1. Infrastructure Development
of Small and Niche Ports
Ian Jason
April 2015
California Maritime Academy

2. 1
United States Ports
When discussing ports in the United States, the ones that are most mentioned are the
Ports of South Louisiana, Houston, Los Angeles (LA), Long Beach, and the Port of New York
and New Jersey. These are some of the largest ports in both the United States and the world, with
national rankings of one, two, five, fourteen, and three respectively. These five ports are talked
about not because they are in major cities, but because of the astronomical volume of cargo
traffic that they receive annually. Without these large and thriving ports the United States would
fall behind in international and domestic trade, but it is important not to overlook the hundreds of
other ports throughout the country.
The history of the United States and its rise to world prominence has been influenced and
allowed by its access to the sea. Ports along the coasts and the vast inland waterways have given
cities the ability to communicate and trade with the entire world and allowed small towns to
boom into major cities. There is no doubt that ports are beneficial to a country, and the United
States has 360 public and private commercial sea and river ports (U.S. Port Industry, 2013).
Everyone knows that ports bring in goods, but in addition to maritime activity many ports also
have jurisdiction of airports, bridges, commuter systems, railroad terminals, industrial and trade
centers, public recreational facilities, and much more. A port is easily defined as, “a harbor town
or city where ships may take on or discharge cargo”, but in most cases ends up serving the city in
much more ways than simply loading and offloading cargo.
Today the most common method of moving freight is using containers. The container
revolutionized the shipping industry as it allows for faster vessel operations and improves the
cargoes security and safety since the cargo is never physically handled. Containers are capable of
being transported by ship, rail, and road, so it is common for ports in the United States to have

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gates with quick access for trucks or even on-dock rails. The term for moving freight between
through multiple modes is called intermodal transportation.
A port in the United States has four major functions, which are to generate local
employment, facilitate trade, generate tax revenue, and encourage port or near port spending.
The employment impact of a part can be seen throughout a region as people find direct and
indirect employment through the port or enterprises that are associated with port activities. In
order to facilitate trade a port needs to continue developing new terminals and infrastructure, as
operating inefficiencies can slow down the movement of cargo and decrease economic growth.
Ports, their associated governments, and private partners are those responsible for spending
assets on port infrastructure, which has an effect on commercial or industrial businesses that can
be attracted to that port. The purpose of a port is to benefit the regional economy and all
stakeholders, and the bottom line for each United States port is to financially grow while
protecting the environment and making sensible decisions.
The Affect of the Panama Canal Expansion on United States Ports
The growth of the global supply chain has brought the need to expand the Panama Canal,
which in turn will major changes to North American container ports. The Panama Canal (the
Canal) expansion along with growing commerce, logistics, and manufacturing, has brought a
demand for bigger and faster cargo ships. When the Canal upgrades are completed in 2015, the
new lock system will allow container ships three times as large as those currently in use to pass
through (Pupate, 2014). The larger ships will bring out numerous port upgrade projects in the
United States, as well as environmental issues, new legislation, and economic debates.
In 2007 a Panama Canal expansion began that would add two new sets of locks on both
the Pacific and Atlantic sides, adding three chambers with water reutilizing ability. In addition to

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the new locks, portions of the existing navigation channels are also being widened. The purpose
for the expansion is the growing number of vessels that use the Canal has grown due to increased
global trade, which has caused blockages and delays. In response the Panamanian government
approved the expansion project in 2006, and is projected to cost $5.25 billion dollars. While
bigger ships mean more cargo can be moved, up to 12,000 TEUs from the current 4,800 TEUs, it
will not necessarily create trade but rather allow goods to be moved more efficiently (Koba,
2013). However, an impact will be seen throughout the country as nearly 70% of the cargo that
travels through the Canal arrives in the United States, and much of this tonnage will be on Post-
Panamax vessels. The expansion has caused ports to improve infrastructure to take in the larger
ships, as they are shallower than the major container ports. The mean low water depth (MLW)
for ports prior to the project was 40 feet, but Post-Panamax ships will increase it six to seven feet
(Kendall, 2012).
United States imports and exports will continue to grow, and deeper more capable east
coast ports will draw some cargo away from the west coast majors, as it can cost a lot to unload
at these ports and then ship them via rail or freight to distant parts of the country. Some
infrastructure changes east coast ports are making in anticipation of the completed expansion are
acquiring super-sized cranes, dredging, creating tunnels or lanes that better accommodate tractor-
trailers, and raising the height of bridges so the larger vessels can pass through. Chris Davis, a
maritime lawyer who lives and works in Panama, is on the record saying, “There's no question
it's a gamble to do all these port improvements” (Koba, 2013). There will be impacts, but the
impact on the economy in the long term is what should and is being focused on, as there will not
be astonishing growth, but rather a steady increase in shipping.

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What is a Niche Port?
While many large container ports will be forced to upgrade after the Panama Canal
expansion, others will have to make a decision. A set of ports that would not be directly affected
by the expansion is niche ports. A niche port is defined as a port that handles a particular cargo
or market segment, focuses on bringing in cargo based on its facilities and equipment, and
invests in port infrastructure tailored for a target customer so a return on investment is almost
guaranteed (Popham, 2006). The ports physical characteristics mainly determine what bulk
commodities they deal with, including their location, facilities, and equipment. Niche ports will
invest in infrastructure to retain and expand these defined bulk commodities, and not to simply
modernize.
A niche port often specializes in the movement of goods that are not the focus of larger
container ports, like automobiles, agricultural products, machinery, and other bulk commodities
that do not lead to containerization. Of the eleven publically operated California ports, eight are
considered small ports with a niche focus (Trend Analysis, 2014). These include the ports of San
Diego, San Francisco, West Sacramento, Redwood City, Richmond, Stockton, Humboldt Bay,
and Hueneme. As one would expect there is a lot of risk with specializing a ports activity or
infrastructure, but there is a large demand for the movement of bulk cargo. Since there is a large
reliance by niche ports on the industries they serve, they must be constantly innovating and
shifting practices to maintain revenues.
If the demand for bulk commodities increases in the future, niche ports will have to
improve their infrastructure in order to remain competitive. One of the major logistics issues
with niche ports is access to rail, as the bulk materials generally require heavy rail access. Of
course the containerization of these bulk commodities is an option, but this would lead to a need

6. 5
for repositioning the container locations, as well as updating the ports loading techniques and
infrastructure. An argument that will arise is whether small ports should try to keep up with
United States majors like LA or Long Beach, or continue finding a niche markets that a small
port can cater to. The operation style of large container ports is about efficiency and volume, and
this is not going to change. If a small or niche port were to containerize heavily, it is doubtful
that companies will divert their ships from proven major ports to an up and coming one.
By the year 2000 waterborne container cargo on the west coast grew to 450% of its tonnage in 1982,
while lumber/logs steadily decreased,and both autos and bulks fluctuated but never experienced large
growth. Looking at general cargo west coast ports grew by 150 % in that period.
http://humboldtbay.org/sites/humboldtbay.org/files/documents/rev_plan_2003/FinalReport.pdf
Examples of Niche Ports
Some United States Ports that could benefit by updated infrastructure and not expansion
are the Ports of San Diego, Humboldt Bay, and Canaveral, as they are niche ports that specialize
in specific terminal operations that do not fit in the containerization model. Instead of traditional
container terminals, these ports have specialized in cruise terminals, automobile handling, bulk
cargoes, agricultural products, and industrial materials. Each niche port has different growth

