Mr. Donald Urquhart of the BUSINESS TIMES began his newest article with this heading:
“A classic case of not in my shipyard”. His sub-heading was: “When it comes to paying for a navigational safety system, stakeholders stay coy.”
It wasn’t easy to connect these two lead-ins, but the story following had a familiar ring to it.
“I have a very strong hunch that the shipping community not only wants their cake, but they want to eat it too,” he wrote. “The issue of who should pay for the whole system that keeps ships safe while transiting busy and potentially dangerous hazardous waterways like the Malacca and Singapore Straits has again risen to the surface in frothy bubbles.
“While shipowners, operators and managers rightfully expect top-notch navigational safety in the Malacca and Singapore Strait, they don’t seem to feel any compunction to share the costs of maintaining this crucial infrastructure.
“Currently the burden of upkeeping navigational safety in the two straits lies with the three littoral states of Malaysia, Indonesia and Singapore, with assistance from Japan …”
“Who should pay for this system which includes lighthouses, buoys, radar installations, traffic services for the separation scheme, emergency oversight and law enforcement? Not me, says the shipping industry.
“The argument is familiar and quite frankly starting to look a bit tattered. Port and light dues and other tariffs collected by port states should be earmarked for this purpose, they say.
“Better yet, the Straits of Malacca and Singapore are technically international waterways according to the Law of the Sea which provides for the right of unimpeded innocent passage, by which they presumably take to mean ‘free’ passage.
“Following the proposal last week to establish a voluntary scheme to enable the industry to help contribute directly to the cost of maintaining navigational safety in the straits, the shipping community flatly rejected any mandatory notion and even rejected coolly to the voluntary one.
“The novel idea hit upon by Japan’s philanthropic Nippon Foundation – virtually the sole third party contributor to navigational safety, having contributed more than US $ 120 million over the last 35 years – is to create a voluntary fund based on charging vessels according to their deadweight tonnage. At one US cent per tonne, the fund would raise about $ 40 million annually. To put this into perspective, a typical containership of 5,000 TEUs would be in the neighborhood of 66,000 deadweight tonnes, which at US $ 0.01 per tonne would amount to a mere US $ 660.
“Let’s face it, this is peanuts. It’s slightly more than two tonnes of bunker fuel and significantly less than the US $ 5,600 this same vessel would pay in port dues to the Maritime & Port Authority of Singapore for a port call of less than 24 hours. Shipping lines would probably pass this on to shippers anyway, meaning that consumers ultimately would pick up the cost, which by the time you broke it down to that bottle of wine you purchased at the supermarket, you would be paying probably less than one additional cent …”
“But the bottom line for shipping companies and other users, as Nippon Foundation chairman Yohei Sasakawa succinctly points out, is that these users must recognize their corporate social responsibility towards the promotion of navigational safety and environmental protection of the vital straits.
“Simply put, those who profit most from the waterway must start helping to pay for it.”
This is not just a ‘novel idea’, it’s a terrific idea. We’ve been saying exactly the same thing to those who’ve been demanding that we here in the U.S. should shoulder the costs of upgrading the infrastructure in our lengthy supply chain. Putting it just as simply, “those who profit most from infrastructure upgrading must start help to pay for it.”
But not me, says the shipping industry. In Vol. X, Art. 27 we quoted a top executive of a large Asia-owned carrier in this regard.
• “As we look at 2007” he said, “it is also significant that we take a view to 2014, when the enlarged Panama Canal is anticipated to be completed. This will … put further emphasis on the urgency of U.S. East Coast gateways to prepare for the incredible growth of cargo volume and increased vessel calls that is expected. During this period, new ships will only get larger, and port facilities will be expected to meet the requirements of these vessels … I will repeat last year’s statement that the need for expanded port space must be understood, and … all harbors should work to make the movement of cargo swift and smooth through an intelligent commitment to infrastructure development.” [“Not me, though,” says he under his breath.]
• The president and chief executive of still another Asia-owned carrier makes the same point: “More shippers are aware of the inadequate transportation infrastructure problems in the U.S. The problems can’t be solved without the participation of government and end-users in the supply chain.” [“Not me either,” says he under his breath.]
• Similarly, the American boss of an Asian-owned carrier suggests that the coordinated effort and expense of upgrading our infrastructure should be borne by the U.S. government and the nation’s consumers … otherwise supply chains will bog down, consumer prices will go up and the economy will suffer. “Neither business nor government acting alone, can get the job done on a national scale,” he said. [“Not me either,” he echoes under his breath.]
Well, what difference does it make then? The U.S. consumer/taxpayer pays for it either way. Right? We foot the bill if we’re forced to upgrade, or we foot the bill if we decline to upgrade.
[No matter how you look at it … or where you look at it … “Not me, says the shipping industry.”]