A Relic of Nineties Rhetoric Slides into the Sea of History
Perhaps China will be the next target
Conveniently forgotten but in limbo, a maritime dispute that once threatened a trade war has officially faded into obscurity. The ramifications should be remembered.
The Federal Maritime Commission jumped on Japan in 1997 over restricted port hours (breaks for lunch and no weekends) and methods of operation, as dictated by the Japan Harbor Transportation Association (JHTA) through a system of “prior consultation” before making major or minor operational changes, coupled with a ban on foreign companies owning any of the country’s terminals.
In plain terms, all lines had to stick to strict procedures and schedules and had to tell the JHTA, viewed as a department of the central government, of even the most minor changes.
The upshot was that “K” Line, MOL and NYK, were fined $100,000 for each port call, which reached a total of $3 million plus threats that ships would be seize4d. Diplomatic negotiations ensued and changes were made. Also, a Singaporese company has been allowed to take over a terminal.
An important part of this was that the imbroglio had arisen out of complaints by American President Lines and Sea-Land that they were being discriminated against.
This week, the FMC put to bed the last element of its retaliation, twice-yearly reports by the three Japanese-owned lines plus APL and Maersk.
Why the last two? Because American President was bought out by NOL and re-named APL while Sea-Land became part of the Danish behemoth. They disappeared not because of the trade dispute with Japan but because the tide of economic history moved on. Their complaints did little to avert the march of business efficiency and technology.
In the US there have been attempts to block foreign ownership (DP World, in the name of “security”), but foreign ownership has proceeded anyway (the latest being Portland and ICTS of the Philippines).
Hotheads in Congress were whipping up the fervor, harking back 10 years and fear of Japan taking over the world’s economy. Similar hotheads led the campaign against DP World.
One wonders if the same tactics could be employed against China.
Of course, efficiency at US ports is today much better than that of the “closed shop” in Japan, if you count backwards. About 25 moves per hour compared with 35-40 in Japan.