The “economy is recovering” story is not reflected in traffic at LA area ports (LA and Long Beach, which combined are the fifth largest in the world). The outlook for the shipping industry is even worse on the whole than for traffic volumes, since many carriers did not cut equipment orders.
And while shipments are expected to improve 10% next year, industry experts do not see that as a rosy number, given the depressed levels this year. In addition, they see next year’s rebound as driven by inventory restocking rather than a real change in end user demand.
From the Los Angeles Times:
In another sign of how deep the global recession has become, the ports of Los Angeles and Long Beach on Friday reported their worst combined import statistics for September in nine years.
September is often the busiest month at the nation’s biggest port complex, making it one of the best barometers of the health of the economy and international trade.
The port of Los Angeles received 309,078 containers packed with imported goods in September, representing a decline of 16% from the same month last year and 27% from September 2006, L.A.’s best month ever for imports. Long Beach received 224,924 import containers in September, a drop of 19% from a year earlier and 32% from September 2007, the port’s best September ever.
For the first nine months of the year, imports, exports and empty containers through the port of Los Angeles were down 16% at just under 5 million containers while the Long Beach port saw a decline of nearly 25% at just under 3.7 million containers, compared with the same period last year….
…. a greater worry goes beyond the immediate and substantial loss of local trade-related jobs: Some of the ports’ most important tenants were so poorly positioned for the downturn that they might sink completely in a sea of billions of dollars of red ink, experts say….
Paul Bingham, managing director of global commerce and trade for IHS Global Insight, said his firm predicted a 10.1% growth rate next year over 2009 levels in international trade, but he added that the figure masked a great deal of weakness. Part of what will make 2010’s international trade figures a double-digit improvement over 2009 will be rebuilding inventories for warehouses, not direct sales.
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If we move thru the Christmas season and retail sales are flat to down, then you will be correct to conclude that we are nowhere near a recovery. Any assertion that we have entered a recovery should be viewed as being spin, there is significant political interest in putting lipstick on this pig of a recession.
This will eventually blow back on East Asia. Imagine the political pressures of devaluation as they play out in that region. It will end ugly.
The other day I was waiting at Anchorage (Alaska) International Airport, and I overheard a telephone conversation a fat old dude with a white beard was having. It went like this, and I quote:
“Look, Rudolph, you know you’ve been like a son to me, but I feel it in my bones it’s gonna be a lousy Xmas season, so I gotta let ya go, boy.”
[sobbing heard from the other caller]
“Sorry, Rudy, no can do. Can’t affort to feed you all that Chinese hay, when there’s like 50 airline pilots lined up outside of my igloo, willing to fly the sled for 16 grand a year plus food stamps and no benefits.”
Vinny G.