For executives like Tom Matte, the huge U.S. trade imbalance presents aconstant shell game.
A senior manager for an international auto handler, Matte must find storagespace for hundreds of Hondas arriving in the bellies of hulking cargo shipsfrom England while shipping hundreds of new Fords to Puerto Rico and theMiddle East. Like competitors at ports around the country, Matte struggles tofind room for all the imports increasingly outweighing the exports.
"We're trying to get contiguous land, or land as close as possible," topark all the cars, said Matte, the former Baltimore Colts running back who isa senior vice president at ATC Logistics of Maryland Inc. "The state may needto consider building garages [to park shipped vehicles] if the trendcontinues."
Thousands of imported cars line up near the Patapsco River on the southside of the Baltimore Harbor Tunnel, waiting to be loaded onto ships, trainsor trucks. Auto imports to the public port of Baltimore nearly tripled from1996 to 2003, to 440,000, while exports hovered around 100,000.
Such trends led the Commerce Department to report this week a record $61billion trade deficit for the United States. The nation imported $161.5billion in goods and services in February and exported $100.5 billion worth.The deficit eclipsed the previous record of $59.4 billion, set in November.
Trade experts don't expect a reversal any time soon.
"For every six ships coming in from China, only one leaves with merchandiseback to China," said U.S. Rep. Benjamin L. Cardin , the ranking Democrat on akey House subcommittee on trade.
Contributing to the imbalance is the U.S. dollar, which while weak againstthe euro, remains strong against developing countries' currencies such as theChinese yuan. The strong dollar encourages Wal-Mart Stores Inc. and otherretailers to stock inexpensive Asian products, said Peter Morici, a professorin the University of Maryland Robert H. Smith School of Business. Oil and autoimports from Japan and Germany, autos from Korea, and auto supplies from Chinacompound the trade imbalance.
The imports have been a boon to ports, their workers and state coffers - inaddition to some less expensive items for sale in stores. But trade expertssay the imbalance could result in greater pressure on U.S. manufacturers andjobs lost overseas. Eventually, some retail prices could rise because they'llinclude surcharges to ship goods or because some goods won't make it throughthe thicket to store shelves at all.
The import deluge has caused backups at West Coast ports, which threatenedto make shipments late last Christmas. Logistics companies say the crunch haspushed some ships to East Coast ports with space available, but delays therecould also lead to product shortages and higher costs. Meanwhile, largeshippers could squeeze out smaller importers.
"Wal-Mart gets their stuff on board first because they have so many morecontainers than everyone else," said Dennis Kelly, vice president ofinternational operations for TBB Global Logistics Inc., a Pennsylvania firmthat handles imports and exports of food, steel, wood and manufactured goodsfor small- and medium-sized shippers.
"It's become a lot more difficult to get space on ships than even fiveyears ago, particularly in the peak season," he said. "China, Korea and Japanhave gotten so big in supply to the United States, most of it coming to theWest Coast, it requires the entire infrastructure to move farther and fartheraway from the port location."
Ocean carriers used to tack on surcharges in the last couple of monthsbefore the Christmas holidays, but now surcharges are lasting longer, said SamPolakoff, president of TBB.
Baltimore - with an imbalance by value of trade of close to 3.5 to 1 - hasavoided backups like those on the West Coast, where the bulk of Asian cargolands. Los Angeles' imbalance, according to federal statistics, is more than 6to 1 and Long Beach's is about 4.5 to 1. But as ocean carriers and shipperslook for less crowded ports or new entry points for holiday items that beginsailing in over the summer, some trade experts say East Coast ports could facemore than an occasional logjam of cars.
John C. Martin, a consultant who has studied the economic impact of portsincluding Baltimore, said the weak dollar compared with many currencies is notmaking U.S. goods much more desirable overseas, as expected.
The growth in Asian imports started in the mid-1990s, primarily with a boomin consumer goods such as electronics that were headed mostly to SouthernCalifornia ports. After the attacks in 2001, importers became concerned abouttheir supply chains and began dispersing shipments to ports such as Savannah,Ga.; New York; and Norfolk, Va., Martin said. As those become busier,Baltimore; Jacksonville, Fla.; and others have opportunity, he said.
To get the cargo he said, Baltimore and others will have to make sure theyhave the ability to receive it. They will have to have more space at the portand attract large corporate distribution hubs near the port that stow goodsthat make their way into stores.
Baltimore has made investments in increasing its capacity. It has broughtin cranes that can stack containers at its Seagirt Marine Terminal, doublingavailable space.
Baltimore City officials have set aside waterfront land where retail andresidential development, which much of the harbor has become, is prohibited.And state officials have approached officials at General Motors Corp., whichplans to close its 70-year-old plant near the public port next month, aboutconveying its property to the state.
Helen Delich Bentley, a former U.S. representative and consultant to theport of Baltimore, and James J. White, the port's former executive directorwho left after a row with Transportation Secretary Robert L. Flanagan,advocated reserving land for the future. They have also sought otherinvestment in the port, particularly funds to deepen the channel toaccommodate ever larger cargo ships.
Flanagan has said port and transportation officials will continue toexplore ways to make better use of the space available and to acquire moreland. But, he has said, further land purchases would have to be carefullyreviewed because properties owned by the port go off the property tax roles,potentially draining local coffers.Copyright © 2015, CT Now