Terminal folly

Any port operator in a storm, except an Arab-owned one.

Published February 24, 2006 8:27PM (EST)

If you are the kind of geek who gets off on transportation infrastructure, then one of the most impressive vistas in the San Francisco Bay Area is the view of the Port of Oakland, as seen from the Bay Bridge while driving from S.F. to the East Bay.

The fourth busiest shipping port in the United States, the Port of Oakland is a skyline of giant cranes, poised to swoop down on containers brought in from all over the world and hoist them over to waiting trucks and railway cars. It is a massive transportation hub, a linchpin of the Northern California economy.

Who runs this port? Well, it's owned by the city of Oakland, which leases out the management of terminals to at least half a dozen different operators. Among them are Singapore's APL, Taiwan's Evergreen, Japan's Transpacific Container Service, Total Terminals International (a joint venture between a South Korean company and a U.S. firm) and the U.S.'s own SSA Marine.

Globalization in a nutshell, one could call it -- worldwide, a handful of companies have specialized in the highly complex logistics of terminal management and consolidated operations across the globe. As the New York Times points out today, it's an unglamorous business that the U.S. mostly abandoned decades ago, but as world trade has boomed over the past 20 years, it has become increasingly profitable.

And increasingly competitive. The largest port operator is Hong Kong's Hutchison Whampoa. No. 2 is Singapore's state-owned PSA, and No. 3, with a bullet, is Dubai Ports World. Over the past two years, PSA and DP World have engaged in a ferocious battle to ramp up operations. In 2004, DP World outbid PSA for CSX Terminals, and then, just this year, DP World outbid PSA again for the U.K.'s P&O, which, notoriously, gives DP World the right to operate terminals at six U.S. ports. (But what both companies really wanted, according to analysts, was access to ports in India and Asia, where shipping traffic is growing most quickly.)

Of course, if PSA had won the bidding for P&O, there would be no current uproar from Republicans and Democrats lambasting George W. Bush for letting Arabs have their way with the U.S. ports system. We would also have been denied the thrill of seeing such unlikely bedfellows as Ann Coulter and Barbara Boxer agree with each other in paroxysms of xenophobia. And we would have missed the opportunity for some really second-rate conspiracy theorizing.

CSX Terminals was a division of a much larger transportation company that used to be run by current Treasury Secretary John Snow (although CSX Terminals operated no U.S. ports). The ties of the Bush family to Dubai elites are also well known -- the infamous Carlyle Group does business in Dubai and Bush's brother Neil has been known to frequent the tiny emirate. The jump from these circumstantial pieces of evidence to the assumption that Bush approved the purchase of P&O as a giveback to his cronies is easy to make -- and in the current political climate, quite unavoidable. As many have noted, when you cry wolf about terrorism as much as Bush does, sooner or later the wolf turns around and bites you on the ass.

But the whole uproar is also kind of dumb. There's no evidence anywhere, yet, that George W. Bush, his brother or Carlyle had anything to do with the purchase of P&O by Dubai Ports World. The simple reality is that with oil prices sky-high, Dubai is flush with cash, and thus the state-owned DP World could outbid the Singapore state-owned PSA. No conspiracy necessary here. You could even make the argument that having a Dubai company run logistics at those terminals would make them safer. If you were a terrorist trying to sneak an atomic bomb into New Jersey, would you choose to do so on a container set to be unloaded at a Dubai-run terminal, where scrutiny would most likely be highest? Or would you look for the Singaporean or Korean or Japanese terminal, where no one was paying attention?

Port security, as has been noted repeatedly in press coverage, is the responsibility of the U.S. Coast Guard and customs officials. One can quite reasonably argue that President Bush could have made a much bigger difference in keeping the U.S. safe if he had authorized the spending of a mere fraction of the funds that have gone to pay for the war on Iraq on bulking up container inspections. But how does it help anyone's security to deny a company that is playing by the same rules as everyone elsl the same opportunities as everyone else? If anything, it will only further inflame the sentiments of Arabs who see the U.S. as inimically opposed to all things Middle Eastern. And just as with the case of China's CNOOC oil company's attempt to buy Unocal, the political opposition sends a clear message to the rest of the world. It's OK for American corporations to traipse across the globe buying up everything they want, but don't you foreigners even dare to give us a taste of our own medicine.

In the long run, that kind of attitude is not going to bolster American security. It's just going to make the rest of the world even more angry at us than it already is.

By Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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Globalization How The World Works Terrorism