Posted on 02/22/2006 7:04:15 AM PST by new yorker 77
'We haven't done a good job of explaining how we work'
Just about any given time, it's possible to find a Greek-owned ship flying a Liberian flag, employing a Filipino crew and carrying cargo from China into a U.S. port terminal managed by a British company that hires American longshoremen.
This is how Wal-Mart, Best Buy, Target and others get their socks and stereos for the U.S. consumer.
So, some in the shipping industry have been taken aback in the past week by growing criticism in Washington and in state capitals to a deal that would transfer control over some operations in several major U.S. ports from a British company to one owned by the government of Dubai.
"To be fair, we're on the edge of the world and we haven't done a good job explaining how we work, so people are confused by it," said Art Wong, a spokesman for the port of Long Beach, near Los Angeles.
.... skip to
In the major U.S. ports where Dubai Ports World would operate terminals - Baltimore, New York, New Jersey, Miami, New Orleans and Philadelphia - many of the shipping lines, the stevedores that load and unload ships and terminal operators have foreign owners.
The top 10 containership fleets are based in Denmark, Switzerland, Taiwan, China, Germany, France, Japan, Hong Kong and Singapore, said Peter S. Shaerf, managing director of AMA Capital Partners LLC, a merchant banking firm that focuses on the maritime and transportation industries. All call on U.S. ports, and some of the shipping lines manage terminals.
Other terminal operators with U.S. operations are based in England, Denmark and Hong Kong.
....
(Excerpt) Read more at baltimoresun.com ...
Regarding number (1) -- there are no domestic terminal operators who can take over P&O's allegedly enormous North American operations -- P&O is not, contrary to the impression being spread, some kind of US ports behemouth.
P&O Ports (from whom DP World is acquiring its US terminal interests), operates approximately 31 container, general cargo, and passenger terminals in New York, New Jersey, Philadelphia, Baltimore, Miami, New Orleans, and Vancouver.
P&O has (now "had") no operations at all at the Port of South Louisiana or Houston (the two largest domestic ports in terms of tonnage by a very wide margin), nor at the ports at Bayport, Beaumont, Los Angeles, Long Beach, Huntington Tri-State, Baton Rouge, Corpus Christie, Texas City, etc., etc.
These other terminals, including the massive container, ro-ro, general cargo, hydrocarbon, and chemical terminals at South Louisiana and Houston, are operated by a rather wide variety of both foreign and domestic terminal companies. Here's a partial list:
Charleston Heavy Lift, LLC
East Coast Terminal
EMESCO Marine Services, Corp.
Federal Marine Terminals
Gateway Terminal Services
Gulf Elevator and Transfer
Hyde Shipping Corp.
ITO Baltimore
INBESCA America, Inc.
Industrial Terminals, L.P.
J.P.S. Express, Inc.
Kinder Morgan/Pinney Dock & Transport LLC
L&L Fleeting, Inc.
Levin Richmond Terminal Corp.
Maher Terminals, Inc.
Manchester Terminal
Maritime Terminal of Pennsylvania, Inc.
Mid-Atlantic Terminal, LLC
Warrior & Gulf Navigation Co.
North Atlantic Distribution, Inc.
Pacific Delaware, Inc.
Penn Terminals, Inc.
Pacorini USA, Inc.
Rota Terminal & Transfer
Ruckert Terminals Corp.
Saipan Stevedore
Samson Tug And Barge Co., Inc.
Sun Terminal Inc.
SSA Marine
AP Moeller-Maersk
Texas Terminals LTD.
Transocean Terminal Operators, Inc.
etc., etc. -- Not to mention dedicated terminal operations by Exxon/Mobil, Chevron/Texaco, BP, Shell, etc.
Finding an acceptable operator to pick up P&O's former interests in the 31 terminals at issue really presents little or no problem. Which, in my view, makes this sale and securtity lapse even more unneccesary, perplexing, and boneheaded. Why open the door at all for a company that is owned and operated by a state with a demonstrated history of terrorist funding, transit, and facilitation?
