Export Transportation
...” and Intergovernmental
...” Public Policy
lary 1985




NOTE:
The Cover photo is provided Courtesy of
the Port of Long Beach. -
This report is an analysis of key issues
associated with intermodal port develop-
ment. Part of its content includes policy
and other recommendations based on this
researcher's perception of the issues in-
volved. Recognizing that there may be many
alternative approaches to resolving trans-
portation problems, these positions may not
necessarily represent those of the U.S.
GOVernment. As such, no endorsement of these
COnclusions or recommendations is either
expressed Or implied by the U.S. Department
Of Transportation.
DOT-|-86-13 - ºw
Export Transportation Fitz
and Intergovernmental
Public Policy
i
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#31
14
º
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: A
tº a
Final Report
February 1985
Prepared by
Peter L. Shaw, Linda Brandt, Gerald LeOnard,
John Matzer, Elbert Segelhorst,
Elizabeth, Lefson, and Jon Tilley
Institute for Transportation Policy and Planning
Bureau of GOvernmental Research and Services
Graduate Center for Public Policy
and Administration
California State University
Long Beach, California 90840
Prepared for
University Research Program
Office of the Secretary of Transportation
U.S. Department of Transportation
Washington, D.C. 20590
Distributed in Cooperation with
Technology Sharing Program
Office of the Secretary of Transportation
Q
Tarrºr:tion
Research issiºgi
§ Sº sº; tº #: , ; ; , ; sº: '. ºf s'. § 3 ;
§§§§§§§ &#: ##### & @
:*, *.*.***
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EXECUTIVE SUMMARY
AND
CONCLUSION
Traditionally a successful exporter, the nation now has a Complex trade
problem. The l984 trade detlcit was $123.3 billion and may reach $150 billion in
1985. When related to gross national product the lmbalance Cost two percentage
points in real growth and 2.5 million jobs in 1984.
To help call attention to the Sltuation, the Presldent's l983 State of the
Union Message addressed the lnterrelationship of lnternational trade, exports and
jobs. His interest has stimulated public discussion of the dilemma.
According to many observers, several possible reasons may account for the
change in our trade balances: general productivity of the economy, basic Competi-
tiveness ln world trade, need for "relindustrialization" and high value of the
dollar. With lower value of the dollar, temporary trade imbalances should begin
to self Correct. But Our transport system may also be adding to the difficulty
of exporting. It may not be operating in the most economic, efficient and
effective way for exports.
The purpose of this study is to focus On the domestic transport Component
of the export process. American transportation modal systems (highway, rail,
pipeline and water) play an important individual and collective role ln the
export transportation process. They, as industries, are in positions of both
leadership and Support for export transportatlon. By leadership, they are
attempting to take an active role in encouraging exports and presenting workable
packages. The Support role has been always a function of their activities;
mainly within the normal domestic transport operation without special attention
necessarily upon the export process. A key leadership role here has been dis-
played by the American port industry in laentifying opportunities, bringing
foreign and domestic participants together, assembling packages, arranging
flnancing, and implementing projects to make large scale export activities
possible. For the most part this is a new and significant role for the port
lndustry and is now being expanded by the larger domestic transport Companies.
Aside from the lmmediate urgency of the growing trade imbalance and the
lmpact of declining exports upon employment, there are long-term factors with
potentlally large limplications. The United States is in an excellent position or
will be by the year 2000 to provide much of what the world needs for basic life
support, raw resources, Commodities, goods and services. The more likely Candi-
dates include Coal and agricultural products such as grain cargo carried by
container freight rather than break bulk will be increasing as well. There is
concern that by the year 2000, as the demand tor our output increases, the trans-
portation system may be at points of maximum operation and thus require signifl-
cantly expanded or new facillties and services. Should this be the case, they may
well encounter the intergovernmental public pollcy system. Whatever is
necessary operationally to Change or bulld will in many locations come linto
contact with the federal, state and local laws, rules, regulations and pollcies
governing domestlc activities. This intergovernmental policy framework might
offer Some impediments or bottlenecks, whlch Could become absolute stoppages or
barriers to the export transport process in key ways.
ii
& Hº ; ;&
Iºla |
To consider these questions, this study reviewed long-term alſº
lmplications of the intergovernmental pollcy tramework for export transportation.
It examined the general export transportation process, American port facilities,
role of ports and trade, intergovernmental pollcy framework, deregulation and
Selected port experiences.
Research methodology employed extensive literature Search of a vast
body of information, Collection of material by mall and phone requests, and field
interviews and Case Studies. The work was guided by an advisory committee
composed of representatives from the U.S. Advisory Commission on Intergover-
nmental Relations, Department of Transportation, American Association of Port
Authorities, National Council of Physical Distribution Management, Ports of Long
Beach and Los Angeles, Southern California Association of Governments, Los
Angeles County Transportation Commission, Southern Pacific Railroad and Security
Pacific Bank. Products included two interlm reports, a workshop on " Exports,
Transportation and Private/Public Cooperation," and workshop proceedings.
The existing American intergovernmental public pollcy System was developed
on a piecemeal basis without real consideration of transportation, exports or
ports. Such lncremental evolution resulted in a rich mosaic of structures,
practices, traditions and experiences, often enunicated in the form of public
pollcy laws, rules and regulations. In the same regard, governmental levels have
different interests and purposes for their own public pollcy. Transportation -
related intergovernmental policy of general concern and sometimes a specific
difficulty include the environmental area (air, water, wildlife, dredging, dredg-
ing waste, noise), highway vehlcle weight and size limitatlons, permits and
llcensing, State utllity Commission permitting and licensing, Coastal zone Con-
trols, local regional, County and City land use and zoning Controls, Safety and
hazardous Cargo policies, tax policies for international business, motor Carrier
and railroad deregulation, and questions of eminent domain as in new transport
technology development and lmplementation (Slurry pipelines). For example,
federal influence uses direct orders, cross cutting requirements, Crossover
Sanctions, and partial preemptions. Some port facility projects worked with
Over 70 federal, state, and local reviews and permits. Dredging may require 23
to 25 years from project conception to completion. These experiences are not
unløue.
The current economic resurgence should provide lincentive to plan ahead and
decide Some key strategy issues. Although export transportation problems are not
yet at the intensity experienced in l979-80, they may recur for Coal or grain
transport. The American economy has undergone severe stress and is faced with
increasing strong foreign competition. At the same time heavy industry is expe-
riencing "reindustrialzation," causing uncertainty about what it will produce and
export. The "smokestack" areas of the nation, the Northeast and Midwest, have
lower export volume. To the extent these areas, no longer produce export Cargo,
their supporting transportation and port infrastructure will be impacted. This
ls Something to Consider for long-term strategy policy planning at the highest
levels as the nation readjusts itself internally. All infrastructure locatlon
and investments may be affected by these shifts. On the other hand, such stress
external to the port industry provides new opportunities and some pitfalls
regarding actual Cargo Carried, routing and the governmental regulation process.
For the time being lower levels of activity compared to the l970's provide an
opportunity to address the future and plan for it more thoroughly, antloipating
what might occur and how to prepare for it. An illustratlon may be in the case
Of increasing agricultural and Coal exports. If new facilities are desirable (or
iii
certainly expanded Services), programs Could be arranged now, designed, publicly
discussed, reviewed and approved tor all permiting and licensing. They Could
then be ready to go as the operations pick up again. Some port Officials though
fear, that even lit this were the case, polltical affairs in local areas may
switch and reverse prior approvals.
For the American transport system to be as supportive as possible for the
export process, certain strategic policy issues need to be addressed in the
coming years. Management of the port facilities, the role of labor, the intro-
duction of new technology both on and off shore, Costing and productivity must
all be monitored carefully and Coordinated. It volume attalns high levels, it
may be more prudent to Shlft cargo to less densely populated urban areas or rural
coastal locations, where smaller but speciallzed facilities can be Constructed
quickly and Cheaply. Should this happen, it would be a major relocation of port
facilltles Outside Our urban areas. There are SOme indicatlons that SOme ports
might consider joint activities to develop facilities in less Congested rural
locations. Two factors in this rearrangement are the Cost of renovating and
improving existing facilities, and incentlve provided by large railroad Company
operations with more flexible export cargo routing and Costing. At the same time
ports are facing financial stress. Compared to general Service local and State
governments, they appear to be making a lot of money. Even though they need to
preserve and protect their earnings for Capital development and operations,
financially hard-pressed unlts of government see them as potentlal Candidates for
borrowing of funds or Outright Sharing of earnings. In effect, politicallzation
of port actlvities is a serious Concern. -
It is possible that ports may become in some cases more like transportation
company conglomerates, who would view the port operation as a profit Center and
invest earnings for greatest return. If this did happen, then we milght start
seeing some ports in dense urban areas slowly but surely leaving the port busi-
ness and transferring into other money making operations. Existlng urban port
land Could then be converted to higher value utilization for residentlal develop-
ment on the waterfront, Commerlcal and entertainment complexes.
Lastly, the intergovernmental policy System has great capability to cause
Consternation and difficulty. Its very Complexity, number of actors and levels,
Cross-Cutting horizontal and vertical relationships, all may add up to a morass
hindering timely response by ports to export. On the other hand, the System is
designed for non-export transportation purposes. It serves general urban life
goals and objectives. Thus the System may be indirectly telling the port industry
that, at SOme point, port activity is no longer as valued an economic activity for
its regional areas. It will be allowed to reach full, existlng capacity
incrementally; not allowing major new facility operations and cargo flows through
dense urban areas. If that OCCurs, such indirect sequencing is a result of free
marketplace Calculations about Cost and transport activities. In the long-term
Cargo flows would be redirected to more rural locations where, theoretloally,
transport Operation is easier to Conduct. Whether present or future activities the
intergovernmental pollcy tramework has potentlal to say "No" in a non-coordinated
way, but little Capability to say "Yes" in a coordinated way. This crucial
distinctlon LS important to keep in mind and must be dealt with. It coal 1s signi-
floantly expanded, then any of the COmmunities in many states along the way may
reject the development of Coal transport activities through existing rallroad (or
other modes) rights-of-way. Just the example of the street crossing sltuation may
be enough for local governments to politely suggest that the national interest
would be served best elsewhere. -
iv.
The export transportation industry has developed by independent actions a
collection of strategies that are beginning to show significant signs of improv-
ing the system. Most of the ideas and new programs are generated by the private
sector (carriers, Shlppers) and some by public agencies (ports, local, state and
federal). Over ninety have been identifled. Facillties and Services include;
goals and value Statements, planning task forces/associations, design and engi-
neering, finance, taxes/fees, and Operations. Regulations include: rallroads,
motorcarriers, Shipping, pipelines, export impact statement, cost benefit
analysis, fast tracking, and regulatory relief. Exports include: representation
asSlstance, promotion, financial/tax, and COOrdination.
CONCLUSION
The export transportation system is an important, but still subsidiary,
Component of the domestic transportation framework. Rail and motor carrier de-
regulation has added Competitive vigor to the whole system. Shipping and regu-
latory changes are now Opening more Competitive possibilities. As the federal
government reduces regulatory activity, private and public roles and relation-
ships begin to adjust, data Collection functions are ellmlnated, Coordination is
less evident, and policy vacuums are created. Long-term transportation system
Considerations are guided more by immediate and near-term marketplace forces.
Before deregulation, no part of government clearly addressed how the
Complex intergovernmental policy system affected the export transportation func-
tion. Now, more than ever, it is necessary to encourage public attention and
discussion on this matter. An excellent opportunity ls presented for private and
public institutions at the national, state regional and local levels to assume
this role, individually or cooperatively, while the system is relatlvely
"unstressed" and prior to a crisis-response cycle of problem and solution.
What functions might best help to encourage more public attentlon and
discussion of a subject that has no organized support group and Constituency,
yet affects so much of the national economy, employment, Corporate and government
revenues, and quality of life?
There may be three levels of basic activities:
Level I - Informational Communication Activities:
l. data Collection
2. discussion and briefing Sessions
3. Conferences
4. training
5. educational programs for technical groups, private and
public decision makers, Citizens
Level II - Advocacy Communication Activities:
- l. position Statements
2. lobbying
3. Service on advisory commlttees
4. public Statements and media messages
5. press releases
Level III – Decision Making Powers:
l. program and/or Office funding
2. program and/or office staffing
program regulatlons, pollcies, rules, procedures
voluntary agreements and programs by Concerned parties
collective agreements by concerned parties
legislative power from Congress, state or County/city
Jurisdictions
identltication of transportation Corridors for export
(e.g., as with Dept. of Defense Strategic rail Corridors,
or Surface Transportation Assistance Act of l982 require
ment to identify special large truck Interstate routes.
:
.
7.
A variety of private organizations could accomplish these candidate func-
tions. In the private Sector, it could be accomplished by local chambers of
commerce, trade associations, industrial groupings, export associations, COOpe-
ration with nonprofit research and university groups. At the regional, State and
national levels, similar types of Organizatlonal mechanisms may be established
for increasing awareness and discussion of export transportation.
In the public sector, starting with local government, a somewhat simillar
network potentially exists among the governments at the City, County, Special
districts, and regional levels. For example, some areas of the nation have
active "district export councils" based on the U. S. Department of Commerce's
trade program forums. At the state and federal levels, Simllar Ottlee functions
exist and may become useful in these activities. -
Identification of candidate levels of activity and implementing organiza-
tions is designed to be "menu-driven." By this, it is meant that all of these are
potential, voluntary activities. They may be accomplished by marketplace,
private Sector forces as need occurs. Depending upon the intensity of the export
transportation problem, a mixture of the approaches could be considered for
longer-term Situations. For example, lt the backup of export transportation cargo
occurs in the rail or highway system in key points of the country, local areas
Could try to organize and handle the response themselves. In tact, this did occur
and did not require a strong state and federal lnvolvement, except in monito-
ring. In the case of Hampton Roads and Baltimore and coal export, the queuing
and vessel permit systems lessened severity of the situation. The Port of
Seattle has been active in helping to Consolidate export shipments to Secure lower
"through rates" for shippers or manufacturers. Portland has organized the
Columbia and Snake River System. Houston linked closely with railroads on grain
backlogs. New Orleans provides leadership for the Mississippi System. Charleston
is opening inland Consolidation facillties and providing real time shipment
monitoring systems. Miaml is developing the gateway Concept for Latin American
trade. In Southern California, regional government in Cooperation with many local
public and private agencies, including the ports, has identifled rall trelght
Corridors for export transportation. The Port of Long Beach and Port of Los
Angeles are jointly developing an intermodal Contalner facillty, and a master plan
for the year 2020. These illustrate local voluntary action and how they may come
into play.
If things become far more intense and voluntary local private and public
cooperation did not respond adequately, then a stronger governmental role should
be considered and initiated after a sufficient period for a natural local solu-
tion to develop. *
vi
In an extremely competitive world of linternational trade, every little
advantage yielded by our transportation system to facilitate exports can only help
the nation's economic healthiness and position in trade. This Coordination is
necessary. It appears now that we have none to minimal Coordination, thus
in the late 1970's and early lo&0's, there was an intense export boom almost
demanding it. When export pressure grows again to maximize the system tor the
long term, we may well wish for more advance planning and Coordination by the
private and public Sectors.
What must be decided by the marketplace and the intergovernmental pollcy
System is, what priorities should the export transportation system have to make
our exports as competitive as possible? These types of pollcy issues and ques
tions must be discussed and resolved. This research study sees a growing need
for some kind of Coordination to be encouraged and accomplished. Whetner it is a
result of free market forces alone or with governmental encouragement, the results
hopefully will be the same and etfective support would occur. The visibility of
Centrallzed functions and informational Campaigns, statutory and program Coordina-
tion and implementation will facilitate a useful statement of the broad game rules
for export transporta tion priority. Such steps as the Export Trading Company Act
and discussion of dredging legislation are a good beginning to redirect attentlon
and to develop integrated pollcy and programs.
The intergovernmental pollcy of the nation as it stands now ls not to treat
export transportation as a total pollcy package. Such intergovernmental freedom
and independence may be scrutinized more and more if the balance of trade detlcit
Continues to grow. A clear decision between local and national interest might
have to be made. A potentially useful approach to initiate discussion is
establishment of a pollcy agenda to Consider future export transportation strategy
Optlons and decisions.
vii
ACKNOWLEDGEMENTS
For the combined export transportation system of the nation, the period of
l98l-l984 was a stimulating time, full of challenge, opportunity, and
uncertainty. This research effort documents that era and Otters data, observa-
tlons, analysis and suggestions based upon Cooperation and support from many
agencies, Corporations and individuals dedicated to improving our export trans-
portation System.
The Project Advisory Committee helped retine these thoughts and we are most
appreciative: Port of Long Beach, Leland Hill, Director, Port Planning; Port of
Los Angeles, Art Goodwin, Project Manager; Los Angeles County Transportation
Commission, Dr. Joseph Leach, Director , Policy; Security Pacific National Bank,
Gladys Moreau, Vlce President; Southern California Association of Governments,
Renee Simon, Deputy Director, Transportation; Southern Pacific Railroad, Lila Cox,
Attorney; Southern California Automobile Club, Richard Mills, Chalr, Port Trans-
portation Task Force; Bergen Brunswig, Corp., Dr. Bernard Hale, Vice President,
Transportation and former President, National Council of Physical Distribution
Management; U.S. Congress Surface Transportation Subcommittee, Paul Schlesinger,
Staff; Advisory Commission on Intergovernmental Relations, Carl Stenberg, former
ASSlStant Director; AmeriCan ASSOCiation Of POrt Authorities, J.ROn Brinson,
Executlve Director, and Rex Sherman, Director, Research. Other invaluable
asslstance came from: members of the National Academy of Sciences/Transportation
Research Board Committees on State Role in Waterborne Transportation, Inland
Waterways, and Intergovernmental Policies; American Association of Rallroads;
American Trucking ASSOCiation; and the executive directors and senior management
of the ports of Baltimore, Charleston, Hampton Roads, Miami, Houston, New Orleans,
Long Beach, Los Angeles, Portland, and Seattle.
Many officials in the United States Department of Transportation provided
lmportant Counsel. Principal among them were our project manager, James Carman,
Manager, Port Operations Program, Office of Port and Intermodal Development,
Maritime Administration; William Brown, Director, Ottlee of University Research,
Office of the Secretary and Norm Paulhus, Program Manager, Office of Tehnology
Sharing; and former DOT executives, John Norrls, Ottlee of Facilitation and Dr.
Lloyd Money, Office of Unlversity Research. Individually and collectively, they
helped frame the project and guide its development to meet program and
procedural guldelines and goals.
Within the UniverSlty key elements of Support were provided by the Office
of University Research, the Unlversity Foundation and the Graduate Center for
Public Pollcy and Administration.
The Workshop on Exports, Transportation and Private-Public Cooperation was
a joint effort of the Graduate Center for Public Policy and Administration, the
California State World Trade Commission, Export Managers Association of
California, Los Angeles Area Chamber of Commerce, Los Angeles International Trade
Development Corporation, Southern California Association of Governments and
Southern Calltornia Transportation Action Committee.
General management of the entire project was the responsibility of Peter
L. Shaw. Over the Course of the Study, Colleagues involved included Linda
Brandt, Gerald Leonard, John Matzer, Elbert Segelhorst, Elizabeth Letson and
Viii
Jonathan Tilley (Port Transportation Fellows), and student assistants Pamela
Bausman, Valerie Bremser, Lian Wang. This final report was prepared by Peter Shaw
with the excellent staff assistance of Elizabeth Letson (who prepared Chapter II)
and Lori Copley, project support and word processing, and Janice Drake, word
processing. Elbert Segelhorst prepared a working paper On port and shipping Cost
Considerations. All of them made the three reports, workshop and proceedings
pOSSible.
ix
TABLE OF CONTENTS
Te Chni Cal Report Do Cum ent a ti on . . . . . . . . . . . . . . . . . . . . . . . . . i
Executive Summar Y . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i i
Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Vi i i
List of Tables, Figures, Maps . . . . . . . . . . . . . . . . . . . . . . . . . . xii
Chapter I - - INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Study Purpose - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Research Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Research Paradigm Shift . . . . . . . . . . . . . . . . . . . . . . . . . . .
Research Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Research Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F in a l Report For m at . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
End not e s - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
PART I – SYSTEM DEVELOPMENT
7
Chapter II -- UNITED STATES EXPORT POSITION.............
Introduction - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Significance © C C C C C C C C C C C e O e o O C C C C C C C C C C C C C C C C C C,
Historical Trade Relationships . . . . . . . . . . . . . . . . . . . . .
Export Profiles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . l 0
Long-Term Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Forecast - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 21
Con Clusion - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 23
Endnotes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Chapter III -- U. S. PORT FACILITIES . . . . . . . . . . . . . . . . . . . . 30
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Port Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Port Structures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32
Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Endnotes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
:
PART II — — INTERGOVERNMENTAL POLICY SYSTEM OPERATION.
AND CHALLENGES 38
Chapter IV -- INTERGOVERNMENTAL PUBLIC POLICY SYSTEM 38
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Development of Intergovernmental System . . . . . . . . . . 38
Participant in the Intergovernmental Policy System 40
Policy Mechanisms to Influence Activity . . . . . . . . . . 40
Export Transportation-Related Policy. . . . . . . . . . . . . . 46
System Contact and Interaction . . . . . . . . . . . . . . . . . . . 52
Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Endnotes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Chapter V -- TRANSPORTATION REGULATION ... . . . . . . . . . . . . . 67
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Regulatory System . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 /
Regulatory Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Motor Carrier System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Railroad Carrier System . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Ocean Carrier System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
Endnotes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
Chapter VI ºne tº EXPO RT SEA PORTS © C C C C C C C C C C C C C C C C C C C C C C Q @ l U 0
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
Atlantic Coast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . lub
Baltimore • - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 100
Charleston . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
Hampton Roads . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . l 04
Miami . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
Gulf Coast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
Houston . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
New Orleans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
Pacific Coast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . l U9
Long Beach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
Los Angeles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
Portland - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - ll 4
Seattle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
Con Clusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ll 6
Endnotes - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - . . . . . . . . . . 116
Chapter VII -- DREDGING POLICY ll 7
PART
In troduct i on . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ll 7
Importance of Dredging . . . . . . . . . . . . . . . . . . . . . . . . . . . ll 7
Dredging Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
Financing of Dredging . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
Alternatives to Dredging . . . . . . . . . . . . . . . . . . . . . . . . . l 30
Conclusion - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - . . . . . . . . . 136
Endnotes - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - la /
III —— LONG-TERM IMPLICATIONS l39
Chapter VIII – EXPORT TRANSPORTATION STRATEGIC POLICY
ISSUES l39
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . l 39
Structural Shift - - - - - - - - - - - - - - - - - - - - - - - - . . . . . . . . . 139
New Opportunities and Pitfalls . . . . . . . . . . . . . . . . . . . 144
Strategic Policy Issues . . . . . . . . . . . . . . . . . . . . . . . . . . l 45
Conclusion - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 151
Endnotes - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 15l
Chapter IX – EXPORT TRANSPORTATION STRATEGIES lb 3
Introduction - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 153
Strategy Framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153
Facilities and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . 154
Regulations - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - lb 4
Exports - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - l 66
Conclusion - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 168
Endnotes - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 169
App en di x e Q e o e º O C C C C C C C C C C C C C C C C C C C C C C C C C , C C C C C C C C C C C C C e O l / 2
Chapte
United
Figure
Figure
Figure
Figure
Figure
Table
Table
Chapte
r II
LIST OF TABLES,
States Export Position
II-l
II-2
II–3
II - 4
II-5
II-l
II - 2
r III
U. S.
Internati Onal ECOn Omi C Perf Orman Ce
FIGURES
U. S. Agricultural Export Markets,
1967–71 and I 977–81
U. S. Merchandise Exports,
U. S. Manufactured Exports,
Rising Dollar,
l 967
L 96.7
Falling Exports
and l 981
and l 981
Current International Trade POS it iOn Of the
United States
Industrial COuntries:
1967 – 85
U. S. Port Facilities
Table
Table
Table
Table
Table
Chapte
III-l
III-2
III-3
III-4
III – 5
r IV
Export and Import Volumes,
U. S. Seaport Terminal Facilities by Region . . . . .
Commercially Navigable Waterways of the
Unlted States by Lengths and Depths . . . . . . . . . . . .
Type of U. S. Port Authorities by Region
Total Foreign Waterborne Commerce - Leading
United States Seaports
Foreign Export Waterborne Commerce - Leading
United States Seaports
y
© O C C C C C C,
Intergovernmental Public Pollcy System
Table
Table
Table
Table
Table
Table
Table
Table
Table
IV—l
IV-2
Iv–3
IV— 4
IV-5
IV-6
IV-7
IV-8
IV-9
A Typology of Intergovernmental
Regulatory Programs e e o O e o e o e o O © e o O C C C C C C C C C C C C C
Major Statutes of Intergovernmental Regulation,
1960–80
Devices for Indirect Management of
Intergovernmental Programs . . . . . . . . . . . . . . . . . . . . .
Major Federal Statutes Regulating State
LO Cal Government S
and
Impact of Specific Regulations on U. S. Exports .
Domestic Regulations that Have Had a Negative
Impact on U. S.
Exports
Estimated Total Pollution Abatement and
Environmental Quality Expenditures, l 978-87 . . .
Highway Trust Fund Tax Rates,
After the Surface Transportation Assistance Act
of l 982 and Effective Dates of Change . . . . . . . . . .
Estimated
Taxes for Average Truck Owners in 1985
In C reases in Federal
Bef Ore and
Highway
8
ll
l2
l 3
l4
l 9
24
3.1
3.1
33
36
37
4.l
42
44
47
50
5l.
5.8
59
Chapter V
Transportation Regulation
Figure V-l
Table
Table
Table
Table
Table
Table
V—l
V-2
V-3
V-4
V-5
V-6
Chapter VI
Export Seaports
Table
Table
Table
VI —l
VI-2
VI – 3
Chapter VII
Dredging Pollcy
Table
Table
Table
Table
Table
Table
Table
Table
VII-l
VII – 2
VII – 3
VII — 4
VII-5
VII-6
VII-7
VII–8
Chapter IX &
Export Transportation Strategies
Table
IX-l
Motor Carrier Act Summary . . . . . . . . . . . . . . . . . . . . . .
Contracts Approved . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Market POwer Of Rall roads Over Domestic
Shippers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Coal Export Prices
Transport Options
Representative Crew Costs
Representative Ship Construction Costs
Selected Port Characteristics - Atlantic Coast .
Selected POrt Characteristics - Gulf Coast
Selected Port Characteristics - Pacif lo Coast . .
Largest Vessels and Average Vessel Size in
the WOrld Fleet &
Summary of Straight Channel Depth and Width for
Each Major U. S. Port . . . . . . . . . . . . . . . . . . . . . . . . . . .
Existing and Potential Effective Capacity
for Handling Export Coal at U. S. Ports
Estimated Costs and Trade by Port, l 990
Sequence of Steps for Navigation Projects
Undertaken by U. S. Army Corps of Engineers . . . . .
Status of Approvals for U. S. Seaport
Dredging Projects - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Economic Effects of a User Charge on U. S.
Deep Water Commerce
Port Dredging vs Alternatives for Coal Export
Port Development - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Selected Long-Term Transportation Strategy
Concepts
Cover photo courtesy of the Port of Long Beach.
75
79
80
8l
86
94
94
l Ul
107
lll
ll 8
ll 9
l2l
l 22
l 23
l24
l 29
l31
lb b
xiii
Chapter I
INTRODUCTION
The United States is closely integrated with the world by many intricate
relationships such as trade, economic pollcy, telecommunications, environment,
transportation. This study reviews ln depth one aspect of the web of linterrela-
tionships -- the domestic transportation function – and export of the nation's
Output. Influencing the transportation activity is a set of federal, state, and
local laws, pollcies and programs which , in effect, torm the Country's lnter-
governmental public pollcy System.
For export of American output, the domestic transportation system should
ldeally Operate-economically and effloiently. Problems of transporting goods and
commodities from their points-of-origin to seaports should be minimized by the
role of government, not unitentionally exacerbated. There is reason to believe
that the intergovernmental system has offered some key bottlenecks (impediments)
and barriers (obstructions). The export transportation system must operate
within the very same Complex, fragmented institutional policy framework formed by
the intergovernmental system. &
In the land-sea export process, American seaports have been widely recogn-
1zed as the plvotal point. To the transportation Company executive, the manu-
facturer or farmer, the governmental pollcy-maker, ports are a natural place to
consider when thinking about exports and transportation. In Some situatlons,
they may be too visible. They are indirectly encouraged to take leadership
positions to develop trade, line up financing, and long-term Contracts, assemble
the best domestic transportation packages, and steady Suppliers. From their
successes, benefits accrue to the nation's economy, producers, and Citizens.
Jobs are created or enhanced through the multiplier effect. But, on the other
hand, the ports may take a lot of "heat" by being aggressive and visible in
behalf of improving exports. Their return on organizatlonal and financial Capi-
...tal invested may be revenue earned as port landlords, Owners, or operators of the
facilities through which cargo moves. That revenue does help their parent juris-
dictions and local economies. Overall though, the ports have voluntarily assumed
the leadership role.
Interest ln exports, transportatlon and public pollcy is growing. The
President in the l983 State of the Union address noted:
One out of every five jobs ln our Country depends on trade. So, I
will propose a broader strategy in the field of international trade-
one that increases the openess of Our trading System and is falrer to
America's farmers and workers in the world marketplace. We must
have adequate export financing to sell American products overseas.
I will ask for new negotiating authority to remove barriers and get
more of our products into foreign markets. We must strengthen the
organization of our trade agencies and make changes in our domestic
laws and international trade pollcy to promote free trade and the
increased flow of American goods, Services, and investments.
Our trade position can also be improved by making our port system
more efficient. Better, more active harbors translate into stable
jobs in Our Coal fields, railroads, trucking industry and ports.
After two years of debate, it's time for us to get together and enact
a port modernization bill.
Education, training, and retraining are fundamental to Our Success,
as are resaerch, development and productivity. Labor, management,
and government at all levels can and must participate in improving
these tools of growth. Tax policy, regulatory practices and govern-
ment programs all need constant reevaluation in terms of our competi-
tiveness. Every American has a role, and a stake, in international
trade. (emphasis added)
The Council of Economic Advisers and Congress have also emphasized trade.”
The imbalance in l984 was a trade deficit of $123.3 billion which "cost the
grOSS national product two percentage points in real grºwth" and "as many as 2.5
million" jobs. The l985 deficit may reach $150 billion.
In support of the Präsident, according to Ambassador William E. Brock, U.S.
Trade Representative, is: *
Domestically, Our challenge will be to fashion economic policies that
will generate sufficient growth to allow the nation's economy to
adjust to rapidly changing technological and Competitive Conditions.
As economic recovery accelerates, American industries will emerge
more efficiently and better able to compete.
Tax policy, regulatory practices, and governmental programs will be
regularly evaluated in terms of our competitive opportunities,
(emphasis added)
Although the domestic export transportation system is not the primary Cause
of the nation's trade imbalance, it may be a contributing Cost factor for its
product competitiveness. It is very difficult to separate transportation Cost-
ing, especially that element attributed to governmental laws, regulations and
policies.
The American public appreciates the Country's international trade situation
and understands its importance. Eighty-nine percent agreed with the statement:
"We must make better products more efficiently- to compete in the world, rather
than depend on trade barriers such as tariffs.” Yet, fifty-five percent favor
"increaſing taxes on foreign imports to protect American jobs in certain indus-
tries."" The seeming inconsistency can be explained in the first poll by the
question noting a condition that U.S. exporters are treated liberally abroad as a
quid pro quo. This became most evident in March, l985 in the strain placed on
United States - Japanese trade relations.
Given the importance of international trade to the American economy and the
role that export transportation intergovernmental policy may have, there is a
distinct and clear federal strategic policy interest. It was within this Context
that the U.S. Department of Transportation, Research and Special Programs Adminis-
tration was concerned by the long-term implications of export trade, transporta-
tion, and intergovernmental institutional policy. &
Study Purpose
The research study was conducted in a three-phased effort in the l981–1984
period. The primary purpose was to identify intergovernmental transportation
bottlenecks and barriers to the efficient operation of the export process. The
first year of study examined the demand for U.S. exports, the intergovernmental
transportation policy system, and how it interacted for the transportation of
Coal, grain, and Containers to the Port of Long Beach and Port of Los Angeles.
The second phase reviewed the changes in the intergovernmental transportation
System, the impacts of deregulation, the direct experience of the ports of Balti-
more, Hampton Roads (Norfolk-Newport News), New Orleans and Seattle. This report
presents long term Considerations for exports, ports, intergovernmental policy
(including deregulation, port operation, and dredging), and the key strategic
policy issues for the federal government and the transportation industry.
Research Questions
The underlying concept, the interface between intergovernmental policy
framework and transportation of goods and commodities for export, requires that
Several broad questions be identified. These relate to the "flow" sequence from
point-of-origin in a port's "hinterland" or service zone to the port, onto the
Ships, and past the Coastal limit.
For example, what federal, state, and local laws, regulations, rules and
policies govern directly (or to an important indirect degree) and relate to these
Components of the transportation export process: l. point-of-origin: prepara-
tion of goods and commodities for shipment; loading process, facilities, labor;
transportation facilities, supply, labor; freight forwarders, brokers; Capability
for new demand; capital requirements; 2. transportation (origin to port): mode
(truck, rail, pipeline, barge); operational process (facilities, equipment,
labor); charges; maintenance; capability for new demand; Capital requirements;
3. port complex: access to port; transfer equipment, operation (unloading and
loading), labor; storage facilities, space, operations, labor; ship berthing and
departure; ship harbor traffic (internal moorage, movement); ship exit to and
beyond coastal territorial limit; capability for new development; Capital requir-
€ſments. *
Another set of research questions relates to the laws, regulations, rules
and policies. How does one determine if a governmental law is good or bad? What
Criteria exist to help shed some light on such matters? Unfortunately, the field
of public policy offers no clear cut way. So much depends upon the original need
for the law, the groups and individuals to benefit or disbenefit, the implementa-
tion of the law, and subsequent operation over time. Recognizing the delicate
ground here, this study attempts to lay out. the various perspectives and inter-
pretations explicit and implicit in a particular situation.
So, such questions as the following will be raised whenever appropriate:
l. transport law contact: what brings laws into play; what statutory requirement
exists; what standard serves as trigger mechanism to initiate; process; what time
periods are involved; 2. administrative law criteria; who benefits/disbenefits;
burden; equity; fairness; efficiency; effectiveness; financial cost; even-handed-
ness in interpretation and application; uniformity; Consistency; 3. policy
incentives and disincentives; regulatory license and operations; subsidy; rate of
3
return On investment; taxes.
Research Paradigm Shift
The original problem, which initiated the study, was the quickly growing
demand for United States exports of coal, grains, and merchandise. Foreign
purchases were expanding so fast that by the late l970's, many Cargo logistical
bottlenecks, and sometimes barriers, became more visible in the domestic land-sea
transportation system. Parenthetically, some had been anticipated by Simllar
experiences on the import Side of the equation (e.g., petroleum import). The
role of government was static. Exports were, as interstate commerce, a federal
concern. State and local activity deferred to historical federal leadership in
these spheres. The transportation system was considered by all governmental
levels to be mainly Concerned with domestic origins and destinations. Except
for ports and some export-oriented firms, little attention was given to the
interrelationships.
Between l980 and l984, the stable role of government and all its partici-
pants underwent a "sea change" in philosophy, direction, activity and funding.
Deregulation OCCurred for rails and motor carriers in 1980; shipping regulation
was modified and "loosened" in 1984. The federal government had the stated goal
of lessening its involvement across the board in the domestic intergovernmental
public policy system. Transportation was one of many functional areas to be
vacated slowly. At the same time, the nation experienced high inflation, defla-
tion, government revenue shortfalls, and a continued trend of more imports, fewer
exports and increasing value of the dollar. ..
The export Cargo logistical system was no longer stressed. Urgency became
less important. Studies indicated that rising demand for exports would be
"postponed" until the outyears, l090 and beyond. At the same time, state and
local governments recognized the value of trade and began expediting the export
process. Ports became quite visible as lead agencies in encouraging exports (and
imports).
Thus, the study reviewed a period that began with intensity, urgency and
high demand for Coal and grain, and is now in a less stressed, lower demand time.
The intergovernmental public policy system has also become less a present Concern
because logistical Overload does not indicate an immediate need for expansion of
existing operations and Construction of new facilities.
The "boom and bust" cycle of trade has afforded the nation a temporary
reprieve before demand jumps up again and utilizes the system to capacity. When
that occurs, all parts of the export transportation system should be ready with
procedures and facilities to handle increased cargo flows. The intergovernmental
public policy system should also be prepared to respond in a coordinated effec-
tive manner to support export transportation needs to help improve the nation's
trade position and competitiveness in accordance with desired public policy
goals. In essence, there is a Window of opportunity to get prepared for the
tº- ibiliti
Research Methodology
To explore these questions, research approaches incorporated several tech-
niques. .
l, Literature Review. The vast body of literature has been reviewed for
information about the technical elements of the transportation process and the
variety of federal, state, and local laws that might apply. Especially useful
resources include the Maritime Research Board and Transportation Research Board
Bibliographies, the Index to Legal Periodicals, and American Association of Port
Authorities materials.
2. Advisory Committee. General input and valuable assistance have come
from the Research Advisory Committee, composed of representatives of the Port of
LOng Beach, Port of Los Angeles, Southern California Association of Governments,
Los Angeles County Transportation Commission, Ports Transportation Task Force,
Southern Pacific Transportation Company, Security Pacific National Bank, U.S.
Department of Transportation, and U.S. Congress Surface Transportation Committee,
American Association of Port Authorities, National Council of Physical Distribu-
tion Managers, and the Advisory Commission on Intergovernmental Relations.
3. Interviews/Meetings/Information Gathering. Numerous interviews were
Conducted with local, state, and federal officials, representatives of trade
associations, Corporate managers for the railroads, trucking, terminal and
Commodity organizations. General information about all ports in the nation has
been Colle cted directly from them, along with trade association materials about
the goods and commodities for export. Local, state, and federal officials and
Corporate managers have been contacted by mail and phone to elicit their informal
thoughts about the export-transportation intergovernmental policy contacts.
4. Case Study. Much of the subject matter is abstract and Conceptual
until fleshed out with the realities of actually transporting export goods and
Commodities. Case studies examined individual experience: Atlantic Coast (Balti-
more, Charleston, Hampton Roads, Miami) Gulf Coast (Houston, New Orleans), and
West Coast (Long Beach, Los Angeles, Portland, Seattle). Each port was chosen to
represent a mixture of geography, cargo, size, and Operations.
Research Limitations
Several Constraints need to be mentioned at the OutSet. The export inten-
sity and degree of logistical system overload have lessened. The basic study
purpose and questions explored became more distant, rather than immediate.
Nevertheless, the essential problems should be addressed in terms of strategic
policy.
Data collection sometimes proved difficult. Carriers and ports, acting in a
proprietary manner in very competitive industries, did not readily share Cost
data. Published sources are often out-of-date, incomplete, based on different
measures and formats for presentation. Such has been the norm for the field.It
became even more difficult with deregulation when federal regulatory agencies
stopped or reduced data collection activities for reasons of philosophy and Cost
Also, many ports downscoped quickly their future plans, reflecting lower export
activity, and viewed them as more distant Concerns to be considered later, not
IlCW. -
Institutional images were also a factor. Extensive interviews were conduc-
ted with all segments of the field. Representatives of a specific company or
governmental agency would, in effect, suggest:"There are no problems here. "our
agency does not impede the flow of exports." "This agency is innovative and doing
many positive things." As it was most understandable, almost all representative
spoke in general terms giving hints and clues for other parts of the country or
industry. It appeared that only when things had gotten so bad and frustrating
that officals felt free to mention negative experiences with the
intergovernmental system. Despite this, all were pleased to talk about basic
issues for the nation, what might be done about them, and to explain how innova-
tive practices and ideas can make a difference.
Final Report Format
The research project has produced two interim reports, a workshop and
proceedings and this final report treats the subject for the period of 1980–
l984. Material is essentially new, with some inclusion of prior data. The
report is divided into three major units:
Part I: System Development
Export Demand
Port Facilities
Part II: Intergovernmental Policy System Operations
Intergovernmental Public Policy
Transportation Regulation
Port Profiles
Dredging
Strategic Policy Issues
Export Transportation Policy Strategy
Part I explains current and future export requirements for the nation and
how ports serve that demand. Part II discusses the interaction of the
export transportation system and the general intergovernmental public
policy framework, regulation of transportation, port case study profiles,
and port dredging. The subject flows from the broad sweep to the specifics
of dredging. Part III looks forward to anticipate issues and promising
Strategies.
*President Ronald Reagan, "state of the Union Address Text," Los Angeles
Times (January 26, 1983), part I, p. A.
*See: Office of the President and Council of Economic Advisers, Economic
Report of the President (Washington, D.C.: Government Printing Office, Feb-
ruary 1984), pp.5–6; U.S. Congress Subcommittee on Trade, Hearing-U.S.
Trade Deficit (Washington, D.C.: Government Printing Office, 98th, 2nd ses-
sion, l984); and, U.S. Congress, Subcommittee on Commerce, Transportation and
Tourism, Hearing - Trade Deficit and the Economy (Washington, D.C.:Govern-
ment Printing Office,98th, 2nd session, l984
*William E. Brock, "U.S. Trade Policy," National Journal (February 19,
l983), p. 409. -
*Faith in Free Trade Has Not Waned," Business Week (May 30, 1983), pp. 16.
6"A Poll in foreign Trade: America First?" Newsweek (May 30, 1983), p. 28.
Chapter II - UNITED STATES EXPORT POSITION
tr io
The importance of trade in international affairs cannot be understated. It
is of great significance to the United States economy and world economy. As a
nation founded on trade, the United States has a tradition in the maritime
industry and in trading that, while it is at times ignored, is not forgotten by
those who are engaged in its pursuit. At the present time, there is much
rhetoric about the trade deficit and the need to increase the value of our
exports. If exports are to play a greater role in the U.S. economy, (-0.3 perient
net exports in 1983, greater private and public effort will be necessary.* In
the past we have been able to dictate the rules by virtue of being the largest
player in the marketplace. The U.S. exported twenty-five percent of the total
volume of world trade in 1950. The figure drops to fourteen percent in 1984, and
is forecast to be ten percent in 2000. At the same time the spectacular growth
in World trade volume is projected to decline a bit and actual volume to remain
Somewhat level until the end of the century. Against this rather sober back-
ground the immediate past, present and future of U.S. exports will be examined.
Significance
In the past, because of its large domestic market and rich supply of natural
resources and energy, the United States has not had to rely upon imports or
exports to satisfy its basic needs. That has changed with the greater reliance
upon imported energy, raw materials, especially for the petrochemical industry,
and manufactured goods that occurred during the l870's and continues into the
1980's. (See Figure II-l). -
In Comparison to other developed western nations, the United States imports a
relatively small percentage of its GNP, 9.8 percent c.i.f. in 1980. The Nether-
lands imports over 45 percent and the other European nations over 20 percent of
their GNP. In contrast, the U.S. exported 5.9 percent of its GNP in 1983,
France, l8.3 percent, West Germany, 29.5 percent, the United Kingdom, 29.l
percent, and Japan, l2.7 percent. Unfortunately, the net export of goods which
was .9 percent ln l980, had fallen to -.3 percent in 1983 when the trade defloit
was $69.4 billion.* The 1984 figures are $123.3 billion trade deficit and a net
export figure of about —l percent of real GNP. Economists estimate that the trade
deficit has cost the U.S. two percentage points of geal growth last year as well
as an estlmated 2.5 million jobs by some estimates.
It is the trend of this statistic as well as its magnitude which concerns
economists. Not since the beginnings of the Industrial Revolution in the United
States, llſ_years ago, has the US had a trade deficit for as long as nine consecu-
tive years.” Key sectors of the American economy have been impacted. For example,
there is the plight of Mid-western farmers unable to pay off loans owned to local
banks and the Farmers Home Loan Administration. While farm land was appreciating
at a rapid pace due to the expansion of exports, bankers made loans which totaled
One hundred percent of the collateral on the assumption that the increased value
of the land would soon reduce the amount to the more standard eighty percent. In
the last two years, several factors have acted together to depress the value of
/
Figure II-1
U.S. International ECOnomic Performance
140
120
#
100
3.5
3.0
2.5
2.0
1.5
1.0
12
10
# 8
# 6
# 4
# 2
0
–2
Trade-Weighted Dollar Exchange Rate
* | | | | | | | | | | | | | | | | | | | | | | rº
1978 1979 1980 1981 1982 1983 1984
U.S. Exports to Major Debtor Countries
* | 1 | | | | | | | | | | | | | | | | | | | | | | | *
1978 1979 1980 1981 1982 1983 1984
Real Net Exports
}= Export. ... “--------------....... *
- - - - - - - - - - - - - - nº. T ~ + T ==
H - —
^s Net Exports
_1 | 1 | | | | | | | 1. | | | | | | 1 || | | | 1 - | |
1978 1979 1980 1981 1982 1983 1984
SOURCES: Federal Reserve Board; International Monetary Fund; U.S. Department of Commerce,
Bureau of Economic Analysis. -
NOTE: Major debtor countries: Mexico, Brazil, Venezuela, Argentina, Poland, Yugoslavia,
Chile, Peru, and Philippines.
Source: U.S. Congress, Congressional Budget Office. The Economic
and Budget Outlook: An Update (Washington, D.C.: Government
Printing Office, August 1984), p. 25


farmland particularly in the wheat and corn regions of the mid-west. Countries
which previously imported United States grains are now exporting grain, most notably
France and China. Also, world harvest of many major crops is settlng records this
year. The high level of supply is depressing the price buyers is willing to pay an;
thus the farmers are receiving a lower price for their crops than they anticipated.
The combination of these factors plus higher prices for machinery, labor and
supplies is putting pressure particularly on the middle sized farmer who has no
outside income as does the small, part-gime farmer and is not part of a large
business as are the Conglomerate farmers.
One sixth of all domestic manufacturing jobs depends directly upon exports
and Over seventy percent of our goods are exposed to foreign cºmpºsition. TWO-
fifths of agricultural employment is involved in export production.
The ability of an industry to increase its market by exporting makes it
posslble to maintain a domestic presence in the particular sector in which the
industry operates. Unfortunately, many industries have found it cheaper to
export the whole operation rather than compete for higher priced U.S. Capital and
labor in the domestic market.
A similar problem exists for mining which finds itself in a depressed world
market having to compete with nationalized industries which are operated to pro-
vide employment in lesser developed Countries gluiyhatever foreign exchange the
export of ore or semi-finished products will bring.
Historical Trade Relationships
As a nation founded mainly by European nations interested in trade, new
territories were a source of raw materials and a growing market.
With nationhood and expansion, the country relied upon transportation to
Carry its goods to the world's markets and to extend its development to the West,
particularly to California and the gold fields. Clipper ships sailed to China
Carrying Yankee traders to a legendary place in history. Their ghosts seem to
haunt the merchants of today as they struggle to make a dent in the competition
for World market share.
The surge of industrialization which occurred in concert with the develop-
ment of the transportation network supplied the machinery and goods to develop a
nation. Such great quantites were needed that much of the industrial output,
great as it was, was required by the domestic market. The United States in many
Ways withdrew from the rest of the world until involved in World War I. She did
not actively rejoin the world community until World War II, when she supplied
the rest of the world with food, technology, and manufactured good while helping
destroyed economies to rebuild with state-of-the-art technology. Because there
was no lntense competition to encourage a company to stay 'lean and mean' many
factories were not modernized and/or became gºddled with labor contracts which
discouraged peak productivity and efficiency." This state of affairs was not a
large problem until recently when American manufactured goods have found it
almost impossible to compete overseas unless they were high tech, state-of-the-
art electronics or machinery which utilized such sophisticated technology in
their operation or construction. Even in this field, the Japanese are developing
new generations of computers almost more rapidly than we are, and they are
applying that technology to the constºction of consumer goods which the rest of
the world seems unable to do without.
This leaves our natural resources and agriculture as Our major exports to
the rest of the world. These high bulk relatively low value products include:
lumber, coal, grain, fibers, feed, tobacco, Oilseeds, livestock and poultry. The
United States exports sixty-five percent of its wheat, fifty-five percent of its
soybeans, and thirty-five percent of its coarse grains (oats, rye, millet, etc.)
crops.” As has been previously mentioned the world supply of agricultural pro-
ducts has been expanding rapidly while demand is projected to grow at five to Six
percent per year until the end of the century. The Pacific Rim is expected to
grow at a rate of 6.3 percent and will thus offer and expanded market to US
farmers but they will have to compete for it with the Australians and the rest §
the food exporting nations on the combination of price and transportation Cost.
(See Figure II-2)
The problem of food for less developed nations (LDC's) and particularly
African nations of the Sahel region remains. Unfortunately these nations will not
be able to afford to buy food on the world market and will have to be supplied
through government aid or extremely low rate loans with long repayment periods.
The problems of this region and of Africa in general will take much time and more
than just food aid in order to reestablish stable, self-supporting economies able
to participate in the world market as full partners.
Up until this point in time, the United States has enjoyed a positive
balance of trade in services. This positive balance has offset the negative trade
balance in the merchandise trade and prevented the US economy from suffering as
greatly as it might have without it. In the past year , the amount of this
surplus has been halved from $28.1 billion at the end of l983 to $12.2 billion
annualized at the end of the third quarter of lo&4. Investment income receipts
and payments fell from $23.5 billion in 1983 to $14.7 billion in mid-l984.
Business- related services, primarily travel, transportation, fees, and royali-
ties, fell from $5.7 billion in 1983 to $0.2 billion in third quarter of 1984.
Other services category, already in the red, went from -$l.0 billion in l983 to -
$2.7 billion. This reflects the effect of higher intergst rates and a faster
growing US economy on the investors in foreign countries.** In 1982, United States
investors had placed $215 billion abroad while $65 billion of foreign capital was
invested in the United States. In 1984, $200 billion of United States capital was
invested abroad and $130 billion foreign capital was invested here. , The
difference falling from $150 billion to $70 billion over this period of time.]9
The normal United States recovery rate for imports in the early stages of
recovery after a recession is twice as fast as GNP, but since the 1980-81 reces-
sion, our imports have grown at four times the rate of GNP. This is attributed to
the more rapid recovery of our economy as compared to those of our trading
partners. It is assumed that this will level out with their recovery. Among the
United States's major trading partners in the past have been countries in Latin
America. Those Countries burdened with huge debts to pay off, are limiting their
imports to the bare essentials at the best price and exporting everything they can
to get foreign exchange to pay the banks. This will have some positive benefit to
the United States as they owe large amounts to United States banks. The balance of
payments is predicted to even out with the rest of the world as their rate of
growth increases from its present low rates to two percent for European countries
and four percent for Canada and28apan. Developing Countries are predicted to
achieve 3.8 percent through l985. -
Export Profiles
Since l980, the United States merchandise balance of trade has gone down-
10
E
The United States is the world's leading
exporter of agricultural products, ac-
counting for nearly 18% of such exports
in 1981. Each year for the past 25 years
nearly one-quarter of the U.S. farm
product has been sold abroad.
Japan has been the leading pur-
chaser of U.S. farm products for many
years. Other major purchasers have
been the Netherlands, Mexico, Canada,
West Germany, United Kingdom, South
Korea, and (since 1976) the U.S.S.R.
, 10%. , 5% Canada
NS -
70%T3%. Latin America'ſ • *
and Caribbean
Western Europe, though still the largest
regional market, now takes a smaller
share of U.S. agricultural exports than
in the 1960s.
Source: Map and table figures based on
Department of Commerce, Highlights of U.S.
Export and Import Trade, (FT 990) December
issues; U.S. Exports by World Area (FT 455),
annuals
Figure II-2
U.S. Agricultural Export Markets, 1967–71 and 1977–81
36%. 29% W. Europeº
N
4%
Africa
(excl.
S. Africa)
4%
1967- 1977.
1971 1981
~ of total $ value
U.S. Agricultural Exports, 1981
$ billions
TOTAL 43.3
Western Europe 11.9
Netherlands 3.3
West Germany 1.7
Asia (excl. Japan, China) 7.0
Japan 6.5
Latin America and Caribbean 6.3
Mexico 2.4
U.S.S.R. and Eastern Europe 3.1
Africa (excl. South Africa) 2.6
Canada 1.9
China 1.9
Other 2.1
South Africa .3% .3%
Leading U.S. Agricultural
Exports in Order of Value, 1981
Corn
Wheat
Soybeans
Cotton
Soybean cake and meal
Rice
Tobacco
Asia - 21%. 20%
(excl. Japan)
*
--ſº º ſoceania.7% .5%
Atlas O
Source: U.S. Department of State. f § ,37
United States Foreign Relations (Washington, 2^
Exports as percentage
D.C. : Government Printing Office, June 1983),
P. 60.
Boundary rep kon is not ily
º

































counted for less than 30% of U.S. mer-
chandise exports. Developing countries
(including oil exporters) accounted for
about 31% of U.S. exports in 1967 and
39% in 1981.
Source: Figures based on U.S. Department of Com-
merce, Highlights of U.S. Export and Import Trade,
FT 990 (December 1968, December 1981)
Figure II-3
U.S. Merchandise Exports, 1967 and 1981
$ource: U.S. Department of State. Atlas of
#nited States Foreign Relations (Washington;
D.C. ETGovernment Printing Office, June 1983)
The value of U.S. exports (excluding
services) almost tripled between 1967
and 1981. But U.S. export trade in this
period did not grow as rapidly as that of
other developed market economies. The
leading single-country importer of U.S.
goods is Canada. Other major importers,
in order of rank, are Japan, Mexico, the
United Kingdom, and West Germany. In
1981, for the first time in more than two
decades, Western Europe as a whole ac-
§
-
RS 22% 17% Canada
p. 56.
f
and Caribbean
(excl. OPEC)
zºº Riries
S. Africa)
1967 1981
Exports as percentage
of total $ value
N à.
º, W. Europe Yº tºº
(e.g. opeCY
i - |
ºf-l, Y--\ . OPEC
*------- * ſº {}
º 2 - • *
r
Ł other.
~~ *
U.S. Merchandise Exports, 1981
$ billions - -
TOTAL º -
------- 234
Western Europe ... 65
United Kingdom 12
West Germany . . . 10
Canada - º 40
Latin America and
Caribbean (excl. OPEC) 36
México . . . 18
Asia (excl. OPEC, Japan)
Japan …º. º
OPEC
Oceania: ºr . . . . .
Africa (excl. OPEC, South Africa)
U.S.S.R. and Eastern Europe
South Africa -
6% 9%
South Africa. Tº Tº
º
ºrrº-ºº:
ºr. - - -
- º:
- - --
º - - -
- º -
--- º
Japan 9% _9%
13% 11%
3%
Boundary representation is not necessarily authoritative
































5.
The United States was the world's
largest exporter of manufactured goods
from the end of World War II until 1970
when it was surpassed by West Ger-
many. The West German share of world
manufactured exports in the 1970s was
16%, the U.S. share about 13%. (Most of
West Germany's manufactured exports
remain within the European Economic
Community.) The United States, how-
ever, was once more the leading ex-
porter of manufactured goods in 1981,
surpassing West Germany by about $3
billion. Machinery and transport equip-
ment accounted for about one-quarter of
U.S. Manufactured Exports,
U.S. manufactured exports in 1981, the
largest subcategory being road motor
vehicles and their parts. Although
Canada, Japan, the United Kingdom,
and West Germany have long been the
leading importers of U.S. manufactured
goods, Asian developing countries as a
group have become the fastest growing
market for these products.
Source: Figures based on U.S. Department of Com-
merce, Highlights of U.S. Export and Import Trade,
FT 990 (December 1968, December 1981); U.S. Ex-
ports, Commodity by Country, FT 410 (December
1967, December 1981)
Figure II-4
1967 and 1981
U.S. Manufactured Exports, 1981
$ bilikons
154
TOTAL
Western Europe
United Kingdom
West Germany
Latin America and Caribbean
Canada .
Asia (excl. Japan)
Japan
Oceania
Africa (excl. South Africa)
South Africa
U.S.S.R. and Eastern Europe
Other
sº
-ve.***
s
U.S.S.R. ay. E. Europe .3% .3%
*\canada
º, /º S
gº
Zº
(ſº-
º §
§§
§§§
§ N § §§
\\ & * Asia 10%. 18%,
* - WS (excl. Japan)
N
2%. 3%
(excl. S. Africa
Africa
19%. 21% Latin America and
Caribbean
Source: U.S. Department of State. Atlas of
United States Foreign Relations (Washington,
D.C. ETGovernment Printing Office, June 1983),
P. 58. -
4%
2.
Boundary representation is not necessarily authoritative
NS
1967 1
67 1981 South Africa 2%. 1%
Exports as percentage tº
of total $ value





































hill. Since mid-82 the angle has become rather steep, and the figure for the end
of l984 ($l46.3 billion) is almost three times the last dip which occurred in mid-
79. Unfortunately, the bottom is not in sight; Secretary of Commerce, Malcol."
Baldridge, predicts that the trade deficit in 1985 will be about $150 billion.
The portion of this balance which is attributed to manufactures has led this
decline with a drop to -$38.2 billion in l983 and an annualized third quarter
figure of -$ll2.1 billion.** See Figure II-5.
Figure II-5

