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

Lyon, France-based Norbert Dentressangle, a $5.5 billion global third-party logistics (3PL) services provider focused on global logistics, transport, ocean, and air services, said today it has acquired Des Moines, Iowa-based Jacobson Companies, a value-added warehousing (VAW) company, for $750 million from private equity firm Oak Hill Capital Partners.

Download the newly released research report, "Transportation Management Systems" conducted by Peerless Research Group (PRG) on behalf of Supply Chain Management Review and Logistics Management magazines. Learn what logistic experts are saying about their current supply chain technology infrastructures, how they tackle the transportation component, and revealed the gaps that still need to be filled in order to attain end to-end visibility of a streamlined supply chain.

From cost center to growth center. Get insightful opinions on changes in the marketplace from this independent survey of warehouse personnel. Motorola Solutions examined the current warehousing marketplace in our 2013 Warehouse Vision Report, conducted April-May of 2013.

Even though not all publicly-traded less-than-truckload carriers (LTL) have posted second quarter earnings yet, the early consensus for those that have issued results is looking very good.

The advance estimate for second quarter GDP at 4.0 percent could serve as a sign of a steadier and improving economy.

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.