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Archive for the ‘Government’ Category

Rx: Port Decongestant

In Competition, Government, Port Performance, Ports on April 14, 2016 at 1:14 am

The Secretary of Commerce received recommendations from her department’s Advisory Committee on Supply Chain Competitiveness (ACSCC). The paper: Recommendations to the Secretary of Commerce Regarding US Seaport and Connecting Infrastructure Congestion “for addressing and resolving” the “urgent national topic” of port congestion.

(From the humble perspective of a long time ports advocate in Washington, DC, home of the ten-ring circus, it is gratifying and reassuring that ports can sometimes make it to the spotlight and, even more, qualify as an urgent national topic…whether to the Commerce Secretary or to anyone. Not a bad career choice after all.)

Federal leadership is needed to advance a set of best port congestion reduction practices that the private and public owners and stakeholders of each port can individually adopt as appropriate. Our report contains a number of congestion reduction practices for this purpose. By advancing these practices, the Nation can achieve a comprehensive, holistic reduction in port congestion that improves national competitiveness and economic growth.

The February 4, 2016 transmittal letter to Secretary Penny Pritzker also noted that there is a limit to the role that Washington can play in addressing the issue but wanted to make the most of that role.

However, where Federal Government involvement can directly resolve port congestion issues, or reduce their impacts, Federal action should be swift and decisive.

The nine-page paper was drafted, discussed, and edited by the panel — a formal Federal Advisory Committee — over a good part of the previous year and then was approved at its January meeting. The folks who led the initiative are knowledgeable in freight logistics. And if certain others of the 30 to 40 persons usually present for the meetings had little personal knowledge of what happens in the life of an ocean shipping container it was explained to them.

(This is a good time to note that one sector that did not have a seat at that table is one that could have contributed greatly to the panel’s understanding of port terminal operations — the marine terminal industry. Further note: the newly selected class of ACSCC appointees to the 44 member advisory committee continues the seeming exclusion of representatives of the terminal industry.)

Port congestion, as it has come to be called, is a problem only in a few of the larger US ports but as those international gateways — New York/New Jersey, Los Angeles, Long Beach, Oakland, Virginia — handle a substantial share of the nation’s cargo, especially imports, slowed cargo throughput is a problem and can be costly to cargo interests and others involved in the port-centered supply chain. It is not that the other ports will never see port congestion. Others likely will, eventually. But even as this “urgent national” port topic has become an issue in Washington, and attracting the attention of multiple Federal agencies, most ports have seen none of the symptoms and few of the causes, of which there are many.

Simplistically, it might be compared to growing pains. Changes are happening to the port, terminal and other elements of the port-centered supply chain. Some of their moving parts are not moving as well as they had been. Cargo volumes are shifting. Shippers are diversifying ports of entry. Larger vessels mean more cargo to load or unload during one vessel call. Terminals were configured for the business of ten years ago. Ocean carriers relinquished ownership of chassis but not full control. A chassis or container depot is not convenient to the terminal. The truck driver makes multiple trips for one load. Drivers are told to to pick up the container when there might be better times to do it. Trucks spend hours in lines, sometimes needlessly. Discouraged drivers exit the business, causing shortages. Roads to the terminal are inadequate for the truck volume. Rail capacity is insufficient. Berths may work around the clock but gates do not because the container is destined for a warehouse not open until eight in the morning.

Throw in some sort of labor dispute (slowdown, etc) or a failure of the computerized terminal operating system and a combination of these factors can make for a quite a mess. The 2014-2015 West Coast experience during protracted labor contract negotiations — with two dozen and more ships at anchor offshore as evidence of the problem onshore — remains vivid in the minds of many whose cargo was slow to get to market and, in the case of farm exports, spoiled. The experience also is a vivid memory for  the people who worked to clear the ships and terminals of containers.

So, yes, there is a problem that some ports have been working to address. Indeed in those named ports multidisciplinary groups were organized to identify and tackle those problems. The first of those was the NY/NJ Port Performance Task Force, which for the implementation phase was succeeded by the Council on Port Performance.

