Sydney port backers use bogus arguments and bullshit numbers: Morning File, Thursday, January 11, 2018

News

1. The megaport delusion

An article published yesterday in the Cape Breton Spectator is a must-read for anyone who thinks Sydney or Melford or Halifax for that matter can become a significant transshipment port operation.

Because international shipping is such a gigantic industry, there is much research, reporting, and academic work looking at and attempting to understand the industry. Mary Campbell has reviewed much of that literature, and has talked to academics studying port operations.

Campbell begins her article by looking at the competition between the ports of Quebec City and Montreal (the French media have the kind of detailed reporting on the matter that is sadly lacking in Atlantic Canada), which leads to the observation that the super-ships — those of 18,000+ TEUs (twenty-foot equivalent, or the standard container) — are not plying the North Atlantic and, unless something dramatic happens, probably won’t any time soon.

Campbell spoke with Brian Slack, a professor emeritus of geography at Concordia University, about how and why transshipment ports are successful, and how and why they aren’t successful. Slack told Campbell:

By far the most important factor is market. You’ve got to get the stuff to the market and the market has got to generate enough containers, and in the case of Sydney/Melford (and I would add St. Pierre Miquelon, which I’m also familiar with) there’s no market. There is a very small amount of containers going to be generated locally, so the result is, most of the containers are either going to have to be transshipped to somewhere else, which takes time and is a delay factor and is a cost factor, as efficient as they are. And also, the cost of shipping most of the containers — if they’re going to be shipped to market by land — [is] a much higher cost than by ship. So, as much as I can appreciate how local people can see, “Oh my god, we’ve got to do something,” in terms of the situation of global [container] shipping, why would you put a transshipment port in the Northwest Atlantic?

That to me is the fundamental issue: the notion that these very large container carriers…and we’re talking about 20,000 TEUs, you know, you have to fill them…And the only way you can fill that is if you’ve got guaranteed markets that can justify a weekly service.

Where I have I heard this before? Oh yeah, I wrote it:

No shipper wants to use the North American port that is closest to Europe. That makes no sense at all.

Think about it. You are the manager of a German manufacturing firm, and you want to export to North America. You’re not going to sell many widgets in Canso or in Eastport. Instead, your primary market is going to be places like New York City, or Chicago, where there are millions of people and lots of industry to buy your widgets.

So how do you get your widgets to Chicago? Expensive and light stuff, you can fly directly there. Everything else has two legs: one by sea, and one by land.

The sea part of the voyage is relatively inexpensive. You can stack a gazillion of your widgets in the new post-Panamax ships. A small, underpaid crew from the Philippines steering a ship flying the flag of a lightly regulated country like Liberia doesn’t cost much.

The land part of the journey, however, is expensive. You’ve got to divide up your gigantic cargo and divvy it into a thousand trucks, each driven by a highly paid (relative to the shiphands) driver, using lots of fuel to get to Chicago. Or, if you’re lucky, you can use rail, which, while cheaper than the trucks, is still much more expensive than the sea voyage, per unit transported per distance.

The guy sitting in Germany isn’t looking for the North American port closest to Germany, but rather the North American port closest to Chicago, or wherever his widgets are going. If that means a longer sea journey, the cost is more than made up for with the huge savings of a shorter land journey. I’m not sure why megaport boosters get this so wrong.

Even though superships are not now sailing the North Atlantic and are unlikely to start any time soon, and even though it makes little sense to build a transshipment port in the Northwest Atlantic, that’s the vision that’s being sold to Sydney. Well, OK, but what if it all somehow works out? Campbell continues:

But here’s the real eye-opener: Slack and [Elisabeth] Gouvernal’s paper [“Container Transshipment and Logistics in the Context of Urban Economic Development,” published in 2016] contends that even successful transshipment ports don’t necessarily attract logistics operations.

This was news to me — I had accepted our port promoters’ premise that, should we succeed in establishing the Port of Sydney as a transshipment hub for ultra-large container ships, the logistics park would follow as night follows day. In fact, to hear our port promoters talk, it sometimes sounds as if the logistics park (Novazone) will precede the port.

