The continued weakening of the world’s economies and the global reaction of ocean carriers will be key issues for terminal operators in 2009. The government recently confirmed what we have all been feeling for months: The U.S. has been in a recession since December 2007. A downturn of this magnitude has not been seen for decades and is expected to last through 2009.
When imports began to drop off early last year, increased exports provided the needed buffer and kept total volumes up. Now we see the dollar beginning to strengthen, and as a result, exports are falling. Shipping lines are under pressure to address these conditions in major markets. This is playing out in a variety of ways, including carrier consolidations, increased vessel-sharing agreements and reduction in services. How far these shifts in service will go, we do not know. It is clear that we have not hit bottom yet.
As these changes by ocean carriers crystallize into new approaches to operations, terminal operators will have to respond in intelligent and cautious ways if the industry is to remain stable and efficient. Two years ago, the industry was desperate for some breathing room in the sprint toward new capacity, and now the industry is in a hiatus, albeit for reasons not predicted and certainly not preferred. While this is concerning, it is also an opportunity to focus on much-needed infrastructure improvements, to gain operations efficiencies, and for the industry to position itself for the economic rebound that will undoubtedly come.