Absolute Unpredictability

Over the past several years, my wife and I have taken our main vacation time during a two- to three-week period in January, after the holiday season is past, but during the depth of winter in most of the country. So when the midwinter weather in Portland is cold, wet and dreary, we escape to Hawaii.

In addition to being beautiful; geologically, geographically and historically interesting; and completely dependent on efficient logistics, Hawaii is predictable. Its weather is predictable; its traffic is predictable; the beauty, regardless of traffic and weather, is predictable.

But when we were hit by an unusually strong, and unpredictable tropical storm during our visit, I started to think, as I have for the past few years with my January columns, about predictability and how we deal with this concept.

While there is no way to ever predict or forecast anything to an absolute certainty, absolutely all the time, with absolutely no exceptions, we can be pretty certain about some things: The sun will rise in the east and set in the west; life, death and taxes are safe predictions; and our industry will defy consistently accurate forecasts.

It’s become a habit at this time of year to look at all sorts of lists, predictions and forecasts for just about everything. With the added bonus of 2012 being an election year, we’re bound to see more prognosticating than normal. The possible good news for our business is that maybe with all of the other predicting distractions, our own set of forecasts may be lost in the crowd. This, however, seems unlikely. We’ve had a pretty bad run since 2008, and our hopes for a rebound in 2012 will provide ample room for predictions.

Just look at the agenda for The Journal of Commerce’s upcoming TPM Conference, and you’ll note that not less than half of the scheduled panels have some component of prediction in their descriptions. We have a need to look into the future for some guidance about what to expect. Notwithstanding the less-than-stellar record of our industry in making these future castings, we still want to have some sense of what our experts foresee.

I no longer spend much time doing deep dives into the data; what’s past is past and may or may not have significant bearing on what’s to come. I’ve come to rely more on what I see and experience for my own sense of what the coming year might bring. It’s not much, and I strongly recommend not making any major decisions based on the following observations, but here’s my less-than-enthusiastic view of what to expect for our industry this year.

Exports, especially in the agriculture and specialty manufacturing sectors, will remain strong. Agricultural shippers will continue to face difficulties with equipment issues, but system adjustments, such as increased availability of transload facilities, may provide some relief. Export rates, which should increase based on increased demand for space, won’t be as robust as carriers would like, because their mania for market share will continue to keep rates lower than necessary.

Trans-Pacific eastbound volumes will be weaker than hoped and will result in continued vessel overcapacity as U.S. consumers continue to deleverage and keep the lid on personal spending. Once again this year, the January crowds in Hawaii are less than satisfactory to local merchants, hotels and others in the tourist sector, a sure sign the consumer is not back in the game.

With the completion of the Panama Canal expansion project just two years away, the frenzied jockeying for position by U.S. East and Gulf Coast ports will be exceeded only by the frenzy produced by the 2012 presidential election. Let’s hope the ports are more civil than the candidates and the electorate.

Problems in Europe and with the euro will be around all year. China will still be around for us to worry about. Emerging markets will continue their emergence. And the sun will still rise in the east and set in west. That said, most forecasts won’t be good enough for anyone to take to the bank.

My best wishes to everyone for a healthy and successful 2012.

Barry Horowitz is the principal of CMS Consulting Services. Contact him at 503-208-2232 or at barryh@cms-cs.com.

For the full story: Log In, Register for Free or Subscribe