By Jim Kruse
The next time you’re trying to understand the global economy — the next time that hearing about tariffs and trade deficits makes you want to tune out — just remember that much of the study of economics boils down to just two things: seaports and your stuff.
That’s because you use a lot of stuff, and much of that stuff comes from very far away.
Just consider the typical American home, starting in the living room. Television, bookshelves, sofa, floor lamp, end table, and even small things like picture frames. Consider also what you’ll find in the kitchen, laundry room and even the driveway and garage.
Now, ponder the origin of those things. In most cases, it’s likely those things came from somewhere beyond American shores. And that means that they arrived here on a cargo ship docking at one of several seaports along our East, West and Gulf Coasts.
It’s easy to overlook those seaports and to disregard their relevance to our lives. Out of sight, out of mind, right? In contrast, we drive every day alongside big trucks emblazoned with household names – ubiquitous 18-wheeled billboards reminding us that the things we can’t seem to live without are always just a store visit or a mouse click away. And while those trucks represent the most visible leg of the journey our stuff takes to reach us, they wouldn’t even be in the picture were it not for the seaports where our stuff is transferred from a ship to a semi.
It’s understandable why so many of us assume that the products we buy begin and end with the retailers themselves. But those sellers are not only the biggest retailers in the U.S.; they are also America’s biggest importers of foreign goods. Importers of the stuff that we covet and consume.
So, why should you care about any of this?
Our seaports and our highways are both part of the same national infrastructure system that’s increasingly overloaded and underfunded. As consumer spending grows, so does the demand for shipping and import activity. But U.S. seaports are being forced to operate inefficiently. This means one of two things; either the cost of what you buy will be higher than it needs to be, or the imports just won’t happen.
Policy discussions about infrastructure – in Washington, D.C., and state capitols across the country – tend to focus mainly on highways. Highways, however, enjoy the advantage of a dedicated revenue source in the form of federal and state gasoline taxes. Seaports in some states have no comparable sustained funding source, and must rely upon port fees augmented by federal appropriations for expansions or improvements in order to sustain their operations and grow their capacity. Those improvements can include dredging to deepen or widen a channel, as well as improving truck and rail access to a port.
But those federal appropriations have lagged in recent years. In Texas alone, four different ship channel improvement projects have had federal approval for as long as 14 years, but no federal funding has accompanied those approvals, and two more projects are moving through the authorization process at this time. The same is true for port expansion efforts elsewhere on the Gulf, East, and West Coasts.
Public funding for infrastructure is limited, and ports and highways must compete with a vast collection of other federal and state priorities for scarce resources. The cost of meeting our future seaport needs – whether in the water or for connections to other parts of the transportation system on land – will be high. But the cost of doing nothing in the face of those needs will likely be even higher for the consumer.
On a national scale, the cost of doing nothing would mean lost opportunity and a sluggish economy. But on a more personal scale, it would likely mean that you’ll wait longer, and pay more, to get your stuff. In trying to understand the global economy, that’s as good a place as any to start.
Kruse is the director of the Center for Ports and Waterways at the Texas A&M Transportation Institute.
This article was originally published in the Austin American-Statesman, July 10, 2018.
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