TRANS-ATLANTIC TRADE - Freight on the trans-Atlantic in ‘08

By: | at 08:00 PM | Channel(s): International Trade  

For better or worse - depending on your point of view - US exports are up and imports down to Europe. But is that the real story? Time to look for another shift in ‘09?

>By George Lauriat, AJOTIn a simpler time, the great economist Adam Smith wrote, “Consumption is the sole end and purpose of all production; and the interest of the producer ought to be attended to only so far as it be necessary for promoting that of the consumer.” In short you produce a good product or service around a consumers need. And it follows that if the product is good the demand will rise and producer will profit. Of course, Smith lived a couple of centuries before the era of before mega-retailers, supply chains linked by mega-boxships and an economy floating on a green sea of financial securities. Consumerism has been the engine of growth in the US for the better part of three decades and led to the rise of enormous retailers like the omniscient WalMart and a dozen or more demi-retailers, like Target, Kohls, Carrefour or Sears. The supply chains that stretched back into the factories of Asia were based on the proposition that boxships full of high value retail goods, would deliver these goods to the US market and return, largely with empty boxes to be re-filled. Whatever commodity would fill the ship for the return was a bonus for the carriers with the imbalance of full containers running as much as eight inbound to every two outbound. Historically, the standard lament among ocean carrier representatives was that there isn’t enough export freight to fill the ships, and this was cutting into the bothering the bottom line folks in Tokyo, Seoul, Copenhagen, Paris, Geneva, Beijing, Shanghai, Hong Kong and other exotic locals. TIMES THEY ARE A CHANGING But times they are a changing. Recently, an East Coast based NVO (NVOs buy space from the ocean carriers and sell the slots to shippers) related a story that he needed a twenty-foot container and called around and located two in Houston. He placed a call to his contact and she told him that she indeed had not one but two twenties… and after a short pause, said the “147 other reps had already called” for what must have seemed like the last two free twenties on the North American continent. The huge export drive has manifested it self differently in different locations. On a very general basis East Coast ports seem less impacted in terms of sheer volume than West Coast ports. For example, Joe Harris the Media Relations Manager at VPA (Virginia Port Authority) said that they expect that this year “imports will be flat or marginally up, which isn’t bad in these times.” He also said that the region’s exporters, particularly of recycled paper and related products were having trouble securing boxes. “There simply is a dearth of containers,” Harris said. He added that some of the exporters believe they could do 20 to 25 more loads a week if the equipment was available. The numbers bear out Harris’ assumptions. Last year the Port posted 2.13 million teus (up 4%) and through the first two months this year the Port’s box numbers are up almost six percent. Down the Coast in the Port of Savannah Georgia, Robert Morris the GPA’s (Georgia Ports Authority) Director of External Affairs made a similar observation. The GPA posted more than 2.6 million teus, a 20.6% increase for 2007. He said, “Despite the weakening of the market, we still experienced double digit growth fort he first two months of the year.” He said that the exports of forest products and kaolin clay were significant contributors. The kaolin clay is an interesting niche product. The white clay is used a wide variety of processes including glossy paper and porcelain. In the neighboring Port of Charleston South Carolina, Byron D. Miller, Director, Public Relations for SCSPA (South Carolina State Ports Authority) said, “February was the second busiest export month in Charleston’s history. February was also the first time in five years that Charleston’s loaded export TEU exceeded loaded import T

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American Journal of Transportation