The dollar is strong, Asian markets are weak, and just as th holiday shipping season hits its stride the Port of Baltimore finds itself flush with an unlikely commodity: empty cargo containers.
The amount of cargo being shipped in to Baltimore so outweighs the amount being shipped out that the empty containers are crowding the piers. They arrive carrying low-priced goods from Asian countries whose currencies have plummeted, but little goes back because American goods are too expensive overseas.
Baltimore's ports always import more than they export, but the balance has shifted so heavily in recent months that some veterans of the local shipping industry are comparing the season to the trade-barren years of World War II.
"We've moved some of our export people over to imports just so they'll have something to do," said M. Sigmund Shapiro, chief executive of freight forwarder Samuel Shapiro & Co. "Fortunately, trade is a two-way street, and a lot of the drop has been made up by imports, but the moment of truth will be the early part of next year after the holidays are over. Then we'll know just how bad things are."
The drop in exports is not unique to Baltimore, and not as pronounced here as on the West Coast where trade with Asia is heaviest. Steamship lines in ports like Los Angeles are carrying empty containers across the Pacific so they can be stocked with imports to the United States. Ships leaving Asia are so full that some goods reportedly have been stranded at the piers for weeks.
For steamship lines, an imbalance is simply part of the trade, and repositioning empty containers is a necessary complication. "If world trade was always the same in every market, then we'd always be full," said George Thomas, regional representative for Evergreen Line, a Taiwanese shipping company that is one of the largest involved in Asian trade out of the Port of Baltimore.
But what hurts shipping lines the most is that outgoing shipping rates drop faster than rates for incoming cargo can rise. Steamship lines forced to move empty containers from the United States to overseas ports that need them are scrambling for something to put in them -- and slashing export rates lower than most industry officials can remember.
"How low are the rates? You can move a box from Baltimore to Hong Kong right now cheaper than you can take a trailer and run it to Pittsburgh," said Gene Johnson, Baltimore representative for China Ocean Shipping Co., which operates a liner service between Baltimore and Asia. "I don't think the rates have ever been this low."
Some lines say the cost of shipping an average 40-foot container to the Far East has dropped to $500 or less. A container of low-value cargo such as waste paper can be shipped as cheaply as $150.
In the other direction, meanwhile -- ships leaving Asia for the United States -- the scramble for space has pushed rates up. The Federal Maritime Commission is investigating complaints that shipping lines are charging premiums as high as $1,000 a container to guarantee space on ships leaving Asia.
Local freight handlers say the export market has started to recover as the heavy season for shipping holiday merchandise draws to a close. But consumers still might see the effects at the cash register, where the relative low cost of imported goods could be offset by increased costs of shipping the goods here.
Baltimore routinely imports twice as much cargo as it exports, an imbalance that has as much to do with geography as economics. Manufacturers who want to move their goods quickly often prefer to load them at a ship's last port of call, not at a mid-Atlantic port like Baltimore, which is generally in the middle of a ship's East Coast schedule.
But in July, the most recent month for which figures are available from the U.S. Census Bureau, the imports-to-exports imbalance swelled to 3 to 1. During that month Baltimore received more than $1.5 billion of cargo -- the highest total for any month in the last year -- while it exported about $520 million, second lowest for the year. Those figures also include goods shipped by air through Baltimore-Washington International Airport, about 4 percent of the dollar value of the area's commerce.
"Our volume is pretty solid. We did 300,000 containers in 1997, we'll do about 300,000 in 1998," said James White, acting director of the Maryland Port Administration, which operates the state's public marine terminals. "But the exports are really slowing up."
According to a survey by the U.S. Treasury Department, Maryland's exports of electric and electronic equipment to Asia were down almost 40 percent from the first quarter of 1997 to the first quarter of 1998. Exports to Indonesia have dropped 84 percent over the same period.
For many in Baltimore's maritime community, a trade imbalance doesn't much matter. Most making a living at the waterfront don't care which direction cargo is moving, just whether it moves.