Post by HardTimeTrucker on Jun 30, 2009 18:46:26 GMT -5
Moody’s Downgrades U.S. Ports
"This is not good news for container haulers"
Negative outlook reflects deteriorating cargo movement, port revenue
Moody’s Investors Service downgraded its outlook for the U.S. port industry as a whole from stable to negative.
Ports in the United States face severe competitive pressures over the next year or year and a half as the recession and weak consumer confidence alter their formerly strong financial position, said a Moody’s report.
“We expect the ports will be operating under challenging financial, competitive, and credit environments that could result in negative credit pressure over the next 12 to 18 months, the timeframe covered by the outlook,” said Moody’s analyst Baye Larsen, author of the report. “Global cargo movement and port revenues have deteriorated in a trend that we expect to continue into 2010.”
While the long-term outlook is for an eventual recovery, the short-term position of the ports is hampered by less flexibility due to competition for limited trade activity and the likelihood that shipping lines and operators will seek rate relief, producing still lower revenue.
"The breadth and depth of the economic downturn may result in fundamental shifts in trade patterns, and negatively affect the competitive position of some ports," said Larsen.
Contact Thomas L. Gallagher at tgallagher@joc.com.
"This is not good news for container haulers"
Negative outlook reflects deteriorating cargo movement, port revenue
Moody’s Investors Service downgraded its outlook for the U.S. port industry as a whole from stable to negative.
Ports in the United States face severe competitive pressures over the next year or year and a half as the recession and weak consumer confidence alter their formerly strong financial position, said a Moody’s report.
“We expect the ports will be operating under challenging financial, competitive, and credit environments that could result in negative credit pressure over the next 12 to 18 months, the timeframe covered by the outlook,” said Moody’s analyst Baye Larsen, author of the report. “Global cargo movement and port revenues have deteriorated in a trend that we expect to continue into 2010.”
While the long-term outlook is for an eventual recovery, the short-term position of the ports is hampered by less flexibility due to competition for limited trade activity and the likelihood that shipping lines and operators will seek rate relief, producing still lower revenue.
"The breadth and depth of the economic downturn may result in fundamental shifts in trade patterns, and negatively affect the competitive position of some ports," said Larsen.
Contact Thomas L. Gallagher at tgallagher@joc.com.