The 2016 recommendations to Secretary Pritzker do not stand alone. In 2014, the Federal Maritime Commission heard stakeholders during four regional listening sessions, and later issued staff reports. The FMC is about to launch what may be its last initiative — Supply Chain Innovation Teams to “develop commercial solutions to supply chain challenges and related port congestion concerns” at the San Pedro Bay ports. In March of this year, the cabinet secretaries of Commerce, Labor and Transportation hosted an invitation-only, “21st century seaports roundtable” that was organized by the White House’s National Economic Council. Bills were introduced on Capitol Hill in 2015 and one — the Port Performance Act — eventually became law. The Department of Transportation’s Bureau of Transportation Statistics is now working on implementing the resulting Port Performance Freight Statistics Program. All of which can reasonably be attributed to the lobbying of cargo interests, with the help of trucking, who smarted from the West Coast port mess and wanted to see improvements that included, but not were limited to, workforce issues.

Committee members noted, during the discussion of this Report, that these measures can be used by the ACSCC to help the U.S. Department of Transportation to develop the set of port performance metrics required by the Fixing America’s Surface Transportation Act. The Committee also encourages the U.S. Congress to consider additional investment in last-mile infrastructure, new technologies and intelligent systems, and on-dock and near-dock facilities towards reducing U.S. port congestion.

The recommendations of “best practices” delivered to Secretary Pritzker, the details of which you can read here, apply to ocean carriers; terminal operations; port authorities; Federal, State and local government; chassis equipment management; motor carriers; and transportation planners. It is interesting to note that the recommendations apply to just about everyone in the port-related supply chain except the importers and exporters who, as happens, were the principal writers and proponents of the document.

One might wonder if others in the supply chain would have “best practices” to suggest to that shipper community. I think they would.

The Port Performance Task Force report engaged representatives of stakeholders from most aspects of the supply chain and came up with twenty-three recommendations to try to implement. Some of those recommendations, perhaps many, are true challenges, asking competing parties to cooperate in establishing shared solutions such as a truck management system (a.k.a. “appointments”) and chassis pools. Most of the recommendations have little to do with Federal or State government and much to do with improving commercial relationships, embracing new technology, sharing information, adjusting operations, improving communications, and respecting a negotiated labor contract. A few of those are in the recommendations to the Secretary.

The interest of Federal agencies in the port congestion issue is not a bad thing but it is misleading to label it “port congestion.” It is a supply chain problem. Why did the advisory committee recommendations go to the Secretary of Commerce? I suppose the reason is — like the banks to Willie Sutton — because she is there, and the panel exists to advise the Secretary. But as the transmittal letter admits, there is not much that the government can do. Outside of facilitating meetings and providing some assistance in funding infrastructure projects, the lion’s share of the work to be done is there in the supply chain, by the parties that make up the supply chain…and not just at the marine terminal.   Pbea

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Congress Got It Done

In Congress, Government, Infrastructure, Legislation, Ports, Water Resources on May 23, 2014 at 1:13 pm

While strolling through the park one day
In the merry merry month of May
I was taken by surprise…

Two recent May events are fresh in mind. Maybe not of the surprising sort but perhaps, eventually, capable of the unexpected. On May 6th the Maritime Administration convened its second symposium aimed in the direction of a National Maritime Strategy. And just this week, Congress gave final approval to the first water resources development act legislation enacted in seven years. Both have significance to the maritime sector but, for the time being, we may be able to gauge the significance of just the one.

So, let’s talk WRDA…rather, WRRDA.

You don’t have to have inside-the-beltway know-how to know what “werda” is.  For nearly 50 years, and for more than a century earlier under different names, WRDA has been the path that harbor deepening and inland waterway projects—not to mention flood protection and shore and environmental restoration projects—have taken to Federal approval.

Project ideas graduate from feasibility studies to be authorized for funding by Congress. WRDA is how the Harbor Maintenance Tax and Trust Fund became law in 1986. It is how the near-completed 50-foot deepening in the Port of New York/New Jersey was authorized in 2000. And it is how the Corps of Engineers will be given the go-ahead to deepen and otherwise modify channels in the ports of Boston, Savannah, Jacksonville, Canaveral, Palm Beach, Freeport, and Corpus Christi.

