Archive for the ‘Outlook’ Category

Impacts of the US housing market on transportation: the upsides and downsides

Posted on: March 16th, 2012 by The IAS Team No Comments

The US housing market has been bouncing along the bottom for the last 5-6 years. Signs that the market could now be improving could have a number of positive, and indeed negative, implications for the US transportation sector.

Clearly, if the market does start to improve, a rise in real estate construction could lead to an increase in the import of goods used to supply that market. Fixtures and fittings, whether for the new market or for people looking to upgrade and improve existing homes, all stand to benefit.

A secondary benefit could be the resurgence of the US domestic market. Starting in the early 1990s, shipping lines discovered that they could save significant dollars on empty repositioning by supplying US domestic logistics companies, or Intermodal Marketing Companies (IMCs), with their excess equipment. The IMC would pick up the 20ft, 40ft, or Hicube container in a surplus location like Chicago, load it with one-way cargo for the US West Coast, and return it to the ocean carrier in Los Angeles or the Pacific North West. Then the ocean carrier only had to load it empty on a vessel back to Asia. The situation was a win-win. The savings to the ocean carrier were valuable, anywhere between $300 and $500 per container. And while the IMC and their shipper had to use a smaller container than the usual 48′ or 53′ box, the credit paid by the carriers was more than enough to make it worth their while.

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White water rafting in SouthEast Asia – a look at Vietnam’s economic situation

Posted on: February 17th, 2012 by The IAS Team No Comments

Imagine you are in a canoe, paddling down a river. When you started out, the water was calm, the sun was shining, and the going was easy. But now the sky has clouded over, the water is running faster and faster, and you can hear the roar of rapids up ahead. Turing around isn’t an option and the shore is too far away. Your only choice is to hang on tight, keep paddling, and pray you don’t capsize.

Such is the situation now being experienced by the government of Vietnam. The water looked inviting and China appeared to be having such a wonderful time. But Vietnam now finds itself being carried ever faster downstream, away from the familiar centralized command economy with its reassuring five-year plans and off into the unregulated maelström that is global capitalism.

True, Vietnam has accomplished much in a short period of time. The streets of Ho Chi Minh may not have reached the development of today’s Shanghai, but they have at least reached a level equivalent to Shanghai in 1999. Vietnam enjoys a trade surplus with both the USA and with the EU, and the number of people living below the poverty line has reduced significantly. More and more jobs are being created – not in the traditional field of agriculture – but in both industry and services.

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