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Economic Development (Links not active. Article found at www.actaz.org)

 

PHOENIX, AZ (By Jon Garrido, Act AZ) March 20, 2006 — The Polar ice cap is melting at an accelerated rate according to the National Center for Atmospheric Research in Boulder, Colo. Much of the summer ice will disappear by 2050, according to Marika Holland, a scientist working on the sea-ice portion of that model.

The most that can be expected, some climate scientists say, is to limit the human contribution to warming enough to forestall the one truly calamitous, if slow motion, threat in the far north: the melting of Greenland's ice cap.

Rising two miles high and spreading over an area twice the size of California, this vast reservoir - essentially the Gulf of Mexico frozen and flipped onto land - contains enough water to raise sea levels worldwide more than 20 feet.

In addition, warming of the oceans will intensify hurricanes and extend the season from June through November in the Gulf of Mexico disabling port operations resulting in international trade seeking safer ports.

Today, the Sea of Cortez is 20 miles southwest of Arizona. The demise of the polar ice cap will bring the Pacific Ocean into Arizona and will enable Arizona to facilitate an opportunity to become a player in the U.S. intermodal transportation system by adding marine transportation through a new port on the Pacific side of the Americas and at the upper end of the Sea of Cortez.

Even with without raising sea levels, Arizona's access to the Sea of Cortez working with the Mexican government could bring economic development to northwest Mexico and southwest Arizona.

The mouth of the Colorado River flows into the Sea of Cortez. The area between the United States and Mexico south of San Luis to the Sea of Cortez is 20 miles of marshes that by dredging could provide a deep channel to port facilities; however, the flow of the Colorado River as controlled by US Federal agencies determines the depth and at times may leave the entrance into the Sea of Cortez without water sufficient to enable tankers to navigate.

For this reason, the Port of Yuma is moving forward to structure an inland port as modeled by eastern seaboard ports.

Mexico is also embarking on establishing a port on the Sea of Cortez and an announcement will be forthcoming later this year.

The prime factor in success wherever a port is located is contingent upon back haul. Cargo users will not use any Sea of Cortez port if once the containers are disembarked there are no containers to load to be hauled back to point of origin or points in between.

For this reason, Amermart will focus on locating US manufactures in an industrial park located on the America side of the US Mexico border. Without this major component, the use of the Sea of Cortez will not materialize.

A new major international trade port for Mexico located in close proximity to Arizona will provide for thousands of Mexican port construction jobs with high wages and will enable construction workers to move not only into port operations but also to new Mexican companies providing support to port operations.

This could achieve a multiplier of 5 creating jobs in housing, school and retail construction.

The boom in port facilities in Mexico with a U.S. Foreign Trade Zone in Arizona along the Mexican border would facilitate international trade with Latin America.

The proposed Free Trade Agreement of the Americas may be years away but already most member nations located on the Pacific side have entered into bilateral trade agreements with the United States and Latin Ameirca. It is this corridor that would be the prime engine to move containers through the Arizona/Sonora port into Arizona where trade items could then be distributed primarily throughout the southwest but also throughout the western United States. In times of hurricanes, this distribution network would expand to provide traffic to areas that were previously served by the Gulf of Mexico ports.

A sea port at the Sea of Cortez could have an significant economic impact on Arizona by enabling Arizona to become part of annually moving more than 15 billion tons of freight with a total value of over $9.1 trillion. As trade volumes increase, the capacity of America's total intermodal transportation system must also increase in order to maintain our nation's economy. The Arizona/Sonora port could position itself to become an integral part of this trade.

While domestic waterborne trade is expected to grow modestly, U.S. international container traffic is projected to at least double from 2001 to 2020 according to the June 2005 Report to Congress on the Performance of Ports and the Intermodal System submitted by the U.S. Department of Transportation Maritime Administration.

Nowhere will this pressure be felt more than at U.S. ports, which serve as gateways for both commercial and military cargo. This proposed port could provide access to the Military facilities located in the Yuma area.

Since the advent of containerization in the early 1960's, ports have had to keep up with significant evolving changes in vessel and shore side infrastructure needs. Container vessel capacities have grown TEU+ (A "TEU" is a standard "Twenty Foot Equivalent Unit" steel ocean shipping container) ships to over 8,000 TEU's and next generation containerships with capacities of 9,000+TEUs are already under contract. Private sector railroads, addressing supply chain competition and ports' needs to accommodate commercial and military cargo simultaneously, have employed double stacked trains. Double stacked trains require larger facilities for increased rail traffic.

Introduction of new terminal technologies that enhance and improve just in time delivery processes within the nation's supply chain, a projected doubling of throughput on the system, providing needed maintenance on the current system will require flexibility and massive new investments in intermodal transportation infrastructure.

There are other factors to be considered in assessing the Arizona/Senora port feasibility. The major task is to find infrastructure funding. The World Bank’s Mexican Office was contacted on March 16, 2005. A written scope of the undertaking was requested. Most importantly, Mexican approvals would have to be obtained. Former associates in Cuidad Juarez, Mexico and owners of the largest industrial park in Mexico were contacted on March 16. Preliminary interest is positive. The participation of the Mexican government would be left to the Mexicans.

A major hurdle may be the use of the Sea of Cortez by whales. Fortunately, San Ignacio Lagoon, Baja California Sur is located on the Pacific side of Baja California.

If the port was within the United States, a preliminary environmental assessment would be required leading to an environment impact statement (EIS). I do not know today the requirements in Mexico but I do know there are many Mexican agencies involved in the Sea of Cortez.

A few examples of other factors that affect throughput and performance are summarized below:

 

Factors that affect Port Cargo Volume:

  • Types of cargoes handled by the port (specialization)

  • Location of port relative to shippers' markets (regional demand)

  • Price of port services relative to shippers' alternative ports

  • Waterside access limitations

  • Carrier investment in port infrastructure

  • Quality of port services

  • Business realignment to increase purchasing power

  • Availability of national government subsidies (World Bank contacted March 16, 2005 to determine availability of infrastructure funds.)

 

Factors that Affect Port Efficiency:

  • Labor efficiency (cargo moved per unit of labor)

  • Land use efficiency (cargo storage per unit of land)

  • Waterside access limitations

  • Capacity of port road and rail connections

  • Inland transportation availability (Rail and Freeway access are located within a reasonable distance and Yuma has an airport that could be expanded to fly trade goods into the USA.

  • Cargo handling capability

 

Jon Garrido, president and CEO of Amermart, is the former economic development coordinator for the City of Tucson, Arizona, who won approval for the Tucson Foreign Trade Zone and former executive director of economic development for the City of El Paso, Texas, who won approval for the El Paso Foreign Trade Zone from the U.S. Foreign Trade Zones Board in Washington DC and later established, owned, and operated JG Manufacturing, a maquiladora, in Cuidad Juarez, Chihuahua, Mexico, where he was responsible for company operations including custom procedures of import and export tariffs.

 

 
   

 

 

Jon Garrido, President, Arizona Law and Education Center (ALEC)

602.244.1000

 

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