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Shipping Industry Sees Little Threat to National Security in Port Deal

Posted on: Thursday, 23 February 2006, 00:00 CST

CHICAGO _ A state-owned Arab company's foray into the American maritime business has been labeled in Washington, D.C., as a terrorism risk and a virtual takeover of key U.S. ports.

But the deal by Dubai Ports World to take over operations in 28 American ports is being viewed very differently by many shipping industry participants and some security experts. They say a change of ownership in the company that runs docks and warehouses won't compromise national security.

It won't change who works on the docks or what they do, they point out, nor will it change security procedures, which are overseen by the U.S. Coast Guard, the U.S. Customs Service and armed port authority police. The ports themselves are government-owned, usually by states or cities.

If anything, those in the business say, the acquisition by Dubai Ports World of P&O Ports is just the latest chapter in a long history of consolidation in the maritime industry. P&O itself is rooted in a 169-year-old British-owned company that only got into the American port management business within the last 10 years.

"There has been a lot of hyperventilated rhetoric," said Bill McLaughlin, a spokesman for the Philadelphia Regional Port Authority, one of six U.S. ports to host a P&O terminal. The others are New York, New Orleans, Baltimore, Miami and Newark, N.J.

"It seemed like there is too much of a big deal being made of (the Dubai deal)," agreed Sean Duffy, general manager of the New Orleans-based Steamship Association of Louisiana, a trade group for maritime companies. "I don't see it as potential security breach."

The transaction by Dubai Ports, a business owned by the United Arab Emirates, set off a furor among key Washington lawmakers, who threatened to pass legislation to block the sale of P&O, which manages terminals in six major ports and loads and unloads ships in another 22.

The port of New Orleans, which has largely recovered from Hurricane Katrina, illustrates the role P&O, and thus Dubai, plays in the international business of shipping.

Its public docks specialize in "general cargo" _ everything from coils of steel to bags of coffee to containers stuffed with liquor or electronics. And as at most major ports, unionized longshoremen work the waterfront.

P&O bought up several existing companies, including Transocean Terminal Operators (TTO) and today moves about 55 percent of New Orleans' general cargo.

"People working on our docks for P&O were the same as those working for TTO, and will be the same for the next company," said Dave Wagner, chief operating officer for the port of New Orleans. "They are all Americans."

P&O and other terminal operators play a role in port security, but it's relatively small, Wagner said and in his view, the ownership or nationality of the terminal operator is "not really a relevant issue."

The primary security role of the operator involves checking trucks and trains that enter and exit the terminal, Wagner said. In some ports, they also sometimes participate in submitting general port security plans to the Coast Guard.

But the Coast Guard and the U.S. Customers Service and Border Patrol are responsible for the security surrounding ships and the cargo they carry.

At New Orleans and many other ports, armed port authority police officers guard entrances leading to the hive of terminals and docks.

Ten years ago in New Orleans, anyone could easily walk through one of those entrances and amble onto dock for a close-up view of longshoremen at work. That's nearly impossible today.

Some experts said that the biggest maritime security threat isn't at the dock but at factories and warehouses that could be located thousands of miles away. That is where the metal cargo containers being shipped to the United States are loaded and locked before being shipped across the ocean.

"The real issue is not so much what comes into the country, but where it starts," said Harlan Ullman, a senior adviser on national security at the Center for Strategic and International Studies in Washington, D.C.

Security concerns shouldn't be an issue in the Dubai deal, he said, because terminal operators like P&O and Dubai are relative bit players in port operation. And whether owned by Americans, Europeans or Arabs, "It doesn't make any difference," he said.

Ullman said politicians are responding to the post-Sept. 11 fears of their constituents, which are "understandable but emotional." Still, a lot of the criticism has been hyperbolic, he said, implying that U.S. ports were being taken over.

Meanwhile, the Bush administration was slow to respond to the issue, he said. "You know this is going to be explosive. You don't have to be a political genius to understand it."

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(c) 2006, Chicago Tribune.

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Source: Chicago Tribune

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