Weak US port
traffic dampens energy demand
A DRAMATIC slowdown in activity at
US ports may extend well into 2009 as the recession deepens,
spelling weak demand for diesel from the shipping and trucking
Cargo volumes at major US container
ports have fallen for 17 straight months, and 2008 ended as the
weakest year since 2004, according to the monthly Port Tracker
survey by IHS Global Insight for the National Retail Federation.
“We don’t expect a significant
increase in traffic at the ports until retail sales return to normal
levels, and even then retailers will be careful not to overstock,”
said Jonathan Gold of the National Retail Federation.
Port activity is a key economic
indicator because it reflects consumption and trade. It is also a
crucial reflection of demand for diesel, the fuel of choice for
trucks moving goods to and from the ports.
US demand for distillates like
diesel and jet fuel fell by 5.8% in 2008 – the biggest drop since
1980, according to the American Petroleum Institute. This played a
major role in the global decline in energy use that has pushed oil
prices down more than US$100 a barrel since July.
The dropoff in diesel use may be
accelerating, port activity statistics show.
The number of loaded shipping
containers going in and out of the busiest US port complex in
Southern California fell 23% in December from a year earlier, and
16.4% from the previous month, according to data from the Port of
Los Angeles and the Port of Long Beach.
Together the ports – the two
largest in the country – handle more than 40% of US imported goods.
“That’s a very brutal contraction
at the end of last year,” said Antoine Halff, energy analyst at
Newedge Group. “The volume of global imports and exports is coming
down very hard and that’s likely to be continued due to the sudden
eclipse of the US consumer.”
Container volume at the US ports
may fall 5.6% in the first quarter of this year, according to Port
Port of Long Beach spokesman Art
Wong said: “We’re waiting for some signs that there will be a
turnaround. This may be the hardest year to forecast because nobody
knows when we are going to hit bottom.”
Trucking tonnage carried on US
highways has fallen about 20% over the past six months – the biggest
decline on record, according to the American Trucking Association.
The ATA says truckers can consume
about 2.6 million barrels of diesel per day, accounting for about
two-thirds of US distillate consumption. — Reuters