Ports often make the news when they break: like the bridge collapse that shut down Baltimore's port earlier this year. But every day, ports in cities around the world keep supply chains humming and feed local economies; every year, they help move 80% of the things we buy.
As conflicts between world powers intensify, ports are also the latest battlefields where geopolitical power is won and lost. Bloomberg’s Brendan Murray tells host Sarah Holder how ports, from Belgium to Peru, are becoming strategic sites for countries to defend their interests. And why trillions of dollars are on the line in order to make these ambitions happen on time.
Brendan Murray: So ports, generally, handle the flow, the export and the import of goods. Those could be items, consumer goods and containers. Those could be bulk items like wheat. Those could be cars. They could be oil. And they are really the key engines of a country's connectivity to the rest of the world.
Sarah Holder: This is Brendan Murray. He’s known as the Trade Tsar at Bloomberg, which means he knows a thing or two about ports. And he told me that most of today's ports have been in use for decades, if not centuries. At these waterside hubs of activity, you can see the layers of infrastructure and technology at work.
Murray: Ports are more or less kind of industrial looking and very busy, with trucks and trains and lots of people moving around.
Holder: I used to live in San Francisco and I remember the very distinctive cranes in the Oakland port that looked like something out of Star Wars.
Murray: Yeah, I guess they're an acquired taste visually.
Holder: When you think of a port, maybe instead of Star Wars, you get visions of Marlon Brando in On The Waterfront rushing headfirst into a fistfight. The kind of cultural depiction of ports that show them as sites full of personal drama and tension. Holder: And sure, it’s a fictional representation. But at ports around the world in real life, there’s a lot at stake too — far beyond Marlon Brando.
Murray: Dockworkers have this sort of Hollywood romanticized image. Ports have always been gateways or hubs for trade. You know, a place where navies establish themselves or you start to form a colony, going back centuries even. There's a lot of employment at ports. They contribute a lot to economic activity.
Holder: But in the past few years, Brendan has noticed a shift. Ports are no longer just places that facilitate global trade and support local jobs.
Murray: They have become real strategic national security assets that governments can no longer just assume will be used for good economic purposes. Ports are not only gateways and connections to the global economy, but they can become choke points.
Holder: Choke points that global superpowers like the US and China are trying to have more and more influence over.
The collapse of the Francis Scott Key Bridge in Baltimore in March only made this problem more urgent — and more obvious. When the bridge collapsed and Baltimore’s port shut down, Maryland’s governor called it a “global crisis”. An initial estimate found that closing that port would cause an economic loss of $15 million per day.
Now, as political conflicts intensify all around the world and governments work to protect their own economic interests…ports are being thrust into the spotlight — as both an asset and as a vulnerability.
Holder: This is The Big Take from Bloomberg News. I’m Sarah Holder.Today on the show, ports are the latest battlefields where geopolitical power is won and lost. How are they adapting to meet the moment?
Holder: When ports have made the news in the past few years, it’s usually because something has gone terribly wrong. There was the container ship that got stuck in the Suez. There was the drought that led to long traffic jams for ships in the Panama Canal. There was the bridge collapse in Baltimore.
Brendan Murray, who oversees trade coverage for Bloomberg, says there’s one thing these stories all reinforce.
Murray: It's hard to argue that there are more important links in global supply chains than ports themselves.
Holder: Ports handle 80% of the world’s merchandise trade. And when they’re disrupted — by disaster, war, weather or disease — there can be major ripple effects.
Murray: What the pandemic made clear to lots of people was that supply chains, and trade generally, are, is very vulnerable.
And what we've seen over the past several years is that ports generally are very efficient, they operate very smoothly. But if something goes wrong, the whole system can kind of break down.
Holder: And if that deeply interconnected system breaks – it can mean skyrocketing shipping rates, shortages of food and medicine, decreased revenue for cities with ports, and delays on packages getting to your door.
So economies around the world are readying to spend trillions of dollars on bolstering their supply chains — by building the ports of the future.
Murray: We have an estimate from an expert that $200 billion a year for the next 10 years is going to be spent reshaping port infrastructure. And that's decarbonization, digitization, and re-globalization, that’s the realignment of trade routes.
Holder: Brendan and a team of Bloomberg reporters around the world have been taking a close look at several global ports that are tackling these challenges head on.
Holder: Can you walk me through, say, the three ports that are at the most interesting crossroads right now? And we'll go rapid fire. Just a short anchorage at each stop.
Murray: So I'll give you three. Two new ones and a very old port.
Holder: The first is in a small city in Peru, called Chancay.
Murray: China is building a massive container port there that's going to completely reroute the port trade through Latin America. China will have access to lots of agricultural commodities and minerals in South America, Brazil, and other large economies there.
Holder: Re-globalization, check.
Murray: The second one would be a port in India, on the west coast of India, a couple hours north of Mumbai, that is a $9 billion project that the government of India is behind. This is part of the Made in India push that the Modi government has initiated to really become a rival to China. India has a very old port system and their maritime connectivity needs a lot of improvements. This port is going to go a long way to do that.
Holder: Digitization, got it.
Holder: And the third port we’ll visit…
Murray: It’s a port that's been around for centuries, Antwerp in Belgium.
Holder: Why did it stand out to you?
Murray: The first is the sheer scale of Antwerp.
The footprint of the port and the industries that are connected to it is 120 square kilometers, which is double the size of Manhattan which to me was just mind boggling.
Holder: That is astounding.
Murray: It has its own, you know, sort of police force. It's like a city in the city itself. This is a port that has survived through world wars. it came out of World War II pretty much undamaged, and helped rebuild Europe's industrial, economic base. Today it's the location of lots of chemical and oil refineries. So it's got a lot of work to do to decarbonize.
