A low tide lowers all boats

A low tide lowers all boats

No one under 80 years old can remember worse economic times than these. What we're in now doesn't compare with the Great Depression, but it's not a good time, especially for the growing number of people who have lost their jobs.

We all wish this economic crisis weren't happening, but it's worth remembering that a low tide lowers all boats. These dismal economic times could produce some positives for transportation and logistics. For example:

-- Companies will get back to basics. Good times encourage bad decisions -- banks extend mortgages to homebuyers with no hope of repayment, businesses enter markets that they should avoid, companies get sloppy about pricing. This recession will refocus many companies' and people's' thinking -- if they're smart and disciplined enough.

-- Fuel prices have fallen, a result of slumping demand. It's hard to believe that barely five months ago, ships' bunker fuel fetched $700 a ton, gasoline was selling for $4 a gallon in some U.S. states, and truck diesel was going for even more. Soaring fuel prices skewed planning for cargo interests as well as carriers. More stability in fuel costs will have widespread benefit -- if we don't become complacent again about preparing for the day when high costs return, as inevitably they will.

-- Congestion has eased at ports and terminals. That means publications such as The Journal of Commerce don't have to write constantly about it (and better yet, you don't have to read about it). This is an unalloyed benefit to the supply chain -- if facilities and operating practices can be improved to keep things running smoothly when traffic picks up.

-- Prospects have brightened for overdue investment in transportation infrastructure. The economic impact of the proposed economic stimulus seems to have been oversold, but there's no question that it will be good for supply chains -- if lawmakers can resist diverting money to pet projects and boondoggles.

-- Freight rates are coming down. That's not good for carriers, but if you have cargo to ship, this is a buyer's market. Ocean, air, road and rail carriers are desperate to fill space, and are willing to deal. Lower transportation costs can help companies ride out the economic slump -- if shippers are savvy in their negotiations.

-- Bad economic times reveal who your real friends are. When times get tough, shippers try to stretch out payment terms and use intermediaries as a bank. Manufacturers, distributors and retailers try to push off inventory on each other. And despite the talk about relationships, look for many cargo interests to try to stick it to carriers in the next negotiations. When good times return, those on the receiving end of these tactics will remember -- if they're still around.

Joseph Bonney is editor of The Journal of Commerce. He can be contacted at jbonney@joc.com.