Featured Headlines:
93 Reasons to Stop Yer Whining
Total Eclipse of the German GDP Heart
CBP Flexes Its Green Thumb
- Last month, US Customs and Border Protection (CBP) announced the launch of its Green Trade Strategy to help bolster green trade, facilitate innovation, strengthen its existing environmental enforcement efforts and counteract negative impacts related to climate change.
- CBP’s Green Trade Strategy establishes a proactive model that will align with other broad efforts to curtail the effects of climate change introduced by the Department of Homeland Security (DHS) and other US agencies; and it outlines (4) four goals to help guide trade-related environmental activities both domestically and globally:
- Incentivize Green Trade;
- Strengthen Environmental Enforcement Posture;
- Accelerate Green Innovation; and
- Improve Climate Resilience and Resource Efficiency.
- For more information, check out CBP’s Green Trade Strategy webpage.
USDA Does a Favor for FAVIR
- Did you know that the US Department of Agriculture (USDA) developed a new database for Animal and Plant Health Inspection Services (APHIS) to replace the existing Fruit and Vegetable Import Requirements (FAVIR)?
- The new database, called the Agricultural Commodity Import Requirements (ACIR), provides a new search option feature that makes it easier and simpler for users to locate import requirements for agricultural items.
- The ACIR is available to all users now; and FAVIR requests will be re-directed to the new web page beginning September 30, 2022.
- Importers should also note that the 3 import manuals currently located on FAVIR—Cut Flowers and Greenery Manual; Seeds not for Planting Manual; and Miscellaneous Processed Products Manual— will remain in their current location until the end of 2023.
- Video tutorials to assist interested parties with the transition to the new interface are available here.
- For questions or concerns, please reach out directly via [email protected]or the ACIR feedback page.
Truck This!
- Oakland was choked land when over 100 independent owner-operators, angered by California’s AB5 labor law, set up their protest directly in front of ILWU parking at the port. This proved to be a clever chess move indeed, since the ILWU workers refused to cross what amounted to a picket line. Oakland was essentially closed on July 18th; and the trade can do nothing but watch out for the next queen’s gambit from California draymen.
- For the US trucking industry overall, the US producer price index (PPI)— one of the many government indices that profoundly confound when you try to imagine actually calculating it—dropped by 0.2% in May. This is the first drop in PPI (which may or may not actually exist) in a year. All kidding aside, the drop is also connected to a notable 2.4% decline in long-distance truckload prices.
- DAT Freight and Analytics has reported that Full Trailer Load (FTL) spot and contract rates followed the PPI trend for June. They also asked the press not to reveal that DAT stands for “Dial-A-Truck” (uhm yes…it does). Anyway, average FTL spot rates dropped a whopping 29% in June, though contract moves again dominated FTL volumes overall. When isolating contract moves (without supper and after being sent to their rooms), we note a 3% decline for June, ending at $2.54 per mile.
- As we watch FTL and long-distance rates decline, specialized motor carrier sectors—including refrigerated, flatbed, dry bulk, liquid tank, heavy-haul, and puppy transport— are all seeing rate increases. Unfortunately, for puppy haulers, the summer heat does provoke plenty of tongue-wagging and (yes) drool, which cuts into profits with the ever-rising cost of handy wipes.
- The top dog in the trucking profit parade is the Less-Than-Truckload (LTL) sector; prices here have gone up for several months running, including 6% over the last three months.
- Per the American Trucking Association, truck tonnage in June soared 7.9% above the same month last year. Given the overall pricing decline, this affords us a great chance to condescend to our dear readers with some powerful economic analysis! (It seems that the US trucking industry has done a great job with supply… see, because the volumes are up but the overall average price is down. See?)
- US trucking broke its own record (and is bragging about it daily while flat-out mocking railroads) by claiming a 72.5% share of overall US domestic tonnage.
- Can we please stop talking about truck parking? Seriously, can we? Look, we’ll stop being sarcastic if we can PLEASE stop talking about it! One thing is certain though, the US House will be talking about it again, as the Truck Parking Safety Improvement Act is scheduled for debate before the House Transportation and Infrastructure Committee.
