Wednesday, March 02, 2005

Finally, a way to curb the current account deficit

US ports are terribly congested writes the FT.
Surging trade with China is increasing the strain on Los Angeles and Long Beach, which together receive nearly 80 per cent of traffic to the western US. The Pacific Maritime Association, which represents west coast ports, predicts import volumes will increase by a further 14 per cent on average this year the same rate as last year.

Container ships bound for California last year had to wait offshore for several days before a berth became free, delaying deliveries to retailers and pushing up costs for carriers and shippers.

The ports, with their powerful labour unions, limited working hours and outdated technology, must increase investment and productivity if further disruption is to be averted, said the executives and analysts. “The congestion we faced [in the US] last year is likely to be repeated this year,” David Lim, chief executive of Neptune Orient Lines, a Singapore-based ocean freight carrier, told a conference on trans-Pacific shipping this week. “There is a need for closer co-ordination between industry, government and other interested parties to make sure much-needed investment [in US ports] is not further delayed.”

The result? Higher prices for imported goods. Frankly, I don't understand how anyone can still talk about deflation during times like these.
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