Overhaul of Import Tax Could Help US Seaports

In September, two Washington senators, Patty Murray and Maria Cantwell, will pitch their ambitious plan to overhaul the Harbor Maintenance Tax, to create incentives for shippers to return to the use of American ports. It is hoped that the overhaul will stop shippers from dodging the tax by using ports in Canada or Mexico, and it is seen as an important step in the development of the intermodal network in the US. The tax is designed to provide funds for the maintenance of harbor facilities, specifically for the dredging of federal navigational channels. It currently generates $1.6 billion per year, with around $900 million in expenditures, and has so far failed to deliver the desired results, with shipping channels only being at optimum width and depth around 35% of the time. The senators hope to replace the Harbor Maintenance Tax (HMT) with a Maritime Goods Movement User Fee, which it is hoped will stop HMT funds from being diverted to other projects. The new arrangement will be imposed on goods entering the US by road or rail, from both Canada and Mexico to circumvent the current practice of landing cargo in those countries, and then shipping them overland to avoid the HMT. It will also end the tax benefits that are currently given to major gas and oil companies as a means of increasing revenues for the scheme. The funds are to be used to continue to upgrade America’s intermodal network, and a significant focus will be on the development of lesser-used, “subsistence” or remote harbors that are currently at a disadvantage in their access to federal developmental funding. The senator’s bill indicates that America’s harbors are desperately in need of maintenance, and yet only half of the tax that is collected for their upkeep is used for that purpose. Worse still, a significant proportion of the taxes are not being collected at all, exacerbating the decline in the state of the ports that it is meant to maintain. It is hoped that the new scheme will benefit ports such as Seattle and Tacoma, by making it more efficient and cost-effective to use American ports directly once again. The legislation is tabled to be introduced into the Senate early in September. Analysts are skeptical of its success in the face of the defeat of similar bills in the past and the current fiscal deadlock in Washington. But most are agreed that it is at least a step in the right direction for US intermodal shipping in the 21st Century.