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issues and areas to improve, but generalized recommendations can be made that when applied
would allow them to grow in tonnage volume by improving in marketing and establishing
business partnerships.
The changes small ports should be making is maximize their efficiency not by expanding,
but by utilizing all space on terminals, improving networks, and either developing or improving
rail and freight access. Based on the characteristics, location, facilities, and equipment a niche
port has, a maritime business plan can be written once goals have been established as a way to
plan the investment of assets that can support the current and future target markets. Niche ports
like San Diego, Canaveral, and Humboldt Bay should only containerize if room is available and
competition from major ports would not greatly affect tonnage volume. If containerizing is not
an option, a niche port should institute creative business models that can draw or retain
customers or tenants, and then invest in infrastructure that can be immediately utilized to
generate economic growth.
The Port of San Diego Case Study
The Port of San Diego was born with the passing of State Senate Bill 41 in 1962, which
established an organization with the responsibility of protecting and developing San Diego’s
tidelands, for the city and the State of California. The Port is comprised of 5 member cities that
work in concert; Chula Vista, Coronado, Imperial Beach, National City, and San Diego. The
activity areas for the Port of San Diego include maritime, real estate, environmental protection,
harbor police, and tidelands governance, with all of this being expressed in its mission statement.
“The San Diego Unified Port District will protect the Tidelands Trust resources by providing
economic vitality and community benefit through a balanced approach to maritime industry,
tourism, water and land recreation, environmental stewardship and public safety.” The Tidelands

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Trust is the name of the Port of San Diego’s waterfront and submerged land, which the port
administers.
There are a number of overall uses allowed for the tidelands, but the criteria is that they
provide a public good to the state, not just a local benefit. Some examples include building
terminals, docks, hotels, warehouses, and allowing recreational activities like commercial and
sport fishing, swimming, and boating. The San Diego Convention Center fulfilled the
requirement of being able to benefit the state by being a visitor serving facility, and therefore
was allowed to be constructed on tidelands. Since its opening the Convention Center had raised
demand for hotel rooms in the city, giving a large economic boost in terms of jobs and money to
the various sectors.
The Port of San Diego has greatly benefited from the push to modernize, restore, and
construct new buildings along the tidelands, as they either own and operate or own and lease
2,403 acres of land. In total it manages 5,938 acres of real property including submerged lands,
and has 800 real estate agreements. The addition of marinas, restaurants, hotels, parks, museums,
and a convention center, has created a large disparity between both the revenue stream and
importance of real estate and maritime to the Port. While maritime continues to be highly
profitable, the decline of cruises, lack of exports, and limitation to niche imports, has had a
noticeable affect on the port and City of San Diego.
The Port of San Diego’s revenue has been largely composed of real estate deals and
projects along the tidelands. In 2012 the Port had total revenue of $143,864,237 with 55% of that
coming from real estate, and 23% from maritime. The other components that generate revenue
are harbor police at 11%, reimbursement for services, and the remaining amount from
miscellaneous sources. The Port of San Diego’s tidelands property is the best real estate in the

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city, which of course comes with a high price. The Port’s tidelands span over five member cities
and are constantly evolving, while the two port terminals at 10th Avenue and National City have
little to no way to grow both in size and infrastructure. Add in the fact that the cruise ship
terminals are less utilized than before, and it is clear why the marine terminal operators should
try and find other ways to grow.
The process of planning and building along Port tidelands property is long and tenuous,
as there are a number of hurdles the port has to get through. For every project a feasibility study
must be completed, followed by an environmental impact report, and then present the plan to
developers who will bid on the project and propose another plan. The 1.7 million square foot
Convention Center came under construction in 1987, which cost the port $165 million from its
cash reserves. The San Diego Convention Center is therefore owned by the Port, not the city, and
is on lease. The City of San Diego, however, does not pay market value to the Port for leasing
the original building and later its expanded version, and only gives the Port $1 for its annual
lease. The Convention Center was completed in two years, and opened in November 1989. It had
instant success and surprised many by attracting 50 conventions and trade shows in its inaugural
year, along with another 17 consumer shows, totaling 1.1 million visitors (History, 2010).
The Port of Los Angeles is the busiest port in the United States, Long Beach is one of the
busiest container ports in the world, and San Diego is home to the majority of the United States
Navy’s Pacific aircraft carrier fleet. The lack of cruises coming into the terminals and strong
Navy presence is why the Midway museum was opened in 2004, and has been generating a large
amount of revenue for the city and the Port annually. San Diego’s naval presence and its status as
a strategic port offer protection for maritime use, and is why the terminals will likely not be
abandoned this is in contrast to similar ports such as San Francisco, that have chosen to focus

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more on tourism at the waterfront. However, their reasons differ, as maritime revenue in San
Francisco has never been as high as San Diego’s, and they have the larger Panamax capable Port
of Oakland across the bay. To replace their cargo operations the Port of San Francisco maritime
division focused more on tourism, and has expanded their ferry services along the San Francisco
Bay excursions. Another reason why maritime in San Diego will not be abandoned anytime soon
is that it is still highly profitable, as break bulk shipments and Dole containers still arrive
regularly. Pasha automotive, which is anchored at the National City Terminal and leases control
of the terminal, processes one of out every ten cars that enter the United States.
The Port of San Diego Tenth Avenue Terminal boasts a channel depth of 43 feet,8 berths, a mobile
harbor crane,and a state of the art on-dock cold storage facility.
San Diego faces heavy competition in the container market from larger ports to the north
such as Los Angeles, Long Beach and Oakland. Even if the Port was able to dredge and take in
larger ships, berthing space would need to be expanded significantly, and there is no guarantee
that shippers would choose to come to San Diego when it would be more cost and time efficient
to go to Long Beach. Currently, only the first nine miles of the bay is accessible to Post-Panamax
vessels, and with ships getting even larger, more depth could be required to accommodate their
draft. The City of San Diego’s proposed Economic Development Strategy recognizes the

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struggle the Tenth Avenue Marine Terminal has with growing, stating the terminal is,
“constrained by existing commercial, residential, and government development and facilities,
limiting the Port’s ability to add significant infrastructure to support contemporary container ship
operations.”
Port of San Diego’s Maritime Business Plan
The Port of San Diego’s Maritime Business Plan is a document that tries to project how
the division should operate over the next 30 years, and to provide insight on maritime commerce
to the Port as well as current and future customers. One of the focuses is to observe the two
terminal’s capacity and realistic growth opportunity, on a terminal-by-terminal and cargo
specific basis. The business plan is created by collecting past reports and studies like Port Master
Plans, terminal evaluations, analysis of the regional economic impact, looking at future areas for
development, predicting what infrastructure changes will be needed to meet target demands, and
an evaluation of environmental impacts.
All of the Port’s business and master plans emphasize that infrastructure and global
fluency are essential to large-scale export success. The three most important types of export
infrastructure are airport, port, and cyber. Unfortunately due to the lack of land and capital,
expanding San Diego’s port terminals and airport does not seem probable, therefore the focus
must shift to advancing the cyber infrastructure where needed. This can include updated
equipment such as cyber technology so organizations can share with or acquire data from one
another locally or from overseas markets. The first step in this process is to define the region’s
exports, and then identify the infrastructure that they use already, or need to either be established
or modernized.

