Ports, trains, trucks - barometer of economy

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It has been noted that trucking is down, some have found more profit in cutting up their trucks and sending the scrap to the docks.

A story in the LA times cites railroad freight down 20%, Cargo passing through So Cal docks are down by as much as 25% according to the Press Telegram.

Another bad sign: It has been pointed out to me that the cargo ships which enter port sit deep in the water - those leaving sit high. No exports to balance our trade dollars.

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On the Waterfront: Longshoremen still seeing tough times

By Kristopher Hanson, Staff Writer Press Telegram

01/11/2010

Longshoremen continue struggling to find work as container volumes in Long Beach and Los Angeles remain at levels far below their 2007 peak.

The plight of longshoremen in the nation's largest port complex was the focus of a recent segment on CNN, which followed workers as they waited patiently - and for most, fruitlessly - on a recent morning at the longshore hiring hall in Wilmington.

Said one worker, Shaun Cibel, it's been a meager existence for much of the past year.

"Week by week, living check by check," Cibel said.

International Longshore and Warehouse Union Local 13 President George Lujan said the economic recession has been especially hard on West Coast workers, who have been slammed by the deep decline in international trade since 2007.

Volumes are down as much as 25 percent since that time.

"People are losing homes, losing income, marriages have broken up," Lujan said. "I think the biggest challenge facing my members right now is just keeping their pride intact, keeping on with their union ways. This economy has been really, really tough on my members."

Indeed, reports show work for casual longshoremen, who aren't considered full-time members, has virtually disappeared in the past 18 months, throwing thousands out of work or into other jobs.

Most work now goes primarily to Class A and Class B members, who have put in years of work to reach their position.

Still, new data shows the worst may be over.

The National Retail Federation said Monday that nearly 30 consecutive months of decreasing volumes at the nation's major seaports ended in December, when retailers and manufacturers imported more than the comparable period the year before for the first time since mid-2007.

"These numbers are a clear sign that retailers are optimistic about 2010," said NRF Vice President Jonathan Gold. "Retailers are still going to be cautious with their inventories, but we wouldn't see these increases in imports if stores weren't expecting sales to improve. It's been a long time since we've seen year-over-year volume go up, so this is definitely good news."

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Freight trains carry 20% less cargo in 2009 than in the previous year

The drop is a dramatic reminder of the brutality with which the recession cut demand for coal, lumber and other goods that make up the backbone of the economy.

By Ronald D. White

January 14, 2010

The nation's railroads had their worst year in decades in 2009, a dramatic reminder of the brutality with which the recession damped demand for coal, lumber and other goods that make up the backbone of the economy.

Freight trains carried 20% less cargo last year than in 2008, according to a report by the Assn. of American Railroads, and the industry shed nearly 21,000 jobs.

The 12-month period was the slowest since the association began keeping records in 1988.

Among the most dramatic declines was a 33% drop in lumber and wood products carried by train, a key indicator of demand for new construction. Trains carried 34% fewer motor vehicle parts and 8% less coal.

"Last year saw declines, most of them quite steep, in every major category of rail carload traffic," said John Gray, senior vice president of policy and economics for the rail association. "Railroads are happy to have 2009 behind them."

The drops in the movement of coal, lumber, retail goods and other products carried by train mirrored the devastation in the U.S. economy wrought by the housing and mortgage industry meltdowns. As demand crashed for houses, cars and the commodities used in manufacturing, so did the need to haul goods and materials.

Taken over a two-year period that included all of 2008 and 2009, the declines were even more dramatic, according to the report: a 48% drop in the transportation of motor vehicle parts; a 49% drop in metallic ore and metals; and a 47% drop in lumber and wood products.

By last month, though, the picture was beginning to brighten. Twelve of the 19 main commodities hauled by trains -- including grain, chemicals, petroleum and automobile parts -- showed growth during December compared with the same period a year earlier. The number of rail cars in storage also began to drop in December, indicating another uptick in business.

The signs of thaw reflected hopeful indications at the nation's seaports, where traffic also increased in December. Like the increase in train traffic, imports are a sign that consumers are again buying some goods. These products -- many of them carried in shipping containers that are then bolted onto flatbed freight cars -- will travel by train and truck to destinations across the nation.

Several Wall Street analysts are predicting increased rail traffic this year as the housing and automobile industries begin to recover, increasing demand for lumber and motor vehicle parts. Demand for coal could also increase as factories begin to ramp up production.

In November, billionaire investor Warren Buffett bet big on railroads, agreeing to pay $34 billion for Burlington Northern Santa Fe Corp. The world's second-richest man called the investment an "all-in wager on the economic future of the United States," just a month before the industry began to show signs of recovery.

BNSF is one of the two freight lines that serve Southern California and the ports of Los Angeles and Long Beach. The other is Union Pacific Corp.

If the improvement continues, it would bring relief to the railroads, which were suffering before the economic slowdown spread to other countries from the U.S., said Rick Paterson, an air freight and surface transportation analyst for UBS Investment Research in New York.

"Transports [including railroads] were in trouble before the global recession hit," Paterson said. "They were overexposed to the two worst parts of the U.S. economy -- the housing and automotive industries."

Railroads such as Fort Worth-based BNSF and Union Pacific, headquartered in Omaha, will be "in much better shape in 2010" as domestic freight and international trade recover, he said.

BNSF and Union Pacific will both report their fourth-quarter and full-year earnings Jan. 21.