Goods Movement Solutions: Maintaining California Ports’ Competitive Edge
THE ISSUE: MAINTAINING CALIFORNIA PORTS’ COMPETITIVE EDGE
California is the international trade leader of the United States – providing a gateway to the dynamic economies of the Pacific Rim. International trade is one of the most important economic and job creation drivers of the state and a key to the state’s recovery. Together, the three California Customs Districts – Los Angeles, San Diego and San Francisco – led the nation by processing approximately $640 billion in two-way trade value by vessel in 2011. And the combined California Ports of Los Angeles, Long Beach, and Oakland are the busiest seaports in the nation – handling nearly 47% of all the waterborne containerized cargo coming into the United States.
It’s not just the Ports that light up the economy – it’s the entire supply chain including the manufacturing, retail and wholesale trade, construction, transportation and warehousing sectors. About 640,000 people work in trade related jobs in the Southern California Region.
Given what’s at stake, California must do more to ensure that our Ports remain competitive. California Ports continue to face stiff competition from other North American, West Coast and Mexican Ports. India and Singapore are becoming major shipping hubs and their routes favor Ports on America’s East Coast. And, competition will intensify after the expansion of the Panama Canal in 2015, as the Gulf and East Coast Ports in the U.S. work aggressively to attract business away from California. California Ports are taking action to prevent any further potential loss of market share by expanding terminal capacity and investing in the modernization of other goods movement related infrastructure projects. Still, many of California’s competitors are likewise engaged in investing hundreds of millions of dollar in capital improvement programs. And, many of these other North American hubs for trade are providing incentives to attract Port shippers as well as a number of other users. Accordingly, more needs to be done to protect California’s vitally important international trade sector and to maintain and grow new business, manufacturing, and trade-related jobs in the years ahead.
Meeting the Challenge of Increased Competition
In 2012, The Jobs 1st Alliance, a non-profit representing a partnership between business, labor and the public sector, launched a Beat the Canal Campaign to accelerate the delivery of goods movement infrastructure projects that are funded and ready to go – projects that will create 100,000 jobs. These projects will help reduce freight congestion bottlenecks and related air quality impacts, and improve travel time, among other benefits. The Leadership Council is a partner in this effort.
Important infrastructure projects are often held up for years by EIR law suits that drag on and on. To help remedy this, in 2011 Governor Brown signed AB 900 which gives the Governor discretion to certify certain large projects that meet specific conditions as being “environmental leadership projects” eligible for expedited judicial review should an EIR law suit be filed. However, goods movement projects were not called out in this legislation. Enacted as a short-term approach to spurring the economy, the Act sunsets January 1, 2015.
As a complement to, and in advancement of, President Obama’s National Export Initiative to double U.S. exports over the next five years, the provision of tax incentives to exporters and importers of discretionary cargo who increase their throughput at California’s seaports and airports was considered by the California Legislature in 2012 – incentives that would put our ports and airports on a more competitive footing with other North American facilities that are offering substantive tax credits. Jobs 1st Alliance sponsored this jobs-generating bill, AB 2656, which was not enacted. In an environment of fiscal crisis, no tax incentive bill was approved by the Legislature, other than the extension of the existing film and television tax credit program.
The Southern California Leadership Council supports actions needed to help California ports and airports maintain their competitive edge in light of increasing competition for market share. The Leadership Council supports efforts to advance a trade corridor system that delivers world class, clean, state-of-the-art logistics services that are community sensitive and environment friendly. Funding consortiums and public/private partnerships must be encouraged to do just that. And, the Leadership Council supports CEQA Modernization in order to enable projects that respect the environment to move forward in real time.
To maintain California as the preeminent international trade leader in the United States and given that other states are providing incentives to aggressively attract trade, the Leadership Council supports actions that will incentivize users of California’s ports and airports to increase their throughput of export-related cargo and imported discretionary cargo, along with the jobs created as a result of doing so.
A partner with Jobs 1st Alliance since its inception, the Leadership Council supports its Beat the Canal mission of helping jump-start trade related infrastructure projects that are stalled; projects that will improve our movement of goods and create 100,000 jobs.
News, Updates, and Background:
Relevant News and Articles
Incentives Sharpen State’s Competitive Edge
The Future of U.S. Ports after Panama Canal Growth