Sharpen Your Pencils

October’s Cargo Business News featured a story – a baloney sandwich, really – bearing the headline, “Container Productivity – The Challenges Abound”.

Our little fourth grade friend of a few years ago – now a delightful young genius in high school – nearly split her sides laughing at the comments being offered by port officials who are paying themselves annual salaries upwards of a quarter of a million dollars.

“These guys should be swabbing decks,” she said, “not dictating how our nation’s supply chain should be managed.”

How right she is. See if you don’t agree. Here are some of her comments:

“Greed, stupidity and selfishness – it’s all there,” she told us. “And it’s so obvious. Why won’t the American taxpayers raise a fuss? Why do they put up with it? Americans are being tricked into subsidizing an international racket!” Then she got specific.

1. “On page one”, she begins, “an ‘executive director’ makes the brilliant observation that ‘speedy offloading from a vessel does an importer no good when the container is delayed getting on the road’. But does he offer a solution? No. And why should he? As long as that problem is there, he’ll continue to collect his three hundred thousand dollar annual salary.

“Is it possible that he hasn’t read about your patented storage, retrieval and delivery system?” she asked. “It’s been out there since I was in fourth grade. Why hasn’t he been doing his homework?

2. “Then we got this from a terminal operator’s attorney – a lady, I’m embarrassed to say. ‘Some important areas to address to optimize productivity … include enhanced automation, continued efficient labor-management relations, and yard and crane size,’ the lady stated.

“‘Yard and crane size are significant because bigger cranes and bigger yards are required to more productively service the big ships. In addition, road and rail infrastructure to support the movement of freight to and from the terminals has generally lagged behind the productivity increases, but many projects are underway to improve the situation’.

“This lady must be in on the con. Because girls are smarter than boys [that’s what the kid said!] and because she went to law school, she knows darn well that the costs of the ‘bigger cranes and bigger yards’, and the ‘road and rail infrastructure projects’ shouldn’t be paid for by the taxpayer/consumer. Those expenses should be paid for by the shipping lines, the container terminal operators and the railroad and trucking companies. They’re the ones who’ll be raking in all the profits. Right? The lady knows better. But lawyers, of course, also know which side their bread is buttered on.”

[At this point we decided to get in line at the pencil sharpener.]

2. The writer of the article chimed in with the observation that “The automation part of the equation could prove a bit thorny … observers have said they expect dockworkers to dig in their heels on technologies that could cost jobs, and shippers, vessel operators and East Coast terminal operators are bracing for possible increases in Asia-originated and-bound cargo traffic routed through the Panama and Suez canals.”

Now our little friend was getting hot under the collar. “Why shouldn’t the dockworkers dig in their heels?” she demanded to know. “Port officials have just one thing in mind … replace the worker with high tech gadgetry so they themselves can pocket the increased profits while the unfortunate laid-off family man gets in line at the welfare office. Hooray for me, to heck with you!

“And as far as those increases in Asia traffic is concerned, those East Coast terminal operators should tell those bandits to take their precious cargo somewhere else. Then you’d see some changes made.”

3. But she was just getting warmed up. She was miffed at what Georgia Ports Authority officials had to say about “dredging underfunding”. According to a spokesman down there, she pointed out, “Because maintenance dredging has been underfunded and the modernization of harbor channels constrained, (all paid for by the U.S. taxpayer/consumer, of course) the U.S. is missing out on the full job growth that can come through world trade. New, larger ships serving global commerce offer dramatically lower operating costs and decreased environmental impacts as more goods can be carried on fewer ships.”

“Can you believe that nonsense?” she asked. “Doesn’t this ‘spokesman’ realize that until we put people back to work in this country, none of the ‘new, larger ships’ and the ‘goods carried on fewer ships’ will ever reach our ports? Doesn’t he realize that unless there’s a demand for those ‘goods’ by employed consumers, there can be no supplies delivered by those ‘new, larger ships’?

“And those ‘dramatically lower operating costs’ are at the expense of the unwitting consumer, naturally. What gall! This is one big con job”, the little girl assured us.

[So we went to the pencil sharpener again.]

4. The ‘spokesman’ wasn’t quite finished, however. Vessel operators ‘must limit expenses in order to remain competitive,’ he said. ‘Mounting economic pressures are leading shippers to demand increased efficiency in a world where speed is the currency of the day.’

“‘Increased efficiency’? … and ‘speed’? … all in the same breath?” It was obvious that our young lady was a little upset about this statement. “These guys have been so anxious to fan their feathers that they’ve gone out on a limb and bought ‘way,’way more giant ships than they’ll ever need. And that’s what they think ‘efficiency’ is all about? They have so much capacity now that they’re forced to adopt ‘slow-steaming’ tactics in order to avoid laying up many of their ships.

“‘Slow-steaming’?… and that’s what they call ‘speed’? And the extra cost of keeping those squeezed in ships fueled and manned, why don’t they throw that into the equation?

“And more rambling from this ‘spokesman’. ‘The same logic (???) holds true for deepening the Port of Savannah to more effectively serve the larger vessels set to transit the Panama Canal after its expansion in 2014. If these ships cannot access U.S. ports we stand to not only forego the benefits of these vessels, but also to lose jobs and economic opportunities to the other countries around the world that can accommodate them. It is therefore vital,’ he insists, ‘that this country (now get this!) both invest the necessary money to maintain authorized channel depths at our ports and see that necessary expansion projects are completed in ports where deeper harbors are needed for the future.’

“If this ‘spokesman’ were allowed to say more, he’d no doubt claim that two plus two equals five,” the girl mumbled. “He’s probably a stockholder in a local dredging company,’ she mused.

5. “And take a look at this,” the kid said. “It says here, ‘To keep pace with container volumes, the nation’s ports continue to repair, upgrade and expand property, facilities and equipment … Information from several of them provide a glimpse.’

“New York/New Jersey, Savannah, Port Everglades, Palm Beach, Los Angeles, Oakland and Tacoma are all spending hundreds of millions of dollars – and in some cases, billions – for all this repairing, upgrading, dredging and expansion. We get ‘glimpses’ but we never seem to get a full accounting of what the taxpayer is forced to pay.

“We also get an occasional ‘glimpse’ of the huge losses incurred by this international maritime industry, losses as a result of the unemployment problems throughout the world – no demand, no supply, you know – and not just here in our country. So if the industry is losing so much money – including terminals in our very own ports – why do port officials keep demanding millions and billions for the so-called ‘repairing, upgrading, dredging and expansion’ of these port facilities?

“Could it be that some of the funding received goes toward the fancy three hundred thousand dollar annual salaries of these nitwits?” she asked.

“I remember you writing about what Secretary Norman Mineta said about port locations,” she recalled. “He said we needed to set up about two hundred smaller ports so that most of our importing and exporting operations can be spread out instead of everything being handled by just five or six giant, congested and polluting ports. Port officials should have followed his advice, and if they did, jobs would have been created, costs would be reduced by shorter truck trips, and everyone would be benefitting from the reduced air pollution.

“With so many of these smaller ports so close to the businesses buying the cargos”, she reminded us, ” there’d be no need for us to foot the bill for all those giant containerships. Our shipyards could be building those smaller, more efficient containerships you designed. Think of the jobs we’d be creating. Think of the jobs that would be coming back to this country and the transportation costs we’d be saving, along with the money we’d be keeping in this country by paying American factories for stuff made right here in this country. How come American grownups haven’t figured that out yet?” If she expected an answer from us, she didn’t get one.

[We need an electric pencil sharpener. These old-fashioned ones are tough on the wrist.]