Those ports, and various States and counties, will be relieved when the Water Resources Reform and Development Act of 2014, HR 3080, is signed by President Obama.

Passage of WRRDA 2014 was cheered in the halls of Congress. To be sure, some of the voices heard where those of lobbyists, but more prominent were the self-congratulatory speeches and tweets (#WRRDA) let loose by the legislators, especially those with projects at stake. Even Tea Partiers, who two years ago questioned why Congress should even have a role in public works, voted for the conferenced measure and made floor speeches hailing its importance to their town or to the national economic interest.

No small amount of pride was declared in proving to themselves and to the nation that Congress is capable of agreeing on major infrastructure legislation despite the fractious partisanship and anti-spending sentiment that has come to characterize this town. The bill’s reforms and deauthorization provision, which will dump $18 billion in previously authorized projects, provide the calculated and rhetorical coverage they consider essential to allow them to vote for a bill with an estimated, eventual cost in the neighborhood of $12 billion.

Yes, public works can be costly. Of course, not building such infrastructure also can be costly.

If there is an indicator that the conservatives have been hungry to vote in the affirmative on an [insert favorite jobs creation modifier] infrastructure bill and to show that Congress can do something, it is that only four House members opposed final passage despite it being a Heritage Action “key vote.” Only seven senators—also Republicans—opposed the final bill this week.

It helps that some planned projects—including unsexy port channels for goodness sake!—have in recent years been regularly reported across the country as important to US competitiveness in global commerce. The House Transportation & Infrastructure Committee leadership used it early on to educate colleagues and the public alike. Who hasn’t heard that the Panama Canal is being expanded to accommodate big ships? They must not have been listening to the President, the Vice President, the news media, etc.  Those are the same ships that the aforementioned ports in Massachusetts, Georgia, Florida, New York and New Jersey, among others, hope will come their way.

WRRDA lacks the earmarking that turned some in Congress sour on public works legislation. Instead it prescribes a more detailed process by which the legislature will receive and act on project recommendations. It is a rational process, devised on the House side and intended to be something other than earmarking while reserving the prerogative for Congress to authorize projects i.e., not leave it to the Executive to make the decisions.

The added “R” in the bill is more than for show. Reforms to current law and practice are many. Some are intended to speed the famously bureaucratic civil works process. Others introduce new process and calculus to how Harbor Maintenance Trust Fund monies are budgeted and appropriated. (I may devote some words to that in a future post and so will limit my comment here to wishing “good luck and great wisdom” to the folks at Corps headquarters whose task it will be to interpret and implement the intent of Congress.)

It will have to be seen how well the reforms will enable the Corps of Engineers to meet, and will hold them to achieve, a 3-year study mandate, for example. One test of that will be the extent to which project sponsors are willing to leave the fate of their projects in the hands of Federal planners and analysts. That is because the bill gives more flexibility to project sponsors, such as port authorities, to study, construct and finance their projects. As we have seen in Florida and South Carolina, financial commitments are being made in State capitals in order to get projects constructed and completed well ahead of whenever Federal process and funding get done.

So there is a lot in WRRDA to cheer, not the least of which is the fact that it is done. And should the congressional committees actually live up to the sense of Congress, in Section 1052, to wit, “Congress should consider a water resources development bill not less than once every [two-year] Congress,” there will be even more to cheer in the years ahead.   Pbea

Do something. But not just anything.

In Government on May 2, 2014 at 12:34 pm

I took perverse pleasure in the breaking stories on the GW Bridge screw-up last fall. They seemed to promise that glaring lights would be aimed at the problem that has been consuming the nationally prominent, first-ever American public authority. Something needed to be done. Maybe this would be the tipping point.

Six months later, there is reason for optimism.

The subject of the Port Authority of New York & New Jersey and the utter mess that the 93 year old agency finds itself in has been on my mind for many years; the seeds of the problem were sown quite some time ago. It’s just that by this time the sprouted weeds, not invisible if one were looking, have grown thick to the point of crippling and discrediting a once very creditable institution.

