Deep Port Shipping Growing Greater

Elaine Meinel Supkis

My ex-husband was in the shipping industry. He worked for foreign companies just like I once did, too. Yesterday, I was at the deep water ports in New Jersey and saw some rather interesting things. First, the ports weren't as busy as last spring. Second, all the cars being imported were quite noticable. Time to discuss international auto shipping as well as sales and how they interact with modern 'free trade'.

From World Wide Shipping:

Roll-on/Roll-off

We offer Ro/Ro service from major U.S. ports to destinations worldwide. Ro/Ro vessels are designed with maximum flexibility to transport both rolling and non-rolling stock, including autos, motorcycles, boats and heavy equipment.

Roll On/Roll Off vessels are designed with maximum flexibility and are able to carry a wide variety of wheeled and non-wheeled cargo.The inside of the ship has a basic design of a parking garage. Ro/Ro vessels can carry up to 6600 cars and have up to 12 decks.

Worldwide offers Ro/Ro service from major U.S. ports to ports throughout the world. WSA will arrange delivery to the port for all types of cargo, including cars, pickups, trucks, boats on trailer or cradle, motorhomes just to name a few.

I walked all over the neighborhood, looking at shipping yesterday. Most shipping places now have hard to see through fences unlike in the past where everything was much more open. There were good views from the various bridges or the Polansky Skyway but I don't have a telephoto lens camera and besides, we were swiftly engulfed in fast moving fog and clouds from a huge storm that battered NYC as soon as I drove north.

These deep sea ports where built while my ex was working in NYC years ago, just as I used to watch the work on the WTC, I also would go visit the new port facilities. Ships used to dock at Red Hook, Brooklyn and even Manhattan, etc. But these were mostly pre-WWII ships. Hellenic Lines, for example, was based on this sort of old style shipping. But the revolution of deep port container ships turned sea trade from a small operation into a monster machine. The interstate treaties between New Jersey and New York had to be revised so they could build deep sea ports.

From the NY NJ Port Authority:

Throughout the 19th century, New York and New Jersey waged many disputes over their valuable, shared harbor and waterways. A dispute over the boundary line through the harbor and the Hudson River - settled by the Treaty of 1834 - once led state police to exchange shots in the middle of the river. The impasse eased when the two states agreed that the port area was, in effect, one community and that conflict squandered the port's potential. The states sought a governmental body to oversee port affairs and found a model in the Port of London, administered by what was then the only public authority in the world.

On April 30, 1921, The Port of New York Authority was established to administer the common harbor interests of New York and New Jersey. The first of its kind in the Western Hemisphere, the organization was created under a clause of the Constitution permitting Compacts between states, with Congressional consent. An area of jurisdiction called the "Port District," a bistate region of about 1,500 square miles centered on the Statue of Liberty, was established. In 1972, the organization's name was changed to The Port Authority of New York and New Jersey to more accurately identify our role as a bistate agency.

Actually, there was a huge dispute over the Statue of Liberty that took forever to resolve. Tourists had to take this expensive ferry ride from lower Manhattan to the statue which happens to have a road from New Jersey that goes to the statue much easier and cheaper. Disputes over who owned access to Miz Liberty were bitter and long. Today, one can go to the statue from both New Jersey and New York City. But the other huge joint project, the WTC, has been utterly destroyed. Its destruction has spawned even more disputes than visiting Miz Liberty's tiny island.

The fact is, starting with oil tankers which mostly stood offshore to pump oil onshore, the mega-ship building process which began with Europe and Asia beginning to use many more cars than before WWII, caused ships to grow rapidly in size. The technology of ship building went through this revolutionary process of seeking ever-greater volume and girth and alongside this was building huge deep sea ports that can take these ships. New York had to concede this to New Jersey after bitter fights in the sixties because the ports in New York couldn't be made easily accessible to deep port shipping. I once lived on Coney Island and we could plainly see, the ocean was far too shallow too far out from the shore, to be turned into a huge port.

But the New Jersey shoreline south of Manhattan was capable of handling big ships. To develop these ports in New Jersey required not just changing the shoreline but also changing the road and rail interchanges and expanding a lot of services that run to and from ports. This was very successful, of course. And this became one of several important open doors to free trade that took off after this port opened.

