U.S. Ocean and Air Cargo Supply Chains Not Likely to Expand in Coming Year, Says Fitch Ratings

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While growth prospects remain healthy for ocean and air cargo segments heading into next year, the the trajectory figures to level off somewhat according to Fitch Ratings in its latest annual report.

The broader economy is proving to be resilient thus far amid increased recession talk.
Factors more likely to curb the rate of growth are more sector-specific ion nature, according to Transportation and P3s group head Scott Zuchorski.

“Aircraft safety is under increased scrutiny, ongoing U.S./China trade tensions are creating strategic shifts in the shipping sector,” noted Zuchorski.

Air traffic remains quite healthy for U.S. airports and will remain so headed into 2020 with Fitch projecting 2.5%-3.5% growth overall.

This mirrors a report issued recently by Airports Council International (ACI) which observed that many airports are near, at, or even exceeding capacity which is causing congestion, affecting levels of service, “and frustrating demand.”

An ongoing development worth note is the Boeing 737 Max model, the return of which remains on ice. “Delays in delivery of new orders stand to become more widespread which will affect air travel performance the longer the Boeing 737 Max model remains grounded,” said Senior Director Seth Lehman.

The most acute effect of escalating trade tensions between the U.S. and China remains ports with those in the West Coast increasingly susceptible to monthly volatility in volumes.

Conversely, East Coast ports are seeing much stronger performance over the last few months with volumes increasing nearly 6% compared with the first half of 2018.

“Some ports will face greater adverse effects based on their individual balance of trade as shippers try to beat tariff deadlines,” said Senior Director Emma Griffith.

Fitch’s ‘U.S. Transportation Trends – Fall 2019’ report is available at ‘www.fitchratings.com’ or by clicking on the link.




About the Author

Patrick Burnson, Executive Editor

Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [email protected]


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2019-10-08 13:16:00

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