“Spreading the risk”

Sooner or later it becomes obvious that there’s a downside to every approach when you’re not on the right track. In spite of the fact that some of the most prominent folks in the supply chain have issued repeated warnings about imminent gridlock, maritime interests continue to insist upon “ … trying to fit a 16-inch pipe into a 4-inch opening”. Ed Kelly, president of the Maritime Association of the Port of NY/NJ, may have put his finger on part of the problem when he cited the natural resistance of shippers and carriers in the ocean transportation industry to try something new. After all, goes the thinking, when it comes to problem solving, what has worked in the past will more than likely work in the future. Every obstacle encountered in the past tended to disappear when enough money was thrown at it. So that’s the way traffic congestion and supply line breakdowns should be dealt with. Just go back to the trough again. Why change things? “If it ain’t broke, don’t fix it.”

Well, it is “broke”, and it’s about time we paid attention to Mr. Kelly, and it’s about time we paid attention to some of the far-fetched proposals being bandied about. Like these, for instance:

• Local authorities are considering an 18-mile highway corridor for access to the Port of Los Angeles. The projected cost (in today’s dollars) is $ 4.5 billion, and the corridor should be completed in about 15 years. The downside? There are two serious glitches in this proposal. First of all, there’s no money available to throw at it. And secondly, relief is needed at the ports right now, not in 15 years.

• Also under consideration at both the LA/Long Beach and NY/NJ complexes are the so-called inland container depots and the rail shuttles required for the transport of containers from the port terminals to these offsite container yards. These setups should be real cheap. As Senator Dirksen used to say, “A billion here and a billion there, and pretty soon we’re talking about some real money”. The downside? There are serious glitches even beyond the extravagant costs of construction. For one thing, the additional container moves will increase costs to the end users. The scarcity of land is another drawback, and an abundance of unresponsive citizens residing in the vicinity of these proposed offsite depots is an even more serious one. Again, how would this pipedream provide relief right now?

A blessing in disguise for the West Coast, however, may be the eventual unavailability of terminal space for those shipping lines that do not own their own terminals at that complex. Because of growing volumes these smaller lines will be forced to look elsewhere for berthing space, and the new terminals established “elsewhere”to accommodate these orphaned lines will prove to be the real solution to the industry’s supply chain congestion. All of this new terminal construction will be affordable and these new terminals will be on line, not on paper. Construction will take months, not decades, and relief will be immediate. By following Peter Keller’s advice and “spreading the risk”, everyone benefits. Not only will employment opportunities be created in the smaller port communities, but a comfortable status quo instead of constant chaos would suit everyone in the hard-pressed LA/Long Beach communities. [Listen up, NY/NJ!]