Undercurrent of competition concerns

This is ‘we are alive to the competition, but it’s not really that big a deal and the traffic will still come here’. Belying that is the effort to get Congress to impose a surcharge on imports routed through Canada, which all ports claim is at the behest of politicians and not them.

Seattle port is caught up unwillingly in the simmering controversy over Canada taking unfair advantage of the US Harbour Maintenance Tax, which some say has led to the northern neighbour persuading Asian suppliers to the US to route containers through Canada and avoid the tax.

Seattle politicians, as distinct from the port, were part of a coalition that ordered the Federal Maritime Commission to investigate and consider the imposition of a surcharge. Conclusions have been lukewarm, but suspicion has grown as the US economy has worsened and a report is to be presented soon.

The port says diplomatically: “We support fairness in tax policy and believe that US tax policy shouldn’t disadvantage a US port, and should apply to all Non-NAFTA US-bound maritime cargo. But we don’t have an answer as to the best approach at this time. The HMT continues to serve as a critical function for US ports. Obviously, it has some problems and we should explore reforming it. It is necessary [and common] for any tax policy to be evaluated according to how it affects economic competitiveness. This criteria needs to be applied here too.”

Observers say that another warning sign of competition has come from APM Terminals breaking ground for a new terminal at Lazaro Cardenas – and that the competition is going to intensify, regardless of what happens with the canal.

A big advantage that the West Coast has over other regions, which is less often heard about, is channel readiness. Most are considerably deeper than their East Coast rivals. Los Angeles is about three months from finishing the deepening project of its main channel to 53 ft, after 15 years and $370m.