03 September 2008

What a waste

More full containers moving from US ports to China

Forget scrap paper, plastics, scrap metal and the bounty of agricultural harvests. Until this year, the biggest US contribution to the international supply chain was vast mountains of empty cargo containers outbound on ships to China, where they were quickly refilled with the imports on which American consumers have come to depend. "For the longest time, we used to joke that our biggest export was our fine California air," said Eric Caris, assistant director of marketing for the Port of Los Angeles. "The good news for us in 2008 is that we are finally exporting more loaded containers than empties." From January to July, exports have jumped more than 27 per cent compared with the same period of 2007 at the nation's two busiest container ports, Los Angeles and Long Beach. But the export boom overshadows a deep pullback in US consumer spending. Imports are down so much that the twin ports are on pace to record their second consecutive year of declines in overall international trade. That hasn't happened in at least 30 years, despite a handful of national recessions along the way. The slowdown has hit almost every harbour in North America.

Of the 10 busiest seaports that are tracked every month by the nation's largest retailers for signs of congestion, only two are doing more business than last year. One is Vancouver, which is serving an economy much healthier than that of the US. The other is Savannah, GA, which is winning market share as the first big East Coast stop for cargo headed north from the Panama Canal. At the five top US West Coast ports -- Los Angeles, Long Beach, Oakland, Seattle and Tacoma, WA -- imports were down by as much as 13% through the first seven months of the year. At Long Beach, where imports fell 12.7%, some of the biggest declines can be found in materials used in remodelling and new construction, port spokesman Art Wong said. Stone, plaster and cement imports were down 15.4%, Wong said. Wood imports were down 12.9%. Furniture and bedding imports were down 10.1%. Big contractions are also being seen in consumer goods, which retailers are hustling to bring in now to fill shelves for the holidays. Toys and sports equipment imports, usually among the top categories at the Port of Long Beach, were down 16.5% through June, Wong said. Another popular import, footwear, was down 5.2%. Aided by the weak dollar, which makes US goods cheaper for foreign buyers, outgoing traffic from the five big West Coast ports was up by as much as 23% in Los Angeles and 23.2% in Long Beach. Meanwhile, the number of empty containers shipped back to Asia for refilling with imports was down by at least 22.1% at each of the major ports.
(Vancouver Sun 080903)

Much like the railways that end up having to ship a lot of empty containers back to the point of origin in a situation where the flow of goods is largely one-way, the container ship companies have to deal with this too. As with rail I assume they have to charge demurrage on containers for both directions to the customer whether they are full or not. It seems like a huge waste of energy and resources to be sending empty containers back and it is good to see that this is a problem that is slowly being addressed.

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