Cargo volume at Chinese ports falls to 7-year low

By Daphne Howland | July 14, 2016

Dive Brief:

• Growth in cargo volume through China’s ports reached its lowest point in seven years during the first half of 2016, according to a report from research firm Alphaliner cited by the Wall Street Journal.
• Cargo volume at China’s 10 biggest ports grew just 1.4% so far this year compared with the first six months of 2015, behind the 2.5% growth reported across all ports and far below the 3.9% expansion in shipping traffic at smaller river ports, which often carry domestic goods, Alphaliner found. Port container volumes increased 2.5% from January through June from the same period last year, and the ports at Shanghai and Shenzhen (China's largest destinations for imports and exports) saw container volumes fall 1%. Traffic is the lowest since 2009, when Chinese cargo volumes fell 4.6%.
• Exports from China fell 4.8% in May and imports fell 8.4%, the China General Administration of Customs said Wednesday.

Dive Insight:

“Overall container volumes at Chinese ports are growing at the slowest pace since 2009,” Alphaliner noted in its weekly shipping trends newsletter—further evidence of slowing trade in the Chinese market, an issue vexing many retailers, especially those in the luxury space that ambitiously expanded operations there. For example, Burberry this week cited its China sales as a particular problem in its muted quarterly results. 

Savvy retailers likely aren’t caught off-guard by major upheaval in the Chinese market, Profitero Vice President of Strategy and Insight Keith Anderson told Retail Dive earlier this year. That’s in part because, like many economists and businesspeople, retailers familiar with the reality there didn’t buy into the Chinese government’s official growth estimates or other statistics—data seen by many observers as overly optimistic, Anderson said.

Certainly, China's growth has tempered. The fast-moving consumer goods (FMCG) retail market, for example, grew 5.4% in 2014 compared with 11.8% in 2011, according to Bain’s China Shopper Report released last October. Luxury retailers also were reporting slower spending by Chinese consumers last year.

But there are still glimmers of optimism. “There definitely is a rising middle class, so there’s a definite growth story there,” Anderson said.