A once sought-after model for other public authorities, one that recovered admirably from the most destructive and tragic foreign attacks on American soil is now associated with political abuse, patronage, vindictiveness, and incompetence and scandal that has been a constant source of headlines since November 2013. But the blame cannot be limited to persons of the Christie Administration who took it upon themselves to play traffic doctor and “study” how to turn a town’s congestion into paralytic pneumonia.

My interest in the subject is easily explained and offered as a disclaimer. Jersey bred and a student of government, I was once an employee. A fair number of former colleagues–smart, dedicated, and weary-from-what-ails-the-agency professionals–are still on duty there. I joined the Port Authority in 1980 and remained for over 25 years. We of a certain age witnessed its rapid change from a vigorous, highly ambitious and self-confident agency, especially when it came to tackling regional economic problems, to being heavily politicized and lacking sufficient resources both to maintain adequate staffing and to meet mounting capital and maintenance requirements.

The foundation is still sound, but major structural repairs are needed and the sooner the better. And not in the way the governor of New Jersey may be thinking.

The Port Authority stopped spinning gold for New York and New Jersey several decades ago. External conditions having to do with the economy, changes in the region’s population and commuter choices, and the demands both of aging infrastructure and of ambitious governors put agency revenues on a downward slope and its capital spending on an uphill path. It faced great  challenges, but nothing that couldn’t be managed.

In its colorful history, well documented in James Doig’s Empire on the Hudson, the Port Authority has been far from perfect, but it had served as a model for other states and municipalities searching for ways to manage essential public services. It has been the principal entity to provide New Jersey and New York with a regional framework of public works serving the daily commuter as well as interstate and foreign commerce. With steel, fiber optic cable and the pooling of its revenues for mostly transportation projects, it strengthened and bridged the metropolitan area’s borderless common interest.

Politicians are inclined to see borders as bright dividing lines. Many office holders like to see and use those lines as defensive moats or walls from which to lob obstructions and insults to the other side. Over the years the Port Authority itself has been the target, especially of mayors whose towns host its bothersome facilities. (Rudy Giuliani found nothing to like there and tilted at the agency with borderline animus.) Governors, on the other hand, have known it as a resource.

As recent articles have detailed, and as agency employees have known for years, the precipitous institutional decline in the agency and in the morale of its workers can be pegged to George Pataki’s decisions soon he took office in 1995. He and other conservatives employed a mantra reflecting the Ronald Reagan theme that government is the problem and that the private sector has the solution.

Public employees were denigrated and their jobs eliminated. In their place were private sector contracts. (Consulting, a profession where I now reside, took off in a big way as Federal, State and Municipal agencies were made to hire outsiders who were presumed to be more expert and cheaper than public employees.) Why have a law department when you can hire a law firm? Why have engineers and architects on the payroll when you can hire a name corporation? Perchance, did favoritism ever play a role in privatization? You tell me.

Governor Pataki, as is documented, showed his ideological stripes–and perhaps his indifference–early by naming George Marlin, a failed Conservative Party candidate and portfolio manager as Executive Director in charge of an agency with close to 10,000 employees. Governor Christie Whitman objected, but ultimately went along with the appointment by exacting some insurance. She got to name the Deputy Executive Director. One can hardly blame her; however it only served to accelerate the regional agency’s decline by starting the bifurcation of the executive offices of the Port Authority and more intimate levels of decision-making through the taut strings that ran back to Trenton and Albany.

Marlin lasted two years; the damage to the agency’s planning capacity and staff morale, among other things, however, was lasting.

Then came the events of 2001, not to forget the bombing of 1993. The emotional hit within the organization was inestimable, starting with the loss of 84 Port Authority civilian and uniformed personnel, including its capable executive director. (How the surviving workers enabled the huge, and financially significant organization immediately to relocate headquarters staff to maintain operations, recover and quickly pivot into heightened, anti-terror security initiatives deserves its own telling.) The toll on agency finances, both in terms of revenue and the costs associated with recovery and the largely political decisions as to how to manage the World Trade Center site was immediate and continues to this day.

