New legislation being proposed by U.S. Sens. Maria Cantwell and Patty Murray would help Puget Sound ports compete with those in Canada and Mexico, they say.
The senators want to do away with the Harbor Maintenance Tax charged on containers of cargo that come into the United States by sea. Instead, they would charge a fee on all containers that originate internationally, even if they come by rail or truck from Canada or Mexico. Then shippers wouldn’t be able to circumvent the charge by sending their goods through Canadian and Mexican ports.
“Some of the laws we have in place … are actually hurting our ports,” said Murray, adding that the harbor tax is outdated and unfair.
The Maritime Goods Movement Act for the 21st Century, which the senators plan to introduce in September, would address one of the biggest competitive issues facing the ports of Seattle and Tacoma. It was hailed by local port commissioners as long overdue.
“It’s hard to believe that our own country is making it hard for us to compete,” Port of Tacoma Commissioner Constance Bacon said.
Washington ports face increasing competition from Canadian and Mexican ports, especially British Columbian ports that can ship goods by rail across Canada to the American Midwest.
“Fixing this is about businesses and workers in our trade economy, and we want to make sure that we have a level playing field,” Cantwell said.
In 2012, 70 percent of the containers shipped through the Port of Prince Rupert were bound for the United States, according to the Port of Seattle. An increasing amount of the cargo that goes through the Port Metro Vancouver is bound for the United States as well.
The new law would allow the United States to start charging a fee — on average about $109 per container — on containers that originate in another country but end up coming to the United States through Mexico or Canada. In 2011, there were 478,000 containers that came from Canada, according to the Port of Seattle.
Diverted cargo means diverted jobs, too. Port of Seattle CEO Tay Yoshitani estimated that about 10,000 Puget Sound jobs are at risk of diversion to Canadian ports.
“We’re ready to compete with Canada and Mexico, but we do so with one arm tied behind our backs right now,” Yoshitani said.
Cantwell and Murray announced their legislation at a waterfront news conference attended by representatives from the ports of Seattle and Tacoma and a fruit-exporters’ industry group. The widespread local support for the new legislation is not only because it could give local ports a competitive edge.
The legislation also would change the way the money collected from shippers is divided. All the money would go back to ports, and it could be used for a wider variety of infrastructure projects.
Harbor Maintenance Tax money is used for a lot of dredging now, which means deep-water ports in Puget Sound don’t get much of it. In 2013, the Harbor Maintenance Tax collected $1.8 billion, and about $848 million went back to the ports for maintenance.
The Port of Seattle ended up with about 1 percent of the money it generated.