Rising Dollar, Falling Exports
Since 1981, the rising value of the dollar has made exports of American
goods relatively more expensive and imports less expensive. While exports
have continued to grow, imports have soared, and the U.S. merchandise
trade balance has declined sharply. The following graph traces the inflation-
adjusted trade-weighted value of the dollar from 1975-84 and the merchan-
dise trade balance.
ſº- -
Cº.
.8 +20 120 :
# 2, - *
{º}
§ = 0 100 5 &
% = | *
E e –20 80 = g
.# — =
$2 ep
Gº --- --4- 60
: -40
–60 4()
& KS K & & SS sº sy Y.
$ $ $ $ $ $ Sº Sº SV &
23.3—
-F—l
Source: Richard Corrigan and Bruce Stokes. "The High Flying Dollar",
National Journal (Vol. 17, No. 8, February 23, 1985), p. 412.
Reprinted with permission.
In 1983, the trade balance for capital goods was $26.4 billion, but by the
third quarter of 1984, the figure had dropped to $6.9 billion, annualized rate.
Only food and beverages of the other categories continued to show a positive
figure with $6.5 billion at the third quarter of l984. Consumer goods were at -
$51.3 billion, Petroleum and products at -$53.2 billion, and other industrial
supplies at -$9.0 billion complete the list. The positive balance in the services
category of $13.7 billion at the end of the third quarter of l984 offsets th;
deficit somewhat, but that figure is down from the 1983 figure of $28.1 billion.
Even in areas where the U.S. has traditionally exported a large percentage
l4
of its production, agriculture, the trend is down to wavering. The lo&4 figures
for export of grain and feeds is down three percent over last year and oilseeds
and products is down l8 percent. Cotton and linters is up nineteen percent but
the total volume is rather small. The other significant area of export, livestock
and products, is }} four percent. Overall, agriculture exports are down four
percent from 1983.
In recent years, there have appeared to be several bonanza opportunities for
U.S. exports, the most spectacular was the demand for U.S. coal which peaked in
the late l970's. This was caused by a combination of factors, mainly strikes, in
Poland, South Africa and Australia which shifted demand to U.S. supplies in spite
Of the higher price. Many plans were made to service this increased demand on the
assumption that it would continue in the future (Long Beach, Portland, Maryland,
New Orleans, Hampton Roads, etc.). Unfortunately, no careful analysis was made of
the true basis for the demand, and it disappeared as soon as the strikes and
political disturbances were settled, leaving several Suprised ports, railroads and
Coal companies with large investments and no way of recovering them. It must be
polnted out that an expanded demand for coal has been predicted as the oil supply
dwindles and various sectors are priced out of the market. The glut in the world
oil market with the continued lowering of the #ice puts this possibility into the
long term as opposed to the short term future.
Yet, the coal situation is not that unusual for other commodities. A recent
article in the Los Angeles Times tells of a storm wiping out seventy percent of
the Japanese onion crop and its effect on demand for U.S. Onions. The U.S.
farmers responded by abandoning their domestic market for the export market. The
next year onions were over planted; the Asians were out of the market and the
glut was so large that farmers #9% onions for less than it cost to raise them.
The bonanza was an expensive bust.
This lack of analysis may be the result of many Small firms or players
misjudging the market or an oversight, but many £ople have commented upon the
lack of a long-term, cohesive U.S. trade policy. George Cabot Lodge has com-
Iſlented that "there is no Iloriºing, no data base, and no coherent system in place
to predict critical needs."** The grain embargo against the USSR after its to
invasion of Afghanistan merely caused minor inconvenience to them as they switched
supplies and purchased wheat from Argentlna. United States wheat farmers were
Sorely affected by the excess grain which accumulated and affected the following
years' crop prices as well. This harmed United States farmers both by loss of
income and by loss of the reputation of being reliable suppliers. This last has
affected more than the grain farmers as commodity buyers in foreign Countries have
been hesitant to sign long-term (five to ten years) contracts for fear that U.S.
government action will interupt the flow of needed goods. Being a friend of the
U.S. is not seen as protection against such action as similar moves against Mexico
and other are cited as examples.
In more recent years the strength of the dollar has made the cost of United
States goods even dearer overseas. Traditionally sure markets for United States
grain such as the Soviet Union in non-boycott years, have Cancelled Contracts to
buy wheat from the United States to take advantage of lower prices offerred by
France and Argentlna. In early l985, Soviets cancelled purchases totalling
450,000 metric tons. In corn market, where the United States faces much less
Competition, is much more favorable. But there are reports that China has shipped
corn to Mexico, a traditional major purchaser of United States corn. In other
agricultural commodities, similar actions are occurring. India has purchased
Soybean oil from Brazil instead of the U.S. Turkey which earlier had offered to
15
buy United Staffs wheat has withdrawn the offer to pursue other suppliers,
possibly France. The Crowning blow to United States agriculture was delivered
when Cargill, Inc., the world's largest grain merchant, announced in January,
1985, plans to import twenty-five thousand metric tons of Argentine wheat to the
United States. The high value of the dollar has made the unthinkable possible.
For a Country which had contributed 50 percent of the world's grain trade in the
l970's to be importlng wheat ten years later was hard on the United States
farmers. Cargill expected to deliver the Argentine wheats.Fo the Gulf Coast for
about $ll2 per ton as compared to US wheat at $150 per ton.
Even such traditionally non-agricultural nations as Saudi Arabia are inves-
ting in wheat farming. Using oil drilling technology and American dryland
farming methods, the desert produces prodigeous amounts of wheat. Four years ago,
the country produced four thousand tons of wheat and relied upon imports from the
U.S. to the supply the rest of its needs. In l984, the wheat harvest was l.3
millions tons, and Saudi Arabia became an exporter of food. This feat was
accomplished using deep drilling methods from the Oil industry to tap into deep
aquifers Containing fossil water which is pumped up to supply One thousand foot
long pivoting irrigation arms which apply water to circular fields. To encourage
development the government gave the farmers the land, paid for half the cost of
drilling the wells, extended interest free loans to cover other costs, and pro-
vided a subsidy of about five times the world price for wheat ($978 per ton). In
l985, the subsidy is expected to drop to $560 P3% ton and eventually to zero as
the Saudis expect to compete on the world market. -
In spite of the negative news, the grain sales to the Soviet Union total
15.63 metric tons compared with the record l978–79 year of lb.5 metric tons. This
level of purchase is in part a response to the severe crop losses which the
Soviets sufferreed last year. But the existence of other sources in the market
place, has made the U.S. less likely to sell the volume of grain it has in the
past.
With foreign Cotton selling at a price of four to eight Cents a pound lower
than United States cotton, farmers are expected to reduce their plantings slightly
to lſ).7 million acres in l985. Other farmers are also expected to plant fewer
acres to crops; a combination of low prices, acreage diversion program, and the
inability financially strapped farmers to obtain production loans is cited as
the reason.” -
The lack of an export market has made it difficult if not impossible for
farmers to pay off the loans necessary for modern farming. This has led to
failures of rural businesses dependent upon farmers' trade: banks, implement and
Supply stores. The threat is that many of the small towns which dot the heartland
of America will no longer have the population or the business to sustain them.
The falling domestic sales Coupled with the competition from lower cost foreign
plants has encouraged several equipment manufacturers to move their Operations
Overseas; thus intensifying the effect upon the Mid-west economy; The high va, ue
of the dollar is cited as a contributing if not ultimate cause. -
The situation with United States coal exports is no better. Coal is sold
in two categories: steam or thermal and coking or metallurgical. Steam Coal Can
be of any grade, but only bituminous coal with certain characteristics is used to
make coke for steel production. Steam Coal Competes directly with natural gas
and petroleum for use in electric generation plants and indirectly with water,
wind, solar and nuclear power. Petroleum Coke, a by product of oil retining,
competes with coal in steel making. Because of its specialized requirements,
l6
metalurgical coal has sold in the export market at a consistently high level.
Overseas exports during l984 totaled 49.3 million tons as compared with 43.0
million tons for one year earl §r. Steam Coal exports totaled ll.4 and l7.l
million tons for the same period.
While the United States is well situated to serve both the European and
Pacific markets and has the largest export volume of any producer, it exports a
rather Small percentage of its production. Overseas exports have usually totalled
less than ten percent of production, topping that figure only during l981 and l982
When Poland and Australia were both out of the market. The United States coal
industry is unique because of its low level of export percentage; a major share of
for elgn Coal production is exported. It is also different because of the
diversity of holdings ranging in size from small owners with one mine to large
multinational Companies. Most foreign production is tied to long-term contracts
With little excess Capacity available to the spot market. United States producers
have excess Capacity and regularly deal on the spot market. Most of the new,
high-volume mines in Australia, South Africa, and Western Canada have been
developed with associated rail and port facilities by government owner-operators
Specifically for the large-scale export of steam coal. The United States rail-port
System was designed with more diverse usºs in mind, combining both the domestic
and general export markets in the design.
In the future, the growing market in the Far East is seen as available to
Western United States coal production, but because of the long distance to port,
inland transportation costs total fifty to seventy-five percent of the delivered
Cost of Western coal at the port. United States coal is already the highest priced
Coal ln the international market and the addition of high transportation costs
makes it even less able to compete with sources with lower labor and/or transpor-
tation Costs. While western mines have lower labor costs, their higher transpor-
tation Costs puts them at the high end of the market. The reliability of United
States Supply allows it to capture a larger share of the market than pricesālone
would dictate because buyers are willing to pay up to a $10 per ton premium. AS
in the Case of grain, United States' coal mining costs are so far above the world
level that International Marine Terminals near New Orleans has imported a 30,000
ton shipment of Columbian steam Coal for a power plant. The cost is competitive
with co gmined in eastern Kentucky and shipped by rail or barge to central
Florida.
As older deep pit mines in Europe, Japan and Taiwan become uneconomical to
Continue to work, the existance, of large coal reserves in western states capable
of being mined by open pit or strip mining techniques holds hope for the future
for United States coal producers. The factors which favor United States mines
Will also favor Canadian mines in Alberta and British Columbia. China is expect-
ted to become a major player in the market after the year 2000 when the infrastru-
Cture to connect mines to ports will be in place. The competition from other
Sources of energy, mainly petroleum, will be the other major constraint 2n}nited
States coal development as a larger supplier in the Pacific Rim market. The
continued strength of the United States dollar will make the price of United
States goods more expensive in the international market and Will Continue to
agravate the position of United States coal in the energy market.
The United States position in trade with other nations has reflected the
strength of the dollar. Our balance of trade is positive only with the Communist
Bloc. In 1984, the value of US imports from Western Europe, Japan, Canada, OPEC,
and Other developing contries is lower than the value of , our exports to
them. The trend is again in the negative direction parallelling the
l'7
trend in Our Overall trade patterns.” See Table II-l.
The strength of the dollar against foreign currencies has been attributed to
several causes. The more rapid recovery of the United States economy after the
recent recession, the federal deficit, the relative safety of investment in the
US, and higher interest rates are cited among other reasons. What ever the cause
or Combination of Causes, the ability of foreign goods to penetrate and establish
themselves in the United States market will have long reaching effects. Quotas and
tariffs on automobiles, textiles and steel have only shifted emphasis of overseas
exporters to machinery and other capital goods. Prices lower by twenty to twenty-
five percent have attracted purchasers in the United States who are attempting to
modernize and thus improve the output of their production lines. Michigi Evans Of
Evans Economics commented,"Patriotism can only be stretched so far." Capital
goods is one sector where the United States has had to this point a surplus in
trade. That advantage is disappearing rapidly. In l982, the figure was $34.6
billion; in 1983, $26.4 billion; the third quarter l984 annuilized figure is $3.7
billion. The final figure for l984 rebounded to 17.0 billion.
This inter-relationship of the various sectors of the economy is reflected
in the transportation system which has been developed to serve as Conduit for the
goods produced by it. The provision of roads, rails, waterways and ports to move
domestic and foreign goods to market from their point of manufacture has also
provided the means of communication to build social and political cohesion within
and between communities. The movement of the goods will provide income to the
operators to apply to the costs of operating and maintaining the various facili-
ties but the decline in domestically produced goods in the American economy will
remove the economic basis for maintaining communities and therefore markets for
many of those goods. Witness the changes predicted for the Mid-wistern farm belt
and the smokestack industrial areas of the eastern United States.
What export volume there is, is concentrated in those ports which handle
bulk products or have a trade advantage with the Pacific Rim nations: Portland,
Seattle, Baltimore, Hampton Roads, New Orleans, Los Angeles-Long Beach, Oakland.
The struggle between the various ports to acquire or to extend their internal
attractiveness to shippers and therefore their revenues has been fierce. The
discussion over the proposal to impose a fee upon ports and/or ships using the
Corps % Engineers dredging projects has illuminated the fray to a small
degree. -
Long-term Trends
As can be gathered from the preceding discussion, the past long-term trends
in United States export trade have not been positive. The United States merchan-
dise trade balance as a percentage of the gross Patiºnal product has fallen
steadily except for a brief upward spike in 1975. The major factor in this
situation seems to be connected to the strength of the United States dollar and to
the federal deficit as a factor in attracting foreign investment in U.S. Securi-
tles and real estate. A contributing factor is the relative security of inves-
tment and the higher rate of return in the United States. Another factor is the
need of U.S. industries to modernize and increase productivity. United States
industry also need to develop consumer products based upon basic research as have
the Japanese. Another factor is the slower recovery of other nations from the
recent recession. Actions taken by other nations to erect tariff or non-tariff
barriers to United States exports and/or to undersell us in the world market by-
use of export subsidies will need to be met with strong negative action, either at
the negotiating table or in the event of failure by a re-examination of our stand
l8
U.S. MERCHANDISE TRADE
$Billion, fa.s. (Customs annual rates
400
350 r
300 H. Z
250 H. Total importa 2^--~ ~~~~~~
200 -
2 - - - -
Mfd. Imports
50 -
1-1 i 1–1–1 | | | | | | | | | | | | | | Lll LL
+25 __2~ * ~~mid. Goods Balance
O - _ - * -->
- -
{—a YS-
*O –50 Total Trade Balance
-*ll-L-L-L-L-L-L-L-L-L-L----|--|--|-
1978 1979 1980 1981 1982 1983 1984
Exports Imports Balance
+ !.a.s.l. 1
f.a.s. Customs Customs c.i.f.
(Billions of dollars, annual rates)
Total trade'
1983 annual 2005 258.0 –57.6 – 69.4
1984 annual 217.9 325.7 – 107.9 — 123.3
1984: ! ... . . . ... 2.13.1 3.18.0 —-105.0 – 119.3
l! ......... 212.4 217.2 – 104.8 – 119.8
Ill ........... 222.6 351.5 – 128.9 – 146.3
IV ......... 224.0 3.18.1 –94.1 – 109.2
Manufactures trade
1983 annual ...... 132.4 163.4 – 31.0 – 38.2
1984 annual ...... 143 1 221.5 – 78.4 – 88.7
1984: ! ......... - 138.5 213.7 — 75.2 – 84.7
II .. --- 140.1 212.2 –72. 1 -82.0
Ill ........... 146.7 246.8 – 100. 1 – 112.1
IV ........... 148.1 215.0 – 66.9 -- 77.1
Agricultural trade -
1983 annual .......... 36.5 16.5 20.0 18.4
1984 annual ......... - 38.2 19.8 18.4 16.6
1984: --- 4.1.0 20.4 20.6 18.8
36.4 19.0 17.4 15.6
37.9 21.9 16.0 14.0
'cif. import values not shown.
Notes for tables: Quarterly data seasonally adjusted unless
starred (*). All values in current dollars. f.a.s.-Free
alongside ship. c.i.f.-Cost, insurance, and freight.
Table II-1
COMPOSITION OF U.S. MERCHANDISE TRADE
$ Billions
+50
1984 SURPLUS
+25 H Petroleum
& Products
0
Capital Food &
Other
–25 Goods Aut ti Beverages Industrial
- utomotive Supplies
–50 Consumer Vehicles pp
.75 H Goods
1984 DEFICIT
100
Exports Imports Balance
!.a.s. Customs !.a.s. MCustoms
(Billions of dollars, annual rates)
Capital goods
1983 annual ........... 67.2 40.9 26.4
1984 annual .. 72.0 59.8 12.2
1984: | .. 70.2 57.5 12.7
|| ... 71.3 55.9 15.4
||| .. 72.4 68.7 3.7
IV ........... 74.1 57.1 17.0
Consumer goods
1983 annual ........... 13.4 44.9 31.5
1984 annual ........... 13.3 59.8 –46.5
1984: ! … 13.4 60.2 – 46.8
|| .. 13.1 57.0 43.9
||| .. 13.4 64.7 – 51.3
IV ........... 13.4 57.5 -44.0
Automotive vehicles and parts
1983 annual ........... 17.0 42.0 –25.0
1984 annual ... 21.0 55.3 — 34.3
1984: ! ... 21.0 53.3 – 32.3
II ... 19.6 55.2 – 35.6
Ill .......... 22.0 59.2 37.2
IV ........... 21.4 53.4 - 32.1
Food and beverages
1983 annual ........... 30.9 18.2 12.8
1984 annual ........... 31.4 21.2 10.3
1984: 34.4 20.9 13.5
30.5 20.3 10.2
29.4 22.9 6.5
31.4 20.5 10.9
Petroleum and products
1983 annual ........... 5.0 53.6 – 48.6
1984 annual ... -- 4.7 57.3 –52.6
1984: ! .. 3.6 55.0 –51.4
|| .. 4.7 59.9 –55.2
||| .. 4.7 57.9 –53.2
IV ........... 5.9 56.4 –50.5
Other industrial supplies
1983 annual ........... 51.5 52.2 – 0.7
1984 annual .. --- 56.7 64.8 – 8.0
1984: ! .. 54.9 64.9 – 10.0
II .. 55.7 63.8 8.1
|||.. 59.7 68.7 9.0
IV ........... 56.7 61.7 5.0
Note: Commodity values do not add to U.S. trade totals because of omission
of miscellaneous products.
U.S. MERCHANDISE TRADE BY AREA
$ Billions
+20
1984 SURPLUS
Communist
- 20 – Western Countries
Europe
-40 Hz
LDCs
1984 DEFICIT
–60
- Exports imports Balance
!.a.s. Customs !.a.s.l. Customs
(Billions of dollars, annual rates)
Western Europe
1983 annual .......... 56.1 53.9 2.2
1984 annual ........... 58.0 71.2 13.1
1984: | “… 57.5 7.2.1 14.5
ll ......... 55.6 67.3 11.7
||| .. 60.1 78.1 18.0
IV 59.2 67.9 8.7
Japan
1983 annual ........... 21.9 41.2 19.3
1984 annual ......... 23.6 57.1 - 33.6
1984 | ..…. 22.6 50.8 28.2
|| 23.6 55.0 31.4
||| ---- 23.5 67.3 43.8
IV ........... 24.6 6.2 31.6
Canada -
1983 annual ........... 38.2 52.1 - 13.9
1984 annual .......... 46.5 66.5 -- 20.0
1984: | .. 46.5 63.6 17.1
|| .... 46.6 67.0 20.3
III ... 47.7 69.1 – 21.4
IV .......... 45.6 67.1 – 21.5
opec *
1983 annual .......... 16.9 25.1 -8.2
1984 annual ....... - 14.4 26.6 – 12.2
1984: ! … 15.0 24.9 10.0
| . 14.1 28.8 – 14.8
||| . 13.9 28.3 14.4
!V ......... 14.6 24.3 - 9.7
Other developing countries*
1983 annual ------ 55.3 77.2 - 21.9
1984 annual .... 60.0 93.2 33.2
1984: ! .... 56.5 93.6 - 37.1
II .... 60.2 89.4 29.2
||| .... 61.7 100.6 -- 38.9
IV ........... 65.6 89.1 23.5
Communist countries*
1983 annual ........... 5.1 3.6 1.5
1984 annual ........... 7.2 5.2 2.0
1984: ! .... 6.4 4.9 1.5
If .... 5.9 4.7 1.1
||| .... 7.1 6.0 1.1
• IV ........... 9.4 5.2 4.2
Note: Areas are not intended to add to U.S. trade totals.






























s
U.S. BALANCE OF PAYMENTS
CURRENT ACCOUNT
$ Billions
+20 H CURRENT ACCOUNT SURPLUS
0
–20 H. º
–40 H.
–60 H.
...I CURRENT ACCOUNT DEFICIT
1978 1979 1980 1981 1982 1983 1984
(Jan.-Sept.)
----- export. --- - - ------ - - saiane-
(Billions of dollars, annual rates)
Current account total
1983 annual 332.2 373.8 ' – 41.6
1984 annaul
1984: | 362.8 44.14 ' — 78.7
II 355.6 454.4 ' – 98.8
III 366.7 498.3 ' – 13 1.6
Merchandise trade (adjusted, excl. military)*
1983 annual ........... 200.3 261.3 – 6.1.1
1984 annual .. -- -
1984: ! .. 215.7 3.19.2 – 103.4
!! ........... 218.3 32 1.6 – 103.3
!!! ........... 222.0 354.5 – 132.5
Services
1983 annual ........... 131.9 103.8 28.1
1984 annual ...........
1984: I 147.0 113.7 33.3
II --- 137.3 124.2 13.1
III 144.7 132.5 12.2
Investment income receipts and payments
1983 annual .... 77.0 23.5
1984 annual ....
1984: ! .... 93.2 62.2 31.0
!! .... 83.3 69.5 13.8
III ... 90.0 75.3 14.7
Business-related services *
1983 annual .... 41.6 35.9 5.7
1984 annual ...
1984: ! .... 43 37.8 5.3
ll .... 43.2 40.8 2.4
III ... 43.4 4.32 0.2
Other services
1983 annual .... 13 4 14.4 - 1.0
1984 annual ....
1984: ! .... 10 8 13.7 -- 3:0
II .... 10.9 13.9 – 3.0
2.7
III ... 11.3 14.0 -
'Includes unilateral tranſers.
Values differ from those in “U.S Merchandise Trade” table as they are
adjusted to the balance of payments accounting
3. Primarily travel, transportation, fees, and royalties.
Table II-1 C
Ont.
KEY INTERNATIONAL COMPARISONS
Balance of Merchandise Trade
total
(Billions of dollars
with us."
Jan.-Sept.
1983 1984
, annual rates)
United States 57.6 107.9 - - - -
France ................ 5.7 — 2.2 2.4 0.8
Germany, Fed. Rep. – 21.0 - 23.5 - 1.9 - 4.7
United Kingdom .. -- 16 – 5.5 - 1.2 - 1.0
Japan .................................. + 31.6 + 44.4 - 18.5 + 31.8
1. imports valued c.i.f.
--- */ change in Trade
1983 to 1984 Exports as
- % of
Exports Imports GNP, 1984
United states ............... + 8.7 + 26.2 5.8,
France ................ + 2.7 – 0.9 19.7
Germany, Fed. Rep. + 1.2 – 0.2 27.6
United Kingdom .. - 2.3 – 6.4 21.5
Japan ..................... - 15.7 - 8.7 13.6
t January-secember
Share of World Exports
1970 1975 1980 1983 iss4
(Percent)
United States .................... 15.4 13 6 12 1 12.4 12.8
France .................... 6.4 6 7 63 5.9 5.2
Germany, Fed. Rep. 12 1 * 1 4 10 5 10.5 9.7
United Kingdom ...... 7 0 5 € 6.0 5.7 5.2
Japan .................................. 6.9 7 1 7 1 9. 1 10.2
1 January-September
Value and Share of Industrial Countries
Manufactured Exports
--- value Share
1970 1980 1984 1970 1980 1984 *
(S Billion) (Percent)
United States .................... 29 144 143 21.3 18.3 19.7
France .................... -- 14 84 71 t 9. 1 10.2 9.2
Germany, Fed. Rep. 31 167 147 t 19 8 19.8 19.1
United Kingdom ... ... 17 86 £2 + 1C 4 10.0 7.8
Japan ..........................… * 124 *62 t 8.9 11.9 15.2
'F's ºudºng exports to United States January–June
f January–September at annual rate
FACTORS INFLUENCING
U.S. COMPETITIVE POSITION
1984
1983 1984 Ti H. TII iv.
% change from same period of previous year)
Industrial Production
United States 6.5 10.8 15.4 12.9 9.2 6.2
France ............ 0.6 2.5 1.3 0.6
Germany, Fed. Rep 0.8 6.0 – 1.3 5.1
United Kingdom . --- 3.3 3.0 1.0 -- 1.1
Japan .............................. 3. 10.9 11.7 10.6
Wholesale Prices for Manufactures
United States 1.0 2.4 2.7 3.3 2.2 1.6
France ............ 11.1 13.1 15.5 14.4 12.6 10 2
Germany, Fed. Rep 1.5 2.9 3.2 2.6
United Kingdom ........... 6.1 5.9 6.3 6.2 5.9
Japan ...............-------------. - — 0.1 – 0.8 – 0.1 0.3 0.5
Value of U.S. Dollar Vis-a-Vis Other Currencies
13 currencies ... 2.9 6.8 5.0 4.9 7.3 9.7
French franc .... 15.9 14.7 20.5 11.6 12.5 14.7
German D-mark 5.2 11.5 12.2 9.1 10.5 14.1
U.K. pound ....... ... 15.3 13.9 6.8 11.2 16.5 20.9
Japanese yen ................ –4.7 0.1 – 2.0 – 3.3 0.5 5.1
1960/70 1970/80 1982 1983 1984
(% change average annual rate
Productivity in Manufacturing
United States ............... 2 8 2.5 2.1 4.3 4.7
France - 6.7 5.0 5.6 5.9
Germany, Fed. Rep. 5.8 4.5 1.2 4 7
United Kingdom ..... --- 3.7 2.7 3.9 66
Japan .............................. 10.8 77 8, 1 5 0
U.S. IMPORTS OF PETROLEUM
AND PRODUCTs
Value Price
Quantity Customs per barrel
(Mil. bbl/day) (bil. $) (dollars)
(Annual rates)
1983 annual ........ ..... 5.1 53.2 28.58
1984 annual ............ .. 5.5 56.9 28. 11
1984: ! ....….. 5.5° 56.4.” 28.32
II ...... - 5.6* 58.3." 28.45
Ill ...... - 5.5° 56.8° 28.00
IV 5.5° 56.2° 27.70
Note: Values differ slightly from adjusted data in “Composition of U.S.
Merchandise Trade table.
Source: U.S. Department of Commerce, International Trade Administration. Current International Trade
f Position of the United States (Washington, D.C. : Government Printing Office, February 1985).




















as a free market Operator. As long as these factors continuºgo Operate, United
States goods will be among the higher priced in world markets.
~ * * *-*
Attempting to forecast the future in any detall beyond one or two years is
very risky and is seldom attempted by anyone other than psychics, or without many
qualifications and Conditions attached. Most long-range economic forecasting is
of this nature. The major subject of long-range forecasts is in the area of
trends - the most famous in recent times is John Naisbitt's Megatrends. Of the
ten trends Mr. Naisbitt highlights, several are of interest in the area of world
trade. The change from an industrial Society to an information society is evident
in the shift of basic industries such as mining, steel, and other heavy industry
from the developed countries of Europe and North America to the lesser developed
Countries of the Third World. The shift from a United States national economy to
a World economy is more than evident in the balance of trade defloit and the
increasing penetration of imports into the United States market. The shift in
technology to high tech uses in almost every aspect of life is exemplified by the
increasing robotization of the assembly line and talking appliances, to mention
two extreme examples. The increasing emphasis upon quality in products and stra-
tegic planning represents the shift from the short term outlook to the long term
Outlook. All of these trends portend an increasingly interdependent world connec-
ted by mutual interest and mutual need. The production of basic goods in lesser
developed countries for consumption in economically advanced countries, food grown
in one Country for consumption in another and energy produced where a quirk of
nature placed it exported to the area which can used it and §n afford it are all
Scenarios of the present destined to intensify in the future.
Other forces include: a shift to increasing North/South trade patterns over
the East/West pattern, a growth in counter trade or barter in international
trade, growing pressures for protectionism particularly non-tarltt barriers, and
differential rates of growth in national or regional economies. North America
will slow to two to three percent for the rest of the century while Europe grows
at One to two Pºſcent and the newly industrial nations of the Pacific Rim grow at
six percent. Another trend which is developing is the change in the growth
rate of world trade. Through the 1960's and early l970's, it increased at rates
exceeding at times forty percent annually. After the slow down in 1975, the rate
of growth climbed back to 26.8 percent in 1979. Since then, thºtrend has been
in a negative direction with recent years below ten percent. This slowed
growth in world trade is predicted to Continue to the next Century and thus any
large growth iſ, United States foreign trade will Come at the expense of another
nation's trade.
In addition to these extensions of existing trends, the development of
technology such as the smart-power or high-voltage integrated circuit which will
enhance the life of fluorescent lights and the quality of the image of Computer
flat panel displays, will enable Small electric motors to start-up and slow-down
Smoothly, and improve the efficiency of alternating current motors by forty per-
Cent. This promises a reduced rate of increase in the demand for electricilty
which will further lower our dependence upon foreign oil but at the same time
Will reduce overseas demand for our steam coal. Another technological advance is
in the area of reinforced plastics and Composites. These products are already
Common in microwave bakeware, showerstalls, and golf Club shafts. New applica-
tions include an internal-combustion race Car engine made of polymers, a drive
shaft of graphite composites and a fiberglass minesweeper for the Navy. In some
Ways this will increase the demand for oil and natural gas as raw materials, but
2l
it also has the potential for gºducing demand for oil by reducing the weight of
vehicles which use it for fuel.
The trend toward the application of advanced technology to agriculture has
already been noted in Saudl Arabia. Lybia too is attempting to tap the vast
reservicr of water trapped in deep aquifers beneath the desert. In a plan that
envisions drilling 270 gravity flow wells in an area l, 243 miles into the inte-
rior, Lybia is building a pipeline which will supply 700 million cubic meters of
water per year to be used to irrigate l80,000 acrea of farms along the coast.
Expansion from the present crops of dates, Olives, citrus and other fruits,
grapes and tobacco should make Lybia self-sufficient in most of its agricultural
needs. A combination of United States and Korean firms are the principal Contrac-
tors. The projeºtsawhich is estimated to cost $3.3 billion, is scheduled for
Completion in 1989.” The OPEC nations which have the foresight to use their oil
revenues to develop the other sectors of their economies will enable their citi-
zens to maintain a reasonably high standard of living. The impact for the United
States is that a nation self-sufficient in foods needs little or none of our
principal export commodities. On the other hand, the problems of sub-Saharan
Africa Continue to grow. With few natural resources needed in the world market,
as in the Sahel, or with a national leadership unable or unwilling to commit
itself to economic development in the rural areas, as in Nigeria, nations below
the Sahara are facing famine, falling standards of living, poverty of large
numbers of their citizens, and the threat of eventual civil disorder as unhappy
citizens or opportunistic neighbors react to the deteriorating situation. Nations
unable to grow their own food for whatever reason will need to import it, but
without the means of earning foreign exchange, they have no way to pay for it.
In order to assure ourselves the markets for our goods, we need to help these
nations to stabilize their economies and to develop industries and activities
which $#1 produce the goods whose sale will enable them to sell on the world
market.
Regardless of what the lesser developed nations do, the Continued penetration
of the United States market by foreign manufactured goods and the continued inabi-
lity of United States manufactured goods to compete in the world market must be of
concern. Steps must be taken to assure the success of United States manufacturers
in foreign markets. The strategic advantage of gaining a 'first niche in a market
has been ignored by the United States in negotiating sales agreements in other
countries. Other developed countries are using a combination of loans and
foreign aid to secure contracts for their own national firms. The United States
has cried foul but that has not stopped countries such as Germany from using the
technique to secure that crucial toehold for machinery which extracts oil from
seeds in Egypt to the detriment of a United States bidder. To accomplish this,
the Germans matched the price and loan package and threw in $10 million in foreign
aid funds to boot. The U.S. has attempted to duplicate this procedure but with
little success. When the United States has offered to use Agency for
International Development funds with lesser developed nations such as Botswana to
help purchase locomotives, the offer was turned down because the government prefe-
rred to receive the aid as uncommitted monies to be used as they wished without
strings attached. The major problem seems to be that the receiving nations
perceive that the money is being moved about as in a shell game and no new money
is being added to the deal, only new strings; a procedure which # not designed
to gain the United States a reputation for generosity or fair play.
Conclusion g
While the United States has pushed for the opening of other nation's borders
22
to trade free of tariffs and non-tariff barriers, we have been succumbing to the
not so subtle pressures of industries undergoing heavy competition from foreign
goods ln the domestlc market. The auto, textile and steel quotas and a forty-five
percent tariff on motorcycles are only some of the examples which come to mind.
"Buy American" laws are still On the books for much government work, and the Jones
Act prevents foreign flag Carriers from engaging in domestic trade between United
States ports. These are much more open than the almost archane examples of
"health and safety" rules and "quality" standards imposed by other nations,
partloularly by the Japanese whose bureaucracy combines with a traditional
Society based upon long standing associations to keep foreign penetration of
their market to a minimum. It has been premised that the structure of Japanese
Society is a much stronger force in keeping foreign goods out of Japan than are
the rules and regulations. "Buy Japanese" is a way of life and needs no laws to
enforce it. In spite of the inconvenience involved, other nations have taken the
Japanese attltude and applied it to Japanese imports, and others if they happen to
Compete in a particular product. France requires all video recorders to undergo
rigerous test ln a small inland town, Poitiers, before being released to the
French market. The General Agreement on Trade and Tariffs is supposed to cover
these kinds of regulations but has no section which covers non-tariff barriers nor
does it cover the growing international trade in sergipes. Attempts to negotiate
Such agreements have met with failure to this point.
As long as such barriers meet natioſºl needs without imposing high-cost
penal lties, they will continue to exist.” "Buy American" has serious national
defense implications as chromium, Cobalt, manganese and platinum, metals widely
used in steel, areospace, electronics and other high-tech industries, are produced
by South Africa, Zaire, and the U.S.S.R. Our dependance upon such sources encou-
rages such actions as strategic stockpiles and contingency plans for recycling
domestic scrap. It also underlines our increasing dependang; upon our fellow
nations in the midst of our build up of defensive posture.” During the next
decade, the United States needs to assess her position in world trade for the
future and make preparation to carry out whatever plan is decided upon. The
existance of barriers to trade will need continual attack to prevent their growth
to the proportions of the 1930's when protectionism and super-nationallSm almost
destroyed the world. The other point to work upon is the strength of the United
States dollar relative to other currencies. As long as it remains as high as it
is at present United States firms and goods will remain the last resort for buyers
With alternative markets.
23
Table II-2
Table 13.
(Percentage changes)
Industrial Countries:
Export and Import Volumes, 1967–85
Change from Preceding Year
Average
1967–762 1977 1978 1979 1980 1981 1982 1983 1984 1985
Exports
Canada 7.0 8.9 10.2 1.6 0.5 3.6 — 0.7 8.8 24.7 7.7
United States 6.7 1.2 10.0 14.2 . 7.0 — 3.2 – 11.9 – 6.2 6.5 3.6
Japan 13.0 9.1 1.0 0.2 19.2 10.6 — 2.4 8.6 12.3 5.5
•France 9.6 6.6 6.6 9.1 3.3 4.0 — 3.8 3.7 5.5 4.5
Germany, Fed. Rep. of 8.1 6.0 4.6 7.3 3.9 5.2 1.9 0.4 8.5 7.0
Italy 8.8 7.0 11.1 7.3 — 8.1 5.5 – 0.5 5.2 5.0 4.0
United Kingdom 5.7 7.8 2.6 4.8 1.0 — 0.8 2.3 0.8 6.1 4.0
Other industrial countries 8.0 4.9 6.0 8.3 1.9 2.4 1.4 6.3 6.5 4.4
All industrial countries 7.9 5.3 6.2 7.6 3.9 3.3 — 2.3 2.6 8.6 5.1
Of which,
Seven major countries above 7.9 5.5 6.2 7.4 4.6 3.6 — 3.6 1.5 9.2 5.4
European countries 7.9 5.8 6.0 7.3 1.3 3.9 0.3 3.8 6.6 4.9
Imports
Canada 7.7 1.2 4.0 9. 1 — 5.2 2.7 — 15.3 14.1 23.5 7.7
United States 6.9 12.7 7.4 1.0 – 6.0 0.7 — 5.0 10.0 27.8 11.1
Japan 10.4 3.6 6.6 11.6 — 5.0 –2.4 — 0.7 1.3 8.1 5.5
France 10.2 0.7 6.1 12.2 6.2 —3.9 3.1 — 2.0 2.1 1.5
Germany, Fed. Rep. of 8.0 4.3 7.9 9.2 2.0 – 3.7 0.4 5.2 7.5 4.7
Italy 7.1 — 0.2 7.9 13.9 , 2.8 – 11.3 3.2 1.6 6.5 6.5
United Kingdom 5.2 1.8 4.7 10.6 – 6.0 – 3.9 4.8 6.9 7.2 4.7
Other industrial countries 6.9 3.8 1.4 9.3 0.8 — 3.0 1.8 1.6 5.2 4.1
All industrial countries 7.5 4.4 5.2 8.6 – 1.5 — 2.2 – 0.6 4.4 11.9 6.5
Of which, * &
Seven major countries above 7.8 4.7 6.7 8.3 — 2.3 — 1.9 — 1.5 5.5 14.5 7.0
European countries 7.5 2.5 4.1 10.7 1.1 — 4.3 2.0 2.9 5.5 4.2
"Trade in goods only. For classification of countries in groups shown here, see the introduction to this appendix.
* Compound annual rates of change.
Source:
International Monetary Fund, World Economic Outlook, September, 1984, occasional

Paper 32, Washington, D.C
, , International Monetary Fund. T534.
Reprinted with permission.
P. 40.
International Monetary Fund
24
EndnoteS
1
Security Pacific National Bank. Economic Report (Spring-Summer 1984),
p. 107.
2
Shirley Hoffman Rhine. The Impact of Regulations on U.S. Exports
(New York: The Conference Board, Report No. 809, 1981), p. 1.
3
Ibid. p. 41.
4
U.S. Congress, Congressional Budget 0ffice. The Economic and Budget
Outlook (Washington, D.C. : Government Printing Office, August, 1984), p. 25.
5 º
Oswald Johnston. "1984 Trade Deficit Hits $123 Billion", Los Angeles
Times (January 31, 1985), Pt. I, p. 1.
. 6

"Challenge On Trade", Los Angeles Times (editorial, Feburary 5, 1985),
Pt. II, p. 10.
7
- Albert R. Karr. "World Harvests of All Major U.S. Crops Setting Highs,
Putting Pressure on Prices", Wall Street Journal (November 12, 1984), p. 32.
8
Jeff Bailey and G. Christian Hill. "Plowed Under: As Many Farms Fail,
More Rural Banks Are At Risk of Dying Too", Wall Street Journal (January 1, 1985),
p. 1; "93,000 Medium Size Farms in Financial Trouble, Report Says",
Los Angeles Times (March 11, 1985), Pt. I, p. 4.
9
George Cabot Lodge and William C. Crum. "Keeping Informed: U.S.
Competitiveness: the Policy Tangle", Harvard Business Review, (January-
February 1985), p. 34.
10
* "Falling Exports, Rising Support Payments Throwing Farm Economy Out
of Sync", National Journal (November 24, 1984), p. 2251.
11
Paul Richter. "HOW Strong Dollar Sells Out Firms", Los Angeles Times
(February 2, 1985), Pt. I, p. 1.
12
"The Death of Mining: America Is Losing One of Its Most Basic Industries",
Business Week (December 12, 1984), p. 6b.
13
"The Toughest Job in Business: How They're Remaking U.S. Steel",
Business Week (February 25, 1985), p. 51.
14 -
"Challenge On Trade"
15
John R. Block, U.S. Secretary of Agriculture. Address to the American
Association of Port Authorities National Convention (Seattle: September 14, 1983).
16
"Farm Supports", p. 2252.
25
17
Stanley Meisler. “African Famine Grows on Its Fallow Farmlands",
Los Angeles Times (March 3, 1985), Pt. IV, p. 2.
18
U.S. Department of Commerce, International Trade Administration.
Current International Trade Position of the United States (Washington, D.C. :
Government Printing Office, March, 1985).
19
Michael Czinkota. "Alternative Futures For International Trade and
Implications for Trade Policy", I ransportation Research Board Conference
(Washington, D.C., January 14, 1985); Ronald K. Shelp. "U.S. Shouldn't
Ignore Needs of Service Sector", Los Angeles Times (January 27, 1985),
Pt. W., p. 3. .
26)
William E. Brock in U.S. Congress, House of Representatives, Committee
on Ways and Means, Subcommittee on Trade. HearingS –– U.S. Trade Deficit
(Washington, D.C.; Government Printing Office, March 28, 29, April 5, 10, 12
and 25, 1984), p. 24; U. S. Congress, Congressional Budget Office. The
Economic and Budget Outlook: An Update (Washington, D.C. : Government Printing
Office, August, 1984), pp. 24-26; Juan de Onis. "Brazilian Carnival
Dedicated to Democracy", Los Angeles Times (February 18, 1985), Pt. I,
p. 5; Steve Fraiser and S. Karene Witcher. "Mexican Spat With IMF Over
Austerity Could Delay Billions of Dollars in Credits", Wall Street Journal
(February 15, 1985), p. 27. \
21
"Commerce Secretary Sees Wider 1985 Trade Deficit", Wall Street Journal


(December 10, 1984), p. 48.
22 -
U.S. Department of Commerce, International Trade Administration.
Current International Trade Position of the United States (Washington, D.C. :
Government Printing Office, November 1984).
23 *
Ibid.
24
U.S. Department of Agriculture, Foreign Agricultural Service,
World Production and Trade, Weekly Round-up, Supplement 2-85 (Washington, D.C. :
Government Printing Office, February 7, 1985).
25
Lawrence Ingrassia. "Plunging Pound: Sterling Drops Sharply Despite
Good Health of British Economy", Wall Street Journal (January 1, 1985), p. 1.
26
"For Centuries, Onions Made Good Scents", Los Angeles Times
(January 27, 1985), Pt. I, p. 7.
27
Czinkota, op.cit.
28
Lodge. Op. cit. , p. 38.
26
29
"Mexico Hopes Exports Will Help Its Economy Out of the Doldrums",
Wall Street Journal (January 31, 1985), p. 1; Roger E. Brinner in U.S.
Congress, House of Representatives, Committee on Energy and Commerce,
Subcommittee on Commerce, Transportation and Tourism. Hearings -- Trade
Deficit and the Economy (Washington, D.C. : Government Printing Office,
March 6, 1984), p. 13.
30
Wendy L. Wall. "Grain Contract Prices Decline as Demand For Export
Weakens", Wall Street Journal (February 15, 1985), p. 32.
31
Richter. Op. Cit.
32 -
Charles P. Wallace. "Saudis: A Revolution in Farming", Los Angeles
Limes (March 1, 1985), Pt. I, p. 1; David B. Ottaway. "Saudi Arabia's
Well-Oiled Economy Has Slipped Into 1st Big Recession in 2 Decades",
Los Angeles Times (January 27, 1985), Pt. W, p. 6.
33
Wall. Op. Cit.
34
Ibid.
35
Art Pine. "Dollar's Rise, a Boon For Many, Also Hurts Major U.S.
Industries", Wall Street Journal (February 22, 1985), p. 1; U.S. Congress,
Congressional Budget Office. Reducing the Deficit: Spending and Revenue
Options, A Report to the Senate and House of Representatives on the Budget
Part II (Washington, D.C.: Government Printing Office, February 1985), p. 35.
36 -> -
National Coal Association News (No. 4761, February 4, 1985), p. 1.
37
U. S. General Accounting Office. Prospects For Long-Term U.S. Steam
Coal Exports to European and Pacific Rim Markets, Report by the U.S. General
Accounting Office (Washington, D.C.: Government Printing Office, GAO/NSIAD-83–
08, August 4, 1983), pp. 1-4; see also U.S. Congress, Senate, Committee on
Energy and Natural Resources, Subcommittee on Energy and Mineral Resources.
Hearings.--Condition of America's Côal Industry (Washington, D.C. : Government
Printing Office, November 15, 1983).
38
U. S. General Accounting Office. Prospects For Long- |erm U.S. Steam



Coal Exports, pp. 18–21.
39
National Coal Association News (No. 4739, September 4, 1984), p. 3.
40
U.S. General Accounting 0ffice. Prospects For Long-Term U. S. Steam
Coal Exports, pp. 23–24.
41
National Coal Association News (No. 4764, February 25, 1985), p. 4.
2/
42
Brock. Op. cit., pp. 6–7.
43
"Trade Deficit in Quarter Swells to $32.9 Billion", Los Angeles Times
(December 18, 1984), Pt. IV, p. 1; "Remaking U.S. Steel", p. 53.
44
U.S. Department of Commerce, International Trade Administration.
Current International Trade (Washington, D.C. : Government Printing Office,
February 1985).
45
Pine. "Dollar's Rise"; Art Pine. "Rapidly Rising Dollar, Big Trade
Deficit Stir More Pleas for Help", Wall Street Journal (February 12, 1985),
p. 1; Larry Green. "Main Street: Small Town America Endangered", Los Angeles
Times (March 4, 1985), Pt. I, p. 1; Jeff Bailey and Marj Charlier. T"Farm-
debt Crunch: Many Growers Get Aid From Farm Banks Unwilling To Take Losses
Now", Wall Street Journal (March 4, 1985), p. 1.
46
U.S. Congress, Congressional Budget Office. Charging for Federal
Services (Washington, D.C. : Government Printing Office, December 1983).
47 -
Lodge. Op. cit. , p. 35.
48 -
Ronald W. Reagan. Economic Report of the President (Washington, D.C. :
February 1984), pp. 124-127; Igrassia. op.cit.; "Japan Focuses on Basic
Research to Close the Creativity Gap", Business Week (February 25, 1985),
p. 94. -
49
- John Naisbitt. Megatrends: Ten New Directions Transforming Our Lives
(New York: Warner Books, 1984).
50


Harvey Romoff. "Introduction" (Washington, D.C. : Transportation
Research Board Conference, January 14, 1985); International Monetary Fund.
World Economic Outlook (Washington, D.C.: International Monetary Fund,
Occasional Paper 32, September 1984), p. 3.
51
Maxwell Watson, Peter Keller and Donald Mathieson. International
Capital Markets: Development and Prospects (Washington, D.C.: International
Monetary Fund, Occasional Paper 31, August 1984), p. 2.
52
Czinkota. op.cit.
53
Security Pacific National Bank, Futures Research Division. FutureScan
(No. 419, March 4, 1985).
. 54
"Charleston Becomes Part of International Team For 'Great Man-Made
River' Project", Port News (Charleston, SC: Port of Charleston, South
Carolina State Ports Authority, Wol. 38, No. 2, February 1985), p. 10-12.

28
55
Meisler. Op. Cit.
56
Paul Richter. "Foreign Aid Becomes a Troublesome Force in the Battle
Over Exports", Los Angeles Times (March 3, 1985), Pt. W, p. 1.
57
Martin Baron. "U.S. Protectionism: Trade: No Nation Has Clean Hands",
Los Angeles Times (January 31, 1985), Pt. I, p. 1; Czinkota. op.cit.
58
Czinkota. Op. cit.
59
"U.S. Could Develop New Strategic Metals Sources, Study Finds",
Wall Street Journal (January 15, 1985), p. 64; see also U.S. Congress, U.S.
Senate, Committee on Energy and Natural Resources. Hearings -- Geopolitics
of Strategic Critical Materials (Washington, D.C. : Government Printing
Office, May 19, June 20, and July 22, 1983).

29
Chapter III
U. S. PORT FACILITIES
Introduction
- The American port industry ls undergoing raplc change. In a Sense, it acts
as a lightning rod for much of the world and American economy. It also ls quite
sensitive to how economic forces are translated into Specific public pollcy at
the national, state and local levels of government.
More observers are recognizing the importance of ports and what they have
done and may do for the nation. Citizens, industries, and public officials in
maritime areas have long recognized the relationship and their governments have On
the whole been supportive. The national government has recognized the importance
and value of ports, but has trouble demonstrating it in a Coherent statutory and
programmatl.c agenda. Whether it be dredging or merchant marine, Coastal preserva-
tion or coal terminal development, increased productivity through technological
application (Containers) or longshoremen job preservation and protection, the
contrasts continue in many ways. However this simply illustrates further the
implicit contradictions of public pollcies that are placed upon the export tran-
sportation system and how they become most visible for ports.
Aside from recent presldentlal proclamations for National Transportation
Week, the President has further stated that export is critical. In his State of
the Union message, January 25, 1983, he stated that one out of five jobs in the
country is tied to export. Furthermore, he mentioned the intent to propose a
Coordinated foreign trade pollcy.
In recent years more attention has been given to the multifaceted port
industry. The following information summarizes the status of the port industry.
Port Facilities
The American port industry ls diverse. There are many different components
and organizational form; and relationships with public and prlvate agencies vary
too. A sºmºlary report from the U. S. Department of Transportation noted the
tollowing” (Table III-1, 2):
l. There are l83 Commercial seaports on all coasts
(including Great Lakes);
2. These deep draft ports require Only two percent or
l650 mileS Of COast;
3. There are 2871 deep draft berths for Ocean going
vessels including l396 for general Cargo, 699 for
dry bulk and 776 for liquid bulk;
4. There are approximately 25,000 miles of
commercially-navigable inland waterways, of which
the Mississilpi System accounts for lo,000 miles
along with the Gulf, intracoastal, Alabama River,
and Columbia/Snake River Systems.
30
Table III-1
U.S. Seaport Terminal Facilities by Region!/

NUMBER AND Type of Berths
GENERAL CARGO FACILITIES BULK CARGO FACILITIES
Tſ" "TTT specializep AE- -
NUMBER | TOTAL NUMRER | CONVENTIONAL GENERAL CARGO DRY BULR LIQUID BULK TÜTh I,
REGION roºs renºus arraraulx Tcontainerſ Royroſaargº ship ſcºrin Tcom. Toneſother ſpºrno,Tusc/ird Torner
NORTH ATLANTIC 27 322 308 54 26 5 13 || 23 14 || 47 | 85 6 B 4 715
SO}}TH ATLANTIC 24 1 4 3 1) 6 21 30 2 l l 3 26 65 l 1 3 279
GULF 24 358 252 12 14 6 29 9 7 51 1.37 2 68 527
SOUTH PACIFIC 37 222 189 5] 21 2 8 5 - 29 90 gº 23 4 : 8
NORTH PACIFIC 43 204 142 26 9 s 19 gº 8 54 76 * -º 13 34 7
GREAT LAKES 28 317 110 *ge - - . 47 || 65 47 193 se sº 15 3.25
TOTAL 183 1,566 l, 117 164 100 15 117 | 103 || 79 || 400 60l. 9 166 2, R7 l
includes those commercial cargo-handling facilities with a minimum depth alongside of 25 feet for the ocean
cºastal ports ard 18 feet for the Great Lakes ports.
Source : Maritime Administration, Office of Port and Intermodal Development, Port Facility Inventory, 1975-1983; and
- U.S. Army Corps of Engineers, Water Resources Support Center, Port series TT972-T553.
Source: U.S. Department of Transportation, Maritime Administration. A Report to the Congress on the
# Of #e Public Ports of the United States (Washington, D.C.: Government Printing Office, August
| 3 |} , 8.
g
Table III-2
Commercially Navigable Waterways
of the United States by Lengths and depths}/
Lengths in Miles of Waterways and Corresponding Depths
Waterway Groups thrder 6 to 9 to l2 to 14 ft.
- 6 ft. 9 ft. 12 ft. l4 ft. & Over | Total
Atlantic Coast Waterways | l, 426 l, 24]. 584 938 l,581 5,770
Atlantic Intracoastal
Waterway-Norfolk, Va.
to Key West, Fla. tº 65 65 l, 104 º l, 234
Gulf coast Waterways 2,055 ô47 l, lº& 79 378 4,292
Gulf-Intracoastal
Waterway-St. Marks, Fla. *
to the Mexican Border Gº tºº tºº l, i37 * * l, 137
Mississippi River System 2,020 969 4,957 740 268 8,954
Pacific Coast Waterways 730 498 237 26 2,084 3,575
Great Lakes. 45 89 º 8 348 490
All Other Waterways 76 7 º l g 7 9]
Grand Total 6,352 3,516 6,976 - 4,033 4,666 || 25,543

