Panjiva data shows sharp declines in global trade activity from August to September

By Jeff Berman, Group News Editor
October 17, 2011 - LM Editorial

New data from Panjiva, an online search engine with detailed information on global suppliers and manufacturers, found that there was a “significant seasonal drop in global trade activity in September.”

This was reflected in matching 8 percent declines for the number of United States-bound waterborne shipments and the number of global manufacturers shipping to the U.S. from August to September.

Shipments were down for the second time in the last six months at 1,030,068 for the 8 percent decline. This is steeper than the sequential drop-off in recent years, with 2010 down 6 percent, 2009 down 5 percent, 2008 down 7 percent, and 2007 down 4 percent during the same timeframe.

Manufacturers shipping to the U.S. hit 141,435, which was also steeper than declines in previous years, with 2010 down 6 percent, 2009 down 5 percent, 2008 down 7 percent, and 2007 down 4 percent.

Earlier this year, Panjiva CEO Josh Green told LM that with August typically being the peak year for shipment and manufacturer levels for global trade, that coming declines were likely. With September’s numbers, Green’s forecast was indeed correct.

“We did expect to see this decline,” he said, “but what is somewhat disconcerting is the magnitude of the decline. If you compare it with the declines of previous years, it is the largest we have seen in the last four years. It gives fuel to the fires of fear that are consuming [stakeholders] in global trade right now. As we look around the world and see macroeconomic challenges looming, it is reasonable to be concerned.”

Part of the reason for this is that September shipments represent post-holiday orders, which Green said were being made without a sense of truly knowing what lies ahead, with those parties making orders being somewhat cautious for beyond the holiday season.

And until there is clarity on how resilient consumers are the holiday season, Green said it is unlikely businesses will be aggressive in their buying strategies.

“Businesses have basically decided that it is better to be caught too lean with inventory than the alternative,” said Green. “Typically what we see is a slow decline through February at which point we should see growth again.”

Given this situation, Green said it is expected that businesses will remain cautious with order and buying patterns, adding that he will be taking a close look at the difference between the peak in August and the trough in February in terms of how sharp the declines are, coupled with levels of supply chain contraction.



About the Author

Jeff Berman headshot
Jeff Berman
Group News Editor

Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. .(JavaScript must be enabled to view this email address).


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

The PMI, the ISM’s index to measure growth fell 0.8 percent to 52.7 (a PMI of 50 or greater represents growth). PMI growth has been at 50 or higher for 31 straight months (with the overall economy growing for 74 months), and the current PMI is 1.7 percent below the 12-month average of 54.4.

The current status of FedEx’ planned acquisition of Netherlands-based TNT-NV and a provider of mail and courier services and the fourth largest global parcel operator for $4.8 billion, which was initially announced in April, remains in flux, with continued actions being taken by the European Commission.

Panjiva said that the 1 percent sequential growth was in line with typically flat growth from May to June, as higher monthly growth typically takes hold in July and August in advance of the holiday season.

Hackett officials described this new offering as a short-term index that offers up “the sentiment for trade at a glance,” akin to other key economic metrics like the PMI and Consumer and Carrier confidence indices, while providing access to specifically see where a group of economic indicators are in relation to trade for the current month, too.

While many industry analysts contend that distribution centers near U.S. East Coast ports will see a surge of new business after the Panama Canal expansion, real estate experts say this phenomena is already underway.

About the Author

Jeff Berman, News Editor
Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman.

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2015 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA