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August 17 2020

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30 The Journal of Commerce | August 17 2020 Government EXECUTIVES AT US seaports are step- ping up calls for more direct federal aid, saying the prolonged downturn in demand caused by the COVID-19 pandemic threatens their financial viability. "It's not just on the container side; it's passenger ships, bulk, coal, forest products, aggregates, liquids, and tank- ers," said William Doyle, executive director of the Port of Baltimore and a former Federal Maritime Commis- sioner. "You name it, it's been hit." Doyle's comments, made on the July 22 episode of JOC Uncharted, came just before the American Association of Port Authorities (AAPA) sent a let- ter signed by 69 of its members asking Congress for $1.5 billion to cover "business-critical expenses that ports have incurred due to COVID-19." Congress is introducing bills that would allow for emergency grants to the maritime industry and that would step up port funding. But port leaders say the aid needs to come in the most current round of COVID-19 relief being considered in Congress, lest ports make further personnel and operational cuts. The immediate need for personal protective equipment, extra cleaning supplies, and other safety measures already is putting a hole in port bud- gets. Daily temperature checks for longshore workers at the Port of New York and New Jersey, for example, cost up to $60,000 per week. Those new safety-related costs are butting up against ongoing capi- tal spending needs and debt service costs at ports as well as revenues that have fallen along with cargo volumes. Through the first half of 2020, US import volumes tumbled 7.3 percent year over year, according to data from PIERS, a sister product of The Journal of Commerce within IHS Markit. The AAPA says furloughs and lay- offs already are happening throughout the maritime industry, positing a worse-case scenario of up to 130,000 US seaport jobs lost due to COVID-19. "America's seaports are experienc- ing significant financial challenges as commercial cargo has plummeted and passenger travel has nearly ceased," AAPA chief executive Christopher Connor said. The stimulus is needed to keep ports in a "state of readiness to significantly aid in the nation's eventual economic recovery." Doyle said he hopes the money will be included in the next COVID- 19 relief bill, which is currently being debated in Congress. No time to waste This latest round of stimulus remains stalled on whether it will extend the extra unemployment benefits that were introduced in the original $3 trillion aid package. But Doyle said it should be easy to find broad political support for helping ports, given how many direct and indirect jobs they support. "All port directors, states, and governors can get behind" providing stimulus, he said. "Not much was in the first round of stimulus for seaports." It's also particularly important to make sure port operations are fluid now that many states are starting reopening plans and companies are slowly ramp- ing up operations, Doyle added. "Some ports have had to cut back their hours," Doyle said. "It's not the ocean carriers that dictate and deter- mine where cargo goes, but it's the shippers and beneficial cargo owners all working at the same time" as the ports. Challenged by drops in revenue across multiple business lines, includ- ing airports and road and bridge tolls, some port authorities already have made their own calls for help during the COVID-19 downturn. The Port of Oakland, for example, in April asked for state aid as it antici- pates "steep financial losses" over the next two years. The Port Authority of New York and New Jersey asked for $3 billion in direct federal aid to cover an expected revenue shortfall and also applied to the Federal Reserve's municipal bond buying program to help stabilize prices for its publicly traded debt. In May, two members of the FMC sent a letter to Congress asking for direct aid to marine terminals, whose rents and throughput fees make up the bulk of seaport revenue. "Marine terminal operators are getting hit hard," Doyle said. "They are laying out a lot of money to keep people employed and keeping things clean." Relief packages already have been put forth in Congress. Rep. Peter Fazio, D-Oregon, chair of the House committee on transportation and infrastructure, and Rep. Sean Maloney, D-New York, who heads a subcommittee on the US Coast Guard and marine transportation, intro - duced a bill in early July that would give the Maritime Administration the ability to provide emergency funding to maritime supply chain businesses, such as shipyards, tug operators, and stevedores. A draft funding bill in the House also seeks to add $1 billion to the Department of Transportation's Port Infrastructure Development Program, on top of $300 million already tar- geted for the program, for fiscal 2021. While Doyle welcomed those other efforts, "both bills are going to take some months to move forward," adding urgency to the COVID-19 relief bill currently under debate. "We've been hit hard," Doyle said, "and it's time we get some stimulus." JOC email: A little help from the feds US ports step up calls for short-term stimulus By Michael Angell "Not much was in the first round of stimulus for seaports." The AAPA warns the US maritime industry could lose up to 130,000 seaport jobs due to COVID-19. International | Washington | Customs | Security | Regulation

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