Cary Davis, President & CEO of the American Association of Port Authorities (AAPA), joins host Jeff Dance to discuss the future of Port Policy and Finance.

 

Cary Davis: I don’t envy the difficult decisions that many of these great women and men who run the ports have to make right now. Because how do I invest in things that won’t be obsolete in 10 or 20 years, right? If you are doing things to generally decarbonize operations by electrifying the operations of your port, by installing the near-shore offshore wind farm or the solar panels, you’re making very big bets with huge CAPEX decisions about what your future is going to look like.

 

Jeff Dance: Welcome to the future of a podcast by Fresh Consulting, where we discuss and learn about the future of different industries, markets and technology verticals. Together, we’ll chat with leaders and experts in the field and discuss how we can shape the future human experience. I’m your host, Jeff Dance. This is the second in a two-part series focused on the future of ports, with the previous episode with three port leaders on the topic of port innovation. Today, we’re talking about infrastructure, policy, and finance, and how that can both drive and constrain innovation. Cary Davis is here with us. He’s the president and CEO of the American Association of Port Authorities, known as AAPA. And AAPA is actually a 112-year-old thought leader and meeting place for over 120 Western Hemisphere seaports on international trade, infrastructure, shipping, security, supply chain, environmental stewardship, and digitalization. Before serving as a president at AAPA, Cary Davis served in the federal government as a presidential appointee for international trade and security. He’s also lectured at Penn, Georgetown, and the University of Denver, among others. Cary Davis, we’re grateful to have you. Welcome.

 

Cary: Jeff, thanks so much. I’m an admirer. I’m an admirer of you and of your company, Fresh Consulting. We’ve had the chance to work together. That is Fresh and AAPA, and I value that relationship. And I appreciated your intro. It’s a deep privilege and honor to help run with a great team at a 112-year-old trade association for an industry that’s pretty much as old as mankind, right? Trade and shipping. So thank you for this opportunity.

 

Jeff : I admire some of the original designers and architects and they were shipbuilders. At Fresh, we both design things and engineer things, but some of the original designers and engineers were these amazing shipbuilders that were in your neck of the woods often. So it’s exciting and we’re grateful for the partnership as well and looking forward to the future together. You know, seeing that you’ve already been covered in places like New York Times, Politico, BBC, Bloomberg, CNN, et cetera, and then to have you here, it’s exciting. Just before we really dive in, anything else you can tell the listeners about yourself, your journey, and kind of becoming a part of the industry? What got you interested in the space? I’d love to hear a little bit more if you can.

 

Cary : Appreciate the opportunity to talk about that. I haven’t had the most typical route when it comes to shipping and supply chain. I’m a trade lawyer. So I came up as a young lawyer representing Global 500 companies, very large multinational conglomerates who were structuring deals, selling widgets or more financialization. I represented companies like Nike and Toyota. I went into the government in the Department of Commerce to help work at a very high level with a lot of the, what you’d probably call updates to trade policy between the U.S. And China. So this was during the rollercoaster and tumultuous Trump years. And he was completely shaking up the Washington consensus on sort of how we should approach China. And I think that’s a great point. We’re sure a lot of our trade that we had offshore to China over the years. And so I was working on trying to ensure that U.S. Companies and U.S. Products were given the market access that we thought they ought to have. That is, it should be easier for us to sell to China, not just to buy from China. And that was the launchpad. Well, let me just back up half a step. It’s funny when you work in the government, especially in the federal government, these really high level, like we should export this much more lumber to China or Vietnam or Canada. And you never really think, well, how does that lumber get from point A to point B? What are the means of actually moving it? And that’s why I was so glad to actually now work a little more on the hands-on aspects of supply chains, not just theoretical numbers about how much we can or should sell. But, okay, you make a deal to buy and sell between countries. How does the stuff get from point A to point B? And I’m fortunate. I’m fortunate to get to work on that stuff now.

 

Jeff : You’re involved in a lot of serious conversations when it comes to policy, trade, and the future. And this is between cities and countries and government organizations. What do you do for fun?

 

Cary : The things that matter most to me are pretty much two in this order, family and golf. Anytime I’m not working or golfing or reading, I’m with my family. The older and more experienced I get, the more I realize we are nothing but dust and ash. Atoms without people that we can share our experiences with. And for me, there’s no one better than family. So I love my family. And a close second is golf. I’m fortunate to do a lot of road tripping and travel to go see great golf courses. I’m part of these virtual networks where you can meet people at different clubs and at different locations. So I’ve made some incredible friends and contacts and seen some of the most beautifully conceived and manicured golf courses in the world. I was just at Lookout Mountain above Georgia, above Chattanooga, TN, if anyone knows that location. But yes, there is about a 115-year-old golf course on top of that mountain. And it was a religious experience, actually. So those are the things I love.