1/ The mileages in this table represent the lengths of all navigable channels of the
United States, including those improved by the Federal Government, or other agencies,
and those which have not been improved but are usable for commercial navigation.
Source: U.S. Army Corps of Engineers
Source: U.S. Department of Transportation, Maritime Administration. A Report
to the Conqress, on the Status of the Public Ports of the United States
(Washington, D.C.: Government Printing Office, August 1934), p. 3.
31
The inland systems, have over la 60 barge tacllities in lix U major river-
ports.
These ports have a tremendous influence upon the national economy. In 1980
they generated the following activity:
l. Handled Over 2 billion Short tons Of trade.
2. Added $5.5 billion from Custom tees to the treasury.
3. Contributed over $35 billion to the gross national
product.
4. Generated $70 billion in direct and indirect
dollar income from gross sales and services to
its users.
5. Invested Over $5 billion from l946 to l980 in
Capital facilities and antlcipated by l990 an
additional $5 billion.
6. Inland ports anticipated $4.8 billion investment
through l890.
Port Structures
To accomplish these impressive statistics a variety of organizational
structures have been developed over the years. For the most part, the type of
organization (and its relationship to various levels of intergovernmental Opera-
tion) depends upon the sector of the country and the age of the port. In the
North Atlantic (where jurisdictions are more compact and densely populated) of
approaches used lnclude municipal ports, bi-state port authority, state port
authoritles and departments of transportation. Moving southerly, public Corpora-
tions and state port authorities seem to become more in use, and along the Gulf
Coast the independent navigation district is the predominant pattern as well as
in the North Pacific area. The South Pacific is a mixture of municipal ports and
independent navigation districts with some state influence. All in all, the
predominate form throughout the Country is the independent navigation district
with shared rankings of autonomous state chartered public Corporations and muni-
Cipal port departments. See the following American Association of Port Authori-
ties description, Table IIT-3.
Although according to this table states have a more limited role in their
establishment and Connection to port authorities, statistics suggest something
different. The American Association of State Highways and Transportation Oftl-
Cials studied state involvement and found that:
l. Twenty-two states have funding programs for land—
Site port and Cargo facilities.
2. States invested $674.7 milllion between l977 and
l981.
3. Tidewater land-site ports received $531.3 million
state investments, Great Lake ports $66.9 million
and inland waterway terminals $76.4 million.
4. The East Coast and the Gulf Coast received the
most state investment money at $272.5 and $245.9
million, respectively.
5. The Midwest and the West received much less at $98.4 milllion and
57.9 million, respectively.
32
Table III-3
Types of U.S. Port Authorities by Region1/
State State County Independent Autonomous
Regi Dept. of Port Bi-State Municipal Port Navigation Municipal State-Chartered No. of
99 lon Transport. Auth. Port Auth. Port Dept. Dept. D18tricts Port Corp. Public Corp. For ts
North Atlantic
l 2 3 * * l l 3 13
south Atlantic?/ 3 gº * = i l * 4 10
Gulf l 12 dº 3 20
.
sº
* =
South Pacifica/ sº 6 E- * * 13
North Pacific!/ º º º 13 Eº gº l 4
2l53
§ -
Great Lakes sº l º gº 2 * 5 10
TOTALS 6 5 2 l4 2 35 1 15 80
1/Based on total of 80 U. S. ports which comprise the corporate membership of the American Association of Port Authorities (AAPA) .
2/Includes Puerto Rico and the U.S. Virgin Islands.
2/Includes Hawaii and Guam.
**Includes Alaska.
Source: The American Association of Port Authorities. AAPA ADvisory, vol. xv.1, No. 49 (Washington, D. C.,
* December 6, 1982). * -
Reprinted with permission.
6. State port and terminal construction funds are
administered by nine state departments of trans-
portation, eight state port authorities, four
state economlc development agencies and one
capital development agency.
7. Various procedures are used tor state funding
authorization, including twelve at discretion of
state agencies, ten legislator-enactment of state
agency recommendations, five by legislative
authorization on a project-by-project basis.
8. Funding sources include, general obligation bonds,
general revenue funds, revenue bonds, user Charges
and excise taxes; the largest Sources provided by
general obligation bonds at $309.4 million.
9. In addition to the elght state port authorities,
there are 239 local port authorities, port
departments, dock boards, or port Commissions
created by state and local units of government to
develop port facilities. t
Nationwide for the tour year period between 1977 to 1981, funding levels
have been relatively consistent ranging from a low of $107 million to a high of
$173 million, though beginning to drop off again in the 1981 period. And, Certain
states have been predominantly involved with funding port facilities (principally
Louisiana and South Carolina) for deep draft ports on the Coast. Illinois and
Indiana have been involved with Great Lakes ports, and Indiana and Louisiana for
lnland waterways. Most states fund projects whlch purchase land, Construct
piers, docks and wharves, buildings, storage areas and facilities, Cargo handling
equipment, access roadways and railspurs, dock and navigatlon Channel dredging,
33
Cargo terminal insurance and security facilities.” Most states also have per
Sive funding powers granted to local port authorities within local government
rules and regulations. So, for example, local port authorities are allowed to
issue revenue bonds, general obligation bonds, industrial revenue bonds, borrow
money, receive grants or loans from the state, r;ceive grants or loans from
federal agencies. Far fewer are able to levy taxes.
To generate and support this amount of activity, ports have to charge fees
and collect revenues for its services.’ General obligation bonds are the main
Source of funds (twenty-eight percent); revenue bonds (twenty-five percent) and
port revenues (twenty-two percent) are also important. Previous studies have
found that ports use a variety of methodologies for determining their cost and
charging fees and tariffs. The AAPA further found that it would be desirable to
have a consistent aproach available to the ports. And, the U. S. General ACCoun-
ting Office identified a growing problem in the late l970's regarding ports'
financial position. Being a very competitive industry, such rate formulation Was
almost privileged information and did help one port maintain its edge Over
another port. On the other hand, unbridled "cut-throat" competition, would if
left unconstrained, hurt some ports so much so that they would have severe
financial difficulties. Although the situation was not yet chaotic, the potential
did exist. Other transportation industries are now beginning to experience true
deregulation and free flow pricing, i.e., railroads and trucking. They are,
according to many shippers, approaching Chaos. The port industry, though never
being so closely regulated, has had the independence of pricing and relied upon
the marketplace to maintain its relationships and its long-term stability.
Fourteen port authority structures representing all types were examined.”
Earnings potential came from a variety of sources. Six of the ports were opera-
ting ports and eight were run by lessees and contractors. The majority earn
their monies from usage revenues, principally from terminal fees and wharfage
activities. An underlying message is that ports are quite sensitive to the
volume of activity and their fee structure has a tight margin of profit. The
more flexibility they have in adjusting their fees, the more possibility they Can
work closely with shippers and Carriers to combine the best package for export
activitles. This allows and encourages competition in the marketplace and is
generally healthy. Still, the Central point is that cargo volume (not value) is
the source of income for most of the ports. -
Several Other #spects of the American port system must be noted at the
outset of this study:
l. 42.2% of the berths in the nation are in port city
population zones of 500,000 or more;
2. 28.6% of the berths in the nation are in port city
population zones of 100,000 to 499,999;
3. The physical condition of the ports is in
acceptable shape--58% of the national average as
"good" and 29% of the national average as "fair;"
4. Between l970–1976, the industry invested
$138,689,000 in federally mandated environmental
protection (70%); employee health/safety (ll?); and
cargo security (19%);
5. Between 1970–1976 the industry incurred $55,121,000
in operating Costs for environmental protection
(22%), employee health/safety (ll%), and cargo
security (67%).
34
The fact that most of the capacity is in already developed urban population
areas lS not Surprising. What is of potential Concern is, Should these facilities
require upgrading, modernization, or expansion, there simply may not be Suffloient
land surface area. Some ports have had to create new acreage from their dredge
material Another aspect of this is the potential expansion of trelght movement to
and from the harbors through the densely populated areas. More and more Conflicts
with COmpeting public purposes pollcies are bound to OCCur. At Some point, local
jurisdlctions may face the hard decisions—
"should our port remain at its current level of activity with its
known impacts, or Should it be allowed to lncrease activity Signifl-
cantly and have possibly Commensurate urban impacts?"
Lastly, the total foreign waterborne commerce (export and import) in l983 was
735, l'98,000 short tons valued at $269,391,000,000. The leading tonnage was
handled by New York. Tables III-4 and 5 show the total commerce, export data and
port rankings. Preliminary figures indicate the downward trend of l981-83 was
reversed ln l984.
Conclusion
The coastal and inland ports of the United States represent a major econo-
mic and transportation activity. Their role and influence, Collectively, ls
tremendous. Yet, polltically, the governmental system responds in a fragmented
Way which in part represents the nature of the port and transportation industry.
Even on key issues that cut across the lifeblood of port activities, that is, the
Capacity of facilities to handle large size vessels, and Channel and harbor
dredging, for example, disagreement exists. Free enterprise attitude and the
realities of competitive pricing directly affect port income sources. Pressures
from local and state agencies or private operators to ralse or lower charges
illustrates their difficulty. Reaching a common position, good for the whole
industry, on such matters is a Complex process.
*U.S. Department of Transportation, Maritime Administration, A Report to the
Congress on the Status of the Public Ports of the United States (Washington,
D.C.: U.S. Government Printing Office, August l984), pp. 3-ll.
*American Association of State Highway and Transportation Officials, Survey of
State Funding of Landsite Port Facilities and Cargo Terminals–1982 (Washington,
D.C., l'982), p. 3.
*Ibid, P- 26. “Ibid, P- 36.
*U.S. Army Corps of Engineers, A Public Port Financing Study (Washington, D.C.:
Government Printing Office, Institute for Water Resources, June, l984), p.VII-XI.
*U.S. Department of Transportation, Usage Pricing for Public Marine Terminal
Facilities—Volume I (Washington, D.C.: U.S. Government Printing Office, Decem-
ber 1981), pp. l-lD. w
"U.S. Department of Commerce, Maritime Administration, National Port Assessment
l980/1990 (Washington, D.C.: U.S. Government Printing Office, 1980), pp. 13-27.
35
TOTAL UNITED STATES
New York, NY
Houston, TX
New Orleans, LA
Norfolk, WA
Philadelphia, PA
BALTIMORE, MD
Tampa, FL
Long Beach, CA
Baton Rouge, LA
Corpus Christi, TX
Portland, OR
Newport News, WA
Mobile, AL
Marcus Hook, PA
Los Angeles, CA
Tacoma, WA
Seattle, WA
Galveston, TX
Savannah, GA
Paulsboro, NJ
Boston, MA
Richmond, CA
Portland, ME
Charleston, SC
Oakland, CA
Jacksonville, FL
Wilmington, NC
San Francisco, CA
Stockton, CA
*Position - 1983
SOurce:
SHORT TONS
1983
135,198,000
51,714,500
13, 363,900
13, 307,500
12,212,000
9,613,500
8,976,000
8, 151,000
8,258,500
7,292,000
6,020,000
TOTAL FOREIGN WATERBORNE COMMERCE - LEADING UNITED STATES SEAPORTS*
1982
Löl, 191,000
l,7,1130,500
l,8,167,000
l;7, 153,500
l,6,915,200
25,679,000
30,682,700
16,962,500
19,8116,000
23, 193,500
18,782,500
.
:
9:
:
i
i
t
Calendar Years 1983 and 1982
%
O
f
Table III — 4
Change
Maryland Department of Transportation.
Report - 1983 (Baltimore: Mai
6
º
6
ºQ©e
1
:
e.
i
2
TOTAL UNITED STATES
New York, NY
Long Beach, CA
Bouston, TX
Los Angeles, CA
Seattle, WA
BALTIMORE, MD
New Orleans, LA
Oakland, CA
Norfolk, WA
Philadelphia, PA
Savannah, GA
Charleston, SC
Portland, OR
Jacksonville, FL
Tacoma, WA
Corpus Christi, TX
Galveston, TX
Baton Rouge, LA
Boston, MA
Marcus Hook, PA
Tampa, FL
Portland, ME
Newport News, WA
San Francisco, CA
Wilmington, NC *
Richmond, CA
Paulsboro, NJ
Mobile, AL
Stockton, CA
1983
$ 269,391,000,000
$ l;2, 7|13,000,000
20, 103,000,000
17,953,000,000
15, l;71,000,000
1,376,000,000
12,797,500,000
11, 192,000,000
9,519,000,000
8,611,000,000
6,202,000,000
l,781,000,000
l, ;77l,000,000
l, 388,000,000
l,063,000,000
3, l;76,000,000
3, 113,000,000
2,772,000,000
2,765,000,000
2,709,000,000
2,658,000,000
1,937,000,000
1,936,000,000
1,726,000,000
1,703,000,000
1,671,000,000
1,515,000,000
1 ,l,62 ,000,000
1,161,000,000
13,000,000
$ 283,216,000,000
DOLLAR VALUE
1982
$ lui,612,000,000
Foreign Commerce Statistical
Maryland Port AdminisłFäEion, 1983), E.
IO.
17,936,000,000
23,961,000,000
11, 129,000,000
13,070,000,000
1l, 22L, l,00,000
13,793,000,000
10,016,000,000
10,318,000,000
7,099,000,000
lı,210,000,000
% of
-.
:!
ºeºº©e
!1:
i
:
3:
º

§
SHORT TONS - DOLLAR WALUE
% Of
1983 1982 Change 1983 1982
TOTAL UNITED STATES 363,298,500 O3, 1 35, OOO =–2-2 TOTAL UNITED STATES $ 105,169,000,000 $ 120,0l,5,000,000
Norfolk, WA 29, 152,100 l;2,871,700 - 32.0 New York, NY $ 12,019,000,000 $ 14, 100,000,000
New Orleans, L.A . 24,593,500 28,850,500 - 111.8 Houston, TX 10,301,000,000 13,358,000,000
Houston, TX 22,295,500 25,909,500 - 13.9 BALTIMORE, MD 6,958,600,000 8,556,200,000
Tampa, FL 16, 35,000 13,512,500 + 21 ... O New Orleans, LA 6,541,000,000 7,793,000,000
Baton Rouge, LA 13, l;03,000 14,986,500 - 10.6 Norfolk, WA 5,609,000,000 7,305,000,000
Portland, OR 12,521,000 11,209,500 + 11.7 Long Beach, CA 5, 186,000,000 5,246,000,000
BALTIMORE, MD 12,216, 200 20,845,600 - l;1.l. Oakland, CA l,737,000,000 5,277,000,000
Long Beach, CA 12,203,500 12,1168,500 - 2. 1 Los Angeles, CA 3,605,000,000 3,803,000,000
J Newport News, VA 11,827,500 18,557,500 - 36.3 Seattle, WA 2,521,000,000 2,602,000,000
~! Mobile, AL f 10,215,900 11,969,300 - 11.6 Charleston, SC 2,517,000,000 2,797,000,000
Galveston, TX 7, 112,500 5,596,000 + 27.6 Savannah, GA 2,252,000,000 2,080,000,000
Tacoma, WA - 7,037,000 5,733,000 + 22.7 Portland, OR 2, 172,000,000 1,892,000,000
Los Angeles, CA 6,060,000 7, Olı0,500 - 13.9 Galveston, TX 2,050,000,000 1,873,000,000
New York, NY 5,1118,000 5,730,500 - 5.5 Baton Rouge, LA 1,993,000,000 2,315,000,000
Seattle, WA l,552,500 3,952,000 + 15.2 Tampa, FL 1,259,000,000 1, 179,000,000
Philadelphia, PA l, 269,500 5, lull",500 – 21.6 Philadelphia, PA 1,242,000,000 1,583,000,000
Savannah, GA lu, 135,500 l, 708,000 - 12.2 Newport News, WA 1,178,000,000 1,709,000,000
Corpus Christi, TX 3,036,000 3,066,000 - 1.0 Wilmington, NC 1,046,000,000 1,233,000,000
Oakland, CA 2,730,000 2,926,000 – 6.7 Tacoma, WA 98/1,000,000 9||13,000,000
Richmond, CA * 2,560,000 1, 160,500 + 120.6 Jacksonville, FL 81,7,000,000 987,000,000
Charleston, SC 2,556,000 2,315,000 + 10.1; Mobile, AL * 791,000,000 1,229,000,000
Jacksonville, FL 2, 110,000 2,359,500 - 10.6 San Francisco, CA 677,000,000 963,000,000
Wilmington, NC 692,000 775,000 - 10.7 Richmond, CA 6Ol;,000,000 388,000,000
Stockton, CA 680,000 930,000 - 26.9 Corpus Christi, TX 5||11,000,000 6L6,000,000
San Francisco, CA 668,500 795, OOO - 15.9 Boston, MA 538,000,000 660,000,000
Boston, MA 623,000 l;98,000 + 25.1 Stockton, CA 106,000,000 122,000,000
Paulsboro, NJ 293,000 230,500 + 27. 1 Paulsboro, NJ 67,000,000 65,000,000
Marcus Hook, PA 153,500 128,500 + 19.5 Marcus Hook, PA 52,000,000 l;6,000,000
Portland, ME 25,500 9,000 + 1,10.0 Portland, ME 3,000,000 15,000,000
Table TT I – 5
FOREIGN EXPORT WATERBORNE COMMERCE - LEADING UNITED STATES SEAPORTS*
Calendar Years 1983 and 1982
*Position - 1983
Source: Marvland Department of Transportation. Foreign Commerce Statistical
Report – 1983 (Baltimore: Maryland Port Administration, 1983), p. 11.
PART II - INTERGOVERNMENTAL POLICY SYSTEM
OPERATION AND CHALLENGES
This section discusses current operations and Challenges of intergovernmen-
tal public policy. It is based upon Part I - System Development, which explained
the American export situation and how it is served by the port transportation
system. The orientation of the material in Part II is from the general to the
specific. Chapter IV discusses the broad intergovernmental policy system in terms
of federal, state and local laws and regulations which may directly or indirectly
affect export transportation. Chapter V addresses the more narrow based aspect of
intergovernmental policy dealing with regulation. Even though it is a large field
in its own right, transportation regulation is still a subsidiary element of the
intergovernmental public policy framework. Chapter VI reviews Selected major
export seaports in the country with reference to contact with the
intergovernmental system. Lastly, Chapter VII analyzes intergovernmental public
pollcy addressing seaport and channel dredging. The discussion on dredgling inte-
grates many Specific federal, State and local policies as almost important and
complex example of how the intergovernmental system operates in just One segment.
Chapter IV =INTERGOVERNMENTAL PUBLIC POLICY SYSTEM
Introduction
The concept of lintergovernmental public pollcy is relatively new in terms of
historical development of the American federalism system. In the simplest, theo-
retical sense, it is the belief that each level of government has clear cut
responsibilities. The federal government has one set, state government and local
government still another. To the Corporate manager attempting to export or to the
informed government employee, or citizen, only a small piece of the system is
visible. It is only when things begin to go awry does it become obvious that the
system is far more involved than this initially simplistic notion. For that
reason, this chapter describes in general terms the intergovernmental public
policy system, its relationship to export transportation, the participants in that
system, policy mechanisms to influence activity, and how the separate but
comingled Worlds of intergovernmental policy and export transportation systems
COntact and interact. -
Development of Intergovernmental System
The intergovernmental public policy system is a composite framework of
federal. State and local laws and policies for the conduct of their official
responsibilities. The system relates vertically and horizontally in several
ways. For example, vertical inter relationships may be between two levels of
government (local to state, or state to federal) or within one specific func-
tional Category (local transportation agencies relating to state transportation
agencies, or state relating to federal). Horizontal interrelationships are found
in One level of government. Local governmental agencies must work with each
other in many ways in different functions. The same horizontal scale occurs for
state and federal agencies. Adding to this executive and administrative complex-
ity are the traditional, other two branches of government at each level. Legis-
lative and judicial Sections have influence as well on the intergovernmental
public policy system. So, when first thinking about the intergovernmental public
policy System, one must immediately have this framework in mind and the placement
of the discussion in the hierarchy of the framework - whether a problem relates
38
to vertical Or horizontal interrelationships; or, is it solely within one element
of a governmental operation? Is the matter a responsibility of only one branch,
legislative, executive/administrative or judicial? Or, is it part of several in
combination? -
Although the basic, simple intergovernmental framework was established at
the very founding of the nation and has been elaborated, it was not until the
stlmulus of population growth and rapid urbanization, interrupted by two world
Wars, that governmental activity truly grew and fleshed out the framework. As
more and more people moved from the farm to urban areas, or migrated to the United
States, population densities and political power grew in urban centers. These
large populations required governmental structure and services to meet their
needs. Much of the growth of the federal domestic structure and state and local
governmental activities occurred as a result. A second major stimulus for growth
of the intergovernmental policy framework was military necessity. The federal
government, in order to protect the nation in two all-consuming wars, increased
its power and program. It expanded activities for defense and interstate commerce
to facilitate military preparedness and economic strength.
For the most part the defense aspects are separate from the domestic
program structure. But there are overlaps and points-of-contact when it comes to
domestic functions of commerce and transportation. For example, it is necessary
to have an internal transport system able to meet defense logistical needs. It is
necessary to have a strong economy with promotion of internation trade to help
Support industrial and agricultural Capability. It is necessary to have a strong
economy for the preservation and support of the domestic population. There are
other examples of how overlap may occur, however for the goals of this research
the relationship is kept distinct.
The most common form of federal activity has been subsidy. Beginning with
the land grant program for establishing an agricultural university system, to the
present day cash grants or aid for a desired activity, it has been a frequent
practice. Since 1969, according to the Advisory Commission on Intergovernmental
Relations, subsidy has been supplanted by regulation. It is a "dramatic shift"
and strongly influences states and localities. "Although the upward climb in
grants subsidy persisted during most of this era, federal policy makers also
turned increasingly to neºn more intrusive, and more compulsory regulatory pro-
grams to work their will." Regulation became increasingly pervasive until the
early l980's.
Characterized in qualitative terms, subsidy would be an incentive for an
individual or organization to behave in a certain way, and regulation would be a
coercion or sanction backed by penalties to behave in a certain way. It would
appear that the intergovernmental system has definitely received greater direction
of the negative-type (through regulation) due to the growth of federal program
activities and intrusion into state and local governmental affairs. And, it is
apparent that states and their localities have acquired the practice for their own
subagencies and jurisdictions. Part of this is tied to the very human notion that
money is not passed out freely. Expectations are stated and connected to grant
awards. Yet, in many programs the two, although clear here for definitional
purposes, are not so separate ln operation and they often are blended and fused
39
together. Few pure types seem to exist. Both seem to be elements of a Continuum
showing diverse parameters in practice. Subsldies or Cash grants with few strings
would be at one side of the continuum; on the other would be regulatory pollcy
with Sanctions and penalities.
Particleants in the Intergovernmental Policy System
- In the broadest sense, American Organization Culture has two large divi-
sions which are the public or governmental sector and the private Sector. Within
and between each are a wide range of possibilities. Sometimes they are Called
quasi-public, quasi-private, or nonprofit agencies or Organizations. In the public
Sector is the basic division of federal, State and local government (COmposed Of
regional, county, municipalities, and special districts). More often than not,
the special district or public authority such as a seaport is another example of
local government with private like powers acting as a free agent in the public
realm. On the private sector side, governed by the marketplace are Organizations
providing services, goods and commodities within the requirements of the inter-
governmental policy system. They may be prlvate seaport terminals, transportation
Carriers, producers of export goods and services and many other Orgalzatlons.
Both public and the private sectors also operate within a free market type system,
interacting as interests meet. The intergovernmental pollcy systems attempts to
exert influence in a positive way upon that open Operation by establishing game
rules and constraints. To the extent the system provides incentives, the market-
place will behave in One way. If Sanctions are wielded, the marketplace and the
players will perform in a different way. With little or no governmental guidance,
the free market place will resolve most problems by itself, according to theory.
In reallty, the existence of our intergovernmental pollcy system in part
presumes that the marketplace needs more guidance and direction. By assigning
functions to different levels and types of government, specific benefits will
accrue and will improve overall well-being of the economy and the population.
Since late l970's, Some have questioned these assumptions and sought improvements.
Is it possible that government Collectively and individually should back out and
provide less subsidy and regulation? These are new thoughts Compared to the last
thirty years and strike at the very heart of the intergovernmental policy system
as developed through the 1970's. Current discussion is lively and fluid,
although broad perameters have been established by transferring federally
Collected tax funds to state and local governments, sharing more power with state
and local governments, and lastly lessening subsidy and regulation in some areas
(particularly the transportation Sector).
Policy Mechanisms to Influence Activity
Perhaps a key feature to note about intergovernmental regulation is that it
has a significant factor of Compulsion. In some ways, it is "more nearly manda-
tory" upon state and local governments.
There are four types of federal programs utilizing the following techni-
ques:
l. direct Orders
2. Cross Cutting requirements
3. CrOSSOver Sanctions
40
4. partlal preemptions
Table IV – l lllustrates how they operate in potential policy areas of lnvol-
vement. The most prevalant one used appears to be cross cutting requirements.
Partial preemption has sometimes been called a substitution approach and is most
evident in the Clean Air Act of l970. Fiscal penalties occur under crossover
sanctions such as ln Highway Beautiflcation or the Emergency Highway Energy
Conservation Act Of l974.
Table IV-1
A Typology of Intergovernmental Regulatory Programs
Program -
Type - Description - Major Policy Areas Employed
Direct Orders Mandate state or local actions under Public employment, environmental pro-
the threat of criminal or civil penal- tection
ties f
Crosscutting Re- Apply to all or many federal Nondiscrimination, environmental pro-
quirements assistance programs tection, public employment, assistance
management
Crossover Sanc- Threaten the termination or reduc- Highway safety and beautification, en-
tions tion of aid provided under one or vironmental protection, health planning,
more specified programs unless the handicapped education
requirements of another program are
satisfied
Partial Preemp- Establish federal standards, but del- Environmental protection, natural re-
tions egate administration to states if they sources, occupational safety and
adopt standards equivalent to the health, meat and poultry inspection
national Ones -
Source: Advisory Commission on Intergovernmental Relations:
Regulatory Federalism: Policy, Process, Impact and Reform (Washington, D.C. :
Government Printing Office, February 1984, A-95) p. 8.

These techniques of regulation have been developed, at first, incrementaly
and then later in at least thirty-two major statutes of intergovernmental regula-
tion between 1960 and 1980. Table IV-2 identifies them in historical chronology.
In addition to regulation generated by federal. programs, there are Other
techniques that influence activities in the federal program structure. They need
to be identified here as reminders of the variety of means of influence.
As noted, subsidy is a principal form of incentive. The monies granted by
subsidy could be accomplished by formula allocation, based upon some pre-agreed
approach, to the recipents. Revenue sharing as a grant-in-aid type program is a
variation upon tormula in which money is being returned to a jurisdiction through
a block of tunds with tew or no restrictions. Other techniques include benefits
in tax law, no interest or low interest loans, and sharing of cost for desired
4l
aCtiVities.
Table IV-2
Major Statutes of
Intergovernmental Regulation, 1960–80
1964 Civil Rights Act (Title VI) Rehabilitation Act (Section 504)
1965 Highway Beautification Act Endangered Species Act
Water Quality Act 1974 Age Discrimination Employment
1966 National Historic Preservation Act
Act Safe Drinking Water Act
1967 Wholesome Meat Act National Health Planning and Re-
1968 Civil Rights Act (Title VIII) sources Development Act
Architectural Barriers Act Emergency Highway Energy Con-
Wholesome Poultry Products Act Servation Act
1969 National Environmental Policy Family Educational Rights and
Act Privacy Act
1970 Occupational Safety and Health Fair Labor Standards Act Amend-
Act ments
Clean Air Act Amendments 1975 Education for All Handicapped
Uniform Relocation Assistance "Children Act
and Real Property Aquisition Age Discrimination Act
Policies Act 1976 Resource Conservation and Re-
1972 Federal Water Pollution Control covery Act -
Act Amendments 1977 Surface Mining Control and Rec-
Equal Employment Opportunity lamation Act
Act Marine Protection Research and
Education Act Amendments (Title Sanctuaries Act Amendments
IX) 1978 National Energy Conservation
Coastal Zone Management Act Policy Act r
Federal Insecticide, Fungicide, Public Utility Regulatory Policy
and Rodenticide Act Act
1973 Flood Disaster Protection Act Natural Gas Policy Act
Source: Advisory Commission on Intergovernmental Relations. Regulatory
Federalism: Policy, Process, Impact and Reform (Washington, D.C.: Government
Printing Office, February 1984, A-95), p. 6.
Regulation certainly includes the four Categories of direct Orders, Cross
cutting requirements, CrossOvers Sanctions, partial preemption. It also includes
devices serving as a medium for these techniques such as licenses, permits,
standards, criteria, guidelines, and direct requirements. Each of these has an
implicit and sometimes very obvious Condition that a certain mode of behavior is
desired in order to receive approval to Operate Or to receive the benefits
granted.

Enforcement Serves as a form of regulation. It relles upon fines, penal-
ties and prohibition. Often, enforcement may be only partly, or not at all,
utll lzed. Thus the players in the system may well know that some activities are
not seriously targeted for Compliance.
Not noted as part of the kit of subsidy, regulatlon and enforcement is a
Concept that is actually the social and economic political glue holding the
System together and allowing it to work. Leadership is that theoretlal element.
At some point a Credible and workable statement of philosophy, goals and objec-
tlves is necessary for public pollcy to be implemented effectively by the play-
ers. It does require Shared participation in the formulation and implementation
of that pollcy. Consensus must exist for delivery and continued success. There
must also be forums to resolve disagreement and conflict, intormally and formally
With in the system or Outside the system. Each of these matters depends upon the
degree of leadership provided at the appropiate Jurisdictional level. If that
ingredient is missing then a free-for-all system is in effect. Judgements will
be acCOmplished by many independent discrete actions by the parties. Sometimes,
they will Only be resolved by special legislation, rulings, or judicial action.
Additional devices for influencing activity throughout the
intergovernmental system” are described in Table IV-3. Indirect management may
influence program SCOpe and Contents, program delivery, program control, and all
of proceedings. The devices range from legislation and budgets to requests for
proposal, training, audits, evaluations, selection of key operational personnel.
Each of these provides real meaning to the concept of policy mechanisms to
influence activity. All of them occur at each level of government but with the
principal lnfluence being from the higher to the lower level of government. On
OCCaSiOn, they may occur in One level but among agencies that must coordinate.
Some belleve that the judiciary (federal and state) has been too active,
While others suggest too acquiescent. In either Case, most observers agree that
the Court system has had singular impact upon intergovernmental pollcy. Often one
decision on a narrow part of programmtic law could well influence many other
programs through the establishment of a precedent, or the broad applicatlon of
its interpretation. -
With the intergovernmental pollcy System and the new forms of regulation,
numerous problems have been identified. One particular array is the following
SeVen: & .
l. Cost
2. inflexibility
3. inefficiency
4. inconsistency
5. intrusiveness
6. ineffectlveness
7. unacountability
In support of these seven elements age insightful Observations regarding
the implementation of the regulatory process.
* Substantial delays are frequently encountered between passage
of a regulatory statute and the beginning of actual administration
and enforcement.
43
Table IV -3
Devices for Indirect Management
of Intergovernmental Programs
Area of Influence Devices
Program Scope and Legislation
Contents Budget
—Proposal
—Authorization
—Appropriation
Formal regulations
—Prohibitions
—Standards
—Requirements
Interpretation of Regulations
Grant Applications (Assurances,
formal plans)
Program Delivery RFP (Request for Proposal)
Proposals (Bids)
Reimbursement Procedures
Technical Assistance
Training
Program Control Plan Review and Approval
Licensing
Contract Negotiations
Interpretation of Regulations and
issuance of waivers -
Audits (financial, program) and
disallowances ..
Monitoring: inspections, site visits
Evaluations
Sanctions: withholding future
funding support, closing facilities
All of the Above Influence on selection of key
operational personnel
Source: Stephen R. Rosenthal. "New Directions for Evaluating Intergovernmental
Programs", Public Administration Review (November/ December 1984). p. 474.
Reprinted with Permission from* Public Administration Review Q1984 by The
American Society for Public Administration, TIZOTC Street, N.W., Suite 500
Washington, D.C. All rights reserved.
44
* Legislative language and history often provide insufficient
guidance On Crucial Operational questions.
* In many Cases the technical or scientific information required
for efficient and effective regulation is not available.
* Issues not addressed or left unresolved by the Congress often
erupt into intense political Conflict during the rulemaking stage.
* Federal regulators tend toward expansive, inflexible, and
Costly interpretations of national requirements.
* Overly Stringent or unrealistic regulatory standards and re-
quirements actually may hamper progress toward national goals.
* The new forms of federal lntergovernmental regulation have been
litigated heavily, adding to delays and uncertainties.
- * Federal courts typically have upheld agency interpretations of
legislatlve intent, have urged faster action, tighter standards, and
more vigorous enforcement.
* Federal agencies generally lack adequate capacity and resources
to assure full Compliance with regulatory requirements.
* For administrative and polltical reasons, federal otfloials are
Often reluctant to lmpose harsh Sanctions against State and local
government that fail to meet national standards or deadlines.
* Attainment of regulatory objectives depends heavily upon the
leadership and Commitment of target jurisdictions.
Implementing such programs no doubt encounters many of the above problems.
Flrst, "writing rules - easier said than done". It may be quite complex,
include regulatory delay, agency mismanagement, administrative Complexity, statu-
tory ambiguity, and political conflict. Once written the regulations may be too
broad or too narrow. They in turn will be subject to Confusing and complex
dynamics in regulation within the specific requirements of the statute. The
motivations of the bureaucracy and scrutiny from the judicary must be Consid-
ered. In this sequence, the weakest link seems to be in enforcement. Often it
is due to administrative and technical infeasibility, limited resources and
political llabilities.
These are in broad brush the mechanisms available to influence activity
Within the intergovernmental system. They are mainly applied by the federal
government to state and local governments, however they are more and more used by
States to their localities and within each level of government. At the same
tlme, individual governmental units and their agencies, as well as private CorpO-
rations, act independently within the system and must deal with the variety of
techiques and devices designed to achieve Some goal of public pollcy. As noted in
the criticisms a program may in an abstract way be manageable and "reasonable"
for compliance by subject parties. But if many are necessary to respond to, all at
Once, before a particular activity receives approval, then progress is far more
difficult, time consuming and possibily expensive. For a private agency pro-
45
posing some activity or attempting to expand an activity, this feature of
cumulative Corrsponding complexity is most significant. It would work the same
for a public agency however the expense is not as visible and, possibily, not as
lmmediately Crucial.
Export Transportation Policy
Federal statutes, illustrating the new forms of regulatlon, govern very
much the export transportation system. An ACIR study of regulations Slnce 1960
includes over thirty-six that potentially apply to the export transpo-rtation
sector (Table IV-4). For the most part, it would appear that of the Cross Cutting
type requirements, socio-economic pollcies total thrlty-six. The primary
category would be environmental protection containing Sixteen separate pieces of
legislation. Protection and advancement of the economy Contalns three pieces of
legislation and the section on labor standards also three pieces. There are Over
twenty-three adminstrative and fiscal pollcies requirements governing public
employee standards (two) for administrative and procedural requirements of a
general kind (ten) and recipient-related administrative and flscal requirements
(nine).
Another study polled large and Small business managers famillar with exports
to determine the impact of regulations of the United States exports. Commis-
sioned by the United States Conference Board, Inc., an independent not-for-proflt
research institution supported by 4,000 associates from Corporations, govern-
ments, unions, universities, and other organizations and individuals, the Survey
was conducted in August and September 1980 and was sent to 909 manufacturing
Companies; l68 were useable returns from companies involved in export with Sales
ranging from $20 million to $47 million annually. . Although not statistically
representative, the opinions did suggest an interpretation of how the system was
operating at the time and is revelant today. Two tables of analysis were
presented and are shown hege. Table IV-5 addresses the impacts of specific
regulations on U.S. exports. ' This table notes that the items of most substan-
tial negative Concern Include taxation on foreign income of U.S. citizens, anti-
boycott legislation, Foreign Corrupt Practices Act, and export embargoes or
restrictions. The balance of possibilities dealt with technical aspects of trade
practices, defense, and Cargo matters.
The study noted that in addition to these direct disincentives for export,
there are others serving as indirect and uningentional deterrants from legisla-
tion designed to regulate domestic operations.
For example, Compliance with legislation aimed at cleaning up the environ-
ment, making the work place Safer, keeping unsafe products off the market to name
a few, frequently raise Costs of production, lſ only because of the lncreased
paperwork and the growth of Compliance staffs. This, in turn, means higher
prices. Since Costly domestic regulations are far more prevalent here than
abroad, U.S. producers are at a disadvantage in the international market place
vis-a-vis their foreign competitors.
46
1973
Table IV-4
and threatened animal species.
Appendix Figure 1—A
Major Federal Statutes Regulating State and Local Governments
Public
Title Objective Law Type"
Age Discrimination Act of Prevent discrimination on the basis 94–135 CC
1975 of age in federally assisted pro-
grams.
Age Discrimination in Em- Prevent discrimination on the basis 93–259; DO
ployment Act (1974)* of age in state and local government 90–202
employment.
Architectural Barriers Act Make federally occupied and funded 90-480 CC
Of 1968 buildings, facilities and public con-
veyances accessible to the physical-
ly handicapped.
Civil Rights Act of 1964 (Ti- Prevent discrimination on the basis 88–352 CC
tle VI) of race, color or national origin in
- federally assisted programs.
Civil Rights Act of 1968 (Ti- Prevent discrimination on the basis 90–284 CC
tle Vill) of race, color, religion, sex or nation-
al origin in the sale or rental of feder-
ally assisted housing.
Clean Air Act Amendments Establish national air quality and 91–604 CC,CO,PP
Of 1970 emissions standards.
Coastal Zone Management Assure that federally assisted activi- 94–370 CC
Act of 1972 ties are consistent with federally ap-
proved state coastal zone manage-
ment programs.
Davis-Bacon Act (1931)3 Assure that locally prevailing wages 74–403 CC
are paid to construction workers em-
ployed under federal contracts and
financial assistance programs.
Education Amendments of Prevent discrimination on the basis 92—318 CC
1972 (Title IX) of sex in federally assisted education
programs.
Education for All Handi- Provide a free appropriate public ed- 94–142 CO4
capped Children Act ucation to all handicapped children.
(1975)
Emergency Highway Ener- Establish a national maximum speed 93–239 CO
gy Conservation Act limit of 55 mph.
(1974)5 *
Endangered Species Act of Protect and conserve endangered 93–205 CC,PP
47
Title
Equal Employment Oppor-
tunity Act of 1972
Fair Labor Standards Act
Amendments of 1974
Family Educational Rights
and Privacy Act of
1974
Federal Insecticide, Fungi-
cide, and Rodenticide
Act (1972)
Federal Water Pollution
Control Act Amend-
ments of 1972
Flood Disaster Protection
Act of 1973
Hatch Act (1940)
Highway Beautification Act
Of 1965
Marine Protection Re-
search and
Sanctuaries Act
Amendments of 1977
National Energy Conserva-
tion Policy Act (1978)
National Environmental
Policy Act of 1969
National Health Planning
and Resources Devel-
opment Act of 1974
National Historic Preserva-
tion Act of 1966
Natural Gas Policy Act of
1978
Occupational Safety and
Health Act (1970)
Table IV-4 cont.
Objective
Prevent discrimination on the basis
of race, color, religion, sex or nation-
al origin in state and local govern-
ment employment.
Extend federal minimum wage and
overtime pay protections to state and
local government employees.”
Provide student and parental access
to educational records while re-
stricting access by others.
Control the use of pesticides that
may be harmful to the environment.
Establish federal effluent limitations
to control the discharge of pollutants.
Expand coverage of the national
flood insurance program.
Prohibit public employees from en-
gaging in certain political activities.
Control and remove outdoor adver-
tising signs along major highways.
Prohibit ocean dumping of munici-
pal sludge.
Establish residential energy conser-
vation plans.
Assure consideration of the environ-
mental impact of major federal ac-
tions.
Establish state and local health
planning agencies and procedures.
Protect properties of historical, ar-
chitectural, archeological and cultur-
al significance.
Implement federal pricing policies
for the intràstate sales of natural gas
in producing states.
Eliminate unsafe and unhealthful
working conditions.
Public
Law
92–261
93–259
93–380
92–516
92–500
93–234
76–753
89–285
95–153
95–619
91–190
93–64
89–665
95–621
91–596
Type"
DO
DO
CC
PP
CC,PP
CC,CO
CC
CO
DO
PP
CC
CO
CC
PP
PP
48
Table IV-4 cont.
Public
Title Objective Law Type"
Public Utilities Regulatory Require consideration of federal 95–617 DO
Policies Act of 1978 standards for the pricing of electricity
and natural gas.
Rehabilitation Act of 1973 Prevent discrimination against other- 93–112 CC
(Section 504) wise qualified individuals on the ba-
sis of physical or mental handicap in
federally assisted programs.
Resource Conservation Establish standards for the control 94–580 PP
and Recovery Act of of hazardous wastes.
1976
Safe Drinking Water Act of Assure drinking water purity. 93–523 CC,PP,DO
1974 t
Surface Mining Control Establish federal standards for the 95–87 PP
and Reclamation Act control of surface mining.
of 1977 : -
Uniform Relocation Assist- Set federal policies and 91–646 CC
ance and Real Proper- reimbursement procedures for prop-
ties Acquisition Poli- erty acquisition under federally as-
cies Act of 1970 sisted programs.
Water Quality Act (1965) Establish federal water quality stand- 88–668 PP
ards for interstate waters.
Wholesome Meat Act Establish systems for the inpection 90–201 PP
(1967) of meat sold in intrastate commerce.
Wholesome Poultry Prod- Establish systems for the inspection 90–492 PP
ucts Act of 1968
of poultry sold in intrastate com-
TherC6.
* Key: crosscutting requirement (CC), crossover sanction (CO), direct order (D0), partial preemption (PP).
* Coverage of the act, originally adopted in 1967, was extended to state and local government employees in 1974.
* Although the Davis-Bacon Act applied initially only to direct federal construction, it has since been extended to some 77
federal assistance programs.
* Although participation is voluntary, the failure of a participating state to comply with federal requirements can result in
the withholding of funds from several federal handicapped education programs. The requirements of PL 94–142 are
nearly identical to those established by the Department of Education under Section 504 of the Rehabilitation Act, a
crosscutting requirement.
* A permanent national 55 mph speed limit was established by the Federal-Aid Highway Amendments of 1974, (PL
93–643), signed into law January 4, 1975.
* Application was restricted by the Supreme Court in National League of Cities v. Usery, 426 U.S. 833 (1976).
Source: Advisory Commission on Intergovernmental Relations. Regulatory
Federalism: Policy, Process, Impact and Reform (Washington, D.C.: Government
Printing Office, February 1984, A-95), pp. 19–21.

49
Table IV-5
Impact of Specific Regulations on U.S. Exports
Substantial Moderate Slight or No Does Unfamiliar Number
w Negative Negative Negative Positive Not With the Of
Regulation Impact Impact Impact Impact Apply Regulation_Responses
Percent of Total Responses
Taxation of income earned abroad by U.S.
Citizens living abroad. . . . . . . . . . . . . . . . . . . . . . . . 22 41 19 18 (155)
Anti-boycott legislation. . . . . . . . . . . . . . . . . . . . . . . . 24 38 33 4 1 (154)
Foreign Corrupt Practices Act . . . . . . . . . . . . . . . . . . 21 34 38 3 4 (156)
Export embargoes or restrictions for the purpose
of furthering foreign policy objectives, other -
than human rights . . . . . . . . . . . . . . . . . . . . . . . . . . 15 29 41 13 2 (156)
Uncertainty over availability of foreign
tax credits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 32 46 10 (155)
Export embargoes to countries where human rights
are being violated. . . . . . . . . . . . . . . . . . . . . . . . . . . 14 25 48 12 1 (157)
Controls on re-exports of U.S. originated products . 5 25 37 28 5 (154)
Export controls for national security reasons. . . . . . 8 17 47 28 (154)
Uncertainty about the application of antitrust
laws to joint international ventures . . . . . . . . . . . . 2 21 47 28 2 (156)
Controls on the export of hazardous substances... 5 11 30 53 1 (154)
Foreign policy and environmental reviews
required for Export-lmport Bank credit . . . . . . . . . 3 12 38 40 7 (156)
Arms export Controls. . . . . . . . . . . . . . . . . . . . . . . . . . 3 6 24 * 66 1 (156)
Export controls on products in short
Supply in the United States . . . . . . . . . . . . . . . . . . . 1 4 32 61 2 (154)
Nuclear export controls. . . . . . . . . . . . . . . . . . . . . . . . 1 3 23 - 72 1 (156)

Source: Shirley Hoffman Rhine. The Impact of Regulation on U.S. Exports
(New York: The Conference Board, Report No. 809, 1981), p. 15.
Reprinted with permission.
In some instances a particular regulation may have no - or perhaps Only a
slight — direct negative impact on a company's exports, but the total negative on
the company may be substantial because of regulations' lndirect effects. For
example, one respondent pointed out that although the direct impact on his firm
of taxation of income earned abroad by U.S. citizens was slight, it seriously
affected the overseas business of Some U.S. Contractors that are its Customers.
Consequently, when these contractors lost some of their overseas business, they
cut back on their purchases from U.S. suppliers. This meant that the responding
company lost a significant amount of export orders from U.S. Contractors working
on Overseas projects.
Also as a consequence of the ripple effect, the loss of export Sales by
U.S. companies may result in the loss of domestic sales by other U.S. Companies
from which they components parts.
Table IV-6 shows domestic regulations that have had a negative effect On
U.S. export. The most frequent item of concern is Occupational Safety and
Health. The Clean Air Act, the Water Pollution Control Act, the Consumer Product
and Safety Act, Toxic Substances, ‘Food and Drug and Environmental Protection
received about one-third to one-half "mentions." The ways in which these regu-
lations caused difficulty was additional Capital outlay, more personnel, more
paperwork and diverse additional Costs. -
50
Table IV-6
Domestic Regulations that Have Had a
Negative Impact on U.S. Exports
. How Regulation Has Increased Costs
Number Additional
of Capital Additional More M/S Cel.
Mentions Outlays Personnel Paperwork laneous'
Occupational Safety and
Health Act (OSHA). . . . . 31 10 7 8 15
Clean Air Act . . . . . . . . . . 15 12 3 3 6
Water PO||ution
Control Act . . . . . . . . . . . 12 11 3 4 3
Consumer Product
Safety Act. . . . . . . . . . . . 11 4 1 2 10
Toxic Substances
Control Act . . . . . . . . . . . 10 3 3 3 7
Food and Drug Act
(FDA). . . . . . . . . . . . . . . . 9 1 1 1 9
Environmental Protection
Agency (EPA)*. . . . . . . . . 9 5 2 2 3
Employee Retirement
Income Security
Act (ERISA). . . . . . . . . . . 6 1 1 4 3
"Many of these responses were general rather than specific, for example, in-
creased production costs; overall cost increases; internal cost; increased cost of
product. Aside from the nonspecific responses, there were a number of more explicit
responses, for example, for OSHA: increased maintenance costs, legal fees, in-
surance costs; Clean Air Act: additional operating expenses; Water Pollution Control
Act: increased administrative costs; Consumer Product Safety Act: products
engineered to U.S. product liability standards are not competitive in export markets;
Toxic Substances Control Act: increased registration cost before products can be
exported; FDA: FDA approval of new drug often takes years, requires building
manufacturing facilities abroad, increased insurance costs; ERISA: increased ad-
ministrative CoSt.
*Respondents did not mention a specific regulation or act but instead replied in a
general way: “environmental regulations,” “various EPA regulations,” “noise
control."
Note: Other domestic legislation mentioned include Equal Employment Op-
portunity, voluntary wage and price controls, Resource Conservation and Recovery
Act, and energy efficiency standards of the Department of Energy. Each of these
was mentioned by fewer than four respondents.

Source: Shirley Hoffman Rhine. The Impact of Regulations on U.S. Exports.
(New York: The Conference Board, Report No. 809, 1981), p. 17.
Reprinted with permission.
Within the context of these laws, whether federal, State or local and
regulatory policies, are the specific activities necessary to meet the spirit and
letter of the law. In most cases when identitled as separate steps or procedu-
ral activities, complexity quickly grows as the number of actors or players in
the intergovernmental public pollcy system increase. Several studies indicate in
Just Small sections as subsets of a larger intergovernmental public policy
SYStem how things may operate.
51
The subject of environmental protection is an official concern of many
federal agencies and activities that authorize operations in U.S. navigable
waters or ocean waters. For example, there are over forty-four different agenc–
ies with jurisdiction over seventy different activities ranging from permits and
licensing, t? pipelines, foreign trade zones, water supply, shoreline erosin and
climatology." (See Appendix I).
An example of how this may operate when combined with state and local
permit requirements is the Cove Point Maryland Terminal, a new liquidified
natural gas terminal. Proposed in l970 by the Columbia Gas System and Consolida-
tion Natural Gas Company for the importation of liquified natural gas (LNG),
forty-nine separate permits were required. It took over six and half years for
the final permit to be issued. An LNG terminal for import may be more controver-
sial and complex than traditional export transportation facilities, however the
example of complexity Carries fºrwag. There were eleven federal, twenty state,
and nineteen local permits required.
Another situation for importing energy resources was the New England Energy
Company oil refinery near the Maine Coast. Begun in 1972 by the Gibbs Oil
Company and then later reorganized into a consortium, a refinery was to be built
in the vicinity of Sanford, Maine with terminals in Portland, Maine. By the time
the project was approved five federal, Seven state, four municipal, and two other
types of licenses and permits were required.”
Aside from permits and licenses as a regulatory device, system generated
problems are characterized by:
l. delay
... uncertainity
... unrealistic Conditions
. Confusion
. "blackmail"
... excessive cost of regulationn
. denial
... shifts in harbor uses
... loss of trade
These problems manlfest themselves as a result of procedural and substan-
tive problems. Procedural problems include: redundancy, poorly defined
processes, agency interpretation, agency advocacy, lack of accountabillty, double
jeopardy, lack of decision making mechanism, lack of harbor policy, lack of
economic and management responsibility for regulatory actions, and interactive
delay. On the substantive side, the problem that agencies lack sound and detail-
ed policy technical basis from which to make decisions. "It appears that many
technical criteria are promulgated with inadequate investigation and with poor
understanding of #heir full impact on the environment as well as on our industry
and the public."
System Contact And Interaction
In normal operatlon the intergovernmental policy system offers numerous
points of web-like contact for transportation shippers, carriers, ports, govern-
ments, and export buyers. For the most part the system clearly works. Goods
and commodities are manufactured and produced. They are loaded on transportation
carriers, shipped, transshipped in ports onto Ocean going vessels, and then
52
ultimately received at the foreign destination.
It is when the logistical system is at a maximum or has an accident that
intergovernmental regulatory policy comes into play, frequently in an oversight
or negative sense. The mechanisms which trigger the contact include:
performance standards in the law not being met; complaints from the public or
producers or Carriers; major versus minor contact related to project or
activity size; significance of location, timing, events, cost; existing opera-
tions; proposed expanded operations, or new facilities or new operations. Each
of these is subject to a different set of perceptions from the primary partici-
pants in the intergovernmental policy framework.
LOOking at Such trigger mechanisms and perceptions, there might often be
predictable flash points. One Could anticipate very readily what type of situation
will Cause the most difficulty. From the preceding observations about how the
intergovernmental policy System has worked for subsidy, and particularly regula-
tion, at the federal level it is clear then that just the myriad number of
agencies with different responsibilities and requirements potentially will be a
procedural logjam. Occasionally, it may serve the public interest if projects
that should not be considered are ultimately cancelled through the review
process. For the private sector, the flash point often occurs when planning
requires large, continued expenditure of time and money for their activities. It
is possl ble that some of the basis for the plans would disappear, as in coal
export operations, from changing market conditions. In this case the initial
negative polnt of in contact became a blessing. it took a long enough time for
the review process to occur that when terminals might have been already under
Construction, market demand evaporated or shrank. In many ports, market forces
protected most parties from heavy Capital investment losses in the short term, and
at best in the long term creatlng reserve capacity which may never be used.
Rarely is there a mechanism established in the system to resolve conflicts
and disagreements. It is left to individual program operation and internal
procedures established. Sometime conflict is resolved by changes in market
place demand. At other times a situation becomes so Overridingly important that
a major piece of legislation, new national policy, or Change in public mood is
possible for the proposed, original activity.
To illustrate: in Long Beach California a large petroleum importation pro-
ject was ultimately cancelled in May 1979 from delays and excessive cost of
regulation through combined federal, state and local requirements. The company
Said originally that the project was too expensive to development under the exis-
ting laws and requirements. Others believe that the demand for North Slope Oil
diminlshed; therefore, the project, on its own merits regardless of the law S
became too expensive. While this was still going on and the project was about
to be cancelled, the citizens of Long Beach conducted an election on an "advisory
issue" about whether or not to allow Construction and operation of the terminal
facility. The citizens voted for it. Nevertheless the project was cancelled.
This is on the import side but it does demonstrate what could happen should
export projects be treated similarly.
Sometimes an activity creeps into the public Conscience as a significant
matter of national interest. Head-On conflicts might not occur; instead, a Case
for action is slowly built into the system. The Surface Transportation Act of 1982
exemplifies this possibility. It provided additional federal funds to maintain
and rehabilitate the Interstate Highway System and to allow useage in many areas
of larger and double trailers. The legislation yielded a positive compounding of
53
results for the export transportation system. The issue at hand earlier was the
fact the system was falling apart and causing delays and damage to vehicles and
goods. More lndirect, negative Consequences were experienced by surrounding
urban areas. They received traffic forced to take local streets and alternative
KOuteS.
General deterioration of public infrastructure in the nation is another
aspect that is being reviewed in the same regard. To the extent that the
infrastructure ls necessary to allow transportation of export cargo, then the
type of compound, incremental situation may ultimately impact quite severely the
flow of export goods. It may be in the form of freeway or tunnel bridge Safety.
But if a national policy is developed to ameliorate infrastructure difficulties,
then lt will avoid emergency, negative contacts of the intergovernmental policy
System triggered by the crisis.
In the area of environmental regulation, a large illustration of System
interaction is cost estimates (in l978 dollars) through l987 for abatement
expenditures necessary for air pollution, water pollution, Solid waste, toxic
Substance, drinking water, noise, pesticides and land reclamation. Estimating a
cumulative total sum of $710.10 billion, costs are identified for public and
private sectors. Not all of this to export transportation, however a signifi-
cant amount relates to the production of goods and Commodities for export, tran-
sportation to the ports and port operations. To factor out the costs separately
would be quite difficult. Yet, this is an anticipated starting point. When
faced with such high costs in a general sense, it becomes very clear that the
impact is high on ultimate competitiveness of American products, and subsequent
ripple effect upon the transportation system and cost capabilities.
The physical condition of the infrastructure of the nation is also a matter
of concern and subject to debate. Some believe that it has a strong influence
upon the ultimate economic recovery of the nation and its ability to operate
efficiently and grow. Others are uncertain of the connections and which indus-
tries benefit from what parts of the system. With that debate about the economic
role of the infrastructure aside, major progress has occurred in financing the
system, particularly highways. The U.S. Surface Transportation Assistance Act of
l982 programmed an additional $6 billion per year for the Federal-aid Highway
System and public translt. About $900 million per year was dedicated to elimina-
ting bridge deficiencies under bridge replacement and reconstruction program. In
total the lncrease of expenditures for infrastructure moved from $19 billion in
fiscal year l982 to $25 billion in fiscal year l983. The states too have been
increasing their support. Thirty-four states sincial%l increased motor vehicle
fuel taxes. Most are earmarked for transportation.
There are several reasons for federal involvement in programs of this
nature. Spill over or external effects, Centralized coordination, development
and distribution of resources are primary motivators. These involvements are
based upon interstate relationships the federal government must govern, whether
impacts are positive or negative. Coordination is often necessary to maintain a
network in the national interest. Also, funds have been invested in infrastruc-
ture for regional development and to foster growth of the economy as a whole.
54
Table IV-7
ESTIMATED TOTAL POLLUTION ABATEMENT AND ENVIRONMENTAL
QUALITY EXPENDITURES, 1978.87
(in billions of 1978 dollars)
1978 1987 1978-87
Total Total Cumulative
Annual Annual Total
Costs" Costs" Costs * *
Air Pollution
Public 1.7 4.0 27.4
Private
Mobile 7.6 14.4 1 11.4
Industrial 6.2 11.3 87.4
Utilities 3.8 13.0 79.5
Subtotal 19.3 42.7 305.7
Water Pollution
Public 13.1 19.9 164.5
Private
Industrial 4.7 12.0 85.3
Utilities 2.4 3.9 32.1
Subtotal 20.2 35.8 281.9
Solid Waste
Public 1.9 3.2 27.0
Private 4.5 7.9 66.3
Subtotal 6.4 11.1 93.3
Toxic Substances 0.1 0.3 2.2
Drinking Water 0.6 1.6 12.5
Noise <1.05 0.1 6.6
Pesticides <1.05 0.1 0.5
Land Reclamation 0.1 1.0 8.0
Total 46.7 94.2 710.7
*Includes operation and maintenance costs and capital costs.
**Includes capital investment, operation and maintenance, and capital costs.
SOURCE: Council on Environmental Quality, Executive Office of the President, Environmental Quality, 1979,
Washington, DC, U.S. Government Printing Office, 1979, p. 667.
Advisory Commission on Intergovernmental Relations, The Federal Role
In The Federal System: The Dynamics of Growth, Protecting the Environment:
Politics, Pollution, and Federal Policy. (Washington, D.C., Advisory Commission
on Intergovernmental Relations, 1981. ) p. 57.

55
Another illustration, in part byzantine in nature, addresses trade
relationships. A bill has been proposed in Congress, HR 422, the Imported Coal
Tariff and Trade Equalization Act of l985, which would "impose a duty of $8 per
ton on coal imported from Countries other than those that have historically
bought more Coal from the United States than they have sold it." The duty could
be adjusted upward or downward under specified circumstrances. The amount, $8,is
the difference for Costs between the U.S., Poland, South Africa, and Australia at
the ºne-mouth. At this time, coal imported into the United States is duty
free. What this simple example illustrates is that while we are attempting to
sell more coal to the rest of the world, we erect barriers to sales to us. The
example we set makes our free trade stance hypocritical and may encourage the
American Coal industry and carriers not to be as cost conscious as they might be
under competitative pressure from the world market. Similar Observations Tight
hold for other sectors of the American economy such as agriculture and steel.
Federal preemption also occurs for motor carrier safety. The Federal
Highway Administration has been Ordered to review state laws for vehicle safety
under the Motor Carrier Safety Act of l984. State commercial vehicle Safety
regulations are to be examined and analyzed in relationship to existing federal
requirements to see if they have the same effect, are less stringent or more
stringent than federal regulations. The intent is that by October 30,1989 the
laws must be brought into Conformance or be preempted. ' This governs, ºnly inter-
state commerce, Commerical vehicles operations and foreign commerce.
In another area, federal standards are being proposed for heavy duty diesel
engines. "EPA has called for more strict diesel engine gases and particularly
emmission standards for l987 and l990 model year trucks." The American Trucking
Association believes that this will cause a "fuel economy penalty" of "$6,000 per
truck per year" and by l997 will cost $2.2 billion in additional fuel costs for
the motor freight carrier industry. The matter becomes even more complex accor-
ding to the American Trucking Association. They labelled the action as
"irresponsible" and argued that the attempt to reduce some heavy diesel engine
emissions offsets gains made by other legislation allowing use § twin trailers
and wider equipment. It would hurt the industry's productivity.
Within the federal level there is also a division of opinion between the
executive branch and Congress regarding the direction of environmental programs.
At a time when Congress and the public are making sharper distinctions among the
subjects best suited for regulation and deregulation, the status of many programs
and broad federal policies will remain in flux for an unknown period of transi-
tion. There is severe disagreement between economic regulation and social regu-
lation, which is meant to include environmental controls. This push-pull nature
of public policy affectic the intergovernmental policy system and the export
transportation subsystem.
A confusing situation is developing for motor carrier freight in several
mid-western states. Some states have added what is called "third tier" or "third
structure" tax to all carriers, regardless of their state registration. Examples
of such taxes include "annual fees, trip fees, per miles taxes, ton per mile
taxes, per axle taxes, per gallon taxes, per ton mile taxes, taxes based on fuel
to be used multiplied by fuel price, per truck taxes, per trailer taxes, variety
of flat rate taxes." If one state raises a tax specifically for all Carriers
passing through the state, but exempts operators registered in the same state,
then other states begin to place retroactive taxes of similar kind. The net
effect is that its possible, due to the routing of certain carriers, that they
could pay a retaliatory tax currently for six states. There are seven states
56
registered showing taxes of this kind (Arkansas, Georgia, Maine, Nebraska, New
Hampshire, New Jersey, Oklahoma). The Private Truck Council of America and local
truck associations are Challenging the issue. Such retallatory taxes do not apply
if the motor Carrier is registered in a state not utlizing them. It is exempt.
Per vehicle this does not seem to be a tremdous cost; some taxes area $120, others
are $185 but in the aggregate it is another illustration of the complexity of the
pricing structure, impact on domestic and international export trade, and how
numerous; Small independent decisions add up and injure the competitiveness of the
eCOnomy. 7
The Surface Transportation Act of 1982 changed the tax structure for federal
highway transportation, as well as increased taxes. Table IV-8 shows the before
and after Situation. Gasoline and diesel fuel rates increased from four to nine
Cents per gallon. These rates in total will cost average truck owners by the
following amounts (Table IV-9 ) on the estimated increases for 1985. Note how
larger units pay #most double the previous amounts and the smaller units have
Small lncreases. The American Trucking Associations belleves in almost every
Category the real rates are higher. The complexity of the matter is also
illustrated by a range of estimates for future costs under the tax schedules
generated by the American Trucking Associations, Inc., Data Resources Inc.,
Congressional Research Service, and the Department of Agriculture for l985. The
estimates run from a low of $1.98 tax increase Perl gile driven to a high of $2.65
for eighty thousand pound gross vehicle weight." Lastly, there is a dispute
about the total productivity effects of the law for the trucking industry l985.
Including such elements as allowing double trailers in the East, increased vehicle
Widths, increased vehicle lengths and elimination of barrier state weight limits,
and less tax burden the Department of Transportation estimates that $3.24 billion
will acº. But the American Trucking Associations, Inc., estimates only $829
million.* There ls a general belief that the act will increase productivity, have
Variable economic effects, and favor the less than load motor carriers more than
the full truck load carriers. Short haul Carriers should benefit more §han long
haul carriers but owner operators will be "worse off" than the averages.
Another lllustration of the number of federal and state regulations govern-
ing one significant aspect of environmental regulations is that of wet lands.
There are over twenty-four agencies and legal requirements in effect, and the
practice varies, in terms of treatment of state owned or privately held
land, fresh and salt water wet lands, inland and Coastal wet lands, navigation,
and general definition of wet lands and boundaries. Often coastal states have
wet land protection as part of a larger more comprehensive legislation regula-
tion. Case by case permits are granted for fill or structural activities in a
dozen coastal states. A regulatory agency is authorized in six states to "enact
Wet land protection orders such as zoning regulations, permitting, and wet land
UlSe 1gnations." Five inland states, by l978, developed wet land protection
acts. Forty-five states have some kind of regulation and activity regarding
wetlands and floodplains. The number of programs vary from one to aş4lany aS
five. The total number of relevant pieces of legislation is ninety-six.
And in May 1980, "nineteen states have federally approved the program; how-
ever, four states are currently out of the program and the chances for four other
states achieving approval program are questionable." Implementation of the
federal law was made difficult for reasons of funding, complexity, lack of
monltoring at the state level, and special local cases.
57
Item
Gasol ina, diesel fuel
Trucks, tral lers
Truck parts and
accessories
Lubricating oil
Highway tires
Laminated tires
Otner t lºſes
Inner tubes
Tread rubber
Heavy vehicle use tax
(annual)
Table IW-8
Highway Trust Fund Tax Rates
Before and After the Surface Transportation Assistance
Act of 1982 and Effective Dates of Change
Old rate
4 cents/gallon
Trucks with a GW of
10,000 pounds or less
and trailers intended
for use with such
trucks: no tax
Other trucks and
trailers:
price
8 percent of
manufacturer's
sale price
6 cents/gallon
9.75 cents/pound
1 cent/pound
4.875 cents/pound
10 cents/pound
5 cents/pound
26,000 pounds GW
or less: no tax *
More than 26,000
pounds GW: $3/1,000
pounds
10 percent
of manufacturer's sales
Effective date
of change
4/1/83
4/1/83
1/7/83
1/7/83
1/1/84
1/1/84
1/1/84
1/1/84
viſa.
7/1/84b
*All of these taxes that were not repealed by the Surface
Transportation Assistance Act of 1982 are scheduled to expire
on September 30, 1988.
bThe effective dates of the new rates of the heavy vehicle use
tax are delayed 1 year for trucks belonging to persons who own
and operate no more than five taxable trucks.
Vehicles used
for less than 5,000 miles on public highways are exempt from
this tax.
Sources: Background and Description of Present Federal Excise Taxes,
prepared by the staff of the Joint Committee on Taxation
(U.S. Government Printing Office, 1982), p. 30.
Present Federal Excise Taxes, prepared by the staff of the
Summary of
New rated
9 cents/gallon
Trucks with a GW of 33,000 pounds
or less and trailers with a GVW of
26,000 pounds or less: no tax
Other trucks and trailers:
12 percent of retail sales price
Repealed
Repealed
40 pounds or less: no tax
40–70 pounds: 15 cents/pound over 40 pounds
70-90 pounds: $4.50, plus 30 cents/pound
over 70 pounds
90 pounds and over: $10.50, plus 40 cents/
pound over 90 pounds
Repealed
repealed
Repealed
Repealed
Under 33,000 pounds GW: no tax
33,000–55,000 pounds GVW; $50, plus
$25/1,000 pounds over 33,000 pounds GW
55,000–80,000 pounds GVW: $600, plus
$40/1,000 pounds over 55,000 pounds from
7/1/84 to 6/30/86
$44/1,000 pounds over 55,000 pounds from
7/1/86 to 6/30/87
$48/1,000 pounds over 55,000 pounds from
7/1/87 to 6/30/88
S52/1,000 pounds over 55,000 pounds after
6/30/88
80,000 pounds GW and over:
$1,600 from 7/1/84 to 6/30/86
$1,700 from 7/1/86 to 6/30/87
$1,800 from 7/1/87 to 6/30/88
$1,900 after 6/30/88
Joint Committee on Taxation (U.S. Government Printing Office,
1983), pp. 6 and 7.