Export Retort Report
- With US imports getting all the press and attention, even from expert newsletters like this one, US exports have been a bit grumpy and sharp-tongued in pointing to their own accomplishments. From the broadest perspective, the value of US exports has grown by nearly 20% in the last 12 months. “Take that, imports,” said those exports when asked.
- In the last 3 months alone, prices for US agriculture and manufactures have increased 5%, as exporters fill certain critical market voids created by the war in the Ukraine and the ramp up of shipments to a (hopefully) re-opening China. Boy, we sure would like to see lower petroleum product volumes in those numbers; but oil exporters only grumbled, “oh, NOW, we get your attention, huh?!”
- While US agricultural prices fell for the first time since 2021 in June, the overall trajectory for the segment is quite positive, improving by 15% year-over-year.
- Though US exporters have tried to deny it—and they certainly deflect the subject when it comes up—the overall value and prices of US exports of scientific machinery, medical/dental devices, and pharmaceutical materials are down since May.
- After a long run of increases, exports of US automobiles, SUVs, and ridiculously masculine pick-up trucks are largely flat in 2022 YTD.
- Semiconductor chips (and certain flavors of potato chips) exports to China continue to be closely monitored to ensure that advanced technological know-how does not make its way to Beijing. Many politicians and potato farmers worry about China stealing US intellectual property. While it is unclear what potato chips have to do with this, it is presumed that many of the more exotic new flavors, especially “Flamin’ Hot Dill Pickle Remix”, require tremendous research and development.
93 Reasons to Stop Yer Whining
- American importers of technology products from China paid over $32 billion in “Trump tariffs” from mid-2018 to the end of 2021; a technology trade group is pushing the White House to look closely at removing Section 301 “Trump tariffs.”
- Spokespeople from the 93 countries around the world with an annual GDP below $32 billion offered a giant eye roll after taking the stage to comment. This is believed to be the only silent press conference in world history.
Airline Industry Turbulence
- Lufthansa, the German giant, has announced the cancellation of an additional 2,000 flights between now and the end of August, bringing the total number of YTD cancellations to 6,000 for the German giant. (Side note: German giants, including Lufthansa, also find airline snacks to be absurdly poor in size, quality, and nutrition. Yes, they do.)
- In a mixed snack bag of info, Cathay Pacific has announced so many conflicting results that friends are stopping by to check on the Chinese giant; June passenger traffic was up 270% vs 2021, yet still 95% lower than June 2019. After resuming a full freighter schedule, air capacity is greatly increased, while actual cargo volumes are down 4.4% year-over-year and lag 2019 by 36.2%; and, we think just to confound us all, Cathay also mentioned that their TOTAL air capacity now stands at 56% of pre-pandemic levels. Dear readers, we hope you have a very clever niece or nephew to help explain all of this!
- Speaking of confounding results, let us take a peek at some industry-wide air cargo trends: over the last five weeks, global airline capacity has increased 15%, while chargeable weight has declined a steep 8%; thus, global air rates are down, right? Wrong. Worldwide air cargo rates are in fact up an impressive 18%. We’re not sure whether to ask Cathay, or your niece/nephew to explain this one to us all!
- But wait, patient reader. IATA industry data indicate that route distances have a voice in this economics lesson. While IATA confirms the cooling of air cargo demand by volume, they also indicate that cargo ton kilometers are down only 2%, 2022 vs. 2019. And, the volatility of the passenger market means that the right space is not always in the right place at the right time (very much like the location of the good snacks we might expect on airplanes).
- Perhaps, the most revealing airline statistic of them all is that the industry expects to cut losses to $9.7 billion (with a “b”) in 2022. What a long, strange flight it has been for the world’s airlines since 2020.
Total Eclipse of the German GDP Heart
- This joke just never gets old! Please do consider this: only 40 countries in the world had higher GDP than the $300 billion made by ocean carriers in 2021. Some famous names on this list include Chile, Finland, Vietnam, and 147 more nations worldwide.
- If you really MUST know, German GDP is currently 12 times larger than the expected profits for the steamship industry in 2022, but 150 nations will make less!