 

Jeff  : You know, you’ve said public policy advocacy is the sharp edge of the knife for why the AAPA exists on behalf of U.S. Seaport members. Can you talk more about the EPA’s role in port policy today and some of its recent impacts?

 

Cary : Definitely, Jeff. Let me backup half a step. You correctly said that AAPA, based in Washington, D.C., represents United States seaports vis-a-vis the federal government. So whether it’s the president, him or herself, the National Economic Council, the Department of Transport, the United States Congress, including all of the appropriations committees, which hold the purse strings for everything the federal government spends money on, we represent United States ports vis-a-vis all of those decision makers. So there are about 80 of those deep draft ports in the U.S., deep draft being 30, 40 feet of depth.

There are another 40 plus seaports from Canada, Latin America, Islands Caribbean, and the Pacific that are also members of our trade association. We have events, networking, best practices, publications. We talk a lot about technology and how that’s taking root in the industry. So that’s kind of the makeup of our trade association. 125-ish ports across the entire hemisphere, 80-some-odd ports in the U.S. And yes, we lobby for that. We try to ensure that the federal government is paying requisite attention and resources to these hubs of transportation that are so important for our national economy. The things that move, not a shocker, but I have to say it, the things that move through ports touch every single congressional district in the country. So we go into Congresswomen and Congressmen’s office to let them know, hey, yes. You might be from Iowa, but do you know where your corn and soy products? Do you know the probably 15-plus coastal ports that all of those commodities are moving through? So there are a myriad funding mechanisms through the government for port infrastructure. You asked, what are some of the recent impacts? Well, the Bipartisan Infrastructure Law and the Inflation Reduction Act, which are two landmark pieces of legislation in the last three years, really stepped up the funding levels that are available for port infrastructure. And I always applaud our congresswomen and men for stepping up to that challenge. Hopefully, we’ll have sustainable funding. But the recent infusions have been historic. I mean, even way beyond what happened in the Eisenhower era when we were building the national highway system. We’re talking historic levels of funding. And day in and day out, there’s just environmental regulations, supply chain regulations. There’s resilience. I often joke that 112 years ago, when AAPA was first formed, there were no building standards for docks, and fires were breaking out left and right.

Well, guess what? With the increase in EVs that are being shipped through ports and these lithium-ion batteries, we’re seeing a new era of fires on the ships and the docks. Some of the things don’t change. So that’s an issue we work on as an industry. But I think we’re going to probably get into some digitization, digitalization, automation, and tech. So some of the issues are way different than what we were talking about 112 years ago.

 

Jeff  : Can you give an overview of the power program? We’ve been reading about that. Port opportunities with energy, resilience, and sustainability, and kind of how that affects individual ports. Is that part of the infrastructure movement? Or tell us more. 

 

Cary  : Well, absolutely. Let me just pick up specifically on what you asked, and then I’ll zoom out and talk about the program a little more generally. Specifically, whether it’s the offshore wind build-out, right? And our national goal is to get to 30 gigawatts. Of offshore wind-generated energy by 2030. Or it’s some of your recent thought leaders that you had about port technology. We’re talking about how it might make a lot of sense to do solar farms because of all of the relatively flat warehousing space and assets that are at a lot of these port complexes. It kind of makes a lot of sense to do solar on top of those. There are ports working on micronuclear. They are micronuclear manufacturing and enrichment facilities that are being co-located at ports. So I’m just giving you a sense, right? Some of the cool, sexy things. But ultimately, ports are huge movers and users of energy, right? Whether we’re moving traditional oil and gas products to the ports or moving to alternative fuels, LNG, hydrogen hubs are now being co-located at ports. And the ports themselves and their operations require a lot of energy, as do the giant vessels. That is called, you know, going in between the ports. So as users and movers of energy, it only makes sense to co-locate a lot of the, frankly, next generation of energy production. The sources I mentioned, offshore wind directly, that’s the one that’s like ramping up the fastest. We knew that as an industry, we need to be makers of policy and decisions in these topics rather than takers, which was the historical role that we were playing. It was just kind of like whatever the vessel builders, the people who build the big ships, they were making decisions over in Europe about the energy sources that are going to power the ships. The legacy utilities and the energy producers, they were making decisions. Ports are the hubs of where a lot of this is happening, we’re trying to up our game and be makers of decisions as well. So that’s what the port opportunities with energy resilience and sustainability programs are all about. Of course, we are moving towards decarbonization in a realistic manner. And we’re not just throwing out some ports have right. Every port is different. If you’ve seen one port, you’ve seen one port. Some ports have made commitments about timelines that they’re going to get, get to net zero. Most haven’t. We as an industry have not, but we certainly play in the large international debates about what the realistic timelines for decarbonization are.

