China's International Freight Industry - Looking forward to the Future

China's International Freight Industry - Looking forward to the Future

Shipping companies and the Intl freight sector in China continue to feel the effects of the global economic gloom as they experience trading at the start of 2010. Very large declines in demand for Chinese import goods from the developed economies in Europe and the USA have had a knock on effect throughout the freight forwarding sector in China.

China's Transport Ministry has forecast that container throughput at Maritime ports in China will have decreased by seven percent in 2009. In the first 3 quarters of 2009, China's ports handled more than 77 Twenty Foot Equivalent Units (TEU's), down 9% on the same period in 2008. The impact has not been uniform, with some ports suffering worse than others. Year on year volumes at Shanghai, China's largest container port, fell 15% in the first nine months of the year and the second largest port, Shenzhen saw an even steeper decline at over 20%. This was because nearly half of the freight forwarding containers handled at Shenzhen are [China import bound for Europe and this international freight business has been particularly badly hit by the global economic slowdown. Meanwhile, some of the coastal ports such as Quindao and Dalian suffered smaller declines in container movements and some, such as Ningbo, Yingkou and Tianjin saw positive growth.

However, entering the New Year for 2010, the freight logistics industry in China is bullish about the prospects for the future. Public statements from shipping companies and freight companies operating in the China freight forwarding industry are predicting growth in 2010. This point of view is backed up by a recent report on international freight trends by Deutsche Bank which predicts throughput in China should recover strongly during 2010. The securities firm has increased its forecast for China's 2010 export growth to 10% as China import grows in Europe and the United States.

This optimistic forecast is reflected in the ongoing development activity in relation to China imports. As an example, a sixth container terminal is being built at Waigaqiao Port and is scheduled to come on stream in 2010 with an annual capacity in excess of 2 M TEU and 730,000 vehicles.

This will help consolidate the extremely strong freight transport infrastructure in China and improve the country's position as trade resumes, following the recovery of the world economy and the inevitable continued growth of China imports as there is more spending power and credit available in Western economies.

The likely continued economic development of the Eastern European countries are also likely to provide a further market for China imports as is improved relations between China and Taiwan.

One of the optimistic pointers for future development of the freight forwarding infrastructure in China is the increasing amount of consolidation as smaller ports tie up with larger ports. For example, Ningbo and Zhoushan ports have joined together and this has encouraged Shanghai to take equity stakes in Chongquing, Wuhan and other ports on the upper reaches of the Yangtse. Meanwhile, in Northern China. Qingdao and Dalian are coming together with neighbouring smaller ports. The aim of the consolidation is to tap the group's advantages.

In this way, the main organisations in the freight services infrastructure in China are building the foundations for a bright future and the numerous shipping companies and freight companies that utilise the ports will stand to benefit.

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