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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. So ports generally handle

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Speaker 1: the flow, the export and the import of goods. Those

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Speaker 1: could be items, consumer goods and containers. Those could be

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Speaker 1: bulk items like wheaked, those could be cars, they could

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Speaker 1: be oil. And they are really the key engines of

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Speaker 1: a country's connectivity to the rest of the world.

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Speaker 2: This is Brendan Murray. He's known as the trades are

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Speaker 2: at Bloomberg, which means he knows a thing or two

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Speaker 2: about ports. And he told me that most of today's

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Speaker 2: ports have been in use for decades, if not centuries.

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Speaker 2: At these waterside hubs of activity, you can see the

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Speaker 2: layers of infrastructure and technology at work.

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Speaker 1: Ports are more or less kind of industrial looking and

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Speaker 1: usually very busy with trucks and trains and lots of

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Speaker 1: people moving around.

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Speaker 2: I used to live in San Francisco and I remember

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Speaker 2: the very distinctive cranes and the Oakland Port that look

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Speaker 2: like something out of Star Wars.

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Speaker 1: Yeah, I guess they're an acquired taste.

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Speaker 2: Visually, when you think of a port, maybe instead of

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Speaker 2: Star Wars, you get visions of Marlon Brando in on

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Speaker 2: the waterfront, rushing headfirst into a fistfight, the kind of

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Speaker 2: cultural depiction of ports that show them as sites full

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Speaker 2: of personal drama and tension.

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Speaker 1: I got what I've done, I'm gonna take on do

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Speaker 1: it that I get.

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Speaker 2: Come and Sure it's a fictional representation, but it ports

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Speaker 2: around the world in real life. There's a lot at

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Speaker 2: stake too. Far beyond Marlon Brando.

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Speaker 1: Dock workers have this sort of Hollywood romanticized image. Ports

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Speaker 1: have always been gateways or hubs for trade. You know,

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Speaker 1: a place where navies establish themselves or you start to

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Speaker 1: form a colony, going back centuries. Even there's a lot

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Speaker 1: of employment at ports. They contribute a lot to economic activity.

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Speaker 2: But in the past few years, Brendan has noticed a shift.

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Speaker 2: Ports are no longer just places that facilitate global trade

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Speaker 2: and support local jobs.

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Speaker 1: They have become real strategic national security assets that governments

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Speaker 1: can no longer just assume will be used for good

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Speaker 1: economic purposes. Ports are not only gateways and connections to

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Speaker 1: the global economy, but they can become choke points.

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Speaker 2: Choke points that global superpowers like the US and China

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Speaker 2: are trying to have more and more influence. Over the

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Speaker 2: collapse of the Francis Scott key Bridge in Baltimore in

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Speaker 2: March only made this problem more urgent and more obvious.

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Speaker 2: When the bridge collapsed and Baltimore's port shut down, Marland's

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Speaker 2: governor called it a global crisis. An initial estimate found

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Speaker 2: that closing that port would cause an economic loss of

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Speaker 2: fifteen million dollars per day. Now, as political conflicts intensify

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Speaker 2: all around the world and governments work to protect their

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Speaker 2: own economic interests, ports are being thrust into the spotlight

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Speaker 2: as both an asset and as a vulnerability. This is

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Speaker 2: the big take from Bloomberg News. I'm Sarah Holder today

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Speaker 2: on the show. Ports are the latest battlefields where geopolitical

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Speaker 2: power is won and lost. How are they adapting to

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Speaker 2: meet the moment. When ports have made the news in

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Speaker 2: the past few years, it's usually because something has gone

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Speaker 2: terribly wrong. There was the container ship that got stuck

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Speaker 2: in the Suez. There was the drought that led to

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Speaker 2: long traffic jams for ships in the Panama Canal. There

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Speaker 2: was the bridge collapse in Baltimore. Brendan Murray, who oversees

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Speaker 2: trade coverage for Bloomberg, says, there's one thing these stories

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Speaker 2: all reinforce.

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Speaker 1: It's hard to argue that there are more important links

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Speaker 1: in global supply chains than ports themselves.