SOur Ce:
U. S. Comptroller General , The Surface Transportation Assistance Act of
1982:
Comparative Economic Effects on the Trucking Industry. Report to the Committee of
Finance, U.S. Senate (Washington, D.C. General Accounting Office, 1984.), p. 6.
58
Table IV-9
Estimated Increases in Federal Highway
Taxes For Average Truck Owners in 1985*
Tax increase
Under Under Tax increase for each mile
old tax new tax for each driven Percentage
rate S rate S truck owned (cents ) tax increase
Type of truck
Single unit under
26,000 lbs. GVW - •
12,028 miles $ 125 S 1 38 S 1 3 . 1 1 10.4
Single unit over
26,000 lbs. GVW -
15, 474 miles - 506 506 º tº- tº-
Combination unit
under 50,000 lbs.
GVW - 30, 70.9 miles 745 1,024 279 . 91 37.4
Combination unit be-
tween 50-70,000 lbs. *
GVW - 32, 156 miles 1, 193 2, 153 960 2.99 80 - 5
Combination unit be-
tween 70–75,000 lbs.
GVW – 62, 764 miles 1,555 3,061 1,506 2. 40 96.8
Combination unit
over 75,000 lbs.
GVW – 67,930 miles 1,699 3, 441 1,742 2.56 102.5
aThese estimates implicitly assume that all changes in the federal highway excise
taxes on such items as fuel, tires, and new equipment are fully passed on to truck
owners. Although 1985 is the first full year that the increased
tax will be in effect, it will continue to increase from 1986 to
vehicles with a GVW over 55,000 pounds. Any adjustments to 1985
forecasts or 1985 truck population projections will affect these
in federal highway taxes.
heavy vehicle use
1988 for Owners of
tax revenue
estimated increases
Source: DOT, "Information on New User Fees and Truck Size and Weight Provisions in
the surface Transportation Assistance Act of 1982, " and Final Report on the
Federal Highway Cost Allocation Study.
Source: U.S. Comptroller General, The Surface Transportation Assistance Act of 1982:
Comparative Economic Effects on the Trucking Industry. Report to the Committee on
Finance, U.S. Senate (Washington, D.C., U.S. General Accounting Office, 1984 )p. 19.

The Port of Los Angeles is Considering an application for a domestic east-
bound pipeline to carry North Slope Alaskan oil. Similar to the previous example
of the Sohio project and the Port of Long Beach, the proposal for a $1.66 billion
pipeline to transport up to nine hundred thousand barrles of crude daily between
Los Angeles and Midland, Texas. It ls proposed by Pacific Texas Pipeline Company
for a thirty year lease on "yet to be bullt lix0 acre land fill". By May, 1979
SOhio had spent forty-five months for permitting and a $57 million. The company
maintained that the delay cost $3.5 million a month on a proposal already at $700
million. It belleves that the problem was not only permitting, but a larger
59
question of the "process". "There were so many pieces that weren't coming
together." There are many differences in the proposal, as well as the intrepre-
tatlon of environmental rules today compared to seven or eight years ago when
the major concerns were raised by the State of California's Air Resources Board
and the South Coast Air Quality Management District. Today, this proposal
appears to benefit from the learning experience, better agency jurisdictional
definltlon, better linterpretative data on technologies to be selected, and an
interagency task force coordiºgted by the Port of Los Angeles to handle the
processing of the applications.
According to a recent survey by the Highway Users Federation, many states antici-
pate raising motor vehicle and truck carrier taxes. Eighteen states are
Consldering higher truck fees taxes, twenty-three states are reviewing possible
increases in motor fuel levys, twelve are reviewing the possibility of repealing
the 55 mile per hour speed limit, or not to enforce the federal restriction. Many
of the states included are the largest in the nation and very active in exports
such as California, Georgia, Louisianna, Massachusetts, Missouri, Oregon,
Pennsylvania, Tennessee, and Texas. These naturally include port locations. In
l984 seven more states increased motor vehicle fuel taxes. Thus the majority of
states has increased their own tºs since the federal tax increases in the
Surface Transportation Act of l982.
At the state level a battle is being raged about new technology. A Coal
slurry pipeline has been proposed from the Southwestern Virginia coal fields to
the Port of Hampton Roads. The specific project would have required 400 miles of
right-of-way and had the state electric utilities and the railroads lining up
against the Coal producers, exporters and pipeline interest. In addition, impor-
tant Concerns were the impact of eminent domain, acqusition of right-of-way and
environmental impacts. The issue vividly shows the intense opposition often
greeting introduction of any new technology. It directly affects the potential
for export. The proposal agrues that the Costs would be lower for slurry tran-
sportation than for rail system operation. The vote in the Virginia House of
Delegates after a three year debate Xàs sixty-two against and thirty-six for ,
which was considered a strong defense.
To be completely fair, the intergovernmental public policy system has im-
pacts as already discussed not only for exports but for the entire domestic
economy. A recent study has found that "fantastic numbers" of interstate trade
barriers could cost consumers as much as $150 billion per year in higher prices
for goods and services. In the agricultural sector alone there are fifteen
hundred restrictions on interstate trade in eleven western states. These restric-
tions are caused by preference given to local products and services by state and
local governments. Part of the problem is that these protective measures result
from unclear definitions of "interstate commerce" and illegal trade restrictions
"at the federal level. It is maintained that the Supreme Court has aboușathe half
the time. upheld state barriers. In short it is a "invisible" trade war.
State governments are running into an interesting national situation that
has potential offsettling consequences. As the economy became more difficult,
states have realized the desirability of promoting their own economic growth
through increased exports. For that reason many states have directed activities
to expansion of trade promotion and assistance to their companies. All states in
1983 spent an estimated $36 million on promotion through technical assistance
and export financing aid. The "technical assistance includes state offic jo
abroad, internatinal trade shows, and other forms of information dissemination."
In contrast, many states through the late 1970's concentrated only on attracting
60
foreign investment. Benefits for the states are helping their economy through
Swings in the larger national economy, jobs, income, and tax revenue. However
benefits and liabilities of state expoſſ promotion may not be clear-cut. Accord-
ing to the Congressional Budget Office: y
The effect of government export subsidies is ambiguous.
Theoretically, in a world with flexible exchange rates, export
Subsidies are Self-defeating for the economy as a whole. While they
may increase sales of the subsidiized products, the increased demand
for dollars in foreign exchange markets to pay for those purchases
Will Cause the value of the dollar to rise. This in turn will dampen
demand for all other exports and increase the demand for imports,
leaving the Overall trade balance unchanged. The net effect is a
Change in the composition of trade favoring subsidized products.
Nevertheless, individual states may see it as within their interests
to support in-state industries, if they can be fairly certain that
Out-of-state industries will bear the burden of compositional changes
in the traded sector.
In the area of export financing, programs are available in eight states,
legislation is pending in four and thirteen are seriously considering the possi-
billty although no legislation is proposed, three have a Constltutional provision
and the remaining states have no activity planned according to a National Associa-
tion of State Development Agencies survey in July 1983. Lastly, twelve states
employ a unitary taxation system which does impact the national business involve-
ment and possible federal law. California, one of the largest first states to
declare its right to tax mulit-national corporations with operations in
California on a unitary basis, was upheld by the Supreme Court in June 1983.
Foreign based corporations believe that such taxation "violates international tax
treaties because it results in double taxation of earnings made Outside the United
States." The motivation behind the unitary taxation is that it permits states to
receive an accurate amount of taxes based upon actual income earned on total
earnings in and out of the state and abroad. This prohibits under income repor-
ting and joying profits from one subsidary geographically to another to avoid
taxation.” state economic development programs which help promote export as part
of economic development may experience a variety of advantages and disadvantages.
The advantages could include: responding to diversity, greater experimentation,
Cost sharing through state financing, and greater awareness of local Conditions.
On the other hand, disadvantages may include: locational inefficiency, poor budge-
ting policy, gonflict with national purpose, administrative duplication, and
bidding wars.”
The states possess incentives and disincentives in the form of tax exemp-
tions, deductions, credits and special treatments to help economic development.
The splil over effect potential is valuable for export industry and activities.
Each technique is used by the following number of states:
l. job creation tax credits l9
2. investment tax credits 23
3. property tax abatement 31
4. business inventory 35
5. goods in transit --- 43
6. research and development l4
7. pollution Control equipment 39
8. industrial machinery & equipment 45
9. industrial fuels & raw materials 44
10. energy & fuel conservation measures 4l
61
Each of these has some kind of concession in these categories.**
State technical assistance for trade activities varies as well. The mean
for each state ls about 7.3 of the following type programs with their totals
listed alongside for the whole nation:
l. trade missions 46
2. trade shows 45
3. marketing assistance 48
4. marketing development 4l
5. export education 46
6. investment information 44
7. investment missions 45
8. advertising 35
9. international tourism 25
Because the states are so actively moving into the international trade
arena for self benefit, they are now experiencing some of the conflicts
internally and potentially with the federal government in establishing policy and
programs and reconciling when they may conflict. For example, promoting export
programs may directly Conflict with promoting internal investment programs. Such
promotional activities are rapidly getting to the funding levels of the United
States Department of Commerce for trade promotional activities. To the extent
the states move into trade financing experimentation and tax incentives, this may
begin to compete with the federal Export Import Bank and DISC programs in terms
of multi lateral discussions and controls at the international level. Foreign
customers might see Contradictory policies occurring, as in the State of Califor-
nia, where there are incentives and promotional programs for export. Yet the
unltary tax policy would drive away foreign business in Californa. The very real
fear here is that in matters of national policy, if the states move forward and
create their own policies for trade promotion (and subsequently transportation),
they will be subject to the very same conflicts, confusion and complexity of
policy experienced at the federal level. This would be just another manifesta-
tion of the possibile types of federalism that were discussed earlier. Instead
of being truly Cooperative federalism, it has been more co-optive or antagonlstic
federalism. The potential for further conflict is large as a laissez faire
atomsphere ls created to, gllow states to exercise, develop and implement a here-
tofore federal function. -
At the national level, U.S. trade promotional activitles are increasingly
subject to inclusion and discussion by the national industrial poliy debate.
Such export promotion currently is accomplished by the Export/Inport Bank that
offers loan guarantees and direct loans to foreign companies or countries so they
can buy American goods. The belief is that without such assistance the transac-
tions could not occur. In fiscal l982 new obligations of the bank were $3.5
billion with net outlays of $763 million, while new guaranteed loan Commitments
equalled $5.8 billion. A second activity is the DISC program which "attempts
to lncrease exports through a system of tax deferral." It has been determined to
be illegal under the General Agreement on Tariffs and Trade (GATT). A third
program is a creatlon of Export Trading Companies to #lp facilitate Small and
medium size business development of markets and sales. Although each of these
approaches has its advantages, there seems to be the general belief that if the
nation really applies a free trade philosophy in a world that does not, any
export promotion will be most difficult. At the highest most strategic levels
then, it becomes obvious that trade and the role of American transportation
systems in support of trade is a subsidiary concern to the more fundamental
62
questions of the economy, the value of the dollar and interest rates.”
Conclusion
The intergovernmental pubic policy system in general and the transportation
Subsystem for exports is a complicated, tension filled system. It is character—
ized by Several levels of government and subsections of each level along with many
independent functions within each level. The levels relate to each other
Vertically and horizontally. Exports and transportation are not a conscious part
of the System's design. In most cases it grew on an incremental, slow evolutionary
basis for the domestic economy and domestic well being. To the extent that
foreign affairs, trade and exports are connects they are overlays from clearly
national interest perspectives (or as lately-by states self-interest). The
stressful System is like a web, it has grown and promises to continue to grow at
the state and local (and perhaps federal). Indeed, in some situations at the
federal level the system is showing signs of deregulation and disinvolvement,
allowing states and local governments to pick up formerly federal activities in
actual authority and funding opportunities. It causes a very uncertain period of
transltion while the economy is also going through a degree of instabililty.
Debate exists beyond the matter of institutional level, roles and power.
There are questions of how accurate technical data may be upon which decisions
are made. The Criteria, the standards, the guidelines required may be subject
to legitimate dispute. Intepretations of law and practice may as well be open to
discussion. The attitude about the role of government in the private sector
varies from one region and sector of the country to another. Such customs and
beliefs definitely influence the expectations and individual units in each
Sector. On the whole, it would seem that all parties value the need for ex-
ports, positive benefits and a transportation System that supports it. But at
that point, the commonality may end, not by intention, but more by honest posi-
tions representing diverse perspectives.
The net effect still seems to be that exports receive a low priority, and
the transport role in the process an even lower priority. The domestic economy
and market are so large that they demand all of an organization's attention. As
one president of a large exporting corporation noted, whether decision affect
foreign or domestic affairs, little notice seems to be given to the impact upon
the export system and its significance to national well-being. . The country, is
now seeing the cumulative effects of those seemingly incremental, uncoordinated
and compounding decisions over the years.
Lastly, there are still valid pros and cons for the roles that have been
exercised so far. The increasing role of regulation since 1960 as identified by
the Advisory Commission on Intergovernmental Relations has relied upon preemption
as a technique to influence the conduct of state, and local officials, and commen-
Surately the private sector. In a summary way the benefits and disbenefits, which
Can be equally applied to state governments relating to35me local governments (and
therefore the operation of the private Sector) help to: .
1. reduce discretionary authority of state and local governments
and inhibits their ability to work out problems;
2. create confusion among citizens about who is accountable;
3. undermine the effectiveness of state programs already in
place; * ſº
4. threaten the principle of federalism;
5. heighten intergovernmental conflict and tension; gº ſº
6. not always assure that adequate or appropriate action will be
63
*º-
taken Once a field is nationally occupied;
7. in Cases of partlal preemption ... Shlft responsibilities from
state legislatures to governors;
8. as Courts have presumed a predominate role in deciding preemp-
tion lSSues, ...remove lSSues from the polltical process.
Several agruments are identitlable for broad preemption powers and are
based upon:
l. relieve States of the responsibility and Costs of providing
Services or regulation; .
2. ellminate inconsistent legislation from One State to another;
3. enable a coherent and logical response to problems that are
national ln SCOpe.
Consequently, the intergovernmental pollcy system directly and indirectly
affects the export transportation function in many ways, often not immediately
vlsible but Obvious On a Cumulative, incremental basis. It would appear that the
system would function similarly for other governmental Concerns too (e.g.,
health, educatlon, housing). it seems though to be particulary accute for the
export transportation system in that lt may cause delays, additional Costs and
inefficiencies. It may make the nation less cost competitive in the world
economy. There are many benefits that have resulted from this system but there
is a growlng belief that it Could be flned-tuned at the very least, or improved
structurally in Several ways to make it operate better and facilitate our posi-
tlon for export transportation and trade promotion. •
64
Endnotes
1
Advisory Commission on Intergovernmental Relations. Regulatory Federalism:
Policy, Process, Impact and Reform (Washington, D.C. : Government Printing
Uffice, February 1984, A-95), pp. 1-3. -
2
Stephen R. Rosenthal. "New Directions for Evaluating Intergovernmental
Programs", Public Administration Review (November–December, 1984), pp. 469 – 477.
3
Advisory Commission on Intergovernmental Relations, op.cit., pp. 12-17.
4
Ibid.
5
Shirley Hoffman Rhine. The Impact of Regulations on U.S. Exports,
(New York: The Conference Board, Report No. 809, 1981), pp.15, 17.
6
Ibid. , p. 16.
7
National Research Council. Public Involvement in Maritime Facility
Development (Washington, D.C.: National Academy of Sciences, 1979), p. 239–
242.


8 9
Ibid., pp. 104 – 142. Ibid., pp. 172 - . 191.
10
California Port and Navigation Caucus. Port Caucus Issues (Long
Beach: California Marine Affairs Conference, California Association of Port
Authorities, California Marine Parks and Harbors Association, March 3, 1981),
pp. 5–11. *
11
Advisory Commission on Intergovernmental Relations. Financing
Public Physical Infrastructure ( Washington, D.C.: Government Printing
Office, June TG3M, A-96), pp. 2-4,
12
Congressional Budget Office, U.S. Congress. The Federal Government
in a Federal System: Current Intergovernmental Programs and Options for Change
(Washington, D.C. ETGovernment Printing Office, 1983) pp.30-33; see also:
Art Levine, "Easing of State-Local Regulatory Burden Leaves Some Pleased,
Others Grumbling", National Journal (August 4, 1984), pp. 23 - 28.
13 -
American Association of Port Authorities. AAPA Advisory (Washington,
D.C.: AAPA, Vol XIX, No. 2, January 14, 1985), pp. 1-2.
14 -
"States Must Send DOT Copies of Motor Safety Laws, Rule for Review",
Traffic World (Vol. 201, No. 3, January 14, 1985), p. 3.
15
"New EPA Rules on Diesels, May Cost $2.2 Billion - ATA", Traffic World
(Vol. 201, No. 3, January 14, 1985), p. 28. -
16 -
Robert E. Taylor and Andy Pasztor. "Reagan Administration's
Deregulation Offensive Stopped in Its Tracks", Wall Street Journal ( January 8,
#. p. 58. *.
17
Eric D. Lindeman. "Retalitory Taxes in Six States Targeted for PTCA
Court Battles", Traffic World (Vol. 200, No. 13, December 24, 1984), pp. 8–9.


65
18
U. S. Comptroller General. The Surface Transportation Assistance Act
of 1982: Comparative Economic Effects on the Trucking Industry, Report to the
Committee on Finance, U.S. Senate (Washington, D.C.: Government Printing
Office, April 6, 1984), p.19.
19 20 . 21
Ibid., p. 23. Ibid., p. 25. Ibid., pp. i-Vi.
22
National Highway Research Program Report. Guidelines for the Management
of Highway Runoff on Wetlands (Washington, D.C.: Transportation Research
Board, NCHRP Report 264, November 1983), Chapter 5 "Federal and State Regulations",
pp. 39–43.
23
Ibid., pp. 70–81; For a similar discussion of the complexity but only
within the federal government and in the transport sector, see U.S. Department
Of Transportation. Federal Transportation Policy – the Coastal Zone Management
Program (Washington, D.C. ETGovernment Printing Office, DOTOffice of
University Research, April 1980).
24
U. S. General Accounting Office. Problems Continue in the Federal
Management of the Coastal Zone Management Program (Washington, D.C.: U.S.
General Accounting Office, CED-80–103, June 25, 1980), pp. i-iii.
25 P
Gregory W. Griggs. "Pipeline Plans Head for Government Agencies",
Long Beach Press Telegram (January 7, 1985) p. D1, D5.
26 W -
"Trucking Taxes Expected to Hike in Many States Along With Fuel Jumps",
Traffic World (Vol. 201, No.4, January 21, 1985), pp. 33–37.
27 y
Tom Sherwood. "Wa. House Kills Coal Slurry Line Construction Bill, a
Victory for Railroads", Washington Post (January 18, 1985), p. D4.
28 - P
"War Between the States Still Goes On - But Over Trade, Study Finds
Costly Barriers", Los Angeles Times (September 25, 1984) Part IV, p. 11; see
also: Steven G. Craig and Joel W. Sailors. "A Destructive Trade War Between the
States", Wall Street Journal (February 5, 1985), p. 30.
29 -
Congress of the United States, Congressional Budget Office. The Federal
Role in State Industrial Development Programs (Washington, D.C.: U.S. Congress,
July 1984), p. xvii. - -
30 31 32 33
Ibid. pp. 25–26, Ibid., pp. 28–29. Ibid., p. 31. Ibid., pp. 43-50.
34 35
Ibid., pp. 64–65. Ibid., pp. 72–73.





36 ~
John M. Kline. State Government Influence in U.S. International Economic
Policy (Lexington, Mass.: Lexington Books, 1983) pp. 213-223,
37. - V
U. S. Congress, Congressional Budget Office. The Industrial Policy
Debate (Washington, D.C. : U.S. Congress, December 1983) pp. 35–36.
38 y
Ibid., p. 50.
39
Bruce D. McDowell. "Federal Preemption of Transportation Policies"
(Washington, D.C. : Transportation Research Board Annual Meeting, January 14,
1985) pp.5-6. -
66
Chapter V - TRANSPORTATION REGULATION
Introduction
This Chapter will discuss the transportation regulatory system for rall-
roads, motor Carriers and Shipping as a major component of the intergovernmental
pollcy System. At the Outset it is important to note since l880 the fleld has
been exciting, stimulating and stressful. The nation is seeing, and thus the
export transportation Sector, fundamental changes in the domestic system which
attempt to redirect practices developed over the last one hundred years. Much of
this is generated by forces external to the Carriers. The direction and momentum
established are still under development. There may be calls for further change
to accelerate and advance the process of transportation economic deregulation.
On the other hand, some wish to reregulate. The industry itself is fragmented
and the variety of experiences and opinions dictate contradictory polltical
System demands and requests. Such turbulence and dynamism cannot but help to
Spill Over to the export transportation system.
Regulatory System
The nation's transportation history is based to a large extent upon several
Waves of new technology, expansion and competition with older technology.
Whether it be establishment and expansion of the barge and canal systems, intra-
Coastal packets and Schooners, railroads, pipelines, and highway trucking
Systems, each has experienced difficulty. To find a stable place for each sector
is not easy.
In addition to the advancement and expansion of technology, a key factor
has been the manner in which a transportation sector conducted itself, that is,
not subject to external Controls or challenges. Apparently, governmental influ-
ence was necessary in some aspects. Much of the regulation for the surface
transportation system was developed in response to negative experiences in Canals
and barge Operations and in the railroad system. In part that system and exper-
ience provided a model for subsequent antitrust and industrial regulation of
basic industries such as petroleum, steel, Chemicals, and manufacturing. Until
strong governmental regulation entered in each case, the process seemed to be
Character lzed by rapid speculation and expansion of transport
facilities, tinancial bankruptcies, loss of public trust and money and often
higher charges to the Consumer.
This intense cycle was best evidenced in the promotional age of rallroad
development up until the l870's. Then it progressed to an era of captive
audiences, competition for freight sources and other practices considered preda-
tory. All aspects of the market seemed to be open including freedom to establish
new companies, expand access from existing operations to related activities,
Change services and facilities freely, avoid coordination due to technological
requirements (e.g., switching and equipment classifications and Communications)
and abandon Or discontinue Service. Each Of these fundamental areas of
Commerical activity in the free market place ultimately came under governance of
the federal interstate commerce clause.
In many ways, a similar course of events occurred for motor carrier freight,
pipelines and shipping. Although shipping has been more Concerned with inter-
national cooperation. Much of the shipping Concerns were to help establish solid
ground for the domestic maritime trade Competing with other nation-state organi-
Zations, often not acting as free enterprise, but as governmentally encouraged
Cartels.
67
An illustration of how things seem to change is that railroads and shipping
companies in the late l800's had closely coordinated their activity for import
and export. For example, railroads with Cooperation of steamship Companies
generated passenger travel demand by encouraging migration to the United
States. Industrial and agricultural workers were recruited from all parts of
Europe and encouraged with advertisements, posters and salesmen in their home
town and language saying"Come to the United States the land of opportunity."
They would also incidentally offer very low cost, one-way fares. The same thing
happened on the west coast for the Chinese and Japanese. Chinese were recruited
as a labor source for railroad construction. Later, Japanese were more actively
recruited for agricultural production. In the reverse direction, grandiose plans
were arranged so that whole agricultural sectors of the Country were opened up a
"bread basket" or food sources for Europe and China. The San Joaquin Valley in
Northern California became a wheat supplier for decades to most of Europe. The
draw was tremendous. Demand for raw resources from the United States helped
generate the Capital and the political desire to open up the land for
agricultural and mineral development. Utilizing in turn the cheap mannual labor
provided by immigration from Europe and Asia. The transportation system expanded
intermodally (rail and shipping) to help exploit vast resources.
Now, railroads and steamship companies in some cases are allowed to assoc-
iate again for trade.
With the maturing of the canal and the railroad industry, the introduction
of competitor modes (trucking and pipeline) the regulatory system then shifted
slowly to consider the national well-being in a different regard. In earlier
days it was designed more often for the protection of the public from abuses by
the industry. By the Depression period, emphasis continued on the protection of
the public but also on the stability of the existing transportation infrastructure
and permitting changes and improvements incrementally. That theory and
philosophy did seem to work, though it often slipped into maintenance of status
quo, resisting new technology. Through industrial and political influence, the
regulatory system came more of a competitive burden, while protecting the public.
Ultimately the regulatory system grew to great complexity and permitted an inef-
ficient transport system. In effect, it helped develop the l970's economic Con-
text indicating need for deregulation.” -
Regulatory Changes
The structure of public policy regulating interstate transportation under-
went fundamental shifts in 1980. In the case of railroads, almost one hundred
years of incremental expansion of the federal regulatory role was frozen and
reversed. Motor carriers experienced a similar transformation. Although the
movement towards deregulation--that is, disinvolvement of the federal government
from private sector intervention—was called for by many interests in the pre-
vious decade, the environment for public policy formulation made July to October,
l980 a memorable legislative period. The Motor Carrier Act of l980 (Public Law
96–296) was passed by the Senate on April 15, by the House on June 19–20, and
signed by the President on July 1, 1980. The Staggers Rail Act of 1980 (Public
Law 96-448) was passed by the Senate on April l-3, by the House on September 9,
and signed by the President on October 14, 1980.
Almost four years later, March 1984, shipping underwent significant change
too. Technically it was not "deregulation", although the statute shared some of
the same spirit.
68
Both acts (motor Carrier and rail) shared a common philosophy designed to
untangle the matrix of regulations, institutional relationships, and policies.
The legislative findings segion of each law illustrated basic Concerns, utili-
Zing fairly strong language: -
Motor Carrier Act:
Sec. 3 (a):
* The Congress hereby finds that a safe, sound, competitive, and
fuel efficient motor Carrier system is vital to the maintenance of a
strong national economy and a strong national defense;
* that the statutes governing Federal regulation of the motor car-
rier industry are Outdated and must be revised to reflect the tran-
sportation needs and realities of the l980's;
* that historically the existing regulatory structure has tended in
Certain circumstances to inhibit market entry, carrier growth,
maximum utilization of equipment and energy resources, and opportu-
nities for minorities and others to enter the trucking industry;
* that protective regulation has resulted in some operating ineffi-
Ciencies and some anticompetitive pricing;
* that in order to reduce the uncertainty felt by the Nation's
transportation industry, the Interstate Commerce Commission should be
given explicit direction for regulation of the motor Carrier industry
and well-defined parameters within which it may act pursuant to
Congressional policy; -
* that the Interstate Commerce Commission should not attempt to go
beyond the powers vested in it by the Interstate Commerce Act and
other legislation enacted by Congress; .
* and that legislative and resulting changes should be implemented
with the least amuont of disruption to the transportation system
consistent with the scope of the reforms enacted.
Staggers Rail Act:
Sec. 2: The Congress hereby finds that—-
* (l) historically, railroads were the essential factor in the
national transportation System;
* (2) the enactment of the Interstate Commerce Act was essentlal to
prevent an abuse of monopoly power by railroads and to establish
and maintain a national railroad network; - -
* (3) today, most transportation within the United States is competi-
tive;
* (4) many of the Government regulations affecting railroads have
become unnecessary and inefficient;
* (5) nearly two-thirds of the Nation's intercity freight is
transported by modes of transportation other than railroads;
* (6) earnings by the railroad industry are the lowest of any tran-
sportation mode and are insufficient to generate funds for necessary
Capital improvements;
* (7) by lo&5, there will be a capital shortfall within the railroad
industry of between $16,000,000,000 and $20,000,000,000;
* (8) failure to achieve increased earnings within the railroad
industry will result in either further deterioration of the rail
system or the necessity for additional Federal subsidy; and
* (9) moderization of economic regulation for the railroad industry
with a greater reliance on the marketplace is essential in order to
achieve maximum utilization of railroads to save energy and Combat
69
inflation.
The wide Sweeping changes embodied in both laws * are still being understood
and implemented by all parties. Their full effects are not known yet.
The Motor Carrier Act affected the following activities:
l. Common Motor Carrier:
* eases entry in the motor carrier market and limits protests
against applicants with Contestants bearing burden of proof;
* permits zone of rate freedom--raising or reducing rates by ten
percent without fear of ICC suspension;
* stipulates that ICC may require joint rates and through rates;
* allows more exemptions in commodity transport and services,
such as ex-air traffic, used pallets, empty Containers, livestock
and poultry feed, and mixing of exempt and regulated commodities in
the same vehicle.
2. Contract Motor Carrier;
* limits protest against permit applications;
* allows carriers to engage in Common carrier service; and
* removes limits on geographic Coverage and number of shippers
that can be contracted.
3. Freight Forwarder: -
* permits freight forwarders to enter into contracts with rail-
roads; ..
* permits zone of rate freedom--raising or reducing rates by ten
percent without ICC suspension; and
* permits use of contract carriers.
4. Exempt Transport: - --
* transportation of used pallets, empty containers, intermodal
Cargo containers and other shipping devices;
* transportation in interstate commerce within municipalities
and commerical zones; and - -
* trucking of agricultural Commodities, fish, livestock, feed,
Seed, and plants.
The Staggers Rail Act affected the following railroad activities:
* provides greater rate freedom with fewer restraints;
* reduces involvement in management affairs; .
* Codifies long term contracting for rates, services, and re-
lated conditions; -
* exempts piggyback and container-on-flatcar services from regu-
lations (indirectly, through new ICC authority);
* permits the ICC to deregulate various types of rail transport
under certain conditions:
* eliminates the discriminatory provisions for contracts,
surcharges, route cancellations, or separate rates for distinct ser–
vices.
The legislation for trucking and railroads does not really address the
export component of interstate land transportation. By extension though, their
70
collective provisions affect the export transportation chain from point-of-origin
to Seaport. If the more open competitive marketplace benefits general interstate
commerce, Similar benefits should spill over to the export component in terms of
better service and lower costs.
Although in timing coincident to the movement of deregulation, the Shipping
Act of 1984 (Public Law 98-237) is a revision and improvement in many regards to
the Shipping Act of l.216. The new legislation is a result of over four years
discussion and intensive study attempting to reconcile the many interests invol-
ved. Signed into law by President Reagan March 20, 1984, the Act accomplishes
many of procedural and substantive changes. Perhaps best expressing the spirit of
the Act is the Declaration of Policy:
1. to establish a nondiscriminatory regulatory process for the
common carriage of goods by water in the foreign commerce of the
United States with a minimum of government intervention and
regulatory Costs;
2. to provide an efficient and economic transportation system in
the ocean commerce of the United States that is, insofar as possible,
in harmony with, and responsive to, international shipping practices;
and
3. to encourage the development of an economically sound and effe-
cient Unites States-flag liner fleet capable of meeting national
Security needs.
This particular piece of legislation reconciles two earlier Congressional
bills H.R. l878 and S. 504. The legislative supplemental information and confer-
ence reports provided considerable detail. On the meaning of various phrases.
However, confusion resulted and further legislative definition and clarification
may be necessary.
The act is a landmark in that it does attempt to bring American shipping
and supporting groups into the 1980's. There were few changes since the Shipping
Act of lol6. Except for Federal Maritime Commission and antitrust legislation
interpretations along the way, the earlier act became quickly irrelevant in many
regards. Nevertheless, its provisions were attempted to be applied by federal
agencies and the private sector participants. The actual provisions are best
Summarized by the following material. The act specifically expands the antitrust
immunity provision, requires conferences to recognize independent action, allows
for service contracts, and intermodal through, rates by conferences and other
procedurers. Thirteen major areas were covered: -
l. Consortla Agreements- The new procedures and the new general
standard for agreements are going to make formation and alteration
of Consortia far easier. The new expedited procedures allow agree-
ments to become effective 45 days from Submission to the FMC..
2. Conference Agreements- The Act and the legislative history
strongly support conference formation and intermodal authority. Loy-
alty agreements are not permitted for new agreements.
3. Service Contracts – The new law authorizes Carriers and Conferen-
ces to enter linto service contracts with shippers. The "essential
terms" must be disclosed. - -
4. Conference Ratemaking - Under the l916 Act, initial rates and
71
rate increases require 30 days notice; decreases of existing rates
are effective immediately; conferences with dual rate Contracts may
increase rates only on 90 days notice. The new Act keeps the same 30
day rule in effect for rate increases and new and initial rates, with
conferences to publish a member's independent action rate On 10 days
notice.
5. Time Volume Rates - Time volume rates are Specifically allowed
under the new bill. Individual carrier members have a right of
independent action on time volume rates.
6. Controlled Carriers - The Act basically continues the Controlled
Carrier Law without change, but Operation of the law may be quite
different because of the changed nature of conferences. Under the
Controlled Carrier law, Carriers that are deemed COntrolled have a 30
day notice period for all rate changes, including decreased rates.
Controlled carriers' rates are subject to suspension if the FMC finds
them to be unjust or unreasonable.
7. Shippers' Associations- The effect of this section is not
entirely clear. The Act defines a "shippers' association" as a group
of shippers that consolidates and distributes freight on a non-
profit basis for the members of the group in order to Secure Carload,
truckload, or other volume rates or Service Contracts. It is prohl-
bited for a common carrier to directly or indirectly "refuse to
negotiate with a shippers' association." Yet, there is no antitrust
immunity glven to Conferences whlch negotiate with shippers' associa-
tlons. The report of the conferees explains this by stating that
Shippers' associations remain liable to all provisions of other laws,
implicitly meaning the antitrust laws. It would appear that further
rules will need to be promulgated.
8. Antitrust Immunity - The new Act changes the structure of the
antitrust immunity for Conferences and other rationalization agree-
ments. There are two aspects to potentlal antitrust liability, civil
and criminal. Under the old law, if carriers collectively took
action outside the scope of an approved and criminal penalties.
Under the new law, it is a prohibited act to operate under an
agreement required to be flled which has not been filed, or whlch has
been filed and disapproved.
9. Non-Tariff Items - The new law requires a continuation of tarlrt
filing in the same manner as the old Act, except that a few commodi-
ties will not be subject to tariff flling, and a new "forest pro-
ducts" definition is substituted for the old "softwood lumber" excep-
tion. -
l0. Intermodal Ratemaking - One of the principal provisions of the
new law is clearly to allow Conferences to publish intermodal rates.
As with existling practice, however, conferences with intermodal aut-
hority can set rates for an intermodal movement, but cannot
Collectlvely negotiate with the inland carriers. The Act gives
Conferences an antitrust immunity to "discuss, fix or regulate tran-
sportation rates, including through rates," but not inland divisions.
ll. Forwarders - The new law codifies much of existing practice with
72
regard to forwarders. Carriers may not collectively agree to give
forwarders less than reasonable compensation.
l2. Foreign Flag Discrimination - The new Act gives the FMC much
broader authority to take action against offending carriers, inclu-
ding tariff Suspension. It allows suspension of tariffs of foreign-
flag vessels of nations which have impaired access of U.S. flag
vessels to foreign-to-foreign trades.
13. Marine Terminal Agreements - Carriers wishing to jointly operate
terminals will be free to do so, but will not receive anti-trust
immunity.
The following sections of this chapter will review and discuss events since
the passage of these three laws, and their relationship to the export transporta-
tion System.
Motor Carrier System
Almost within a year of the passage of the Motor Carrier Act of 1980,
significant changes became visible. Several independent studies within and
outside the government attempted to mark the progress and to document the degree
of Change.
One summary was published by a "pro-transportation" group entitled the
Business Council for Improved Transport Policies, Washingtion D.C., December
1982. Overall, prices and service Conditions changed considerably. Referring to
a 1981 Harbridge House Survey of transportation users, averaging slightly over $1
billion in sales, the council noted that "a weighted mean average savings per
firm of $2.4 million per year on a weighted mean freight bill of $32 million, or
7.5%, attributed by these firms to the combined effects of rail, air, and truck
regulatory changes. The bulk of the savings were in the motor carrier area." A
Business Week study noted that the One hundred largest carriers experienced a
peak in revenue just after the passage of the MCA and went downward in 1981.
Fewer complaints have been received by the ICC after the act. And, price
discounts seem to be widely used. While this was occurring the Teamsters Union
reported "wide spread lay-offs, and has made a number of concessions in the
recently signed contract, including avoidance of wage increases other than Cost
of living increased for three years..." Contract rates have increased
Significantly.
Another major concern was the effect on Small Communities motor Carrier
Services. A study by the ICC reviewed the truck service experience to small
isolated communities. It found that shippers in these areas heavily relied upon
"for hire" truck service. The variety of shipments vary significantly from as
few as one per month to over twelve hundred per week. Under 500 pounds was
"the most frequently mentioned shipment size." It appears that most shippers
experience better available service and improvement in service, by three to
eight times than those reporting poorer service. The majority felt that service
was almost always on time, shipments arrived in good Condition, and that their
options for shipment and receiving were about the same as previous to the MCA.
Complaints were on a downward trend. The mandated study selected businesses in
randomly #elected small communities with a response rate over two-thirds in most
Segments.
73
A spirited discussion of the changes in the Motor Carrier Act and in the
perceived role of the Interstate Commerce Commission is raised by one observer,
notling that the Commission has lost its "character, competence, and independence."
In brief, the ICC has in the case of motor carrier regulation carried the mandate
too far and perhaps in key areas given advantage to the railroag industry
especially with trailer and flat car type operations and intermodalism.
The Chairman of the Interstate Commerce Commission provided a summary
statement of the progress made under the Motor Carrier Act of l980 for the House
Surface Transportation Subcommittee. (Figure V-l) The difficulties found in the
first two years of experience, he believed, were due to, primarly the condition
of the economy and not a result of the MCA. Things have substantlally improved
Since then.
The numbers do look impressive and in some areas have significance for
export operations. In general, the number of new certificates granted for opera-
ting authority and new carriers has helped to instill competition and affect the
pricing structure. The shippers seem to be on the whole satisified. Most impor-
tantly, applications for Contract carriers have increased thirty-seven percent in
the forth year. Rate increases ranged up to eight percent but "served merely as
base prices from which discounts are taken." And, piggy-back, and trailer
container on flat car traffic has incresed twenty percent in l983.
Another point of view is based upon a survey” of motor carrier executives
and their review of the future for the next five years in terms of market out-
look, competitive forces, technology trends and impacts, cost reduction and
pricing tactics, and management priorities for financial success. The respon-
dants felt that tonnage would increase by ten percent annually through l988. On
the other hand, they would receive intense competition from other modes such as
TOFC and air freight. On the whole, "for-hire trucking industry, truck load
Carriers and special commodity divisions of LTL carriers were expected to expe-
rience stronger growth than LTL Carriers, exempt carriers and owner Operators."
All expected equipment, labor and fuel Costs to increase. -
Interestingly, a majority felt that government influence would increase,
"Nearly all survey respondants assumed that federal and state highway taxes would
increase; most also believed that more stringent safety, emission, and noise
regulations would be forthcoming with the next five years. Larger investment
requirements and lower profitability were expected as a result."
Adoption of new technology for information processing and billing were
essential in the minds of many. And, technology aimed at increasing fuel effi-
ciency and lowering Operating costs were thought necessary by motor carrier
executives for investment decisions. Many believed that they would be increasing
their use of longer and wider trailers. Also, "one-third anticipated increased
use of double trailers..." -
An important footnote to the government regulation aspect is that even
though taxes would be increasing regulations expanding energy and air quality,
and application of new technology, many felt still the roads highways and brid-
ges would be deteriorating.
The study was based upon a year long study research program of motor
carrier chief executives, mailed in the spring l983. Of the 500 companies Con-
tracted, l26 participated. "The Survey sample represented a broad spectrum of
the for-hire motor carrier industry."
74
: |

Figure V-1
Motor Carrier Act of 1980 Summary – June 30, 1984
* Since the effective date of the Act, July 1, 1980, 23, 61 O
new carriers have received authority from the Commis–
sion. This marks an increase of 15, 224 over the figures
reported to this Committee on June 25, 1982. More than
3, 788 grants of authority have been issued to new car-
riers since November 16, 1983.
The total number of new certificates served since the Act
went into effect is 65,800. There was an increase of
approximately 5, 389 new certificates since the last
House hearing.
As expected, applications appear to have leveled off. As
of June of this year, applications were being filed at a
rate of approximately 1, 1 OO each month. They are holding
steady at about that rate.
Overall, shipper satisfaction with the level of service
remains high .
* Although initial results indicated that the Motor Carrier
Act had little positive impact on owner-operators, recent
figures suggest that , increasingly, they are making use
of the special provisions of the Act to obtain their own
operating authority. Since June 1, 1982, 287 owner-
Operators have been granted certificates for operating
authority.
Contract carrier applications, as a percent of all appli–
cations, rose to 37 percent during the fourth year under
the Act. For the first three years, they accounted for
16 percent, 27 percent, and 28 percent, respectively.
Existing carriers accounted for about 65 percent of all
contract carrier applications for the fourth year.
* Broker authority growth has been strong, with 1195
approvals since mid-1983. This is an annual rate of
1504, which is 45 percent higher than a year earlier.
* More than 1 OOO firms, with approximately 11, OOO
subsidiaries, have not ified the Commission of their
intent to engage in compensated inter corporate hauling.
' Unless otherwise specified, figures for the fourth year are
based on data for the 11-month period ending May 31, 1984.
75
Figure V-1 cont.
* Independent rate actions increased steadily through FY
1983 from 27, 141 in calendar year 1979 to 6 O, OOO and
1 15,085 in calendar years 1980 and 1981, and to 18O, 829
and 230, 184 during FY 1982 and FY 1983. For FY 1984,
59, 426 independent actions are projected, based on six
months' actual data from major rate bureaus. The pro-
jected drop is attributed to the fact that many motor
carriers are no longer publishing independent rates
through the rate bureau process, but instead are pub-
lishing discount provisions and individually negotiated
rates in individual tariffs.
General rate increases were approved, effective April 1,
1984, for nine major rate bureaus. Increases ranged from
2.5 to 8. O percent. Increases for the bureaus a year
earlier ranged from 4.6 to 6.6 percent. The 1983 re-
structuring, which resulted in significantly higher
increases in lower LTL weight brackets, was less evident
in this year's general increases. In many instances, the
rates, as increased by general increases, serve merely as
base prices from which discounts are taken.
TOFC/COFC traffic continues to offer opportunity and
competitive challenge to motor carriers. Piggyback
volume rose approximately 20 percent during 1983, and is
continuing to increase in 1984. Numerous motor carriers
are specializing in gathering and distribution opera-
tions, in coordination with long-haul motor carriers and
railroads. * \
Financial performance and tonnage improved during
calendar year 1985, as compared to 1982, for the 100
largest motor carriers of property. During 1983, revenue
tons increased by 1.9 percent, the first increase in 12
month traffic volume for the largest 1 OO carriers since
the period ending June 30, 1979. Net carrier income more
than tripled. The combined operating ratio for these
carriers improved from 98.6 to 96.O percent. Rate of
return on equity increased from 2.6 to 12.4 percent.
These improvements were broad-based.
Source: Statement of Reese H. Taylor, Jr., Chairman, Interstate Commerce
Commission before the Surface Transportation Subcommittee of the House
Public Works and Transportation Committee on Implemention of the Motor
Carrier Act of 1980 (Washington, D.C.: Interstate Commerce Commission
June 20, 1984). -
76
There is increasing evidence that collective rate making is dying out as a
practice in the trucking industry and is being replaced by increasing competition.
An antitrust official, Observes that single firm profit maximization is a goal as
this trend increases.” Some Corporations have installed a "simplified national
rating System" based on postal zip codes and a rate scale. Introduced by Roadway
Express Inc. Akron, Ohio, these
tariffs are national in SCOpe and are set outside the collective
rate making process. Whether intended or not, they can not possibly
strengthen the Collective rate making process and inevitably must
undermine it. We are seeing, I believe, the commerical (as opposed
to the Fºlitical or legal) beginning of the end for collective rate
making.
The Surface Transportation Act of l982 permitted double trailers and 102–
inch wide commerical motor vehicles on designated Interstate and other qualifying
Federal-aid Highways. After extensive investigation and discussion the Federal
Highway Administration as required py the act determining (June 3l, l984) the
Conditions and size of the system. It was a "national network" and required
twelve foot wide lanes. Many routes were disputed for reasons of safety geomet-
rics, maintenance, rehahbititation, and signing. Other factors included length of
the trailers, special situations for automobile transporters, dromedary boxes, and
Overhangs. The maximum gross vehicle weight will be 80,000 pounds. The entire
System is Over l8l,000 miles, of which 42,000 miles are Interstate.
Significant economies are anticipated from greater Operating efficiency and
productivity. When totally factored into the export transportation system's
Costing of goods carried by such trailers, there should be a discernible, posi-
tive impact. On the other side of the coin is the realization that as traffic
increases, there will be off-setting wear and tear, greater expense and perhaps
increases. User vehicle fees will not cover actual rehabilitation or
maintenance necessary for these heavier and larger trucks. Also, a concern
raised by many states and individuals regards mixing personal automobile or bus
travel with these larger freight vehicles.
The matter of double trailers is still under study, as required by the
act. 13 "Compared with single trailers, double trailers offer the advantage of
increased volume and capacity and the potential for added operating efficiency.
Two 28' trailers have about 20% greater Cubic space than a 45' semi-trailer, the
largest single trailer in common use nation wide." As allowed by the act, when
48' semi-trailers are fully employed on the national network, that cargo space
advantage will be cut to about 15%. In total, the economic advantages are
Significant. Safety and pavement wear should also be considered:
The combined effects of greater use of doubles and higher weight
limits are forecast to produce shipper cost savings in 1985 of $2.l
billion dollars (in 1977 prices). Of this, $1.6 billion is attribu-
table to the shift to freight to doubles, due to lower terminal
handling costs and line haul Savings from the larger capacity of
doubles. Averagissmall shipment freight costs fall 2 cents per ton
mile (about 6%). *…
A provision was designed specifically for the "barrier states" (Illinois,
Arkansas and Missouri) requiring permitting eighty thousand pound vehicles on
the Interstate System. They had lower limitations which effectively prohibited
larger vehicles to be used cross country. In addition, there must also be
77
reasonable access "between the milional network and truck terminals, facilities
for food, fuel, repairs and rest."
States have not followed quickly on the federal deregulatory path. Ac-
Cording to the chairman of the American Trucking Associations, the trend of
deregulation at the federal level has not really spread to the states. "Forty-
four states now regulate motor carriers in some fashion, while six do not." The
degree of regulation remains quite high as fortyigne states Continue to fully
regulate their for-hire motor carriers of property."
States maintain strongly their right to tax and support freight industry
highway useage. At an annual meeting of the National Governors Associations,
policy principles were endorsed about the right of states to tax and finance
their Own Systems and their responsibility for safety of the highway users. A
Complicated set of principles identified situations in which minimized require-
ments would be desirable for motor Carriers operating in more than one state and
how the state should coordinate their systems. The importance of these observa-
tions and principles is against the backdrop at that time of pending federal
legislation about a National Trucking Industry Commission to study taxation of
truckers (H.R. 3612), draft legislation by the federal Department of Transporta-
tion On more uniform state truck registratlon tax procedures, additional legis-
lation from the American Trucking Association "advocating preempting of some long
Sacrosanct state prerogatives" and other DOT directives.
One Consistant fear regardless of federal or state is, what happens to the
Small and medium size Community and shipper. Earlier, an ICC study found that
there was no significant adverse impact on most parties involved. At the state
level, a Florida investigation found that the most important factor was location
rather than firm or community size. And most groups of shippers and receivers
found that improvements far outweighed erosions inservice.
Railroad Carrier System
The Staggers Rail Act of 1980, according #8 the Interstate Commerce Commis-
Sion, has substantially improved the industry. Despite economic recession and
Contlnuing cost inflation, there is the belief that railroads are in better
financial position than in many years. In fact, it is believed that without the
Act the effects of the recession would have been far more severe. It has given
Carriers more freedom and encouragement to make needed changes. There have been
more mergers; the larger of which are the CSX Corporation control of the Chessie
System and Seaboard Coastline Industries, Burlington Northern Inc's merger with
the St. Louis-San Francisco Railway, Norfolk and Southern's control of the South-
ern Railway and Norfolk and Western Railway, and Union Pacific Corporation control
of Missouri Pacific and Western Pacific. "As to the future, it appears that the
Current merger movement will Continue. The efficiences and economics resulting
from Single line or single system operations will lead, in all likehood, to the
creation of a few transcontinental system."
One attractive deregulatory feature for railroads is permmission to offer
contract rates. As of summer l983, 7844 rail contracts had been filed with the
Commission since the passage of the Act, as shown below in Table V-l.
Deregulation of railroads has extended to one important aspect of export
transportation system operation--coal cargo. It is of such concern to rail car-
riers and coal producers that each has commissioned studies and petitioned the
78
Commission to elther regulate or deregulateh A study by the Coal Exporters
ASSOCiation and National Coal Association found:
Table V-1
Contracts Approved
Commodity Group Contracts Percent
Grain/Grain Products . . . . . . . . . . . © C & © O e º e 1 O33 13.2%
Coal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 349 4.5
Forest Products, Lumber, Paper . . . . . . . . . . 1562 19.9
Autos, Parts, Machinery, Implements . . . 273 3.5
Iron and Steel, Metals, Scrap . . . . . . . . . 887 11.3
Foodstuffs • * > 0 e º O e o e o e o e o e e e e o e e e o e e e e e a e 984 12.5
Bulk Chemicals and Minerals . . . . . . . . . . . . . . 1769 22.5
All Others—Service-Misc. , Ftc. . . . . . . . . . . . . _987 12.6
Totals 78.44 1 OO. Oſó
Source: Reese H. Taylor, Jr., Chairman, Interstate Commerce Commission.
Testimony before the Surface Transportation Subcommittee of the Senate
Committee on Commerce, Science and Transportation on the Staggers Rail Act of
1980 (Washington, D.C.: Interstate Commerce Commission, July 26, 1984).
l. coal export railroads have market power Over domestic ship-
pers; -
2. domestic railroads have market power in world Coal trade;
3. economic losses are Caused by exemption;
4. antitrust Sanctions are inadequate;
5. Comparing rail rates to Coal prices does not lead to the
COnclusion that rall rates are reasonable.
The study in general determined that exempting coal export rates from
regulation is not justifled. It predicted that "deregulated rail rates for
export coal would average 57% higher than if they remained regulated." With
higher freight rates anticipated under deregulation between l983 and l990, 450
million fewer tons of coal would be exported at a domestic shipper revenue loss
of $20.8 billion dollars and an export receipts loss of $21.4 billion (including
higher rail revenues). It would also result in a cumulative reduction of U.S.
real income of $4.2 billion. The importance of this discussion is that rallroad
Carry the predominate amount of coal for domestic use or export (Table V-2).
Indeed, much of it for some parts of the Country is carried only by one company.
For example, railroads carry 99.78% of the anthracite and bltuminous coal pro-
duced in 1980. - - -
79

Table V-2
MARKET POWER OF RAILROADS OVER DOMESTIC SHIPPERS:
SHARE OF EXPORT TONNAGE IN CEA SURVEY WHICH WAS CAPTIVE
TO ONE CARRIER FOR MOVEMENT FROM MINE TO PORT
Mode and Capacity Status
(1) All-Truck:
(2) From Points with Rail origins
(3) From Points with Rail Origins
(4) All-Water
(5) Truck-Water
(6) Rail-Water
(7) All-Rail:
(8) From Points Served by Two Railroads
(9) From Points Served by One Railroad
(Row (7)—Row (8)
(10) All Modes Combined
Anthracite and Bituminous
1980 Tonnage
(Thousands
of Tons)
(1)
81.2
7.7
73.5
0.0
0.0
0.0
37,344.6
1,175.5
36, 169.1
37,425.8
Percent Share
(IJT37,475.3)x100
(2)
0.22
0.02
0.20
0.00
0.00
0.00
99.78
3.14
96.64
100.00
Bituminous Only
Iššū Tonnage
(Thousands
of Tons)
(3)
0.0
0.0
0.0
0.0
0.0
0.0
37,104.1
1,175.5
35,928.6
37, 104.1
Percent Share
(3) T37,IGHTXIGO
(4)
0.00
0.00
0.00
0.00
0.00
0.00
100.00
3.17
96.83
100.00
Source: Verified Statment of Richard B. Blackwell in Support of Complaint vs. The Atchison, Topeka
and Santa Fe, et al., Docket No. 38301S:
Rows (1), (2), (3), (7), Table 1.
Rows (4), (5), (6), p.3
Row (8), p. 9. -.
Row (10), Table 1 and p. 3.
Source: National Economic Research Associates, Inc.
Railroad Exemption -- Export Coal (Ex Parte No. 346 (Sub 7))
before the Interstate Commerce Commission (Washington, D.C. ETNERA, Coal Exporters Association, National Côal

