By Dave Gatton
March 5, 2012

Exports will account for nearly 40 percent of future U.S. economic growth over the coming decade, but increased investment in the nation’s intermodal transportation system will be necessary in order to take full advantage of expanding markets overseas, mayors learned during their National Leadership Meeting on Metro Exports and Ports, February 23-25 in Jacksonville. The meeting was attended by over 70 mayors, port directors, transportation specialists, and international trade experts.

“If you’re serious about creating jobs, you have to be serious about expanding exports,” said Conference of Mayors President Los Angeles Mayor Antonio R. Villaraigosa. “Ninety-five percent of the world’s consumers are outside of the United Sates.” “To help businesses get their products from cities across the United States to markets around the world, we need to invest in our roads, bridges, ports, and rail systems,” he told over 100 Jacksonville business leaders who joined the mayors for the concluding session.

Leading U.S. ports and trade economist John Martin told the mayors that the expansion of the Panama Canal by 2014 and the growth in the Suez Canal would have significant implications on changing trade patterns. He said that East and Gulf Coasts will have to make major infrastructure improvements to handle the larger sized vessels that will be deployed on both Suez as well as Panama Canals, including dredging harbors to a 50-foot depth, expanding berth capacity to handle 1,000 ft plus vessels, and increasing crane outreach capability. Otherwise, these ports will lose business to Caribbean transshipment centers.

Long Beach Mayor Bob Foster adamantly claimed that the nation could no longer respond to growing international competition through a band-aid approach of insufficient infrastructure investment. He called for development of a national freight policy that would create a fully integrated system of transportation for the movement of goods, by increasing investment in port modernization, railway systems, roads and distribution facilities. “This will only work if we develop a national intermodal system, but today we have no such policy to keep us globally competitive,” he said.

Westland Mayor William Wild, representing the Detroit metro area, said that the Great Lakes ports were key to the nation’s transportation system, but that significant investment was needed for their modernization. “We have a federal Harbor Maintenance Trust Fund that has a $6 billion surplus that could be unleashed to create jobs and improve our ports, but only a small portion is appropriated annually,” he said. “What has Congress done with the money?” he asked.

In fact the port modernization needs extend far beyond the nation’s seaports. The nation has 12,000 miles of inland waterways with 191 lock systems, in addition to a river system that is key for the transport of bulk exports. Fifty percent of the nation’s locks and dams are over 60 years old with a replacement cost of $125 billion in 1994 dollars.

Yet these inland ports and waterways are key to many metro economies. “Through the economic activity of our inland port, we have weathered the Great Recession fairly well,” said Little Rock Mayor Mark Stodola.

For many metro economies, ports are major economic engines. “Our port in Jacksonville is a $19 billion engine that supports 65,000 jobs with an average salary of $44,000,” Jacksonville host mayor Alvin Brown said. Brown chairs the Conference of Mayors Metro Exports and Ports Task Force. Because of their economic impact, mayors are not standing idly by as international competition heats up.

Foster said the Port of Long Beach will invest $4.4 billion in its Capital Improvement Plan that includes terminal developments, rail improvements and bridge replacements over the next ten years.

Villaraigosa told the Jacksonville business leaders that “greening” the Port of Los Angeles was key to its ability to move forward with modernization plans. He said that by embracing the environmental improvements needed at the L.A. port, he was able to receive approvals for key projects. The mayor cited major reductions in air pollutants from the port and a resulting improvement in air quality.

Yet, despite such local developments, it is the overall intermodal transportation system that desperately needs federal investment, the mayors concluded. Expert speakers told them over the two-day conference that the railways are essentially maxed out, the lack of elevated crossings slows movement and ties up traffic, most ports remain too shallow for the new mega'ships, intermodal connections are inadequate, and trucks remain stalled in metro congestion. Meanwhile, foreign governments, including India and China, are making dramatic investments in their infrastructure.

“This is not just a coastal issue,” said Des Moines Mayor Frank Cownie. “We just inked a multi-billion dollar export deal with China Vice President Xi Jinping for agricultural products and machinery, but we rely on a total transportation system to deliver these goods that are vital to our regional economy.” “If we don’t ensure the future viability of that national transportation system, we jeopardize our entire economic future,” he said.

Conference of Mayors Second Vice President Mesa Mayor Scott Smith summed up the mayors’ feelings. “Investing in these national infrastructure needs is all about our future. It is for our children. Generations before us made investments for us. Will we do the same? If we don’t or can’t because of partisan politics, then it is time for us to get angry. This is not a Democratic or Republican issue, this is a national issue, and our future is at stake,” he said in his closing remarks. It was a sentiment shared by everyone in the room, including businesses and policy leaders.

The mayors then turned their attention to how to increase metro exports in a growing global economy. Rybak reminded the mayors that only one percent of U.S. businesses currently export and of those, over half do so to only one international market.

He challenged the Conference of Mayors Metro Exports and Ports Task Force to develop a list of five key approaches that mayors could take in developing metro export strategies. Working with the Brookings Institution’s Metro Policy Program, the Task Force will develop a “toolkit” on metro export strategies and work with a group of cities in developing such plans.

Amy Liu of Brookings said the first step in developing a plan was to acquire the data on existing exports and businesses within a metro region, but that such data was extremely difficult to develop. She indicated that certain agencies within the federal government will not share information with the International Trade Administration, so it must be built through other means. “This is one of our biggest challenges,” she said.

Akron Planning Director Samuel Deshazior said that cities must help small and medium sized companies overcome the “fear factor” in developing international markets. “They are afraid of costs, not getting paid, and the time involved for the possibility of losing their shirts,” he said. “The fear factor is our first and biggest hurdle,” he told the mayors.

Others said they must integrate “exports” into the mission of their economic development departments, citing that they relate to businesses on all sorts of issues, but rarely on whether they are exploring overseas markets.

Other mayors recommended being more strategic in their current international travel, often focused around cultural exchanges, to incorporate more local businesses with export potential. “Our international relations needs to be more business focused,” said Tallahassee Mayor John Marks.

“The mayor plays a key role here,” said Rybak. “We can bring all the key parties together—businesses, universities, workforce training, federal trade resources, and labor—to develop export strategies that build on our local economic strengths.”

The task force will work with Brookings to implement The U.S. Conference of Mayors Metro Export Challenge, a major initiative launched by Villaraigosa at the Conference’s Winter meeting in January. The Challenge will work with a select number of cities to develop metro strategies.