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Speaker 2: Ports handle eighty percent of the world's merchandise trade, and

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Speaker 2: when they're disrupted by disaster, war, weather or disease, there

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Speaker 2: can be major ripple effects.

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Speaker 1: What the pandemic made clear to lots of people was

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Speaker 1: that supply chains and trade generally are is very vulnerable.

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Speaker 1: And what we've seen over the past several years is

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Speaker 1: that ports generally are very efficient. They operate very smoothly,

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Speaker 1: but if something goes wrong, the whole system can kind

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Speaker 1: of break down.

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Speaker 2: And if that deeply interconnected system breaks, it can mean

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Speaker 2: skyrocketing shipping rates, shortages of food and medicine, decrease revenue

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Speaker 2: for cities with ports, and delays on packages getting to

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Speaker 2: your door. So economies around the world are readying to

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Speaker 2: spend trillions of dollars on bolstering their supply chains by

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Speaker 2: building the ports of the future.

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Speaker 1: We have an estimate from an expert that two hundred

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Speaker 1: billion dollars a year for the next ten years is

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Speaker 1: going to be spent reshaping infrastructure. And that's decarbonization, digitization

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Speaker 1: and reglobalization. That's the realignment of trade routes.

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Speaker 2: Brendan and A team of Bloomberg reporters around the world

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Speaker 2: have been taking a close look at several global ports

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Speaker 2: that are tackling these challenges head on. Can you walk

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Speaker 2: me through the three ports that are at the most

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Speaker 2: interesting crossroads right now? And we'll go rapid fire, just

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Speaker 2: a short anchorage at each stop.

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Speaker 1: So I'll give you three, two new ones and a

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Speaker 1: very old port.

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Speaker 2: The first is in a small city in Peru called

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Speaker 2: shang Khai.

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Speaker 1: China is building a massive container port there that's going

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Speaker 1: to completely re route trade through Latin America. China will

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Speaker 1: have access to lots of agricultural commodities and minerals in

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Speaker 1: South America, Brazil and other large economies there reglobalization check.

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Speaker 1: The second one would be a port in India on

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Speaker 1: the west coast of India, a couple hours north of Mumbai.

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Speaker 1: That is a nine billion dollar project that the Government

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Speaker 1: of India is behind. This is part of the Made

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Speaker 1: in India push that the Modi government has initiated to

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Speaker 1: really become a rival to China. India has a very

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Speaker 1: old port system and their maritime connectivity needs a lot

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Speaker 1: of improvements. This port is going to go a long

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Speaker 1: way to do that.

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Speaker 2: Digitization got it. And the third port will visit.

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Speaker 1: Is a port that's been around for centuries, Antwerp in Belgium.

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Speaker 2: Why did it stand out to you?

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Speaker 1: The first is the sheer scale of Antwerp. The footprint

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Speaker 1: of the port and the industries that are connected to

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Speaker 1: it is one hundred and twenty square kilometers, which is

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Speaker 1: double the size of Manhattan, which to me was just

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Speaker 1: mind boggling.

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Speaker 2: That is astounding.

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Speaker 1: It had its own, you know, sort of a police force.

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Speaker 1: It's like a city in the city itself. This is

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Speaker 1: a port that has survived through world wars. It came

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Speaker 1: out of World War II pretty much undamaged and helped

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Speaker 1: rebuild Europe's industrial economic base. Today it's the location of

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Speaker 1: lots of chemical and oil refineries. So it's got a

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Speaker 1: lot of work to do to.

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Speaker 2: Decarbonize, decarbonization, and when Brendan says Antwerp has a lot

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Speaker 2: of work ahead, he means it it's a massive undertaking

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Speaker 2: that will cost hundreds of millions of dollars. So where

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Speaker 2: is all that money going to come from? The answer

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Speaker 2: is part of a geopolitical struggle that could give those

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Speaker 2: Hollywood depictions of ports a run for their money. That's

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Speaker 2: after the break Bloomberg Trades are. Brendan Murray has been

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Speaker 2: taking stock of the challenges and opportunities facing some of

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Speaker 2: the world's most important ports. On a trip to Antwerp's Port,

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Speaker 2: Brendan saw firsthand how several of these thorny props come together.

