Annual Review & Outlook 2013: Port of Oakland

Deborah Ale FlintGlobal economic uncertainty and excess shipping capacity are two key factors that will drive the maritime industry in 2013. One of our concerns is the slowing of Asia-Pacific manufacturing, which contributes to trans-Pacific trade volatility. At home, our nation has been in a slow economic recovery, and we saw the U.S. housing market making consistent gains in late 2012. Although we’ve seen some improvement in the U.S. economy, global factors could disrupt the U.S. recovery, making it difficult for Americans’ purchasing power to grow, affecting the demand for imports.

We are cautiously optimistic that U.S. exports will continue on an upward trend. For example, we are seeing an increasing demand for California’s agricultural and meat products. Demand for U.S. products overseas will be dependent on the strength of global economies with which we trade and the U.S. dollar value compared with our trading nations’ currency values.

From 2012 to 2015, 162 vessels of 10,000-TEU capacity or higher will be deployed in the world, according to Alphaliner. An excellent example of this — Oakland welcomed the largest ship to call in the Americas, the MSC Beatrice, a 14,000-plus-TEU container ship, in October 2012.

According to Credit Suisse, analysts predict vessel capacity will exceed demand in 2013, and carriers will likely use economies of scale to reduce their fuel, operating and capital costs. Idle ship capacity totaled 5 percent of the fleet last year, but is anticipated to increase this year as new, larger container ships are deployed. Fewer ships mean a continuing, highly competitive market for the port industry.

Port authorities in the U.S. will need to consider preserving the value of previous infrastructure investments while finding new ways to compete in these market conditions.

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