Transport Economics: Don't be so gloomy


Attendees at the CBN’s fourth Port Productivity Conference in Long Beach in October were told not be so gloomy about the decade ahead by opening keynote speaker Edward Leamer, professor of management, economics and statistics at UCLA’s Anderson School of Management.

Leamer said we’ve gone through a consumer cycle, not a business cycle, that he claimed was an overdue repair of the balance sheet.

The Dow Jones has gone through 19 Bear Markets with monthly close declines in excess of 10 percent since 1883, he said.

Based on past, and current data on the lifespan of these markets, Leamer’s statistics reveal an average of 7-month peaks of bear activity with 35 percent average losses returned from peak to trough, and that it takes on average, 1.7 years to repair, or, get our money back, at this rate. The Great Depression took 25.2 years for full recovery by 1954, however, average turnaround time for Bear Markets has shortened considerably since then, his stats showed.

Leamer’s “hunches (not forecasts),” or what he referred to as a time for “turning our shopping malls into factories:”

  • Negative growth behind us
  • Two percent not 5 percent recovery
  • Unemployment rate capping out near 10 percent
  • Commercial real estate troubles continue
  • Depreciating dollar
  • Fed funds rate staying low throughout the year, but some elevation as the economy shows convincing signs
    of growth in early 2010.
  • Possible surprise expansion in homes, cars and business equipment

Public investment: A few highlights from draft House bill* Joe Bryan, vice president, transportation and logistics advisory, Halcrow
for Cargo Business News’ Southeast Freight Conference:

  • Funds 21st Century system: $450+ billion over 6 years, from variety of sources
  • Restores Office of Intermodalism to “highest level” with real power
  • Responsible for National Transportation Strategic Plan
  • Implements new, mode-neutral discretionary program to raise metropolitan mobility of people and freight (“MMA”)
  • Implements reformed discretionary program for nationally
    important projects: multimodal, merit-based, performance targets (“PNS”)
  • Implements National Infrastructure Bank to finance projects, including highway, rail, seaports, intermodal freight
  • Establishes new Freight Improvement Program with dedicated funding for freight-related highway projects
  • Requires statewide freight strategies and private sector involvement
  • Institutes performance measures for freight speed and reliability
  • Includes secondary freight routes, beyond highway system

 

In This Issue

Up Front

News, Trends & Analysis
New Items

Transport Economics: Don’t be so gloomy

Capitol Watch: From cargo screening to
roadability equipment

Trade Tools: A different world of trade in 2010

Supply Chain
Chris Steele: The corner and what’s around it

Compliance Corner: Hot trade compliance issues for 2010

Tech Trends: Five trends for 2010

Commentary
David Bennett: Five predictions for 2010

Gateway Glance
Georgia

Vietnam

The Port Community
East Coast Ports 2010: Five things to watch for

West Coast Ports 2010: The future of West Coast port productitivy?

The Shipping Environment: Five sustainable trends for 2010

Product Review: Cranes

Casualties
Triple-deck trailer barge snaps towline, tankers leak,
Coast Guard ice breaker runs aground ... and much more

Final Say
Your supply chain dynamics: 2010 crisis? Or oppotrunities?