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Mar.7, 2016

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GOVERNMENT WATCH INTERNATIONAL | WASHINGTON | CUSTOMS | SECURITY | REGULATION 88 THE JOURNAL OF COMMERCE www.joc.com MARCH 7.2016 By Reynolds Hutchins A U.S. COMMERCE Department advisory com- mittee has come up with some ways it can help the federal government prevent supply chain bottlenecks at the nation's ports. The Advisory Committee on Supply Chain Competitiveness, in a report sent to the Commerce Department, suggests the establishment of a federal office dedicated to multimodal transportation, the creation of "lockboxes" to protect freight funds from being diverted to unrelated projects and the collection of specific metrics to capture freight flows and market trends. The suggestions come about a year after the showdown between U.S. West Coast employers and unionized port labor exacerbated congestion and nearly crip- pled container handling from Long Beach to Seattle. The near meltdown spurred Congress to direct the Department of Transportation to create a set of metrics to measure port productivity. The 40-member group — with execu- tives from the likes of BNSF Railway, Boeing, Campbell Soup, Halliburton, Menlo Worldwide Logistics, Pfizer and Target — highlighted areas where the federal gov- ernment can be involved and where that involvement should be "swift and decisive." A key recommendation in the group's letter to the government is the introduc- tion of so-called lockboxes to protect freight-related funds from being diverted to non-freight-related projects and programs. "Federal freight-generated revenue pro- grams (the Harbor Maintenance Tax and Merchandise Processing Fee, for example) should have 'lockboxes' around them to prevent diversion of these revenues to non- freight or non-goods-movement uses," the committee suggested. That suggestion echoes remarks made by a number of lawmakers and industry stakeholders who have complained for years that federal freight-generated revenue pro- grams have seen millions of dollars worth of funds diverted to unrelated line items. Under the Water Resources Reform and Development Act signed into law in 2014, the U.S. is working year-by-year to hit benchmarks to one day ensure that amounts credited to the Harbor Maintenance Trust Fund are used for harbor maintenance, with a goal of using all funds by 2025. To date, Congress has released about two-thirds of the fund to support the deepening and wid- ening of U.S. ports and waterways. The American Association of Port Authorities, the largest U.S. port lobby, said it's optimistic the federal government will continue to hit those benchmarks. "In fis- cal year '16, they hit the target. That target was 69 percent of the prior year's estimated revenues," Jim Walker, the AAPA's director of navigation policy and legislation, told The Journal of Commerce. Th is yea r, t he goa l is 7 1 percent , Walker said. "We've got two years out of 10. Given they've got a one-year trend of hitting the target, we're optimistic," he said. Adding another layer of protection, the committee suggested that those federal funds be prioritized for federally funded freight projects by one single office. "The Department of Transportation needs to establish an office of multimodal freight within the office of the secretary," the com- mittee advised. That office would be responsible for the prioritization of federally funded discre- tionary freight projects, because it would be more in tune with which projects would have "the greatest payback or benefit to the supply chain." Like many of the advisory committee's suggestions, the group recommended that the office be used to facilitate direct part- nerships with state and local agencies. The office also could make use of freight move- ment data and other supply chain trend input that can provide aggregated informa- tion on market trends and volumes to assist in its prioritization process. The advisory committee's recommen- dation makes no reference to it, but the language suggests the proposed office could make use of the new data that will be col- lected and studied by the DOT via the new multiyear highway bill, the Fixing America's Surface Transportation, or FAST, Act. NEW IDEAS ON PORT PRODUCTIVITY A report from a Commerce Department advisory committee suggests new ways to prevent supply chain disruption

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