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Mexico wants to build a port in Baja to compete with the ports in Long Beach and Los Angeles. Dickerson nicely lays out all the positives and negatives here.
So why would anyone build a port south of the border for the American market? We don't have the financial numbers. I'll bet that they pencil out OK for the right investor, especially given the forty-five year term of the lease on the harbor. Deep pockets are involved. Maybe we accept that. Now comes the hard part.
Why would the shippers want to use the port? Since the inception of the containerized shipping industry in the fifties and its growth in the sixties and seventies, things have changed. What was once a growth industry has matured into a commodity business. Changes are occurring, of course, but they are coming slowly. Prices for shipping a container will likely remain fixed unless there is a change in technology that allows for more profitability for the lucky early adopters of the new technology.
A rough timeline of the changes in the industry shows changes in the container itself, the crane used to pick it up and either place in on or off the ship, the technology imbedded in the ship, the size of the ship, the speed of the ship and the ship's likely fuel economy. Quite a list.
The containers have gotten larger year by year. The early ones were six and a half feet tall. I notice that they're now nine and a half feet tall. Looks like the length has stayed constant at forty feet. The container itself is not likely to change too much, especially in a way that effects a Mexican port. Perhaps, the containers could get even larger than they are today - say fifty-five feet long versus today's forty feet - but that would require huge investments in cranes at every port the ships call at. The trucks would need a change. Finally, who is going to fill up a fifty-five foot long container?
Cranes are crucial. They're the key element that trap a ship in port, a losing proposition for the ship owner who isn't making any money unless the ship is under way to the next port. That means two things: there have to be enough cranes. The cranes that are available must be fast a both unloading a ship, and loading it. Mexico could compete here if they buy the newest, best cranes and keep them up-graded.
Ship technology continues to evolve. Early ships were converted WW II tankers. No longer. The ships are behemoths. The interactions between the cranes and the ships are computerized to ensure that the correct containers are swapped at the right time and that the ship is trimmed properly (flipping in port used to be a problem, way back when) at all times. There may be a place for more growth in the size of a ship, but it is my bet that the best place for improvement is in fuel economy and speed. That means hull design - and maybe even surface designs - that reduce drag from water and air might increase profitability.
All this ship design doesn't effect Mexican ports any more than American ports, unless there is some way to equate ship design with port utility. American ports are becoming more and more environmentally conscious, so Mexico may be able to take advantage of that, at least for the short term. Alternatively, the ship owners, or the shippers themselves (the ones that own the product in the containers), may be able to make a case to their customers that an environmentally friendly port helps them. Mexico has the opportunity to build green technologies into their port that exceed American technologies - and that reduce costs or time in port for shippers.
The California ports need help getting the containers to the trains. Congestion seems to be great between the ports and the train hubs in the Inland Empire of Riverside and San Bernardino Counties. If Mexican operator can negotiate with the rail roads to place an adequate train hub at the port, that could create an advantage, enough to reduce crucial shipping costs. Time is money, after-all. In this time of security checks at borders, it seems that a technology solution for speeding the containers over the border could make the Mexican proposal sensible.
Since some of the rail lines in Mexico will probably be new, there may be speed technologies that could be built into them as well as into the trains themselves. Fuel economy is still important as is speed to market. Some changes might be possible especially if the infrastructure is newly constructed with new, "buried" technologies.
Mexico may be able to add fuel to the ships to the equation. If they were able to fuel ships cheaply while they are in port, there may be pennies to be saved, enough to tip the balance toward the Mexican location. Same for the trains.
The Long Beach/Los Angeles ports are up and running. Yes, they are making continual improvements. If the Mexican port was able to make all the suggested changes add up to reduced shipping costs - and reduced time in port - they might have a case for creation and expansion of their proposed port.
If we think of all this from the US side of the border, the same suggestions apply. If the trains can't cross the border, the Mexican port can't pencil out. Alternatively, the US ports can make environmental and efficiency changes that increase the odds that their ports are cheap enough and speedy enough to hold their current clientele and attract others.
A lot of pencils are going to need pushing on this deal before it is done. The shippers may perceive savings in dropping containers in a Mexican port. The investments to make that happen will be large - and risky - for all sides.
Reference
Dickerson, Marla. Mexico plans huge Baja port for U.S. trade. LA Times. 28 August 2008. http://www.latimes.com/business/la-fi-mexico28-2008aug28,0,844963.story
Levinson, Marc. The Box. How the Shipping Container Made the World Smaller and World Economy Bigger. Princeton University Press. 2006.