Ports deal: Full scope of firm's U.S. role tallied

WASHINGTON — The $6.8 billion deal British courts approved Monday, putting a Dubai-owned company in charge of significant operations at six U.S. ports, also gives the company a lesser role in other dockside activities at 16 other American seaports.

By purchasing London-based Peninsular & Oriental Steam Navigation Co., DP World bought the publicly traded British firm's concessions to manage and operate some cargo or passenger-terminal facilities in New York, New Jersey, Baltimore, New Orleans, Miami and Philadelphia. The deal is slated to close March 16.

It has been known that the deal involves limited operations at ports besides the six that have drawn the most attention. An Associated Press survey of ports managers across the country on Monday determined the full scope of the other dockside operations in question.

Tampa's port authority, for example, said Monday it will reconsider a pending contract for the British company to manage and operate some terminals once DP World's purchase is finalized.

The AP review of ports nationwide found that at more than one dozen others, DP World would operate so-called stevedoring operations that employ longshoremen to load and unload cargo on behalf of a port's terminal operators. These ports include Baton Rouge, La.; Corpus Christi, Texas; Gulfport, Miss.; Lake Charles, La.; and Portland, Maine.

The Department of Homeland Security has said DP World would "only operate and manage specific, individual terminals located within six ports."

DP World formally submitted last week to an unusual, broader security examination by the Bush administration over the ports deal. The investigation will be conducted by a U.S. review panel, which considers security risks of foreign companies buying or investing in U.S. industry. The panel previously unanimously approved the ports deal.

DP World said during the renewed scrutiny, or until May 1, Dubai executives would not control or influence the company's business in the United States.

Terminal operators keep cargo containers securely in storage yards until they pass U.S. Customs requirements. Containers are then loaded onto trucks for final delivery across the country. Unlike a terminal operator, a stevedore does not control a port's gates for entry and exit of cargo.

Peninsular & Oriental's executive vice president for security, Robert Scavone, told senators last week at a congressional hearing that aside from the company's major operations in ports such as Miami and Newark, "everywhere else we're either just a pure stevedore, or we do manage terminals with something not quite even as extensive as a lease."

U.S. lawmakers of both parties continued to criticize the move, which remains in limbo for 45 days while it is under review.

U.S. Reps. Benjamin Cardin and C.A. Dutch Ruppersberger, both Democrats who serve on committees overseeing port and security concerns, said after a tour of the Port of Baltimore on Monday that they remained concerned about a foreign government having any role there.

"I still feel it's not worth the gamble of letting a foreign country in," said Cardin, who has introduced legislation to ban foreign governments from the port once their existing contracts expire.

Even if the deal giving some control of U.S. port operations to a company owned by the government of Dubai were to be sunk, it's still unlikely to pave the way for an American replacement, maritime experts say.

Through a wave of consolidation in recent years, foreign cargo-handling companies have grown large and left few major U.S. ones to take over.

Neil Davidson, a research director for Drewry Shipping Consultants, an independent maritime adviser based in London, said the foreign operators have grown large through consolidation over the past several years because they have seen a chance to spread their risk by operating terminals around the globe.

In addition, those companies have tended to be foreign because many of the terminal operators are also shipping lines, a business U.S. companies have mostly left because of what they viewed as high U.S. labor costs and cumbersome regulations, said Peter Shaerf, managing director of AMA Capital Partners, a merchant banking firm in New York and Baltimore that focuses on the maritime and transportation industries.

Many U.S. ports have committed to foreign managers of their terminals and cargo for years.

The largest U.S. operator, SSA Marine, which is ranked ninth on the global list, according to Drewry, operates some terminals in Seattle.

Additional information from The Washington Post and Seattle Times archives