Wednesday, May 28, 2008

Intermodal Conference: Part Uno

Thanks to both the proximity and success of the Port of Tacoma, and their initiative as Principal Sponsor, the Tacoma metro enjoyed recent presentation of the Northwest Intermodal Conference May 19-20. Presented by Cargo Business News, this had to be one of the better transportation conferences.

The NWIC focused on the essential factors that affect the volume of intermodal traffic through the Pacific Northwest gateways and the development of strategies that will successfully drive this business. Attendees learned about the future of the intermodal business through Northwest ports from a panel of experts including business leaders hailing from every sector of the industry - ports, shippers, ocean carriers, railroads, intermodal marketing companies, third party logistics, equipment suppliers and other service providers – as well as from expert panelists from the fields of economics, academia and public policy. Issues discussed included the future of Pacific Northwest intermodal, trade trends, infrastructure development, industrial real estate solutions and shipper perspectives.

Tim Farrell, Executive Director, Port of Tacoma, began the conference with opening remarks, challenging the attendees to notice the opportunities and competitive advantages of the Port of Tacoma. Capacity, environmental quality and political support are all in the strong hand held by the Port of Tacoma.

The opening keynote by Walter Kemmsies, Chief Economist, Moffat &Nichol, called to mind just how important it is for a community to be ready when the economic tide rises. Not all boats rise the same; those rise highest and fastest that are prepared to take the flood at its crest. Kemmsies expects a return to the long term trend in late '08, although his forecast is for slow growth through 2011. Nevertheless, slow growth is positive growth. And Kemmsies particular insight is his expectation that north-south trade could hold the greatest surprises.

Kemmsies, noted, as did other speakers later in the conference, that global trade has grown 2x GDP growth since 1950. This growth he attributes to containerization, trade agreements, the world wide web and offshoring. He cites tht the number of ports that can handle containers has increased from 75 in 1970 to about 550 in 2007.

For the U.S., Kemmsies says TEU (20-ft. equivalent units, a common denominator for container length) has increased 5x for our GDP growth of 2x between 1982 and 2007. His forecast is for PNW ports share of the North American volume to grow by 15% in the next decade. The current division on container volumes is due to the nature of cargo from origin to port of entry. West Coast ports receive household goods from Asia. East Coast ports receive medicine, toys, etc. from Europe, up 22%.

Kemmsies forecasts a 3.1% GDP growth and a 7.8% TEU growth until the next decline (recession) in 2011 (as the economy follows its pattern of 8.5 year cycle).

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