Archive for July, 2013

JOC Insights by Mario Moreno: U.S. Containerized Apparel Imports Up 3.7% through April

July 30, 2013

U.S. domestic imports of apparel, not knitted or crocheted (HS code 62), are modestly recovering from 2012’s dip. Year to date, through April, apparel imports were up 3.7%, and totaled $12.4 billion. Last year, imports totaled $36.8 billion for a dip of 0.4%, while in 2011 imports totaled $36.9 billion for an increase of 8.0%. 2012 was a mediocre year for apparel imports partly because real disposable personal income per capita experienced sluggish growth.

U.S. Apparel Imports by Dollar Value

CHINA LOSING SHARE OF IMPORTS; BANGLADESH, VIETNAM GAINING

China is the largest supplier of apparel (not knitted or crocheted) to the U.S. by dollar value. China sourced 40% of all U.S. apparel imports in 2012, down by 0.6% from 2011. Year to date, through April, China saw its share of imports declined further to 36.8%, despite an increase of 3% of exports to the U.S.

Share of U.S. Apparel Imports by Country and Annual Growth Rate

Imports from other low-cost producers such as Bangladesh and Vietnam are growing faster this year, partly as a result of the fast-pace rising production costs in China. Vietnam’s share has grown steadily in recent years, boosted by rapid export growth. Year to date, Vietnamese exports of apparel to the U.S. jumped 17%, and Vietnam’s share of imports increased to 8.4%. Second-ranked Bangladesh also saw its share of imports increased in recent years and it’s currently holding 10.8% of the total U.S. apparel imports trade year to date. Ultra low wages, which have remained flat for years, spurred an $18 billion garment industry. According to some estimates, average monthly pay in 2009 for workers in Dhaka was $47 compared to $235 in Shenzhen China.

Bangladesh’s exports of apparel to the U.S. rose 8% year to date, a good improvement over the 1% dip seen last year. Nevertheless, exports growth will likely be challenged for the rest of the year in the aftermath of the April 25th collapse of Rana Plaza, an eight-story building in Savar, Bangladesh, killing over 1,000 garment workers. Some apparel retailers have signed a safety pact agreement with the intention of raising payment to suppliers so that factory owners undertake major safety upgrades. Furthermore, the Bangladeshi government has agreed to International Labour Organization proposals that include worker protection rights and liberty to form unions. How will new safety measures and regulations impact container apparel imports from Bangladesh going forward?

WILL APPAREL IMPORTS FROM BANGLADESH BE ADVERSELY IMPACTED BY THE RANA PLAZA DISASTER?

U.S. container imports of apparel from Bangladesh were up 7.6% year to date through May, and totaled 34,544 TEUs. By extrapolating the data we can determine the expectation of apparel import volumes from Bangladesh over the next 6 months as the graph shows. This is important because we can estimate the impact of the Rana Plaza disaster and new safety measures and regulations over future container imports of apparel from Bangladesh. For June, apparel imports from this country are expected to grow by 7.4% year over year.

 US Apparel Imports from Bangladesh

More of Moreno’s trade and economic analysis can be obtained by subscribing to JOC Insights or by following him on Twitter @MarioMoreno_JoC.

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JOC Group Launches Port Productivity Database

July 23, 2013

JOC Group Inc. is pleased to announce the launch of the Port Productivity database, the first global, apples-to-apples measurement of container port performance.

Download our JOC Port Productivity Whitepaper

The database, which was five years in development, was created to help elevate what for several years have been stagnant overall productivity levels in the container port industry, according to ports and carriers. Based on data provided by a majority of the world’s largest container lines, the database measures container lifts per hour achieved at ports and marine terminals worldwide. Moves per hour, or MPH, is a basic indicator of how quickly ships are loaded, unloaded and sent back to sea to continue their service rotations. The quicker ships are turned around at port, the greater the opportunity for carriers to reduce fuel costs by “slow steaming” their vessels while staying on schedule. Slow steaming reduces fuel consumption and CO2 emissions, while allowing carriers to absorb excess capacity. Vessel turnaround at the berth is also a factor in how quickly cargo is discharged from the port and sent to onward destinations, thus relevant to effective logistics and broader facilitation of trade.

The detailed data behind the rankings of top ports and terminals is available for purchase through PIERS. Download the whitepaper describing the data in detail at joc.com/ppwp.  A free webcast with Andrew Penfold and Dean Davison of Ocean Shipping Consultants will also be held Sept. 5, at 11 a.m EDT.

