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Steel traders push for more port dredging

Keywords: Tags  American Institute for International Steel, AIIS, Water Resources Development Act, Harbor Maintenance Trust Fund, port dredging, John Foster, Kevin Castagnola, South Jersey Port dreging

CHICAGO — The American Institute for International Steel (AIIS), pushing for Congress to pass the Water Resources Development Act, is focused on a provision that would require the government to spend all of the funds collected through the Harbor Maintenance Tax for their intended purpose: dredging and maintaining ports.

The law’s passage "would be a major step (toward meeting) the nation’s infrastructure needs," AIIS chairman John Foster said in a statement. "Now is the time for Congress to act, as dredging has been underfunded for so long that over $7 billion has built up in the Harbor Maintenance Trust Fund. The year-after-year underfunding of this critical task has significant costs for our economy."

Every time a vessel’s draft is reduced by one foot due to inadequate dredging, shippers have to bear an additional $1 million in shipping costs, according to Kevin Castagnola, chief executive officer of South Jersey Port Corp. and chairman of the AIIS ports committee. Such costs hurt job creation and manufacturing productivity, he added.

"An analysis by the U.S. Army Corps of Engineers stated that fully authorized channel dimensions are available less than 35 percent of the time at 59 of the highest-use harbors in the United States," Castagnola said. "These costs are a serious competitive problem (that is a) direct result of not allocating the (harbor maintenance fee) solely to dredging, as the law states."

Describing steel trading as a "highly competitive world," Foster said that the lack of proper port channels has hurt AIIS members’ competitive edge. "Reaching President Obama’s goal of doubling exports, for example, is made more difficult with a less-competitive port system," he said

The U.S. Army Corps of Engineers just completed a 10-year, $370-million dredging project to deepen the Port of Los Angeles’s Main Channel, West Basin Channel and East Basin Channel to 53 feet from 45 feet, which will allow it to accommodate larger cargo vessels (, April 4).

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