Marine Transportation System

Will Ports Be Ready? (Part 3)

In Efficiency, Ports on September 17, 2009 at 11:22 pm

Will U.S. ports, especially those on the Atlantic and Gulf coasts, be ready to operate in the changing domestic and international commercial environment? With major shifts on the way the ports that adequately prepare will be the ones to maintain and gain market share.  A shift in buying power—where the consumers are—may be the greatest change facing major gateway ports throughout the U.S.

Consumer Demand
The primary end-consumer of manufactured goods is shifting east—Far East.  For U.S. ports, it is going to be as important to be an efficient “export port” in the coming decade as it was to be an efficient “import port” last decade.

Over the last decade a significant shift in national and individual wealth occurred from America and Europe to the Far East and India.  In the next several decades the emerging middle classes in China and India will be the primary global goods and services consumers.  China already has a middle-class of 300 million, approximately the same number as the U.S. total population.

An increasing demand for goods will be driven by two phenomena: population growth and economic convergence.  The world population (currently at 6.8 billion) is expected to reach 7 billion in late 2010 and to reach 8 billion within 20 years, or sooner.  (Much of this growth will be in Asia and Africa, but by 2050 it is projected that India will be the world’s most populous nation.)

Approximately 80 percent of these new individuals will have discretionary incomes nearly equal to their western counterparts because of increasingly convergent economic patterns for most nations.  Meanwhile western-populations will age and increase their savings rates in order to provide for their retirement years.  In short, the demand will be on the other side of the planet.

The Bottom Line
U.S ports planning to participate in the international trade and transportation business will have to be agile, 2-directional (serving both imports and exports), environmentally sound operations, and take advantage of economies of scope and scale to compete in the 21st Century.  These are business considerations that should be included in a port’s strategic business plan to maintain and gain market share.

T. H. Wakeman

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