Manufacturing Matters

 Manufacturing Matters

Thursday, August 14, 2008 Issue 8, August 2008   VOLUME 2 ISSUE 8  
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U.S. Container Exports Still Dominated by Junk - Scrap Paper, Scrap Metal, and Bulk Commodities
Reprinted from Manufacturing News

The United States continued its years' long trend of exporting scrap paper and commodities, while importing orders of magnitude greater amounts of high value-added manufactured goods. In 2007, U.S. retail giants, Wal-Mart, Target, Home Depot and Sears were the four largest importers of ocean freight containers, at 720,000, 435,000, 365,300, and 248,600 twenty-foot equivalent container units (TEUs), respectively, according to data compiled by the Port Import/Export Reporting Service (PIERS) run by the Journal of Commerce.

The combined imports of the four companies -- 1,768,900 TEUs -- equaled the total exports of containers for the top 21 U.S. exporting companies. More than half of those 21 exporters filled containers with scrap paper. Most all of this waste is re-manufactured into cardboard to pack valuable manufactured goods for export back to the United States. Like the millions of products headed to American shores, it is cheaper to manufacture cardboard in China than it is in the United States.

But it was not all gloomy for the United States on the trade front. The depressed dollar has given exporters hope, and there was a 17 percent increase in container exports last year, while imports declined by 0.6 percent. Agricultural and food commodities led the charge with an increase of 131 percent. Chemical exports were up 51 percent, and automobile exports were up 48 percent.

"The demand for U.S. products is spreading to smaller manufacturers in the country's heartland that have never thought about shipping overseas," writes the Journal of Commerce's Peter Leach in an analysis of the annual PIERS data. "The trouble with this bright export picture is that as U.S. containerized imports slow, relatively few import containers wind up empty near the sources of U.S. exports."

America's largest exporter, in terms of volume via container, remained a company virtually unknown in the United States: American Chung Nam Inc. The Chinese company exported 211,300 containers of waste paper to its Chinese sister company, Nine Dragons Paper Industries. Its exports were one-quarter the amount of Wal-Mart's imports. American Chung Nam's cargo was worth virtually nothing in the United States.

Weyerhaeuser was the country's second largest export company, with 165,800 TEUs filled with paper. At least 10 of the 20 largest U.S. exporters shipped paper or waste paper in 2007; four others shipped bulk chemicals and one shipped scrap metal. Only one of the top 20 U.S. exporters was a U.S.-based product manufacturer: Procter & Gamble. The few remaining large U.S companies among the top 20 exporters via ocean container sold bulk chemicals, agricultural commodities or paper.

Few of America's top corporate giants were shipping manufactured goods via container to overseas markets. Mighty General Electric ranked 23rd among exporters with 41,200 container equivalents shipped. But the company imported three times that amount (112,900 containers) and was ranked 11th among importers. Caterpillar was in 27th place among exporters, behind 12 wastepaper exporters.

General Motors ranked in 68th place among exporters at 18,500 TEUs. Deere & Co. ranked in 77th place, exporting 16,300 TEUs, but it imported 13,800 TEUs. Whirlpool exported 15,400 containers, placing it 83rd on the list of exporters. The company had five times the level of imports (67,300 container equivalents), placing it 18th among importers.

Less than one-fifth of the top 100 exporters via ocean-going container could be considered diversified U.S. manufacturing firms. Among the top 100 exporters, at least 20 exported bulk food, feedstock or agricultural commodities; about 15 shipped bulk chemicals; and seven shipped scrap metals. Combined with the 20 scrap paper exporters, more than two-thirds of America's largest exporters via ocean container sold either junk, bulk chemicals or food commodities, exports typical of most Third-World nations.

It's a strikingly different story on the import side of the ledger. At least 35 of the top 100 importers are retail companies importing sophisticated manufactured consumer goods. The vast majority of other importers were high-tech manufacturing companies selling their goods to U.S. distributors and retailers. These well known companies include Canon, Nike, Philips Electronics, Samsung, Mattel, Sony, Panasonic, Michelin, Sharp, Adidas and many more. Eight of the top 100 importers were tire companies. Combined, they imported 200,000 containers of tires.

Shipping rates have gone up only marginally. There have been recent increases in fuel surcharges, but the basic, full rate for a 40-foot container to the United States from Asia remains a little above $4,000. For high-value products like flat screen televisions the amount spent on freight is marginal.

