Panjiva Blog: Blogging Global Trade

Thanks to Paul Kedrosky for highlighting Ambrose Evans-Pritchard’s article about China’s plans to limit exports of rare earth minerals.

Specifically, there’s discussion of limiting exports of terbium, dysprosium, yttrium, thulium, lutetium, neodymium, europium, cerium, and lanthanum.  We took a look at who’s sending shipments to the United States that include these rare earth minerals.  Results below:

• 3 suppliers of products including terbium
• 5 suppliers of products including dysprosium
• 54 suppliers of products including yttrium
• 1 supplier of products including thulium
• 8 suppliers of products including lutetium
• 41 suppliers of products including neodymium
• 12 suppliers of products including europium
• 85 suppliers of products including cerium
• 121 suppliers of products including lanthanum

If you dig into the searches, you can see the geographic distribution of these suppliers.  Some are the original suppliers; others are middlemen.

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Earlier this week, Panjiva released data showing that, after several months of free-fall, the number of global manufacturers shipping to the U.S. market appears to have stabilized.  Of course, there’s still a lot of risk in the system, as highlighted in many of the news accounts of our analysis.  Here’s a sampling of the coverage:

The New York Times: “‘The free fall in global trade seems to have halted,’ said Josh Green, the chief executive of Panjiva…”
http://www.nytimes.com/2009/05/29/business/economy/29norris.html?_r=1

The Wall Street Journal: “‘The number of companies shipping to U.S. customers is no longer in free fall — definitely a reason for optimism,’ Panjiva said.”
http://blogs.wsj.com/economics/2009/05/29/signs-of-stabilization-in-trade/

BusinessWeek: “‘Unfortunately, there is still substantial risk facing those engaged in global trade, and the global trading system remains vulnerable to further shocks,’ cautions CEO Green.”
http://www.businessweek.com/managing/economic_recovery/blog/archives/2009/06/global_trade_tu.html#more

MarketWatch: “Customers will have to decide whether they will share in the suppliers’ restructuring costs, or leave it entirely to the supplier “and run the risk of seeing [the] supplier go under.’”
http://www.marketwatch.com/story/gm-fallout-set-to-be-windfall-for-japan-automakers

CIO: “New global trade data from Panjiva, a vendor that tracks the health of the world’s suppliers, shows that ‘after four months of free fall in the number of manufacturers shipping to American customers, there have been small increases from February 2009 to March, and then from March to April.”
http://www.cio.com/article/493868/Supply_Chain_Reality_Much_Risk_Tied_Up_in_Shrinking_Pool_of_Suppliers_

The Business Insider: “[C]onfirming the rebound are privately collected numbers from the firm Panjiva, which monitors manufacturing and supplier information…”
http://www.businessinsider.com/the-rebound-in-china-is-real-2009-6

Supply & Demand Chain Executive: “‘While some may interpret this data as a welcome sign that the global manufacturing economy has hit bottom and is rebounding, analysis of historical trends and additional shipment data points to a need for continued caution as significant risk still exists.’ Panjiva said.”
http://www.sdcexec.com/web/online/Decision-Support-News/Green-Shoots-in-the-Supply-Chain-Manufacturers-Shipping-to-US-Increases-for-Second-Month-in-a-Row/37$11389

About.com: “[T]he risk for companies engaged in global trade remains high as the percentage of significant manufacturers on the Panjiva Watch List edged up from 30% in March to 31% in April.”
http://logistics.about.com/b/2009/06/01/reasons-to-be-cheerful.htm

Reuters: “CEO Josh Green… warns further that, ‘there is still a tremendous amount of risk in the system.’”
http://economics.alltop.com/

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Thought you’d be interested in some of the recent coverage of Panjiva’s March data, as well as our recent initiative with Sinosure.  Lots of good commentary including, for the first time, thoughtful criticism.

Reuters: “On a basic level, the greatest threat companies on the watch list pose is that these factories could go out of business,” said Panjiva Chief Executive Officer Josh Green.

http://www.forbes.com/feeds/reuters/2009/05/04/2009-05-04T172709Z_01_N28337426_RTRIDST_0_ECONOMY-SUPPLYCHAIN-ANALYSIS.html

About.com: “For purchasing professionals working with vendors in China, a new innovative solution will help to reduce their company’s supply chain risk. Panjiva, the online resource for information on suppliers around the world and Sinosure, the leading provider of credit information on companies in China, have combined their efforts to launch Panjiva SinoScreen, which will assist U.S. companies to assess if any of their Chinese partners are at risk.”

http://logistics.about.com/b/2009/04/29/panjiva-sinoscreen-reduces-supply-chain-risk.htm

Supply & Demand Chain Executive: “Leveraging various data sources, including U.S. customs data and credit information from Sinosure, Panjiva SinoScreen provides customers with an easy-to-interpret analysis of their Chinese supply chain.”

http://www.sdcexec.com/web/online/SourcingProcurement-News/New-Tool-Debuts-to-Help-Anxious-Companies-More-Quickly-Assess-Chinese-Supply-Chain/27$11316

