US Container Exports Slowed in Second Quarter

The growth of U.S. containerized exports slowed in the second quarter as overseas demand for pet and animal feeds tumbled, according to Mario Moreno, chief economist for The Journal of Commerce and its sister company PIERS.

U.S. containerized exports rose 6 percent in the second quarter year-over-year to a total of 2,970,227 20-foot-equivalent units of container after expanding by 12 percent in the previous quarter.

Exports of the second-largest commodity, pet and animal feeds, which mostly include DDGs, or distillers dried grains, contracted 25 percent, or nearly 40,000 TEUs, to a total of 120,629 TEUs.

By the Numbers: A 10-Year Profile of U.S. Containerized Exports

The deep decline in TEU volume, which followed a 6 percent gain in the previous quarter, is due to lackluster demand from China, resulting from its ongoing antidumping investigation against U.S. DDGs.

Pet and animal feeds shipments to China dropped 59 percent year-over-year in the quarter. Other declining export shipments included synthetic resins (down 10 percent) and fabrics, including raw cotton (down 4 percent).

On the upside, scrap paper led the gains, climbing 9 percent (or 37,152 TEUs) to a total of 432,475 TEUs, while metal scrap, ferrous and pig iron expanded 56 percent (or 24,848 TEUs) to a total of 69,466 TEUs. Moreno said these increases are positive in the current environment of a global manufacturing slowdown because both of these commodities play a key role in the manufacturing chain.

Other notable gainers included logs and lumber (+25 percent), motor vehicles (+23 percent), vinyl alcohol, PVC resins (+44 percent) and grains and flour products (+38 percent).

On a regional level, exports to Northeast Asia rose by the most, up by 5 percent (or 64,502 TEUs) to a total of 1,282,130 TEUs, followed by Northern Europe up by 12 percent (or 39,680 TEUs) totaling 372,606 TEUs.

On the downside, exports to the Caribbean dropped 5 percent (or 6,257 TEUs) to a total of 126,898 TEUs.

On a country level, exports to top market China gained the most volume, albeit at a slower pace than in the first quarter.  Exports to China rose 6 percent (slower than the 14 percent increase in the first quarter) led by gains in scrap paper, logs and lumber, and wood pulp.

U.S. meat exports jumped by 535 percent as rising incomes in the world’s most populated nation are improving diets and spurring a remarkable demand for the mentioned commodity.

In addition, higher incomes and favorable exchange rates prompted a solid Chinese demand for U.S. motor vehicles, up 40 percent in the quarter. Among the largest decliners were Italy (-16 percent), Indonesia (-6 percent) and Japan (-1 percent).

Overall exports fell 2.1 percent in June as gains in metal scrap and grains and flour products couldn’t offset deep losses in pet and animal feeds and fabric, including raw cotton. On a month-over-month basis, exports slid 1 percent in the second quarter this year from a year earlier. For the year-to- date through June, overall U.S. containerized exports increased 9 percent.

-- Contact Peter T. Leach at pleach@joc.com. Follow him on Twitter @petertleach.