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BUILDING PARTNERSHIPS TO FACILITATE FREIGHT TRANSPORTATION
Remarks of
Jeffrey N. Shane
Under Secretary for Policy
U.S. Department of Transportation
Port Industry Day
Port Authority of New York and New Jersey
October 7, 2004
It is a privilege to be part of the Port Authority of New York and New
Jersey’s fourth annual Port Industry Day. On behalf of President Bush and
Secretary Mineta, I would like to thank all of you for the important work you do
in keeping this port vibrant and in a position to respond to these constantly
changing times. Every port in our country is important, but this complex is
particularly so in light of its strategic location and role as an economic
linchpin of the northeastern United States.
The Port Authority of New York and New Jersey also serves as a model of bi-state
cooperation. That cooperation includes, of course, all of the industry
representatives here today that have been major contributors to all that this
port complex has accomplished over the years. I know that you bring a great
sense of pride and patriotism to the job every day, especially since 9/11, as
you should. It is important work that you do here, and it is wholly fitting that
we take this day to honor that work.
Transportation in a Global Economy
The stakeholders represented here today are at the forefront in serving our
Nation’s economy, which is evolving rapidly and growing more interconnected by
the day. Each day you are called upon to adapt to rapidly changing patterns in
global logistics, light-speed advances in information technology, double-digit
annual trade growth, and transformational changes in overseas markets. All these
factors have altered forever the way we do business.
Our economy relies more and more each day on seamless connections between all
modes of transportation. Port facilities, and the domestic transportation
networks that serve them, are critical elements in that system. Unfortunately,
more often than ever, they are stretched to their very limits as they deal with
steadily mounting cargo volumes, ever larger ships, and increased land side
congestion. Those of us in government with responsibility for national
transportation policy must be cognizant of your requirements and creative in our
approaches to developing increased capacity across our transportation system.
That’s because the U.S. economy has been transformed in recent years – from an
economy predicated on domestic commerce to one driven by global trade. In 1970,
overseas trade accounted for only 13 percent of U.S. GDP; today it accounts for
nearly 30 percent, and that percentage is expected to escalate further in the
years ahead. That dramatic growth in international trade has created new demands
on our ports and other parts of our national transportation system. Our domestic
system is carrying more than 15 billion tons of freight annually, valued at over
$9 trillion, and even the most conservative forecasts suggest that overall
freight volumes will grow by another 60 percent by 2020.
Here at the Nation’s third largest port, you experienced a nearly 12 percent
jump in total cargo last year compared to 2002, and it looks as though this year
will surpass all previous records. As the largest container port on the
Atlantic, you have done a first class job of wringing out ever higher levels of
productivity in an area where waterfront land for terminal expansion is in short
supply. That’s particularly important as we watch containers start to pile up at
some of our largest ports due to an early peak in this year’s cargo flows and
because of the limits on available infrastructure.
New York/New Jersey’s Model Efforts in Public-Private Cooperation
We realize, of course, that this port complex has a number of important capacity
enhancement projects already underway that will help to accommodate future
growth in cargo. You have a total of $1.5 billion in projects on the terminal
side, including an expansion of the ExpressRail Project and the Maersk Terminal;
four new post-Panamax container cranes and on-dock rail services at Howland
Hook; and IT innovations at key terminals that will improve terminal tracking
and gate flows. We know that at Maher Terminals they are using a stacked
operation to maximize through-put. They also encourage carriers to use
cooperative chassis pools, again saving precious terminal space for vital
container operations. We salute those innovations as models for other container
ports to follow.
On the inland distribution side, you are developing a system that will improve
links to other modes of transportation in important ways. I am talking about the
Port Newark Interim Rail Terminal; the Port Authority Bi-State Rail Initiative;
and E-Commerce innovations like the FIRST Project for port customers. Perhaps
most importantly, you have launched an innovative Port Inland Distribution
Network – or PIDN – an effort to develop a series of satellite corridors and
distribution hubs in order to accommodate cargo operations outside of the urban
core. The PIDN includes a prototype Short Sea Shipping Service from the port
complex here to Albany. Our Maritime Administration frequently cites the PIDN as
a particularly valuable demonstration of short sea shipping, and you are to be
commended for successfully getting that up and running.
