The Supply Chain Daily provides a curated overview of Panjiva's research and insights covering global trade policy, the logistics sector and industrial supply chains and draws from global shipping and freight data.
Subaru slams into reverse as Japan's big 7 automakers hit the skids
The big seven Japanese automakers saw global production fall by 7.7% year over year in August, while their exports from Japan dropped by 6.2%. The latter marks a reversal from an 8.3% growth in exports in the three months to July 31.
Honda Motor Co. Ltd. was the worst performer with a 53.5% slump in exports while Subaru Corp. saw the fastest turnaround with a 22.4% drop in shipments in August, compared to a 21.8% rise in the prior three months.
The firm has blamed "reasons related to shipping vessel schedules" for the slowdown. Panjiva's seaborne shipping data shows that 86.4% of U.S. seaborne imports of vehicles associated with Subaru were handled by Nippon Yusen Kabushiki Kaisha in the 12 months to Aug. 31, followed by Mitsui O.S.K. Lines Ltd. with 12.8%. Subaru may need to diversify its shipping suppliers to prevent future export interruptions.
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Trade war resilience boosts Savannah, Charleston but congestion looms
Container handling through the ports of Savannah, Ga., and Charleston, S.C., surged 12.9% and 16.5% year over year, respectively, in August. That included a growth in imports of 18.7% and 14.0%, respectively, compared to the national average of 0.3%.
Both ports saw a surge in shipments from China with Savannah's volumes up 10.3% year over year while Charleston's climbed 3.3%. That may have been due to a pre-tariff rush shipped via the Panama Canal.
There may be an emerging congestion problem, with 24% of containers handled at Charleston being empty. That was the worst August result in over 10 years while Savannah experienced its worst August since 2015. The two ports may need to cooperate more closely to manage congestion should the trade war not trim volumes later in the year.
The largest container-line using the two ports in the 12 months to Aug. 31 was Ocean Network Express — owned jointly by Mitsui O.S.K., Kawasaki Kisen Kaisha Ltd. and NYK — with a 15.5% share followed by CMA CGM SA and ZIM Integrated Shipping Services Ltd.
(Panjiva Research - Logistics)
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Regular trade war tariffs not enough to smash glass dumping
There were just three trade infraction complaints filed with the U.S. government in September, including two intellectual property cases relating to batteries and one anti-dumping complaint relating to glass bottles and jars from China.
The glass products targeted are already covered by section 301 duties of 25% applied as part of the list three cluster of trade war-related tariffs on exports from China. Despite this, the complainants allege dumping has occurred at a rate of up to 819%. U.S. imports from China of the glass products covered were worth $363 million in the 12 months to July 31, 32.5% of the total.
Mexican exporters including Vitro S.A.B. de C.V. and Fevisa Industrial S. A. de C. V. may have lost out. While imports to the U.S. from China rose 7.0% year over year in the past 12 months, imports from Mexico fell 4.6%.
(Panjiva Research - Materials)
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Improving China outlook still not positive for suppliers
China's manufacturing outlook improved slightly in September's survey of local logistics professionals, with the Purchasing Managers' Index rising to 49.8% from 49.5%, where 50% or below indicates a contraction. A jump in export order expectations to 48.7% from 47.2% was the best result since April. It still indicates an outlook of falling orders.
Import order expectations only improved marginally to 47.1% from 46.7% ahead of the traditionally quiet Golden Week holiday. That bodes ill for China's major supplier nations, including the U.S., Japan and South Korea which all saw lower exports year over year in August.
(Panjiva Research - Economics)
Semiconductors, not geopolitics, the driver of South Korea's September slump
South Korea's international trade activity fell 8.9% year over year in September, including a 10th straight decline in exports of 11.6% — or 12.8% if excluding the volatile shipping industry.
The trade spat with Japan, which recently included the bilateral removal of trusted trader status, may not yet be having a significant effect. South Korea's exports to Japan only fell 5.9% while its imports fell by 8.6%.
Semiconductors continue to be the main drag on South Korea's exports, with a slump of 31.5% in shipments representing two-thirds of the decline in the country's exports in aggregate in dollar terms.
Weakness in exports across most sectors of the economy suggests the slowing trade situation across Asia — eight out of 11 countries that have reported August exports saw a year-over-year fall — may be set to continue.
Riding the retail rollercoaster — September 2019 in 10 reports
The month of September saw a rollercoaster of sentiment regarding the U.S.-China trade war. The most read Panjiva research last month was our conference report that flagged the changing nature of trade policy risks, the presence of U.S. corporates "in China for China" as well as bipartisan agreement in the U.S. that China needs to be dealt with.
Our deep dive into the history of the trade war showed a cyclical pattern of rising tariffs followed by improving sentiment and concessions before reversals. September saw an uptick in sentiment after both sides delayed tariff increases, with potential benefits for pork exporters in the U.S. such as WH Group Ltd., medical device manufacturers including Varian Medical Systems Inc. and oil exporters.
Yet, it's not all sunshine with the apparel retail industry having faced trade war tariffs for the first time at the start of the month. Our readers' focus included the corporate reactions by Lululemon Athletica Inc. — whose shipments from China to the U.S. by sea may have fallen by 69.1% year over year — as well as the situation for Fast Retailing Co. Ltd.'s Uniqlo and Target Corp.. The latter has refused to accept tariff pass-through costs and Chinese export price data suggests that suppliers are obliging.
Tariffs also took a toll on the logistics industry, though C.H. Robinson Worldwide Inc. may have bucked the trend with U.S. import handling up 3.5% year over year in August. Finally, it's not all been about the trade war. The largest geopolitical event of the month was probably the attacks on Saudi Arabia's oil export facilities.
(Panjiva Research - Most Read)
Christopher Rogers is a senior researcher at Panjiva, which is a business line of S&P Global Market Intelligence, a division of S&P Global Inc. This content does not constitute investment advice, and the views and opinions expressed in this piece are those of the author and do not necessarily represent the views of S&P Global Market Intelligence.
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