Are you ready for the oligarchy?

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The thing that disturbs me the most about this methanol/LNG mess is not the methanol or LNG per se.   Rather it’s that these issues bring home the hard, cold fact that while we were sleeping, there’s been a coup.   Our city’s been taken over by hostile forces. Tacoma and the United States are both well on their way to becoming oligarchies.

When people talk about the country becoming an oligarchy on the national level, it’s hard to grasp.   We still have our homes and jobs, the same programs are on TV. We’re going on a vacation to Yellowstone next year. Cousin Steve just got married and the wedding was fantastic!   On and on. In almost every ordinary way, things are the same now as they were 5-10 years ago.

As applied to the United States, the term oligarchy is an abstract; it’s intangible. Because of the overt normalcy, it’s really hard to come to terms with. “Yeah, America is an oligarchy, you say? Hey did you catch last night’s Mariners game?”

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What can Port of Tacoma do to become more competitive with the Canadian ports?

To recap, Vancouver has a slight edge in certain factors like the cost of transiting terminals, they have more large super-post-Panamax cranes, they have slightly better rail delivery rates through state-subsidized Canadian National Rail, slightly better productivity, and they get a break of about $100 per container on Harbor Maintenance Tax.  And they have massive plans for expansion.

One of the most obvious things we can do to improve our competitive position is to improve our productivity, and having modern, state of the art equipment would make it a lot easier.  The slight edge Vancouver enjoys in productivity could easily be attributed to the fact that they’ve spent a lot of money upgrading their cranes and yard equipment.

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Port Metro Vancouver or Port of Tacoma? Who’s got the edge?

 

 

 

 

According to a report prepared for Port Metro Vancouver (PMV), their Container Traffic Forecast (which again, I encourage everyone to read), they predict that West Coast container volumes will increase between 3.4% and 5.7% per year through 2030.  Based on that, they’re forecasting their share of the traffic will provide increases for PMV from 3.51 million TEUs in 2014 to 7.02 million TEUs in 2030.

According to the report, they believe they will capture the lion’s share of this work because:

“…Vancouver is considered to have a better competitive position than its immediate competitors – Prince Rupert, Seattle, and Tacoma – based on a review of the following criteria:

  • Physical capability of the terminals;
  • Planned development of capacity;
  • Productivity of the terminals;
  • Cost of transiting the terminals;
  • Delivered costs to Central Canada and the US Midwest;
  • Intermodal capacity;
  • Import/export balances;
  • Suitability as a regional hub; and
  • Existing customer base.

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Port of Tacoma – moving boldly into the future, or sliding into oblivion?

 

I read a really good book recently, on the evolution of container shipping:  The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger, by Marc Levinson.   It’s a great book.  Anyone interested in understanding the Port of Tacoma and/or the shipping business should read it.

One of the things that struck me was how quickly the shipping world transitioned from “breakbulk” cargo to containers.  Breakbulk was where everything was all shipped individually, or more recently, on pallets. It’s the same basic system that’s been used for hundreds of years. A breakbulk ship might take a week or more to unload, as everything was taken off piece by piece. But put the same amount of cargo in containers and the ship could be unloaded in just hours.   The cost savings from containerization were enormous. In the mid-50’s, the world was breakbulk; by the start of the 70’s, container shipping was big business.

It wasn’t an easy transition at all; the push to containerize was very contentious with many, diverse elements of the industry including the unions fighting it.  The ports as a whole were very skeptical – transitioning to working containers was quite an expensive proposition because of the specialized equipment necessary.

A few forward-looking ports including Tacoma decided to take the plunge, investing heavily in container cranes and handling equipment.  Many other ports did not, believing breakbulk would prevail.

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