The migration of manufacturing in China inland and north to avoid higher labor costs in the south is now being reflected at the country’s ports, said container lines and analysts.
Export growth from China has slowed in recent months due to lower sales to Europe and general economic uncertainty, but the slowdown has impacted container terminals in the south far more than counterparts further up the coast.
“People have been talking about a move to the center and north, but in 2011 it has happened,” said Thomas Knudsen, Maersk Line CEO in the Asia-Pacific.
Figures from Drewry show that northern ports such as Tianjin/Xingang, Dalian, Lianyungang and Yingkou posted double-digit year-over-year volume gains every month from January through October.
Container volume at Ningbo was up 12.3 percent year-over-year in the first three quarters, while Yingkou traffic was up 24.3 percent. Initial figures show the trend was maintained at most terminals in November although growth rates slowed across the board as exports fell.
By contrast, ports in the south such as Shenzhen have seen minimal growth this year with year-on-year contractions evident in five of the 11 months through November, and volumes down 3.3 percent in the first three quarters.
Hong Kong’s traffic growth rate in the third quarter increased by just 2 percent year-over-year, while outbound loaded containers for export decreased 8 percent compared to the same period of 2010. Volume via Shanghai, further up the coast, were 8.9 percent higher in the first three quarters but contracted by 0.8 percent in November.
“Without a doubt the northern ports are doing better than those in the south,” said Neil Dekker, editor of Drewry’s quarterly Container Forecaster. “Part of the reason is the gradual migration of manufacturing from southern regions to northern and inland locations because of production and labor costs."
Dekker said some of the manufacturing has moved to Vietnam but it is difficult to determine how much numerically. He said some of the growth seen in the northern port was due to increased intra-Asia trade and Chinese domestic consumption. Trade from Asia to the Mideast and Indian subcontinent has grown 12 percent to 15 percent year-to-date, and the Asia-Middle East trade is more than 2.5 million 20-foot equivalent units annually, Dekker said
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