Nothing like getting scooped in your own backyard...
This morning as I read Michelle Malkin's blog entry on Our Ports, Our Sovereignty, I wondered how I missed this information. Since my current company publishes trade magazines specifically for the shipping business, I walked to our lobby and picked up one of the latest issues to see what, if anything, they had published.
Okay, everyone. Take a deep breath.
The article, buried towards the back of the magazine, was that PSA International (a Singapore-based terminal operator) dropped out of the takeover battle for the port business of P&O (Pennisular & Orient--a British-based company). This cleared the way for PSA's rival, DP World (a Dubai-based company) to proceed with the acquisition.
A couple of points:
- Ports are owned by Government Agencies, generally known as "Port Authorities." In some areas, these Port Authorities govern the airports as well as the ocean ports. But not always.
- Port Authorities do not, as a rule, operate the shipping terminals. Usually, PA's lease the land to the terminal operators and/or stevedoring companies who set up and run the docks.
- Many terminal operators and stevedoring companies are owned in whole or in partnership with a foreign company or a consortium of foreign companies.
- It would be physically impossible to inspect every one of the shipping containers that come into and out of U.S. ports daily.
- U.S. Customs does have a "pre-screening" program in place for cargo coming into the U.S. that flags shipments that look odd. Those containers are placed on hold and inspected at the U.S. port of discharge.
I'm not sure what the U.S. Government can do to prevent one foreign company from buying one located in a different country. It would seem to me that perhaps the local Port Authorities might be able to revoke the terminal operations lease based on the change of ownership and the country of incorporation.
But who would take over?
The sad fact is the U.S. Maritime Industry as a whole is in dire straits. There are no major U.S. flag carriers, with U.S. crews, in the TransPacific trade. No merchant ships are being built here. Most of the graduates from the six Merchant Marine Academies in the U.S. do not go to sea. Rather, they work in port operations for companies that are either completely foreign owned or are a joint U.S.-foreign company venture. (The foreign company--at least here on the West Coast--is often a foreign steamship line or maritime company.)
Huffing and puffing will not resolve these problems, which have their origins with the first oil crisis, back in the mid-1970's. And we will continue to have them until American companies decide that the rewards available in the maritime industry are worth the risk. Until then, we will have to depend on the "kindness of strangers" who are willing to take that risk.
Side notes:
- Logically one would think that a company who is investing $6.8 billion in something would not hire people who want to blow that investment up. However, I have not been impressed with the logic I've seen in the Muslim world.
- On the other hand, those while DP World might be the nominal operator, they will have to hire ILA longshore labor. This could be interesting...
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