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May 2015 Issue

Giving U.S. Ports the Right Toolkit
Lauren K. Brand
It is hard to overstate our nation’s reliance on ports. They enable the handling, storage and transfer of the raw materials and finished goods that enhance our quality of life and strengthen our economy. Most of our everyday essentials—from cereal and shoes to the coal that generates our electricity—pass through U.S. coastal and inland ports. In 2013 alone, more than 2 billion metric tons of domestic and international cargo moved through America’s ports, contributing trillions of dollars to the U.S. gross domestic product and billions more in state, federal and local taxes.

Ports are so crucial to the health of our nation that upgrading them is one of the best moves we can make to ensure a thriving future for America. That’s why President Barack Obama has explicitly mentioned the importance of enhancing our ports at two consecutive State of the Union addresses.

However, with each passing day, modernizing our ports becomes less of a “best practice” and more of a vital necessity. With the completion of the Panama Canal expansion nearing, a new generation of megaships is already calling at U.S. ports, requiring wider and deeper shipping channels, larger cranes, expanded cargo capacities, and many other port facility efficiency and infrastructure improvements. Renovations like these will be essential for U.S. ports to continue operating and competing in the national and global supply chains—and they don’t come cheaply.

Often, the high cost of port modernization requires a mix of private investors, commercial interests, and public seed investment. Because ports produce a blend of public and private benefits (from improved emissions to expanded business opportunities), it’s no small task to select and identify appropriate investors, yet alone define their roles and boundaries. No matter how you look at it, financing port infrastructure is a complex maze. Adding to this complexity is the fact that port equipment and facilities often last for multiple decades, if not centuries.

We at the U.S. Department of Transportation’s Maritime Administration (MARAD) have long seen this as a unique challenge—one that our nation needs its ports to overcome. That’s why MARAD’s StrongPorts Program kicked off an initiative to help U.S. port management, stakeholders, and communities identify and plan to attract the funding necessary to achieve vital port infrastructure enhancements.

As part of this initiative, StrongPorts engaged in a cooperative agreement with the American Association of Port Authorities (AAPA) and a working group of 57 industry expert volunteers representing metropolitan planning organizations, transportation logistics researchers, freight coalitions, financial and legal firms, as well as port managers and operators, consultants and engineers. This diverse group was selected to explore and address the many complexities and hurdles involved in funding port infrastructure. The result of the partnership was a specific product: a detailed, step-by-step navigational guide to help port authorities through the often overwhelming maze of financing facility and waterway improvements.

We call this product our Port Planning and Investment Toolkit, and in November of last year, MARAD released the first of three toolkit modules. Titled the “Funding Strategy Guide,” this module provides best practice guidelines, analytic tools and resources to help port authorities organize the financial structures needed to modernize and rehabilitate commercial and industrial port properties, as well as marine terminal and administrative facilities.

The Funding Strategy Guide includes: case studies that illustrate various ports’ use of successful funding strategies; specific best practices for promoting private and public sector participation; frameworks for building new business relationships between a port and local stakeholders; advisories on navigating legal and regulatory frameworks; evaluations of financial instrument soundness; guidance on applying for Transportation Investment Generating Economic Recovery, or TIGER, discretionary grants and additional sources of federal funding; information on regional private and public sources of both traditional and alternative funding; and a whole lot more.

The Funding Strategy Guide covers all the financial bases for ports—including everything from pursuing financial advisors to triggering joint venture property development—and we at MARAD are very proud to offer the guide to interested parties for free. The materials can be found right on the StrongPorts website. Even if you’re just a little bit curious, I encourage you to take a look.

As I mentioned, the Funding Strategy Guide is the first of several Port Planning and Investment Toolkit modules. In coming months, it will be joined by additional modules. The next will focus on planning cost-effective, sustainable and efficient infrastructure solutions to port challenges. The third module slated for subsequent release will zero in on the actual build/completion phase of port projects.

I’m proud to report that the Funding Strategy Guide can serve to help ports bring together the financing to realize infrastructure projects that may have otherwise been put on hold. Soon it will be in good company and working in conjunction with effective planning and completion modules, so our nation’s ports won’t have to worry about outlining the intricacies involved with strategically developing themselves for the future. They’ll have the right toolkit for the job.

To view the Funding Strategy Module, visit StrongPorts.gov/toolkit.

Lauren K. Brand is the associate administrator of the Office of Intermodal System Development at the U.S. Maritime Administration (MARAD). Previously, she was the senior director for business development at Port Canaveral, Florida. Brand has a degree in transportation from Niagara University, and, in 2000, earned a professional port manager certification from the American Association of Port Authorities.

2015:  JAN | FEB | MARCH | APRIL | MAY

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Sea Technology is read worldwide in more than 110 countries by management, engineers, scientists and technical personnel working in industry, government and educational research institutions. Readers are involved with oceanographic research, fisheries management, offshore oil and gas exploration and production, undersea defense including antisubmarine warfare, ocean mining and commercial diving.