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Global Trade (Still) In Freefall: Imports Collapse At Largest Three US Ports

Tyler Durden's picture




 

We’ve said it before and we’ll say it again: global growth and trade are grinding to a halt. 

Back in September, we flagged comments from WTO chief economist Robert Koopman who warned that after a “burst of globalization”, we are now “at a point of consolidation, maybe retrenchment.” 

“It’s almost like the timing belt on the global growth engine is a bit off or the cylinders are not firing as they should,” Koopman concluded.

Trade growth, the WTO observed, has averaged just 3%/year since 2010. That compares rather unfavorably with around 6% a year from 1983 to 2008. “Few see any signs that trade will soon regain its previous pace of growth, which was double the rate of economic expansion before 2008. In 2006, global trade volumes grew 8.5%, compared with a 4% expansion in global GDP,” WSJ pointed out at the time.

Besides being proof that trillions in global QE - not to mention DM central bankers’ descent into NIRP-dom - has been utterly insufficient to provide the global economy with the defibrillator shock it apparently needs, this also suggests that we may have entered a new era, where lackluster global growth and trade are systemic rather than cyclical.

For the latest bit of evidence that global trade is indeed in free fall, look no further than the container terminals at the ports of Los Angeles, Long Beach, Calif. and around New York harbor which handle more than 50% of seaborne freight coming into the US. As it turns out, “peak” season turned out to be anything but. Here’s WSJ:

For the first time in at least a decade, imports fell in both September and October at each of the three busiest U.S. seaports, according to data from trade researcher Zepol Corp. analyzed by The Wall Street Journal. Combined, imports at the container terminals at the ports of Los Angeles, Long Beach, Calif. and around New York harbor, which handle just over half of the goods entering the country by sea, fell by just over 10% between August and October.

 

The declines came during a stretch from late summer to early fall known in the transportation world as peak shipping season, when cargo volumes typically surge through U.S. ports. It is a crucial few months for the U.S. economy as well: High import volumes can signal a confident view on the economy among retailers and manufacturers, while fears of a slowdown grow when ports are quiet.

 

 

The missing peak season has been a major headache for trucking companies, railroads and steamship lines. One large maritime carrier, Singapore’s Neptune Orient Lines Ltd., told investors there was “no peak season” in North America as an explanation for a $96 million quarterly loss.

 

Some of the country’s biggest trucking companies and railroads have recently reported weaker-than-expected earnings. Many have cut the rates they charge customers as demand sagged during what is usually their strongest months. For trucking companies in particular the turnabout has been abrupt, with some companies pivoting from expressing concerns about tight capacity to worries about future profits in the space of a few weeks.

Amusingly, we seem to have gotten to a point where economists excuse bad news by pointing to old bad news without mentioning that it was bad. Case in point:

Some say the slump is being driven by businesses that have cut back on imports because of a weak economic outlook, which could point to sluggish global growth ahead. Others say it is a side effect of a massive inventory buildup that took place earlier in the year.

Got that? So obviously a "weak economic outlook" is bad, which must mean that what this weak outlook is being contrasted with in the sentence shown above is good - or at least un-bad. In other words, the implication from that excerpt is that if this is due to "a massive inventory buildup" then that's somehow ok.

Only it isn't - as we've outlined on too many occasions to count. To wit, from last week:

Having risen to its highest level since the middle of the last two recessions, wholesale inventories-to-sales ratio remains at cycle highs at 1.31x. With wholesale sales and inventories both rising 0.5% (both more than expected), however, the absolute difference between sales and inventories has never been higher, leaving either major inventory liquidation ahead (or a miracle in sales). Wholesale inventories have now risen 4.7% YoY, as Sales have fallen 3.9% YoY

Recession anyone?

The absolute spread between inventories and sales has never been wider...

Back to WSJ:

Despite the weak peak, imports in the first 10 months of the year at the nation’s busiest ports are still up 4% from a year earlier, Zepol data show. Rather than ordering huge shipments of goods in the late summer and early fall, more businesses are stocking up throughout the year and holding on to inventories for longer.


