February 15, 2012
Port Developments
I think it's good news (and about freakin' time!) that there is movement in the Legislature--specifically a commission headed up by Jamestown Rep. Deborah Ruggiero--to develop Quonset/Davisville as a short sea shipping port. Imagine: taking advantage of our geography and greatest natural resource for possible economic gain! There are some hurdles ('allo Guvnah!)
The commission found that there was little statewide coordination of the maritime trade economy, and suggested that the governor appoint a port economic policy ombudsman to take on that role.There's also some dredging that would need to be done and, in an of-course-it's-Rhode-Island kinda way, it turns out the Harbor Maintenance Fund I mentioned last week can't be tapped to dredge the Davisville port:The ombudsman would chair a Rhode Island Port Marketing Collaborative, which would seek out business and development opportunities for the state’s ports.
A spokesman for Governor Chafee said the governor received the port commission’s report Tuesday afternoon and would not comment until after he had studied it.
The port commission urged the General Assembly and the state’s federal delegation in Congress to ask the U.S. Department of Transportation to designate Rhode Island ports as “destination ports” in the U.S. Department of Transportation’s Marine Highway System. That’s a federal program started in 2010, designed to move freight along the coastline and waterways, relieving highway congestion.
Ruggiero noted that New Bedford is already on the Marine Highway map, but Rhode Island’s ports are not. “New Bedford had an advocate, while the State of Rhode Island did not,” she said.
She said Rhode Island’s location should give it an advantage in short sea shipping.
The port commission also recommended that the state fund what Ruggiero called “maintenance dredging” at Davisville and in the shipping lane extending from Davis ville to Jamestown/Conanicut Island.So, a long-term competitive advantage, but a short-term bottleneck because of a tax exemption. Figures, right? So instead we're going to have to go the bond route. Of course, we don't have to go that way. There's a remarkable vehicle that could be used to fund the dredging that wouldn't require the state taxpayers taking on more long term debt: It's called the State Budget. Of course, that may require re-prioritizing expenditures and the like. I guess we can't have that.The commission recommended that the state issue $7.5 million in revenue bonds to pay for the dredging.
While federal funds could be used for the dredging, the port commission said that could mean a wait of between 5 and 10 years before funds could be appropriated.
What’s more, since Davisville hasn’t been dredged since the U.S. Navy did it in 1977, the port is exempt from a federal Harbor Maintenance Tax.
Davisville is the only commercial port on the East Coast without the tax, which gives it a commercial advantage that is important to its growing auto-import business.
So for $7.50 per-capita we can have a structural advantage in a nationwide competitive market?
Sounds better than risking $75 a head for a one-time video game company deal, or $300 per-capita to take $2,200 from each person and give them $1,900 back (RILOT).
Posted by: mangeek at February 15, 2012 10:21 AMIn theory, I support this project as a legitimate function of government.
However, I make the following predictions based on the fact that this is Rhode Island:
- There will be little to no effective oversight of the project.
- The project will reach double or triple its original budget.
- The project will take at least double the time originally expected.
- Political insiders will make a lot of money and at least one will be Federally indicted as a result.
- At least 1 or 2 people will be accidentally killed.
For all of Dan's insightful comments above, we have to deal with what is.
We have to regain our position as a "player" in world trade. I was disheartened by a news story on NPR today. A Chinese emissary is visiting Iowa, much of Iowa's industry has moved to China. In short "much of our business has gone to China, they should invest here". This sounds like the plea of a 3rd world post-colonial country. I was reminded of Rhodesia/Zimbabwe's claim that Britain had purposely hampered their ability to engage in trade by using a railroad gauge that was not compatible with those of neighboring countries. This required off loading and reloading at national borders. This is standard to prevent invasion by rail. Think of the Nazis using pack horses to invade Russia.
Even in our new technological age, as regards international trade, carriage by sea is still the only efficient method. About 40% of my business is international, largely small items. An example, I just made a sale to Malaysia. Transportation by any of the commercial carriers, such as UPS or Fedex, does not include the possibility of "surface" transport. So, transport of a $1,700 item to Malaysia would be about $800.00, exclusive of "inland" costs. Including it with a "container" shipment, by sea, reduces that cost to about $25.00, perhaps less.
Interestingly, we have stepped back a century, or so, as regards dredging. To be efficient some ships, such as ULCC, have grown so large they do not see a port for years at a time. They cannot enter ports and stand off shore, with cargo transported to port by "lighters". This will increase with the advent of Panamex vessels. This harkens back to the days of sail when smaller ports could not accept "ocean going" vessels. I remember speaking with a Mercedes dealer in the Dominican Republic. Port difficulties were such that they could only manage one "delivery" per year.
Posted by: Warrington Faust at February 16, 2012 1:49 AM