Yearly Review

Because this unprecedented economic crisis is throwing cold water on our holidays – and because no one has found a way to reverse this graveyard spiral – it wouldn’t hurt to review the advantages offered by our patented systems.

Many of those in authority have overlooked the fact that we need to create jobs. Not just a handful here and there, but many millions throughout the country. Without jobs we’re without buying power, and a nation without buying power is – without. The multi-billion dollar bailout programs presently being devised do not address the nation’s severe unemployment crisis and, in the end, will only compound our problems. Bailout programs are nothing more than smoke screens.

Because so many are without buying power, and because of the relationship between supply and demand, we are now faced with an unforeseen reduction of imported goods through our container-handling ports. This severe hitch in our supply chain has adversely affected our transportation industry and thousands and thousands of rail cars and truckers have been idled as a result. That’s an easy to understand cause-and-effect scenario, but what isn’t easy to understand is the insistence by port officials and maritime consultants that billions of taxpayer dollars must be spent to dredge our major waterways in order to accommodate the enormous container ships that are being built in overseas shipyards. Dredging isn’t cheap and if badly-strapped U.S. taxpayers and consumers are demanding less and buying less from overseas sources, and if shipping lines are now forced to cut back on port calls because of those drastically reduced demands, why should dredging programs even be considered?

We’ve claimed repeatedly that our patented designs are the answer to our economic woes because our shipboard and shoreside container handling systems will create the jobs needed to develop our nation’s lost buying power. In the present scheme of things, because low salaried foreign laborers have a decided edge in every mode of production, we’ve lost our manufacturing capacity. We can no longer compete with overseas nations in this regard and economic pundits are now admitting that the end of our freefall is nowhere in sight. Lower overseas production costs, economists say, mean that we’re no longer a player when it comes to responding to consumer demands. In almost every case that would be true, but the exception to this rule would be where patented designs exclude competitive pricing and overseas production. And that’s what we’ve been preaching.

Shipbuilding is the key to economic dominance. England, Holland and Spain are proof of that and we can regain our economic status by making better use of our existing shipyards, reopening shuttered yards, and even building new facilities. We were required to take such steps during World War II, and our Vol. VII, Art. 2 commentary (How times have changed …) describes our productive efforts in that national emergency. But unlike the successful conclusion of that earlier challenge, this national emergency is heading toward a disastrous conclusion. This can all be changed by reserving to U.S. shipyards the exclusive rights to produce our patented container ships. This design is patented under international patent treaties, and unless we say otherwise, no foreign shipyard will be allowed to build this type of vessel.

U.S. Patent Numbers 5,860,783 and 6,077,019 describe and display the instantaneous storing and retrieving capabilities of this new design, in Jones Act vessels, of course. A quick perusal of these patents will illustrate the efficiencies of these vessels, and the operational capabilities of this new design preclude the “necessity” of dredging any of our waterways. It would be a win-win situation for U.S. workers and taxpayers.

Added to the thousands of jobs that would be created within our shipyards, thousands of supporting industries would spring up along with millions of additional job opportunities. That’s what happened as a result of our shipbuilding efforts during World War II, and we’ve seen the same development in Japan, South Korea, China, and even in India. Just a fraction of the amounts being spent on the unprofitable construction of our warships would more than suffice for this national shipbuilding endeavor, and instead of witnessing the dissipation of precious taxpayer funds, our patented container ships would be built at a profit, sold at a profit, and operated at a profit, by U.S. interests.

Consider how wasteful and unnecessary the dredging of “hub-ports”, or “king-ports”, would be. Unthinking port authorities are jamming as many containers as possible into about a half-dozen of this country’s major ports. No amount of funding could heal the pollution and traffic congestion wounds created by this ill-advised and costly strategy, yet port officials insist upon expanding these congested sites.

