Tariffs and Threats of Tariffs are
by Bill Virgin
There's been so much high-level posturing and bloviating about trade policy and tariffs and retaliatory measures and negotiations that it's easy to lose sight of what's going on down at sea level -- the place where stuff that people might want to buy or sell and eat or use gets moved.
So, just what is going on there anyway?
Quite a lot, actually, some of it having to do that high-level posturing and bloviating.
The ports of Tacoma and Seattle, for example, reported that June import volumes were up 8.8 percent from June 2017, to their highest level since 2010, while export volumes were up 14 percent from the year-ago period to the highest level since 2005.
"June volumes foreshadow the strong peak season forecasted by importers," the ports said in their monthly report. "In addition, shippers may be shipping ahead of planned tariffs."
That peak season referenced in the report includes the stuff retailers will be importing for your Black Friday and holiday-season shopping, as well as some seasonal agricultural commodities headed overseas. Ag commodities in particular figure prominently in the retaliation phase of the trade tiffs of the moment, so it's no wonder buyers are trying to beat the imposition of duties by shopping early.
As for the other stuff, expectations for now are for a decent economy, which would mean decent consumer confidence, which would mean decent holiday sales volumes, which would mean retailers will want to be well stocked.
The tricky part is that qualifier of "for now."
Who we're mad at and threatening with import duties, and what those counterparties might do in response, could change and change once again between the time this is written and the time you read it. That makes prognostication and planning tough for producers, shippers, distributors and retailers.
If everyone resolves their quarrels and patches up their differences, then does the economy motor along as though nothing happened? Or is there a slight slowdown because of the shift of purchases by those trying to beat the deadline that evaporated?
Then again, maybe the quarrels will devolve into full-scale trade wars. Does that mean the recession the trade advocates have been warning of becomes reality? Or is there enough capacity in the domestic market to pick up the slack?
The experts can cogitate endlessly on those questions, but in the meantime let's turn to other issues involving the local ports, one of them being traffic congestion.
If it appears from shore that containers don't move very fast when carried on a ship, at least they're moving, which is more than can be said for some of those containers that wind up on a truck venturing out onto Interstate 5.
The Port of Portland and BNSF Railway have come up with what they refer to as a shuttle service to keep some traffic off the highways. Containers can be trucked to the port, put on rail cars and carried to the ports of Tacoma and Seattle by rail for placement on container ships.
For inbound shipments, reverse the process, with the containers winding up on a truck in Portland.
Using rail to move containers regionally is "a time-saving alternative for some shippers, who face delays from truck congestion at ports to the north," a port official said in a release.
Using rail this way gives Portland a way of staying in the container shipping game. While the port sits at the terminus of BNSF's and Union Pacific's lines up the Gorge, it also sits about 80 miles from the ocean on the Columbia. Currently, the port has no regular calls by container ships.
In and of itself, the service doesn't represent a threat to the ports here, since cargos aren't being diverted to another port. But it does illustrate an ongoing competitive issue Tacoma and Seattle have to deal with -- freight mobility, and how easy or challenging it is to get containers and other cargo to and from vessels.
That's not purely a highway issue, although what's going on with I-5, the Valley Freeway, state Route 512 and other local highways is a big component of freight mobility. A lot of freight goes through port gates by truck to and from the forest of warehouses and distribution centers in Pierce and King counties.
But considerable volumes get to and leave the ports by rail networks, which have their own congestion issues.
BNSF has proposed building a second bridge over Lake Pend Oreille in Sandpoint, Idaho, to eliminate a single-track chokepoint on its northern transcontinental line. The Point Defiance Bypass' purpose was to relieve congestion on a portion of the north-south rail corridor. We know how that's going.
If the ports and railroads can't unsnarl those snags and eliminate bottlenecks, then ports still farther north will be able to market themselves as true time-saving alternatives (and the Canadian government is committing a lot of cash at the moment to making sure those ports can move freight expeditiously).
Of course, if trade negotiations go as badly as feared, freight mobility will be less of an issue because there'll be less freight moving -- not that that's a particularly elegant or desirable way to solve the problem.
BNSF Offers New Rail Service at Port of Portland by Staff, Progressive Railroading, 1/8/18
BNSF, Port of Portland Partner to Shuttle Freight to Seattle by Staff, DC Velocity, 1/8/18
Port of Portland Partners with BNSF to Move Freight Faster by Staff, Supply Chain Dive, 1/8/18
New Business Lines Needed to Subsidize Portland Container Shipping by Mateusz Perkowski, Capital Press, 1/19/18
Port of Portland's Container Terminal at a Competitive Disadvantage, Study Says by Staff, Bisnow, 1/12/18
Port of Portland Must Diversify at Troubled Container Terminal, Study Shows by Staff, Transport Topics, 1/11/18
Portland May Lose Dedicated Container Terminal by Staff, Container Management, 1/11/18
Farm Exporters Uncertain about Portland Transload Facility by Mateusz Perkowski, Capital Press, 1/5/18
Port of Portland Announces Rail Service to Assist Shippers by Hellenic Shipping News, Hellenic Shipping News, 1/4/18
Shipping Authority Seeks to 'Adopt' Portland by Staff, Port Strategy, 5/12/16
Here's Why Portland Won't Get New Shipping Container Service Anytime Soon by James Cronin, Portland Business Journal, 5/9/16
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