Panjiva says trade fundamentals are strong, despite concerns over tariffs

February shipments, at 949,198, rose 13% annually, marking the fastest rate of growth going back to February 2016.

By ·

Data recently issued by global trade intelligence firm Panjiva pointed to a very strong month for United States-bound waterborne shipment activity in February.

February shipments, at  949,198, rose 13% annually, marking the fastest rate of growth going back to February 2016, topping January’s 7.7% annual increase, which was the best annual growth rate going back to April 2017 at that point. Through the first two months of 2017, total U.S.-bound waterborne shipments are up 10.3% compared to the same period a year ago at 1,958,188.

One factor for February’s strong showing, said Panjiva, is the later-than-usual timing of the Lunar New Year, which will likely result in a “correction” in the form of fewer shipments in March.

Another factor to monitor, according to Panjiva, is actions the Trump administration are considering through a broad range of tariffs, which are part of the White House’s section 301 review of its intellectual property policies.

“One of the centerpieces of the Trump administration’s economic policy is that America is losing an economic war with China and a big part of that is America’s trade deficit with China,” said Panjiva Research Director Chris Rogers in an interview. “At the same time there are concerns about technology transfer and the fact that China seems to be playing by its own set of rules, which led to [White House’s] creation of a section 301 review of its IP policies of China and what that allows Trump to do is say if are there any findings that China is breaking the rules that the U.S. can put tariffs on any Chinese goods it wants to.”

The timing of the Lunar New Year partially paced a 23.7% import increase from China, including Hong Kong, which outpaced all other markets, save for Vietnam at 30.1%. Taiwan snapped a nine-month stretch of declining shipments with a 1.9% gain, while imports out of Singapore dropped 12.7%.

Panjiva said that productions with high production levels in China saw gains in February, with furnishings up 24.7% and toys up 27.6%, with the firm suggesting those levels may reflect a “potential pre-emption of tariffs,” with a likely similar effect for iron and steel shipments, which saw a 19% gain for its fastest rate of expansion going back to May 2015.

Putting aside protectionist leanings, Panjiva’s Rogers explained that trade fundamentals are actually pretty good.

“Business confidence is the highest in a decade, due to tax cuts and when people are confident they spend both overseas and domestically,” he said. There is no reason that will change in the short-term. Whether it is Wall Street or Main Street, until higher tariffs actually hit you in the pocket as a business or consumer you are not going to change your shopping or purchasing behavior.”

For things to trend in the other direction, Rogers said it would clearly require large protectionist measures.

“Consumer and business confidence factors are what has been driving trade so far, and that is why there has been optimism,” he said. “Trade fundamentals feel great going into spring, but the concerns over tariffs looms.”

About the Author

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. Contact Jeff Berman

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!

Latest Whitepaper
Strategies to Build Efficiencies into Your Supply Chain and Logistics Operations
This white paper outlines key areas where third party logistics (3PLs), carriers, retailers and manufacturing companies can replace manual repetitive work within their operations with new and innovative robotic process automation technology solutions.
Download Today!
From the November 2018 Logistics Management Magazine
If I were to share a single observation from this year’s CSCMP conference, it would be this: Nearly every conversation I had in Nashville touched on the motor carrier capacity crisis.
Land O’Lakes lock in Texas-based capacity
How will the tariff war with China affect U.S. container ports?
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Leveraging the Internet of Things (IoT) in Manufacturing
Is digital transformation a risk or an opportunity? This webinar will detail Manufacturing industry challenges and how using IoT can address these challenges through optimizing logistics, improving processes and gaining meaningful insights.
Register Today!
The Logistics News that Shaped 2018
Every year at this time, group news editor Jeff Berman combs through the mountain of news that was...
Land O’Lakes lock in Texas-based capacity
Faced with the challenge of securing capacity in specific lanes, the iconic company broke with...

8th Annual Rail/Intermodal Roundtable: Work in progress
Volumes are strong and steady, service is improving, yet our panel of the nation’s foremost rail...
Transportation Best Practices and Trends: Frios’ cool solution for a hot seller
Gourmet ice pop maker adopts collaborative cold chain solution to keep profits from melting away due...