Last, but certainly not least, the Port Authority has also worked hard to
integrate security into all its activities. As some of you know, I have been
actively involved in the Bush Administration’s Operation Safe Commerce
initiative. Along with our partners at TSA, Customs and Border Protection, and
the three major load center ports, we have been testing an array of
security-enhancing technologies. We hope that we will see results very soon that
will help us improve and standardize container security throughout the global
supply chain. Within the last few days, Basil Maher, who will follow me on the
program a bit later this morning, and other port leaders stepped forward to
announce the formation of the “Coalition for Secure Ports.” We applaud that
initiative as the right kind of leadership -- one that involved the public and
private sectors working hand-in-hand to improve both security and
productivity.
A Renewed Focus on Trade and Logistics
Before outlining some of the Administration’s ideas for how we might build on
your good work, it is important to understand the context that drives the need
for more robust transportation infrastructure and services. Global trade
liberalization has been a major pursuit of President Bush and this
Administration. Over the last three years, the Bush Administration has
negotiated a dozen new free trade agreements, opening markets for a wide range
of American exports that will engender significant economic benefits all across
the country. We have also breathed new life into the World Trade Organization’s
Doha Round of multilateral negotiations and we have pursued regional trade
agreements in places close to home like Central America.
But all that market-opening activity has produced a problem. While our
successful trade agenda will bring enormous economic benefits to consumers and
economies both here and abroad, it poses a difficult question: Are we going to
have the transportation infrastructure in place to handle the increased flow of
commerce that these agreements bring about? Embedded in that simple question, of
course, are some very difficult fiscal, environmental and technological
challenges.
Addressing these challenges in an effective way will require port stakeholder
communities and government agencies to cooperate in new ways and develop new
approaches. Secretary Mineta has insisted that we examine this question not
through a series of mode-specific proposals, but rather as a comprehensive,
intermodal freight distribution system. This is the basic principle that has
guided us in working to develop federal programs that address the challenges at
port gateways, as well as the equally important landside system. Working
together, we can keep goods moving efficiently and safely throughout an
integrated, intermodal transportation system. In that connection, I am pleased
to report that our Department has made freight and goods movement a major
priority over the last few years.
One major opportunity to enhance the efficiency of freight movements is the
reauthorization of our surface transportation programs. Last week, we marked the
first anniversary of the expiration of the Transportation Equity Act for the
21st Century – TEA-21 – which provides funding and authorization for the whole
array of federal highway, highway safety and transit programs that supported the
creation of the Interstate Highway System, among other things. That anniversary
is no cause for celebration. Because Congress was not able to pass a six year
bill, DOT now has to work within the constraints of an 8-month extension of the
old programs that will last until May 2005.
There are important innovations in the Administration’s SAFETEA proposal that we
want to see passed, and we will continue to urge Congress to adopt those changes
in a six-year bill. For example, we would focus resources on the intermodal
connections between our roads, ports, railways, and airports. We have also
proposed a number of new financing tools to better support infrastructure
investments, including making highway and freight transfer facilities eligible
for private activity bond financing for the first time, and broadening TEA-21’s
successful “TIFIA” innovative financing program. Finally, we have proposed a
requirement that each state appoint a “Freight Coordinator” to help ensure that
freight projects receive the proper measure of attention in local and regional
planning processes. Realizing the benefits of these proposals can only come with
final congressional action, however, so it is important that Congress pass a
six-year surface transportation reauthorization as soon as possible.
A Near Term Freight Action Agenda
In the meantime, rather than waiting for Congress to act, we have worked to make
sure that we leave no stone unturned. For much of the past year, DOT’s Office of
Intermodalism has coordinated an effort to take a comprehensive look at all our
modal administrations’ work in the area of freight and goods movement and to
develop integrated solutions wherever possible, especially those that can be
done within the framework of our existing authority.
The result is what we call our Freight Action Agenda. It incorporates many
recommendations from stakeholders, including the suggestion that we work hard to
identify and support nationally significant freight projects at our major
transportation gateways. To tackle such projects, the Department is creating
Intermodal Project Facilitation Teams to ensure a sustained focus on large,
complex projects of this kind while providing cross-modal expertise and
coordination.
Other items include the development of freight-focused performance measures for
our national transportation system; seminars and programs that will provide
training to public sector professionals so they better understand why efficient
freight movement is so important to the future of our economy; and finally,
encouraging adoption of new technologies in areas like positive train control to
ensure safer, more efficient rail shipments throughout the country. We will
continue our work in improving coordination among our modes on freight issues,
and appreciate the support that our stakeholders across the modes have provided
thus far.
