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Tacoma/Seattle Cooperation, New Water Bill Aid U.S. Port Competitiveness, FMC Says

Monday, July 28, 2014
Sandler, Travis & Rosenberg Trade Report

An updated FMC report states that two domestic developments in 2013 should help U.S. ports compete against their Canadian and Mexican counterparts for U.S.-bound container cargo. The Commission began reporting on this issue in 2012 following requests from members of Congress to evaluate the extent to which the Harbor Maintenance Tax, other U.S. policies and other factors may incentivize the shift of such cargo from U.S. seaports to those in Canada and Mexico. This year’s report focuses on a discussion agreement between the ports of Seattle and Tacoma and the enactment of the first water resources bill in nearly seven years. It makes no mention of further developments in Canadian or Mexican ports.

The report states that on March 5 the FMC unanimously voted to effectively allow the ports of Seattle and Tacoma, which are located 30 miles apart along the Puget Sound in Washington state, to move forward on a cooperative agreement to exchange information and combine efforts to find synergies that will allow them to compete more effectively against international ports. As a consequence of their relatively small local populations, the report notes, both ports are heavily reliant on cargo bound for inland destinations and face fierce competition from other North American ports, particularly the Canadian ports of Vancouver and Prince Rupert, for that cargo. Rather than trying to divert business from each other, Seattle and Tacoma are now beginning to collaborate on issues such as container facility planning and development and the enhancement of existing or development of new regional port-related transportation infrastructure.

The report also highlights the June 10 enactment of H.R. 3080, the Water Resources Reform and Development Act of 2014, which authorizes $25 million for ports like Seattle and Tacoma to use for port infrastructure improvements and rebates to importers and shippers. The bill also reforms the Harbor Maintenance Tax Trust Fund so that the percentage of funds expended on port infrastructure projects increases from 67 percent in fiscal year 2015 to 100 percent in FY 2024.

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