U.S. ports had some ups, some downs in 105th Congress

By Staff -- Logistics Management, 11/1/1998

The 105th Congress sent U.S. ports on a roller-coaster ride, with enough "ups" and "downs" to make any port director queasy. Overall, though, ports got more of what they wanted than they have in many a previous year.

On the up side, passage of the Transportation Equity Act for the 21st Century, better known as "TEA-21," addressed some problems in its predecessor, the Intermodal Surface Transportation Efficiency Act (ISTEA). Under that legislation, power to distribute transportation project funding was in the hands of local Metropolitan Planning Organizations, or MPOs. Ports and other freight interests charged that, because MPOs were ignorant of the economic importance of freight transportation, freight-related projects received only a fraction of the funding for which they were eligible. The new law ensures that freight interests will be heard and that they have a fair shot at getting the funding to which they are entitled, says Kurt J. Nagle, president of the American Association of Port Authorities (AAPA). AAPA's membership includes more than 140 port authorities in North America, the Caribbean, and Latin America.

The Ocean Shipping Reform Act of 1998 also was a crucial issue for ports. Port interests opposed early versions of the bill, largely because they would have eliminated the Federal Maritime Commission (FMC). By working with other members of the maritime community, including shippers, carriers, and labor unions, AAPA helped revise the legislation so that it retains the FMC and provides for what the group considers adequate regulatory oversight by that agency. The final version of the law, which was signed by President Clinton in October, also made no changes to regulations governing contracts and relations between ports and ocean carriers.

Ports applauded the Clinton administration's decision to delay sending to Congress its proposed Harbor Services User Fee, which would fund navigation-channel maintenance. That fee would replace the Harbor Maintenance Tax (HMT), which in March was ruled unconstitutional on exports by the U.S. Supreme Court. The HMT as applied to imports, meanwhile, faces a challenge by the World Trade Organization. In light of that threat, the White House had suggested a plan to replace the HMT with a tonnage-based tax. The AAPA, carriers, and others oppose that plan, which they say would place a disproportionate financial burden on ship operators. Ports would prefer no fee at all; they advocate funding such projects out of general revenues, as was the case before the HMT was implemented in 1986. Failing that, the group has said members would accept some equitable compromise that wouldn't harm their competitiveness.

The ports' biggest disappointment was Congress's failure to enact the most recent version of the Water Resources Development Act (WRDA). This legislation, which must be re-authorized every two years, authorizes funding for many federal navigation-improvement projects. According to the AAPA, passage was held up by a dispute in the House of Representatives over a flood-control project in California. "Essential navigation dredging projects for ports around the nation were held hostage by election-year politics," Nagle said at the organization's annual convention in Houston. "Congress's inability to take action on this critical bill contradicts its focus on global trade as the foundation for our strong U.S. economy."