Monday, March 8, 2010
Friday, March 5, 2010
Cockeyed Optimism
The surge in imports may be a triumph of hope over reality.
By Bill Armbruster
Have U.S. importers been too optimistic about growth prospects in the U.S. this year?
I think so — and I think that helps explain why there such was a mad scramble for container space out of China in January and the first half of February. Sure, importers wanted to get their goods on the water before factories shut down for a week or two during the Chinese New Year, which began Feb. 14. But there’s always a rush before Chinese New Year. This year’s frenzy was unprecedented.
The chaos was largely due to carriers’ cutbacks in capacity, as I discussed in my last blog entry. In fairness to the carriers, they were caught off guard by the surge in demand. Part of the reason for that surge was the need for importers to replenish inventories. Merchandise was flying off their shelves, so it was natural to feel that they had to step up their orders.
A Bureau of Economic Analysis report showing that personal spending in January was up 0.5% over December — seems to add ground for that sense of optimism. However, that same report shows that disposable personal income – what’s left after taxes — was down 0.4% in January.
Another disappointing indicator was February’s sharp decline in consumer confidence. After rising for three straight months, the Conference Board Consumer Confidence Index dropped to 46.0, down from 56.5 in January.
Meanwhile, the housing market isn’t looking any better. Existing-home sales fell in January, and the market could be in for a rough ride once the home buyer tax credits end on April 30, according to the National Association of Realtors. Housing is a major driver of the import market because people tend to buy more home furnishings when they are moving into a new home. In addition, no meaningful recovery in commercial real estate is expected before 2011.
Most analysts are forecasting 8 to 10% increases in import containers this year, although the Port Tracker report for February, prepared by Hackett Associates and the National Retail Federation, projected that retail container imports would be up 25% in the first half of 2010. Look for that projection to come down to about 15% in this month’s Port Tracker, but it still seems wildly incongruous with the NRF’s forecast that retail sales will grow just 2.5 percent this year.
As for the data on container trade, The Datamyne’s figures show just a 2.8% increase in arrivals of container imports from China in January. Final figures for February will not be available until March 15, but preliminary figures show an increase of about 12 to 13%. I would not be surprised if it’s even higher. Watch this space for the final tally.
I’ve let you know what I think, but what do you think about the container market this year? Please post your comments below.
About Bill Armbruster
Bill Armbruster, the anchor for The Datamyne Blog has covered shipping and trade for 30 years as a reporter and editor with The Journal of Commerce and Shipping Digest. “I’ll be blogging on headline news and current issues in oceangoing commerce, trying to shed some light on the backstories and, wherever I can, supply some sound advice for shippers.” Write to Bill@TheDatamyne.com
By Bill Armbruster
Have U.S. importers been too optimistic about growth prospects in the U.S. this year?
I think so — and I think that helps explain why there such was a mad scramble for container space out of China in January and the first half of February. Sure, importers wanted to get their goods on the water before factories shut down for a week or two during the Chinese New Year, which began Feb. 14. But there’s always a rush before Chinese New Year. This year’s frenzy was unprecedented.
The chaos was largely due to carriers’ cutbacks in capacity, as I discussed in my last blog entry. In fairness to the carriers, they were caught off guard by the surge in demand. Part of the reason for that surge was the need for importers to replenish inventories. Merchandise was flying off their shelves, so it was natural to feel that they had to step up their orders.
A Bureau of Economic Analysis report showing that personal spending in January was up 0.5% over December — seems to add ground for that sense of optimism. However, that same report shows that disposable personal income – what’s left after taxes — was down 0.4% in January.
Another disappointing indicator was February’s sharp decline in consumer confidence. After rising for three straight months, the Conference Board Consumer Confidence Index dropped to 46.0, down from 56.5 in January.
Meanwhile, the housing market isn’t looking any better. Existing-home sales fell in January, and the market could be in for a rough ride once the home buyer tax credits end on April 30, according to the National Association of Realtors. Housing is a major driver of the import market because people tend to buy more home furnishings when they are moving into a new home. In addition, no meaningful recovery in commercial real estate is expected before 2011.
Most analysts are forecasting 8 to 10% increases in import containers this year, although the Port Tracker report for February, prepared by Hackett Associates and the National Retail Federation, projected that retail container imports would be up 25% in the first half of 2010. Look for that projection to come down to about 15% in this month’s Port Tracker, but it still seems wildly incongruous with the NRF’s forecast that retail sales will grow just 2.5 percent this year.
