Harboring Bad Feelings

America is the world’s leading economy.  You, as a consumer, are part of our nation’s prowess.  Personal consumption comprises roughly 70 percent of the country’s output.  When we aren’t consuming services (e.g., dining out, travel, doctor’s visits, financial advice, etc.), our wallet share goes toward goods.  Many of those goods are built outside of the U.S., usually requiring them to be shipped via the ocean and received at ports.  For all the consumption of foreign-made goods, (America has run a trade deficit each year since 1976), our nation isn’t very adept at receiving the wares.

In a release detailing the performance of 370 ports around the world, the World Bank and Standard & Poor’s Global Market Intelligence ranked America’s two largest ports at the bottom.  No other port in North America is bigger than the one in Los Angeles.  Just 30 miles south of it lies the continent’s second-largest, Long Beach.  These two are ranked 370 and 369 respectively.

Harbors don’t seem to be something our nation does well.  The bottom half of the list also includes notable ports like Savannah, New York, New Jersey, and Oakland.  Size seems to be a challenge.  America did have a few in the list’s top 50, but they were all on the smaller end of the scale.  Improvements are possible.  For instance, Virginia was the highest-ranking American port, coming in at 23 and gaining 60 spots versus 2020.

Efficiency matters in a world of higher-than-average-inflation.  One way to combat rising costs is productivity.  Port performance is a critical input in the cost of international trade.  As the American economy experienced recently, poorly run ports cause shipment delays, supply chain disruptions, added costs, and reduced competitiveness.  The bad news is that America does not operate relatively efficient ports.  The good new is that there’s room for improvement.  That improvement, however, will require time, capital, and real estate, three finite resources about which everyone has an opinion.