Before 1972, there was very little in major trade. If you took all the ships that sailed into NY harbor in 1969 and bundled their cargo inside a modern ship, it would have taken less than a dozen ships to bring everything over. We put goods in wooden crates, this is how I shipped stuff from Asia to Europe and then, to America, it was a slow and tedious process that took months, in 1972, this all rapidly changed. The older shipping companies like Hellenic Lines, stuck with a pre-deep sea port fleet, blew their chances and went bankrupt. Others, like Maersk Lines, grew rapidly. Indeed, the smaller the company, the smaller the fleet, the easier it was for them to switch gears!

Newer Korean, Taiwanese or Japanese shippers got a head start, already using deep sea ports in Asia. The Asian advantage was hastened by their abilty to undercut prices of shipping that funnelled through European or American companies. Proud of their new prowess, these Asian companies color-coded their ships and painted their names in giant letters so everyone could see who was plying the Seven Seas. I used to sit out on the rocks at Grave's End, checking the ships entering the harbor and discussing this with my ex at his workplace.

So I was filled with curiousity as to how things are done today when I walked about Bayonne, New Jersey.

First off: The ships come here with lots of cars and goods but depart with nothing. This is totally different from the old days. In Hellenic Lines, the business of the main office on Broadway, just south of the new WTC, was to FILL THOSE TUBS! If there was an inch of space empty going in either direction, Mr, K., the Greek shipping millionaire, would be very angry and go about the office, prodding everyone to fill that hold!

So the aim of shipping was TWO WAY. All the competitors wanted to not just sail but insure that both directions, the ships were full as possible. This is in stark contrast with today's shipping. Nearly all shippers concentrate on one-way deals. Free trade has driven down prices but not by being efficient. The much older system was far more efficient in that it didn't waste space. Today, there is great volume but if you look at the ships going BOTH ways, the 'efficiency' rating is twice as BAD as it seems if it is calculated going only one way.

And because the ships had to be filled going both ways, this prevented one-way trade which is what everyone is trying to do today by the horrible mechanism of using monetary differentials. Everyone wants one way trade and currency advantage due to weakness! Which will cause the next depression.

I visited the docks for Global Shipping:

They had lots of European containers piled more than 4 stories high. The entire dock was filled with piles and piles of containers. Global Shipping is the modern Hellenic Lines: they take all sorts of containers from all sorts of businesses and pile them on their ships. Right next door was the BMW port of entry. The cars filled that lot. The shipping of cars are hugely responsible for one-way trade for the ships are seldom filled with much of anything on their return journeys to the ports in Europe and Asia. In the US, NOT ONE auto manufacturer was built next to a deep sea port. In Asia, they ALL are built this way. Toyota was most careful to NOT do this in the US, like here, all their factories were built in virgin countryside deep in the heart of the US. For NONE of these are meant to sail anywhere.

From Wikipedia:

Various types of RORO vessels include ferries, cruiseferries, cargo ships, and barges. A true RORO's ramps can serve all of the vessel’s decks; otherwise it is a hybrid type. New automobiles that are transported by ship around the world are often moved on a large type of RORO called a Pure Car Carrier (PCC) or Pure Car Truck Carrier (PCTC).

Unlike elsewhere in the shipping industry where cargo is normally measured by the metric tonne, RORO cargo will typically be measured in the more convenient unit of lanes in meters (LIMs). This is calculated by multiplying cargo length in meters by its width in lanes (lane width differs from vessel to vessel and there are a number of industry standards). Aboard PCCs cargo capacity is often measured in RT or RT43 units which is based on a 1966 Toyota or by car equivalent units (CEU).
*snip*
With the building of of the Wallenius Vilhelmsen's 8000 CEU car carrier Stockholm Faust in June of 2007 the car carriers entered a new era called the LCTC (Large Car & Truck Carrier)[2].

This is very significant: the standard auto unit for shipping is based on specifically, Toyota's cars. From the beginning of the US trade deficit in 1972, the US didn't bother shipping cars all that much but rather, 'expanded' and built factories in Brazil, Mexico and other places. They solemnly swore, this was for the domestic markets in South America, for example.

But that was a lie. The output was shipped here. But not in the vast quantities as the Japanese. For the Japanese, being an island, could easily build their plants right next to deep sea ports. These ports were expanded and sponsored by...hold onto your hats, everyone: the US NAVY! Go, Navy.

