The US Department of Transportation (DOT) released data showing United States overall surface (rail, truck, and pipeline) trade decreasing with Canada and Mexico in September 2009 vs September 2008.
DOT figures show the US had $12.663 billion of imports from Mexico via surface transportation in September 2009 vs. $13.596b in September 2008 and $11.907b in August 2009. Exports fell to $9.864b in September 2009 vs $11.427b in September 2008 and $9.421b in August 2009. Total commerce was $22.527b in September 2009 vs. $25.023b in September 2008 and $21.328b in August 2009, a negative 10.0% change in September vs. September value.
DOT figures show the US had $18.154b of imports from Canada via surface transportation in September 2009 vs. $26.708b in September 2008 and $16.955b in August 2009. Exports fell to $16.612b in September 2009 vs $20.069b in September 2008 and $15.971b in August 2009. Total commerce was $34.766b in September 2009 vs. $46.778b in September 2008 and $32.925b in August 2009, a negative 25.7% change in September vs. September value.
These figures show an interesting trend where despite economic weakness in year-over-year value of trade, exports from the United States to Mexico and Canada fell; but, interestingly the fall in exports and imports to/from Canada was greater than the fall in Mexican-U.S. trade data. Despite swine flu and crime issues in Mexico, US surface trade with Canada fell far more sharply. Nearsourcing looks at the statistics beyond the immediate news stories to evaluate these trends. For longer-term comparison, US exports to Canada and Mexico are up 38.4% vs September 1999 level while imports are up 27.2%. Total surface trade was up 4.3% vs. the level of September 2004.
Thursday, December 31, 2009
Friday, November 6, 2009
Data: US Surface Trade for August
The US Department of Transportation (DOT) released data showing United States overall surface (rail, truck, and pipeline) trade decreasing with Canada and Mexico in August 2009 vs August 2008.
DOT figures show the US had $11.907 billion of imports from Mexico via surface transportation in August 2009 vs. $14.016b in August 2008 and $11.294b in July 2009. Exports fell to $9.481b in July 2009 vs $11.448b in August 2008 and $9.23b in July 2009. Total commerce was $21.328b in August 2009 vs. $25.464b in August 2008 and $20.524b in July 2009, a negative 16.2% change in August vs. August value.
DOT figures show the US had $16.957b of imports from Canada via surface transportation in August 2009 vs. $26.804b in August 2008 and $16.317b in July 2009. Exports fell to $15.971b in August 2009 vs $19.986b in August 2008 and $14.703b in July 2009. Total commerce was $32.925b in August 2009 vs. $46.971b in August 2008 and $31.020b in July 2009, a negative 29.6% change in August vs. August value.
These figures show an interesting trend where despite economic weakness in year-over-year value of trade, exports from the United States to Mexico and Canada fell; but, interestingly the fall in exports to Canada was less than the fall in imports while the reverse is true in Mexican-U.S. trade data. Also, despite swine flu and crime issues in Mexico, US surface trade with Canada fell far more sharply. Nearsourcing looks at the statistics beyond the immediate news stories to evaluate these trends. For longer-term comparison, US exports to Canada and Mexico are up 35.5% vs August 1999 level while imports are up 18.8%. Total surface trade was up 1.3% vs. the level of August 2004.
To view the US DOT release, please see:
http://www.bts.gov/press_releases/2009/bts051_09/html/bts051_09.html
DOT figures show the US had $11.907 billion of imports from Mexico via surface transportation in August 2009 vs. $14.016b in August 2008 and $11.294b in July 2009. Exports fell to $9.481b in July 2009 vs $11.448b in August 2008 and $9.23b in July 2009. Total commerce was $21.328b in August 2009 vs. $25.464b in August 2008 and $20.524b in July 2009, a negative 16.2% change in August vs. August value.
DOT figures show the US had $16.957b of imports from Canada via surface transportation in August 2009 vs. $26.804b in August 2008 and $16.317b in July 2009. Exports fell to $15.971b in August 2009 vs $19.986b in August 2008 and $14.703b in July 2009. Total commerce was $32.925b in August 2009 vs. $46.971b in August 2008 and $31.020b in July 2009, a negative 29.6% change in August vs. August value.
