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The Exporter's News Digest - February 16, 2024

The Hitch is Splice's newsletter and news blog post.

This edition hits several big topics for exporters: exchange rates, economic growth (or lack thereof), optimism in US logistics, the Red Sea and Panama Canal crises, and chassis pools. That's a diverse mix.

Inflation, PPI and Exchange Rates 

Inflation in the US has not cooled off as much as expected, and that can be bad for exporters because of currency exchange rates. The Federal Reserve has raised interest rates in an effort to bring down prices, but higher interests rates make the US dollar relatively more attractive compared to other currencies. The result is a strong dollar, which makes exports more expensive. Today's higher than expected producer price index (PPI) is likely to reduce the chance of a reduction in interest rates, and as a result, interest rates have bumped up higher today and the dollar is looking at fifth consecutive week of gains


Japan and Germany Economic Worries

Data released this week showed that Japan slipped into a recession at the end of last year. The Japanese economy has shrunk for two straight quarters, which many economist define as a recession. Japan is now the fourth largest economy in the world, falling behind Germany. But data from Germany isn't looking good either. German chambers of commerce and industry see GDP at -0.5% this year, a second year of recession and its worst downturn in 20 years. For exporters, seeing two large foreign markets falter is bad news. 


January 2023 Logistics Manager’s Index 

Now for a burst of economic positivity! "For the first time since September of 2019 every metric in the Logistics Managers’ Index is reading in expansion territory... [with] growth is driven by an increase in the restocking of inventories – especially for retailers – after a busy holiday season as Americans are clearly feeling better about the overall economy." Dig into the juicy details of the January Logistics Manager Index


Red Sea Update: Freight Rate Growth May Have Peaked

An analysis by Xeneta indicates that rates are beginning to soften after the Red Sea crisis caused them to jump. The increase in Asia to the U.S. has ranged from 146% ot the East Coast to 186%  to the West Coast. Read the latest in CNBC.


Panama Canal Update: No Change to Restrictions before April

Today the Panama Canal Authority stated that it does not expect changes to current vessel transit restrictions until at least April. Find initial info in Seatrade Maritime News. The drought is taking its toll on the Panama Canal Authority which has projected losses ranging between USD $500-700 million for 2024.


FMC Chassis Ruling: A Win For Chassis Choice Advocates

This week the FMC upheld a prior ruling by an administrative law judge that ocean carriers violated federal law by requiring trucking companies to use specific intermodal chassis providers. The ruling is focused on merchant haulage and grey pools, where they exist. The details can get gnarly and for the brave, dig in the ATA's winning argument here, or read the article in FreightWaves


Splice is going to TPM! Are you headed to TPM at the beginning of March? Great! We are, too. Let's get together. Click the link below to arrange a meeting with Kevin Speers, our CEO. 


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