After nine years of construction and a series of delays, a $5.4 billion expansion of the Panama Canal was inaugurated Sunday June 26. The expansion is expected to have a significant economic impact for U.S. ports and the states in which they reside. Here’s a rundown of what a number of states are expecting, the preparations and challenges that could lie ahead for the nation’s ports and some economic factors that could reshape expectations for the new canal.

CSG Midwest

If the plans of a group of investors called Great Lakes Basin Transportation get the go-ahead, the Midwest could soon be home to the nation’s largest new railroad project in more than a century.

The idea behind this proposed 278-mile rail line is to allow some freight traffic to bypass the Chicago rail yards, where congestion caused by the greatest density of rail lines in the world can tie up freight for 30 hours. Current projections show traffic in this rail hub...

CSG South

According to June 2015 statistics released by the U.S. Army Corps of Engineers, 40 of the top 100 U.S. ports (coastal, Great Lakes and inland) in terms of tonnage are located in states belonging to the Southern Office of The Council of State Governments (CSG), the Southern Legislative Conference (SLC). Impressively, seven of the top 10 ports were SLC state ports. The Port of South Louisiana and the Port of Houston rose to the top, ranking first and second, respectively. While the SLC has focused on ports, the economic influence of ports and the potential impact of the expansion of the Panama Canal on ports in the South for more than 15 years, this Regional Resource reviews an important allied field: emerging trends linked to the nation's, and specifically the region's, inland ports, waterways and related infrastructure.

CSG Midwest
An estimated 25 percent of all of the nation’s rail traffic goes through Chicago, where 56 Amtrak trains originate or terminate every day and where six of the nation’s seven largest railroads converge. But the Midwest’s largest city isn’t just a hub of rail transportation; it’s also known as a major “chokepoint”: a source of gridlock, poor on-time performance and dispatching problems. In October, Amtrak’s Chicago Gateway Blue Ribbon Panel released its recommendations for loosening the Chicago “chokepoint,” which poses a larger economic vulnerability to the U.S. economy than any other major rail hub. (A panel-commissioned study estimated that up to $799 billion in annual gross domestic product depends on freight rail service through Chicago.)
CSG Midwest
Two years ago, an explosive fire caused by a rail tanker car carrying crude oil took 47 lives and destroyed much of the downtown Québec city of Lac Megantic. A number of nonfatal fires involving oil-carrying trains have followed, most recently this year in Illinois and North Dakota. These incidents have raised safety concerns on both sides of the border, as well as this question: What can governments do to prevent the accidents from occurring? This spring, a mix of new federal and state standards were unveiled that set new rules for tanker cars and what is being loaded on them.

Janet Kavinoky is the Executive Director for Transportation and Infrastructure at the U.S. Chamber of Commerce in Washington, DC and Vice President of the Americans for Transportation Mobility Coalition. Pat Thomas is Vice President of Global Public Affairs for UPS and currently serves as First Vice Chairman at the American Trucking Associations. Both were speakers at a transportation policy roundtable May 12 in Washington as part of the 2015 CSG Transportation Policy Academy. In these excerpted portions of their remarks to state legislators attending the academy, they spoke about why both of their organizations support a federal gas tax increase, why Congress hasn’t been able to reach agreement on a plan to meet the nation’s infrastructure investment needs, what it may take to convince them to do so and how predicted changes ahead for freight transportation makes a national focus on the issue imperative.

Brian Pallasch is the managing director for government relations and infrastructure initiatives at the American Society of Civil Engineers (ASCE) in Washington, DC. He was among the presenters at a policy roundtable CSG hosted on May 12 as part of the 2015 Transportation Policy Academy in Washington. During these excerpts from his remarks, he discusses ASCE’s 2013 Report Card for America’s Infrastructure, the economic costs of not investing in infrastructure, why ASCE supports an increase in the federal gas tax and a permanent fix for the Highway Trust Fund and why he believes a proposal to eliminate the federal role in transportation is a bad idea.

In Alabama Department of Revenue v. CSX Transportation the Supreme Court held 7-2 that railroads can be compared to their competitors when determining whether a tax is discriminatory in violation of the Railroad Revitalization and Regulatory Reform Act (4-R Act).  Different taxes paid by railroads and their competitors must be compared with determining whether a tax railroads pay is discriminatory.  The State and Local Legal Center (SLLC) filed an amicus brief in this case disagreeing with the Court’s first holding and agreeing with its second holding. 

A new Congress this year could decide the long-term future of federal surface transportation programs after years of uncertainty that have had a huge impact for states and their planning processes. Meanwhile, 2015 could bring significant activity in state capitals on transportation funding initiatives. Public-private partnerships and tolling seem likely to continue their evolution after what was a pivotal year in 2014. With transportation funding scarce, the process of planning and approving transportation projects is under new scrutiny as well and appears likely to be influenced by a growing number of new metrics and methodologies, technological, demographic and lifestyle changes, and other factors. The struggles to increase transportation investment at the federal and state levels continue despite what appears to be solid evidence of the job creation and economic growth potential of investment, as evidenced by the actions of some of America’s biggest economic competitors. Here’s my expanded article on the top 5 issues in transportation for 2015 and a selection of additional CSG and non-CSG resources where you can read more.

Two new reports and a variety of recent developments in states lay bare the challenges of relying on the gas tax as a revenue source to meet transportation needs. I also have updates on some of my “States to Watch in 2015” and the usual roundup of recent items on MAP-21 reauthorization, public-private-partnerships and tolling, and state multi-modal activities.