 

Jeff : It’s really interesting. And it goes along with, you know, what we heard you say previously that this is an infrastructure decade. And so it sounds like we have the funding and now a lot of the ideas in the programs to help modernize the front doors of our country. As far as initiatives that you think ports should be investing in today, you mentioned, you know, decarbonization. You talked about solar as a key theme in some of the big wind energy programs that are being rolled out and more. What else do you think ports should be investing in today? I know each port, each port is unique beyond what you just mentioned. Are there some key themes of things that really need to be modernized as we think about preparing for the future?

 

Cary  : It’s a fantastic question, Jeff. And as you survey the industry on what they’re investing in, it runs a wide gamut. I think I’d be kidding myself and your listeners if I didn’t start by saying we had so much deferred maintenance, we had so much deferred maintenance, and upkeep of just what you might call the brick and mortar of ports. And a lot of the, I mentioned the infusion, the historical dollars through the Bipartisan Infrastructure Law and the inflation reduction act. A lot of the early tranches of those funds starting around calendar year 21 and ongoing were for rehabilitating traditional port infrastructure, which was just, just nearing the end of its useful life. I talked about sort of the Eisenhower infrastructure program post-World War II. That’s when a lot of modern ports were built. So you can imagine those pharmacs, those wharves, those docks, those warehouses, those access roads. You can imagine it was all reaching the end of its useful life. One of my favorite stories comes from Port Angeles, Washington, probably not very far from you. They had a pier, which was 115 years old. So it was older than AAPA itself. And they fortunately got, it was a sizable, I couldn’t cite exactly how much their federal grant was to rehabilitate that pier, but just gives you a sense of the deferred investment. Now we’re moving. So we’ve covered a lot of those types of getting the traditional infrastructure back up to snuff. One thing that we’ve always got to do as an industry, and as a, as a nation, as an economy is ensure that the largest vessels, the largest ships, the most modern ships are able to call on us ports. That includes cruising and tourism ships, by the way, a major economic driver and lifeblood to so many communities all across the country, because of course it tends to be people with disposable income wealthier clientele, although cruising is very democratic and really works for a lot of different people. It’s a great economic driver. So whether it’s the largest cruise ships or more commonly the largest cargo ships, they have a very deep draft that they need in order to call on ports. So the dredging program at ports, which is a huge thing that the US federal government for many, many years has really taken a leadership role on dredging, is constantly important because silting is natural. The channels where these ships go and the areas where they dock, are always experiencing silting. So dredging is a never ending aspect of quote unquote, infrastructure maintenance app ports. We’ve learned through a survey that there are 50 billion of alternative energy projects in some stages at ports. Granted, a lot of these are on the planning or the conceptual stage, but I did mention everything from hydrogen to nuclear to offshore wind. So there are plenty of projects that actually have shovels in the ground as well. But 50 billion of green energy projects. And as part of that, there are so many funding opportunities and there’s so many different types of projects. It’s an exciting time. The last big thing to look out for is the U.S. Environmental Protection Agency (EPA), EPA, in the federal government is rolling out a one-time tranche, a one-time bite at the apple, 3 billion grant program for cleaner infrastructure and operations. That’s going to be rolling out in either Q1. Or Q2 of this year of 2024. So we helped write this program with the government. We helped writing the parameters, you know, all the details. It’s a, you can imagine how long the list of parameters are for a project to qualify for something like this. So we’re working with the government on that. And that funding window is going to open probably late Q1, 24.

 

Jeff  : We saw such extreme pain, you know, during the pandemic with the supply chain. We all felt it during that time. Do you think that sometimes? You need some deep problems to kind of bring people into the light of innovation needs and whether that’s dredging and that’s the real innovation that a port needs, these micro nuclear energy plants or the solar of the future. Do you think that has shaped policy and the funding that we’re seeing now to drive innovation?

 

Cary  : In many ways, yes. Although I’d be kidding myself if I said we’ve really internalized. All the lessons of the pandemic supply chain crunch. Now, being a good lawyer and lobbyist for my industry, I have to say not a single port closed for a single day because of the challenges of the pandemic. That in and of itself, I think, shows that we were pretty resilient. And that was in stark contrast with what was happening with ports around the world, including in China. And certainly large. Gateways in Africa, where the public health emergency actually closed down the critical infrastructure, including ports. So I actually thought we did pretty good there.