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With the proper infrastructure, San Diego has the potential for sizable export growth, as
there are few cities in the United States with such a beneficial strategic location. Just minutes
away from the U.S-Mexico border with access to the Pacific Ocean, San Diego should be a
larger player and act as the cargo gateway for both Latin America and Asia. San Diego is the 8th
largest city in the country, but as of 2010 was just 17th in number of international exports. The
ultimate question is where would money come from for infrastructure expansion, and if the
money is there, whether or not the projected growth would be enough to justify the initial costs.
Recommendations
The location of San Diego is very strategic in a military sense, but also in a commercial
sense. The Port of San Diego is seen by many as the “gateway to North America”, but with few
ships using the gateway the title means little. The terminal access the Port of San Diego offers,
while limited, is less congested than its west coast counterparts. Break bulk shipping must
therefore be the focus, and incentives for smaller shippers must be explored, as not every
international company will be upgrading its vessels to Post-Panamax capabilities. Traditional
shipping will not disappear in 2015 with the Panama Canal expansion, so the emphasis for
maritime should be attracting smaller shipping companies. International trade is one of the city’s
base sectors along with manufacturing, tourism, and military, but could rapidly decline if
improvements are not made to the terminals.
Expanding the terminals is not conceivable due to land constraints and development
constraints, so advanced infrastructure like updated storing facilities, cyber networks, rail and
freight access, and updated equipment could draw in new shippers. While the Port of San Diego
does have many departments and revenue streams, maritime is not an aspect of the Port of San
Diego that can be left behind due to San Diego’s naval ties and strategic port designation, so the

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goal should be to stimulate growth by modernizing and making the current facilities more
efficient. This investment would be beneficial, cost a lot, but if there were interest from shipping
companies in utilizing San Diego’s terminals if they are upgraded, then the initial expenses
would certainly be made up quickly.
This graph shows total revenue from all of the Port’s Operating Centers,dividing each bar with how
much each Operating Center contributes to total revenue. Realestate is by far the largest contributor to
revenue the Port has, followed by maritime. *Environmentalno longerrecordedinrevenues as an
OperatingCenterafter FY09.
The real estate and maritime departments at the Port are the highest revenue earning
departments in the organization. Combined, both of these operating centers make up over half of
the Port’s annual revenues; $116,092,693 out of $148,126,376 of the Port’s actual revenues from
Fiscal Year 2013. Real estate brought in 55.8% of the Port’s revenues, while maritime brought in
a still significant 22.6% of the total revenues in fiscal year 2013. The remainder of the revenues
was combined between Harbor Police and miscellaneous revenue sources.
If one considers the perspective that real estate brings in more money, and is therefore
more important, it could be easy for the casual observer to brush maritime to the side. The
$0
$20,000,000
$40,000,000
$60,000,000
$80,000,000
$100,000,000
$120,000,000
$140,000,000
$160,000,000
$180,000,000
Figure 1: Port of San DiegoTotal Revenues from Operating Centers
by Fiscal Year
Environmental*
Miscellaneous
Harbor Police
Real Estate
Maritime

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strategic port designation and amount of revenue maritime generates for both its size and yearly
maintenance costs, however are why it is such an essential operating center. Maritime
consistently brings in around one third of the year’s total revenues, without having heavy annual
investment.
Therefore, specialization in either department would not be in the best interest of the Port,
but rather maximization of the Port’s marine terminals along with continued real estate growth.
Unless the cruise industry picks up again, the key to maritime consistently growing and once
again reaching the $40 million mark it was at from FYs 2008-2010, will be advancing its current
infrastructure and establishing relations with new shippers. Infrastructure features that could
feasibly be improved are: aging cranes, storing facilities, cyber networks, and access to rail and
freight lines. The Port of San Diego’s small size and strategic location already set it apart from
other west coast ports, so by maximizing efficiency and establishing new relations with shippers,
growth will gradually and consistently be attained.
Port Canaveral Case Study
Cape Canaveral is located midway between Jacksonville and Miami along Florida’s
Atlantic coast, and is home to the Kennedy Space Center, numerous beaches, and the growing
Port Canaveral. Port Canaveral was dedicated in 1953 by a Special Act of the Florida State
legislature, which also established the Canaveral Port Authority. This port authority was divided
into five regions in the north and central regions of Brevard County Florida, with an elected
official representing each of these five regions. This elected Board of Commissioners is
responsible for setting the fiscal, regulatory, and operational policies for the Port of Canaveral
(Port Canaveral, 2015).

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Like the San Diego Unified Port District, the Port of Canaveral Authority acts as a
governmental body with the responsibility to protect the land, but also generate revenue from it.
While Port Canaveral can negotiate for government grants, it has become self-sufficient and
relies on multiple revenue sources to continue operations. The four main economic generators for
Port Canaveral are the cruise industry, cargo, land leases, and park operations. Like most ports,
Port Canaveral has had a large economic impact, as in 2012 it generated 13,039 jobs over their
various operating centers, $1.1 billion dollars in revenue, and $648.8 million in direct, indirect,
and induced wages (Canaveral Port, 2015).
The cruise industry is the most recent Port Canaveral revenue source, it is what the port is
most known for, and accounts for a vast amount of its income and job creation. Cruise activity in
Port Canaveral includes the day to business activity, cruise operations while ships are in dock,
port of calls, and gaming or daily cruises. In addition the cruise passengers also impact the
tourism, as well as the nearby airports. While the city of Cape Canaveral is not itself a mega
popular tourist destination, the port has profited off its proximity to Disney World, and has
somewhat become the park’s official cruise port. Port Canaveral boasts six cruise terminals, with
cruise liners from Carnival, Disney, Royal Caribbean International, and Norwegian. The shift
$0
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Cruise Cargo Real
Estate
Marina
Port Canaveral Economic Impact FY 2012
Income: Direct, Indirect, Re-
Spending

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from a cargo-centered port to cruise centered occurred in 1982 when a warehouse was converted
into “Cruise Terminal One”, which was ingenious as Port Canaveral has been ranked as the
seventh best cruise port in the United States, and deals with the second most passengers (Chad,
2011).
Commercial shipping began at Port Canaveral in 1955, when bagged cement was loaded
onto a cargo liner. That same year construction began on a refrigerated warehouse by the
Tropicana Corporation, so local agricultural products could be stored before shipping. The port
currently has nine dedicated cargo berths, broken up between the north and south cargo piers.
These berths are separated from the cruise terminals, and are properly secured by the Brevard
County Sherriff, as the Port Canaveral Police Department was disbanded last year. The dedicated
cargo berths range from 400 to 1000 feet long, and have depths from 35 to 40 feet. While Port
Canaveral is primarily a cruise port, it has not abandoned its cargo operations, and has recently
completed a $44 million project that widened, extended, and rebuilt its south cargo piers (Berths,
2015).
Since ports occupy fragile environments, Port Canaveral like the Port of San Diego has
tasked itself with mitigating its impact. There are many stakeholders in Port Canaveral, including
0
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4,000
6,000
8,000
10,000
12,000
Cruise Cargo Real Estate Marina
Port Canaveral Economic Impact FY 2012
Jobs Created : Direct,
Indirect, and Induced

