Global container shipping congestion is easing, with global trade volumes registering a monthly decline of 0.8% in October, according to data from the Kiel Trade Indicator.
Currently, 10% of all goods shipped worldwide are congested.
For the United States – the world’s largest economy – the indicator showed no change in import levels, but a 2.7% drop in export levels.
Europe’s largest economy, Germany, recorded declines of 0.9% and 0.2% in imports and exports, respectively. For the EU, October trade was little changed, with no change in imports and exports, up 1% on a monthly basis.
However, Asia’s largest and world’s most populous economy, China, has clearly emerged as an exception. There was no significant change in import levels (0.9 percent) but a strong increase in exports (10.1 percent).
“Global trade shows an unstable trajectory, even if this evolution is not evenly distributed in all countries. German exports have been following this sideways movement in terms of adjusted prices for several months now, so the difficult economic conditions are obviously having a noticeable impact on German exporters,” said Vincent Stamer, head of Kiel Trade Indicator.
“China’s export growth during the month of September is a positive outlier in global trade. It remains to be seen whether this marks a relaxation of China’s restrictive zero-Covid strategy and if it implies a lasting positive trend for Chinese exports,” Stamer said.
The Covid-19 pandemic has highlighted significant challenges in the logistics sector, with many freight customers struggling to find shipping containers amid an industry labor disruption. Acute supply chain bottlenecks have led to congestion and delays at ports, shortage of containers and a sharp increase in the cost of shipping goods.
The World Trade Organization’s Merchandise Trade Barometer released August 23 suggests that world merchandise trade continued to grow in the second quarter of 2022, but the pace of growth was slower than in the first quarter and should remain weak in the second half of the year.
The WTO projects that the Russian-Ukrainian war could reduce global gross domestic product growth by 0.7 to 1.3 percentage points, bringing it to between 3.1% and 3.7% for 2022, it said. she said in an April report.
In Russia, sanctions imposed by Western countries have an impact on monthly variations in trading volumes. October exports and imports fell 2.6% and 0.4%, respectively, according to data from the Kiel Trade Indicator.
An analysis of exports from 57 countries and regions to Russia, including the EU and China, for the months of June, July and August showed that Russia imported about 24% less goods per month than in 2021. The monthly import gap is about $4.5 billion. .
While the EU was Russia’s most important trading partner in the summer of 2021, China now occupies this leading position. Compared to last year, the EU exported 43% fewer goods to Russia, while China exported 23% more. However, China’s increase in exports to Russia petered out in September, according to data from Kiel.
“Given that China’s exports are currently not sufficient to offset Russia’s declining trade with the EU, Russia’s efforts to replace declining imports from Europe are proving increasingly harder,” Stamer said.
“Sanctions imposed by the Western alliance are apparently hitting the Russian economy hard and significantly limiting people’s consumption options.”
This is also indicated by the drop in cargo unloaded at Russian ports.
St. Petersburg, an important hub for Russia’s trade with Europe, achieved less than 10% of the previous year’s volumes in October for the first time. The main Black Sea port, Novorossiysk, recorded only 50% of the previous year’s trade.
The port of Vladivostok, which is important for processing trade with Asia, also saw a drop in incoming freight.
Since the start of the year, freight rates from China to northern Europe have fallen by around two-thirds, Kiel said. For the first time in about two years, prices for a standard container are below $5,000.
“The significant drop in freight rates is a positive impulse for world trade and therefore also for the German economy. If tariffs stay low and global shipping congestion continues to ease, low shipping costs could partly thwart recession fears in export industries,” Stamer said.
Updated: November 07, 2022, 1:46 p.m.