DP World to take over US Ports?

Colleges and Universities A-Z Service Academy Parents
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<p>This past week saw the announcement that Dubai Ports World of the United Arab Emirates would be given permission to run several major US ports. London-based Peninsular and Oriental Steam Navigation Co., was bought last week by DP World, a state-owned business. Peninsular and Oriental runs major commercial operations in New York, New Jersey, Baltimore, New Orleans, Miami and Philadelphia.</p>

<p>Unsurprisingly, politicians of both parties have voiced their concerns. Of interest, David Sanborn, recently nominated to become MARAD Administrator, was a VP of DP World and is a USMMA grad. (this will make his nomination hearing interesting!)</p>

<p>Are concerns about the UAE controlling the port operations legitimate? Could homeland & port security be compromised? I do not know enough about how ports operate, much less how ownership would impact this. It sounds insecure, even with the Homeland Security Dept. giving its OK. Those who know about these things, please opine! I would love to hear from those in the maritime community.</p>

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<p>i dont think its a danger to national security but i wish theyd stop selling companies to china and others :-/</p>

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<p>It's interesting since P+O was a British company being sold to a company owned by the UAE. Nothing American in the ownership - but they run ports worldwide. Part of the "World is Flat" (Thomas Friedman) at work.</p>

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<p>"China is now the 3rd largest foreign holder of US Treasury bonds and will probably be 2nd by year’s end. (Japan is far and away the largest at $442 billion — something else worth thinking about.) In effect, our trade deficit with China is helping finance our budget deficit, keeping interest rates here lower than they otherwise would be."
-National Review</p>

<p>Folks, I hate to break it to you, but the US economy is a house of cards dependent on Chinese (communist) investment. Americans not even born yet are going to be paying off the Bush spending spree decades after the current administration retires. China is very opportunistic, they also import oil from Iran. Many experts feel that deficit spending based on Chinese investment constitutes a threat to our national security.</p>

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<p>USNA09Mom -- As one of those experts that you're referring to, I would really suggest (and it's just a suggestion really) you not get into this in these boards. It's not what they're for and you have a very limited understanding of global capital markets. The Chinese own these bonds because they, through their exports, own dollars and have to do something with them. They can't simply sell the bonds to "destroy the US" because someone has to buy those dollar-denominated assets. Doing so, would cheapen the value of the assets they have and strengthen their own currency -- which is the last thing they want to do -- they need to keep exporting cheaply. Worry about the Chinese military and their consumption of oil if you want to. Anyway, I'd be happy to use private messaging to talk further about this if you like, rather than get everyone all riled up.</p>

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<p>weski, sent you a PM</p>

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<p>Fiscal policy in the United States is on an unsustainable path. Under reasonable projections, the budget deficit is likely to amount to about 3.5 per cent of Gross Domestic Product (GDP) in each year over the next decade. Thereafter, deficits are likely to grow much larger, as health and retirement costs mount for the baby boom generation. Over the next 75 years, the nation's fiscal gap could amount to about seven per cent of GDP. </p>

<p>At best, these deficits will gradually harm the future income of Americans. At worst, they could trigger a fiscal crisis, which could accelerate and possibly exacerbate the damage. </p>

<p>New Economy</p>

<h1>The Brookings Institute</h1>

<p>afadad,
Many "experts" also believe our economy is headed in the wrong direction. Leave the personal attacks off the thread.</p>

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<p>Folks, the intent here was to discuss the globalization of the maritime industry. We are dependent on foreign shipping firms since there are only a handful of US owned and operated ships. Few US companies, if any, are left to operate our ports. The business of running ports is different than the security and safety, which is a Homeland Security, INS and Coast Guard concern. Commerce and security, while not mutually exclusive, are different beasts. Deployment of overall port security and its resources to do same are driven by Government. Incentives to have a viable US shipping industry have failed. We will have an provocative debate on all these topics as now the media and politicians have jumped in. I fear it will turn out badly.</p>