As for the data on container trade, The Datamyne’s figures show just a 2.8% increase in arrivals of container imports from China in January. Final figures for February will not be available until March 15, but preliminary figures show an increase of about 12 to 13%. I would not be surprised if it’s even higher. Watch this space for the final tally.
I’ve let you know what I think, but what do you think about the container market this year? Please post your comments below.
About Bill Armbruster
Bill Armbruster, the anchor for The Datamyne Blog has covered shipping and trade for 30 years as a reporter and editor with The Journal of Commerce and Shipping Digest. “I’ll be blogging on headline news and current issues in oceangoing commerce, trying to shed some light on the backstories and, wherever I can, supply some sound advice for shippers.” Write to Bill@TheDatamyne.comThe Day the Earth Got Knocked off Its Axis …
… in other news, trade in wine, fish, fruit is disrupted
The Chilean earthquake may have shifted the Earth’s axis by 3 inches and shortened the length of an earth day by about 1.26 microsecond NASA calculates. It has most certainly caused hundreds of casualties and at least $US30 billion in damages.
Now add to the toll the disruption of Chile’s export sectors.
As the AP reports (here, in the Miami Herald), the tsunami that hit Talcahuano wiped out that port city’s $40-million business in anchovies and sardines. The quake chewed up the nation’s only north-south highway, halting shipment of farm-raised salmon. According to The Datamyne’s trade data, Chilean exports of fish (fresh and frozen) and fish products were valued (FOB) at more than US$1.1 billion in 2009.
The Maule region, most affected by the quake, is the heart of Chile’s wine growing region. Chile’s biggest winemaker, Concha y Toro, said Monday that it would be halting production for at least a week.
All told, Chile exported approximately US$50 billion in 2009, with the U.S., its second-biggest market, buying US$5.6 billion worth of goods and commodities.
Not all the news is bad: Chile’s copper mining and refining operations, concentrated well north of the quake epicenter, were relatively unscathed. Key ports of departure for Chile’s top export, Antofagasta and Mejillones, were back in operation within hours.
The Datamyne Chilean database provides comprehensive information about the nation’s import-export trade — including bill of lading details about transactions. The Datamyne’s data assets can also be used to locate alternate sources of supply in the Americas, Asia and Europe. To learn more, click here.
The Chilean earthquake may have shifted the Earth’s axis by 3 inches and shortened the length of an earth day by about 1.26 microsecond NASA calculates. It has most certainly caused hundreds of casualties and at least $US30 billion in damages.
Now add to the toll the disruption of Chile’s export sectors.
As the AP reports (here, in the Miami Herald), the tsunami that hit Talcahuano wiped out that port city’s $40-million business in anchovies and sardines. The quake chewed up the nation’s only north-south highway, halting shipment of farm-raised salmon. According to The Datamyne’s trade data, Chilean exports of fish (fresh and frozen) and fish products were valued (FOB) at more than US$1.1 billion in 2009.
The Maule region, most affected by the quake, is the heart of Chile’s wine growing region. Chile’s biggest winemaker, Concha y Toro, said Monday that it would be halting production for at least a week.
All told, Chile exported approximately US$50 billion in 2009, with the U.S., its second-biggest market, buying US$5.6 billion worth of goods and commodities.
Not all the news is bad: Chile’s copper mining and refining operations, concentrated well north of the quake epicenter, were relatively unscathed. Key ports of departure for Chile’s top export, Antofagasta and Mejillones, were back in operation within hours.
The Datamyne Chilean database provides comprehensive information about the nation’s import-export trade — including bill of lading details about transactions. The Datamyne’s data assets can also be used to locate alternate sources of supply in the Americas, Asia and Europe. To learn more, click here.
The Datamyne In the News
The March cover story in American Shipper (subscription only) on “The Resilient NVO” features data and analysis from The Datamyne, including the top 100 non-vessel operating common carriers on Asia-to-U.S. and Europe-to-U.S. trade lanes based on TEU volumes, 2008-2009, as well as market share charts for the top 10 in both directions — Asia to U.S. is shown here.
Monday, March 1, 2010
Low Expectations
U.S. consumers are pessimistic; confidence is back in Asia, Brazil
The Conference Board Consumer Confidence Index (released Feb. 23, based on a survey of 5,000 U.S. households through Feb. 17) now stands at 46.0 (1985=100), down from a relatively optimistic 56.5 in January. The closely watched indicator, based on a monthly survey by TNS, echoes other measures of the American consumer’s readiness and/or willingness to spend. The Reuters/University of Michigan Surveys of Consumers on Feb. 12 reported its preliminary index of consumer sentiment for February was 73.7, down from 74.4 in late January (but up from 56.3 a year ago).