 

Jeff: Yeah. One of the things you cited was that many shippers were essentially using the port space as sort of free warehousing during the pandemic for various reasons. And I’m just curious on your angle on that. Was that a main part of the bottleneck that things were just kind of stale?

 

Cary : I do believe it was. I am not here to blast. All of the. Shippers and brands and companies that use our ports are far from it. We want operations to be fluid. We want them to be able to have visibility into their cargo location and to be able to get the cargo as they see fit. Was it like the biggest contributing factor? No. Consumption spike was the biggest contributing factor, but it was the least reported factor, I believe. And you pretty much cited my own words back to me. But. Because it was a backflow of cargo because put yourself back in mid 2020 economies still shut down in many ways or traditional economy, brick and mortar in person economy, if you will, still shut down in many ways. And yet the online buying spree is like nothing we’ve seen before. Most experts, economists would say something like we fast forwarded our buying habits by about 10 years. Right. So we were. We were shifting towards e-commerce in the course of one year. We lurched 10 years forward. So because brick and mortar was closed, because inventories were full or being strained at one point, there was like point one percent warehousing capacity available in Southern California. It was packed to the gills. A lot of cargo owners were leaving their cargo on the docks for lack of being able to put it somewhere else. And that was causing a lack of space, basically. So I do think that was the most underreported thing. I take a lot of heart now, though, for a lot of reasons, not the least of which are well, three. One is what we were talking about before. A lot of the infrastructure investments are increasing the capacity of ports. You can move stuff more quickly, more comfortably when ports were moving nearly 20 percent more cargo at the height of the buying spree. People forget that, too, right? We were moving more stuff. Capacity improvements through infrastructure investments help a lot. Two, I want this conversation to be evergreen, but folks will know there is a crisis playing out in the Red Sea right now with the Yemen’s Houthi forces militants attacking the large cargo ships and many of those cargo carriers, the vessel operators saying we’re not even going to do business in the Red Sea right now. Government and industry have been getting together regularly to try to anticipate what the impact is. What’s the impact? How is cargo going to start shifting from one region to the next? Do we need to deploy more truckers, longshore folks, and chassis to be better prepared where there might be a surge of cargo? So we’re having regular calls along those lines. And that feeds up into point three, which is that the government has recently stood up its FLOW initiative. Logistics . Ultimately, at the end of the day, it’s an algorithm and a metric. It’s an algorithm. The chain, if you will, are better able to coordinate if we’re all looking at the same data set.

 

Jeff : It’s good to hear about the infrastructure and the programs to alleviate what we all experienced, you know, across the world. And it’s good to get some insights on why that happened. One of the things you just touched on was, you know, the Red Sea. And that brings us to security, you know, being a big part of port infrastructure. We’re seeing ports now, though, like the ones connected to Israel and, you know, the ones connected to Russia and Ukraine as like these war zones. And so I think that kind of heightens our thinking around security. Can you talk a little bit more about how you guys are thinking about security? I know there’s a bill recently introduced. What initiatives are important right now as we think about security?

 

Cary  : Well, I want to pick up on the one nugget that you dropped there again before zooming out, because this is an important specific point. This is the GBP Space Act, which is what you just. Referred to or securing ports at customs expense. CBP Space Act coming from the world of politics. I’ve always liked writing bill acronyms. So that’s one of my corny ones.

Jeff : FLOW is amazing. Really get behind FLOW so that that’s the creative side of you guys coming out.

Cary : I can’t take credit for that one. There were a couple of really good federal officials who I work with who came up with that one. So I can’t take credit for that one. I wish I could. I really do like writing bill names, especially when they kind of capture the challenge you’re trying to solve or the thing we can all rally around. So the specifics of the bill are specific. There are certain revenues, fees, funding streams that all of this activity at ports generates, right? The activity of ports generates a lot of money that goes back into the public treasury that, yes, should be reinvested in ports, but also go to pay for all the services that we rely on government help and support for. So I would argue that the activity of ports is really helping our federal budget overall and state budgets for that matter. To that point, it has always, always going back to the beginning of the U.S. Constitution. It’s actually in there. It has always been the responsibility of the government to have a government that is going to help us.

