COVID-19 And Historically Low Oil Prices Impacting Little Rock Port Authority
The Little Rock Port Authority is seeing a decrease in shipping volume not only because of the coronavirus pandemic, but also due to record low oil prices.
Bryan Day is the executive director of the Little Rock Port Authority. He says the port authority itself as well as other private businesses have seen an impact in the past few months.
"We have seen several industries at the port that have slowed down. Some of it related to the virus, some of it related to the price of oil, some of it related to just general economic conditions. What that looks like at the end of the day, we’re just not sure yet," Day said.
While Day believes the COVID-19 has definitely impacted the amount of freight that has traveled through the port, the low price of oil is also a big factor.
"That has had an equal negative impact on our economy and has to be addressed or stabilized so we can move forward," Day said.
On Monday, oil prices went into negative territory, going as low as - $37 a barrel. Day says that low price of oil is great for people filling up their gas tanks and for those heating their homes, but bad for the manufacturing industry.
"The making of goods, heavy equipment, steel pipe, aluminum ingots, interstate sign ways, roads and bridges. A lot of that is funded off oil, gas taxes, premiums. People are not spending as much on oil, they’re not investing…corporations are not investing because there’s no return on their investment when oil is so cheap," Day said.
Since the port is still operational, Day says they are taking extra precautions when it comes to unloading freight off of railcars and barges.
"Our employees are using a little bit more aggressive personal protective equipment, masks, gloves. Most of the barges we are unloading have been idle for some time so we’re pretty confident that the virus doesn’t exist on those materials,” Day said.
While the port itself has not let go of any of its employees during this time, Day says that isn’t the case for other businesses at the port.
"There are a number of businesses that have furloughed, that have laid off, that have reduced their work force as a result of the downturn in the economy, the uncertainty of the future, the price of oil, the virus and all of those other factors," Day said.
Back in January, the port was predicting record breaking numbers for the year in freight as well as employment. Now, Day says that’s no longer true. As far as when there will be an idea how the coronavirus and low oil prices will ultimately impact the port authority, Day says could take months.
"Until the economy and the American people have some sense of stability, some sense of safety, some sense that this is behind us, we won’t really see the return to industry. I’m thinking probably by June or July, we’ll have a really good idea of what the rest of the year looks like," Day said.
Though Day says the economic impact of all of these factors will have a significant and long-lasting effect on Arkansas’s economy, the state will recover.
"We will come back. We’re strong and resilient, but it could be towards the end of the year before we’re back to the volumes we saw in early January," Day said.