On Monday, we released data showing the extent to which the economic downturn is decimating the global supply base. Specifically, our analysis showed that there are fewer suppliers actively serving the U.S. market, and, of those that are active, many have suffered an alarming decline in the volume shipped to U.S. customers.
We’ve received questions about whether this is a China-only phenomenon. The short answer is no. Some statistics:
World: We saw a 72% drop-off in the number of active apparel suppliers from July to October. Of those that remain active, 40% are on Panjiva’s Watch List, as a result of suffering a huge decline in the volume shipped to U.S. customers in the most recent three month period.
CHINA: The comparable statistics for Chinese suppliers look much the same. We saw a 69% drop-off in the number of active apparel suppliers from July to October. Of those that remain active, 45% are on Panjiva’s Watch List.
Bottom line: the data suggest that this is not a China-only problem, but nor have Chinese suppliers been spared the pain that the global supply base is feeling.
December 11th, 2008 at 12:41 pm
The world’s ocean carriers may have been the first major players to anticipate this trend, as they quickly began withdrawing capacity from key trade lanes several months ago. There is no “peak” season this year, and more consolidation among vessel operators is a given.
December 12th, 2008 at 2:21 pm
I tend to disagree that ocean carriers anticipated this trend; if they truly did, they would have withdrawn capacity and canceled new ship orders well ahead of the collapse in shipping volume and, consequently, shipping rates. In contrary, virtually everyone was adding capacity and placing new ship orders right to the point when charter and shipping rates reached their peak, hoping that the party would never end.