These figures show an interesting trend where despite economic weakness in year-over-year value of trade, exports from the United States to Mexico and Canada fell; but, interestingly the fall in exports to Canada was less than the fall in imports while the reverse is true in Mexican-U.S. trade data. Also, despite swine flu and crime issues in Mexico, US surface trade with Canada fell far more sharply. Nearsourcing looks at the statistics beyond the immediate news stories to evaluate these trends. For longer-term comparison, US exports to Canada and Mexico are up 35.5% vs August 1999 level while imports are up 18.8%. Total surface trade was up 1.3% vs. the level of August 2004.
To view the US DOT release, please see:
http://www.bts.gov/press_releases/2009/bts051_09/html/bts051_09.html
Wednesday, October 21, 2009
The U.S. Dollar and Nearsourcing
The overall depreciation of the United States dollar against most currencies also affects nearsourcing. As with essentially any economic news, there are pros and cons with any event and statistic.
Cons of a depreciating dollar for those in the United States or a dollarized country such as El Salvador include less purchasing power for imports from non-US dollar countries, normally higher prices for US dollar-denominated products, particularly crude oil, and the potential for inflation from an oversupply of dollars in the global market. The lower purchasing power also hurts countries such as Mexico and Canada with substantial trade and tourism with the United States.
Pros include more competitive global position for export and increased advantage at home for domestic companies as the prices of imports rise.
The strategic questions include how do these results affect a nearsourcing company, how long will this depreciation last (is it cyclical or secular), and how will other countries react (such as China)?
Nearsourcing means evaluating all options and factors. A depreciating United States dollar is a serious factor in a decision to place manufacturing in America, Guatemala, or Asia.
Cons of a depreciating dollar for those in the United States or a dollarized country such as El Salvador include less purchasing power for imports from non-US dollar countries, normally higher prices for US dollar-denominated products, particularly crude oil, and the potential for inflation from an oversupply of dollars in the global market. The lower purchasing power also hurts countries such as Mexico and Canada with substantial trade and tourism with the United States.
Pros include more competitive global position for export and increased advantage at home for domestic companies as the prices of imports rise.
The strategic questions include how do these results affect a nearsourcing company, how long will this depreciation last (is it cyclical or secular), and how will other countries react (such as China)?
Nearsourcing means evaluating all options and factors. A depreciating United States dollar is a serious factor in a decision to place manufacturing in America, Guatemala, or Asia.
Friday, October 2, 2009
"Buy American"
One example of the role of political environment in manufacturing is the "Buy American" policy as part of the Obama Administration's stimulus program. This clause requires stimulus-funded programs to only source from United States companies, unlike for example the "Cash for Clunkers" car program which allowed consumers to buy non-American automobiles.
"Buy American" restrictions have been supported by some legislators, manufacturers, and unions.
As mentioned in the article below, this policy can lead to protectionist charges from trading partners, who may in turn impose restrictions on American products. It also has problems with content as often components can cross borders or an "American" supplier may actually be foreign-owned and qualify while a U.S. company's subsidiary abroad is disqualified. In addition, free trade proponents would point as possible losses in quality, competition, consumer prices, and opportunity cost.
Nearsourcing emphasizes the need to have possibilities for location, beyond simple mandates or the lowest-cost-always-wins approach.
http://online.wsj.com/article/SB125314622440117989.html?mod=wsj_share_facebook#
"Buy American" restrictions have been supported by some legislators, manufacturers, and unions.
As mentioned in the article below, this policy can lead to protectionist charges from trading partners, who may in turn impose restrictions on American products. It also has problems with content as often components can cross borders or an "American" supplier may actually be foreign-owned and qualify while a U.S. company's subsidiary abroad is disqualified. In addition, free trade proponents would point as possible losses in quality, competition, consumer prices, and opportunity cost.
Nearsourcing emphasizes the need to have possibilities for location, beyond simple mandates or the lowest-cost-always-wins approach.
http://online.wsj.com/article/SB125314622440117989.html?mod=wsj_share_facebook#
Data: US Surface Trade for July
The US Department of Transportation (DOT) released data showing United States overall surface (rail, truck, and pipeline) trade decreasing with Canada and Mexico in July 2009 vs July 2008.
DOT figures show the US had $11.294 billion of imports from Mexico via surface transportation in July 2009 vs. $13.447b in July 2008 and $10.962b in June 2009. Exports fell to $9.23b in July 2009 vs $11.319b in July 2008 and $8.783b in June 2009. Total commerce was $20.524b in July 2009 vs. $27.266b in July 2008 and $19.745b in June 2009, a negative 17.1% change in July vs. July value.
