- The justification for replacing the cranes is that they pose a threat to national security
- There is no evidence to suggest there is an actual risk
- It’s common knowledge in the maritime industry that remote control and automation via cellular networks are becoming de rigeur
The Biden administration’s recent decision to spend $20 billion replacing Chinese cranes at seaports means the U.S. will fall further behind the rest of the world.
More than just a pointless and ill-advised waste of taxpayers’ money, it is a symbol of the U.S. government’s failure to recognize that digital technologies like cloud, 5G, artificial intelligence (AI), and automation have rewritten the rulebook for how to build and maintain world-class infrastructure of all kinds.
In the rest of the world, governments are forging ahead with building digitally enhanced infrastructure projects that are demonstrably cheaper, more efficient, safer and use less energy than 20th century equivalents.
Yet here in the U.S., infrastructure strategy has not changed since President Roosevelt’s New Deal. We trail other developed countries in every key infrastructure category: transportation, communications, power, water supply and energy.
It is an extraordinary paradox that the country with a tech sector that is the envy of the rest of the world — and does more than any other to drive the development of next-generation digital technologies — is also governed by an administration that is incapable of grasping the essential nature of the transformative impact they are having on global infrastructure.
Backward-looking infrastructure
The U.S. administration’s decision to replace 200 cranes from Chinese manufacturer ZPMC is a textbook example of where the U.S. is going wrong when it comes to building forward-looking infrastructure.
Its justification for replacing the cranes is that they pose a threat to national security because they could be used by China to glean sensitive data about U.S. trade, or by China-backed hackers to disrupt global commerce.
However, there is no evidence to suggest this is an actual risk. In fact, Rear Admiral John Vann, head of the U.S. Coast Guard Cyber Command responsible for port security, has testified to lawmakers that no "malware or a Trojan-Horse-type software" had been found on the cranes.
The American Association of Port Authorities (AAPA) has also dismissed the fears as “alarmist.”
What the Coast Guard did find was a dozen cellular modems on Chinese crane equipment and in a data center at one U.S. port. This prompted lawmakers to claim that the devices were placed there to remotely control or program the cranes. This is exactly what the modems are supposed to do — but not for malign reasons.
What is common knowledge in the maritime industry, but beyond the understanding of our government, is that remote control and automation via cellular networks are becoming de rigeur in port facilities; it’s only the U.S. that persists in having its cranes operated manually from the crane cab by human beings. To meet this requirement, 5G cellular capabilities are now built into port cranes not only from China, but those from Kalmar (Finland-Sweden), Konecranes (Finland), and Liebherr (German-Swiss).
The culprit? It’s … 5G.
Consider which is the more likely explanation: that the 5G equipment, which was installed in plain sight, was placed there to facilitate Chinese espionage, or that it was delivered as part of today’s standard loadout for a $10 million ship-to-shore gantry crane?
The 5G modems are not the smoking gun the U.S. administration claims. They are simply a fig leaf for the U.S.’s increasingly aggressive campaign to use security scaremongering to thwart the ubiquitous use of Chinese technology by the West.
Congress’s security argument doesn’t fly in the case of the port cranes, and at a wider level, it is undermined by the U.S. military’s extraordinary dependency on Chinese tech. In fact, over 40% of the semiconductors and subsystems used in U.S. advanced weapons are currently sourced from China, according to research conducted by data analytics firm Govini. (In a separate study, Govani also found that the U.S. Department of Defense is using 1,444 Chinese suppliers of AI technology, which, ironically, doesn’t seem very smart. At all.)
American military’s dependency on China’s high-tech is now so great that any conflict between the two countries — or the US and one of China’s allies — would result in the U.S. warfighting capabilities being quickly neutralized when the supply of these critical components is cut off. Talk about supply chain risk.
If the U.S. government wishes to address the threat to its national security, it should prioritize limiting its military’s reckless reliance on Chinese technology — and not interfere with maritime ports.
In dire need of a digital upgrade
But the U.S. government isn’t doing that. Instead, we are insisting on spending $20 billion to pointlessly rip and replace 200 made-in-China port cranes over the next five years.
In a nation governed by common sense, the U.S. would turn those cellular modems on, then spend that $20 billion to upgrade the rest of the nation’s port infrastructure with the advanced AI-enabled industrial automation capabilities like those in Brazil, China, Sweden, Thailand and other forward-looking countries.
America’s ports are in dire need of such a digital upgrade. In a 2022 World Bank study of the performance of the 348 largest ports in the world, Long Beach, Calif., America’s largest port, was ranked third from bottom — at 346. The port in Oakland, Calif., placed in 343rd place. Baltimore’s, 300th.
The U.S. is addressing these issues both through the Infrastructure Investment and Jobs Act (IIJA), and its Port Infrastructure Development Program (PIDP), which allocates almost $18 billion for ports (the $20 billion for the cranes is incremental to that). But all that money is being allocated to physical infrastructure — building new ports or making existing ones bigger.
So, while the rest of the world is focused on building smart ports that use advanced digital technologies, the U.S. plans to spend billions on concrete and girders to create even larger but equally dumb facilities.
Missing out
The decision to replace the cranes is a policy failure of the first order, precipitated by the U.S. adherence to a strategy that is essentially unchanged since President Roosevelt’s New Deal, in which different classes of infrastructure were siloed, and improvements made discretely (a Bay Bridge here, a Hoover Dam there). And this is how the government still views and plans infrastructure, using distinct categories that — with a couple of exceptions like electric vehicles, and broadband — haven’t changed since the 1930s.
Globally, it’s becoming standard practice to add a layer of intelligent digital technology — cloud, plus AI, automation, and digital security — over the top of traditional physical infrastructure projects to dramatically improve everything from power usage to site safety.
Last year, I inspected examples of this methodology first-hand in China (Tianjin port), Hong Kong (CUHK Medical Centre), and Hungary (the EWG Intermodal Rail Terminal). Each project’s success depended on the same thing: digital integration of what the U.S. still approaches as the infrastructure equivalent of apples and oranges.
By ignoring the global transition to ubiquitous industrial digitalization, the U.S. is ensuring we miss out on a trend that would improve performance, cut costs and increase sustainability — in ports, energy, healthcare and transport.
It’s hard to think of a better emblem of the United States’ national failure to keep up with trends in infrastructure than the port crane fiasco. Like an elephant startled by a mouse, the discovery of a dozen 5G modems is triggering the most powerful nation in the world into flushing away $20 billion for no competitive advantage.
We used to be better than this.
America’s economic success was built on a foundation of infrastructure achievements: railways, shipping and highways. But in the 21st century, new digital technologies like cloud, 5G, AI and automation are the key enablers of success.
The US has both the wealth and digital technology savvy required to be the world leader in using digital infrastructure for public programs, but the current Luddite strategy means we are falling further behind the rest of the world — with catastrophic consequences for the economy and our global standing.