US-China trade war hits global container shipping as demand falls
GLOBAL container shipping demand growth slowed to one per cent during the first nine months of the year, according to Bimco's chief shipping analyst Peter Sand, down from 3
GLOBAL container shipping demand growth slowed to one per cent during the first nine months of the year, according to Bimco's chief shipping analyst Peter Sand, down from 3.8 per cent growth in 2018, reported London's Loadstar.
'The slowdown in demand is showing no signs of easing, and should the latest round of tariffs be implemented on December 15, virtually all US imports from China will be subject, which will only cause further harm to the shipping industry,' Mr Sand said.
'A continued reshuffling in manufacturing in Asia may offer some upside once processes are up and running, but, as Bimco has said, there are no winners in a trade war.'
Moreover, intra-Asia volumes were flat from January to September.
Notwithstanding the manufacturing shift away from China to neighbouring countries, the trade war has also resulted in products produced in China being transshipped through other countries by using a change of origin certification to bypass the tariff on Chinese imports into the US.
Surprisingly however, the expected boost to the intra-Asia trade from the shift in manufacturing and transshipment has not benefited the shipping sector so far.
Bimco suggests this is because volumes are being transported by land from China into neighbouring countries before being loaded onto export vessels.
In a related development, Bimco said supply growth in the container shipping sector now stands at 3.6 per cent, and is likely to rise to 3.7 per cent by year-end. Taking into account newbuild deliveries so far of 964,064 TEU, and with scrapping standing at 163,000 TEU to date, this brings the total containership fleet to 22.9 million TEU.
'ULCVs currently make up 60 per cent of the orderbook in volume terms, a figure which has grown over the past few years, from 41.4 per cent in January 2016, and one that is likely to continue to do so,' said Mr Sand.
The analyst said that of the 12 box ships ordered in October, 11 have a capacity of 23,500+ TEU.
He said: 'There are only a few trades able to handle ULCVs and, as they arrive on the market, cascading will lead to large ships finding their way to many of the world's other trades, the majority of which have no need for them or extra capacity, putting further pressure on freight rates.'