“SEA-21”: Strengthening the Maritime Portfolio
But one very important piece of this puzzle has been missing up to now. That is
our maritime sector, which too often gets overlooked as we furiously debate
aviation or highway reauthorization bills. Secretary Mineta is changing all
that, primarily through a comprehensive program that would put the maritime
sector on the national policy agenda more prominently than ever before. Perhaps
President Bush said it best: “To compete in the global economy of the 21st
century,” he said, “the United States needs a maritime policy tailored to 21st
century needs.”
The so-called “SEA-21” review that Secretary Mineta launched earlier this year
began with a comprehensive assessment of how we could improve the way our
maritime transportation system might move commercial goods more effectively. A
number of outside groups, including the Marine Transportation System National
Advisory Committee, and the National Academies’ Marine Board, have all called
for such a review and have urged DOT to take the lead in pursuing a more robust
maritime policy. The U.S. Commission on Ocean Policy has also served up a
powerful menu of maritime policy recommendations for the Administration to
consider. Lillian Barrone, your distinguished former Port Director, served on
the Oceans Commission and her contribution was absolutely critical to ensuring
that port interests were fully addressed in the final report. Congressional
passage of the SAFETEA provisions that I mentioned earlier, of course, would go
a long way in helping to jump start what we are trying to do in the maritime
context by facilitating much improved landside links to our major ports and
inland waterways.
As it is currently envisioned, a SEA-21 package would help pave the way for a
far more competitive and efficient maritime sector and improve connections
between the various modes. As Secretary Mineta noted in a speech earlier this
year, SEA-21 will emphasize leadership and coordination within the Department of
Transportation and across the federal government. Right now we have an
Interagency Committee on the Maritime Transportation System – or ICMTS – that is
supposed to coordinate federal maritime programs across the numerous agencies
involved. Thus far, however, it typically has not had the level of
representation necessary to do so effectively. We are therefore exploring
whether we can elevate that group to create an interagency coordination
mechanism that is much more robust. We want the participating agencies to be
represented at the Deputy Secretary or Administrator level, which would ensure
that maritime issues receive the sustained, high-level attention that they
deserve.
SEA-21 will also focus on leveraging funds from federal, state and local
governments, as well as the private sector, to address the capital needs of the
Maritime Transportation System. As our superb Maritime Administrator, Captain
Bill Schubert, noted in a recent visit to one of our Great Lakes ports, “We are
committed to investing in the future of our ports to ensure the seamless flow of
commerce so that we may continue to compete in the global market.” That message
applies to all ports, large and small, each of which contributes to the
efficient operation of our nation’s maritime transportation system.
We are carefully examining the tax burdens on our maritime sector with the goal
of improving our fleets’ and crews’ ability to compete internationally. As many
of you have undoubtedly heard, two very significant changes to the tax treatment
of our maritime sector are included in the conference report adopted yesterday
in connection with the corporate tax legislation that has been moving through
the Congress. These will bear close watching as the conference report is taken
up on the House and Senate floors in the days ahead.
Finally, SEA-21 will also be about trying to facilitate greater use of “short
sea shipping.” The Port of New York and New Jersey is already working with our
Maritime Administration on this initiative, and in fact will be hosting MARAD’s
Short Sea Shipping Conference next week. Through short sea shipping we can make
better use of our coastal and inland waterways and provide some relief to our
nation’s congested highways. As part of our SEA-21 review, we are actively
promoting industry efforts to establish short sea shipping operations and
looking carefully at current federal policies that may inhibit such operations.
Only by using all available options to move freight along our most congested
corridors can we ensure that we have the capacity we need to address future
demand.
Conclusion
I referred earlier to the recently released Oceans Commission report. The
Commission recommended that we establish – in the words of a Journal of
Commerce headline last Monday -- a “clearer voice” within the federal
government on maritime policy. Without detracting in any way from the important
related missions of our sister agencies, I want to leave you with an ironclad
assurance that the U.S. Department of Transportation and its superb Maritime
Administration will indeed provide that clearer voice. The Congress clearly
charged the Department with that responsibility, and Secretary Mineta is taking
it very seriously.
Make no mistake: Freight issues have finally taken their rightful place on the
national policy agenda. Washington understands the impact of congestion on the
national economy, and it understands the importance of efficient, interconnected
transport to the way business is done today. It is not too much to say that
America’s place in the global economy of the future will be determined in large
part by the efficiency of our transportation system. We are determined to do all
we can to enhance that efficiency.
Thank you for allowing me to share these thoughts with you today. I look forward
to continued partnering with the Port of New York and the Port of New Jersey on
these important issues.
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