Rise in Chinese Exports Creates Logjam, Reports WSJ
New York, NY, January 4, 2021-"A logjam in the global shipping industry is testing the resilience of China’s exporters, who have driven the country’s economic recovery by churning out goods to meet surging global demand during the Covid-19 pandemic,” reports the Wall Street Journal.
Much of the SPC consumed throughout the world is made in China.
“That demand in recent months has outpaced the capacity of a global shipping industry that has been slowed by pandemic safety measures. Chinese exporters have been paying sharply higher rates and struggling to find containers for their goods.
“The problem has been aggravated by a worsening imbalance in global trade. In November, China logged a record trade surplus of $75 billion, fueled by strong consumer demand from Western countries ahead of the holiday season for everything from electronic gadgets to furniture and bikes.
“Major U.S. ports imported 2.21 million 20-foot containers in October, up 17.6% from a year earlier and setting a record since the National Retail Federation began tracking imports in 2002. Container freight rates from Asia to the U.S. surged to a record in September and rates from Asia to Europe reached a 10-year high in December.
“Pandemic-related safety measures have lowered efficiency at ports, leading to delivery delays and containers getting stuck all over the world. In November, only half of global carriers managed to stay on schedule, compared with 80% a year ago, according to a service-reliability index from Sea-Intelligence.
“The average turnaround time for containers returning to China was up to 100 days in December from the more typical 60 days, according to the China Container Industry Association.
“‘The logjam is completely unprecedented, both in terms of the scale of the surge and the duration,’ said Tan Hua Joo, a Singapore-based consultant at Liner Research Services.
“While economists say shipping problems haven’t derailed China’s solid recovery yet, they pose a challenge to sustaining the export growth that has driven it.”