THE I-WORD – AN ECONOMIC FILLIP?

After urgently agreeing on roughly $3 Trillion + of emergency relief (this does not include monetary actions by the U.S. Federal Reserve Bank), policy makers at the highest levels are likely to enact further stimulus measures.

The I-word has again been mentioned as a possible channel for injecting an economic fillip. But the opinion of many legislators, including on the Republican side of the aisle, it would be difficult to pass another gargantuan piece of legislation (an additional $2 Trillion has been mentioned) which did not provide short-term very visible benefits to out of work constituents.

Consider also that definitions of “infrastructure” go beyond motorways and railways, in the aftermath of the pandemic, “healthcare” which is up against flimsy and unconnected supply chains at every turn, might, legitimately (in my view) be included.

However, it’s not possible to handicap political outcomes – even in “normal” times, which these surely aren’t. So I won’t really try to make any predictions.

Nevertheless, we can point to loud talk from Ms. Pelosi, even at the height of the Q1 “impeachment” debacle (and before the virus erupted- bringing the U.S. into a true “recession”), on her desire to introduce fresh infrastructure legislation during the Springtime.

Beneficiaries would include segments previously discussed- but also “healthcare”. In this critical, dare I say “existential” segment, the broken distribution links have been painful. In the past, I’ve advocated that ports follow their passions, which means pursuing specialties where they might have a competitive advantage compared to their rivals.

What I do see coming (not a prediction, but an idea worth exploring) is that imports, storage and landside movements of materials that might dramatically reduce the severe of the next outbreak (think masks, protective equipment, breathing apparatus and related machinery) will be receiving special attention. Such cargoes are no longer something that’s stuffed in a 40ft box; they are now, and will be for some time, critical materials.

When the scramble to get a piece of that next Infrastructure pie ($2 Trillion or otherwise) ensues, maybe in the Summer, ports that have specially addressed the “health care” supply chains should find their places near the front of the line.