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Researched by Industrial Info Resources (Sugar Land, Texas)--Amid the trade tariff standoff between the U.S. and China, ports in the U.S. have a stake in the outcome, particularly if rising tariffs curb import/export traffic.
Industrial Info is tracking more than $24 billion worth of U.S. marine cargo-handling projects, of which more than $8 billion worth are assessed as having a high probability of moving forward as planned.
Click on the image at right for a chart showing U.S. high-probability marine cargo-handling projects by market region.
After trade negotiations between Chinese and U.S. officials stalled earlier this month, President Donald Trump raised the tariff rate on an estimated $200 billion worth of Chinese products per year to 25% from 10%. In retaliation, China increased its own tariffs on $60 billion worth of U.S. products, effective June 1.
The Trump administration is mulling a tariff of as much as 25% on an additional $300 billion worth of Chinese products imported annually by the U.S.
The American Association of Port Authorities (AAPA) has asked the Trump administration to rescind the tariff hike that took effect on May 10, and to postpone the imposition of tariffs on additional Chinese imports.
"We urge the president to put a pause on this action and continue negotiations," said Susan Monteverde, AAPA's vice president of government relations, in a press statement. "Tariffs harm all Americans, as the increased cost of goods imported and exported are felt throughout our nation."
However, the revenues of many ports are largely insulated from U.S.-China tariffs, at least in the near future, according to Fitch Ratings Incorporated (New York, New York).
Increased tariffs on bilateral U.S.-China trade may result in decreased traffic at certain U.S. ports, the credit ratings agency said in a May 15 a press release, but port revenues are not likely to be similarly affected in the medium term given the "landlord-based operating model at many of the more exposed West Coast ports, in which contractual minimums provide a floor for revenues, should volume declines worsen."
Fitch continued: "Imports, which make up the largest share of volumes at many of the ports with higher exposure to Chinese trade, have thus far been resilient to the imposition of tariffs, though the risks to volumes will rise if trade protectionism is prolonged."
Some ports already have seen falling export volumes since the tariffs were imposed, while others haven't been affected as much, Fitch said.
"Of the larger West Coast, East Coast, and Gulf of Mexico ports, there is a levelling off or decline in loaded exports, other than the Port of Houston, Texas, since tariffs were put in place in January 2018. This trend worsened in second-half 2018 onward, as additional tariffs went online in June and September," Fitch said.
Total tonnage at the Port of Houston set a record of 35.7 million tons in 2018, a 9% increase from 2017, according to the port authority. Container twenty-foot equivalent units increased 10% to a record 2.7 million. Imports and exports through the port were about even.
Among the port-related projects being tracked by Industrial Info is a $704.5 million harbor deepening project in Florida by the Jacksonville Port Authority. As part of a two-phase effort, a 13-mile stretch of existing channel is being deepened from 40 feet to 47 feet, with completion expected in early 2022. According to the Jacksonville Daily Record, the port's exposure to the trade war is limited, as less than 10% of the port's container volume is from Chinese imports and exports. For more information, see Industrial Info's project report.
In Texas, Great Lakes Dredge & Dock Corporation (NASDAQ:GLDD) (Oak Brook, Illinois) was awarded a contract to deepen and widen the Port of Corpus Christi ship channel. The $360 million project will increase the channel to a maximum depth of 54 feet and a width of 530 feet. Construction on the Port of Corpus Christi project was planned to kick off this month, with completion expected by the end of 2021. For more information, see Industrial Info's project report.
In Oregon, the $160 million modernization of Terminal Berth 5 in Seattle is in the preliminary engineering phase. The Port of Seattle project includes reconstructing a crane rail, rehabilitating docks and dredging to allow the terminal to handle larger container ships. Construction is planned to kick off later this year, with completion in mid-2020. For more information, see Industrial Info's project report.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
Industrial Info is tracking more than $24 billion worth of U.S. marine cargo-handling projects, of which more than $8 billion worth are assessed as having a high probability of moving forward as planned.
After trade negotiations between Chinese and U.S. officials stalled earlier this month, President Donald Trump raised the tariff rate on an estimated $200 billion worth of Chinese products per year to 25% from 10%. In retaliation, China increased its own tariffs on $60 billion worth of U.S. products, effective June 1.
The Trump administration is mulling a tariff of as much as 25% on an additional $300 billion worth of Chinese products imported annually by the U.S.
The American Association of Port Authorities (AAPA) has asked the Trump administration to rescind the tariff hike that took effect on May 10, and to postpone the imposition of tariffs on additional Chinese imports.
"We urge the president to put a pause on this action and continue negotiations," said Susan Monteverde, AAPA's vice president of government relations, in a press statement. "Tariffs harm all Americans, as the increased cost of goods imported and exported are felt throughout our nation."
However, the revenues of many ports are largely insulated from U.S.-China tariffs, at least in the near future, according to Fitch Ratings Incorporated (New York, New York).
Increased tariffs on bilateral U.S.-China trade may result in decreased traffic at certain U.S. ports, the credit ratings agency said in a May 15 a press release, but port revenues are not likely to be similarly affected in the medium term given the "landlord-based operating model at many of the more exposed West Coast ports, in which contractual minimums provide a floor for revenues, should volume declines worsen."
Fitch continued: "Imports, which make up the largest share of volumes at many of the ports with higher exposure to Chinese trade, have thus far been resilient to the imposition of tariffs, though the risks to volumes will rise if trade protectionism is prolonged."
Some ports already have seen falling export volumes since the tariffs were imposed, while others haven't been affected as much, Fitch said.
"Of the larger West Coast, East Coast, and Gulf of Mexico ports, there is a levelling off or decline in loaded exports, other than the Port of Houston, Texas, since tariffs were put in place in January 2018. This trend worsened in second-half 2018 onward, as additional tariffs went online in June and September," Fitch said.
Total tonnage at the Port of Houston set a record of 35.7 million tons in 2018, a 9% increase from 2017, according to the port authority. Container twenty-foot equivalent units increased 10% to a record 2.7 million. Imports and exports through the port were about even.
Among the port-related projects being tracked by Industrial Info is a $704.5 million harbor deepening project in Florida by the Jacksonville Port Authority. As part of a two-phase effort, a 13-mile stretch of existing channel is being deepened from 40 feet to 47 feet, with completion expected in early 2022. According to the Jacksonville Daily Record, the port's exposure to the trade war is limited, as less than 10% of the port's container volume is from Chinese imports and exports. For more information, see Industrial Info's project report.
In Texas, Great Lakes Dredge & Dock Corporation (NASDAQ:GLDD) (Oak Brook, Illinois) was awarded a contract to deepen and widen the Port of Corpus Christi ship channel. The $360 million project will increase the channel to a maximum depth of 54 feet and a width of 530 feet. Construction on the Port of Corpus Christi project was planned to kick off this month, with completion expected by the end of 2021. For more information, see Industrial Info's project report.
In Oregon, the $160 million modernization of Terminal Berth 5 in Seattle is in the preliminary engineering phase. The Port of Seattle project includes reconstructing a crane rail, rehabilitating docks and dredging to allow the terminal to handle larger container ships. Construction is planned to kick off later this year, with completion in mid-2020. For more information, see Industrial Info's project report.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
