Pain is increasing among the world’s biggest ports—from Shanghai to Hamburg—amid weaker growth in global trade and a calamitous end to a global commodities boom, according to The Wall Street Journal. Overall trade rose just 2.8 percent in 2015, according to the World Trade Organization, the fourth consecutive year below 3 percent growth and historically weak compared with global economic expansion.
The ancient business of ship-borne trade has been whipsawed, first by a boom that demanded more and bigger vessels, and more recently by an abrupt slowing. That turnabout has roiled the container-shipping industry, which transports more than 95 percent of the world’s goods, from clothes and shoes to car parts, electronic and handbags. It has set off a frenzy of consolidation and costs cutting across the world’s fleets.
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Editors Insight: This sobering report focuses mainly on the Asia-Europe trade, driven largely by a slowdown in the Chinese economy and a government crackdown on corruption. The report notes that U.S. ports are pursuing expansion in anticipation of higher volumes. The opening of the expanded Panama Canal on June 26 bodes well for U.S. trade.
The global trade outlook would be stronger if the U.S. supported the Trans-Pacific Partnership (TPP) that would lower trade barriers to Pacific Rim countries. President Obama supports TPP but the major presidential candidates oppose it.
Just yesterday, Food Logistics reported that U.S. Agriculture Secretary Tom Vilsack met with Vietnamese officials to discuss TPP. Under the TPP, Vietnam would reduce and eventually eliminate tariffs across a broad range of food and agricultural products, helping put U.S. exports on a level playing field and giving the U.S. a leg up on non-TPP competitors.
In October, the U.S. Department of Agriculture released a series of fact sheets illustrating how the newly reached agreement can boost the U.S. agriculture industry. 4-27-16 By Elliot Maras