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<p>Sorry you took it personally. I was only commenting on your view of the deficit and the Chinese holdings of US treasuries -- something I happen to know about. Yes, many experts point to the facts you cited (the ones not relating to that topic but your economic views), others point to the US's strong growth in GNP, lower levels of unemployment, low inflation, etc. My point was only that this really isn't the place for that debate, which is why I offerred to discuss privately. But it's certainly your right to do so (and I only politely suggested you not do it here). I think this is more of a forum for issues relating to the service academies and our kids who wish to attend them. Wouldn't you agree? Of course, I suppose it's possible to relate any topic to the academies if you really need to discuss it!</p>

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<p>Weski --sorry we got off track. I have views on this but like your first post suggested, I would prefer to hear from some knowledgable folks about this. I know little except what I've read. It does seem foolish to allow a UAE company to be responsible for the ports but I really don't know where security ends and commerce begins.</p>

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<p>The US has permitted other foreign companies to take over the running of our ports, as well as most of the ships involved in US-global trade. The distinction here is that DP World is owned by the UAE, for better or worse. P&O would have been bought by another non-US firm, as there are no American firms left in this league. So which do you prefer - a multinational Asian firm or DP World? Hobson's Choice?</p>

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<p>I dunno. Not knowing enough about the shipping industry especially port operations, I can't contribute anything intelligent on the subject. My concern is that even though DP world seems to employ a good many Americans & Brits & run ports all over the world, the Sultan's ties to terrorist organizations are clear. Its just alittle unsettling to me. Still researching the big wide web to learn more. </p>

<p>Found a little something interesting in looking around. Its a pdf file so hope all are able to view it.
<a href="http://www.foxnews.com/projects/pdf/Dubai_Ports_letter.pdf%5B/url%5D"&gt;http://www.foxnews.com/projects/pdf/Dubai_Ports_letter.pdf&lt;/a&gt;&lt;/p>

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<p>some info from the NYT:</p>

<p>"We're pleased by this development and remain encouraged by the P.& O. board's unanimous recommendation to its shareholders of our offer," said the DP World chairman, Sultan Ahmed bin Sulayem, who works directly for the crown prince of Dubai, Sheikh Mohammed bin Rashid al-Maktoum. "It would be inappropriate for us to say anything more ahead of the shareholder vote," he said. </p>

<p>Port industry ownership is increasingly moving out of European and American hands, as state-controlled entities like DP and PSA pay to buy publicly traded competitors, hoping to reap the benefits from strong global trade. In the future, these large companies are only going to get more market share, analysts predict. </p>

<p>Port companies like PSA, which is backed by the Singapore government, or Hutchison Whampoa, which is part of a giant conglomerate, can use their parents' deep pockets to pursue deals that are too expensive for their publicly traded competition, said Neil Davidson, a container ports analyst at Drewry Shipping Consultants in London. "They can take a strategic view, rather than thinking about shareholder value," he said. </p>

<p>In 1999, Dubai started to expand from its home ports of Rashid and Jebel Ali into other countries from India to Romania. After the acquisition closes, DP World will handle about 33 million containers, just over 9 percent of the world's total. </p>

<p>This is the second time that DP World has beat out PSA on a deal. In December 2004, the Dubai company purchased the port business of the American rail company CSX for just over $1 billion. </p>

<p>Despite the rapid growth of industry leaders like DP World, there is currently little fear that the top companies will put the squeeze on the shipping industry or manufacturers. The port industry is still relatively diversified, with the top 10 port companies controlling about 50 percent of the total capacity. Some big port companies, meanwhile, are owned by shipping lines, and small independent port company start-ups are common. </p>

<p>DP World will become one of the world's top three port companies after the deal closes. </p>

<p>Dubai has been eager to diversify from oil revenues as its reserves of crude decline and has been pouring money into projects like real estate development and creating a new financial market. Sultan bin Sulayem is also chairman of Nakheel, a real estate company developing the Palm, which is creating three man-made palm-shaped islands off the coast of Dubai. </p>

