U.S. government figures show exports have flattened out this year.
The value of goods and services exported during the first five months of the year increased 5.6 percent from the same period in 2011. Overseas shipments of goods climbed 6.3 percent. Those figures are below the pace of 14.5 percent and 16.7 percent in annual export growth the previous two years.
A big reason for the cool down is weaker consumption in other countries. China's economy grew 7.6 percent in the second quarter, down from 8.1 percent Gross Domestic Product in the first quarter for a country that has been used to red-hot annual growth near, or above, 10 percent for a long time, except during the recent global recession.
China is the United States' third largest export market, but regulations to dampen real estate speculation, less demand for Chinese products due to weak economies in Europe and the United States and the completion of a massive round of infrastructure projects funded by the government to stimulate economic activity during the recession have slowed productivity there.
Several U.S. companies have lowered their sales forecasts because of weaker demand in China.
Meanwhile, the United Kingdom and other parts of Europe are in recession, and South American growth is gradually slowing.
In May, the United States actually narrowed its trade deficit to $48.7 billion in May.
One of the ramifications of 20 years of trade deficits has been an imbalance between flows of loaded import and export containers. Many containers simply are returned empty to overseas manufacturing hubs because there are not enough exports to fill them.
In recent years, though, U.S. shippers have faced challenges gaining access to containers because their plants or farms are often not located near major population centers along the coast. Ocean carriers have determined it's cheaper to get empties back on the ship to service their import pipeline than letting the boxes travel to customers in the interior of the country and then having to manage the return of their equipment by truck or rail.
Greg Tuthill, a senior vice president of sales and marketing for NYK Line (North America), recently explained that seasonality is another reason for the equipment imbalance in the United States.
The surge in U.S. agricultural exports in March typically precedes the spring increase in merchandise imports, he said June 25 in Chicago at a seminar on the nation's export opportunities hosted by the Containerization & Intermodal Institute.
U.S. container imports typically tail off in January and February after the holiday season before picking up, but the timing doesn't coincide with the peak agricultural season for many commodities, he said.
"So we need to figure out ways to balance these cycles," he said.
(For an update on the Obama administration's National Export Initiative and why export growth will be hard to sustain, read the feature story "Boosting U.S. Competitiveness"
in the August issue of American Shipper
.) - Eric Kulisch