Supply Chain Management Review: “Sinosure has been the only provider of export insurance to Chinese manufacturers, which makes it a strong source of business intelligence…  They know which companies are financially stable and which ones are in trouble. At a time when many supply chains are vulnerable to collapse, this is vital information.”

http://www.scmr.com/article/CA6656198.html

Procurement Leaders: “The service [Panjiva SinoScreen] is particularly timely. And while many larger, more mature, organisations would be expected to carry out such analysis themselves, there is no harm in having a little bit of extra intelligence and data.”

http://blog.procurementleaders.com/procurement-blog/2009/5/5/understanding-the-risk-of-chinese-suppliers-a-new-service.html

Global Logistics & Supply Chain Strategies: “Panjiva will act as exclusive U.S. reseller of Sinosure’s credit reports on Chinese manufacturers.”

http://www.supplychainbrain.com/content/headline-news/single-article/article/panjiva-to-help-us-companies-mitigate-risk-of-business-in-china/

Spend Matters:  “A business class ticket from the US or Europe and a stay in a Western style hotel to visit a single supplier will probably cost you more than the price of admission [to Panjiva SinoScreen]. But a onetime profiling effort should never be a substitute for consistent and proactive monitoring overtime — nor, when it comes to China especially, should it substitute for continuously monitoring supplier performance management trends as well. ”

http://www.spendmatters.com/index.cfm/2009/4/30/Panjiva-Partners-With-Sinosure-for-Supply-Risk-Part-2

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Earlier today, Panjiva announced an exclusive relationship with Sinosure, the leading provider of information on the financial health of Chinese companies.  Now we’re moving quickly to provide you with the tools necessary to assess the health of your Chinese supply chain.

Specifically, I’m excited to tell you about Panjiva SinoScreen — a diagnostic tool that will help you quickly and inexpensively assess the health of your Chinese supply chain.  The Panjiva SinoScreen report will provide you with an assessment of 20 Chinese suppliers, based on Panjiva’s analysis of import data and Sinosure’s analysis of credit data.  Why two data sets?  No one data set is perfect, so triangulation using multiple data sources increases the likelihood that you’ll reach an accurate conclusion about which of your suppliers stand the best chance of surviving the downturn.

Between now and May 31st, Panjiva SinoScreen is available for a one-time fee of $5,000.  Check out a sample of Panjiva SinoScreen.

To order your customized Panjiva SinoScreen report, contact us at +1 212 763 2125, or fill out this short form.

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Over the last few years, I’ve heard many complaints about the lack of reliable information on companies around the world.  However, I’ve heard one complaint more than any other: “There just isn’t good information on the financial health of Chinese companies.”

Today, I’m pleased to announce that Panjiva is tackling this problem head on, by providing access to information on the financial health of 8 million Chinese companies.

How are we doing this?  Via an exclusive deal with Sinosure.  Let me explain…

For the last few years, we’ve been looking for credible information on the financial health of Chinese companies.  To be sure, there are lots of organizations offering information on Chinese companies — but credible information on financial health?  Tough to find.

About a year ago, we met Sinosure.  Sinosure is the organization that was originally set up by the Chinese government to provide export insurance to Chinese companies.  In order to correctly price this insurance, Sinosure had to develop an approach to assessing the financial health of exporters — and get access to the information needed to fuel these assessments.  Which brings me to why we concluded that Sinosure can provide the best possible perspective on the financial health of Chinese exporters:

1. Access to the most information — By virtue of their government ties, Sinosure has access to an unbelievable array of data sources, providing Sinosure with a variety of data points on any individual company.
2. Reliance on their analysis for decision-making — At Panjiva, we’re by nature skeptical of data sources — because every data source has a bias.  Interestingly, that’s what makes Sinosure so compelling.   Their bias is to get the analysis right.  After all, if they get the analysis wrong, they’re going to price insurance incorrectly and lose money.  At which point, the Chinese government loses money.

Is Sinosure data perfect?  Of course not.  No data set is.  That’s why we advocate looking at multiple data sets anytime you’ve got an important decision to make.  My next post will walk you through how Panjiva’s making this kind of triangulation as easy as possible.

In the meantime, I want to welcome Sinosure to Panjiva’s extended family.  In the months ahead, our U.S. customers will be able to get access to Sinosure reports on any Chinese manufacturer — only through Panjiva.

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Yes, I’m finally twittering:  http://twitter.com/panjiva

And, as a consequence, I’ve become more concise.  So, in response to Jason Busch’s SpendMatters post on Alibaba’s shortcomings and what the future holds for buyer-supplier marketplaces, I’ll simply say, “Amen.”

Check it out: http://www.spendmatters.com/index.cfm/2009/4/22/Alibaba–Is-China-Really-Still-the-Top-Supplier-to-Global-Buyers

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Thought I’d share some of the recent mentions of Panjiva across the web.

