For port cities, slowdown in global trade hits home

Powerful cranes, each shaped like an upside-down "U" and towering a dozen stories high, hug the dockside. Specialized vehicles called jockey trucks scurry past stacked shipping containers, while in a nearby union hall, burly longshoremen pass the time playing cards and swapping jokes.

All that's missing here at one of the nation's leading ports are some ships. It's midafternoon on a workday and almost 2 miles of prime cargo-handling waterfront sit empty in the bright sunshine. The nine vacant berths symbolize a savage decline in global trade that is alarming economists and sending shivers through major port communities.

"Global trade is collapsing. ... The whole global economy continues to tank, from China to Europe to the United States," says Kenneth Rogoff, former chief economist for the International Monetary Fund.

For Savannah, the accelerating global downturn is arresting more than a dozen years of impressive growth, dealing a blow to a local economy that is weakening along with that of much of the United States. In February, the port handled 21.7% fewer containers than it had the same month a year earlier, its 10th consecutive monthly decline. "All of a sudden, it all started dropping at the same time," says Doug Marchand, 61, executive director of the Georgia Ports Authority.

This year, for the first time since 1982, trade is expected to shrink. Last month, the World Trade Organization predicted that shipments of goods would fall 9% in 2009, the largest decline since World War II.

As debt-laden U.S. consumers stop spending freely, factories in China, South Korea, Taiwan and elsewhere are shuttering assembly lines. In January, the dollar value of U.S. trade fell more than 20% compared with the same month in 2008. New trade barriers in the USA, Europe, Russia, India and elsewhere — including domestic content requirements for some government purchases — threaten to exacerbate an already dire situation.

Where trade once spread prosperity, it now transmits weakness. Fewer shipping containers passing through commercial gateways such as Savannah mean less revenue for port operators and local governments, fewer hours of work for stevedores, longshoremen and truckers, and fewer dollars flowing to local businesses. In January, the local unemployment rate hit 7.5%, up from 4.6% one year earlier.

"The port is a major economic driver for us. When imports and exports go down, it has a mushrooming effect. It just spreads out over everything," says Mayor Otis Johnson.

James Tandy, 38, knows all about the ongoing erosion. Last year, he worked up to 60 hours a week hauling cargo on the docks. Last month, after a seven-day week of showing up at the longshoremen's union hiring hall for 5:30 a.m. job calls, Tandy had worked just five hours total.

"It's pretty rough," he said.

Help from Texas

On this day, the waterfront is only temporarily empty. Container ships bearing goods such as dining room sets and flat-screen televisions begin arriving within hours. Savannah thus far is weathering the financial storm better than some trade centers. In California, for example, the port of Long Beach suffered a 40% decline in its February monthly container total.

Beneath the spring sun, men and machines join in an industrial ballet. Steel containers bearing the names of shipping lines such as Hanjin, Yang Ming and Maersk stretch for acres.

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