Seattle, Port of

The global financial crisis and recession will continue to have a significant impact on the maritime and transportation industries this year and beyond. Reduced consumer spending in the U.S. and elsewhere will result in lower cargo volumes and lower near-term revenue for port authorities, ocean carriers, terminal operators and other businesses within our industry. Consumers will continue to look for low prices, which will keep manufacturing activities centered in low-cost locations, though overall manufacturing is likely to decline, even in China. Lower near-term fuel costs, which are part of the current deflationary trend, will help keep a fair amount of manufacturing activity outside the U.S. Ocean carriers will continue to restructure routes and alliances to reduce cost, which will in turn affect intermodal rail volume and routes in the United States. These two factors, which are largely beyond the influence of port authorities, will result in winners and losers among ports and the regions they serve. Continuing volatility in the financial and credit markets will make it harder for port authorities to fund capital projects, and some projects planned or already under way may be shelved or delayed. Even with all of those challenges, the economy will eventually stabilize, consumer spending will rebound and global trade will grow. The businesses that successfully navigate the current storm and still have a revenue stream and debt capacity will drive the recovery.