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the cargo and cruise industries, the coastal resident community, and the inhabiting flora and
fauna populations. Ports are very unique facilities as they simultaneously function as a
workplace, home, economic catalyst, and place of recreation. In order to preserve and restore the
physical conditions of the environment, the Canaveral Port Authority has committed to a number
of initiatives that work to protect at-risk species, monitor water quality, preserve beaches, create
artificial reefs, and to educate children, tenets, and port staff. While the Canaveral Port Authority
was not primarily established to protect the tidelands like the Port of San Diego, it is still a goal
to ensure the port can function for years to come.
An overhead shot of Port Canaveralhighlighting the location of its two cargo piers. Since the piers are
somewhat isolated from the cruise terminals and passenger areas,there is much room to expand.
Port Canaveral Expansion
Back at the beginning of 2014 Port Canaveral underwent an expansion project that would
have the ultimate goal of establishing the port as a premier cargo destination, and to draw more
cruise ships. Overall the project is set to span up to ten years, and cost about $587 million
dollars. This campaign is set to have a significant impact on all of Brevard County, as the
tourism industry would receive a large lift, and increased cargo traffic would create

18. 17
manufacturing opportunities and the need for an advanced distribution network. In the past Port
Canaveral has only handled a couple hundred TEUs annually, but the upgraded cargo facilities
will feature ship to shore cranes that are expected to move an astounding 100,000 TEUs its first
fully operational year, and in total a maximum capacity of 600,000 (Clarke, 2013).
In 2013 Port Canaveral served roughly 4 million cruise passengers, and with the new
terminal, the port is projected to service 5 million passengers in 2016, and then increases to 6
million in late 2017. The location of Port Canaveral is by far its biggest advantage, as passengers
are able to make day trips to Walt Disney World and Kennedy Space Center. This increase in
passengers per year is not only due to more ships making port of calls, but also larger ships
coming in, as a new 185,000 square foot cruise terminal with a larger berth capacity is under
construction. One of these cruise ships is Royal Caribbean’s Quantum of the Seas, which will be
the largest cruise ship to ever dock in Canaveral when it arrives later this year, and is one of the
largest in the world (Clarke, 2013). In addition to this new terminal a passenger shopping and
dining area is set to open within walking distance from the cruise terminals, and port staff will
soon be scouting locations for three future cruise terminals, with the next one to have ground
broken in a year or two.
The reason for this large expansion project is that Port Canaveral is only the fifth largest
cargo port in Florida by tonnage, behind the ports of Tampa Bay, Jacksonville, Miami, and Port
Everglades. Current CEO of the Port Canaveral Authority John Walsh wants the port to attract
companies that transport food, clothing, merchandise not just into Port Canaveral, but also into
the State of Florida. Walsh last year disclosed “ not many people know there are more than 6
million cargo units that travel into Florida, and only half of that comes through Florida’s ports--
that’s 50 percent lost business for the region” (Bilbao, 1, 2014). The rest of this cargo is

19. 18
transported by rail and truck into Florida from out of state. The push to bring more cargo through
Florida’s ports is a no brainer, as the state has the room to expand and bring goods in directly
into port rather than over land.
One plan within the Port Canaveral expansion is to create a hard rail that would connect
the cargo terminal docks with the Florida East Coast Railway (FEC). The FEC Railway spans
351 miles and connects much of Florida’s east coast including its southern ports, and can make
connections from Jacksonville to surrounding states (Pursuing Rail, 2014). The implementation
of a hard rail would better link Port Canaveral to the global economy, and make use of
underutilized federal land which will directly and indirectly add thousands of jobs. This plan is
still in its conceptual stages, but completing the line seems practical and would likely take five
years. The hard rail connection to the FEC Railway would improve the speed at which freight is
transported in a container by multiple modes, also known as intermodal transportation. This
method of container transportation eliminates the actual handling of cargo, improves security,
and reduces the possibility of cargo loss. The addition of this rail connection will certainly be a
selling point Canaveral makes to draw in new shippers.
This expansion is not just going to positively impact Port Canaveral and its city, but also
has a chance to boost all of Central Florida. Economist Sean Snaith stated, “cargo is a sector of
the economy that will continue to grow and provides an opportunity for the port to get a larger
slice of an active and growing pie” (Bilbao, 1, 2014). By being able to accommodate larger cargo
ships in Port Canaveral and Florida’s ports, it will create new jobs and opportunities for
businesses to move goods throughout the state. Taking advantage of this lost commerce can
exponentially increase Port Canaveral’s cargo business, and would make it a higher trafficked
port than Miami, and close to that of Tampa.

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It is common that port authorities have jurisdiction or ties to nearby airports, and Port
Canaveral is looking to create a stronger partnership with the Orlando International Airport
(OIA). The Orlando International Airport is also undergoing an expansion project, and Port
Canaveral CEO Walsh believes that the increased passenger traffic at OIA will help them reach
their goal of 6 million cruise passengers. A way that the OIA and Port Canaveral are working
together is by making a joint marketing plan that will promote Central Florida’s tourism and
growing businesses. Stakeholders from both sides have recognized that a partnership can help
grow each other, as well as benefit the region of Central Florida. Even though these two
organizations have been indirectly benefiting each other for years, the first joint meeting between
the two boards happened just last year, as they look to draw in more cargo and passengers in the
near future.
Port Canaveralhas options for air transportation, as three international and one regional airport are all
within an hour-long drive. http://www.portcanaveral.com/cruising/airports.php

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Recommendations
The Port Canaveral expansion is expected to take 10-15 years, but the benefits in the
region will be seen well before the last project is completed. One reason CEO Walsh believes
growth can happen sooner is that the port is looking to attract businesses that will also invest in
port and cargo infrastructure. Walsh and the board of commissioners are aware that marketing
Port Canaveral is a large component of the expansion, which is clear when he expressed, “we
know the port can be something even bigger for business, and this is our way of getting it
started” (Bilbao, 3, 2014).
Port Canaveral like San Diego has a strategic location, but one of the main differences
between the two is that San Diego has the megaports of Los Angeles and Long Beach to compete
with. Port Canaveral is in a very good and different situation, as only half of the cargo that goes
into Florida is through a port. In this case it is therefore beneficial to fully containerize rather
than remain a niche port. Unlike the Port of San Diego, Canaveral has hundreds of acres to work
with and expand, so to remain a small port that moves less than a thousand TEUs annually would
be foolish. Of course this expansion project is already underway and therefore a recommendation
is not necessary, but it is beneficial to see why they decided to expand, and what resources they
have to make it possible.
The argument for the Port of San Diego was to so maximize cargo efficiency and
establishing new relations with shippers, while continuing the large real estate projects that bring
in the majority of revenue. Port Canaveral is very different as maritime makes up the vast
majority of its revenue, but within maritime, cargo operations take a back seat to the cruise
industry. Port Canaveral could have focused all its resources on expanding and building the
cruise terminals sooner, but instead decided to improve the cargo piers and begin work on

