The Port of Tacoma is predicting that by the end of 2008, it will see a 4 percent decline in the number of containers going through its facilities, and that the port will continue to see the impacts of economic uncertainty through 2009.
The port commission and public were updated on cargo forecasts through 2013 at a meeting Nov. 13, during which Tong Zhu, the port’s director of commercial strategies, outlined predictions for the future.
“Although we’re faced with many challenges and great uncertainty in the coming years we are optimistic that in the medium term volumes will return and grow,” Zhu said.
Tacoma’s cargo container volumes are down 2.3 percent over the last year. By the end of the year, Zhu predicted the port will handle 1.85 million twenty-foot-equivalency unit (TEU) containers, down from last year.
The third quarter of 2008 is projected to be the first in five years that the port will see negative economic growth – about -0.6 percent, according to Zhu. The fourth quarter is projected to be even worse, with a decline of 2.2 percent.
Zhu predicts a modest 0.6 percent growth in 2009, and noted that most economists are looking toward late 2010 for economic growth to resume.
Meanwhile, economic concerns will force cargo carriers to implement new measures to cut costs.
“In this time of uncertainty and challenging economic climate, our customers continue to look for ways to cut costs and adjust their business models to improve their profit margins. It’s likely that we’ll see some shift in our existing services,” Zhu said. “We can expect both positive and negative changes. Sometimes they will work to our benefits, other times not, but the net impact will be negative.”
While Tacoma’s container volumes have suffered, Zhu said it has fared much better than other United States West Coast ports, which are down an average of 6 percent. On the West Coast, only Vancouver, British Columbia, has seen positive container volume growth, up 3 percent over the last year. The ports of Long Beach and Seattle have seen the greatest declines.
Apart from economic challenges, the port has seen declining volumes due to a decreasing share of the Asian import market. Since 2002, West Coast ports have seen their shares of Asian imports decrease, to both East Coast and Canadian ports.
“Despite the challenging economic conditions, Tacoma has gained a modest amount – 0.1 percent in market share – while all other U.S. West Coast ports have been losing, except for Oakland, which has remained stable,” Zhu said.
Port staff is keeping a close eye on how cargo forecasts and numbers evolve, as those numbers play a key role in the budget-making process.
“We’ve made some revisions to our forecast based on what’s happening (with cargo volumes),” said Tim Farrell, the port’s executive director. “I think we’ll have to continue to keep an eye on that and make revisions as necessary.”