We needed deep, complex ports for our aircraft carriers and our subs. Since we decided to leave the US naked to anyone who wants to attack, we spent most of our energy and minds on fixing Japan so it could be a deep sea port power so we could station our fleets over there. To keep Japan as our ally (HAHAHA) we didn't build these very big ports ourselves, we hired the Japanese and took on more debt. The Japanese then developed the tools, technology and skills as well as the corporations, for developing deep sea ports.

Then Fortress Japan, MITI and the LDP teamed up to turn Japan into the world's biggest deep sea port facility! And the need for mirror ports was very strong so they were quite happy that the US Navy made other deep sea ports in California, Washington and Oregon. For a while, the ships sailed there and then the cars were taken by rail to the East Coast. The Germans, our other allies who lost WWII to us but now were part of our empire, wanted the same thing on the East Coast for the same reasons: the Japanese were killing them in the import auto markets in the US. So the US built these fine ports that connect to the hinterlands much more efficiently than the western ports due to the many train links up here.

Wikipedia:

While the characteristics of seagoing RO/RO car ferries have inherent risks, there are benefits to its seaworthiness. For example the car carrier Cougar Ace listed 80 degrees to its port side in 2006 but did not sink, since its high enclosed sides prevented water from entering.

Indeed, as I stood watching the ports, a Toyota ship dropped anchor. It was this HUGE brown box. There were virtually no features on the outside except for a small box on top for the small crew and their captain. I have been on board the early container ships and they seemed more like ships than this monster. The huge ship also was missing something important: a name. Instead of 10 story tall letters like Hanjsin ships, for example, this thing was anonymous. The Toyota docks had a sign but not a pretty one in lights like the BMW lot. It was all very low-key but vast. A huge tarmac desert that rapidly filled up with the thousands of cars disgorged from this giant whale.

Now for a look in the far past: From CNN Money, September 10, 1990

THE NEW 1991 models will soon be rolling out, and all the attention is focusing on the superslick $64,000 Honda NSX, Japan's costliest sports car and its designated Ferrari fighter. Car buffs have all but ignored the relatively mundane Honda Accord station wagon, due to arrive in dealer showrooms in late November with a base sticker price of about $16,000. Don't be misled.

The Accord wagon is a revolutionary vehicle, one likely to excite consumers and unnerve U.S. carmakers. Designed by Americans in Torrance, California, and built at Honda's burgeoning complex in Marysville, Ohio, it is the most American car ever produced by the Japanese. The Accord wagon adds a third dimension to Japan's North American auto strategy.

The Japanese began as importers of their own cars, reaching a peak of 2.4 million in 1986. Their next move was to assemble the cars in America. Today, Honda, Toyota, and Nissan are well on their way to becoming nearly autonomous producers, able to research and engineer as well as to build and design the cars in the U.S. Except for their ownership, these top Japanese automakers are beginning to appear as American as General Motors, Ford Motor, and Chrysler. Already the world's most proficient producers of cars, the Americanized Japanese will reap big gains in marketing acumen, development time, and operating costs. Many industry analysts forecast that the Japanese, who already produce more than one in four passenger car sales in the U.S., could boost their share to one in three in the mid-Nineties -- approaching GM's.

I was frankly shocked. I didn't know these ships were so huge! The displacement of water was minimal considering the great size, the car cargo isn't dense. For example, the weight displacement of containers which are steel and have considerable weight, themselves, and then filled with more or less heavy items, outweighs, per square foot, autos. Also, if a container ship lists at sea, this is a catastrophe. More than one ship has vanished suddenly when hit by a mega-wave. These waves happen at sea in mysterious ways. So much so, back in the seventies, I would watch for ships to come to the harbor to insure they were actually coming in during storms like before hurricanes when the seas get rough.

The cargoes of these tragic sinkings sometimes float around the world for years. Scientists use them to study currents. Once, a ship filled with sneakers lost its cargo to the high seas between Asia and the US. The lose shoes were then tracked to South America, Australia, Asia and the West Coast. There are gyers in the sea where the ocean's currents form circles. In these areas, there are flotillas of debris from sunken ships, mostly plastic, floating around and around.

The 1990 article boasting about how Toyota was designing and building cars in the US, when we look at the huge ships coming in filled with Toyotas made in India, China and other places, we have to remember, this is all about PROFITS. Even with the shipping, the profit value to the Japanese of shipping cars from Asia are even greater today than in 1990. Also, the Japanse 'depression' began interestingly enough, right when they 'outsourced' their cars to the US and incidentally, increasingly to other Asian countries. The Japanese no longer are getting endless good-paying jobs with a paternalistic, benevolent corporation. They are on a long-term, starvation diet that is now being applied to our own auto workers.

