“U.S. ports are competitive internationally; however, it would appear that the (Harbor Maintenance Tax) makes the challenge more difficult,” according to a new report by the Federal Maritime Commission. “This is especially the sentiment of the ports that are competitive with Canadian and Mexican ports. According to Tay Yoshitani, CEO of the Port of Seattle, “A lot of factors go into the routing of cargo and a lot of carriers/shippers want diversity in how they get cargo to warehouses…cost is always an issue, and the HMT clearly disadvantages us against Canadian Ports.”
The report, requested by Rep. Rick Larsen, D-Everett, and other members of Congress, said that the tax is one of many factors resulting in increased use of Canadian and Mexican ports of goods that are eventually bound for U.S. inland locations.
“While a user fee is necessary for U.S. ports to grow, the number of proposals in both the House and Senate as well as from other sources, suggest that amendment to the current HMT structure should be given consideration,” the report stated.
The Harbor Maintenance Tax, charged by the federal government, pays for all of the U.S. Army Corps of Engineers’ shipping channel dredging costs, according to the report.
Larsen, who sits on the Coast Guard and Maritime Transportation Subcommittee in the House of Representatives, said the report shows that the U.S. needs to invest in its infrastructure and reform the “inflexible” harbor tax.
Larsen is running for re-election this year against Republicans Dan Matthews, Eli Olson, John C.W. Shoop, Mike Lapointe of “The 99% Party” and Glen Johnson, who listed no party preference. Click here to see our candidate information for that race.
Following is from his office:
WASHINGTON—Rep. Rick Larsen, WA-02, says a Federal Maritime Commission report released today shows that Pacific Northwest ports are losing business to Canada and called for action to address the root causes of the cargo diversion. Larsen is the top Democrat on the Coast Guard and Maritime Transportation Subcommittee, which has jurisdiction on the issue in the House of Representatives.
“Pacific Northwest ports are facing an invisible blockade that is sending our business to Canada,” Larsen said. “The Federal Maritime Commission’s report shows we need to invest in our infrastructure to make our ports more competitive and take a hard look at reforming the inflexible Harbor Maintenance Tax which is putting our ports at a disadvantage.
Larsen led a letter with other members of Washington state’s Congressional delegation in September requesting the report. That letter is available here.
“With this report in hand, I will work with my colleagues to reform the Harbor Maintenance Tax so we can get more U.S.-bound cargo coming through our ports and get longshoreman, truckers and shippers back to work,” Larsen added.
As the report shows, a large number of U.S. imports from Asia are processed through Canadian ports before moving to the United States through cross-border rail. In meetings with port officials throughout the Pacific Northwest, Larsen has been told that the Harbor Maintenance Tax creates a significant competitive disadvantage for U.S. ports compared to Canadian ports. Canada does not have a comparable tax, which charges shippers $1.25 per $1,000 worth of cargo.
The report also notes that Canada and Mexico have a “strong national port policy and infrastructure strategy.” Larsen has been a strong advocate of a national freight policy and infrastructure investment as a way to create jobs and lay the foundation for economic growth.
The commission concluded that shippers that use non-U.S. ports do not violate U.S. laws, treaties or Federal Maritime Commission regulations.
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