In recent years, we have observed many changes that have affected our industry, physical as well as market-driven. In last year’s Review & Outlook, our interest was in the financial changes that were beginning to be recognized and the impact those would have on the movement of cargo. Specifically, we began looking at the weakened U.S. dollar and drastic increases in fuel prices. It is comfortable now to say those items were indeed big players over the past year.
The dollar appears to remain weak, which should continue to support the concept of U.S. export growth. This growth, however, will likely continue to be in the bulk and breakbulk areas because the U.S. container business is heavily centered on import cargoes, which have clearly fallen off.
Fuel appears to have stabilized, at least for now, and the Olympics have come and gone, which in itself appears to have played a significant role in the incredibly fast-paced decrease of freight rates. With freight rates considerably lower and fuel costs slightly more manageable, will exports continue to grow even with the pressures of a weak global economy?
That’s a difficult question to answer. However, grain and barge rates along the Mississippi River are among the highest ever. Understanding this to be a seasonal factor, it still seems to show that despite the global economy, cargo continues to grow, and there seem to be some industries doing more than just surviving during these tough economic times.
We have new leadership headed to Washington, bringing with it new ideas and new direction. Legislative decisions made over the next several years will have a direct impact on the movement of cargo. It is too early to even guess at this impact, but there will be changes.