American Seaports--Changes Affecting Operations and Development

CED-80-8: Published: Nov 16, 1979. Publicly Released: Nov 16, 1979.

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In coping with dramatic changes in maritime transportation and cargo-handling techniques, America's seaports have incurred large, long-term debts; and many ports anticipate additional large capital expenditures to accommodate trade increases. A continuation of current trends will require even greater changes--deeper shipping channels and harbors, extensive capital expenditures, and shifts in traditional patterns of cargo movement, with greater emphasis on a few main ports. Many ports are having difficulty obtaining funds from traditional sources for continued development, and the question of whether the Federal government should have a role in this development has been raised. Legislation to provide funding has been considered but not enacted. Options for Congress to consider when evaluating the Federal role in seaport development were reviewed.

Modern cargo movement and handling techniques require fewer laborers but increasing amounts of capital. Several matters have affected attempts by ports to modernize. There has been a greater social awareness of the effect that port activities have on the environment and employee safety. Dredging costs have risen because of stricter standards concerning the disposal of dredging wastes. Employee safety and cargo security regulations have increased port costs. Ports have been experiencing greater difficulty obtaining local or State revenues or tax-supported bond issues for capital expenditures. Obtaining funds based on port income has been difficult because of the small profit margins on which many ports operate. Several options that Congress should consider when determining the role of the Federal Government in port development were noted. The Federal Government might continue to provide and maintain channels, harbors, and navigational aids and share the costs of port research and regional planning. A national plan for port development, including Federal underwriting of capital investments and Federal subsidies of operating deficits might be adopted. Congress might decide to adopt a national plan for port development financed by a tax on port users patterned after the airport development program. Other options include Federal underwriting of ports' financial needs by guaranteeing loans, or Federal financing of federally mandated costs.

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