But according to Slack and Gouvernal’s preliminary research, that might not be true — while it is “widely recognised that there are strong relationships between containerisation and supply chains that are giving rise to significant clusters of logistics firms around the large gateway ports,” when it comes to transshipment ports, “logistics firms are reluctant to follow.” 

Campbell links to the entire paper, and you can go to her site and read the whole thing. At issue, says Campbell:

I’m not going to go into great detail, but I’d like to look at one example: Algeciras, that transshipment port in Spain.

In 2008, the port transshipped 1.6 million TEUs, making it one of the world’s busiest transshipment ports that year. Employment — direct and “port-related” — looked like this:

“Intermediary activities” would cover any logistics jobs and as you can see, there were hardly any — 137 total, direct and indirect.

Now look at the predictions for the Port of Sydney, as cited in the 2016 InterVISTAS report, “Port of Sydney: Estimated Economic Impact of Proposed Container Terminal and Logistics Park”:

The Port of Sydney is predicting 2,350 logistics-related jobs.

And look at the estimates the Port of Sydney gave InterVISTAS for container traffic at the fully built-out facility:

According to the Port of Sydney Development Corporation, after a 2.5 year construction period, traffic volumes at Novaporte are expected to ramp up to 1.2 million TEU using a phased approach between Year 1 to 5. Construction of Phase 2 of the project is planned for Year 5 to 7, increasing terminal capacity to 3.2 million TEU. An additional 1 million TEUs is expected between Year 7 to 10 and an increase of an additional 1 million TEU is planned for Year 10 to 12.

In 10 years, Sydney will be handling 5.2 million TEUs. To put that in perspective, that would make Sydney busier than any of these leading transshipment hubs was in 2015:

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Search:

Port	Volume (Million TEU)
Colombo, Sri Lanka	5.19
Valencia, Spain	4.62
Algeciras, Spain	4.52
Jeddah, Saudi Arabia	4.19
Port Said, Egypt	3.60
Marsaxxlokk, Malta	3.06

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Even InterVISTAS was a little uneasy with these figures, judging by the footnote they added:

Timeframe for full build-out of Novaporte was provided by the Port of Sydney Development Corporation. InterVISTAS Consulting was not asked to review or comment on the magnitude of the forecasted container volumes or their timing. This report merely documents the expected economic impacts should the forecast be achieved.

Read: Don’t look at us, we didn’t calculate these crazy-ass figures.

The point is, even if you believe those container traffic figures (and InterVISTAS clearly doesn’t), there is reason to doubt that a transshipment hub handling that volume of traffic would attract logistics operators.

Click here to read “Could Sydney Really Be a Transshipment Hub?”

As with the Examiner, the Cape Breton Spectator is subscriber supported, and so this article is behind the Spectator’s paywall. Click here to purchase a subscription to the Spectator, or click on the photo below to get a joint subscription to both the Spectator and the Examiner.
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2. Children in the care of the state

“Nova Scotia will be reviewing the cases of children who are in the care of the province and don’t have citizenship, Premier Stephen McNeil said Tuesday as the province is being criticized for its handling of the case of Abdoul Abdi,” reports the CBC.

3. CFL economics

The Chronicle Herald is now on Part 10 (!) of its series looking at a potential CFL team in Halifax, in which reporter Josh Healy looks at the economics of running a CFL team. There’s some interesting information in the article, but I don’t have time to parse it this morning.

My biggest interest is: How much initial investment will the Martime Football people have to raise? Because my guess is that whatever is put up privately will be dwarfed by the public investment in a stadium, and yet the profits will go exclusively to the private investors.

4. Freedom of information

“Two Halifax regional councillors questioned the cost of handling freedom of information requests on Tuesday, but a local privacy lawyer said that’s just the cost of doing government business,” reports Zane Woodford for Metro:

Each request costs the municipality $473 to process, according to a projection in last year’s budget — well below Municipal Benchmarking Network Canada’s median of $798. The municipality added a staff position in 2017 to the clerk’s office to help handle the requests, bringing the Access and Privacy budget up to $268,800.

“I think the takeaway for me is just for the public to know that this is something that is costly to the municipality,” Coun. Bill Karsten said in council on Tuesday.