Association: December 18, 1981).
g
Table V-3
COAL, EXPORT PRICES
1960 - 1980
F.O.B. Mine Price Average Rail Freight to Port
Holmes Bales Holmes Bales
Current Constant Current COInStaint Current Constant Current Constant
Dollars 1972 Dollars Dollars 1972 Do!!ars Dollars 1972 Dollars Dollars 1972 Dollars
1960 NR $ 5.12 $ 7.45 NR $ 4.08 $5.94
1961 NR 5. 20 7.50 NR 4.08 5. 88
1962 NR 5.30 7.51 NR 4.08 5.78
1963 NR 5.31 7. 41 NR 4.08 5. 69
1964 NR 5.50 7.56 NR 4.08 5. 61
1965 NR 5.54 7, 45 NR 4.08 5. 49
1966 NR 5. 72 7.45 NR 4.08 5. 32
1967 NR 6.07 7.68 NR 4.08 5. 16
1968 NR 6.21 7.52 NR 4. 23 5. 12
1969 NR 6.67 7. 69 NR 4.48 5.17
1970 NR 9.33 10. 20 NR 5. 13 5. 61
1971 NR 12. 20 12. 71 NR 5. 42 5. 65
1972 NR 13. 38 13.38 NR 5. 62 5. 62
1973 NR 14. 74 13.95 NR 5.90 5.58
1974 NR 37.91 32.99 NR 7.03 6.12.
1975 $44.51 $35.44 44.68 35.58 $ 8.27 $ 6.59 8.10 6.45
1976 41.63 31.51 42. 16 31.91 9.20 6.96 8.67 6.56
1977 42.51 30.58 42. 70 30.54 9.66 6.91 9.47 6.77
1978 43. 13 28. 74 43.34 28.88 10. 75 7. 16 10.54 7.02
1979 41. 74 25. 64 41.51 25.50 12. 22 7. 51 11.98 7.36
1980 40.86 23. 03 NR 13. 19 7.43 NR
NR - Not reported.
Source:
Cols. (1) and (5); Verified Statement of Constance B. Holmes in Support of Complaint vs. The Atchison, Topeka
and Santa Fe, et al., Docket 38315, Attachment Thirteen.
Cols. (3) and (7): Verified Statement of William B. Bales, in Support of Petition by Norfolk and Western, Ex Parte
No. 346 (sub-No. 7), Attachment H at 3.
°ols. (?), (4), (6), (8): Derived from the above, using the GNP implicit Price Deflator.
*...*.**ional Ecºnomic Research Associates, Inc. Railroad Exemption - Export coal (Ex parte No. 346 (Sub 7))
before the Interstate Commerce Commissi & tº & a tº G
Association; December 18, 1981). ission (Washington, D.C.; NERA, CoalTExporters Association, National Côal

g
Of that only 3.1% is produced is areas served by railroads. (See Table V-2).
In 1980 the average rail freight to a port, according to several studies, was
approximately 32% of the mine price (in current dollars). The mine mouth Cur-
rent dollar price was $40.86 per ton for coal export, plus $13.19 transport to
the port for a total port price of $54.85 per ton.
Effective September 12, 1983, the ICC Export Coalzºecision exempted all
aspects of export Coal transportatlon from regulation. And, as required by
Section 208 of the Staggers Fºl Act of l980, an ICC study on railroad contract
rates was undertaken in l984. Reflecting the concern over confidentlal Con-
tract information, most railroads and shippers participating in the study reques-
ted that their contract rate/making practices and individual information be kept
Confidential. Thus, this report provided a general Overview of the contract rate
making and did not disclose specifics of individual Carrier or shipper Contracts
or practices. It added further that a major element of the act was to "protect
the confidentlally of contracts and allow railroads and shippers a degree of
Confidentially similar to that of other businesses throughout the Country."
Coal transportatlon costs still influence major decisions for regional
development and therefore export activities. Southwestern states, according to
One state official, require additional transport lines to develop nearby energy
Sources. In one case a railroad with Captive access to the source would charge
a rate high enough to Convince the utility buyer to look for a coal source
outside the state, or at least an alternative transportation mode. As a result,
a coal slurry carbon dioxide pipeline is being examined as a possibility. The
utility Official voiced a need for Congress to take into consideration Captive
markets, particularly utility, coal shippers and to protect them through the
Interstate Commerce Commission. ..
But the Maryland legislature (joint House-Senate Study committee) rejected
a bill to "grant eminent domain authority for proposed coal slurry pipeline
through Maryland." It would link Coal fields in West Virgina through Maryland at
the Cheasepeake, Bay. The recommendation is not binding but it will carry Consi-
derable weight.” This further illustrates to introducing new technology.
The situation regarding coal export has gotten more complicated.” After
the ICC exempted coal export from regulation, suits were filed and an Appeals
Court reversed the ICC decision. The Commission then asked the Supreme Court to
overturn the United States Court of Appeals, District of Columbia Circuit deci-
sion. the ICC reportly argued that market forces were sufficient to establish
"the most effective means of insuring reasonable rail rates on export coal."
The Court did not agree and said that
the ICC failure to prove that effective competition against
railroads exists in the export Coal market... if permitted to stand,
will effectively preclude the ICC from any significant use of the
exemption power intended by Congress to be cornerstone of federal
rail transportation policy.
Ports "have a special interest in Contracts because of their rights under
the Staggers Act to protest Contracts that may result in unreasonable discrimina-
tion." An ICC survey received responses from the California Association of Port
Authorities, the Inland Rivers Ports and Terminals, Inc. and the Pacific Coast
Association of Port Authorities. The opinion is split. Four of the eleven Cali-
fornia ports responding felt that contracts did not help them and that the
overall impact has been negative. Confidentiality is a negative factor. They
just do not know as a result how contracts may help them or not help them and
82
fear unreasonable discrimination. Inland river ports also feel that they have not
benefitted and that the confidentiality factor is very important for the same
reasons. For the larger membership of the Pacific Coast Association of twenty-
four ports, nineteen of which are U.S. ports, there is also division of opinion.
Some believe that the practice has been beneficial because it provides "a marke-
ting tool that allows aggressive port sales staff to develºp new business." But
that Contract Confidentiality has a negative aspect to it. -
It is believed that the contract rate making has bºn "one of the most
Sucessful regulatory measures provided by the Staggers Act."** For the railroads
* Contract revenue constitutes an average of 26.5 percent of
total revenue.
* Contracting has intensified intramodal competition and has also
been successful in attracting traffic from other modes.
* Growth in contract traffic is anticipated to be five to ten
percent annually Over the next five years.
* Contracting was especially useful in weathering the recession
as Carriers were able to obtain volume commitments in return for rate
ConCessions.
* The major benefits of contracting were the ability to lock in
traffic; flexible pricing to quickly meet market conditions; and the
ability to tailor rates and Service to individual customers.
* Confidentiality of Contracts is viewed as a key incentive to
Contract rate-makeing. *
* Dedicated cars or equipment are not a major part of
Contracting.
On the other hand, the railroad experience does not carry over necessarily
to the shippers or the ports. For example,
* Most reporting shippers, with the exception of Coal burning
utilities, indicate that they have benefitted from contracts with the
primary benefit being reduced rates. .
* Most reporting shippers felt that the greatest benefits of
Contracting were realized by shippers with competitive transportation
alternatives. -
* Most reporting shippers indicated that contracting was
successful in diverting traffic from other modes to rail. rail.
* Most reporting shippers viewed the Confidetiality of Contracts
as a postive factor in negotiating Contracts. -
On January 16, 1985, the Association of American Railroads and the National
Industrial Transportation League came to an agreement about joint rates, route
Cancellations and changes. This is very significant in that their agreement will
be recommended to the ICC to form the basis of a guidelines for rule making. Now,
a rail carrier "proposing to cancel a through 4–5 days prior to the effective
date of such cancellation." It also provides an opportunity for the affected
party to respsond and establishes a procedure that the protestant would need to
Iſleet with a carrier before going to the ICC. The word "significant" is used
Several time insofar as the impact or effect upon the shippers and it is n%
defined. It is anticipated that this will be an issue for the ICC to resolve.
User groups and some of the smaller carriers are feeling the negative
effects of deregulation. Routes are being consolidated, lines abandoned, service
limited prices in some cases raised, and joint switching rights may be set at
Conducted higher rates, or cancelled. These lead to an anticompetitive environment
and more captive market sectors. According to the president of the Association of
83
*.
American Railroads, "there ls no more important fight for us." Part of the reason
for the growing movement may be in the following observation: "the benefits of
deregulation, while real enough, tend to be diffuse and indirect (emphasis
Supplied). But when deregulation imposes cost on ºtain groups, such as the
Shippers, the political reaction is focused and sharp."
Another important goal of the Staggers Act is to balance the need for
railroad revenue adequacy and promoting intermodal Competition. Some belleve that
in the long-run these may º be compatible and offer intensive economic analysis
to show the possibilities.
Another aspect of the deregulatory era is railroad operation or merger with
Competitive modes. Evident already is the rapid entry of railroads into trucking
operatlons. There is the additional example of a railroad purchasing a barge
line. This directly alarms barge operators and brings back memories of the era
When rails were able to compete in a most predatory way to capture business.
Then, they put the barge companies out of business and raised their rates. These
fears are being brought up again. Representatives of the railroad industry
believe that there is no demonstration "rail-barge mergerºyill not harm competi-
tion and that they can in fact produce efficiency gains."
While deregulation is occuring there is a growing belief that the transpor-
tation System still has Over Capacity. Of particular relevance to agricultural
users is the decline in the agricultural export markets and results over supply
of transportation Capacity. Even with the projected ten percent increase in the
market by 1985, the System can absorb it. In turn, there is still concern though
on "the evolving consolidation" within one mode and among modes. There is a
real possibility that agricultural shippers Wilſº be presented with fewer competi-
tive markets and fewer shipping alternatives. -
The Canadian syſtem has been feeling similar forces and will most likely
be very Competitive.
Canada's grain transportation System can probably move 30 million
metric tons of export grain in 1985/86 if proposed additions are
completed. However, bottlenecks will develop in the west as exports
Of nonagricultural bulk Commodities resume and exceed their prereces-
sion levels. The Canadian system will be hardpressed to increase
grain and oilseed exports to 36 million metric tons by 1990 given
proposed investment levels. - -
Canada could expand its market share, possibly at the expense of
U.S. grain and oilseed exports, if the transportation constraint is
overcome. Improvements in grain handling and transportation facill-
ties that enable Canaded to deliver grain without costly delays will
enhance its competitiveness in the World market for grains by helping
establish Canada's reputation as a reliable supplier.
Shippers seem in general to have mixed opinions on deregulation. They are
pleased but worried. Apparently, there is an "unprecedented increase in railroad
action to eliminate competing railroads from the market place." Known as vertical
foreclosure, to railroads it means "joint rate and route cancellations, the
outright closing of reciprocal Switching, or the raising of reciprocal Switching
charges far beyond reasonable rates to make them economically prohibitive." As a
result the shipper has many fewer options among competiting roads. An industry
group, "The Procompetitive Group" established in 1983 by a variety of shippers,
believed the ICC is not implementing the act strongly enough in these statutory
84
areas.”
To put the Concept of intermodalism in better perspective, it is necessary
to address the Competitive positions of trailer or containers on a railroad flat
Car against the traditional railroad box car. Railroads provide both services
and it is most likely that the container technology eats into the box car
traffic. One of the most Contested issues before the ICC was boxcar exemptions.
There is also the recent change permitting larger and longer motor carrier
freight vehicle COmbinations on the Interstate. This will impact boxcar traffic
too. ACCOrding to some, "boxcar traffic is approaching a solid core" and "boxcar
deregulation will help protect that Core." The kind of commodities carried best
by boxcars appears to be "heavy-loading commodities, products requiring high cube
equipment with less-sensitive Commodities." In order to compete effectively with
TOFC 33d COFC boxcars had to be deregulated and Conrail was a big motivator for
this.
Another important component of intermodalism is labor. The regulatory
System now allows greater flexibility and competition, technology is either
available or On the drawing boards for improvements, but labor practices may not
fully allow greater productivity. A relevant example is the Road-Railer concept
tested in the Conrail corridor between Buffalo and New York City. After eighteen
months it was found to be very competitive and favorable, with the execption of
Work crew costs. Unions "refused to adjust the one hundred mile rule and to
decrease crew size to a total of two; a trained pilot and copilot, each of whom
is trained as an engineer and brakeman so that they can exchange duties during
the trip." With such work rules future rail carriers will be much fewer in
number an; carry only bulk Commodity requiring less labor over longer
distances. *
Representing new technology that is coincident with the development of
deregulation is a dedicated coast-to-coast intermodal train service of double
deck units. Utilizing a specially designed flat Car, train Service started July
21, 1984 between Seattle, Washington and Kearny, New Jersey. There are "twenty
Car sets, each with five articulatd platforms. Each platform has positions for
two forty or forty-five containers." "The end platforms can also hold two
twenty foot containers and one of the larger Contal ners. This gives each Car set
the capacity to hold up to twelve containers." The service uses Union Pacific,
Chicago and Northwestern, and Conrail rights-of-way. It was established by
American Preſident Lines with the equipment made by the Budd Company of
Philadelphia.
An illustration of the dynamic rate structure and how different Ser-
vice/technology combinations may be is Table V-4 , , quoting rates from Trailer
Express, December 1, 1984, for shipments from Chicago to Seattle. Note the
close cost range and how the price structure dropped for less immediates;hipments
and those services offered by steamship, container trains or backhauls.
There are further complications for what the ICC is attempting to do. . . The
literature and experience to this point suggest that, goals as with other kinds
of public polcy may not be compatible as given in the original legislation. In
fact, one source suggests much of the difficulty of the ICC in implementating
Staggers Rail Act is tied to multiple policy objectives. "This tendency to treat
the various objectives separately is encouraged by the fact that the many inter-
connected issues are subject to separate rule making and individual Cases before
the ICC." The goals of the Act include revenue adequacy, protection to captive
(or market dominant shippers, relaxing regulation of competitive traffic and
85
revenue enhancement of deficit traffic.97
Table W-4
Transport Options
From Chicago
To Seattle Door-to-Door
(Most Points)
1. In a 45' Railroad Trailer (3,000 cu. ft.) $1,754 to $1,770
2. In a 40' Railroad Trailer (2,750 cu. ft.) $1,704 to $1,720
3. In a Backhaul Reefer Trailer (unit off)
(2,450 cu.ft.) $1,620 to $1,670
4. In a 40' Steamship Container (daily)
(2,500 to 2,700 cu.ft.) $1,520 to $1,670
5. In a 40' Steamship Container “Stack Train"
(weekly) (2,500 to 2,700 cu. ft.) $1,415 to $1,470
6. In a 20' Steamship Container (daily)
(approximately 2,200 cu. ft.) $ 890 to $ 965
7. In a 20' Steamship Container “Stack Train"
(weekly) (approximately 2,200 cu. ft.) $ 850 to $ 925
Or Rail Spur to Rail Spur
8. In a 50' Railroad Car (5,000 to 5,300 cu. ft.) $1,400°
** On 45,000 pounds, add $1 per 100 pounds over 45,000 pounds with $150
switching charges absorption on each end if not on the BN.
9. Truck rates can be quoted at about $1 per mile from or to almost any point in the 48-
state area. That would be about $2,000 from Chicago to Seattle. You as a traffic
manager can use options, for you can then buy transportation to suit your special
needs. Allow two days longer and you can save huge sums to use the railcar. It now
competes with both trucks and rail. On light and bulky freight, it is a 50 per cent
savings. Third parties do have special deals, for they buy volume lots and give you
the benefits of that buying and their nationwide coverage and Service very few
companies can match at a competitive cost. -
Source: Fred H. Tolan. "How A Traffic Manager Survives Under
Deregulation" Traffic World (Vol. 200, No. 12, December 17, 1984),
pp. 73. *
Reprinted with permission.
Many parties have pleaded for fairness and equity, which in their cases
means they are losing some of the Captive shipper protection they enjoyed pre-
Staggers. Or, there may be Calls from parts of the industry, that have not had to
compºte as much, about sunk Costs and rates of return. A caution in this regard
lS :
Any transition mechanism must thus come to grips with the
essence of the transition problem from a political as well as an
economic perspective: who is to bear the consequences of the "over-
head" of sunk costs. Misunderstanding or failing to recognize these
transition problems Can pose substantlal dan gers: Specifically,
premature application of economic Concepts that, while arguable valid
in some future regime in which all sunk cost are amortized, decidely
do not account for the effect of these sunk costs on the marketplace
in the short run. Misunderstandings of the transition problem may
also encourage false conclusions about the eventual results of de-
regulation, that is, the long-run Competitive equilbrium and industry
structure that will emerge. As a Consequence, policy recommendations
designed to address the problems of the transition may inadvertently
86
frustrate the ultimate goal of deregulation.
By the summer l983, a review.” of the ICC's implementation of the Staggers
Act of 1980 found that the railroad financial performance has been mixed, few
railroads earned adequate revenue, selected shippers saw change in rates and
Service, and the ICC investigated fewer shipper rate protests. Forty-two ship-
pers were Contacted, representing the Category of possibily lacking competitive
Shipping alternatives before the Act was passed. About half were generally
dissatisfied. About half thought that service has improved, "though few attri-
buted it to the Staggers Rail Act." About half said that they had benefitted
from the contract provisions. "One noted that it had contracted to move 98% of
its coal at rates 20% below the railroads published rate." The act had changed
provisions for obtaining an investigation or suspension of an rate increase. It
became more difficult and thus found that before the act in a two year period
about twenty percent of the cases were investigated and after the act only about
eleven percent. For the same time periods, suspensions fell from eight percent
to almost ten percent.
For states, Staggers permitted federal preemption of intrastate rate regu-
lation. Part of the concept was based upon the belief that "state rate regula-
tion, in the absence of market domiance by railroads, is completely preempted."
This will limit the future role of states "to rigidly exercising present and
forthcoming ICC standards and procedures." On the other hand for motor Carriers,
there is no preemption evident yet. Many felt that "preemption was a pragmatic
remedy to the conflicts and frustrations resulting from state regulation." It
has changed so much that "tºy independent state economic regulation of trans-
portation no longer exists."
Rapid progress made under rail derégulation thus seems to be under
Challenge from many parties. One notable situation is Coal export regulations.
A three Judge federal Appeals Court overturned the ICC's Coal export rate deregu-
lation de:# ion in 1983. The court said "The ICC had tilted too much toward
railroads."” Furthermore there is continuing dissension at the ICC and in public
press. Doubt exists about the continued direction toward deregulation, or whether
there will be reregulation. parently, clear-cut clash of philosophy is found
at the commissioner level.” Continuing this thrust of uncertainity is the
possibility of federal invovlvement again via Congressional action on the Concept
and application of deregulation. With this perhaps in mind, "the ICC announced
that it will underta; a consolidated, review of its post-Staggers regulations in
a single proceeding."
Nevertheless, deregulation of railroads has been successful in general 44
and in one of its main objectives - rehabilitating the System. Much of the
massive capital inflow for maintenance and development has been in anticipation
of improved earnings caused in part by deregulation.
Over the past five years railroads have invested more than $60
billion in maintenance, renewal and expansion of track, yards, termi-
nals and equipment. And this investment has been made over a periCd
characterized mostly by economic recession. -
Today, America's freight railroad have virtually eliminated
main-line deferred maintenance. Conrail...is running freight trains
at 70 mph over some of the finest track in the industry. Trans-
continental shippers are guaranteed fifth morning delivery on Coast
traffic, and third morning delivery between the west Coast and
Chicago—all highly competitive with motor Carriers.
37
And,
The rate of increase in rail coal rates since Staggers--27.3%
before adjusting for inflation -- is less than the corresponding
increase in electric rates. Railroad Coal rates today are a smaller
percentage of the delivered price of coal than a decade ago. Through
Straggers would have allowed the railroads to raise their coal rates
22% above the rate of rail inflation since l980, railroads have
raised their coal rates by only about 3% above such a level since
1980. And al most half the coal we move now moves under contract --
with most Contracts representating reduction in the precontract
prices.
Ocean Carriers System
It is far too early to be able to assess adequately and accurately the
impact of the Shipping Act of l984. However it is desirable to identify apparent
issues. Temptation is considerable to view the legislation as a deregulatlon
bill; therefore, rounding out the deregulation of motor carriers and rail with
shipping. That is not really the Case and there is good reason for this, no-
twithstanding strong expectations in this regard.
At first glance it may appear an internal Contradiction that conferences
are allowed and continued. This is an outgrowth of the original Shipping Act of
l916. Reflecting an era of turmoil, it was an attempt to ratlonalize cut-
throat and severe competition in trade. The conference approach appeared to be
the best way to organize the industry, provide for the national interest, ratio-
nalize a division of trade and insure American maritime capabilities. A driving
reality was that international acceptance of carrier conference agreements had
been historic, and for the United States to compete and cooperate in world trade,
such an approach was deemed necessary. House and Senate Conferees stated that
"the reasonable use of conferences and other conservative activity to address
Structural Competitive problems, such as severe rate instabillty and Over Capa-
City" are acceptable aims.
Underlying this determination is also a realizatlon that the
major economic allies of the United States continue to tolerate or
even support Conference and other cooperative carrier activity, in
many Cases in a measure far stronger than our laws have tolerated.
Any major change in regulatory policy, although not precluded by
these differences in approach, should be taken with a sensitivity to
interests of friendly nations, and, insofar as possible, in tandem
with them.
Also involved is gradual errosion since l8lb of carºr antitrust immunity
as originally granted. It Would appear that such erosion
has rendered those protections largely illusory. Conferences act at
their peril in Conducting the very activities that the shipping act
contemplates they won't undertake, because the FMC and the courts
usually view such activity as anticompetitive combinations which
are presumptively Contrary to the public interest.
Some of the results of the incremental erosion are:
l. Delay in the FMC's approval process for Section lb agreements
sometimes stretching on for years. * -
2. Application of vague standards of approvability for Section 15
88
agreements and subsequent loss of predictability in regulatory
decisionmaking.
3. Conflicting views of executive branch agencies concerning
acceptable Conference practices, as well as shifting decisions by the
FMC and the Courts, have created confusion over the responsibilities
of the Conferences and the Government's regulation of conference
activities.
4. A "chill ling effect" on the efforts of carriers cooperatively
to arrive at rational Commerical arrangements to improve U.S. parti-
Cipation in Our liner trade, increase operational efficiency, and
promote Comity with our trading partners. These efforts not only
face Constant risk of opposition from the Antitrust Division of the
Department of Justice, but have exposed all parties to presecution or
the threat of prosecution under the U.S. antltrust laws.
In perhaps the best statement of the philosophy and need counter to deregu-
lation of the land transportation system is the following language from the
Senate Report. It is fascinating in that it mentions reasons from the interna-
tional sphere as to why anticompetitive forces should be encouraged:*
A new statutory framework, establishing a new regulatory
philosophy, is needed to allow Carriers and shippers to conduct
international trade in a stable efficent and fair manner. It must
place a new emphasis on harmonizing U.S. policies and practices with
those of our trading partners and removing the handicaps which our
laws have imposed upon Our Own Carriers. DOmestic rules of Competi-
tion may work at home and fully justify recent deregulatory
approaches to reexposing domestic transportation to the antitrust
laws; they have been proved, however, not to work in international
liner Shipping.
This bill recognized that such phenomena as Contalnerlzation,
state-controlled fleets, the aspirations of less developed nations to
possess merchant fleets, and cargo sharing arrangements by
multilateral or bilateral measures were not even dreamed Of when the
Shipping Act of 1916 was enacted.
Concurrent to this long lasting debate was the world liner trade movement
toward protectionism, as reinforced "by the UNCTAD Code, which calls for closed
Conferences and bilateral allocations of Cargoes among the trading Countries (ef-
fective October 1983)." All this at a time that Over capacity had wor-
sened, containerzatlon had increased efficiency, and Curtailed shipping demand.
"State-controlled carriers (particularly Soviet) have impinged on existing
business, offering in some instances rates below the costs of a American-flag
carriers." And in some cases "several Countries have used the American open
conference system to gain a piece of lucrative American trade." For reasons of
national pride, even among newly emerging third world nations developing their
own fleets, maritime fleet capacity most likely will increase despite
questionable profitablity. National flag liner fleets are more a political and
military force than a trade force. There has been a large drop in the number of
flag liner companies. In the U.S. the number has decreased from nineteen in 1970
to eight in 1983. A similar period of reduction starting even earlier has
reduced the Japanese flag lines from twenty to about six lines Controlling "around
80% of all tonnage operated under the Japanese flag."
The U.S. Comptroller General argued that competition should be increased.
In a letter, June l, 1983 to the Chairman, Committee on the Judiciary, House of
Representatives he stated that the U.S. flag liner fleet "is not in a state of
89
decline Commonly ascribed to it, and its present condition does not justify a
major revision in the Shipping act." Contalnerization technology which in fewer
ships Carrys the total cargo, makes the claim possible. He agreed that it may be
necessry in the future for carriers to form "consortia in order to pool their
resources" to take advantage of technology produced larger more costly vessels.
The GAO telt that if Congress were "to eliminate antitrust immunity for liner
Operators Serving U.S. foreign trade...," Amerlcan diplomatic relations would be
affected, high Cost U.S. t1ag Carriers would be affected, but it would lintroduce
price Competition and reduce wasteful service Competition. F35eign Operators
flag liners would be subject thus to the American antitrust laws.
There is a body of opinion that believes the act does "reduce U.S.
government regulation of Carriers whlle placing greater reliance on shipper
demands for low rates, and good Service as a means of 'regulating' carriers." It
does so in three ways:
l. It makes clear that carriers may receive antitrust immunity
for the Collective Setting of rates for through transportation.
2. It makes major Changes , both substantlve and procedural, in
the way that government reviews multi-carrier agreements.
3. It expands the antitrust immunity Conferred on carriers for
their COllectlve actionS.
The act also provides "shippers provisions" which include a mandatory write
up in an independent action for Conference carriers and statutory recognition of
Service Contracts and Ocean liner transportation in the shippers associations.
"It ls believed that thesisprovisions enhance Shippers ability to bargin for
better rates and Services." •'
One of the more widely reported elements is contract authority granted
under the lintermodal Section. "Conferences may lawfully received authority from
the FMC (thereby receiving antitrust immunity for collective setting for
intermodal through rates)." This allows Carriers to market intermodal services.
It distingishes between "inland portion" and "inland division". The former being
the actual geographic Section of travel offered by common carrier and the later
beling the allocation of costs to the carrier for that portion. It prohibits
discussion or agreement regarding the inland division (prices or charges) on
through rates. Also, a Conference cannot negoitate with a group of nonocean
Carriers (e.g., truck and rail) on any matter relating to rates or services pro-
vided them by those nonOcean Carriers. "Thus the antitrust immunity gxtended by
the Act is limited only to the ocean side in most large concerns.”
It would appear then, that the Shipping Act of 1984 has eased government
regulation of Carriers within the Conference system. And it has "provided a
strengthening of Shippers negotiating power vis-a-vis carriers, so that shipper
regulations Could substitute for governmental regulation."
Independent of the actual passage of the Shipping Act of 1984 was a "Notice
of Inquiry and Intent to Review Regulation of Ports and Marine Terminal Opera-
tors" (Federal Maritime Commission, Docket No. 83–38), initiated on September 14,
1983. The Commission requested comments from the public on this matter and the
period for Comment closed December 2, 1983. The inquiry addressed marine terml-
nal tariffs, filing of approval of marine terminal agreements, gºd the need for
continued antitrust immunity for marine terminal operators." The Comments
submitted and hearing record determined that "the vast majority of the commenta-
tors indicated that terminal tariffs should continue to be published, centrally
located, easily accessable, and flled with the commission." Some of the reasons
90
offered in favor were that it would insure proper notice of shippers, carriers and
other users of port facilities about other revelant charges, rules and regula-
tions. It would also "insure ready access to market information" and "provide
information to other terminal operators resulting in stability and abating the
possibility of rate wars." -
The American President Lines, Eagle Marine Services, Virginia Port Authority
and Port of Seattle stated that the information would be available at the opera-
tor's place of business or by the port terminal Operators. Regarding agreements,
"no clear Consensus emerged" on exempting terminal agreements from filing
approval requirements. However twenty-five percent thought the status quo should
be left. Many Overall believed that the public notice elements were essential for
"business intelligence". "An Overwhelming majority" thought that antitrust immu-
nity for port and marine terminal industry should be continued. Forty percent
believed that stability would result from continued antitrust immunity; it would
help avoid rate wars and provide consistency and uniformity in rates and
practices. It would also protect Small ports from predatory larger ports.
Another aspect is that one-third felt that the port industry is a "unique and
essentlal industry." Many seem to believe that the stabillty and consistency
provided by antitrust immunity allowed to public enterprises, that is, the ports
must be very capital intensive while Operatlg in a very dynamic rate service
market. Long term agreements Can result and this would be a better way to build
new technology and facilities, such as Container terminals. It also helps retain
public confidence for purchasing low Cost financing bonds. The role of informa-
tion exchange is quite valuable and would allow Conferences to pool their know-
ledge, experience and expertise for terminal activities. It would also provide
them with the same kind of parity to help offset powerful Ocean a carrier Confer-
ences and high volume shippers. Some were concerned by the "whipsawing" of ports
and prices.
As a result of the inquiry, a report ** was made and with the recommenda-
tion that rules should be prepared by COmmission staff to
l. unconditionally exempt fully non-anticompetitive terminal
agreements from all filing and processing requirements, including:
a) strictly landlord–tenant leases of on-dock and off-dock
facilities; and
b) agreements detaillng ar limited to facilities and services
used in connection with the handling of proprietary Cargo.
2. specify that terminal Conference and interConference agree-
ments continue to be filed and processed under existing rules and
procedures; and
3. exempt all other terminal agreements from the 45-day waiting
period of section 5, on condition that they be filed and published
for informational purposes.
Divergent testimony is provided in the record. Leading executives of the
major ports in the nation commented upon the difference between the port public
Community andits role in serving the public interests of its area, and the
nation. The majority did support the need for antitrust immunity of terminals
and ports. Unbridled competition, Concensus agrued, would only diminish imple-
mentation of the public interest. The hearing officer drew the conclusions that
the public nature of the ports and marine terminal Operators "constltute Commu-
nity investments financed by the taxpayer justfy the greater protections and
Safeguards provided by antitrust immunity." Also it was determined that "termi-
nal rates are not excessive, and are often barely compensatory or noncompensa-
tory. Terminal conferences often help achieve Compensatory levels." Oddly, it
91
was noted that Competition is not stifled by the Cartels authorized with anti-
trust immunity simply because they are not that efficient. And, "independent
terminal Operators use the benefit of antitrust immunity to Compete more effec-
tively with carrier-affiliated MTO's."
In line with the interim authority granted to the FMC by the Shipping Act
of 1984, the hearing officer found that the antitrust immunity for shipping
should be Continued, however not blindly adhered to for an unknown future time.
The Shipping Act of l984 requires that the question of antitrust immunity for
ports and marinal terminals be Considered in the report developed by the Advisory
Commission on Conferences and Ocean Shipping, established by ths Act. It would
COver informatlon Collected and analyzed over a five year period.
Both reports, part I and II, have been reviewed and adopted by the Commis-
Sion and the Proceeding contlinued as of January 18, 1985.
With the passage of the act, the ocean Carrier industry is somewhat more
Optimistic. But it has been down so low, according to SOme, that the optimism is
understandaº. "Those in U.S. shipping circles feel that you can only go up from
the bottom."
Never ess, there are realistic fears of overtonnage, rate wars, and
more stress.” The background of optimism has perhaps encouraged new technology,
ships and services. Constructed by a South Korean Company for $570 million, the
United States Lines is purchasing "l2 new mammoth container vessels" to be used
in around-the-world service. "The vessels, 950' long by l()0' wide, can haul
more tha 4,420 foot containers stacked eight below deck and five above." The
ship will take 84 days for around the world service. The Atlantic Line is
purchasing $300 million of flexible container ships carrying 2300 twenty foot
equivalent units. The Barber Blue Sea Line is purchasing the largest RoRo ves-
sels in the world. Lykes Brothers Steamship Company is adding six ships to the
Pacific fleet. Evergreen Marine Corporation of Taiwan already has twenty-four
G-type Container ships (Carrying 2720 TEU) for around the world service. Even
with more tonnage in the Pacific, thehre is a lot of traffic moving east and that
reflects the current import situation in the United States. It is also antici-
pated that ocean carriers will expand their trucking ocmpany agreements and
rights for increased consolidated service. They will not purchase or start,
though, their own Companies in domestic United States transportation. -
Besides overtonnage at a time when many ships are "sailing out of the
United States ports as much as two-thirds empty," is continuing diversion of
United States cargo to less Costly Canadian ports' and bilateral trade agreements
cause further concern. Canadian diversion is high. "One steamship executive
estimates some fifty percent of outbound container cargo, mostly from Midwest,
moves on the North Atlantic via Canada." Bilateral trade agreements reflects the
attempts of less developed nations to "protect their own fleets from more effi-
cient carriers."
Overtonnage is part of the trend toward around the world liner service and
load centers developing American coasts. Some experts believe that the high
value of the dollar has changed the Cargo mix to
low rated products as raw materials, scrap rag, and resins to
specific Pacific Rim and Asian Countries. Formerly, there was machi-
nery and heavy industrial equipment. Under the around the world
liner service changes have already begun to occur. The two companies
92
offering such service, U.S. Lines and Evergreen, have begun to bite
into the load factors of other carriers and will increasingly take a
Share. The diversion in the Pacific trade for the east bound land
Can be absorbed by other carriers reasonable better than on the
Atlantic Side and East Coast U.S. lines "has cut its east coast
ports of Call to just two - New York and Savannah – and others are
expected to follow." .
It is noted that the trend to Consolidatlon is not new but it has accel-
erated.
Conference groups are already changing. Under the new act they may oper-
ate in more flexible manner and it would appear that consolidation is the trend.
"For example, the nine east bound and west bound conferences that once governed
trade between U.S. East Coast, U.K., Europe, and Scandinavian have been replaced
by just two - One east bound, the other west bound - with authority from Main to
Florida." By March l, l985, "the four conferences that deal with trade between
the U.S. East Coast and the Mediterranean become just One, and on the West Coast,
One Conference with twenty carriers already signed up will repláge several
formerly involved in U.S. trade to the Far East and South East Asia."
It is interesting to observe that the Concept of super ports based on load
Centering by the ocean carriers has received indirect support by the Federal
Maritime Commission. A question occurred about natural tributary cargo and the
FMC ruled that "cargo originating at a particular geographic point cannot be
considered naturally tributary to any port, no matter how close together the
port and point may be. The agency cited "the rise of Contalnerization, inter-
modalism, and load Centers as a basis for its decision." This may facilitate the
growth of load centers in places such as Seattle and Los Angeles, even jough
there is excess capacity in the industry now and more ports Can compete.
Under the Shipping Act of 1984, service Contracts were allowed. Since the
bill's passage, during the fiğt six months over 310 have been filed at the
Federal Maritime Commission. The contracts are still governed by regulatory
rules however often they are at lower rates than published tariffs. There are
additional benefits that were anticipated by the act that "the Contracts make
the market place regulatory of business, as Carriers Can tailor their services
and rates to meet the specific demands of shippers." "Many contracts focus
mainly on guaranteeing vessel space in return for a guaranteed volume of goods
over a specified time." According to the FMC, by November 28, 1984, 303 contracts
Were filed and "one-third were submitted by Evergreen Lines, the non-Conference
Taiwanese carrier that initiated around the world Service earlier in the year."
Contracts seem to be available for many diverse Categories. Evergreen was quick to
reassure that the rates were not mandatory and that they are"normal for the
market." As a large independent, Evergreen Could be disciplined under the Shipping
Act by the other conference members. Evergreen has more freedom to offer Con-
tracts initially than conference members who may be disciplined or prohibited by
Virtue of their conference membership. "Over 200 of the Contracts filed So far
at the FMC are for U.S. imports." And shippers may certainly benefit from Con-
tracts locking in future space, pricing and timing. But if market conditions
Change particularly with the over capacity that generally exists, shippers may be
locked into paying a higher amount which initially looked advantageous.
Representative of the difficulty the liner and ship Construction industries
are encountering is the cost differentlal for both operational labor and ship
Construction. Table V –5 illustrates representative crew costs for U.S. flag
Ships, OECD and non OECD flags. For the various types including liner, dry bulk
93
and tanker, the difference is astounding. Daily costs are mainly a function of
wage rates. For the OECD members the difference is for liners is almost one-
third less and for the non-OECD the difference is almost one fifth. Ship con-
struction Table V-6 illustrates representative building costs in millions of
dollars for liners, dry bulk and tanker. The differentlal is rather considerable
compared to Japan. For liners the United States is ost twice as much. The
relationship relatively holds for the other categories.
Table W-5 Table W-6
ive Ship Constructions Costs
Representative Crew Costs Rºman's º
U.S. Flag OECI) Flag Non-OECD Flag U.S. Japan
Manning Daily Manning Daily Manning Daily Ship Type
Level Cost Level Cost Level Cost Liner (2,450 TEU”) $118.0 $61.5
Ship Type Dry Bulk (35,000 DWT.”) 62.0 27.3
Liner 39 $8,200 33 $3,061 37 $.1,616 Tanker (90,000 DWT") 86.0 41.3
Dry Bulk 26 6,250 26 2,100 26 1,250
*TEU: “Twenty-foot equivalent units” A standard
Tanker 26 6,200 26 2,310 26 1,375 measure of containerships.
**DWT: “Dead-weight tons” * &
Source: Office for Policy and International 4ffairs,
U.S. Department of Transportation.
Source: W. R. Di Benedetto. "Washington Report – In-Fighting Is In",
WWS/World Ports (October/November 1983), p. 10.
Reprinted with permission.
Some believe that the Shipping Act is not as clear and reform oriented as
first apparent. It may be "the lawyers' full employment act of 1984", from one
perspective. The Act favors large shippers and carriers at the cost of Smaller
sized-shippers and carriers. The concensus of opinion is that although there may
be disagreement on what the Act does and who benefits, a new set of tools is
available which substantlally changes internal Gompetitigº and marketing freedom.
It is up to the industry now to utilize them effectively.
Conclusion
With the dynamic changes in all modes of land and water transportation
regulaton in the United States, and among the modes for intermodal services and
activities, it is most difficult to draw firm conclusions about the relation-
ships and the long term impacts on export transportation systems. Increasingly,
it becomes clear that the export situation is a subset of the larger domestic
transportation process and System. In some well defined situations it Can be a
dominating or influenial factor, but still it appears on the whole to be subsidi-
iary factor.
Whether it be changes driven by political, economic, technological, or
profit making forces, much seems to be in flux. For example, deregulation by the
ICC of coal export rates has been challenged, as well as boxcar deregulation and
94
joint rates. The motor Carrier industry is unhappy with the taxation structure
and the competition provided by railroad TOFC and COFC operations. World
shipping Carriers, who are establishing larger ship service and load center
COncepts for around the World routing, will exert more influence on development
of port locations and supporting inland transportatlon Systems. The Shipping Act
of 1984 all Owing through rate service is a step in the right direction for one-
stop shopping, however that too will begin to influence the dynamics of rate
structure. Such freedom in aggregate benefits large volume shippers and a select
number of lines or Carriers. Despite studies of the small shipper and Small town
areas (or medium size areas) showing they are not unduly injured, fear still
exists. Continuing concern about regulation would therefore cause a potential
demand for reregulation in some of these areas.
Perhaps, one of the best ways to identify the amount of turblence and
stress, as well as opportunity in the new regulatorgºnvironments, is the obser-
vations from a traffic manager's point-of-view.
l. There is no dependable Overall freight rate source today. It
is a "mish-mash of dozens of Contracts, tariffs, quotes, discounts
and new third party alternatives."
2. Carrier monopolies rarely exist now except for some limited
bulk situations such as coal. There are at least five or more
Optlons. -
3. The Interstate Commerce Commission as a policeman in the
marketplace has just about vanished and state regulations are drop-
lſ]C.
P °. There is at least a 20% to 30% over supply of domestic trans-
portation which is depressing rates and forcing carriers to buy
"cash flow" with unwarranted rate cuts. The trucking fleet is
overaged now and badly needs replacement.
5. The new size and weight limits for highway trucks will soon
revolutionize most highway transportation.
6. The rise of piggyback has moved vast amounts of highway and
boxcar traffic into the piggyback.
7. The decline of railroads sales staff and the loss of personal
contacts presents a pale shadow of what they were five years ago.
Many railroads have reduced their staffs and gone to third parties
for quotations.
8. At least 75% of all piggyback shipments are now routed and
controlled by third parties under the railroad today. -
9. The decline of U.S. exports from the Midwest and East to the
West Coast is offering huge new opportunities for domestic shippers
to use backhaul steamship containers and steamship trains to cut
west bound Costs.
95
Endnotes
1
Richard J. Pierce, Jr., Gary D. Allison, and Patrick H. Martin.
Economic Regulation: Energy, Transportation and Utilities (Indianapolis:
The Michie Company, Contemporary Legal Education Series, 1980), Part 4,
"Regulation of Transportation", Chapter 15.
2 .
Charles A. Taft. Management of Physical Distribution and Transportation
(Homewood, Ill. : Richard D.TIrwin, Inc., Tø34, 7th Edition), Chapter 19,

"Institutional Aspects of Transport Policies and Programs".
3
PL 96–296, 94 STAT. 793–794; PL 96-448, 94 STAT. 1896–1897.
4
Tom McCarthy. "Transport (De) Regulation Report -- Shipper Choices 1981",
Traffic Management Magazine (Special Report), pp. 1–5.
5
American President Lines, Ltd. Service Schedule (Oakland, California:
American President Lines Ltd., May 1984).
6
Business Council for Improved Transport Policies. "Report on the
Results of the Motor Carrier Act of 1980", December 1982, in U.S. House of
Representatives. Hearings, Oversight - Motor Carrier Act of 1980 (Washington,
D.C. : U.S. Congress, 97th Congress, 2nd Session, Subcommittee on Surface
Transportation of the Committee on Public Works). -
7 -
Interstate Commerce Commission. Small Community Service Study, Section 28
Motor Act of 1980 (Washington, D.C.: Office of Transportation Analysis,
Interstate Commerce Commission, September 1, 1982), pp. 1-7.
8

Paul Stephen Dempsey. The Interstate Commerce Commission – Disintegration
of An American Legal Institution (Denver, Colorado: University of Denver,
College of Law, Transportation Law Program; Paper presented before Western
Transportation Law Seminar, San Francisco, 1984), pp. 1–3, pp. 56–57.
9 -
Reese H. Taylor, Jr., Chairman, Interstate Commerce Commission.
Statement before the Surface Transportation Subcommittee of the House Public
!'orks and Transportation Committee on the Implementation of the Motor Carrier
Act of 1930 (Washington, D.C.: Interstate Commerce Commission, Jume 20, 1984),
pp. 1-3.
10

Booz-Allen & Hamilton Inc., Transportation Consulting Division. Motor
Carrier Executive Survey Report - Strategies for Success in the Motor Carrier
Industry (Bethesda, Maryland: Booz-Allen & Hamilton Inc., June 1984), pp. iii-ix
and pp. 2-3.
11

"Collective Rate Making in Trucking is Dying, Antitrust Official Says",
Traffic World (Vol. 198, No. 11, June 11, 1984), pp. 25–29.
12
U.S. Department of Transportation, Federal Highway Administration.
Truck Size and Weight: Final Rule (23 CRF Part 658, Part W.) (Washington, D.C. :
Federal Register, June 5, 1984, Vol. 49, No. 109), pp. 23302 – 23329.
13
Robert E. Skinner and Joseph R. Morris. "TRB Policy Study: Monitoring
The Effect of Double-Trailer Trucks", TR News (Washington, D.C.: Transportation
Research Board, No. 114, September/0ctober 1984), pp. 15–21.

96
14
"'Final ' National Highway Network for Larger Trucks Issued by FHWA",
Traffic World (Vol. 198, No. 11, June 11, 1984), pp. 29–31.
15
Robert M. Butler. "Majority States Still Regulate Surface Transportation
Companies", Traffic World (February 20, 1984), pp. 25–27. -
16
"Nation's Governors Favor Uniformity in Trucking, But on Voluntary
Basis", Traffic World (March 12, 1984), pp. 19–21. -
17
Richard Beilock and James Freeman. "Florida Motor Carrier Deregulation:
Perspectives of Urban and Rural Shippers/Receivers", American Journal of
Economics (February 1984), pp. 91-98.
18
Reese H. Taylor, Jr., Chairman, Interstate Commerce Commission.
Testimony before the Surface Transportation Subcommittee of the Senate
Committee on Commerce, Science and Transportation on the Staggers Rail Act
of 1980 (Washington, D.C.: Interstate Commerce Commission, July 26, 1983), pp. 1-8.
19

National Economic Research Associates, Inc. Railroad Exemption -
Export Coal (Ex Parte No. 346 (Sub-No7) before the Interstate Commerce
Commission) (Washington, D.C. : NERA, Coal Exporters Association, National
Coal Association, Before the Interstate Commerce Commission, December 18,
1981), pp. 1–5.
20
Taylor. Op. Cit. , p. 14.
21
"Transportation Costs Will Determine South West Coal Use, Official
Says", Coal News (National Coal Association, September 17, 1984), p. 2.
22
Association of American Railroads. Rail News Update (Washington, D.C. :
Association of American Railroads, No. 2412, December 12, 1984), p. 1.
23 -
Ibid. p. 2.
24
Interstate Commerce Commission. Report on Railroad Contract Rates
Authorized by Section 208 of the Staggers Rail Act of 1980 (Washington, D.C. :
Interstate Commerce Commission, Office of Transportation Analysis, Section of
Rail Services Planning, March 13, 1984), pp. 36-37.
25 *
Ibid. pp. 3-5.
26
"NIT League, AAR Reach Agreement on Joint Rates/Route Cancellations",
Traffic World (Wöl. 201, No. 5, January 28, 1985), pp. 10-11.

27
Christopher Conti. "Push for Tighter U.S. Supervision of Railroads
Is A Threat to Success of Reagan Deregulators", Wall Street Journal (January 7,
1985), p. 38.
28
William B. Tye. "The Role of Revenue/Wariable Cost Ratios:
Determinations of Rail Market Dominance", Transportation Journal (Winter 1984,
Forthcoming, Presented to American Economic Association Annual Meeting, Dallas,
Texas, December 1984); See also William B. Tye and Herman B. Leonard. "On the
Problems of Applying Ramsey Pricing to the Railroad Industry with Uncertain
Demand Elasticities", Transportation Research (Vol. 17A, No. 6, 1983),
pp. 439 – 450.
97
29
William H. Huneke, L. Lee Lane and Thomas McNamera, Intermodal Policy
Studies Group, Association of American Railroads. "Greater Efficiency or
Predation: The CSX-ACBL Merger", (Washington, D.C.: Transportation Research
Board, January 17, 1985), pp. 1–2.
30
"Transport Over Capacity to Continue, U.S. D. A. Official Predicts",
Traffic World (Vol. 201, No. 1, December 31, 1984), pp. 16-17.
31
U. S. Department of Agriculture, Economic Research Service, Mary Ann
Normile. Canada's Grain Handling and Transportation (Washington, D.C. :
Government Printing Office, U.S. Department of Agriculture, Foreign Agricultural
Economic Report, Number 192, November 1983), pp. i-v.
32
Fred M. Zitto, Manager, U.S. Distribution Operations, International
Paper Company. "A Shippers Perspective on the Staggers Rail Act After Four
Years", Paper presented at the Transportation Research Board (Washington, D.C. :
Transportation Reaearch Board, January 16, 1985), pp. 1–2.
33
Perry A. Trunick. "A Long Haul for Intermodal", Handling and Shipping
Management (Vol. 25, No. 4, April 1984), pp. 39–42.
34
Don Byrne. "Piggyback Seen as Rail's Future But Not With Current
Work Rules", Traffic World (Vol. 199, No. 9, August 27, 1984), pp. 18–19.
35
"New Double Deck Train To Haul Containers Coast to Coast", Handling
and Shipping Management (Vol. 25, No. 11, October 1984), pp. 33–34.
36 W
Fred H. Tolan. "How a Traffic Manager Survives Under Deregulation",
Traffic World (Vol. 200, No. 12, December 17, 1984), pp. 71–74.
37
William B. Tye. "Balancing the Rate Making Goals of the Staggers Rail
Act", Transportation Journal (Summer 1983), pp. 17–26.
38
John R. Meyer and William B. Tye. "The Regulatory Transition",
(Dallas, Texas: American Economics Association, December 1984), Paper
presented and forth coming in the American Economic Review, pp. 1-2.
39 •
U. S. General Accounting Office. Information on Regulatory Reform
Under the Staggers Rail_Act_of_1980 (Washington, D.C. : General Accounting
Office, GAO/RCED-83–174, August 17, 1983), pp. 1–5.
40
Kevin H. Horn. "Federal Preemption of State Transportation Economical
Regulation: Conflicts versus Coordination", Transportation Journal (Vol. 23,
No. 2, Winter 1983), pp. 42–43.
41 -
Christopher Conti. "ICC Deregultion of Rail Rates on Coal For Export
Is Over Turned by U.S. Court", Wall Street Journal (September 19, 1984), p. 23.
42

Christopher Conti. "ICC Nears Paralysis as Its Members Feud Bitterly
About Deregulation", Wall Street Journal (July 18, 1984), p. 29.
43 -
Daniel Campbell and John Broadly. "Assault on Rail Deregulation Gains
Steam", Wall Street Journal (October 4, 1984), p. 34. - *
98
44
Richard E. Briggs, Executative Vice President, Association of
American Railroads. Remarks Before the 64th Annual Meeting, Transportation
Research Board (Washington, D.C.: January 16, 1985), p. 5, pp. 9-10.
45
U.S. House of Representatives. Shipping Act of 1984 – Conference
Report (Washington, D.C.: U.S. Congress, 98th – 2nd Session, February 23,
- • D. .
46 -
U.S. Senate. Shipping Act of 1983 – Report of the Senate Committee on
Commerce, Science and Transportation on S. 504 (Washington, D.C.: 98th
Congress- 1st Session, February 17, 1983), pp. 6–7.
47
Ibid. p. 12.
48
U.S. House of Representatives. Shipping Act of 1983 - Report -
Part 2 (Washington, D.C. : U.S. Congress, 98th Congress, 1st Session,
July 1, 1983), pp. 4-5.
49
Conference Report, op. cil. , pp. 44–46; See also: U.S. House of
Representatives, International Ocean Commerce Transportation, Report – Part 1,
HR, 1878 (Washington, D.C.: U.S. Congress, 98th Congress, 1st Session, April 12,
1983, Section B – Intermodalism, Section C – Open Conferences, and Section D –
Rationalization), pp. 12–15.
50 z
- Peter A. Friedmann and John A. DeVierno. "The Shipping Act of 1984:
The Shift From Goyernment Regulation to Shipper 'Regulation'", Journal of
Maritime Law and Commerce (Vol. 15, No. 3, July 1984), pp. 311-14.
51 * 52 53
Ibid., pp. 340–342. Ibid., pp. 323-324. Ibid., p. 351.
54
Federal Maritime Commission. Notice of Inquiry and Intent to Review
Regulation of Ports and Marine Terminal Operators, Synopsis of Comments.
(Washington, D.C.ETFMC, Docket No. 83-38, 1984), pp. 1-23.
55 e
Ibid., Report of Inquiry Officer - Part 1, pp. 21-22.
56
Ibid. , January 18, 1985, Part 2, pp. 1-23.
57.
John LoDico. "Carriers Eye Future Problems by Economy, Backhaul",
Traffic World (Vol. 199, No. 13, September 24, 1984), pp. 42-44.
58
Joseph T. Kane. "Ports and Maritime Outlook 1985, Sea Still Rough
for Shipping Industry", Handling and Shipping Management (Vol. 26, No. 1,
January 1985), pp. 44–52.
59
- "Divergent Views Aired on Future Development of Port Load Centers",
Traffic World (Vol. 198, no. 11, June 11, 1984), p. 43.
60
John LoDico. "Service Contracts on Growth Curve in Early Months
After Shipping Act", Traffic World (Vol. 201, No. 1, December 31, 1984), pp. 40–41.
61 - ſº º || -
W.R. DiBenedetto. "Washington Report – In-Fighting Is In", WWS/World
Ports (October/November 1983), p. 10.
*Joseph T. Kane. "Slow Route to Reform", Handling and Shipping.
Management (Vol. 25, No. 9, September 1984), pp. 34-38.
63 * -
Tolan. op.cit., pp. 71-74.
99

Chapter VI = EXPORT SEAPORTS
Introduction
American seaports compose a rich fabric of diversity, and experience. Ten
ports were Chosen to highlight the wealth on the Atlantic, Gulf and West Coast;
Specifically examined were exports, regional draw, size, logistics and plans,
intergovernmental policy, new directions and concepts.
On the Atlantic Coast, case studies" reviewed the experiences of Baltimore,
Charleston, Hampton Roads, and Miami; on the Gulf Coast, Houston and New Orleans;
On the West Coast, Long Beach, Los Angeles, Portland and Seattle. As individual
ports and as groupings by Coast they may share similar circumstances,and some-
tlmes responses. Much depends on the age of the facilities, urban and hinterland
infrastructure for transportation, along with the industrial and agricultural
base.
Atlantic Coast
The ports of Baltimore, Charleston, Hampton Roads and Miami are discussed
here. Two are large established operations and two are smaller emerging ports.
Table VI-l profiles key information.
Balti e
Management of the Port of Baltimore is the responsibility of the Maryland
Port Administration, a department of state government. The MPA also has juris-
diction over several smaller ports in the state. The entire operation of the MPA
is in turn the responsibility of the Maryland Department of Transportation. The
port Operates as an independent agency, however annual budgets, income, and
expenses are reviewed by the state Department of Transportation.
In some functions, the port is an "operator" port in that it provides the
service, rather than serving as a landlord, for general cargo and container-
ships. Railroads, shipping, and commodity interests own private terminal facil-
itles. Such division of activity permits the port to target lts resources for
modern technology and facility development. -
Trade volume exceeded 34.3 million (short tons), of which 21.4 million
were export in 1981. The largest export was coal and mineral fuels at 12.9
million and food and live animals at 5.5 million. Serving the industrial North-
east and Midwest hinterland, the port is subject to the well-being of those
regional economies. Many of the traditional industrial belt export industries
are declining and port volume experiences corresponding changes, while Container
imports increase. Coal holds long-term promise but as almost all other coal
ports, facilities are underutilized.
Surface transportation systems to the port have been consolidating and
adjusting service under deregulaton. The CSX System and Conrail serve the port
and own considerable amounts of acreage and facilities. The CSX operation is
modern and well maintained, while Conrail has had to eliminate lines, slowly
rebuild trackage and acquire rolling and motive stock. The CSX appears to be in a
better position to handle large unit train-type operations at faster, safe speeds
than Conrail. Over 160 trucking companies and carry cargo to the port, which is
served by l27 ocean carriers. The metropolitan expressway and Interstate
100
Table WI-1
Selected Port Characteristics – Atlantic Coast
Rubber & Plastic products
Electrical & Electronics
POrt TRADE
Total Int'l Exports º Imports -
Tonnage Walue Tonnage Walue Tonnage Value NEW IDEAS/ACTIVITIES
(,000's). (000,000's) (,000's) (000,000's) (,000's) (000,000's)
1983 21,624 $12,797 12,216 $8,969 total 9,408 $6,072 total World Trade Center
Lil Coal Iron Ore - Waterfront Development
25 Corn Gypsum
= General cargo Residual Fuel Oil
H. Sugar
à Misc Petroleum Products
1983 4,812 $4,771 2,556 $2,517 total 2,256 $2,257 total International Transport
35 Textiles - Semi finished Textiles Center, Export Packing
5 Fibers Iron & Steel Products Company
H Chemical S Bananas
% Paper Products Metal lic Ores
E Grain Petroleum
2, 1983 17,698 $1,034 40,980 $6,787 total 6,718 $3,553 total World Trade Center
Fº Coal, Bituminous Crude Petroleum W. International Terminal S
$2 Corn & Wheat Heavy Fuel Oil ETC (WEXTRAC)
Pº Soybeans Bauxite & Al Ores FTZ
E Fertilizers, mfgd Gypsum & Crude Limestone Unification of several ports
# Animal Feed Crude Rubber into one management
<ſ
Im.
1983 23,057 12,479 $5,000 total 10,577 Free Trade Zone
Food & Food Products Food & Kindred Products
H Machinery Stone, Clay Vitreous & Glass
: Transport. equipment Construction Materials & Supplies
º Paper Products & News print Beverages
:
:
i
#
Port PORT ORGANIZATION LOGISTICS
Structure Net Transport
Agency Mgt Role Income Revenue Op. Exp. Location Depth Mode
(,000's) (,000's) (,000's) H_T_RR B S
State Landlord Il - d . fl. d. Tl. d. BackBay 50' 2 160 2
Wide Port &0P. Container - channel
Authority Terminal 25–40
berth
State Land Lord Il - d. Tl. d. $29.63 mil River 35' 5 94 2 17
Wide Port & Operator - channel
Authority 40'
9 Commissioners plan
Appta by Gov.
State Land Lord $3,509 . $15,421 (82") $11,912 (82') Rivermouth 45' 1 135 3 85
Port Co-ordination channel
Authority planning 55
11 COmmissioners plan
Development monies
from State
County Land Lord $1,449 $11,756 (82') $2,773 (82') Bay 36' 1 50 2 18
Seaport - channel
Department 42
(Metro-Dade) plan
Self-supporting
H - Interstate Highways, T - Trucking lines, RR - Railroads, B - Barge lines, S – Ship lines
f
§
Systems are adequate. A key link to be expanded is the Fort McHenry tunnel,
supported by $825 million federal Interstate monies. Dredge spoils from the l.7
mille harbor tunnel Will Create new land for a marine terminal.
If Coal export terminals were expanded, as originally proposed, dredging
would be necessary in the maln Channel and alongside some wharves, in order to
receive the Super Colliers. Current depths handle forty-two teet but flity feet
are necessary. Dredging plans in l982 could cost as much as $840 mill.llon. Full
project authorization has been held up for reasons of federal funding Constralnts.
The large upper reach of the Chesapeake Bay has ample shoreline for port
expansion and the inner harbor has facilities that can be upgraded. The inner
harbor is the Core of a successful waterfront entertainment and offloe develop-
ment with a World Trade Center building Complex and ajacent hotels leading the
rennovation. The port is considering selling the WTC. As a natural resource,
the Cheseapeake Bay is Sensltive to environmental changes. In the last decade,
Concern about its condition has increased and local and state governments care-
fully review proposed activities. The port is sensltive to such concerns and
planning with them. Lastly, labor practices and regulations influence port
COmpetitlveness for general cargo.
Charleston
As an agency of the South Carolina Port Authority, Considerable automony
allows management to act in many ways similar to a private Corporation. The port
board is composed of nine members appointed by the governor and confirmed by the
State senate for seven year terms. Though á state organization, the land-lord
port operating costs are covered from revenues (1984 operating budget $29.6
mllllon). Capital support from the state is ln the form of general obligation
bonds, e.g., the Wando River Container Terminal was underwritten by $56 million in
State bonds.
The port's hinderland encompasses the Southeast and Central Midwest. Land
transportation offers five Interstate Highway routes, two major rail system,
ninety-four motor carriers and seventeen coastal barge Operations. Ocean Carrier
Service to and from fifty-six nations are promoted by fifty-seven steamship
Companies. The port has "28 first end arrivals" and "50 last out sailings,"
Which offer cost and time savings on Cargo storage and transit.
Land is available to the port on several banks of the Charleston Bay,
Ashely River, Cooper and Wando Rivers. The natural anchorage afforded by the
bay exits at Fort Sumter to the Atlantic Ocean. Only one-half hour from open
Sea, harbor channels are dredged to thirty-five foot depths and maintained by the
Corps. Plans anticipated forty-two foot entrance depths and forty foot Channel
depths.
In l983, Charleston trade totalled 2.8 million, of which about 64 percent
of general cargo and 63 percent of container trade is export. Compared to 1973,
70 percent was import trade. Principal exports are textiles, fibers, chemicals,
paper products, grain, forest products, wood pulp, Clay and clay products, heavy
equipment and machinery. Container trade is growing quickly (increasing from 69
Percent of current trade total to 85 percent of total trade. Large sums have
been invested in new container facilities (Wando Terminal, and Cooper River west
bank) in the combined amount of $97 million. More export growth is anticipated
103
in Southern pine lumber and textiles machinery. To carry this cargo, motor
Carriers transport 74 percent in 1980 and are projected to carry 81 percent in
1990. Evergreen Line has selected Charleston as one of its East Coast load
Center portS-Of-Call on around the world liner service.
Increased container traffic in the larger vessels will be facing depth
problems. Currently thirty-five feet, the more optimal depth would be for ty
feet. Since l970, the Corps of Engineers have reviewed and studied the situa-
tion. Estimated project costs are $104 million but federal funds were not ap-
proved in l984.
The port has opened a Foreign Trade Zone adjacant to the Charleston airport
on the Interstate system and has permission to opreate a FTZ in Spartanburg,
S.C. (200 miles inland). Also, the port established in l983 the International
Transport Center for "containerized cargo destined inland to come the 210 miles
direct from Charleston before being cleared by Customs for reshipment to indivi-
dual inland area business. Empties returning to Charleston will be available for
export and thus offer Cargo Consolidation and eliminate one-way empty charges.
New trade offices were opened in Brussels and Tokyo in 1983 and a state-wide
delegation sent to China. It also has a state-of-the-art twenty-four hour On-
line Computer shipping document system -- the Orion Computer.
Hampton Roads
America's first port, the region of Hampton Roads is a collection of cities
and urbanized portions of the Virginia tidewater. The cities of Newport News,
Norfolk, Portsmouth and Cheseapeake and their surrounding areas comprise the port
urban jurisdiction. Due to the proximity to the coals fields of West Virginia,
and to a favorable rail cost position, Hampton Roads is by far the largest Coal
handling port in the country. For most other commodities including containers,
there is heavy competition along the Eastern seaboard -- but coal is the domain
of Hampton Roads. -
In 1952 regional port competition was foreseen for the East Coast and the
Virginia General Assembly created the Virginia Port Authority to consolidate the
four existing Hampton Roads area ports and five smaller ports outside the area.
The VPA is directed by a fourteen member Board of Commissioners in Norfolk. The
natural common martime interest of the Hampton Roads is also shared by the large
U.S. Navy facility in the sheltered Cheseapeake Bay. The VPA is also proceeding
with a plan of consolidation for general cargo, and container facilities, owned
and operated by the Norfolk and Western Railway Company.
In the peak year of coal export, 1981, Hampton Roads exported 52 million
short tons of coal, and 4.7 million tons of corn and wheat, of a total export of
59.8 million tons. As with Baltimore ships were forced to wait outside the
harbor as long as one month. With railroad, terminal, and Coast Guard COOpera"
tion, a registration and queing system smoothed out the backlog. Currently, key
depths are forty-five feet and need to be expanded to fifty-five feet. The VPA
landlord function is intensively coordination operations and planning. Some
state development funds have assisted. In 1982 the port earned $3.5 million on
revenues of $15.4 million.
Surface transportation to the port is by three railroads, and l35 trucking
companies; 81 ocean carriers make calls. For some rail routes back to the coal
fields, 353 public rail-highway grade crossings are on coal unit train routes.
104
In 1981 about $50 million was estimated for grade separation work. There is one
connection for the Interstate System, I-95.
As Coal exports increase and the port complex successfully diversifies its
trade base, more traffic will result in all modes. Existing facilities are not
at the moment stressed, but, as in the case of coal, significant overload is
possible. Environmental impacts with all aspects of coal mining, transport,
storage, processing, and ship loading may be significant.
There is also commercial development of the waterfront for office and
entertainment activity. A Foreign Trade Zone and Export Trading Company have been
established, and a World Trade Center. Should volume grow again, particularly
for Coal, dredging and land side rail congestion will be concerns.
Liami
One of the most recently developed, emerging ports in the country, Miami is
in a gateway position to serve Latin American trade and to support the Carribean
Basin Initiative. A measure of the rapid growth is that in 1960 Florida foreign
trade was less than $700 million. In 1980 over $9 billion worth of cargo passed
through the Port of Miami.
The six hundred acre Port is a non-operating department of the
Metropolitan Dade County government. It is not as autonomous as a public
authority or special district-type ports.
Trade in 1982 was 2.6 million tons and l.7 million cruise ship passengers.
Operating costs are carried by fees and lease earnings, while revenue bonds
underwritten by the County support capital development. In 1982, $1.4 million
Was earned from $ll.7 million revenue. Over fifteen million tons are planned in
the year 2000. Current exports are food and food products, machinery, transpor-
tation equipment, paper products and news print, rubber and plastic products.
Bulk cargoes are not handled by the port. The port is going after high value
Containerized cargo trade. -
& The port is at the end of a long distribution network for the country. It
1S Served by fifty motor carriers, two railroads,and eighteen ocean carriers. To
the extent that logistical problems could occur far back up the system, the port,
as other Atlantic coast ports, might be affected. For example, the Conrail
Corridor ls of concern, particularly at the Alexandria, Virginia freight yards.
Florida Interstate components and the Jacksonville freight yards may need extra
Sapacity should cargo grow significantly. Rail traffic southbound is six times
larger than northbound. - -
Highway and rail approaches to the port are through the fast growing office
area on downtown Miami's border. Access to the port island is by one highway
bridge (two lanes) and one rail bridge (one track) Plans have been announced for
building a new bridge and later a tunnel. Local opposition does not want heavy
trucks affecting downtown ambient noise levels, traffic, and property values.
Some prefer reconstruction of the existing bridges for short-term needs. General
99sts may reach $30 million. Direct access is also necessary to I-395 Over a four
block, local street segment.
The port islands are not fully developed. Cargo growth will require new
land Space and more intense use of existing facilities. An advantage that the
Port has 1s the capbility to manage space on a day-to-day basis by being a
105.
landlord. It does not have contracts with unions or facility operators in terms
of fixed Cargo and activity locations. Given operational needs, cargo may be
sent to the most appropriate facility. Plans includes additional dredging from
thirty-six foot channels to a forty-two foot channels.
The port has established a Free Trade Zone and is establishing a Latin
American network of representation and service.
Gulf Coast
The ports of Houston and New Orleans serve the heartland of the nation.
Historically, the latter specializes in agricultural exports and the former in
Coal. Table VI-2 presents basic data.
Houston
The Port of Houston started in the Buffalo Bayou in l836. With rapid
growth the agency has been renamed from the Harris County Ship Channel Navigation
District to the Port of Houston Authority in l98l. Directed by five commis-
Sioners, two named by Houston City Council, two by Harris County Commissioner's
Court, and a chair named by both governing bodies. . In l979 further public
Support was received when Harris County voters approved additional financing for
Barbours Cut and turning basin facilities.
In l983 the port volume was 40.7 million tons, of which exports were 22.2
million tons. On that activity the ports earned $ll.4 million from $43.5 million
in revenue. All five grain elevators on the channel handled 8,516,966 tons.
Most of the bulk in the port is controlled by private facilities and include
crude petroleum, petroleum products, petro chemicals and grain. There is also a
Foreign Trade Zone.
The port is prinicipally an owner-operator facility: Barbours Cut Container
Terminal operations, the bulk terminal operations and the turning basin and the
Public Grain Elevator. By virtue of the role of private enterprise in the
industrial development in the area, considerable capitalization has occurred for
facilities along the entire length of the fifty mile channel. These are owned
and operated by private organizations and sold or purchased on the real estate
market as such. They must conform to the City of Houston's and Harris County:
rules and regulations governing the navigation district as a geographic area
within the municipal county boundaries. For the most part space along the channel
is limited and highly valued. .
The port is served by the Southern Pacific, the Union Pacific systems,
Santa Fe, Burlington Northern, and the Missouri–Kansas–Texas railroads. Within
the port facilities a port terminal railroad association handles switching ser"
vices for both public and private activities in the upper section of the channel.
Motor carriers number at least one hundred for the port and the area served by an
extensive freeway system including several Interstate loops leading to eight
freeways. At the Gulf Coast, there is access to the intercoastal waterway for
barge traffic. With traffic as dense as it often may be on the channel a volunt
tary vessel traffic system is in operation by the Coast Guard. As a result in
the past three years, the port has "maintained one of the lowest vessel accident
rates among major U.S. ports."
*
106
:
|
Table VI-2 Selected Port Characteristics — Gulf Coast
POrt TRADE
Total Int' I Exports Imports
Tonnage Value Tonnage Walue Tonnage Value NEW IDEAS/ACTIVITIES
(,000's). (000,000's) (,000's) (000,000's) (,000's) (000,000's)
1983 40,785 $17,955 22,287 $10,302 total 18,497 $7,652 total FTZ
Ind. Mach & Equip Passenger Autos & World Trade Center
Grain Vehicles
Wheat Crude Oil
Iron & Steel Products
1983 36,573 $11,192 24,593 $6,541 total 11,979 $4,651 total FTZ
Grain Fuel ()il S World Trade Center
Coal Iron & Steel Products Consolidation service to
Animal Feed Lubricating Oil Small volume shippers
Heavy Fuel Oil S Al & Al Alloys
Syn. Resins & Plastics
POrt , PORT ORGANIZATION LOGISTICS
Structure Net Transport
Agency Mgt Role Income Revenue Op. Exp. Location Depth Mode
> (,000's) (,000's) (,000's) H T RR B S
Port Auth. Operating $11,430 $43,508 $42,689 Ship Channel 30 berths 100 5
5 Commissioners
2 app. by City
35 Council
5 2 app. by Harris
a Commissioners
Im. Court
Chairman named
jointly
State Land Lord . –$1,374 $31,133 $32,507 River 40' 3 6
7 Comm'rs channel
%2 5 yr. terms 36'
j App' to by Gov channel
E. Nom. by local
O grOupS.
i Reflects 3
2. parishes in
Port area.


