Crisis? What Crisis?

The April 4 Editor’s Letter, “Crisis Point,” about federal financing of port projects ends with the line, “That may mark the end of one era, but the beginning of another.”

The new era contemplated in the column is federal money flowing to ports through a new Department of Transportation process of “transparent analysis” rather than through earmarks instigated by lobbyists — that is, political considerations far away from the daylight of public disclosure.

While the “transparent analysis” part sounds like a good idea, expecting the Department of Revenue analysts to be better able to resist political pressure than members of Congress is a mental stretch. Political favors would continue to dominate the process influencing the flow of federal funding to ports.

But, hey, wait a minute, what’s wrong with ports self-financing, backed by increased fees for shipping companies and/or for importers and exporters? If a port infrastructure project has economic value for the port’s users, those users — after huffing and puffing — will pay it rather than move business to another port.

Ports perceived by users as providing real value will grow and prosper. Those ports that can only survive with transfusions of taxpayer life support will fade.

The most effective “transparent analysis” to distinguish between port infrastructure projects providing economic value and those that are political “bridges to nowhere” is to allow port users to vote with either their wallets or their feet. The Democratic staffer quoted by Paul Page as saying, “It’s the end of days,” will be proved correct if what ends is port infrastructure investments being based on political favoritism rather than on hard economic reality.

Peter Spiller
Saint Augustine, Fla.

 

Reality Check on Ship Savings

I read your nice piece on Maersk’s new 18,000-TEU, Triple E ships (“Big, Bigger, Biggest,” April 18). Maersk is promoting these ships, claiming the Triple E factor saves 26 percent compared with the single “E” — which, in my opinion, is not exactly accurate.

Most of the savings are due to the lower speed and boxy hull shape allowed by this speed, and not by the sheer size (scale economies). I suspect the net savings relative to a similarly designed 15,000-TEU ship due to scale economies (18,000 vs. 15,000) will probably be much less, perhaps in the 5 percent range. This figure better reflects reality, since I also suspect the new MSC and CMA CGM ships will follow the same design principles of Maersk ships.

I am not sure though about the cost-effectiveness of the double screw, a long-term debate in the industry, especially because the lower speed reduces the horsepower requirement, which, in turn, could still be efficiently provided by a single-screw engine.

Larger ships usually incur higher port cost. Assuming the same productivity, the Triple E may require an additional 20 percent (18,000 TEUs vs. 15,000 TEUs) time at port.

Ships typically spend about 30 percent of their time at port, and at-port consumption of ships is about 10 percent of their at-sea.

Accordingly, the longer port stay may increase a ship’s overall fuel consumption by about 1 percent. The longer port cost also increases the ship’s capital cost and port charges (dockage). Finally, there is the issue of cranes; very few ports have 23-wide gantry cranes.

Altogether, Maersk’s new ships are definitely more economical, although the savings are not as great as presented if the comparison is done properly.

Still, Maersk took a real bold step in undertaking such an innovative ship construction program. I only hope the market will be able to absorb the huge additional capacity.

Asaf Ashar

National Ports and Waterways Institute, University of New Orleans


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