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Executive Summary
The question whether ports in the United States are adequate to serve
the nation's present and future needs became a major public concern in
the early 1980s. Attention focused on port adequacy when, as a result
of the Iranian Revolution, world demand for U.S. coal exploded.
During 1980, news media in the United States were full of reports that
large numbers of colliers were waiting for weeks and sometimes months
to gain access to U.S. coal-loading facilities. During this same
period, a number of studies concluded that the United States had the
opportunity to become a major supplier of a large new world market for
steam coal. To gain and secure that market, it was repeatedly argued,
the United States would need to be able to handle the most efficient
dry-bulk carriers, and such carriers require greater water depths than
those available at U.S. coal ports.
The events of the early 1980s brought to Public attention an issue
that had long been developing. me ^ _ _ ~ ^ ~ _ ~ ~ ^ · -
was the growing interdependence of the U.S. and the world economies.
During the 1960s and 1970s, the U.S. economy moved from being
essentially self-contained to becoming the largest component of a
world economy. Increasingly, U.S. economic well-being was seen as
being dependent on the nation's capacity to compete in a world
economy. Particularly for high-volume, low-cost commodities such as
coal, efficient low-cost transportation was viewed as an essential
ingredient to American competitiveness. For such commodities. loran
bulk carriers were believed to offer major economies of scale. Many
of those involved in ocean transportation noted that the United States
would only be able to enjoy these economies of scale if it developed
substantially deeper ports, ports capable of handling large deep-draft
vessels.
Second, although the seeming advantages and trends to larger
vessels in the world fleet were evident, the 1970s saw little in the
way of a response to these perceived needs for deeper U.S. ports. The
inability of the nation to respond to the apparent need for deeper
ports was the result of an unraveling of the social contract that had
been in place for over 150 years between the federal government and
the ports concerning how both maintenance and new construction
dredging would be funded, managed, and regulated. By the 1980s, then,
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1
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24 ports had proposals for improvement dredging projects and no
significant new construction dredging had occurred for a decade.
This report is an investigation of the major issues associated with
port dredging. Specifically, it investigates three general
questions: (1) Is additional port construction and maintenance
dredging necessary now or over the next two decades? (2) What
impediments and barriers militate against carrying out additional
dredging if it is needed? (3) What alternatives offer promise of
mitigating or effectively responding to those impediments in order
that any needed dredging can be carried out?
Assessing the nation's dredging needs requires setting them in a
more general context. It is necessary to seek an understanding of the
role of ports in the broader U.S. and world economy and ocean
transportation system. Further, it requires comparing the dredging of
existing ports with a variety of alternatives that have been proposed
for meeting the nation's transportation needs. Proponents and
opponents of port dredging and the alternatives to dredging range
across a broad spectrum. Some contend that immediate dredging of
existing ports is a necessity while others argue that U.S. ports are
adequate for the foreseeable future or that there are more cost-
effective ways than dredging to meet the nation's need to handle large
vessels.
The central conclusion of this report is that the nation needs
additional capacity to handle large vessels and that such a capacity
should exist on each of the nation's coasts. It is important to
emphasize two reasons for this conclusion. First, the United States
faces great uncertainty with regard to the size and character of the
future world economy, the nature of future oceanborne transportation
into and out of U.S. ports, and the future mix of commodities that the
nation will export and import. Further, the character of U.S. exports
and imports, particularly exports of such bulk commodities as coal and
agricultural products, is likely to fluctuate greatly from year to
year. Most of the analyses and arguments used by proponents and
opponents of additional port capacity to handle large ships start from
assumptions about the future size and character of U.S. trade and
transport. All these assumptions must be viewed as highly uncertain.
Decisions with regard to developing additional port capacity, then,
must be made with the recognition that future needs are difficult to
determine.
There is less uncertainty about the time required to develop
additional port capacity. Port construction requires long lead times
that will be measured in years. In the case of major federal dredging
projects, the lead time is now 22 years. The nation, then, faces a
fundamental mismatch between the uncertain and fluctuating character
of future need and the certain and long times required to develop
additional port capacity. A decision to develop additional capacity,
therefore, involves risks. Unless those risks are taken, however, the
United States precludes the opportunity to take advantage of any
benefits offered by large ships in the future. It must be emphasized
that particularly with regard to bulk commodities, extreme swings in
trade and transport have traditionally occurred over very short
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periods of time. To take advantage of rapidly expanding markets, the
nation must have available port capacity when those swings occur. To
protect against the loss of those markets when world demand declines,
the nation must be able to offer its products at the lowest possible
cost.
The major findings of the study immediately succeed this summary.
It must be noted that the key finding--the nation needs additional
port capacity--is not derived from a detailed economic analysis.
Rather, the finding represents the committee's consensus judgment of
what is in the nation's interest, given an uncertain future. The
committee found only disagreement in its review of existing research
and in its interviews with experts concerning future port needs and
the economic benefits of deeper ports. Thus, there is no consensus in
the expert community on the costs and benefits of deeper ports. The
committee chose to frame the central question of its study, then, as
"What should the nation do if future port needs are uncertain?" and
concluded that in the face of uncertainty it is prudent to have
increased options--that capability should exist to enjoy maximum
benefits given a wide range of future developments.
A common reading of several developments led to this consensus
judgment--the growing importance of world trade to the economic
well-being of the United States; a trend to larger ships because they
offer economies of scale; the importance of ocean transportation costs
in the delivered price of high-volume, low-cost commodities, such as
coal; the growing number of deep-water ports in other countries; rapid
year-to-year fluctuation in trade in particular commodities; and the
long lead times required to develop deep port capacity, and thus, the
inability to develop additional port capacity in response to
short-term fluctuation and need.
The report is organized into seven chapters. Chapter 1 provides an
overview of the background and issues associated with port dredging.
The following six chapters investigate the six basic issues which the
committee found must be resolved if the port adequacy question is to
be meaningfully addressed. Those six questions are as follows: (1)
Does the United States need additional port capacity to handle large
ships? (2) Is dredging the most attractive way for the United States
to handle large ships? (3) How should dredging be funded and what are
the implications for dredging of various funding approaches? (It
should be emphasized that the committee, in defining this task,
excluded overly specific funding recommendations. Resolution of the
funding issue is inherently a political choice, which in the system of
the United States must be made by Congress.) (4) What are the causes
of the slowdown in decision making for local port projects and the
stalemate for federal projects, and what are the ways to bring
increased speed, predictability, and stability to the decision making
process? (5) What are the problems associated with the design and
implementation of new construction dredging and how can they be dealt
with? (6) What are the environmental problems associated with
dredging, and can they be effectively managed?
The 33 findings that follow are organized as responses to each of
these questions.
Representative terms from entire chapter:
port capacity
