Moffatt & Nichol economist Walter Kemmsies calls exports the “unspoken hero” of the U.S. economic recovery, and they may well drive the country’s next growth cycle. That is already happening in the Pacific Northwest.
Addressing the Port of Tacoma’s annual breakfast meeting last month, Kemmsies said Asian consumers are increasing their purchases of food products, and the U.S. is a leader in the export of a wide variety of agricultural products.
First quarter container statistics for the ports of Portland, Ore.; Tacoma and Seattle, Wash.; and Vancouver and Prince Rupert, British Columbia, show that although imports and exports increased year-over-year, exports gained more than imports.
According to first quarter numbers posted by the Pacific Maritime Association, total container volume moving through the Seattle-Tacoma gateway increased 9 percent over the first quarter of 2010. Imports grew 5 percent, while exports were up 13 percent.
Total container volume at Portland in the January-March period rose 16 percent, with imports growing 14 percent and exports up 18 percent.
The ports are the main gateways for outbound agricultural products from the fertile farmland in Washington and Oregon, and handle grains, fruits and vegetables heading out of the U.S. Midwest. But Kemmsies, speaking this month at the Virginia International Trade Symposium, said their growth is partly constrained by the limits in infrastructure to get containerized agriculture goods to the ports.
“I personally believe we lack the infrastructure to boost our exports, and we are choking on our own congestion,” he told the meeting in Norfolk, Va. “We need to focus on getting containerized exports to the gateways. Right now, with containers going to urban areas and exports coming from rural areas, we have a positioning problem. That is where the infrastructure has to go.”
Imports had an edge in Port Metro Vancouver, Canada’s largest port, increasing 11 percent in the first quarter, while exports were up 8 percent. Total TEU volume, including empty containers, was up 10 percent over the first quarter of 2010.
Container volume moving through Prince Rupert was down almost 15 percent in the first quarter because of significant drop in the return of empty containers to Asia. Canada’s newest container port is building its export base, so a number of containers that in previous years would have been returned empty are now carrying exports to Asia. Prince Rupert’s loaded export container volume jumped 70 percent in the first quarter.
Industry analysts project that U.S. containerized imports from Asia will increase about 6 to 9 percent this year depending upon such factors as the impact of high energy prices on consumer spending, the extent of the rebound in the housing market, and the return of Japan’s exports after March’s tsunami and nuclear reactor disaster. Imports moving through the Pacific Northwest ports generally fell within that range.
The growth at individual ports will be affected by conditions that are particular to their operation. In 2010, for example, Seattle’s container volume surged faster than the U.S. port industry as a whole, because Maersk Line, the world’s largest container line, relocated its operations there from Tacoma. Container volume increased 35 percent.
The container volume in Tacoma fell 5.8 percent, with exports declining even more steeply at 19.8 percent. However, the year-over-year comparisons began to improve at the end of 2010, and in December, Tacoma returned to double-digit growth, with imports up 16 percent compared to December 2009 and exports up 17 percent.
Prince Rupert should experience an especially strong year in 2011. The port, which opened its container terminal in 2007, has been handling two weekly services from Asia, and announced last month that two additional weekly services will commence in May.
Contact Bill Mongelluzzo at email@example.com.