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transport tips continued trading houses were involved as LAXT par- ticipants, but Japanese utilities steadfastly refused to sign a long-term agreement guaranteeing they would take coal through the new terminal. In the final analysis it was not environmental pres- sure that closed the LAXT terminal, but an inadequate flow of coal to support the ter- minal financially. Why would anyone think it would be better to rely on a "grow- ing Chinese market?" Why would any Chinese utility or coal buyer sign a long- term coal import supply agreement when they have more than enough coal to sup- ply their needs from their own mines? One of the main reasons coal ships were not unloaded in June was because Chinese ports were full of Chinese coal. Their major coal export terminal, Qinhuangdao, currently has more than 9 million tons in their growing stockpile, and this is only one of several Chinese export terminals. Chinese authorities must decide whether to ship their own coal south to Chinese power stations, or to buy coal imported coal from Indonesia, Australia, and even the U.S. The international marketer advising his company to "get in the game" while there is still a "growing Chinese market" needs to make sure he is relying on something other than coal traders and magazine articles. He should talk to end users, and he should make sure there is a genuine long term need for his coal at his price. Considering the Chinese penchant for coal arbitrage, one has to ask why the Chinese buyer would commit to buying U.S. coal over Indonesian or Australian coal. Considering the wild swings seen in daily rates for Panamax and Capesize vessels since 2007, a cheap delivered price today may become an expensive delivered price tomorrow, and distance will be a determining factor. The U.S. coal supplier should consider the dis- tance differentials between the natural suppliers (Indonesia and Australia) and U.S. coal terminals before acting. Dave Gambrel is the president of Logisticon, a coal transportation consultancy. He was director of transportation for Peabody Coal Company for 15 years, and was also in charge of the company's ocean shipping pro- gram. He was a member of the U.S. negotiat- ing team during the formative stages of the LAXT terminal, and a member of the DTA management committee. He may be reached at bunkgambrel@earthlink.net. August 2012 100th Anniversary Special Issue www.coalage.com 21