Trump 2.0, as many commentators are referring to the second term of the President, has started with a flourish, or, according to some, “with a bang”.
Ports are clearly concerned about potential losses of business from tariffs, and trade flow disruptions which come with them. Then there are questions about activity in the offshore wind segment, of concern in the Northeast, and excitement about possibilities for energy and chemical movements- seeing attention in the Gulf of America (yes, the body of water has been re-named, so I am following the official script).
My long career as a freight market analyst (writing is fun, but- sadly, it does not pay all the bills) has taught me that disruptions, or actually the fear of them, is a good thing for port activity, albeit in the short run. My crystal ball, for forecasting market ups and downs, as well as the actual flows, broke a long time ago and I don’t mean to offend my data crunching compatriots, but it’s really not possible to see to far into the future. In 2024 and 2025, a spate of data analyzers- most trumping their Artificial Intelligence (AI) capabilities, have come on the scene. Yet the geopolitical infusion into nature of international cargo flows makes it very difficult for the data boffins to produce reliable forecasts going out beyond a few months- if that.
It is worth pointing out that from a supply/ demand perspective, these uncertainties and the subsequent responses to short-term developments, are actually good for absolute levels of freight rates although necessarily indicative of market strength. The reason is that all the pausing and surging is inefficient - for example, facilities ramping up (based on the best information last month) only to see that they are being underutilised because of some subsequent development.
So, for the port planners and strategists, don’t cancel your analytics subscriptions and data feeds; and keep experimenting with AI to sharpen your economic picture. But, be prepared for more “in the short run” stopping and starting than we’ve seen in recent years. The cargo shippers and the carriers are doing their best to plan ahead, but it will take awhile for a new sense of “normalcy” to set into Washington, D.C. where the important decisions and initiatives are currently being accompanied by unprecedented political fireworks. But just be prepared to ride the storm and be responsive to all switching on/ switching off/ switching back on/ etc. etc. etc.
