NOT SUCCEEDING AS QUICKLY AS YOU'D LIKE ISN'T FAILING:

Shanghai Surprise: The World's Ports Experience an Unexpected Boom (Thomas Schulz, 8/25/06, Der Spiegel)

Globalization has come to Hong Kong Bay -- in the form of a traffic jam. Like a string of pearls, giant steel container ships extend far out into the South China Sea, most of them more than 200 meters (656 feet) long and weighing upwards of 10,000 tons, their decks loaded to capacity with pants for H&M, cell phones for Nokia and athletic shoes for Nike.

Space is at a premium in Hong Kong harbor these days. An average of 18 massive container ships drop anchor there each day of the year, and the endless docks behind the harbors quay walls are filled with 60,000 containers, stacked high, at any given time. And yet this still isn't enough to make Hong Kong the world's largest port, a distinction it lost last year after holding it for decades. Despite Hong Kong's booming business, Singapore grew even faster.

But Anthony Tam isn't overly concerned. "As long as we're all making these kinds of profits, it doesn't really matter," he says. Tam works for Hutchison Port Holdings (HPH), the world's largest port operator, with 251 terminals in 43 ports, from the Bahamas to Panama, Singapore to Poland. Here in Hong Kong, the company's homeport and headquarters, HPH owns 14 of the harbor's 24 berths.

"There isn't any more room for expansion here," says Tam. "But these days you can't go wrong building a port just about anywhere." HPH's current construction projects include a deepwater terminal in Shanghai, three kilometers (about two miles) of quaysides in Malaysia and two container facilities in Oman. It's also investing €200 million ($255 million) in its Panama terminals.

Many of the world's other ports are also undergoing new construction, expansion and upgrading at a feverish pace. With economies under enormous pressure to maintain unimpeded access to the highways of globalization, they're pumping billions into redeveloping old port facilities and building new ports from scratch. Private port operators are also scrambling to stay in the race, as they face the prospect of takeover battles and more and more financial investors eying highly profitable container transshipment companies.

The failure of the recent round of trade talks has left many folks disgusted, but the reality is we're living in an extraordinary time of near universal global growth and economic interconnectedness. Some periods of consolidation and respite from further expansion are to be expected.

Posted by Orrin Judd at August 25, 2006 7:57 AM