“Nobody goes there anymore … it’s too crowded.” – Yogi Berra
Two days ago we mentioned the presence of Hutchison Whampoa Ltd. in three of Mexico’s West Coast container terminal ports. Hutchison positioned itself in those locations because of the inability of LA/Long Beach port officials to overcome the self-imposed obstacles that have had a nasty ripple effect on much of our nation’s distribution chain. Because of the foresight and aggressiveness of Hutchison’s management teams the company has a history of being in the right place at the right time, and its track record proves it. Only a Rip Van Winkle could fail to see the intent behind Hutchison’s strategy to set up shop in those Mexican ports, and to dispel any doubt, it has been announced by the president of the Baja California House of Deputies’ Commission for Economic Development and Port Affairs, Deputy Antonio Rodriguez Hernandez, that Hutchison will develop a new $ 1.2 billion container terminal in the Ensenada area, and that the new port is intended to be competition for LA/Long Beach and will become “the primary port of the Asian Pacific”.
The deputy went on to say that a railroad would connect Mexicali with Yuma, AZ, new highways would connect Punta Colonet with Ensenada and Tecate, and he revealed that other investments would be required during the construction period. His reference to investments may have been prompted by an announcement that a group composed of Chinese government officials and 23 people from China’s business world will be visiting Baja California next week to look into investment possibilities. Sergio Tagliapietra, Baja California’s Secretary of Economic Development, when discussing this upcoming visit by the Chinese, stated that economic indicators point toward an explosion in Chinese investment in Baja California. Sure looks that way.
About a month ago the cat was let out of the bag when we heard that officials from the State of Missouri, from Kansas City Southern, and from SmartPort in Kansas City were cozying up to Mexican government officials with the intention of establishing a major trade corridor from the Mexican West Coast terminals to Laredo, TX, and into Missouri. These entities knew of Hutchinson’s wide coattails and sensed the sure-fire successes awaiting them because of the woes brought to mid-America’s supply routes by those repeated breakdowns in the Southern California port complex. The U.S. Surface Transportation Board, being well-aware of the critical nature of the failure of LA/Long Beach to handle the growing east-west volumes, on the 29th of November approved Kansas City Southern’s May 14, 2003 application for authority to control the Tex Mex Railway and the U.S. portion of the International Rail Bridge at Laredo.
Relief is in sight, but it isn’t exactly what Californians were hoping for and it will cost the West Coast economy a lot of jobs, a lot of money, and a lot of prestige. It’s never too late to act, of course, but the intransigence of port and terminal officials on the West Coast must be dealt with before any economic threat can be met. The overly optimistic Yogi Berra would put it this way: “It ain’t over ‘til it’s over”. Yogi said something else, though, that has pessimistic implications because of recent conditions in the LA/Long Beach complex.
“Nobody goes there anymore … it’s too crowded.”