Port infrastructure must keep pace with rebound, says economist

Speaking at last week’s San Francisco Roundtable, Council of Supply Chain Management Professionals, a prominent shipping industry economist emphasized that change will be slight, however.
image

Dr. Walter Kemmsies, Moffatt & Nichol’s Chief Economist

By Patrick Burnson, Executive Editor
January 31, 2012 - SCMR Editorial

Ocean cargo shippers can expect a slight surge in business this year, with the economic tide lifting all boats. This will be particularly evident when it comes to measuring port throughput across the Continent.

Speaking at last week’s San Francisco Roundtable, Council of Supply Chain Management Professionals, (CSCMP) in Oakland, a prominent shipping industry economist emphasized that change may not be ongoing, however.

“The fact that the U.S. is resuming economic leadership is comforting,” said Dr. Walter Kemmsies, Moffatt & Nichol’s Chief Economist. “And our exports are largely responsible for driving this trend.”

Kemmsies, who pioneered development of container volume forecasts by trade lane, utilizes a blend of regional economic data with the identified market reach of U.S. ports. He said almost every major U.S. outbound ocean cargo gateway is benefitting by demand for U.S. goods.

“But we are still looking for sustainable numbers,” he said. “Emerging markets are making the rebound possible but our ongoing deficit in petroleum imports is worrisome.”

Meanwhile, U.S. port authorities should continue to lobby for funds to expand infrastructure, said Kemmsies. The observation resonated with the Port of Oakland shippers who comprise the nation’s top exporters of agricultural cargo.

“Bulk commodities and specialized capital goods (project cargo) fit the profile of U.S. comparative advantages,” he said. “Relative to faster growing emerging markets, the U.S. has a lower cost of capital. It also has a relative abundance of scarce resources – like water – and more advanced biotechnology. Finally, we have more reliable quality control and surveillance of compliance.”

But the higher cost of U.S. labor remains a problem, said Kemmsies, and may not be able to offset the strong demand for raw materials.

“And we don’t want to live much longer with a jobless recovery,” he said. “At the same time, we are encouraged by the government’s commitment to invest in its ports and related industries.”



About the Author

image
Patrick Burnson
Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at .(JavaScript must be enabled to view this email address).

Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

With the holidays rapidly approaching, it appears retailers are not quite done getting inventory set up and on the shelves in time for what is expected to be a fairly active shopping season. That much was evident based on recent data for September volumes issued by the Port of Los Angeles (POLA) and the Port of Long Beach (POLB).

Join Industry Expert Adrian Gonzalez for this educational webinar on the tenets and the benefits of Closed-Loop Operational Management. You’ll learn how Closed-Loop Operational Management optimizes orders, inventory, and transportation concurrently, and how it is able to optimize large-scale problems on a daily basis.

In a separate conference call following CP’s third quarter earnings release call yesterday, CP CEO Hunter Harrison make myriad convincing points for a merger between CP and CSX and offered up his take in general industry M&A as well.

Seasonally-adjusted (SA) for-hire truck tonnage in September checked in at 132.6 (2000=100) for the second straight month, remaining as the current all-time high level for the second month in a row, with November 2013’s 131.0 now the second best month recorded.

Ahead of its third quarter earnings call this Friday, freight transportation and logistics titan UPS rolled out rate increases for 2015 that are set to take effect on December 29, 2014.

About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review. Patrick covers international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. Contact Patrick Burnson

Comments

Post a comment
Commenting is not available in this channel entry.