<p>PSA's retreat on Friday caps several months of gamesmanship by the Singapore and Dubai companies. DP World bid £3.3 billion for P.& O. in November, a 46 percent increase from the British company's trading price before markets began speculating about a deal in October. PSA followed that bid in January with a £3.5 billion offer, which was topped by DP World's £3.88 billion offer weeks later.</p>

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<p>I guess its true. The more you read, the more you know. LOL I've driven myself nuts reading stuff about this today. Not nearly as anxious as I was earlier. Port security remains a problem and from what I find, DP World won't have much to do with operations on that front. The security will remain "our" problem and I hope that with the new scanning devices we have, things will improve. I read that they are using the new scanners in Charleston. Cool huh. I need worry beads cause I still am not fond of the Sultan..... ;)</p>

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<p>Good reading for some perspective</p>

<p><a href="http://www.thomaspmbarnett.com/pnm/%5B/url%5D"&gt;http://www.thomaspmbarnett.com/pnm/&lt;/a&gt;&lt;/p>

<p><a href="http://www.thomaspmbarnett.com/bfa/%5B/url%5D"&gt;http://www.thomaspmbarnett.com/bfa/&lt;/a&gt;&lt;/p>

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<p>The following article re: Dubai Ports..............</p>

<p>BY CHANG QIAN GUAN AND SHMUEL YAHALOM
Chang Qian Guan is assistant professor of logistics and intermodal transportation at the U.S. Merchant Marine Academy. Shmuel Yahalom, right, is professor of economics at the State University</p>

<p>February 24, 2006</p>

<p>There are natural concerns about an Arab company taking over the port operations now run by a British firm. But much of the current controversy does not take into account the way American and foreign ports actually work. </p>

<p>We need to look carefully at how the Arab firm, Dubai Ports World, works and not rush to judgment. We need to look into its daily involvement in operations with respect to security, terminal operations, management, personnel and finance. We need to know how its decisions are made and how involved its management is in daily security and other operations. </p>

<p>What are the risks inherent in the takeover? Let's look at some background. </p>

<p>The tradition of a foreign company running ports is not new. In an era of globalization, it is a growing phenomenon. Specialization and private-public partnership of owning and running ports is the general trend.</p>

<p>There is a distinction between owning a port and running a port. The port authority (the landlord) leases its terminals to private port operators to run the day-to-day business. This is the most prevailing form of port administration.</p>

<p>The port operators are required to follow all the rules and regulations imposed by government agencies, including security. The six terminals currently run by the British firm, Peninsular & Oriental Ports, are in lease agreements with port authorities in the United States. </p>

<p>The terminals in New York-New Jersey are run by private companies: Maersk Sealand Terminal, Maher Terminals, Port Newark Container Terminal and Global Container Terminal, all in New Jersey; New York Container Terminal and Red Hook Container Terminal in New York. P&O Ports runs one of them and also runs terminals in Europe, North America, India, China and Australia. Dubai Ports World operates terminals in Arab countries, China and other developing countries.</p>

<p>Private port-operating companies take advantage of their global reach and size to provide better services and increase profit. The acquisition of P&O Ports by Dubai Ports World is a part of the industry trend and will put the company into position as a top-ranking port operator. </p>

<p>After 9/11, Congress passed several laws aimed at increasing security across the board. There are multilayered security measures required by the Maritime Security Act: security for vessels, ports and cargo. All companies that operate vessels, run port operations and ship cargo in or through the United States are subject to all of these security regulations, regardless of whether they are foreign or domestic. </p>

<p>Security measures are implemented not only in the United States, but overseas. For example, all shippers are required to submit their cargo manifests to the U.S. Customs and Border Protection 24 hours before cargo is loaded on vessels in foreign ports. Also, Customs and Border Protection is engaged in collaborative efforts with foreign ports and private industries to improve their security. Every U.S. port and terminal operator must submit a security plan to the Coast Guard for approval. </p>

<p>A terminal in the United States has a designated security officer with security clearance that allows access to classified information. The security effort is designed to identify the smallest and weakest link along the freight supply chain and eliminate it to reduce security risks. So what is so different about this case, when an Arab company takes over operations in the United States? In the post-9/11 environment, considering the recent unrest and tension in the Muslim world, security concerns associated with that world are much more pronounced. </p>

