This Week's Editorials
In case you missed it, here are this week's editorials from Maritime Executive's Editor-in-chief, Tony Munoz, Nishant Pillar, Direct of Cargo and Port Security of Unisys and Michael Goldsmith, CEO of Global Defense Solutions.
Occupy MARAD!
By Tony Munoz, Editor-in-Chief of The Maritime Executive Magazine and the MarEx Newsletter
“Storm the Bastille”
The September 2011 MARAD report, “Comparison of U.S. and Foreign-Flag Operating Costs,” was not only a waste of precious dollars but filled with “analysis-paralysis” comparisons and meaningless data the Maritime Administration has had for decades. More importantly, the report is simply a regurgitation of information already in the hands of the professionals at MarAd. The fact is, in order to participate in the Military Security Program (MSP) or Cargo Preference, U.S. flag operators are required to submit their operating costs to the agency annually.
The report by PriceWaterhouse Coopers (PwC) spends significant time explaining why U.S. operators are not as cheap as their foreign counterparts. To do so, it compares operating costs such as ‘Stores and Lubes’ (“not evident why U.S. operators cost more”); ‘Maintenance and Repair’ (PwC says “significantly higher U.S. crew costs tend to diminish the importance and impact of M&R on U.S-flag vessels”); ‘Insurance Costs’ (U.S.-flag operators’ insurance costs are roughly 1.5% higher, and bulkers and Ro/Ro vessels 2.1% higher); ‘Overhead Costs’ (“overhead costs of U.S. flags are 1.7 times higher than foreign flags and requires further research”); ‘Costs Variation’ (“the reason ships register under the U.S. flag is due to MSP payments of $3.1 million and the availability of cargoes”), and ‘Conclusion’ (U.S.-flag operators in foreign trade are 2.7 times more expensive than foreign equivalents).
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Vessel Traffic Management System: Brazil’s SEP’s Vision for a National Framework
By: Nishant Pillai, director of Cargo and Port Security Practice, Unisys
and Michael Goldsmith, CEO of Global Defense Solutions
With more than 8,500 km of coastline and 228 port terminals—many of which are ranked among the top 50 ports in the world—Brazil’s maritime sector accounts for approximately 90 percent of the country’s trade volume (1). In fact, this past year these ports transported roughly 6.9 million TEUs (20-foot equivalent units); 36.6million metric tons of general cargo; 630.9 million metric tons of solid and liquid bulk cargo; 490,000 vehicles; and well over 1 million passengers (2). Furthermore, the country has seen a steady rise in maritime activities in the last decade. Brazil’s container market alone has grown more than 10 percent per year over the past 12 years. In 2010 the market realized 14.2percent growth with an estimated 424,065 ship movements within Brazil’s territorial waters – coastal and port (3);
Although preliminary calculations suggest the industry is only operating at roughly 65 to 75 percent of its potential dynamic capacity, these statistics imply vessel traffic in Brazil is expected to increase substantially over the next decade. Particularly with events like the 2014 World Cup and 2016 Olympic Games on the horizon, dealing with the expected increase in vessel traffic is of utmost importance, as Brazil’s maritime operations fall under the watchful eye of the international community.
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