As Congress works to help airports, transit systems and other transportation services impacted by the coronavirus pandemic, the Port of San Diego and the American Association of Port Authorities (AAPA) believe it’s crucial that seaports also get the resources necessary to deal with the unprecedented financial, personnel, infrastructure and supply challenges imposed by this crisis.
Due to the pandemic, AAPA anticipates direct job losses at America’s seaports of about 130,000 workers. That’s 20% of the U.S. maritime workforce, which, at full employment, supports an additional 30 million jobs nationwide. Most big U.S. ports will experience cargo volume declines ranging from 10% to 30%, while many smaller ones may experience much worse. Of course, ports, including the Port of San Diego, that specialize in moving hard-hit cargoes like steel and automobiles, or depend on tourism dollars, such as from cruise ship calls and land leases to hotels, restaurants and retailers, are particularly vulnerable.
At the Port of San Diego, California’s fourth largest of 11 commercial seaports, cruise activity shut down abruptly in March. For the 2019-2020 cruise season, which would usually end in June but ended three months early, at least 26 vessel calls were lost, and with them at least $1 million in revenue. In the port’s cargo sector, auto imports have stalled due to the shutdown of manufacturing plants and dealerships. The National City Marine Terminal has processed about 450,000 autos annually in recent years, but the Port of San Diego is expecting a reduction of 141,000 imported autos and a loss of $2.3 million in revenue for this current 2019-2020 fiscal year. Next fiscal year, the Port of San Diego is forecasting a loss of 125,000 imported autos and a revenue reduction of $3.2 million.
When looking at taxes, cargo activities at America’s seaports generated $5.4 trillion in revenues in 2018, representing a quarter of the U.S. economy and producing $378 billion in federal, state and local taxes. Additionally, America’s tourism ports attracted 13 million international cruise-goers, whose spending provided $53 billion in business revenue nationwide and yielded wages, salaries and taxes exceeding $23 billion.
While the Port of San Diego is a public benefit corporation and a regional government, it doesn’t collect taxes. Instead, revenues generated by maritime and waterfront businesses help the Port of San Diego provide and maintain public amenities including 22 public waterfront parks, fishing piers and three boat launch ramps, including the state’s busiest launch facility on Shelter Island.
Additionally, as one of only 17 commercial strategic ports in the nation, the Port of San Diego is a partner in America’s defense, frequently making its cargo terminals available for military loadouts of equipment, vehicles and other material.
Now facing significant cargo and cruise passenger declines, as well as added coronavirus-related costs for cleaning, sanitation, personal protection equipment and related supplies, the Port of San Diego is joining scores of America’s seaports in requesting federal assistance. This isn’t about replacing lost revenue. It’s about maintaining a “state of readiness” to make good on bond and other debt payments, and keeping our workforce employed to the fullest extent possible.
To aid the seaport industry’s coronavirus response and recovery efforts, AAPA and the Port of San Diego are urging Congress to provide $1.5 billion in direct grants to help ports cover operations, equipment and infrastructure costs, and debt service expenses. We’re also asking that any future aid packages be available to local authorities of any size, including ports, and that legislation provide payroll tax credits to cover personnel sick and family medical leave. Additionally, we’re recommending repeal of the trade-choking, job-killing “301” China tariffs. Doing so will increase domestic consumer spending and help American manufacturing.
An April 2020 report prepared for the U.S. Committee on the Marine Transportation System shows that increasing port-related transportation infrastructure investments above a “business-as-usual” scenario will deliver higher levels of gross domestic product, create more jobs, increase incomes, improve trade performance and raise productivity.
Policymakers cannot overlook our nation’s ports in this pandemic. Please support our request to Congress for modest relief from the shocks imposed by this crisis. This will ensure America’s seaports have the capability to maintain a reliable “state of readiness” to aid in the nation’s recovery.
Coniglio is president and CEO of the Port of San Diego. Connor is president and CEO of the American Association of Port Authorities.
Read the full article published in the San Diego Union-Tribune here.