Monday, October 22, 2012

Global Trade and Port Data Seasonality

One of the many indicators that we track is that of the Los Angeles and Long Beach port data. Combined, these two ports handle almost 50% of the shipping traffic for the United States, so they are obviously useful in order to follow global trade. As you can see in the chart, port data is very seasonal. You can see that total trade (the green line) typically peaks in October and typically bottoms in February. Sometimes this cycle is off by a month in either direction, but for the most part it’s very consistent.

LA and Long Beach Port Data

(Click to enlarge)

While total shipping volume, outbound plus inbound containers, is down over 25% from the peak back in September of 2007, it is important to look at the same month due to seasonality. Looking at shipping volume from February 2010 against the peak February in 2007, shipping is down -13.7% or 118,562 containers.

So is trade improving or getting worse? By breaking the data down into performance by month we can see if this January and February are better or worse than other years. In the chart below, you can see that in both January and February 2010 the level was slightly above their historical averages. On average, January sees traffic shrink by -3.10%, but this year it only shrank by -3.05%. February sees an average decline of -4.42%, but for 2010 it only declined -2.89%.

Port Data Seasonality For Jan And Feb

(Click to enlarge)

Frankly, right now the data isn’t screaming at us. Numbers are coming in close to the historical norms, but overall there is little to get to worked up about. Basically, port data is currently telling us that the recovery is still in progress, but that nothing is really improving or declining. What would be a constructive sign would be to see higher March data, where we have a historical average increase of 10.69%. A large miss would be a bad sign, while an average or even slightly higher number would be considered by us to be very bullish.

Disclosure: No positions

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