CRYSTAL BALL GAZING

As far as cargo moving through ports, I’ve looked at various data, listened to numerous “experts” (increasingly strutting their stuff on social media rather than in high priced newsletters) and can only come up with the standard economist trope, on one hand this, on the other hand, that. We know that inflation is at a 40-year high, with its handmaiden, oil prices, bouncing around above the three-digit handle. In the US, economists and governmental types are reluctant to call out an impending “recession”, colloquially described as “the R word.”

So, trade flows, and the congestion and problems that have accompanied them, could move in two opposite directions, with seemingly equal probabilities, following a strong first half of the year. On the all-important consumer side of things, Q3, summertime into early Autumn, has historically been a time for building up inventories in advance of Q4- a busy time for retailers with the holidays. On the industrial front, with a recovery still in high gear, trade has been going at full steam. But going forward, if the “R word” does indeed take hold, importers may decide that existing inventories will suffice, and will pull back the throttle on shipping moves.

For ports, it goes without saying that planners must try, however painful it may be, to look into their crystal balls. To me (striving to be an optimist, though admittedly my crystal ball is so clouded over that I leave such things to other people), the real concerns will be if the positive situation takes hold, if trade sees a Q3 uplift, and things remain busy. Then, it’s easy to see that congestion- a result of discontinuities in the entire “system” (not just the failure of ships, trucks, or other particular links in the chain) would likely return. The TV news programmes might even start showing ships at anchor as they were doing in Q1 of this year.

Once in a while, planners get a chance for a “do-over,” where learnings from previous iterations can be applied. This might be one of them, it’s an opportunity to not repeat mistakes made in earlier bouts with congestion. By the way, threats of action by ports, against entities impeding cargo flows, might not be such a bad thing.