H - Interstate Highways, T – Trucking lines, RRTRailroads,
B - Barge lines, S – Ship lines
5
The Houston ship channel does cause some concern environmentally. As of
1983, it did not meet water quality standards and was projected not to meet them
in the future without significant Capital expenditures. A study is now underway
to Consider the possibility of instream airation to offset the pollution levels.
Thus expanded new and amended waste water permits (both state and federal (MPDES)
Cannot legally be recommended for issurance under the existing allocation. It is
estlinated that more stringent treatment levels would cost $180 million in addi-
tion of $15 million a year for operation and maintenance costs."
The port has experienced logistical problems both in number of ships in the
Channel and rail trains leaving and entering the port. Shipping congestion has
been handled for the most part by the Coast Guard Vessel Management system men-
tioned earlier. Also is the fact that facilities are being moved further down the
channel to the coast, such Barbours Point, which lessens the need for traffic to
come up the entire channel. The rail problems occurred when grain exports were
high. In l983 a plan was developed called the Houston Project. All rail corpora-
tions belong to it and through constorium agreements help to control all train
track facilities far back into the countryside. For an area with effectively no
zoning and less powerful local and regional governments than other parts of the
country, coordination has developed essentlally through large actors in the
marketplace. Now that the channel is almost fully developed, coordination of
shoreline useage and adjacent land has become more necessary. The channel is
governed principally by Houston regulations. The largest concern of channel
activities still has been environmental impacts. There is a long history of the
water being unable to support wildlife; however fish are entering back into the
channel. A large cause of the pollution is nonpoint Source pollution from urban
runoff. Thus a significant generator is not solely the ships but the surrounding
industrial activity. ..
New Orleans
The Port of New Orleans on the Mississippi River is the true bellweather
port for the agricultural and natural resource heartland of the nation. It draws
upon almost the entire Midwest, and further upriver to the Northeast and Northwest
sections of the central part of the country. The New Orleans community is
sensitive to the relationship, in that for the last two hundred years the city has
served as a cultural and trade headquarters for large hinterland Service zone.
The port is an agency of state government, but with a large degree of
autonomy. Stipulated by state law, the seven citizens are appointed by the
governor, to the Dock Board for five year terms. They are selected from dif-
ferent maritime related interests: four from Orleans Parish, two from Jefferson
Parish and one from St. Bernard Parish. In the case of the Parish of Orleans, a
nominating group is composed of the Chamber of Commerce of the New Orleans Arear
New Orleans Board of Trade, Ltd., New Orleans Steamship Association, Inter"
national Freight Forwarders and Custom Brokers Association of New Orleans, Inc.,
International House, Maritime Trades Council of Greater New Orleans and Vicinity,
Metropolitan Area Committee, Lousiana Farm Bureau, New Orleans Cotton Exchanger
International Trade Mart, Urban League of Greater New Orleans, Dillard University
and Xavier University. Such broad interest representation formalizes group
participation and appears to enhance successfully the community's stake in the
port.
In 1982 port trade totalled 47.2 million tons of which exports were 28%
million tons (grain l8.3, coal 4.8 and animal feeds, 2.8 million tons). Princi.
pal imports were fuel oils, 18.3 million tons, barged up the river system. *
108
measure of the extent of the port's role in U.S. bulk foreign commerce is that
in 1981, twenty three percent passed through the port.
The port is served by barge carriers. The industry is undergoing a
Shakeout now due to overexpansion of capacity, lower trade volumes and higher
prices. In 1984 one Company tried an experiment carrying containers by barge
from New Orleans to the Chicago area. The service was not utilized much by
Shippers but the Operation was shown to be feasible. Other studies indicated
that the entire industry must contract to survive. Rail systems serving the port
area number six. The are increasing their competitive position at the expense of
barge operators and motor Carriers. Unit trains running parallel to the river
offer alternative Service. And, a trend may start as one road, the CSX, purchased
a barge operator, Atlantic Coast. Upriver logistical bottlenecks include Locks
and Dam 26 on the Mississippi, a new dam and lock are necessary for Gallipolis on
the Ohio River, and replacement locks on the Monogahela.
Land facilities have sufficient space along much of the river's urban New
Orleans area for development or rehabilitation of aging, general cargo facili-
ties. Some land was dedicated in the Central city for the World's Fair location,
office and commerical development and entertainment complexes. A localized
bottleneck is the Inner Harbor Navigation Canal, restricted by bridge, lock and
depth dimensions between Lake Pontchartrain and the River.
River and coastal access depths are a concern if the port is to handle
deeper draft ships for coal exports. The major restraint is forty foot depths at
the outlet depending upon which channel is taken. Currently, topping off is
necessary for large loads, but fifty foot depths are planned.
The port has a Foreign Trade Zone, World Trade Center building and is
Considering an Export Trading Company. While these Outreach activities occur,
railroads are providing strong land bridge competition to the West Coast with
faster service than via the Panama Canal. Slurry systems might lessen barge
export volume, whenever implemented. The state has established a Task Force to
study the river system port needs, and an authority for a bulk offshore terminal
to be shared by river ports. These efforts in the short-term will also help
Offset dredging constraints. General Cargo labor handling, as on the East Coast,
is a continuing concern. But the Port has significantly expanded and installed
modern container facilities, and more are planned.
Pacific Coast
Ports in the Pacific provide illustrations of rapid growth and geographic
advantage for the Pacific Basin trade. As a group, they experience the Opportu-
nities of expansion, and the stresses. Table VI-3 presents their profiles.
Long Beach
The port's development did not begin in earnest until 1911 when the City of
Long Beach completed a municipal pier. At that time, the city was Vying
economically with the City of Los Angeles, and the nearby Port of Los Angeles.
As a municipal entity, the Port is directed by a five member Board Of
Harbor Commissioners, appointed by the City Council. Membership is actively
109
sought by members of the community. Officially there is no requirement that
certain segments of the community be included but the Council seeks members with
businesses, international trade or financial experience. For six year terms.
The Harbor Department acts as an independent agency, subject to Council review.
Net income in l983 was $25.5 milllion of a total revenue of $64.2 mill llon,
based on principally land-lord charges for most port activity.
Trade is growing quickly with Container import expanding tastest. Total
tonnage in 1983 was 47,989,799 MRT composed mostly of petroleum (bunker fuel),
general Cargo, and Containers. Leading export Cargo was bulk petroleum and
Coke. To handle this volume, the port has 4.5 Square milles of land area. Water
depths range from Sixty foot channel and turning basin to seventy to seventy-six
feet in anchorages and berths. Addltional dredging plans for the year 2020
anticipate up to eighty-two feet. The port is served by an extensive network of
Interstate and Callfornia freeways, including three major Interstate routes.
Over two hundred trucking flrms and three railroads (Southern Pacific, Santa Fe,
Union Pacific). Over 53 shipping lines also serve the port.
With such rapid growth, the transportation infrastructure in the harbor
areas has not kept pace for current needs and projected year 2020 growth. Cargo
is anticipated to grow to loC million tons, malnly in contal ners. Shlp sizes and
frequency of visits require deeper berths, channels, basins and improvements in
almost all facilitles. Additional land is necessary and will provide by dredge
spoil land fill, in and outside the breakwater. The total capital cost of the
project approaches $350 billion. Land side improvements planned include trans-
portation Systems and private industry port-users.
Transportation bottlenecks appear now on local road systems, with Out-of-
date arterials, and insufficient bridges, poor internal Circulation and Safety
hazards. Rail systems need improvement and a large project with the Port of LOS
Angeles is already underway - the Joint Intermodal Container Terminal - which
will move Southern Pacific rail container facillties from Older yards in Los
Angeles about twenty-five miles closer to the port complex border. The Long Beach
Freeway needs additional upgrading for projected growth. The Terminal Island
Freeway needs direct access to other nearby freeways. In general terms, the rail
and highways systems leading into Southern California are modern, well malntained
and have the capabllity to handle anticipated cargo increases by the year 2020.
Of concern will be the additional wear and tear caused by larger Containers,
vehicles, and weight from both modes as a result of technological changes and
dimension increases permitted under the Surface Transportation Act of 1982. It
may be advisable for motor carriers to avoid rush-hour travel on some routes.
The Port of Long Beach has a Foreign Trade Zone, is reviewing the
possibility of an Export Trading Company, and announced plans for a large World
Trade Center complex in downtown Long Beach. The Port is in a sound flnancial
position and has adequate access to the Capital markets. However, to facilitate
the growth foreseen in the 2020 plan institutional, financial, dredging and
environmental issues will need to be worked out closely with the large port
Community.
Los Angeles
The Port of Los Angeles developed before the port of Long Beach, in part
because the City of Los Angeles had aggressively sought municipal ownership of the
harbor facilities. By 1909 the city had annexed a narrow strip of land from
110
Table VI – 3 Selected Port Characteristics – Pacific Coast
POrt TRADE -
Total Int' ] Exports Imports
Tonnage Value Tonnage Walue Tonnage Value NEW IDEAS/ACTIVITIES
(,000's). (000,000's) (,000's) (000,000's) (,000's) (000,000's)
a 1983 20,011 $20, 103. 12, 203 $5,486 total 7,807 $14,617 total World Trade Center,
§ Petroleum, bulk Petroleum, bulk Intermodal Container
É Coke, bulk Steel & Steel mfg. Freight Center
Grain, bulk Electric Mach. & parts
CD e e - e
3 Chemical S, misc. Plastics mfgs.
—l Wastepaper Clothing
1983 12,212 $15,471 6,060 $3,605 total 6, 152 $11,866 total World Trade Center
3 Petroleum Coke Petroleum
II: Coal Automobiles
CD Iron & Steel Scrap Bananas
2. -
s:ſ Cotton
C/O Fruit
sº
1983 14,833 $4,388 12,521 $2,172 total 2,311 $2,216 total FTZ, Portland Ship
C Wheat , Al Umina Repair Yard
: Woodchips Limestone Rock
F Barley Autos, Wans & Parts
£5 Soda Ash Misc. Iron & Steel Products
D- Lumber Salt Crude
1983 8,976 $14,376 4,553 $2,521 total 4,423 $11,855 total Consolidated intermodal
Grain - Petroleum transport rates
Fruit Automobiles Container unit trains

#
É
POrt PORT ORGANIZATION LOGISTICS
Structure Net Transport
Agency Mgt Role Income Revenue Op. Exp. Location Depth Mode
(,000's) (,000's) (,000's) H. T. RR B S
City Land Lord $25.5 mil (83') $64.2 (83') $36.2M (83') Coastal 60' 3 200 3 83
#: Board of channel
55 Commissioners 75–82'
CO 5 App' to by plans
# Mayor
S 6 yr. term
3 City Land Lord $41.7 mil (84') $80.6 (84') $33,581 (82')Coastal 51' 3 200 3 46
II. Board of channel
É Commissioners 75–82'
<ſ 5 appt'd plans
- 3 by Mayor
Indep. Operating $4,992 (83-84') $58,296 $54,381 River 40' 2 64 3 20
= Port District (83–84") (83-84') channel
=; 9 member board 12.2 m
5. App' to by Gov. plans
sº
Ind Land Lord $10,174 (83') $94,819 (83') $84,645 (83')Coastal Unlimited 2 34 4 10 65
º Munic. Corp - channel
E 5 elected 12–73'
§ commissioners plans

H - Interstate Highways, T – Trucking lines, RR - Railroads, B - Barge lines, S – Ship lines
f
almost twenty-five miles inland (to the north) reaching directly to the Wilming-
ton and San Pedro area.
As a municipal agency, the port is managed by a five member Board of Harbor
Commissioners. Appointed by the mayor, and confirmed by the city council,
membership is balanced among the various port interests.
The port acts in a landlord capacity. In l982 its net income was
$42,584,547 on a revenue base of $69,793,207.
Trade is benefiting from the Pacific Rim growth and the port is heavily
investling in new facilities and expanded operations. Major export items are
petroleum, Scrap metal, general cargo (and container freight). Growth is antici-
pated primarily in container freight. The port facilities are housed on seven
thousand acres of land. It is now completing a rigorous channel dredging and
land fill program to facilitate large size ships. The main channel has been
dredged to fifty-one foot total (federal funds supported work to the forty-five
foot depth). Additional plans are to depths ranging from seventy-five to eighty-
two foot depths. Some land area is available for replacement activity. Fish
Cannery operations are closing down. The shipyard component is operating at low
levels as foreign builders outbid many projects.
The dredging project may very possibly be the last of the "old style" Corps
of Engineers projects in the nation. The project started in 1965 and was not
Completed until 1984. Approved costs in l979 totalled $26,625,000. Problems
encountered were institutional and technical. For example, among the federal,
State and local governments over twenty-eight coordination points were offically
necessary between l977–1979. This also included long-term coordination with
fourteen federal agencies, thirteen state agencies, one regional and six county
agencies, nine municipal agencies, three chambers of commerce, and eighteen
environmental groups and interested parties. Such numbers very possibly under
State what some other ports presently coordinate with on an ongoing basis. Tech
nical operations are hindered by delays in finding an electric dredge instead of a
diesel dredge (which emits more air pollutants).
The port shares development plans with the Port of Long Beach on two key
projects: the Joint Intermodal Container Freights Terminal and the 2020 Plan. In
the ITCF project, a completely new transfer operation will be built, in three
Stages on 260 acreas of Port of Los Angeles land. By full completion in the year
2000, total escalated cost is estimated at $130 million with the first phase now
under construction. Capacity requirements would grow from a l981 two-part base
of l23,000 containers annually, 908 daily, to 612,700 annually andó 4,517 daily
in 2000. The facility will connect Southern Pacific container rail service
twenty-five miles closer to the port than existing facility locations. It is to
be built and operated by a specially created authority with powers to raise
Capital. Loan quarantees are provided by the Long-term Industrial Bank of Japan,
Ltd.
Land and rail logistical bottlenecks are generally shared with those dis-
Cussed under the Port of Long Beach profile. Land space availabity is con-
Strained without significant new land fill operations, as suggested in the 2020
plan.
113
Portland
The Port of Portland is located at the confluence of the Willamette river
and the Colmbia River. Its hinterland draws much further back, though, on the
Combined Columbia/Snake River system into the upper Northwest of the country. It
perceives itself as serving the Midwest, in terms of large population centers
because the upper northern tier of the Country is undeveloped although a source
of Some export products.
In 1891 the Oregon legislature established the Port of Portland. In
November, l970 the citizens of the City of Portland and Multnomah County agreed
that the port itself and the Portland Dock Commission should be merged and the
new Port of Portland would be a municipal corporation. The state legislature
"approved expansion of the port district to include Washington and Clackamas
Counties in l973".
The port is directed by commissioners appointed by the governor of Oregon.
Representing the three Oregon counties involved for the Port of Portland dis-
trict, the nine member board of Commissioners serve without pay.
The port trade position in 1983 had 9.8 million tons for export and 2.1
million tons for import totaling almost l2 million tons. The majority of this
was dry cargo at ll.7 million. The leading trading partner was Japan for export
at 3.5 , Korea for l.4, and India for l.3 million tons. The major commodities
exported include wheat (6.8 million tons) barley (605,575 tons), and wood chips
(650,886 tons), and in lesser amounts lumber, metal scrap, paper board/liner
board, SOda ash, and bentanite clay.
The port has assets valued at $403,137,000. The port is supported by
property tax revenues principally and some capital grants from federal and local
governments. This was done to prevent it from relocating to another location
another part of the country. And industrial development revenue bonds Were
issued to Upland Industrial Development Company, Union Pacific Railroad Company,
and Stichers Steel Products Company, for $14.7 million.
The port has been concerned by dredging and bridge problems. The Columbia
River Bar dredging project is anticipated to be finished by 1985 bringing the
depth from forty-eight feet to fifty-five feet. This will allow greater
efficiency for the forty foot channel at the Columbia River to Portland. Further
significance is in the fact that "it is believed that with better load planning
and utlilzation of high water river stages, ships will be able to call and depºrt
Portland with heavier loads." The Bonneville Dam Lock system needs rehabilitº"
tion and enlarging. Such improvements will bring it into conformity with othº
lock systems on the Columbia/Snake river system. "At the present growth rate.
the lock will reach capacity by the end of the decade - with congestion already
emphasising the importance of the project." The stage of the project is that it
has been authorized and primarly soil testing and engineering work have already
been accomplished, although in 1985 Congress may authorize the project- º
bridges have been of concern and there is now work underway to replace the
seventy year old Burlington Northern Railroad bridge spanning the Willamette
river."
. The port is a owner-operator facility and in addition to maritime º:
ties has a ship yard repair facility, and is responsible for managing tr
commerical and general aviation of the area. In contrast to many other ports in
ll4
the nation, Portland has an interesting measure of success in that on May 15,
1984, its voters supported a new indebtedness of $40 million for general obliga-
tion bond measure to fund the rebuilding of the northern half of Terminal Two on
the west Side of the Willamette River. f
The port has Considerable land space available for development and leases
it out in accordance with a plan development process. It has helped in some
Cases expedite industrial development including "a major filling project by the
port's dredge Oregon in order to keep a major company in the port district
(CUMMINS) .
The port is served by three railroads, Union Pacific, Burlington Northern
and Southern Pacific and an Interstate freeway system heading south and east.
Over Seventy major truck lines call on the port. The port is also served by the
Columbia/Snake river barge navigation capabilities as far as twelve hundred miles
inland.
The port has an extensive goals statement and public involvement in its
activity. It took a leadership role in forming the Columbia/Snake River System
Marketing Group. It has connsolidated tariffs, reduced their length and
Complexity and organizing through service. Lastly, railroads have lowered or
maintained their rates to Portland to draw Midwest cattlehides and Texas and
Tennesee cotton for export. Imports rates have increased.
Seattle
As the leading port trading with the Orient, Seattle holds a unique posi-
tion among the nation's ports. This relationship is due to the port's role in
actively seeking trade, and being a full-day closer to the Orient in Sailing time
than other "lower – 48" ports. In 1896 the Gateway role was initiated with the
arrival of the first Japanese vessel in the trans-Pacific trade. In 1897 Yukon
gold fixed Seattle as a staging point.
Governed by five commissioners elected by King County voters, for six year
terms, the Port also manages Sea-Tac International Airport. The Commission is
balanced with business and labor leaders. The Port acts in a landlord Capacity.
In 1983, port net income was $10.1 million on revenues of $94.8 million. Total
trade tonnage was over 9 million metric tons (MT) of which l.6 were grain, and
1.1 were petroleum. Containers accounted for 5.2 million. This activity is
àCComplished on deep Puget Sound natural Coastal location, up to seventy-three
feet of water, with a land area of 779.85 acres.
Surface logistics are performed by two Interstate Highway links, thirty-
four motor carriers and four railroad systems. Ten barge operators serve the
Coastal Alaska trade. Sixty-five ocean Carriers serve the port.
The port land area is surrounded by built-up sections of the City of
Seattle. Space appears to be limited, especially for container operations.
º Port revenues are supported by a property levy upon King County real estate
for about ten percent of its annual operating budget. That amount is directed
by port policy solely toward capital improvements so that the citizens will
*ecognize a constantly improving equity position in the Community.
The port is the major container port on the Pacific Coast topped nationally
only by New York in 1982. Geographic location, advanced terminal equipment, and
ll 5
interlocking customer Services utilizing the newest generation of data/processing
facilities help make this possible. An example of aggressive customer service is
the port assuming a contract rate and cargo assembly role. The port has
Contracted for unit trains serving the Midwest and East, arranging consolidated
Shipping rates for LTL and LCL.
With strong community support, the port has developed a comprehensive
Statement of goals, policies and programs incorporating economic, service, envi-
ronmental and community needs applicable to maritime and aviation activities.
Illustrating Compatible activities, the port has helped upgrade a pier for small
fishing vessels, build a new fish-processing and cold storage facility.
Inland transportation routes are well established and maintained. Seasonal
Snow blockages may delay motor Carrier or rail service but usually for a short
period. Depending upon the Cargo, the hinterland zone reaches the Midwest and
East. Most of the aagricultural, wood and mineral cargo originates from the
Upper Midwest and Northwest. Some hinterland competition is with Tacoma, which
opened a new container facillty that drew Sea-Land from Seattle, the Canadian
Port of Vancouver, and Portland. Some rail service concerns existed when the
Chicago, Milwaukee, St.Paul and Pacific Railroad declared bankruptcy.
The port appears to have a positive relationship with local public and
state agencies. Environmental consciousness has been a strong value of the
Northwest and has been incorported into port planning and operation. Deregula-
tion has affected opertors and provided lower, long-distance contracts rates and
cargo consolidation innovations by the port. In general, the well maintained
relationships make conflict mitigation and resolution more likely.
CONCLUSION
These ten ports represent the spirit, dynamism and importance of the
general port role in the export transportation system. Each has had historical
development patterns still governing its relationship with the immediate urban
area and hinterlands. Under the broad force field changes occurring in the world
economy, trade relationships, domestic transportation and public policy, they are
sources of innovation and leadership. Most ports would act in the same way if
confronted with similar externalities. Collectively, all are concerned by
finance, trade volumes, trade composition, direction and technology requirements.
labor costs. As large-scale new facilities must be developed, they are faced
with intergovernmental public policy coordination that must be factored into the
time and expense calculations. To the extent work can be accomplished with
existing facilities and increasing productivity, then response-time can be short-
ened with less potentlally negative impacts and contact with the
intergovernmental system. ~
In any case, it appears that ports must contlinue even more to act
outside the federal support System (trade promotion, service, dredging, customºl
etc.) as the federal government confronts resource limitations. They must alº
face competition among themselves, not just regionally, but now as load Center*.
or parts of land-bridge, mini-bridge systems. Consolidated rail, barger and
motor carriers contract and shipments will force reliance on fewer carriers W1
less competition. Ocean carriers now can arrange through service agreements *
simplify the shipping process, but also to lessen the port's role as middleman *
intermediary in many Cases. Such challenges will continue.
*
* Port narrative is based on full case studies
contained in Phase I and Phase II interim reports and
working papers. -
ll 6
Chapter VII - DREDGING POLICY
troductio
This Section will examine why port dredging is important, how it is financed
and alternatives to the need for dredging. Almost every port in the nation
requires routine maintenance dredging to keep existing channels and wharf areas
free of silt. Some locations have greater difficulty than others. River ports,
especially in the Lower Mississippi, have more need at the river mouth than
immediately in the port Confines. Some coastal ports are man-made such as Los
Angeles and Long Beach, while others are in bays, inlets or far into the upper
regions of a large bay, such as Hampton Roads, Baltimore, Charleston, and Seattle.
Ironic as it may be, the significance of dredging has come full circle.
Apparently, Over ten year ago initial concern about the water ports and the need
for dredging was generated by the imperatives of petroleum import. The nation was
in an energy crisis and anticipating larger super tankers. That pressure has been
relieved somewhat by changing technology, use of off-shore pipelines and commodity
flow patterns. However in the late 1970's early 1980's coal became very impor-
tant as an export commodity with a promise that grain would soon follow. Both
exports benefit from large, deep draft ships. Now, although petroleum is still
being imported in supertankers, the load Center concept and superContainer ships
generate a demand for greater depths. The export element of deep draft vessels,
Whether Coal or grain has turned down and is not anticipated to reach soon the
levels envisioned at the earlier period.
Nevertheless, dredging is critical to the long term health of ports and
national export Capability to benefit from economies of scale offered by newer
technologies in ocean vessels. Yet, there are external Constraints that may
lessen advantages offered, to the exporting and importing ports.
Lastly, as an element of intergovernmental public policy dredging is one of
the most immediately significant examples before the ports. Technological de-
Iſlands may far outstrip port institutional and financial settlngs. The willing-
ness and capability to respond will determine the future of many ports in the
Country.
Importance Of Dredging
tº An effective way to visualize how the question of dredging becomes important
1S demonstrated by the following tables. Table VII-l illustrates specifications
for the largest and average-sized vessels. Table VII-2 shows related port depths
Channels, wharves, turning basins). The largest vessels in the world draw from
67 to 81 feet. Dry bulk carriers require 67 feet, have a beam of lé4 feet, a
length of 1,030 feet and carry up to 224,000 dead weight tons (DWT). Combination
Carriers go slightly higher for a depth of 71 feet carrying 278,000 DWT. At the
ºnent the largest in the world is the general tanker which draws 81 feet and 556
PWT. Some also reach as much as 94 feet however they are slightly smaller in
length, beam and capacity. All carry over 500,000 DWT. Note that the largest
ull containership carries 52,000 dwt. and draws 43 feet, but average world fleet
"°ssel sizes and characteristics are considerably lower for actual operational
*ēs. Even at those levels some of our ports are reaching their limits such as
With combination carriers at 45 feet, general tankers at 38 feet, dry bulk
°arriers at 35 feet. -
117

Largest Vessels and Average Vessel Size in the World fleet”
Largest Vessels in the World Fleet Average Vessel Size in the World Fleet Total
tº Number
Vessel Type capacity2/| Length.3/| Beam | Draft 4/ capacity?/ | Length Beam | Draft Of
(000's) (ft. ) (ft.) (ft. ) (000's) (ft.) (ft.) (ft. ) Vessels
Breakbulk Freighter | 34 dwt 603 84 37 8 dwt 39 l 55 || 24 9,924
Partial Containership. 31 dwt 600 90 38 ll dwt 444 64 27 l, 290
Full Containership 52 dwt 944 l 06 43 18 dwt 573 79 30 705
Roll-On/Roll-Off 42 dwt 5.99 l 06 39 9 dwt. 453 69 23 638
Container/Ro-Ro 44 dwt 80.8 l 06 38 l2 dwt 514 75 25 - 46
Pallet carrier l5 dwt. 552 85 33 7 dwt. 374 60 23 23 °
Barge Carrier - 49 dwt 858 107 40 32 dwt 775 100 32 32
Dry-Bulk Carrier 224 dwt l, 0.30 l64 67 34 dwt 598 84 35 3, 9 l?
Combination Carrier 278 dwt l, l09 179 71 106 dwt 805 ll 7 45 239
LNG Tanker 82 dwt 900 138 44 45 dwt 747 109 32 64
LPG Tanker l22 dwt 892 128 54 l 5 dwt. 427 64 25 37.2
Chemical Tanker 82 dwt 8.33 ll 3 46- - l3 dwt 405 60 25 532
General Tanker 556 dwt l, 504 226 815/ 75 dwt. 661 97 38 4, 364
*/As of January 1, 1982, for foreign-flag vessels, and June 1, 1982, for U.S.-flag vessels.
*/capacity in terms of thousands of deadweight tons (dwt).
3/Length shown is length overall (LOA), when available, otherwise length between perpendiculars.
Table VII-1
4/Draft shown is loaded, or load draft. N
2/There are three other tankers in the world fleet having a loaded draft of 94 feet, but they
are designed with a lesser length (l, 359 ft.), beam (207 ft. ), and deadweight (545,000-546,000 dwt.) .
, source: Maritime Administration, Office of Port and Intermodal Development and Office of Trade
Studies and Statistics, 1983 -
- Source: U.S. Department of Transportation , Maritime Administration - A Report to the Congress on the
Štajkº of tWhe Wº u \o" i C Vºor-ts of-the United states (vlashington, D.C. : Government PRTTETTETOffice TAUGUSETT934),
Wº - -
É
| ab I e W II – 2
SUMMARY OF STRAI GHT CHANNEL DEPTH AND WIDTH
F0 R EACH MAJOR U. S. PORT (DEPTH IN FEET)
WID TH
HARB 0 RS 350–400 400–500 500-600 600-80U [800-IUOO
| |
Port I and ſ : | 35
BO St On 32 | 35
Pro V idence 35 | 40 i
New London ! : 33 i
New Ha V en 35 35 i
New York 35 35 ; 35 35
Philadelphia : 40 40 40
Albany 32 32 31 |
Chesapeake : 35 42,37 41,40
Baltimore 27 * : 42 35
Charle Ston 35,33 35 35 : 35 #:
i - . 2, 9 5 5
º 38 40 . 40 - 4
Savannah 38 40, 38 40 |
Jacks on ville 30 38, 39 34 42,38
Miami . 38, 35
Tampa 34, 32 36 36
Mobile 40 40 42, 40 40
New Orleans i 36, 33 40, 30, 38.
Port Arthur 40 40 gº
Corpus Chris ti 45 47, 47 |
Houston 40, 35 | 42,40 40
LOS Angeles 47
Long Beach : 60
sº Francis CO 30 #30,35 #30 40
Ortl and t 0 t |
COO S Bay 30 ;
Seattle . 55
Juneau. 30
Honolulu 35 40 :
Duluth : i
Source: Panel on Harbor/Port Entrance Design, Marine Board
Assembly of Engineering, National Research Council,
Problems and Opportunities in the Design of Entrances
to Ports and Harbors -- Proceedings of a Symposium


(Fort Belvoir, Virginia, August 13–15,
1980), p. 72.
119
Clearly evident is the contrast between growing maximum ship fleet sizes
and draft requirements with Current port Capabilities, regardless of Cargo and
trade direction. The issue has been anticipated at least a decade ago as tech-
nology rapidly progressed. Concern is less immediate now for export and more
likely a problem for import by large Container ships employing the load Center
concept. Illustrating earlier concern is the fact that legislation was intro-
duced and special studies conducted as part of the U.S. Senate energy Oversight
activities. The National Fuels and Energy Policy Studies, authorized by Senate
Resolution 45, May 3, 1971, created a special committee. The issue then was
petroleum and how it may be best imported, given predictions that importation
will continue to grow quickly requiring larger vessels. One study Concluded that
deep water ports are indeed desirable, however coastal port costs and
environmental impacts suggest strongly that off-shore deep water ports should
instead be developed. Draft legislation was even proposed and comprehensively
reviewed by governmental agencies. One of the key reasons for Considering off-
shore facilities was that authorization to dredge would be too time Consuming,
Costly, and Complex a process. It would also encounter local port area fears of
potential negative impacts from additional large petroleum refineries nearby, and
the introduction of such large ships with attendent environmental impacts.
Whether deep water ports are necessary for exports or imports, it apears
that technology is forcing the American port system to remain competitive by,
enjoying the promised economies of scale. It is almost as if the choice is not
that of the United States or individual ports, but more ne of how best to Catch-
up technologically. This may be likened to the introduction and impact of Con-
tainer cargo boxes as a technological breakthrough thirty years earlier. Dredging
appears to be a feasible route to increase capacity for carrying commodities such
as coal and grain, with side benefits for import of petroleum and containers by
super-sized ships. Due to the turn down of export demand, particularly for Coal,
Cargo flow will not increase as fast as originaly projected, however in the long
run potential increases are still promising and dredging seaports will make a
difference.
The limited obvious capacity of American ports to handle deeper draft
ships became during the coal export boom in the early 1980's. Quickly responding
though to market demand, many ports announced plans (Tables VII-3) to expand exist:
ing coal through-put facilities or to build new ones. According to a 1982
survey* existing capacity was 94.4 million tons of coal export although
facilities were designed for 189.8 million tons. Expansion could add 160.4
million tons, but by 1982 when the boom was slowing down only 23.0 million tons
of expansion Construction were underway. Most of this expansion was at Newport
News, Baltimore and Philadelphia. t
At one point, effective total capacity by 1985 might have been as high as
277.8 million tons. Large investments would have had to be made in existing new
facilities. This would mean, for example, improving railroad rights-of-Way,
unloading and storage facilities in the port vicinty, ship loading facilities,
and water capacity to handle larger and deeper ships.
Depths necessary to support : ctivity originally projected run from fifty-
five to eighty-feet. These pla: 3 have been substantially revised and postponed
but do represent original estimates. For example, Hampton Roads had anticipated
fifty-five feet and Los Angeles/Long Beach up to eighty. The projects are n2%
cheap. In 1980 dollars Hampton Roads would have required $438.5 million for the
deepening plans, which is not excessive when compared to other plans. The rangº
120
Table VII-3
Existing and Potential Effective Capacity for Handling
Export Coal at U. S. Ports
Total Mid-
Wessel Size *i;s Capacity cºpe; Expansion" “.....”
(dwt.) (10° tons) (10° tons) Capacity," 1985
Port/Terminal Existing Proposed Designed Effective Planned Underway (10° tons)
East Coast
New York (P)C 80,000 5.0 5.0
Philadelphia, Pier 124 (E) d 60,000 5.0 2.5 6.5 9.0
Camden (P) 35,000 2.0 2.0
Wilmington (P) 30,000 7.5 7.5
Lower Delaware Bay (P) 100,000+ 10.0 t 10.0
Baltimore (E) - 70,000 100,000+ 27.2 16.6 11.0 . 6.5 34.1
Norfolk-Pier, 6–North (E) 80,000 100,000+ 58.0 29.0 7.3 36. 3
Pier, 5–South (E) 8.0 4.0 1.0 5.0
Newport News, Pier 14 (E) 80,000 100,000+ 33.0 16.5 16.5
Pier 15 (E) º 14.6 5.3 5.0 10. 3
Pier 9 (E) - 5.0 5.0
Portsmouth (P) 50,000 100,000+ 10.0 10.0
Morehead City (P) 50,000 100,000+ 5.0 5.0
Charleston (P) 40,000 50,000 5.0 5.0
Savannah (P) 50,000 70,000 7.5 7.5
Brunswick (P) 30,000 43,000 5.0 5.0
Total 145.8 73.9 81. 3 18.0 173.2
Gulf Coast a
Mobile (E) 60,000 100,000+ 11.0 5.5 5.0 10.5
New Orleans, Davant (E) 60,000 100,000+ 14.0 7.0 3.0 10.0
Myrtle Grove (E) 60,000 100,000+ 6.0 3.0 9.0 12.0
Mile 118 (P) 60,000 100,000+ 4.0 4.0
Baton Rouge (Burnside) (E) 60,000 100,000+ 5. 0 2.0 4.0 6.0
Port Arthur (P) 60,000 100,000+ 2.0 2.0
Galveston (P) 55,000 100,000+ * 10.0 10.0
Corpus Christi (P) 75,000 100,000+ - 0.5 sº-ºº-ººººº. _0.5
Total 36.0 17. 5 32.5 5. O 55.0
West Coast
Los Angeles (E) 100,000+ 4.0 1.5 7.5 9.0
Long Beach (E) 100,000+ 4.0 1.5 5.0 6.5
Sacramento (P) 30,000 40,000 1.2 1.2
Stockton (P) 35,000 40,000 1.2 1.2
As toria (P) 50,000 5.0 5.0
Port l and (P) 55,000 3.0 3.0
Coos Bay (P) 35,000 3.0 3.0
Kalama (P) : 50,000 7.5 7.5
Bellingham (Cherry 100,000+ 1.2 1.2
Point) (P)
Dupont, Washington (P) 100,000+ 3.0 3.0
Grays Harbor (P) 40,000 60,000 3.0 3.0
Anchorage (P) 100,000+ 3.0 3.0
Trading Bay (P) 100,000+ - _3.0 3.0.
Total 3.0 3.0 46.6 & 9.6
Total United states 189. 8 94.4 160.4 23.0 277.8
*The columns showing capacity expansion and effective capacity are not dependent upon the deepening of h
channels at the respective ports; however, the column showing proposed vessel size is dependent “P” "
completion of dredging projects.
*Based on a survey of U.S. ports, using 1985 as the nominal date for mid- to long-term coal port development
plans.
C(E) Existing Facility.
d(P) Potential Facility.
Source: Ref. 1.
Source: Kenneth M. Bertram, Argonne National Laboratory, Energy and Environmental
System Division, Center for Transportation Research. Alternatives to
Deep-Draft Port Dredging for U.S. Coal Export Development: A
PFeTiminary Assessment (Washington, D.C.: Government Printing Office,
U.S. Department of Energy/ U.S. Department of Transportation, March
1982), p. 33.

l2l
seems to run from $371.8 million to $479.6 million. Table VII-4 shows estimated
Costs and trade tonnage deepening plans.
By any standards, these plans are quite capital intensive public works
activities. For them to be borne alone by an individual port is quite diffi-
cult, even in the best of times. But at one point the Port Authority of New
York/New Jersey attempted to develop a coal export terminal on State Island and
not seek federal dredging funds. It was anticipated project Completion would be
expedited by many years and allow New York to move quickly into the export
market. The project was subsequently cancelled (or technically put "on hold" for
market conditions). Allowing for the port's unique financial strength, the
possibility indicates how frustrating the federal authorization process Could be.
Table VII-4
Estimated Costs and Trade by Port, 1990

Existing Incremental Estimated
Operations T Operations Estimated
otal Costs Total
and Construction and Trade' Coal Exports Deepening
Port Maintenance Maintenance in 1990 in 1990 #.
Costs Costs
(million 1980 dollars) (million short tons) |
Hampton Roads ......................... 3.2 438.5 6.1 80.6 58.9 55 feet
Great Lakes ............................... 4.5 0.0 0.0 31.5 19.7 None
Baltimore • * * 2.1 383.7 1.6 74.9 29.2 50 feet
New Orleans/Baton Rouge ...... 14.9 479.6 125.1. 173.5 8.6 55 feet
Mobile .......................................... 4.6 371.8 2.8 25.8 4.7 55 feet
Los Angeles/Long Beach ......... 0.1 420.2 O.0 81.4 2.8 80 feet
Philadelphia ................................. 5.8 0.0 0.0 67.7 12.0 None
1
Total trade is comprised of waterborne exports, imports, and coastwise movements.
* Includes the Ohio ports of Ashtabula, Conneaut, Sandusky, and Toledo.
Note: Existing operations and maintenance cost estimates converted from 1982 dollars using the GNP deflator,
1. 1641; new construction cost and incremental operations and maintenance cost estimates converted from 1981 dollars
using the GNP deflator, 1.0946.
Sources: e Office of Policy, U.S. Army Corps of Engineers for cost estimates.
© 1990 total trade by port estimated from Maritime Administration data and forecasts from the Federation of American
Controlled Shipping. 9.
• 1990 Coal trade by port estimated using regional coal export forecasts from the International Coal Trade Model, and
current and under-construction port capacity from the Maritime Administration.
Source: U.S. Department of Energy, Robert M. Schnapp and Byung Doo Hong,
Energy Information Administration, Office of Coal, Nuclear, Electric and
Alternative Fuel S. Port Deepening and User Fees: Impact on U.S. Coal
Exports (Washington, D.C.: Government Printing Office, Department of
Energy, May 1983), p. 18.
Ports often can act quickly and the dredging "bubble" represents thel;
flexiblity. That in turn is a function of their quasi-public (and quasi-private
position. It became evident that not all the plans could proceed. Only a fe"
locations were actually pushed forward: Hampton Roads, New Orleans, Long Beach
and Los Angeles. This type of experience may well foretell how things might
develop for other cyclical exports for (agricultural) and for the load center
concept initiated by Containership companies. Selected locations will
eventually develop in the marketplace for a variety of economic and logistical
reaSOI)S = -
122
Dredging Process
The process for planning dredging activities, receiving approval and
actually constructing is quite involved. It is representative of much what does
occur in the intergovernmental public policy system.
Table VII-5
Sequence of Steps for Wavigation Projects Undertaken by
U.S. Army Corps of Engineers
. The public requests assistance from Congressional delegation to solve water resources problems.
The committee on Public Works of House or Senate authorizes study.
. Congress enacts initial funds for study into law.
. Corps district officials conduct reconnaissance (Stage 1 Planning) includes public meeting and other forms of public involvement.
. If results of reconnaissance are favorable, Corps district officials continue study and develop preliminary alternatives (Stage 2
Planning) includes public meeting and other public involvement.
6. Corps district officials select several alternatives to develop in detail and, on the basis of further evaluation, tentatively select plan
that best achieves the objectives of the study (Stage 3 Planning) includes public meeting and the preparation and circulation of a
draft report and a draft environmental impact statement (EIS).
. District engineer submits report and EIS to division engineer.
. Division engineer submits report and results of division review to Board cf Engineers for Rivers and Harbors (BERH)--includes public
notice.
9. BERH reviews district and division recommendations and issues its findings and recommendations--includes public notice of
- ſeCommendations.
10. Chief of Engineers coordinates proposed report and EIS with Governors of affected States and Federal department heads.
11. The Secretary of the Army and the Office of Management and Budget review the chief Engineers report. This report is submitted to
Congress--final EIS is filed with the Environmental Protection Agency.
12. Congressional Committees on Public Works hold hearings and include project in authorization bill or authorize by joint resolutions.
13. Congress appropriates initial funds for advance engineering and design for project enacted into law--usually several years after
authorization.
14. Corps reaffirms plan based on current conditions and any new planning criteria applicable to project--including a public meeting and
other forms of public involvement.
15. If plan is reaffirmed, or satisfactorily modified to accommodate new conditions or criteria, Corps develops engineering and design
Specifications and awards initial construction contracts.
16. Non-Federal interests enter into formal agreement with Secretary of the Army to fulfill their obligations, as authorized by Congress.
7. Congress appropriates initial funds for construction of project enacted into law-requires specific decision by President and Congress
to initiate construction of project.
18. Corps continues engineering and design specifications and project construction--may include adjustments based on results of detailed
engineering design.
19. Project construction is completed.
:
:
Source: U.S. Army Corps of Engineers, based on material in Coal Exports and Port Development - A Technica/ Memorandum, April
1981, Office of Technology Assessment.
Source: U.S. Department of Energy, Robert M. Schnapp and Byung Doo Hong, Energy
Information Administration, Office of Coal, Nuclear, Electric and Alternative
Fuels. Port Deepening and User Fees: Impact on U.S. Coal Exports (Washington,
D.C.: Government Printing Office, Department of Energy, May 1983), p. 14.

Whether federal funds are used or not, various permits and coordination
*ē required by federal law. Cited in the chapter on intergovernmental public
Policy was the fact that there were over 72 federal activities involved in the
*vigable U.S. ocean waters managed by 44 agencies. This complexity is repeated
* many ways at the state and local levels. On the whole, most port attention
* upon federal practices as that level is the primary source of funds.
Table VII-5 shows the actual sequence required for U.S. Army Corps of
Engineers project approval and implementation. The Corps is the lead agency for
*PProval of applications and also for conducting much of the work from project
°nception to actual construction and maintenance. This dual role aspect is
Table VII-6
Status of Approvals for U. S. Seaport Dredging Projects
Present Project Step
Project Port Under Waya
Principal coal ports
Baltimore, Md. 16
Hampton Roads, Va. 10
Mobile, Ala. 9
New Orleans 6
Additional coal ports (or potential)
East Coast : 2
New York City 10
Charleston, S.C. 7
Savannah, Ga.
Brunswick, Ga.
Gulf Coast:
Galveston, Texas
(Texas City)
(Pelican Island)
Sabine, Texas
Corpus Christi, Texas
West Coast :
Columbia River, Wash.
(Astoria)
Kalama, Wash.
Be 11 ingham, Wash.
Gray Harbor, Wash.
Long Beach/Los Angeles
Sacramento, Calif.
10 (unfavorable)
6
Permit granted to
private organization
6
6
6
Permit requested for
private dredging
Deepening not required,
step not applicable
6
18
9
*Approval process has the 19 steps outlined in Table 2.
Source : Re f. 2.
Source: Kenneth M. Bertram, Argonne National Laboratory, Energy and Environmental
System Division, Center for Transportation Research. Alternatives to Deep-Draft
Port Dredging for U. S. Coal Export Development: A Preliminary Assessment
(Washington, D.C. : Government Printing Office, U.S. Department of Energy/ U.S.
Department of Transportation, March 1982), p. 8.

l24
difficult for the Corps. The table identifies nineteen different steps through
which projects must progress. At each critical stage Congress must review the
status of the application and appropriate funds. Summary informatlon is not
readily available on recent completed projects because no new project has been
approved in recent years. The most recent authorization by Congress was in 1970
for the Port of Baltimore. The project is nearing completion. For thirty-six
projects Completed between l973 and 1975, the average period required was nine
to ten years from Congressional resolution and feasibility study to completion of
engineering and environmental reviews. Add another six to seven years for
Congressional authorizations and Construction funding. Actual implementation of
the project would require an additional eight years. In sum, twenty-three to
twenty-five years were necessary in completing a project from start to finish.
Tables VII-6 shows approval states for major projects.
Much of the problem can be identified as lack of funding and thus long
delays waiting for more money to be made available. Project backlogs and
activities already underway require the Corps still to conduct a significant
amount of activity. In 1982 about $670 million a year was spent of which $270
million was for construction, operation and maintenance of shallow draft-projects
and about $337 million for operation maintenance of deep draft projects.”
One subpart of the integrated process is review and approval necessary for
environmental aspects. Frequently subject to dispute and controversy is agreement
on environmental migation measures. The Corps implemented on July 8, 1983 the
"principles and guidelines" for water and related land resources implementation
Studies. -, The statement instructs the Corps to consider mitigation during
planning.
In general terms, problems associated with mitigation measures are at the
federal level. Sometimes they also reflect what occurs even more intensely at
State and local levels. The most prevalent issues are:
l. disagreement between agencies over what projects need mitiga-
tion, what constitutes mitigation, and what Constltutes "replacement
in kind;"
2. the absence of consistent federal standards and policies
regarding mitigation requirements and Subjective basis of agencies
decisions;
3. extensive unpredictable time delays; .
4. a lack of expertise on the part of the agency personnel in the
fiscal engineering and operational limits of ports.
Each agency has a legal mandate and, of Course, chooses to implement it
properly. In some cases the statutory basis has no reference identifying the
Special situations of ports or an area's economic needs.
Another observer notes that the Concept of mitigation is "undisputed."
However the negotiation necessary to make it work is very difficult and ports as
project applicants should allow for a long-term, lengthy involvement. The Port
of Oakland in an expansion activity had difficulty receiving precise comments
from the Environmental Protection Agency, the Fish and Wildlife Service and the
National Marine Fishery Service specifying what are the exact mitigation measures
in their project and how compensation should be done. "Herein lies the basic
Problem. The permitting system can require mitigation but there are no set
ProCedures as to hº you determine how much mitigation is required or where it
should be located." -
—l25
With many of these elements in mind the American Association of Port Autho-
rities passed a resolution, E-ll-Dredge Material Disposal and Fill, that
attempted to address one aspect of this general Concern. Appendix II presents the
recommendation. The resolution focuses upon the timing, expense and discretionary
parts of the review process. During the Coal export boom, many recognized that
expedited processing was necessary. Proposals were advanced from the Congress
and the executive branch. "Fast tracking" such reviews is still an objective of
legislation.
One of the accomplishments in this regard has been in the Section 404
review process that the Corps must manage. According to Robert K. Dawson, Acting
Assistantidsecretary, U.S. Army Corps of Engineers, there has been significant
progreSS.
* Reflecting the status of the dredging matter was the creatlon of a Task
Force to Study the National Dredging Issues. It is sponsored by the Marine
Research Board, National Research Council of the National Academy of Sciences.
The study considers prospects for trade and vessels likely to carry the trade,
design criteria for navigational Channels and turning basins, environmental
effects of dredging and disposal of dredge materials, alternatives to dredging,
regulatory institutional framework, national Security and defense. The study
group and the task force were announced in the Federal Register and the effort
was requested by U.S. Corps of Engineers. The final report has not yet been
issued, however one of the findings has addressed criteria for dredging. There
is uncertainty as to how ports actually arrive at there numbers; why does one
choose forty-one feet or another forty-five. Such criteria do not exist in
general and could be established to facilitate a uniform analytic f ramework.”
Another concern has been the backlog of projects, first caused by insuf-
ficient funds. The General ACCountlng Office investigated and determined that
there is a water project construction backlog. Based upon Corps data "934
authorized water projects needing about $60 billion to complete construction"
were left pending. Due to inflation in project Cost increases, the Corps had in
l982 a twenty-three year backlog "based on appropriations approved in those
years". And operation and maintenance funding has required an increasing share
of the Corps budget and has grown to thirty-seven percent in 1982 from twenty-
threed percent in 1973. Options for reducing the backlog were identified and
included increasing appropriations, Cost sharing and setting priorities. These,
as will be seen, are very controversial approaches. Increasing the budget is
unlikely given the current national fiscal situation. Cost sharing is under
serious consideration. Setting priorities is difficult because of the balancing
required for maritime and other factors. The group of factors priority setting
must face is generic tº the gamut of water projects managed by the Corps and the
Bureau of Reclamation.
Financing of Dredging
As an established national priority, water projects are funded by federal
programs. On account of many factors, including political philosophy and competit
tive budget priorities, the question of financing of dredging has been opened up
in the last several years. Discussion has intensified in Congress; many bills,
too numerous to identify here, have been proposed to accomplish the financing of
dredging. The range of possibilities are from one hundred percent federal
financing to almost no federal financing, with many combinations in between. Thº
most recent federal proposal requires "non-federal sources to pay 72 percent of
the costs for projects at harbors with depths of 45 feet or less, and 100 percent
126
of the Costs for increasing harbor depths beyond 45 feet." For inland waterways,
operations and maintenance imposes "a user-fee based on a ton-mile system resul-
ting in non-federal sources paying 70 percent of maintenance costs." Federal
funding in 1984 was $570 million for deep draft ports and harbors and $630
million for inland waterways. This amounted to full subsidy for the ports and a
ninety-One percent subsidy for the inland waterways. These are revenues
Considered foregone, that is the federal government would not receive funds for
these activities. In light of the total enterprise (ports and maritime
Community) it is a somewhat different situation. Deep draft ports and harbors
have a Cargo shipping community equalling $13.7 billion for total enterprise
transactions of which the federal subsidy equals 4.2%. Inland waterways
(similarly through barge freight and shirgers) has a total enterprise activity of
$2.5 billion of which 23% is subsidized.
The Concept of user fees or Cost sharing (proposed to respond to federal
funding difficulties) works in this way. The user or beneficiary pays a fee
(Sometimes called a tax) that reflects to some extent the actual cost of the
benefit received. That fee on prorated basis equals one hundred, fifty, or ten
percent of the total activity costs. Another way that this could be accomplished
is through cost sharing which has a similar motivation and is slightly variant.
The total project costs and activities necessary to maintain them would be
identified, and agreed to in advance for specified period of time. If fifty
percent of project dredging cost would be borne by the federal government, the
other fifty percent might be covered by state and local governments , the ports
and/or a £ombination of user fees or taxes. Advantages of user fee financing
include:
first, federal fees give the user of service an incentive to
demand suitable choices of federal investment... Second, if the
relative cost of competing services are not distorted by selective
public subsidies, improved allocation of private resources follows.
Third, user fees applied properly Can encourage efficient use of
existing capacity, thus helping to reduce the need for new construc-
tion... Fourth, financing back user Can be critical to start needed
new projects. There is also the significant advantage of reduction of
the federal deficit in transfer of cost burden to non-federal
SOUICeS.
On the other hand, there are limitations of user fees: existing subsidies
to Competitors, infant industries, previously invested Capital, and legal
COnStraints.
The types of user fees include: system wide fees (tax, tariff, benefit
tax); specific fees (taxes, tolls); special facility or service fees (levies,
Surcharges, incident-specific fees); two-tier fees (fixed rate, metered rates,
Peak-hour surcharges, congestion fees).
Some basic issues relate to administering them: System wide versus specific
fees; market pricing versus cost recovery; Cash flow versus amortized financing;
financial linking versus fiscal control. In one study by the Congres sional
Budget Office (CBO) fees of $.27 per ton of cargo were analyzed along with an
*Verage fee for coal colliers of $1.66 per ton.
A system wide fee of 27 cents per ton of cargo paid by
commerical shippers could defray the U.S. Army Corps of Engineers
l984 outlays of $570 million on routine port Construction and mainte-
nance. Covering the additional costs of adapting certain harbors to
the special deep-draft-needs of large coal-carrying vessels could
|
127
require further annual Corps expenditures of $100 million to $200
million. These latter amounts could be recovered by a specific fee to
Operators of Colliers averaging $1.66 per ton. At Coal ports, the re-
sult would be a two-tier fee system, with all shippers paying the
Systemwide fee and Coal shippers paying a Sur charge to finance the
service only they require.
Similarly, the CBO study reviewed the situation inland :
The existing federal barge tax--8 cents per gallon of motor
fuel--recovers only $54 million of the $631 million spent annually on
inland waterways by the U.S. Army Corps of Engineers. Recovery of all
federal costs would require a systemwide fee equal to 3 mills per
ton-mile (the current tax is equivalent to 0.25 mills per ton-mile).
The alternative of a segment-specific fee would range from 0.6 mill
per ton-mile for low-cost waterways to $l for the most expensive
ones. A uniform fee would raise shipping costs by roughly one-third,
in turn, increasing prices of goods shipped by barge and/or reducing
farm incomes. Another outcome would be a diversion of freight traffic
from barge to rail.
In coal or grain export such cost increases would at first affect the
nation's competitive position. However many of the countries to which the Cargo
is sent have import levies. The net effect, it is believed, would be that higher
landed prices of the U.S. cargo would still remain above the importing Countries
internal price, and "import levies would simply be reduced accordingly." "If the
U.S. were under sold by cheaper grain from other grain export countries, demand
would be unaffected." Interestingly, other countries sell commodities at a
higher price than the international market. Japan sells American wheat at à
price that is over fifty percent markup from the purchase price. That would
suggest, then, that U.S. price increases would not materially affect the volume
sold in already highly controlled and high priced internal markets.
Importing countries employing import tariffs applied to American (or other)
products count on that revenue source. It would seem likely that they would
increase their own tariff even more to offset import prices equal to or bel9"
their own domestic #ices. The revenue loss "withdrawal pains" would be signifiº
Cant in many Cases. - -
Another study investigated the impact of twenty-five cent per ton us?”
chargesfor the entire nation. Table VII-8 shows how the economic effects would
play out through the industrial-port shipping system in terms of direct salº
jobs, income, taxes, duties, user charges, cargo and commodity balance- The
biggest loser in direct salesd would be the port shipping industry in compari”
to hinterlººd industries, however the hinterland would lose almost twice º
many jobs. -
A sobering point of view suggests that even with the imposition of various
types of user charges and cost sharing, the position of the American export
market would not materially be charged on a delivered cost price basis. *
example in coal, the United States is a "swing" or "marginal supplier". Margº
in that it handles an increment that a country would purchase based on the fact
that America is known as a stable supply source of relatively good quality
products. The swing supplier is vital whenever a foreign Crisis or interruptio"
of regular supply occurs. The United States has been Counted on to increase
production for the temporary situation. Unfortunately for many ports all
128
Economic Effects of a User Charge on U. S. -
ALL FOREIGN & DOMESTIC COMMERCE, 1979, BY PORT AREA
(1979 Do 11 ars)
Table VII – 7
Deep water Comune roe
User Charge = $.25 per ton of Imports, Exports, Domestic Unloadings
INDUSTRY/AREA
Port/Shipping Industry
North Atlantic
South Atlantic
Gulf of Mexico
California
Pacific Northwest
Great Lakes
Total
Hinterland Industry
North Atlantic
South Atlantic
Gulf of Mexico
California
Pacific Northwest
Great Lakes
Total
Total
North Atlantic
South Atlantic
Gulf of Mexico
California
Pacific Northwest
Great Lakes
Total
Source: U.S. Department of Commerce, Economic Development Administration.
Direct Employ-
Sales
$1000
49
-83.29
-1468
-94.93
- 31.79
-4319
- 12339
-39128
-4631
1585
-91.488
-3B99
-10116
–9517
-126066
-12960
117
-100.981
–7078
-22435
-21056
- 165,194
, ment Income Taxes
Jobs $1000 $1000
-677 - 15869 - 4147
-121 –2941 -743
–771 -18065 -4721
-268 -6373 -1666
-35B -8.465 -2212
- 1073 -25577 -6685
- 3267 -771.93 -20175
|-646 - 12605 ~2608
-25 944 366
~4229 -122463 -32341
-86 - 3053 –946
-1172 -29053 -7.353
-688 -16621 -4076.
-6846 -182852 -46958
-1323 –2847.4 -6755
-146 -1997 -377
-5000 -140528 -37062
-354 -9426 -2612
~1530 - 375.18 -9565
- 1761 -42198 -10761
-101.13 –260045 -67133
Duties
$1000
-401.7
-1151
-3964
- 1067
-780
- 1169
- 12147
-4017
-1151
-3964
- 1067
–780
-1169
-12147
User
Charge
$1000
85164
17763
124282
33525
22.942
53.162
3.368,47
85164
17763
124282
33525
22.942
53.162
3.368,47
Commodity
Cargo Balance
1000ST $1000
- 1946 10910
-237 2508
-1478 -4 1021
- 414 - 683
-614 - 16603
-4822 - 10924
-95.12 - 558 16
-1946 10910
-237 2508
- 1478 -41021
-414 -683
-614 - 16603
- 4822 - 10924
-95.12 -55816
User Charge Study Findings –
Economic Effects of Levying a User Charge on Foreign and Domestic Commerce to Finance Harbor Maintenance
(Washington, D.C.: U.S. Department of Commerce, September 16, 1983, Fact Sheet), p. 32.

