Where in the world is Frank? Episode 2

Frank Down Under

By Frank Romano

April 11th, 2008 - Captan James Wright says he was a terrible teen and dreamed of staring out the window all the time -- “And that’s pretty much what I do all day as Captain.” I have sailed with him on the QE2, Queen Mary 2, and now on the Queen Victoria. O captains, my captains: I keep thinking of all the captains in my life: Captain Nemo, Captain Cook, Captain Bligh, Captain Ahab, Captain Queeg, Captain Video, Captain Midnight, Captain Kirk, and even Captain Crunch.

In Auckland, New Zealand I spoke to a group of printers about digital printing. The meeting was hosted by Print NZ, the local trade association, managed by Joan Grace. I first met Joan at Margie Dana’s Print Buyers’ Conference in Massachusetts in November.

It was also wonderful to meet up with Andy and Jane Tribute, who were able to visit the ship because they were friends of the captain. Andy was on a speaking tour (he takes airplanes) and even popped into my session to get some pointers on good presentations :)

Joan gave me a booklet to read that provided a snapshot of the New Zealand printing industry. I was surprised to see that there was an increase in the number of print establishments -- 254 in 2006 to 335 in 2007.

Well, they re-defined the industry and thus sign shops and copy shops got counted. In actuality, mergers are taking place constantly and the number of real printing firms is down. Thus revenue only went from $1.1 Billion (NZ) to $1.25 Billion (NZ). What was most interesting is that digital printing is up 44 percent.

I will cover the re-definition of the industry in a later article.

Joan is very active in representing the printing industry to the NZ government. It was a great group that attended my session and they had lots of questions about where the money was in digital printing. As with the US, they were starting to see that digital printing engenders new value-added services and they were beginning to get good pricing for database, creative, and fulfillment services -- except for one printer who was pricing database work as a commodity because it was included as a line item on the bill. I say he should make a separate bill and emphasize the complex nature of the service. By bundling print and database, buyers may feel that both are commodities.

I met the printing firm that prints the labels for the Fiji bottled water bottles. The only industries on Fiji are tourism and tuna packing, so printing needs are satisfied by New Zealand and Australian printers -- except for T-Shirts printed by screen printing. I discovered that all paper for commercial printing comes from outside New Zealand (only newsprint is made there from their abundant forests).

We sailed to Napier, NZ, the art deco capital of the world I think. Only Miami Beach has as much art deco building and signage. It was their art deco weekend and everyone was dressed in 1930s dress and vintage cars were everywhere. I found a printing company that was a quick printer in front and a commercial printer in back -- housed in one building.

The ship sailed to Wellington, the NZ capital. Joan invited Arina from the QV print shop and I on a tour of some of the locations used in the Lord of the Rings movies. We popped into a supermarket and I found a brand of soda called “frank” stocked not far from the local Tui beer. Most packaging seems to be flexible packaging.

There were quite a few brands of breakfast cereal, but the number pales in comparison with US supermarkets. There is a small NZ package printing industry, again, because of the proximity of Australia, which dominates.

Printing seems to flow back and forth between New Zealand and Australia. Both are being affected by Chinese printing which has a severe effect on smaller markets.

Trade
You must see the number of container ships and container ports to understand global trade. Because the Queen Victoria is a larger ship, we have docked at some container terminals. They have been running 24/7, unloading and loading a container ship in only a few hours. In Manzanillo, Mexico, Wal-Mart offloads containers and trains and trucks them to Kansas City, avoiding the Port of Los Angeles. Instead of paying the high rates to use the Panama Canal, some ships offload on one side, train the containers across Panama, and then re-load them on ships. It was a $280,000 toll for the Queen Victoria to use the Canal and you must pay in advance and no EZPass; thus, Panama City has many skyscrapers occupied by banks.

Containers have eliminated theft, loss, and are capable of handling perishable food, thus making foodstuffs globally available. Most of those containers contain stuff that is packed in boxes (printed) with labels (printed) and folding cartons (printed) and even instructions (printed). Customs officials count the stuff but not the printing. Thus, we have no idea how much printing has been lost by American printers -- and printers in other countries.

In Hong Kong I saw a container facility just for Costco. Entering Hong Kong harbor at 7am, I started counting container ships and in one hour counted over 400. On the shuttle bus back from downtown to the ship, I shot a video at the point where a line of containers were stacked -- and 12 minutes later the line ended -- miles long, many deep, and 5 high. The ship left Hong Kong at 1am and I was taping a container ship being loaded at that hour.

Ironically, China is sub-contracting some work to Vietnam because their wage rates are lower than China’s. Ironic!

The flow of containers from Asia is pretty well matched by the flow of containers from everywhere else. Each nation attempts to find a balance of trade and supports local industries that export. Right now, China and other Asian countries, are the powerhouses of world trade, engendered by lower wage rates. Japan was in such a position after WW2 but their standard of living rose and they embraced quality. Then it was South Korea and the same thing happened. Today it is China and nations in the Pacific Rim with the low wage rates. But their standards of living will also rise and we may then run out of places in the world with low wages.

Ironically, China is sub-contracting some work to Vietnam because their wage rates are lower than China’s. Ironic!

America still has products to export, from cotton to software, but our industrial base is disappearing. I do not think you can get it back through protectionism, because history has proven that barriers to trade do not work. They make special interest groups happy, but eventually prices rise to a point that turns consumers off and they find alternatives. Every time we, as a nation, try to protect some industry, the American consumer winds up paying a high price -- or finds an alternative.

We must out think the rest of the world. I found PCs in Internet cafes around the world and all ran Microsoft products. The computers were made in India and other places, but the intellectual property was based in Washington state, USA.

Trade is a thorny subject because sometimes there are winners and losers in the balance of imports and exports. I cannot picture my country as only a service economy -- we have to make stuff and printing falls into that category. We need to find ways to print things that are parts of things that get exported. I love the show on cable TV called “Made in America” because it highlights US manufacturers that have found unique products or unique niches. That’s what printing needs -- unique products and unique niches.

As I was writing this, Don Taylor sent me: “So, we get nice rebate: If we spend that money at Wal-Mart, it will go to China. If we spend it on gasoline it will go to the Middle East, if we purchase a computer it will go to India, if we purchase fruit and vegetables it will go to Mexico, Honduras, and Guatemala, if we purchase a good car it will go to Japan, if we purchase useless crap it will go to Taiwan, and little of it will help the American economy. We need to keep that money here in America, so buy beer and visit Indian casinos, since those are the only businesses still in the US.”

All of Asia is undergoing a tourist boom. I picked up oodles of brochures and materials. With 88 new cruise ships coming online in the next 10 years, one can see an area of printing growth.

The US dollar is now down against other currencies and this is creating an influx of shoppers from all over the world to America, where the stuff we sell (that is made in Asia) is cheaper than buying it in Asia. There was an economist on board and I asked him to explain this to me, but after about 10 minutes my brain exploded.

No man and no country is an island (except for Australia). We are all inter-related. We are all part of a global infrastructure. We are all in this together.

You can track Frank’s location here

http://www.richtextandgraphics.com/Wheres_Frank.html

The Queen Victoria bridge cam is here (with lots of pictures of water)

http://www.cunard.co.uk/bridgecam/qv_cam1.asp

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