Forewarned Is Forearmed

When West Coast congestion was at its worst a few weeks ago no one was exempt from criticism. Almost everyone had failed to project accurately the expected increases in cargo volumes, and because every link in the supply chain was affected by these miscalculations, officials are now making their customary vows to be prepared for next year. Last year saw similar congestion and delays, however, and similar pledges as well, but in the minds of most back then, the shutdown was to blame. Well this year there was no shutdown, but there was misjudgement on the part of management, so that will have to serve as a convenient alibi for this year’s logjams.

But what about next year? Present methods of operations guarantee congestion, delays and near chaotic conditions in 2005, regardless of preparations, and unless corrective steps are taken conditions throughout the supply chain will eventually become intolerable. Drastic changes must be made in container handling procedures because the projected infrastructure expansion, which is nothing but fantasy, could never accommodate the volumes being projected. If approximately 10,000 acres are now required to handle the approximately 12,000,000 TEU annually serviced by the LA/Long Beach complex, and if triple the volume is projected over the next 15 years or so, where will triple the acreage come from? Isn’t anyone doing the math? If authorities proceed with proposals now in the planning stages, taxpayers in the not too distant future will have laid out billions of dollars in a failed effort to achieve an unattainable goal. So it boils down to two questions: Where will the Port of Long Beach find the acreage for this expansion, and where will the authorities find the money? It’s obvious to the naked eye that the acreage just doesn’t exist, but what’s not so obvious is the possibility that the city may be a little short of funds at this time. The Long Beach Press Telegram recently published an article in connection with the Redevelopment Agency Board and inferred that the city is in financial trouble. [If that’s so then this would be a great time to contact us, through this website, and consider an offer we’d not hesitate to put on the table. We would quickly relieve the port, the city, and the taxpayers of all financial concerns, all acreage concerns, and all expansion concerns. We have good reason to be critical of the port’s modus operandi. There’s a method to our madness.]

Recall what Mr. Nicola Arena was saying about predictions and preparations back in October. He commented on the inaccurate estimates by officials all along the supply chain, but he reminded us that shipping lines had correctly forecasted the growth numbers and accordingly introduced the appropriate amount of capacity to accommodate that growth. Reports indicate that the shipping lines are projecting dramatic increases in volume for the next three to four years and are once again going all out to accommodate this growth. Asian shipyards are maxed out, and in this seller’s market anything with a bottom is being chartered. One can’t help being reminded of what Jean Godwin said about the 16-inch pipe and the 4-inch opening. Forewarned is forearmed.

[Correction: On November 17th we commented on the September 27th boarding of the “Tampa” by the USCG. In our December 9th commentary we again referred to that event but we mistakenly gave the date as the “27th of November” instead of the “27th of September”. Sorry about that.]