I traded emails with Panjiva's Josh Green earlier this week regarding his analysis of the firm's latest look into global trade data. According to a recent post on Panjiva blog, "between January 2009 and February 2009, we saw a 10% drop in global manufacturers shipping to the US (118,000 companies vs. 131,000)". It's worth noting that there is no seasonality to this number. Josh writes that this time last year, there was actually "a very slight increase in the number of companies shipping to the United States (from ~147K to ~148K)".
Based on these trends, I asked Josh for his view about how companies should use this information to take action to reduce their global supply risk. He responded that the "best approach is to do a deep dive on your key suppliers. Collect as much data as possible, from as many sources as possible, and assess which of these key suppliers are in danger of failing. But make sure to avoid two things: 1) The ostrich approach (sticking your head in the sand and hoping that risk won't affect you); 2) Spreading yourself too thin (spending weeks or months trying to analyze every single supplier before taking action)."
I also was curious to get Josh's perspective on the chance that global suppliers are merely shifting their sales efforts into local markets and whether he had any thoughts or anecdotal evidence that global suppliers are weathering the global shipping decline by taking this approach. He responded: "I don't have any examples of companies that are shifting to a domestic focus, but I hope it's happening -- for the suppliers' sake, and for their international buyers who can't currently support their suppliers with larger orders, but who will need these suppliers when the economy turns around." Personally, I'm aware of at least one Chinese supplier who is making the shift to a local focus. But it's a tough move in the face of falling local demand.