10 Most Read Panjiva Research Reports in August | — Panjiva
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10 Most Read Panjiva Research Reports in August

  • By Christopher Rogers
  • · September 13, 2017
  • ·

August proved to be a tumultuous month for the logistics industry and trade policy. Our readers’ interest in the logistics industry focussed on consolidating market power in the NVOCC sector, alongside comments from DSV that it is looking for new acquisitions. An attempt to quantify Hurricane Harvey’s impact – still being felt – garnered attention. Meanwhile the first anniversary of Hanjin Shipping’s failure and the tenth anniversary of the financial crash shows an interest in the current lessons from past pains. The start of NAFTA talks, sanctions against North Korea, the section 301 review of China and a revised Middle East military strategy showed trade remains front-and-center of the Trump administration’s policy activity.

#1 Expeditors and CH Robinson in control (Aug 10) Our monthly review of the performance of the NVOCCs showed Expeditors and CH Robinson, expanded by 12% and 10% respectively. Expeditors’ recent results suggest it may have had to accept lower rates to achieve this. Among the second tier players Panalpina fell 4%, while DSV declined 1% when adjusting for last year’s UTi acquisition. Further consolidation looks likely given DSV’s recent commentary.

BIGGER IS BETTER   

Chart shows change in U.S.-inbound, seaborne shipments by NVOCC in last month on a year earlier and vs. the prior month Bubble width indicates relative number of shipments. Colors for clarity only.  Source: Panjiva

#2 DSV back on the acquisition track (Aug 2) DSV reported an improvement in its second quarter earnings, but the big news was an expressed intent to consider further acquisitions “over $1 billion”. Panjiva analysis of over 3,500 U.S.-bound NVOCC-country pairs shows DSV is under-represented in market share terms on China/Hong Kong, and Latin America-to-U.S. lanes. The challenge is that logical partners including Apex, Orient Express and Honour Lane already have significant controlling shareholders or are privately controlled.

#3 Houston’s Harvey disruption (Aug 29) Hurricane Harvey was one of the worst storms to hit the mainland U.S. on record, and took its toll on the logistics industry. Ports closed included Houston, which handles around 6,500 TEU of container freight per day, which will have been diverted or delayed. Shipping disruption spread to other ports as consignees including General Motors and handlers including Expeditors and Schneider looked for other routes.

#4 A decade of lessons after the crash (Aug 9) August marked the 10th anniversary of the financial crash. We took a look at the implications for trade trends in flows, financing and logistics industry restructuring. In terms of the latter, the NVOCC sector has changed radically, with Christal, DB Schenker and Panalpina all achieving top 10 status. The ports’ relative importance has shifted as the east coast ports displaced the west among the top volume handlers

#5 “Terminate” losers = Michigan and Ohio (Aug 24) August saw the start of NAFTA negotiations, including threats from President Trump to “terminate” the deal if he didn’t get the deal desired. Our analysis of larger states’ exports, Michigan has the most to “lose”, with 64% of state exports going to Canada and Mexico. It is also the third largest state by U.S. exports. Ohio has the fourth highest exposure at 51% and is the fifth largest exporting state.

RICK AND DOUG HAVE NAFTA WORK TO DO

Chart segments exports by U.S. states according to destination market for the 12 months to June 30. Calculations based on U.S. Census Bureau data. Source: Panjiva

#6 NAFTA ill-starred before it started (Aug 14) Our preview of the NAFTA talks highlighted the hill to be climbed, with a desire from Canada to include chapters ranging from dispute settlement to indigenous people’s rights and a focus from the U.S. on reducing its trade deficit. With the second round of talks having just ended it isn’t clear their positions have changed.

#7 Trump’s 301 gambit may hurt consumers (Aug 2) China also fell into President Trump’s trade sights with the launch of a section 301 review by the U.S. of its intellectual property rights policies. Our preview highlighted that eventual tariff action may end up hitting consumer products, with dominant Chinese exports to the U.S. including phones and computers (21%), apparel (12%), furniture (7%) and toys (4%).

#8 North Korean sanctions may change little (Aug 7) The main geopolitical events of the month focussed on continued North Korean missile tests, and the international community’s attempts to restrain it. While China has cut its purchases from North Korea, it has significant room to cut it sales to the DPRK of machinery and apparel. These form part of its – apparently unfinanced – $1 billion trade deficit with North Korea.

#9 Hanjin Shipping’s legacy (Aug 30) As well as 10th anniversary of the financial crisis, August also marked the first anniversary of Hanjin Shipping’s failure. Our review of the container-lines’ performance since then showed revenues rising 10% on a 20% rise in rates. The most important legacy though may be the spate of consolidation currently taking place.

#10 Trump’s terror strategy, in Pakistan (Aug 22) President Trump’s revised military strategy for dealing with terrorism in the Middle East and Afghanistan included a reference to Pakistan. That raises the prospect of trade measures, as has been the case with North Korea. Panjiva analysis of Pakistan’s top 200 exports to the U.S. show apparel and textiles each account for 37% of the total, making them prime targets for tariffs or quotas.

APPAREL AND TEXTILES DOMINATE PAKISTAN’S EXPORTS TO THE U.S.

Chart segments last 12 months exports from Pakistan to the U.S. by product (HS-6). SourcePanjiva

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