John McCown, a former shipping company CEO and transport hedge fund executive, debunks the faulty calculations in the Cato Institute’s analysis of the Jones Act as it applies to Puerto Rico.
Most container traffic from the US flows from Jacksonville FL to Puerto Rico. Containers headed to Puerto Rico must be carried in US-flagged hulls, due to the cabotage restrictions of the Jones Act.
It appears Cato Institute researchers’ figures are patently wrong, their methodology is flawed, and they have excluded several factors that would affect the Puerto Rico – US container trade link. Cato researchers came up with an 88% decline in the cost of shipping a container by their flawed technique. But Mr McCown’s spreadsheet says it is more like 10-12%, an amount that is hardly worth junking the Jones Act.
The purpose of the Jones Act is to maintain a capable US maritime segment. It embraces, for instance, container shipping between US ports, US shipbuilding, and US seamen and training, along with the stricter requirements for seamen’s well-being that a US flag puts into effect.
The Cato Institute seems to have aligned itself with some radical allies of the sitting US President. We don’t see why they would be so eager to cook the books on this issue. And we don’t understand why they insist on repeating their false conclusions even when they have been called into question by a serious critic, on fairly easily ascertainable facts.
It seems as though Cato is falling prey to the fake news fad, and won’t shut their collective mug when they are found out. It’s a good way to lose everyone’s respect.
via Commentary: Cato’s Jones Act numbers wrong
This article looking at Flexport now appeared recently under Cathy Morrow Roberson’s byline in The Loadstar. We enjoy hearing about what Flexport is doing now. But the idea that they are changing direction to become more like a 4PL is not the point. That’s where they were always going!! The press and financial folks may have perceived them as a technology play. But all along Ryan Petersen has intended to create a firm that actually helps customers manage their supply chains, by giving them visibility, a certain amount of in-depth analysis, and good service assistance in dealing among supply chain partners, temporary or permanent. I don’t think the vision has changed; just the world’s view of it.
Cathy Morrow Roberson via The Morrow-Roberson road test: Flexport – moving beyond freight forwarding – The Loadstar
July 22, 2019 in entrepreneurship, Logistics, Service Management, Supply Chains
Tagged 3PLs, entrepreneurship, innovation, Logistics, supply chains, technology, trade, transportation
Asim Anand writes in Platts agriculture report that China is suffering from substantial losses in their pig population due to African swine fever (ASF). The pig herd has declined by 20%, and that translates to less need for soybeans. Estimates run to 22 million mt less.
I’ve been watching the world soybean flows since 2014 when my colleague Cris Clott and I, working with Althea and Libby Ogard, and with help from Scott Sigman, wrote an article about the soybean flows and the possibilities for containerization of soybeans as opposed to bulk transport.
US soybean exports to China have fallen by 85% due to the imposition of a tariff of 25% on US products by China. So world wide there is a glut of soybeans and prices are dropping fast. Prices of US soybeans are under $9 per bushel, the lowest since 2016. (See graph from USDA-NASS).
Graph from https://www.nass.usda.gov/Charts_and_Maps/Agricultural_Prices/pricesb.php retrieved 2019-05-14.
We can expect this trend to continue, and as the trade war with China escalates, US soybeans will cease to be exported to China at all. Exports represent about half of the US production each year, and China is the largest customer. We can hope for a change, but I’m guessing this market is virtually gone for the US, as the other soybean-producing countries, Brazil and Argentina especially, move in and establish supply chains around the world.
via Swine fever set to reduce China’s soybean imports further: USDA | S&P Global Platts
May 14, 2019 in Logistics, My Research, Shipping, Supply Chains
Tagged China, economics, Logistics, soybeans, supply chains, technologies, trade, transportation