China’s Ports Strain Under Weight of Overcapacity


China’s maritime industry is straining under overcapacity due to a rapid introduction of mega-ships and increase in shipping traffic, according to a report from the country’s Ministry of Transport.

The report says that 2018 saw China’s domestic coastal container traffic increase by just under eight percent compared to 2017 and warns that freight rates are “generally falling” as a result.

Furthermore, by December 31, 2018, there was a total of 252 vessels with a capacity greater than 700 TEUs moving between Chinese ports.


Shanghai Deepwater Terminal 

There was a 2.1% drop in container traffic across the China-Taiwan strait, despite a general increase in two-way shipping volumes and a spike in direct cargo traffic.

A recent Port Technology technical paper explored the gaps in the supply chain and how to fix them 

In 2019, it expects the coastal box shipping market to continue to grow and for two-way traffic across the China-Taiwan strait to jump by as much as 10%.

However, it also warned and that its domestic market could be harmed by international continued international overcapacity.

China insists its coastal shipping market is generally solid and that freight rates in other sectors remain, such as dry bulk, are “stable”.

The country’s liquefied natural gas (LNG) carrier market rose in 2018 but is “generally balanced”, and its domestic LNG traffic was “basically unchanged”. 

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