Is International Shipping Returning to Pre-Recession Levels?
Travel back to 2007. Payton Manning led the Indianapolis Colts to the Super Bowl XLI win over the Chicago Bears. Spider-Man 3 broke box office records with its theatrical release. And carriers were ordering new ships, yes megaships, in record breaking numbers in response to the boom in international shipping.
Payton Manning took the Colts from the bottom of the NFL to Super Bowl champions while becoming a four-time MVP. But a series of neck surgeries had Payton Manning on the sidelines by the 2011 season and the Colts let him go in 2012.
While Spider-Man 3 broke all those opening weekend box office records, fans and critics blasted the movie. Too many undeveloped villains, bad plot points (thanks convenient butler for getting Harry back on track right when he was needed), evil-emo-dancing Peter Parker… DVD sales were well under industry expectations, even after record setting advertising dollars were spent to promote sales. There would be no Spider-Man 4 as previously planned.
The ordering of all those megaships by carriers was quickly questioned. International shipping went from a booming industry that was making ship owners, investors, and bankers rich to an industry plagued by overcapacity with carriers losing billions of dollars as the Great Recession hit countries all over the world at the end of 2007 and throughout 2008.
Five years after the Great Recession ended (for the U.S. it “officially ended” in June of 2009), “the U.S. economy remains far from fully recovered” according to an Andrew Fieldhouse article in the Huffington Post.
Recovery seems to take forever, doesn’t it? Will we ever get back to a global economy with the kind of booming international shipping industry that led to all those optimistic megaship orders from international shipping carriers?
Perhaps the August import/export numbers at the Port of Los Angeles suggest that international shipping is returning to pre-recession levels.
Cargo volume rose 6.7 percent at the Los Angeles port in August compared with the same month a year ago. The port moved 757,702 cargo containers, making it the busiest single month at America’s largest port since August 2010, when it moved 763,837 units.
Imports for August at Los Angeles also soared 7.8 percent to 383,551 units, while exports were up 6.16 percent to 168,248 units. Empties, which are empty containers sent overseas to be replenished with goods, also increased 5.3 percent from a year ago.
“A combination of larger vessels calling at the Port of Los Angeles as well as the beginning of peak shipping season has led to a particularly strong August here in Los Angeles,” said Los Angeles port spokesman Phillip Sanfield.
The port hasn’t seen a month with 757,000 units since August 2010, and before that, its peak year in 2006, Sanfield said.
The booming international shipping industry in 2006 was a big part of why carriers felt so confident in ordering all those megaships in 2007. Seeing import and export numbers at the Port of Los Angeles that recall 2006 numbers to its spokesman’s mind is a great sign for the direction in which the international shipping industry is heading.
On first look, numbers right next door at the Port of Long Beach seem less optimistic.
Meeks’ Press Telegram article went on:
Meanwhile at the Port of Long Beach, overall container cargo movement in August was down 9.1 percent from a year ago, with 573,083 units. Imports declined 8.2 percent to 300,851 units and exports fell even further at 17.7 percent to 126,856 units. Empties were also down 2 percent to 145,376 units.
Long Beach port spokesman Lee Peterson said last month’s numbers are being compared to August 2013, which for Long Beach was the busiest month since October 2007.
October 2007 was right before the Great Recession grabbed hold of the U.S.
Lee Peterson also attributes the lower August numbers at the Port of Long Beach to an early peak season the port received from April to June as shippers imported and exported early, before the traditional peak season, to avoid shutdowns or slowdowns they feared might happen during ILWU contract negotiations with West Coast ports, according to Meeks’ article.
Payton Manning returned to the field last season and led the Denver Broncos to the Super Bowl with a record breaking, MVP performance season (let’s ignore how that Super Bowl game actually turned out for the moment).
Spider-Man has successfully returned to the big screen in well-received reboot movies for the franchise.
Is the global economy on its way to a similar rebound? Could international shipping be returning to pre-recession levels?
Let us know your thoughts in the comments section below.