Marine Transportation System

DPW Redux?

In Congress, Politics, Ports, Transportation Policy on May 12, 2016 at 10:50 pm

The trade press is reporting that a majority of shares of Ports America may be acquired by a corporation in Turkey, Yilport Holding Inc. The Istanbul-based corporation is part of a multi-industry holding company, its owner also a major investor in the French CMA CGM container shipping line, acknowledged the talks are occurring. Taking control of a major US terminal organization with around 40 operations around the country, would be a big move as compared to the UAE-based Gulftainer’s purchase of a small container terminal at Port Canaveral a few years back.

A better, if not perfect, analogy of a Mideast-based business making a move on a US MTO/stevedore would be the ill-fated move by DP World in 2006 to take over P&O Ports. At a time when American port security in a post-2001 world was still a very active subject in Washington the credible Dubai Ports World ran afoul of Chuck Schumer (D-NY) and others of both parties in Congress, including then-Senator Hillary Clinton (D-NY). Claims were made that it was a potential foot-in-the-door by a state-owned organization from a region that sponsored terrorism. The rhetoric was hot. The subject was raw meat for never-too-tired-to-talk radio.

P&O Ports had approved the acquisition and the transaction involving port leases required Federal government review and clearance by Treasury’s Committee on Foreign Investment in the United States (CFIUS). Despite those approvals, and the strong support of the George W. Bush White House, the issue became such a political firestorm — involving an industry little understood in Congress, it should be noted — that in the end DP World withdrew, selling P&O Ports’ American operations to AIG. (As it happens, those terminals eventually came under the Ports America name.)

A second, unfortunate casualty of the blowup was the Bush administration’s candidate to be Maritime Administrator. The respected David Sanborn had the doubly bad luck of 1) having his nomination considered in the Senate in this same time frame and 2) being an operations executive of — yes, that’s right — DP World.

So is this another potential “DP World” should Yilport and Ports America do a deal? Maybe not. Turkey is a member of NATO and a US ally, if not the best kind of ally, and more time has passed since that anxiety-filled first decade. But the situation does invite a recollection of a particularly crazy time here when the marine terminal industry and the international nature of the maritime sector were under the glaring, if not illuminating, lights of official US.

What is not especially evident is whether all that attention then led to a greater understanding of the industry today.

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