A $30 Impact

The state’s Joint Transportation Committee continues to grapple with the question of how to fund freight mobility infrastructure.

A consultant study, mandated by SSB 5207 (2007), is evaluating existing fees paid by the freight industry and seeks to identify other income sources to finance freight congestion relief investments. This includes an evaluation of other states and countries' programs and their impact on competitiveness. Originally findings were to be completed prior to the 2008 Session; however the Committee has extended the study to coordinate with highway and rail freight project work being done by the Department of Transportation and will present its findings to the 2009 Session.

A piece of this research includes an analysis of the diversion of container traffic that would occur as a result of fees or charges that are imposed on containers moving through the ports of Tacoma and Seattle. Conducted by Dr. Robert Leachman, and independently reviewed by BST Associates of Kenmore, WA, the study verifies what industry insiders have long argued: a state-imposed container tax would result in the diversion of both cargo and jobs from the Pacific Northwest.

The study found that a charge of $30 per Twenty-foot Equivalent Unit (TEU) would drive away over 30% of cargo passing through the state. According to Dr. Leachman, “Even a small container fee at Puget Sound may drive significant amounts of traffic away from the Puget Sound ports.” BST Associates went on to note that “The report focuses on imports from Asia. However…there could be an equal or greater loss to other international traffic (specifically, exports and empty containers).”

It is important to remember that diverted cargo means diverted jobs. According to an economic impact study completed in 2005 (based on 2004 data), Port activities generate 43,100 jobs in Pierce County that pay 41 percent more than the county average. Statewide, 113,000 jobs are related to Port of Tacoma activities, an increase of 11 percent from 2000. The Port’s cargo-handling, construction and leasing activities generate $91 million in state and local taxes.