Amid continuing tepid growth in world trade in the Great Recession’s aftermath, the EU crisis and a slowdown in China, the Pacific Northwest saw an overall decline in its market share in the second quarter. A Journal of Commerce report said overall container traffic to North American West Coast ports fell by 2.3 percent compared with the same period in 2012 and overall market share also declined. But the pain was not uniformly felt.
In Los Angeles, container volume fell 9.9. percent, but this was offset by Long Beach’s 10.1 percent growth. This helped keep Southern California dominant in its share, up four tenths of a percentage point to 60.1 percent. Oakland was off 0.2 percent but its share grew slightly to 9.8 percent among the West Coast ports.
The story was different in the Northwest. The Port of Tacoma saw its container volume leap 34.3 percent, the best showing among the group surveyed. Unfortunately, most of this came as a result of the Grand Alliance and Hamburg Sud lines moving from the Port of Seattle, where traffic plummeted 28.8 percent, the biggest loss seen that quarter. Portland dropped 13.8 percent. Thus, the Northwest overall fell to 11.7 percent market share from 12.1 percent in the second quarter of 2012 and 12.4 percent in 2011. Share in Vancouver and Prince Rupert grew to 13.8 percent vs. 13.4 percent in 2012 and 12.6 percent in 2011.
The chief financial officer of Maersk Line, the biggest seaborne container shipper, recently said the global trading cycle has hit bottom and is posed for a rebound. Two years ago, Maersk spent $3.8 billion on giant new ships in anticipation of a rebound. The World Trade Organization has forecast that global trade would grow a mere 2.5 percent this year. However, Maersk anticipates container traffic to recover to between 4 percent and 6 percent in 2014 and 2015.
All that must be predicated on the U.S. avoiding a self-imposed default and the resulting financial meltdown.
But for the Northwest, and the Puget Sound specifically, the writing is on the water. If it doesn’t regain momentum and increase its market share, it can expect no help when the wider Panama Canal opens. In an economy that is mostly defined by making the super-rich richer, the bankers happy and minting fast-food jobs, the ports provide middle-class positions to thousands and are essential competitive assets. I know we’re in danger of crisis fatigue, but the relative decline of the Puget Sound ports is one. This should be an urgent matter for political and business leaders.
And Don’t Miss: Forecast sees shutdown costing U.S. economy $300 million a day | Bloomberg
Today’s Econ Haiku:
Where’s Kevin Spacey?
Francis would be a statesman
In this House of Cards