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January 6 2020

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78 The Journal of Commerce | Januar y 6 2020 Government | Executive Commentary 2020 ANNUAL REVIEW & OUTLOOK American Association of Port Authorities Chris Connor President & CEO Because they support over a quarter of the US economy and 31 million American jobs, proper mainte - nance of the nation's deep-draft harbors and navi- gation channels for today's new, larger ships is paramount to the manufactur- ers, retailers, exporters, and farmers who count on ports to move their products to market. For more than three decades, US ports have been denied full mainte- nance funding through the harbor maintenance tax (HMT) that ship- pers pay to use the nation's federal navigation channels. Committing this revenue for harbor maintenance is vital, but it's being administered through an unfair, broken system. That system is on the brink of change. Led by the American Associ - ation of Port Authorities, the US port industry has agreed on a new plan that devotes all HMT funds to our ports, while placing no additional tax burden on the industry or taxpayers. Under the revised HMT plan, annual revenues would be provided to the US Army Corps of Engineers, providing benefits to all of America's seaports, including donor and energy transfer ports, and emerging harbors. Donor ports are those with natu - rally deep harbors where significantly more HMT funds are generated than they receive. Energy transfer ports, which the federal government consid- ers a national priority, process greater than 40 million tons, and more than one-quarter of their cargoes are energy products. The nation's smaller ports, called emerging harbors, would also see safeguards under this plan, through guaranteed minimum funding levels to address maintenance needs nationwide. AAPA was pleased with the progress of HMT reform legislation passage (HR 2440) in the House last fall, and looks forward to seeing how the Senate and House address HMT reform in WRDA 2020, which will help keep America moving. Bryant's Maritime Consulting Dennis L. Bryant Principal The marine industry is adapting to some of the most radical environmental challenges in its history. The ballast water management system (BWMS) requirements have led to expensive retrofits of existing ships and major design changes to new ships. The 2020 fuel oil sulfur limits are requiring the use of more expensive bunkers or installation of complex scrubbers. Unfortunately, this is the beginning of these processes, not the end. The BWMS regulations estab - lished discharge standards that are attainable under current engineering processes. Those processes will con- tinue to evolve. It should be expected that discharge standards will gradually ratchet up, in line with the inevitable improvements in engineering. Atmospheric emissions from ships are greatly improving as the 2020 fuel oil sulfur limits take effect. The next aspect under consideration relates to carbon emissions. This issue cannot be solved by simply using cleaner oil; it will require the near-to - tal elimination of carbon-based fuels for ship propulsion. At some point in the not-too- distant future, both oil and LNG will be largely banned from shipping use. Ammonia and several other currently exotic fuels may be utilized in their stead, along with fuel cells. Batteries are already being used on some smaller vessels plying short routes. Improved technology will expand potential use to larger ships and longer routes. Wind energy, with kites or high-tech sails, may be used to reduce energy consumption. Experiments have been conducted utilizing solar energy on ships, but salt-water spray presents significant difficulties. The bottom line is that the greening of the marine industry will continue apace. Ship speed and noise issues are waiting in the wings. The industry must continue to identify and implement practical approaches, rather than be the subject of change. Canadian International Freight Forwarders Association Bruce Rodgers Executive Director While a cer- tain degree of political vola- tility and uncertainty is always a given, in recent years countries such as Canada find themselves caught up in trade wars whose effects are severely damaging to the economy and to consumer and business confi - dence overall. All of this plays into how well our sector, the logistics service providers, can deliver the goods while "managing expectations" of new consumption patterns that are driving new trading partners. Along with this rapidly shifting trading environment, technology, such as the push towards digitization, moves forward at breakneck speed, but government policy and the often slow-moving, at times archaic cus - toms processes struggle to keep up. The explosive growth of e-com- merce puts added pressure on the system. What will be the best balance between maintaining security and enabling better revenues? Our sector cries out for a change of mindset toward transparency, collaboration, and sharing around data, but cyber - security looms as a significant threat to all. We live in a challenging environ- ment of rapidly changing economic conditions. A significant change is occurring, moving from public sector to private sector. The new economy is changing to increased globalization and elimination of borders, accom- panied by advances in information technology and more open communi- cation channels. "At some point in the not-too-distant future, both oil and LNG will be largely banned from shipping use." ▶ Dennis L. Bryant "Our sector cries out for a change of mindset towards transparency, collaboration, and sharing around data, but cybersecurity looms as a significant threat to all." ▶ ▶ Bruce Rodgers ◀ "The US port industry has agreed on a new plan that devotes all HMT funds to our ports, while placing no additional tax burden on the industry or taxpayers." Chris Connor

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