Interests to Serve
Once, in the mid 90’s, I was invited by the consultants McKinsey & Co. to meet with several of their Japanese clients in Tokyo to discuss an export market development programme that I had introduced to Austrade’s clients. As I had business reasons to regularly visit San Francisco, I decided to accept and meet with the gentlemen during a layover. The programme had the (yes, unfortunate) title of “Penetration Logistics”.
The objective of my programme was to encourage exporters to seek out, & directly serve, markets deeper inside existing foreign supply chains in order to increase their relative competitiveness/responsiveness vs multinational corporate competitors. The programme sought to illustrate opportunities to reduce relative landed costs for sub-regional markets.
The above was a stratagem that I believed had worked for niche traders I was associated with. It provided them an opportunity to compete with larger trade competitors, those that would maintain an economic advantage derived of economy of scale and lower costs if both traders were to trade through the same hub and spoke derived supply chain.
I confess that the adopted means of the Japanese military’s employ of bicycles in their WWII Indo-China & Malaya campaigns raised in my mind the prospect of generating enthusiasm among my Japanese audience. Unfortunately, the gentlemen subsequently appeared to be more desirous of defending interests in big infrastructure development. Perhaps, for them, the meeting was more about financial risk mitigation than about the possibility of alternate trade development paths.
Initially, I thought I would illustrate this “interests” question with reference to the port and supply chain infrastructure on the Australian East Coast – and specifically issues surrounding Newcastle and East Coast Rail development. There we have a contest between coal, wheat, and general container shipping development interests that involves port and rail development capacity issues that echo through the wider economy.
I have, however, covered some of this ground earlier in a submission to government on rail development, and readers can already view this here:
But, in keeping with themes discussed earlier in - terms of contests between extractive resources and merchandise trades - I will introduce an another case. The case I refer to today concerning the US North west, and the ports of Oregon in particular, starts from several reports. While I make no direct charge in respect of individual events associated with those reports – I do believe that the interests of the various players are being played out in a wider contest for port and inland infrastructure access.
Following the weight of new money, the first citation in respect of the US North-West refers to coal developments and prospective export trade with China. For our purposes, it is sufficient to note the depth of the contest for port & rail space. One news leader we noted said: “The growth of Montana and Wyoming’s jumbo coal mines hangs on the Northwest, with coal companies pursuing space in six ports in Oregon and Washington to export coal to Asia.” This and many other
current reports on the subject are linked here: http://projects.oregonlive.com/coal/
A more detailed account of the issues and the involved infrastructure is also given here:
Yet another report from nearby Washington State, however, recently attracted my attention due to the previously reported congestion in NE rail services accessed through the Columbia River, and BNSF's heavy involvement in the Coal project (particularly noteworthy for me owing to BN having been my employer in forwarding in the early 80's, and BNSF now being owned by Warren Buffet's Berkshire Hathaway).
The said report linked below concerns a local producer’s ability to maintain access to reliable and swift rail services from the Washington region to sell their produce in mid-west markets:
And finally, we have a report in respect of longshoreman union actions, and the subsequent loss of container ship calls in the Port of Portland.
And yes, we note the union official’s comment in the above link that there are claimed to be better labour relations in other terminals presently operating at the port. We also note the likely diminished level of trade through BNSF’s Portland Intermodal Facility, and on the congested tracks in the hinterland.
So, all we have said today is that interests, as associated with trade infrastructure access and development, are always noteworthy.