And I think that’s a really important thing. To help oversee the security of the ports. That’s not to say the port authorities and all of the users of the ports don’t have responsibility, but the presence of Customs and Border Protection, CBP, a unit of the Department of Homeland Security, it’s always been the federal government’s responsibility to pay for their presence and for their operations at ports to facilitate the FLOW of cargo. So what we’re proposing to do with the CBP Space Act is to adjust some of those merchandise fees to ensure, that the agency, CBP, does in fact have the funds that they need to, guess what, recapitalize a lot of their infrastructure that is reaching the end of its useful life, whether it’s the warehouses where they do the inspections or, as we move more towards a digital system, they use very sophisticated IT architecture and algorithms, including AI, to determine what are the highest risk cargos that, hey, we should open up that box and take a look at what’s in there, because it might be coming from a high-risk cargo. So we’re not going to be able to do that. We’re going to be able to do it in a high-risk country or something like that. So that’s what we propose to do with that bill. Appreciate the chance to kind of plug it. We would love to see its passage in 2024. And of all the things that Congress fights on, they can’t even agree on the color of the sky or the day of the week. This is a bipartisan bill that everyone agrees on, right? Getting our agents the resources that they need in facilitating commerce. I kind of want to start zooming out on the point I started making about the digitization of more port operations and the threat that that carries with it. The physical infrastructure, the hard infrastructure of ports is always going to be a high-value, juicy target for anyone who wants to disrupt economic operations, whether it’s economic warfare or you want to make it more difficult to get in and out of a country. Maybe you want to scare off the trading partners from doing business in that country, right? So the whole infrastructure is always going to be a threat. Again, huge kudos to the government. They’ve done a great job, especially post-9-11, whether through regulations or through funding to help the ports remain safe. And now we’re entering an era when more of the port operations are connected. IoT (Internet of Things), the operating systems of the ports being critical for the day-to-day operations, the success. So there are, of course, many new threat vectors that any bad actor is going to be looking at. This is not a secret. If you Google this, you’ll read about U.S. Ports and foreign ports that have been victims of ransomware attacks. Hey, we’re going to shut down your port. We’re going to impose a million dollars plus economic losses. That’s what we estimate the closure of a port for one day to be. That adds up pretty quick, doesn’t it, right? Hey, we’re going to take your equipment offline. We’re going to hold your customer data set, databases, and ransom. A lot of new threat vectors where you could target a port.

 

Jeff  : You know, as we think about the future, you want to learn from the past. And you’ve cited some things from the past. You want to be present in the present and understand really the challenges. And you want to prepare for the future. And it’s good to hear that you’re thinking about both sides of making the future good. It’s not just innovation, but it’s also security. It’s not just being open. But it’s also being safe. And having that balance, I think, is so important. As we think about the future and jump ahead 10 to 20 years, I know you talked about the AAPA being a 112-year organization. So 10 to 20 years ahead may not seem as big of a time. But in technology, it’s a very long time. You know, it’s like you can have something like AI come in and be something akin to fire, the invention of fire, and what that might do for humanity. So it’s a very long time. As we think about the future, you mentioned digitization, IoT (Internet of Things). You mentioned core infrastructure. When you change core infrastructure, that can last for a long time and be beneficial for a long time. But as you look ahead, being in the position you are where you see the dollars coming in for this infrastructure, what policy or infrastructure changes? What things should we look forward to? What things do you envision as we kind of look to the future?

 

