Chinese cargo ship in Suez
China’s ports will face excessive transport capacity in 2009 according to Asia Pulse which claims that China’s ports will face excessive transport capacity in 2009 on contraction of port business with the unfolding of the international financial crisis and the slowdown of the Chinese economy.
Ports taking container transport as their main business have seen their throughputs from US lines decline persistently since April 2008, and the throughput of other commodities has also been affected by the downturn of China’s foreign trade.
The consumption drop in the US, Japan and European Union, which are the most important three economies for China’s exports, affected Chinese ports’ export transport severely.
CargoNews Asia reports that in addition, China’s demand of such staple commodities as coal and metallic ores began to fall in the second half of 2008 as China was gradually entering the middle and late phases of its industrialization as well as adjusting its way of economic growth.
Economic analysts reckon that economy and foreign trade development are the fundamental factors determining ports’ transport.
The reasons for Chinese ports foreign trade throughput decline in the latter part of 2008 according to the report are the appreciation of the RMB, soaring labor costs and the impact of the financial crisis.
Research institutions hold that the situation of excessive transport capacity will not be reversed in 2009 after analysing market demand of various commodities in 2009.
According to industrial insiders, the demand for container transport is closely hinged with the stability and recovery of the US and EU economy.
Calculated on previous demand growth, the demand growth of container transport in 2009 is 10 percent, that of bulk cargo transport is six percent and oil tank transport is two to three percent.
The supply and demand of container transport will get balanced first once the global economy recovers, and its freight will rebound accordingly.
This report seems oddly in conflict with others which suggest that China will survive the economic downturn, especially in logistics, better than most countries.