Nevertheless, rates for shipping exports are going up because many of the ships in the transpacific are at capacity. This does not mean they are full. It means that exports of cheaper commodities and waste paper are heavier than the imports. Ships are hitting their dead-weight capacity before they hit their cubic capacity. Rather than returning to China empty, "a shipping container that might be $4,000 this way, might be $1,000 filled with waste paper going back the other way," says Joe Bonney, editor of the Journal of Commerce.

Top 50 U.S. Importers Via Ocean Container Transport -- 2007

As measured in 20-foot-equivalent container units or TEUs

The first number listed for each company is the number of TEUs imported in 2007, followed by 2004 and 2002. NR means the company was not on the top 50 list for that year. SOURCE: Journal of Commerce and the Port Import/Export Reporting Service (PIERS).

  1. Wal-Mart Stores, retail, 720,000, 576,000, 291,900
  2. Target Corp., retail, 435,000 202,700, 173,100
  3. The Home Depot, retail, 365,300, 301,200, 182,000
  4. Sears (includes K-Mart), retail, 248,600, 186,000, 60,400
  5. Dole Food, food, 223,200, 164,100, 142,900
  6. Costco Wholesale, retail, 183,800, 66,400, 19,382
  7. Lowes Cos., retail, 182,100, 100,000, 82,900
  8. LG Group, conglomerate, 130,000, 43,300, 33,500
  9. Philips Electronics, electronics, 127,200, 27,200, 22,000
  10. Chiquita Brands Intl., food, 116,300, 115,600, 103,200
  11. General Electric, conglomerate, 112,900, 51,800, 48,500
  12. Ashley Furniture Inds., furniture, 104,700, 69,800, 45,200
  13. Heineken USA, beverages, 104,300, 83,400, 75,000
  14. Ikea Intl., retail, 102,000, 100,000, 44,700
  15. Jarden Corp., appliances, 74,700, 21,800, 14,600
  16. Red Bull, beverages, 72,500, 20,400, NR
  17. JC Penny Corp. 68,400, 45,000, NR
  18. Whirlpool, appliances, 67,300, 26,800, NR
  19. Canon, computers, 66,400, 26,200, 220,000
  20. Nike, footwear & apparel, 62,700, 47,900, 38,700
  21. Williams Sonoma, retail, 62,400, 50,000, 19,200
  22. Gap Stores, retail, 59,300, 14,800, 12,000
  23. Toyota Tsusho America, autos, 58,800, 52,000, 45,000
  24. Bridgestone Americas, tires, 52,300, 42,500, 26,800
  25. Dollar General, retail, 51,000, 40,000, NR
  26. Samsung, electronics, 50,800, 52,800, 46,200
  27. Pier 1 Imports, retail, 49,600, 48,100, 46,700
  28. Mattel, toys, 48,900, 49,300, 43,700
  29. Sony Corp., conglomerate, 46,900, 47,100, 40,000
  30. Big Lots, liquidator-retail, 46,600, 36,300, 45,800
  31. Daimler AG, autos, 46,500, 14,600, 14,200
  32. Family Dollar Stores, retail, 44,600, 19,300, 10,000
  33. Panasonic Corp., electronics, 43,300, 52,100, 41,500
  34. Furniture Brands Intl., furniture, 42,700, NR, NR
  35. Kohl's Corp., retail, 42,400, NR, NR
  36. Nestle, food & beverages, 40,400, 28,500, 14,300
  37. Dorel Industries, furniture, 39,900, 28,700, NR
  38. Michelin, tires & rubber, 38,700, 46,100, 34,500
  39. Staples, retail, 32,800, 13,200, NR
  40. Yamaha, transportation mfg., 32,000, 27,300, 24,600
  41. Del Monte Foods, food, 32,000, 32,400, 12,600
  42. Nissan North America, autos, 31,800, 27,700, 16,500
  43. American Honda, autos, 30,900, 10,300, 46,200
  44. Michaels Stores, retail, 30,600, 27,100, 14,600
  45. Hewlett-Packard, computers, 29,700, NR, NR
  46. Coaster of America, furniture, 29,500, 13,300, NR
  47. Hankook Tire Americas, tires, 28,800, 20,400, NR
  48. CVS Corp., retail, 28,000, 10,200, 16,000
  49. BMW, autos, 27,400, 14,200, 14,000
  50. Rooms to Go, retail, 27,200, 24,200, 19,800

Top 50 U.S. Exporters Via Ocean Container Transport -- 2007

As measured in 20-foot-equivalent container units or TEUs The first number is the number of TEUs exported in 2007, followed by TEUs exported in 2004 and 2002. NR means the company was not on the list of top 50 for that year. SOURCE: Journal of Commerce and the Port Import/Export Reporting Service.

