Opinion: Digging Into the Trade Data

Aug 05 2015 |
China Jobs Lost Manufacturing Jobs Trade Trade with China
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American exports are going down, not up. Richard McCormack explains why.

In light of the trade data released today by the Commerce Department, AAM would like to provide our readers further insight with the following article.  The post below is an opinion piece written by award-winning journalist Richard McCormack, the founder and publisher of Manufacturing & Technology News. McCormack also served as the editor of the 2013 book on revitalizing manufacturing, ReMaking America. You can follow him on Twitter at @RichardAMc

Millions of Americans might think that the United States is an exporting powerhouse, given that President Obama, the U.S. Department of Commerce, and the U.S. Trade Representative talk constantly about the inexorable growth of exports and their importance to the U.S economy.

But when looking at the actual composition of exports in ocean-bound containers, the United States resembles more of a third-world country. And American exports are going down, not up.

For the first six months of 2015, exports of goods (at $767.4 billion) have fallen by 5.3 percent from the same period of 2014 (when they were at $810.6 billion), a decrease of $43 billion.

Photo Credit Todd Lappin

America's biggest exports by volume via ocean freight container remain waste paper and scrap metal, bulk agricultural commodities, and forest products. Its export volume and value pales in comparison to its imports of highly engineered and value-added high-tech manufactured goods, according to the latest analysis the Journal of Commerce and its Port Import Export Reporting Service (PIERS).

In 2014, the top 100 U.S. exporters via ocean-bound ships exported 4,093,000 twenty-foot-equivalents (TEUs) containers. But the country's top 100 importers imported more than 2 million more containers — 6,358,500.

The largest U.S. exporting company via ocean container is not an American manufacturing powerhouse like General Electric or General Motors. In fact, neither of those two companies made the list of top 100 U.S. exporters via ocean container. Instead, America's largest exporting company is headquartered in China: American Chung Nam. It exported 335,400 twenty-foot-equivalent unit (TEU) containers of scrap paper to its parent firm Nine Dragons Paper in Dongguan, China. This American-made garbage is then reconstituted as cardboard used to pack Chinese manufactured goods for shipment back to the United States.

A Revealing Breakdown

While American Chung Nam was the largest exporter via ocean container, America's largest importer was Walmart at 775,400 TEUs — well more than double the amount of containers for the leading exporter.

Of the top 100 exporters via ocean containers, 30.4 percent of them sold waste paper, scrap metals, and plastic recyclables; 17.6 percent were conglomerates; 14.1 percent sold finished paper, packaging materials, and forest products; 12 percent sold agricultural grains, feeds, and cottons; 9.5 percent sold chemicals, plastics, and minerals; 6.4 percent sold grocery foodstuffs; 6 percent sold other manufactured goods; 2 percent were retailers; and 2 percent were U.S. government and military organizations shipping stuff to their overseas outposts.

Photo Credit Ingrid Taylar

In simple numbers, five of America's top 10 exporters via ocean containers sold recyclables.

  • American Chung Nam has been the leading U.S. exporter of ocean-bound containers for more than a decade, but its export volumes are declining. At 335,400 containers in 2014, shipments are down from 374,000 containers in 2013, and from 354,000 containers in 2011.
  • The second largest U.S. exporter via ocean container in 2014 was Koch Industries, filling its 239,800 containers with mostly paper produced by subsidiary Georgia-Pacific, along with fibers and fertilizers.
  • Third on the list of biggest American exporting companies was International Paper, exporter of 157,300 containers of paper.
  • The fourth biggest U.S. exporter was DeLong Co. a supplier of food grains, at 111,900 containers.
  • In fifth spot among the U.S. exporting juggernauts was another unknown entity: Denison Intl., a company that last year exported 104,000 containers of waste paper to China.
  • Sixth place on the list was DuPont, which exported 102,500 containers of bulk chemicals.
  • In seventh place at 93,800 containers was MeadWestvaco, a maker of "global packaging solutions."
  • Eighth place in 2014 was held by Sims Metal Management with 84,400 containers filled with scrap metal and dead electronics.
  • Ninth place among American exporting powerhouses was held by Newport CH International, which filled 80,500 containers of waste paper, waste plastics, and scrap metals headed mostly to China.
  • Rounding out the top ten of America's greatest exporting companies via ocean containers was Potential Industries, an exporter of waste paper and cardboard, filling 78,200 TEUs.

The first real manufacturer of highly engineered discrete products on the list of the top 100 U.S. exporters in 2014 was Caterpillar in a distant 30th position with 46,100 containers (down two spots from 2013 when it shipped 47,200 containers). Next among American manufacturers was Procter & Gamble, in 37th place with 33,600 containers shipped (down from 36,000 containers of exports in 2013). Ford Motor was in 47th place with 26,900 containers (down from 28,800 containers in 2013). Deere finished in 51st place with 25,700 containers of exports.

Walmart Remains Import King

Meanwhile, the import side of the container trade ledger is dominated by American retailers and large foreign technology companies. Retailers accounted for 53.6 percent of the imports via ocean container as measured by PIERs, followed by grocery foodstuffs (13 percent); manufactured goods not including apparel and footwear (11.4 percent); conglomerates (10.4 percent); motor vehicle parts, tires, and equipment (8 percent); and apparel and footwear (4 percent).

Photo Credit aushiker
  • The biggest importer of containers in 2014 was, once again, WalMart, with its more than 775,000 TEUs. (The company spread those out to its 5,212 retail locations in the United States.)
  • That was well past Target in second place, which supplied its 1,795 stores with 521,300 containers.
  • Third place: The Home Depot, at 342,400 containers supplying 2,270 stores.
  • Lowes took the fourth spot with 249,000 containers of imports, supplying 1,840 U.S. stores.
  • In fifth place was Dole, importer of fruits and vegetables, at 199,600 containers.
  • In sixth place, stood Sears (and its Kmart division), at 179,000 containers to supply 1,700 U.S. stores.
  • Seventh place in imports via ocean container was Chiquita Brands Intl., importer of fruits and vegetables, at 171,000 container equivalents.
  • Eighth place stood beer maker Heineken at 149,700 containers.
  • Samsung was in ninth place in 2014, importing 147,000 containers of high-tech electronics.
  • And in tenth place among American importers: Family Dollar Stores /Dollar Tree at 135,100 containers.

Export volume for the top 10 U.S. exporters decreased from 1,454,700 20-foot equivalent units in 2013 to 1,387,800 in 2014. In June of this year, exports at the Port of Los Angeles and Long Beach declined by 10.4 percent compared to the same month in 2013, according to the Journal of Commerce.