US ports require US$18 billion upgrade, but only $7 billion is budgeted

US PORTS need US$18 billion in infrastructure upgrades to keep up with the rest of the world, but only $7.2 billion has been budgeted to do the job, according to the American Society of Civil Engineers (ASCE).

"Congestion and delays lead to goods waiting on docks and in warehouses for shipment, which in turn leads to higher transportation costs and higher-priced products on store shelves," says ASCE president Andrew Herrmann.

From 2020 to 2040 more than $28 billion will be needed, which leaves requirements $17 billion short in current budget estimates, said the ASCE study, according to New York's Maritime Professional.

Inland waterway traffic is forecast to rise by 11 per cent to 51 million tons by 2020, and 25 per cent by 2040, the report said.

More than half of crude oil goes on inland waterways, along with 24 per cent of other fuel oils and 22 per cent of basic chemicals. Costs attributable to delays in the nation's inland waterways system were $33 billion in 2010 and will increase to $49 billion by 2020, said the ASCE report.

Combining inland waterways with ports, the funding gap is $46 billion for capital upkeep. From 2012 to 2020, it is estimated that 25 per cent of the capital investment needs of ports will be for expansion, and 75 per cent for upgrades. By 2040, 83 per cent of the funds will go to maintenance and upgrades, the report said.

"Port authorities themselves are planning on spending a combined $18 billion through 2016 on infrastructure improvements for water terminals, while their private-sector terminal partners are looking at spending $27.6 billion, for a total of nearly $46 billion. This is more than $9 billion a year in combined infrastructure investment, of which more than one-third will be spent by the port authorities themselves," it said.

The ASCE said much dredging will be needed based on its calculations on the extra costs of using smaller ships to import and export goods. The total for all goods to 2040 is $13 billion, with oil and related products the most costly at more than $4 billion.