A Fitting Solution
Here’s a question that requires logical analysis. Why should containers carrying products destined for U.S. consumers be diverted to container ports in Canada and in Mexico? This diversion extends delivery time, increases the cost of these goods to the end users, and also deprives our trucking and railroad systems of the opportunity to deliver these goods. The shipping lines show little concern for the consumer’s added burdens, however, because these detours save time and money for them, and like any well-run business entity, shipping lines will gladly accept whatever subsidies the consumers and taxpayers unwittingly grant them. Let’s put the pieces of this puzzle together by reviewing some of what we’ve heard from transportation authorities, and let’s begin at the very top.
1. Mr. Norman Mineta, secretary of the DOT, stated a while back that the 60 container handling ports in the U.S. will not be able to handle the increase in volume projected for the foreseeable future. Mr. Mineta stated that another 200 of the country’s 361 ports must be converted to container handling facilities and the logic of his assessment becomes more and more apparent as time passes. To pay added fees for transshipment from Mexico to the U.S. consumer and to deprive U.S. workers of the opportunity to service these vessels in U.S. ports amounts to a lose-lose situation. The majority of the 29 West Coast ports participating in the 2002 shutdown are not container handling ports and a number of these should be equipped to handle containers in order to service those vessels now being “diverted”. When Mr. Mineta’s logic begins to sink in, considerable financial benefits will be realized by these new container handling ports and by communities adjacent to these ports.
2. Mr. Chuck Raymond has endorsed short sea shipping as an efficient and cost-effective way of transporting containers from one U.S. port to another, and from one U.S. coastal region to another. Mr. Raymond’s reasons for taking this position are obvious and commendable. He has in the past directed our attention to the unacceptable levels of pollution generated by truck traffic as well as to the heavy cost of building new highways. As opposed to inexpensive coastal waterways, Mr. Raymond reminds us that new highway construction costs $ 32 million per mile. Increasing the number of container handling ports will not only remove unacceptable levels of pollution but will also provide more efficient service and lower costs to a greater number of end users. Until we embrace the logic behind Mr. Raymond’s reasoning, and until more ports are equipped to handle containers, problems with our infrastructure and the cost of goods will continue to mount.
3. At Port Industry Day sponsored by the Port Authority of NY/NJ four years ago, moderator Conrad Everhard questioned the wisdom of expensive dredging projects in order to accommodate mega-ships. He noted that larger vessels cause increased traffic congestion and higher levels of pollution because of the additional trucks required to deliver containers, and that public funding of dredging amounts to a subsidy of shipping companies building these large ships. Establishing additional container handling ports, and locating them closer to end users, would provide relief to those large port communities now forced to contend with unhealthy pollution levels and unacceptable highway congestion, and would also eliminate the need for expensive dredging projects and costly transshipment from distant hub-ports to end users.
4. Mr. James Hartung, when speaking on behalf of the AAPA, stated that port officials would oppose a hub-and-spoke system as a solution to congestion. At a Capitol Hill briefing sponsored by the AAPA in 2001, Mr. Hartung affirmed that concentrating truck and rail traffic at a few ports would worsen congestion and create extraordinary logistic challenges. “To king-make and favor a few ports would decrease the efficiency of the marine transportation system and skew the economic benefits,” he said. Conversely, it should be apparent that increasing the number of container handling ports, and even reducing the size of our largest ports, would increase the efficiency of the marine transportation system and generate more favorable economic results.
5. In discussions about the cost of dredging to accommodate the new generation of oversized container ships, the U.S. Office of Management and Budget has cited the prohibitive cost of such projects and is even now objecting to current dredging projects. This reluctance reflects extensive study on the part of the OMB and a determination to exercise fiscal responsibility with respect to the development of marine transportation issues. Additional ports servicing smaller vessels, rather than hub-and-spoke ports catering to mega-ships, will serve the interests of all U.S. consumers and taxpayers, and the OMB seems to be well aware of this.
6. Mr. Nolan Gimpel of Axiom Consulting has stated that mega-ships strain the capacity of inland infrastructure, terminal operators and rail and truck carriers. As terminals run out of space, he added, ports will be required to seek alternate ways of expanding their operations. The most logical and least costly way to expand without straining the capacity of inland infrastructure, terminal operators and rail and truck carriers is to establish smaller container ports closer to end users. The benefits, as stated above, will accrue to all taxpayers and consumers.
7. Neil Davidson of Drewry Shipping Consultants at Navis World 2004 in San Francisco called attention to the operational and commercial limitations that reduce the effectiveness of mega-ships. Mr. Davidson foresees carriers having a more difficult time filling these large vessels, thereby cancelling out the economies of scale these ships are supposed to produce. He also cites the limited number of ports able to service these larger vessels because of harbor depths, and the inability of these vessels to accommodate importers and exporters who prefer more direct, less costly service. “The bigger the ship, the more transshipment and feedering you need, and that costs money,” Mr. Davidson said. This is another example of an unwitting subsidy paid to shipping lines by consumers, and emphasizes the need for smaller container handling ports in closer proximity to end users
The close-fitting pieces of this puzzle, when interlocked, reveal a very simple solution to what has been looked upon as a very complex problem. Every projection and every prediction put forth by analysts point to chaotic conditions for the supply chain, and maritime authorities have yet to propose a viable solution. The patented system described by this website is a viable and logical solution and can be retrofitted wherever needed at no cost to port authorities or taxpayers.
Our “Problems & Solutions” page and our October 14th commentary offer quick reviews of the benefits and advantages provided by this viable, logical and inevitable solution.