Seeking Stability, Security and Sustainability

One thing is for sure though. Security will remain high on the agenda (p.34). And securing the supply chain, including the ports, will remain a top priority for us all. Despite some serious gaps that still need plugging, the chances of a successful terrorist attack that takes advantage of weaknesses in port security, have been much reduced. That doesn’t make it watertight though.

On trade, the US has never looked more protectionist. Whether it’s European steel or Chinese socks – yes socks – the Bush administration has clashed regularly with its trading partners and has been fined by the WTO for violating trade laws. We’ll see whether things will change in this second term – but don’t hold your breath.

And likewise with the environment. No expectations of revisiting Kyoto in the next four years.

That said, Bush does now have the opportunity of reviewing some of these key issues and the weeks ahead will reveal just how he wants his presidency to be remembered.

Speaking of politicians, Gwyneth Dunwoody MP, chairwoman of the UK Government Transport Select Committee, has come up with an interesting proposition in calling for port operators to involve themselves more in the planning, and even the financing, of road and rail infrastructure links (p.12).

Contrast this with comments by Richard Pearson of HPH in Lloyd’s List recently. “Berthing rates have gone down in real terms.

But the cost of providing more capacity has rocketed enormously, ” he said. “We don’t earn enough money to hold on to a lot of capacity just waiting for someone to use it. There is still pressure on price despite the lack of capacity. To build anything physically in the UK takes seven to eight years. How can you have a system whereby shipping lines can’t even tell you what the throughput and growth rate will be in six months’ time?” Fair point.

Meanwhile, still in the UK, three regional development agencies in the north of England are seeking to redress what is known here as the growing North South divide – and in particular how the ports of Liverpool, Teesport and the Humber can assist (p.14). “Future growth of the northern ports will contribute to the North’s economic development, ” says the report. This goes to the heart of an important truism: that ports, by their very existence, not only serve as trade conduits but can actually generate trade from their own volition.

Richard Pearson goes on to say that provided the yard at Felixstowe can be kept free of empties, then he’s hopeful congestion can be avoided in the pre-Christmas rush. Echoes here of Southampton’s troubles too. Congestion is a recurring theme these days. The US West Coast is a dire example (p. 38) and P&O Ports are also reporting overcrowding at its terminals around the world. Its facilities in China, India and Pakistan are all achieving record volumes but the situation is at its worst at import terminals in Antwerp, Le Havre and Southampton.

This overall squeeze on container traffic, together with the new capacity being brought on line around the world to resolve it, and the corresponding boom in the export of raw materials, is of course due in no small measure to China’s phenomenal economic growth. If so much is predicated on this, then what happens when the brakes are applied? Hard or soft landing? If the latter, then no big worries but if they can’t control the slow-down and the bubble bursts rather than hisses, then the chain reaction could spell some difficult news for everyone although at least congestion would not be part of the scenario. The recent hike in interest rates by China was seen as having virtually no immediate impact on shipping or on the bellwether steel industry, although analysts say it could signal a change in market sentiment.

We look for certainties in an uncertain world. Besides prosperity we seek stability and security. And, lest we forget the environment, we should include sustainability in the list as well. Nick Elliott