U.,S. Lgistics Are All Jammed Up

Implications: That miserable word unreliability is poking its ugly head above the surface in our logistics pileups. We have ships at anchor standing off our shores waiting for available dock space to unload their container cargo. Some of the most modern are so big that they can’t stand at the majority of the wharves. When the containers are lifted off the ships onto waiting trucks or rail cars, there’s a question about whether the resulting journey to the warehouse can be done in any reasonable time. Then too, the question is where to warehouse the goods since there is little standing inventory availability of new space.

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 Some of the material offloaded in Los Angeles/Long Beach winds up in Omaha or some other Midwestern metropolis for this reason. Most times the warehousing is done closer to home, but the point is that the process is getting inefficient. Using the airports and air cargo is a matter of availability too since these facilities are often at capacity in the growth areas of the country, primarily the Sunbelt. We as a result are going to return to U.S. manufacture in the near future for a growing portion of our purchases. Panama proposes to accommodate the new super breed of container carriers through changes to the Panama Canal which should shift a portion of the burden from the Pacific to the East Coast. Nicaragua has a plan too for a brand new replacement for the Panamanian facilities cutting across the east/west width of the country.

Or maybe instead of turning to Asian/Chinese wares, the United States may be more likely to import from and through Mexico since that country is in a position to assist us in our logistics problems. We just don’t have the coastline space to site seaports nor the available rights-of-way for rail and highways. It’s not easy either but way easier than in the case of seaports to find sites in the Sunbelt to accommodate new cargo airports. Mexico probably has better sites available here too, primarily on the mainland along the Sea of Cortez or farther east. Development activity is heating up in Northern Mexico to meet the demand. As opposed to many other commercial real estate markets in the United States that we are in imminent danger of overbuilding while chasing yesterday’s market, the demand appears to be overwhelming here and the competition relatively light. You can set up a doomsday outlook regarding the long-term growth of the U.S. markets, but the truth is that the U.S. is relatively lightly populated and an attractive place to live. Immigration will probably continue even if the world’s population peaks in 2050 as many of the nay-sayers believe.

This market is definitely early-on and that’s when the riches sometimes are available to the fortunate. As ever, observing the unfolding of this probability will be fascinating like watching the Southwest U.S. develop all over again.