Uncertain growth prospects for trade and port volumes

Forecasting trade growth and from that port projections is becoming increasingly difficult in a time of increased geo-political turmoil, technological disruption and climate change.

Josh Hurwitz, senior consultant at Moffat & Nichol, speaking the American Association of Port Authorities (AAPA) Latin American Ports Conference, scanned multiple economic prognostications, he explained that growth forecasts have been revised downward, pointing to a broader external slowdown for trade flows.

With Latin America, where he said that IMF’s 2.4% growth forecast looked “optimistic”, he identified Colombia as a bright spot. With a number of Latin American countries exporting commodities, he suggested that their economic prospects have been negatively impacted by the strong US dollar.

Another presenter on the same panel, Ricardo Sanchez from the United Nations, displayed data showing that Latin American ports are only now beginning to prepare for larger ships that will continue to enter their trade lanes, increasingly from China. “You need to have the port ready…independent of the times we are in now,” he said- emphasizing the long-term nature of port planning.

Beyond the very tentative economic forecasts, Hurwitz’s real message was that the trade environment is increasingly being impacted by geo-political factors, after 20 years of “working extremely well.” He described a new world order being formed, with the post World War II paradigm being repudiated, not “unipolar” any more- with a “state directed model” continuing to evolve.

After describing disruptions from both technology accelerating at a fast rate and climate change - with difficulties predicting what type of world we will be living in physically -  he said that it was possible to apply rigorous analysis, and testing numerous “what if” simulations to arrive at viable strategies for coping with unprecedented change.

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