The state of the economy will continue to loom large on our industry in 2011. With lackluster U.S. GDP growth expected to be in the 2 to 3 percent range for the coming two years, consumer confidence obviously is low. The high unemployment rate hovering and a dramatic increase in private thrift (actually a good thing, in my view) foretell general weakness in the recovery. The European and Japanese economies are in a similar state, with a lack of robust growth predicted for the coming years.
Because the pace of recovery won’t accelerate soon, growth in trade experienced since the nadir of the 2008 crash will slow considerably in coming months, which will again strain carriers’ discipline in matching supply to demand.
Overcapacity also marks the marine terminal-handling industry, which has all but halted terminal expansion and seen increased pricing competition, especially from the leveraged buy-out enterprises of several years ago. This will mean a continued emphasis on driving inefficiencies out of the system, which, over time, will prove beneficial to operators.
On the labor front in the East Coast, there is a rising vocal faction that seems intent on threatening the relative labor peace the region has enjoyed for decades. Any significant threat to labor peace at this juncture will surely dampen the prospects of recovery for East Coast labor and operators in the coming year.