Is the pessimism universal? The latest Nielsen Global Consumer Confidence Index shows the consumers of Latin America (at 98 on a scale of 0 to 200) and Asia/Pacific (at 91) well ahead of their counterparts in North America (84) and Europe (77) when it comes to confidence, with the biggest gains in the markets recovering fastest from recession — including Hong Kong, China, Singapore, India, and Brazil. [Note: The Datamyne covers China, India and Brazil.]
But post-holiday second-thoughts about what lies ahead can dampen spirits in even the strongest markets. The Getulio Vargas Foundation (Fundação Getulio Vargas), which saw a boost in its Brazilian Consumer Confidence Index in January to 113, now reports [in Portuguese] slippage of 2.2 point in February. The current 110 is still well above the historical average of 107.
The Conference Board Consumer Confidence Index (released Feb. 23, based on a survey of 5,000 U.S. households through Feb. 17) now stands at 46.0 (1985=100), down from a relatively optimistic 56.5 in January. The closely watched indicator, based on a monthly survey by TNS, echoes other measures of the American consumer’s readiness and/or willingness to spend. The Reuters/University of Michigan Surveys of Consumers on Feb. 12 reported its preliminary index of consumer sentiment for February was 73.7, down from 74.4 in late January (but up from 56.3 a year ago).
Is the pessimism universal? The latest Nielsen Global Consumer Confidence Index shows the consumers of Latin America (at 98 on a scale of 0 to 200) and Asia/Pacific (at 91) well ahead of their counterparts in North America (84) and Europe (77) when it comes to confidence, with the biggest gains in the markets recovering fastest from recession — including Hong Kong, China, Singapore, India, and Brazil. [Note: The Datamyne covers China, India and Brazil.]
But post-holiday second-thoughts about what lies ahead can dampen spirits in even the strongest markets. The Getulio Vargas Foundation (Fundação Getulio Vargas), which saw a boost in its Brazilian Consumer Confidence Index in January to 113, now reports [in Portuguese] slippage of 2.2 point in February. The current 110 is still well above the historical average of 107.
OJ on Ice
A January cold snap spikes the price of citrus
Latest assessments from the U.S. Department of Agriculture put the loss to Florida citrus growers from January’s cold snap at 7.4 million boxes of fruit at minimum — this on top of a harvest forecast that was already 20% off peak. Bad news for consumers but, as The Ledger of Lakeland, Fla., reports, by forcing prices up the freeze-related losses may have turned a money-losing 2009-10 season into a profitable one for growers, especially in groves that escaped significant damages.
For produce wholesalers and distributors who want to protect profit margins, one option is to look for alternative sources in California or Texas (also affected by the cold snap, although with more damage to onions than citrus) — or further afield. The Datamyne can help here: our bill of lading database yields current information on who’s shipping citrus now; and our international databases include the top countries for U.S. citrus imports, Mexico, Spain and Chile. To learn more about using The Datamyne to find new sources or new customers, contact us.
Update: On February 27, Chile was struck by an 8.8 earthquake. Aftershocks continue to hamper rescue and recovery. Go to http://www.google.com/relief/chileearthquake/ if you are looking for or have information about someone in Chile—or want to contribute to relief efforts.
Latest assessments from the U.S. Department of Agriculture put the loss to Florida citrus growers from January’s cold snap at 7.4 million boxes of fruit at minimum — this on top of a harvest forecast that was already 20% off peak. Bad news for consumers but, as The Ledger of Lakeland, Fla., reports, by forcing prices up the freeze-related losses may have turned a money-losing 2009-10 season into a profitable one for growers, especially in groves that escaped significant damages.
For produce wholesalers and distributors who want to protect profit margins, one option is to look for alternative sources in California or Texas (also affected by the cold snap, although with more damage to onions than citrus) — or further afield. The Datamyne can help here: our bill of lading database yields current information on who’s shipping citrus now; and our international databases include the top countries for U.S. citrus imports, Mexico, Spain and Chile. To learn more about using The Datamyne to find new sources or new customers, contact us.
Update: On February 27, Chile was struck by an 8.8 earthquake. Aftershocks continue to hamper rescue and recovery. Go to http://www.google.com/relief/chileearthquake/ if you are looking for or have information about someone in Chile—or want to contribute to relief efforts.
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