As for (2) -- DP World won't have any responsibility for security -- I cannot agree with your suggestion that DP World's security responsibilities will be neglible.
Operator cooperation is integral to effective port security. The Canadian PIP program, the US Customs CIS program, the proposed Container Seal Verification Regime (CSVR), and the Transportation Worker Identification Credential (TWIC), are just a few of the security regimes that require operator initiative, cooperation, and reporting.
The CSVR regime will necessarily involve operator cooperation, reporting, content inspection, and seal and re-seal responsibilities. As described:
1. Obligation To Seal: The party that physically performs the stuffing of the container is responsible for sealing the container immediately upon the conclusion of a secure stuffing process. Each seal has a unique number, which must be provided to the carrier by the shipper.
2. Seal Standards: All seals should meet the International Organization for Standardization (ISO) standard for high security seals.1 The government should establish a specific date by which all containerized shipments must be affixed with such seals by the party that physically performs the stuffing of the container.
3. Recording Seal Changes: When persons having custody2 of a container, including U.S., state and local government officials, break the seal, they must immediately affix a new seal meeting the ISO standard, and provide the carrier (e.g., trucker, railroad, ocean carrier) or terminal operator in possession of the container with written or electronic confirmation of the event. The carrier or terminal operator must record the new seal number on the relevant shipping documents.
4. Modal Changes: Ideally, at each modal interchange3 in custody, the party receiving the container (e.g., trucker, railroad) must verify and record4 the seal, its number and its condition upon its receipt. If there is a seal discrepancy or anomaly, the receiving party shall inform the shipper, the party tendering the container, and the party to whom it delivers the container of such discrepancy or anomaly, and shall note it on the shipping documents.
As a further example of operator involvement in security, TWIC is a uniform personal credential procedure, and will vet the identity and background of individuals with access to cargo and to secure areas of a marine cargo handling facility. It is to be implemented by the operator pursuant to explicit operator duties under the Maritime Transportation Security Act of 2002. The duties under the 2002 Act include requirements that marine cargo handling facility operators submit facility security plans designating "secure" areas of the facility for control of access by vessels, vehicles and individuals.
These procedures (PIP, CIS, CSVR, TWIC) are designed with the intention of operator participation, and include essential site security procedures and mandates directly imposed on the operator. Properly vetted personnel at domestic facilities, secure rail and land connections with terminals, container content verifications, etc. are nothing to be sneered at or lightly dismissed.
Heck, even DP World stated explicitly that "We intend to maintain and, where appropriate, enhance current security arrangements," (very reassuring, eh?) making the general claim that DP World will have no responsibility for security a truly odd little piece of spin.
The UAE and Dubai have been unable (or, more likely, unwilling) to police their domestic companies and financial institutions, which have an ignoble history of providing terrorism funding, transit, and logistics. There is no good reason to believe that a state owned company of the UAE will be somehow free from the same manipulations.
The more difficult it is to smuggle or deliver devices, materials, or fungibles to an end destination, including a port itself (which is, after all, a perfect target in many instances due to immediate proximity to chemical and petroleum storage and refining), the better off we are. That's the whole point of efforts to assure container, site, personnel, and land transfer security, and the whole point behind integrating domestic, trustworthy operators into these security procedures.
As for (3) -- this deal was made public more than two years ago and nobody complained -- I am thorougly perplexed by it.
DP World didn’t even proffer the high bid on P&O Group until January 26 of this year, and the deal wasn’t approved by P&O shareholders until February 13, 2006.
Jan. 27 (Bloomberg) -- Dubai agreed to pay 3.88 billion pounds ($6.9 billion) for Peninsular & Oriental Steam Navigation Co., 68 percent more than the company was valued at in October, to top Singapore's bid for Britain's largest port operator.``It's a generous offer,'' Sultan bin Sulayem, chairman of DP World, Dubai's port company, said in a phone interview yesterday after the agreement was announced. ``We want to finish this deal very quickly and don't want it to drag on.'' . . .
