Sunny skies could be off in the distance for shipping exchange traded funds (ETFs), because despite signs of pullback in the shipping industry, many ports are looking to prepare for that time when the listing economy finally rights itself.
Los Angeles and Long Beach port officials see the signs of retrenchment in the shipping industry, and feel that now is the time for expansion even if they are met with objections across the board, reports Ronald D. White for The Los Angeles Times.
The global economic slump has cut rates that cargo ships charge for shipping, cutting into profits, and outside the harbors of Singapore, Hong Kong and Shanghai dozens of cargo vessels are idled with no goods to carry.
This slowdown come at a time when projects in the Los Angeles and Long Beach areas are reaching critical stages and the ports’ director say it’s time to push the plans through. The projects, they contend, would reduce the pollution endured by neighbors by using newer, greener technologies.
What’s more, the harbor will be ready when the economy rebounds and the global trade heats up. This will also pave the way for other harbors and shipping transports to follow in this path if the projects get funded and everything goes smoothly. All of these efforts could very well pay off for shipping ETFs.
Areas in along the East Coast and down under are feeling the effects of the global shipping slowdown, as the Port of Melborne is breaking their long-term growth trend. Phillip Hopkins for Business Day reports that the Port of Melbourne, for imports and exports, fell by 3.2% last month. Melbourne handles about 36% of Australia’s trade, and about a third of all containerized imports are consumer goods.
Looking around two years into the future, one shipping insider in Melborne thinks growth will be at 1%-2%.
- Claymore/Delta Global Shipping (SEA): down 47.7% since its Sept. 8 inception
- PowerShares Global Progressive Transport (PTRP): down 24% since Sept. 23 inception
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.