Cary: Jeff, it is a lot of the things we’ve been talking about. Let me sort of start with a quandary before giving some specific ideas about what a U.S. Or hemispheric port might look like in 10 or 20 years. I don’t envy the difficult decisions that many of these great women and men who run the ports have to make right now because they’re trying to decide, okay, historic federal and states now because the feds are making such large investments in the ports. We see a lot of the large, especially maritime trading. You can imagine the Florida’s, the Louisiana and California and plenty of others. They’re now saying, okay, our dollars can go further, right? So we’re now creating dedicated funding streams for our ports to better match the opportunities that are available at the federal level. And the women and men who run these ports have to decide, okay, if I’m going to gear up and get my grant writers together and spend my political capital trying to work with policymakers to maybe get an absolute game-changing grant to reimagine the infrastructure of my port. How do I invest in things that won’t be obsolete in 10 or 20 years, right? What are the types of trains, trucks, warehousing? What is the depth that my channel needs to be to accommodate ships that aren’t going to hit the water for four or five years, you know, give or take a three-year lead time to build a world-class cargo ship? And some of them are being built that are going to be fueled by methanol. Some of them are being built that are going to be fueled by ammonia. Some of them are being built that are going to be fueled by hydrogen. Some of them are going to be able you’re going to be able to toggle back and forth between different fuel types. So as you’re deciding what type of project you want to angle for funding for, and you’re trying to decide, well, if I’m going to offer these fuel types at my port and I have to build pipelines and fueling facilities and barges that are going to deliver the fuel to the ships, what’s the fuel of the future? What am I betting on, right? And that’s just one example. If you’re installing a new operating system and IT architecture at your port, if you are doing things to generally decarbonize operations by electrifying the operations of your port, by installing the near-shore offshore wind farm or the solar panels, you’re making very big bets with huge CAPEX decisions. About what your future is going to look like. From where I sit, you know, to kind of zoom out and not belabor this, but try to answer your question a little more generally, the infrastructure of the ports is going to include a lot of the things we’re talking about. Electrified operations, more connected and automated equipment. I use a term that I don’t hear all that often, which is cobots. It’s amazing how much more safe and comfortable we can make the lives of port people. Workers and of longshore folks by use of machines that are going to make their lives better. I think, you know, imagine if we were still in an era where we were using grappling hooks to take bales of, name your commodity, wheat, sorghum, whatever, off of a ship. Circa only 50 years ago, there were more than 4,000 casualties of women and men working at our ports. And that’s down to a handful. Everyone’s a tragedy, of course. So it’s kind of, I don’t think It’s that dissimilar. Like, no one would argue that we should go back to the era of grappling hooks and getting a level of comfort and education about these innovations is really important for the trade association and for the technologists that are going to help the ports envision what they’re going to look like 10, 20 years from now.

 

Jeff  : There’s definitely a heightened awareness of the dirty, dull, and dangerous jobs that robotics and automation can help solve for the future, where you have, often, the most efficient, less labor, less people interested in that work, and then injuries, and also a changing workforce that’s used to having maybe more digital tools or more connected infrastructure. So you mentioned cobots, and you also mentioned kind of IoT (Internet of Things) from a technology perspective. We talked about some of the different energies. Can you think of any other technologies that might play a big part in the future? We talked about the more open we are, the more secure we have to be, because that represents, you know, a threat as well. So that’s not something to take lightly. But do any other technologies come to mind that might shape the future?

 

Cary : Absolutely, Jeff. The big one is digital platforms where cargo data is shareable on an interoperable basis across the players in the supply chain. So a lot of jargon there. Most of your listeners will have some sense of what I’m talking about. But these are, you know, these are the ubers of freight, or some people cheekily refer to the pizza test of freight, where you can apparently track your dominoes all through the process. I’ve never actually used that app, but I believe deeply in getting young women and men to get more interested in our industry, and frankly, to get a lot of the perspectives of younger folks. So I run a really robust law clerk and intern program through the Trade Association, where I’m mostly bringing in young folks from the colleges and universities. And I’ve been working with a lot of universities in Washington, D.C. To come work for us for a semester or longer, if they choose. And when we really started ramping up our work on working amongst the ports and the government and other players in maritime transport to think about what a really good interoperable digital system for freight looks like, I had a young man say, what do you mean we’re going to do that? And I was like, well, you know, customers of shipping, they want a better sense of where their cargo is. They want to be able to attract. We can drive so many more efficiencies in the system if the truckers and the rail operators and the ports all kind of have a single source of truth about when the ship is arriving and how quickly it’ll unload. And he just couldn’t wrap his head around that we didn’t already have something like this, right? He’s a native, you know, he’s a native to apps that I can’t even imagine give you insights into everything. I’ve started doing some mood tracking, which is pretty helpful, but are natives to things I don’t even understand. And he just couldn’t do it. He couldn’t imagine that in such a high stakes industry that accounts in some way, shape or form for one quarter of our GDP that we didn’t have something like this. So a lot of ports have their own what are called port community systems, PCs. There are other terms, but these are generally what we call these digital platforms for cargo tracking. And some of them are amazing, but a lot of them just don’t speak to each other, right? And it’s really remarkable from one port to the next, from one shipping company to the next, the way we define arrival. When does the ship arrive at the port? When it comes into the harbor? When it ties up dockside? When the cargo gets cleared and it’s allowed to begin moving off the ship? Everyone defines this differently. How in the world can you have a commonality of terms, of data, of decision making when you don’t have standard definitions? So that work is heavily underway. I mentioned the FLOW initiative that’s being led by the government, and that’s specifically for the purpose of figuring out where bottlenecks and surges might occur. But of course, we want to be able to do so many more things, include put AI over the top of these platforms. So that is one of the most exciting things happening over the next 20, 10, 20 years. And I would hope that we have a really powerful, useful, trustworthy, interoperable national system and maybe even an international system before 20 years.

