Port Security: At What Price, Who Decides and to Whose Account?
Corpus Christi Port commissioners approve 500 percent ship fee hike to pay for Security Patrol. Slim 4-3 vote margin underscores overwhelming local opposition to new marine patrols which local port users deem unnecessary.
The Port Commission of the Port of Corpus Christi Authority on Tuesday, in a divided 4-3 vote, approved motions for fee local increases of more than 500 percent and implementation of a marine patrol to be supported by the fee increase. The annual operating cost of the three patrol boats could be as much as $2.9 million by 2011. Ten of eleven speakers at the meeting were opposed to the fee hike, which has taken local users by surprise. Local trade organizations such as the Port Industries of Corpus Christi, an alliance of ship channel industries, and the West Gulf Maritime Association, which represents more than 140 maritime companies on the Gulf Coast, also weighed in against the fee hikes.
The whopping increase in fees also comes at a time when most users are ill-positioned to absorb the costs. One shipper who did not want to be identified, estimated that the new fees would cost his firm as much as USD $200,000 annually.
The new fees, all but a foregone conclusion, also fly in the face of a recent proclamation by the American Association of Port Authorities (AAPA) which heralded a change in Federal Emergency Management Agency policy that will allow the use of preparedness grant funds for security equipment maintenance contracts, warranties, repair or replacement costs, upgrades and user fees under all active and future grant awards. FEMA manages the Department of Homeland Security's Port Security Grants program. Corpus Christi, according to DHS records, has received more than $30 million in DHS grants.
Local users want to know why those DHS funds – now available for this kind of expense – cannot be used to fund the patrols. It is a very good question. But the situation developing in Corpus Christi probably shouldn’t surprise too many other port users in other places, where “port security” has eaten up more than its fair share of infrastructure dollars in the wake of 9/11 attacks. Back then, federal and state officials quickly realized that the sinking of a single vessel in the middle of a busy waterway - especially on the U.S. Gulf Coast – could effectively cripple the supply chain and/or the distribution of refined petroleum products.
It is fair to ask what is reasonable in terms of local security arrangements and who should fund the cost of that protection. Local port officials clearly feel that the Coast Guard is not up to the task (I somehow doubt that DHS would share that sentiment) and accordingly have gone out and purchased patrol boats that the industrial user base feel are unnecessary. And just as these added costs are now about to be felt locally in the supply chain in South Texas, so too could this happen elsewhere. For that reason, port authorities everywhere and their customers are watching what unfolds here with real interest.
The situation in Corpus Christi might be an anomaly, but I doubt it. And in places where a 10 percent hike in pilot’s fees hardly raises an eyebrow, the news from South Texas might seem like a non-event. This time, however, that kind of thinking would be a mistake. This week’s vote raises the harbor fee for ships from $275 to $2,032, starting April 1, 2010 with barge fees increasing at a similar percentage. For local refineries moving hundreds of thousands of barrels of crude and refined petroleum on multiple platforms daily, the fees will add up quickly.
Make no mistake about it: the global threat to security on the waterfront is very real. The billions of dollars doled out in port security grants by the federal government in the years following 9/11 are ample testament to that metric. But the real story won’t be just the new fees. Instead, it will involve watching the traffic volume on the Corpus Christi Ship Channel in the coming year. Those shippers captive to a certain cargo in a single port of call might not have much a choice but to grin and bear it. That’s not always going to be the case, however.
As a minimum, the timing of the fee increases show an astonishing lack of understanding (or perhaps sympathy) for the current economic plight of the port's customers. Port authorities elsewhere contemplating similar moves against the wishes of their local customers, especially in this current fiscal climate, ought to sit up and pay attention. It is often just this sort of thing that can send a loyal shipper to another – dare I say it – safer refuge. – MarEx.
Joseph Keefe is the Editor in Chief of THE MARITIME EXECUTIVE. He can be reached with comments on this editorial at [email protected]. Join the Maritime Executive ‘Linked In’ group at by clicking http://www.linkedin.com/e/gis/47685>