Flow of Nations

Supply Chain Deployment Options by Experts on Demand

2009-05-22T09:43:00.000-05:00

container ship orders collapse

2008-09-22T08:31:00.001-05:00

September 22, 2008

Orders for new container ships have dried up as vessel charter rates and ocean freight rates tumble and volume growth slows on key liner trade routes.

Enquiries to shipbuilders about new tonnage have “hit the floor,” according to London-based Clarkson, the world’s biggest shipbroker “With volumes and earnings stalling, owners’ taste for newbuilds has slowed right down.”

The collapse in orders, which has affected all ship sizes, follows five straight years of historically high deliveries. Only 179 containerships were contracted in the first eight months of this year, down 49 percent on-year, Clarkson reports. This compares with a record 566 contracts in 2005, 479 in 2006 and 530 in 2007.

From The JOURNAL of COMMERCE ONLINE
Full Story here

Maryland Agriculture- small but determined

2008-07-18T13:14:00.009-05:00

Maryland’s Ag industry is really small, but its exports to the world grew substantially over the past several years, due to currency devaluation no doubt. In 2007, Ag exports grew only slightly but significant gains were made in Asia, where exports grew 65%. Russia is a small market for Maryland, accounting for 0.5% of the state’s Ag exports to the world.

In contrast to other markets, MD Ag exports to Russia were flat from 2004 to 2005; then fell in 2006 and 2007.

Over half of Maryland’s agricultural exports to Russia were poultry related. Sales of HS 0207 Poultry Meat And Offal (Chickens, Ducks, Geese, Turkeys And Guineas), Fresh, Chilled Or Frozen totaled only $692,575 and accounted for over 54% of the state’s Ag sales to Russia.

Pretty small on the Ag radar, but you still have to consider that some exports produced in landlocked states may be attributed to Maryland. (Only state business development staff will be able to discern the role that local Ag producers play in these numbers).

This sector is where the bulk of Maryland’s loss occurred. It remains to be seen whether this is the result of lower demand on Russia’s part or... Has Maryland lost market share to other U.S. poultry producers?

Supermarket to the World

2008-06-30T15:24:00.001-05:00

2007 U.S. Exports of Prepared Foods - HS: 21
Rank	Name	Value %	Value
1	NAFTA	43.9%	$1,930,045,754
2	Asia	24.6%	$1,079,229,441
3	Europe	9.9%	$434,365,047
4	Americas	8.6%	$378,391,078
5	Islands	7.1%	$311,739,649
6	Middle East	4.3%	$187,963,344
7	Africa	1.6%	$70,858,923
	Total		$4,392,593,236

Economic Disruptions to the Global Economy and Trade

2008-06-09T09:50:00.001-05:00

We have witnessed a dramatic fall in the value of the dollar, a surge in oil prices, and the worldwide financial fallout resulting from the collapse of the sub-prime mortgage market. The Spring Conference of the International Trade Data Users will address these recent economic events and their impact on global trade and investment trends. Topics include:

Mandatory Electronic Filing of Export Declaration Information – Impact on Data Collection and Statistical Outputs
The Need for Quality Trade Information by the Growing Chinese Economy – What is Available and What is Required
Recommendations for Standardizing Definitions of International Commodity Trade Statistics and Cargo Flows
The Impact of Trade Shifts on Container Cargo Logistics

Co-sponsored by the Weissman Center for International Business at Baruch College.

ITDU Conference June 17
Registration 8:00. Conference begins at 8:45
Baruch College Newman Conference Center
151 E. 25 St., Fl 7, New York
Visit the ITDU website for the detailed Agenda and Registration.
www.itdu.org

Trade from a Small State

2008-04-28T03:20:00.004-05:00

Low population states don't get much attention paid to their exports. However, exports are critical to the millions of workers and citizens in those states. Oklahoma exports highlights...

The Next Bubble to Burst: Cheap Imports?

