Ports in the US are facing a difficult 2021 as the economy worsens, trade tensions continue and fiscal stimulus is delayed, according to Fitch Ratings.
In the ‘Fitch Ratings 2021 Outlook: US Transport’ the credit ratings agency said the COVID-19 pandemic will continue to impede growth, even though there will be an improved performance in 2021.
Cargo ports have shown resilience throughout the pandemic and are expected to recover to 2019 levels by 2022, according to Fitch.
The credit agency also said the pandemic will have long-term effect on traffic as more people work from home and the economy remains sluggish, hindering cargo traffic volumes.
Other areas of US transportation, such as airports and cruise ports, would remain the most exposed to the pandemic-related volatility in 2021. Credit stability as a whole will depend on how quickly vaccines can be developed and distributed.
However, the economic uncertainty is unlikely to harm capital investment plans as interest rates are very low, Fitch said.
Fitch added that it expects ports to work collaboratively with partners – tenants and customers – to raise the necessary capital needed to upgrade infrastructure and expand operations in 2021.
US ports had a mixed 2020, with those on the West Coast seeing trade plummet at the start of the year as exports from China stopped.
On the East Coast, ports which were not directly affected by the fall in trade with China enjoyed several months of growth and were also able to continue with expansions and upgrades to equipment.
As exports from China resumed the ports of Los Angeles, Long Beach and Oakland all broke either volume or container handling records.
This also led to several record-breaking months for US imports towards the end of 2020 as said trade with China combined with the holiday season.
The pandemic has emphasised the importance of improving the US internal supply chain. In September 2020, the US Department of Transportation included five intermodal projects in its $1 billion initiative to improve the flow of goods across the country.