China's surge past Japan in GDP is making headlines worldwide as its economy grows to match that of the U.S. Less heralded are more specific trade-related metrics for these Pacific countries that do not bode well at all for the U.S. and its transportation sector.
U.S. trade with Japan is at its lowest dollar value since 1992, immediately after the peak of Japan-phobia in the States. Adjusting for the weaker dollar indicates that American goods are probably much less desirable to Japanese consumers. Japan will be even less inclined to spend more on U.S. goods given its economic weakness. The U.S. administration's plan to double exports in five years will have to find some other market.
Container traffic has passed its peak now that the U.S. recovery is dying. Inventories are rising across the board as many industries find that they ordered too much too fast. Transporters had a jolly good time shipping peak loads while that lasted.
The larger lesson for investors in any of this news is that right now is a very poor time to invest in U.S.-based transportation stocks. U.S. trade is suffering, especially in the Pacific, and tonnage is about to drop. I'll wait this one out for some very cheap transportation stocks in Q4 this year.
Full disclosure: No positions in any U.S. transportation stocks.