“I know there was one recently, just days ago, that I personally spent about an hour trying to retrieve some stuff out of my deleted (emails).”

Coun. Lorelei Nicoll also questioned the cost. She suggested the municipality’s open data efforts were failing if the number of requests was growing.

I suspect that Karsten was searching his email in response to a freedom of information request I filed. But it’s part of his job. For what it’s worth, the city is charging me plenty to respond to this request.

5. Nova Scotia Textiles

“What exactly is happening with Windsor’s iconic Nova Scotia Textiles building?” asks Hants Journal reporter Colin Chisholm.

The short answer: nothing much.

The longer answer: after a series of failed development schemes, the city of Windsor is attempting to lure a developer through a tax reduction scheme.

6. Asterix

“A new naval supply ship lost power in Halifax Harbour last week just ahead of a winter storm that packed nearly 80 kilometre-per-hour winds at the dockyard and gusts that exceeded 100 km/h elsewhere in the province,” reports Tom Ayers for the Chronicle Herald:

The MV Asterix, a large former commercial container ship that has been converted into an interim auxiliary naval replenishment vessel, arrived in Halifax late last month and will be leased to the Royal Canadian Navy once it passes sea trials.

With the storm coming and the Asterix tied up at the pier next to the Halifax Seaport Farmers’ Market, the harbour authority asked the ship’s owners to move its berth up the harbour, said Spencer Fraser, CEO of Federal Fleet Services, the company that refurbished the vessel.

The ship was accompanied by tugboats, as usual, he said, and after the power went out, an extra tug was called in just as a precaution.

7. Free advertising

Companies looking for free advertising have long ago learned the trick: produce a ranking, or a top ten list, or some such, issue a press release, and local media will bite — they’ll rewrite your press release as a news article and cite your company. Voilà! Free advertising.

We’ve seen this time and again. Real estate firms rank cities for livability or happiness or “best place to live” or whatever. A sex toy company produces a list of online sales by city. Now an online review site produces a list of “tourist destinations on the rise,” whatever the hell “on the rise” means. And editors assign reporters stories, and reporters waste their valuable time rewriting press releases. I’m looking at you, Metro and Global.

This violates everything taught in journalism school. The companies producing the lists are self-interested, so at the very least the claims in the lists should be independently verified. Better yet, find a second, contrary opinion. Even better: don’t run the story in the first place. It’s a disservice to your readers and viewers. This is not journalism.

Look, if your business model relies on selling advertising, why are you giving away free advertising? It makes no sense. Advertising revenues are going down the toilet, declining year after year, and media companies respond by giving the stuff away. No wonder they’re going out of business.

And news consumers should see these “stories” for what they are: advertising. There’s no point in getting excited about your city being named in a “top tourist designation” list because some other company is going to name the city down the road in their list. The goal isn’t to promote or reward or recognize your city; the goal is to get you to go to their website. It’s all just marketing, i.e., bullshit.

8. Advertorial

And then there’s advertising disguised as news stories — “advertorial.”

Apparently, after the PR disaster of shutting down a book signing by Joan Baxter, author of “The Mill,” Northern Pulp mills feels it needs to buy some positive PR. Yesterday, the Chronicle Herald published a piece of “sponsored content” — sponsored by Northern Pulp — responding to environmental critics of the mill.

I don’t know if the average reader understands what “sponsored content” is, but Northern Pulp and the Chronicle Herald must think they’re pulling the wool over at least some readers’ eyes, because otherwise they’d simply call it “advertising,” right?

Again, this isn’t journalism. It’s a disservice to readers.

Views

1. New York

Stephen Archibald went to New York and noticed a bunch of stuff.

2. Wolf in sheep’s clothing

“I was aware of only one version of the ‘wolf in sheep’s clothing’ fable, which cautions that appearances can be deceptive, and our willingness to see only the appearance of innocence can get us into trouble,” writes lawyer and blogger Barbara Darby:

It is a Biblical caution: “Beware of false prophets, which come to you in sheep’s clothing, but inwardly they are ravening wolves” (Matthew 7:15).

