House Bill: All PA Liquor Imports Through Philly

[Sfuffy]

There was a brief blurb in the Inky about this last week but I forgot about it:

State Wants Philly to Be Entry Port for Its Liquor Shipments

[cdh]

Sounds brilliant to me... Good for them.

Just hope that being granted a monopoly doesn't give the Port folks ideas about jacking up fees and costs because there is no other alternative.

[Sfuffy]

What's so brilliant about something that will lead to higher prices and less variety?

[cdh]

How do you see either higher prices or less variety as a necessary result of mandating booze come in through Phila?

Is our port notably more slow, inefficient, corrupt, or otherwise quality-reducing than the Port of New York? If the levels of inefficiency and corruption here and there are equal, then there should be a net price drop reflecting the cutting out of trucking costs (and any bundled inefficiency and corruption).

Using PA's purchasing power to drive more business to our longshoremen and port authorities seems quite reasonable, provided the port folk don't immediately decide to abuse their monopoly. It will certainly up city and state tax revenues, as all of the excess work will certainly produce more taxable wages. What's wrong with that?

This seems like a play to get all of the big importers to do business here rather than (or in addition to) elsewhere.

[herbacidal]

How do you see either higher prices or less variety as a necessary result of mandating booze come in through Phila?

Is our port notably more slow, inefficient, corrupt, or otherwise quality-reducing than the Port of New York?  If the levels of inefficiency and corruption here and there are equal, then there should be a net price drop reflecting the cutting out of trucking costs (and any bundled inefficiency and corruption).

I agree.

Using PA's purchasing power to drive more business to our longshoremen and port authorities seems quite reasonable, provided the port folk don't immediately decide to abuse their monopoly.  It will certainly up city and state tax revenues, as all of the excess work will certainly produce more taxable wages.  What's wrong with that? 

I completely and emphatically agree.

This seems like a play to get all of the big importers to do business here rather than (or in addition to) elsewhere.

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I would hope so.

Edited July 2, 2006 by herbacidal (log)

[joiei]

the link did not work

[Sfuffy]

How do you see either higher prices or less variety as a necessary result of mandating booze come in through Phila?

Is our port notably more slow, inefficient, corrupt, or otherwise quality-reducing than the Port of New York?  If the levels of inefficiency and corruption here and there are equal, then there should be a net price drop reflecting the cutting out of trucking costs (and any bundled inefficiency and corruption).

Using PA's purchasing power to drive more business to our longshoremen and port authorities seems quite reasonable, provided the port folk don't immediately decide to abuse their monopoly.  It will certainly up city and state tax revenues, as all of the excess work will certainly produce more taxable wages.  What's wrong with that? 

This seems like a play to get all of the big importers to do business here rather than (or in addition to) elsewhere.

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All other things being equal, an importer will want to ship his product through the port that is the most efficient at the lowest cost - that could be Philadelphia, New York, Newark, Baltimore, etc. Such cost efficiency would then be built into the price which the importer charges its customers including the PALCB. The Philadelphia port may not be the most cost-efficient choice in all cases. The choice of port should be left up to the importer who is best able to assess these benefits. The PALCB should merely bargain for the best price on its purchases and leave it up to the importer on how best to bring in the product. (And if we really want to guarantee maximum jobs benefits to PA why don't we just have the PALCB control the entire process and eliminate the middleman?)

In addition, there's a certain economy of scale to bringing all imports in through one port. An importer may find, for example, that Port Newark is the most cost-efficient port of entry for bringing in product to be sold in the mid-Atlantic and northeastern states (even after factoring in trucking costs). If he has to bring PA's imports through Philly, he has two choices: (1) bring all imports through Philly even though it will cost more for all his imports and lose him sales in other states or (2) split his imports between Philly and Newark which means he loses the economic benefits of bringing all his goods through one port. In either case, it will mean higher costs for PA liquor purchasers.

Depending on the volume of his sales in PA as compared to other states (esp. in the case of a boutique brand or small winery), the importer may decide it's not worth the hassle of splitting his shipment and just won't sell these products to the PALCB. Thus certain products will become unobtainable in PA

[herbacidal]

All other things being equal, an importer will want to ship his product through the port that is the most efficient at the lowest cost - that could be Philadelphia, New York, Newark, Baltimore, etc. Such cost efficiency would then be built into the price which the importer charges its customers including the PALCB. The Philadelphia port may not be the most cost-efficient choice in all cases. The choice of port should be left up to the importer who is best able to assess these benefits. The PALCB should merely bargain for the best price on its purchases and leave it up to the importer on how best to bring in the product. (And if we really want to guarantee maximum jobs benefits to PA why don't we just have the PALCB control the entire process and eliminate the middleman?)

In addition, there's a certain economy of scale to bringing all imports in through one port. An importer may find, for example, that Port Newark is the most cost-efficient port of entry for bringing in product to be sold in the mid-Atlantic and northeastern states (even after factoring in trucking costs). If he has to bring PA's imports through Philly, he has two choices: (1) bring all imports through Philly even though it will cost more for all his imports and lose him sales in other states or (2) split his imports between Philly and Newark which means he loses the economic benefits of bringing all his goods through one port. In either case, it will mean higher costs for PA liquor purchasers.

Depending on the volume of his sales in PA as compared to other states (esp. in the case of a boutique brand or small winery), the importer may decide it's not worth the hassle of splitting his shipment and just won't sell these products to the PALCB. Thus certain products will become unobtainable in PA

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I agree somewhat with your reason, but you're making rationalizations and putting obstacles in the importer's path without actually knowing the actual situation.

From the economy of scales point of view, Newark is far and away the largest port on the east coast, Long Beach being the largest in the US and on the west coast.

That said, the importer could just as well be set in its ways and leaving things at Newark because it was started that way, and despite inefficiencies / cost changes / etc. left things there.

It also doesn't necessarily mean the higher costs (if so) will be passed on, if the state doesn't permit it.

Another option would be an assist from the state in terms of marketing to boost sales to make up the difference.

I'd be interested in looking at the issue more in-depth, examing labor rates, warehouse space, port fees, etc. and breaking that down, but I don't have the time to do so. Unless I did that, I'll give whatever happens the benefit of the doubt.

I believe Walmart, for instance (this is something I heard from a good source, although I do not specifically recall which one right now), when selecting among product suppliers for its stores, forces the supplier to making X amount available at Y price, often at a price where the supplier makes little if any profit. The supplier may buy in thinking he'll make it up in volume, but down the line when the supplier has already increased production volumes, Walmart decreases the price and increases the volume requested, furhter driving down profits.

I wouldn't suggest Walmart necessarily be that sadistic, but that's using economy of scales in an even more opportune manner.

[hathor]

I was an importer for many years...restrictring an importer to one port is a death knell. For many reasons, you may need to use Baltimore, Newark, Philly or even LA. Lack of vessels, vessel schedules, lack of rail space, etc. etc. To restrict the importer is just plain wrong. Its hard enough to do business and make a profit. The sentiment of bringing business to Philly is good, but it is politcally motivated, not reality based.