22. 21
establishing on-dock rail connections to improve intermodal transportation and attract cargo
shippers. A port should not specialize in one but rather work to maximize all revenue sources,
which Port Canaveral is doing with its expansion, and a concept San Diego could progress.
Port of Humboldt Bay Case Study
Humboldt Country California is located on the North Coast of the State, which was first
inhabited by the Wiyot people and then settlers, as the region was abundant with extractable
natural resources. Due to this boom in population the city of Eureka was established, which is the
county seat and principal city for Humboldt County. Eureka has always been tied to the Port of
Humboldt Bay and the Pacific Ocean as it is home to a large oyster farming operation, and
unfortunately to declining fishing and timber industries. Although these industries have taken
economic hits, they still play a large role in the county’s local economy, and Eureka is a pivotal
center for the region’s commerce and tourism sectors (Humboldt Bay Harbor, 2015).
The Port of Humboldt Bay is in Humboldt County (highlighted in red), has the location advantage of
being the furthest north deepwater port in California, but due to its location has a small market size.
In order to manage the tidelands, harbors, and estuaries in Humboldt County the State
Legislature created the Humboldt Bay Harbor, Recreation and Conservation District (the
District) in 1970. This agency is very similar to the San Diego Unified Port District as it is tasked
with overseeing the development of the harbors and ports in Humboldt County, which has

23. 22
multiple uses for commercial and public benefit. Specifically the agency’s purpose is to,
“manage Humboldt Bay for the promotion of commerce, navigation, fisheries, recreation, and
the protection of natural resources, and to acquire, construct, maintain, operate, develop, and
regulate harbor works and improvements” (Municipal Service Review, 3, 2012). This bill
however varies a bit from SB 41, which established the Unified Port District in San Diego, as it
focuses on promoting marine commerce over tideland protection. This however makes sense as
the Port of Humboldt Bay is more secluded from the cities it serves, while the Port of San Diego
is right on the downtown tidelands.
The Port of Humboldt Bay has an advantage over most niche ports in California, as it is
the northern-most deep-water shipping port in the state, and is the only port between San
Francisco and Coos Bay Oregon (Port of Humboldt Bay, 2012). The District therefore has a
strategic location as well natural advantages, and can accommodate Panamax vessels. Like all
Port Districts Humboldt Bay has a variety of revenue sources, including its import and export
operations, property taxes, permits, usage fees, dredging surcharges, and tidelands rents and
leases. At the moment the major imports at the Port of Humboldt Bay are logs and petroleum, its
common exports are logs, woodchips, lumber, and its primary trading partners are Canada,
China, and various Pacific Rim countries.
Humboldt Bay at the moment has seven berths, but several of them are used specifically
by one company or handle a single type of commodity. The common equipment used at these
terminals include front end loaders, cranes, specialized cargo weighing, expansive warehouse
space, forklifts, and freshwaters as well as fueling services. Like mentioned earlier this
equipment is used primarily for the handling of logs, lumber, wood chips, and rocks. In 2012
four small projects were submitted to the District’s Port of Commissioners to address needs or

24. 23
deficiencies at these facilities. The first of these new projects was the creation of marine-based
planned development establishing a modernized public dock in the Redwood Marine Terminal
area, for uses like aquaculture and light commercial import and export. The second was the
creation of a marine based rail that would connect a barge facility to water dependent industrial
lands. The third project would benefit the Port’s cargo operations, which was a request to
purchase modern equipment so that export containers could be placed on a barge line as an
alternative to traditional highway transportation. Last was as suggestion that would benefit the
public, which was to improve the paddleboat facilities around Humboldt Bay (Municipal Service
Review, 2012).
The Port of Humboldt Bay eight small terminals and docks that span over a larger area than Cape
Canaveraland San Diego, but they deal with far fewer cargoes. Humboldt Bay however has the advantage
if they choose to expand their terminals and modernize its equipment.
Port of Humboldt Bay Issues
Even though the Port of Humboldt Bay can accommodate larger ships and has room to
expand, it has a number of issues that have been limiting its growth. As seen in its imports and
exports Humboldt primarily deals with forest products, which have recently declined by mote

25. 24
than 50%, having a significant impact on the Port. Some other issues that are natural and cannot
be fixed or modified are navigation hazards due to sediment deposition, the fact that the Port is in
a remote area, and that Humboldt County has a limited market size, with a small population that
generates less inbound freight for consumption than other California niche ports. There are also a
number of issues that can be dealt with by funding for improved infrastructure and policy
change, including limited connections for intermodal transportation involving freight and rail,
cargo-handling facilities are becoming outdated, and economic damage brought about by the
impacts of non-indigenous species (Port of Humboldt Bay, 2012). These issues along with the
corrections Caltrans is trying to make in regards to freight congestion and deteriorating roads
when improved will greatly reduce congestion and improve life for residents and Port of
Humboldt Bay employees.
Port of Humboldt Bay Expansion
This section on the Port of Humboldt Bay Expansion will differ from that of Port
Canaveral, as Humboldt has actually done very little to improve its facilities and increase
revenue. This Port has the advantage of almost a dozen deepwater facilities, but they for the most
part are unused and have deteriorated. Log exporting has continued in recent years, but in total
the Port only exports about 350,000 tons per year, and sees on average one ship per month. Since
there is no official Port expansion project at the moment, this portion will look at how Humboldt
Bay could expand its facility, and whether or not its revenue would make up for the cost.
A project that has been discussed about between the Port District and consulting firms
has been a rail that would stretch from east to west, starting at Redding California and reaching
Eureka. Advocates for this railroad believe that bulk goods such as iron ore, grain, and coal
would move in heavy volumes along this rail, and would generate revenue for the rail service

26. 25
and the cities that unload and offload the commodities. This new east-west rail would cost an
estimated $1.2 billion, and then the north-south rail from Windsor to Samoa would have to be
redeveloped, adding another $609,000 (Mintz, 2013). Of course this rail service sounds good at
first glance as it would benefit the Port of Humboldt Bay, but the development of this railroad
would unlikely be economically feasible. A study by Washington-based BST Associates and
Portland’s Burgel Rail Group consulting firms revealed that because there are already west coast
port rail connections in place, “Humboldt County would face several competitive disadvantages
relative to these other ports, including the need to cover the cost of constructing the new line and
the lack of a rail distance advantage” (Mintz, 1, 2013). Not only do these other west coast ports
have the rail advantage, but also the customer and cargo advantage, meaning that the new rail
from Redding to Eureka would be high cost, high risk.
An overhead image of the proposed rail line (in yellow). Due to the extremely rugged terrain
approximately 200 miles of track would be needed to navigate curves and sloped mountains, while the
exact distance between cities is only 100 miles.
While containerization at the Port of Humboldt Bay has been discussed, all studies have
shown that break bulk cargo has a much larger potential market in comparison to theoretical
container operations. Due to these findings it is likely that containerizing will never be a plan for
the Port of Humboldt Bay’s future, and it would probable that future investments would be

