The Arab port deal

Many are understandably aghast over the recent government approval of the sale of a British port operations company (P&O Lines) to a state-run Arab company from the UAE. It brings to mind the brouhaha with COSCO (China Overseas Shipping Company) during the Clinton years. But is this Emirates deal as bad as cracked up to be?

First, the UAE/Emirates are presumably western friendly. It's not as if Yemen, Sudan or Iran were suddenly taking over the port of Newark. Second, this company won't actually control the port itself. The government-run port authorities will retain control and oversight as they always have. The UAE company will only be running the offload/transload operations.

Yet there should be concerns. Similar to handing over a tract of land to communists in southern California, we're handing over port transloading operations to people who have a higher than average potential for being turned into crazed fanatics. For example, let's say someone in the UAE company converts to Wahabbism. Think he could get a few containers with WMD through the port? Or, how about blackmail from al-Qaeda groups?

Keep in mind how the intermodal business operates-- containers come in on ships, are loaded onto trailers, where they're either placed on railroad flatcars for long distance delivery or hooked to trucks for shorter range delivery.

Thousands of these boxes are rolling the streets and tracks of America at any given time. At left is a "container train" rolling into the outskirts of Memphis a few years back. So, having a hearing might not be a bad idea. Maybe they can ask Treasury Secretary Snow, former CEO of CSX Railroad/SeaLand Intermodal, a few questions about the deal, just to ease our minds.

HEARINGS BEFORE BILL, FOLKS 2/17/06

The dems think they have another issue, but it may turn out to be a boat anchor:

Robert Menendez of New Jersey and Hillary Clinton of New York said they would offer a measure to ban companies owned or controlled by foreign governments from acquiring U.S. port operations.

"We wouldn't turn the border patrol or the customs service over to a foreign government, and we can't afford to turn our ports over to one either," Menendez said in a statement.

Other than the fact P&O itself is foreign-owned (British), the ports themselves will not be outright "controlled" by these operators, just the loading/unloading operations. We need to keep that straight.

But we also need some historical perspective. Legislation to stop foreign operators from staking out beachheads at American ports is hardly without precedence. Perhaps Hillary has forgotten her husband's position regards the Port of Long Beach and COSCO? Maybe Charlie Trie and Johnny Huang could refresh her memory, wherever they are.

Anyway, as noted I'd be in favor of hearings on this matter. But to sponsor a bill essentially limiting only Arab countries from investing in US ports is hard to justify in light of what we've already allowed. Meanwhile, perhaps an eager journalist can "follow the money" and find out what's really going on here. After all, that's what helped unravel the COSCO deal.

MEATHEAD! 2/18/06

From a Newsmax story on the ports:

Flynn and others said even under foreign control, U.S. ports will continue to be run by unionized American employees. "You're not going have a bunch of UAE citizens working the docks," Flynn said. "They're longshoremen, vested in high-paying jobs. Most of them are Archie Bunker-kind of Americans."

See--those union dock workers are gonna keep them A-rabs in check.

MORE 2/18/06

This issue seems to be bringing both sides together. Meanwhile, LASunsett shares some rage with Michelle.

An even larger concern might be that DP World will not only control American stevedore ops, but former P&O port ops around the world. Check out this P&O webpage for perspective.

But the bottom line is always the money, and in this case: gobs of it:

"[DP World] is owned by a monarchy, but it's a business and its money is the same color as everyone else's, only it's got more of it," said Peter S. Shaerf, managing director of AMA Capital Partners LLC, merchant banking firm focused on the maritime and transportation industries.

Shaerf said the sale price is the most ever paid for any port operations company, and was considered high by many analysts after DP World and rival, Singapore-based PSA International, bid up the price.

DP World, formerly known as Dubai Ports International, began as the port authority in Dubai. In 1999, it began aggressively buying up other port operations in the Middle East and around the world, Shaerf said. In January 2005, the company moved further into Asia and Europe with acquisition of the international terminal business of CSX Corp. With that acquisition, it changed its named to Dubai Ports World.

CSX? What say you, Mr. Snow?

If nothing else this issue certainly brings forth questions on how capitalism fits within a GWoT. Time for some hearings.

ed-cleaned up misconception on who's on whose side above..

2/20/06

Think foreign companies don't already have their hands in American ports? Check out this photograph by local Memphis photographer M.J. Scanlon. It shows a Canadian National railroad locomotive switching freight cars at one of America's bigger inland ports, the port of Memphis at President's Island.

Trivia..this railroad used to be called Illinois Central, made famous by Arlo Guthrie's song the 'City of New Orleans' years ago. No one seemed to complain when it was taken over in 1999 during the Clinton administration by the our friends in the frozen north.