“There was a little bit of overdoing it in the beginning of the year,” said Ethan Harris, co-head of global economic research for Bank of America Merrill Lynch. “Once we adjust to it, I would expect that business picks up again, shipping picks up again, container imports should pick up again.”

Right, once we "adjust to it." In other words, once people start buying stuff, and if October was any indication, that isn't in the cards. 

As Rosalyn Wilson, a supply-chain analyst with Parsons Corp. told WSJ, “Instead of taking that extra money that [low fuel prices] are generating and going on a shopping spree, consumers are being more conservative. It’s bad for the global economy because it means we’re not purchasing.”

And so, as we've said in the past, either central banks start learning how to print trade, or here's what comes next...

 

 

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Sun, 11/15/2015 - 16:14 | 6796744 SaulRosenberg
SaulRosenberg's picture

I'm confident Hillary will change things for the better...right?

Sun, 11/15/2015 - 16:16 | 6796748 Bollixed
Bollixed's picture

Depends...

Sun, 11/15/2015 - 16:23 | 6796762 knukles
knukles's picture

.... on the weather

Come on, people!  Final sales are falling accompanied by sky high inventories just in time for more inventories being built up for the holidays when there will be tepid sales at best.
Everything's fine. 
Just relax
A nice warm Metamucil will calm you down ....

Sun, 11/15/2015 - 16:33 | 6796792 Stainless Steel Rat
Stainless Steel Rat's picture

Depends on if you are a bankster.  And raw psyllium husk is the way to go!

Mon, 11/16/2015 - 05:16 | 6798765 mkkby
mkkby's picture

Article is bullshit. 

There is no shipping slump.  Look at the chart cited in the artile.  It just ramped up and peaked a little earlier this year.  No net change.

Sun, 11/15/2015 - 16:36 | 6796801 Fukushima Fricassee
Fukushima Fricassee's picture

"warm Metamucil " causes man made global climate change and therefore is the number fucking one problem this world faces.

Sun, 11/15/2015 - 17:35 | 6797012 KnuckleDragger-X
KnuckleDragger-X's picture

We're not buying Chinese crap and they aren't buying American crap. I expect some genius will try to restart Smoot-Hawley, and since stupid knows no bounds, Congress might pass it.......

Sun, 11/15/2015 - 17:47 | 6797042 Freddie
Freddie's picture

"You should've looked out for me a little bit"

https://www.youtube.com/watch?v=uBiewQrpBBA

F**k the Longshoreman's Union of gangsters.

Sun, 11/15/2015 - 16:23 | 6796765 Winston Churchill
Winston Churchill's picture

XXL.

Sun, 11/15/2015 - 18:49 | 6797269 sun tzu
sun tzu's picture

The fed said it was due to mild weather. They're not shipping as many winter clothing here as they usually would. Blame it on global warming. IT's long past time that we buy carbon credits from Wall Street in order to save the world and global economiy.

Sun, 11/15/2015 - 16:17 | 6796756 Hohum
Hohum's picture

Lower imports means higher GDP, all other factors remaining constant.

Sun, 11/15/2015 - 16:24 | 6796766 Francis Marx
Francis Marx's picture

Well! you dont say. I been watching CBS news for the past 7 years and thought everything was fine and dandy..

Sun, 11/15/2015 - 16:31 | 6796778 knukles
knukles's picture

Brian Williams was shrieking about Global Warming influencing/causing other unrelated shit (like the Paris Attacks) on MSNBC yesterday.
I miss him.  His bravery and determination.  He and Geraldo should host a reality show.  "Hosts starve to death painfully in the desert"
That or have Mike Tyson do a tune-up on him.  "What was it like Brian, taking that left cross on your right temple?"  Easy boy, I'm over here ....."

