On Feb. 24-25, Microsoft Corp. hosted a major conference on transportation and technology in Redmond. The first day focused on “breaking gridlock with technology,” and the second day on “dealing with a rising tide of freight.” Lead organizers of the event were Bruce Agnew of the Cascadia Center and John Niles of Global Telematics.
In a debriefing on day one, conference organizers agreed that the virtue of technology in transportation goes beyond its “gee-whiz” capabilities. The real value of tech is to enable optimal use of existing capacity, a critical factor at a time of surging demand and limited resources.
This point was picked up early on day two by Washington Department of Transportation Secretary Doug MacDonald, who spoke of the disconnect between “needs and funding” and “aspirations and competencies.” MacDonald noted that, “without funding, we cannot activate the other aspects.”
Opening keynoter for day two was Richard Biter, deputy director of the Office of Intermodalism at the U.S. Department of Transportation. Biter described a “road, rail, air and marine system tied together by intermodal connectors.”
Citing the 30 percent share of U.S. economic activity related to trade, he observed that “to shut down commerce in the name of security is to shoot ourselves in the foot.” Biter said the projected increase in cargo volume over the next 20 years was 100 percent in the West, highest for any U.S. region.
This theme was picked up by other presenters who have been active in the West Coast Corridor Coalition, an alliance among Pacific States’ transportation leaders from Alaska to Mexico.
Every state in our region handles at least three times the national share of cargo that its population share would suggest. The twin ports of Los Angeles and Long Beach are the largest container load centers in the Western Hemisphere, while Tacoma and Seattle rank second on some lists. The Columbia-Snake River system is second only to the Mississippi in bulk cargo transport. Anchorage is the nation’s busiest air cargo hub.
Overall, the West Coast handles half of America’s global trade. Yet federal transportation funding formulas don’t recognize this. Indeed, the West Coast is a “donor” region that sends more to Washington, D.C., in transportation taxes than it receives in revenue.
At the gathering, Coalition leaders focused two priority goals. The first is “favorable action in the federal reauthorization and appropriations process for funding West Coast transportation infrastructure and operations.”
Luncheon keynoter U.S. Rep. Rick Larsen, from Washington’s 2nd District, said that in our region each $1 billion spent on transportation generates 47,000 direct and indirect jobs. Moreover, there is long-term impact. Larsen reminded attendees, “If freight doesn’t move, jobs will.”
The Coalition’s second priority goal is to promote cost efficiency and policy coordination along the West Coast. This would be achieved in two ways: focusing on systems approaches rather than projects in planning, designing, building and operating transportation infrastructure; and sharing best practices from each part of the corridor and promoting their adoption throughout the region.
Therese McMillan, deputy director of the Bay Area Metropolitan Transportation Commission, called systems approaches and best practices “vital” because they can be applied now, before the congressional debate on federal funding is resolved. Moreover, cost efficiency strengthens the financial case by assuring that more adequate funding will be spent effectively.
Larsen lauded formation of the Corridor Coalition, observing that “other areas of the country are very well organized from a corridor perspective and work together state-by-state to get corridor funding.” He has put in a $500,000 federal funding request to support the Coalition’s work, calling it “a critical part of coordinating our efforts to match those of other regions.”
Cal-Trans freight chief Richard Nordahl observed that “a corridor system with a national perspective demands a paradigm shift.” Bill Wagner, director of the Cascades West council of governments in Salem, Ore., said, “The West Coast is the gateway. How many of our infrastructure dollars should we have to spend making sure goods get to Chicago?”
The ultimate issue is a sea change in the global economy. The China-U.S. trade relationship is becoming No. 1 in the world. China has overtaken the United States as the largest consumer market. Only Japan exceeds China as a destination for U.S. exports. In Washington state, China is the top customer for Boeing jets and for wheat, the leading export other than aircraft.
On the import side, the trade gap is worrisome. Yet, imports lower the inflation rate, include component parts that end up in U.S. finished products, and support millions of jobs in wholesale and retail trade. Moreover, last year, Japan bought $275 billion and China $175 billion in U.S. treasury bills.
Some players are beginning to ask if Asian finance might include direct investment in infrastructure that supports the trade relationship. More broadly, given the fact that no one imagines anything but rapid growth in Pacific Rim trade, how can the beneficiaries — from China to Chicago — help move the goods by helping share costs that now fall entirely on West Coast gateway regions?
GLENN R. PASCALL’s column appears regularly in the Business Journal. He is a Seattle-based economic and public policy consultant, and a senior fellow at the Center for the New West. Since 2001, Pascall has served as Coordinator of the West Coast Corridor Coalition.
© 2005 American City Business Journals Inc.