27. 26
similar to the Port’s Harbor Revitalization Plan. The final report for the Harbor Revitalization
Plan was published in 2003 and focused on improving marine facilities, land access,
diversification opportunities, and how to better market the Port to increase economic growth.
Some examples of projects that would come about from this plan were improving
infrastructure to handle various bulk liquid and niche dry niche cargoes, marine industrial
projects, and identifying the potential for a marine science cluster that could draw in tourists. In
order to implement these ideas the key concerns that had to be addressed were site readiness and
lack of marketing. Site readiness involves the steps to make one of these infrastructural changes
happen, which includes removing property restrictions, prepare publically owned land for
marketing and development, and lastly ensure the changes better the Port of Humboldt Bay. The
step labeled as “intensifying marketing” in the report is a function within the District that
proactively identifies and pursues opportunities that it finds Humboldt Bay could be
economically competitive in (Harbor Revitalization Plan, PB Ports & Marine, Inc.)
Recommendations
The Port of Humboldt Bay is disadvantaged compared to other California ports due to
their small market size and inland transportation access. It does however have advantages as well
including their strategic location in Northern California and natural deepwater berths. While
these disadvantages are significant and have hampered Port economic growth for years, with
investment inland access can be improved. The Port of Humboldt Bay therefore should invest in
their infrastructure in order to capitalize on its position and expand the niche cargoes it handles.
According to many reports commissioned by the Port it was recommended that under no
circumstances should the District fund a rail or container terminal project unless it was
guaranteed product would be available in mass quantities to move. I addition the Port must also

28. 27
have the contractual support of shipping lines, so that cargo is guaranteed to come in when the
infrastructural renovations are finished. The Port of Humboldt Bay must also actively search out
niche cargoes that its west coast competition does not handle, as steady terminal operations will
revitalize the Port and increased revenue will likely be reinvested into its infrastructure. In
conclusion the Port of Humboldt Bay should finance an infrastructure expansion project, but
only when future customers and funding is secured. The Drewry Shipping Consultants Firm is
another advocate of this stance and concluded in its report about the Port that, “the difficulty will
lie in convincing the shipping lines that the Port of Humboldt Bay offers sufficient competitive
advantages over Prince Rupert, Vancouver, Seattle, Tacoma, Portland and Oakland for it to fully
support the project before construction commences” (Mintz, 2, 2013).
Niche Port Marketing and Development
While small and niche ports are often created by state legislation and are established for
the good of the public, they are in most cases ran like businesses and therefore have similar
development strategies as small businesses. All three of the niche ports mentioned so far have an
obligation to be environmental stewards, were established by state legislation, generate large
amounts of revenue from a variety of sources other than cargo operations, and are attempting to
or have discussed improving their terminal infrastructure.
The key to small port expansion is to develop strategies that promote sustainable
development. In this context sustainable development involves the business approaches that meet
the current and future needs of the port and its stakeholders, while protecting human and natural
resources in the port’s jurisdiction. Sustainable development focuses on economic growth that is
both immediate and continuous, which can only be accomplished through intensive research and
proper allocation of resources. The crucial drivers for sustainable development are a unified

29. 28
organization that has defined goals, a strong relationship with the port’s stakeholders, and to
recognize and take into consideration the port’s limitations (Degans, 2008). A small port’s
stakeholders include port employees, shipping lines, customers, and general public that live
nearby to the port and are affected by its decisions.
In this model all decisions must be viewed through a business perspective, which has
three categories of benefits that are applicable to port development. The first category is return
on investment, which includes the upfront cost, maintenance, and proper research. The second is
more specific to port authorities rather than traditional businesses, and includes ensuring all
decisions have environmental, social, and community benefits. The final category is working to
avoid implementation issues of a port project. After a port district has approved a plan the focus
must then shift to risk reduction, remaining on schedule, and being on the same page with all
stakeholders to reduce obstacles that may arise. Tools used by ports to asses if a project will be
successful or required by law include an economic impact assessment, cost-benefit analysis,
environmental impact analysis, and a life cycle analysis (Degans, 2008).
Niche Port Marketing and Partnerships
At the end of the day development is measured by the amount of jobs created, regional
economic growth, and port revenue. In small ports this is much harder to accomplish so the goal
must be to make their facilities as productive as possible. Making connections with nearby
businesses as well as shippers can do this. These connections take years of lobbying to establish,
but when made the benefits for both the port and its partner will be realized long into the future.
If a port like San Diego, Humboldt Bay, and Canaveral is willing to connect the services
available with businesses that require their facilities, there is no doubt the ports can and will
grow.

30. 29
After embracing the strategy of growing as a niche port, there are marketing and
implementation plans that can be specifically applied to this style of port and terminal operation.
The first two stages are to define the mission and goals of a certain project or when looking to
attract new customers. Some examples of missions these ports could have are attempting to
fulfill the requirements of current and future customers, attempt to expand or diversify its cargo
handling capabilities and infrastructure, provide excellent customer service, and find ways to
increase tonnage volume and revenue. Goals in this marketing strategy are specific undertakings
the port district may have, and can include doing what it takes to retain current customers,
increase revenues and tonnage volume by a designated figure (for example an expected growth
target of five percent), and lastly make sure terminal operating rates are competitive (Popham,
2006).
This diagram displays the four concepts a port must market to a customer. The customers in this model
are the shipping lines or carriers,and shipper who owns the cargo that is being moved.
The most difficult step in marketing and attracting new businesses is standing out from
the crowd and showing why a company should relocate or expand with that port. An example of
a small port authority that was successful in attracting business partners was Warren County,
Ohio. This small Port has a county population of only 215,000, but was able to draw in

31. 30
companies by offering a tax credit that would allow them to purchase construction materials free
of tax if they were building on Port property. This exemption lured FedEx, which constructed a
$15 million ground terminal, and saved $350,000 because of the tax credit (Heaton, 2014). Port
Director Martin Russell attributes the partnership between them and FedEx to the economic
incentives they offered, and stated, “it’s an inducement to a company that could have picked
locations in multiple other states or anywhere else in southwest Ohio,” as well as, “[the port] is
one of the tools the city can use to attract capital investment and create employment growth
(Heaton, 4, 2014). Since the Warren County Port Authority was just established in 2007 and has
a large volume of land to sell leases on and build infrastructure, other niche ports can learn from
their success and try to be creative when offering incentives like tax credits.
Niche ports have a responsibility to the public to provide access to the tidelands, to
protect the environment, and make decisions that will benefit the port and stakeholders into the
future. Going green in ports for example is an investment that benefits all groups, as long as a
return on investment is predictable. There is no doubt that with port development the board of
commissioners, customers, and public must all be on the same page, as projects are expensive
and delays come with significant costs. Sustainable development is a concept that furthers the
goals of all stakeholders and can be approached by first researching possible growth areas, and
then establishing missions. The goal for the Ports of San Diego, Canaveral, and Humboldt Bay
should be to make the facilities the most productive they can be, so if a shipping company or
business were looking to expand, they would negotiate with that port.
How Niche Port Projects are Funded
The United States generally is very open to foreign investors in contrast to other major
economic powers, as they do not attempt to block foreign investment in the majority of the

