It's getting worse and they can't spin the real numbers

[ALS]

Imports dive at ports of Los Angeles and Long Beach
They report their worst combined import statistics in nine years for September, which is often the busiest month at the nation's biggest port complex.

Port of Los Angeles
By Ronald D. White
October 17, 2009

In another sign of how deep the global recession has become, the ports of Los Angeles and Long Beach on Friday reported their worst combined import statistics for September in nine years.

September is often the busiest month at the nation's biggest port complex, making it one of the best barometers of the health of the economy and international trade.

The port of Los Angeles received 309,078 containers packed with imported goods in September, representing a decline of 16% from the same month last year and 27% from September 2006, L.A.'s best month ever for imports. Long Beach received 224,924 import containers in September, a drop of 19% from a year earlier and 32% from September 2007, the port's best September ever.

For the first nine months of the year, imports, exports and empty containers through the port of Los Angeles were down 16% at just under 5 million containers while the Long Beach port saw a decline of nearly 25% at just under 3.7 million containers, compared with the same period last year.

As dismal as those figures are for the two ports, which rank first and second in the U.S. in container volume and together rank fifth in the world, a greater worry goes beyond the immediate and substantial loss of local trade-related jobs: Some of the ports' most important tenants were so poorly positioned for the downturn that they might sink completely in a sea of billions of dollars of red ink, experts say.

"Without a doubt, the Southern California ports should be worried," said Neil Dekker, an analyst at Drewry Shipping Consultants in London who produces container industry forecasts. "Companies will go bust; freight rates may take years to recover."

The outlook could hardly be more ominous, said John Husing, an independent analyst with Economics and Politics Inc. in Redlands who follows the effects of global trade on the Inland Empire.

Seeing nothing but smooth sailing ahead for the globalization that has reshaped international trade, the world's shipping lines committed themselves years into the future to orders for new container ships that have as much as 69% more cargo carrying capacity than the vessels that were the world's largest in 2004, Husing said.

He described it as "the worst recession in modern times hitting an industry that was geared for the opposite of what they are facing."

Through the first half of 2009, each of the world's 17 biggest shipping lines were in the red, according to Paris-based AXS-Alphaliner, which maintains online databases for shipping industry professionals

Denmark-based APM-Maersk had losses of $540 million. Cosco Container Lines of China lost $671 million. Hapag-Lloyd, Germany's biggest container line, lost $680 million. NYK of Japan posted net losses of $694 million, AXS-Alphaliner research shows.

Jan Tiedemann, a shipping analyst with AXS-Alphaliner, said the companies were dealing with less cargo, lower freight rates for the cargo that remains, contractual obligations for new ships they don't need and the inability to rid themselves of older vessels quickly enough by scrapping them to reduce overcapacity.

"No one in the industry is making money," Tiedemann said.

Dekker of Drewry Shipping Consultants said shipping lines had been able to increase their freight rates for handling a 40-foot container from less than $900 during the summer to $1,450 in September, but he added that "last September, they would have been able to charge $2,000 for the same container, so they are not even back to breaking even yet."

As landlords, seaports have been responding to their tenants in ways that would make a financially struggling apartment dweller green with envy.

Kathryn McDermott, deputy executive director of business development for the Port of Los Angeles, said there was a 10% discount on the rate that customers normally had to pay to move containers through the port. She added that the port's Infrastructure Cargo Fee had been postponed indefinitely "until we are sure that we need it."

Full Story
latimes.com/business/

[GHogHarvester]

Wow, with the whopping 30K jobs "created or saved" things are good! Wait, you don't think they would mislead us, do you?

Baltic Dry Index

Read the notes at the bottom of the page....

[redeye202]

The west coast ports are slow but what about container carrying trucks coming up from Mexico, how is activity at Mexican ports. Just a thought.

[PBC Solutions]

Newspapers in other parts of the world seem to know about this problem and report on it....

Revealed: The ghost fleet of the recession anchored just east of Singapore

Read more: http://www.dailymail.co.uk/home/mosl...#ixzz0UFrClgpD

"The biggest and most secretive gathering of ships in maritime history lies at anchor east of Singapore. Never before photographed, it is bigger than the U.S. and British navies combined but has no crew, no cargo and no destination - and is why your Christmas stocking may be on the light side this year"

[Halftrack]

The west coast ports are slow but what about container carrying trucks coming up from Mexico, how is activity at Mexican ports. Just a thought.

It's a good point. That's what all the fuss about the trans texas corridor was all about. There was a lot of talk about how it would bypass the US west coast for the ports in Mexico, in order to take advantage of less expensive labor and other cost cuts.

I haven't paid much attention to it lately. Anybody have anything on it?

I can't argue with the need to cut costs, but it seems counterproductive to me at some point. If consumers don't have jobs, how will they buy your products?

Maybe I'm just simple.

[msp701]

It's a good point. That's what all the fuss about the trans texas corridor was all about. There was a lot of talk about how it would bypass the US west coast for the ports in Mexico, in order to take advantage of less expensive labor and other cost cuts.

I haven't paid much attention to it lately. Anybody have anything on it?

I can't argue with the need to cut costs, but it seems counterproductive to me at some point. If consumers don't have jobs, how will they buy your products?

Maybe I'm just simple.

Not simple, just sensible. Sadly, not much in this world seems sensible anymore.