The number of idle trucks lined up for kilometers outside a major seaport in China shows that the country’s export sector is struggling as international demand falters. Rent and purchase prices of containers at major ports in Asia also plummeted, expected to take at least a few more months to recover.
Excess containers
The Lunar New Year holiday ended a few weeks ago, but not every truck driver in Shenzhen has returned to work. On the highway towards Diem Dien port, a number of uncontained trucks on trailers parked on the side of the road, forming a line of vehicles nearly 1 km long.
A driver surnamed Huang told the newspaper South China Morning Post (SCMP): “These are just a handful of empty trucks. The rest have to park in Dongguan.”
Dongguan is another city in Guangdong, an hour’s drive from Yantian, one of China’s largest container ports for foreign trade.
Mr. Huang is one of the lucky drivers who still has work to do. He said the port of Diem Dien has more than 15,000 registered truck drivers, but currently only about 2,000 have jobs.
“I feel this year’s export market could be extremely bad,” he said. I just heard a lot of factory owners saying that they can’t export electronic products because many foreign customers have not placed orders yet and many factories have moved to Southeast Asia.”
Analysts and industry insiders say China’s exports are likely to continue to weaken amid slumping international demand and rising geopolitical tensions.
For many truckers, the current stagnant scene in Yantian is in stark contrast to the situation two years ago.
In 2021, it is difficult to find an empty container because exporters have a lot of goods to move. But now, empty containers are taking up all the space around the port.
“In previous years, there were no empty containers here,” said the driver, surnamed Xu, as he pointed to the outside of Yantian’s automatic toll gate. There, empty containers are piled up to seven stories high.
“These containers have been lying dormant here since the second half of last year,” he added. But now they can’t be loaded any higher because the crane can only reach seven floors.”
The official statement from Diem Dien port authorities in November 2022 said that the amount of empty containers stored here has reached the highest level since March 2020 and will soon reach the highest level since the port opened. door 29 years ago.
When the containers are covered with dust, the container yards – which make money by loading and unloading goods – also have difficulty. The manager of a container yard near Diem Dien port reported: “We had no work to do. Some yards have had to close.”
The outlook is bleak
Mr. Christian Roeloffs, CEO of shipping services company Container xChange, said containers are an important barometer for global economic activity and trade. According to him, the current market outlook looks bleak.
“Falling freight rates and an increase in container availability in some regions of the world are indicative of weak demand and slowing economic growth,” he said.
Mr. Roeloffs said container rental and purchase prices at major Asian ports such as Ningbo, Shanghai and Singapore have fallen sharply over the past year, suggesting that the current situation may continue for the foreseeable future.
According to a recent report by Drewry maritime research consulting firm, 40 foot container freight rates in December 2022 have decreased by 45% compared to the same period in 2021. The report estimates prices will continue to decline in the next 6 to The first 9 months of 2023 will only recover.
The Freightos Baltic Index shows the cost of shipping a 40-foot container from Asia to the US west coast last week was $1,295, 92% lower than in the same period last year. Meanwhile, shipping rates from Asia to the east coast of the US and Europe are down 86% and 80% respectively from a year ago.
The latest report from the National Retail Federation estimates that the country’s seaborne import volume in February will be 12% lower than January and 26% down from a year ago.
Judah Levine, research director at Freightos, explains: “The reason for the decline could be large inventories, weakening consumption due to inflation and a trend towards spending again on services.”
According to VietnamBiz.vn