32. 31
country’s industries. An exception to this however is that the United States prohibits foreign
investment in the transportation sector, especially in airline operations and shipping. Barriers to
foreign involvement in the United States maritime industry are the oldest of such legislation, and
can be traced to a Congress passed act in 1789 that imposed tariffs on imported vessels based on
its ownership and place of construction (Michaeli, 2014). Since this time a nationally built,
owned, and manned fleet of vessels, also known as the United States merchant marine, has been
a part of the country’s identity, and there have been various acts passed to protect this industry.
The Jones Act and Maritime Administration
The most important of these acts to date is the Merchant Marine Act of 1920 (Jones Act).
The Jones Act specifically addresses cabotage laws in the United States, which are those that
refer to the transport of goods or passengers between two points in the same country, and in the
maritime context between to domestic ports by a vessel. This is done to protect the country’s
territorial waters, preserve national shipping infrastructure for national security, and to protect
the domestic shipping industry from foreign competition. The points of the Jones Act are that
any vessel that moves between two United States ports that is carrying passengers or cargo must
be built, owned, and flagged, in the country, and also crewed by United States citizens that are
also permanent residents.
The United States Maritime Administration (MARAD) was established in 1950 after the
Maritime Commission was eliminated, and its tasks were split between MARAD and the Federal
Maritime Board. While MARAD is most known for maintaining the United States’ national
defense ready reserve fleet, it has expanded its role within the United States Department of
Transportation (DOT) to become an industry facilitator that works to develop National
commerce while focusing on environmental protection and safety. All ports in the United States

33. 32
are governed by MARAD as it promotes the integration of intermodal transportation, going from
waterborne to either freight or rail, or vice versa. In addition to the focus on environmental
protection and safety, MARAD is involved with shipbuilding, port operations, vessel operations,
and national security.
While there are Federal agencies like MARAD that are responsible for decision making
in major port impact areas like dredging, security, and environmental regulations, there is no
actual national port policy that governs the operation of United States ports. A drawback to the
lack of a national policy is that infrastructure like highways deteriorate and are left to states to
fix, which gets backlogged and leaves smaller ports behind. Some other negative aspects are that
every port is vying for the same Federal funds and due to the lack of centralized planning
neighboring ports often offer the same services, and receive no direct assistance in business
planning and the acquisition of technology.
All ports in the United States welcome and support legislation that would improve the
areas of security, dredging, and transportation networks, but they each operate individually and
are responsible for the marketing and development of their terminals. This Federal “do not
disturb” strategy regarding the competitive relationships between ports can be seen by a
drawback by some but considered beneficial by others. Without intervention all port districts are
able to develop their own markets, implement new technologies, attempt to finance any approved
projects, and then solicit Federal funds or grants when necessary. A port authority can essentially
operate in any manner it wants to as long as it is properly run, abides by the legislation that
established it, and follows all applicable Federal and state laws.
Since port authorities are economic engines that have a substantial impact on the entire
Nation, one may wonder why they are becoming increasingly deregulated. The answer is that

34. 33
there are over 150 ports in the country, and since the container revolution running terminal
facilities has become increasingly complex. Some of these factors include time management, the
planning of yard space, cargo volumes, and berths is complex, and the fact that labor in ports
since containerization has become much more technical. The Federal bodies are also not privy to
local and community interest a port authority encounters, and therefore would not be proficient
at managing the specific environmental requirements which vary from state to state.
Outside Sources of Port Funding
In an effort to attract and retain shipping lines United States ports have to invest in berths,
warehouses, rail, and highway systems. These infrastructure improvements cost millions of
dollars and since port authorities generally cannot afford to pay for construction projects on their
own, they have to look for outside sources of project funding. The areas of funding for port
improvements are capital the port has, state and local subsidies, private investment, and Federal
grants. Because heavy investment programs are so expensive there is pressure on ports to only
apply for funding that can create significant growth when the project is completed, and without
any investment it is likely that even large ports fall behind.
An example of a Federal grant that any United States port can apply for is the
Transportation Investment Generating Economic Recovery (TIGER) Discretionary Grant
program. The TIGER program is administered by the United States DOT, which looks to invest
Federal funds in rail, road, port, and transit projects that achieve national objectives. TIGER
Grants have helped fund many projects throughout the country, as since 2009 Congress has
dedicated $4.1 billion to multi-modal or jurisdictional projects that have benefited the country
(About TIGER, 2014). The focus of the DOT through the TIGER Grant program is to examine a
number of projects that are brought forth based on their value, and then choose those that are

35. 34
deemed most important and will likely have the highest value and benefit the United States
taxpayer. TIGER Grants are applied for by providing the DOT with the detailed benefits of the
project, what the expected five-year outcomes are, and if the project promotes environmental
sustainability, livability, economic competitiveness, and safety (About TIGER, 2014). Other
factors that the DOT considers include if the project would contribute to economic recovery,
create new partnerships, and infrastructural innovation.
This graph shows which project types receive funding, and how much has been allocated to them since
2009. Ports have received the fourth most amount of Congress dedicated money at $401,118,140, which
is a significant sum since that investment can go to projects that ports otherwise could not afford to fund.
TIGER Grants are certainly a great way to fund a project, but the odds of a port authority
like San Diego, Canaveral, and Humboldt Bay receiving one are slim. In 2014 the DOT received
797 eligible applications from 49 states, which was an increase of 212 applications from the prior
year. These applicants requested in total $9 billion for transportation related projects while only
$600 million was available through TIGER Grants that year (TIGER Discretionary Grants,
2015). Niche Ports would have a good shot at receiving a TIGER Grant if proper marketing is
done before applying, and it is certain that economic competitiveness in that region would grow.
DOT Secretary Anthony Foxx is very proud of the TIGER Discretionary Grant program, and has

36. 35
said, “as uncertainty about the future of long-term federal funding continues, this round of
TIGER will be a shot in the arm for these innovative, job-creating and quality of life-enhancing
projects” (TIGER Discretionary Grants, 3, 2015). The strong demand for this program has not
gone unnoticed, as the DOT has brought the GROW AMERICA Act to Congress, which would
effectively double the funding for TIGER Grants and increase the number of needing projects
that could be supported.
All ports in the United States are publically owned, but the ports work in concert with
United States private industries in developing and financing marine terminals and other
infrastructure. In 2012 the American Association of Port Authorities conducted a survey and sent
out Port Infrastructure Questionnaires to 82 ports. The 63 ports that responded indicated that they
planned on investing an estimated $46 billion with their private sector business partners from
2012 to 2016 (U.S. Public Port, 2013). This money would go to building and modernizing
terminal facilities, which has the impact of reducing costs for customers, efficient cargo
movement, creating jobs, and making exports more competitive.
Niche ports would choose to use this project-based type of financing to fund new
facilities because it reduces the burden of cost on the port. If a niche port were to take a shot in
the dark on an infrastructure project it could set them back for a decade or more, as their
resources and land are limited. By constructing a deal with a private entity by offering tax
incentives or splitting costs, the risk shifts from the port districts to that business. Another reason
why partnering with private companies is smart is they have experience with growing their
facilities and business, so they would most likely make smart decisions when investing in the
port’s intermodal infrastructure.

