Peeve or Fitch?

This press release appeared in the “Financial Times”, and it merits a second look.

“Fitch Special Report – U.S. Seaports: Challenges and Opportunities

“SAN FRANCISCO – (Business Wire) – Aug. 9, 2006 – Fitch ratings today released a special report titled ‘U.S. Seaports: Managing Capacity.’ Fitch’s 2006-2007 outlook for U.S. seaports is robust, based on strong cargo growth in the near-term, presenting both opportunities and challenges.

“The greatest near-term challenge U.S. seaports face is dealing with capacity-related pressures, which have competitive implications. As West Coast ports and the U.S. land bridge feel the strain of increased cargo volume, Eastern and Southern ports must continue developing capacity through technological advances and innovative logistics solutions so that commerce demands will be met. Future competition will come from development and utilization of ports in Mexico and Canada. The costs associated with U.S. seaport infrastructure improvements are quite significant, and although those seaports operate profitably, traditional financial resources used to fund such enhancements are increasingly constrained …

“Currently, the shipping industry is operating at record levels. Fitch expects 10% growth in U.S. seaport cargo throughput as the shipping and logistics industries enter their peak season (July through November). Additionally, U.S. cargo volumes are expected to double between now and 2020-2025. U.S. seaports benefit from surging cargo volumes, while ship owners, operators, and logistics companies continue generating robust earnings. Moreover, positive economic trends in Japan, Germany, and China, along with the trend of U.S. companies to move production overseas, has driven ocean trade to all-time highs.

“Nonetheless, cargo growth at select U.S. seaports will likely slow starting in 2008. Fitch’s economic forecast for 2007 indicates that global growth could move back toward 3%, and the expected soft landing of both the global and U.S. economies, together with excess vessel capacity, will likely pressure the shipping industry in general, and potentially U.S. seaports. Furthermore, U.S. seaports that depend on dramatically increasing cargo volumes and rates may face a challenging environment after this season if trade patterns shift or consolidation results in a significant realignment in the shipping industry.”

Fitch’s analysis raises a bunch of questions. Here’s a sampling:
– What does this analyst mean by ‘technological advances and innovative logistics solutions’? [If a ‘magic bullet’ has been found, port authorities would love to know about it.]
– Instead of taking for granted ‘Future competition … from ports in Mexico and Canada’, why not push for the development of some of our own West Coast ports?
– And the ‘pressure’ from ‘excess vessel capacity’? Isn’t that what we were warned about by this same “Financial Times” earlier this year? And by Neil Davidson, and Charlie Woo, and Nolan Gimpel, and James Hartung and Conrad Everhard, etc., etc., etc.? Hmmm?