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Ports pay price for trade war; Brexit export bright spots

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.

Trade war hurts West Coast ports, helps New York reverse declines

U.S. ports suffered a lackluster growth in inbound traffic in September, with volumes having risen by just 0.6% year over year. The U.S.-China trade war is likely to blame, and unsurprisingly that has led West Coast ports to underperform.

Los Angeles suffered a 2.2% drop in inbound shipping in September compared to a year earlier, following a 3.6% year-over-year rise in the three months to July 31. Shipments to Seattle and Tacoma, Wash., also reversed with a 5.4% drop in September following a 2.1% rise in the prior three months.

The East Coast ports did better, with imports to Newark, N.J., and New York having risen by 4.6% in September after an earlier decline. That has largely been down to a jump in shipments from Asia ex-China, and in particular from Vietnam where shipments to New York surged 58.7% higher. Replacements for Chinese supplies beset by tariffs were likely the main driver, including higher shipments by Shop-Vac Corp. and Bob's Discount Furniture LLC among others.

(Panjiva Research - Logistics)

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Honda, Croda provide export bright spot as deal-based Brexit beckons

A deal-based Brexit — featuring a "border in the Irish Sea" — looks possible ahead of forthcoming EU heads-of-state meetings and a parliamentary vote in the U.K. on Oct. 19. Should those fail, U.K. Prime Minister Boris Johnson would have to request an extension to the Oct. 31 deadline for Britain's divorce with the EU.

In the meantime, there is little evidence of stockpiling in recent U.K. trade figures for August. Those showed imports from the EU fell by 4.3% year over year in August, including a 5.5% drop in shipments of food, a 19.0% slide in imports of medicines and a 19.8% slump in fuel imports excluding electricity.

A brighter spot was a 12.2% rise in exports to outside of the EU, suggesting the weaker pound is helping competitiveness. Exports to the U.S. rose by 13.1%, reflecting a 63.3% jump in organic chemicals and a 14.0% rise in pharmaceuticals.

The latter, Panjiva's data shows, includes shipments by Reckitt Benckiser Group PLC and Croda International PLC. Exports of cars continued to grow with a 37.0% jump, though exporters including Honda Motor Co. Ltd. and Bayerische Motoren Werke AG may have faced rising inventories, given U.S. foreign car and truck sales fell in September.

(Panjiva Research - Policy)

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Buzz and Woody defeat Thanos as Halloween imports creep ahead

Halloween spending in the U.S. may be set to grow in 2019. U.S. seaborne imports of Halloween-related products including outfits and decorations grew by 1.5% year over year in the May-to-September import season. Decorations did better than outfits, which fell 8.1%, with movie franchise successes being a big driver of the growth — or otherwise — in specific outfit lines.

The fourth installment of The Walt Disney Co.'s Toy Story series likely drove a 156% surge in imports of related costumes, while the Aladdin reboot has not helped prince/princess outfits, which fell 2.0%. Marvel has also done poorly with a 1.3% slip despite the final installment of the Avengers series as well as the Captain Marvel film earlier in the year.

The new Harry Potter franchise has not repeated 2018's 11.8% rise in wizard costumes, while the 2018 surge in clown costumes, linked to the "It" franchise, has also not occurred.

(Panjiva Research - Consumer Discretionary)

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Sumitomo, GE drag on Indian exports as trade war opportunity is missed

India's international trade activity fell for a fourth straight month in September, including a 6.6% drop in exports. One reason is that India may be failing to capitalize on reduced Chinese exports to the U.S. resulting from the ongoing trade war.

Indeed, India's seaborne exports of apparel to the U.S. grew by just 4.9% in September. Similarly, shipments of machinery and electronics fell 2.6% after rising 9.3% in the prior three months. Panjiva data shows that imports by Sumitomo Wiring Systems Ltd. and General Electric Co. may have fallen by 67.6% and 66.0%, respectively, in September compared to a year earlier.

India's export decline means it joins the group of eight out of 11 countries that have reported September data and seen a downturn, which so far has averaged 3.9% year over year.

(Panjiva Research - Economics)

Panama Canal dodges trade war with increased shipments to East Coast ports

Vessel transits through the Panama Canal climbed 3.3% in September compared to a year earlier, including a 10.9% surge in larger neopanamax vessels. That has come despite a decline in China-to-U.S. traffic due to the trade war and likely reflects the influence of replacement goods shipped from other Asian countries.

The Canal may still be facilitating the diversion of traffic to U.S. East Coast ports from those in California. Seaborne shipments to the East Coast of the U.S. from eight major Asian exporting economies rose by 9.1% year over year in September while those to Californian ports fell 5.1%.

(Panjiva Research - Logistics)

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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