Donald Fry: Port surge shows value of transportation infrastructure

 

By Donald C. Fry

While the Inner Harbor gets much of the glory when people think of Baltimore’s waterfront, our working port continues to be a major driver of our regional and statewide economies.

This was decisively underscored by Governor Martin O’Malley’s recent announcement that cargo business at the Port of Baltimore is surging in a big way – an economic outcome that, in order to continue nurturing, touches on a chronic fiscal challenge facing lawmakers in Annapolis.

The port saw a 15 percent increase in cargo handled in 2011 – the most growth of any port in the U.S. The 38.7 million tons of cargo that crossed the port’s docks in 2011 was 5 million tons better than in 2010, and the $51.4 billion value of cargo handled was the most ever for the port.

The amount of automobile units handled by the port was the most in the United States. Other records set by the port last year included exported cargo, amount of coal handled and containers handled at public marine terminals managed by the Maryland Port Administration.

Among 360 ports in the United States, Baltimore’s port ranks as the top port in seven cargo categories and 11th in the nation for overall value of cargo handled.

Baltimore’s port is also proving to be a popular cruise terminal, currently ranking 5th among East Coast ports and 14th in the United States for cruise passengers.

What does all of this data mean to our region and state? In a word: jobs. The port directly generates about 14,630 jobs, and 108,000 jobs in Maryland are related to port activities, according to state data.

It’s important to recognize that the kind of success our port is experiencing doesn’t just happen. It’s directly related to a well-designed strategic policy and strong fiscal and management decisions made by the state and Port Administration managers.

For example, the groundbreaking public-private partnership agreement with Ports America Chesapeake to operate the Seagirt Marine Terminal is prompting substantial capital improvements to Seagirt’s berths and facilities. A new 50-foot container berth and more than $460 million in equipment upgrades and other improvements will position Baltimore as one of only two ports able to attract the mega-container ships that will be seeking to unload cargo at East Coast berths beginning in 2014, when the Panama Canal expansion is completed.

This is a significant competitive asset for Baltimore’s port. Studies show the super ships could drive as much as a 400 percent increase in mid-Atlantic container business, according to port officials.

In addition to the 3,000 construction jobs being generated by facility improvements, the state’s Seagirt partnership will create 2,700 new permanent port-related jobs, according to estimates.

It’s a worthy example of the state partnering with business which, among other things, is an important core pillar for economic growth and job creation cited in the Greater Baltimore Committee’s report, “Gaining a Competitive Edge.”

Working to strengthen exports from Baltimore is also a key element of new recommendations by the Brookings Institution for building economic growth in the Baltimore region. A Brookings report released yesterday further recognizes the importance to the region of transportation infrastructure – another GBC priority and core pillar for competitiveness.

This brings me to a serious note of caution. Maryland has done a lot of things right to position the port and, by extension, the state for strong post-recession economic growth. But two important things are worth noting.

First, the Port Administration is, by definition, an entrepreneurial agency that has grown adept at managing available fiscal resources to position the port for growth.

Second, however, is that it is an agency of the Maryland Department of Transportation (MDOT) and, as such, relies heavily on Maryland’s Transportation Trust Fund. Due to stagnating revenues to the fund, the Port Administration is saddled with the same fiscal challenges faced by the State Highway Administration, the Maryland Transit Administration and other MDOT agencies.

Like the highway and transit agencies, the Port Administration’s current capital budget is severely constrained. Almost two-thirds of it is earmarked for maintenance – mostly for dredging. Not much is left for investment in landside improvements.

Frankly, without the public-private Seagirt partnership with Ports America, funding for the capital improvements to position our port for the post-Panamax super ships would not have been available.

Lawmakers in Annapolis, who for years have failed to adequately address our state’s growing crisis in funding transportation infrastructure, tend to relate transportation funding to roads and transit — resources for which they apparently struggle to recognize as having an economic impact.

Collectively, they have been unable to grasp what business instinctively knows: transportation infrastructure is directly related to competitiveness, job creation and economic growth.

The story of the Port of Baltimore, however, offers policymakers an illustration of this in compelling economic terms: 108,000 jobs, $3 billion in personal wages and $300 million in annual state and local taxes.

These are economic impacts worth paying attention to and that, I would argue, few would seek to stifle. And they are generated by just a portion of the infrastructure that has enabled Maryland throughout history to take competitive advantage of its mid-Atlantic location and its inland port.

The reality is Baltimore’s port and the supporting statewide transportation infrastructure in the middle of the eastern seaboard constitute the vital heart of our state’s economic growth. It deserves much more serious attention than it is getting.

Comments are closed.