2008-04-21T23:27:00.002-05:00

One thing that makes us feel like we still have a decent standard of living is the cheap imports. What happens when THAT bubble bursts? We'll finally realize just how stagnant our wages have been. Here's a provocative and quick video from Daniel Altman at the International Herald Tribune. This is the first in a new series called "Global Economic Minute"...

Quality Fade

2008-04-14T01:41:00.004-05:00

This is an article that came out last year, but I came across it again. It touches on issues we'll be dealing with for a long time. Paul Midler gives a concise description to a phenomenon that most of us have only vaguely suspected. "Quality Fade" is the “deliberate and secret habit of widening profit margins through a reduction in the quality of materials.” This is a practice Chinese manufacturers employ in order to avoid the higher costs of production that come with the standards expected by U.S. importers.

With successive production runs, manufacturers will use materials or processes of slightly decreasing quality. This is done in a manner so gradual that the American buyers do not notice. “A supplier can bury substandard product knowing full well that warehouse workers in the U.S. do not have the time to examine each piece that comes in... so the supplier who quotes low and quietly cuts corners on quality is the one who wins.” This penalizes suppliers who quote higher prices and will maintain quality. Quality fade is incentivized by the constant pressure to source cheaper.

Midler points out that the long term success of Japan and Korea was established with very different methods. In contrast “quality fade” is a short term tactic and undermines trust in supplier relationships.

The entire article can be found on the Forbes website here

Problems with tracking Bio-Diesel trade

2008-03-27T00:35:00.003-05:00

Before there can be research assistance to increase a commodity's international competitiveness, you have to know how much is exported and where to.

Bio-diesel is one such product. It is categorized in HS Code 3824.90. If you look at our import codes, you can easily find how much we import out to the 10 digit level. But in the Schedule B (export code) descriptions, there is simply far less detail at any 10 digit level.

For 2007 US exports of 3824.90, this is the universe of exports identifiable at the 6 digit level: $2,895,657,134. But even with USDA data, we do not have a complete picture for all codes at the 8 digit level for the same year.

The latest and most complete year is 2006. US exports of 3824.90 in 2006 equaled $2,222,935,833. We can drill down to the 8 digit level for some codes and still build a picture of industry exports. However, at the 10 digit level, the export data falls off.

According to information received from the USDA, bio-diesel export codes are not well defined. Precise codes are not well defined in the EU either. HS 3824.90 contains not only bio-diesel , but other chemicals not specified in the code description, such as hydrated silica gel used to remove moisture from foodstuff and optical equipment. This makes it difficult to use export data to gauge competitiveness.

Companies requiring an export number should consult the Schedule B Code from the U.S. Census, or request that a specialist from the US Census help assign a number. The import and export codes will be the same out to 6 digits. After that, they begin to diverge, as with all products.

A look back at China Toy Recalls

2008-03-26T02:12:00.003-05:00

In my company's efforts to unmask the 'masked' AMS shipment records, we've developed techniques, such as recognizing shipping lane patterns. The implication is that these patterns will be instrumental in uncovering future consignee identities.

The Consumer Product Safety Commission provides an invaluable service to American consumers, and with the resources at hand it does an excellent job. Still, one area that could most easily be addressed while bringing added value to American companies is the process of gathering toy recall information. We were surprised to find so little information on foreign suppliers in the recall announcements. This begs the question ‘why’? Minor changes could be made in the disclosure rules for the sake of more accurate reporting.

I feel there should be an obligation on behalf of the American importers to reveal the identity of foreign suppliers who may be at fault in the event of a recall. This would allow American buyers to gauge supplier performance and forestall problematic shipments. In this way, pressure could be put to bear on foreign suppliers without them having to reveal the identity of their subcontractors.

It is my estimation that safety and quality fade issues will continue to be significant areas of concern until operational standards in China grow closer to expectations of U.S. consumers and distributors. Taking into account the occurrence of recalls of Chinese-made products in other countries, U.S. companies should consider diversifying their supply base and foster relationships with a variety of foreign companies. Being over-dependent on too few suppliers exposes supply chains to disruption in times of crisis.