Context: December 2009

— by Pat Foran

The Elongated View From 30,000 Feet

Smack-dab in the middle of the information gathering for our annual "outlook" coverage, I attended the National Industrial Transportation League's (NITL) annual meeting, held Nov. 15-18 in Anaheim, Calif. For the most part, I was there to get a feel for what shippers and other freight transportation folks were thinking as we begin the long and winding climb back from the recessionary bottom most of us believe we've hit. I got that and more. A few takeaways:

• Jokes about economic uncertainty have worn out their welcome. They certainly fell flat when offered up by panelists and presenters. The message from meeting attendees was clear: "Tell me something about your world view, your biases, your business and your ideas, however half-baked. If I talk to enough people, I might come away with a better view — and, with any luck at all, an ability to make better planning decisions."
• RE: the recovery — if there was a consensus, it was this: It'll be of the elongated "U" (as in gradual) variety. Attendees seemed to want to feel better about 2010; so, many of them do. "I was pleased to hear any number of learned souls in the different lanes expressing something — it was more than a hope, it was a calculated cautious optimism," NITL President Bruce Carlton told me a few days after the event. "Nobody was saying, ÔHuzzah, relief is here.' But nobody was saying we're headed for another 12 months of what we just experienced, either." That said, the "dark cloud hanging over everything" continues to be unemployment, he added. "To the extent that this recovery continues to be a jobless one, the economy is going to continue to drag anchor."
• Speaking of dragging anchor: Ocean carriers' and truckers' overcapacity (and big-time financial) woes seemed to trump just about everything else at NITL's 102nd annual get-together. "When you flip it over to the truck and the ocean sides, it's so far down, you can't see the bottom," Carlton said. And for three days, that bottomlessness effectively relegated rail issues (pricing power, the in-development Rockefeller "balanced competition" bill) to the back burner, at least publicly. As one shipper put it: "Rail's the stable one right now. At least we know our railroad partners are going to be here tomorrow."
• That isn't to say shippers aren't thinking about the Rockefeller measure. "There is an expectation of a major rail bill coming," Carlton said. Shippers want "improved competition," not "full-blown re-reg," he said, adding that he'd be stunned if the bill were slanted in the extreme toward shippers or railroads. "It'll be somewhere between the 40-yard lines," he said. His sentiments are consistent with what AAR's Ed Hamberger shared with me and what Class I CEOs told Managing Editor Jeff Stagl last month.

That consistency prompted me to think about what I'd term as an increasing willingness among the rail and shipper lobbies to wean themselves off the "fightin' words" that for so long seemed to frame their discussions (or lack thereof). I think it's making a difference. By getting serious about getting past the contentiousness, they'll be able to move on to bigger issues — like figuring out how to convince policy shapers and the public to consent to a meaningful freight transportation policy. They're a ways off from moving on completely — picture an extraordinarily elongated "U." But the pilot light at the end of the tunnel, while it always could be a little brighter, is burning. Keeping the flame flickering ought to be a priority in 2010.

Hardly Containing Their Hopefulness

Another morsel from Economic Indicator Central: In February, volume at major U.S. container ports is projected to break a 31-month streak of year-over-year declines, according to the National Retail Federation's (NRF) and IHS Global Insight's latest "Port Tracker" report.

The 10 surveyed U.S. ports handled an estimated 1.17 million 20-foot equivalent units (TEUs) in October, which would represent a 15 percent year-over-year decline. November volume will drop 11 percent to 1.09 million TEUs and December's will be flat at 1.06 million TEUs, Port Tracker predicts. For the year, volume will total 12.7 million TEUs, a 16.8 percent decline compared with 2008 volume and the lowest since 2003's 12.47 million TEUs. In January, volume again will drop — 3 percent to 1.03 million TEUs, marking the 31st month of year-over-year declines. But in February, it'll rise 16 percent to 973,872 TEUs, Port Tracker predicts. Then, March volume is expected to increase 5 percent to 1.02 million TEUs.

"This could be the turnaround we've been waiting to see," said NRF Vice President for Supply Chain and Customs Policy Jonathan Gold in a prepared statement. "There's not enough data yet to establish a clear trend, but we're hopeful that this is a sign of recovery."

Pretty much like everybody else.