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The Journal of Commerce recently reported not only the names of the top 100 Importers and Exporters, but also provided some interesting insight into the commodities that saw declines in 2020 as well as those that saw increases. In 2020, over 36 million TEU’s were transported in US Container Trade. That number actually reflected a 1.1% drop YOY from 2019. Imports were up 2.4% YOY from 2019 and Exports were down 7.5% YOY from 2019.
Household Goods Up, Clothing Down
A few interesting observations relate to the products that saw increases and those that experienced decreases. For example, clothing imports were down 15% from 2019 levels , Household Goods imports were up over 10%, Electronics imports were up almost 15%, Foodstuffs imports were up almost 18%, Solar products imports were up over 35%, while to no one’s surprise, Personal Protective Equipment imports were up over 25%.
We’re not exactly sure how 2021’s figures will finally stack up, but one thing we do know for sure is that US Importers and Exporters will be digging deeper into their pockets to ensure their products get where they need to go. As everyone knows, this year importers and exporters face tremendous challenges not only with the costs they will have to pay, but even at these extremely higher ocean shipping costs, capacity remains an issue. For most Importers, the only way for them to insure their containers actually get on a ship is to pay a premium, a sort of a surcharge, to ensure their containers do not get rolled. It’s a bidding war for sure and there does not appear to be any end in sight.
Western Ports Congestion and Lessons Learned
Adding to these woes, are congestion issues principally at West Coast Ports. In fact, it’s currently estimated that there are in excess of 500,000 containers backlogged at various ports. Shortages of Chassis remains a problem once containers arrive and offloaded at the ports and there continues to be tight capacity with not enough power units to move product once the containers are grounded. As we have said in the past, to say this is a “perfect storm” would be an understatement.
Out of all of this chaos there are a few lessons to be learned for both importers and exporters. First and foremost is the fact that continuing to operate in a “business as usual” environment is no longer an acceptable approach. Companies that feel “this too shall pass” are going to be in for a big surprise as they continue to spend huge sums of money, well above previously budgeted amounts, and they still may still not be able to get their products delivered, so that is a disaster waiting to happen.
Secondly, the need to build inventories is more critical now than ever before. “Just in Time” needs to be replaced with a “Just in Case” approach where companies ensure they always have excess inventory on hand to meet their customer’s needs now and into the immediate future.
Re-Shoring and Attracting Manufacturers Stateside
And finally, it appears that American manufacturing supply chains are actually taking a long hard look at “Re-Shoring” efforts as a way to ensure they will never again be held hostage by forces outside of their controls. According to a recent story in the Wall Street Journal, several states in the US Midwest and Southwest are luring factories including semiconductor makers with open land, and local tax breaks. These states include Arizona, New Mexico, Texas and Oklahoma and have added in excess of 100,000 jobs in just the past three years, representing 30% of US factory job growth. Creating and maintain stable Supply Chains demands that companies have multiple sources of supply, as well as developing multiple resources for transport, both domestic and international to ensure they create and maintain an “Anti-Brittle” supply chain.
Trying to navigate this “new normal”? Learn more about our international shipping consulting services and reach out to us today to see how we can help your company address the significant supply chain challenges of today and tomorrow.
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