The pressure mounts

The pressure mounts

In the first nine months of this year, U.S. container movements resumed their long-term, high-growth pattern, expanding more than 8.3 percent on the import side. Exports, as has also been the case in recent years, grew at a slower overall pace, at 7.3 percent, widening an already gaping trade and equipment imbalance.

An 8.3 percent import growth rate has implications. It means that the already intense pressures on the transportation infrastructure - U.S. marine terminals, truckers, intermodal rail and locally affected communities - are abating not an iota. To the contrary, as we report in this week's cover story about late-night gate hours at the ports of Los Angeles and Long Beach, political pressures to alleviate congestion are gathering steam in Southern California, forcing the transportation community to devise its own solutions lest they be imposed (again) from the state capital.

The volumes, however, don't tell the entire story for container lines. This year has been a largely successful one for carriers on the revenue front - despite long-term, systemic weakness on export freight rates, import rates in the all-important eastbound trans-Pacific shot up as of the May 1 renewal date for annual contracts and haven't weakened much since. Steamship line executives are relatively sanguine over the prospects for another, though less dramatic, rate increase in 2004, though a glut of new and large ships set for delivery in 2005 has made many of them nervous about the prospect of overcapacity that year (see article, Page 18).

Some individual carrier statistics stand out in the figures. Some new and emerging lines in the U.S. such as Sinotrans Container Line (up 109 percent on imports and 657 percent on exports) and Evergreen Marine's Hatsu Marine (up 134 percent on imports and 159 percent on exports) are showing particularly robust growth. Hanjin Shipping Co.'s growth of 26 percent on imports and 14 percent on exports reflects its absorption of sister company Senator Lines at the beginning of this year, though Ole Sweedlund, Hanjin's general manager of North American operations, says the company did not take all of Senator's business, only the most attractive accounts.

China Ocean Shipping Co. says its figures, which is said were down 9.8 percent on imports and 15.1 percent on exports, reflect a reduction in capacity, the implementation of a new global information system, and the fact that it "walked away from businesses that were below our costs for outbound shipments."