Testimony of Kurt J. Nagle

Testimony of Kurt J. Nagle

President and CEO

American Association of Port Authorities

Before the

U.S. House Committee on Transportation and Infrastructure

Hearing on

“The Federal Role in America’s Infrastructure”

February 13, 2013

Thank you for the opportunity to submit this written testimony for the record. Founded in 1912, the American Association of Port Authorities is an alliance of the leading public ports in the Western Hemisphere. Our testimony today reflects the views of our U.S. members.

Beginning with the founding of Jamestown colony, seaports have served as a vital economic lifeline for America by bringing goods and services to people, creating economic activity, and enhancing our overall quality of life.

Since the founding of our nation, there has beena clear and consistent federal role and an overriding national interest in developing and maintaining landside and waterside connections to America’s seaports. Pursuant to the U.S. Constitution, Congress, by statute, has reserved jurisdiction over navigable waters for the federal government. The General Survey Act of 1824 granted the Army Corps of Engineers the authority to construct and maintain navigation projects on behalf of the United States. In 1826, Congress passed the first Rivers and Harbors Act and provided funds to the Corps to create specific navigation projects. It is particularly crucial that in these challenging times the federal government continuescore federal missions,such astransportation infrastructure investment, that directly impact America’s economic vitality and national security.

More than a quarter of the U.S. Gross Domestic Product is accounted for by international trade. Freight movement through America’s seaports supports the employment of 13.3 million American workers, and seaport-related jobs account for $649 billion in annual personal income. For every $1 billion in exports shipped through seaports, 15,000 jobs are created.

In a recent member survey, AAPA found that public ports and their private sector marine terminal partners plan to invest more than $46 billion through 2016 in capital improvement projects to meet growing demand.

To accommodate increasing trade volumes, there must be adequate, safe, and congestion-free access to our ports from both the land and water-sides. Under-investing in these connections with ports will drastically impact our country’s abilityto compete internationally and meet U.S. demands.

Unfortunately,in recent years the federal government has prioritized neither maintaining nor enhancing port-related infrastructure projects.On January 15,the American Society of Civil Engineers (ASCE)released a report on the impacts of under-investing in America’s infrastructure. The marine ports and inland waterways section shows that an additional $15.8 billion investment per year through 2020 (just one-tenth of the report’s cumulative total) will protect nearly $700 billion in U.S. GDP, $270 billion in U.S. exports, 738,000 jobs, and $770 per year in household costs. Overall, ASCE projects America could see as much as a $4 trillion loss to its GDP by 2040 if we ignore U.S. transportation infrastructure needs.

The report notes that land and water connections that affect the ports’ ability to move cargo into and out of the country are often insufficient and outdated. The resulting congestion and delays cause the goods we import to become more expensive, and the goods we export overseas to be less competitive in world markets.Because international trade is central to our economic well-being and seaports connect us with the rest of the world, keeping them modern, navigable, secure, and properly supported are core priorities for AAPA – and they must be for the nation as well.

The volume of trade through America’s seaports creates a prominent target for terrorist and other attacks. The ports are international borders that the federal government has a constitutional responsibility to secure. The potential vulnerabilities of seaports are many and growing; given the overwhelming number of ships and containers that pass through seaports every day the federal government has a clear interest in their protection, and has created programs in the past to attempt to address this need.

Today, as we confront a host of international challenges, from sputtering economic growth tonational security concerns, we must realize that the continuing vitality of our seaports is of critical importance.

The ports, however,cannot work alone to maintain and improve this infrastructure. They rely on partnerships with the private sector and the federal government.

In efforts to streamline government and reduce the deficit, it is vital to recognize that not every federal dollar spent is the same. Federal investments in seaport related infrastructure that connects American industry to international markets is an essential, effective utilization of limited federal resources. They pay enormous dividends through increased international competitiveness, long-term job creation, economic prosperity, and over $200 billion in federal, state, and local tax revenues.

At AAPA, we’re hopeful that the federal government’s current efforts at implementing provisions of 2012’s MAP-21 transportation bill will result in the creation of a coherent and effective national freight policy and strategy.Such a national strategy and the necessary federal investment to support it will ensure thatAmerican-made products are more competitive around the globe,American manufacturers and consumers pay lowerprices for the goods that they need, and American jobs are sustained and createdhere at home.

Passage of the Water Resources Development Act, which Chairman Shuster has made his top legislative priority, is critical to maintaining and expanding water navigation channels. It provides opportunities to modernize U.S. ports and streamline the Corps of Engineers navigation program to meet the needs of today and the future in a more timely and efficient manner.

It is heartening that Chairman Shuster, Ranking Member Rahall, and other members of the Committee have brought these issues front and center in the 113th Congress. It is critical that Congress recognize the need for federal investments in transportation infrastructure.

Thank you again for the opportunity to include this testimony as part of this hearing’s written record.

- 1 -