WASHINGTON, DC: The Cass/INTTRA ocean freight index for June shows U.S. container exports continue to decline and have dropped 8.4 percent overall this year. Author Rosalyn Wilson cites a global economy "still struggling to recover" as the main cause.
The import container index dropped 3.7 percent from May, following the slight 0.8 percent decline in April. U.S. import orders remained weak in the first half of the year and contributed to a 5.7 percent year-to-date decline.
Imports from China fell for the third month in a row, but China's new export orders rose in June, signalling a rise in U.S. imports in the coming months. China excluded, there was a 2.0 percent rise in imports from other Southeast Asian countries according to the index.
"Globally, economic performance for the first half of 2014 was dismal, driving the global GDP growth rate down to 2.5 percent. This is the level traditionally used to demarcate growth or recession. The U.S. was no exception, but a more robust second half is expected because consumers are beginning to drive the economy once again," Wilson notes.
With an improving job market and declining unemployment, a rise in consumer spending has been the "missing element" in the country's economic recovery. "Household wealth has risen for the upper tiers of U.S. earners and this has generated more spending, which trickles down to more work and income for lower-end earners," she adds.
In her annual report for the Council of Supply Chain Management Professionals (CSCMP) published in June, Wilson says total U.S. logistics costs rose to US$1.39 trillion in 2013, a 2.3 percent increase over the previous 12 months.
However, she points out, the logistics industry declined for the second consecutive year as a percent of U.S. GDP while shipments got heavier and truck drivers got scarce. She says the driver issue remains a "top concern" for CSCMP due to a lack of personnel for existing capacity; a decline in productivity due to new hours of service regulations; and an increase in company trucking bankruptcies - just as the U.S. economy is apparently picking up.