1. 1 Ports and Harbors – Transitions and Challenges Ms. Doris J. Bautch Commissioner, U.S. Section of PIANC U.S. Maritime Administration Presented at the Organization of American States Inter-American Committee on Ports Houston, Texas December 7, 2005

2. 2 Overview of U.S. Ports Most are landlord ports operated by State, County or Local Governments Mixed Goals Very capital intensive, but may not be profitable Include domestic and international traffic Intensely Competitive

3. 3 Port Capital Expenditures by Type – Share of Total Capital Expenditures Source – Marad Port Financial Survey - 2003

4. 4 U.S. Maritime Infrastructure Conditions and Concerns - 25,000 miles of waterway and harbor channels handle 2.4 billion tons of cargo vital to economy Maintenance backlog increased to nearly $700 million under FY 2005 Budget Lock Construction Projects underway to meet these needs have been delayed by 5-10 years due to funding shortfall Harbor improvements are needed to handle new larger vessels Billions of dollars in economic benefits of projects foregone due to delays in construction of harbor and waterways

5. 5 Evaluating Ports and Economic Development We agree: Ports contribute to local, regional, and national economic well being Ports are expensive to construct and operate but require corresponding investment by others Are we adequately valuating the asset? Public Utility? Business Incubator? Convention Center?

6. 6 Ports are now Components of Global Supply Chains Historically, limited inland transportation options defined a port hinterland – “local or captured cargo” Today, transportation decisions are geographically “blind”. Extended hinterlands have allowed “investment corridors” development of economies of scale, resulting in lower transportation costs Ports are part of system – not single node What correlation exists between a port’s success and other external actors? How do port’s handle growth?

7. 7 Port Activities – Part of Larger Chain

8. 8 Challenges to U.S. Ports Channel and Navigation Access Landside Access Urbanization

9. 9 What Metrics Best Present the Need to Improve the System? Inventory Functions Engineering Operational Reliability Economical and Financial Safety and Security Non Navigational Users

10. 10 What is the U.S. Maritime Industry Doing? Promotion Cabinet Level MTS New Maritime Studies from interested Groups Promoting Inland Water systems Planning Short Sea Shipping Asset Management Strategies Extending Terminals by using off-site terminals Corps NETS Program Terminal Productivity Greenfield/Brownfields