Fast forward to today.

While the George Washington Bridge incident is scandalous, it is not a Port Authority scandal. It is a New Jersey Governor’s Office scandal. Fundamentally, it also is a New York governor’s and Board of Commissioners’ scandal.

It is not the result of Port Authority professionals run amok. It is the consequence of one governor after another, Democrat and Republican, drawing an ever deeper red line and effectively saying, “my commissioners and I will do what we want to do on my side of the line.” Regardless of cost. Regardless of whether it is a credible Port Authority mission or within the long-established geographic scope of the Port District. A rail extension in the Meadowlands. An airport in Atlantic City. A crumbling Skyway. A substitute for a bankrupt state transportation trust fund. And that’s just in New Jersey.

This is a good time to mention something that isn’t being said enough. Nothing of any political or economic consequence is decided at a high level in the Port Authority without the implied or direct consent of the governors or through their proxies at the Port Authority or in the governors’ offices. If it had to do with something on the New Jersey side, it was allowed or caused by a Christie, a Corzine, a McGreevey. If a project was approved in New York, it was okayed by a Cuomo, a Spitzer, a Paterson.  If a press release was written, well… So it can be very misleading when a major action—and this is not intended as a reference to Bridgegate—is described as “the Port Authority” did something or decided another. This is deliciously illustrated by the most recent and messy toll hike, the details of which I will leave to The Record.

By their actions a good many governors dismissed the formative notion that an independent public authority is needed to foster and serve the bistate common interest. They strayed from the classic boardroom model and the thoughtfully limited, statutorily set, gubernatorial power to veto board actions. They enjoyed the privilege of political patronage. Patronage may have had its start with George Pataki and Christie Whitman, but what succeeding governor didn’t want to put his own people in nicely salaried jobs, even if those jobs had to be created? The genie was let out of the bottle.

David Wildstein may be an extreme illustration of what can result from doling out patronage and power. We shouldn’t assume it is limited to him and others appointed by Governor Christie but let’s keep the spotlight there for a moment. By all telling in recent years Wildstein was a noxious, destabilizing presence that employees and persons outside the agency found threatening, which is as he wanted. Wildstein and Bill Baroni—himself, notorious for his performance before a US Senate committee—were two of perhaps several persons who were placed in positions of authority and did real damage. Whatever legitimate accomplishments they might have achieved along the way, they bruised and helped bring about early ends to the careers of responsible professionals at the agency.

As it happens, some of those Christie people now find themselves at the curb—fired or resigned. Some facing litigation. Some saving face.

Governor Christie suggests maybe it’s time to split up the agency. But that would only finish the bifurcation of the agency. It also would complete the corruption of the original intent to establish a public authority that plans, builds and invests in public works with a little separation from the election-oriented office holders. If we have learned anything it is that the recent revelations point to the need for just that kind of separation.

Instead of splitting the baby, Governor Christie and the inscrutably silent Governor Andrew Cuomo should take to heart the views of Professor Jameson Doig, RPA chief Robert Yaro, and former Port Authority executives Peter GoldmarkDick LeoneMartin Robins, among other experienced and thoughtful persons. They should also listen to Chuck Schumer. Yes, that Chuck Schumer.

A panel recently was formed by the current Board of Commissioners to explore reform ideas. In a speech on April 28th, the Senator invited the Port Authority leadership to consider his proposed reforms and come up with any additional ones for consideration in Congress, where the Port Authority Compact was first approved in 1921.

In his “seven point plan” are guidelines for the selection and responsibilities of the Port Authority commissioners and executive director, who should have “full managerial authority and responsibility for “the entire Port Authority organization.”

That very basic reform can get at the root of the problem, but it wouldn’t get at the problem of whether a bad or indifferent governor is in office. That’s a problem for the electorate. But it can help return the Port Authority to having leadership that has “a fiduciary duty” to the agency and full managerial responsibility. Maybe it even will be possible to stuff that patronage genie back into the bottle.

And that is why I was happy to hear how traffic came to a standstill in Fort Lee.   Pbea