…If you follow world trade, you may remember that there in the middle of the financial crisis, it fell across the glove by either 11% if the WTO is your go-to data agency, or 12% if the World Bank fills that role.
This for an area of the world economy that hadn’t not grown by double digits since record keeping began, which made for a great ride, but then that whole ‘since record keeping began’ thing came around to bite the world in the butt, since the plunge was the steepest since, yes, record keeping began.
It was more than the usual grind of a recession; it actually made you feel cold all over. What in the world was going on? Anyone had the right to ask. Partly it was the nature of the crisis, which was financial at the core, and there’s a lot of financing at the heart of world trade. Partly it was the long lead times involved in ordering and shipping goods across one ocean or another; who knew what further disasters would fall upon the shipper between placing and receiving the order, so retailers and supply chain managers simply stopped ordering altogether.
Mostly, it was as prime an example as we’re likely to see in our lifetimes that one of the great powers of the supply chain on the private side is the ability to simply shut down at will. The communication and IT tools are there to make and undertake decisions rapidly, and that is exactly what decision-makers did. The sense was not far distant from the sense you get when you yank a backyard faucet as far to the left as you possibly can, until it squeaks.
The trade world has spent the intervening years since 2008 icking its wounds, tightening down the hatches, cautiously gearing up for the recovery, and then tippy-toeing out into the full practice of trade between nations.
As things stand now, trade is back up to just about where it was when the crisis hit, though you don’t hear much mention that we have a few tens more millions of people in the world now, so by rights it ought to be climbing, but we’ll take what we can get.
Interestingly to those stateside, the US has again take its place as second only to China when it comes to exports, edging our Germany, who relies much more on the export economy, but which is a much smaller economy as well.
Many things are going right for US exports, not least you have to have something to export, and as US manufacturing has come back into its own, we can add higher order products to our commodities and our refining exports.
The best thing we have going for us however is the weak dollar, making our products cheaper to the purchasing country, and the best thing about that weaker dollar is that it looks likely to stay in place for some length of time into the future, courtesy of Mr. Bernanke and the Federal Reserve who have all but come out and said that interest rates are going to be kept near zero through 2014.
Both sides of the continent are benefiting now, with the LA Basin Ports and the NY/NJ Ports, number 1, 2, and 3 in the nation, reporting record years, much of that based upon exports.
I’m told by the smart people around me that export based port infrastructure is different to some degree from import based, the latter being where all the action has been these last twenty years, and which the ports have spent their capital investment money in accommodating. I know it was often said these years that China for its part had an excellent outgoing infrastructure from the inlands to the ports and across the seas, but a much less developed incoming infrastructure, so there must be something to it.
Now, with exports again taking the stage, we can look for improvements and modifications to the warehousing, freight rail and docking infrastructure of the US ports, which, along with the channel deepening taking place on the East Coast ports, are the key areas of activity in the port world.
It is a likely, but not certain outcome of these next two years that the notion of mega-ports will start to emerge; in fact, the three I just mentioned are already there. Getting up into that ranking will be key to success, and in truth, there’s only room for a certain number of players. Shippers and the oceangoing freight industry, save for specialized products or specialized unloading facilities (like autos), will gravitate towards making the fewest harbor stops possible, which will dovetail into the new breed of huge ships able to passage through the newly widened and deepened Panama Canal.
The efficiencies can’t be argued with, and between proximity to the major population centers, harbor depth, and the building out of port infrastructure – for both imports and exports, as we’ve been talking – the port world my evolve into a system similar to our Solar System, a few huge players, a big gap in size, and then the smaller niche players.
….I don’t think it’s earth-shaking that the chambers of Congress didn’t get their votes in on the highway bill before the brief recess of this week. It’s a huge bill, there are many voices to be heard and constituencies to be satisfied. The major media don’t really understand this bill since it only comes around every six or seven years, and, well, most people including our friends in the national media don’t understand infrastructure very well, so they alternate between ignoring it, juicing up the drama, or getting people as riled as they possibly can to increase the number of click-throughs on their websites.
You’d never think it, but the biggest things missing right now are good old earmarks, which both chambers have made a big deal of outlawing. Earmarks weren’t evil at all, but were a means of leveling at the local level funding flows that wouldn’t have happened otherwise in the face of rigid federal and state formulas. The awarding of such funding was a persuasive tool for the chamber leaders that they don’t have now. Public pressure, the strong desire on the part of our lawmakers to not look foolish, the continuing jobs crisis, the passage of time..those are the new tools in place, blunt though they be.
…A Martian giving a debriefing to his people back home could say that while he was uncertain about much, he could say with confidence that human beings have a strong aversion to infrastructure.
You can see it in the automatic opposition to almost anything new in the built environment, across all the modes, vertical or linear, public or private, and much of it stems from some fundamental misunderstandings about the movement of goods and people.
It is almost always the case that the place that the goods are – finished goods, raw materials like oil or coal, renewable sources like wind – are someplace different than the place they’re going to be consumed. The absolute necessity of managing and crossing geography is part and parcel of this world. It’s certainly true of human beings, who definitonally want to get to someplace else when they employ one or another means of transportation.
I have read this insight – this is in Shop Class to Soulcraft, a great book that touches somewhat on infrastructure type issues – that modern life has provided many benefits, but also many illusions, chief of which is that simply because we can shove data and transactions around the world at the speed of light, tractionlessly, the same rules ought somehow or other to apply to the physical world.
Sadly, not so. A young person might say that it is way not so. The traversing of geography always includes the expenditure of energy, the routing of tracks or wires or pipeline, the loading and unloading of goods in big noisy environments, and then often as not, the shipping and distribution even further from there, along ever smaller lines of transport. All this is contrary to the normal states of nature and energy which everything else being equal would prefer to stay at rest, so no wonder the disruption of it is a noisy and consequential affair.
Or I suppose you don’t have to go to fancy theories to come up with an explanation, it’s most easily explained by the fact that most people haven’t been exposed to infrastructure at all, haven’t ridden in a truck, haven’t worked in a power generating plant, haven’t been on a container vessel. Funny part is, it’s not really their fault. It’s the invisible nature of infrastructure – and decades of invisible success put forward by tireless professionals – that have pushed these vital systems into the background and kept them out of the public eye. The lights always come on, the water always flows, the roads always get built.
Funny business, they really are two separate cultures, the consumers and the producers, and a bit of a baby brother to the hugely separate cultures of the civilian and the military, each not really understanding the other. – Larry McGurn
“False mastery,” that was the phrase from the book, an attitude which is easy to adopt if you’re pounding on a spreadsheet, impossible to adopt if you’re pounding on a pavement.