Industry Featured Articles
Tuesday, September 18 2018
By Greg Jones, Vice-President, FTZC™ (Foreign-Trade Zone Corporation)
In his Magnum Opus commonly known as “The Wealth of Nations,” 18th century Enlightenment philosopher and economist Adam Smith noted, “Every man thus lives by exchanging, or becomes in some measure a merchant, and the society itself grows to be what is properly a commercial society.” If one were to update this observation, one might say that every man and woman’s livelihood depends on the exchange or trade of goods, services, and every form of property. Since ancient times, trade in goods has fueled the growth of cities, the construction of roads, ports, and other infrastructure, and indeed, nations and empires. In those days the trade of goods was – literally – a pedestrian affair. Merchants loaded goods and commodities on a beast of burden and hoofed-it to the village, town, or city where the goods would be sold. Today, trade ranges across the globe, with raw materials, parts and components, and finished products being produced, marketed and transported in every country, city, town, and household via multiple modes of transportation: ocean, air, rail, and highway.
As trade has expanded and become more complex, competition has become global. The competition to attract and retain value-added business operations, and thereby reap investment, employment and prosperity is also global in scope.
Tuesday, May 29 2018
By Sarah B. Hood
In January, Port of Cleveland President and CEO William Friedman spoke on behalf of the American Association of Port Authorities (AAPA) before the U.S. Senate Committee on Environment and Public Works about the sector’s critical infrastructure issues.
“It’s imperative that related infrastructure be a part of any broad infrastructure investment legislation the committee develops,” he told the Committee. “AAPA has identified $66 billion in potential waterside and landside investments over the next decade that will help assure the benefits from an anticipated $155 billion in port-related capital infrastructure investments.”
AAPA President and CEO Kurt Nagle points out that “seaport cargo activity accounts for 26 percent of U.S. GDP and over 23 million American jobs, and generates over $320 billion annually in federal, state and local tax revenues.”
Sunday, October 01 2017
By Lisa A. Bastian, President, Bastian PR
A Promising Future for American Foreign Trade Zones
America's Foreign Trade Zones (FTZ) program is stronger than ever and continues to be a high-value asset for U.S. exports activity and re-shoring of manufacturing efforts.
Every zone is an economic development tool giving competitive advantages to U.S. firms representing myriad industries. By reducing costs, zones not only "level the playing field" but help companies keep their manufacturing or distribution operations in America. While not all participating companies are large, many which utilize FTZs are global giants, including General Electric, Dell, Intell, Merck, General Motors, BMW and ExxonMobil.
Friday, September 29 2017
By Kurt Nagle, AAPA President/CEO
At a time when the United States government is focused on creating American jobs, propelling the economy and modernizing infrastructure, the role played by the nation’s freight transportation system is more critical than ever. Unfortunately, transportation infrastructure investment in the U.S. has lagged, impacting the flow of goods to farmers, manufacturers, workers and consumers who must have access to the global marketplace.
According to the American Society of Civil Engineers (ASCE) in its 2017 “Infrastructure Report Card,” America can no longer afford to defer investment into its infrastructure. To close the current $2 trillion, 10-year investment gap, meet future needs, and restore the nation’s global competitive advantage, an increase in investment from all levels of government and the private sector is needed - from 2.5 percent to 3.5 percent of U.S. Gross Domestic Product by 2025.
Friday, September 01 2017
Anticipated federal under-investment in port-related infrastructure could dampen job and economic prospects
In its just-released 2016-2020 Port Planned Infrastructure Investment Survey, the American Association of Port Authorities (AAPA) – the unified and recognized voice of seaports in the Americas – asked its U.S. member ports how much they and their private-sector partners plan to spend on port-related freight and passenger infrastructure over the next five years. The answer was a whopping $154.8 billion.
AAPA then contrasted that number with what it believes is the “best-case” scenario for investments by the federal government into U.S. ports, including their land- and water-side connections, through 2020. The answer was just $24.825 billion.
Tuesday, May 30 2017
By Kurt Nagle, AAPA President and CEO
Success in meeting an organization’s improvement and expansion goals can be interpreted in many ways. The American Association of Port Authorities (AAPA) – the collective and recognized voice of ports throughout the Western Hemisphere – recently asked its member ports to answer the dual questions, “What is the biggest success of your port since the recession?” and “What obstacles did your port overcome to achieve this success?”
The answers we received from a cross-section of AAPA’s member ports reinforce an industry saying, “If you’ve seen one port, you’ve only seen one port.” No two answers were quite the same, reflecting each port’s unique goals, objectives and obstacles. However, one theme was recurrent…even the toughest challenges are no match for persistence and dedication toward a favorable outcome.
Thursday, September 15 2016
By Tommy L. Berry, Chief Business Officer of PointTrade Services, Inc.
As one begins to understand the impact of sea ports and inland ports and their role in attracting and maintaining value-added services to their respective communities, it is advantageous to understand what a Foreign Trade Zone (FTZ) is. An FTZ is a secure and defined location that acts as an extension of a U.S. Port of Entry. Established in 1934, the United States FTZ Program was developed to promote economic development through international trade. FTZs have been established in all fifty states and Puerto Rico. FTZs may allow for delayed and/or reduced duty payments on imported merchandise. Duty deferral, reduced Merchandise Processing Fees (MPF), duty elimination on scrap and exports, reduction or elimination of a drawback process, supply chain efficiencies, inverted tariff savings and increased compliance are some of the benefits offered through a zone. Some areas in the country also offer additional benefits such as a tax break on inventory.
