Why foreigners manage our ports

March 05, 2006|By Donald Currier

All of a sudden, out of the blue, our politicians have discovered something that has been known to them for years. Most of the major ports in this country are managed by foreign companies. In fact, of more than 100 major ports, only eight are run by American companies. Does this make me angry? Not at all. What infuriates me are the lengths to which self serving politicians will go to use this data to stir up the uninformed masses for partisan political purposes. It is not only Democrats seeking to make themselves look tough on security, but also Republicans seeking to keep their jobs in the 2006 elections. It is time to look at the facts.

The first fact is that corporate ownership of a firm does not equate to total operational control of all facets a given operation. The contractor bids for the job according to the criteria specified by the national port authorities. In the case of ports like New York, New Jersey and Baltimore, for example, the criteria is specific that port security is controlled by the United States and remains totally in the hands of the U.S. Customs and Border Protection, the U.S. Coast Guard and the U.S. Department of Homeland Security.


Apparently this is good enough for nonArab countries but not good enough for companies owned by the United Arab Emirates (UAE), no matter how good our relations are with the UAE and how helpful they have been to us over the last five years in fighting the war on terror. It's the word Arab that seems to hang every one up. But what is so safe about a British company or a Singapore company bidding on and winning a contract under the very same terms? And who knows what terrorists working for American companies lurk within our own borders? Talk about racial profiling!

The real question we should be asking, if we are worried about foreign management of our ports, is why aren't American companies bidding on those contracts to manage our ports and, if they are bidding, why aren't they winning the bids? Certainly we are not favoring foreign companies over American companies. The answer lies in our free enterprise system. In the absence of federal laws prohibiting foreign management of our ports, the contracts go to the lowest bidder!

The next question is how come foreign contractors can outbid American firms when the operating criteria are the same? I don't know all of the answers but let me speculate a bit.

The contracts involve establishing port facilities, hiring and paying dock-side labor, scheduling ship arrivals and unloading and clearing the ports of unloaded cargo after all security measures have been taken by U.S. authorities. The stevedores are all American union workers screened and hired by union hiring halls according to their various specialties. The operating managers may well be a mix of foreign and American people in corporate jobs but port operators are all American.

So what is the difference? My guess is that it is the degree of automation used by the contractors that keep labor costs lower and operations more efficient. American contractors either cannot afford to automate the docks or cannot make the required deals with the unions to allow them to operate as efficiently. How can the foreigners do it? They have the bargaining power to get the unions to agree to the new work environment by offering fewer good jobs at higher wages.

What options can the politicians who are making the most strident complaints offer? I see only two. Pass laws prohibiting foreign companies from managing American port operations and look terrible in the eyes of the whole world for our obvious xenophobia. Or, perhaps with congressional oversight, spend more time and money vetting all contractors foreign and domestic regardless of nationalities and welcome the lowest qualified bidder, as we should be doing in a global economy.

Donald Currier is a Smithsburg resident who writes for The Herald-Mail.

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