After a five per cent growth in 2015, it appears that U.S. ports will slow slightly to only three per cent in 2016, according to Moody’s investors Service. As demand for American exports weakens, the US dollar remains strong and inventories remain high, the container volumes that sky-rocketed last year will begin to taper off.
The perfect storm of increased port space that occurred when the West Coast ports finally reached an agreement and cargo started flowing will taper off and slow but will not begin receding as of yet. The gridlock that crippled both Long Beach and Los Angeles has become smooth flowing once again increasing inventories in the US, which has also dampened the traditional peak season somewhat. As retailers want to be prepared to stop any further shortages if there’s an increase in congestion, they are planning further out, just in case.
While there is going to be a decrease, we expect much more stability surrounding the 2016 figures as fewer labor related issues, weather crisis’, and consistently low fuel prices will help keep the market even as Chinese growth continues to slow. The Chinese trade accounts for up to thirty per cent of all container moves and affects all global demand for cargo.
Long term growth, according to Moody’s, should follow the US GDP with relative certainty. As we move into a period of a slower, albeit consistent growth, we at BCS expect hiring and jobs to remain stable and growing along the same rates as port and trade numbers, possibly at a rate less than 2015 but steady and competitive all the same.