Competition is a pretty good thing. More often than not it brings out the best in us. But not always. U.S. West Coast ports appear to be rivals for the growing west-to-east volumes of TEUs, but maybe they should give serious thought to settling their family feud before some serious damage is done.
In our commentary of November 22nd we took issue with the general manager of PierPass, Inc. for his attempt to convince carriers that it would not be practical to direct their vessels to other West Coast ports. Those carriers were exercising that option because of the unmanageable congestion at LA/Long Beach, of course, and those carriers chose to take that step because of the heavy cost incurred during the extended delays at the port. Had the general manager taken the time to look at the whole picture, he would not only have understood the problems that his port has created for the shipping lines, but he would have also seen how impractical it would have been for those carriers not to divert their ships. And he would have been dismayed to see that not all those vessels were diverted to our sister ports up north.
A number of those vessels diverted to ports in Mexico. Governor Schwarzenegger must have been thrilled when he heard that. If cooperation, encouragement and support had been the order of the day, most of the 100+ diverted ships could have docked at other ports in California, or even farther north in Oakland, San Francisco, Grays Harbor, Seattle or Tacoma. It doesn’t look as though any thought had been given to these beneficial alternatives, though.
It doesn’t look as though any thought had been given to what’s developing South-of-the-border either. That’s where an undetermined number of diverted vessels actually were serviced. LA/Long Beach may well have seen the last of those vessels because of that service. Those terminals on Mexico’s West Coast are enjoying the presence, and the stature, of one of the most ambitious and aggressive forces in the world of containerization. Hutchison Whampoa Ltd. owns and operates terminals in Ensenada, Manzanillo and Lazaro Cardenas, and instead of seeking constraints against U.S. competition, officials at LA/Long Beach should be looking over their shoulders. There’s where the real competition is.
Hutchison Whampoa’s holdings and operations are so widespread that it would take a ream of paper just to list them. Their worldwide terminals will handle more containers this year than all the U.S. ports combined. Wal-Mart and a number of other large U.S. retailers, TFM Railway in Mexico, and Kansas City Southern Railway, with the backing of influential Mexican officials and businessmen, are working with the three above-named Hutchison-owned terminals to establish a trade corridor from those ports to the heart of the U.S., and unless port authorities on the U.S. West Coast are awakened to this eventuality (because it’s pretty much a done deal) there will be a negative effect on the economies of the Western Coastal States. That wouldn’t be nice.
MARINE LOG, in its November issue, devotes an article to one of Chuck Raymond’s recent addresses. The title of the article is, “Time to work together”. Now that’s what would be nice.