§
business, the up-turn in the Coal market experienced recently was based more upon
that Swing situation. Polish mine production was stopped by a long worker
strike. Now, there are reports that other Countries as well are up-grading their
facilities far more comprehensively and at a lower Cost than the United States
(South Africa, Australia and Canada). Furthermore, there is promise that coal in
China will be developed for export. Given these circumstances, it is difficult
to project in the short-term a very strong competitive position for the United
States Coal market. Assuming a reduced transportation cost of up to $4 per ton
for large coal Colliers, it still is "not sufficient to either induce a sizable
increase in foreign demand for U.S. coal or allow the United States to signifi-
Cant other major suppliers." Consequently, noneconomic factors may play an
influential role in the increase of American sales, if freight buyers perceive
the nation as a Cooperatlve #ading partner, politically stable, or a general
increase in world Coal demand.
There is also doubt among the international community that the United
States will be able to be a significant provider for world coal markets on a cost
basis. Insufficient transshipment facilities including ground storage, loading
and automatic sampling equipment are lacking. U.S. antitrust law prevents
collective agreements by coal sellers for sale abroad. A combination of high
rail rates and lack of East and Gulf Coast deep draft ports makes marketing
abroad with credibility difficult. One benchmark study believes "under present
constraints the United States will tend §§ remain a swing supplier with an
erratic annual volume of export steam coal."
Alternatives to Dredging
With heightened attention upon the dredging situation, more research has
been targeted to identify other possibilities. Choices include a combination of
technology, financial and institutional changes. Already discussed under the
issue of financing has been the element of user fees and cost sharing. These
will strongly influence market demand and requirements that would determine the
size of the ships, depths necessary and volume of cargo coming through. All of
these would be factored into help choose an alternatives. As some studies
suggested, it is entirely possible that dredging would not be necessary in many
Cal Se Se
In the realm of technological and institutional choices, there are Sl?
basic approaches with many subsets involved. These include:
... port dredging
. coarse Coal pipelines
. Coal slurry pipelines .
... vessel to ship loading
... barge Carrying ships
... extra wide beam coal ships
:
Table VII-8 addresses alternatives, funding, time requirements, impacts and
constraints. It would appear that the quickest responding items would bº
vessels-to-ship type loading activities, or barge-carrying-ship possibilities and
extra-wide beam coal ships. These also should be less costly to public agenciº:
The technology is generally available. In the case of slurry pipelines, or of
coarse coal pipelines, the technology has been demonstrated and proven but
would encounter, potentlally, considerable environmental and right-of-way Pº.
blems from railroads, competition from barge companies and Water supply
difficulties. .
130
Port Dredging Vs. Alternatives for Coal Export Port
Development
Years
9–10
6-7
Constraints
Federal government
funding doubtful;
environmental con-
troversies (dredge
disposal site im-
pacts and ground-
water aquifer
d is turbances,
etc.).A, B
Remarks (key system characteristics,
advant ages, d is advantages, etc.)
User charge estimates range from $0.20/ton
to $3.70/ton vs. estimated freight rate
savings of $3 to $6/ton for deep-draft
coal ships. A These savings do not include
$6 to $.10/ton recent demurrage charges at
Norfolk and Baltimore.9 similar econo-
mies would result for large oil, ore, and
grain ships. U.S. freight rates would im-
prove relative to competition (see
Table 1). Tables 2 and 3 indicate that
of 15 major coal-port public dredging
proposals, only Baltimore and Long Beach
have completed administrative review stage
(see time requirements columns).
Table VII —8
Alternative
Port Dredgin
(Major Ports – to
allow 100,000+ dwt
ship traffic and
loading).
f
Coarse Coal Pipe-
lines:
Kamyr, Inc.
(slurry load/
dry unload of
up to 250,000
dwt ships).
Wheelabrator-Frye,
Inc. (slurry
load/dry unload
of 140,000 dwt
ships). a
1981
Capital
Co st
(106 S)
280–440
per port
(1980
costs).
140-160
(5-mi
offshore
pipe-
lines,
10 mil-
lion
annual
tons) a, D, G
150
(15-mi
offshore.
pipe-
lines,
5 mil-
lion
annual
tons)
165 (ex-
panded
system -
15 mil-
lion
annual
tons). F
Sources
of Fund ing
Local, state
and/or federal
govts. ; ports.
Private pipe-
line company,
energy company,
or consortium.
Private pipe-
line company,
energy
company,
Or Con S Or - -
tium.
Capital
Recovery
Mechanisms
User fees
(based upon
vessel draft
or cargo
tonnage).
Pipeline
freight
rate 8
(current
U. S. port
loading
costs plus
premium
added to
capture
OC e 3. In
freight
savings).
Pipeline
freight
rate 8
(current
U. S. port
loading
cost plus
premium
added to
capture
OC ean
freight
savings).
Time Requirements
Tasks
Administrative
review (EIS,
etc.)
Congressional
authorization
and funding.
Planning, de-
sign and con-
struction.
All (EIS re-
quirements not
yet investi-
gated). .
All (assumes
E IS not neces-
sary).
5 mi maximum off-
shore distance
(limits U. S. East
Coast applica-
bility); private
financing uncer-
tain; environmen-
tal considerations
not yet investi-
gated; pipeline
plugging or
severing would
require major
repairs. D, E
Private financing
and avoidance of
EIS uncertain
(despite verbal
as surances from
environmental
officials).
Throughput of 7000 tons coal /h using seven
1000 ton/h on shore high-pressure feeding
stations. Large coal particle size (up to
6 in.) and dewatering system claimed to
eliminate need for ship retrofits. Return
pipeline from ship to shore allows water
reuse in system. Coal is 25% of slurry
volume and a final coal moisture content
of 8-10% aboard ship is estimated.P System
has shorter implementation time than
dredging, but is unproven underwater, has
distance limitations, and has no present
commitments. Has reduced coal (only)
ocean-freight rates similar to port
dredging, but higher loading charge.
Throughput of 2500 tons coal/h. In it is 1
system throughput would require 3 retro-
fitted ships and expanded system would
require 8 additional ships. Costs shown
include inland transport interface, coal
storage, two pipelines (one for water
return and reuse in system), ship
mooring buoy, and ships." Coal is to make
up 50% of slurry volume; particles are to
be maximum of 2 in. ; and final moisture con-
tent of coal aboard ship is estimated at 6
to 8x. F system has shorter implementation
time than dredging and longer (claimed)
distance capabilities than other underwater
coal pipelines, but is unproven underwater
º
Table VII-8 cont.
Time Requirements
Years
Alternative
Coal Slurry Pipe-
lines:
Boeing Corp.
(slurry pipeline
from mine mouth
to 350,000 dwt
slurry carrier
ship). b
Continental Re-
sources Corp.
(slurry pipe-
line from port
area to 150,000
to 350,000 dwt
ships).
Vessel-to-Ship
Loading:
Topping off of
' 130,000 dwt
1981
Capital
Co st Sources
(106 S) of Funding
750c, H
(1980
cost; 11
million
tons
annually).
Private pipe-
line, energy
company, or
consortium.
250e Continental
(K20 mi Resources Co.
under-
water
pipe-
lines,
10 mil-
lion
tons an-
nually). J
<20/shipe
(conver-
s ion of
self-
Shipowners
Capital
Recovery
Mechanisms
Pipeline
freight
rate S
(current
U. S. inland
transport
and port
loading
costs, plus
premium
added to
capture
OC ean-
freight
savings).
. Pipeline
freight rates
(current U.S.
port loading
cost, plus
premium added
to capture
ocean freight
savings).
Topping off
charge
(<ocean
freight
Tasks
Administrative 2H
and environmen-
tal approval."
Design and
construction.
All (assumes
EIS not re-
quired).
Brokering
AH
3e, J
O. 5–0. 8 e
(begin-
ning in
1983–84).
Constraints
Only use of pre-
designated utili-
ty corridor or
railroad use of
its own right-of-
way avoids need
for state and/or
federal eminent
domain; water re-
quirements can
spark environmen-
tal opposition.
Funding doubtful
for the one pro-
posed.
20 mi maximum
offshore dis-
tance. Avoidance
of EIS uncertain.
Water require-
ments could spark
environmental
opposition.
Reduced coal ship
freight rates due
to European reces-
s ion; funding
Remarks (key system characteristics,
advantages, d is advantages, etc.)
and has no present commitments. Distance
capabilities are disputed by Boeing Corp.,
which claims that pump pressures required
for moving 2 in. coal underwater beyond 6
mi would burst casings on a centrifugal
pump. Has reduced coal (only) ocean-
freight rates similar to port dredging,
but higher loading charge.
Underwater pipeline throughput of 6000 long
tons coal/h. Ship-to-shore pipeline re-
turns water for treatment and agricultural
use. System realizes cost savings of
both on shore and offshore slurry pipe-
lines. System can transport only 1/8
in. maximum size part icles (53% of
slurry weight) or inland pipeline can
connect with coarse-coal pipeline at
dock area. System has shorter implemen-
tation time than dredging, but longer
one than coarse-coal pipeline (Exception:
built by railroad a long its own right-of-
way, mine mouth-to-ship slurry pipeline
implementation time requirements would
roughly equal those for underwater pipe-
lines.) Fine slurry proven underwater.
Requires res lurrying of 307-moisture coal
at destination. Has no present commit-
ments." Has reduced coal (only) ocean
freight rates similar to port dredging,
but higher loading charge.
System is same as Boeing's except it
would be designed as the only port area
ship-loading facility or would connect
with proposed 1500-mi Kentucky-Florida
slurry pipeline. Also differs in that
range of chartered vessel sizes is cons id-
ered. Capital funding can be assured."
Has reduced coal (only) ocean freight
rates similar to port dredging, but higher
loading charge.
Reduced coal-ship freight rates and
reluctance of ship operators and
European buyers to make advance com-
mitment s due to recess ion has under-
g
:
Topping off
150,000 dwt
ships using
floating coal
terminals (Sea
Containers, Inc.
and Coastal Barge
Corp.). T
80 Sea Containers,
(40 per Inc. and
terminal, Coastal Barge
10 mil- Corp.T
lion tons
annual- *
ly).
Topping off
charge
(same as
above).
Design and
construction.
2M
In sufficient
shelter in rough
weather.
Vessels loaded at port to 70,000 dwt will
be topped off. Floating terminal is to
operate in 70-ft-deep water beyond bar
at mouth of the Mississippi River.
Break-even volume is much less than
10 million annual tons. More units may
be built." Has ocean freight rates
similar to ship-to-ship topping off.
Table VI I-8 cont.
Alternative
ships (using
70,000 dwt
ships).
Barge Loading
or topping off
of 120,000 dwt
ton ships.
Barge-Carrying-Ships:
Current (LASH,
SEABEE ships).
Proposed (120,000
dwt ship - 1257–
ft length, 213–
ft beam, 38.7-
ft draft; 80
barges with 1500
tons capacity
each).
1981
Capital
Co st Sources
(106 s) of Funding
unloading
bulk
carrier).K
None
120/ship" None
(SEABEE). needed
(existing)
or private
shipping
company.
250e, N Private
(1.2 shipping
million company.
tons/ship
annually
010 trips).
Capital
Recovery
Mechanisms
cos t d if-
ference
between
full and
partial
loading).
Ocean
freight
rate 8.
Ocean
freight
Iſ a tes.
Time Requirements
Tasks
Can be
immediately
implemented. A
Design and
construction.
Design and
construction.
Years
2.5N
3.5
(U.S.) N
2
(for-
eign) N
Constraints
presently un-
available for
those proposed.
Barge and ship
scheduling diffi-
culties. Requires
deep-draft
sheltered loading
8 Te 3 S .
*
In sufficient cargo
capacity, non-
competitive
freight rates.
Wide-beam incom-
patibility with
most U. S. port
channels, dry
docks.P,Q
Government
construction
subsidies un-
likely.
per ship required.
Remarks (key system characteristics,
advantages, disadvantages, etc.)
mined near-term development. U. S.
East Coast efforts postponed until
1983-84. However, 25,000 dwt Great
Lakes ships recently loaded 160,000
dwt bulk ship with coal in Seven
Islands. Canada (Gulf of St. Law-
rence.jf,i Has ocean freight rates
only slightly lower than at present.
Avoids double transfer of coal at dock, as
well as need for dredging. Requires mar-
shalling up to 80 1500-ton barges to meet
120,000 dwt ship and a sheltered area with
55-ft depth.* Largest ship loaded so far
59,000 cargo dwt; took 5 days with 2
derrick cranes. Loading 120,000 dwt
would take 5 days using 4 derrick
cranes." Has ocean freight rates
slightly lower tº, an current rates.
LASH ship cargo capacity 25,000 tons using
loaded barges; 40,000 tons loading ship
cells directly. Minimum freight rate of
$125/ton not competitive.9 SEABEE cargo
capacity 23,000 tons; best long-term
contract rate of $90/ton. P. Neither ship
type designed for this service. High
tare-to-cargo weight ratio.
Needs inland waterway connections to
enhance efficiency. High tare-to-cargo
weight ratio. One extra set of barges
System could be used
for backhauls of other bulk cargo. R
Ship beam a major problem.” Ocean
freight rate competitiveness uncertain.
Tax benefits. Guaranteed share of U. S.
coal traffic would facilitate.
Table VII-8 cont.
1981
Capital Capital g g
º: Sources Recovery Time Requirements Remarks (key system characteristics,
Alternative (106 $) of Fund ing Mechanisms Tasks Years Constraints advantages, d is advantages, etc.)
Extra-wide Beam Coal N/A Private Ocean Design and 2-3R Government sub- Possible Marad program calling for con-
Ships: (estimate shipping freight construction. sidies unlikely. struction of 20–40 ships over next decade.
45-ft draft, 170- under company. rate 8 . Requires most U. S. First contract awards would not be made
ft beam, 940-ft develop- ports to be dredged until late 1983. Required port dredging
length, 143,000 ment). to 45 ft. would need same approvals as deeper, 55-
dwt ship. ft dredging. Freight rates would be much
lower than 60,000 dwt ship much higher
than 55-ft draft, 150,000 dwt ship.
38-ft draft, 120e, S Private Ocean Design and 2.5° Less fuel effi- Would not require port dredging. Avon-
173-ft beam, (1.2 shipping freight construction. cient than 45-ft- dale shipyards would contract to build.
885-ft length, million company. rate 8 . and 55-ft-draft Considers dimensions viable. S Higher
120,000 dwt tons/ ships and requires ocean freight rates than 45-ft draft,
ship. ship higher ocean 120,000 dwt ship are still much lower
annually freight rate. S than 60,000 dwt ships." Tax benefits
for 10 Government subsi- (accelerated depreciation and higher
trips). dies unlikely. investment tax cred it for U.S. vs.
*All estimates preliminary.
Frye estimates of $55-60 million for shores ide components and mooring buoy.
p
Frye system also has cost estimate of converting ships for dewatering of $1.4 million/ship.
bspecific mine-to-port pipeline would be 654 miles from Emery fields of Utah to Port Hueneme, California.
2 miles southeast of Port Hueneme and mooring buoy 14, 200 ft offshore to 117 ft of water.
foreign ships) and guaranteed share of
U. S. coal traffic would facilitate.
Most appropriate for shorter U. S. East
Coast to Europe movements, where ship
fuel use penalty is less. S
Costs include Kamyr estimates of $85-100 million for delivery and return pipelines plus dewatering system and Wheelabrator-
Cost of 1 mile offshore pipelines would be $108-119 million.
Wheelabrator-
Slurry storage/terminal facility located
Vessels hand le 350,000 dwt cargo, but 30Z is water.
“system costs include four new $14.7 million ships, with one-half of financing provided by U.S. government subsidy.
subsidy will significantly diminish claimed delivered freight cost advantage (see text).
Currently unavailability of
*Federal and state approvals could take as long as four years, but certain design and construction activities could begin after two years.
*Preliminary estimates.
freceiving vessel bound for Nippon Steel, Japan. Delivering ships were self-unloaders. Monthly shipments now being made.
SOURCES:
*office of Technology Assessment (OTA), U.S. Congress, coal Exports and Port Development (April 1981), pp. 24, 25, 72, 73, and U.S. Senate Environment
and Public Works Committee, as cited by R. F. Morrison, in User Fee Calculation:
Big Quest ion for Ports, J.
of Commerce, pp. 24b, 3B (Dec. 31, 1981).
Bu.s. Inter agency Coal Export Task Force, Inter im Report of the Inter agency Coal Export Task Force (Jan. 1981), p. 92.
°Coal week International, March 18 and 25, 1981, as cited in OTA report.
g
;
Table VII-8 cont.
PKamyr, Inc., Coarse Coal Pipeline and Dewatering System, Onshore-Offshore; Engineering Report and Cost Estimate, Glens Falls, N.Y., graph 2, pp. 6,
8, 25 (Sept. 8, 1981).
*Erwin Funk, Manager, Special Projects Group, Kamyr, Inc., personal communications, (Aug., Sept. 1981, March 1982).
*William D. McDonough, A Coal Slurry Export Terminal Concept, paper presented at Association of American Port Authorities Seminar, Mobile, Ala.,
pp. 5-8 (Feb. 1981). -
*William D. McDonough, Project Manager - CoSMOS, wheel abrator-Frye, Inc., personal communications (Aug., Sept. 1981, Feb. 1982).
*Boeing Engineering and Construction Company, Executive Summary: Pacific Bulk-Commodity Transportation System, report prepared for Maritime Administra-
tion, U.S. Department of Commerce (June 1980), pp. 9-14.
*Leonard Kopeiken, vice President - Business Development, Boeing Engineering and Construction Co., personal communication (Aug., Sept., 1981).
"Robert Kelly, Manager, Corporate Development, Continental Resources Co., Inc., personal communications (Sept. 1981, Feb. 1982).
“Patrick Calahan, Economics of Topping off coal ships, (paper), New York, N.Y. (June 1981) and personal communications (Sept. 1981, Feb. 1982).
*Greg Storey, Bulker Loads 160,000 Tons of U.S. Coal in Canada, J. of Commerce, p. 1 1A, (Aug. 6, 1981) and L. Ryan, Shipline Urges Superport on St.
Lawrence, J. of Commerce, pp. 1A, 3A (Dec. 21, 1981). -
*B.H. Green, Assistant vice President, Ryan Walsh Stevedoring Co., personal communications (Sept. 1981, Feb. 1982). º
"stewart Thayer, Vice President, Research and Development Design and Construction, SEABEE Division, Lykes Bros., Inc., personal communication (Sept. 1981).
9A.J. spinato, Traffice Manager, waterman steamship Co., personal communication (Sept. 1981).
*Robert Martinez, Vice President - SEABEE Division, Lykes Bros., personal communication (Sept. 1981).
RPaul Mentz, Program Manager, Advanced Ship Systems, Office of Maritime Technology, Maritime Administration, U.S. Department of Transportation, personal
communications (Sept. 1981, March 1982).
SMelvin Colon, Vice President, Advanced Programs, Avondale Shipyards, Inc., , personal communication (Sept. 1981).
T“Major Container Group to Diversify into Floating Coal Terminals," Fairplay, p. 9 (June 25, 1981).
Uw.M. Sterry, Manager, coal Transportation Systems, Boeing Engineering and Construction Co., personal communication (Feb. 1982).
Source: Kenneth M. Bertram, Argonne National Laboratory, Energy and Environmental System Division,
Center for Transportation Research. Alternatives to Deep-Draft Port Dredging for U.S. Coal
Export Deyelopment: A Preliminary Assessment (Washington, D.C. : Government Printing Office,
U.S. Department of Energy/ U.S. Department of Transportation, March 1982), pp. 13–17.


Finally, an idea not cited in this table but recently studied by the U.S.
Maritime Administration is the concept of one-way dredged Channels. The inbound
channel is dredged to a shallower depth for the lighter empty ship.The fºtbound
Channel is dredged to a greater depth to allow for the fully loaded ship.
Conclusions
Dredging is crucial to the Capability of American sea- ports to handle
larger ocean ships. The argument for such Capability rests principally upon
economies of scale, afforded by larger ships. Nevertheless, studies have begun
to note that even with lower cost, the relative position of the American coal
export and grain markets would not significantly change. This may in fact be
Caused by the U.S cost structure, which is far higher overall than other world
suppliers. In the case of coal, it would therefore suggest that the U.S. as a
marginal and swing supplier will ultimately share in the growth of the World
market, but not take a giant large stake. In the situation of grain similar
potential exists , however the commodity is subsized at a lower price by current
federal programs, which as with dredging programs, are under budget scrutiny. If
such commodities had to sell based upon true costing, the impact of dredging
would even be less Some studies argue.
By itself, dredging appears to be one of the less expensive ways to take
larger sized ships. On the other hand, it is the most time consuming and potent-
ially environmentally harmful. Thus it is unlikely to be permitted in many
locales.
Furthermore, dredging is significant for the import side of the American
economy. Super containerships carrying imports to the United States also re-
quire greater depths. Such capability would help lower per unit sales costs tº
the American consumer, which in its own way would be an offsetting benefit tº
present export difficulties. Still, it would appear in the long term that
dredging is necessary to handle larger ships, ceteris paribus, in order to.”
sure the United States has the most up-to-date, technological transportation
system in use and development. If other forces are allowed to prevail, altern"
tives to dredging in selected locations may be prudent and timely.
In the meantime, the intergovernmental public policy framework presentº
sizable problems demanding speedy resolution. Much of the delay at the federal
level has been based upon funding problems. At all levels there is controveº
about agency missions, interpretations, lack of clear-cut guidelines and agº.
coordination. These may be improved by coordinative mechanisms and up-front
agreement on requirements and standards.
136
Endnotes
1
U. S. Department of Transportation, Federal Maritime Administration.
The Report to Congress on the Status of the Public Ports of the United States
(Washington, D.C.: Government Printing Office, Maritime Administration, August
1984), pp. 15–22.
2
U.S. Congress, Senate Committee on Interior and Insular Affairs. Deep
later Port Policy Issues, A Staff Analysis (Washington, D.C. : Government
Printing Office, 1974, Pursuant to SR 45, A National Fuels and Energy Policy


Study), pp. 3-24.
3
Kenneth M. Bertram, Argonne National Laboratory, Energy and
Environmental System Division, Center for Transportation Research. Alternatives
to Deep-Draft Port Dredging for U.S. Coal Export Development: A Preliminary
Assessment (Washington, D.C.: Government Printing Office, U.S. Department of
ºrs. Department of Transportation, March 1982), p. 33.

U.S. Department of Energy, Robert M. Schnapp and Byung Doo Hong, Energy
Information Administration, Office of Coal, Nuclear, Electric and Alternate
fuels. Port Deepening and User Fees: Impact on U.S. Coal Exports (Washington,
D.C.: Government Printing Office, Department of Energy, May 1983), p. 18.
5 6
Ibid., pp. 13-15. Bertram. op.cit., p. 8.
7 -

Col. F. W. Mueller, Jr., Board of Engineers for Rivers and Harbors, U.S.
Corp of Engineers, Panelist. "Mitigation - the New Style of Environmental
Response", Proceedings of the American Association of Port Authorities Annual
Conference (Seattle, TWA:TAmerican Association of Port Authorities, September 14,
3 ...”. 13–17.

º William K. Fehring, Fish and Wildlife Service, National Marine and
fishery Service. Ibid., pp. 17-18.
9 tº
Charles R. Roberts. Ibid., pp. 19-20.
10 * -
Lawrence Mosher. "Corps Chief Says All Players In Water Projects
Debate Must Show Constraint", National Journal (Vol. 16, No. 52, December 29,
1984), pp. 2442 – 2443.
11
Aurora Gallagher, Technical Panel on Ports, Harbors and Navigational
Channels. Study of National Dredging Issues (Washington, D.C.: Transportation
Research Board, Committee on State Role in Waterborne Transportation,
January 15, 1935). -
12
A Seri U.S. General Accounting_0ffice. Water Project Construction Backlog --
#91;]ºm With Ng Easy Sºlutiº (Washington, D.C. : Government Printing
- “ººt-as-is, January 26, 1983), pp. i-v, pp. 22-25.

Congressional Budget Office, U.S. Congress. Charging for Federal
§ryices (Washington, D.C.: Government Printing Office, December 1983), pp. 4-5: :
Administration Unveils Legislation On Waterway Cost-Sharing Formulas",
Traffic World (voi. 201, No. 10, March 4, 1985), pp. 41-42.
137 –
14
Charging For Federal Services, p. 44.
15
U. S. Department of Commerce, Economic Development Administration.
User Charge Study Findings – Economic Effects of Levying a User Charge on
Foreign and Domestic Commerce to Finance Harbor Maintenance (Washington,
D.C.: U.S. Department of Commerce, September 16, 1983, Fact Sheet), pp. 1–3.
16
U.S. Department of Energy. Study on Port Deepening, pp. Vii-X.

17 -
Organization for Economic Cooperation and Development, International
Energy Agency. Coal Transportation Infrastructure (Paris, France: 1984),
pp. 7-8.
18
U.S. Army Corps of Engineers and U.S. Department of Transportation,
Maritime Administration. Application of CAORF Simulation as a New
Technology for the Determination of Dredging Requirements (Washington, D.C. :
Government Printing Office, 1984) cited in MARITECH R&D Technology Transfer
Journal, U.S. Department of Transportation, Maritime Administration
(Vol. 5, No. 6, September 1984), p. 4.

138.
PART III -LONG-TERM IMPLICATIONS
This final part of the study addresses the more enduring type issues and
responses necessary for the export transportation system to consider. Virtually
every part of the System seems to be under stress and change. Glven such charac-
terlstics, new ideas often are developed faster and solutions more rapidily
accepted. If that be the Case, the nation has a clear-cut need and opportunity to
CO SO. *
The emphasis here is upon strategic pollcy for federal, state and local
agencies. Chapter VIII will identify candidate lssues for strategic policy
Consideration Chapter IX will identify strategies to help address these issues.
The suggestions draw from Part I and Part II about system development, and
Current operations and Challenges. A primary goal is to stimulate further
thinking, dialogue, research, and action. Some of the lSSues are already being
COnSidered. Some of the strategies are being implemented. Others are still
under discus SiOn.
Again, in any case almost everything seems to be in flux in a very turbu-
lant era. It is a lively time when ports, Carriers and governments are trying to
be more proactive and less reactive. *
Chapter VIII
EXPORT TRANSPORTATION STRATEGIC POLICY ISSUES
jucti
The purpose of ths chapter is to address the sensitivity of the export
transportation system to changes in its external operating environment, the
United States economy and the world economy. It will suggest how the domestic
and export transportation systems are structured for a different set of under-
lying assumptions than may be operating now and will be operating in the future.
The system's predicament is becoming profound. These lssues represent serious
danger signals for management throughout government, and the port and land trans-
portation industries concerned by export transportation viability. At the same
time, promising opportunities are presented the following issues.
Structural Shift
The nation is moving toward a Service economy, but it is served by a
transportation – economic system based upon earlier imperatives. Fundamental
change is taking place. The following summarizes key aspects of that process:
l. The domestic transportation System is predicated upon an
industrial structure designed for heavy industry and manufacture,
natural resource and agricultural production and distribution.
2. That structure relied heavily upon railroad transport and
physical labor. +
139
3. For exports and imports the system relied upon a generally
balanced two-way flow.
4. The international trade system was co-mingled with an exten-
sive domestic transport infrastructure of the rails, highway, barges
and pipelines.
5. Based upon linternational trade flows and domestlc U.S. popula-
tion geographic shifts, the demand for this transportation infra-
structure has shifted.
6. The older parts of the system, Northeast and Midwest,
reflected the industrialized "Snowbelt" of the country.
7. The newer parts reflected the growth in the "Sunbelt" South,
Southwest, and Northwest and relied more upon a new extensive highway
system instead of rail, except for long interCity distances.
8. The newer port facilities were also constructed in the growing
South and Southwest, Northwest.
9. Subsequent trade flows show the greatest growth has been
exports to the Pacific Rim and not Latin America, Europe or Africa.
(though need exists). -
lſ). Ports exporting agricultural and natural resource Commodi-
ties, and industrial goods will be hurt by the failure or slow
dimunition of these economic sections.
There are many other factors certainly involved in this cycle but the
external forces operating seem to suggest this direction. More discussion is
necessary to explain fully why these may be.
An early warning system, in reviewing such factors, might well indicate
that our transport system is out of synch with what is being bought and sold,
exported and imported. It may be located in the wrong places, the wrong tech-
nology, the wrong costs, and greatly subject to one way flows with empty vehicles
or containers returning to their originating point. For some, this may seem
like a roller Coaster with many cyclical ups and downs happening at unpredictable
times. Others may see these patterns and begin to suggest that it is no longer a
roller coaster, it is in fact a long-term radical change. The process by which
our transport system moves from older assumptlons to the newer, yet partlally
understood assumptions will be a wrenching and difficult one. Ports and the land
transport system for export will not be exempt from this and will experience many
of these disconcerting effects.
The change has been dramatic in the last two decades." The merchandise
trade balance has declined from about one percent of GNP in 1960 to about nega-
tive two percent of GNP in 1983. The decline has been evident in " steel,
automobile, consumer electronics, apparel, and machine tool industries..." And,
* America's share of world GNP and exports have fallen
Considerably.
* Our merchandise trade balance has deteriorated both in absolute
terms and as a percentage of GNP. s
* Many domestic companies have suffered reduced profitability and
140
* The manufacture capacity utilization rate has cascaded while
unemployment has climbed.
Underlying this situation is the fact that over seventy percent of the
American economy's goods are in active competition with foreign made goods.
American entrance, thusly, into the world competitive market arrived slowly and
quietly. 2Many Companies and corporations did not fully realize this was
happening.
Another way to view the situation is that basically U.S. heavy industrial
production was losing out to foreign competition. Major categories were being
invaded so that by l981, to illustrate, "26% of its cars, 17% of its steel, 60% of
its televisions, radios, tape recorders and phonographs, 43% of its calculators,
27% of its metal forming machine tools, 35% of its textile machinery and 53% of
its computerized machine tools" were being imported. All these categories were
less than l9% apiece twenty years ago. Similarly, there were closely related
declines to the American shares of the world market--"automobiles by almost one-
third; industrial machinery by 33%; metalworking machinery by 55%." There are
many reasons suggested for why this may happen. Some are lower cost labor, newer
technology, nationally subsidized industry, trade restraints against American
products, more devoted and industrious labor force, and higher productivity. Many
American corporations found it more profitable to shift their domestically gene-
rated profits to foreign markets to produce there at a cheaper cost. In turn, the
United States' capital-driven foreign produced goods and Commodities would be sold
here and the profit margin much greater. In a world market there is nothing wrong
with this. In fact, it is a strength of free trade. But for an economy that must
depend upon its own capital being reinvested at home and employing its own
citizens at home, such cycles can be devastating. Lastly, America's strength as
an automated industrial society may in fact become its undoing. High volume
automated manufacture can be outperformed by other Countries. Germany and Japan
suffer from the same problems of an advanced industrial Society as the United
States. They are being outcompeted and performed by lower cost, emerging
economies such as Korea, Singapore, and Taiwan.
Offsetting these trends of American exports may be such items as
agricultural and natural resources. -
Sales of grain and coal and revenues from services have helped
ease Americans trade imbalance, but these enterprises alone Cannot
guarantee our economic future. The most accessible Coal will have
been mined within the next few years; additional Coal will be more
costly to retrieve not only in terms of machinery and equipment but
also in damage to the environment and injuries to workers. Nor Can
grain exports be relied upon indefinitely; improvements in
agricultural production will spread to the areas of the globe with
favorable climate and soil conditions and our soil Will gradually
become depleted.
The future for the United States seems to be heading towards a flexible
industrial society designed for technically advanced and skill-intensive activi-
ties, for example, information processing and service industries. , New markets
must be sought out, cultivated and instantly responded to. Just as in the Export
Trading Company Act, the implicit belief is that the United States must produce
what the world wants to buy, not sell what it has to produce.
l4l
These bellets have significant lmpact on the present and future American
transport and export system. Simply put, if the above tears are Credible (they
may not be), what is it that the United States will be exporting in ten to twenty
years? It would seem doubtful that the economy will not be producing anything
that is marketable abroad. Domestic rail, truck and barge transport Will still be
necessary. But the volume might be diminished from present day levels. These
lingering thoughts are disturbing. -
More popularized in thinking but equally as dramatic are the Observations
of John Naisbitt, in Megatrends.” He forSees ten key Changes in Our SOCiety and
belleves the radical transformations are also affecting the entire world. He
sees numerous opportunities and pitfalls along the way, but still the directlons
are on balance more positive. Of special relevance to discussion here are the
trends suggesting that the Country is moving from an industrial Society to an
information society, from forced technology to high technology, from a national
economy to a world economy, from Centralization to decentrallzaation and north to
SOuth.
One strong indicator of the first appropriate trend is that Only thirteen
percent of the workforce is in manufacturing. Every indication is that the
number will still shrink and move out of the Country. New job opportunities will
be in the information production or processing industries which provides now
sixty percent of employment. This may be Counterblanced by Some new exportable
breakthrough in idea, production or technology so that jobs remain in the United
States.
The second trend is the forced technology to high technology point. Over
the years it would seem that the American working torce has resisted technology.
Technology was brought into play over a painfully long time with Considerable
union negotiation. When ultimately accepted, any new Changes were equally resis-
ted. The more that high technology is generated and applied, such as space age
techniques or robotics, the more potential job loss. In the transport industry
One need only look at Container technology and its applicatlon as a breakthrough
Compared to labor-intensive breakbulk and general Cargo industries. Unit trains
of containers do not require individual boxcars to be loaded and unloaded. Siml-
larly for trucking, the application of Containers yields a vast difference.
The fact that our economy is becoming closely integrated (if not already
entirely) with the world economy is significant. More and more people and lndus-
tries will be involved in exporting and importing. What they will be exporting
and importing is somewhat uncertain. Perhaps it will be information and service
industries but not mass production, capital goods and agricultural product or
natural resources. What will the transport system carry? One interesting possi-
bility ls that the United States could become a transportation Conduit across the
Continent by land bridge operations. It might be cheaper to produce high value
products and basic industrial goods in the Far East to send to Europe via a land
bridge across the United States (or vice versa, for European production). These
may be farfetched thoughts now but they should not be dismissed. At the moment,
land bridges are necessary because the Panama Canal cannot handle the additlonal
volume and ship size. Even if a second canal 1s constructed in Central America,
the area is subject to polltical instability.
The idea that the world and particularly the U.S. economies are undergoing
a shift from Centrallzation to deCentralization is enticing. It has visions of
high tech usage at home. It also indicates that business activities requiring
142
ConCentratlon and interactlon of people in a particular locatlon may no longer be
as necessary. It also may indicate that the means of distribution will be diffe-
rent. The transport System for Carrying freight and cargo for domestic distribu-
tion and export may have different fundamental directlons and needs.
For example, decentralizatlon has made possible the growth of the South and
Southwest as population Centers. The rapid shift of the population and industry
Of all types from the North, Northeast and Midwest to the Sunbelt areas has overly
ConCentrated inltially in Southern Calltornia, Northern Calltornia and San Diego.
These areas have become Overcrowded and expensive. As consumption and production
areas, their businesses are spliling over to less dense, undeveloped desert or
mountain areas. For those natural resources and agricultural products produced in
rural areas, there may be considerable population growth developing nearby the
production areas, or adjacent to the transport Corrldors. As more and more tran-
Sportation activity OCCurs, it would seem that these areas in turn would become
Subject to the Same problems seen today in transportation, production, and Sur-
rounding land use impacts. A most notable example currently is the Controversy
Caused in the Port of Long Beach by the proposed coal unit trains coming into a
dense urban areas; illustrative of what may happen when national export needs and
port facility Capabilities and Surrounding dense urban areas Clash.
A shift to the South from the North in terms of population and lndustrial
base is fundamental and appears to be lirreversible. Supporting demand for intra-
structure development and maintenance will become cruclal, as it may already be
in many of the locations such as Florida, Texas and California. What it also
implies is that the nation has a very large investment in highway, rall and barge
systems in the older areas no longer fully necessary. And, many indicatlons seem
to lead to the belief that they will be underutllized by the year 2000. Such
projections suggest that we have unequal distribution of lnfrastructure Capacity,
population, and resource demand. Without economic incentlves to retain the
population where the infrastructure already exists, a host of new investments may
be necessary. For industrial production and export transportation, it would seem
then that the basic industries of those areas in the North and Midwest--auto-
mobiles, steel, Chemicals, rubber, metalworking, farm equipment, machinery, tor
example——have been the large shippers for domestic and export Consumption. What
will the railroads and trucks carry lit that is no longer the Case? These may in
part be some of the basic reasons why the Penn-Central merger was necessary, why
it went bankrupt, and why Conrail was Created. All in all, lt is an illustration
of a cycle of a declining industrial population base area and an out-of-synch
transport system. Ports relying upon serving these areas may be consequently
affected. .
The other side of the coin is import transportation and "back-hauls" of
empties. To the extent though that the United States Continues to buy more and
more from abroad, there must be Some internal distribution System than Can Carry
the goods and commodities. This will suggest that the existing transport System
will be primarily carrying one-way import Cargo. Perhaps, the volume of imports
will be so much that it will Counter the loss Of exports and keep ports, rail-
roads, barge and trucking companies fully occupied. Perhaps, they will carry
items only for domestic distribution on the backhaul. And, then the container or
ship, will go back empty to the producing foreign Country. If this were the
case, then the cost would be factored into the Overall freight rates and charged
to the American consumer. It is already a practice.
These external shifts have clearly affected our transport and export sys-
tem. They show up in lower exports in almost all categorles, lower export
143
earnings, lower profits in transportation industries, and lower port revenues.
With deregulation of the rail and trucking industry, and shipping regula-
tion reform, there is intense competition for for carrying declining traffic
volumes. All sorts of Combined services, new fare structures, and route locations
are evident. Shippers have a difficult time determining which price and service
quote will promise future stability and long term contracts. Prices have dropped
in longer haul Competitive market areas, but they have also risen in low volume,
non-traditional route areas. Discontinuance of service and route abandonment
have been announced by many companies. This too will affect American capability
to export its declining marketable products.
New Opportunities and Pitfalls
Deregulation has allowed transportation Companies to be more aggressive
and competitive. It provides new institutional market opportunities to find
better ways to serve Customers and make more profit. But the theoretloal oppor-
tunity has not fully been exercised yet. In part the economies of the railroad
industry suggest that the long haul, more modern western and southern roads will
merge to form several cross Country railroad systems. They will begin to out
Compete the northern, eastern and midwestern roads tied to declining industrial
SectOrS. They will have better Capital, plant and equipment, maintenance,
and through Service. Such aggressive railroad operations will foster new rela-
tionships and strenghten older ones with key ports, particularly those on the
South Atlantlc and the Pacific Coast or the Gulf Coast and the Pacific Coast for
mini-bridge and land-bridge services.
The trucking industry might experience under deregulation similar oppor-
tunities. However, the indication so far is that the competition has been cut-
throat. Many have been absorbed or gone out of business. Furthermore, railroads
are now able to operate their own trucking companies under deregulation and
provide through intermodal bill of lading service. This has great advantage to
many shippers for essentially "one-stop shopping" The full service operations
will expedite the movement of freight and possibly lower costs. Ocean Carriers
may now also participate in the through service concept.
All these changes are just resulting from deregulation and the external
forces and shifts identified earlier. They are the tip of the iceberg of what
might occur should these trends continue unabated. It is entirely possible that
the number of railroads and trucking companies Concerned with large scale trans-
port leading to export operations from point-of-origin and the hinterland will
clearly diminish and become a small number of large full service interConnecting
operations. Ultimately, it may provide better service for importers and expor-
ters who happen to be near the major transportation corridors of the main line
carriers. It will cause, initially, difficulty and more expense for those pro-
ducers who are not near main routes. Examples are already evident as in the
situation of country grain elevators along recently abandoned rail lines. Should
a new technology such as slurry pipeline operations come into play, some feel
that the railroads will be completely threatened and no longer viable as economic
transportation operations. Recent comments by the representatives of the American
Association of Railways, indicate the possibility. Although in the long run
slurry might be a better and cheaper mode for transporting many export bulk
commodities, it will dramatl.cally affect railroad operations, barge Operations in
competitive corridors and the number of employees supported by these activities.
l44
Once the Cargo is ready to ship, often there is more than one feasible
export port destination. Possibly there are more ports than necessary for
Current export activity. On the other hand, they are necessary as imports gates
of entry for large nearby markets. Much depends upon how deregulation works out
with the Changes in rail and motor Carrier services. Shippers will respond and
reroute trade flows if geographic advantage and preferential pricing are
favorable. Fluidity of this kind is not reassuring for long-term transport
planning. It is an area that needs to be watched quite closely.
In the Case of ports for exports, it may be foreseeable that there will be a
resorting of the facilities. If for example, coal or grain is a major export, it
may become necessary to find each a different location than existing ports, or
through dense urban port areas, and it may cause citizen complaints of travel
Obstructions at grade Crossings, heavy highway traffic, accidents, noise, dust, or
vibration problems. At some point it may become more desirable technically and
politically to move the commodity to an isolated port specially designed for high
volume bulk commodities. Although it would hurt traffic and revenues for existing
ports, it may be a way to permit movement of bulk commodities without unduly
impacting urban populations. Slurry pipelines Could offer that opportunity by
being relatively inexpensive to construct and operate to the port or to offshore
locations.
Another variation on this theme may be that all Coal or grain would go to
one or two locations on each coast for export. . By national or marketplace
design, the ports would specialize their facilities and become mutually suppor-
tive and not competitive. This is a political "landmine" area and not meant to
be a suggestion, just an outcome of marketplace forces under some of the
assumptions postulated earlier. Port regionalization and COOrdination may end up
costlng the consumer, whether domestic or abroad, more because of potentlal
monopolistic effects from cartel-like-operations. Competition among the
transportation carriers and the port industry, especially after deregulation
promises price service improvements possibly lost by such rationalization.
Strategic Policy Issues
Given the external shifts, the transition and turmoil and the new opportu-
nities facing the export transportation industry, one would think the industry
response would be forceful, organized, and concerned. It would appear though
that for the most part, the combined industry is as fragmented as federal policy
is on export. Past trends and behavior patterns are continuing and intensifying,
and require closer monitoring.
In the transportation industry management has been historically less than
competitive. Railroads have had their market share and long-term customers
arranged. There was little incentive to compete on price or service, except for
the markets that were extremely lucrative. They became accustomed to the ICC
protective role, which buttressed the tendency to avoid hard competition and
price reductions. Trucking was essentially the same.
With deregulation management is for the most part leaner, more Competltive,
and more responsive in the marketplace. There is open competition on pricing and
service. For the shippers, this is a healthy, however for the time being, hectic
and uncertain environment. Part of the management changes in the railroad and
trucking industries is Caused by consolidation or mergers, partloularly for the
railroads in providing Cross Country connections and coordination. Trucking
firms are now finding that railroads can now enter and operate with their own
145
firms are now finding that railroads can now enter and operate with their own
trucking service and provide intermodal, through bill-of-lading delivery.
Railroads are becoming less labor intensive. Still, a railroad strike
Could occur at any time Over work rules, salaries or other conditions. The
Brotherhood of Railway Workers and related unions have power to stop the system.
They are particularly susceptible to key pressure points and the influence of a
few people in yard or locomotive operations.
Trucking is more labor-intensive because more of the cargo is less than a
full Container (truckload) and requires manual packing and unloading. The sheer
number of drivers and mechanics to support operatlons also can be large and
influenced by union operations. The Independent Truckers' Association went on
strike in January l983 to object to the new federal gas tax increases. Belleving
that the tax would be particularly severe upon member operations and would drive
many of them out of business, it too had the potential to impact all transport
Operations and export. For the most part though, in terms of trucking and
highways, labor Costs lncrease in predictable stages by contract relationships.
Labor in the port operations is an important factor. Equipment, i.e.
containers handling even more automated. But, the systems are just as vulnerable
at key points. -
Most American transport Systems are improving their technology. Railroads
have developed unit train operations for natural and agricultural resources.
These required specially designed loading and unloading terminals owned or Oper-
ated by the railroads or other private companies. The railroad fleet is being
renewed through new engine and car construction. More technology-efficient Cars
are added for capacity, safety and performance. The mixture of the fleet is
changing too towards lighter weight, more fuel efficient Cars. Containers par-
ticularly offer a fascinating insight into the quickly moving technological
developments. One that is of special note is the Road Railer developed by the
Bi-Modal Corporation. It is a truck chassis with tires and steel rail wheels
attached to the undercarriage. Each set can be lowered and raised for the
appropriate mode. The container stays on the chassis. Facilitating through
service, entire trains now are dedicated on an experimental basis and run suc-
Cessfully from Buffalo to New York City for export and from St. Louis to Houston.
Another new technology incorporated here is the Fuel Foiler from Santa Fe. Two
large aerodynamically designed Containers,and stacked upon each other, on top of
a specially low-slung chassis.
Another technology that Cannot be understated is the impact potential of
slurry pipelines systems. It is feasible now given sufficient water and resolu-
tion of the political and modal Competitive problems.
In shipping the technology is improving to develop larger size ships.
Unfortunately, recent studies show that the "economy is down so much that the dry
cargo and bulk cargo fleet suffers from excess capacity, ships are still being
produced, Coming on-line as demand is woefully low."
Transport cost appears to be dropping on the land side. Deregulation has permit-
ted trucking and rail rates to decline in Competitive areas and to increase where
there is litle competition and almost a monopoly on service. Cost savings are in
part possible because technology and new lower Cost labor agreements are imple-
Imented. -
146
Breakthroughs in management attitude and practice, labor relations and
technology, and improvements in Cost of export transportation would seemingly
result in greater productivity. Every indication is that this should be the
Case, however there is little hard information to document it. Most observers
take it on faith that productivity must result every time automation is intro-
duced. There is no reason to suspect that this relationship does not hold and
apply here but there is little to present in terms of documentation.
One aspect that does promise more productivity and can be demonstrated is
that the larger the vessel, the greater the capacity. This holds whether a truck
or a rail Car, a barge, bulk carrier, or super tanker. Other factors may well
Offset the advantage; for example, attendent costs for support facilities in
terminals, rail yards, heavier track, wear and tear on the track, bridge struc-
ture, grade Crossings, locks and dams on the rivers and canals, dredging harbors
and Channels, port of entry capability in the receiving Country. Such factors
must be added to the full Calculation and may make the smaller size operations
more Cost-effective. Lower Cost may result by maintaining and expanding capacity
and Operations and the margin.
Incremental improvements should be easier to make than the radical, total new
facilty operations which cost so much Capital up front. During uncertain econo-
mic periods, it may be more prudent to be Cautious.
Shipping technology changes also make major changes possible. Broader,
shallower beam ships such as Great Lakes freightérs allow more tonnage than
Conventional Panamax sizes. They do not require the great draft that colliers or
supertankers require. Lightering, and topping off Can assist in that aspect of
productivity. Or, slurry pipelines for loading and unloading. In any Case,
bigger and bigger facillties and operations are being planned and Constructed.
Transportation facility location is also undergoing Change. Restructuring
of the American economy has set the basic direction. Deregulatlon hastens it.
The railroad system is consolidating, shrinking, and focusing on the interCity
long haul. This has great advantage for the through shipper but offers less
service to the occasional and Small shipper. Trucking may in turn pick up the
business declined by railroads. Barge amd maritime facilty locations are estab-
lished and not all that flexible. In some Cases private Carriers and shippers
may choose to develop a new loading and unloading facility On the river System,
or altogether a new terminal port operation outside the current established
ports. The Louisiana Offshore Oil Port is one response, but for oil import (not
export). Slurry pipeline proposals have suggested new Offshore mooring points,
not requiring a great Capital structure Onshore.
Collectively, what these trends and events begin to indicate is that
transportation system facility location and service are beginning to reflect
structural changes in the entire economy and Caargo flows. If this is a long-
term response, it is perhaps more telling than any short term crisis that could
occur. Yet, basic decisions may well be made in Crisis situations such as the
queuing at Hampton Roads for Coal Colliers.
The transportation industry has found itself in the midst of a governmental
philosophic shift. Deregulation certainly has strongly affected rail and motor
freight carriers and shippers. The entire spectrum of federal, state and local
laws, regulations and rules has definitely influenced transport of export goods
from the hinterland to the seaports. Other sections of this report discuss how
these contacts may occur. For existing operations, the contacts have been pretty
147
well worked out. It is often when an accident occurs or some exceptional Circum-
stance that the intergovernmental system is pulled in. Unfortunately, the
involvement may be in a negative responsive way. Many times the environmental
process is used as a Substitute for integrated planning by transport agencies,
carriers, and ports. There is no well-defined process requiring all partles to
work together. In many locations, the need has not been that great. But, when a
question or an issue arises the easiest way to put things on hold and to force
reevaluation is to use the environmental review process. At the federal level
and in some states environmental laws are strong. On the other hand, if a
particular export commodity and operational significantly expands its volume,
then it will at some point exceed the system's logistlcal capacity and become
more visible to the public. Large Cargo increases may require greater transpor-
tation operatlons, expanded facilities, or new Constructed systems. Then, with-
out doubt the full spectrum of intergovernmental laws comes into play and focuses
On that project and those proposals as lightning rods. American ports, railroads
and Coal companies have experienced such a response cycle themselves. Grain
export may follow suit should the flows move to the East and the West, and not
all through the river barge traffic on the Mississippi and coastal waters.
At the One port level, an equally complex mixtyre of issues confronts
management. According to a l983 review of the industry:
l. There is little understanding by policymakers and publics of
the harbor as a system serving multiple and changing needs.
2. The harbor decision-making environment is complex, fragmen-
ted, and often fails to recognize the interconnectedness of uses and
the need for comprehenslveness in analysis and decision-making.
3. Because of the influence and control port authorities exert
Cver resources, improvements in harbor decision-making and management
will have to include port authorities in substantial ways.
4. Ports are public enterprises, having the characteristics of a
government agency and a private business -
5. The traditional Orientation of public ports promotes a bias
toward the enterprise function and away from local, public interest,
non-revenue generating functions of ports.
6. Three trends over the next twenty will influence port
decision-making substantially: 1) shifts in maritime trade and tran-
sportation due to economics of scale and deregulation within a highly
Competitive environment; 2) the scarcity and higher cost of Capital
with which to build new facilities and 3) increased pressure from
local economic and environmental organizations seeking more benefits
and better accountability from public ports.
In the last ten years it would appear that the nature of the instltutional
process issues facing ports and by extension the export transportation industry
appear to be Consistent. In many ways their magnitude and intensity have Only
increased. Ports face an administrative dilemma of attempting to implement
diverse Congressional legislation, fragmentation of power and lack of national
goals. Opportunity still exists for expanded state and federal rgles in terms of
understanding and describing the Overall national port situation.
148
A 1984 Survey of sixty-two port directors, balanced for all categories and
sizes, elicited their opinions on key issues facing ports. The principal find-
ings indicated that financing and load centers were the primary concerns. For the
time being, it would appear that the ports felt that environmental problems were
still important but not as severe as financing and load centering. Deregulation,
government policy, labor, and legal problems took lower rankings. To some
extent, it would appear that the ports that are less active in terms of volume
(and possible earnings) were more Concerned, therefore, by finance needs. Ports
attempting to expand were more concerned by environmental aspects. Smaller ports
were less impacted by load Centers than medium size or even larger ports. The
North Atlantlc and the Great Lakes areas considered labor as significant concern.
Deregulation disturbed ports on the Atlantic and Gulf C s more than the other
locations. All experienced uncertainty in Cargo growth.
By virtue of their middle position in the transportation cost chain, ports
are experiencing a rate squeeze. In the l960-70's ports made tremendous invest-
ments to containerize and improve technology. In order to stay competitive the
cost was not passed along, for the most part, to the carrier. As sources of
pressure became more diverse, American made goods started to lose competitiveness
abroad. The cost squeeze thus fell more heavily on the full transport cost of
the export package. "Rail and truck lines, although making some reductions,
retained a good portion of their former rate structure." Steamship lines were
able to reduce their costs, forced by competition and introduction of new tech-
nology, or absorb low profit levels. However, some port areas were at a disad-
vantage - the unionized ports in the Northeast. With the price squeezing even
tighter and steamship companies introducing larger ships and more expensive tech-
nology, ports are beginning to feel a squeeze not known before. The load Center
concept requires selection of ports with the most attractive rate structure and
facilities able to handle the ships.
For many ports to stay in the game, heavy Capital investment is neceſsary.
This financial crunch and subsequent sorting out appears likely and severe.
For ports, and most of the transportation Community, data problems affect
capability to make informed decisions. There has been a downturn in the availa-
bility, amount, and quality of data Collection information heretofore relied upon
and considered important.” These changes have resulted, in part, because of
deregulation, public finance and information technology.
Many data collection programs of public agencies have been
thrown out with the regulatory bathwater On the assumption that the
need for such data no longer exists. Yet Carriers, Shippers brokers,
and individuals need more-not fewer Cost and other data to Cope with
the increased diversity and competition in for-hire transportation.
Several issues related to data Collection and application are:
l. institutional mechanisms for monitoring and feedback;
2. benefit cost evaluation of data;
3. decentralization and privatization;
4. cost recovery and public agencies as data vendors;
5. social and political impacts of data and information tech-
nology; *. tº
6. improved efficiency of data collection and management.
These crosscutting categories lead to specific needs and involve the stan-
149
dard industrial classification codes, commodity flow data, truck activity data,
passenger travel data, urban travel data, and highway monitoring and inventory
systems. In brief, organizations do not exist to Collect, monitor and utilize
the data. There is increasing need for this function as the data absence is
noted more and more.
Ports face greater local government politicalization and may lose their
intentional insulation from general purpose, city-County-regional governmental
operations. The practice has allowed them to operate more as a business and to
protect their revenues for facility operation, Construction and redevelopment.
Such insulation is not undesirable. Through the use of the special district or
public authority technique, quasi-public or quasi-private agencies have been
employed in many different aspects of American governmental-private sector rela-
tionships. It is a very effective device for single purpose non-mainstream
public activitles. In many regards they have been independent enough to Control
their Own budgets, fees and revenues, operations and to have bonding and taxing
authority. -
However, public pressure upon American ports is growing. Many port
agencies, and their Officials, are definitely concerned about the growing involv-
ement of the general citizenry and elected officials. Since ports in many places
are "money machines," compared to financially hard pressed local governments
facing severe budget cutbacks, elected officials may be tempted to dip into port
"pots-of-gold." How long they may insulate themselves and keep their funds intact
for their own operations and project devlopment is a good question.
The public is also getting more involved in port activities by recognizing
port impacts. If coal trains. Come through more densely congested urban areas,
there will be undesirable effects. Elected officials are responding to the
public and are more closely reviewing port activites and structures. Their
quasi-independence may be affected by any number of procedures--from outright
city council or county-level Control, to regular budget review to removal of
bonding or fee setting powers. These are just some of the examples of the
politicalization process. If this trend actually picks up and materializes
strongly, then ports have real reason to be concerned. If port export-related
activites are tightly controlled and limited by local governments, the system
might not be able to meet future demand. It does not mean that efficiency and
effectiveness will disappear but other non-economic factors may be brought into
play through the political process. Such work and influence in the past have led
to more slowly developed projects, greater public review and accountability,
sharing of funds and higher Overall transportation costs passed back on to the
COInSUHT162K e
Another aspect of the intergovernmental response is that the system is
still fragmented at all levels. Many observers, whether professional transporta-
tion managers, elected Officials or leaders of the nation's industry and govern-
ment, have noted that a single point-of-focus at the federal cabinet level is
quite desirable for export and trade policy. The Administration proposed in
May, 1983 that a Department of Trade be established. The President proposed,
and noted in his State of the Union and in National Transportation Week
activities, that exports in general need to be facilitated by integrated, coordi-
nated governmental policy at all levels. Export transportation is one of the key
facets. At the same time though, special studies by the Heritage Foundation and
the Grace Commission recommend less federal waterway support. So, the problem
has been identified. Organizational turf and bureaucratic infighting have
prevented prior proposals from succeeding. And there is a legitimate difference
150
of Opinion On what functions and powers should be part of the proposed agency.
Conclusion
The transportatlon port industry response to the traumatic shifts in the
external environment is complex and uneven. It is not coordinated and reflects a
free moving system that often seems to be an ameoba, making progress here and
retreating there, OOzing forward and backward in different ways. The system is
undergoing intense politicalizatlon on account of financial and budget Con-
straints, strong competition from foreign Countries and producers outbidding and
selling American producers. The system intergovernmentally will be allowed to
stand so long as there is little pressure and reason to change. The Shippers,
Carriers and ports have learned to work with the system and to handle the cost-
ing. If demand for any export product expands considerably, then new points-of-
Contact and Conflict will occur. At that time the intergovernmental system will
COme into play. There will be legitimate Concern about how the system may retard
export Operation and in the long run make the nation less Competitive.
Identification of these problems will facilitate advance planning on how to
respond when the export economy picks up and intergovernmental points-of-contact
occur in greater depth. The magnitude of agricultural and coal exports in the
late l970's demonstrated weaknesses in the system. With the current slow-down
there is time to reflect and to improve the process at a less hectic but still
well-programmed and paced sequence. The opportunity must not be lost, otherwise
the nation and its export transportation industry will be caught in a crisis
reactive mode. With advanced planning and coordination again, residents of
densely populated urban port areas will be better prepared to accept and to work
with ameliorating negative impacts by increased export transportation activity.
That is not to say that everything can be worked out. Hard decisions will arise
where compromise can not resolve all points and trade-offs. But much more Can be
fine tuned and incrementally accomplished.
Ote
l. George Cabot Lodge and William C. Crum, "U.S. Competitiveness: The Policy
Tangle," Harvard Business Review (Vol.63, No.l., January–February, l985), pp.34–
35. f -
2. Robert B. Reich, "The Next American Frontier," The Atlantic Monthly (March
l983), pp. 43–58. See also, Ira C. Magazines and Robert B. Reich Minding
America's Business (New York: Vintage Books, 1983), pp. 29-58.
3. John Naisbitt. Megatrends (New York: Warner, 1982).
4. Institute for Marine Studies, University of Washington. The Future of U.S.
Harbors (Seattle, Washington: University of Washington), November 1, 1983, pp. 1-
l8). -
5. Henry S. Marcus, Janes E. Short, John C. Kurpers, Paul O. Roberts. Federal
Port Policy in the United States (Cambridge Mass: MIT Press, 1976), pp. 215-223.
6. Planning Research Corporation. Ports and Shipping Research Center Bulletin
(New York City, NY: PRC-Engineering, May 1984), pp. l-4.
151
7. Charles H. Nelson, Jr., "Port Pricing-Again Under Fire," WWS/World Ports
(December/January 1985), p. 25.
8. Alan E. Pisarski and Rolf R. Schmitt, "Critical Data Issues and Opportunities
in Transportation," TR News (Washington, D.C.; Transportation Research Board, No.
ll 5 November/December 1984), pp. 23–28.
152
Chapter IX - EXPORT TRANSPORTATION POLICY STRATEGIES
tr ti
The focus upon strategies for the export transportation system is based on a
belief that a participant will first need to know several aspects: l. what action
is possible; 2. who to contact; 3. how to do it; and 4. what contact points to
expect with the intergovernmental policy system. Whether the perspective is one
Of the producer, shipper, Carrier, port, broker, freight forwarder, or federal,
State and local governments, the Orientation is similar in attempting to bridge
the long range possibilities against immediate or short term needs and actions.
The strategy approach provides that blend and helps identify the range of
possibilities and approaches in different settings.
In a sense, this constitutes a menu of strategies drawn from the whole of
the export transportation system. The illustrations raised are generated more
Often by the private sector with significant public sector input. Ports and
Carriers play an important role in bringing the parties together. And
OcCassionally, governmental agencies themselves are party to the successful
application of some of the strategies.
Strategy Framework
A wealth of ideas is being generated during the current period of economic
change and stress. Many relate directly to transportation modal and intermodal
operation, exports, and national policy. The freedom provided by regulatory
change has helped to create a competitive atmosphere to stimulate improvements in
facilities and service. Technological Change in SOme Cases is introduced faster.
In others, resistance is high to new technology. Transportation regulation is in
a momentary period of "rest" while rapid change started with deregulation is
still being absorbed. Export generation and assistance are subsumed by the
greater questions of national economic policy and strategy. The general belief
is that the American economy should receive direct attention before any sub-
parts, including trade, are addressed. Current economic policies appear to offer
that stability and long-term power.
Based upon the research conducted in this study, over ninety ideas were
identified which hold promise for improving the nation's export transportation
system operation and policy framework. Each Concept is presented in a matrix of
characteristics: * .
Source Or Sponsor
User
Results
Intergovernmental levels
Status
Presented as possible actions to consider, the Concepts are further orga-
nized by:
Facilities and Services .
l. Goals and Values Statement
2. Planning Task Forces/Associations
3. Design and Engineering .
4. Finance
5. Operations
Regulation
l. Railroad
2. Motor Carrier
153
3. Shipping
4. Pipeline
5. Export Impact Statement
6. Cost-Benefit
7. Fast Tracking
8. Regulatory Relief
Export
l. Representation
2. Assistance
3. Promotion
4. Financial/Tax
5. Coordination
Table IX-l summarizes the data. The array is intended to stimulate ideas and
further consideration by all interested parties. Quick reference to the "User"
column will assist each export transportation System participant to determine
potential applicability.
Following the table is additional narrative highlighting the more recent,
not as widely known, Concepts and experiences throughout the nation.
The following discussion synopsizes the material presented in the table.
If the reader wishes to pursue more detailed information, fuller discussion is in
previous chapters. Additional material is fully cited here.
Facilities and Services
Many ports and related transportation activities in the Country have
internal belief systems and value statements that help guide or at least docu-
ment their activities. Rarely, though, are they published and shared with Sur-
rounding communities in ways that demonstrate commitments and policy positions.
Occasionally, this may happen in a formal statement such as a plan, or environ-
mental analytic document. The Port of Portland, has täken a further step in this
process and announced a Goals and Values statement.* Its ideas relate to the
purpose of the port and how it Conducts business and relates to the community. It
may facilitate public Communication, comprehension, and coordination with other
agencies. Six basic values included are:
* Build a strong economy: The port will promote a strong econo-
mic base in the community to the fullest extent of its charter with
emphasis on marine, aviation and land development.
* Maintain public Confidence: We recognize that public confidence
in the port is essential in Carrying out our responsibilities.
* Assure customer satisfaction: To compete successfully in our
markets, we must have Satisified Customers.
* Demand competitive financial performance: The port combines a
unique blend of government and business practices that requires a
special approach to its financial performance. The port must be
financially healthy if it is to perform its economic role in the
community and earn enough to remain competitive.
* Insist on excellent leadership and teamwork: Leadership and
teamwork are the Cornerstones to the port's success and are encour-
aged at all levels. - &
* Recognize employees are the port's key resource: We are commit-
154
Table IX – 1
Selected Long-Term Transportation Strategy Concepts - Facilities and Service
Characteristics: Source/Sponsor USér
Action:
1. Goals and Values Port of Portland POrt
Statement
2. Planning Task Forces/
Associations
A. Municipal Goals City of LB City
Harbor POrt
Goals Com
B. Marketing Group Columbia/Snake POrts
River Marketing
System
C. Ports Task Southern Calif. , Ports,
H FOr Ce Assoc. of Govts. carriers,
§ cities
D. Study Commission. Louisiana Mississippi
ports
E. Operations Group Port of LB Maritime
Harbor Talking Com. trades
F. Master Plan Ports of LB and LA Ports
( Corps of Engineers)
3. Design and Engineering.
A. Maximum Feasible Ports of LB and LA Ports,
Utilization carriers
processors
B. Joint Authority Ports of LB and LA Ports
Container Terminal Carriers
C. Joint Authority Louisiana POrts
River carriers
coal ship-
pers
D. Joint Authority- Delaware Bay Ports
Bay Ports shippers
carrier
facilities,
more intensive use,
higher productivity,
incremental impacts
Joint Intermodal
Local, carriers
Container Freight
Authority
Bulk State, ports
Terminal
Commission
(Off-shore)
First port Local, states,
concept federal
Results Intergovernmental
Public awareness Local
Public awareness Local
and support
Coordination and Oregon, Wash, Idaho
Action
Coordination and Region, 3 counties
Action cities, carriers, 2 ports
Governor's study State. ports, cities
mission on ports
Coordination Port, local, state,
federal
Year 2020 Plan Local, state, federal
Newer technology, Ports
Status
Implemented
Implemented
Implemented
Implemented
Implemented
Implemented
Announced, Public Review
Ongoing
Construction
Commission formed,
study initiated
Concept discussion
Table IX - 1
(Corſt)
Selected long-Term Transportation strategy Concepts - Facilities and Service
Conservation Dist.
Port of LB and LA
Port of Baltimore
Port of Baltimore
Port of Los Angeles
Port of Long Beach
Ch.1 racteristics:
Action:
E. Regional Plan
F. Overload-Coal
G. Overload-Grain
4 . Finance
A. Bonds
5. B. Real Estate
ON.
C. Fees/Taxes
Source/Sponsor
Metropolitan
Transp. Comm,
Bay Area
Hampton Roads
Baltimore
Port of Houston
- Hampton Roads
User Fees-general
Federal Dredging
Fees
Federal Taxes
Local Taxes
User
Ports
carriers
POrt
carriers
Port
Carriers
Ports
carriers
Port,
general
Port, general
Port, general
Port, general
Port, general
Carriers
Carriers,
ports
Carriers
Port of
Portland
Results
Joint Bay Area
Development and
Conservation Plan
Intergovernmental
Local, state
(conflict resolution)
Coal collier
queing, reserva-
tion
Coord. of grain
unit trains
Bonds, Japanese
loan guarantees
(bank)
Commercial water-
front development
(Rouse Corp)
World Trade
Center
Marina, park
World Trade
Center
Commercial
waterfront
development
Dedicated to
mode
Harbor deep-
ening
Dedicated to
Mode
New property
Taxes
Local,
Coast Guard
Port of Houston,
local governments
Local
Local
Local
Local
Local
Local
Ports, states, federal
Local, state, federal
State, federal
Local
Status
Adopted, implementing
Implemented
Implemented
Contracts signed
Operating
Operating
Construction
Announced, leasing,
construction in 1986
Operating
Concept discussion,
proposed legislation
(various)
Concept discussion/
proposed legislation
Operating
Approved 5/84

