Trade war, deglobalisation and technology: can container shipping weather the storm?
- The engine of globalisation has had a ‘torrid decade’, and the sector is facing another period of great volatility
- The US-China trade war is accelerating the regionalisation of supply chains, with the long haul sea freight business a natural casualty
When the first of Mandarin Shipping’s six small, modern container ships rolled into Hong Kong dock three years ago, Tim Huxley, the company’s founder, could not have anticipated the disruption to merchandise trade caused by the US-China trade war.
Mandarin Shipping’s Topaz class feeders, which are capable of carrying 1,700 20-foot equivalent units (TEU), are a drop in the ocean when compared with the world’s biggest container vessel, the MSC Gülsün, the 400 metre (1,312 foot), 224,986.4 tonne, 23,756 TEU goliath that sailed out of Tianjin Port on its maiden voyage last week. But arguably, they are more in tune with the industry’s future.
The company was established to service trade within Asia, a continent with almost 60 per cent of the world’s population and which, according to the Asian Development Bank, will double its share of the global economy to 52 per cent by 2050.
“We saw the demand for a focused, regional, feeder container operator catering to the customers here,” Huxley said. “More manufacturing moving across the Pacific to Mexico will obviously impact the trans-Pacific trade, but I think the movement of manufacturing within Asia is a particularly interesting one, that will be a real boost to intra-Asian trade.”
Hing Chao, executive director of another Hong Kong shipping company, Wah Kwong Maritime Transport Holdings, said that “the shift of manufacturing away from China to cheaper, regional markets in Southeast Asia has arguably led to more intraregional trade, which is backed up by the continued growth of intra-Asian container demand”.