DP World, Dubai's port company, yesterday agreed to pay 520 pence a share for P&O, beating a bid of 470 pence made earlier in the day by PSA International PTE, Singapore's largest port company. P&O switched support to DP World from PSA in less than 12 hours. . . .
Furthermore, P&O didn’t even acquire the lion’s share of its North American terminal operations until 1999, when it bought out ITO’s interests.
How is it that this deal was miraculously "made public over 2 years ago"?
Sometimes, the deal itself doesn't bother me as much as the purposefully misleading defenses of the deal do.
There's a big difference between a US company choosing to bid on acquisition of P&O's worldwide operations, and a US company capable of operating P&O's rather modest North American operations.
Surely you're not under the impression that P&O's North American operations constitute some kind of port-terminal-monolith. And surely you're not under the impression that the US is devoid of capable, and indeed enormous, terminal operators of its own.
This company is based in Seattle and is not loved by the labor unions. The point is moot anyway, because this wasn't a new bid for the contract. DP World acquired the contracts (assets) as part of the takeover.
#2 Correct. Container security is considered more important at the point of departure. DHS controls security at US ports
#3 The bidding war of P&O began 3 months ago. Forbes Article. Congress held hearings in October raising concerns about CFIUS. Maybe they should have taken notice of this, but apparently, only President Bush is suppose to be all knowing, all seeing.
This is very like those in the oil industry watching the debates over oil. The industry looks very different from inside--what goes on outside is as often as not total nonsense.
So, you think we should FORCE US companies to bid on something they don't want to bid on? Or are you in favor of us "nationalizing" the ports a la Soviet Union?
For my resonse, see post 41. And I apologize for the length.
Oh for crying out loud. If this deal is nixed for security reasons, you won't have to force anyone to bid on the terminal facilities that are freed up. There will be plenty of bidders.
I didn't say it was negiligible. It's in the physical security realm, not the Customs inspection role.
I don't know. Who made that claim? My response was merely speculation, as I think I made clear.
Thanks for the info. I had seen some mentions of November discussions, but this Forbes article is the first October source for me.
Why don't you get me a little list of all the major port managers and show me all the American companies on it? I'll wait here.
Customs clearly has primary responsibility for container and general cargo inspection, but that responsibility can realistically be carried out only on a spot-check basis (at present, physical inspections cover about 10% of total cargo). It's my point that compliance by trustworthy operators with container content, verification, seal, and re-seal reporting is crucial, and constitutes a kind of "first-line" defense that customs must necessarily rely upon.
I agree with your perspective on the layers of security. And I completely missed your typo. :-)
I've seen that claim twice in the last couple of days. It's pretty strange. The latest one was this morning, on this thread, starting at post 5:
http://www.freerepublic.com/focus/f-news/1583363/posts?q=1&&page=1
Nobody knew before January 26 who the winning bidder would be for P&O's assets. Heck, P&O didn't know itself, changing its mind in the last 12 hours before announcing DP World.
Because P&O Group wasn't selling either P&O Ports or its North American operations as a seperate package. Rather obvious.
Why don't you get me a little list of all the major port managers and show me all the American companies on it? I'll wait here.
Read point (1) in post 41.
The assertion that the port operator has "no responsibility" for security seems confusing, since they hire and manage the workers that handle the shipments, no?
Over here in knee-jerk, it certainly does seem a bit riskier to pay a country known to produce jihadists to run selected port operations, rather than someone a bit more reliably not-jihadist.
I agree on the misleading statements/questions. It works both ways, and I think the majority are done unintentionally. (Lord knows I've been guilty a few times.)
Megadittoes!
The issue is not whether day-to-day, on-the-ground conditions at the ports would change. They presumably wouldn't. The issues are whether we should grant the demonstrably unreliable UAE access to sensitive information and management plans about our key U.S ports, which are plenty insecure enough without adding new risks, and whether the decision process was thorough and free from conflicts of interest.
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