Monday 1 November 2021

Something else that LVT would sort out?

It is difficult to see how to sort this mess out, even with LVT and a free market (as opposed to a crony capitalist "free" market).

Ports and, to a lesser extent, warehouses enjoy a natural monopoly in that additional facilities are extremely expensive to construct and, as far as ports are concerned, most of the good locations were already taken centuries ago. LVT could tax away the superprofits made from the monopolies, but that's hardly going to be an incentive for the landowners to invest in additional facilities and without effective competition, the free market can do little to make that worthwhile either.

Anyone got any bright ideas? I am sure this must be something creeping up Joe Biden's priority list, what with Christmas coming up and all.

Edit: The Biden administration is already onto it with the predictable government response:

“There are $17 billion in port improvements in the President’s infrastructure bill and they’re urgently needed. This is one of the reasons why we’re eager to see congressional action, and I know my department is ready to put those dollars to work,”

or, in other words, "they own land, give them money".

17 comments:

Mark Wadsworth said...

No bright ideas. I saw another interesting TV program on competition between US ports.

Each one has to dredge their harbour a bit deeper and wider than the others to accommodate ever larger ships, and the ship builders then just build bigger ships...

No answer to that either.

Bayard said...

"and the ship builders then just build bigger ships..."

but that's what the ports are aiming for: the shipping companies using ships that can only use their ports and not the others. The problem comes when the others catch up and the whole cycle begins again. To a certain extent, the Panama and Suez canals would act as a brake on this, too.

Lola said...

Well, how come Felixstowe works? Very few delays as far as I know.

Mark Wadsworth said...

B, "To a certain extent, the Panama and Suez canals would act as a brake on this, too"

The two canals have their own arms race.

Suez' trump card is that it is piss easy to widen it a bit. And Suez' Achilles Heel is regional political instability.

Mark Wadsworth said...

B, just reading your post again:

"LVT could tax away the superprofits made from the monopolies, but that's hardly going to be an incentive for the landowners to invest in additional facilities and without effective competition"

Haven't I given two examples of ports and canals competing with each other to increase capacity?

Bayard said...

Mark, I was surprised to see, reading that article, that the total rise of the Panama canal locks is only 85 feet. At that height/depth, I would have thought it would be possible to build a sea level canal.

Dunno why ports should compete with each other in attracting larger ships, but not in increasing throughput. Perhaps they are just holding out for that $17 Bn. Alternatively, there could already be federal grants available for increasing the maximum size of ships that the port can handle. When businesses start behaving oddly, there's usually a subsidy or a tax behind it.

Bayard said...

L, this is that lot on the other side of the Atlantic.

Lola said...

MW Yes. But if Felixstowe works well why don't the US ports? F'Stowe is a private port. Maybe it's down to 'competition' from the likes of Harwich, Tilbury, Hull etc?

Bayard said...

L, possibly because the way the ports over here charge for their services is different and so there's more of an incentive to be efficient? The cynic in me thinks that the US ports are f*cking it up deliberately, so that the government will pay them to put it right.

Mark Wadsworth said...

B:

1. 85 feet to chop away is OK if you just have to blast through a hill or two, but they would have to blast an 85 ft swathe through a whole mountain range.

"Dunno why ports should compete with each other in attracting larger ships, but not in increasing throughput."

Maybe it's a macho thing?

L, this is B's post. We ask the tricky questions, he gives the answers. I'm waiting for B to say "UK government regulation" and then it will all kick off :-)

Lola said...

B. Panama Canal. I would think that even though the rise is only 85 ft, you'd still need locks to control tidal flows between the two oceans.

Mark Wadsworth said...

L, that is a most interesting question. The Suez canal seems to manage without any locks at all. But there are virtually no tides in the Med and maybe the Red Sea, being an inlet from an ocean, doesn't have much in the way of up and down either?

Derek said...

Tidal action could be a benefit. rather than a cost. Just build a massive power station and forget about all that shipping nonsense!

Lola said...

D Yes. But. You'd still need to control the flow. Locks with bypass channels to power the turbines possibly?

Bayard said...

Mark,the Med is lower than both the Red Sea and the Atlantic, so there is a current from both seas into it, possibly greater athigh tide and lesser,or non-existent at low tide.

L, the problem on the Panama canal is the Culebra cut, where the base had to be reduced down from 210ft to 39ft above sea level. De Lesseps started the work,with the aim of building another sea-level canal, but got down to 193 ft before having to give up. Tidal action would be a bonus, if the ships always went with the tide.

Lola said...

B. Maybe. Remember A1V1 must equal A2V2. You might get quite high speed flows through the canal...

Bayard said...

"Well, how come Felixstowe works? Very few delays as far as I know."

Apparently not, it seems: https://www.bbc.co.uk/news/uk-england-suffolk-59220447