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Speaker 2: Paint a picture for me. How did you get there?

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Speaker 2: What did you see?

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Speaker 1: So it took a full day and I got a

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Speaker 1: tour from a couple of tour guides and they took

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Speaker 1: me all around. They took me to a chemical company.

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Speaker 1: They took me to a large container terminal, which I

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Speaker 1: can tell you the containers just like stretched out into

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Speaker 1: the distance, like out to the horizon. It was so

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Speaker 1: many of them, it was hundreds of thousands being moved around.

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Speaker 1: There were two container terminals visible from the deck that

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Speaker 1: we were standing at, looking out over the port. One

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Speaker 1: of them had manual cranes being operated by drivers, and

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Speaker 1: another container terminal right next to it, operated by another company,

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Speaker 1: had all automated equipment. So literally you could see the

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Speaker 1: old way of doing things and the new way of

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Speaker 1: doing things.

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Speaker 2: After merging with Bruges, Antwerp's Port has become the number

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Speaker 2: two container port in Europe behind Rotterdam. It accounts for

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Speaker 2: five percent of the Belgian ECON and it handles fifteen

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Speaker 2: percent of the natural gas flowing to EU countries.

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Speaker 1: They have hundreds of kilometers of pipelines that carry everything

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Speaker 1: from natural gas to steam, to all sorts of industrial

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Speaker 1: gases and fluids that are carbon based, and all of

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Speaker 1: that they hope to use for the greener fuels that

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Speaker 1: are coming into use. It's been investing a lot of

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Speaker 1: money in green hydrogen and fuels like that, so they're

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Speaker 1: confident that they can make that transition.

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Speaker 2: Brendan says that right now Antwerp is trying to bridge

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Speaker 2: this gap between old and new, and in some ways

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Speaker 2: the task is existential.

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Speaker 1: We were driving down a road that was on one

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Speaker 1: side was the Total Energies the French oil refinery. The

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Speaker 1: other side of the road was a one ten foot

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Speaker 1: high retaining wall that was holding back the tidal river

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Speaker 1: from storm surges. So rising water comes over that wall

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Speaker 1: and starts in that oil refinery, and you know, you've

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Speaker 1: got a huge problem. They've just recently built this wall

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Speaker 1: in the past couple of years, and it's just it's

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Speaker 1: got some amazing graffiti out it actually and it's I

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Speaker 1: think it's a kilometer long, but there it was a

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Speaker 1: pretty stark example of how ports are all located on

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Speaker 1: coastlines and they're at risk of all sorts of things

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Speaker 1: from weather to rising sea levels.

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Speaker 2: As it grows. Antwerp has partnered with countries like Dubai, Namibia,

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Speaker 2: Germany and with China, which has been investing in infrastructure

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Speaker 2: around the world as part of its so called Belt

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Speaker 2: and Road initiative.

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Speaker 1: So basically they partner with other countries and invest in

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Speaker 1: them with the promise of will help you develop your economy.

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Speaker 1: And the Belton Road Initiative is something that the US

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Speaker 1: government is actively trying to provide alternatives to. The Biden

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Speaker 1: administration is really worried about Chinese port cranes. China is

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Speaker 1: the dominant producer of port cranes. These cranes have a

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Speaker 1: lot of software, a lot of technology in them. So

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Speaker 1: the real sort of concern is that China's using these

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Speaker 1: cranes to spy on us, and so whether that's the

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Speaker 1: case or not, nobody really knows, but that's the concern.

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Speaker 1: A lot of commercial ports are next to military bases,

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Speaker 1: and so those kinds of national security concerns.

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Speaker 2: China's president Shi Jinping once said that on the path

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Speaker 2: to prosperity, a country must first build ports. Today, China

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Speaker 2: is home to seven of the ten largest container ports

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Speaker 2: in the world, and the country's reach extends to ports

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Speaker 2: in Greece, in Peru, and in Belgium.