“The database has a basic overall goal, which is to foster discussion and analysis that will lead to higher port productivity worldwide,” said Peter Tirschwell, JOC Group Executive Vice President & Chief Content Officer. “With ships getting larger and trade growing, productivity needs to be improved to avoid bottlenecks and excess cost in the international supply chain.”

This data provides carriers, ports, marine terminals, investors and others with an interest in container ports to compare productivity in detail within a specific port, country, region or among similar entities, revealing opportunities for improvement. The database is an ongoing project that is being expanded through participation by additional carriers and inclusion of additional data elements.

Major carriers supporting the Port Productivity project include: APL, China Shipping, CMA-CGM, COSCO, CSAV, Emirates, Evergreen, Hamburg Sud, Hapag-Lloyd, Hanjin, Hyundai Merchant Marine, MSC, Maersk, OOCL, United Arab and Zim. The 2012 data contains submissions from 17 carriers representing more than 70 percent of the global fleet in deployed capacity according to the Alphaliner rankings. The 2012 Top 20 rankings of terminals and ports in the Americas, Europe/Middle East/Africa and Asia are based on berth productivity defined by total number of container lifts between a ship’s berth arrival and departure time, drawn from 87,000 validated vessel calls to 350 ports and 580 terminals worldwide.

To speak to a sales representative about pricing, visit piers.com/port_productivity or to download the whitepaper register at  joc.com/ppwp.

In a Changing China, Shippers Must Rethink Strategic Goals

July 16, 2013

Restructuring of the Chinese economy will force transportation companies and many manufacturers in southern China and Hong Kong to rethink their long-term strategies, according to shipper representatives.

A number of analysts have downgraded economic forecasts for China this year as the export outlook has deteriorated. But the latest port statistics illustrate that trade to and from northern and central regions is still growing at relatively brisk rates even though export growth has been running in single figures for most of the year.

Of China’s top 10 container ports, the southern ports of Shenzhen and Guangzhou saw the slowest growth in the first five months of 2013.

Hong Kong, which is likely to be supplanted by Shenzhen this year as the world’s third-largest container port by throughput, has fared even worse. Box volumes were 9.1% lower in January-May 2013 than a year earlier. And, although throughput was skewed by a 40-day strike by port workers that started on March 28, the port suffered double-digit year-over-year declines in February and March.

With economic growth slowing after 20 years of rapid expansion, and with the government increasingly focusing on its domestic market, shipping interests see danger signs for logistics demand in Hong Kong and southern China.

“The period of high growth in China many believe has now gone,” Sunny Ho, chief executive of the Hong Kong Shippers’ Council. told The Journal of Commerce. “The government already knows it cannot rely on exports for economic growth as much as before so it doesn’t come as a surprise.”

Rising wages in southern coastal China, meanwhile, has forced shippers to make adjustments, according to John Lu, chairman of the Asian Shippers’ Council. “From the nation’s point of view, wage increases are good, but for shippers, costs are now higher in the traditional manufacturing centers so they are less competitive,” he said. “They have to make major decisions about whether to move factories closer to markets or to the interior of China to bring costs down, or face the cost of high worker turnover.”

“China is looking to reduce its dependency on exports, by growing domestic consumption and that will take a lot of adjustment by manufacturers,” Lu added.

Ho believes shippers and the transportation sector in Hong Kong should plan for a further slowdown in export growth from the Pearl River Delta even though exports via ports in the north such as Tianjin on the Bohai Rim have been performing strongly.

“We are the most hard-hit region because this is where the largest concentration of labor-intensive and low-value production with a strong outward trade concentration is,” he said. “These are the products most seriously impacted by cost increases and the policy changes of central government.”

Hong Kong manufacturers need to upgrade to more premium products, find new markets or explore domestic markets, Ho said. “This is the only way out,” he said. “I think the trend has been continuing for the past seven years, and now it’s having a substantial impact.”

March U.S. Containerized Exports Highest in a Year

July 10, 2013

U.S. containerized exports slipped 0.8% in March 2013 year-over-year, totaling 1,072,190 20-foot-equivalent units, according to PIERS data. However, this is the highest monthly volume since March 2012 when exports totaled 1,080,341 TEUs. March containerized exports were up 6% from February through March exports edged up 1.2% from the year-earlier period.

