Opinion: Port of Stockton on the Stimulus Plan

In mid February, after intense political fighting, lawmakers in the US Congress passed a $787bn economic stimulus package, a big portion of which will be devoted to “infrastructure”.

Roads and bridges will get roughly $29bn, water projects will get $6bn, and rail will get more than $8bn – with a focus on high speed transport.

The new package does not create a central infrastructure bank (as President Obama had suggested), but will give individual states a big role in parceling funds out.

PS caught up with Bill Lewicki, the marketing director at the Port of Stockton in California, as he was preparing for a series of trade shows. Like many members of the international business community, Mr Lewicki is aware of the numbers being debated, but he cautions that: “It’s very difficult to say what is going to come out of the political debates. What’s most important to us is that the overall economy will support the businesses that need to move cargo.”

Mr Lewicki keys in on two important industries for the port: farming (generating cargoes of refrigerated produce and fruits) and construction (generating cargoes of gypsum, aggregates and steel products), telling PS: “The farmer needs credit to buy fertiliser and seeds; the construction business also requires the availability of credit for supplies.”

The conversation with Mr Lewicki reveals important lessons in port planning, while offering insights into the role of the overall economy in the health of this port, located in the fertile valleys of central California.

Stockton is served by the San Joaquin River, maintained at 35 feet depth, connecting to San Francisco Bay with the iconic Golden Gate Bridge 75 miles to the west.

Mr Lewicki praises the port’s planners and commissioners, saying: “They had the foresight to diversify. We are in multiple markets and the mix has helped us in these tough times.” He explains that record tonnages of cement, some 2m tonnes, moved through the port in 2005, but that throughputs dropped substantially in 2008.

“The diversification includes cold storage; we have new facility that’s just opened to serve the growers in the region. We have a lot of land where businesses can set up a processing or distribution facility, but those potential tenants at our port must see a viable economy. We hope that the flurry of activity on Capitol Hill will produce a stimulus that can support the needs of our customers.”

Mr Lewicki does note that both the House and Senate packages include spending on the railroad industry. “We would welcome spending on the rail mode; in the past we’ve moved steel rails through the port; we have the longest on dock ship/rail interface on the West Coast.”

He adds that the ports heavily reinforced concrete docks also support the movement of raw steel slabs which can then be transferred to mills producing finished products.

The port complex is one mile from a major north south artery, Interstate 5, which connects into the interstate highway highway system. Two of the biggest US rail carriers, Union Pacific and the Burlington Northern Santa Fe, serve Stockton.

The proposals within the Obama stimulus package supporting alternative energy also excite Mr Lewicki, who notes that Stockton was moving wind energy components and stands for wind turbines before alternative energy had gained the prominence that we enjoy today. “We have a dedicated rail line and staging facility, and an experienced labour force that is ideal for project cargo.”

Circling back to Stockton’s approach to port management, he says: “This is an example of diversification; we realised the importance of these cargoes, and our unique ability to handle them, long before Obama was expected to win the nomination of his party.”

One potentially worrisome aspect of the political discussions for the Port of Stockton were the “Buy American” provisions in earlier drafts of the stimulus legislation.

Mr Lewicki is resolute on allowing trade to flow freely, telling PS: “If we restrict the movement of someone else’s imports, then they might prevent our cargo from moving. We serve many countries in the Pacific Rim, and we hope that trade would not be restricted.”