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“Everybody expects 2009 to be a bleak year. Now, it looks like 2010 is going to be just as bleak.”

Idle ports signal two ‘bleak’ years ahead in world trade
 Loss of financing threatens sector that accounts for 25% of world economy
BY MICHAEL JANOFSKY AND MARK DRAJEM JANUARY 5, 2009

 Chris Lytle, chief operating officer of the port of Long Beach, Calif., took in a panorama of the slumping world economy from his rooftop observation deck one day this month.

Shipping cranes stood still, truck traffic trickled and a cargo vessel sat idle, moored to a pier.

“You never see that,” Lytle said. “It’s quiet. Too quiet.”

Port traffic is slowing around the world — everywhere from North America to Asia — as a recession erodes consumer demand and the credit crisis chokes off loans to export-dependent companies. International trade is set to fall by more than two per cent next year, the most since the World Bank began measuring it in 1971. Idle ports are showing how quickly a collapse in trade can spread, undermining growth in each country it reaches.

September and October are typically Long Beach’s busiest months as U.S. retailers take deliveries for holiday sales. This year, September imports fell 15.8 per cent from a year earlier, October’s dropped 9.5 per cent, and November’s slid 13.6 per cent.

“Everybody expects 2009 to be a bleak year,” said Jim McKenna, chief executive officer of the Pacific Maritime Association, a San Francisco-based group representing dock employers at U.S. West Coast ports. “Now, it looks like 2010 is going to be just as bleak.”

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“Shipping volumes at the container port have fallen far short of initial expectations that capacity would be fully taken up this year.”

B.C. port expansion delayed
PATRICK BRETHOUR
Globe and Mail Update
December 19, 2008 at 6:24 AM EST

The port of Prince Rupert is delaying the expansion of its container terminal by at least 18 months, as the global recession and its own financing woes dash hopes of breaking ground on the $650-million project next year.

According to a confidential study commissioned by the federal government, a summary of which was obtained by The Globe and Mail, the port authority has hit the debt wall, with the decline in shipping volumes meaning it will breach federal requirements on its current loans of $22-million.

The port authority’s limited cash flow, and inability to borrow against its lands, means it cannot support an increased debt burden and will not be able to borrow the $200-million needed for its portion of the Phase 2 expansion, concludes PricewaterhouseCoopers. Prince Rupert has “little or no financial flexibility to move forward with plans for Phase 2 in the short term,” says the summary, written in August, before the full force of the economic crisis swept over the global shipping industry.

The head of the Prince Rupert Port Authority confirmed in an interview with The Globe yesterday that Phase 2 has been delayed, and will likely begin in late 2010 rather than the middle of next year.

But Don Krusel, the port authority’s president and chief executive officer, attributed the delay to global economic conditions, and the resulting blow to shipping volumes, rather than to the organization’s finances.

Shipping volumes at the container port have fallen far short of initial expectations that capacity would be fully taken up this year.

Instead, only about a third had been used as of the end of November, and traffic dipped from the month before. The volume of shipping to Prince Rupert in November, if maintained over a full year, would mean the container port would be running at about 60-per-cent capacity, Mr. Krusel said.

The container port may not reach the full capacity of its first phase until 2010, a consequence of the severe slowdown in transpacific shipping volumes. “You cannot push back against a tidal wave,” Mr. Krusel said. Read the rest of this entry »

“The decline we are seeing in recent weeks is faster and deeper than what most people had expected only a few months ago.”

From The Times
December 10, 2008
Maersk Line warns shipping industry needs a lifebelt
Carl Mortished, World Business Editor

It was the one industry geared for huge volume growth. From China alone, annual double-digit percentage increases in trade had been the norm in the shipping world.

But a sudden and sharp slowdown in global trade is hurting the cashflow of container shipping companies. The situation is so critical that a senior executive of Maersk Line said that the accelerating traffic decline could push a big group over the edge next year.

Maersk, the world’s leading container shipping line, has slashed the rates it charges for transporting containers on its Asia-America routes and last week the Danish company said that it was laying up eight vessels amid worsening market conditions.

The eight ships, each with a capacity for 6,500 containers, will remain at anchor, probably in the Far East, until next summer. They are unlikely to represent the last capacity cut for the shipping giant, Michel Deleuran, head of network and product at Maersk, said: “We are certainly seeing a dramatic slowdown. The decline we are seeing in recent weeks is faster and deeper than what most people had expected only a few months ago. If we don’t see improvements, we will be laying up more.”

 

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“Even if growth continues as strongly as it has in recent years, any new trade will probably pass the West Coast by,” 

Ship cargo volume slumping at West Coast ports
George Raine, Chronicle Staff Writer
Sunday, November 30, 2008

Cargo volume at West Coast ports, after years of being dominant in U.S. maritime trade, is slumping, clearly the result of the worsening global economic crisis but also because Gulf Coast and East Coast ports are gaining favor, shipping industry executives say.

The first priority for the cargo container business, of course, is making good decisions in an economy in which consumers have zipped their wallets, orders are a fraction of what they were in good times, Asian factories are shuttered and unemployment rates are rising.

Long-term infrastructure improvements, including increased rail service and improved trucking conditions – as well as helping to cleanse the air at pollution-heavy, dangerous ports – will be necessary for the West Coast to hold on to market share amid ever-increasing competition from across the country, experts say.

Container cargo volumes moving through the West Coast ports fell again in October, and 2008 is now expected to be the slowest year since 2004, according to the National Retail Federation. Collectively, the decline at West Coast ports is more than 1 million containers so far this year, American Shipper magazine reported.

 

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“This is another setback for US West Coast ports…”

Hanjin move another blow for US West Coast ports
By Martin Rushmere 
San Francisco 

Hanjin Shipping has signed a 30-year lease with the Jacksonville Port Authority for a US$300 million, 88-acre container terminal at Dames Point in northeast Florida. Expected to be up and running in 2011, it is expected to bring in $1 billion a year to local business, mostly from the 5,000 jobs that will be created, according to Jaxport officials.

This is another setback for US West Coast ports, which have been losing business as shipping lines focus on East Coast ports.

 

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“Even if global trade returns to its formerly robust pace, Drewry said, “any new trade will probably pass the West Coast by. Volumes are unlikely to decline, but the days of strong growth on the Pacific Coast are behind us.”

Panama Canal expansion threatens some US ports
By Ronald D. White, Los Angeles Times-Washington Post News Service
Published: December 07, 2008, 23:3
1

Los Angeles: The slowdown in international trade has left the docks at the United States’ biggest seaport complex quieter than they’ve been in years.

Some workers, particularly non-union “casuals”, at the Los Angeles and Long Beach ports wait for shifts that never come. Automobiles and other merchandise pile up as consumers dig in for a long economic winter.

But the problems at the twin ports, along with smaller West Coast harbours, extend beyond the nation’s economic woes, maritime experts say, and changes on the horizon could leave the seaports struggling to keep customers.

 

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