Tuesday, January 6, 2015

Fidley Watch: Interesting Times

By Chris Philips, Managing Editor

Several long-ranging policy and infrastructure developments may have a profound effect on our world in the new year. As the holidays approached, maritime industry talk on both sides of the Pacific Ocean kept coming back to the labor negotiations between the Pacific Maritime Association (PMA) and the International Longshore and Warehouse Union (ILWU).

Although US West Coast ports remain open, ILWU slowdowns are causing problems for port-dependent companies – especially US agricultural exporters – and some foreign shippers are sending their cargo to Canada or Mexico, threatening the jobs of port-dependent workers not otherwise involved in the negotiations.

As the holidays approached, the South China Morning Post reported that the labor dispute was threatening to ruin Christmas for Hongkongers if it continued to delay the export of thousands of Christmas trees from Washington and Oregon bound for the city through the Ports of Seattle and Tacoma.

The ships carrying the trees take up to 22 days to reach Hong Kong, and the delay could be a disaster for the city’s Christmas tree sellers, who needed the trees by mid-December in order to take advantage of a very small sales window.

Almost 22,000 fresh Christmas trees were imported last year, with most of the trees coming from the United States, according to the Hong Kong Agriculture, Fisheries and Conservation Department, but next year people celebrating Christmas in Hong Kong might be decorating Canadian trees.

Another development out of Hong Kong is the proposed Nicaragua Grand Canal – a partnership between the Chinese Government and Hong Kong Development Group (HKND), a privately-held international infrastructure development firm headquartered in Hong Kong with offices in Managua. On July 7, 2014, HKND announced the selection of a preferred route for the construction of the canal, starting from the mouth of the Brito River on the Pacific side, passing through Lake Nicaragua, and ending in the Punta Gorda River on the Caribbean. The proposed canal will be between 750 and 1,720 feet wide and 90 feet deep. The project will include the canal and two ports, a free trade zone, holiday resorts, an international airport and several roads. The project is expected to be open for business in five years, according to project partners, including the Russians, who view the project in part as an opportunity to pursue strategic interests in the region.

Meanwhile, Recent sub-rosa negotiations between the White House and Cuba’s Castro regime led to the Obama administration’s decision to restore full diplomatic relations with the island nation. The White House is also taking steps to remove Cuba from the State Department list of countries that sponsor terrorism and roll back restrictions on travel and trade. These developments have led some in the media to speculate that sometime in the next two years the US will abandon its claim to the Guantanamo Bay naval facility.

Naval Station Guantanamo Bay, Cuba is on the front lines for regional security in the Caribbean, and supports the ability of US Navy and Coast Guard ships, along with allied nation ships to operate in the Caribbean area by providing logistical support with superior services and facilities, including maintaining US treaty obligations, a naval base for refueling ships and a forward presence near the Windward Passage to the Caribbean.

With labor issues threatening reliable port access on the US West Coast for importers and exporters alike, along with the rise of Canadian and Mexican alternatives, a possible Chinese and Russian-controlled canal through Nicaragua and the loss of the security barrier of the operating naval base in Cuba, the US can expect an interesting future indeed.