Tag Archive: exports

Imports & Exports: Which Companies Dominate and What are the Related Impacts?

June 28th, 2018

 

According to the Journal of Commerce, the U.S. imported double the amount of its exports (measured in TEU). In 2017, imports increased 6% whereas exports increased 1%.  This is quite an accomplishment since China (the top market for U.S. exports) announced an importation ban last year that cut across the various types of the top U.S. export, waste.

 

  

So, who do you think was at the top of the import list?  
Walmart!

The Details
The largest segment of import is retail at 3.5 million TEU.  The next largest segment is foodstuffs at 700,000 TEU.  This is quickly followed by household goods around 645,000 TEU, conglomerate at 606,000 and auto parts and automobiles at 453,000.

On the other hand, the top exporter is America Chung Nam (largest exporter of recycled paper).  Thus, the largest segment in export is recyclables at 1.1 million TEU, followed by agricultural goods at 630,000 TEU, paper and forest products at 521,000 TEU and chemicals at 310,000.  

What is projected this year?  It appears to be shaping up to be the strongest international and domestic demand conditions in at least a half-decade.  It isn’t all rosy though.  There are plenty of concerns about tariffs and a tight trucking market. According to Wolfe Research, shippers expect a 5.2% increase in truckload rates and a 3.4% bump in less-than-truckload rates.  These are the highest expectations in the history of Wolfe’s survey.

What Should We Consider and/or What Impacts Could Arise?
Well, clearly growth and volume are robust (just like in manufacturing).  However, there is plenty of concern about potential disruptors (such as Amazon) and volatility.  Thus, we must stay on top of trends and likely impacts – and focus on agility. Are you able to respond rapidly to changing market conditions or will you be left in the dust?

We can expect freight challenges.  How significant is freight to your bottom line?  For example, when I was a VP of Operations for an absorbent healthcare products manufacturer (adult diapers, hospital underpads), freight was a BIG concern.  Although our product wasn’t heavy, it was definitely bulky. Thus, we focused a lot of attention on how to collaborate with customers and transportation partners on innovative programs. We invested efforts into product and packaging redesign that would reduce the size of the boxes while meeting/ exceeding customer expectations and more.  Aside from cost, tight transportation capacity might translate into late deliveries.

Do you have transportation partners or vendors? Perhaps you better take a more strategic view….

 



Manufacturing Gains

February 8th, 2017

As one of the panelists at the Manufacturers’ Summit last week said, “Have you ever seen manufacturing in the news more than it has been lately?” Quite an intriguing point….

The Summit had an expert panel on the future of manufacturing — and what the Trump era was likely to bring to manufacturing.  The panel was specifically non-partisan and included several heavy hitters including the president of the CMTA (California Manufacturers & Technology Assoc), the president of a local manufacturing company who also sat on the president’s export council for many years, the president of the Inland Empire Economic Partnership (IEEP), a manufacturing leader at a global company and the COO of the National Association of Manufacturers (NAM). I definitely took notes.

The bottom line is that manufacturing has much to gain. This ties in with the sentiment of the manufacturers in attendance. How might you gain?

manufacturing trendsWhat Should We Consider and/or What Impacts Could Arise?

Let’s start with a few highlights and a mixed bag: Exports won’t change. Trade isn’t dead although costs will likely rise on imports. The use of technology is on the rise. Industry 4.0 is becoming “the thing to watch”. California has some steep disadvantages to overcome. For example, our energy costs are 15% higher than the next most expensive state, according to one of the large local companies in the Inland Empire, and investment in manufacturing is weak at best!

Now on to some positive news:

  • Tax reform – it is likely to benefit manufacturers
  • Infrastructure – definitely likely to benefit manufacturers and specifically California (roads, bridges, ports, digital, energy); however, we need to make sure it happens!
  • Regulatory reform – permitting will definitely improve, and regulatory reform will benefit manufacturers overall.
  • Healthcare – somewhat unknown; however, if Pence does what he has said he’d like to do, the states will have a significant say in how money is allocated. Certainly, most manufacturers have struggled with healthcare the last several years and so the hope is for improvement.

There is plenty to think about in these expert predictions. What can you do to start the ball rolling so you are ahead of the curve?