Moscow-Pullman Daily News March 4-5, 2006
By Judith L. Brown
The “port deal” has been all over the news lately. It has called to my mind a plenary presentation on U.S. ports in the global economy that I attended at a conference last May. This presentation left me dazed. Although I try to keep pretty up-to-date on a range of policy issues, here was a cluster of interconnected problems that I knew nothing about—and that have unwelcome and unpleasant consequences.
The plenary was on the state of our ports and, more generally, of the international marine freight system that moves large and small manufactured goods from Asia and elsewhere to the shelves of our local stores. The presenter was Irving Mintzer, senior research fellow at the Center for Global Change, University of Maryland. He has devoted his career to understanding and debating policy issues related to energy, the environment and economic development — and security.
Here’s the gist of what Mintzer laid out.
As the U.S. economy has shifted from a manufacturing-led to a service-oriented economy, and as trade has globalized, the shelves of stores all across America have filled up with manufactured goods that were made in Asia (primarily). How do these goods get from factories in Asia to the shelves of our local stores?
They are hauled across the oceans on container ships, ships that are huge and growing more huge. Twenty years ago, container ships carried 4,000 standardized containers and could just barely fit through the Panama Canal. Today’s container ships carry up to 7,600 containers and are too big to pass through the Panama Canal, so they have to travel alternate routes. They also are too big to dock at most U.S. ports, so alternate methods of ferrying cargo-containers from ship to shore have to be used.
In the near future container ships will carry as much as 15,000 containers and will be the largest ships able to pass through the Suez Canal. Even larger ships, unable to use the Suez Canal and unable to dock at most existing port facilities the world over, are foreseen.
Container ships continue to get bigger and bigger because cargo shipping costs per ton-mile drop lower and lower for larger and larger ships: 10 cents per ton-mile for ships with a capacity of 4,000 containers, 7 cents per ton-mile for ships with a capacity of 18,000 containers. Low shipping costs help keep the prices of all those imported goods on our store shelves low. But there are other hidden, and ignored, costs.
There are costs associated with clogged ports and aging, outdated infrastructure. For example, in 2004 more than 5,000 ships docked at the Port of Los Angeles, designed to handle 1,800 ships per year. Some ships sat as long as 10 days waiting to be offloaded. This saps the productivity of U.S. ports and slows the movement of goods from overseas factories to store shelves. It also saddles nearby communities with noise, air pollution and congestion.
There are environmental costs and damage associated with the international marine freight system. Larger ships also use larger quantities of ballast water on empty legs of their journeys, bilgewater that is simply dumped when no longer needed. Huge ballast tanks turn out to be hospitable places for various aquatic hitchhikers, from microbes to mollusks to fish. In addition to the public health aspect, exotic but invasive species are now threatening coastal fisheries for scallops and Dungeness crab, and even Lake Superior’s freshwater fishery.
Then there is the security aspect and security costs, which have been the main focus of the “port deal.”
Who should pay these costs? And what will be the consequences if they continue to go unpaid?
Irving Mintzer says we need a “broadly based, national conversation” and a strategy to support a safe, secure, efficient goods movement system and to avoid the potentially dire negative impacts of our expanding marine freight system. In his writings Mintzer says this somewhat calmly, with a certain academic distance. When I heard him speak last May, there was an unmistakable note of panic in his voice.
Here’s hoping the “port deal” is just the opening lines in this conversation, that the conversation will continue and will be followed by actions and solutions, and that these actions will be taken and solutions implemented before there is another national or international calamity.
* Judith L. Brown is an economist and the director of the Idaho Center on Budget and Tax Policy. She lives in Moscow with her family and can be reached at jlbrown@turbonet.com.