<p>U.S. terminals run by an Arab-owned company would be a new phenomenon, which raises questions in many people's minds. All these terminals are subject to the maritime and cargo security regulations enforced by the Coast Guard and Customs and Border Protection. Also, port workers are Longshoremen's union members. </p>

<p>Still, we need to know whether there will be classified security information-sharing with the management of Dubai Ports World, which could compromise security information collection efforts or be obtained by terrorists. We need to know what projects, organizations and countries the company supports and sponsors. Dubai Ports World should be transparent in providing the information to erase the public's concern. And new security standards should be introduced whenever foreign firms acquire U.S. companies. </p>

<p><a href="http://www.newsday.com/news/opinion/ny-opgua244638959feb24,0,2143073.story?coll=ny-viewpoints-headlines%5B/url%5D"&gt;http://www.newsday.com/news/opinion/ny-opgua244638959feb24,0,2143073.story?coll=ny-viewpoints-headlines&lt;/a&gt;&lt;/p>

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<p>Thanks for the update PM. This still has my heart doing big flip flops. Personally think its a bad bad decision on the part of the administration. Watched Face the Nation yesterday morning & find it even more scary. I had the misconception that DP would not be responsible for any of our port security but our MOC are saying they will. Wish I could be a fly on the wall at the Whitehouse to see what is underlying about this deal. Seems we have our rear in another sling. Someone brought up that they felt that this deal was all about keeping a good relationship with the UAE for a pre-game kind of thing for watching Iran more closely. Another stated that Americans can't buy stock or any manner of those types of things in the UAE. Wonder why.....</p>

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<p>Sounds like the Coast Guard has its doubts as well:</p>

<p><a href="http://www.cbsnews.com/stories/2006/02/26/national/main1346503.shtml%5B/url%5D"&gt;http://www.cbsnews.com/stories/2006/02/26/national/main1346503.shtml&lt;/a&gt;&lt;/p>

<p>Looks like this one really got poor vetting.</p>

<p>"Citing broad gaps in U.S. intelligence, the Coast Guard cautioned the Bush administration that it was unable to determine whether a United Arab Emirates-owned company might support terrorist operations, a Senate panel said Monday. </p>

<p>The surprise disclosure came during a hearing on Dubai-owned DP World's plans to take over significant operations at six leading U.S. ports. The port operations are now handled by London-based Peninsular & Oriental Steam Navigation Company. </p>

<p>"There are many intelligence gaps, concerning the potential for DPW or P&O assets to support terrorist operations, that precludes an overall threat assessment of the potential" merger," an undated Coast Guard intelligence assessment says. </p>

<p>"The breadth of the intelligence gaps also infer potential unknown threats against a large number of potential vulnerabilities," the document says." "</p>

<p>"There are many intelligence gaps"----gee where have we heard this one before......????</p>

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<p>For those who think it is unpatriotic to criticize a sitting President during time of war, I give you Teddy Roosevelt,</p>

<p>""The President is merely the most important among a large number of public servants. He should be supported or opposed exactly to the degree which is warranted by his good conduct or bad conduct, his efficiency or inefficiency in rendering loyal, able, and disinterested service to the Nation as a whole. Therefore it is absolutely necessary that there should be full liberty to tell the truth about his acts, and this means that it is exactly necessary to blame him when he does wrong as to praise him when he does right. Any other attitude in an American citizen is both base and servile. To announce that there must be no criticism of the President, or that we are to stand by the President, right or wrong, is not only unpatriotic and servile, but is morally treasonable to the American public. Nothing but the truth should be spoken about him or any one else. But it is even more important to tell the truth, pleasant or unpleasant, about him than about any one else." </p>

<p>The sitting president at the time was Democrat Woodrow Wilson, the war was WWI.
May 7, 1918</p>

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<p>You know its a real problem when Michael Savage and Democrats agree.</p>