Commentary: Container Shipping Sector Facing the Music

“Summertime and the livin’ is easy” isn’t just a lyric from one of the most covered songs in the history of theater (“Summertime” by DuBose Howard, 1935, from “Porgy and Bess”) but also a feeling I’m sure most of us have experienced. For example, it’s been more than 40 years since I graduated McGill University in Montreal, but somehow I’ve never gotten over the idea that summer is the time for livin’ easy and having a few months’ break. Work has never cured me of the joy of summer holidays or the sounds of summer.

For those toiling away in our industry, summer has traditionally been the time of our annual peak season, those few months, typically June (or July or August) through October (or November) during which a major portion of U.S. merchandise imports to be sold during the back-to-school and holiday seasons enters warehouses and distribution centers across North America.

They are, of course, just waiting for eager customers to buy, buy, buy and provide a boost for wholesalers, retailers and the economy. Perhaps Eric Idle of Monty Python fame put it best in his “Shopping Song”: “Shopping, we’re always happy when we’re shopping. We’re always happy if we shop until we drop! In search of bargains we will never stop, stop, stop!”

Unfortunately, the past few peak seasons (since 2009) have been disappointing. Four years after the 2008 economic crash, the effects are reverberating throughout the national economy, and the impact continues to exert downward pressure on container shipping volumes, particularly in the crucial eastbound trans-Pacific.

As a result, recent summertimes for our industry have been anything but easy; when times were good, most of us were so busy we couldn’t even think about, let alone consider, the suggestions of another classic song about summer: “It’s time to head straight for them hills; it’s time to live and have some thrills … Well, are you comin’ or are you ain’t, you slow-pokes are my one complaint, hurry up before I faint. It’s summertime, summertime, sum, sum summertime” (“Summertime, Summertime” by The Jamies, 1958).

When times are bad, we work even harder to find ways to make things better.

So how do things look in the heat of summer 2012? Regrettably, not that good. Shipping volumes on major trade lanes haven’t recovered to the point that we can relax and put our feet up and take it easy. Volumes haven’t come back to where they were in 2007 or 2008 before the crash. Rate levels have been volatile, as have major carrier cost elements, especially fuel costs.

Add to these concerns the labor uncertainty across the nation’s ports, whether on the West Coast with ongoing disputes between employers and the International Longshore and Warehouse Union or on the East and Gulf coasts with the on-again-off-again negotiations with the International Longshoremen’s Association and the race to reach a new deal before the current contract expires on Sept. 30.

In the meantime, “summer’s here and the time is right for dancin’ in the streets” (Marvin Gaye, et al), so enjoy it while you can.

And don’t forget the fall conference season is just around the corner. Leading off is the 2012 edition of the Inland Port Logistics Conference in Oak Brook, Ill., (near Chicago) on Sept. 5-6. A little more than a month later comes the 6th Annual TPM Asia Conference in Shenzhen, China, on Oct. 17-18. Finally, the 2012 Canada Maritime Conference will be held for the first time in Canada’s business center of Toronto on Nov. 7-8.

In addition to these container sector events, the JOC’s sister publication Breakbulk will stage three conferences this fall: Breakbulk Americas in Houston, Oct. 8-11; the Breakbulk Turkey Congress in Istanbul, Nov. 13-15; and the Breakbulk South America Congress in Sao Paulo, Brazil, Dec. 4-5.

Details of all of these events can be found at www.joc.com/events.

Finally, it’s not too soon to begin planning for what has become the No. 1 industry event of the year: the annual TPM Conference, in Long Beach, Calif., March 3-6. Our planning process is well under way, so look for an initial agenda in the coming weeks.

Enjoy the rest of your summer, and rock on!

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

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