In a significant new policy paper entitled ‘Increased trade and economic growth won’t happen in Scotland until we sort out our ports’, Alf Baird warns the Scottish Government that its hopes of growing the Scottish economy to provide for increased employment and a higher tax base from which to fund public spending will will come too little without resolving the chronic crisis affecting Scotland’s major privately owned ports. The paper can be downloaded here Economic growth & Scottish Ports
The paper argues that increasingly obsolete sea transportation facilities and links (docks, ports, shipping services) in Scotland mean existing international trade flows are weak and are becoming ever weaker as the Scottish economy continues to lose competitiveness. Indeed, much of Scotland’s traded goods have to be sent to and from ports in England, raising costs. The effect is that the amount of trade going through Scotland’s container ports is the same as that going though Iceland’s Reykjavik container port (when Iceland’s population is just 329,000). The obsolescence results from chronic lack of investment over decades by private equity port owners in new technologies, infrastructure and facilities as well as from the privatisation of the port authority role.
On this basis the paper contends that as ports in Scotland are a devolved responsibility, there is nothing to stop the Scottish Government formulating its own ‘ports policy’, preferably as part of a wider maritime transport and trade policy. Such a policy should seek to estimate the port capacity that is needed in future, and to then provide that capacity to enable trade to expand and thereby ensure the economy can grow, and to plan and facilitate ongoing investment in essential port infrastructure and key international shipping connections. Moreover, the Scottish Government should also seek to return the statutory regulatory ‘port authority’ roles and functions which are currently held by offshore private equity firms, to the control of public agencies, as is the case in virtually all other countries.
But critical in formulating its own ‘ports policy’, the Scottish Government thus needs to take control of the situation, not by taking existing obsolete ports into public ownership but by developing entirely new port capacity at more optimal locations. The paper argues this can be done by offering concessions to private firms to build and operate required ports and terminals as well as by an enforcement regime requiring port owners to adequately maintain and improve existing facilities, and to better regulate port charges.
Alf Baird commented: ‘No economy can sensibly depend on the offshore private equity model of port ownership and regulation to bring about trade growth. By its very nature, the private equity model limits investment in new port infrastructure, whilst continually demanding excessive profits, followed by selling on of what are ‘mature’ port assets to another ‘fund’ to do precisely the same thing over again. Ultimately, there comes a time when the nation’s port assets are so obsolete and trade is so diminished that this model is completely unstuck; given Scotland’s moribund trade position that time seems ever closer’.
Biographical note
Alf Baird began his working career in 1974 as a Liner Shipping Clerk at the port of Leith, then running a small packaging and freight forwarding company. After a degree in Business Studies at Napier University in Edinburgh in 1993, he was employed there first as a researcher and then as lecturer, completing a PhD on strategic management in the global container shipping industry in 1999. He was appointed Director of the Maritime Research Group at Napier in 1997, and in 2005 was appointed Professor of Maritime Transport. He has been appointed as specialist advisor on maritime transport matters by a number of select committees of Parliaments in the UK, Northern Ireland and the Isle of Man, and as advisor to various government agencies and ports including Scottish Enterprise, Highlands & Islands Enterprise, Clydeport, and Orkney Islands Council. He left Edinburgh Napier University in 2015 although he remains actively involved in international research and consultancy activity, particularly in the maritime economics/policy/business areas, and with emphasis on ferry transport, container shipping, cruise shipping, and seaport policy and design.