From Ship Gazette, Scandinavia:

Emma Mærsk is even bigger according to survey

SSG-RINGKØBING. A. P. Møller-Mærsk’s E-class container vessel seems even bigger than the 14,500 TEUs claimed by several sources until now. AXS-Alphaliner, an international container research company, has done a new counting based on a detailed drawing of the type. Their conclusion on the capacity landed on: 15,200 TEUs with a capacity of 7,004 TEUs under the hatches and 8,208 TEUs on deck. This capacity is still a theoretical number of boxes, but the ships have the possibility to take that many containers. The new figure raises the World record by some 700 TEUs. The E-class now consists of six vessels (Emma, Estelle, Eleonora, Evelyn, Ebba and Elly) Another two units is under construction at Odense Steel Shipyard.
Published: 19.10.07 15.44

There is this race between the European ship builders and the Chinese to see who can make the world's biggest container ships. Even the Japanese have given up on that business. They build their huge car ships and leave it at that. But the push for ever-swifter, ever-bigger one-way ships has not diminished, it is growing. Indeed, the harder it is to make a profit, the more these ships will grow.

Early Hellenic Lines ships had a large crew of dozens of men. First, they were Greek and Eastern European. Then, to save money, North African and then, Bangladesh and Chinese. Finally, this sort of shipping died off and the container ships had on quarter the crew and dropping. The thinking is, if the square feet and tonnage is increased while staffing drops, this will increase profits. This pushes things towards more international shipping. Local shipping makes less money due to smaller ports and smaller loads. It takes a bigger crew to ship locally than internationally.

Another side story from Shipping Gazette:

The ferry Vironia vill sail on its last voyage between Sillamäe in Estonia and Kotka in Finland on 19 October. The service will be closed down after negotiations with Russia to be allowed to pass east of Hogland have failed. The move would have reduced the voyage time by two hours to four hours. Saaremaa Shipping Company’s managing director Tõnis Rihvk says to SSG that the negotiations stranded already this spring and that any hopes of new negiotiations vanished when Russia announced that they will build a radar station on Hogland. The vessel Vironia will be sold.

Russia is squeezing Europe's balls at every turn. He has made it crystal clear, they must negotiate as equals and treat Russia as a major power, not as someone they can push around using the US as their bully boy. I have warned everyone, using the US nuclear arsenal as a diplomatic tool is pure folly, totally insane. The US navy can't stop Russia from destroying all of Europe so they better learn to triangulate fast or we will have serious problems that will make WWII look like a walk in the park. This same warning goes to Japan. The Russians need to build this radar station because Bush wants to build attack missiles all over Europe. So now things will be tough for the Scandinavians who live very close to this very angry Bear.

Another story from Shipping Gazette:

The EU Commission has adopted a strategy and an action plan for an integrated maritime policy in the European Union. The strategy contains steps such as a European maritime transport space without barriers, an integrated network for maritime surveillance and a review of EU labour law exemptions for the shipping and fishing sectors.

Europe is trying desperately to make itself into a Neue Heiligen Romänisch Reich: the New World Order. They think all they must do is build up their naval facilities and missile bases. There was another article about how the Scandinavians can't find enough sailors for their wretched, tiny military navy. Again: they don't have to do this, all they must do is triangulate. During the Yeltsin years, everyone thought triangulation meant strangulation. This is why Putin and not some rich guy is running Russia. Certainly, not Goldman Sachs.

From Bloomberg:

General Motors Corp. posted a 4 percent gain in quarterly global sales, bolstering its bid to hold off Toyota Motor Corp. and extend a 76-year reign as the world's largest automaker.

The 2.39 million vehicles sold set a third-quarter record, Detroit-based GM said today in a statement. Toyota's combined sales in its biggest markets -- the U.S., Japan and Europe -- fell 3.8 percent in the quarter. Toyota will release its worldwide totals on Oct. 22, spokeswoman Mira Sleilati said.

None of these Fords came oveseas via huge box-like carriers. They were nearly universally built overseas. So this 'good news' means squat diddly here in the US. Our trade deficit continues to be very bad. During 25 years of GM's supposed reign, cars poured into the US. From $1 billion a year to $400+ billion a year. This is destroying our economic base in many ways. This doesn't produce all that many jobs. If 6 people can deliver 6,000 cars, this is a very low number versus material goods.

