East Coast ports optimistic for post-coronavirus recovery
Officials from South Carolina and New York/New Jersey ports see an end in sight to blanked sailings and lower volumes.
“Despite what’s happening right now, we are very optimistic. We think May and June is going to be the worst of it in terms of COVID impacts and then I think we’re going to bounce back quite strong,” Sam Ruda, marine director for the Port Authority of New York and New Jersey (PANYNJ), told the Agriculture Transportation Coalition (AgTC) during its virtual annual meeting Thursday.
“Big picture we were down 8% in April. Year-to-date through April we’re down about 2.5%. I think obviously May and June are going to be our big months” for year-over-year cargo volume declines, Ruda said.
“March and April we had 12 and 13 blanked sailings, respectively. They were all from the Far East. It really shot up this month — May, 21 blanked sailings. In June, 25 have been announced and only 12 in July,” he said, pointing out that canceled sailings now are a global phenomenon and no longer limited to trans-Pacific services out of Asia.
Looking ahead, some things will change. Some will not, according to Ruda.
“There is a lot of rhetoric about the end of globalization. We think that’s a bunch of hogwash. A shift in sourcing? Absolutely. Increased China tensions? Absolutely,” he said.
“We have slightly more Suez services than we have Panama services through here. We think that’s a trend that’s going to continue. We started to see cargo shift out of China to Southeast Asia/West Asia predating the China tariff issue. It certainly has accelerated, I think, because of the pandemic. The idea of diversifying cargo sourcing is going to increase,” Ruda said.
South Carolina Ports Authority (SCPA) President and CEO Jim Newsome also sees some changes ahead and welcomes them.
“I’m an optimist by nature and in spite of all the dismal news right now, I see a very good growth prospect for the long-term future. We don’t believe that trade is coming to an end. I don’t believe that all the manufacturing is coming back to America,” Newsome told the AgTC on Thursday.
“We think the East Coast and certainly the Gulf Coast are going to continue to grow as part of the overall U.S. port volume percentage over 50%,” he continued. “We think the Southeast is going to grow above market for the simple reason that we have a population growth and manufacturing and distribution growth, and I don’t think anything that’s happened with this virus is going to stop the fact that people will continue to move from more expensive, denser populated areas to the South.”
Retail is changing, too, Newsome said.
“The future is all about e-commerce. The large omnichannel retailers are winning and I think we’ve seen the surveys that omnichannel retail requires more distribution space. You’re probably saying, ‘Why are you talking about imports at an export conference?’ Well, imports create container availability for exporters so we think it’s important to continue that growth,” he said.
“We’re seeing some new trends. We’ll handle about 50,000 resin containers in export next year. We’ve got two big facilities coming online and a lot of our focus is on transloading cargo because there’s less and less port-based space to transload cargo,” Newsome said. “We’ve got a strong inland port network. Our inland port at Greer has probably set the standard for inland ports and we think that adds to our reliability supply chain-wise.”
Meanwhile, the SCPA, like the PANYNJ, is experiencing lower volumes and a higher number of blanked sailings during the pandemic.
“We were sailing along beautifully through January, volume ahead of plan, and then obviously the virus hit. So in quarter two of this year, our volume is probably down about 15% year-over-year,” Newsome said. “We see a slow crawl out of the situation that we’re in. … We’re probably back in fiscal 2022 to where we are today.”
The frequency of canceled sailings to the Port of Charleston is declining, he said.
“We’ve had 53 blanked sailings announced. We’re through 30 of those by this weekend, so another 20 to go. The good news is those seem to be moderating. As of right now, we didn’t have any new ones [announced] this week,” Newsome said.
Source: Freight Waves