DOT figures show the US had $16.317b of imports from Canada via surface transportation in July 2009 vs. $26.794b in July 2008 and $15.971b in June 2009. Exports fell to $14.793b in July 2009 vs $20.068b in July 2008 and $15.037b in June 2009. Total commerce was $31.02b in July 2009 vs. $48.862b in July 2008 and $31.008b in June 2009, a negative 33.8% change in July vs. July value.
These figures show an interesting trend where despite economic weakness in year-over-year value of trade, exports from the United States to Mexico and Canada fell; but, less than the rate US imports. Also, despite swine flu and crime issues in Mexico, US surface trade with Canada fell far more sharply. Nearsourcing looks at the statistics beyond the immediate news stories to evaluate these trends.For longer-term comparison, US exports to Canada and Mexico are up 48.6% vs July 1999 level while imports are up 30.1%. Total surface trade was up 7.2% vs. the level of July 2004.
To view the US DOT release, please see: http://www.bts.gov/press_releases/2009/bts046_09/html/bts046_09.html
DOT figures show the US had $11.294 billion of imports from Mexico via surface transportation in July 2009 vs. $13.447b in July 2008 and $10.962b in June 2009. Exports fell to $9.23b in July 2009 vs $11.319b in July 2008 and $8.783b in June 2009. Total commerce was $20.524b in July 2009 vs. $27.266b in July 2008 and $19.745b in June 2009, a negative 17.1% change in July vs. July value.
DOT figures show the US had $16.317b of imports from Canada via surface transportation in July 2009 vs. $26.794b in July 2008 and $15.971b in June 2009. Exports fell to $14.793b in July 2009 vs $20.068b in July 2008 and $15.037b in June 2009. Total commerce was $31.02b in July 2009 vs. $48.862b in July 2008 and $31.008b in June 2009, a negative 33.8% change in July vs. July value.
These figures show an interesting trend where despite economic weakness in year-over-year value of trade, exports from the United States to Mexico and Canada fell; but, less than the rate US imports. Also, despite swine flu and crime issues in Mexico, US surface trade with Canada fell far more sharply. Nearsourcing looks at the statistics beyond the immediate news stories to evaluate these trends.For longer-term comparison, US exports to Canada and Mexico are up 48.6% vs July 1999 level while imports are up 30.1%. Total surface trade was up 7.2% vs. the level of July 2004.
To view the US DOT release, please see: http://www.bts.gov/press_releases/2009/bts046_09/html/bts046_09.html
Tuesday, September 22, 2009
Political Stability and Site Selection
With the reappearance of ousted President Miguel Zelaya in Honduras, it seems fitting to look at the role of political stability in site selection.
Honduras, according to the International Development Bank, has a low cost of mandatory benefits and low level of labor regulations affecting competitiveness (combined ranked the lowest in Latin America in 2000 by the IDB). These statistics seem to promote Honduran competitiveness.
Yet, there are other issues such as labor force education, resources, and infrastructure. There is also the issue of political stability.
Honduras is facing a situation with a deposed president holed up in the Brazilian embassy in Tegucigalpa and demonstrations for and against Zelaya's return. In addition, the country is under some international pressure from expected sources (Hugo Chavez in Venezuela) as well as the EU, Canada and United States.
For a site study, there are questions such as will civil unrest grow? Will trading partners impose more restrictions? Will there be moral pressure and boycotts from pressure groups? All of these are variables in choosing whether Honduras makes a wise choice.
It is the same for all sites. Will the 2010 United States congressional elections change the makeup of Congress and party leadership? Will Canada continue under Tory minority government? What about the economic pressure and growing discontent facing Chavez? A death or two among the Castro brothers in Cuba? Is it worth the higher labor and location costs in Costa Rica in exchange for greater stability?
These are all questions that a serious site selection for nearsourcing must consider.
Friday, September 11, 2009
Importance of Infrastructure
Nearsourcing includes evaluating the total business environment, be it labor costs, government stability, local economy, transportation, energy, or infrastructure.
The recent series of five water main breaks in Los Angeles in a week are a small example of the importance of evaluating a potential business site. One gas station estimates $22,000 in lost business per day from one break, with the relevant street being closed at least a week. Some of the broken water mains date from 1914 and were on a list for eventual replacement; but, the replacement came too late for those people and businesses affected.
The recent series of five water main breaks in Los Angeles in a week are a small example of the importance of evaluating a potential business site. One gas station estimates $22,000 in lost business per day from one break, with the relevant street being closed at least a week. Some of the broken water mains date from 1914 and were on a list for eventual replacement; but, the replacement came too late for those people and businesses affected.
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