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Future U.S. ports could be located in the ocean, 20 to 40 miles from shore, under the proposed Portunus project. The off-shore port concept would allow cargo to be inspected far away from cities as one way to increase homeland security.

By Stephen Wampler
Newsline staff writer

In another decade or two, ports in the United States may never be the same.

While today’s ports that serve huge ocean-going ships are located near major coastal cities of the United States, tomorrow’s ports may be strategically sited in a new location — in the ocean 20 to 40 miles away from shore.

The concept of cargo inspections at off-shore ports in the middle of the ocean has arisen since 9/11 as one way to increase homeland security and to counter the threat of radiation dispersal devices (RDDs) or improvised explosive devices (IEDs). Ships could be inspected or unloaded before they steam near U.S. cities.

 On June 8, three of the nation’s top 10 business schools — Northwestern University’s Kellogg School of Business, UC Berkeley’s Haas School of Business and Dartmouth’s Tuck School of Business — presented economic analyses of the off-shore port concept during a day-long session at the Hyatt Regency Hotel in San Francisco

The economic feasibility studies were presented to a panel of government experts, who then interviewed the business school teams and recommended a path forward for the off-shore port concept.

Among the panel members were: Michael Klowden, president and CEO of The Milken Institute; U.S. Coast Guard Rear Adm. James Castillo, commander of the 11th Coast Guard District; Seth Stodder, president and CEO of Palindrome Strategies and a former director of policy and planning for U.S. Customs and Border Protection; and retired U.S. Navy Capt. Jeff Kline, program director for the Maritime Defense and Security Research Group at the Naval Postgraduate School. In addition, Jim Lee, who works with the Department of Homeland Security’s (DHS) Domestic Nuclear Detection Office, also participated in the panel discussions.

“The panel members were impressed by the presentations and the proposals of the business schools,” said Hank Glauser of the Physical and Life Sciences Directorate and the principal investigator for Global Security’s Portunus off-shore port project. (Portunus was the mythical Roman god of ports and harbors).

“Not only did the panel learn that these off-shore ports are economically feasible, but they learned that they could potentially be economically beneficial,” Glauser said.

In the end, the panel recommended that the top priority at this time should be a proposal on the technical feasibility of the off-shore port concept.

The feasibility study would include computer simulations, engineering research and small-scale wave testing of the proposed platform. It would focus on structural integrity, platform stability, wave attenuation, buoyancy limitations and other key engineering issues facing the design, deployment and operations of an off-shore port.

The exploration by LLNL of off-shore ports, dubbed the Portunus project, grew out of a report called “Beyond the Horizon” authored in 2002 by Cliff McMillan and others associated with a San Diego company, Float Incorporated.

About a year ago, that report and numerous others caught the eye of LLNL’s Glauser, who, with the aid of government and private industry reports on maritime security, terrorism, shipping and port efficiency, developed the Portunus project.

With Laboratory strategic mission funding, Glauser invited economic analyses of the Portunus off-shore port concept from the nation’s top 20 business schools. Twelve schools expressed initial interest and their ranks were narrowed down to three business schools — Northwestern, UC Berkeley and Dartmouth.

“As a national security laboratory, LLNL is a credible agent to develop the technologies necessary for off-shore platforms,” Glauser said in an interview.

“The principal aim of the Portunus effort is to prevent ships entering a U.S. port with weapons of mass destruction and to do so in a way that benefits the nation’s economy,” he said.

With a large off-shore platform, the U.S. government would have the capability to inspect ships and cargo at sea prior to their arrival in U.S. ports near American cities.

Three options have been identified by Glauser and his team — inspecting the ships and allowing them to proceed; off-loading the ships’ cargo, inspecting and then reloading the ships; and off-loading the ships’ cargo, inspecting and then reloading the cargo on different ships for economic reasons.

The June meeting was opened by Tomás Díaz de la Rubia, now the Laboratory’s deputy director for Science and Technology.

De la Rubia thanked the business school teams, the panel of government experts and the audience for taking the time to work with the Laboratory on the Portunus project.

“I think the mission need is unassailable,” de la Rubia said. “There are people out there who want to do us harm. This is a compelling national security challenge where the Laboratory’s capabilities could have an extraordinary impact.”

One of the audience members, Neal Brown, a vice-president of technology for Float Incorporated, patent owner of one of the technologies to be evaluated, said floating off-shore ports could be about 400 acres in size and built with reinforced, pre-stressed concrete with a density less than water.

The off-shore ports would cost about $15 million per acre, weigh millions of tons and consist of modules that would be 1,000 feet long and about 200 feet wide, said Brown, who taught naval architecture at the Massachusetts Institute of Technology and the University of New Orleans. The ports would be moored to the ocean floor.

“Off-shore ports would not only achieve much more security, but they would also help provide an economy of shipping,” Brown said. “The port business is all about real estate. In some cases, containers are moved several times inside a port before they are loaded onto trains or trucks. None have enough real estate.”

With off-shore ports, there is a potential benefit to the U.S. economy because U.S. supply chain logistics can be improved, Glauser said.

“Coupled with maritime domain awareness,” he added, “the ability to detect and direct any ocean contact to a safe location for inspection before it gets within striking distance of the U.S. is an important capability when faced with the rising threat that terrorism presents over the coming decades.”

In their presentation, Northwestern’s Kellogg School of Business students recommended building six off-shore megaports — in Seattle, Oakland, Los Angeles-Long Beach, the Gulf of Mexico, Georgia and New York.

It was estimated that the six ports would cost about $60 billion to build, with an annual economic and tariff benefit of about $5.3 billion per year and a payback period of 23 years, according to the Kellogg School of Business team.

The panel of government experts thought the Kellogg team’s tariff income would be lower than expected, but added that the value of WMD avoidance would be much higher than the team’s $730 million estimate, probably running into the hundreds of billions of dollars, significantly shortening the payback period.

Under the Kellogg School’s plan, a phased-in approach would bring megaports on line from west to east. Experience from initial megaports would be applied to new ones, and there was an expectation that shippers would attempt to divert cargo from the new megaports during the implementation process unless a government mandate was in place.

In addition to a student team leader, the UC Berkeley Haas School of Business team’s ranks included two Port of Oakland officials, two officials from a shipping company and a UC Berkeley professor, Andrew Isaacs.

“Our friends and colleagues say, ‘It’s good that you’re working on such an off-shore port plan, but it’s crazy,’” Isaacs said.

Later Isaacs noted, “This [the thought of a WMD attack at a world port] is like driving a bus into the center of the world’s economy. If there is an attack on our ports, then this whole discussion changes. This is the elephant of all elephants in the room.”

The Dartmouth Tuck School of Business team, in preparation for their presentation, spoke with a billionaire shipping tycoon and several of his shipping presidents, a Coast Guard rear admiral and a board member from the Port of Maryland.

The best operational model for Portunus, in the view of the Tuck School, would be to have a public-private partnership for constructing the estimated $10 billion off-shore ports. The federal government would raise the financing and private firms would do the construction.

“The panel members were impressed by the presentations and appreciative of the Laboratory’s efforts,” Glauser said. “They found the business school analyses to be very educational. They also decided that there was a significant and positive case to be made for the economic feasibility of the Portunus concept.”