“Wishing will make it so …” is a line from an old song, but in leaner times those words were wisely denied by our parents. Wishful thinking never worked for them and they strongly advised us to avoid the pitfalls brought about by complacency. A number of influential analysts, who should know better, are on record as having said that the influx of containers will slack off early in 2005 after the peak holiday period, and also because of annual Chinese New Year celebrations. These analysts assure us that U.S. ports will then clear up their congestion and logjams. Yeah, right.
If our elders were alive today they’d be reminding us of their admonitions about wishful thinking. The Chinese have no intentions of halting or even slowing down their rate of production, nor do the shipping lines have any intention of reducing any phase of their operations. China’s Minister of Communications, Zhang Chunxian, revealed that his country’s containerized trade will grow from this year’s 60 million TEUs to 100 million TEUs by the year 2010. That works out to a little less than a 10% annual growth rate, in line with World Bank forecasts which have been badly underestimated of late. Mr. Chunxian also revealed that total tonnage during the coming six-year period will increase from this year’s one billion tons to 3.5 billion tons. But that doesn’t reflect a 10% growth rate, it reflects a growth rate in excess of 20%, and this is what should concern those in the U.S. who are expecting a slowdown. The significant difference in Mr. Chunxian’s figures cannot be accounted for in breakbulk and automobile shipments. Simply translated, it means that the 10% rate of growth for container estimates is far too low, especially when one considers that Chinese output has tripled in the past five years. China makes no secret of the fact that the biggest obstacle to their plans for continued growth are the inadequacies in the infrastructures of foreign transportation systems, especially those in the U.S. Here’s a true ripple effect. What we are putting off is causing sleepless nights for analysts on the opposite shore of a 7,500 mile wide ocean.
Let’s hear it from another authority … someone who has “put his money where his mouth is”, so to speak. Mr. Nicola Arena, the U.S. President of operations for Mediterranean Shipping Co., expressed confidence in the forecasts of continued and rapid growth of international trade and he chided others in the international supply chain to do some homework and acknowledge the investments that carriers have made in their fleets. His 8,130 TEU MSC Texas is the first of some 30 vessels recently ordered by MSC, now the second largest carrier in the world, and while 60, 70, and even 80 vessels are regularly backed up in LA/Long Beach, we talk about an impending slowdown and restful interlude. That won’t happen because there are no time outs in this game. If the peak periods, the holiday weekends, and the terminal slow downs are more than we can handle now, what will it be like next year, or the year after that? Mr. Arena reminds us that it took just six months to build the Texas, and the other 30 vessels are soon to follow. He also reminds us that it took just 11 days for the Texas to cross the Pacific, and that vessels lose almost that much time waiting in line for a berthing space in LA/Long Beach. He and many other maritime authorities have issued repeated warnings that the U.S. supply line needs an immediate transfusion or transformation.
It’ll be a transformation, not a transfusion. We don’t need more of the same, we need changes.