Paper Routes

Which comes first, the cardboard or the box? The annual Journal of Commerce Top 100 Importers and Exporters rankings bring the chicken-and-egg conundrum to mind.

But the real truth behind the list is that shipping in 2011 shows stark signs of the intertwined state of the global economy. Most U.S. exports of scrap paper are destined for Asia, where they’re recycled into corrugated cardboard used to ship flat-screen TVs, electronic gadgets and other consumer goods.

That makes wastepaper exports a leading indicator of container imports. A spike in exports of recycled paper often signals future increases in shipments of consumer products to the United States and Europe.

Look what happened in 2009, at the depths of the recession. While U.S. containerized imports fell 15.1 percent that year, wastepaper exports jumped 9.2 percent to nearly 1.7 million 20-foot-equivalent units.

The weak dollar contributed to the increase by making U.S. products more affordable, but the main driver was optimism about future exports from Asia. In 2010, as companies moved to rebuild inventories, U.S. containerized imports rebounded 14.3 percent.

This year’s Top 100 Exporters list includes 19 specialists in recycled paper or metals. America Chung Nam expanded its perennial lead in the Top 100 Exporters rankings with 300,800 TEUs, well ahead of International Paper’s 128,000 TEUs.

Besides recycling companies, the exporters list was dominated by forest products companies and chemical makers (15 each), agricultural products exporters (14) and food producers (seven).

On the import side, mass merchants dominate. Retail giants Wal-Mart, Home Depot, Target, Lowe’s are in the Top 10. The Top 100 Importers list also includes healthy representation from automakers, chemical companies, electronics companies and toymakers.

Several companies made the Top 100 in imports and exports. Wal-Mart was the largest among them as the top importer and the No. 39 ranking on the export list.

What this shows is that the global sourcing, made possible by containerized shipping, is an entrenched feature of manufacturing and distribution. Cargo interests gripe about costs and delays, but liner shipping remains one of the world’s great bargains. How else could shippers find it feasible to source products from the other side of the globe?

Behind the numbers in the Top 100 Importers and Exporters rankings is the continuing shift in distribution patterns by companies searching for lower costs. Consider furniture, the largest U.S. import commodity category.

Over the last two decades, U.S. furniture manufacturing has steadily lost market share to cheaper foreign competition led by China. Yet The Washington Post last week described the futile attempts of U.S. manufacturers to use anti-dumping tariffs to restrict imports of bedroom furniture.

Since the tariffs took effect in 2004, U.S. imports of Chinese-made beds, nightstands and related goods dropped from $1.2 billion to $691 million. But that business didn’t move to the United States. Instead, many manufacturers merely shifted production to Vietnam, whose U.S.-bound shipments of the same goods jumped from $151 million to $931 million.

And that adds up to a lot of cardboard boxes.

Contact Joseph Bonney at jbonney@joc.com.
 

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