However, there is a 12th century Greek version by Nikephoros, in which the wolf seeks an easy access to a meal by altering its appearance, donning a sheepskin to infiltrate the flock. In this effort, the wolf is successful, and is enclosed with the fold for the night. More wine! More mint jelly! The wolf is killed by the shepherd who mistakes it for a sheep when he goes to get his own dinner. Oh, let sleeping sheep lie.

The first version cautions those interacting with the wolf. The second cautions the wolf itself, an evil-doer penalized by death.

This leads me somehow, I know not how, to the “Sam and Ralph” Looney Toons sketches.

Darby goes on to give a fascinating (really!) read of the cartoon characters, who in the end punch the clock and call it a day, which leads to lawyers’ practice of shaking hands at the end of a trial, which leads to legal cases that cite “wolf in sheep’s clothing. She details a few and then notes:

The opprobrium is directed to the wolf and the caution is to those who must beware of the wolf: “Checkpoint” traffic stops are wolves alleged to masquerade as sheep-like opportunities for drug seizures (R. v. J.J.W., 2008 NSPC 16 (CanLII)). Standard form documents are wolves hiding dangerous clauses (International Harvester Credit Corporation of Canada Limited v. Dolphin, 1978 CanLII 708 (AB QB). Even a the nature of a court proceeding itself (Goryn v. Neisner, 2015 ONCJ 191 (CanLII)) could be a disguised wolf.

There is no sympathy that I can find for the wolf, hanged for a lamb without mercy or pity. The law does not concern itself with the wolf.  But let’s think about this: the shepherd enters the fold, and assumes that the creature killed deserves it, was there for that very purpose, should have seen it coming. The disguised wolf was in the wrong place at the wrong time, but by its own volition and subterfuge. Certainly the wolf’s clothing permitted the attack and we are rightly clear, legally, that no appearance justifies assault. There is no leniency for the effort to eat, even the genius (super) of an apt disguise, because of the dishonesty of it. Should the shepherd have been more careful about mistakenly killing?  Do you have any sympathy for the hungry wolf?

Let me be perfectly clear. I am not comparing evil doers to victims. I am asking to consider when the wolf in sheep’s clothing became evil.

Government

City

Thursday

FCM 2018 Conference Advisory Committee (Thursday, 1pm, City Hall) — here’s the agenda.

Harbour East Marine Drive Community Council (Thursday, 6pm, HEMDCC Meeting Space, Alderney Gate) — the agenda.

Public Information Meeting – Case 21076 (Thursday, 7pm, NSCC Leeds Street Campus) — the agenda.

Friday

Budget Committee – 18-19 Budget and Business Plan (Friday, 9:30am, City Hall) — here’s the agenda.

Province

Thursday

Economic Development (Thursday, 10am, One Government Place) — about immigration.

Friday

No public meetings.

On campus

Dalhousie

Thursday

rDNA (Thursday, 10am, Theatre A, Tupper Building Link) — Marlene Snyder from Acadia University will speak on “The Hidden Signature of rDNA Evolution in Our Genome.”

Opening Reception: 64^th Student, Staff, Faculty and Alumni Exhibition(Thursday, 4pm, Dalhousie Art Gallery) — Open until January 28, and includes folks from King’s. See here.

Friday

Chronic Illness in Prison (Friday, 12:10pm, Room 104, Weldon Law Building) — Adelina Iftene will speak on “Addressing Chronic Illness in Prison: Law, Policy and Reality.”

Dreaming Revolution: Tricontinentalism, Anti-Imperialism and Third World Rebellion (Friday, 3:30pm, Room 1170, Marion McCain Building) — Isaac Saney will speak.

In the harbour

6am: Dalian Express, container ship, arrives at Fairview Cove from Norfolk
6am: ZIM Luanda, container ship, arrives at Pier 41 from Algeciras, Spain
11:30am: AlgoScotia, oil tanker, sails from Imperial Oil for sea
3pm: Symphony Star, cargo ship, sails from Pier 28 for sea
4pm: Dalian Express, container ship, sails from Fairview Cove for Dubai
5pm: Grand Pioneer, car carrier, sails from Auotport for sea

Footnotes

We’re re recording Examineradio today.