First a bit of a disclaimer. Most of the time when you see port data you are looking at Long Beach and/or Los Angeles as no other port in United States releases their data on a monthly basis. That being said LA and LB account for almost 50% of all port traffic in the United States. Finally this port traffic is comprised almost entirely of trade with Asia whether it be China, India, Thailand, Mongolia, etc. If it ships from Asia it usually finds its way to one of these ports.
So what is port date showing? Well at first glace the chart below shows that over the past few months trade has fallen off a cliff. On further review however you will notice that there are very pronounced seasonal tendencies in port data. From November through February each year port traffic slows down considerably. That being said you can still see that even with the seasonality factored in, that trade is nowhere near where it was pre-crash.
Combined LA and Long Beach Port Data
The green line represents all trade both imports and exports. It has yet to make a new high and is currently in a free-fall. The blue line represents imports and it looks even weaker as it has yet to make a high since 8/1/06. This tends to show that not only are we as consumers not consuming quite like we were but companies are not ordering like they were. The much vaunted inventory rebuild of the past year was barely enough to take import levels back above the high in 2008. Finally we have the red line which is exports. In a way this number is actually looking the best as it is steadily climbing. Still it is a long ways away from its peak formed in 8/1/08.
Port data is giving signals for a variety of things. How does this impact China, India, and the rest of Asia? How does this affect consumer discretionary stocks? We know that Apple has almost all of these containers filled with I-Pads, I-Pods, and I-Phones so who is not importing anything anymore? How does this affect shipping stocks? Why has the seasonality been so pronounced for so long? Don’t corporate purchasers look at the data and try to game shipping costs by ordering a few months earlier? And finally how is global trade going? As we can see it has improved but have the markets gotten ahead of themselves?
These are all questions where port data can be used to arrive at a conclusion. We are constantly surprised how few investors use these and other obvious, to us anyways, data points that can help you make an informed decision.
Disclaimer-We are long some stuff and short some stuff but none of it is directly related to port data.