Holder: Decarbonization. And when Brendan says Antwerp has a lot of work ahead – he means it. It’s a massive undertaking that will cost hundreds of millions of dollars.
So, where is all that money going to come from?
The answer is part of a geopolitical struggle that could give those Hollywood depictions of ports a run for their money...that's after the break.
Holder: Bloomberg Trade Tsar Brendan Murray has been taking stock of the challenges and opportunities facing some of the world’s most important ports.
On a trip to Antwerp’s port, Brendan saw firsthand — how several of these thorny problems come together.
Holder: Paint a picture for me. How did you get there? What did you see?
Murray: I took a full day, and I got a tour from a couple of tour guides, and they took me all around. They took me to a chemical company. They took me to a large container terminal, which I can tell you the containers just stretched out into the distance like out to the horizon. It was so many of them. it was hundreds of thousands, being moved around.
There were two containers, visible from the sort of deck that we were standing at, looking out over the port. One of them had manual cranes being operated by drivers.
And another container terminal right next to it, operated by another company, had all automated equipment. So literally, you could see the old way of doing things and the new way of doing things.
Holder: After merging with Bruges, Antwerp’s port has become the number two container port in Europe, behind Rotterdam; it accounts for 5% of the Belgian economy; and it handles 15% of the natural gas flowing to EU countries.
Murray: They have hundreds of kilometers of pipelines that carry everything from natural gas to steam to all sorts of industrial gases and fluids that are carbon based. And all of that they hope to use for the greener fuels that are coming into use. It's been investing a lot of money in green hydrogen and fuels like that. So they're confident that they can make that transition.
Holder: Brendan says that right now, Antwerp is trying to bridge this gap between old and new. And in some ways, this task is existential.
Murray: We were driving down a road that was on one side was the TotalEnergies, the French oil refinery. The other side of the road was a one, 10 foot high retaining wall that was holding back the tidal river from storm surges. So, rising water comes over that wall and starts inundating that oil refinery and, you know, you've got a huge problem.
They've just recently built this wall in the past couple of years and it's just, it's got some amazing graffiti on it actually. and it's, I think it's a kilometer long. But there it was, a pretty stark example of how ports are all located on coastlines. And they're at risk of all sorts of things from weather to rising sea levels.
Holder: As it grows, Antwerp has partnered with countries like Dubai, Namibia, Germany — and with China, which has been investing in infrastructure around the world as part of its so-called Belt and Road Initiative.
Murray: So basically they partner with other countries and invest in them with the promise of we'll help you develop your economy. And the Belt and Road Initiative is something that the US government is actively trying to provide alternatives to.
The Biden administration is really worried about Chinese port cranes. China is the dominant producer of port cranes. These cranes have a lot of software, a lot of technology in them. So the real sort of concern is that China's using these cranes to spy on us. And so whether that's the case or not, nobody really knows, but that's the concern. A lot of ports, a lot of commercial ports are next to military bases, and so there's those kinds of national security concerns.Holder: China’s President Xi Jinping once said that on the path to prosperity, a country “must first build ports.” Today, China is home to seven of the ten largest container ports in the world. And the country’s reach extends to ports in Greece, in Peru, and in Belgium.
Murray: Antwerp Bruge have a Chinese company running one of the container terminals. Now, China's presence there 10 years ago might have been not a big issue. Now, some critics might say, you know, what are China's intentions? Could they punish us? could they use the port to, you know, to limit economic activity through there.
Holder: Brendan says that accepting Chinese investment in its container terminals could lead to complications down the line for Antwerp. And it’s not the only port whose relationship with China could prove messy.
Holder: How are these tensions between the US and China playing out at, say, Chancay, Peru?
Murray: This port opens at the end of this year, so we will see a ribbon cutting of some sort, I'm sure by some high level Chinese officials there. And they’ve got this great slogan for it – it’s Chancay to Shanghai.
The American embassy there isn't happy that the Chinese are gaining a real foothold there.
Holder: In response, the Peruvian government has pointed out that US firms haven’t been willing to invest in Peru's infrastructure in the way China’s have.
Beyond this jockeying for soft power happening portside – we’re also seeing new military conflicts play out that put ports in a critical position – from the Russia-Ukraine war, to Israel’s war in Gaza, to the Houthi militants attacking in the Red Sea.
Holder: What role are ports playing in these times of conflict and what pressures are some of these key sites under right now?
Murray: One of the ports affected by the Russia Ukraine war is one in Poland. This is one where there are US weapons going into, and out of, some for training for Poland, some going to the front lines in Ukraine. Right next to those docks is a Chinese operated port operation and there's been some friction there about whether the two can coexist in a way that you would expect in an environment like that.
The confrontations that are going to play out are really going to be economic and technological. Ports are the front lines of those kinds of conflicts. If you want to, uh, you know, Assert yourself economically, your economic power, you need to have, uh, you know, a strong, uh, maritime system to, to import what you want to import and export what you want to export.
Holder: As for the rest of us… these shifting power dynamics at ports will likely float downstream.
Holder: How do all of these maritime shifts affect people who are just hoping to get their packages on time?
Murray: In the short run, it would seem to raise the cost of goods that are traded globally. There will be, shipping rates will have to account for the green corridors that companies want to ship their goods on. Those are just going to be inherently more expensive. Things are probably not going to be as cheap as they used to be.
The development of technology, automation. In the longer run, a lot of these will make ports more efficient.
The next 10 years will be a tough transition, a tough transformation for Maritime Gateways. But in the long run, they will adapt as they always have and the economy will be better off for it.