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Speaker 1: Antwerp Bruges have a Chinese company running one of the

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Speaker 1: container terminals. Now, China's presence there ten years ago might

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Speaker 1: have been not a big issue. Now some critics might say,

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Speaker 1: what are China's intentions? Could they punish us? Could they

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Speaker 1: use the port to limit economic activity through there.

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Speaker 2: Brendan says that accepting Chinese investment in its container terminals

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Speaker 2: could lead to complications down the line for Antwerp, and

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Speaker 2: it's not the only port whose relationship with China could

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Speaker 2: prove messy. How are these tensions between the US and

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Speaker 2: China playing out at say, chang Hai, Peru.

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Speaker 1: This port opens at the end of this year, so

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Speaker 1: we will see a ribbon cutting of some sort, I'm

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Speaker 1: sure by some high level Chinese officials there, and they've

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Speaker 1: got this great slogan for it, It's chang Kai to Shanghai.

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Speaker 1: The American embassy there isn't happy that the Chinese are

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Speaker 1: gaining a real foothold there.

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Speaker 2: In response, the Peruvian government has pointed out that US

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Speaker 2: firms haven't been willing to invest in Peru's infrastructure in

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Speaker 2: the way Chinas have. Beyond this jockeying for soft power

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Speaker 2: happening port side, we're also seeing new military conflicts play

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Speaker 2: out that put ports in a critical position, from the

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Speaker 2: Russia Ukraine War to Israel's war in Gaza to the

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Speaker 2: Huthy militants attacking in the Red Sea. What role are

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Speaker 2: ports playing in these times of conflict and what pressures

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Speaker 2: are some of these key sites under right now?

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Speaker 1: One of the ports affected by the Russia Ukraine War

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Speaker 1: is one in Poland. This is one where there are

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Speaker 1: US weapons going into and out of, some for training

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Speaker 1: for Poland, some going to the front lines in Ukraine.

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Speaker 1: Right next to those docks is a Chinese operated port operation,

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Speaker 1: and there's been some friction there about whether the two

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Speaker 1: can coexist in a way that you would expect in

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Speaker 1: an environment like that. The confrontations that are going to

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Speaker 1: play out are really going to be economic and technological.

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Speaker 1: Ports are the front lines of those kinds of conflicts.

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Speaker 1: If you want to assert yourself economically, your economic power

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Speaker 1: need to have a strong maritime system to import what

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Speaker 1: you want to import and export what you want to export.

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Speaker 2: As for the rest of us, these shifting power dynamics

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Speaker 2: at ports will likely float downstream. How do all of

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Speaker 2: these maritime shifts affect people who are just hoping to

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Speaker 2: get their packages on time?

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Speaker 1: In the short run, it would seem to raise the

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Speaker 1: cost of goods that are traded globally. There will be

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Speaker 1: shipping rates will have to account for the green corridors

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Speaker 1: that companies want to ship their goods on. Those are

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Speaker 1: just going to be inherently more expensive. Things are probably

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Speaker 1: not going to be as cheap as they used to

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Speaker 1: be the development of technology automation. In the longer run,

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Speaker 1: a lot of these will make ports more efficient. The

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Speaker 1: next ten years will be a tough transition, a tough

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Speaker 1: transformation for maritime gateways, but in the long run they

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Speaker 1: will adapt as they always have and the economy will

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Speaker 1: be better off for it.

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Speaker 2: This is the Big Take from Bloomberg News. I'm Sarah Holder.

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Speaker 2: This episode was produced by Jessica Beck and Audrina Tapia,

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Speaker 2: who also fact checked this episode. It was mixed by

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Speaker 2: Blake Maples. It was edited by Aaron Edwards, Brendan Murray,

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Speaker 2: and Michelle Jamrisco. Our senior producers are Kim Gittleson and

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Speaker 2: Naomi Shaven, who also edited this episode. Our senior editor

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Speaker 2: is Elizabeth Ponso. Nicole Beemsterbor is our executive producer. Sage

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Speaker 2: Bauman is Bloomberg's head of podcasts. If you like this episode,

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Speaker 2: make sure to subscribe and review The Big Take wherever

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Speaker 2: you listen to podcasts. It helps people find the show.

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Speaker 2: Thanks so much for listening. We'll be back tomorrow