Are U.S. taxpayers wasting billions of dollars on East Coast port expansion?

Are U.S. taxpayers wasting billions of dollars on East Coast port expansion?

Photo: U.S. Department of Transportation

(Updated on Friday, April 28 to reflect a new Wall Street Journal article and Datamyne Port Report)

American taxpayers have spent billions of public dollars to dredge harbors, raise bridges, and make other infrastructure improvements to East Coast ports in anticipation of new larger container ships bringing manufactured goods from Asia by way of the Panama Canal, bypassing the West Coast ports of Los Angeles and Long Beach.

As we have reported here several times, international shipping experts have long been dubious of the wisdom of some of those investments.  See Florida – Land of ‘build it and they will come” port dreams for one example.

Some of the costs have been dearer than money. In the process of reckless and poorly planned dredging, the U.S. Corps of Engineers has done irreparable damage to our environment. See Florida port dredging projects under attack after Port of Miami dredging destroys hundreds of acres of coral reef.

And ports want tens of billions more in public dollars, as evidenced by a near constant drumbeat of news articles touting the necessity of more spending. See the recent article in Dredging TodayU.S. Ports Plan Big Investments In Capital Projects.

“AAPA then contrasted that number with what it believes is the “best-case” scenario for investments by the federal government into  U.S. (East, West, and Gulf Coast) ports, including their land and water-side connections, through 2020. The answer was just $24.825 billion.”

Large investments are needed to implement zero emissions technologies to reduce air pollution and carbon emissions, and protect the health of port workers and the millions of people who live near ports, railyards, and freight routes.  But are additional investments by US taxpayers to expand the capacity of East Coast ports a prudent use of tax dollars?

Though East Coast ports have experienced volume increases in the last few years (See the Datamyne Port 2015 Port Report, released on Thursday), an article published in today’s Wall Street Journal casts doubts there will be any substantial shift going forward:

“The change in volumes “is going to be pretty minor,” said David Egan, head of industrial research in the Americas for CBRE. ‘Most of what we thought was going to happen has already happened.'”

An article in the LA Times makes a similar point about shifts in shipping volumes.

“… estimates by cargo analysts suggest that only around 5% of those products would be diverted through the canal, because the trip from Shanghai directly to the East Coast is two weeks longer than the one from Asia to Los Angeles, O’Connell said.

Check out these news articles.  What do you think?

East Coast Ports to See Muted Boost From Panama Canal Expansion-CBRE, Wall Street Journal

Competitors are eating into L.A. ports’ dominance, LA Times

Opinions expressed in this blog are those of the author, and do not necessarily represent the positions of the Moving Forward Network or its members. All errors are the responsibility of the author.

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