Steve Chuang’s Hong Kong-based electronics manufacturing company has enjoyed steady demand from the US and Europe over the past year. But, like many Asian exporters, he is struggling to get his products to customers.
Chuang’s business, which makes solar energy electronics, is just one of many enjoying a trade boom that has helped the regional economy bounce back from last year’s pandemic-driven downturn.
But their success is being held back by disruption to global shipping supply chains. The surge in exports from China to the west, combined with disruption at ports due to coronavirus, has left many containers out of position, resulting in queues of ships outside ports and soaring freight rates. The Chinese media have dubbed it “a single box is hard to find”.
The amount it costs to send a 40-foot container from China to the US has more than quadrupled in the past year, Chuang said: “We have never seen anything like this in the last two decades . . . Empty containers cannot get back to Hong Kong.”
China has recovered faster from the pandemic than any other big economy and its exports of lockdown-related goods, electronics and medical equipment have soared.
Export volumes have been rising at a double-digit rate for several consecutive months, and at the end of last year China’s trade surplus hit a record high.
But the rise in demand for its products comes as pandemic-related restrictions and staffing shortages in ports across the US and Europe delay the return of containers to east Asian ports.
Roberto Giannetta, chairman of the Hong Kong Liner Shipping Association, said a lack of truckers and warehouse workers elsewhere in the world inhibited the ability of ports to return containers to China.
“There’s a huge number of containers that are just sitting around the middle of nowhere . . . Australia, eastern Europe, middle America,” he said. “It’s like a kind of perfect storm preventing containers from returning back to Asia.”
Hu Haoli, assistant to the president of Wanlong Chemical in Wenzhou, said freight rates remained elevated, although it had only a limited impact on his business because the products it sells are high-end.
But for other companies, especially China’s vast textile industry, the delays are having a more severe effect. An exporter in Shaoxing, a city on the east coast of China, said the sharp rise in freight rates in December had caused many textile businesses to shut.
Shipping executives had hoped the traditional factory closures that usually accompany the lunar new year would slow production volumes, giving shipping lines a chance to catch up. But those hopes have failed to materialise — some Chinese factories pressed employees to keep working over the holiday in a bid to keep pace with global demand.
The delays and shortages risk pushing up goods prices. In Hong Kong, Chuang said…
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