Cargo Business News

December 2011

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Trade Trends 13 By Josh GREEN, CEO, Panjiva, 2012: Expect the unexpected As 2011 draws to a close, it's time to take stock of where we are, and look ahead to 2012. In some respects, 2011 was not a terribly exciting year for global trade. Despite bullish predictions that 2011 would be a year of recovery, as well as bearish predictions that 2011 would bring us a double dip, 2011 looked a lot like 2010 — at least as far as the overall numbers are concerned. Kind of remarkable, given all that was going on in the world. Commodity prices were all over the place, wage rates continued to rise in China, there was revolution in the Arab world, and there were debt crises everywhere. And yet global trade, by the numbers, held its ground. I, for one, think we caught a break. Things could have been a lot worse. Heading into 2012, there are reasons for optimism. Consumer holiday spending looks strong and the U.S. job picture is starting to look a bit brighter. On the flip side, however, a solution to Europe's debt problems continues to elude EU political leaders, and China's recent moves to loosen credit suggests that Chinese leadership isn't feeling particularly bullish about the prospects for their export sector. At least with respect to global trade, count me among the bulls. The global trading system has survived a few lean years and shown itself to be quite resilient to macro- fluctuations. And any signs of life in the U.S. economy will give global trade a boost. Things that could push us into bearish territory? The collapse of efforts to salvage things in the Euro zone, a bursting of the Chinese real estate bubble, and a new round of protectionism (don't forget the 2012 election is coming up!). What else can we expect? First, companies will continue to grow less excited about China as a sourcing destination and more excited about China as an export market. Second, the pendulum will continue to swing away from supplier consolidation to supplier diversification. In these respects, 2012 will feel a lot like 2011. But, as always, since we're talking about global trade after all, we should expect the unexpected. December 2011 T

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