Partnership (TPP) in particular could considerably increase business at Washington ports.
2. Remember to increase imports to increase exports
Commissioner Gregoire reminded the audience that the more import containers that come into the port, the more export containers are available for exporters to affordably ship their goods all over the world. A busy import port can also invest more in port infrastructure such as rail access and cranes that exporters will also benefit from.
3. Develop a National Freight Strategy
Our competitor Canada has developed and is executing on a national freight strategy that enables them to make the smartest, most impactful investments in their transportation infrastructure. Canadian ports are working together to attract more business, not competing as often happens in the U.S. The United States is falling behind because we have no comparable coordinated national freight strategy.
4. Increase investment in infrastructure to ramp up productivity
Don Esterbrook pointed out that if our ports do not invest in infrastructure and technology to increase our productivity, we will certainly fall behind. In fact, many East Coast and Canadian ports are already more productive than Washington ports.
5. Create a business friendly regulatory environment
Mike Moore cited mounting regulations as the biggest challenge to Washington port competitiveness. He accused unachievable regulations like the State Environmental Policy Act (SEPA) and storm water runoff regulations of “making the business environment unpredictable and costly, and harming our competitiveness.”
6. Reform the Harbor Maintenance Tax (HMT)
Last but not least, all panelists agreed that the HMT is a top, if not the top, challenge for Washington state ports. The HMT is a tax charged on foreign cargo imported through U.S. seaports. Since there is no tax in Canada, the HMT causes shippers to choose Canadian ports instead of Washington ports and transport their cargo via rail or road into the United States. Even worse, Washington ports do not receive an equitable return on their investment since half of the HMT funds collected are not used, and the other half mostly go to dredging of East Coast ports. Fortunately, the members of the Washington Congressional delegation have been leaders on reforming HMT and introduced HMT reform legislation in both the House and the Senate.
So there you have the top six ways we can work together in Washington state to improve our port competitiveness! As always, WCIT looks forward to working with all of our members to advocate for these priorities and make Washington ports the number one choice for shippers and exporters. And please do let us know if you hear of any pro bono scones lying around…