The European economy may be heading into a double-dip recession, something that should scare freight fowarders and anyone else in the shipping industry. The fourth quarter 2009 figures had the Eurozone (the countries using the Euro) growing at an anemic 0.1% rate. If the Greek economic problems continue (which they have in the first half of the first quarter) to bring downward pressure on the Eurozone, the European economies may have a second recession on their hands this year, or at least a negative growth first quarter of 2010.
That has repercussions across the pond. Container transport, which is the preferred mode of transport for exports, will likely be stagnant if there is a decreased demand for US goods in Europe; that is going to throw a monkey wrench into the President’s plan to double exports in five years. Fewer stuff will be flowing into the ports on the east coast and freight carriers in the east will have less business.
In a recessionary environment, the Euro will weaken, especially if the Greek debt situation casts doubt on the long-term stability of the Euro, which will make European exports more competitive. That will be good news for European car makers and US makers with European connections, but bad news for US car haulers.
This might encourage the US to be more Pacific-focused, as a growing Asia and a stagnant Europe will tend to skew the US economy towards more of a Pacific focus. The ports of the West Coast may become even more important in the years to come.
Source:http://www.marketwatch.com/story/german-gd…dist=beforebell
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