Panjiva's Latest Trade Tea Leaves — Volume is Up But Not Great

US import trade volume appears to be continuing its seasonally adjusted march in the right direction, according to a fairly recent Panjiva analysis. According to Panjiva, "The number of waterborne shipments coming into the U.S. saw a healthy 11% year-over-year increase in April." Moreover, "there was a 3% increase in the number of global manufacturers shipping to the U.S. market, as well as a 2% increase in the number of U.S. companies receiving waterborne shipments from global manufacturers," in April.

In addition, Panjiva suggests that the "percentage of significant manufacturers on the Panjiva Watch List fell to its lowest level yet, down 1% from March to 17% this month." Panjiva also suggests that we should take into account that "year-over-year comparisons are a bit misleading, since global trade was a mess this time last year" and also "that the recent turmoil in global financial markets could jeopardize global trade's nascent recovery." Still, I think that there might be some reason for near-term import optimism (and potential export woes, I might add, as well). And that's the fact that the US dollar has gained against a major world basket of currencies in recent weeks, making imports cheaper and US exports more expensive. Still, the more important factor we should be watching when it comes to trade data and volume is the potential for yet another economic crisis and meltdown, this time based on the European credit and financial markets. If our economy falters, trade will as well.

Given the potential of global supply risk in another downturn -- or more accurately, a double-dip recession -- sourcing organizations should make sure to identify secondary supply options closer to home whenever possible. And if they can, they should also turn to insurance brokers and advisors like March and Aon to underwrite supply risk insurance products for them.

Stay tuned for additional Spend Matters supply risk analysis next week, when we will take a look at ADR's supply risk advisory approach and methodology. I'm sure you'll find it as impressive as I did when they shared it with me.

Jason Busch

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