Christopher T. Cook

Bio: Christopher T. Cook is an academic researcher. The author has contributed to research in topics: Port (computer networking) & Tonnage. The author has an hindex of 1, co-authored 1 publications receiving 2 citations.

Funding port-related infrastructure and development: the current debate and proposed reform

Abstract: Introduction I. Constitutional and Statutory Restrictions on Port Operations A. The Tonnage Clause B. The Shipping Act C. Plaquemines. Courts' Exacting Standard Under the Shipping Act II. Addressing the Funding Problem A. Congressional Proposals 1. H.R. 526: ON TIME Act 2. H.R. 2355: MOVEMENT Act of 2009 3. H.R. 2707: National Freight Mobility Infrastructure Fund 4. Congressional Analysis B. National Infrastructure Bank C. Structured User Fees 1. PierPASS 2. Security-Related Fees 3. Clean Truck Program D. Port Authority Cargo-Based Fees 1. Ports of Los Angeles/Long Beach--Infrastructure Fee 2. Port Authority of New York & New Jersey--Cargo Facility Charge 3. Analysis of Cargo-Based Fee Validity III. Proposed Reform Conclusion INTRODUCTION "[W]e can put Americans to work today building the infrastructure of tomorrow. From the first railroads to the interstate highway system, our nation has always been built to compete." (1) "Our infrastructure used to be the best, but our lead has slipped.... [W]hen our own engineers graded our nation's infrastructure, they gave us a D.'" (2) President Barack Obama's State of the Union Addresses in 2010 and 2011 focused on the need to rebuild trade-related infrastructure as an aspect of revitalizing the United States' economic condition. (3) American seaports are a central component of the President's discussion. (4) Port (5)-related activities contribute more than $649 billion annually to the U.S. Gross Domestic Product, sustain more than thirteen million jobs, and contribute over $212 billion annually in federal, state, and local taxes. (6) United States seaports--much like the rest of the United States' infrastructure--are in desperate need of improvement. (7) Federal, state, and industry actors agree that freight rail and roadways servicing seaports require significant repair and expansion. (8) What they cannot agree upon, however, is how to generate the funds necessary to meet current and future capacity needs. (9) Modern container ports (10) have witnessed a sea change in how global trade is conducted. (11) From 1990 to 2007, trade in containerized cargo--i.e., cargo transported in a truck trailer body that can be detached from the frame of the truck for loading into a vessel or rail car (12)--in the United States' four largest container ports increased as follows: Ports of New York and New Jersey (279%), Port of Los Angeles (395%), Port of Long Beach (456%), and Port of Savannah (621%). (13) Driven by the surging market in containerized trade, the size of ships calling on U.S. ports has grown from 4500 twenty-foot equivalent units ("TEUs") (14) to 12,000 TEUs, (15) which has increased the number of trucks and miles of freight rail necessary to transport cargo from seaports to interior manufacturing and distribution points. (16) Consequently, many roadways have become inadequate, (17) resulting in roadway congestion, (18) increased fuel emissions, (19) and related environmental and public health concerns. (20) Additionally, East Coast ports are uniquely concerned with port-related capacity and infrastructure issues. (21) Historically, the largest ships transporting containerized cargo have been unable to pass through the Panama Canal in calling on East Coast ports. (22) This is about to change. The Panama Canal is currently being expanded to accommodate ships carrying up to 12,000 TEUs. (23) The anticipated completion of the Panama Canal Expansion Project in 2014 has forced ports on the eastern seaboard to dredge channels deeper to accommodate the larger ships (24) and expand intermodal facilities (25) to transport containerized cargo quicker and more efficiently. (26) Containerized cargo is here to stay, but what is less certain is how the United States will fund new infrastructure and development to accommodate its proliferation within the shipping industry. …

Factoring a real value of cargo in port investment and funding decisions

Abstract: Ports are marine gateways to economic activities. Ports’ ability to perform services depends on their facilities, harbor conditions, and other factors. Generally, ports have control over their facilities but must compete for funding to improve them. As for waterways, in the U.S., a Harbor Maintenance Trust Fund was established to fund dredging, which levies a 0.125% cargo value tax on most shippers using U.S. coastal and Great Lakes harbors. Yet, commonly, a gross tonnage metric is used to allocate the fund’s resources, resulting in under-maintenance of some harbors. This, reportedly, deters additional port funding and hinders valuable commerce. Supplemental economic metrics, such as value of commerce or cargo, can improve port financing decisions, but such data is not readily available. Container ports collect cargo value data in nominal terms, but bulk ports do not. When making economic decisions, however, real values must be used. Further, when allocating resources, decision-makers must be able to asse...

A valuation approach of port funding strategies with application to a container terminal concession in Sub-Saharan Africa

Abstract: Purpose: Increased economic activity in sub-Saharan Africa (SSA) has given rise to increased demand for port development. Given the often scarce availability of national public funding, port institutional reform programmes have been implemented to pave the way for the inclusion of external port investors. Notwithstanding this fact, some sub-Saharan African Governments remain institutionally locked into the notion that state-owned enterprises remain an appropriate vehicle for port terminal operations. This, despite the fact that terminal operational concessions globally and within the continent of Africa are increasingly being managed by global terminal operators. Given this context, this study aims to evaluate different port valuation and funding strategies. Two research questions form the core of this research: what is the financial value of a concession? What is the most cost advantageous funding strategy? The methodology is applied to the development of a two-berth container terminal in SSA. Design/methodology/approach: After reviewing a range of financial valuation and funding techniques, the study presents valuation and funding model applicability-fit tests. Thereafter, a suitable valuation technique is selected and applied to the case study providing a concession valuation. Different funding strategies are applied to the valuation model to determine the cost implications of each funding instrument given the local context and institutional constraints applicable to SSA. Finally, the study discusses the significance of the results to potential SSA port investors by highlighting the impact of each funding approach on key financial metrics. Findings: The study presents a range of financial investment appraisal results for the case study concession in consideration of four specific funding strategies. The highest concession valuation could be attributed to a higher debt ratio as a principal funding strategy. In addition, this funding approach (100% debt) realised the shortest payback period and the highest internal rate of return values. The authors, however, maintain that the optimal funding strategy for a concession depends ultimately on the financial goals of the investor. Originality/value: This research makes a contribution to the existing literature on port finance and development by presenting a structured approach to the evaluation of the valuation and funding techniques, which can be used in terminal development subject to the specific local context and institutional constraints (in this case applicable to SSA). The study provides practical insight into the potential cost of the considered terminal concession for private or public sector participants and a view of the most cost advantageous funding strategy available for interested investors.