Norman Mineta, the former U.S. Secretary of transportation, saw the shortsightedness of this strategy when he noted that only 60 of the nation’s 361 ports had container-handling capabilities. He advised the industry to retrofit another 200 of these underutilized ports in order to reduce traffic congestion and air pollution. Others have made it clear that if smaller container ships could deliver goods to smaller ports closer to end users, transportation costs would be considerably reduced and the nation’s highways would be subjected to less wear and tear.

Instead, large container ships, requiring costly accommodations funded by U.S. taxpayers/consumers, are being built so that the foreign owners of those vessels can cash in on what they call “economies of scale”. In short, in order to accommodate these cumbersome and demanding megaships, taxpayers are being forced to spend enormous amounts that could otherwise be directed to more sensible endeavors.

In recent months the difficulties foreseen by authorities such as Secretary Mineta, Nolan Gimpel and Neil Davidson have come to pass. As these men have predicted, those oversized container ships have found it almost impossible to load to break-even points, have lost valuable time in loading and off-loading operations, and have been forced to join with rival lines in vessel sharing agreements.

Further, increased fuel costs now require shipping lines to reduce speeds, and this speed reduction – which was supposed to be what provided significant “economies of scale” benefits – has led to more costly delays and domino-like scheduling difficulties along the supply chain. The outcome of this callous “bigger-is-better” attitude, and the result of the disdain shown toward U.S. consumers, is that orders submitted to Asian shipyards for future megaships are now being cancelled, and a golden opportunity is now being presented to a job-hungry America.

Apart from, and quite different from, the shipboard systems discussed so far, are the patents we hold for the design of a more cost-effective storage, retrieval and delivery system for container terminals. By retrofitting existing terminals and directing growing volumes of imported containers to newly retrofitted smaller ports, concerns about air quality and traffic congestions will become a thing of the past. Equally important is the amount of released acreage that would be made available for the construction of new shipyards. Those growing volumes of imported cargo, it must be recognized, will be the natural result of the buying power of the millions of newly-employed shipyard workers, construction workers, longshoremen, truck drivers, and merchants of every description.

Because our space-saving system frees up large amounts of acreage, a portion of that land would be used to set up an in-house, programmed delivery operation. No gates are required because of this innovation, and therefore there would be no waiting, idling and polluting trucks. All delivery vehicles would be parked within the terminal and each truck would be started up only when designated as the next delivery vehicle. All others would be at rest and unmanned because deliveries would be programmed days in advance. More than 200,000 trucks are available for this nation-wide in-house, programmed and pollution-free delivery operation, and generously compensated employee-drivers rather than struggling owner-operators would be utilized. Because of a lack of space, a delivery system such as the one made possible by our patented container terminal design cannot be installed in conventionally-structured terminals.

In summary, refurbishing our underutilized and shuttered shipyards, and installing our patented systems in container terminals:

• … would enable the U.S. to build smaller, more efficient, more profitable and patented container ships, which would then service smaller, retrofitted ports closer to end users;

• … would create millions of jobs in a short period of time thereby restoring buying power to large numbers of U.S. citizens;

• … would eliminate the need for expensive upgrading projects in “hub-ports”;

• … and instead, would generate funding for badly needed upgrading of our transportation infrastructure, as well as jobs for the thousands of workers required for those projects.

Jobs … productive jobs … and buying power go hand-in-hand, and the unrelenting decline of this empowerment has led to today’s economic catastrophe. U.S. Maritime Administrator Sean T. Connaughton reminded us recently that U.S. shipyards and U.S. shipbuilders were responsible for the largest shipbuilding effort in history during the critical World War II years … the remarkable achievement mentioned above that we had summarized in our “Trends & Development” Vol. VII, Art. 2 commentary, (How times have changed …).

These years are just as critical, and as we descend into an even deeper economic mire, we may well get to understand the futile efforts made by ancient Roman officials to recapture faded glory. But where Rome lacked a road to recovery, we’re somewhat more fortunate because we have an escape route. Whether or not we have the leadership, however, only time will tell.