If, in years past, you came along with me on my daily commute from the Jersey Shore to Manhattan via rapid ferry service, you would undoubtedly have seen something like the picture to the left.   That's a freight vessel bearing the markings "NSCSA" - The National Shipping Company of Saudi Arabia.   I'm not sure that any one day passed when I didn't see a Saudi national vessel either navigating the water of New York Harbor or parked at a terminal.   Freighters and tankers from many other nations are represented as well but the Saudi one stuck out since not very long ago some folks from that country, and others, were responsible for the interruption of a near perfect day's view of the NYC skyline.   Yet we allow these ships access to our shipping terminals every day.   Actually we must since a huge amount of the goods we take for granted each day arrive similarly.

These freighters come right up the bay into the various harbor areas and pass within a very close distance to land.   If some terrorist really needed to gain access to this country, it would be a small matter to board a Saudi ship and then jump while the vessel slowly made its way to port.   If there were concerns regarding the man overboard's survival it would be even more simple to arrange for a small recreational vessel to pick him up.   Nobody would be the wiser.   Even if one of the many fisherman who drop anchor or troll the area did spot a man jumping ship, it would be unlikely they would be able to alert the authorities in time to stop the pleasure boat before it brought its cargo to shore.   That is the reality of the situation near our ports.

I think this was along the lines of what I conjured up when I first heard the news that "management" of a number of ports including New York's would be acquired by a company owned by the government of the UAE.   There were UAE citizens aboard those planes on Sep 11.   While the Bush administration says the UAE has been a good partner inn the war on terrorism, they did supply some hijackers and al Qaeda's money did pass through their financial institutions.   If we turn over management of our ports to the UAE, aren't we providing a secret back door for terrorists to use for private entry into our country?   Well, as usual it turns out not to be so simple.

For one thing, what exactly does "port management" mean?   And if Dubai Ports World were actually to be a branch of al Qaeda themselves, what additional would they have gained by acquiring the operating rights in some of our terminals?   The first thing I decided to try to figure out in order to sort out this mess was how exactly is the local port operated. So I checked out Port Authority of New York and New Jersey (PA)'s web site and found:

"The Port Authority directly oversees the operation of seven cargo terminals in the New York-New Jersey region.   Each terminal offers comprehensive shipping services, a qualified, highly productive labor force and competitive pricing."

"The Port Newark/Elizabeth-Port Authority Marine Terminal complex (NJ), the PA Auto Marine Terminal (NJ), Brooklyn Piers and Red Hook Container Terminal (NY) and Howland Hook Marine Terminal (NY) handle most of the cargo and these facilities are managed by the Port Authority of New York and New Jersey.   In addition, there are private operators such as Global Marine Terminal and a number of marine terminals operated by private bulk cargo operators."

So my first conclusion is no private company is an outsourced solution for port management.   The PA handles what would ordinarily be called "management."   And that management involves leasing usage rights to private companies, some of which are actually not all that private as they are owned by governments of countries which still have nationalized industry like China, several South American countries, and even France.   So I conclude the British company which owns the rights at the center of the controversy must operate some freight terminals which the PA really "manages."   But as you go through the PA web site it becomes increasingly obvious that the rights at issue are hardly even close to being in the ballpark of total "management" of the port facility.   The PA's site says:

"In addition to terminals owned and operated by the Port Authority of New York and New Jersey, the Port of New York and New Jersey depends on the stewardship of private operators to help manage the port terminal network. Private operators such as Global Marine Terminal, the City of New York's South Brooklyn Terminal, and a number of marine terminals operated by private oil companies along the southern New Jersey coastline, handle loads such as imported liquid bulk crude oil.   The NYC Passenger Ship Terminal is operated by P&O Ports North America."

"The NYC Passenger Ship Terminal is operated by P&O Ports North America."   P & O is the company DPW is acquiring.   We're (including me) getting our bowels in an uproar because a UAE company is going to be operating a passenger ship terminal?   Why did I have to go digging for this?   Is this not a material part of the debate about whether this deal should go through?   What are we concerned with?   Is DPW going to kill cruising customers so they can steal their identities for use by terrorists?   How long are we going to have to go until the news media gives us a complete and accurate picture on this?

When I run across an inconsistency, that usually drives me to find more of them.   That's what I like to call my "auditor mentality."   So I set out to see if I could find more.   Here is what I found by port:

Baltimore

This piece involves a six-year contract to manage two facilities which expires in 2007.   According to the Baltimore Sun, the operations being acquired in the Port Of Baltimore involve a grand total of 65 employees.   65 employees?   To me that just doesn't seem like a very big operation.   I used to do the books for a small foreign-owned Orange Juice extract company at Port Elizabeth, New Jersey which had a larger payroll.

Philadelphia

The Philadelphia port operation is a 50% joint venture partner in Delaware River Stevedores (DRS), which provides stevedoring and terminal services in Philadelphia, PA, Camden, NJ, and Wilmington, DE).   The lease for space at the Port of Philadelphia expires this year.   It is impossible to convey just how huge the Port of Philadelphia and Camden actually is.   If you've ever driven by or through the area, you know what I'm talking about.   No single private company manages a single facility as large as this anywhere on the planet.   If you want to take a look, check out their 2004 annual report.   Bridge tolls alone bring in $200 million per year.   The number of persons employed by Port of Philadelphia and Camden exceeds the number of worldwide employees of P&O.   So, it is hard to imagine they are "taking over management" of the port facility.

Miami

The property acquired by DPW here is a partnership interest with Eller & Company of Miami in Port of Miami Terminal Operating Company (POMTOC) which has annual volume of freight of 600,000 containers.   This represents almost half of total freight handled at the port which is certainly impressive.   But Miami is more a cruise ship terminal than it is a freight port.   According to the Port of Miami web site, the organization which actually manages the port employs about 98,000 people.   I can't find anything about how many POMTOC employs but it's half partner is suing for $10 million in damages over the acquisition.   Based on that figure I don't think you can call POMTOC a major piece of the "management" of the Port of Miami.

New Orleans

According to P&O's web site, the New Orleans operation is pretty large and includes "400,000 sq. ft. of open wharf" and "waterside and city-side tracks with rail capacity in excess of 130 rail cars."   While that is certainly a nice sized facility, I suggest to you that it doesn't rise to the level of the "management of the Port of New Orleans."   According to the Port of New orleans web site they have 22 million square feet of cargo handling area and more than 6 million square feet of covered storage area.   The port is services by 6 discreet railroad services - I guess handling P&O's 130 rail cars barely registers.   I guess you could say P&O's size is roughly akin to a pimple on the Port of New Orleans butt.


So now I've got a real problem opposing this thing.   Ports throughout this country and throughout the world are managed by governments because they are so large.   One of the bigger sources of revenue for these ports comes from leasing facilities to "foreign" companies who want to operate port facilities.   these private businesses create much of the infrastructure which makes ports work.   I'm not surprised that a hayseed like Hillary, from land-locked Arkansas, doesn't understand that ports are dependent on foreigners, but somebody in the media ought to at least explore this.   The UAE is not buying into the management of this nation's ports.   It is buying up operations which rent space at a number of ports.   Oh, and by the way, this port thing is not DPW's first venture into U.S. business.   The company already owns CSX World Terminals.   I guess it's already too late to protect ourselves from them.