For executives like Tom Matte, the huge U.S. trade imbalance presents a
constant shell game.
More Top Picks Best Husqvarna Mowers
A senior manager for an international auto handler, Matte must find storage
space for hundreds of Hondas arriving in the bellies of hulking cargo ships
from England while shipping hundreds of new Fords to Puerto Rico and the
Middle East. Like competitors at ports around the country, Matte struggles to
find room for all the imports increasingly outweighing the exports.
“We’re trying to get contiguous land, or land as close as possible,” to
park all the cars, said Matte, the former Baltimore Colts running back who is
a senior vice president at ATC Logistics of Maryland Inc. “The state may need
to consider building garages [to park shipped vehicles] if the trend
continues.”
Thousands of imported cars line up near the Patapsco River on the south
side of the Baltimore Harbor Tunnel, waiting to be loaded onto ships, trains
or trucks. Auto imports to the public port of Baltimore nearly tripled from
1996 to 2003, to 440,000, while exports hovered around 100,000.
Such trends led the Commerce Department to report this week a record $61
billion trade deficit for the United States. The nation imported $161.5
billion in goods and services in February and exported $100.5 billion worth.
The deficit eclipsed the previous record of $59.4 billion, set in November.
Trade experts don’t expect a reversal any time soon.
“For every six ships coming in from China, only one leaves with merchandise
back to China,” said U.S. Rep. Benjamin L. Cardin , the ranking Democrat on a
key House subcommittee on trade.
Contributing to the imbalance is the U.S. dollar, which while weak against
the euro, remains strong against developing countries’ currencies such as the
Chinese yuan. The strong dollar encourages Wal-Mart Stores Inc. and other
retailers to stock inexpensive Asian products, said Peter Morici, a professor
in the University of Maryland Robert H. Smith School of Business. Oil and auto
imports from Japan and Germany, autos from Korea, and auto supplies from China
compound the trade imbalance.
The imports have been a boon to ports, their workers and state coffers – in
addition to some less expensive items for sale in stores. But trade experts
say the imbalance could result in greater pressure on U.S. manufacturers and
jobs lost overseas. Eventually, some retail prices could rise because they’ll
include surcharges to ship goods or because some goods won’t make it through
the thicket to store shelves at all.
The import deluge has caused backups at West Coast ports, which threatened
to make shipments late last Christmas. Logistics companies say the crunch has
pushed some ships to East Coast ports with space available, but delays there
could also lead to product shortages and higher costs. Meanwhile, large
shippers could squeeze out smaller importers.
“Wal-Mart gets their stuff on board first because they have so many more
containers than everyone else,” said Dennis Kelly, vice president of
international operations for TBB Global Logistics Inc., a Pennsylvania firm
that handles imports and exports of food, steel, wood and manufactured goods
for small- and medium-sized shippers.
“It’s become a lot more difficult to get space on ships than even five
years ago, particularly in the peak season,” he said. “China, Korea and Japan
have gotten so big in supply to the United States, most of it coming to the
West Coast, it requires the entire infrastructure to move farther and farther
away from the port location.”
Ocean carriers used to tack on surcharges in the last couple of months
before the Christmas holidays, but now surcharges are lasting longer, said Sam
Polakoff, president of TBB.
Baltimore – with an imbalance by value of trade of close to 3.5 to 1 – has
avoided backups like those on the West Coast, where the bulk of Asian cargo
lands. Los Angeles’ imbalance, according to federal statistics, is more than 6
to 1 and Long Beach’s is about 4.5 to 1. But as ocean carriers and shippers
look for less crowded ports or new entry points for holiday items that begin
sailing in over the summer, some trade experts say East Coast ports could face
more than an occasional logjam of cars.
John C. Martin, a consultant who has studied the economic impact of ports
including Baltimore, said the weak dollar compared with many currencies is not
making U.S. goods much more desirable overseas, as expected.
The growth in Asian imports started in the mid-1990s, primarily with a boom
in consumer goods such as electronics that were headed mostly to Southern
California ports. After the attacks in 2001, importers became concerned about
their supply chains and began dispersing shipments to ports such as Savannah,
Ga.; New York; and Norfolk, Va., Martin said. As those become busier,
Baltimore; Jacksonville, Fla.; and others have opportunity, he said.
To get the cargo he said, Baltimore and others will have to make sure they
have the ability to receive it. They will have to have more space at the port
and attract large corporate distribution hubs near the port that stow goods
that make their way into stores.
Baltimore has made investments in increasing its capacity. It has brought
in cranes that can stack containers at its Seagirt Marine Terminal, doubling
available space.
Baltimore City officials have set aside waterfront land where retail and
residential development, which much of the harbor has become, is prohibited.
And state officials have approached officials at General Motors Corp., which
plans to close its 70-year-old plant near the public port next month, about
conveying its property to the state.
Helen Delich Bentley, a former U.S. representative and consultant to the
port of Baltimore, and James J. White, the port’s former executive director
who left after a row with Transportation Secretary Robert L. Flanagan,
advocated reserving land for the future. They have also sought other
investment in the port, particularly funds to deepen the channel to
accommodate ever larger cargo ships.
Flanagan has said port and transportation officials will continue to
explore ways to make better use of the space available and to acquire more
land. But, he has said, further land purchases would have to be carefully
reviewed because properties owned by the port go off the property tax roles,
potentially draining local coffers.
More Top Picks Best Weighted Blankets For Autism