Sun, 11/15/2015 - 16:54 | 6796851 Hohum
Hohum's picture

Rolling the dice.  Graph doesn't account for El Nino making 2014-15 warmer:

http://www.ncdc.noaa.gov/sotc/service/global/glob/201408.gif

Sun, 11/15/2015 - 18:45 | 6797249 sun tzu
sun tzu's picture

War, famine, and disease didn't happen until the invention of the internal combustible engine

Sun, 11/15/2015 - 16:29 | 6796767 franciscopendergrass
franciscopendergrass's picture

Maybe Walmart was the way the Chinese government channel stuffs their products into US households to hide the true nature of their debt and economic woes.  

The US goose has been completely channel stuffed.  Americans too much in debt to continue to buy useless shit. 

Sun, 11/15/2015 - 18:26 | 6797167 GooseShtepping Moron
GooseShtepping Moron's picture

You're almost correct in that analysis, the only caveat being that dumping does not quite equal channel stuffing. Walmarts are basically de facto Chinese dumping outlet stores designed to saturate the American market and shift all jobs and production to China. The Chinese gain a strategic advantage by hollowing out the American economy even if their capital allocation seems to make no sense in the short run.

Sun, 11/15/2015 - 18:47 | 6797259 sun tzu
sun tzu's picture

A Sports Authority near my home is going out of business. I got a pair of tennis shoes marked down from $60 MSRP to $18. I know I still overpaid, but at least it wasn't by that much. The point is, deflation is here to overstay its welcome. 

Sun, 11/15/2015 - 16:30 | 6796788 divedivedive
divedivedive's picture

Well perhaps imports are down - but with the dollar SO strong exports can't be doing so hot either.

Sun, 11/15/2015 - 16:32 | 6796793 Aeneid
Aeneid's picture

I'm sure there will be a BUY signal from the indomitable Jim hooyah Crapola of Criminal News BS on some retail stock ! Buy the dip!

Sun, 11/15/2015 - 16:40 | 6796815 Fukushima Fricassee
Fukushima Fricassee's picture

Punk ass pres's fault.

Sun, 11/15/2015 - 17:16 | 6796926 newnormaleconomics
newnormaleconomics's picture

The Long Wave. 

Sun, 11/15/2015 - 18:50 | 6797271 sun tzu
sun tzu's picture

This one and the 10 before him along with all the other politicos

Sun, 11/15/2015 - 16:48 | 6796835 apberusdisvet
apberusdisvet's picture

With the psyllium, and metamucil, the real shit's gonna hit the fan.

DUCK!  YOU MOTHERS

Sun, 11/15/2015 - 16:51 | 6796843 herkomilchen
herkomilchen's picture

ZH should not cut off the left side of that Inventory/Sales chart to suit its message.  In the go-go 90's Inventory/Sales was 1.4-1.5, higher levels than what that chart implies must be recessionary.

Sun, 11/15/2015 - 16:51 | 6796844 LedMizer
LedMizer's picture

I came here just to check out the last pic.  Somebody's ass is in a crack.

Sun, 11/15/2015 - 17:00 | 6796867 Smegley Wanxalot
Smegley Wanxalot's picture

May be a mixed blessing for businesses.  If ISIS (CIA, et al) pull off a Paris-like series of hits in the USA near Black Friday time, the malls will be empty.

Merry Christmas from Uncle Sam.

Sun, 11/15/2015 - 17:15 | 6796925 buzzsaw99
buzzsaw99's picture

owebombascare finally killed xmas

Sun, 11/15/2015 - 17:26 | 6796968 scintillator9
scintillator9's picture

Yesterday, my friend came over, and we were discussing the E-Con-O'Me.

I was explaining how the Baltic Dry index is but 51 points from its all time low, and has NEVER been this low for this time of year, how most commodites are nearing, or at, their 2008 pricing.

I also mentioned how Walmart stock is down 33% YTD, Caterpillar stock is down 21% YTD, Cummings Stock Down 30% YTD, Union Pacific Railroad Stock Down 28% YTD, CSX Railroad stock down 24% YTD. Norfolk Southern Stock down 16% YTD, Safe Bulkers down 46% YTD. Navios Maritime Partners down 46% YTDMatson is bucking the trend, and is up 45% YTD

My friend said that all of that is irrelevant, that a Santa Claus rally will be coming, due to AMZN, FB, NFLX .

