Depressed analysts don't make happy forecasts
Predictions for the container business are pretty gloomy at the moment, but expect sunnier forecasts as business starts to pick up.
By definition, depression is a condition that makes it hard for its sufferer to see a way out. They remain trapped in a bleak world with no answers.
For consumers in the US, and all the analysts and economists who thumb suck the predictions, this is the world in which they find themselves. And for that reason, the economic predictions are all the exact opposite of cheerful.
Inventories will inch up next year, container throughout will grow by two or three percent, maybe, or remain flat.
But as the recovery builds momentum, don’t be surprised to find that the forecasts become a lot sunnier – maybe with bar charts in the shape of smiley faces.
The recovery in China and the rest of Asia has been hailed as the start of the global recovery, that China will lead the world out of recession. But it is a two-way street. With no one buying stuff, no one is making it, and the container cranes on both sides of the Pacific will have their hands in the air.
And don’t forget that last year around 40 percent of all inbound containers into the US were from China.
The biggest problem the US ports have is not having enough cargo, but it will save them heaps in infrastructure spending. Instead of building berths they can focus on improving productivity and getting it up to to Asian port levels.
The lines are in deeper trouble because of the overcapacity mentioned in my last blog. There is no easy way out of that and box shipping executives will be spending a lot of time on the psychologist’s couch in the next few years.