LONG BEACH, Calif. — Now that the U.S. has emerged from the economic recession, the freight transportation sector in 2013 will shift its focus to supply chain issues such as federal sequestration, truck capacity shortages and a shift in sourcing away from China, economists told the annual Pulse of the Ports conference in Long Beach Wednesday.
Containerized imports should build as the year progresses, with peak-season imports this fall increasing 5 percent over peak season 2012, said Walter Kemmsies, chief economist at Moffatt & Nichol.
Although U.S. retail sales are not yet back to where they were in 2007, growing auto sales and the rebound in the housing market will continue to drive economic growth this year as those industries did last year. In fact, based on the strength of autos and housing, the U.S. is leading the world out of the economic malaise of recent years, Kemmsies said.
In the longer term, though, imports will have a diminishing impact on the container trades as the aging U.S. population spends its money on services rather than consumer goods. The consumer goods that the U.S. does import will come increasingly from Southeast Asia and Mexico as wages and production costs in China increase, he said.
Exports declined slightly last year because of the recession in Europe and the impact of Europe’s troubles on China and other U.S. trading partners. However, export growth will lead the way in coming years as growing middle classes in Asia and Latin America consume more of the high-quality grains, proteins and other agricultural products that U.S. growers are known for.
The freight transportation sector in 2012 made it through the uncertainty of longshore contract negotiations on the East and Gulf coasts and an eight-day strike by office clerical workers in Los Angeles-Long Beach. All eyes are now focused on 2014 when contract negotiations between the International Longshore and Warehouse Union and West Coast employers will be held.
“Please, please, please stay at the table and get an agreement,” said Jonathan Gold, vice president of supply chain and customs policy at the National Retail Federation.
Of more immediate concern, the Southern California ports of Los Angeles, Long Beach and Port Hueneme have had to deal this month with a reduced presence by U.S. Customs and Border Protection. CBP eliminated overtime work because of the sequestration action by Congress.
Los Angeles-Long Beach, through the PierPass extended gate program, is the only port complex in the U.S. with a regular schedule of night and weekend gates, so Southern California was especially hard hit by sequestration. However, Gold said he “applauds” Customs at the local level for working with the transportation community to remain flexible during sequestration.
At the national level, a trucking crunch could occur beginning in July when new driver hours-of-service limitations take effect, Gold said.
On a more upbeat note, Gold noted that the U.S. and its trading partners are working aggressively this year to advance multination free-trade agreements. Progress is expected this year on developing a Trans-Pacific Partnership, and a proposed free trade agreement between the U.S. and the European Union may begin to take shape this year as well, he said.