Wednesday, June 3, 2015

US Containerized Ocean Exports.......ANOTHER PESKY FACT!

US Containerized Ocean Exports

US containerized ocean export activity has plunged to its worst level in the data series going back to the end of the Financial Crisis.

The index doesn't include commodities such as petroleum products or wheat that are shipped by specialized carriers. It doesn't include goods or commodities shipped by rail, truck, or pipeline to Mexico and Canada. And it doesn't include air freight, which is only a tiny percentage of total freight tonnage. The index is a measure of export activity of manufactured products sent by containership. 

Export activity just about plunged off the chart during Q1. Note how sharp the movement was compared to the relatively slight up-and-down during Q1 last year. The minuscule uptick in April is barely visible at the tail end of the chart.

Exports are vital to every economy. Currency wars are fought to increase exports. Trade wars are fought over it. Every country wants to export more and import less. Exports add to GDP, imports subtract from it. Yet, even as the Fed's QE caused the dollar to swoon against most major currencies after the Financial Crisis, US exports of manufactured goods, which should have gotten more competitive in the international markets, didn't rise past the initial dead-cat bounce. They crashed instead.

And a collapse it is. The index, at 0.665 in April, is 28.4% below a year ago and 33.5% below the level of January 2010, when it was set at 1.00. It's less than half of what it was in much of 2010, 2011, and 2012. This is what that multi-year processes looks like:

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