Issue 1 2021 - FBJNA

///OUTLOOK 2021

Hapag Lloyd and other ocean carriers are experiencing a shortage of 40-foot containers. (Hapag Lloyd photo)

trade agreement. Biden’s infrastructure

By Peter Buxbaum

Now that everyone’s least favorite year is over, optimism

reigns for trade

and transportation in 2021. The numbers bear out that sentiment, showing that tailwinds from the second half of last year—when consumers started spending more on goods, at the expense of services—will carry over into 2021. The new year also brought a new administration to Washington,

with the

expectation of significant policy shifts, including reductions in international tensions and increased infrastructure


which will likely benefit trade and transportation. Last year was the worst

for international trade since the

Great Recession, with

merchandise volumes falling 9.2%, according to the World Trade Organization. For 2021, the WTO forecasts a 7.2% bump-up in trade, a figure that could go higher if COVID-19 vaccines are successfully administered globally. In the political arena,

President Joe Biden will “continue with a strong stand

against China,” said

Anne van de Heetkamp, a product management vice president at Descartes, but former President Trump’s punitive tariffs will likely give way to “more anti-dumping/ countervailing duty cases, increased


standards,” and “broader restricted party lists to limit the influence of the Chinese military.”

MSC enhanced its connections between Asia and the U.S. west coast late last year. (MSC photo)

The new administration “will reengage with U.S. allies alienated by Trump’s unilateral trade policies,” said a report from the Arnold Porter law firm. That

could translate, according to van de Heetkamp, into “the

U.S. re-entering the

Trans-Pacific Partnership or entering negotiations” for a transatlantic or U.K.–U.S. free

plans—which the president called “TIGER grants on steroids” during the political campaign—bode well for progress in modernizing highways, roads, and bridges. A proposed

$2 trillion

a 2021 upswing. Air cargo


infrastructure spending, plus the prospects of additional stimulus dollars heading to U.S. consumers, led S&P Global Platts to conclude that Biden will oversee “faster economic growth, higher employment, acceleration of inflation, a weaker dollar, and a smaller deficit.” Biden’s stimulus policies

will also likely benefit cargo carriers, as “fiscal stimulus has already inflated container shipping demand,” noted research from Drewry, “benefitting ocean carriers through record-high spot rates” and higher earnings. Increased demand is also lifting the prospects of the world’s beleaguered air carriers. Transportation service providers across all modes will likely benefit from

The year of the pandemic was a disastrous one of the world’s airlines—losing half a trillion dollars in revenues in 2020— but those numbers resulted from the falloff in passenger traffic. Cargo performance actually represented a bright spot.

Air cargo volumes fell by 11.5% during in 2020,


revenues saw a 5% increase, attributable, according to the International Air Transport Association (IATA), to a 45% decrease in capacity. Cargo accounted for 36% of airline revenues in 2020, up from 12% in 2019. Cargo “has become a

significantly larger part of airline revenues,” said Alexandre de Juniac, IATA’s director general and CEO. “Cargo revenues are making it possible for airlines to sustain their skeleton international networks.” N o rth Am eri c an

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