 

Jeff: That sounds foundational. The digitization movement is something. That goes in waves through different industries. And it is foundational, I think, to getting into higher orders of automation or robotics or AI. You got to have the data and you got to have an exchange. And that connectivity is sort of the foundation. So it sounds like that’s still rolling through the ports being ones that have had a lot of legacy infrastructure. And a lot of because of the heightened security about all that. And I think that’s what’s really going to be a big part of the future. I think that’s where we’re going to have that interchange. I could see where they might be a little reticent to just dive in as they’re weighing, hey, this is a big part of the future. And am I on the right stack or am I connected into the right programs? And do I have the right security in place? But with the funding, with the standards, with the interest, it seems like that is I can see how that’s a big part of the future and almost necessary in order to get into the kind of the higher orders of automation or technology innovation that can really shape the future. But I love the analogy of, you know, the Uber freight as we think about or the Domino’s pizza trackers, we think about, you know, how do you keep FLOW flowing and have a have a system that that everyone can kind of tie into. There’s a framework called the DIKW framework and it’s data, information, knowledge and wisdom. And as I’m hearing you, I’m thinking of that and it’s, you know, it seems like, oh, you need the data in order to have the connectivity, in order to have the FLOW or the exchange in order to kind of get into these higher orders. So thank you for kind of sharing that vision and what’s going to be happening and how you think about how AAPA continues to drive and support that. As you think about AAPA’s role in designing the future, you know, how would you describe that? You’re obviously at the front of driving critical funding and there’s billions at stake for creating the future. But how do you think about AAPA’s role in creating the future for ports?

 

Cary: It takes three forms. I appreciate your asking because building consensus in an industry trade association with as big of a footprint as us is tough. You have different ports being run by different personalities and business leaders with a vision of what their port can and should be. They’re moving different cargos for different types of customers. It is hard to build consensus. Among such a far-flung industry. We try to do it in a few different ways. One is we listen to our members. We have so many different forums where ports and our supply chain partners get together to talk about the latest and greatest in our industry. Whether it’s a security committee, an IT committee, an economic development committee, a legislation and policy committee. You get it. You get the idea. I could keep going. Defense. You get the idea. We have people who are really dedicated to their craft, who know the industry well and its needs and can bring their individual and parochial views about what their ports are doing. And we get together in the setting of committees, events and the like to try to find areas of commonality. As you’ve probably heard, that’s the one big way that we do it. From. Just the nuts and bolts of how a trade association works. We’re cautious and careful not to push for policies that would, to use a football analogy, outkick our coverage. We always want to remain within the defensive coverage of what our ports want to undertake as a collective. And to that point, we do also push, sometimes try to push the envelope as a trade association, especially the. Collective action issues that no one port itself can do. And that’s kind of goes back 112 years to the to the building standards for fire. You know, every port is probably going to have a little bit of a different notion about what that best building standard is or what the best standard is, given their geography, given the salinity of the water, given how many EVs they’re moving. They each might have a different notion about what the best standard is. So we will try to proactively push some ideas about what might help the industry as a whole. So the two main thrusts are trying to find common denominators about what our industry cares about and wants their association to work on. And also a little more proactively trying to find the sticky wicket areas where it kind of takes a UN of sorts to push topics that will benefit everyone. And we will be doing more and more white papers of this sort. That kind of compare what is the overall national jobs and economic impact of our industry to, again, better position us as getting the attention and resources that we need from policymakers. We’ll be doing a paper a little further out that compares how other countries devote resources to their ports and, in fact, to their digital architecture and what the U.S. Can learn from that. That’s the type of project that only the National Trade Association, or International Trade Association, can do. So those are some of the ways that we try to build consensus.

 

Jeff : It’s really interesting, you know, comparing, obviously, to other countries. And it seems like our airports are finally getting a bit more attention in the U.S., whereas they’ve been one of the most innovative countries. And yet we have some of the worst airports. And seeing that kind of innovate finally across the board slowly. But I could see where, you know, watching other countries and saying, well, what are we doing better and what are others doing better can raise some attention. Thank you for sharing the AAPA’s role in kind of shaping the future and how you’re really at the intersection of, you know, so many voices, so many challenges and so many opportunities. It sounds like a job that probably has its highest highs and some lows as well. It sounds like a roller coaster, but one that, you know, you can feel your energy, your passion for this space. And your insights have been really rewarding. Before we wrap up, a couple of questions I’d like to ask, and just to see if you have any insights, you know, technology has a life of its own. Often it’s moving at a pace that humans don’t really, you know, quite catch up. And we think about humanity in the middle of all this. And when you’re at the center of so many dollars and sort of planning for the future, architecting the future and designing the future, I always ask, you know, how do you do that with intent? How do you consider the humans in the equation and the people in the equation? Versus just the dollars or the commerce. And do you have any thoughts from that nature? Because there’s a thing about policy. Sometimes we forget humanity and we forget and then we find out that technology doesn’t serve us sometimes. So any reflection that or any thoughts that come to mind related to how we design the future with intent?

