US ports climb out of shipping slump

After suffering through their worst two-year stretch in history, ports in the US have begun climbing out of a deep hole brought on by the global economic collapse.

Since January, trade volumes are up about 20 percent from 2009 - a dreadful 12 months labelled "the most difficult year in shipping history" by at least one shipping executive, the McClatchy-Tribune reported.

Gains have been buoyed by imports and exports, which saw their largest increases since 2007.

But the realities of high unemployment, massive personal debt and tight credit across America make the sustainability of recent gains highly questionable.

While solid growth may not return soon, it appears the worst is over.

Financial incentives offered by the ports, including rebates and discounts for shippers, stemmed steep declines in discretionary cargo, or freight moved to points deep in the country's interior.

Jeff Siewert, Home Depot's director of international logistics, said his company is planning to increase shipments through Long Beach as the company reconfigures distribution points throughout the country. Home Depot is one of the nation's largest importers.

But like everything port-related these days, the good news was tempered and cautious.

In 2014, upgrades to the Panama Canal will be complete, allowing large container ships from Asia to bypass Long Beach and LA en route to the Gulf or East Coast.

Wolfgang Freese, president of shipping line Hapag-Lloyd America, who called 2009 "the most difficult in shipping history", said fees and environmental regulations may also drive ocean carriers away in coming years.

"Southern California is a very expensive place for shippers," Freese said. "Cheaper alternatives have popped up."

Port officials acknowledge that cargo will divert in coming years, but are working to retain as much future growth as possible.

The twin ports are investing more than US$4.5 billion in new bridges, roadways, rail yards and terminal upgrades over the next decade, while aggressively marketing the complex to new customers.

Already, port authorities are leading the pack in an effort to capitalise on President Barack Obama's initiative to double exports within five years.

After slipping to less than a quarter of all freight handled at Long Beach-LA in recent years, exports are quickly becoming a vital slice of the trade pie in Southern California.

Buoyed by a cheap US dollar, exports of finished goods, raw materials and California produce has grown to more than 30 percent of all cargo handled locally, and port authorities hope to spur more outbound shipments through discounts to exporters and railroads serving San Pedro Bay.

Fred Malesa of railway Burlington Northern Santa Fe noted that despite competition from seaport communities in the Gulf, Canada and East Coast, ports on the West Coast will remain highly desirable for trade between Asia and the US in coming decades because of their proximity and well-established infrastructure.

"West Coast ports are the lifeblood of this nation," Malera said.

(Source: Cargo News Asia)