Freight forwarders remain positive despite the slowdown of China’s economy
IMF in its latest World Economic Outlook report did not change its prediction on China’s GDP growth, keeping it at 6.8% rate for this year and 6.3% in 2016. Following this report analysts have cut down their growth forecast for 2015: Drewry’s latest research showed that the previous figure of 5.8% growth in container throughput is now down to 4.9%.
In absolute figures derived from Greater China container traffic published by World Bank, this means the shortfall of around 1.9m TEU. Drewry have also found out that risk for dry bulk sector are even greater: “Many in the dry bulk industry missed the slowdown in Chinese fixed asset investments and the fall off in demand for commodities such as iron ore, coal, and oil that have crashed to multi-year price lows.”
Trade data from WTO points at 14% drop in merchandise imports. This figure is supported by reports from China Federation of Logistics & Purchasing and China’s National Bureau of Statistics. The research from HSBC also points out that severe decline in manufacturing activity in July was greater than predicted.
However leading Asia freight forwarders remain positive speaking of volume expectation despite weak European demand and slowing Chinese economic growth, as reported by Lloyd’s Loading List.com. The main argument remains the continuing rise of Chinese middle class and consistently high demand for European goods among this population group. The situation is expected to improve within a few weeks, once people return from holidays and business activities will increase, quoting David Goldberg, senior vice-president for Ocean Freight at DHL Global Forwarding Asia Pacific, as interviewed by Lloyd’s Loading List.com. Increased number of alliances in the region means service rationalization through exploring opportunities previously ignored. Although reducing shippers’ choices, working with forwarders means more service options and better supply chain management.