 

Cary : That is a heavy philosophical question that I’m not qualified to answer. But I do go back to some of my roots, which is federal politics. And public policy. And I kind of started most of our conversation talking about how, you know, in our marble buildings in Washington, and trust me, AAPA is not in one of those marble buildings. But in our marble buildings of Washington, the brain trusts of the decision makers think they know exactly how much of this commodity or that commodity we should be selling to a foreign country. And we never think about, well, how does that actually get executed? You know, who moves those things? I started this combo talking about that a little bit. I’ve been very heartened in recent weeks to meet with some of the greatest companies, not just in the U.S., but in the world, who are designing a lot of the AI architecture. And because most especially in the context recently of a presidential executive order on the use of AI in public policy, you can go read it. It’s a President Biden executive order. I’m still wrapping my head around it. It specifically mentions the transportation sector. And it’s. It specifically mentions that the United States Department of Transportation will need a plan for incorporating AI into its policymaking and for regulating the use of AI in the transportation modalities. And I was just so impressed by, remain nameless for now, but a lot of these tech companies, if you will, brought me in to get a sense of, well, what are the potential uses of AI in the transportation sector? Frankly, they asked me questions just like you did, which is, you know, what’s the real world impact on human beings? Can they use this? Will they want to use this? Will they understand it? Will they shy away from it? Will they be harmed by it? So I’m heartened that so many of these conversations are happening. We all chuckled or worse a few years ago when Congress was holding various hearings on some of the social media platforms. And it didn’t really seem like a lot of some members of Congress are brilliant politicians, politicians and communicators when it comes to social media. But let’s face it, many of them are not. And we all just kind of facepalmed and we’re like, really, these these decisions about our society, you’ve got to understand it. You’ve got to wrestle with it. The scuttlebutt that I’m hearing is that a lot of the AI briefings classified and otherwise that are happening in Congress right now are being very productive. We understand that there’s an impact on humans and our fellow citizens on the way we live, work and value ourselves in the arms race that it creates with many people who would use AI for bad, for evil. But I think smart people are working on it. And that gives me a lot of hope.

 

Jeff : I think that’s a fair answer. And I would agree with you. I think that. The notion of data and being open, but balancing that with being secure and thinking about the impact to the everyday person and how it transforms us as human beings is a big one. So getting more than one perspective, I think, is a lot of us are students right now of the near-term future that is heavily weighing on us and fastly moving. Cary Davis, really appreciate you being on the show. Any other thoughts before we wrap up on the future or AAPA?

 

Cary : I’m just grateful for this opportunity. You can, of course, follow us on socials at Ports United. That’s going to give you updates on how the U.S. Government is thinking about ports, maritime supply chain, and how the ports are positioning themselves there. I understand you’re an excellent snowboarder, so I wish you happy shredding this winter. Fresh Consulting has had a great relationship with AAPA so far. I’m learning a lot from you all. I think our ports are learning a lot from you all. It’s a super exciting time. It’s a super exciting time for the recapitalization and reimagination of what ports are like, why supply chains are so important. I think my very last—I’ve talked your ear off. I’ve been gracious for your chance. I think the last thought I would leave you and your listeners with in an era of great disruption and energy transition and the great energy audition where we’re using so many more different fuel sources is maritime shipping. Maritime shipping is currently the cleanest, greenest, most efficient way to move anything, full stop. So we’re doing other things to be better environmental stewards, but maritime shipping is by definition the cleanest, greenest, most efficient way to move anything. So that’s something I’m really proud about.

 

Jeff : Thanks for your leadership and also your insights and your wisdom today. We’re excited to see you shape the future. Thanks, Kerry.

 

Cary  : Thank you, Jeff.

 

Jeff : The Future of Podcasts is brought to you by Fresh Consulting. To find out more about how we pair design and technology together to shape the future, visit us at freshconsulting.com. Make sure to search for The Future of in Apple Podcasts, Spotify, Google Podcasts, or anywhere else podcasts are found. Make sure to click subscribe so you don’t miss any of our future episodes. And on behalf of our team here at Fresh, thank you for listening.