9:01pm | International trade growth will continue, and the economy is on the mend, but several international and domestic factors are casting a cloud over shipping and goods movement forecasts for the rest of the year, according to supply chain and logistics experts who gathered Wednesday for the Port of Long Beach’s annual “Pulse of the Ports: Peak Season Forecast.”
Speaker after speaker pointed toward positive signs in the economy, and speaker after speaker then threw in some caveats, namely: continued high U.S. unemployment, a floundering housing market, unrest in the Middle East, rising fuel costs and the tragedy in Japan.
“The recovery happened a little faster than we thought,” said Dan Smith, a principal at consulting firm The Tioga Group and one of the panelists at Wednesday morning’s event, which organizers say attracted nearly 500 guests to the Hyatt Regency Hotel in downtown Long Beach.
Panelists predicted that trade will grow more modestly this year compared to the double-digit gains in 2010, while the industry is undergoing changes that will transform the way goods are transported globally.
Among the expected changes: Container ships are getting bigger; rising fuel costs are forcing vessel operators to “slow steam” to conserve fuel; railroad companies are modernizing facilities to meet demand; trucking companies are undergoing changes to meet environmental standards; and the scheduled completion of the Panama Canal project in 2014.
Those who will fare well are those who are planning for the future, Smith said, adding, “The Port of Long Beach is on the right track.”
The port plans to invest $4 billion in its facilities over the next decade, he noted.
Jonathan Gold, vice president of supply chain and customs for the National Retail Federation, gave a largely positive outlook for 2011.
According to NRF, retail sales are expected to grow by more than 4 percent for the year, and single-digit import growth is expected — not as strong as 2010’s double-digit growth, but it’s continued upward growth, he noted.
Continuing high unemployment, the lagging housing market and increased fuel costs are impacting importers and consumers, he said. Other factors that could come into play are issues on Capitol Hill that remain up in the air, such as tax reform, free trade agreements, “and you have some major regulatory issues that the government is working on,” he said.
The NRF estimates growth each quarter year-over-year for the port from 2010, but unknowns are lurking that could place that growth in jeopardy, he said. The possibility of continued unrest in the Middle East “could have an impact,” Gold added.
Frank Baragona, president CMA CGM (America) LLC, also stated his view that growth will continue, and like the others, he added some caution.
“We do see continued GDP growth and this is a positive thing,” he said, adding that the forecast of plus-4 percent growth in retail sales “is a good sign.” He stated that “in general we see optimism and a slow recovery; this is what we have been forecasting for the last couple of years.”
Like the others, Baragona’s cautionary statement followed his positive remarks: Unemployment, the floundering housing market, Middle East unrest and the tragedy in Japan, “all of these have kind of put a cloud over the 2011 forecast,” he said.
Click here for a webcast of the event.