Associated Press

“One in four major Chinese manufacturers shipped less than half as much to U.S. customers in November through January than they did a year earlier, [Panjiva CEO Josh Green] said.”

http://www.newsweek.com/id/191598

CIO

“Panjiva data shows that 132 of the Big Three’s overseas suppliers wound up on Panjiva’s watch list at the end of January 2009″

http://www.cio.com/article/486380/Why_U.S._Taxpayers_Will_Bail_Out_Foreign_Automotive_Suppliers_

SpendMatters

“Yesterday, Panjiva came out with news that paints a dangerous and ugly picture when it comes to the financial viability of global suppliers.”

http://www.spendmatters.com/index.cfm/2009/3/12/Catching-up-With-Panjivas-Josh-Green–A-Scary-Global-Sourcing-Update

“What can you do about supplier disappearing acts? I’d recommend a heathy dose of supplier risk preventive medicine to start, using both internal performance and quality related information as well as proactive third-party content from providers like Panjiva and D&B.”

http://www.spendmatters.com/index.cfm/2009/3/16/When-Suppliers-Just-Disappear

Supply & Demand Chain Executive

“Panjiva analysis shows nearly half of large U.S. buyers doing business with troubled global manufacturers; ‘they never even tell you they are in trouble…they just disappear’”

http://www.sdcexec.com/web/online/SourcingProcurement-Trends/Report–US-Supply-Chains-Face-Significant-Exposure-to-At-risk-Suppliers/13$11129

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Remember when American officials were worried about the safety of Chinese exports?  How quickly the tables have turned.  Chinese premier Wen Jiabao is “worried” about the “safety” of America’s most dangerous export: U.S. Treasury bonds.

Five months ago, I wrote about the parallels between China’s product safety crisis and America’s financial crisis.  Today, there’s not much discussion about the safety of Chinese exports.  Wouldn’t it be nice if, five months from now, no one’s worried about the safety of U.S. Treasuries?

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It’s been a busy few weeks at Panjiva.  We launched coverage of all industries, released new data showing the effect of the economic downturn on the global supply chain, and began working with a great new customer — The Home Depot®.  Thought I’d share some snippets from the press coverage we’ve received:

Financial Times
“Josh Green, chief executive of Panjiva, said the number of Chinese suppliers shipping to US customers in December was 10 per cent lower than in December 2007.”
http://www.ft.com/cms/s/0/fbc46330-f612-11dd-a9ed-0000779fd2ac.html

CNN Money
“The second dimension of the merchandise problem could affect product availability in stores, said Josh Green, CEO of Panjiva, a firm that advises leading U.S. retailers such as Home Depot on supply chain risks.”
http://money.cnn.com/2009/02/13/news/economy/retail_merchandiseissues/index.htm?postversion=2009021314

Forbes
“[W]e took a look at the suppliers that were still active as of the end of 2008…  [C]ompanies [that] suffered a 50% or greater decline in the volume shipped to their American customers.. are on Panjiva’s Watch List, as they are in the greatest danger of going under.”
http://www.forbes.com/2009/02/12/panjiva-global-trade-opinions-contributors_0212_josh_green.html

Fast Company
“Panjiva is not just innovative, it’s revolutionary.”
http://www.fastcompany.com/magazine/133/a-morningstar-for-manufacturing.html

Supply Chain Management Review
“However, there’s good news for supply chain managers who are willing to confront risk head-on. While risk can never be eliminated, it can be significantly reduced through the intelligent application of information.”
http://www.scmr.com/article/CA6635446.html

AP
“Green said of the firms he tracks, the number of global suppliers shipping to the U.S. dropped 13 percent in December compared with October 2007.”
http://news.moneycentral.msn.com/provider/providerarticle.aspx?feed=AP&date=20090203&id=9575003

MetalMiner
“And sleuthing for answers has become a whole lot easier. Companies such as Panjiva provide tools which allow companies to identify overseas shippers, products and destinations.”
http://agmetalminer.com/2009/02/17/identifying-supply-risk-in-toxic-stainless-supply-chains/

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A watered-down “Buy America” provision will be part of the U.S. stimulus package.  Yesterday, on Meet The Press, senior White House adviser David Axelrod took pains to note that the provision respects U.S. treaty obligations.

The text backs up Axelrod’s assertion.  Practically speaking, then, the “Buy America” provision will not have much of an effect on how the stimulus money gets spent.   Because it would be more or less impossible to enforce favoritism for domestic suppliers without violating treaty obligations.

Nevertheless, Chinese authorities are not pleased.  As a Xinhua news agency editorial put it, “[F]acing a global financial crisis, trade protectionism is not a solution, but a poison to the solution.”

So we’ve got measures that don’t provide any protection for American companies — but that are raising fears that America is turning protectionist.  In other words, protectionism without the protection.

One of my colleagues characterized this as the worst of all worlds, but I wouldn’t go that far.  Real protectionism would be worse, and I suspect Chinese authorities are firing a rhetorical shot across the U.S. bow, to ensure that the U.S. understands there will be consuequences if we go any further down the protectionist path.

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