And this is more bad news:

During the quarter, GM again recorded a sales decline in North America, its largest market. Sales there fell 6.1 percent to 1.21 million vehicles.

Not only didn't we export cars, the huge boxes coming in from Japan didn't fill up with American cars going to Japan, GM's market share here continues to shrink. This means, GM might grow...IN CHINA...but this will make our trade deficit worse because they will import these cars...FROM CHINA! Toyota makes expensive cars because this is where the profits lie. But the Chinese are now underselling them, underselling using GM cars made in China, for example.

More Bloomberg:

Industrywide sales in the U.S. may slip to 16.2 million this year, the lowest level since 1998, according to J.D. Power & Associates, based in Westlake Village, California.
*snip*
During the third quarter, Toyota sales in Japan fell 3.8 percent, its U.S. volume dropped 4.9 percent and European deliveries were down 0.1 percent, according to data from the automaker and the Association of European Automobile Manufacturers.

The Europeans sell nearly only very-high value-added cars here. This is why I visited the BMW lots to see how active it was. Japan is desperately crushing inflation at home to keep the fiction of a weak yen and auto sales are collapsing there but not as fast as here! We are IN A RECESSION ALREADY. The news yesterday was all about Wall Street suddenly figuring out this obvious fact. They tried to pretend housing wasn't a problem, they thought the 'consumer' would save the 'economy' which is nearly entirely based on brown, box ships with no name sneaking in from Asia and dropping off zillions of cars made far away from here.

From the China Times:

Chery grew from a small town player into a nationwide player and is now aspiring to become an international player, but Chery has found that shipping is a problem and what seemed like the best solution was to just buy a ship maker.

The Anhui Daily News reported on Saturday that the WuHu Xinlian ship building company held its ‘reopening’ ceremony on Saturday to celebrate its take over by Chery. The company will be building bulk cargo vessels that will be used to ship vehicles, oil, and other chemical products.

Like army ants, the Chinese manufacturers are coming, they won't accept any barriers. And note how they will do what the Japanese, Koreans and Taiwanese did: they will use their own ships to do their deep sea portage. And they will expand into shipping aggressively. I remember when the Asians first hired Americans in the shipping industry. The Americans disliked the long hours and the difficult stresses. To keep offices here, the Asians had to hire some US managers to keep people from rebelling.

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Comments

[sin]

If you have the time, you really should check out the videos on YouTube of the crash test of the Chery. I guarantee you'll never buy one after watching the crash test.

[Elaine Meinel Supkis]

Yup. But you should check out all the Toyota factories in China and then look at where the ships coming to NY harbor are hailing from.

[Ralph]

Really enjoyed this article. Living next to the harbor in Ensenada, Baja CA we, too, enjoy watching the comings and goings of the cargo ships. Ensenada, bit by bit, has captured some of the overflow from the west coast ports of Long Beach and LA. And mainly these are Asian ships bringing their exports to the US via Mexico including many car carrying ships. There is currently a plan underway to develop a mega port at Punta Colonet, some 80 miles south of Ensenada, that would be the third largest in the world and would eventually receive more TEUs than Long Beach and LA ports combined. One of the developers involved is Hutchinson Whampoa Ltd. of Hong Kong which also runs the port of Ensenada. The Chinese have certainly dominated shipping here as far as I can tell.

[Elaine Meinel Supkis]

Correct Ralph and guess what? My next article tomorrow was on exactly that. I got a whole bunch of things to say about Whampoa Ltd. Was going to talk about it here but saw this would make the article way too long, way too long.

[Dan Dashnaw]

Another great piece. Eventually we may see the "China" price hit the auto biz. Americans, I suspect, will ultimately be joy riding with empty pockets in cheap Chinese cars. Who cares about crash-worthy? The Irony is too obvious! Happy motoring!

[larry, dfh]

Careful Elaine, walking around bridges with a camera can get you an unrequested vacation in Cuba! I'm surprised you could get to do much spotting at all, but good job. And nice trees, BTW, nothing but brown on the ground here in balmy DE.

[Elaine Meinel Supkis]

I waved to all the rig drivers and the guys working the docks. I was very well dressed but not too whorish, heh, and they were all very charming. Some tootled their horns at me and waved. The Canadian geese there were so friendly, they came to me, looking for tidbits.