Chinese exports to US and EU off to flying start

Chinese exports to US and EU off to flying start

The port of Shanghai's container throughput rose 12 percent in January year-over-year.

Container shipping continued to enjoy stronger demand for ocean transportation in January, something that was clearly reflected in China’s robust export growth for January to its two largest trading partners, the United States and Europe.

Exports to China's biggest trading partner, the European Union, grew 13.6 percent in January compared with the same month in 2016, and exports to the United States rose 17.2 percent. Overall exports in January were up 15.9 percent, and imports grew 25.2 percent, according to China Customs.

A rush to get goods on the water before factories closed for Chinese New Year drove up the number of containerised exports in December and into January. China's largest container port, Shanghai, experienced its throughput in January grow to 3.3 million twenty-foot-equivalent units, a 12 percent year-over-year increase. This growth in volumes leaving the mainland benefited ports on the other sides of the world.

The big European gateways, such as Rotterdam and Antwerp, reported 2016 increases in volume after business picked up in the second half of the year, and based on China’s exports to the European Union, their January figures are expected to continue this trend.

Records tumbled at some ports in the United States in January as the pre-CNY trade and inventory building after the holidays drove up throughput numbers for the first month of the year.

The Port of Los Angeles experienced its January throughput shoot up 17.4 percent compared with the same month in 2016, with the 826,640 TEU handled representing a record. Los Angeles imports were 415,423 TEU, up 13.1 percent year-over-year, and exports were 162,420, a 28.7 percent increase on January last year. There was also a 17.9 percent increase in the number of empties handled by the port that grew to 248,797 TEU.

Its San Pedro Bay neighbour, the Port of Long Beach, handled 8.7 percent more containers in January compared with last year, with 582,689 TEU crossing its wharves during the month. Imports increased 7.4 percent to 298,990 TEU, and exports jumped 10.8 percent to 118,234 TEU. Empties sent back to Asia rose 9.6 percent to 165,465 TEU.

The month’s total container traffic growth was notable, the port said in a statement, because TEU traffic in January 2016 jumped 25 percent compared with the same month in 2015.

“It was a tough benchmark, so we’re very happy with the way the new year is starting in Long Beach,” said Board of Harbor Commissioners president Lori Ann Guzmán. Port of Long Beach interim chief executive Duane Kenagy said with new alliances beginning this spring, 2017 was expected to be a transition year for the industry.

On the East Coast, the South Carolina Ports Authority handled record container volume in January, with 185,018 TEU moved during the month, a year-over-year increase of nearly 28 percent. “The Port handled an all-time record container volume in January, which is traditionally one of our slower months,” said Jim Newsome, SCPA president and CEO.

The start to 2017 has been good for ports and container shipping, but the big question is whether that growth will continue. According to the Global Port Tracker report by the National Retail Federation and Hackett Associates, imports at major US retail container ports will increase by 4.6 percent in the first half.

Maersk Line certainly subscribes to expectations of growing trade and expects its profit to improve by $1 billion in 2017. The carrier is forecasting a 2-4 percent increase in container volumes as demand from the United States and Europe rises.

However, not everyone is as optimistic in their outlook for 2017, and the uncertainty was highlighted in comments to state media outlet Xinhua by Wang Dongtang, deputy director-general of China’s foreign trade department under the Ministry of Commerce.

"Uncertain and unstable factors are increasing. Difficulties facing China's foreign trade are not short term," Wang said. He told Xinhua that the rise of trade protectionism, sluggish overseas demand, and increasing domestic production costs were potential restraints on China's future exports growth.

Contact Greg Knowler at greg.knowler@ihsmarkit.com and follow him on Twitter: @greg_knowler.