  1. American Chung Nam, wastepaper, 211,300, 201,100, 156,500
  2. Weyerhaeuser, forest products/paper, 165,800, 154,900 95,600
  3. Cargill, food, 123,800, 80,600 51,200
  4. Koch Industries, paper, 123,400, 29,100, NR
  5. International Paper, paper, 100,900, 42,700, 50,100
  6. Dow Chemical, chemicals, 100,000, 64,700, 52,400
  7. DuPont, chemicals, 93,100, 123,000, 104,000
  8. MeadWestvaco, paper, 77,900, 66,800, 59,000
  9. P&G, consumer products, 73,800, 54,200,48,000
  10. Archer Daniels Midland, food, 73,300, 32,300, 17,700
  11. Potential Industries, wastepaper, 70,800, 22,300, 11,500
  12. Newport CH Intl., paper, steel recyclables, 69,700, NR, NR
  13. Sims Metal Mgmt., metals, recyclables, 69,600, NR, NR
  14. Cedarwood-Young, wastepaper, 64,900, 38,600, 21,000
  15. CGB Enterprises, agriculture, 57,500, NR, NR
  16. ExxonMobil Chemical, chemicals, 56,500, 44,300, 28,700
  17. Cellmark Group, paper, 54,200, 56,700, 45,100
  18. JC Horizon, waste paper, 53,000, 28,700, 25,400
  19. BASF, chemicals, 52,500, 50,200, 38,500
  20. Mega Fiber, waste paper, 44,300, NR, NR
  21. Denison Intl., recycled paper, 43,400, NR, NR
  22. DaimlerAG, autos, 41,700, 50,100, 47,000
  23. General Electric, conglomerate, 41,200, 50,000, 44,400
  24. Toyota Tsusho, autos/parts, 40,900, 28,100, 13,100
  25. Allenberg Cotton, cotton, 39,800, 45,900, 21,200
  26. AbitibiBowater, paper, 39,000, 18,900, 9,300
  27. Caterpillar, machinery, 37,300,. 23,500, 19,200
  28. Wal-Mart Stores, retail, 36,400, NR, NR
  29. Rayonier, paper & forest products, 35,500, 31,700, 26,900
  30. Mitsui, conglomerate, 34,900, 24,300, 24,300
  31. Eastman Chemical, chemicals, 34,800, 37,900, 21,500
  32. Staple Cotton Coop. Assn., 33,200, NR, NR
  33. Schoular Co., foodstuffs, 33,100, NR, NR
  34. Shintech, chemicals, 32,900, 22,300, 29,500
  35. Yao Yang Enterprises, wastepaper, 32,700, 29,400, 20,600
  36. Sino Paper, recycled paper, 32,300, NR, NR
  37. Tyson Foods, food, 31,300, 19,600, 44,100
  38. Itochu Specialty Chemicals, chemicals, 30,900, 26,700, NR
  39. Rio Tinto America, minerals, 28,900, 18,500, NR
  40. Kimberly Clark, consumer goods, 28,400, 23,900, NR
  41. Delong, animal feed, 28,400, NR, NR
  42. International Forest Products, paper, 28,400, 20,000, NR
  43. 3M, chemicals, 28,300, 16,800, 14,500
  44. Goodyear Tire & Rubber, tires, 27,300, 21,600, 19,000
  45. Dunavant Enterprises, cotton, 27,300, 32,600, 22,700
  46. Paul Reinhart, cotton, 27,000, NR, NR
  47. Ford Motor, autos, 26,800, 30,200, 32,300
  48. Mills Brothers Intl., food/grain, 26,800, 17,900, NR
  49. Fruit of the Loom, textiles, 26,300, 16,900, NR
  50. ConAgra Foods, food, 25,900, 27,400, 42,200
     

 


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