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Port Authority: How an inland port might impact Utah’s economic future

Utah, once a little-known territory in the mysterious west, is now an economic powerhouse and the envy of many states. This success is a direct result of hard work and visionary leadership.

What is the plan for retaining Utah’s title as the No. 1 state for business? One proactive step being taken is exploring the possibility of creating an inland port.

Looking ahead

On Oct. 24, 2016, Utah Gov. Gary R. Herbert stood in front of more than 450 business leaders at the Utah Global Forum and announced the creation of an exploratory committee to assess the development of an inland port in Utah. The announcement came on the heels of a study, commissioned by World Trade Center Utah (WTC Utah) and Zions Bank, produced by the Kem C. Gardner Policy Institute. The study confirmed Utah’s has the right ingredients for an inland port.

Inland ports are sites located away from traditional land, air and coastal borders that possess strong transportation assets and inland distribution centers. Goods are off-loaded from ships and moved to inland ports for handling and redistribution. An inland port can fulfill many beneficial functions, such as a satellite customs clearance terminal, an intermodal distribution facility and a customs pre-clearance for international trade.

Business leaders have discussed the possibility of developing an inland port in Utah for decades, with some progress made throughout the years. In 1974 the Utah Legislature unanimously passed a bill permitting port authorities throughout the state. Port authorities are governmental or quasi-governmental public authorities formed to operate ports and other transportation infrastructure.

Despite the passage of this legislation in the ‘70s, little progress was made. In 1990 a feasibility study was completed that produced a plan for establishing an inland port authority. A port authority was established, but lacked funds to be fully functional. Leaders decided more research was needed before plans for an inland port moved forward.

The time is right

International trade contributes billions of dollars to Utah’s economy and businesses continue to become more globally focused. Utah is now the fourth fastest growing export state in the United States. The time is right to revisit the creation of an inland port in Utah.

The creation of an inland port would elevate Utah’s status as a global business destination and incentivize international companies to locate in the state. Utah’s centralized location, market access and favorable labor costs are just a few reasons constructing an inland port makes sense.

The market assessment provided by the Kem C. Gardner Policy Institute presented key findings and potential next steps for decision makers. While the Salt Lake metro area is well positioned for an inland port, additional data collection, analysis, public discussion and investment are needed. The Foreign Trade Zone and transportation infrastructure need to be improved, and a governance structure for the port needs to be developed.

This is where the exploratory committee created by Gov. Herbert comes into play. Over the next year the committee, led by WTC Utah and the Utah Governor’s Office of Economic Development, will research and evaluate whether an inland port is the right investment for Utah. The committee had its first meeting in January and is already getting the ball rolling, with the first order of business being to secure funding from the state legislature for a feasibility study.

If funded, the feasibility study will be conducted by an outside consultant and will fully explore the opportunities and challenges associated with creating an inland port. The study will answer the questions of how big a port might be, how much it might cost, where it should be located and who would pay for it.  The finding and recommendations from the feasibility study would then be discussed with the governor and legislature in October.

Economic impact

In terms of recruiting companies, having an inland port would make Utah an attractive option for major manufacturers looking to expand or relocate. The state is already centrally located, but having the opportunity to process and distribute international goods in Utah would be a game changer.

In Gov. Herbert’s remarks at the Utah Global Forum, he referenced that Utah is built on a foundation laid for us by visionary Utahns who came before us. He said, “Maybe the best thing those who went before gave us is their example. We have the responsibility to follow their examples by investing in the future, not just for ourselves, but for our children and grandchildren. We have to lay the groundwork for Utah to be number one not just for today, but for 20 and 50 years into the future. One way we can make that investment and ensure our economic future is through the creation of an inland port.”

The inland port project would take a number of years to develop, but the investment would drive our prosperity in the state for decades. As the exploratory committee meets, that is how each issue will be examined. With a long-term perspective and critical analysis on how it can help the state compete not just nationally, but internationally for years to come.

To view the market assessment produced by the Kem C. Gardner Policy Institute, visit www.wtcutah.com/inland-port-study.

Worldview-Derek-MillerDerek B. Miller is president and CEO of World Trade Center Utah, an organization dedicated to helping Utah companies think, act and succeed globally.