Boston, MA -- (SBWIRE) -- 11/25/2013 -- BMI maintains its cautiously positive outlook on the US freight sector. We have downgraded our US real GDP growth forecast for 2013 to 2.1% from 2.3%, due mainly to base effects from late 2012, and the decision to maintain the 'sequester' cuts to federal spending. Nevertheless, our core view on the US economy is that the recovery is becoming increasingly entrenched, and that by 2014 many of the headwinds to growth will be dissipating.

We believe that US export growth will continue to outpace import growth over the next several years, narrowing the goods trade deficit both as a percentage of GDP and in nominal terms. Increased US competitiveness and reviving global demand will support US exports, while continued expansion of domestic energy production will reduce the country's sizeable energy import bill, though this will be offset somewhat by a resurgent consumer over the next few quarters, which should provide a boost to freight transport volumes. We expect US household finances to continue to improve over the medium term, supporting an uptick in consumer activity, which should support freight transport volumes. A dwindling debt burden, improving consumer sentiment and higher net worth will support an increase in real private consumption, driving real GDP growth of 2.1% this year and 2.7% in 2014.

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Key Industry Data

- At the Port of Los Angeles (LA) we forecast a contraction of 4.2% in total tonnage in 2013, to reach 64mn tonnes. The port will recover in 2014, reaching average annual growth of 3% during our forecast period.
- At the East Coast port of New York/New Jersey (NY/NJ), growth is forecast to be 3.1% in 2013, to reach 147mn tonnes, with average annual growth of 4%.
- We predict growth of 2.3% in air freight volumes, to reach 13.6bn tonnes-km in 2013.
- We predict growth of 5.8% in rail freight tonnes, to reach 2.17bn tonnes in 2013, with annual average growth of 5.8% during our forecast period.

Key Industry Trends

Green Rail Terminal For SoCal Ports Approved

BMI believes that a new rail freight terminal for the southern California (SoCal) ports of LA and Long Beach for which approval has just been granted will help the two facilities, the largest container-handling ports in the US, to remain competitive in the coming years.

UPS Drivers To Hold Second Vote On Agreements

US logistics firm UPS's truck drivers have confirmed intentions to hold another vote on seven proposals on September 18 2013. The agreements were initially rejected following a vote in June 2013, but certain elements of the proposals have been changed, including points relating to a healthcare plan.

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