Ship Happens: Maybe It’s Time to Privatize the Port of Guam

By Charlie Hermosa for Kandit News & Views

For those that remember, “ship my pants” was a creative and humorous way Kmart tackled online free shipping.

In all seriousness, the Port Authority of Guam has long stood as the gateway to our island’s economy, handling over 90% of incoming goods and acting as the logistical heartbeat of the region. From canned goods to construction materials, nothing moves without the port.

In recent years, the Port has posted solid financial gains. By most public metrics, the Port of Guam is fiscally healthy. So why even consider privatization?

Because long-term sustainability isn’t just about profit margins, it’s about the labor force, modernization, efficiency, and the ability to adapt faster than government bureaucracies often allow. This is why it’s time we openly and honestly explore privatizing the Port of Guam, not as a way to weaken the port, but as a tool to strengthen it.

Instead of waiting years for step increases or battling politics to get upgraded gear, port workers would have access to a results-driven environment where effort is rewarded, and equipment is upgraded on a schedule, not a wish list.

Around the world, ports have successfully transitioned to public-private partnerships (PPPs) or full privatization models to unlock new capital, introduce operational expertise, and improve turnaround times. Private operators bring proven technologies, performance incentives, and global best practices. In Guam’s case, privatization or at least partial outsourcing, could mean faster cargo flow, better labor conditions, and accelerated modernization without burdening taxpayers. In fact, we’ve already dipped our toes into this model.

Just last year, the Port Authority signed a public-private partnership to outsource operations and maintenance of our critical fuel piers keeping ownership public while drawing on private sector efficiency. If it made sense for fuel logistics, why not for container operations.

Let’s be clear, if privatization doesn’t improve wages, it’s not worth pursuing. But a well-structured operating agreement can include minimum pay increases and annual bonuses tied to performance. These terms can be baked into any deal from day one.

Ask any long-serving port worker, and they’ll tell you wages have stagnated. Equipment is aging. Promotions take years. Political interference in hiring and operations frustrates professionals. And despite their critical role, port employees rarely feel empowered to improve conditions without fearing retaliation or dead-end bureaucracy.

Financially, we have a choice, we can continue to self-finance gradual upgrades, or we can leverage private investment to transform the port faster without borrowing more or raising fees. Done right, privatization would not replace the Port’s mission, it would empower it.

This isn’t a call for fire-sale privatization or selling our strategic assets to the highest bidder. It’s a call for Guam to lead the conversation with transparency, stakeholder input, and a focus on what’s best for our workers, our economy, and our future.

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Charlie Hermosa is the former general manager of American President Lines and is an adjunct professor at the University of Guam