Thursday, March 17, 2011

Asian Container Freight Trade Set To Boom

Transhipments Will See a Decade of Development
Shipping News Feature

ASIA – A sea change in the buying habits and economic circumstances of the region has resulted in a shift in freight levels throughout the continent and threatens to further diminish the ocean shipping trade with the West. Transhipment container levels are growing annually in the area with estimates in excess of 9 million TEU’s passing through Hong Kong purely on intra Asian contracts.

China particularly may be feeling that tables are turning with regard to their balance of trade lately. Traditionally it has been the norm for the Asian giant to buy in raw materials and technology from the West and export finished product in return but now, as tastes and finances change, import levels are growing. Countries like Korea and the group of ASEAN nations are becoming adept not only at manufacturing but also marketing and freight rates are frequently less than pan oceanic tariffs.

Whereas two years ago the regions nations were squabbling over China’s expansionist ambitions there now appears to be a willingness to court each other as trade increases. The stock markets are witnessing a sudden rise of interest in logistics schemes and companies who operate in Asia, the launching of Hutchison Port Holdings Trust initial public offering (IPO) this week for a cool $5.5 billion presumably evidences the confidence people have that the Asian tiger is starting to roar again.

Hong Kong International Terminals (HIT) is the central plank in Hutchison Whampoa’s world strategy with fourteen berths there and the company has a strategic, if sometimes controversial presence throughout Asia. In 2009 the group handled 65 million TEU’s worldwide but Asia is their growth area with the IPO money doubtless destined to find a home in the new regional developments the group have planned.

Hutchison’s intentions are mirrored by all the major container handlers, with control of the terminals increasingly shared with the container carriers themselves, groups such as Cosco and Maersk also investing heavily to manage their own growing Asian trade.

With the burgeoning of free trade agreements and infrastructure development in Asia there is a definite movement of the usual logistics suspects to ensure they have a place in this new market. In the past few months we have witnessed a plethora of announcements from European and American supply chain specialist to expand their operations throughout all quarters of the continent. Expansion of the world’s freight market is almost inevitable as world population increases, the division of who ships what and to who however is likely to change fairly radically in the coming decade.

Photo:- River Trade Terminal, Hong Kong courtesy of Hutchison Whampoa.