37. 36
The National Working Waterfront Network
The National Working Waterfront Network is a group of state and Federal agencies,
universities, businesses, Sea Grant programs, and individuals that are dedicated to enhancing the
working waterfronts and waterways throughout the country. A working waterfront is defined as
lands, infrastructure, and waterways that are used for water dependent activity, including ports,
recreational harbors, and fishing docks (The National Working, 2013).
The goal of the National Working Waterfront Network is to improve the ability of coastal
communities and stakeholders to make informed choices, ensure public access to the water,
balance tidelands issues, and plan future projects along working waterfronts. This Network is a
resource for ports in the United States as it provides tools for financing and contacts with
partners that collaborate with stakeholders in various communities. The tools this organization
indicates as sources of financial support are grants, loans, dedicated revenue, tax incentives, and
planning assistance. The National Working Waterfront has also broken down the distribution of
where port financing comes from.
As seen in this distribution of financing tools, state resources make up the majority of funding for the
country’s working waterfronts. The amount of tools available to a state depends largely on their amount
of coastline, real estate trends,development pressures,environmental protection laws, and how dependent
the regional economy is on ports and water dependent activity (The National Working, 2013).
0%
10%
20%
30%
40%
50%
60%
70%
State Resources Federal Trade
Associations
Economic
Development
Entities
Foundations
Sources of Working Waterfront Funding

38. 37
Working waterfronts and waterways in the United States are vital to the country’s
economy, heritage, and social identity. Currently 40% of the population lives on or near the
coast, and with this number likely to increase in the future the public must work together to
resolve competing interests and conflicts along shorelines. To assist these communities the
National Working Waterfront has developed an online toolkit that promotes smart decision-
making and historical information on the use of waterfront space, its economic value, and what
any person can do to protect these areas. In order to implement the range of tools the National
Working Waterfront Network provides the first step his sharing successful initiatives from
around the United States to exhibit that these financing options have successfully implemented in
the past.
The Sustainable Working Waterfront Toolkit
The Final Report of the Sustainable Working Waterfronts Toolkit has categorized ideas
that could be implemented in the Ports of San Diego, Humboldt Bay, and Canaveral. This Final
Report recommends that all stakeholders be involved in the decision-making processes, as there
are tools for port authority policymakers, the waterfront landowners, and the everyday users.
Some tools mentioned for policy makers that have not been mentioned previously is zoning,
which ensures commercially owned coastal land is being used as water-dependent property like a
marina. If the need for warehouses or working waterfront infrastructure is met, then a port
authority can work to make commercial spaces along a working waterfront that can generate
economic revenue and taxation.
A waterfront landowner is defined as those who use their property to access the water for
business or recreation, as well as those who can provide this access to other water dependent
users (Sustainable Working Waterfronts, 2013). The waterfront landowners or tenets also have

39. 38
the ability to affect policy and regulation through public support and status as a primary
stakeholder. Like a port authority a landowner has the capacity to enter into private agreements
that provide incentives for supporting working waterfronts, apply for state or Federal grant that is
assigned for preserving a waterfront, and lobby for tax incentives by providing public access or
because of rising property values.
The third category of stakeholder discussed in the Sustainable Working Waterfronts
Toolkit is the waterfront user who relies on the working waterfront for either their livelihood or
other recreational activities. Since the user has the fewest amounts of tools to enact change
through direct involvement, they must focus on bringing to the attention of other stakeholders
initiatives that have been overlooked. Because of the evolving nature of a working waterfront its
users are often displaced or given reduced access, which is frequently the catalyst for a
community to work together and lobby for protected usage and public access. The users are very
powerful since they are the most visibly affected stakeholders and fund the majority of projects
along a working waterfront by paying taxes, fees, and rent (Sustainable Working Waterfronts,
2013).
The conclusion brought out by this Sustainable Working Waterfront Toolkit is that when
working waterfronts regress the coastal economy is affected on many levels, including a decline
in Gross Domestic Product, physical access to the waterfront, and infrastructure that will render
intermodal transportation inoperative. Small and niche ports must continue researching and
investing in infrastructure that allows the economic and cultural aspects of a waterfront to be
fully utilized. Some general recommendations made by the Final Report include publishing
academic works that identify or present research needs, developing policy that designates a
specific working waterfront as a National priority, develop systems that can compile and track

40. 39
data after identifying the key socio-economic metrics, and broaden the sources of funding to
include both public and private investors (Sustainable Working Waterfronts, 2013).
Conclusion
Due to containerization shipping lines have decided to use fewer and larger ports,
creating competition between megaports in the United States and leaving smaller ports. In order
to continue generating revenue as a small port, the Ports of San Diego and Humboldt Bay have
attempted to grow without containerizing their terminals. Embracing their status as a niche port
and continuing to handle refrigerated cargoes, automobiles, and forest products is more
profitable at the moment than trying to develop container terminals, but will be in the future also
since the Ports of Oakland, LA, and Long Beach already have the infrastructure and intermodal
connections the shipping lines require. If a niche port is positioned near another port that handles
containers they should not containerize unless there is open land, funding through partnerships or
loans, and a shipping line or business that is already interested in that port.
Port Canaveral is a rare case when transitioning from a niche port to a container port is
feasible and recommended. The reasoning behind this and why the expansion is already
underway is that most of the freight that comes into Florida is not through a port, but by rail or
highway from another state. Port Canaveral is trying to make up for revenue lost by building new
cruise terminals, expanding the cargo piers, and building on-dock rails. These new terminals will
not draw in shipping lines and customers just because they’re new and modern, but because
Florida only imports half their cargo through ports and these new intermodal lines can save
shippers money.
In California terminal shutdowns have led to ship congestion, as several ships often have
to anchor while waiting for berths at the Port of LA and Long Beach. Backups like this also

41. 40
occur at the Ports of Oakland and the Washington State majors of Seattle and Tacoma. The
reason behind the gridlock at these ports is prolonged labor talks between the Pacific Maritime
Association and International Longshore and Warehouse Union (ILWU) have yet to be resolved.
There is also a shortage of tractor-trailer chassis in on and off dock facilities, and rail service
delays (Gorman, 2014). In addition to these issues even larger container ships are due to be
docking in these ports very soon, adding even more pressure on the infrastructure of these
megaports. With this increased volume of imports, lack of berths, warehouse space, and required
labor, future businesses that may decide to bring their products through Canada, Mexico, or the
east coast of the United States. Because of these strains on the supply chain in California, the
Ports of Humboldt Bay and San Diego should be actively searching for customers to partner with
and then invest in the terminal infrastructure they require.
Even though niche ports have a less significant impact on regional and national
economies, they are environmental stewards, generate local employment, facilitate trade,
generate tax revenue, and encourage port spending. Any small port district that is struggling to
grow their cargo operations should try to expand their terminals or modify them to handle a
different niche cargo. The first step in undergoing an expansion project is to conduct a feasibility
report, and if the results are favorable, investments in berths, cranes, on-dock rail, and highway
connections should be made. These projects can be funded through a business connection in
which the costs are split, tax breaks or incentives are introduced, or the port receives funding
through a state or Federal program like TIGER. As displayed by the Sustainable Working
Waterfronts Final Report all stakeholders have tools at their disposal to explore ways to
revitalize or protect a working waterfront, and enact change. It is clear that not all cargoes fit the

42. 41
containerization model, so niche ports need to focus all assets in moving those items in order to
have successful marine terminals.

43. 42
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