Based on the most recent data available in the Annual Report of the Foreign Trade Zones Board to the Congress of the United States, there were 179 FTZs that were active during 2014 accounting for approximately $798 billion in merchandise received, with approximately $99 billion in direct exports. These zones were utilized by around 2,700 firms employing approximately 420,000 persons.
Monday, May 23 2016
By Kurt Nagle, President and CEO, American Association of Port Authorities
Most economists and politicians agree: infrastructure investments, particularly in transportation, benefit the economy, boost jobs and aid in business development.
As the primary gateway for overseas trade, U.S. seaports are essential for economic prosperity, and federal funding for transportation infrastructure in and around ports pays enormous dividends for the country. Deep-draft coastal and Great Lakes ports are the nexus of critical goods movement infrastructure that connects America’s exporters with markets overseas. They also provide access for imports of raw materials, components, and consumer goods that are a key part of U.S. manufacturing and standards of living.
Given this, it’s no wonder that infrastructure spending at U.S. ports is on the rise.
Wednesday, September 23 2015
Port activity is expanding and many ports, especially on the west coast, are overcrowded and offering slower and more expensive service. The country's major ports are facing congestion as the inbound volume of goods manufactured abroad continues to rise. Projections for the next five years indicate that some ports will triple their containership capacity and freight throughput.
The recent congestion at LA/Long Beach, the country’s largest container port gateway, is due to equipment shortages (e.g., chassis), labor shortages and labor contract negotiations, and the challenge of adjusting terminal operations to larger container ships deployed in the transpacific trade. Ongoing congestion has raised the issue of shifting some cargo to alternate gateways. Options for available for importers and exporters to use other U.S. West Coast ports, Mexican ports, and all-water services via the Panama Canal to Houston and other Gulf ports. However, all these options would likely be more costly and less timely and have their own challenges.
To accommodate the rise in global imports, the industry is shifting more to an "inland port" model, where inbound goods are quickly off-loaded from ships and moved to inland distribution centers for subsequent handling and redistribution within the country.
Thursday, May 21 2015
Seaports are the backbone of a thriving 21st century global economy. Yet, a nation’s freight transportation system is only as good as its underlying infrastructure. In the American Association of Port Authorities’ (AAPA) 2015 Surface Transportation Infrastructure Survey - The State of Freight, results indicate that the nation’s unsurpassed goods movement network needs immediate and significant investment in the arteries that carry freight to and from its seaports. Without that investment, the American economy, the jobs it produces and the international competitiveness it offers will erode and suffer, creating predictable and oftentimes severe hardships to the individuals who live and businesses that operate within its borders.
In 2013 alone, some 1.3 billion metric tons of imported and exported cargo, worth nearly $1.75 trillion, moved through America’s seaports, while an estimated 900 million metric tons of domestic cargo with a market value of over $400 billion was also handled through these international gateways.
Thursday, May 21 2015
Growing markets, shifting manufacturing centers and major infrastructure projects keep global trade lanes in flux
Nine years ago, American Association of Port Authorities (AAPA) hosted a workshop in partnership with the U.S. Maritime Administration (MARAD) designed to give attendees a look at “Shifting International Trade Routes,” especially those anticipated to occur because of the newly-begun expansion of the Panama Canal. The program proved extremely popular, and AAPA has repeated the program in Tampa, Fla., each January since then. It has become a staple in AAPA’s training offerings each year, though the agenda has grown to look more broadly at what’s happening in global trade patterns and market shifts.
Even with the 2015 program, which was held January 29-30, the subject matter remains evergreen – what is happening with the global market? What’s changed since last year? How are trade lanes shifting throughout the world? And – perhaps most importantly – what does this information mean for public ports?
While mainstream media has focused a great deal on the Panama Canal expansion – and certainly the expansion is a newsworthy item and will likely significantly affect global trade – there are many other factors currently driving worldwide trade trends. One critical factor is the location of manufacturing centers within Asia.
Tuesday, March 17 2015
The 47th Annual Georgia Foreign Trade Conference (GFTC) was held in Sea Island, Georgia on February 1-3, 2015. Master of ceremony, Cliff Pyron, CCO for Georgia Ports Authority (GPA), opened this year’s conference. The conference opened with keynote addresses which included insight from federal and state leaders. Georgia Governor Nathan Deal was proud to announce over $1 billion has been invested for transportation and infrastructure by the State of Georgia in preparation for the future Panama Canal project. According to Governor Deal, GPA, the State of Georgia and U.S. Army Corps of Engineers have partnered together in the Savannah Harbor Expansion Project (SHEP.) The state has allocated $266 million in bond money to proceed with the project. Georgia leaders were excited at the passage of federal legislation and the signing of a cost-sharing agreement with the Corps of Engineers – the final hurdles before construction could begin. Deal said, “We’ve dotted all the i’s and crossed all the t’s pertaining to the $706 million Savannah Harbor deepening project.”
Deal said, “Georgia is creating an atmosphere using policies and laws in a focused effort to attract manufacturers to the state. The removal of the energy tax has been very enticing for manufacturers. The most recent announcement of automotive giant Mercedes Benz selecting Georgia to relocate its headquarters is proof that economic development is a priority in Georgia. Mercedes Benz is a symbol of excellence around the world.”