“A day late and a dollar short…” A reprint of Vol. VII, Art. 7 (4/7/06)
One can always count on us (U.S.) to take the wrong road at the fork. Then, of course, when we finally see the error of our ways, we scramble madly to catch up. The job gets tougher and tougher with every wrong turn we make though.
Late this past February, the Singapore BUSINESS TIMES put out an article on the DP World/P&O Ports/ U.S. politicians donnybrook, and the headlines and initial paragraphs were as follows:
“US ports issue: The ship’s already sailed.”
“Stevedoring business shifted to foreigners decades ago as US firms shunned it.”
“(HOUSTON) In the outcry over who should be running America’s seaport terminals, one clear trend appears to have been overlooked: American companies began withdrawing decades ago from the unglamorous business of stevedoring, ceding the now-booming industry to enterprises in Asia and the Middle East.
“So it is no accident that American companies are not in the top ranks of global terminal operators, who have ridden the coat-tails of the explosion in world trade. The shift has transferred growing financial clout to a handful of seafaring centres in Hong Kong, Singapore and now the Emirate of Dubai …”
But stevedoring is not the only “unglamorous” business we’ve ceded. Fifty years ago this month, thanks to Malcom McLean, the era of containerization was officially inaugurated. Prior to that fateful event, however, U.S. maritime authorities made the decision to whittle down our merchant marine and phase out our shipyards. Here we are, a nation surrounded by water, yet we lacked the foresight back then to see the positive effects containerization would have on international trade. As time went on we continued to encyst, and those other “seafaring centres” picked up the slack. As a result of our lack of vision … or common sense … this nation has been left with seemingly unsolvable problems, a lack of “growing financial clout”, and not too many friends.
Instead of logical analysis, however, we insist on staying the course … on the wrong road. We’re borrowing money to throw at worthless efforts at detecting and deflecting terrorist threats, and we’re borrowing money to build mega-ports to make it easier for foreign shipping lines to fatten their bottom lines. Now does that make any sense? Aren’t we just digging ourselves a bigger hole?
Let’s turn back the clock and pretend that we retained our dominating position among the world’s merchants fleets. Those unequaled shipyards of ours would have remained in operation, and it would be U.S. container ships and U.S. ship owners that would be profiting from the millions of TEUs of international trade. And in these threatening times, those same shipyards would be at the ready to retrofit U.S. vessels with the patented (and now desperately needed) shipboard storage, retrieval and inspection systems. But that’s just a dream. Let’s get real again.
The global shipbuilding industry is now dominated by Korea, Japan and China, and the shipyards in those countries can hardly keep up with international demands. If for no other reason than this worldwide demand for merchant ships, the U.S. should be throwing its hat into the ring, but such is not the case.
India, on the other hand, with no previous history as a maritime power but with a great deal more foresight than U.S. maritime authorities, is now developing more than a half-dozen shipyards with the aim to make its shipbuilding industry globally competitive and a leading player by the year 2025. If things continue to progress the way they have, by the year 2025 the U.S. will no longer be a factor on the world’s oceans and will be kowtowing instead to the whims of those Asian “seafaring centres”.
We’re kowtowing already though. We’re jumping through hoops, in fact. We’re striving to accommodate the demands of the owners of these giant megaships by dedicating our resources to the development of megaports. We’re required to pay for all of this, you understand, so that the ship owners can take advantage of “economies-of-scale” and walk off with all the marbles. The fact that such a heavy concentration of containers in “king-ports” has resulted in intolerable congestion in and around our major ports, and along our major highways and railroads as well, has had no effect on the muddled thinking of our logistics specialists. After all, a $ 222 billion bond here and there should take care of matters. The next generation of Americans, our children and grandchildren, shouldn’t mind footing the bill. Somehow or other we owe it to the offshore entrepreneurs.
Our future plans, you ask? Well, shipbuilding is beneath us, of course, because we’re a “service-oriented” society now. The Washington Post shows the cost of our arrogance: “the Bush administration and Congress have poured more than $ 5 billion into homeland security detection systems, radiological and otherwise, only to find that the best available equipment at the time was often of limited use … ” and in the coming weeks, “the Bush administration will award or initiate contracts worth $ 3 billion to develop a new generation of rugged and precise radiation monitors and imaging scanners designed to sniff out radioactive material at the nation’s borders.”
Do you know how many boxships our shipyards could have built with $ 8 billion? Boxships that could be scanning containers, not “at the nation’s borders” but thousands of miles away from our seacoasts? 200? Easily. Would our success at providing true homeland security encourage Americans to invest in this highly profitable shipbuilding and ship ownership effort? Silly question.
American interests would own thousands of container ships today and Americans, not overseas ship owners, would be riding “the coat-tails of the explosion in world trade”. Instead of developing and paying for illogical king-ports, or hub-ports, during this period, dozens of smaller ports, closer to end-users, would have been equipped to handle containers. Thousands of employment opportunities would have been created, and congestion, air pollution and truck driver shortages would never have become problems. Nor would a terrorist scenario be keeping us awake at night.
But we took the wrong road at the fork and transferred financial clout to Asian seafaring centres. Will we continue to throw good money after bad or will we see the error of our ways and scramble madly to catch up … while we still have a chance? Stay tuned. [Or better still, stay awake.]