A.
Characteristics:
Action:
9perations
Rights-of-way
1. Freight Routes
2. Defense Routes
3. Unit Train Routes
4. Public Safety
Routes
5. Urban By-pass
6. Slurry Pipeline
System
7. Mega-container
Ports
8. Channels
4. Rail/Highway
Vehicle
Table IX - 1 (con't)
Selected long-Tem Iransportation strategy concepts - Facilities and Service
Source/Sponsor
Federal
Federal
Southern Calif.
Assoc. of Govts.
States, federal
Railroads
Slurry Coal
Pipeline Assoc.
Ocean carriers
Ports, ocean
carriers
Bimodal Rail,
Corp
User
Motor freight
Dept. of
Defense,
Railroads
Railroads
Railroads
Motor-freight
Railroads
Coal, Ship-
pers
Carriers
ports
shippers
Ocean car-
riers ports
Railroads
shippers
Results
Interstate Syst.
Freight Network
Strategic Rail
Network
Dedicated Harbor
Rail Corridors
Hazardous Mat.
Routes
By-passes/short
Intergovernmental
Federal, state
Federal
Local, state,
ports
Local, state,
ports
Local
cuts (shorter, more
direct routes)
Slurry network
Load Centers
Deeper inbound
channels dredged
Road Railer
Local, state,
ports
Ports
Local, state,
ports
Local, state,
ports
federal
federal
federal
federal
federal
Status
Implemented
Announced
Concept discussion
Concept discussion,
some states, local
implementation
Implemented
Concept discussion,
state and federal
leg. introduced
Operational
Concept discussion
B. Equipment
1. Container Train
Productivity
2. Container Train
Productivity
3. Bulk Train
Productivity
Railroads
American Assoc.
of Railroads
American Assoc.
of Railroads
Railroads
shippers
Railroads
shippers
Railroads
shippers
Double Stack
Container Train
Integral Con-
tainer Trains
Integral Bulk
Trains
Local, state,
ports
Local, state,
ports
Local, state,
ports
federal
federal
federal
Operational
Concept discussion
Concept discussion
Demonstrated feasible
in service
g
B.
Characteristics;
Table IX - 1 (con" t)
Selected Long-Term Transportation Strategy Concepts - Facilities and Service
Source/Sponsor
Action:
Equipment (con't)
5. Motor Carrier
Productivity
6. ship Productivity
7. Ship Productivity
C. Labor and Technology
l. Caboose - less
Trains
2. Decentralized
Facilities
Motor freight,
shippers, ports
Research
Ocean carriers
Railroads
Port of
Charleston
I . In termodal Coordination
1. Full Service
2. Liner Trains
3. LTC/ LTL
4. Documentation
Processing
5. Customs Consol-
i dation
b. Carrier
Consolidation
7. Contracts
Ocean carriers
Am. Pres. Lines
Port of Seattle
Port of
Charles ton
Port of Portland
Railroads,
motor carriers
Railroads,
motor carriers
User
Results
Intergovernmental
Motor freight Double trailers,
shippers, longer units,
ports heavier units,
wider units
Ocean car-
riers ports
shippers
Larger shallow
draft, wide beam
vessels
Ocean car-
riers ports
shippers
Supersized ves-
sels, coal,
liquid containers
Railroads Lower labor cost
Inland transfer
facility (lower
cost)
Motor car-
riers rail-
road shippers
Shippers Through service/
rates
Shippers Coast-to-coast
contain unit
train (land bridge)
Shippers Cargo consolida-
- tion, lower rate
Port, Orion computer
shippers
Columbia/ 3 Customs Dis- .
Snake River trict consolidated
Railroads, Larger, more
motor carrier efficient
systems
Shippers Lower prices/
higher volume
(grain, coal,
containers, etc. )
Ports,
Local,
Ports,
Local, state, federal
ports
Ports, state, federal
local
Local, state, federal
ports
State, federal
Local, state port
Ports, state, federal
Ports, local,
federal
state,
Port, state, federal
Port, customs
federal
State,
ports
state, federal
Status
Operational
Concept
Operational
Experimental
Operational
Operational
Operational
Operational
Operational
Implemented
Operational, in
process, proposal
Operational
g
Table IX – l (con't)
Selected Long-Term Transportation Strategy Concepts - Facilities and Service
F.J. st-tracking
( dredge, coal,
terminals)
Private Company
Federal
Federal
Federal
User
Shippers
Shippers
Shippers
Results
Intergovernmental
Rail-Barge syst.
Containers,
intermodal
Joint line rates
by computer
Transportation Regulation
Ocean
Carrier
Railroads
ports
shippers
Coal
Federal
Federal
Ports
Shipping Act of
1984, flexible
Ports, state, federal
Ports, state, federal
Ports
Federal, state, local
ports
contract coordina-
motor carrier tion
Legislation
voted down
Coordination
Review of trade-
Offs
Earlier project
completion
Local, state, federal
ports
Federal
Federal
Ports, local, state,
federal
Status
Operational
Operational
Vendor Accouncement
Operational development
Uncertain for experts
operating domestically
Staff proposal
Staff proposal, limited
experience
Congressional bill ; some
federal and state agenc -
cies streamline procedur
Characteristics:
Action:
Source/Sponsor
D. In termodal Coordination (con't.)
8. Rai l-barge
9. Rail-trucking
10. Rate System Files
1. Ra 1 1 road
| Hº 2. Motor Carrier
3. Shipping
4. Pipe line
5. Export Impact
Statements
6. Cost–benefit
Analysis
tº . Regulatory Relief
CSX-Am. Com.
Lines
Railroads
Federal
Federal
Federal
Coal Slurry
AS SOC.
Advisory Com. on
Intergovt. Rela-
tions
Railroads
ports
shippers
MOtor
carrier
ports
shippers
Local
ports
8tate 8
Staggers Act -
deregulation 1980
Motor Carrier Act
deregulation 1980
*
Federal, state, local
ports
Federal, state, local
ports
Direct order
cost reimb. (new
regs)
Ports, local, state
Operational, calls for
reregulation
Operational, calls for
reregulation
congressional bill
1.
4.
Characteristics:
Action:
Representation*
Assistance *
missions
trade shows
marketing
market development
export education
investment
in formation/missions
. State S
advertising
port development
Fast-track
-export licensing
Promotion
Financial/Tax *
Table IX - 1
(Con 't.)
Selected Long-Term Transportation Strategy Concepts - Export
Source/Sponsor
State S
ports
local
ports
State S
states
State S
State S
State S
States
State S
Los Angeles ITDC
Port of Charleston
federal
federal
federal
State S
federal
Louisiana
California
User
Exporters
Exporters
Exporters
exporters
exporters
exporters
exporters
exporters
exporters
exporters
exporters
exporters
port
local
port
local
coal pro-
ducers
railroads
exporters
exporters
exporters
exporters
Results Intergovernmental
Export sales/ States, local, ports
import investments
L. A. Int. Trade State, local, ports
Dev. Corp.
(export sales/
import investment)
trade States, local, ports
export growth states (local, ports)
export growth states (local, ports)
export growth states (local, ports)
export growth states (local, ports)
export growth states (local, ports)
export growth states (local, ports)
export growth states (local, ports)
export growth states (local, ports)
export growth local
Orion Computer port
Export Trading port, local, state
CO. federal
Foreign Trade port, local, state
ZOne federal
Coal Export Co. federal
mixed credits state, federal
mixed credits state, federal
tax-free exports port, local, state
Calif. Export state, local
Bank
Status
Ongoing- (1980–33 states
developed)
Ongoing
Ongoing
Ongoing
- 46
— 4.5
– 48
– 41
- 46
– 44 / 35
– 35
– 22
ongoing
ongoing
Ongoing
Ongoing
Congressional bill
ongoing ( 14 states)
Ongoing
Ongoing
proposed legislation
g
5.
Selected Long-Term Transportation Strategy Concepts - Export
- industrial policy reforms
l. Laissez-faire
2. The Space Shot
3. Structural
Re form
4. Protection or
Reta liation
Interest groups
Interest groups
Interest groups
Interest groups
federal incremental
marketplace tinkering
federal "Big-Idea"
Mobilization
federal Depts.
Boards
Advisory
Councils
federal private sector
protection
Intergovernmental
RU tº on:
5. Coordination
- cabinet
- policy review
- processing
- task forces
on export
transportation
Table IX - 1 (con't )
Source/Sponsor
federal
dederal
federal
port
local
State
federal
User Results
federal Dept. of Trade
federal Export Impact
State
ports "Fast-Tracking"
local, key projects
State
federal
local, state coordination
federal, port
* Federal government already active in these spheres .
federal
federal
ports, local, state
federal
port, local, state
federal
federal
federal
federal
federal
Status
Congressional bill
staff proposal
congressional bill
concept
(possibly use existing
private, trade non-
profit associations)
ongoing
proposed legislation
proposed legislation
proposed legislation
ted to an environment in which all employees can Contribute, feel
good about their work, are appreciated as individuals, develop to the
fullest extent possible, and are proud to work for the port.
When confronted with a challenge that is beyond the resource Capability of
one institution, often consortia are formed to address the issue at hand. For the
most part these bodies are temporary, almed at dispute or Conflict resolution.
Some are designed for advance planning for future projects. The agencies involved
include many from port local communities and prlvate Sector linterests, and higher
in the lntergovernmental hierarchy. For example, the City of Long Beach has a
municipal task force to determine what kind of City is desired for the year 2000.
A key subgroup relates to the port. The Port of Long Beach has established a
Harbor Talking Committee to Consider, informally at first, Operational Concerns
within the port's community. Ongoing membership ls the Los Angeles Steamship
Association Southern Calltornia Terminal Operators ASSOCiation and LOS Angeles
Customs and Freight Brokers Association.* The Columbia/Snake River Marketing
System Group, initiated by the Port of Portland, encourages joint research and
action among the ports, Counties and states of Oregon, Washington and Idaho along
the 465 mile system. The group has stimulated Container lzed agricultural for
export cargo.” The Ports Task Force of the Southern Cailfornia Association of
Governments started in response to the anticipated export Coal boom through the
ports. Ports, local governmental along rall Corrldors to the ports find Car Cl62ICS
meet” regularly to review plans for meeting greater freight demand.” The State
of Louisiana has established a Governor's Study Commission on Ports with members
of the maritime and political communities. it will identify ways to improve the
State's Competitive postion, desp draft and inland waterways, assist shallow draft
ports, and avoid duplication. Coincident is the first-time formation of a
state-wide ports associatio 6 And, the state has also Created a Bulk Cargo
Ott-Shore Terminal COmmlSSiOn. s
Design and engineering necessary to implement new ideas are allocated to
several different mechanisms. Continual upgrading and lnstallation of new tech-
nology are the traditional responsbility of port departments. In the case of
larger efforts, an Official goal is to maximize the productivity of the land,
facillty or practice involved. As a regular part of the planning process, the
Port of Long Beach and Port of Los Angeles apply this philosophy individualy and
Jointly. 8 Illustrative joint projects include the Intermodal Contalner Freight
Authority” and the Year 2020 Master Port Plan.” Models for such cooperation also
exist ln the San Francisco Bay Area which utilized a Joint Bay Area Development
and COnServation Plan for COnflict resolutiºn (Metropolitan Transportation Commis-
Sion and Bay Area Conservation District). The recently created Louisiana Bulk
Terminal Qtfifhore Commission and concept discussion of First Port in the
Delaware Bay” are additional applications. When coal and grain exports were
backing up On the port-rail System, for Coal and grain, respectively, Hampton Roads
and Baltimore, and Houston worked Out queing systems for Colliers, grain Ships,
and unit trains to Coordinate the facility overloads. Private industry played an
important role in Solving "queing"-type logistical problems.
In general the Sponsoring agencies as employing an authority approach,
whether limited to One agency or joint involvement, often grant additional powers
to manage the entire program, including financial plans and raising Capital.
For many large Capital projects, ports require extra funding. Frequently,
they turn to the private capital markets for tax-exempt indebtedness, sell or
develop real estate holdings, enter into a Commerlcal activity for recreatlonal,
entertainment, or World Trade Center Complexes. The Port of Portland received
162
Voter approval to increase local property taxes for facility development. Long
Beach and Los Angeles are issuing tax-exempt bonds for the Joint Intermodal
Container Freight Facility Authority back with a line of credit arranged by the
Southern Pacific with the Industrial Bank of Japan, Ltd., should gate charges
not meet debt service obligations. Land development has been completed or is
underway by the New York, Baltimore, Hampton Roads, Long Beach and Los Angeles.
World Trade Centers already have been built for New York and Baltimore
(considering selling the asset). Long Beach is about to sign a contract for
facility development. A variety of taxes, fees, and user Charges are largely in
place or proposed for motor carriers, railroads," barges, and ports. Most are
dedicated for specific uses such as fuel taxes for highway construction and
maintenance. Proposals for4 port user fees have been intensely debated as part
Of the dredging situation.
Operationally, each mode carrying cargo to the ports has enough volume in
Selected areas to require special Consideration in terms of routing, capacity,
technology and impacts on urban life and the environment. The installation of
double-trailer motor Carriers vehicles, with larger containers, longer trailer
Combinations, heavier gross weights stimulated the identification Of an Inter-
state Freight Network System with a $2 billion cost savings. The basic core of
the nation's rail system has been identified by the Department of Defense in the
"STRAGNET-Study of Rail Lines Important to National Defºe." of 32,422 miles with
5,034 additional miles for military base connection. Dedicated rail freight
Corridors to and from the ports of Long Beach and Los Angeles are under
Consideratlon by the Southern California Association of Governments Ports Task
Force. Similarly, hazardous materials are lºfceiving special routing considera-
tions, whether carried by rail or truck. Railroads have developed special
track, by-passes around densely congested urban areas, thus cutting travel
time.* ocean carriers are introducing larger containerships, around the world
liner service and load Center concepts. Slurry pipeline transport offers
potential benefit for coal. export but encounters eminent domain problems wherever
it must Cross railroad rights-of-way. And, one way deeper channels in selected
harbors are being considered for heavily laden export Cargo ships to help offset
dredging costs.
New equipment in all modes holds much promiseasºailroads are exploring
Integral Container Trains and Integral Bulk Trains. Already developed and
operation are double stack container trains, and Road Railer technologies. The
former increases container train Capacity and in some variants (Santa Fe) saves
fuel by aerodynamic design. The latter was demonstrated in New York upstate
service but discontinued principally due to labor rules and costs. Motor car-
riers anticipate increased productivity and cost savings from double trailers,
longer, heavier and wider units. Super-sized ships for coal, other dry and liquid
bulk, and containers are forcing port facility and shipping practices to adjust.
Conceptually under exploration are large Capacity, wide, shallow beam ships
similar to Great Lakes Ore Carriers.
Labor practices have not kept pace with technology changes. The Bi-modal
Corporation found work rules to be restrictive on dual operations. Some rail-
roads are experimenting with "Caboose-less" trains, made possible by high-tech
telecommunication and sensing devices to eliminate the need for human observation
from an observation platform at the end of the train. In other locations,
particularly the East Coast, the fifty-mile labor rule affects the competitive
position of box cars, and sometimes containers. Some ports and Carriers have
opened up transfer facilities far inland beyond the zone of work rule coverage.
l63
The North Carollna Port State Authority has established direct unit train
service with the Seaboard System between Charlotte and Wilmington. The seven
hour trip runs once a week and carries twenty foot and forty foot Contal ners on
thirty-one flat cars. It is coordinated with the newly opened Charlotte
Intermodal Terminal, North Carolina Port Authority contalner storage #cility.
It is Considered the "tirst inland facility of its type in the Country."
Intermodal coordination is being developed in several Ways. Some
Companies are acquiring operations in other modes. The CSX hºf purchased the
American Commerical Lines for joint rail and barge Operatlons. Rall roadS are
consolidatiº9, as well as motor carriers cooperative arrangements are
established. The Port of Settle has negotiated contracts with motor Carriers
and railroads 3:?r Consolidating Cargo, including LTL. Significantly lower rates
are possible. The Amerijan President Lines has land-bridge Contalner unit
trains regularly Operating.
Regulations
Carriers, ports, and private vendors are taking advantage of additional
market freedoms provided by regulatory changes. Railroads have issued COntracts
for coal, grain, Containers and other freight. One private vendor has developed
a system to quote Joint-Line Rates by Computer to facilltiate iCK references
for the myriad number of pricing and routing possibilities. The POrt Of
Charleston has in operation the Orion Computer system with the capability in One
day (or hours) to provide full and accurate data on the status of inbound and
outbound shipments. The Columbia/Spake River System has obtained Customs Dis-
trict Consolldatlon (three to One). There is a need for accurate modal COSt
accounting. The suggestion is generated by shifting of demand, thus Construction
and maintenance Cost, as a major modal diversion. Highways needymore financial
support to help Carry increSed traffic from abandoned rail lines.
Directing cargo also impacts barges. The load center Concept is receiving
a de facto boost from barge operators. They intend to develop a feeder service
with new facilities and equipment for the North Atlantic and Gulf of Mexico
ports. The advantage of barge feeder service would be that lt utilizes the
Intracoastal waterway, American carriers, and help the non-load Center, Smaller
regional ports compete with rall and truck traffic for such cargo diversion.
Carriers belleve that under contact arrangements they could offer lower rates to
offset longer shipment time Compared to truck or rail. One Carrier maintains
that a thirty percent. Savings is possible for barge traffic carrying Containers
between Houston and New Orleans, against truck or rail transportation. It is
anticipated that West Coast traffic will soon pick up with the same service
Orientation.
Explored in depth in the chapter on regulation is the status of railroad
and motor carrier deregulation, and shipping regulatory changes. In fact, there
are now bills lintroduced in Congress to "reregulate" railroads and motor Car-
riers. Shipping regulatory changes promise more flexible relationships between
ocean carriers and land transportation systems. Slurry pipelines have been
denied permission by Maryland and Virginia state legislatures, and Congress, to
establish companies to build and operate such systems. On the other hand,
colncldent with deregulation has been the introduction in the Surface Transporta-
tlon Assistance Act of 1982 of double trailers with larger dimension contalners.
This partloular technological change, though seemingly incremental, may be the
real "sleeper". If it catches on, all facilities wil need to be adjusted to
handle larger sizes. It is very possible a dual export System will be in effect
164
by the year 2000 for rails, motor Carriers, highways, ports, and ocean shipping,
if other nations upgrade their systems to larger sizes. For example, as trade
with China expands, new facilities will need to be constructed in all modes.
What Container size technology will China choose? Will that choice drive the
rest of the World System? Finally, there have been proposals to require Export
Impact Statements at the federal level to ensure full consideration of systemic
effects; and more extensive use of cost–benefit analysis.
Several different parts of the federal government study commissions and
nonprofit groups have Called for greater usage in federal agency management of
the policy technique called Cost–benefit analysis or Cost effectiveness analysis.
The ideas has been available and used for many years in the planning and policy
analysis fields, often part of systems analysis activities. However in this case
it would be more rigorous, applied by legal requirement in the internal manage-
ment of agencies as well as in programs proposed. These important sources for
further application of the Concept include:
l. Presidential Executive Order Number 12291, February 17, 1981
requiring "cost benefit analyses before promulgating major new regu-
lations, revealing major existing regulations, and developing legis-
lation proposals concerning regulations".
2. The Advisory Commission on Intergovernmental Relations has
repeatedly called for increased usage of the technique for measuring
intergovernmental impacts. Af
3. Further elaboratlon of the technique has been proposed by
the General Accounting Office.
4. The White House Council on Trade had proposed greater use of
cost–benefit type concepts for export promotions and review of regu-
lations and trade relating to export activities. This extension
would have been called a "trade impact analysis statement."
5. The Heritage Foundation has called for the application of
cost benefit and cost effectivenes requirements to all regulatory
agencies as a very high priority.
Regardless of the source of the request, the application of the Concept has
validity and merit. As with any new activity, no matter where applied, federal,
state and local, it may well be more burdensome and expensive, especially if it
requires additional cost, time, preparation and review. This Offsetting question
must be handled on a case-by-case basis to decide the ultimate value of the
technique. For example in the trade situatiº; a White House Committee felt that
it would be burdensome to add the practice.
Recognizing the added expense of federal policies to state and local
governments, the Intergovernmental Regulatory Relief Act of 1984 was introduced
March 8, 1984. The bill was designed to assist state and local governments by
relieving them of costs necessary to meet federal regulations: "by reimbursing
state and local governments for direct costs they incur in complying with new
regulations; by requiring a reduction in existing Cost either by reimbursement, by
reducing the regulatory requirements themselves, or by a combination of the two."
Interestlngly "if such relief is not provided for, the bill prohibits any federal
agency or court from enforcing the unreimbursed regulation." Lastly, it also
"requires the President to prepare an annual report estimating total cºs
incurred by state and local governments in complying with federal regulations.""
165
Exports
The preceding discussion presumes there is cargo to Carry, that exports
generate their own demand. Increasingly, experience suggests that the inter-
governmental policy system must actively engage in the promotion of trade and
exports.
Over thirty-three states already have some kind of representation presence
in foreign cities. Some municipalities have created their own promotion organi-
zations, such as the Los Angeles International Trade Development Corporatlon.
Ports have long had foreign offices. Export assistance is offered by a
majority of states, along with a variety of promotional and financial tax incen—
tives. Fourteen states are now Creating export finance programs. More states
are establishing foreign offices and those with existing officies are expanding
their operation. Traditionally, these have been dedicated import development but
now are focusing on export. "Twelve states now maintain sister state agree-
ments with provinces of the Peoples Republic of China." Some are initiating
Contacts with Japanese trading companies. In some cases several states are
Combining their efforts for trade promotion. Several states are exploring Export
Trading Company (ETC) possibilities. "At least 14 state governments are now
developing new export finance facilities, and perhaps another dozen are now
exploring the relevance of such institutions for their exporters." Twenty-seven
operate in 52 offices and 10 Countries, with most in Japan, Belgium, and West
Germany. Two port areas have established export trading companies the New York-
New Jersey Port Authority (XPORT) and §e Virginia Port Authority (VEXTRAC). The
Port of Portland is developing an ETC. -
Since that accountygg there are fifteen states with legislation Creating
expor; financing agencies,” including a proposed California Export Financing
Bank.
A device that is growing as well in importance is the role of an advisory
committee at the state level reviewing the many aspects of the export system,
Commenting, making suggestions, and proposing legislation. The South Carolina
Governor's Port Advisory Committee has created an incentive for exporters "who
increase their gross iggome through direct export sales" and would have a tax
deferred on the income. -
A fundamental component of the export situation is the coordination of
American basic industry. According to Raymond A. Hay, Chairman and Chief Execu-
tive Officer of the LTV Corporation, and member of the Executive Committee of
President Reagan's Private Sector Survey on Cost Control, basic industries are in
trouble. In almost every sector the Country is losing its industrial Competitive-
nenss and position. It is losing foreign markets consistently. This dislocates
basic industry, affects national security, lowers overall employment, and has
severe impacts on surrounding communities. Several polls commissioned by LTV,
surveyed the attitudes of five hundred opinion leaders in the Country (business,
media, labor, elected and appointed officials, public interest groups and
universities). "Overall two out of three opinion leaders believe that America's
economic difficulties can be traced primarly to a structural revolution now taking
place in the United States economy." Over 7 l percent felt that basic
manufacturing industries may "well "become much smaller than during the last 15
years and more streamlined and more competitive internationally." A note of
optimism was that over half believe workers could be retrained and will find
jobs. Over half believe that government should take some kind of role regarding
the basic industries. However, there is disagreement as to the types of
166
government involvement necessary.”
Finally, the White House has recognized the question of federal coordina-
tive roles and leadership. The general subject of exports and how to facilitate
them has been under study by an interagency working group and a White House
group. A list of recommendations was developed by the President's Commission on
Industrial Cºmpetitjyeness and was reviewed by the White House Cabinet Council on
COmmer Ce and Trade.
The Commission was supported by a Cabinet Council Working Group on
Industrial Competitiveness composed of representatives from the Departments of
Commerce, Treasury, Labor, Justice and Education, Office of Management Budget,
Office of the U.S. Trade Representative, and Council of Economic Advisors. The
recommendations were: -
l. The President should direct the Secretary of Commerce to
Coordinate with the appropriate Executive Branch agencies in order to
establish a COOrdinated local interagency export system.
2. The President should direct the Executive Branch and regula-
tory agencies to Calculate and publish analyses of the anticipated
effects of any proposed legislation.
3. The President should seek legislation to clarify the meaning
and the application of the Foreign Corrupt Practices Act. .
4. The President should require U.S. Ambassadors to provide him
annual reports on their embassy's annual export expansion strategy
and the President should appoint a visiting commerical activity
review team of leading U.S. business executives.
5. The Secretaries of Commerce and State should strengthen the
personnel programs of the Foreign Service and the Foreign Commerical
Service to modify current rotation policies to insure longer tenures
and a greater continuity of U.S. effort.
6. The President should direct the Office of Management and
Budget to identify which nonfinance-related limitations on the
Eximbank's operating authority should be removed.
7. The President should direct the Chairman of the Eximbank to
devise a competitive U.S. approach to the mixed Credit financing.
8. The Eximbank should stimulate greater private sector lending
for exports by expanding its working relationship nationwide with
commerical banks and state export banks.
9. The President should initiate a new U.S. export promotion
Calapaign in 1985.
10. The President should appoint a Commission or task force to
investigate the feasibility of creating a semi-private, non-profit
U.S. export promotion organization.
Reportedly, the Cabinet Council rejected the idea of a new export
promotional campaign in 1985, rejected Export-Import Bank recommendations, and
rejected a recommendation that would require federal agencies to "calculate in
published analysis of the potential impact of proposed legislation on U.S. export
industries." This last item would be "terribly Costly".
From the perspective of this research study, it is interesting to note that
the Department of Transportation was not involved in the work. Also, that the
most relevant recommendations (coordinated local interagency export, impact
statements of export policies and combined recommendations for export promotion
and financing) were either rejected or considered accomplished by other agencies
and unnecessary. The did not require presidential attentlon and formal public
L67
-º-
statements at this point. The staff committees essentially agreed with the intent
Of these recommendations but believed their imposition would either be unnecessary
Or burdensOme.
Conclusion
The very depth and breadth of ideas implemented, explored, and discussed
are reassuring. America's dynamic export transportation System, in its parts, is
independently attempting to find ways to review discrete pieces of the transpor-
tation System and improve service and profitability. Theoreticallly, the parts
will add to an invigorated whole that by "enlightened self-interest and benefit"
will stimulate positive changes in the export transportation system.
Some observers believe that the general economic and philosophical system
is too large, and diverse for governmental control. And, it is also too frag-
mented and diverse for marketplace self-guidance and corrections. In matters of
Signlficant national interest, where basic well-being is at stake, there needs to
be "holistic, coherent, flexible, and balanced" set of strategies. They should
"also rest on a broad social cºnsensus and match our institutional norms; it
cannot be dictated from on high".
This chapter has identified a range of long-term strategy options generated
from existing export-transportation subsystem activities. On paper the nation
appears to have an integrated and coordinated program. Most assuredly, the
nation has neither.
168
Endnotes
1
"Oregon Port Adopts Operating 'Values", Traffic World (Vol. 200,
No. 10, December 3, 1984), p. 38. -
2
"Harbor Talking Committee Addresses Maritime Issues", Harbor Highlights
(Long Beach: Port of Long Beach, Vol. 7, No. 2, Fall 1984), p. 21.
3
Linda Pearson. "Made for Containers - the Columbia/Snake System",
Portside International Edition (Portland, Or. : Port of Portland, Wol, 9,
No. 3, July/August 1984), pp. 4-5.
4
Jackie Bacharach, Chair SCAG Ports Advisory Committee and Vice Chair,
Southern California Association of Governments and the Los Angeles County
Transportation Commission. Testimony at U.S. Congress, House of Representatives,
Committee on Public Works, Subcommittee on Surface Transportation Hearings (Long
Beach, gº, October 24, 1984).

State of Louisiana. Executive Order EWE-84–11, July 25, 1984, pp. 1-2:
Ed Anderson. "Umbrella Agency Ponders for Ports", Times Picayune (September
1, 1984)
6
"Port Association Formed", Jefferson Business-Jefferson Parish Times/
The Jefferson Democrat (August 9, 1984), p. 17a.
7
Louisiana Legislature, Act No. 314, Bulk Cargo Off-Shore Terminal
Commission (1984 Regular Session, July 2, 1984), pp. 310-325,

8
Port of Long Beach and Port of Los Angeles. Feasibility Study and EIS -
Joint Intermodal Container Facility (Los Angeles: Port of Long Beach, Port of
Los Angeles, T982).T *

9
Port of Long Beach, Port of Los Angeles, U.S. Army Corps of Engineers.
2020 Plan (Los Angeles: 1984).
10
Denise R. Fay. "San Francisco Bay Area Ports' Planning", Presentation
at Transportation Research Board (Washington, D.C. : January 15, 1985).
11 * -
William S. Gaither. "A National Deepwater Port in Deleware", Marine
Policy Reports (Newark, DE: College of Marine Studies, University of Deleware,
Vol. 4, No. 1, November 1981), pp. 1–4.
12
Port of Portland. Annual Report 1983–84 (Portland, OR: Port of Portland),
13
"SP Plans to Build New International Box Yard Backed By Local Agency",
Traffic World (Vol. 200, No. 4, October 22, 1984), p. 11.
14 . t
Silva Adams and William Heil delmark. "State and Local Taxation of
Railroads and Other Transportation. Companies: A Survey of Statutory Treatment",
Transportation Journal (Vol. 3, No. 4, Summer 1984), pp. 50–59.
15
The Surface Transportation Assistance Act of 1982, Public Law 97-424,
January 6, 1983.
16
Don Phillips. "An Interstate Railroad System - Alias STRACNET",
Trains (April, 1982), pp. 14-15.
17

U.S. Department of Transportation. Hazardous Cargo (Washington, D.C. :
Government Printing Office, 1982), pp.
18
" Santa Fe Advertisement" and Union Pacific Salem Shortcut Advertisement"
Handling and Shipping Magazine (April 1984), p. 33.
19
American ASSociation of Railroads. Executive Summary - High Productivity
Integral Train Project (Washington, D.C. : AAR, April 1984), pp. 1–4 .
American Association of Railroads. High Productivity Intermodal Train –
Guidelines for Design and Performance (Washington, D.C.: AAR, March 12, 1984),
pp. 1-2: American Association of Railroads. High Productivity Integral Coal
Train - Guidelines for Design and Performance (Washington, D.C.; AAR, March 12,
1984), pp. 1-3: T"Firms Cite Interest in Integral Train", Rail News Update
(Washington, D.C.: American Association of Railroads, No. 2403, August 8,
1984), p. 1.
20
"Intermodalism and the Inland Transportation System", WWS/World Ports
(Vol. 47, No. 7, January 1985), pp. 21-24. -
21

Interstate Commerce Commission, Office of Transport Analysis. Finance
Docket No. 303009 - Environmental Assessment - CSX Corporation - Control -
American Commercial Lines, Inc. (Washington, D.C.: Interstate Commerce
Commission, April 10, 1984), pp. i-iv.
22
Tom Warner. "U.S. Truckers - Making Overseas Door to Door Service
Common Place", American Export-Import Management (August 1983), pp. 22-23, p. 63.
"Seattle Truckers Try Private Port Contract", American Export-Import
Management (August 1983), p. 23. -
24
" Double Deck Train Runs Coast-to-Coast", Container News (Vol. 19,
No. 10, October 1984), p. 6.
25 -
Distribution Sciences, Inc. National Railroad Ratemaking and Information
Retrieval System, DSI*Rail Overview for Shippers, Wendor Announcement (Desplaines,
Ill., January 1985).
26
"Columbia/Snake Customs District Becomes Reality", Portside –
International Edition (Portland, OR. : Port of Portland, Vol. 9, No. 6,
November/December 1984), p. 2.
27
Fredrick W. Mennott and Roger L. Creighton. "Trends in State Wide
Freight Planning", TR News (Washington, D.C.: Transportation Research Board,
No. 112, May/June 1984), pp. 24–27.
28
John LoDico. "Barge Feeder Services Grow as Load Center Concept Gains
Steam", Traffic World (August 13, 1984), pp. 32-34.

*s
170
29

U. S. General Accounting Office. Cost Benefit Analysis Can Be Useful in
Assessing Environmental Regulations Despite Limitations (U.S. Congress:
General Accounting Office, RECD-84–62, April 6, 1984), pp. 1-6: Stuart M.
Butler, Michael Sanera and W. Bruce Weinrod. Mandate For Leadership – II
(Washington, D.C. : The Heritage Foundation, 1984), pp. 423-424.
30
"Intergovernmental Regulatory Relief Act Introduced", Intergovernmental
Perspective (Washington, D.C.: Advisory Commission on Intergovernmental
Relations, Vol. 10, No. 2, Spring 1984), pp. 4-5.
31
Richard L. Barovich. "State Governments Broaden Range of Export
Expansion Activities", Business America (October 1, 1984), pp. 16–18.
32 -
Eugene Carlson. "States Turn On To Exporting, But Their Timing May Be
Off", The Wall Street Journal (February 12, 1985), p. 33.
33
California State Economic Development Commission. The California
Economic Development and Trade Update (Sacramento: January 1985), p. 2.
34
"Export Advisory Committee Makes Recommendations for 1985", Port News
(Charleston, SC: Port of Charleston, South Carolina State Ports Authority,
Vol. 38, No. 1, January 1985), pp. 20–21.
35 . .
LTV Form. Basic Industries in Trouble: Why. . . And Are There Solutions?
(Dallas, Texas: LTV Corporation, 1983), pp. 1-12.
36
"Cabinet Council Rejects Export Proposals By White House Advisory Group",
Inside the Administration (Vol. 4, No. 3, . January 18, 1985), pp. 1, 8-10.
37
George Cabot Lodge and William C. Crum. "U.S. Competitiveness: The
Policy Tangle", Harvard Business Review (Vol. 63, No. 1, January–February, 1985)
p. 50. &

171
Appendix
FEDERAL AUTHORIZATION FOR ACTIVITIES IN U. S. NAVIGABLſ:
warenson ocean warERs RELArive To ENviaonmental PRorscrion
* [OERAL AGENCI E3
A C T | V | T Y
Pew rºsts
Ceruficates
Uetter of Permission or
Coordinsises
Review
Enfereewheat
Fines
favºreemental ºwnees: Statement
Oved pºp/ſºng
Owedge $sei's Dºcessal
Aacherapes
Asºº be Mavigatºes
Marbes Precessve Westºs
Morbes Uses
Aerts & ſermºnd Paºlities
lateransdel Tasºspertseen
Veseeds
Perº $egºvºy & Scºoby
Vessel ſtetſie Centreſ
Uscies. Osºs & Casaste
Credºse & Ceesewey's
Pterºss Tuasºsts
Pºsteºs
Fºot: AAU AGENCIES
A C 7 | V | 7 y
$esbºsww.ºe Cables'
Weevesºteo
$sſery

















































172
Appendix cont.
FEO ERAL AGENCIES
A C T | V | T Y
W3 ite
Laund Chernical Waste
Other Haast dout $ubstances
$anntary Waite
$glid Waste
Hasbes Oebert Cleanup
Aw Pollution
$tagh tºwnsworn
Therwhel Pollution
Ceesta Eene
$here line Erosion
£1tuenºs Sanctuartet
Marine $snctuerset
Wetlandº
Wild & $cenic Rivers
Messne & celery
ſº ºth & Waldk!e
Acºlheues
Metterse Velvet
Clarnatelegy


























173
Appendix cont.
FEDERAL AGENCY IDENTIFICATION
ACOHP Advisory Council on Historic Preservation
AEC Atomic Energy Cornmission
APHIS Animal and Plant Health Inspection Service (USDA)
ARMY Department of the Army
81 A Bureau of Indian Affairs (INTERIOR)
8LM) Bureau of Land Management (INTERIOR)
|BOC Bureau of Customs (TREASURY)
BOR Bureau of Outdoor Recreation (INTERIOR)
BR Bureau of Reclarnation (INTER iOR)
8RTA Bureau of Resources & Trade Assistance (COMMERCE)
BSFW ſk Bureau of Sports, Fisheries & Wildlife (INTERIOR)
CEO Council on Environmental Ouality (EXEC. OFC. OF PRESIDENT)
COE Corps of Engineers (ARMY }
COMMERCE Department of Commerce
CPAD Community Planning & Development (HUD)
EDA Ecostomic Development Administration (COMMERCE)
EPA Environmental Protection Agency -
RAA Federal Aviation Administration (DOT
FCC Federal Communications Commission
FDA Federal Drug Administration (HEW)
[REA Federal Energy Administration
[FHWA Federal Highway Administration (DOT)
(FMC Federal Maritime Commission
FPC Federal Power Commission
|HEW) Cepertment of Health, Education & Welfare
HUD Department of Housing & Urban Development
|BC Internation Boundary Commission (US-CAN & US-MEX)
|JC International Joint Commission (US-CAN)
|NTERIOR Department of the Interior
[LABOR Department of Labor
MA Maritine Administration (COMMERCE)
NM 5S National Marine Fisheries Service (NOAA-COMMERCE)
!NOS National Ocean Survey (NOAA-COMMERCE)
NPS National Park Service (INTERIOR)
NWS National Weather Service (NOAA-COMMERCE)
OCZM) Office of Coastal Zone Management (NOAA-COMMERCE)
OMA Office of Maritime Affairs (STATE) -
OME Office of Management & Budget (EXEC. OFC. OF PRESIDENT)
OOG Office of Oil & Gas (INTERIOR)
OPLS Office of Pipeline Safety (DOT)
OSHA Occupational Safety & Health Administration (LABOR)
PCC Panarna Canal Compassy .
PHS Public Health Service (HEW)
SLSD.C. St. Lawrence Seaway Development Corporation (DOT)
STATE, Department of State
TRANSPORTATION Department of Transportation
TREASURY Department of the Treasury (CUSTOMS)
TVA Tennessee Valley Authority
UMTA Urban Mass Transportation Administration (DOT)
USCG U. S. Coast Guard (DOT)
USOA U. S. Department of Agriculture
USGS U. S. Geological Survey (INTERIOR)
WRC Water Resources Council
*U.S. Fish and Wildlife Service as of 1 July 1974.
Source: National Research Council, Committee on the Impact of Maritime
Services on Local Populations. Public Involvement in Maritime
Facility Development (Washington,TD.C. ETNational TAcademy of
Sciences, 1979), p. 239 - 242.
174
Appendix cont.
E-11
Dredged Material Disposal and Fill
WHEREAS, the ports of the United States serve the local.
regional, national, and international needs of maritime commerce.
fisheries, defense, and recreation; and ,
WHEREAS, in 1980 ports accounted for one million jobs, $6
billion in gross sales. $31 billion in personal and business income.
and $15 billion in federal taxes and Customs revenues and state
and local taxes; and
WHEREAS, the dredging and disposal of dredged material and
the placement of dredged fill is critical to the construction and
maintenance of port facilities and waterways that generate these
economic benefits; and
WHEREAS, dredging and the disposal of dredged material and
the placement of dredged fill is controlled by a variety of regula-
tions, policies, laws, and treaties, which contain, and are suscepti-
ble to containing through amendments, unreasonable and ex-
cessive restrictions and prohibitions meant, but not necessarily pro-
ven, to protect the environment, which can cause delay, uncertain-
ty, additional cost, and even denial. to the construction and
maintenance of port facilities and waterways:
NOW, THEREFORE, BE IT RESOLVED by the American
Association of Port Authorities that its Committee on harbors and
Navigation be charged with the development of recommended
strategies for the enactment of U.S. laws. policies, and regulations
which, with respect to dredging and the disposal of dredged.
material and the placement of dredged or fill material, will embody
the following principles, namely, that:
1. Permit decisions be based on the total public interest which
balances environmental impacts with such non-environmental fac-
tors as facilitation of oceanborne trade, defense, employment.
business investment and income, international relations, tax
revenues, energy, and sociological factors.
2. Alternatives be required to be considered only when there
is reason to believe that the proposed dredging, disposal, or fill will
cause significant adverse effects on ocean waters for which better
alternatives exist.
3. Federal, state and local agencies should develop coor-
dinated regulatory policies and procedures, such as joint hearings.
application forms, public notices and agency review comment.
4. Permit decisions be made within 90 days of issuance of the
Public Notice on the permit application, with only one extension
allowed for just cause for a period of another 30 days.
5. Individual permits be issued for periods that conform to
proposed work staging or programming, not to exceed 10 years.
Source:
*U.S. GOVERNMENT PRINTING OFFICE: 1986--491-810/20775
6. Permit application fees nôt exceed reasonable ad-
ministrative costs.
7. The recommendations arid comments of agencies review-
ing permit applications shall describe the benefits to be achieved, be
reasonably available to the applicant, be feasible and practical. and
be within the statutory authority and mandate of the reviewing
agency. - & -
8. The Corps of Engineers exercise management control over
final permit actions and the expeditious resolution of interagency
disagreements.
9. The existence of resource value in need of protection be
justified on a case-by-case basis, rather than by presumption.
10. The ocean be considered an appropriate alternative for
the disposal of dredged material subject to proper management,
rather than the medium of last resort.
11. The disposal of dredged material be recognized.as not be-
ing a “waste," and thus be subject to management and regulation
that reflects this distinction. -
12. The London Dumping Convention to which the United
States is a Contracting party be viewed as a “non-self-executing
treaty commitment as related to the regulation of the ocean
disposal of dredged material.
13. There is a basis for considering a legislative consolidation
of the separate laws that presently control the disposal of dredged
material. -
14. Expedited permitting procedures should be developed for
emergency, minor, and routine dredging through general and na-
tional permits. *
BE IT FURTHER RESOLVED by the American Association of
Port Authorities that its Committee on Harbors and Navigation be
authorized to support those activities of the International Associa-
tion of Ports and Harbors Special Dredging Task Force that have as
their objective fulfillment of the above principles and all those in-
tended to facilitate dredging and the disposal of dredged material
and the placement of dredged fill at U.S. Ports, and to be authoriz-
ed to be represented on the Subcommittee on Ocean Disposal of
the U.S. Shipping Coordination Committee, as all of the above
relate to the London Dumping Convention.
Resolutions E-4 and E-26 of 1982 (New York, NY)
Recommended for readoption as amended by the Harbors and
Navigation Committee.
Recommended for adoption by the Resolutions Committee.
Unanimously approved.
American Association of Port Authorites. Proceedings - Annual
Conference (Seattle, Washington: September, 1983), p. 56-57.
1.75
III.iii.III

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