Grain elevators and the push for lower freight rates.

WHY DOES SENATOR JOHN McCAIN ATTACK THE JONES ACT FLEET?

 We have to label this opinion and speculation because we really don't know, and find ourselves unable to imagine a legitimate reason. The usual advice is "follow the money". We are not saying that Senator McCain is actually knowingly receiving direct financial gain from any of these sources. We have e-mailed investigative reporters in Arizona in the hopes that some news organization would pick up the trail and answer the questions from solid evidence.  We do know of several interests groups that would gain at the expense of the American people if the Jones Act were watered down or eliminated. In this article we will provide information on these sources in the hopes that the American people will be better educated on the subject and that any investigative journalists pursuing this matter will have a head start on the traditional investigative method of following the money. We are totally mystified over why a Naval Academy graduate would take an anti U.S. sea power stance, or why a senator from Arizona would even have an interest in the issue, much less be a leader in the anti Jones Act "movement". We can only observe that while Congressional protection of the Jones Act appears more powerful than Congressional objection to the Jones Act, there are those in Congress who want it eliminated or diffused to the point of uselessness, and there are powerful financial interests domestic and foreign that stand to gain. This is simply a "backgrounder" on some  of those interests related to the American export grain trade. Tomorrow we will describe similar interests in the Offshore oil and mineral industry.
                                                           

Tugs like this built in America and manned by American seamen may become an endangered species if the Jones Act erodes 

                               
The first group that comes to mind when it comes to opponents of the Jones Act are associated with the export grain trade most specifically grain elevator operators. Grain elevators are temporary grain storage and transfer structures located along waterways and rail lines for the transfer of grain from trucks coming off the farm to larger bulk commodity movers like rail cars and barges. The export grain especially moves by barge because it is bound for tidewater for eventual transfer to ships for overseas markets. Barge transport where available is far cheaper than rail, but it would be even cheaper if the barge industry didn't have to pay American wage scales. Two elements in this trade would like to see our Mississippi and Ohio Rivers internationalized with foreign barge operators allowed into the trade. Major American grain traders of long standing have often formed their own barge lines to lower costs but new elements in the trade are consolidating the trade and winnowing it down to fewer bigger operators. Some of these consolidators are nominally American corporations, some are foreign. The other force pushing for foreign entry into this inland transportation trade are foreign owners of American grain elevators. Foreign owners of single or small numbers of grain elevators include companies from Italy, France, Japan, and we have no evidence of it as yet but would not be surprised if China owns some of the American elevators as well.

An Aging Grain Elevator

 If you need additional information on grain elevators in general try this link:


What is a Grain Elevator:
.http://en.wikipedia.org/wiki/Grain_elevator

 Her are some links to recent news coverage of the grain elevator consolidators and foreign owners:

SOROS BACKED GRAVILON BUYING UP U.S.GRAIN ELEVATORS
http://climateerinvest.blogspot.com/2011/04/soros-back-gavilon-buying-up-us-grain.html

But Japanese Giant Marubeni is apparently buying up Gravilon. :
 http://articles.chicagotribune.com/2012-08-23/news/sns-rt-marubeni-gavilon-exclusivel2e8jmaqg-
20120822_1_marubeni-adm-and-cargill-grain-export

Perhaps the biggest counter weight to consolidators and foreign owners who want to eliminate the Jones Act fleet are those few grain traders who have invested in the fleet. Cargil controls about one fourth of the U.S. grain harvest. They also own 460 U.S. barges, 11 U.S. towboats, 2 Great Lakes Bulk carrying freighters, and 12 ships. http://eurekaencyclopedia.com/index.php/Category:Cargill

Another U.S. large holder of Grain elevators ADM: http://en.wikipedia.org/wiki/Archer_Daniels_Midland

A smaller U.S.operator Columbia Grain: http://www.columbiagrain.com/



Here are some links to U.S. Export Grain Industry Associations and trade journals: 

North American Export Grain Association, Inc.: http://naega.org/images/mission.pdf

U.S.Grains Council: http://www.grains.org/

Prairie Grains, a regional trade journal:http://www.smallgrains.org/springwh/Jan04/gate/gate.htm

Now we don't think for a minute that the above and foregoing is anything but a bit of a jump starter for basic background material and future key word searches by a real investigative reporter. But it takes money to get a lobby's message across to the politicians. The foreign sale of American grain elevators hasn't drawn much public interest because the elevators and jobs stay. If the tow boat and barge industry is internationalized the boats are headed for an early trip to the scarp heap, the 126,000 American crew members are unemployed and people, voters notice. If the various anti Jones Act interests associated with the Grain trade are behind the latest two attacks the names of the financiers of the movement  will more probably than not include campaign contributors to one or more of the politicians associated with the anti Jones Act movement.

 Besides Senator McCain, Representative Blake Farenhold (R Texas) has been prominently associated with anti Jones Act legislation especially HR 2460 submitted in July of 2011. Senator Jim Risch (R-Idaho) co sponsored the worse legislation with Senator McCain The Open American Waters Act which sought to completely repeal the Jones Act. There are two maritime states that actually suffer higher costs from the Jones Act and these are Alaska and Hawaii but we found little evidence of the state Congressional delegations taking the lead in anti Jones Act legislation. One Hawaiian legislator was recently on record backing the Jones Act. While it may be a bit more expensive to get good from the other 48 states by American flag shipping, nothing  in the Jones Act seems to stop any state from direct import of items originating from overseas by any shipping flag available. Supporters of the Jones Act from the non contiguous states have mentioned reliability and security as reasons for supporting the slightly higher transportation costs. So the mystery remains, the Congressional enemies of the Jones Act are few, and from constituencies with no maritime interests. Why? Somebody please try to follow the money.

 Now, having said all that, there is another highly interested opponent of the Jones Act with lots of money to spread around and these are the foreign owned multi-national offshore oil industry companies. Or the money for the attacks could be coming from a combination of both major sources and any general competitor of the United States who fears our sea power. Tomorrow we will present some information on these Offshore operators. They could be very active now behind the scenes because they received a major PR set back with the BP oil spill in the Gulf of Mexico and Congress became very aware of their prevalence on the U.S. Outer Continental Shelf. Keep in mind that when we say there is money behind these attacks that doesn't mean that the politicians named in this article who sponsor these bills are receiving direct payment for these attacks. But someone has to develop slick presentations pushing and defending the anti-Jones Act positions. Someone has to write to, visit and sell positions to the targeted legislators. Such lobbying efforts require time, talent, travel, and effort and don't come free inside the Beltway or anywhere else.  There are no attacks against American jobs on the Hill without money by those seeking to export the jobs. Let's hope some investigative reporter takes this ball and runs with it, or maybe there is some blogger out there ready to turn the corner into investigative reporting.

In either case tune in tomorrow for some information on the Offshore operators who would like to drive America's more than 1800 offshore service vessels from the seas with a little support from the U.S.Congress. Why do these attacks come from those who do not answer to voters with maritime interests? Why would such legislators even be concerned? Why are they so opposed to the wisdom of their more numerous peers who actually have experience and constituents involved and concerned in these matters? Why would perfectly rational men get up in the morning and start drafting legislation of no interest to the people who voted fro them? We don't know but the conventional wisdom probably applies follow the money.