Passing the Panama Hat

Whether we’re dealing with folks in California, Oregon, Louisiana, Florida, South Carolina, Virginia, Rhode Island, New Hampshire or Maine, the question always comes up: “If container ports are so profitable, why is it that the port authorities are always asking for millions and billions of taxpayer dollars to expand their operations?”

“Good question,” we reply, “and we don’t know the answer, but your guess is as good as any.”

In Louisiana, for instance, a study by the University of New Orleans showed that the state ports have a total annual impact of $ 22.9 billion. That certainly makes it sound as though things are rosy down there, but in a booklet issued by the Ports Association of Louisiana, where we found the $ 22.9 billion figure, we also found this appeal, believe it or not:

“To continue delivering numbers like these, our ports require sufficient state funding to upgrade existing facilities and build new ones in order to remain competitive with neighboring states.”

That “sufficient funding” mentioned above must be referring to the $ 250 million that was requested last week by the executive director at the Port of New Orleans. Panama’s Senor Rodolfo Sponge, of course, put in an appearance in order to support this expenditure

The rubble-strewn area left behind by Katrina is an embarrassment to the city, yet port officials insist on dismissing the needs of the impoverished in order to fan their own corporate feathers.

Not too far away and not too long ago, the Port of Tampa unveiled its own 20-year plan for expansion. That program is seen as a $ 1 billion expense … for the taxpayers of course … because the Panama Canal expansion, you know, requires considerable infrastructure upgrading throughout the Gulf and East Coast ports. The executive director at the Port of Tampa, the one doing most of the pushing, is well versed on this issue because he worked for the Panama Canal Commission for 23 years prior to taking a position in the U.S. He understands the issue, all right.

Port Manatee is just a few miles from the Port of Tampa, and … and yes, there is a Port Manatee … and an expansion program at this port is “centered on the expansion of the Panama Canal”. A container terminal at an estimated cost of $ 490 million, a berth expansion and a new turning basin at an estimated cost of $ 258 million, and a still-unpriced road linking the port to Interstate 75 are all in the works. Guess where they’ll get the money.

Then there’s the Port of Jacksonville’s executive director’s vision which he calls his “decade of development”. The vision calls for dredging the shipping channel to 45 or possibly 50 feet to make room for the larger ships that are absolutely bound to arrive as a result of … you guessed it … the expansion of the Panama Canal. The director of engineering and construction foresees a cost of about $ 1 billion for this “vision”. The authority is reported to be “seeking funding for the project”.

But wait! There’s more. Charleston’s “The Post and Courier” produced an article with the following headline:

“Economic slowdown to be felt at port”

“Volume in February is forecast to drop 7.6 percent compared with the same month last year,” the report stated. “If that forecast holds true, it will be the seventh month in a row to show a year-over-year decline, as retailers reduce imports to reflect lower sales expectations …”

“Further, data released by the State Ports Authority show cargo volume in Charleston was down 13.2 percent for the first six months of its fiscal year compared with the same period the previous year. The SPA’s fiscal year ends June 30. For the 2007 calendar year, volume at the port slid 11 percent.”

See the part that says “retailers reduce imports to reflect lower sales expectations”? That’s simple enough to understand. It means that the customer … the buying public … determines what, and how much of it, will be delivered to the port. The carrier, therefore, can only deliver what the customer has purchased. Do you have any trouble understanding that simple bit of economics? Of course you don’t, but believe it or not, the officials at the Port of Charleston don’t seem to have a clue. They seem to be of the opinion that they can coax carriers to deliver uncalled-for cargos, and here’s how it was spelled out in a more recent headline appearing in Charleston’s “The Post and Courier”:

“SPA tries to boost business”

“As the State Ports Authority sees fewer containers crossing its docks,” the story begins, “the agency’s two top officials left for Europe and Asia on Tuesday to call on key customers in their own backyards … The itinerary will take them to four countries in nine days while visiting some of the Port of Charleston’s most important customers … The sales trip comes at a time when the port’s container business is on the decline.”

Who knows? Maybe the taxpayers of South Carolina don’t have a clue either.

Not to be outdone, the North Carolina State Ports Authority is also begging for money. “” posted this on Feb. 21, 2008.

“N.C. port officials push transit panel for funds”

“The hands of those at Wednesday’s meeting at the Wilmington port may have been pressing flesh with the 21st Century Transportation Committee members, but it was really a ‘palms out’ meeting.

“Port officials wanted the committee’s support for hundreds of millions if not billions of state dollars, much of which would be spent in Brunswick County.”

[So what’s your guess? Like we said so often in the past, your guess is as good as any. But let’s think about it. If container ports are as lucrative as they claim, why indeed are those port officials always asking for billions of dollars from the state’s taxpayers?]