Year After Year
What Mr. Paul Devine said at the Trans-Atlantic Maritime Conference two weeks ago bears repeating. Mr. Devine is OOCL’s Vice President for Trans- Atlantic trade, and he heard no constructive responses when he reminded those in attendance that, “We are saying the same things, year after year … What’s our game plan?” His question has become a rhetorical one simply because it is indeed a subject of conversation “year after year”, and everyone knows that this very familiar query would not be answered because it could not be answered. There is no game plan except for the annual conferences and gatherings of industry leaders “saying the same things, year after year”.
There was head-scratching at a West Coast conference as well. On May 4th in Sacramento, the same questions were being asked and similar calls for workable suggestions were put forth. Just two days earlier, at the Trans- Atlantic maritime Conference in Jersey City, Mr. Michael White, President and CEO of P&O Nedlloyd North America, stated that unlike past years when authorities had ” … thrown money and land at solving the problem of handling more cargo”, the lack of coastal acreage along with serious environmental constraints now prohibited recourse to these easy solutions. “In tackling congestion, the ‘business as usual’ model will fail”, is the way Mr. Michael Seymour, President of P&O Ports North America had put it. But failure seems inevitable because no one on either Coast has shown the ability to “think outside the box”. [No pun intended.] Although homage is being duly paid to environmental concerns, and although additional space is no longer available to be defaced by authorities, no second thoughts are given to fiscal responsibility. One way or another, the way to handle more cargo will again come down to “throwing more money around”. Funds for dredging, purchasing giant reach-stackers, dealing with peak-hour traffic jams, upgrading inland infrastructure, acquiring additional railcars, etc., will be drawn from the usual unwitting source … the U.S. taxpayer. Who says the business-as-usual model will fail? Who says the option to throw money at the problem is no longer available to the brain trust? Not to worry. As long as costs can be passed on to the consumer, this uninterrupted source of funding will put off the day of reckoning.
Maybe. On May 12th, the Bloomberg report had something to say about the upcoming congestion in the LA/Long Beach complex. With unfounded complacency, West Coast authorities are smug in the belief that last year’s hiring of some 4,500 part-time laborers proved to be the way to handle peak- season surges. The Bloomberg analysis carefully points out, however, that last year’s peak season surge was eased not so much by the hired help but rather by the diversion of more than 100 vessels to other ports. Bearing in mind that an additional 1.7 million TEUs are projected to come eastward this year, how can anyone be satisfied that last year’s “solution” will suffice for this year’s problems? Bloomberg clearly states that this year’s projected 1.7 million TEU increase is an amount that exceeds the entire volume of all but six other U.S. ports. The Singapore Business Times sizes it up succinctly in its May 17th headline: “Crippling Congestion at LA Port Expected to Recur.”
Mr. Doug Tilden, CEO of Marine Terminals Corp., and a reliable observer, isn’t convinced that labor increases alone will prevent backlogs. “Last year the congestion was sitting on ships,” he said. “This year we’re going to move it onto the roadways and onto rail.”