2008-12-29 11:04 AM
Shipping cranes stood still, truck traffic trickled and a cargo vessel sat idle, moored to a pier.
"You never see that," Lytle said. "It's quiet. Too quiet."
Port traffic has slowed from North America to Europe and Asia as a recession erodes consumer demand and the credit crisis chokes off loans to export-dependent companies. International trade is set to fall by more than 2 percent next year, the most since the World Bank began measuring it in 1971. Idle ports around the globe are showing how quickly a collapse in trade can spread, undermining growth in each country it reaches.
September and October are typically Long Beach's busiest months as U.S. retailers take deliveries for holiday sales. This year, imports fell 15.8 percent from a year earlier in September, 9.5 percent in October and 13.6 percent in November.
"Everybody expects 2009 to be a bleak year," said Jim McKenna, chief executive officer of the Pacific Maritime Association, a San Francisco-based group representing dock employers at U.S. West Coast ports. "Now, it looks like 2010 is going to be just as bleak."
Cars, household appliances, machinery and furniture fell in November from a year earlier. The port in Singapore, the world's busiest for containers, posted its first month-over-month decline in seven years in November, at 1.5 percent.
Shipments to the port of Rotterdam, Europe's largest, are likely to remain stagnant this year compared with 2007, said Jan Westerhoud, chief executive officer of Europe Container Terminals BV, the largest handler at the facility.
"The problem is that people can't get financing, no matter what their credit situation," said Ed Rice, president of the Coalition for Employment through Exports, which represents companies such as Boeing Co., Caterpillar Inc., United Parcel Service Inc. and BNP Paribas SA. "Banks are cancelling credit lines even for creditworthy customers."
The Baltic Dry Index, a measure of shipping costs for commodities, is down 93 percent from a record in May, a sign that traders expect export volumes to stay depressed.
Slowing trade is both a cause and an effect of the first simultaneous contraction in the world's largest economies since World War II. Throughout this decade, trade grew by 12 percent a year to US$13.6 trillion in 2007, propelling growth in nations from Germany to China and Chile. Now the evaporation of financing and collapse in demand threaten an activity that accounts for a quarter of the US$54 trillion global economy.
"We are having this dramatic reversal," said Michael Finger, a trade economist in Geneva since the early 1970s. "I'm a long time in this business, but this is unique."
Governments and international lenders are stepping in to fill the gap. China and the U.S. pledged US$20 billion to aid their exporters. The World Bank tripled funding for banks helping emerging-market companies to sell abroad, to US$3 billion. South Korea pledged US$16 billion for its exporters after banks there couldn't secure international credit lines for them.
"We are going to step up and provide credit to our exporters," said Jeff Abramson, the U.S. Export-Import Bank's executive vice president, in an interview. Without export finance, "the credit crisis can impact the real economy."
In Germany, the world's top exporter, trade abroad slipped 0.5 percent in October, the fourth drop in six months. In China, exports fell 2.2 percent in November, which was the first monthly decline in seven years. They decreased a record 26.7 percent in Japan last month from a year earlier. U.S. shipments fell 2.2 percent in October to the lowest level in seven months.
The banking crisis means access to trade credit is becoming scarce too. In recent months trade financing costs soared to more than six times pre-crisis levels, according to a Nov. 18 report by HSBC Holdings Plc.
"You take it for granted until it blows up," said Bernard Hoekman, trade economist at the World Bank, in an interview. "Now it's blowing up."
Exporters worldwide are short US$25 billion in trade financing that either isn't available or costs too much, according to Pascal Lamy, the head of the World Trade Organization.