The Box - Marc Levinson [130]
This new maritime geography brought decidedly nontraditional trade patterns. Exports from southern France might move most cheaply through Le Havre, on the English Channel. Imports for Scotland might ride the train from southeastern England. Japanese cargo headed for San Francisco Bay might well be imported through Seattle rather than Oakland, with the ship line’s saving of one day’s steaming time in each direction outweighing the cost of putting some of the cargo on a train from Seattle to California. Port cities along the Gulf of Mexico increasingly did their European and Asian trade through Charleston or Los Angeles, because ship lines deemed sailing to the Gulf uneconomic. The Hampton Roads of Virginia displaced Baltimore as a major load center through no fault of Baltimore’s, but because a ship line serving Europe could make four more trips per year from Hampton Roads—and when a $60 million ship was involved, those four trips could spell the difference between profit and loss.9
The local economic benefits of a successful port still were large. A metropolitan area with a port would have a concentration of jobs in trucking, railroading, and warehousing, would need customs brokers and freight forwarders, and would reap tax revenue from port-related businesses. Where those jobs happened to be, however, depended upon commercial considerations much more than on geography. Ports such as Seattle, with small local markets, had a realistic hope of being major container gateways, “reaping substantial economic benefits as a result,” one study argued. Ports such as Tokyo and London, with populous markets close at hand, were not guaranteed to prosper. With the ship lines calling the tune, ports were forced to compete for the carriers’ favor.10
Competition involved investment on a dizzying scale. The World Bank and the Asian Development Bank poured $1.3 billion into port projects in developing countries during the 1970s. American ports spent $2.3 billion for container-handling facilities between 1973 and 1989. Ship lines used their bargaining power to push the risks of building new berths, buying new cranes, and digging deeper channels on to government-run port agencies. The ports insisted that the ship lines sign leases, but leases often did not guarantee a flow of cargo. Ship lines could, and often did, move their load centers from one port to another as their strategies changed, making only minimal payments to the ports they left behind. In a single year, thirty ship lines shifted their service at North American ports, leaving some with a severe loss of traffic. Having the fanciest facilities did not guarantee success; Oakland spent a disproportionate share of its revenues for container terminals in the late 1970s but lost enormous market share to Long Beach nonetheless. In 1983, after yet more huge investments, an environmental lawsuit brought a dredging project to a halt, and American President Lines responded by moving much of its traffic to Seattle. Seattle, in turn, lost out in 1985, when Tacoma, a few miles south on Puget Sound, built a $44 million terminal and lured Sea-Land away.11
Inevitably, much of the investment in port facilities went to waste. Baltimore’s new docks led to a surge of cargo in 1979 and 1980—but the port handled fewer containers in 2000 than it had two decades earlier. Taiwan’s expensive containerport at Kaohsiung was a roaring success, but the government’s decision to build a port at Taichung as well was a costly mistake. San Diego was one of many ports to order high-priced container cranes that then found little use. Entire technologies, such as on-dock rail, proved to be sinkholes: ports that laid train tracks on the docks, so that cranes could transfer cargo directly from ships to waiting railcars, learned that the time required to move the train forward as the crane loaded each railcar delayed ships and reduced productivity. Many of the on-dock rail lines were abandoned, but the cost of failure was largely borne by the ports.12