By Mark Edward Nero
The outlook for the US ports industry is stable for 2016 on the expectation of continued economic growth and a steady rise in US container volume, Moody’s Investors Service says in its annual ports outlook.
“Ports – US: 2016 Outlook – Container Volume Growth Supports Stable Outlook,” was released by the investment service Dec. 10. The outlook reflects Moody’s expectations for the fundamental business conditions in the industry over the next 12 to 18 months.
“We expect US container volume to grow three percent to four percent in 2016,” Moody’s analyst Moses Kopmar said. “Although weaker global demand and a strong U.S. dollar have weakened export activity, the US is a net importer with an improving economy, which we believe will support US consumption and drive cargo demand at US ports.”
Moody’s macroeconomic board predicts the US economy will grow two-to-three percent in 2015 and 2016; US container volume typically tracks closely with economic growth.
Additionally, shipping costs are near their lowest levels in recent years, a result of both overcapacity in the container market and low fuel costs.
“Overcapacity in the container market continues to depress freight rates, as supply growth outpaces demand growth,” Kopmar said. “While capacity is tighter for landside freight transport, such as truck and rail, competition and excess capacity have pushed down spot rates in these markets as well.”
Despite expectations of container volume growth, several factors temper Moody’s outlook. Among them is a significant build-up of business inventories than began in late 2014 and increased in 2015, which boosted container volume growth this year. As a result, Moody’s anticipates container volume growth will moderate in 2016.
The report’s part of a series of outlooks on a wide variety of sectors globally published by Moody’s. It’s available to Moody’s subscribers at
https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1009750.
Other reports in the series can be found at www.moodys.com/2016outlooks.