It's almost like the old economy no longer matters.

Where have we heard that before?

 

 

Sun, 11/15/2015 - 18:43 | 6797240 lasvegaspersona
lasvegaspersona's picture

Do you suggest we all read the face book?

I'm down on Netflix. I watched Pulp Fiction and they seem to have cut the whole scene after Sam Jackson says;'say what again'. They skipped over the entire part when Travolta accidently kills the black kid in the back seat.

I'm torn...should i keep sending them $8 a month?

If i stop will the economy crumble?

Sun, 11/15/2015 - 17:56 | 6797071 Yen Cross
Yen Cross's picture

     They should rename that ship the Merkel and park it in the 'Mediterranean Sea', for all the M/E refugees to live on.

  We're all going to be living in shipping containers based on the current path these insane Politicians and Banksters have us on.

Sun, 11/15/2015 - 18:36 | 6797209 chubakka
chubakka's picture

the next real estate bubble? ;)

Sun, 11/15/2015 - 19:08 | 6797349 silverer
silverer's picture

But, but... Krugman promised!

Sun, 11/15/2015 - 19:39 | 6797473 Yen Cross
Yen Cross's picture

 Troika already has dibs on all the 'Greek Islands', so the EU needs to build some sandcastles in the Med.

 Those sneaky Chinese are on to something. ;-)

Sun, 11/15/2015 - 18:49 | 6797270 Sudden Debt
Sudden Debt's picture

Containers wih a view....

Why do all those refugees get all the best stuff?

Sun, 11/15/2015 - 19:37 | 6797462 Yen Cross
Yen Cross's picture

 lmfao! That was funny.

Sun, 11/15/2015 - 18:38 | 6797217 lasvegaspersona
lasvegaspersona's picture

For 5 years I have been reading here that things were bad bad bad. Now I read that things are 'worse'.

How is it that there is still a world economy if things are as bad as ZH sez?

I suspect some areas of improvement have been ignored by ZH. I'd like an honest reporting even if somethings are getting better.

I too expect an ulltimately horrible outcome but figuring out timing is impossible if we don't get unbiased data.

Sun, 11/15/2015 - 18:47 | 6797256 Sudden Debt
Sudden Debt's picture

Imagine you need sportshoes.

There's 30 stores in a 10 mile radius and they're all overstoced. They all sell the same and if you want to drive another 10 miles you'll have another 30 stores that sell it all.

There's no marketshare left, it all so oversupplied already.

In my town for example, here are about 30 phone stores, and next to those stores you have so many phone repair shops and next to that all those shops that sell covers and cables on the cheap.

You hardly ever see a person inside, supply is so large!

The entire retail system needs to change and change very very fast or most will simply not survive.

 

Add online sales, automated trucking and automated warehouses and we've got ourself a shitstorm where most people just aren't needed anymore.

 

Sun, 11/15/2015 - 19:07 | 6797344 silverer
silverer's picture

For Christmas, I'm going to sell everything that I bought over the last 20 years that I really don't need and buy gold and silver  as a present to myself.  (Hope I didn't disappoint anyone on Wall St. with that statement...)  Ho ho ho!

Sun, 11/15/2015 - 19:26 | 6797424 wanderer9641
wanderer9641's picture

Why do they keep on referring to the gasoline savings to have consumers spend more?  Nobody normal saves enough to make up for an ice cream let alone a big buy.

Mon, 11/16/2015 - 00:54 | 6798432 tommylicious
tommylicious's picture

FUCK YOU, BULLSHIT RECOVERY AND YOUR SYCOPHANTS!!!!!!!!!!              BASTARDS!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!1

Mon, 11/16/2015 - 01:04 | 6798458 fowlerja
fowlerja's picture

Sounds like alot of cargo containers are available for use...let's see..what could we use them for...well San Francisco has a housing shortage...stack them up and rent them out...that should take some steam out of the San Fran rental market...

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