Gloomy picture emerges from US shipping industry

Optimists who are celebrating the end of the US recession could find that they are cheering in an empty stadium, as air and sea cargo traffic figures fail to match the heady expectations. With container volumes at least 15% below those of a year ago, and air cargo down by as much as 25%, no one in international trade in the US is willing to match the bold pronouncements, particularly from the finance sector, that the worst is over. Kuehne and Nagel forecasts the drop in the international volume for air freight this year to be 15-20%, with seafreight declining by 10-12%. UK-based transport consultant Transport International notes that international air freight forwarding has contracted by 28% and sea freight forwarding by 32%, while in the first half of 2009, US forwarders suffered a 36% drop. The consultancy does not see a return to 2008 business levels before 2010. Sea routes on the trans- Pacific lanes – the busiest in the world – are being merged or suspended. Even the Big Three of Maersk, MSC and CMA CGM are not immune, giving more cause for uneasiness. They are being forced to merge two strings, themselves the result of a slimming down, in their Central and Northern China services to the US West Coast from September 16. Smaller players are simply being knocked out of the market. Safmarine, with 1% of the market (1 000 TEUs), is abandoning the Pacific route in June 2010, citing poor business conditions. At the twin ports of Los Angeles and Long Beach, the biggest container ports in the US, total TEUs in July were down 20% year on year, an unprecedented drop. The US government's freight transport index – tracking changes in cargo movements in ton-miles for trucking, rail, inland waterways, pipelines and air freight – has been the same for two months and is at its lowest level in 12 years. The 14% decline in June 2008 to June 2009 was the largest such decline in the 20 years for which the index is calculated. According to latest figures from the Air Transport Association of the US, cargo traffic in revenue ton miles was down 20% year over year in May 2009, marking the tenth consecutive month of declining cargo traffic.