The Shanghai International Shipping Institute points to “feeble economic and trade growth” in a recently released report.
Growth in throughput slowed down at major ports worldwide in the first quarter of 2019 “amid the feeble economic and trade growth” compared to the same time in 2018, according to the Global Port Development Report of Q1 2019 recently released by the Shanghai International Shipping Institute (SISI).
Major ports recorded a year-on-year throughput growth rate of 2.7% in the first quarter, which was lower than the same period in 2018, and container throughput growth was at 3.9%, which was 2.7 percentage points lower than last year, according to the report.
Container throughput of major North American ports dropped by 3.4% in the first quarter.
The report cited two reasons: “First, the U.S. economic growth has topped out and begins to slow down dramatically.” America’s real gross domestic product increased at an annual rate of 3.1% in the first quarter, according to the second estimate released last week by the Bureau of Economic Analysis, which was up from the 2.2% increase in the fourth quarter of 2018.
“Second, the tariff policies in the Sino-U.S. trade war intensified the market panic and the ‘advance shipment’ out of concerns of aggravated situations overdrew the cargo shipping capacity, leading to the sluggish container growth in Q1 2019,” according to the report.
The trade war also negatively impacted the Hong Kong Port of China. Its container throughput dropped 9.2% year-on-year to 4.44 million TEUs, and it fell to eighth in the global ranking by throughput. Every other port in the top 10 in throughput experienced growth, including an 8.8% growth by seventh-ranked Guangzhou to 5.29 million TEUs. The rankings of the top seven ports remained static and was led by Shanghai’s 10.42 million TEUs, a 7% increase.
“Besides, the Sino-U.S. trade war compromised the orders from the U.S. buyers in the new season, hurting the import and export trade at Hong Kong Port, dragging down the import and export values at the port by 4.6% and 4.2%, respectively,” SISI stated in the report, adding that “Hong Kong Port has been at a disadvantage in the competition with nearby ports in recent years because of high production costs.”
Throughput of China’s inland river ports increased by 15.4%. The Port of Zhenjiang’s throughput soared by 82%, the largest growth among the country’s major mainland ports, to 66.8 million tons in the first quarter, which jumped it from 25th to 12th in China’s cargo throughput rankings.
Overall, China’s major ports handled 3.15 billion tons of cargoes in the first quarter, a 6.6% increase. The Port of Ningbo-Zhoushan remained the country’s busiest port as its throughput slightly increased by 0.5% to 255.27 million tons. The Port of Shanghai stayed in second place with a 4.1% growth to 175.06 million tons, and the Port of Tangshan jumped the Port of Suzhou for third place with 161.87 million tons, a 12.9% growth.
“In Q1, China maintained stable economic operation, with its GDP growing by 6.4% year-on-year,” the report said. “On the other hand, the Sino-U.S. trade war was intensified. China’s foreign trade was overshadowed, recording around 7 trillion yuan of import and export values in Q1, a slower growth rate of 3.7% year-on-year. Specifically, the import value growth was a mere 0.3%, and the foreign trade throughput growth of ports also slowed down dramatically.”
Ports in the Philippines handled 59.28 million tons of cargoes, a 6.4% increase, while the Port of Singapore had a 2.6% drop in throughput to 150 million tons.
The report stated “the depression of international dry bulks market and bad weather among other reasons” led to Australia’s falling dry bulk throughput.
“Specifically, the hurricanes forced the Port of Hedland to close business for 92.5 hours in March 2019, slashing the port’s iron ore throughput for that month by 14% year-on-year to 36.7 million tons,” according to the SISI. “On the other hand, some coal products in Australia failed to meet environmental requirements, prolonging the customs clearance processes for Australia-imported coal in various countries. China even turned to Russia, Indonesia for coal imports, and the throughputs of Port of Hay Point and other major coal ports in Australia plunged.”
The Port of Qinhuangdao, the major dry bulk cargo throughput leader, saw its throughput fall 15.9% to 48.47 million tons. Brazil’s Port of Santos’ growth rate increased 11.7% to 13.73 million tons and the Port of Rotterdam grew 3.5% to 19.45 million tons.
The growth of liquid bulk in Europe also declined. The liquid bulk throughput at the Port of Barcelona fell 12.5% to 3.58 million tons and the Port of Antwerp dropped 8.6% to 16.96 million tons. The Port of Rotterdam was the top port for liquid bulk throughput with 58.51 million tons, a 4.7% increase the report attributed to “the increased shale oil imports from the U.S.”
Major terminal operators saw a year-on-year slowdown on production. Outside of DP World, which had a negative growth in throughput, all other terminal operators sustained low-rate growth, according to the report.
“In addition, various terminal operators continue to explore the extension of supply chain logistic services beside their main businesses of handling operations to further widen service scopes and improve service quality and values,” SISI reported. “They launched multimodal transport and commerce and trade information businesses through acquisitions and collaboration among other means.”