U.S. containerized exports to Asia in March fell 2.3% year-over-year, however year-to-date through March, the trade to Asia was up 0.7%. The trade is forecast to grow 3.9% in 2013 and 3.8% in 2014.

U.S. Containerized Exports March 2013

Of March’s top 25 containerized export commodities, the highest year-over-year declines were in scrap metals, down 22%; plastic products, down 14%; unclassifiable chemicals, down 12%; and vinyl alcohol resins, down 11%. The largest export increases were in edible nuts, which increased 39%; soybeans, up 28%; and motor vehicles, up 16%.

Among March’s top 25 destination countries, shipments to Germany fell the most, down 12% year-over-year to 23,616 TEUs. Volume to Italy declined 11% to 10,879 TEUs, while the Philippines followed with a loss of 9% to 10,702 TEUs. The country with the steepest increase in exports from the U.S. in March was Vietnam — shipments rose 30% to 19,485 TEUs. Shipments to Indonesia totaled 21,873 TEUs in the month, up 24% year-over-year. Exports to the United Arab Emirates climbed 21% to 22,420 TEUs.

Thanks to our unique data operations infrastructure, which includes onsite port staff who have the ability to manually scan every export Bill of Lading (including those not filed electronically), PIERS can proudly say we are the only source for complete U.S. export transactions. To learn more about how you can benefit from PIERS export data register to receive a free demo.

JOC Insights by Mario Moreno: U.S. Containerized Avocado Imports Down for Seven Straight Months

July 2, 2013

U.S. containerized imports of avocados (HS code 080440) in February, totaling 312 TEUs, tumbled 54.1% year-over-year. This marks the 7th straight monthly decline for avocados imports. For all of 2012, imports totaled 5,210 TEUs, down 33.7% from the prior year. In 2011, imports jumped 50.4% year-over-year, mostly because of the U.S. lifting its ban on Peruvian avocado shipments. Between 2007 and 2012, total imports declined at a compound annual growth rate of -3.2%.

U.S. Avocado Imports

PORT OF LOS ANGELES HELD LARGEST SHARE OF AVOCADOS IMPORTS IN 2012

The Port of Los Angeles handled the most inbound shipments of avocados in 2012, accounting for a 31% share of all avocado imports, up 3 points from 2011. The largest suppliers of avocados shipped from the Port of Los Angeles last year were Chile and Peru.

The Port of New York and New Jersey held a 25% share of avocado imports into the U.S., followed by Philadelphia with a 10% share. The three ports handled 66% of all inbound shipments of avocados last year.

U.S. Avocado Imports by Port

PERU RAPIDLY GAINING SHARE OF U.S. AVOCADOS IMPORTS

Mexico, Chile, Peru and Dominican Republic are the main suppliers of avocados to the U.S., as measured by U.S. dollar import value. Mexico is the biggest supplier with a share of 88.6%, up 4.3% in 2012 year-over-year and 3.3% above 2010. Imports from Mexico totaled $762.3 million in 2012, down 1% from 2011. Second-ranked supplier Chile has seen its share decline over the last two years, from 12% in 2010 to 10.5% in 2011 and down to 5.5% in 2012. Third-ranked Peru, however, has rapidly gained share of the U.S. avocado import market, growing from less than one-tenth of a percent in 2010 to 3.8% in 2012. In U.S. dollar value terms, imports of Peruvian avocados rose nine times in 2010 and 100 times in 2011, mostly owed to the lifting of a ban on Peruvian Hass avocados in 2010. Despite production growth of 82%, exports of Peruvian avocados to the U.S. markedly slowed the pace last year, likely because most production gains came from growing a type of avocado oriented for domestic consumption only. U.S. imports of Peruvian avocados totaled $32.3 million in 2012, up sharply from only $30,000 in 2009.

Top Sources of U.S. Avocado Imports

The Dominican Republic is the fourth-biggest supplier, holding a 2.1% share of imports, up 0.1% from 2011 but down 0.5% from 2010. Imports in U.S. dollar value terms were merely unchanged in 2012 over prior year. U.S. avocado imports totaled $860.1 million in 2012, down 5.8% from 2011.

More of Moreno’s trade and economic analysis can be obtained by subscribing to JOC Insights or by following him on Twitter @MarioMoreno_JoC.


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