Cargo Business News - Current Issue


Home The Magazine Current Issue Archives Blog About CBN Subscribe Reprints Conferences Overview Southwest Intermodal Port Productivity Conference Southeast Freight Conference Port Handbooks Overview Pacific Northwest Ports Handbook Golden Gates Ports Handbook Southern California Ports Handbook Buy Handbook Newswire Subscribe Archives Calendar Classifieds Advertise General Information E-cargo Upoad Files

Will the Stimulus Package Help the Trade Conditions? By David Bennett Vice President, Global Logistics Sales, Schneider Logistics International As I write this column, President Obama has just signed into law one of the largest spending bills in our nation’s history in an effort to stimulate the economy. In recent months since this crisis began, I have consistently said that our nation and economy will improve, and that we seem to have very short memories when it comes to dealing with economic slowdowns. Our partners on the ocean carrier side have seen dramatic downturns in trade before (remember 2001?). Capacity quickly outpaced demand, resulting in conditions similar to what we are experiencing today. Shippers seized the opportunity and drove rates to the floor, similar to what has happened over the last six months. Now that the government has taken steps to address the economic crisis, the questions we need to ask are will the stimulus package revive our economy, and will we see improvements in trade conditions? Are There Positive Signs? My wife and I recently had the opportunity to have a wonderful dinner on the eve of Valentine’s Day (without kids), and we both commented that the place was packed, and the streets and shops were full of people. Wasn’t this a recession? There is NO DOUBT that many Americans are suffering right now with the pressures of this crisis. Many of our colleagues in this industry and other industries are experiencing extremely difficult times due to job cuts and tremendous depreciation in assets such as housing values moving in the wrong direction and diminishing 401K plans that are making everyone sick to their stomachs. However, I remain convinced there are positive signs, and we will see a turnaround starting to take shape by the second half of 2009 that hopefully puts many Americans back to work soon. What are the positive signs that lead me to believe this? • Record low interest rates — 5.25 percent fixed for 30 years (Bloomberg News) • Consumer spending in January 2009 rose 1.5 percent (Dept. of Commerce) • Fuel prices have remained stable over the last 90 days Granted, these are just a few examples, and many experts say the increase in January consumer spending will not sustain in February and March, but these are the first positive indicators that we have seen in months. I heard from a colleague that the traffic at the Las Vegas February Furniture Market was noticeably up from the last market, so there seems to be some optimism in the retail environment that has been remarkably negative for the last two years. Whether traffic equates to orders is yet to be determined, but at least people are “looking at opportunities.” What Does This Mean for Our Industry? By now, everyone is fully aware of the downturn in transpacific trade, as well as Asia to Europe trade. This has caused carriers to lay down vessels instead of operating at revenue levels that simply cannot be sustained over the long haul. Will this stimulus address the tremendous imbalance in trade with our trading partners in Asia? Will it help carriers manage the heavy cost of empty container repositioning; to cover the losses to move empties back to their key origins that normally create positive revenue? Will it address any of the highly publicized infrastructure needs that our ports and terminal operators need to begin building for the future demands in trade? Let me answer these questions. • Unfortunately, it will not impact the trade imbalance. If the dollar weakens, then exports grow and imports contract. Carriers continue to struggle with moving containers inland that must be repositioned back to Asia at a significant cost. • It is doubtful the funds will filter to the ports and terminal operators, and this is where we need to focus much of our attention in terms of infrastructure improvements. The Panama Canal Authority is moving ahead at full steam, allowing much larger vessels to pass through the canal. Unless we take some aggressive steps, our ports may not be ready for these vessels due to draft restrictions. Our industry creates jobs through global trade. I have harped on this for months now — are we taking advantage of this slow-down in trade to prepare for the future? This is the greatest economy in the world, and we will eventually see improvements that will generate significant trade volumes again, but my concern is that this specific stimulus package does not address the fact that we need to be taking advantage of this period to prepare for the future.	In This Issue News, Trends & Analysis New Items Inventory Investment and the Implications on GDP Growth Supply Chain Responding to Changes in the Supply Chain Compliance Corner: How to Utilize Technology to Manage Global Trade Compliance Overseas Opportunities for Exporters Create a Strategy before Cutting Costs Features Gateway at a Glance – Great Lakes, St. Lawrence Seaway 2009 Ro-Ro Trend Supply Chain product review Automotive Supply Chain Software Ports & infrastructure Five Major Ports, Five Different Ways to Handle the Recession Funding a National Freight Policy Commentary Will the Stimulus Package Help the Trade Conditions? Casualties Who, What, Where, When Final Say
Home/Subscribe/Our Conferences/Ports Handbooks/Advertising Info/E-Cargo/Publishing Services/About Us Contact/Classifieds/Industry Calendar/Past Issues/Upload Files All contents of this site are copyright 2008 by Northwest Publishing Center and Cargo Business News and may not be reproduced in any way without express written consent of the author. Site design by Spilled Ink Studio

Will the Stimulus Package Help the Trade Conditions?